Document:

Exhibit 10.11

 

Exhibit 10.10

 

SUPER LEAGUE GAMING, INC.

 

COMMON STOCK PURCHASE AGREEMENT

 

This
Common Stock Purchase Agreement (this “Agreement”) is
made as of __________________________ by and among Super League
Gaming, Inc., a Delaware corporation (the “Company”), and
the investors listed on Exhibit A attached to this
Agreement (each a “Purchaser” and
together the “Purchasers”).

 

The
parties hereby agree as follows:

 

1.

Purchase and Sale of
Common Stock.

 

1.1 Sale
and Issuance of Common Stock.

 

(a) The
Company shall adopt and file with the Secretary of State of the
State of Delaware on or before the Initial Closing (as defined
below) the Amended and Restated Certificate of Incorporation in the
form of Exhibit B
attached to this Agreement (the
“Restated
Certificate”).

 

(b) Subject
to the terms and conditions of this Agreement, each Purchaser
agrees, severally and not jointly, to purchase at the Closing (as
defined below), and the Company agrees to sell and issue to such
Purchaser at such Closing, that number of shares of Common Stock,
$0.001 par value per share (the “Common
Stock”), set forth
opposite such Purchaser’s name on Exhibit A
with respect to such Closing, at a
purchase price of $3.60 per share (as adjusted for any stock
dividend, stock split, combination or similar recapitalization, the
“Original
Issue Price”). The shares
of Common Stock issued to the Purchasers pursuant to this Agreement
(including any shares issued at the Initial Closing and any
Additional Shares (as defined below) issued at Subsequent Closings
(as defined below)) shall be referred to in this Agreement as the
“Shares.”
The Company is authorized to sell and issue up to 4,166,667 Shares
pursuant to this Agreement.

 

1.2 Closings;
Delivery.

 

(a) The
purchase, sale and issuance of the Shares shall take place at one
or more closings (each of which is referred to in this Agreement as
a “Closing”).
The initial Closing (the “Initial
Closing”) shall take
place remotely via the exchange of documents and signatures on the
date hereof, or at such other time and place as the Company and the
Purchasers representing a majority of the Shares to be sold in the
Initial Closing mutually agree upon, orally or in
writing.

 

(b) If
less than all of the Shares are sold and issued at the Initial
Closing, then the Company may sell and issue at one or more
subsequent Closings (each a “Subsequent
Closing”), on the same
terms and conditions as those contained in this Agreement, up to
the balance of the unissued Shares (the “Additional
Shares”) to one or more
Persons (as defined below) as may be approved by the Company in its
sole discretion (the “Additional
Purchasers”), provided
that (i) such Subsequent Closing is consummated within ninety (90)
days after the Initial Closing and (ii) each Additional Purchaser
shall become a party to, and bound by, each of the Transaction
Agreements (as defined below), in each case as of the date of such
Subsequent Closing, by executing and delivering a counterpart
signature page to each of the Transaction Agreements.
Exhibit
A to this Agreement shall be
updated to reflect each Additional Purchaser and the number of
Additional Shares purchased, or to be purchased, by each Additional
Purchaser at each applicable Subsequent Closing, and each such
Additional Purchaser shall be deemed a Purchaser for all purposes
under this Agreement as of the date of such Subsequent
Closing.

 

(c) At
each Closing, the Company shall deliver to each Purchaser
participating in such Closing a certificate representing the Shares
being purchased by such Purchaser at such Closing against payment
of the purchase price therefor by wire transfer to a bank account
designated by the Company, by check payable to the Company, or by
any combination of such methods.

 

 

 

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1.3 Use
of Proceeds.In accordance with
the directions of the Board (as defined below), the Company will
use the proceeds from the sale of the Shares for working capital
and other general corporate purposes. None of the proceeds will be
used to reduce any indebtedness outstanding as of the date of this
Agreement (other than regularly scheduled payments pursuant to
agreements in effect as of the date hereof, if any) or to make any
dividend or distributions to any stockholders or Affiliates of the
Company.

 

1.4 Defined
Terms Used in this Agreement. In addition to
the terms defined elsewhere in this Agreement, the following terms
used in this Agreement shall be construed to have the meanings set
forth or referenced below.

 

(a) “Affiliate”
means, with respect to any specified Person, any other Person who,
directly or indirectly, controls, is controlled by or is under
common control with such Person, including, without limitation, any
general partner, managing member, officer or director of such
Person, or such Person’s principal, or any venture capital
fund, financial investment firm or collective investment vehicle
now or hereafter existing that is controlled by one or more general
partners or managing members (or any affiliates thereof, which
shall include any series or cell of a general partner or managing
member that is structured as a series limited liability company)
of, or shares the same management company with, such Person. For
purposes of this definition, the terms “controlling,”
“controlled by,” or “under common control
with” shall mean the possession, directly or indirectly, of
(i) the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting
securities, by contract, or otherwise, or (ii) the power to elect
or appoint at least 50% of the directors, managers, general
partners, or Persons exercising similar authority with respect to
such Person. For the avoidance of doubt, an “Affiliate”
of a specified Person shall include (x) such Person’s
partners, members, stockholders, other equity owners, officers,
directors, managers, former or retired partners, former or retired
members, former or retired stockholders, former or retired other
equity owners, and the estate of any of the foregoing and (y) a
parent or subsidiary of a Person that is an
entity

 

(b) “Board”
means the board of directors of the Company.

 

(c) “Code”
means the Internal Revenue Code of 1986, as
amended.

 

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

 

(e) “Company Intellectual
Property” means all patents, patent applications,
trademarks, trademark applications, service marks, service mark
applications, tradenames, copyrights, trade secrets, domain names,
mask works, information and proprietary rights and processes,
similar or other intellectual property rights, subject matter of
any of the foregoing, tangible embodiments of any of the foregoing,
licenses in, to and under any of the foregoing, and any and all
such cases as are necessary to the Company in the conduct of the
Company’s business as now conducted and as presently proposed
to be conducted.

 

(f)  “Investors’
Rights Agreement” means
the agreement among the Company and the Purchasers dated as of the
date of the Initial Closing, in the form of Exhibit
D attached to this
Agreement.

 

(g) “Key
Employee” means
any executive-level employee
(including division director and vice president-level positions) as
well as any employee or consultant who either alone or in concert
with others develops, invents, programs or designs any Company
Intellectual Property.

 

(h) “Knowledge”
including the phrase “to the
Company’s knowledge” shall mean the actual knowledge, after
reasonable investigation, of Ann Hand and David
Steigelfest.

 

(i) “Material
Adverse Effect” means a
material adverse effect on the business, assets (including
intangible assets), liabilities, financial condition, property,
prospects, or results of operations of the
Company.

 

 

 

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(j) “Person”
means any individual, corporation, partnership, trust, limited
liability company, association or other entity.

 

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

 

(l) “Toba”
means Toba Capital Ventures Series, a series of Toba Capital LLC, a
Delaware limited liability company.

 

(m) “Transaction
Agreements” means this
Agreement and the Investors’ Rights
Agreement.

 

2.
          Representations and
Warranties of the Company. A Disclosure
Schedule, attached as Exhibit C to this
Agreement (each a “Disclosure
Schedule”), shall be delivered to the Purchasers in
connection with each Closing. Except as set forth on the Disclosure
Schedule delivered to the Purchasers at the applicable Closing,
which exceptions shall be deemed to be part of the representations
and warranties made hereunder, the Company hereby represents and
warrants to the Purchasers that the following representations are
true and complete. The Disclosure Schedule shall be arranged in
sections corresponding to the numbered and lettered sections
contained in this Section 2, and the disclosures in
any section of the Disclosure Schedule shall qualify other sections
in this Section
2 only to the extent it is
readily apparent from a reading of the disclosure that such
disclosure is applicable to such other sections.

 

2.1 Organization,
Good Standing, Corporate Power and Qualification. . The Company is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all requisite
corporate power and authority to carry on its business as presently
conducted and as proposed to be conducted. The Company is duly
qualified to transact business and is in good standing in each
jurisdiction in which the failure to so qualify would have a
Material Adverse Effect.

 

2.2 Capitalization.

 

(a) The
authorized capital of the Company consists, immediately prior to
the Initial Closing, of 50,000,000 shares of Common Stock, $0.001
par value. Immediately prior to the Initial Closing, there are
8,099,279 shares of Common Stock issued and outstanding. All of the
outstanding shares of Common Stock have been duly authorized, are
fully paid and nonassessable and were issued in compliance with all
applicable federal and state securities laws. Simultaneous with the
Initial Closing, 1,551,485 shares of Common Stock will be issued
upon the automatic conversion of certain zero coupon unsecured
convertible promissory notes previously issued by the Company in
the collective original principal amount of $5,050,000. The Company
holds no Common Stock in its treasury.

 

(b) The
Company has reserved 3,000,000 shares of Common Stock for issuance
to officers, directors, employees, consultants and other service
providers of the Company pursuant to its 2014 Stock Option and
Incentive Plan (the “2014
Plan”), duly adopted by
the Board and approved by the Company stockholders.
Of such reserved shares of Common
Stock under the 2014 Plan, (i) zero shares have been issued
pursuant to restricted stock purchase agreements, options to
purchase 2,658,493 shares have been granted and are currently
outstanding, 70,000 shares have been issued pursuant to stock
option exercises, and 271,507 shares of Common Stock remain
available for issuance to officers, directors, employees,
consultants and other service providers of the Company pursuant to
the 2014 Plan. The Company has furnished to the Purchasers complete
and accurate copies of the 2014 Plan and forms of agreements used
thereunder.

 

 

 

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(c) Section 2.2(c)
of the Disclosure Schedule sets forth
the capitalization of the Company immediately following the Initial
Closing including the number of shares of the following:
(i) issued and outstanding Common Stock, including, with
respect to restricted Common Stock, vesting schedule and repurchase
price; (ii) granted stock options, including vesting schedule
and exercise price; (iii) shares of Common Stock reserved for
future award grants under the Stock Plans; and (iv) warrants
or other rights to purchase any of the Company’s authorized
and unissued capital stock. Except for (A) the rights provided
in Section 4
of the Investors’ Rights
Agreement, and (B) the securities and rights described
in Section
2.2,
of this Agreement and Section 2.2(c)
of the Disclosure Schedule, there are
no outstanding options, warrants, rights (including conversion or
preemptive rights and rights of first refusal or similar rights) or
agreements, orally or in writing, to purchase or acquire from the
Company any shares of Common Stock, or any securities convertible
into or exchangeable for shares of Common
Stock.

 

(d) The
Company has never adjusted or amended the exercise price of any
stock options previously awarded, whether through amendment,
cancellation, replacement grant, repricing, or any other
means.

 

2.3 Subsidiaries. .
The Company does not currently own or control, directly or
indirectly, any interest in any other corporation, partnership,
trust, joint venture, limited liability company, association, or
other business entity. The Company is not a participant in any
joint venture, partnership or similar arrangement, other than
license agreements with third parties in the ordinary course and
scope of the Company’s business.

 

2.4 Authorization. .
All corporate action required to be taken by the Board and
stockholders in order to authorize the Company to enter into the
Transaction Agreements, and to issue the Shares at each Closing,
has been taken or will be taken prior to the Initial Closing. All
action on the part of the officers of the Company necessary for the
execution and delivery of the Transaction Agreements, the
performance of all obligations of the Company under the Transaction
Agreements to be performed as of the Closing has been taken or will
be taken prior to such Closing. The Transaction Agreements, when
executed and delivered by the Company, shall constitute valid and
legally binding obligations of the Company, enforceable against the
Company in accordance with their respective terms except
(i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, or other laws of
general application relating to or affecting the enforcement of
creditors’ rights generally, (ii) as limited by laws relating
to the availability of specific performance, injunctive relief, or
other equitable remedies, or (iii) to the extent the
indemnification provisions contained in the Investors’ Rights
Agreement may be limited by applicable federal or state securities
laws.

 

2.5 Valid
Issuance of Shares.

 

(a) The
Shares, when issued, sold and delivered in accordance with the
terms and for the consideration set forth in this Agreement, will
be validly issued, fully paid and nonassessable and free of
restrictions on transfer other than restrictions on transfer under
the Transaction Agreements, applicable state and federal securities
laws and liens or encumbrances created by or imposed by a
Purchaser. Assuming the accuracy of the representations of the
Purchasers in Section 3
of this Agreement and subject to the
filings described in Section 2.6
below, the Shares will be issued in
compliance with all applicable federal and state securities
laws.

 

(b) No
“bad actor” disqualifying event described in Rule
506(d)(1)(i)-(viii) of the Securities Act (a
“Disqualification
Event”) is applicable to
the Company or, to the Company’s knowledge, any Company
Covered Person, except for a Disqualification Event as to which
Rule 506(d)(2)(ii–iv) or (d)(3), is applicable.
The Company has exercised reasonable
care, in accordance with SEC rules and guidance, to determine
whether any Company Covered Person is subject to any
Disqualification Event. The Company has complied, to the extent
applicable, with any disclosure obligations under Rule 506(e) under
the Securities Act.

 

2.6 Governmental Consents
and Filings. Assuming the
accuracy of the representations made by the Purchasers in
Section 3 of this Agreement, no
consent, approval, order or authorization of, or registration,
qualification, designation, declaration or filing with, any
federal, state or local governmental authority is required on the
part of the Company in connection with the consummation of the
transactions contemplated by this Agreement, except for (i) the
filing of the Restated Certificate, which will have been filed as
of the Initial Closing, and (ii) filings pursuant to
Regulation D of the Securities Act, and applicable state
securities laws, which will be made in a timely
manner.

 

 

 

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2.7 Litigation.
There is no claim, action, suit, proceeding, arbitration,
complaint, charge or investigation pending or, to the
Company’s knowledge, currently threatened (i) against the
Company or any officer, director or Key Employee of the Company; or
(ii) that questions the validity of the Transaction Agreements or
the right of the Company to enter into them, or to consummate the
transactions contemplated by the Transaction Agreements; or (iii)
to the Company’s knowledge, that would reasonably be expected
to have, either individually or in the aggregate, a Material
Adverse Effect. Neither the Company nor, to the Company’s
knowledge, any of its officers, directors or Key Employees is a
party or is named as subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality (in the case of officers, directors or Key
Employees, such as would affect the Company). There is no action,
suit, proceeding or investigation by the Company pending or which
the Company intends to initiate. The foregoing includes, without
limitation, actions, suits, proceedings or investigations pending
or threatened in writing (or any basis therefor known to the
Company) involving the prior employment of any of the
Company’s employees, their services provided in connection
with the Company’s business, any information or techniques
allegedly proprietary to any of their former employers or their
obligations under any agreements with prior employers.

 

2.8 Intellectual
Property. The Company owns
or possesses sufficient legal rights to all Company Intellectual
Property without (i) any conflict with, or infringement of, the
rights of others, other than the rights of third parties in, to and
under third-party patents and patent applications
(“Third-Party Patent
Rights”), and (ii) to the knowledge of the Company,
any conflict with, or infringement of, any Third-Party Patent
Rights. No product or service marketed or sold (or proposed to be
marketed or sold) by the Company violates or will violate any
license or infringes or will infringe (x) any intellectual property
rights of any other party other than Third-Party Patent Rights and
(y) to the knowledge of the Company, any Third-Party Patent Rights.
Other than with respect to commercially available software products
under standard end-user object code license agreements, there are
no outstanding options, licenses, agreements, claims, encumbrances
or shared ownership interests of any kind relating to the Company
Intellectual Property, nor is the Company bound by or a party to
any options, licenses or agreements of any kind with respect to the
patents, trademarks, service marks, trade names, copyrights, trade
secrets, licenses, information, proprietary rights and processes of
any other Person. The Company is not aware of any violation by a
third party of any Company Intellectual Property, and the Company
has not received any communications alleging that the Company has
violated or, by conducting its business, would violate any of the
patents, trademarks, service marks, tradenames, copyrights, trade
secrets, mask works or other proprietary rights or processes of any
other Person. The Company has obtained and possesses valid licenses
to use all of the software programs present on the computers and
other software-enabled electronic devices that it owns or leases or
that it has otherwise provided to its employees for their use in
connection with the Company’s business. It will not be
necessary to use any inventions of any of its employees or
consultants (or Persons it currently intends to hire) made prior to
their employment by the Company. Each employee and consultant has
assigned to the Company all intellectual property rights he or she
owns that are related to the Company’s business as now
conducted and as presently proposed to be conducted. Section 2.8 of the Disclosure
Schedule lists all Company patents, patent applications,
trademarks, trademark applications, service marks, service mark
applications, tradenames, domain names, copyrights, and licenses to
and under any of the foregoing. The Company has not embedded, used
or distributed any open source, copyleft or community source code
(including, but not limited to, any libraries or code, software,
technologies or other materials that are licensed or distributed
under any General Public License, Lesser General Public License or
similar license arrangement or other distribution model described
by the Open Source Initiative at www.opensource.org)
(collectively “Open Source
Software”) in, or in connection with, any of its
products or services that are generally available or in development
in any manner that would materially restrict the ability of the
Company to protect its proprietary interests in any such product or
service or in any manner that would (i) require, or purport to
require, any Company Intellectual Property (other than the Open
Source Software itself) to be disclosed or distributed in source
code form, or to be licensed for the purpose of making derivative
works; (ii) restrict, or purport to restrict, the consideration
that could be charged for the distribution or use of any Company
Intellectual Property, or otherwise limit, or purport to limit, the
use of any Company Intellectual Property for commercial purposes;
(iii) create, or purport to create, any obligation on the Company
with respect to any Company Intellectual Property owned by the
Company, or otherwise grant, or purport to grant, to any third
party any rights in or to, or immunities under, Company
Intellectual Property owned by the Company; or (iv) impose, or
purport to impose, any other limitation, restriction or condition
on the right of the Company with respect to its use or distribution
of any Company Intellectual Property. For purposes of this
Section 2.8, the Company shall be
deemed to have knowledge of a patent right if the Company has
actual knowledge of the patent right or would be found to be on
notice of such patent right as determined by reference to United
States patent laws.

