Document:

Exhibit 10.1 

 

CURRENCYWORKS
INC.

(Formerly: ICOX INNOVATIONS INC.)

(the “Company”)

 

2017
EQUITY INCENTIVE PLAN

 

1.       Purpose

 

1.1       Purpose.
The purpose of this 2017 Equity Incentive Plan (this “Plan”) is to: (a) enable the Company and any Affiliate to attract
and retain the types of Employees, Consultants and Directors who will contribute to the Company’s long range success; (b) provide
incentives that align the interests of Employees, Consultants and Directors with those of the Shareholders; and (c) promote the success
of the Company’s business.

 

2.       Eligibility

 

2.1       Eligible
Award Recipients. The persons eligible to receive Awards are the Employees, Consultants and Directors of the Company and its Affiliates
and such other individuals designated by the Committee who are reasonably expected to become Employees, Consultants and Directors after
the receipt of Awards.

 

2.2       While
the Common Stock is listed on the TSXV, a Participant must be a Director, Employee or Consultant (as defined by the policies of the TSXV)
of the Company or a subsidiary of the Company at the time of grant of the Awards, except as otherwise provided by the polices of the
TSXV and, for Awards granted to Employees, Consultants or Management Company Employees (as defined by the policies of the TSXV), the
Company will ensure that the Participant is a bona fide Employee, Consultant or Management Company Employee, as the case may be.

 

2.3       While
the Common Stock is listed on the TSXV, except in relation to Consultant Companies (as defined by the policies of the TSXV), the Awards
may be granted only to an individual or to a company that is wholly owned by individual eligible for a grant of an Award.

 

3.       Definitions

 

3.1       For
the purposes of this Plan, the following terms shall have the following meanings, unless the context indicates otherwise:

 

“Affiliate”
means a corporation or other entity that, directly or through one or more intermediaries, controls, is controlled by, or is under common
control with, the Company.

 

“Applicable
Laws” means the requirements related to, or implicated by, the administration of this Plan under applicable state corporate
laws, United States federal and state securities laws, the Code, the rules or policies of any stock exchange or quotation system on which
the Common Stock is then listed or quoted, and the applicable laws of any foreign country or jurisdiction where Awards are granted.

 

    	 

     

    

 

“Award”
means any right granted to a Participant under this Plan, which may include the grant of Incentive Stock Options, Non-qualified Stock
Options, Stock Appreciation Rights, Restricted Awards or Performance Compensation Awards.

 

“Award
Agreement” means a written agreement, contract, certificate or other document evidencing the terms and conditions of an individual
Award granted under this Plan, which may, in the discretion of the Company, be transmitted electronically to any Participant. Each Award
Agreement shall be subject to the terms and conditions of this Plan.

 

“Beneficial
Owner” has the meaning ascribed thereto in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that, in calculating the
beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person”
shall be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion
or exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time.

 

“Board”
means the board of directors of the Company, as constituted at an applicable time.

 

“Cause”
means:

 

	 	(a)	with
    respect to any Employee or Consultant:
	 	 	 	 
	 	 	(i)	if
    the Employee or Consultant is a party to an employment or service agreement with the Company or any Affiliate and such agreement
    provides for a definition of “cause” or other similar term, the definition contained therein, or
	 	 	 	 
	 	 	(ii)	if
    no such agreement exists, or if such agreement does not define “cause” or other similar term: (A) the commission of,
    or plea of guilty or no contest to, a felony or a crime involving moral turpitude or the commission of any other act involving willful
    malfeasance or material fiduciary breach with respect to the Company or an Affiliate, (B) conduct that results in, or is reasonably
    likely to result in, harm to the reputation or business of the Company or any Affiliate, (C) gross negligence or willful misconduct
    with respect to the Company or an Affiliate, or (D) material violation of any applicable securities laws;

 

	 	(b)	with
    respect to any Director, a determination by a majority of the disinterested Board members that the Director has engaged in any of
    the following:
	 	 	 	 
	 	 	(i)	malfeasance
    in office with respect to the Company or an Affiliate,
	 	 	 	 
	 	 	(ii)	gross
    misconduct or neglect with respect to the Company or an Affiliate,
	 	 	 	 
	 	 	(iii)	any
    false or fraudulent misrepresentation that has induced the Company or any Shareholder to elect or appoint the Director,
	 	 	 	 
	 	 	(iv)	wilful
    conversion of funds of the Company or an Affiliate, or
	 	 	 	 
	 	 	(v)	repeated
    failure to participate in Board meetings on a regular basis, despite having received proper notice of the meetings in advance.

 

    	-2-

     

    

 

The Committee, in its absolute discretion, shall determine
the effect of all matters and questions relating to whether a Participant has been discharged for Cause. 

 

“Change
in Control” means:

 

	 	(a)	the
    direct or indirect sale, transfer, conveyance or other disposition (other than in a transaction contemplated by subsection (e)),
    in one or a series of related transactions, of all or substantially all of the properties or assets of the Company and its subsidiaries,
    taken as a whole, to any Person that is not an Affiliate;
	 	 	 
	 	(b)	the
    Incumbent Directors ceasing for any reason to constitute at least a majority of the Board;
	 	 	 
	 	(c)	the
    date which is 10 business days prior to the consummation of a complete liquidation or dissolution of the Company;
	 	 	 
	 	(d)	the
    acquisition by any Person of Beneficial Ownership of 50% or more (on a fully diluted basis) of either (i) the then outstanding shares
    of Common Stock, taking into account as outstanding for this purpose such Common Stock issuable upon the exercise of options or warrants,
    the conversion of convertible stock or debt, and the exercise of any similar right to acquire such Common Stock (the “Outstanding
    Common Stock”); or (ii) the combined voting power of the then outstanding voting securities of the Company entitled to
    vote generally in the election of directors (the “Outstanding Voting Securities”); provided, however, that for
    purposes of this Plan, the following acquisitions shall not constitute a Change in Control: (A) any acquisition by the Company or
    any Affiliate, (B) any acquisition by any employee benefit plan sponsored or maintained by the Company or any Affiliate, (C) any
    acquisition which complies with clauses (i), (ii) and (iii) of subsection (e) of this definition, or (D) in respect of an Award held
    by a particular Participant, any acquisition by the Participant or any group of Persons including the Participant (or any entity
    controlled by the Participant or any group of persons including the Participant); or
	 	 	 
	 	(e)	the
    consummation of a reorganization, merger, consolidation, statutory share exchange, business combination or similar form of corporate
    transaction involving the Company that requires the approval of the Shareholders, whether for such transaction or the issuance of
    securities in connection with such transaction (in any case, a “Business Combination”), unless immediately following
    such Business Combination: (i) more than 50% of the total voting power of (A) the entity resulting from such Business Combination
    (the “Surviving Company”), or (B) if applicable, the ultimate parent entity that directly or indirectly has beneficial
    ownership of sufficient voting securities eligible to elect a majority of the members of the board of directors (or the analogous
    governing body) of the Surviving Company (the “Parent Company”), is represented by the Outstanding Voting Securities
    that were outstanding immediately prior to such Business Combination (or, if applicable, is represented by shares into which the
    Outstanding Voting Securities were converted pursuant to such Business Combination), and such voting power among the holders thereof
    is in substantially the same proportion as the voting power of the Outstanding Voting Securities among the holders thereof immediately
    prior to the Business Combination; (ii) no Person (other than any employee benefit plan sponsored or maintained by the Surviving
    Company or the Parent Company) is or becomes the Beneficial Owner, directly or indirectly, of 50% or more of the total voting power
    of the outstanding voting securities eligible to elect members of the board of directors of the Parent Company (or the analogous
    governing body) (or, if there is no Parent Company, the Surviving Company); and (iii) at least a majority of the members of the board
    of directors (or the analogous governing body) of the Parent Company (or, if there is no Parent Company, the Surviving Company) following
    the consummation of the Business Combination were Board members at the time of the Board’s approval of the execution of the
    initial agreement providing for such Business Combination.