 

 

 

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2.9 Compliance
with Other Instruments. . The Company is
not in violation or default (i) of any provisions of its Restated
Certificate or Bylaws, (ii) of any instrument, judgment, order,
writ or decree, (iii) under any note, indenture or mortgage, or
(iv) under any lease, agreement, contract or purchase order to
which it is a party or by which it is bound that is required to be
listed on the Disclosure Schedule, or (v) to its knowledge, of
any provision of federal or state statute, rule or regulation
applicable to the Company, the violation of which would have a
Material Adverse Effect. The execution, delivery and performance of
the Transaction Agreements and the consummation of the transactions
contemplated by the Transaction Agreements will not result in any
such violation or be in conflict with or constitute, with or
without the passage of time and giving of notice, either (i) a
default under any such provision, instrument, judgment, order,
writ, decree, contract or agreement; or (ii) an event which results
in the creation of any lien, charge or encumbrance upon any assets
of the Company or the suspension, revocation, forfeiture, or
nonrenewal of any material permit or license applicable to the
Company.

 

2.10 Agreements;
Actions.

 

(a) Except
for the Transaction Agreements, issued and outstanding employment
agreements with executives of the Company, the existing real
property lease agreement for the Company’s headquarters
located at 2906 Colorado Ave., Santa Monica, CA 90404, there are no
agreements, understandings, instruments, contracts or proposed
transactions to which the Company is a party or by which it is
bound that involve (i) obligations (contingent or otherwise)
of, or payments to, the Company in excess of $100,000,
(ii) the license of any patent, copyright, trademark, trade
secret or other proprietary right to or from the Company,
(iii) the grant of rights to manufacture, produce, assemble,
license, market, or sell its products to any other Person that
limit the Company’s exclusive right to develop, manufacture,
assemble, distribute, market or sell its products, or (iv)
indemnification by the Company with respect to infringements of
proprietary rights.

 

(b) The
Company has not (i) declared or paid any dividends, or
authorized or made any distribution upon or with respect to any
class or series of its capital stock, or (ii) sold, exchanged or
otherwise disposed of any of its assets or rights, other than the
sale of its inventory in the ordinary course of
business.

 

(c) The
Company is not a guarantor or indemnitor of any indebtedness of any
other Person.

 

2.11 Certain
Transactions.

 

(a) Other
than (i) standard employee benefits generally made available to all
employees, (ii) executive employment agreements for Ann Hand and
David Steigelfest, (iii) standard director and officer
indemnification agreements approved by the Board, and (iv) the
purchase of shares of the Company’s capital stock and the
issuance of options and warrants to purchase shares of the
Company’s Common Stock, in each instance, approved in the
written minutes of the Board (previously provided to the Purchasers
or their counsel), there are no agreements, understandings or
proposed transactions between the Company and any of its officers,
directors, consultants or Key Employees, or any Affiliate
thereof.

 

(b) The
Company is not indebted, directly or indirectly, to any of its
directors, officers or employees or to their respective spouses or
children or to any Affiliate of any of the foregoing, other than in
connection with expenses or advances of expenses incurred in the
ordinary course of business or employee relocation expenses and for
other customary employee benefits made generally available to all
employees. None of the Company’s directors, officers or
employees, or any members of their immediate families, or any
Affiliate of the foregoing are, directly or indirectly, indebted to
the Company or, to the Company’s knowledge, have any (i)
material commercial, industrial, banking, consulting, legal,
accounting, charitable or familial relationship with any of the
Company’s customers, suppliers, service providers, joint
venture partners, licensees and competitors, (ii) direct or
indirect ownership interest in any firm or corporation with which
the Company is affiliated or with which the Company has a business
relationship, or any firm or corporation which competes with the
Company except that directors, officers or employees or
stockholders of the Company may own stock in (but not exceeding two
percent (2%) of the outstanding capital stock of) publicly traded
companies that may compete with the Company or (iii) financial
interest in any material contract with the
Company.

 

 

 

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2.12 Rights
of Registration and Voting Rights. . Except as
provided in the Investors’ Rights Agreement, and in Section
2.12 of the Disclosure Schedule, the Company is not under any
obligation to register under the Securities Act any of its
currently outstanding securities or any securities issuable upon
exercise or conversion of its currently outstanding securities. To
the Company’s knowledge, no stockholder of the Company has
entered into any agreements with respect to the voting of capital
shares of the Company.

 

2.13 Property.The
property and assets that the Company owns are free and clear of all
mortgages, deeds of trust, liens, loans and encumbrances, except
for statutory liens for the payment of current taxes that are not
yet delinquent and encumbrances and liens that arise in the
ordinary course of business and do not materially impair
the Company’s ownership or use of such property or
assets. With respect to the property and assets it leases, the
Company is in compliance with such leases and, to its knowledge,
holds a valid leasehold interest free of any liens, claims or
encumbrances other than those of the lessors of such property or
assets. The Company does not own any real property.

 

2.14 Financial
Statements. The Company has delivered to each Purchaser its
audited financial statements for the fiscal years ended December
31, 2014 and December 31, 2015 and its unaudited financial
statements (including balance sheet, income statement and statement
of stockholders equity) for the six months ended June 30, 2016
(collectively, the “Financial
Statements”). The Financial Statements have been
prepared in accordance with generally accepted accounting
principles (“GAAP”) applied
on a consistent basis throughout the periods indicated, except that
the Financial Statements may not contain all footnotes required by
GAAP. The Financial Statements fairly present in all material
respects the financial condition and operating results of the
Company as of the dates, and for the periods, indicated therein,
subject to normal year-end audit adjustments. Except as set forth
in the Financial Statements, the Company has no material
liabilities or obligations, contingent or otherwise, other than (i)
liabilities incurred in the ordinary course of business subsequent
to June 30, 2016; (ii) obligations under contracts and commitments
incurred in the ordinary course of business; and (iii) liabilities
and obligations of a type or nature not required under GAAP to be
reflected in the Financial Statements, which, in all such cases,
individually and in the aggregate would not have a Material Adverse
Effect. The Company maintains and will continue to maintain a
standard system of accounting established and administered in
accordance with GAAP.

 

2.15 Changes. Since June 30,
2016, there has not been:

 

(a) any change in the
assets, liabilities, financial condition or operating results of
the Company, except changes in the ordinary course of business that
have not caused, in the aggregate, a Material Adverse
Effect;

 

(b) any damage,
destruction or loss, whether or not covered by insurance, that
would have a Material Adverse Effect;

 

(c) any waiver or
compromise by the Company of a valuable right or of a material debt
owed to it;

 

(d) any satisfaction or
discharge of any lien, claim, or encumbrance or payment of any
obligation by the Company, except in the ordinary course of
business and the satisfaction or discharge of which would not have
a Material Adverse Effect;

 

(e) any material change
to a material contract or agreement by which the Company or any of
its assets is bound or subject;

 

(f) any material change
in any compensation arrangement or agreement with any employee,
officer, director or stockholder;

 

(g) any resignation or
termination of employment of any officer or Key Employee of the
Company, other than the voluntary resignation of Brett
Morris;

 

 

 

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(h) any mortgage,
pledge, transfer of a security interest in, or lien, created by the
Company, with respect to any of its material properties or assets,
except liens for taxes not yet due or payable and liens that arise
in the ordinary course of business and do not materially impair the
Company’s ownership or use of such property or
assets;

 

(i) any loans or
guarantees made by the Company to or for the benefit of its
employees, officers or directors, or any members of their immediate
families, other than travel advances and other advances made in the
ordinary course of its business;

 

(j) any declaration,
setting aside or payment or other distribution in respect of any of
the Company’s capital stock, or any direct or indirect
redemption, purchase, or other acquisition of any of such stock by
the Company;

 

(k) any sale,
assignment or transfer of any Company Intellectual Property that
could reasonably be expected to result in a Material Adverse
Effect;

 

(l) receipt of notice
that there has been a loss of, or material order cancellation by,
any major customer of the Company;

 

(m) to the
Company’s knowledge, any other event or condition of any
character, other than events affecting the economy or the
Company’s industry generally, that could reasonably be
expected to result in a Material Adverse Effect; or

 

(n) any arrangement or
commitment by the Company to do any of the things described in this
Subsection 2.15.

 

2.16 Employee
Matters.

 

(a) As
of the date hereof, the Company employs more than 20 full-time
employees and less than five part-time employees and engages
consultants or independent contractors. There are no current officers, employees,
consultants or independent contractors of the Company who receive
an annual salary of more than $300,000.

 

(b) To
the Company’s knowledge, none of its employees is obligated
under any contract (including licenses, covenants or commitments of
any nature) or other agreement, or subject to any judgment, decree
or order of any court or administrative agency, that would
materially interfere with such employee’s ability to promote
the interest of the Company or that would conflict with the
Company’s business. Neither the execution or delivery of the
Transaction Agreements, nor the carrying on of the Company’s
business by the employees of the Company, nor the conduct of the
Company’s business as now conducted and as presently proposed
to be conducted, will, to the Company’s knowledge, conflict
with or result in a breach of the terms, conditions, or provisions
of, or constitute a default under, any contract, covenant or
instrument under which any such employee is now
obligated.

 

(c) The
Company is not delinquent in payments to any of its employees,
consultants, or independent contractors for any wages, salaries,
commissions, bonuses, or other direct compensation for any service
performed for it to the date hereof or amounts required to be
reimbursed to such employees, consultants or independent
contractors. The Company has complied in all material respects with
all applicable state and federal equal employment opportunity laws
and with other laws related to employment, including those related
to wages, hours, worker classification and collective bargaining.
The Company has withheld and paid to the appropriate governmental
entity or is holding for payment not yet due to such governmental
entity all amounts required to be withheld from employees of the
Company and is not liable for any arrears of wages, taxes,
penalties or other sums for failure to comply with any of the
foregoing.

 

(d) To
the Company’s knowledge, no Key Employee intends to terminate
employment with the Company or is otherwise likely to become
unavailable to continue as a Key Employee, nor does the Company
have a present intention to terminate the employment of any of the
foregoing. The employment of each employee of the Company is
terminable at the will of the Company, other than executives who
have employment agreements with the Company.

 

 

 

-8-

 

 

(e) The
Company has not made any representations regarding equity
incentives to any officer, employee, director or consultant that
are inconsistent with the share amounts and terms set forth in the
minutes of meetings of the Board.

 

(f) Each
former Key Employee whose employment was terminated by the Company
has entered into an agreement with the Company providing for the
full release of any claims against the Company or any related party
arising out of such employment.

 

(g) Section 2.166(g)
of the Disclosure Schedule sets forth each employee
benefit plan maintained, established or sponsored by the Company,
or which the Company participates in or contributes to, which is
subject to the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”).
The Company has made all required contributions and has no
liability to any such employee benefit plan, other than liability
for health plan continuation coverage described in Part 6 of Title
I(B) of ERISA, and has complied in all material respects with all
applicable laws for any such employee benefit
plan.

 

(h) The Company is not
bound by or subject to (and none of its assets or properties is
bound by or subject to) any written or oral, express or implied,
contract, commitment or arrangement with any labor union, and no
labor union has requested or, to the knowledge of the Company, has
sought to represent any of the employees, representatives or agents
of the Company. There is no strike or other labor dispute involving
the Company pending, or to the Company’s knowledge,
threatened, which could have a Material Adverse Effect, nor is the
Company aware of any labor organization activity involving its
employees.

 

(i) None
of the Key Employees or officers or directors of the Company has
been (i) subject to voluntary or involuntary petition under the
federal bankruptcy laws or any state insolvency law or the
appointment of a receiver, fiscal agent or similar officer by a
court for his business or property; (ii) convicted in a criminal
proceeding or named as a subject of a pending criminal proceeding
(excluding traffic violations and other minor offenses); (iii)
subject to any order, judgment or decree (not subsequently
reversed, suspended, or vacated) of any court of competent
jurisdiction permanently or temporarily enjoining him from
engaging, or otherwise imposing limits or conditions on his
engagement in any securities, investment advisory, banking,
insurance, or other type of business or acting as an officer or
director of a public company; or (iv) found by a court of competent
jurisdiction in a civil action or by the Securities and Exchange
Commission or the Commodity Futures Trading Commission to have
violated any federal or state securities, commodities, or unfair
trade practices law, which such judgment or finding has not been
subsequently reversed, suspended, or vacated.

 

2.17 Tax
Returns and Payments. There are no
federal, state, county, local or foreign taxes due and payable by
the Company which have not been timely paid. There are no accrued
and unpaid federal, state, country, local or foreign taxes of the
Company which are due, whether or not assessed or disputed. There
have been no examinations or audits of any tax returns or reports
by any applicable federal, state, local or foreign governmental
agency. The Company has duly and timely filed all federal, state,
county, local and foreign tax returns required to have been filed
by it and there are in effect no waivers of applicable statutes of
limitations with respect to taxes for any year.

 

2.18 Insurance. The Company has
in full force and effect fire and casualty insurance policies with
extended coverage, sufficient in amount (subject to reasonable
deductions) to allow it to replace any of its properties that might
be damaged or destroyed.

 

2.19 Employee
Agreements. Each current and
former employee, consultant and officer of the Company has executed
an agreement with the Company regarding confidentiality and
proprietary information substantially in the form or forms
delivered to VLP Law Group LLP (“VLP”), counsel
for Toba (the “Confidential Information
Agreements”). No current or former Key Employee has
excluded works or inventions from his or her assignment of
inventions pursuant to such Key Employee’s Confidential
Information Agreement. Each current and former Key Employee has
executed a non-solicitation agreement substantially in the form or
forms delivered to VLP. The Company is not aware that any of its
Key Employees is in violation of any agreement covered by this
Section 2.199.

 

 

 

-9-

 

 

2.20 Permits. The Company has
all franchises, permits, licenses and any similar authority
necessary for the conduct of its business, the lack of which could
reasonably be expected to have a Material Adverse Effect. The
Company is not in default in any material respect under any of such
franchises, permits, licenses or other similar
authority.

 

2.21 Corporate
Documents. The Restated
Certificate and Bylaws of the Company are in the form provided to
the Purchasers and VLP. The copy of the minute books of the Company
provided to the Purchasers and VLP contains minutes of all meetings
of directors and stockholders and all actions by written consent
without a meeting by the directors and stockholders since the date
of incorporation and accurately reflects in all material respects
all actions by the directors (and any committee of directors) and
stockholders with respect to all transactions referred to in such
minutes.

 

2.22 Environmental
and Safety Laws. (a) The
Company is and has been in compliance with all Environmental Laws;
(b) there has been no release or threatened release of any
pollutant, contaminant or toxic or hazardous material, substance or
waste or petroleum or any fraction thereof (each a
“Hazardous
Substance”), on, upon, into or from any site currently
or heretofore owned, leased or otherwise used by the Company;
(c) there have been no Hazardous Substances generated by the
Company that have been disposed of or come to rest at any site that
has been included in any published U.S. federal, state or local
“superfund” site list or any other similar list of
hazardous or toxic waste sites published by any governmental
authority in the United States; and (d) there are no
underground storage tanks located on, no polychlorinated biphenyls
(“PCBs”) or
PCB-containing equipment used or stored on, and no hazardous waste
as defined by the Resource Conservation and Recovery Act, as
amended, stored on, any site owned or operated by the Company,
except for the storage of hazardous waste in compliance with
Environmental Laws. The Company has made available to the
Purchasers true and complete copies of all material environmental
records, reports, notifications, certificates of need, permits,
pending permit applications, correspondence, engineering studies
and environmental studies or assessments.

 

For
purposes of this Section
2.22, “Environmental
Laws” means any law, regulation, or other applicable
requirement relating to (a) releases or threatened release of
Hazardous Substance; (b) pollution or protection of employee health
or safety, public health or the environment; or (c) the
manufacture, handling, transport, use, treatment, storage, or
disposal of Hazardous Substances.

 

2.23 Qualified
Small Business Stock. As of and immediately following each
Closing: (i) the Company will be an eligible corporation as defined
in Section 1202(e)(4) of the Code, (ii) the Company will not have
made purchases of its own stock described in Code Section
1202(c)(3)(B) during the one-year period preceding the Initial
Closing, except for purchases that are disregarded for such
purposes under Treasury Regulation Section 1.1202-2 and (iii) the
Company’s aggregate gross assets, as defined by Code Section
1202(d)(2), at no time between its incorporation and through the
Initial Closing have exceeded $50 million, taking into account the
assets of any corporations required to be aggregated with the
Company in accordance with Code Section 1202(d)(3); provided, however, that in no event
shall the Company be liable to the Purchasers or any other party
for any damages arising from any subsequently proven or identified
error in the Company’s determination with respect to the
applicability or interpretation of Code Section 1202, unless such
determination shall have been given by the Company in a manner
either grossly negligent or fraudulent.

 

2.24 Data
Privacy. In connection with its collection, storage,
transfer (including without limitation, any transfer across
national borders) and/or use of any personally identifiable
information from any individuals, including, without limitation,
any customers, prospective customers, employees and/or other third
parties (collectively, “Personal
Information”), the Company is and has been in
compliance with all applicable laws in all relevant jurisdictions,
the Company’s privacy policies, and the requirements of any
contract or codes of conduct to which the Company is a party. The
Company has commercially reasonable physical, technical,
organizational and administrative security measures and policies in
place to protect all Personal Information collected by it or on its
behalf from and against unauthorized access, use and/or disclosure.
The Company is and has been in compliance in all material respects
with all laws relating to data loss, theft and breach of security
notification obligations.

 

 

 

-10-

 

 

2.25 Disclosure. 
The Company has made available to the Purchasers all the
information reasonably available to the Company that the Purchasers
have requested for deciding whether to acquire the Shares,
including certain of the Company’s projections describing its
proposed business plan (the “Business
Plan”). No representation or warranty of the Company
contained in this Agreement, as qualified by the Disclosure
Schedule, and no certificate furnished or to be furnished to
Purchasers at any Closing contains any untrue statement of a
material fact or, to the Company’s knowledge, omits to state
a material fact necessary in order to make the statements contained
herein or therein not misleading in light of the circumstances
under which they were made. The Business Plan was prepared in good
faith; however, the Company does not warrant that it will achieve
any results projected in the Business Plan. It is understood that
this representation is qualified by the fact that the Company has
not delivered to the Purchasers, and has not been requested to
deliver, a private placement or similar memorandum or any written
disclosure of the types of information customarily furnished to
purchasers of securities.

 

3.
           Representations and
Warranties of the Purchasers. Each Purchaser
hereby represents and warrants to the Company, severally and not
jointly, that:

 

3.1 Authorization.
The Purchaser has full power and authority to enter into the
Transaction Agreements. The Transaction Agreements to which the
Purchaser is a party, when executed and delivered by the Purchaser,
will constitute valid and legally binding obligations of the
Purchaser, enforceable in accordance with their terms, except
(a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and any other
laws of general application affecting enforcement of
creditors’ rights generally, and as limited by laws relating
to the availability of specific performance, injunctive relief or
other equitable remedies, or (b) to the extent the
indemnification provisions contained in the Investors’ Rights
Agreement may be limited by applicable federal or state securities
laws.

 

3.2 Purchase
Entirely for Own Account. This Agreement is
made with the Purchaser in reliance upon the Purchaser’s
representation to the Company, which by the Purchaser’s
execution of this Agreement, the Purchaser hereby confirms, that
the Shares to be acquired by the Purchaser will be acquired for
investment for the Purchaser’s own account, not as a nominee
or agent, and not with a view to the resale or distribution of any
part thereof, and that the Purchaser has no present intention of
selling, granting any participation in, or otherwise distributing
the same in violation of applicable securities laws. By executing
this Agreement, the Purchaser further represents that the Purchaser
does not presently have any contract, undertaking, agreement or
arrangement with any Person to sell, transfer or grant
participations to such Person or to any third Person, with respect
to any of the Shares. The Purchaser has not been formed for the
specific purpose of acquiring the Shares.

 

3.3 Disclosure
of Information. The Purchaser has
had an opportunity to discuss the Company’s business,
management, financial affairs and the terms and conditions of the
offering of the Shares with the Company’s management and has
had an opportunity to review the Company’s facilities. The
foregoing, however, does not limit or modify the representations
and warranties of the Company in Section 2 of this Agreement or the
right of the Purchasers to rely thereon.

 

3.4 Restricted
Securities. The Purchaser
understands that the Shares have not been, and will not be,
registered under the Securities Act, by reason of a specific
exemption from the registration provisions of the Securities Act
which depends upon, among other things, the bona fide nature of the
investment intent and the accuracy of the Purchaser’s
representations as expressed herein. The Purchaser understands that
the Shares are “restricted securities” under applicable
U.S. federal and state securities laws and that, pursuant to these
laws, the Purchaser must hold the Shares indefinitely unless they
are registered with the Securities and Exchange Commission and
qualified by state authorities, or an exemption from such
registration and qualification requirements is available. The
Purchaser acknowledges that the Company has no obligation to
register or qualify the Shares for resale except as set forth in
the Investors’ Rights Agreement. The Purchaser further
acknowledges that if an exemption from registration or
qualification is available, it may be conditioned on various
requirements including, but not limited to, the time and manner of
sale, the holding period for the Shares, and on requirements
relating to the Company which are outside of the Purchaser’s
control, and which the Company is under no obligation and may not be able to
satisfy.

 

 

 

-11-

 

 

 

3.5 No
Public Market. The Purchaser
understands that no public market now exists for the Shares, and
that the Company has made no assurances that a public market will
ever exist for the Shares.

 

3.6 Legends.
The Purchaser understands that the Shares and any securities issued
in respect of or exchange for the Shares, may be notated with one
or all of the following legends:

 

“THE SHARES
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND
NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION
THEREOF. NO SUCH TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN
A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.”

 

(a) Any
legend set forth in, or required by, the other Transaction
Agreements.

 

(b) Any
legend required by the securities laws of any state to the extent
such laws are applicable to the Shares represented by the
certificate, instrument, or book entry so legended.

 

3.7 Accredited
Investor. The Purchaser is
an accredited investor as defined in Rule 501(a) of Regulation D
promulgated under the Securities Act.

 

3.8 No
General Solicitation. Neither the
Purchaser, nor any of its officers, directors, employees, agents,
stockholders or partners has either directly or indirectly,
including, through a broker or finder (a) engaged in any
general solicitation, or (b) published any advertisement in
connection with the offer and sale of the Shares.

 

3.9 Exculpation
Among Purchasers. The Purchaser
acknowledges that it is not relying upon any Person, other than the
Company and its officers and directors, in making its investment or
decision to invest in the Company. The Purchaser agrees that
neither any Purchaser nor the respective controlling Persons,
officers, directors, partners, agents, or employees of any
Purchaser shall be liable to any other Purchaser for any action
heretofore taken or omitted to be taken by any of them in
connection with the purchase of the Shares.

 

3.10 Residence.
If the Purchaser is an individual, then the Purchaser resides in
the state or province identified in the address of the Purchaser
set forth on Exhibit
A; if the Purchaser is a partnership, corporation, limited
liability company or other entity, then the office or offices of
the Purchaser in which its principal place of business is
identified in the address or addresses of the Purchaser set forth
on Exhibit
A.

 

4.    
      Conditions to
the Purchasers’
Obligations at Closing. The obligations
of each Purchaser to purchase Shares at any Closing are subject to
the fulfillment, on or before such Closing, of each of the
following conditions, unless otherwise waived by such
Purchaser:

 

4.1 Representations
and Warranties .

 

(a) With respect to the
Initial Closing, except as set forth in or modified by the
Disclosure Schedule delivered to the Purchasers at the Initial
Closing, the representations and warranties of the Company
contained in Section 2 shall be true and correct in all
respects as of the date of the Initial Closing.

 

(b) With respect to any
Subsequent Closing, except as set forth in or modified by the
Disclosure Schedule delivered to the Purchasers at the Initial
Closing (or, if necessary, an updated version of the Disclosure
Schedule delivered to the Purchasers participating in such
Subsequent Closing along with the certificate described in
Section 4.3(b)),
the representations and warranties made by the Company in
Section 2 shall be
true and correct in all material respects (without giving effect to
any limitation as to “materiality” or Material Adverse
Effect set forth therein) on and as of the date of such Subsequent
Closing as though such representations and warranties were made on
and as of such date (other than those representations and
warranties of the Company contained in Section 2 made as of a
specified date or made only with respect to a specified period of
time, which need only be true and correct in all material respects
(without giving effect to any limitation as to
“materiality” or Material Adverse Effect set forth
therein) as of such specified date or with respect to such
specified period of time).

 

 

 

-12-

 

 

4.2 Performance.
The Company shall have performed and complied with all covenants,
agreements, obligations and conditions contained in this Agreement
that are required to be performed or complied with by the Company
on or before such Closing.

 

4.3 Compliance
Certificate.

 

(a) With respect to the
Initial Closing, the President of the Company shall deliver to the
Purchasers participating in the Initial Closing a certificate
certifying that the conditions specified in Sections 4.1(a) and
4.2 have been
fulfilled.

 

(b) With respect to any
Subsequent Closing, the President of the Company shall deliver to
the Purchasers participating in such Subsequent Closing a
certificate certifying that the conditions specified in
Sections 4.1(b) and
4.2 have been
fulfilled.

 

4.4 Qualifications.
All authorizations, approvals or permits, if any, of any
governmental authority or regulatory body of the United States or
of any state that are required in connection with the lawful
issuance and sale of the Shares pursuant to this Agreement shall be
obtained and effective as of such Closing.

 

4.5 Board
of Directors. As of the Initial
Closing, the authorized size of the Board shall be five (5), and
the Board shall be comprised of Ann Hand, David Steigelfest, Jeff
Gehl, Robert Stewart and John Miller.

 

4.6 Investors’
Rights Agreement. The Company
and each Purchaser
shall have executed and delivered the Investors’ Rights
Agreement.

 

4.7 Restated
Certificate. The Company shall
have filed the Restated Certificate with the Secretary of State of
Delaware on or prior to the Initial Closing, which shall continue
to be in full force and effect as of each Closing.

 

4.8 Secretary’s
Certificate. The Secretary of
the Company shall have delivered to the Purchasers at the Initial
Closing a certificate certifying (i) the Bylaws of the Company,
(ii) resolutions of the Board approving the Transaction Agreements
and the transactions contemplated under the Transaction Agreements,
and (iii) resolutions of the stockholders of the Company approving
the Restated Certificate.

 

4.9 Proceedings
and Documents. All corporate and
other proceedings in connection with the transactions contemplated
at such Closing and all documents incident thereto shall be
reasonably satisfactory in form and substance to each Purchaser,
and each Purchaser (or its counsel) shall have received all such
counterpart original and certified or other copies of such
documents as reasonably requested. Such documents may include good
standing certificates.

 

5.           Conditions of the Company’s
Obligations at Closing. The obligations
of the Company to sell Shares to the Purchasers at any Closing are
subject to the fulfillment, on or before such Closing, of each of
the following conditions, unless otherwise waived:

 

5.1 Representations
and Warranties. The
representations and warranties of each Purchaser contained in
Section 3 shall be true and correct
in all respects as of such Closing.

 

5.2 Performance.
The Purchasers shall have performed and complied with all
covenants, agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by
them on or before such Closing.

 

 

 

-13-

 

 

5.3 Qualifications.
All authorizations, approvals or permits, if any, of any
governmental authority or regulatory body of the United States or
of any state that are required in connection with the lawful
issuance and sale of the Shares pursuant to this Agreement shall be
obtained and effective as of such Closing.

 

5.4 Investors’
Rights Agreement. Each Purchaser
shall have executed and delivered the Investors’ Rights
Agreement.

 

6.

Miscellaneous.

 

6.1 Survival
of Warranties. Unless otherwise
set forth in this Agreement, the representations and warranties of
the Company and the Purchasers contained in or made pursuant to
this Agreement shall survive the execution and delivery of this
Agreement and each Closing and shall in no way be affected by any
investigation or knowledge of the subject matter thereof made by or
on behalf of the Purchasers or the Company.

 

6.2 Successors
and Assigns. The terms and
conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties.
Nothing in this Agreement, express or implied, is intended to
confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations
or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.

 

6.3 Governing
Law. This Agreement
shall be governed by and construed under the internal laws of the
State of Delaware, irrespective of conflict of law
principles.

 

6.4 Counterparts.
This Agreement may be executed and delivered by facsimile signature
and in two (2) or more counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the
same instrument. Counterparts may be delivered via facsimile,
electronic mail (including pdf or any electronic signature
complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com)
or other transmission method and any counterpart so delivered shall
be deemed to have been duly and validly delivered and be valid and
effective for all purposes.

 

6.5 Titles
and Subtitles. The titles and
subtitles used in this Agreement are used for convenience only and
are not to be considered in construing or interpreting this
Agreement.

 

6.6 Notices.
All notices and other communications given or made pursuant to this
Agreement shall be in writing and shall be deemed effectively given
upon the earlier of actual receipt, or (a) personal delivery to the
party to be notified, (b) when sent, if sent by electronic mail or
facsimile during normal business hours of the recipient, and if not
sent during normal business hours, then on the recipient’s
next business day, (c) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage
prepaid, or (d) one (1) business day after deposit with a
nationally recognized overnight courier, freight prepaid,
specifying next business day delivery, with written verification of
receipt. All communications shall be sent to the respective parties
at their address as set forth on the signature page or Exhibit A, or to such
e-mail address, facsimile number or address as subsequently
modified by written notice given in accordance with this
Section 6.6. If notice is given to
the Company, a copy shall also be sent to Gregory L Hrncir, Esq.,
General Counsel, Super League Gaming, Inc., 2906 Colorado Ave.,
Santa Monica, CA 90404, gregg@superleague.com,
and if notice is given to Toba, a copy (which shall not constitute
notice) shall also be given to Christopher E. La Chance, VLP Law
Group LLP, 3126 Scott Street, Suite 1, San Francisco, CA 94123,
clachance@vlplawgroup.com.

 

6.7 No
Finder’s Fees. Each party
represents that it neither is nor will be obligated for any
finder’s fee or commission in connection with this
transaction. Each Purchaser agrees to indemnify and to hold
harmless the Company from any liability for any commission or
compensation in the nature of a finder’s or broker’s
fee arising out of this transaction (and the costs and
expenses of defending against such liability or asserted liability)
for which each Purchaser or any of its officers, employees or
representatives is responsible. The Company agrees to indemnify and
hold harmless each Purchaser from any liability for any commission
or compensation in the nature of a finder’s or
broker’s fee arising out of this transaction (and the costs
and expenses of defending against such liability or asserted
liability) for which the Company or any of its officers, employees
or representatives is responsible.

 

 

 

-14-

 

 

6.8 Fees
and Expenses. At the Initial
Closing, the Company shall be obligated to pay the documented fees
and expenses of VLP in an amount not to exceed, in the aggregate,
$30,000 (such amount, the “Reimbursable
Fees”; such obligation, the “Reimbursement
Obligation”). In full satisfaction of the
Company’s Reimbursement Obligation, an amount equal to the
Reimbursable Fees shall be deducted from, and set off against, the
aggregate purchase price otherwise payable by Toba for the Shares
purchased by Toba at the Initial Closing, and such deducted/set-off
amount shall be treated for all purposes of this Agreement as
having been paid to the Company for the Shares purchased by Toba at
the Initial Closing. At the Initial Closing, the Company shall be
furnished with a statement of the Reimbursable Fees.

 

6.9 Attorneys’
Fees. If any action at
law or in equity (including, arbitration) is necessary to enforce
or interpret the terms of any of the Transaction Agreements, the
prevailing party shall be entitled to reasonable attorneys’
fees, costs and necessary disbursements in addition to any other
relief to which such party may be entitled.

 

6.10 Amendments and
Waivers. Any term of this
Agreement may be amended, terminated or waived only with the
written consent of the Company and (a)
the holders of at least a majority of the then-outstanding Shares or (b) for an
amendment, termination or waiver effected prior to the Initial
Closing, Purchasers obligated to purchase at least a
majority of the Shares to be issued at
the Initial Closing. Notwithstanding the foregoing,
Purchasers purchasing Additional Shares in a Subsequent Closing may
become parties to this Agreement in accordance with Section 1.2(b)
without any amendment of this Agreement pursuant to this paragraph
or any consent or approval of any other Purchaser (other than any
consent or approval explicitly required pursuant to Section
1.2(b)). Any amendment or waiver effected in accordance with this
Section 6.10 shall be binding upon
each Purchaser and each transferee of the Shares, each future
holder of the Shares, and the Company.

 

6.11 Severability.
The invalidity or unenforceability of any provision hereof shall in
no way affect the validity or enforceability of any other
provision.