 

    	-3-

     

    

 

“Code”
means the Internal Revenue Code, as it may be amended from time to time, and any reference to a section of the Code shall be deemed
to include a reference to any regulations promulgated thereunder.

 

“Committee”
means the Board or a committee of the Board appointed by the Board to administer this Plan in accordance with Section 4.3 and Section
4.4.

 

“Common
Stock” means the common stock, $0.001 par value per share, of the Company or such other securities of the Company as may be
designated by the Committee from time to time in substitution thereof.

 

“Company”
means CurrencyWorks Inc., a Nevada corporation, and any successor thereto.

 

“Consultant”
means any individual who is engaged by the Company or any Affiliate to render consulting or advisory services.

 

“Continuous
Service” means that a Participant’s service with the Company or an Affiliate, whether as an Employee, Consultant or Director,
is not interrupted or terminated. A Participant’s Continuous Service shall not be deemed to have terminated merely because of a
change in the capacity in which such Participant renders service to the Company or an Affiliate as an Employee, Consultant or Director,
or a change in the entity for which such Participant renders such service, provided that there is no interruption or termination of such
Participant’s Continuous Service; and provided further that if any Award is subject to Section 409A of the Code, this sentence
shall only be given effect to the extent consistent with Section 409A of the Code. For example, a change in status from an Employee of
the Company to a Director of an Affiliate will not constitute an interruption of Continuous Service. The Committee, in its sole discretion,
may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence approved by that party,
including sick leave, military leave or any other personal or family leave of absence.

 

“Covered
Employee” has the same meaning as set forth in Section 162(m)(3) of the Code, as interpreted by the Internal Revenue Service.

 

    	-4-

     

    

 

“Director”
means a member of the Board or of the board of directors of any Affiliate.

 

“Disability”
means that the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or
mental impairment; provided, however, that for the purposes of determining the term of an Incentive Stock Option pursuant to Section
7.1(i), “Disability” shall have the meaning ascribed to it under Section 22(e)(3) of the Code. The determination of whether
a Participant has a Disability shall be determined under procedures established by the Committee. Except in situations where the Committee
is determining whether a Participant has a Disability for purposes of the term of an Incentive Stock Option pursuant to Section 7.1(i)
hereof within the meaning of Section 22(e)(3) of the Code, the Committee may rely on any determination that a Participant is disabled
for purposes of benefits under any long-term disability plan maintained by the Company or any Affiliate in which a Participant participates.

 

“Disqualifying
Disposition” has the meaning set forth in Section 15.11.

 

“Effective
Date” shall mean the date as of which this Plan is adopted by the Board.

 

“Employee”
means any individual, including any Officer or Director, employed by the Company or an Affiliate; provided, that, for the purposes of
determining eligibility to receive Incentive Stock Options, “Employee” shall mean an employee of the Company or an Affiliate
within the meaning of Section 424 of the Code. Mere service as a Director or payment of a director’s fee to a Participant by the
Company or an Affiliate shall not be sufficient to constitute “employment” by the Company or such Affiliate.

 

“Exchange
Act” means the United States Securities Exchange Act of 1934, as amended.

 

“Fair
Market Value” means, as of any date: (a) if the Shares are listed or quoted on any established stock exchange or public market,
including the New York Stock Exchange, the NASDAQ, the OTCQB, the OTCQX, the TSX Venture Exchange or the Canadian Securities Exchange,
the closing price per Share (or if no sales were reported the closing price on the date immediately preceding such date) as quoted on
such exchange or public market on the day of determination, as reported in such source as the Committee deems reliable, multiplied by
the number of Shares underlying the applicable Award; or (b) if the Shares are not listed or quoted on any established stock exchange
or public market, such value as is determined in good faith by the Committee in its sole discretion, which determination shall be conclusive
and binding on all Persons.

 

“Free
Standing Rights” has the meaning set forth in Section 8.1(a).

 

“Good
Reason” means:

 

	 	(a)	if
    an Employee or Consultant is a party to an employment or service agreement with the Company or an Affiliate and such agreement provides
    for a definition of “good reason” or other similar term, the definition contained therein; or
	 	 	 
	 	(b)	if
    no such agreement exists or if such agreement does not define “good reason”, the occurrence of one or more of the following
    without the Participant’s express written consent, if such circumstances are not remedied by the Company within 30 days of
    its receipt of a written notice from the Participant describing the applicable circumstances (which notice must be provided by the
    Participant within 90 days of the Participant’s knowledge of the applicable circumstances): (i) any material, adverse change
    in the Participant’s duties, responsibilities, authority, title, status or reporting structure, (ii) a material reduction in
    the Participant’s base salary or bonus opportunity, or (iii) a geographical relocation of the Participant’s principal
    office location by more than 50 miles.

 

    	-5-

     

    

 

“Grant
Date” means the date on which the Committee adopts a resolution, or takes other appropriate action, expressly granting an Award
that specifies the key terms and conditions of the Award or, if a later date of grant for the Award is set forth in such resolution,
then such date as is set forth in such resolution.

 

“Incentive
Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code.

 

“Incumbent
Directors” means individuals who, on the Effective Date, constitute the Board, provided that any individual becoming a Director
subsequent to the Effective Date whose election or nomination for election to the Board was approved by a vote of at least two-thirds
of the Incumbent Directors then on the Board (either by a specific vote or by approval of the proxy statement of the Company in which
such individual is named as a nominee for Director without objection to such nomination) shall be deemed to be an Incumbent Director.
No individual initially elected or nominated as a Director as a result of an actual or threatened election contest with respect to the
Incumbent Directors or as a result of any other actual or threatened solicitation of proxies by or on behalf of any Person other than
the Incumbent Directors shall be an Incumbent Director.

 

“Negative
Discretion” means the discretion authorized by this Plan to be applied by the Committee to eliminate or reduce the size of
a Performance Compensation Award in accordance with Section 8.3(d)(iv); provided that the exercise of such discretion would not cause
such Performance Compensation Award to fail to qualify as “performance-based compensation” under Section 162(m) of the Code.

 

“Non-Employee
Director” means a Director who is a “non-employee director” within the meaning of Rule 16b-3.

 

“Non-Option
Award” means any Award other than an Option.