 

6.12 Delays
or Omissions. No delay or
omission to exercise any right, power or remedy accruing to any
party under this Agreement, upon any breach or default of any other
party under this Agreement, shall impair any such right, power or
remedy of such non-breaching or non-defaulting party nor shall it
be construed to be a waiver of any such breach or default, or an
acquiescence therein, or of or in any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or
approval of any kind or character on the part of any party of any
breach or default under this Agreement, or any waiver on the part
of any party of any provisions or conditions of this Agreement,
must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any party, shall
be cumulative and not alternative.

 

6.13 Entire
Agreement. This Agreement
(including the Exhibits hereto), the Restated Certificate and the
other Transaction Agreements constitute the full and entire
understanding and agreement between the parties with respect to the
subject matter hereof, and any other written or oral agreement
relating to the subject matter hereof existing between the parties
are expressly canceled.

 

6.14 Corporate
Securities Law. THE SALE OF THE
SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN
QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF
CALIFORNIA AND THE ISSUANCE OF THE SECURITIES OR THE PAYMENT OR
RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO THE
QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT
FROM THE QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE
CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS
AGREEMENT ARE EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING
OBTAINED UNLESS THE SALE IS SO EXEMPT.

 

 

 

-15-

 

 

6.15 Dispute
Resolution. The parties (a)
hereby irrevocably and unconditionally submit to the jurisdiction
of the federal and state courts located in Los Angeles County,
California for the purpose of any suit, action or other proceeding
arising out of or based upon this Agreement, (b) agree not to
commence any suit, action or other proceeding arising out of or
based upon this Agreement except in the federal and state courts
located in Los Angeles County, California, and (c) hereby waive,
and agree not to assert, by way of motion, as a defense, or
otherwise, in any such suit, action or proceeding, any claim that
it is not subject personally to the jurisdiction of the above-named
courts, that its property is exempt or immune from attachment or
execution, that the suit, action or proceeding is brought in an
inconvenient forum, that the venue of the suit, action or
proceeding is improper or that this Agreement or the subject matter
hereof may not be enforced in or by such court.

 

WAIVER
OF JURY TRIAL: EACH
PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE
OTHER TRANSACTION DOCUMENTS, THE SECURITIES OR THE SUBJECT MATTER
HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE
ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY
COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION,
INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS
(INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON
LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY
EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT
TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND
REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL

 

6.16 No
Commitment for Additional Financing. The Company
acknowledges and agrees that no Purchaser has made any
representation, undertaking, commitment or agreement to provide or
assist the Company in obtaining any financing, investment or other
assistance, other than the purchase of the Shares as set forth
herein and subject to the conditions set forth herein. In addition,
the Company acknowledges and agrees that (a) no statements,
whether written or oral, made by any Purchaser or its
representatives on or after the date of this Agreement shall create
an obligation, commitment or agreement to provide or assist the
Company in obtaining any financing or investment, (b) the
Company shall not rely on any such statement by any Purchaser or
its representatives, and (c) an obligation, commitment or agreement
to provide or assist the Company in obtaining any financing or
investment may only be created by a written agreement, signed by
such Purchaser and the Company, setting forth the terms and
conditions of such financing or investment and stating that the
parties intend for such writing to be a binding obligation or
agreement. Each Purchaser shall have the right, in its sole and
absolute discretion, to refuse or decline to participate in any
other financing of or investment in the Company, and shall have no
obligation to assist or cooperate with the Company in obtaining any
financing, investment or other assistance.

 

[Signature
Pages Follow]

 

 

-16-

 

 

IN
WITNESS WHEREOF, the parties have executed this Common Stock
Purchase Agreement as of the date first written above.

 

COMPANY:

 

SUPER
LEAGUE GAMING, INC.

 

 

By:                                                                       

                                                                       

Ann Hand, CEO &
President

 

Address:                                                                       

2906 Colorado
Ave.

Santa Monica, CA 90404

 

 

 

 

 

Signature Page to Common Stock Purchase Agreement

Super League Gaming, Inc.

 

 

 

 

IN
WITNESS WHEREOF, the parties have executed this Common Stock
Purchase Agreement as of the date first written above.

 

PURCHASER:

 

 

By:                                                                     

 

 

 

Name:                                                                     

 

 

 

Title:                                                                     

 

 

 

 

 

Signature Page to Common Stock Purchase Agreement

Super League Gaming, Inc.

 

 

 

EXHIBIT A

 

SCHEDULE OF PURCHASERS

 

Subsequent Closing
Date: ________________, 2017

 

	

 

Name/Address/Phone/Email of Purchaser

	
 

	

Shares of

Common Stock

	
 

	

Purchase

Price

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

_______________________________

 

	
 

	

___________

	
 

	

$___________

	

_______________________________

 

_______________________________

 

_______________________________

 

	
 

	
 

	
 

	
 

 

 

 

 

 

Exhibit A to Common Stock Purchase Agreement

Super League Gaming, Inc.

 

 

 

EXHIBIT B

 

FORM OF AMENDED AND RESTATED

 

CERTIFICATE OF INCORPORATION

 

 

 

 

Exhibit B to Common Stock Purchase Agreement

Super League Gaming, Inc.

 

 

 

 

 

 

AMENDED AND RESTATED

 

CERTIFICATE OF INCORPORATION

 

OF

 

SUPER LEAGUE GAMING, INC.

 

(Pursuant to Sections 242 and 245 of the

 

General
Corporation Law of the State of Delaware)

 

Super
League Gaming, Inc., a corporation organized and existing under and
by virtue of the provisions of the General Corporation Law of the
State of Delaware (the “General Corporation
Law”),

 

DOES HEREBY CERTIFY:

 

1. That the name of
this corporation is Super League Gaming, Inc., and that this
corporation was originally incorporated pursuant to the General
Corporation Law on October 1, 2014 under the name Nth Games,
Inc.

 

2.            That
the Board of Directors duly adopted resolutions proposing to amend
and restate the Certificate of Incorporation of this corporation,
declaring said amendment and restatement to be advisable and in the
best interests of this corporation and its stockholders, and
authorizing the appropriate officers of this corporation to solicit
the consent of the stockholders therefor, which resolution setting
forth the proposed amendment and restatement is as
follows:

 

RESOLVED, that the Certificate of
Incorporation of this corporation be amended and restated in its
entirety to read as follows:

 

FIRST: The name of this corporation is
Super League Gaming, Inc. (the “Corporation”).

 

SECOND: The address of the registered
office of the Corporation in the State of Delaware is 2140 S.
Dupont Highway, in the City of Camden, County of Kent, 19934. The
name of its registered agent at such address is Corporation Service
Company.

 

THIRD: The nature of the business or
purposes to be conducted or promoted is to engage in any lawful act
or activity for which corporations may be organized under the
General Corporation Law.

 

FOURTH: The total number of shares of
all classes of stock which the Corporation shall have authority to
issue is 50,000,000 shares of Common Stock, $0.001 par value per
share (“Common
Stock”).

 

 

 

 

 

 

Exhibit B to Common Stock Purchase Agreement

Super League Gaming, Inc.

 

 

 

 

The
following is a statement of the designations and the powers,
privileges and rights, and the qualifications, limitations or
restrictions thereof in respect of each class of capital stock of
the Corporation.

 

A. COMMON
STOCK

 

1.       
Voting. The holders of the
Common Stock are entitled to one vote for each share of Common
Stock held at all meetings of stockholders (and written actions in
lieu of meetings). There shall be no cumulative
voting.

 

2.      
Dividends.

 

2.1

Dividends Generally. Any
dividends declared or paid in any fiscal year shall be declared or
paid among the holders of the Common Stock then outstanding, pro
rata and pari passu based on the number of shares held by each such
holder. The right to receive dividends on shares of Common Stock
shall not be cumulative.

 

2.2

Non-Cash Distributions.
Whenever a dividend provided for in this Section 2 shall be payable in
property other than cash, the value of such dividend shall be
deemed to be the fair market value of such property as determined
in good faith by the Board of Directors.

 

3.    
  Liquidation,
Dissolution or Winding Up; Certain Mergers, Consolidations and
Asset Sales.

 

3.1

Payments to Holders of Common
Stock. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation or Deemed
Liquidation Event (as defined in Subsection 3.2.1), the assets
of the Corporation available for distribution to its stockholders
shall be distributed among the holders of shares of Common Stock,
pro rata and pari passu based on the number of shares held by each
such holder (the amount payable per share of Common Stock pursuant
to the foregoing sentence is hereinafter referred to as the
“Liquidation Amount”).

 

3.2

Deemed Liquidation
Events.

 

3.2.1

Definition. Each of the following
events shall be considered a “Deemed Liquidation
Event”:

 

(a)

a merger or
consolidation in which (i) the Corporation is a constituent
party or (ii) a subsidiary of the Corporation is a constituent
party and the Corporation issues shares of its capital stock
pursuant to such merger or consolidation,except any such merger or
consolidation involving the Corporation or a subsidiary in which
the shares of capital stock of the Corporation outstanding
immediately prior to such merger or consolidation continue to
represent, or are converted into or exchanged for equity securities
that represent, immediately following such merger or consolidation,
at least a majority, by voting power, of the equity securities of
(1) the surviving or resulting entity or (2) if the surviving or
resulting entity is a wholly owned subsidiary of another entity
immediately following such merger or consolidation, the parent
entity of such surviving or resulting entity; or

 

(b)

the sale, lease,
conveyance, transfer, exclusive license or other disposition, in a
single transaction or series of related transactions, by the
Corporation or any subsidiary of the Corporation of all or
substantially all the assets of the Corporation and its
subsidiaries taken as a whole, or the sale or disposition (whether
by merger, consolidation or otherwise) of one or more subsidiaries
of the Corporation if substantially all of the assets of the
Corporation and its subsidiaries taken as a whole are held by such
subsidiary or subsidiaries, except where such sale, lease,
conveyance, transfer, exclusive license or other disposition is to
a wholly owned subsidiary of the Corporation (an
“Asset
Sale”).

 

 

 

 

 

3.2.2

Effecting a Deemed Liquidation Event.

 

(a)

The Corporation
shall not have the power to effect a Deemed Liquidation Event
referred to in Subsection
3.2.1(a)(i) unless the agreement or plan of merger or
consolidation for such transaction provides that the consideration
payable to the stockholders of the Corporation shall be allocated
among the holders of capital stock of the Corporation in accordance
with Subsection
3.1.

 

(b)

In the event of a
Deemed Liquidation Event referred to in Subsection 3.2.1(a)(ii) or
3.2.1(b), if the
Corporation does not effect a dissolution of the Corporation under
the General Corporation Law within ninety (90) days after such
Deemed Liquidation Event, then (i) the Corporation shall send a
written notice to each holder of Common Stock no later than the
ninetieth (90th) day after the
Deemed Liquidation Event advising such holders of their right (and
the requirements to be met to secure such right) pursuant to the
terms of the following clause (ii) to require the redemption of
such shares of Common Stock, and (ii) if the holders of at least a
majority of the then outstanding shares of Common Stock so request
in a written instrument delivered to the Corporation not later than
one hundred twenty (120) days after such Deemed Liquidation Event,
the Corporation shall use the consideration received by the
Corporation for such Deemed Liquidation Event (net of any retained
liabilities associated with the assets sold or technology licensed,
as determined in good faith by the Board of Directors of the
Corporation), together
with any other assets of the Corporation available for distribution
to its stockholders, all to the extent permitted by Delaware law
governing distributions to stockholders (the “Available Proceeds”), on the one hundred
fiftieth (150th) day after such
Deemed Liquidation Event, to redeem all outstanding shares of
Common Stock at a price per share equal to the Liquidation Amount.
Notwithstanding the foregoing, in the event of a redemption
pursuant to the preceding sentence, if the Available Proceeds are
not sufficient to redeem all outstanding shares of Common Stock,the
Corporation shall ratably redeem each holder’s shares of
Common Stock to the fullest extent of such Available Proceeds, and
shall redeem the remaining shares as soon as it may lawfully do so
under Delaware law governing distributions to stockholders. Upon
any such redemption, each holder shall surrender the certificates
being redeemed upon receipt of payment therefor. Prior to the
distribution or redemption provided for in this Section 3.2.2(b), the
Corporation shall not expend or dissipate the consideration
received for such Deemed Liquidation Event, except to discharge
expenses incurred in connection with such Deemed Liquidation
Event.

 

3.2.3

Amount Deemed Paid or
Distributed. The amount deemed paid or distributed to the
holders of capital stock of the Corporation upon any such merger,
consolidation, sale, transfer, exclusive license, other disposition
or redemption shall be the cash or the value of the property,
rights or securities paid or distributed to such holders by the
Corporation or the acquiring person, firm or other entity. The
value of such property, rights or securities shall be determined in
good faith by the Board of Directors of the
Corporation.

 

4.    
  Election of
Directors. The holders of record of the shares of Common
Stock shall be entitled to elect the directors of the Corporation.
At any meeting held for the purpose of electing a director, the
presence in person or by proxy of the holders of a majority of the
outstanding shares of Common Stock shall constitute a quorum for
the purpose of electing such director.

 

5.    
  Notice of Record
Date. In the event (i) the Corporation shall take a record
of the holders of Common Stock for the purpose of entitling or
enabling them to receive any dividend or other distribution, or to
receive any right to subscribe for or purchase any shares of
capital stock of any class or any other securities, or to receive
any other security, (ii) of any capital reorganization of the
Corporation, any reclassification of the Common Stock, or any
Deemed Liquidation Event or (iii) of the voluntary or involuntary
dissolution, liquidation or winding up of the Corporation, then,
and in each such case, the Corporation will send or cause to be
sent to the holders of the Common Stock a notice specifying, as the
case may be, (x) the record date for such dividend, distribution or
right, and the amount and character of such dividend, distribution
or right, or (y) the effective date on which such capital
reorganization, reclassification, Deemed Liquidation Event,
dissolution, liquidation or winding up is proposed to take place,
and the

 

 

 

 

 

 

time,
if any is to be fixed, as of which the holders of record of Common
Stock shall be entitled to exchange their shares of Common Stock
for securities or other property deliverable upon such capital
reorganization, reclassification, Deemed Liquidation Event,
dissolution, liquidation or winding up, and the amount per share
and character of such exchange applicable to the Common Stock. Such
notice shall be sent at least ten (10) days prior to the record
date or effective date for the event specified in such
notice.

 

6.    
  Notices. Any
notice required or permitted by the provisions of this Article
Fourth to be given to a holder of shares of Common Stock shall be
mailed, postage prepaid, to the post office address last shown on
the records of the Corporation for such holder, given by the holder
to the Corporation for the purpose of notice, or given by
electronic communication in compliance with the provisions of the
General Corporation Law, and shall be deemed sent upon such mailing
or electronic transmission.

 

FIFTH: Subject to any additional vote required by this
Amended and Restated Certificate of Incorporation or the Bylaws of
the Corporation, in furtherance and not in limitation of the powers
conferred by statute, the Board of Directors is expressly
authorized to make, repeal, alter, amend and rescind any or all of
the Bylaws of the Corporation.

 

SIXTH: The number of directors of the Corporation shall be
determined in the manner set forth in the Bylaws of the
Corporation.

 

SEVENTH: Elections of directors need not be by written
ballot unless the Bylaws of the Corporation shall so
provide.

 

EIGHTH: Meetings of stockholders may be held within or
without the State of Delaware, as the Bylaws of the Corporation may
provide. The books of the Corporation may be kept outside the State
of Delaware at such place or places as may be designated from time
to time by the Board of Directors or in the Bylaws of the
Corporation.

 

NINTH: To the fullest extent permitted by law, a director of
the Corporation shall not be personally liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary
duty as a director. If the General Corporation Law or any other law
of the State of Delaware is amended after approval by the
stockholders of this Article Ninth to authorize corporate action
further eliminating or limiting the personal liability of
directors, then the liability of a director of the Corporation
shall be eliminated or limited to the fullest extent permitted by
the General Corporation Law as so amended.

 

Any
repeal or modification of the foregoing provisions of this Article
Ninth by the stockholders of the Corporation shall not adversely
affect any right or protection of a director of the Corporation
existing at the time of, or increase the liability of any director
of the Corporation with respect to any acts or omissions of such
director occurring prior to, such repeal or
modification.

 

TENTH: To the fullest extent permitted by applicable law,
the Corporation is authorized to provide indemnification of (and
advancement of expenses to) directors, officers and agents of the
Corporation (and any other persons to which General Corporation Law
permits the Corporation to provide indemnification) through Bylaw
provisions, agreements with such agents or other persons, vote of
stockholders or disinterested directors or otherwise, in excess of
the indemnification and advancement otherwise permitted by
Section 145 of the General Corporation Law.

 

Any amendment, repeal or modification of the foregoing provisions
of this Article Tenth shall not adversely affect any right or
protection of any director, officer or other agent of the
Corporation existing at the time of such amendment, repeal or
modification.

 

 

Exhibit B to Common Stock Purchase Agreement

Super League Gaming, Inc.

 

 

 

 

 

ELEVENTH: For purposes of Section 500 of the California
Corporations Code (to the extent applicable), in connection with
any repurchase of shares of Common Stock permitted under the
Certificate of Incorporation from employees, officers, directors or
consultants of the Corporation in connection with a termination of
employment or services pursuant to agreements or arrangements
approved by the Board (in addition to any other consent required
under the Certificate of Incorporation), such repurchase may be
made without regard to any “preferential dividends arrears
amount” or “preferential rights amount” (as those
terms are defined in Section 500 of the California Corporations
Code). Accordingly, for purposes of making any calculation under
California Corporations Code Section 500 in connection with such
repurchase, the amount of any “preferential dividends arrears
amount” or “preferential rights amount” (as those
terms are defined therein) shall be deemed to be zero
(0).

 

 

* * * * *

 

 

 

Exhibit B to Common Stock Purchase Agreement

Super League Gaming, Inc.

 

 

 

3.            That
the foregoing amendment and restatement was approved by the holders
of the requisite number of shares of this corporation in accordance
with Section 228 of the General Corporation Law.

 

4.            That
this Amended and Restated Certificate of Incorporation, which
restates and integrates and further amends the provisions of this
Corporation’s Certificate of Incorporation, has been duly
adopted in accordance with Sections 242 and 245 of the General
Corporation Law.

 

IN WITNESS WHEREOF, this Amended and
Restated Certificate of Incorporation has been executed by a duly
authorized officer of this corporation on October 7,
2016.

 

 

By:  /s/ Ann Hand

Ann
Hand, CEO & President

 

 

Exhibit B to Common Stock Purchase Agreement

Super League Gaming, Inc.

 

 

 

EXHIBIT C

 

DISCLOSURE SCHEDULE

 

This
Disclosure Schedule is made and given pursuant to Section 2 of the Common Stock
Purchase Agreement (the “Agreement”),
between Super League Gaming, Inc. (the “Company”) and
the Purchasers listed on Exhibit A thereto. All
capitalized terms used but not defined herein shall have the
meanings as defined in the Agreement, unless otherwise provided.
The section numbers below correspond to the section numbers of the
representations and warranties in the Agreement; provided, however, that any information
disclosed herein under any section number shall be deemed to be
disclosed and incorporated into any other section number under the
Agreement where such disclosure would be appropriate and such
appropriateness is reasonably apparent from the face of such
disclosure. Nothing in this Disclosure Schedule is intended to
broaden the scope of any representation or warranty contained in
the Agreement or to create any covenant. Inclusion of any item in
this Disclosure Schedule (1) does not represent a determination
that such item is material or establish a standard of materiality,
(2) does not represent a determination that such item did not arise
in the ordinary course of business, (3) does not represent a
determination that the transactions contemplated by the Agreement
require the consent of third parties, and (4) shall not constitute,
or be deemed to be, an admission to any third party concerning such
item. This Disclosure Schedule includes brief descriptions or
summaries of certain agreements and instruments, copies of which
are available upon reasonable request. Such descriptions do not
purport to be comprehensive, and are qualified in their entirety by
reference to the text of the documents described, true and complete
copies of which have been provided to the Purchasers or their
respective counsel.

 

 

 

 

Exhibit C to Common Stock Purchase Agreement

Super League Gaming, Inc.

 

 

 

SECTION 2.2(c)

 

Capitalization

 

Following
the Initial Closing, and assuming such closing is in the amount of
$10,000,000 and consisting of the sale of 2,777,778 shares of
common stock, the capitalization of the Company will be as
follows:

 

	

Form of Security

	
 

	

    Amount

	
 

	

    Percentage

	

Common
Stock (1)

	
 

	

12,428,542

	
 

	

           72.84%

	

Options
to Purchase Common Stock (2)

	
 

	

  2,658,493

	
 

	

           15.58%

	

Warrants
to Purchase Common Stock (3)

	
 

	

  1,950,000

	
 

	

           11.43%

	

Restricted
Stock Units

	
 

	

       25,000

	
 

	

 0.15%

	

TOTAL

	
 

	

17,062,035

	
 

	

         100.00%

 

______________________

(1)

Consists of (a)
8,099,279 shares of common stock outstanding prior to the Initial
Closing, (b) 1,551,485 shares of common stock issued at the Initial
Closing relating to the automatic conversion of $5,050,000 of zero
coupon unsecured convertible notes, and (c) 2,777,778 shares of
common stock issued in connection with the collective investment of
$10,000,000. Excludes the exercise of any portion of the
over-allotment of up to 5,000,000, consisting of up to 1,388,889
shares.

(2)

The weighted
average exercise price of the options to purchase 2,658,493 shares
of common stock is $2.41 per share, with a collective exercise
value of $6,410,479.

(3)

The weighted
average exercise price of the warrants to purchase 1,950,000 shares
of common stock is $2.57 per share, with a collective exercise
value of $5,020,000.

 

 

 

 

 

 

 

SECTION 2.8

 

Patents & Trademarks

 

 

	

Patents Pending

	

Matter Name/Description

	

Status

	

Application No

	

Filing Date

	

Priority Claim

	

Inventors

	

 

001WO

(PCT
– International)

 

	

 

Game
System – Generating Game Projection Views

 

	

 

PENDING:

1. Entered National
Phase in the U.S. with 001C1 & 001C2

2. Case Expires May 5,
2017

 

	

 

PCT/US2015/029532

	

 

05/06/2015

	

 

001PR
(Provisional) filed 11/5/14

 

	
 

1. John
Miller

2.
David Steigelfest

	

 

001C1

(U.S.
Non-Provisional)

 

	

 

Multi-User Game
System with Trigger-Based Generation of Projection
View

 

	

 

PENDING

1. Filed
with Prioritized Examination Request

2. Awaiting
Examination by Patent Office

 

	

 

15/179,868

 

	

 

06/10/2016

	

 

Continuation of
001WO

	
 

1. John
Miller

2.
David Steigelfest

	

 

001C2

(U.S.
Non-Provisional)

 

	

 

Multi-User Game
System with Character-Based Generation of Projection
View

 

	

 

PENDING

1. Filed
with Prioritized Examination Request

2. Awaiting
Examination by Patent Office

 

	

15/179,878

 

	

 

06/10/2016

	

 

Continuation of
001WO

	
 

1. John
Miller

2.
David Steigelfest

 

Registered
Trademarks:

 

1.

SLG
(Stylized)

a. Registered

with
USPTO

i.

International Class
9 – Serial No. 86725324

ii.

International Class
28 – Serial No. 86725331

iii.

International Class
41 – Serial No. 86725326

2.

Super League Gaming
(Stylized)

a.

Registered with
European Registration Community Mark No. 14945976

3.

Super League Gaming
(logo)

a.

Registered with
European Registration Community Mark No. 14945976

 

 

 

 

Exhibit C to Common Stock Purchase Agreement

Super League Gaming, Inc.

 

 

 

SECTION 2.12

 

Registration Rights

 

1.

The investors in
the Company’s Series A Round common stock round hold
unlimited piggyback registration rights.

 

 

 

Exhibit C to Common Stock Purchase Agreement

Super League Gaming, Inc.

 

 

 

 

SECTION 2.16(g)

 

Employee Benefit Plan

 

None.

 

 

 

 

 

 

Exhibit C to Common Stock Purchase Agreement

Super League Gaming, Inc.

 

 

 

 

EXHIBIT D

 

FORM OF INVESTORS’ RIGHTS AGREEMENT

 

 

 

Exhibit D to Common Stock Purchase Agreement

Super League Gaming, Inc.Exhibit 10.12

 

Exhibit 10.11

  

SUPER LEAGUE GAMING, INC.

 

INVESTORS’ RIGHTS AGREEMENT

 

THIS
INVESTORS’ RIGHTS AGREEMENT (this “Agreement”),
is made as of ___________________________, by and among Super League Gaming, Inc., a Delaware
corporation (the “Company”), and
the purchasers of the Company’s Common Stock listed on
Schedule 1
hereto (the “Investors”).

 

RECITALS

 

WHEREAS, the Company and the Investors
are parties to that certain Common Stock Purchase Agreement of even
date herewith (the “Purchase
Agreement”).

 

WHEREAS, in order to induce the Company
to enter into the Purchase Agreement and to induce the Investors to
invest funds in the Company pursuant to the Purchase Agreement, the
Investors and the Company hereby agree that this Agreement shall
govern the rights of the Investors to cause the Company to register
shares of Common Stock issuable to the Investors, to receive
certain information from the Company, and to participate in future
equity offerings by the Company, and shall govern certain other
matters as set forth in this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, the parties to this
Agreement agree as follows:

 

1. Definitions
. For
purposes of this Agreement:

 

1.1 “Affiliate”
means, with respect to any specified Person, any other Person who,
directly or indirectly, controls, is controlled by or is under
common control with such Person, including, without limitation, any
general partner, managing member, officer or director of such
Person, or such Person’s principal, or any venture capital
fund, financial investment firm or collective investment vehicle
now or hereafter existing that is controlled by one or more general
partners or managing members (or any affiliates thereof, which
shall include any series or cell of a general partner or managing
member that is structured as a series limited liability company)
of, or shares the same management company with, such Person. For
purposes of this definition, the terms “controlling,”
“controlled by,” or “under common control
with” shall mean the possession, directly or indirectly, of
(a) the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting
securities, by contract, or otherwise, or (b) the power to elect or
appoint at least 50% of the directors, managers, general partners,
or Persons exercising similar authority with respect to such
Person. For the avoidance of doubt, an “Affiliate” of a
specified Person shall include (x) such Person’s partners,
members, stockholders, other equity owners, officers, directors,
managers, former or retired partners, former or retired members,
former or retired stockholders, former or retired other equity
owners, and the estate of any of the foregoing and (y) a parent or
subsidiary of a Person that is an entity.

 

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

 

1.3 “Common
Stock” means shares of
the Company’s common stock, par value $0.001 per
share.

 

 

 

-1-

 

 

1.4 “Damages”
means any loss, damage, claim or liability (joint or several) to
which a party hereto may become subject under the Securities Act,
the Exchange Act, or other federal or state law, insofar as such
loss, damage, claim or liability (or any action in respect thereof)
arises out of or is based upon: (i) any untrue statement or alleged
untrue statement of a material fact contained in any registration
statement of the Company, including any preliminary prospectus or
final prospectus contained therein or any amendments or supplements
thereto, and any free-writing prospectus and any issuer information
(as defined in Rule 433 of the Securities Act) filed or required to
be filed pursuant to Rule 433(d) under the Securities Act or any
other document incident to such registration prepared by or on
behalf of the Company or used or referred to by the Company; (ii)
an omission or alleged omission to state therein a material fact
required to be stated therein, or necessary to make the statements
therein not misleading; or (iii) any violation or alleged violation
by the indemnifying party (or any of its agents or
Affiliates) of the Securities Act, the Exchange Act, any state
securities law, or any rule or regulation promulgated under the
Securities Act, the Exchange Act, or any state securities
law.

 

1.5 “Deemed
Liquidation Event” has
the meaning given to such term in the Restated Certificate in
effect on the date hereof.

 

1.6 “Derivative
Securities” means any
securities or rights convertible into, or exercisable or
exchangeable for (in each case, directly or indirectly), Common
Stock, including options and warrants.

 

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

 

1.8 “Excluded
Registration” means (i) a
registration relating to the sale of securities to employees of the
Company or a subsidiary pursuant to a stock option, stock purchase,
or similar plan; (ii) a registration relating to an SEC Rule 145
transaction; (iii) a registration on any form that does not include
substantially the same information as would be required to be
included in a registration statement covering the sale of the
Registrable Securities; or (iv) a registration in which the only
Common Stock being registered is Common Stock issuable upon
conversion of debt securities that are also being
registered.

 

1.9 “Exempted
Securities” means: (i)
securities issued pursuant to a Recapitalization; (ii) securities
issued to employees, consultants, officers or directors for bona
fide compensatory purposes pursuant to the Company’s existing
equity incentive plan(s), such issuances to be approved by a
majority of the Board; (iii) securities issued upon exercise or
conversion of options, warrants or other exercisable or convertible
securities outstanding as of the date hereof; (iv) securities
issued in connection with the closing of the IPO; (v) securities
issued in connection with a bona fide acquisition of another entity
by the Company by merger, purchase of substantially all of the
assets or other reorganization or a joint venture agreement
approved by a majority of the Board; (vi) securities issued to
banks, equipment lessors or other financial institutions pursuant
to a debt financing or commercial leasing transaction approved by a
majority of the Board; (vii) securities issued in connection with
sponsored research, collaboration, technology license, development,
marketing or other similar agreements or strategic partnerships
approved by a majority of the Board; and (viii) securities issued
to suppliers or third party service providers in connection with
the provision of goods or services pursuant to transactions
approved by a majority of the Board.

 

 

 

-2-

 

 

1.10 “Form
S-1” means such form
under the Securities Act as in effect on the date hereof or any
successor registration form under the Securities Act subsequently
adopted by the SEC.

 

1.11 “Form
S-3” means such form
under the Securities Act as in effect on the date hereof or any
registration form under the Securities Act subsequently adopted by
the SEC that permits incorporation of substantial information by
reference to other documents filed by the Company with the
SEC.

 

1.12 “GAAP”
means generally accepted accounting principles in the United
States, consistently applied.

 

1.13 “Holder”
means any holder of Registrable Securities who is a party to this
Agreement.

 

1.14 “Immediate
Family Member” means a
child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, sibling, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including, adoptive relationships,
of a natural person referred to herein.

 

1.15 “Initiating
Holders” means,
collectively, Holders who properly initiate a registration request
under this Agreement.

 

1.16 “IPO”
means the Company’s first underwritten public offering of its
Common Stock under the Securities Act.

 

1.17 “New
Securities” means,
collectively, equity securities of the Company, whether or not
currently authorized, as well as any rights, options, or warrants
to purchase such equity securities, or securities of any type
whatsoever that are, or may become, convertible or exchangeable
into or exercisable (in each case, directly or indirectly) for such
equity securities.

 

1.18 “Original
Issue Price” has the
meaning given to such term in the Purchase
Agreement.

 

1.19 “Person”
means any individual, corporation, partnership, trust, limited
liability company, association or other entity.

 

1.20 “Qualified
Public Offering” means
the closing of the sale of shares of Common Stock to the public at
a price of at least $10.80 per share (subject to appropriate
adjustment in the event of any Recapitalization with respect to the Common Stock), in a
firm-commitment underwritten public offering pursuant to an
effective registration statement under the Securities Act resulting
in at least $25,000,000 of gross proceeds, net of the underwriting
discount and commissions, to the Company.

 

 

 

-3-

 

 

1.21 “Recapitalization”
means any stock dividend, stock split, combination of shares,
reorganization, recapitalization, reclassification or other similar
event.

 

1.22 “Registrable
Securities” means (i) any
Common Stock issued pursuant to the Purchase Agreement, (ii) any
Common Stock, or any Common Stock issued or issuable (directly or
indirectly) upon conversion and/or exercise of any other securities
of the Company, currently owned, or acquired after the date hereof,
by any Investor or its Affiliate(s); (iii) any Common Stock issued
or issuable upon conversion of those certain Zero Coupon Unsecured
Convertible Promissory Notes by the Company; and (iv) any Common
Stock issued as (or issuable upon the conversion or exercise of any
warrant, right, or other security that is issued as) a dividend or
other distribution with respect to, or in exchange for or in
replacement of, the shares referenced in clauses (i)-(iii) above
held by an Investor; excluding in all cases, however, any
Registrable Securities sold by a Person in a transaction in which
the applicable rights under this Agreement are not assigned
pursuant to Section
6.1,
and excluding for purposes of Section
2
any shares for which registration
rights have terminated pursuant to Section
2.12
of this Agreement.

 

1.23 “Registrable
Securities then outstanding” means the number of shares determined by
adding the number of shares of outstanding Common Stock that are
Registrable Securities and the number of shares
of Common Stock issuable (directly or indirectly)
pursuant to then exercisable and/or convertible securities that are
Registrable Securities.

 

1.24 “Restated
Certificate” means the
Company’s Amended and Restated Certificate of Incorporation,
as amended from time to time.

 

1.25 “Restricted
Securities” means the
securities of the Company required to be notated with the legend
set forth in Section 2.11(b)
hereof.

 

1.26 “SEC”
means the Securities and Exchange Commission.

 

1.27 “SEC
Rule 144” means Rule 144
promulgated by the SEC under the Securities
Act.

 

1.28 “SEC
Rule 145” means Rule 145
promulgated by the SEC under the Securities
Act.

 

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

 

1.30 “Selling
Expenses” means all
underwriting discounts, selling commissions, and stock transfer
taxes applicable to the sale of Registrable Securities, and fees
and disbursements of counsel for any Holder, all of which shall be
borne and paid for by the Holder(s) as described in this Agreement,
except for the fees and disbursements of the Selling Holder Counsel
(as defined herein) borne and paid by the Company as provided
in Section 2.6.