 

“Non-Qualified
Stock Option” means an Option that by its terms does not qualify as, or is not intended to qualify as, an Incentive Stock Option.

 

“Officer”
means a Person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated
thereunder.

 

“Option”
means an Incentive Stock Option or a Non-Qualified Stock Option granted pursuant to this Plan.

 

    	-6-

     

    

 

“Option
Exercise Price” means the price at which a Share may be purchased upon the exercise of an Option.

 

“Optionholder”
means a Person to whom an Option is granted pursuant to this Plan or, if applicable, such other Person who holds an outstanding Option.

 

“Outside
Director” means a Director who is an “outside director” within the meaning of Section 162(m) of the Code and Treasury
Regulations Section 1.162-27(e)(3) or any successor to such statute and regulation.

 

“Participant”
means an eligible Person to whom an Award is granted pursuant to this Plan or, if applicable, such other Person who holds an outstanding
Award.

 

“Performance
Compensation Award” means any Award designated by the Committee as a Performance Compensation Award pursuant to Section 8.3.

 

“Performance
Criteria” means the criterion or criteria that the Committee shall select for purposes of establishing the Performance Goal(s)
for a Performance Period with respect to any Performance Compensation Award. The Performance Criteria that will be used to establish
the Performance Goal(s) shall be based on the attainment of specific levels of performance of the Company (or an Affiliate, division,
business unit or operational unit thereof), and shall be limited to:

 

	 	(a)	net
    earnings or net income (before or after taxes);
	 	 	 
	 	(b)	basic
    or diluted earnings per Share (before or after taxes);
	 	 	 
	 	(c)	net
    revenue or net revenue growth;
	 	 	 
	 	(d)	gross
    revenue;
	 	 	 
	 	(e)	gross
    profit or gross profit growth;
	 	 	 
	 	(f)	net
    operating profit (before or after taxes);
	 	 	 
	 	(g)	return
    on assets, capital, invested capital, equity, or sales;
	 	 	 
	 	(h)	cash
    flow (including operating cash flow, free cash flow and cash flow return on capital);
	 	 	 
	 	(i)	earnings
    before or after taxes, interest, depreciation and/or amortization;
	 	 	 
	 	(j)	gross
    or operating margins;
	 	 	 
	 	(k)	improvements
    in capital structure;
	 	 	 
	 	(l)	budget
    and expense management;
	 	 	 
	 	(m)	productivity
    ratios;

 

    	-7-

     

    

 

	 	(n)	economic
    value added or other value added measurements;
	 	 	 
	 	(o)	Share
    price (including growth measures and total Shareholder return);
	 	 	 
	 	(p)	expense
    targets;
	 	 	 
	 	(q)	margins;
	 	 	 
	 	(r)	operating
    efficiency;
	 	 	 
	 	(s)	working
    capital targets;
	 	 	 
	 	(t)	enterprise
    value;
	 	 	 
	 	(u)	safety
    record; and
	 	 	 
	 	(v)	completion
    of acquisitions or business expansion.

 

Any
one or more of the Performance Criteria may be used on an absolute or relative basis to measure the performance of the Company and/or
an Affiliate as a whole, or any division, business unit or operational unit of the Company and/or an Affiliate, or any combination thereof,
as the Committee may deem appropriate. The Committee may make comparisons to the performance of a group of comparable companies, or data
set out in a published or special index that the Committee, in its sole discretion, deems appropriate, or the Committee may make comparisons
of matters related to Share price as compared to various stock market indices. The Committee also has the authority to provide for accelerated
vesting of any Award based on the achievement of Performance Goals pursuant to the Performance Criteria. To the extent required under
Section 162 (m) of the Code, the Committee shall, within the first 90 days of a Performance Period (or, if longer or shorter, within
the maximum period allowed under Section 162(m) of the Code), define in an objective fashion the manner of calculating the Performance
Criteria it selects to use for such Performance Period. In the event that applicable tax and/or securities laws change to permit the
Committee discretion to alter the governing Performance Criteria without obtaining Shareholder approval of such changes, the Committee
shall have sole discretion to make such changes without obtaining Shareholder approval.

 

“Performance
Formula” means, for a Performance Period, the one or more objective formulas applied against the relevant Performance Goal
to determine, with regard to the Performance Compensation Award of a particular Participant, whether all, some portion but less than
all, or none of the Performance Compensation Award has been earned for the Performance Period.

 

“Performance
Goals” means, for a Performance Period, the one or more goals established by the Committee for the Performance Period based
upon the Performance Criteria. The Committee is authorized at any time during the first 90 days of a Performance Period (or, if longer
or shorter, within the maximum period allowed under Section 162(m) of the Code), or at any time thereafter (but only to the extent the
exercise of such authority after such period would not cause the Performance Compensation Awards granted to any Participant for the Performance
Period to fail to qualify as “performance-based compensation” under Section 162(m) of the Code), in its sole and absolute
discretion, to adjust or modify the calculation of a Performance Goal for such Performance Period to the extent permitted under Section
162(m) of the Code in order to prevent the dilution or enlargement of the rights of a Participant in connection with any of the following:

 

    	-8-

     

    

 

	 	(a)	asset
    write-downs;
	 	 	 
	 	(b)	litigation
    or claim judgments or settlements;
	 	 	 
	 	(c)	the
    effect of changes in tax laws, accounting principles, or other laws or regulatory rules affecting reported results;
	 	 	 
	 	(d)	any
    reorganization and restructuring programs;
	 	 	 
	 	(e)	extraordinary
    nonrecurring items as described in Accounting Principles Board Opinion No. 30 (or any successor or pronouncement thereto) and/or
    in management’s discussion and analysis of financial condition and results of operations as filed with applicable securities
    regulators;
	 	 	 
	 	(f)	acquisitions
    or divestitures;
	 	 	 
	 	(g)	any
    other specific unusual or nonrecurring events, or objectively determinable category thereof;
	 	 	 
	 	(h)	foreign
    exchange gains and losses; or
	 	 	 
	 	(i)	a
    change in the Company’s fiscal year.

 

“Performance
Period” means such one or more periods of time (in any case being not less than one fiscal quarter in duration) as the Committee
may determine, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant’s
right to, and the payment of, a Performance Compensation Award.

 

“Permitted
Transferee” means:

 

	 	(a)	a
    member of an Optionholder’s immediate family (child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former
    spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including
    adoptive relationships), any Person sharing the Optionholder’s household (other than a tenant or employee), a trust in which
    any of the foregoing Persons have more than 50% of the beneficial interest, a foundation in which any of the foregoing Persons (or
    the Optionholder) control the management of assets, or any other entity in which any of the foregoing Persons (or the Optionholder)
    own more than 50% of the voting interests;
	 	 	 
	 	(b)	any
    Person designated by the Committee in connection with a program established and approved by the Committee pursuant to which Participants
    may receive a cash payment or other consideration in consideration for the transfer of a Non-Qualified Stock Option; and
	 	 	 
	 	(c)	such
    other transferees as may be permitted by the Committee in its sole discretion.

 

    	-9-

     

    

 

“Person”
is to be construed broadly and includes an individual, corporation, trust, partnership, governmental authority, or any administrator
or executor of any of the foregoing.