 

1.31 “Toba”
means Toba Capital Ventures Series, a series of Toba Capital LLC, a
Delaware limited liability company.

 

 

 

-4-

 

 

2. Registration
Rights. The Company
covenants and agrees as follows:

 

2.1 Demand
Registration

 

(a) Form S-1
Demand. If at any time after
the earlier of (i) three (3) years after the date of this Agreement
or (ii) one (1) year after the
effective date of the registration statement for the IPO, the
Company receives a request from Holders of at least fifty percent
(50%) of the Registrable Securities then outstanding that the
Company file a Form S-1 registration statement with respect to Registrable Securities then
outstanding with an anticipated aggregate offering price, net of
Selling Expenses, in excess of $10,000,000, then the Company shall
(x) within ten (10) days after the date such request is given, give
notice thereof (the “Demand
Notice”) to all Holders
other than the Initiating Holders; and (y) as soon as practicable,
and in any event within one hundred twenty (120) days after the
date such request is given by the Initiating Holders, file such
Form S-1 registration statement under the Securities Act covering
all Registrable Securities that the Initiating Holders
requested to be registered and any additional Registrable
Securities requested to be included in such registration by any
other Holders, as specified by notice given by each such Holder to
the Company within twenty (20) days of the date the Demand Notice
is given, and in each case, subject to the limitations of
Subsections
2.1(c)
and 2.3.

 

(b) Form S-3
Demand. If at any time when it
is eligible to use a Form S-3 registration statement, the Company
receives a request from Holders of at least fifty percent (50%) of
the Registrable Securities then outstanding that the Company file a
Form S-3 registration statement with respect to outstanding
Registrable Securities of such Holders having an anticipated
aggregate offering price, net of Selling Expenses, of at least
$5,000,000, then the Company shall (i) within ten (10) days after
the date such request is given, give a Demand Notice to all Holders
other than the Initiating Holders; and (ii) as soon as practicable,
and in any event within sixty (60) days after the date such request
is given by the Initiating Holders, file such Form S-3 registration
statement under the Securities Act covering all Registrable
Securities requested to be included in such registration by any
other Holders, as specified by notice given by each such Holder to
the Company within twenty (20) days of the date the Demand Notice
is given, and in each case, subject to the limitations of
Subsections
2.1(c)
and 2.3.

 

(c) Notwithstanding the foregoing obligations, if the
Company furnishes to Holders requesting a registration pursuant to
this Subsection
2.1
a certificate signed by the
Company’s chief executive officer stating that in the good
faith judgment of the Board it would be materially detrimental to
the Company and its stockholders for such registration statement to
either become effective or remain effective for as long as such
registration statement otherwise would be required to remain
effective, because such action would (i) materially interfere with
a significant acquisition, corporate reorganization, or other
similar transaction involving the Company; (ii) require premature
disclosure of material information that the Company has a bona fide
business purpose for preserving as confidential; or (iii) render
the Company unable to comply with requirements under the Securities
Act or Exchange Act, then the
Company shall have the right to defer taking action with respect to
such filing for a period of not more than one hundred eighty (180)
days after the request of the Initiating Holders is given;
provided,
however,
that the Company may not invoke this right more than once in any
twelve (12) month period;
and provided further
that the Company shall not register
any securities for its own account or that of any other stockholder
during such ninety (90) day period other than an Excluded
Registration.

 

 

 

-5-

 

 

(d) The
Company shall not be obligated to effect, or to take any action to
effect, any registration pursuant to Subsection
2.1(a):
(i) during the period that is ninety (90) days before the
Company’s good faith estimate of the date of filing of, and
ending on a date that is one hundred eighty (180) days after the
effective date of, a Company-initiated registration,
provided
that the Company is actively employing
in good faith commercially reasonable efforts to cause such
registration statement to become effective; (ii) after the Company
has effected two registrations pursuant to Subsection
2.1(a);
or (iii) if the Initiating Holders propose to dispose of shares of
Registrable Securities that may be immediately registered on Form
S-3 pursuant to a request made pursuant to Subsection
2.1(b).
The Company shall not be obligated to effect, or to take any action
to effect, any registration pursuant to Subsection
2.1(b):
(i) during the period that is forty-five (45) days before the
Company’s good faith estimate of the date of filing of, and
ending on a date that is ninety (90) days after the effective date
of, a Company-initiated registration, provided
that the Company is actively employing
in good faith commercially reasonable efforts to cause such
registration statement to become effective; or (ii) if the Company
has effected two registrations pursuant to Subsection
2.1(b)
within the twelve (12) month period
immediately preceding the date of such request. A registration
shall not be counted as “effected” for purposes of
this Subsection
2.1(d)
until such time as the applicable
registration statement has been declared effective by the SEC,
unless the Initiating Holders withdraw their request for such
registration, elect not to pay the registration expenses therefor,
and forfeit their right to one (1) demand registration statement
pursuant to Subsection
2.6,
in which case such withdrawn registration statement shall be
counted as “effected” for purposes of this
Subsection
2.1(d).

 

2.2 Company
Registration. If the Company
proposes to register (including, for this purpose, a registration
effected by the Company for stockholders other than the Holders)
any of its securities under the Securities Act in connection with
the public offering of such securities solely for cash (other than
in an Excluded Registration), the Company shall, at such time,
promptly (and in any event no less than twenty (20) calendar days
prior to the filing of the registration statement with respect to
such Company securities) give each Holder notice of such
registration. Upon the request of each Holder given within ten (10)
days after such notice is given by the Company, the Company shall,
expressly subject to the provisions of Section 2.3, cause to be registered all
of the Registrable Securities that each such Holder has requested
to be included in such registration. The Company shall have the
right to terminate or withdraw any registration initiated by it
under this Section 2.2 before the effective
date of such registration, whether or not any Holder has elected to
include Registrable Securities in such registration. The expenses
(other than Selling Expenses) of such withdrawn registration shall
be borne by the Company in accordance with Section 2.6.

 

 

 

-6-

 

 

2.3 Underwriting
Requirements

 

(a) If,
pursuant to Section 2.1,
the Initiating Holders intend to distribute the Registrable Securities
covered by their request by means of an underwriting, they shall so
advise the Company as a part of their request made pursuant
to Section 2.1,
and the Company shall include such information in the Demand
Notice. The underwriter(s) will be selected by the Company and
shall be reasonably acceptable to a majority in interest of the
Initiating Holders. In such event, the right of any Holder to
include such Holder’s Registrable Securities in such
registration shall be conditioned upon such Holder’s
participation in such underwriting and the inclusion of such
Holder’s Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to distribute their
securities through such underwriting shall (together with the
Company as provided in Section 2.4(e))
enter into an underwriting agreement in customary form with the
underwriter(s) selected for such underwriting. Notwithstanding any
other provision of this Section 2.3,
if the managing underwriter(s) advise(s) the Initiating Holders in
writing that marketing or other factors, in its reasonable
discretion, require a limitation on the number of shares to be
underwritten, or the elimination thereof, then the Initiating
Holders shall so advise all Holders of Registrable Securities that
otherwise would be underwritten pursuant hereto, and the number of
Registrable Securities that may be included in the underwriting
shall be allocated among such Holders of Registrable Securities,
including the Initiating Holders, in proportion (as nearly as
practicable) to the number of Registrable Securities owned by each
Holder or in such other proportion as shall unanimously be agreed
to by all such selling Holders; provided,
however, that the number of
Registrable Securities held by the Holders, to be included in such
underwriting, shall only be reduced in proportion to the percentage
reduction of other registrable securities of the Company included
in such underwriting and not part of the Registrable Securities
defined herein. To facilitate the allocation of shares in
accordance with the above provisions, the Company or the
underwriters may round the number of shares allocated to any Holder
to the nearest one hundred (100) shares.

 

(b) In
connection with any offering involving an underwriting of shares of
the Company’s capital stock pursuant to Section 2.2,
the Company shall not be required to include any of the
Holders’ Registrable Securities in such underwriting unless
the Holders accept the terms of the underwriting as agreed upon
between the Company and its underwriters, and then only in such
quantity, if any, as the underwriters in their sole discretion
determine will not jeopardize the success of the offering by the
Company. If the total number of securities, including Registrable
Securities, requested by stockholders to be included in such
offering exceeds the number of securities to be sold (other than by
the Company), that the underwriters in their reasonable discretion
determine is compatible with the success of the offering, then the
Company shall be required to include in the offering only that
number of such securities, including Registrable Securities, which
the underwriters and the Company in their sole discretion determine
will not jeopardize the success of the offering. If the
underwriters determine that less than all of the Registrable
Securities requested to be registered can be included in such
offering, then the Registrable Securities that are included in such
offering shall be allocated among the selling Holders in proportion
(as nearly as practicable) to the number of Registrable Securities
owned by each selling Holder or in such other proportions as shall
mutually be agreed to by all such selling Holders. To facilitate
the allocation of shares in accordance with the above provisions,
the Company or the underwriters may round the number of shares
allocated to any Holder to the nearest one hundred (100) shares.
Notwithstanding the foregoing, in no event shall (i) the number of
Registrable Securities included in the offering be reduced unless
all other securities (expressly excluding securities to be sold by
the Company) are proportionally reduced, or (ii) the number of
Registrable Securities included in the offering be reduced below
fifty percent (50%) of the total number of securities included in
such offering, unless such offering is the IPO, in which case the
selling Holders may be excluded in full if the underwriters make
the determination described above and no other stockholder’s
securities are included in such offering. For purposes of the provision in this
Section 2.3(b)
concerning apportionment, for any
selling Holder that is a partnership, limited liability company, or
corporation, the partners, members, retired partners, retired
members, stockholders, and Affiliates of such Holder, or the
estates and Immediate Family Members of any such partners, retired
partners, members, and retired members and any trusts for the
benefit of any of the foregoing Persons, shall be deemed to be a
single “selling Holder,” and any pro rata reduction
with respect to such “selling Holder” shall be based
upon the aggregate number of Registrable Securities owned by all
Persons included in such “selling Holder,” as defined
in this sentence.

 

 

 

-7-

 

 

(c) For
purposes of Section
2.1, a registration shall not
be counted as “effected” if, as a result of an exercise
of the underwriter’s cutback provisions in
Section
2.3(a), fewer than twenty-five
percent (25%) of the total number of Registrable Securities that
Holders have requested to be included in such registration
statement are actually included.

 

2.4 Obligations
of the Company. Whenever required
under this Section 2 to effect the registration of
any Registrable Securities, the Company shall, as expeditiously as
reasonably possible:

 

(a) prepare
and file with the SEC a registration statement with respect to such
Registrable Securities and use its commercially reasonable
efforts to cause such
registration statement to become effective and, upon the request of
the Holders of a majority of the Registrable Securities registered
thereunder, keep such registration statement effective for a period
of up to one hundred twenty (120) days or, if earlier, until the
distribution contemplated in the registration statement has been
completed; provided,
however, that such one hundred
twenty (120) day period shall be extended for a period of time
equal to the period the Holder refrains, at the request of an
underwriter of Common Stock (or other securities) of the Company,
from selling any securities included in such
registration;

 

(b) prepare
and file with the SEC such amendments and supplements to such
registration statement, and the prospectus used in connection with
such registration statement, as may be necessary to comply with the
Securities Act in order to enable the disposition of all securities
covered by such registration statement;

 

(c) furnish
to the selling Holders such numbers of copies of a prospectus,
including a preliminary prospectus, as required by the Securities
Act, and such other documents as the Holders may reasonably request
in order to facilitate their disposition of their Registrable
Securities;

 

(d) use
its commercially reasonable efforts to register and qualify the
securities covered by such registration statement under such other
securities or blue-sky laws of such jurisdictions as shall be
reasonably requested by the selling Holders; provided that the Company shall not be required to qualify
to do business or to file a general consent to service of process
in any such states or jurisdictions, unless the Company is already subject to service
in such jurisdiction and except as may be required by the
Securities Act;

 

(e) in
the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual
and customary form, with the underwriter(s) of such
offering;

 

(f) use
its commercially reasonable efforts to cause all such Registrable
Securities covered by such registration statement to be listed on a
national securities exchange or trading system and each securities
exchange and trading system (if any) on which similar securities
issued by the Company are then listed;

 

(g) provide
a transfer agent and registrar for all Registrable Securities
registered pursuant to this Agreement and provide a CUSIP number
for all such Registrable Securities, in each case not later than
the effective date of such registration;

 

 

 

-8-

 

 

(h) promptly
make available for inspection by the selling Holders, any
underwriter(s) participating in any disposition pursuant to such
registration statement, and any attorney or accountant or other
agent retained by any such underwriter or selected by the selling
Holders, all financial and other records, pertinent corporate
documents, and properties of the Company, and cause the
Company’s officers, directors, employees, and independent
accountants to supply all information reasonably requested by any
such seller, underwriter, attorney, accountant, or agent, in each
case, as necessary or advisable to verify the accuracy of the
information in such registration statement and to conduct
appropriate due diligence in connection therewith;

 

(i) notify
each selling Holder, promptly after the Company receives notice
thereof, of the time when such registration statement has been
declared effective or a supplement to any prospectus forming a part
of such registration statement has been filed; and

 

(j) after
such registration statement becomes effective, notify each selling
Holder of any request by the SEC that the Company amend or
supplement such registration statement or prospectus.

 

In
addition, the Company shall ensure that, at all times after any
registration statement covering a public offering of securities of
the Company under the Securities Act shall have become effective,
its insider trading policy shall provide that the Company’s
directors may implement a trading program under Rule 10b5-1 of the
Exchange Act.

 

2.5 Furnish
Information. It shall be a
condition precedent to the obligations of the Company to take any
action pursuant to this Section 2 with respect to the
Registrable Securities of any selling Holder that such Holder shall
furnish to the Company such information regarding itself, the
Registrable Securities held by it, and the intended method of
disposition of such securities as is reasonably required to effect
the registration of such Holder’s Registrable
Securities.

 

2.6 Expenses of
Registration. All expenses
(other than Selling Expenses) incurred in connection with
registrations, filings, or qualifications pursuant to
Section 2, including all registration, filing, and
qualification fees; printers’ and accounting fees; fees and
disbursements of counsel for the Company; and the reasonable fees
and disbursements, not to exceed $25,000, of one counsel for the
selling Holders (“Selling Holder
Counsel”), shall be borne and paid by the Company;
provided, however, that the
Company shall not be required to pay for any expenses of any
registration proceeding begun pursuant to Section 2.1 if the registration request
is subsequently withdrawn at the request of the Holders of a
majority of the Registrable Securities to be registered (in which
case all selling Holders shall bear such expenses pro rata based
upon the number of Registrable Securities that were to be included
in the withdrawn registration), unless the Holders of a majority of
the Registrable Securities agree to forfeit their right to one
registration pursuant to Sections 2.1(a) or 2.1(b), as the case may be, in
which case the Holders shall not be required to pay any of such
expenses and shall not forfeit their right to one registration
pursuant to Sections 2.1(a) or 2.1(b). All Selling Expenses
relating to Registrable Securities registered pursuant to this
Section 2 shall be borne and paid by
the Holders pro rata on the basis of the number of Registrable
Securities registered on their behalf.

 

 

 

-9-

 

 

2.7 Delay
of Registration. No Holder shall
have any right to obtain or seek an injunction restraining or
otherwise delaying any registration pursuant to this Agreement as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 2.

 

2.8 Indemnification.
If any Registrable Securities are included in a registration
statement under this Section 2:

 

(a) To
the extent permitted by law, the Company will indemnify and hold
harmless each selling Holder, and the partners, members, officers,
directors, and stockholders of each such Holder; legal counsel and
accountants for each such Holder; any underwriter (as defined in
the Securities Act) for each such Holder; and each Person, if any,
who controls such Holder or underwriter within the meaning of the
Securities Act or the Exchange Act, against any Damages, and the
Company will pay to each such Holder, underwriter, controlling
Person, or other aforementioned Person any legal or other expenses
reasonably incurred thereby in connection with investigating or
defending any claim or proceeding from which Damages may result, as
such expenses are incurred; provided,
however, that the indemnity
agreement contained in this Section 2.8(a)
shall not apply to amounts paid in
settlement of any such claim or proceeding if such settlement is
effected without the consent of the Company, which consent shall
not be unreasonably withheld, nor shall the Company be liable for
any Damages to the extent that they arise out of or are based upon
actions or omissions made in reliance upon and in conformity with
written information furnished by or on behalf of any such Holder,
underwriter, controlling Person, or other aforementioned Person
expressly for use in connection with such
registration.

 

(b) To
the extent permitted by law, each selling Holder, severally and not
jointly, will indemnify and hold harmless the Company, and each of
its directors, each of its officers who has signed the registration
statement, each Person (if any), who controls the Company within
the meaning of the Securities Act, legal counsel and accountants
for the Company, any underwriter (as defined in the Securities
Act), any other Holder selling securities in such registration
statement, and any controlling Person of any such underwriter or
other Holder, against any Damages, in each case only to the extent
that such Damages arise out of or are based upon actions or
omissions made in reliance upon and in conformity with written
information furnished by or on behalf of such selling Holder
expressly for use in connection with such registration; and each
such selling Holder will pay to the Company and each other
aforementioned Person any legal or other expenses reasonably
incurred thereby in connection with investigating or defending any
claim or proceeding from which Damages may result, as such expenses
are incurred; provided,
however, that the indemnity
agreement contained in this Section 2.8(b)
shall not apply to amounts paid in
settlement of any such claim or proceeding if such settlement is
effected without the consent of the Holder, which consent shall not
be unreasonably withheld; and provided further
that in no event shall the aggregate
amounts payable by any Holder by way of indemnity or contribution
under Sections 2.8(b)
and 2.8(d)
exceed the proceeds from the offering
received by such Holder (net of any Selling Expenses paid by such
Holder), except in the case of fraud or willful misconduct by such
Holder.

 

 

 

-10-

 

 

(c) Promptly
after receipt by an indemnified party under this
Section 2.8 of
notice of the commencement of any action (including any
governmental action) for which a party may be entitled to
indemnification hereunder, such indemnified party will, if a claim
in respect thereof is to be made against any indemnifying party
under this Section 2.8,
give the indemnifying party notice of the commencement thereof. The
indemnifying party shall have the right to participate in such
action and, to the extent the indemnifying party so desires,
participate jointly with any other indemnifying party to which
notice has been given, and to assume the defense thereof with
counsel mutually satisfactory to the parties; provided,
however, that an indemnified
party (together with all other indemnified parties that may be
represented without conflict by one counsel) shall have the right
to retain one separate counsel, with the fees and expenses to be
paid by the indemnifying party, if representation of such
indemnified party by the counsel retained by the indemnifying party
would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party
represented by such counsel in such action. The failure to give
notice to the indemnifying party within a reasonable time of the
commencement of any such action shall relieve such indemnifying
party of any liability to the indemnified party under this
Section 2.8,
to the extent that such failure materially prejudices the
indemnifying party’s ability to defend such action. The
failure to give notice to the indemnifying party will not relieve
it of any liability that it may have to any indemnified party
otherwise than under this Section 2.8.

 

(d) To
provide for just and equitable contribution to joint liability
under the Securities Act in any case in which either: (i) any party
otherwise entitled to indemnification hereunder makes a claim for
indemnification pursuant to this Section 2.8
but it is judicially determined (by
the entry of a final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial of
the last right of appeal) that such indemnification may not be
enforced in such case, notwithstanding the fact that this
Section 2.8
provides for indemnification in such
case, or (ii) contribution under the Securities Act may be required
on the part of any party hereto for which indemnification is
provided under this Section 2.8,
then, and in each such case, such parties will contribute to the
aggregate losses, claims, damages, liabilities, or expenses to
which they may be subject (after contribution from others) in such
proportion as is appropriate to reflect the relative fault of each
of the indemnifying party and the indemnified party in connection
with the statements, omissions, or other actions that resulted in
such loss, claim, damage, liability, or expense, as well as to
reflect any other relevant equitable considerations. The relative
fault of the indemnifying party and of the indemnified party shall
be determined by reference to, among other things, whether the
untrue or allegedly untrue statement of a material fact, or the
omission or alleged omission of a material fact, relates to
information supplied by the indemnifying party or by the
indemnified party and the parties’ relative intent,
knowledge, access to information, and opportunity to correct or
prevent such statement or omission; provided,
however, that, in any such case
(x) no Holder will be required to contribute any amount in excess
of the public offering price of all such Registrable Securities
offered and sold by such Holder pursuant to such registration
statement, and (y) no Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act)
will be entitled to contribution from any Person who was not guilty
of such fraudulent misrepresentation; and provided further
that in no event shall a
Holder’s liability pursuant to this Section 2.8(d),
when combined with the amounts paid or payable by such Holder
pursuant to Section 2.8(b),
exceed the proceeds from the offering received by such Holder (net
of any Selling Expenses paid by
such Holder), except in the case of willful misconduct or fraud by
such Holder.

 

 

 

-11-

 

 

(e) Notwithstanding
the foregoing, to the extent that the provisions on indemnification
and contribution contained in the underwriting agreement entered
into in connection with the underwritten public offering are in
conflict with the foregoing provisions, the provisions in the
underwriting agreement shall control.

 

(f) Unless
otherwise superseded by an underwriting agreement entered into in
connection with the underwritten public offering, the obligations
of the Company and Holders under this Section 2.8
shall survive the completion of any
offering of Registrable Securities in a registration under
this Section 2,
and otherwise shall survive the termination of this
Agreement.

 

2.9 Reports
Under Exchange Act. With a view to
making available to the Holders the benefits of SEC Rule 144 and
any other rule or regulation of the SEC that may at any time permit
a Holder to sell securities of the Company to the public without
registration or pursuant to a registration on Form S-3, the Company
shall:

 

(a) make
and keep available adequate current public information, as those
terms are understood and defined in SEC Rule 144, at all times
after the effective date of the registration statement filed by the
Company for the IPO;

 

(b) use
commercially reasonable efforts to file with the SEC in a timely
manner all reports and other documents required of the Company
under the Securities Act and the Exchange Act (at any time after
the Company has become subject to such reporting requirements);
and

 

(c) furnish
to any Holder, so long as the Holder owns any Registrable
Securities, forthwith upon request to the extent accurate, a
written statement by the Company that it has complied with the
reporting requirements of SEC Rule 144 (at any time after ninety
(90) days after the effective date of the registration statement
filed by the Company for the IPO), the Securities Act, and the
Exchange Act (at any time after the Company has become subject to
such reporting requirements), or that it qualifies as a registrant
whose securities may be resold pursuant to Form S-3 (at any time
after the Company so qualifies); and (ii) such other information as
may be reasonably requested in availing any Holder of any rule or
regulation of the SEC that permits the selling of any such
securities without registration (at any time after the Company has
become subject to the reporting requirements under the Exchange
Act) or pursuant to Form S-3 (at any time after the Company so
qualifies to use such form).

 

 

 

-12-

 

 

2.10 “Market
Stand-off” Agreement. Each Holder hereby agrees
that it will not, without the prior written consent of the managing
underwriter, during the period commencing on the date of the final
prospectus relating to the registration by the Company of shares of
its Common Stock or any other equity securities under the
Securities Act on a registration statement on Form S-1
or Form S-3, and ending on the date specified by the Company and
the managing underwriter (such period not to exceed one hundred
eighty (180) days in the case of the IPO, or such other period as
may be requested by the Company or an underwriter to accommodate
regulatory restrictions on (1) the publication or other
distribution of research reports, and (2) analyst recommendations
and opinions, including, but not limited to, the restrictions
contained in FINRA Rule 2711(f)(4) or NYSE Rule 472(f)(4), or any
successor provisions or amendments thereto), (i) lend; offer;
pledge; sell; contract to sell; sell any option or contract to
purchase; purchase any option or contract to sell; grant any
option, right, or warrant to purchase; or otherwise transfer or
dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable
(directly or indirectly) for Common Stock held
immediately before the
effective date of the registration statement for such
offering or (ii) enter
into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of
such securities, whether any such transaction described in clause
(i) or (ii) above is to be settled by delivery of Common Stock or
other securities, in cash, or otherwise. The foregoing provisions
of this Section 2.100 shall apply only to the IPO,
shall not apply to the sale of any shares to an underwriter
pursuant to an underwriting agreement, or the transfer of any
shares to any trust for the direct or indirect benefit of the
Holder or the immediate family of the Holder, provided that the
trustee of the trust agrees to be bound in writing by the
restrictions set forth herein, and provided further that any such
transfer shall not involve a disposition for value. The
underwriters in connection with such registration are intended
third-party beneficiaries of this Section 2.10 and shall have the right,
power and authority to enforce the provisions hereof as though they
were a party hereto. Each Holder further agrees to execute such
agreements as may be reasonably requested by the underwriters in
connection with such registration that are consistent with this
Section 2.10 or that are necessary to
give further effect thereto, and the Company shall cause all future
stockholders of the Company to execute a document containing a
market stand-off agreement comparable to this Section 2.10. Any discretionary
waiver or termination of the restrictions of any or all of such
agreements by the Company or the underwriters shall apply pro rata
to all Holders subject to such agreements, based on the number of
shares subject to such agreements.

 

2.11 Restrictions on
Transfer

 

(a) The
Registrable Securities shall not be sold, pledged, or otherwise
transferred other than in conformity with the Securities Act, and
the Company shall not recognize and shall issue stop-transfer
instructions to its transfer agent (when a transfer agent has been
engaged by the Company) with respect to any such sale, pledge, or
transfer, except upon the conditions specified in this Agreement,
which conditions are intended to ensure compliance with the
provisions of the Securities Act. A transferring Holder will cause
any proposed purchaser, pledgee, or transferee of the Registrable
Securities held by such Holder to agree to take and hold such
securities subject to the provisions and upon the conditions
specified in this Agreement.

 

 

 

-13-

 

 

(b) Each
certificate, instrument, or book entry representing (i) the
Registrable Securities, and (ii) any other securities issued in
respect of the securities referenced in clause (i), upon any
Recapitalization, merger, consolidation, or similar event, shall
(unless otherwise permitted by the provisions of
Section 2.11(c))
be notated with a legend substantially in the following
form:

 

THE
SECURITIES REPRESENTED HEREBY HAVE BEEN ACQUIRED FOR INVESTMENT AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH
SHARES MAY NOT BE SOLD, PLEDGED, OR TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR A VALID EXEMPTION FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT.

 

THE
SECURITIES REPRESENTED HEREBY MAY BE TRANSFERRED ONLY IN ACCORDANCE
WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE
STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE
COMPANY.

 

The
Holders consent to the Company making a notation in its records and
giving instructions to any transfer agent of the Restricted
Securities in order to implement the restrictions on transfer set
forth in this Section 2.11.

 

(c) The
holder of such Restricted Securities, by acceptance of ownership
thereof, agrees to comply in all respects with the provisions of
this Section 2.
Before any proposed sale, pledge, or transfer of any Restricted
Securities, unless there is in effect a registration statement
under the Securities Act covering the proposed transaction, the
Holder thereof shall give notice to the Company of such
Holder’s intention to effect such sale, pledge, or transfer.
Each such notice shall describe the manner and circumstances of the
proposed sale, pledge, or transfer in sufficient detail and, if
reasonably requested by the Company, shall be accompanied at such
Holder’s expense by either (i) a written opinion of legal
counsel who shall, and whose legal opinion shall, be reasonably
satisfactory to the Company, addressed to the Company, to the
effect that the proposed transaction may be effected without
registration under the Securities Act; (ii) a “no
action” letter from the SEC to the effect that the proposed
sale, pledge, or transfer of such Restricted Securities without
registration will not result in a recommendation by the staff of
the SEC that action be taken with respect thereto; or (iii) any
other evidence reasonably satisfactory to counsel to the Company to
the effect that the proposed sale, pledge, or transfer of the
Restricted Securities may be effected without registration under
the Securities Act, whereupon the Holder of such Restricted
Securities shall be entitled to sell, pledge, or transfer such
Restricted Securities in accordance with the terms of the notice
given by the Holder to the Company. The Company will not require
such a legal opinion or “no action” letter or detail
with respect to such transfer other than the number of shares and
the name of the transferee (x) in any transaction in compliance
with SEC Rule 144; or (y) in any transaction in which such Holder
distributes Restricted Securities to an Affiliate of such Holder
for no consideration; provided that each transferee agrees in writing to be
subject to the terms of this Section 2.11.
Each certificate, instrument, or book entry representing the
Restricted Securities transferred as above provided shall be
notated with, except if such transfer is made pursuant to SEC Rule
144, the appropriate restrictive legend set forth in
Section 2.11(b),
except that such certificate instrument, or book entry shall not be
notated with such restrictive legend if, in the opinion of counsel
for such Holder and the Company, such legend is not required in
order to establish compliance with any provisions of the Securities
Act.

 

 

 

-14-

 

 

2.12 Termination
of Registration Rights. The right of any
Holder to request registration or inclusion of Registrable
Securities in any registration pursuant to Sections 2.1 or 2.2 shall terminate upon
the earliest to occur of:

 

(a) such
time as Rule 144 or another similar exemption under the Securities
Act is available for the sale of all of such Holder’s shares without limitation during a three-month
period without registration; and

 

(b) the
fifth anniversary of the IPO.

 

3. Information
Rights

 

3.1 Delivery of Financial
Statements. The Company shall
deliver to each Investor:

 

(a) as
soon as practicable, but in any event within one hundred twenty
(120) days after the end of each fiscal year of the Company (i) a
balance sheet as of the end of such year, (ii) statements of income
and of cash flows for such year, and (iii) a statement of
stockholders’ equity as of the end of such
year, all prepared in
accordance with GAAP and audited and certified by independent
public accountants of nationally recognized standing selected by
the Company;

 

(b) as
soon as practicable, but in any event within sixty (60) days after
the end of each of the first three (3) quarters of each fiscal year
of the Company, unaudited statements of income and cash flows for
such fiscal quarter, and an unaudited balance sheet, all prepared
in accordance with GAAP (except that such financial statements may
(i) be subject to normal year-end audit adjustments; and (ii) not
contain all notes thereto that may be required in accordance with
GAAP);

 

(c) as
soon as practicable, but in any event before the end of each fiscal
year, a budget and business plan for the next fiscal year
(collectively, the “Budget”),
prepared on a monthly basis, including balance sheets, income
statements, and statements of cash flow for such months and,
promptly after prepared, any other budgets or revised budgets
prepared by the Company; and

 

(d) such
other information relating to the financial condition, business,
prospects, or corporate affairs of the Company as any Investor may
from time to time reasonably request; provided, however, that the Company shall not be obligated under
this Section 3.1
to provide information that the
Company reasonably determines in good faith (i) to be a trade
secret or confidential information (unless covered by an
enforceable confidentiality agreement, in a form reasonably
acceptable to the Company) or (ii) would, if disclosed, adversely
affect the attorney-client privilege between the Company and its
counsel.

 

If, for
any period, the Company has any subsidiary whose accounts are
consolidated with those of the Company, then in respect of such
period the financial statements delivered pursuant to the foregoing
sections shall be the consolidated and consolidating financial
statements of the Company and all such consolidated
subsidiaries.

 

 

 

-15-

 

 

Notwithstanding
anything else in this Section 3.1 to the contrary, the
Company may cease providing the information set forth in this
Section 3.1 during the period starting
with the date one hundred twenty (120) days before the
Company’s good-faith estimate of the date of filing
of a registration statement if it
reasonably concludes it must do so to comply with the SEC rules
applicable to such registration statement and related
offering; provided
that the Company’s covenants under this Section 3.1 shall be reinstated at such
time as the Company is no longer actively employing its
commercially reasonable efforts to cause such registration
statement to become effective.

 

3.2 Inspection.
The Company shall permit each Investor, at such Investor’s
expense, to visit and inspect the Company’s properties;
examine its books of account and records; and discuss the
Company’s affairs, finances, and accounts with its officers,
during normal business hours of the Company as may be reasonably
requested by the Investor upon at least five (5) days’
notice; provided, however,
that the Company shall not be obligated pursuant to this
Section 3.2 to provide access to
any information that it reasonably and in good faith determines (a)
to be a trade secret or confidential information (unless covered by
an enforceable confidentiality agreement, in form reasonably
acceptable to the Company) (b) would, if disclosed, adversely
affect the attorney-client privilege between the Company and its
counsel.

 

3.3 Toba
Observer Rights. As long as
Toba and/or its Affiliates beneficially own any Registrable
Securities, the Company shall invite a representative of Toba to
attend all meetings of the Board in a nonvoting observer capacity
and, in this respect, shall give such representative copies of all
notices, minutes, consents, and other materials that it provides to
its directors at the same time and in the same manner as provided
to such directors; provided, however, that such representative shall agree to hold in
confidence and trust and to act in a fiduciary manner with respect
to all information so provided; and provided further, that the Company reserves the right to withhold
any information and to exclude such representative from any meeting
or portion thereof if the Company reasonably determines in good
faith, upon advice of counsel, that access to such information or
attendance at such meeting could adversely affect the
attorney-client privilege between the Company and its counsel or
result in disclosure of trade secrets or a conflict of
interest.

 

3.4 Termination
of Information Rights
and Observer Right. The
covenants set forth in Sections 3.1, 3.2, and 3.3 shall terminate and be of
no further force or effect immediately before the consummation of a
Qualified Public Offering.