 

“Plan”
means this 2017 Equity Incentive Plan, as amended and/or amended and restated from time to time.

 

“Related
Rights” has the meaning set forth in Section 8.1(a).

 

“Restricted
Award” means any Award granted pursuant to Section 8.2(a).

 

“Restricted
Period” has the meaning set forth in Section 8.2(a).

 

“Rule
16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in effect from time to time.

 

“Securities
Act” means the United States Securities Act of 1933, as amended.

 

“Share”
means a share of Common Stock.

 

“Shareholder”
means a holder of Shares.

 

“Stock
Appreciation Right” means the right, pursuant to an Award granted under Section 8.1, to receive, upon exercise, an amount payable
in cash or Shares equal to the number of Shares subject to the Stock Appreciation Right that is being exercised multiplied by the excess
of: (a) the Fair Market Value of one Share on the date the Award is exercised, over (b) the exercise price specified in the Stock Appreciation
Right Award Agreement.

 

“Stock
for Stock Exchange” has the meaning set forth in Section 7.1(c).

 

“Ten
Percent Shareholder” means a Person who owns (or is deemed to own pursuant to Section 424(d) of the Code) shares possessing
more than 10% of the total combined voting power of all classes of stock of the Company or of any of its Affiliates.

 

“TSXV”
means the TSX Venture Exchange.

 

4.       Administration

 

4.1       Authority
of Committee. This Plan shall be administered initially by the Committee. Subject to the terms of this Plan, the Committee’s
charter and Applicable Laws, and in addition to other express powers and authorization conferred by this Plan, the Committee shall have
the authority:

 

	 	(a)	to
    construe and interpret this Plan and apply its provisions;
	 	 	 
	 	(b)	to
    promulgate, amend, and rescind rules and regulations relating to the administration of this Plan;
	 	 	 
	 	(c)	to
    authorize any Person to execute, on behalf of the Company, any instrument required to carry out the purposes of this Plan;

 

    	-10-

     

    

 

	 	(d)	to
    delegate its authority to one or more Officers with respect to Awards that do not involve Covered Employees or “insiders”
    within the meaning of Section 16 of the Exchange Act;
	 	 	 
	 	(e)	to
    determine when Awards are to be granted and the applicable Grant Date;
	 	 	 
	 	(f)	from
    time to time to select, subject to the limitations set forth in this Plan, those Participants to whom Awards shall be granted;
	 	 	 
	 	(g)	to
    determine the number of Shares to be made subject to each Award;
	 	 	 
	 	(h)	to
    determine whether each Option is to be an Incentive Stock Option or a Non-qualified Stock Option;
	 	 	 
	 	(i)	to
    prescribe the terms and conditions of each Award, including the exercise price, medium of payment and vesting provisions, and to
    specify the provisions of the Award Agreement with respect thereto;
	 	 	 
	 	(j)	to
    designate an Award (including a cash bonus) as a Performance Compensation Award and to select the Performance Criteria that will
    be used to establish the Performance Goals;
	 	 	 
	 	(k)	to
    amend the terms of any outstanding Awards, including for the purpose of modifying the time or manner of vesting, or the term of any
    outstanding Award; provided, however, that if any such amendment impairs a Participant’s rights or increases a Participant’s
    obligations under an Award, or creates or increases a Participant’s federal income tax liability with respect to an Award,
    such amendment shall also be subject to the Participant’s consent;
	 	 	 
	 	(l)	to
    determine the duration and purpose of leaves of absences which may be granted to a Participant without constituting termination of
    their employment for purposes of this Plan, which periods shall be no shorter than the periods generally applicable to Employees
    under the Company’s employment policies;
	 	 	 
	 	(m)	to
    make decisions with respect to outstanding Awards that may become necessary upon a change in corporate control or an event that triggers
    anti-dilution adjustments;
	 	 	 
	 	(n)	to
    interpret, administer, reconcile any inconsistency in, correct any defect in and/or supply any omission in this Plan and any instrument
    or agreement relating to, or Award granted under, this Plan; and
	 	 	 
	 	(o)	to
    exercise discretion to make any and all other determinations which it determines to be necessary or advisable for the administration
    of this Plan.

 

The
Committee also may modify the purchase price or the exercise price of any outstanding Award, provided that Shareholder approval shall
be required before the repricing is effective if such Shareholder approval is necessary to satisfy any Applicable Laws.

 

    	-11-

     

    

 

4.2       Committee
Decisions Final. All decisions made by the Committee pursuant to the provisions of this Plan shall be final and binding on the Company
and the Participants, unless such decisions are determined by a court having jurisdiction to be arbitrary and capricious.

 

4.3       Delegation.
The Committee may delegate administration of the Plan to a committee or committees of one or more Directors, and the term “Committee”
shall apply to any Person(s) to whom such authority has been delegated. The Board shall have the power to delegate to a subcommittee
any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Committee shall thereafter
be to the committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may
be adopted from time to time by the Board. The Board may abolish the Committee at any time and revest in the Board the administration
of the Plan. The members of the Committee shall be appointed by and serve at the pleasure of the Board. From time to time, the Board
may increase or decrease the size of the Committee, add additional members to, remove members (with or without cause) from, appoint new
members, and fill vacancies, however caused, in the Committee. The Committee shall act pursuant to a vote of the majority of its members
or, in the case of a Committee comprised of only two members, the unanimous consent of its members, whether present or not, or by the
written consent of the majority of its members, and minutes shall be kept of all of its meetings and copies thereof shall be provided
to the Board. Subject to the limitations prescribed by this Plan and the Board, the Committee may establish and follow such rules and
regulations for the conduct of its business as it may determine to be advisable.

 

4.4       Committee
Composition. If the Board establishes a committee to administer the Plan, except as otherwise determined by the Board, the Committee
shall consist solely of two or more Non-Employee Directors who are also Outside Directors. The Board shall have discretion to determine
whether or not it intends to comply with the exemption requirements of Rule 16b-3 and/or Section 162(m) of the Code. However, if the
Board intends to satisfy such exemption requirements, with respect to Awards to any Covered Employee and with respect to any insider
subject to Section 16 of the Exchange Act, the Committee shall be a compensation committee of the Board that at all times consists solely
of two or more Non-Employee Directors who are also Outside Directors. Within the scope of such authority, the Board or the Committee
may: (a) delegate to a committee of one or more members of the Board who are not Outside Directors the authority to grant Awards to eligible
Persons who are either: (i) not then Covered Employees and are not expected to be Covered Employees at the time of recognition of income
resulting from such Award, or (ii) not Persons with respect to whom the Company wishes to comply with Section 162(m) of the Code; or
(b) delegate to a committee of one or more members of the Board who are not Non-Employee Directors the authority to grant Awards to eligible
Persons who are not then subject to Section 16 of the Exchange Act. Nothing herein shall create an inference that an Award is not validly
granted under the Plan in the event Awards are granted under the Plan by a compensation committee of the Board that does not at all times
consist solely of two or more Non-Employee Directors who are also Outside Directors.