 

3.5 Confidentiality.
Each Investor agrees that such Investor will keep confidential and
will not disclose, divulge, or use for any purpose (other than to
monitor its investment in the Company) any confidential information
obtained from the Company pursuant to the terms of this Agreement
(including notice of the Company’s intention to file a
registration statement), unless such confidential information (a)
is known or becomes known to the public in general (other than as a
result of a breach of this Section 3.55 by such Investor), (b) is or
has been independently developed or conceived by the Investor
without use of the Company’s confidential information as
evidenced by written documentation, or (c) is or has been made
known or disclosed to the Investor by a third party without a
breach of any obligation of confidentiality such third party may
have to the Company; provided,
however, that an Investor may disclose confidential
information (i) to its attorneys, accountants, consultants, and
other professionals to the extent necessary to obtain their
services in connection with monitoring its investment in the
Company; (ii) to any prospective purchaser of any Registrable
Securities from such Investor, if such prospective purchaser agrees
to be bound by the provisions of this Section 3.55; (iii) to any Affiliate, partner,
member, stockholder, or wholly owned subsidiary of such Investor in
the ordinary course of business, provided that such Investor informs
such Person that such information is confidential and directs such
Person to maintain the confidentiality of such information; or (iv)
as may otherwise be required by law, provided that the Investor promptly
notifies the Company of such disclosure and takes reasonable steps
to minimize the extent of any such required
disclosure.

 

 

 

-16-

 

 

4. Rights
Related to Future Stock Issuances

 

4.1 Pro Rata Purchase
Rights. Subject to the
terms and conditions of this Section 4.1 and applicable securities
laws, if, after the date of this Agreement, the Company proposes to
offer or sell any New Securities, the Company shall first offer
such New Securities to each Investor. Each Investor shall be
entitled to apportion the pro rata purchase right hereby granted to
it among itself and its Affiliates in such proportions as it deems
appropriate.

 

(a) The
Company shall give notice (the “Offer
Notice”) to each
Investor, stating (i) its bona fide intention to offer such New
Securities, (ii) the number of such New Securities to be offered,
and (iii) the price and terms, if any, upon which it proposes to
offer such New Securities.

 

(b) By
notification to the Company within twenty (20) days after the Offer
Notice is given, each Investor may, in its sole discretion, elect
to purchase or otherwise acquire, at the price and on the terms
specified in the Offer Notice, up to that portion of such New Securities which
equals the proportion that the number of shares of Common Stock
then held by such Investor (including all shares of Common Stock
then issuable (directly or indirectly) upon conversion and/or
exercise, as applicable, of any and all Derivative Securities then
held by such Investor) bears to the total number of shares of
Common Stock of the Company then outstanding (assuming full
conversion and/or exercise, as applicable, of all Derivative
Securities). The closing of any sale pursuant to this Section
4.1(b) shall occur at the same closing covering the initial sale of
New Securities pursuant to Section 4.1(c).

 

(c) If
all New Securities referred to in the Offer Notice are not elected
to be purchased or acquired as provided in Section 4.1(b),
the Company may, during the ninety (90) day period following the
expiration of the period provided in Section 4.1(b),
offer and sell the remaining unsubscribed portion of such New
Securities to any Person(s) at a price not less than, and upon
terms no more favorable to the offeree than, those specified in the
Offer Notice. If the Company does not enter into an agreement for
the sale of the New Securities within such period, or if such
agreement is not consummated within thirty (30) days of the
execution thereof, the right provided hereunder shall be deemed to
be revived and such New Securities shall not be offered unless
first reoffered to the Investors in accordance with this
Section 4.1.

 

(d) The
pro rata purchase rights in this Section 4.1
shall not be applicable to (i)
Exempted Securities or (ii) any shares of Common Stock issued
pursuant to Section
4.2.

 

 

 

-17-

 

 

4.2 Down
Round Protection. If, after the
date of this Agreement, the Company issues any New Securities
(other than Exempted Securities and any shares of Common Stock
issued pursuant to this Section
4.2) at a price implying a
pre-money valuation of the Company of less than $40,000,000 (a
“Down Round
Valuation”), then,
subject to all applicable securities laws, the Company shall
promptly (and in any event within 7 days thereafter) issue to each
Investor, without the payment of any additional consideration by
such Investor, such number of additional shares of Common Stock as
is equal to the positive difference between (x) the aggregate
number of shares of Common Stock issued to such Investor pursuant
to the Purchase Agreement (as adjusted for any Recapitalization
with respect to the Common Stock effected after the date of the
Purchase Agreement) and (y) if the Down Round Valuation is greater
than or equal to $20,000,000, then the aggregate number of shares
of Common Stock that would have been issued to such Investor
pursuant to the Purchase Agreement (subject to appropriate
adjustment for any Recapitalization with respect to the Common
Stock effected after the date of the Purchase Agreement) if the
price per share of the Common Stock issued and sold thereunder had
been calculated at that time on the basis of a Company pre-money
valuation equal to such Down Round Valuation (and utilizing the
same treasury stock method as was used by the Company in originally
calculating the Original Issue Price), or (z) if the Down Round
Valuation is less than $20,000,000, then the aggregate number of
shares of Common Stock that would have been issued to such Investor
pursuant to the Purchase Agreement (subject to appropriate
adjustment for any Recapitalization with respect to the Common
Stock effected after the date of the Purchase Agreement) if the
price per share of the Common Stock issued and sold thereunder had
been calculated at that time on the basis of a Company pre-money
valuation equal to $20,000,000 (and utilizing the same treasury
stock method as was used by the Company in originally calculating
the Original Issue Price).

 

4.3 Termination.
The covenants set forth in Sections 4.1 and 4.2, shall terminate and be of
no further force or effect immediately before the consummation of a
Qualified Public Offering.

 

5. Additional
Covenants

 

5.1 Employee
Agreements. The Company will
cause each person now or hereafter employed by it or by any
subsidiary (or engaged by the Company or any subsidiary as a
consultant/independent contractor) with access to confidential
information and/or trade secrets to enter into a nondisclosure and
proprietary rights assignment agreement. In addition, the Company
shall not amend, modify, terminate, waive, or otherwise alter, in
whole or in part, any of the above-referenced agreements or any
restricted stock agreement between the Company and any employee,
without the majority consent of the Board.

 

5.2 Employee
Stock. Unless otherwise
approved by a majority of the Board, all future employees and
consultants of the Company who purchase, receive options to
purchase, or receive awards of shares of the Company’s
capital stock after the date hereof shall be required to execute
restricted stock or option agreements, as applicable, providing for
vesting of shares over a four (4) year period, with vesting in
equal monthly installments over the forty-eight (48)
months.

 

 

 

-18-

 

 

5.3 Qualified
Small Business Stock. The
Company shall use commercially reasonable efforts to cause the
shares of Common Stock issued pursuant to the Purchase Agreement to
constitute “qualified small business stock” as defined
in Section 1202(c) of the Internal Revenue Code (the
“Code”);
provided,
however, that such requirement
shall not be applicable if the Board determines, in its good-faith
business judgment, that such qualification is inconsistent with the
best interests of the Company. The Company shall submit to its
stockholders (including the Investors) and to the Internal Revenue
Service any reports that may be required under Section
1202(d)(1)(C) of the Code and the regulations promulgated
thereunder. In addition, within twenty (20) business days after any
Investor’s written request therefor, the Company shall, at
its option, either (i) deliver to such Investor a written statement
indicating whether (and what portion of) such Investor’s
interest in the Company constitutes “qualified small business
stock” as defined in Section 1202(c) of the Code or (ii)
deliver to such Investor such factual information in the
Company’s possession as is reasonably necessary to enable
such Investor to determine whether (and what portion of) such
Investor’s interest in the Company constitutes
“qualified small business stock” as defined in Section
1202(c) of the Code.

 

5.4 Board
Matters. The Company shall
reimburse its directors for all reasonable out-of-pocket travel
expenses incurred (consistent with the Company’s travel
policy) in connection with attending meetings of the Board or any
committees thereof and in connection with attending any other
events (e.g. meetings and
trade shows) required by or at the request of the
Company.

 

5.5 Successor
Indemnification. If the Company or
any of its successors or assignees consolidates with or merges into
any other Person and is not the continuing or surviving corporation
or entity of such consolidation or merger, then to the extent
necessary, proper provision shall be made so that the successors
and assignees of the Company assume the obligations of the Company
with respect to indemnification of members of the Board as in
effect immediately before such transaction, whether such
obligations are contained in the Company’s Bylaws, the
Restated Certificate, or elsewhere, as the case may
be.

 

5.6 Termination
of Covenants. The covenants set
forth in this Section 5, except for Section 5.5, shall terminate
and be of no further force or effect immediately before the
consummation of a Qualified Public Offering.

 

6. Miscellaneous

 

6.1 Successors and
Assigns. The rights under
this Agreement may be assigned (but only with all
related obligations) by a Holder to a transferee of Registrable
Securities that (i) is an Affiliate of a Holder, (ii) is a
Holder’s Immediate Family Member or trust for the benefit of
an individual Holder or one or more of such Holder’s
Immediate Family Members, or (iii) after such transfer, holds at
least 100,000 shares of Registrable Securities (subject to
appropriate adjustment for Recapitalizations); provided, however, that (x) the Company
is, within a reasonable time after such transfer, furnished with
written notice of the name and address of such transferee and the
Registrable Securities with respect to which such rights are being
transferred; and (y) such transferee agrees in a written instrument
delivered to the Company to be bound by and subject to the terms
and conditions of this Agreement, including the provisions of
Section 2.10. For the purposes of
determining the number of shares of Registrable Securities held by
a transferee, the holdings of a transferee (1) that is an Affiliate
or stockholder of a Holder; (2) who is a Holder’s Immediate
Family Member; or (3) that is a trust for the benefit of an
individual Holder or such Holder’s Immediate Family Member
shall be aggregated together and with those of the transferring
Holder; provided further that all transferees who would not qualify
individually for assignment of rights shall have a single
attorney-in-fact for the purpose of exercising any rights,
receiving notices, or taking any action under this Agreement. The
terms and conditions of this Agreement inure to the benefit of and
are binding upon the respective successors and permitted assignees
of the parties. Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or
their respective successors and permitted assignees any rights,
remedies, obligations or liabilities under or by reason of this
Agreement, except as expressly provided herein.

 

 

 

-19-

 

 

6.2 Governing
Law. This Agreement
shall be governed by and construed under the internal laws of the
State of Delaware, irrespective of conflict of law
principles.

 

6.3 Counterparts.
This Agreement may be executed in two (2) or more counterparts,
each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Counterparts
may be delivered via facsimile, electronic mail (including pdf or
any electronic signature complying with the U.S. federal ESIGN Act
of 2000, e.g.,
www.docusign.com) or other transmission method and any counterpart
so delivered shall be deemed to have been duly and validly
delivered and be valid and effective for all purposes. 

 

6.4 Titles
and Subtitles. The titles and
subtitles used in this Agreement are for convenience only and are
not to be considered in construing or interpreting this
Agreement.

 

6.5 Notices.
All notices and other communications given or made pursuant to this
Agreement shall be in writing and shall be deemed effectively given
upon the earlier of actual receipt or (i) personal delivery to the
party to be notified; (ii) when sent, if sent by electronic mail or
facsimile during the recipient’s normal business hours, and
if not sent during normal business hours, then on the
recipient’s next business day; (iii) five (5) days after
having been sent by registered or certified mail, return receipt
requested, postage prepaid; or (iv) one (1) business day after the
business day of deposit with a nationally recognized overnight
courier, freight prepaid, specifying next-day delivery, with
written verification of receipt. All communications shall be sent
to the respective parties at their addresses as set forth on
Schedule 1
hereto, or to the principal office of the Company and to the
attention of the Chief Executive Officer, in the case of the
Company, or to such email address, facsimile number, or address as
subsequently modified by written notice given in accordance with
this Section 6.5. If notice is given to the
Company, a copy shall also be sent to Gregory L. Hrncir, Esq.,
General Counsel, Super League Gaming, Inc., 2906 Colorado Ave.,
Santa Monica, CA 90404, gregg@superleague.com,
and if notice is given to Toba, a copy (which shall not constitute
notice) shall also be given to Christopher E. La Chance, VLP Law
Group LLP, 3126 Scott Street, Suite 1, San Francisco, CA 94123,
clachance@vlplawgroup.com.

 

6.6 Amendments and
Waivers. Any term of this
Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or in a particular
instance, and either retroactively or prospectively) only with the
written consent of the Company and the holders of at least a
majority of the Registrable Securities then outstanding (which such
majority must include Toba); provided that any amendment or waiver
of Section 3.3 or
3.4 (or, solely to
the extent such provision pertains to Section 3.3 or 3.4, any other provision of
this Agreement) shall require the written consent of Toba;
provided further that the
Company may in its sole discretion waive compliance with
Section 2.11(c) (and the
Company’s failure to object promptly in writing after
notification of a proposed assignment allegedly in violation of
Section 2.11(c) shall be deemed to be a
waiver); and provided
further that any provision hereof may be waived by any
waiving party on such party’s own behalf, without the consent
of any other party. Notwithstanding the foregoing, this Agreement
may not be amended or terminated and the observance of any term
hereof may not be waived with respect to any Investor without the
written consent of such Investor, unless such amendment,
termination, or waiver applies to all Investors in the same
fashion. The Company shall give prompt notice of any amendment or
termination hereof or waiver hereunder to any party hereto that did
not consent in writing to such amendment, termination, or waiver.
Any amendment, termination, or waiver effected in accordance with
this Section 6.6 shall be binding on all
parties hereto, regardless of whether any such party has consented
thereto. No waivers of or exceptions to any term, condition, or
provision of this Agreement, in any one or more instances, shall be
deemed to be or construed as a further or continuing waiver of any
such term, condition, or provision.

 

 

 

-20-

 

 

6.7 Severability.
In case any one or more of the provisions contained in this
Agreement is for any reason held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provision of this
Agreement, and such invalid, illegal, or unenforceable provision
shall be reformed and construed so that it will be valid, legal,
and enforceable to the maximum extent permitted by
law.

 

6.8 Aggregation
of Stock. All shares of
Registrable Securities held or acquired by Affiliates shall be
aggregated together for the purpose of determining the availability
of any rights under this Agreement and such Affiliated persons may
apportion such rights as among themselves in any manner they deem
appropriate.

 

6.9 Entire
Agreement. This Agreement
constitutes the full and entire understanding and agreement among
the parties with respect to the subject matter hereof, and any
other written or oral agreement relating to the subject matter
hereof existing between the parties is expressly
canceled.

 

6.10 Dispute
Resolution. The parties (a)
hereby irrevocably and unconditionally submit to the jurisdiction
of the federal and state courts located in Los Angeles County,
California for the purpose of any suit, action or other proceeding
arising out of or based upon this Agreement, (b) agree not to
commence any suit, action or other proceeding arising out of or
based upon this Agreement except in the federal and state courts
located in Los Angeles County, California, and (c) hereby waive,
and agree not to assert, by way of motion, as a defense, or
otherwise, in any such suit, action or proceeding, any claim that
it is not subject personally to the jurisdiction of the above-named
courts, that its property is exempt or immune from attachment or
execution, that the suit, action or proceeding is brought in an
inconvenient forum, that the venue of the suit, action or
proceeding is improper or that this Agreement or the subject matter
hereof may not be enforced in or by such court.

 

WAIVER
OF JURY TRIAL: EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT, THE OTHER TRANSACTION DOCUMENTS, THE SECURITIES OR THE
SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS
INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE
FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY
DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL
NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER
WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL.

 

6.11 Delays
or Omissions. No delay or
omission to exercise any right, power, or remedy accruing to any
party under this Agreement, upon any breach or default of any other
party under this Agreement, shall impair any such right, power, or
remedy of such non-breaching or non-defaulting party, nor shall it
be construed to be a waiver of or acquiescence to any such breach
or default, or to any similar breach or default thereafter
occurring, nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or
thereafter occurring. All remedies, whether under this Agreement or
by law or otherwise afforded to any party, shall be cumulative and
not alternative

 

6.12 Acknowledgment.
The Company acknowledges that Toba and certain of the Investors are
in the business of venture capital investing and therefore review
the business plans and related proprietary information of many
enterprises, including enterprises which may have products or
services which compete directly or indirectly with those of the
Company. Nothing in this Agreement shall preclude or in any way
restrict the Investors from investing or participating in any
particular enterprise whether or not such enterprise has products
or services that compete with those of the
Company.

 

[Signature Pages Follow]

 

 

 

 

-21-

 

IN
WITNESS WHEREOF, the parties have executed this Investors’
Rights Agreement as of the date first written above.

 

COMPANY:

 

SUPER
LEAGUE GAMING, INC.

 

 

By:                                                                       

  Ann
Hand, CEO & President

 

 

 

 

 

 

-22-

 

 

 

IN
WITNESS WHEREOF, the parties have executed this Investors’
Rights Agreement as of the date first written above.

 

INVESTOR:

 

 

 

 

By:                                                                      

 

 

 

Name:                                                                      

 

Title:                                                                      

 

 

 

 

 

 

 

 

 

 

 

-23-

 

 

SCHEDULE 1

 

INVESTORS

 

Name and Address of Investor

 

 ___________________________

 

 ___________________________

  

 ___________________________

  

 

 

 

 

-24-

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