 

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

 

    	-12-

     

    

 

5.       Shares
Subject to this Plan

 

5.1       Number
of Shares Authorized. Subject to adjustment in accordance with Section 12, a total of 13,300,000 Shares shall be available for the
grant of Options and no Shares shall be available for the grant of Non-Option Awards. For so long as any Awards are outstanding, the
Company shall keep available at all times such number of Shares as would be issuable on the due exercise of all of such Awards.

 

5.2       Limitations
on Shares Available for Issuance. While the Common Stock is listed on the TSXV:

 

	 	(a)	the
    aggregate number of Shares subject to Options granted, within a 12 month period, to a Participant who is a Consultant (as defined
    by the policies of the TSXV) is limited to an amount equal to 2% of the issued and outstanding Shares (on a non-diluted basis), calculated
    on the date an Option is granted to the Participant; and
	 	 	 
	 	(b)	the
    aggregate number of Shares subject to Options granted, within a 12 month period, to all Participants (as a group) who are employed
    to perform Investor Relations Activities (as defined by the policies of the TSXV) is limited to an amount equal to 2% of the issued
    and outstanding Shares (on a non-diluted basis), calculated on the date an Option is granted to any Participant, provided that such
    Options must vest in stages over a 12 month period with no more than 1/4 of the Options vesting in any 3 month period.

 

5.3       Nature
of Shares. Shares available for distribution under this Plan may consist, in whole or in part, of authorized and unissued shares,
treasury shares or shares reacquired by the Company in any manner.

 

5.4       Effect
of Cancellation or Forfeiture of Award. Any Shares underlying an Award that is canceled, forfeited or expires prior to exercise or
realization, either in full or in part, shall become available for issuance under this Plan.

 

    	-13-

     

    

 

6.       Option
Eligibility

 

6.1       Eligibility
for Incentive Stock Options. Incentive Stock Options may be granted only to Employees.

 

6.2       Ten
Percent Shareholders. A Ten Percent Shareholder shall not be granted an Incentive Stock Option unless the Option Exercise Price is
at least 110% of the Fair Market Value at the Grant Date and the Incentive Stock Option is not exercisable after the expiration of five
years from the Grant Date.

 

7.       Option
Provisions

 

7.1       Each
Option shall be evidenced by an Award Agreement, and shall be subject to the conditions set forth in this Section 7 and to such other
conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement. All Options shall be separately designated
Incentive Stock Options or Non-Qualified Stock Options at the time of grant, and, if certificates are issued, separate certificates will
be issued for Shares purchased on exercise of each type of Option. Notwithstanding the foregoing, the Company shall have no liability
to any Participant or any other Person if an Option designated as an Incentive Stock Option fails to qualify as such at any time, or
if an Option is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code
and the terms of such Option do not satisfy the requirements of Section 409A of the Code. The terms of separate Options need not be identical,
but each Award Agreement shall include (through incorporation by reference of provisions of this Plan in the Award Agreement or otherwise)
the substance of each of the following provisions:

 

	 	(a)	Term.
    Subject to the provisions of Section 6.2 regarding Ten Percent Shareholders: (i) no Option shall be exercisable after the expiration
    of 10 years from the Grant Date, and (ii) the term of an Option shall be determined by the Committee at the time of grant.
	 	 	 
	 	(b)	Exercise
    Price of an Option. Subject to the provisions of Section 6.2 regarding Ten Percent Shareholders, the Option Exercise Price of
    each Incentive Stock Option shall be not less than 100% of the greater of (i) the Fair Market Value of the Shares underlying the
    Option on the Grant Date and (ii) the Fair Market Value of the Shares underlying the Option on the trading date immediately preceding
    the Grant Date. Notwithstanding the foregoing, an Incentive Stock Option may be granted with an Option Exercise Price lower than
    that set forth in the preceding sentence if such Incentive Stock Option is granted pursuant to an assumption or substitution for
    another option in a manner satisfying the provisions of Section 424(a) of the Code. While the Common Stock is listed on the TSXV,
    the Option Exercise Price shall be determined by the Committee and the Option Exercise Price shall not be less than the price permitted
    by the TSXV or other regulatory body having jurisdiction and a minimum Option Exercise Price shall not be established unless the
    Options are allocated to particular persons and the Company shall not grant Options unless and until the Options have been allocated
    to a particular person or persons.

 

    	-14-

     

    

 

	 	(c)	Consideration.
    The Option Exercise Price shall be paid, to the extent permitted by applicable statutes and regulations, either: (a) in cash, certified
    check or by wire transfer at the time the Option is exercised; or (b) in the discretion of the Committee, upon such terms as the
    Committee shall approve: (i) by delivery to the Company of a certificate representing Shares, duly endorsed for transfer to the Company,
    having a Fair Market Value on the date of delivery equal to the Option Exercise Price (or portion thereof) due for the number of
    Shares being acquired, or by means of attestation whereby the Participant identifies for delivery specific Shares that have an aggregate
    Fair Market Value on the date of attestation equal to the Option Exercise Price (or portion thereof) and receives a number of Shares
    equal to the difference between the number of Shares thereby purchased and the number of identified attestation Shares (a “Stock
    for Stock Exchange”), (ii) pursuant to a “cashless” exercise program established with a broker, (iii) by reduction
    in the number of Shares otherwise deliverable upon exercise of such Option with a Fair Market Value equal to the aggregate Option
    Exercise Price at the time of exercise, (iv) by any combination of the foregoing methods, or (v) in any other form of legal consideration
    that may be acceptable to the Committee. Unless otherwise specifically provided in the Award Agreement, the exercise price of Shares
    acquired on exercise of an Option that is paid by delivery (or attestation) to the Company of other Shares acquired, directly or
    indirectly from the Company, shall be paid only by Shares that have been held for more than six months (or such longer or shorter
    period of time required to avoid a charge to earnings for financial accounting purposes). Notwithstanding the foregoing, during any
    period during which the Shares are publicly traded, an exercise by a Director or Officer that involves, or may involve, a direct
    or indirect extension of credit, or arrangement of an extension of credit, by the Company, directly or indirectly, in violation of
    Section 402(a) of the Sarbanes-Oxley Act of 2002, shall be prohibited with respect to any Award. While the Common Stock is
    listed on the TSXV, the Option Exercise Price must be paid in cash.
	 	 	 
	 	(d)	Transferability
    of an Incentive Stock Option. An Incentive Stock Option shall not be transferable except by will or by the laws of descent and
    distribution and shall be exercisable during the lifetime of an Optionholder only by such Optionholder. Notwithstanding the foregoing,
    an Optionholder may, by delivering written notice to the Company, in a form satisfactory to the Company, designate another Person
    who, in the event of the death of such Optionholder, shall thereafter be entitled to exercise such Optionholder’s Incentive
    Stock Option.
	 	 	 
	 	(e)	Transferability
    of a Non-Qualified Stock Option. A Non-Qualified Stock Option may, in the sole discretion of the Committee, be transferable to
    a Permitted Transferee, upon written approval by the Committee to the extent provided in the Award Agreement. While the Common Stock
    is listed on the TSXV or if a Non-Qualified Stock Option does not provide for transferability, then such Non-Qualified Stock Option
    shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable during the lifetime
    of an Optionholder only by such Optionholder. Notwithstanding the foregoing, an Optionholder may, by delivering written notice to
    the Company, in a form satisfactory to the Company, designate another Person who, in the event of the death of such Optionholder,
    shall thereafter be entitled to exercise such Optionholder’s Non-Qualified Stock Option.

 

    	-15-

     

    

 

	 	(f)	Vesting
    of Options. Each Option may, but need not, vest and become exercisable in periodic installments that may, but need not, be equal,
    and may be subject to such other terms and conditions on the time or times when it may be exercised (which may be based on performance
    or other criteria) as the Committee may deem appropriate. The vesting provisions of individual Options may vary. No Option may be
    exercised for a fraction of a Share. The Committee may, but shall not be required to, provide for an acceleration of vesting and
    exercisability in the terms of any Award Agreement upon the occurrence of a specified event.
	 	 	 
	 	(g)	Termination
    of Continuous Service. Unless otherwise provided in an Award Agreement, or in an employment agreement the terms of which have
    been approved by the Board, in the event an Optionholder’s Continuous Service terminates (other than upon the Optionholder’s
    death or Disability), such Optionholder may exercise its Option (to the extent that the Optionholder was entitled to exercise such
    Option as of the date of termination), but only within such period of time ending on the earlier of: (a) the date that is three months
    following the termination of such Optionholder’s Continuous Service; or (b) the expiration of the term of the Option as set
    forth in the Award Agreement; provided that, if the termination of the Optionholder’s Continuous Service is by the Company
    for Cause, all outstanding Options (whether or not vested) held by such Optionholder shall immediately terminate and cease to be
    exercisable. If, after termination, an Optionholder does not exercise its Option within the time specified in the Award Agreement,
    such Optionholder’s Option shall terminate. While the Common Stock is listed on the TSXV, Options granted to Participants engaged
    in Investor Relations Activities (as defined by the policies of the TSXV) on behalf of the Company expire 30 days after such Participants
    cease to perform such Investor Relations Activities for the Company.
	 	 	 
	 	(h)	Extension
    of Termination Date. An Award Agreement may provide that if the exercise of an Option following the termination of an Optionholder’s
    Continuous Service for any reason would be prohibited at any time because the issuance of Shares in connection therewith would violate
    the registration requirements under the Securities Act or any other state or federal securities laws, or the rules of any securities
    exchange or interdealer quotation system, then such Option shall terminate on the earlier of: (a) the expiration of the term of the
    Option in accordance with Section 7.1(a); or (b) the expiration of a period after termination of the Optionholder’s Continuous
    Service that is three months after the end of the period during which the exercise of such Optionholder’s Option would be in
    violation of such registration or other securities law requirements.
	 	 	 
	 	(i)	Disability
    of Optionholder. Unless otherwise provided in an Award Agreement, in the event that an Optionholder’s Continuous Service
    terminates as a result of such Optionholder’s Disability, such Optionholder may exercise its Option (to the extent that such
    Optionholder was entitled to exercise such Option as of the date of termination), but only within such period of time ending on the
    earlier of: (a) the date 12 months following such termination; or (b) the expiration of the term of the Option as set forth in the
    Award Agreement. If, after termination, an Optionholder does not exercise its Option within the time specified herein or in the Award
    Agreement, such Optionholder’s Option shall terminate.

 

    	-16-

     

    

 

	 	(j)	Death
    of Optionholder. Unless otherwise provided in an Award Agreement, in the event that an Optionholder’s Continuous Service
    terminates as a result of such Optionholder’s death, then such Optionholder’s Option may be exercised (to the extent
    the Optionholder was entitled to exercise such Option as of the date of death) by the Optionholder’s estate, by a Person who
    acquired the right to exercise the Option by bequest or inheritance or by a Person designated to exercise the Option upon the Optionholder’s
    death, but only within the period ending on the earlier of: (a) the date that is 12 months following the date of death; or (b) the
    expiration of the term of such Option as set forth in the Award Agreement. If, after an Optionholder’s death, such Optionholder’s
    Option is not exercised within the time specified herein or in the Award Agreement, such Option shall terminate.
	 	 	 
	 	(k)	Incentive
    Stock Option $100,000 Limitation. To the extent that the aggregate Fair Market Value (determined at the time of grant) of Shares
    underlying any Incentive Stock Options that are exercisable for the first time by any Optionholder during any calendar year (under
    all plans of the Company and its Affiliates) exceeds $100,000, the Options or portions thereof which exceed such limit (according
    to the order in which they were granted) shall not be void but rather be treated as Non-Qualified Stock Options.

 

8.       Provisions
of Non-Option Awards

 

8.1       Stock
Appreciation Rights.

 

	 	(a)	General.
    Each Stock Appreciation Right shall be evidenced by an Award Agreement, and shall be subject to the conditions set forth in this
    Section 8.1 and to such other conditions not inconsistent with this Plan as may be determined by the Committee in its sole discretion
    and reflected in the applicable Award Agreement. A Stock Appreciation Right may be granted alone (a “Free Standing Right”)
    or in tandem with an Option (a “Related Right”).
	 	 	 
	 	(b)	Grant
    Requirements. Any Related Right that relates to a Non-Qualified Stock Option may be granted at the same time such Non-Qualified
    Stock Option is granted or at any time thereafter, but before the exercise or expiration of the Non-Qualified Stock Option. Any Related
    Right that relates to an Incentive Stock Option must be granted at the same time the Incentive Stock Option is granted.
	 	 	 
	 	(c)	Term
    of Stock Appreciation Rights. The term of a Stock Appreciation Right shall be determined by the Committee and set out in the
    Award Agreement; provided, however, that no Stock Appreciation Right shall be exercisable later than the tenth anniversary of the
    Grant Date.

 

    	-17-

     

    

 

	 	(d)	Vesting
    of Stock Appreciation Rights. Each Stock Appreciation Right may, but need not, vest and become exercisable in periodic installments
    that may, but need not, be equal, and may be subject to such other terms and conditions on the time or times when it may be exercised
    as the Committee may deem appropriate. The vesting provisions of individual Stock Appreciation Rights may vary. No Stock Appreciation
    Right may be exercised for a fraction of a Share. The Committee may, but shall not be required to, provide for an acceleration of
    vesting and exercisability of a Stock Appreciation Right in the terms of an applicable Award Agreement upon the occurrence of a specified
    event.
	 	 	 
	 	(e)	Exercise
    and Payment. Upon exercise of a Stock Appreciation Right, the holder shall be entitled to receive from the Company an amount
    equal to: (i) the number of Shares subject to the Stock Appreciation Right that is being exercised multiplied by (ii) the excess
    of (A) the Fair Market Value of a Share on the date such Stock Appreciation Right is exercised, over (B) the exercise price specified
    in the Stock Appreciation Right. Payment with respect to the exercise of a Stock Appreciation Right shall be made on the date of
    exercise. Payment shall be made in the form of Shares (with or without restrictions as to substantial risk of forfeiture and transferability,
    as determined by the Committee in its sole discretion), cash or a combination thereof, as determined by the Committee.
	 	 	 
	 	(f)	Exercise
    Price. The exercise price of a Free Standing Right shall be determined by the Committee, but shall be not less than 100% of the
    greater of (i) the Fair Market Value of the Shares underlying the Free Standing Right on the Grant Date and (ii) the Fair Market
    Value of the Shares underlying the Free Standing Right on the trading date immediately preceding the Grant Date. A Related Right
    granted simultaneously with, or subsequent to, the grant of an Option and in conjunction therewith or in the alternative thereto,
    shall have the same exercise price as the related Option, shall be transferable only upon the same terms and conditions as the related
    Option, and shall be exercisable only to the same extent as the related Option; provided, however, that a Stock Appreciation Right,
    by its terms, shall be exercisable only when the Fair Market Value per Share subject to the Stock Appreciation Right and related
    Option exceeds the exercise price per Share thereof and no Stock Appreciation Rights may be granted in tandem with an Option unless
    the Committee determines that the requirements of Section 8.1(b) are satisfied.
	 	 	 
	 	(g)	Reduction
    in Underlying Option Shares. Upon any exercise of a Related Right, the number of Shares for which any related Option shall be
    exercisable shall be reduced by the number of Shares for which the Stock Appreciation Right has been exercised. The number of Shares
    for which a Related Right shall be exercisable shall be reduced upon any exercise of any related Option by the number of Shares for
    which such Option has been exercised.

 

    	-18-

     

    

 

8.2       Restricted
Awards.

 

	 	(a)	General.
    A Restricted Award is an Award of actual Shares (“Restricted Stock”) or hypothetical Share units (“Restricted
    Stock Units”) having a value equal to the Fair Market Value of an identical number of Shares, which may, but need not,
    provide that such Restricted Award may not be sold, assigned, transferred or otherwise disposed of, pledged or hypothecated as collateral
    for a loan or as security for the performance of any obligation or for any other purpose for such period (the “Restricted
    Period”) as the Committee shall determine. Each Restricted Award granted under this Plan shall be evidenced by an Award
    Agreement, and shall be subject to the conditions set forth in this Section 8.2 and to such other conditions not inconsistent with
    the Plan as may be determined by the Committee in its sole discretion and reflected in the applicable Award Agreement.
	 	 	 	 
	 	(b)	Restricted
    Stock and Restricted Stock Units.
	 	 	 	 
	 	 	(i)	Each
    Participant granted Restricted Stock shall execute and deliver to the Company an Award Agreement with respect to the Restricted Stock
    setting forth the restrictions and other terms and conditions applicable to such Restricted Stock. If the Committee determines that
    the Restricted Stock shall be held by the Company or in escrow rather than delivered to the Participant pending the release of the
    applicable restrictions, the Committee may require the Participant to additionally execute and deliver to the Company: (A) an escrow
    agreement satisfactory to the Committee, if applicable; and (B) the appropriate blank stock power with respect to the Restricted
    Stock covered by such agreement. If a Participant fails to execute an agreement evidencing an Award of Restricted Stock and, if applicable,
    an escrow agreement and stock power, the Award shall be null and void. Subject to the restrictions set forth in the Award, the Participant
    generally shall have the rights and privileges of a Shareholder as to such Restricted Stock, including the right to vote such Restricted
    Stock and the right to receive dividends; provided that, any cash dividends and stock dividends with respect to the Restricted Stock
    shall be withheld by the Company for the Participant’s account, and interest may be credited on the amount of the cash dividends
    withheld at a rate and subject to such terms as determined by the Committee. The cash dividends or stock dividends so withheld by
    the Committee and attributable to any particular share of Restricted Stock (and earnings thereon, if applicable) shall be distributed
    to the Participant in cash or, at the discretion of the Committee, in Shares having a Fair Market Value equal to the amount of such
    dividends, if applicable, upon the release of restrictions on such Share and, if such Share is forfeited, the Participant shall have
    no right to such dividends.
	 	 	 	 
	 	 	(ii)	The
    terms and conditions of a grant of Restricted Stock Units shall be reflected in an Award Agreement. No Shares shall be issued at
    the time a Restricted Stock Unit is granted, and the Company will not be required to set aside a fund for the payment of any such
    Award. A Participant shall have no voting rights with respect to any Restricted Stock Units granted hereunder. At the discretion
    of the Committee, each Restricted Stock Unit (representing one Share) may be credited with cash and stock dividends paid by the Company
    in respect of one Share (“Dividend Equivalents”). Dividend Equivalents shall be withheld by the Company for the
    Participant’s account, and interest may be credited on the amount of cash Dividend Equivalents withheld at a rate and subject
    to such terms as determined by the Committee. Dividend Equivalents credited to a Participant’s account and attributable to
    any particular Restricted Stock Unit (and earnings thereon, if applicable) shall be distributed in cash or, at the discretion of
    the Committee, in Shares having a Fair Market Value equal to the amount of such Dividend Equivalents and earnings, if applicable,
    to the Participant upon settlement of such Restricted Stock Unit and, if such Restricted Stock Unit is forfeited, the Participant
    shall have no right to such Dividend Equivalents.

 

    	-19-

     

    

 

	 	(c)	Restrictions
	 	 	 	 
	 	 	(i)	Restricted Stock awarded to a Participant shall be subject to the following restrictions until the expiration of the Restricted Period,
and to such other terms and conditions as may be set forth in the applicable Award Agreement: (A) if an escrow arrangement is used, the
Participant shall not be entitled to delivery of the Share certificate; (B) the Shares shall be subject to the restrictions on transferability
set forth in the Award Agreement; (C) the Shares shall be subject to forfeiture to the extent provided in the applicable Award Agreement;
and (D) to the extent such Shares are forfeited, the Share certificates shall be returned to the Company, and all rights of the Participant
to such Shares and as a Shareholder shall terminate without further obligation on the part of the Company.
	 	 	 	 
	 	 	(ii)	Restricted
    Stock Units awarded to any Participant shall be subject to: (A) forfeiture until the expiration of the Restricted Period, and satisfaction
    of any applicable Performance Goals during such period, to the extent provided in the applicable Award Agreement, and to the extent
    such Restricted Stock Units are forfeited, all rights of the Participant to such Restricted Stock Units shall terminate without further
    obligation on the part of the Company; and (B) such other terms and conditions as may be set forth in the applicable Award Agreement.
	 	 	 	 
	 	 	(iii)	The
    Committee shall have the authority to remove any or all of the restrictions on the Restricted Stock and Restricted Stock Units whenever
    it may determine that, by reason of changes in Applicable Laws or other changes in circumstances arising after the date the Restricted
    Stock or Restricted Stock Units are granted, such action is appropriate.
	 	 	 	 
	 	(d)	Restricted
    Period. With respect to Restricted Awards, the Restricted Period shall commence on the Grant Date and end at the time or times
    set forth on a schedule established by the Committee in the applicable Award Agreement.

 

    	-20-

     

    

 

	 	(e)	Delivery
    of Restricted Stock and Settlement of Restricted Stock Units. No Restricted Award may be granted or settled for a fraction of
    a Share. The Committee may, but shall not be required to, provide for an acceleration of vesting in the terms of any Award Agreement
    upon the occurrence of a specified event. Upon the expiration of the Restricted Period with respect to any shares of Restricted Stock,
    the restrictions set forth in Section 8.2(c) and the applicable Award Agreement shall be of no further force or effect with respect
    to such shares, except as set forth in the applicable Award Agreement. If an escrow arrangement is used, upon such expiration, the
    Company shall deliver to the Participant, or his or her beneficiary, without charge, the stock certificate evidencing the shares
    of Restricted Stock which have not then been forfeited and with respect to which the Restricted Period has expired (to the nearest
    full share) and any cash dividends or stock dividends credited to the Participant’s account with respect to such Restricted
    Stock and the interest thereon, if any. Upon the expiration of the Restricted Period with respect to any outstanding Restricted Stock
    Units, the Company shall deliver to the Participant, or its beneficiary, without charge, one Share for each such outstanding Restricted
    Stock Unit (“Vested Unit”) and cash equal to any Dividend Equivalents credited with respect to each such Vested
    Unit in accordance with Section 8.2(b)(ii) hereof and the interest thereon or, at the discretion of the Committee, in Shares having
    a Fair Market Value equal to such Dividend Equivalents and the interest thereon, if any; provided, however, that, if explicitly provided
    in the applicable Award Agreement, the Committee may, in its sole discretion, elect to pay cash or part cash and part Shares in lieu
    of delivering only Shares for Vested Units. If a cash payment is made in lieu of delivering Shares, the amount of such payment shall
    be equal to the Fair Market Value of the Shares as of the date on which the Restricted Period lapsed with respect to each Vested
    Unit.
	 	 	 
	 	(f)	Share
    Restrictions. Each certificate representing Restricted Stock awarded under the Plan shall bear a legend in such form as the Company
    deems appropriate.

 

8.3       Performance
Compensation Awards.

 

	 	(a)	General.
    The Committee shall have the authority, at the time of grant of any Award (other than Options and Stock Appreciation Rights), to
    designate such Award as a Performance Compensation Award in order to qualify such Award as “performance-based compensation”
    under Section 162(m) of the Code. In addition, the Committee shall have the authority to make an Award of a cash bonus to any Participant
    and designate such Award as a Performance Compensation Award in order to qualify such Award as “performance-based compensation”
    under Section 162(m) of the Code.
	 	 	 
	 	(b)	Eligibility.
    The Committee will, in its sole discretion, designate within the first 90 days of a Performance Period (or, if longer or shorter,
    within the maximum period allowed under Section 162(m) of the Code), which Participants will be eligible to receive Performance Compensation
    Awards in respect of such Performance Period. However, designation of a Participant eligible to receive an Award hereunder for a
    Performance Period shall not in any manner entitle the Participant to receive payment in respect of any Performance Compensation
    Award for such Performance Period. The determination as to whether or not such Participant becomes entitled to payment in respect
    of any Performance Compensation Award shall be decided solely in accordance with the provisions of this Section 8.3. Moreover, designation
    of a Participant eligible to receive an Award hereunder for a particular Performance Period shall not require designation of such
    Participant eligible to receive an Award hereunder in any subsequent Performance Period and designation of one Person as a Participant
    eligible to receive an Award hereunder shall not require designation of any other Person as a Participant eligible to receive an
    Award hereunder in such period or in any other period.

 

    	-21-

     

    

 

		(c)	Discretion
                                            of Committee with Respect to Performance Compensation Awards. With regard to a particular
                                            Performance Period, the Committee shall have full discretion to select the length of such
                                            Performance Period (provided any such Performance Period shall be not less than one fiscal
                                            quarter in duration), the type(s) of Performance Compensation Awards to be issued, the Performance
                                            Criteria that will be used to establish the Performance Goal(s), the kind(s) and/or level(s)
                                            of the Performance Goal(s) that is (are) to apply to the Company and the Performance Formula.
                                            Within the first 90 days of a Performance Period (or, if longer or shorter, within the maximum
                                            period allowed under Section 162(m) of the Code), the Committee shall, with regard to the
                                            Performance Compensation Awards to be issued for such Performance Period, exercise its discretion
                                            with respect to each of the matters enumerated in the immediately preceding sentence of this
                                            Section 8.3(c) and record the same in writing.

 

		(d)	Payment
                                            of Performance Compensation Awards

 

	 	 	(i)	Condition
    to Receipt of Payment. Unless otherwise provided in the applicable Award Agreement, a Participant must be employed by the Company
    on the last day of a Performance Period to be eligible for payment in respect of a Performance Compensation Award for such Performance
    Period.
	 	 	 	 
	 	 	(ii)	Limitation.
    A Participant shall be eligible to receive payment in respect of a Performance Compensation Award only to the extent that: (A) the
    Performance Goals for such period are achieved; and (B) the Performance Formula as applied against such Performance Goals determines
    that all or some portion of such Participant’s Performance Compensation Award has been earned for the Performance Period.
	 	 	 	 
	 	 	(iii)	Certification.
    Following the completion of a Performance Period, the Committee shall review and certify in writing whether, and to what extent,
    the Performance Goals for the Performance Period have been achieved and, if so, calculate and certify in writing the amount of the
    Performance Compensation Awards earned for the period based upon the Performance Formula. The Committee shall then determine the
    actual size of each Participant’s Performance Compensation Award for the Performance Period and, in so doing, may apply Negative
    Discretion in accordance with Section 8.3(d)(iv) hereof, if and when it deems appropriate.

 

    	-22-

     

    

 

	 	 	(iv)	Use
    of Discretion. In determining the actual size of an individual Performance Compensation Award for a Performance Period, the Committee
    may reduce or eliminate the amount of the Performance Compensation Award earned under the Performance Formula in the Performance
    Period through the use of Negative Discretion if, in its sole judgment, such reduction or elimination is appropriate. The Committee
    shall not have the discretion to: (A) grant or provide payment in respect of Performance Compensation Awards for a Performance Period
    if the Performance Goals for such Performance Period have not been attained or (B) increase a Performance Compensation Award above
    the maximum amount payable under Section 8.3(d)(i) of the Plan.
	 	 	 	 
	 	 	(v)	Timing
    of Award Payments. Performance Compensation Awards granted for a Performance Period shall be paid to Participants as soon as
    administratively practicable following completion of the certifications required by this Section 8.3.

 

9.       Compliance

 

9.1       Compliance
with Applicable Laws. Each Award Agreement shall provide that no Shares shall be purchased or sold thereunder unless and until: (a)
any then applicable requirements of Applicable Laws have been fully complied with to the satisfaction of the Company and its counsel;
and (b) if required to do so by the Company, the Participant has executed and delivered to the Company a letter of investment intent
in such form and containing such provisions as the Committee may require. The Company shall use reasonable efforts to seek to obtain
from each regulatory commission or agency having jurisdiction over this Plan such authority as may be required to grant Awards and to
issue and sell Shares upon exercise of the Awards; provided, however, that this undertaking shall not require the Company to register
under the Securities Act the Plan, any Award or any Shares issued or issuable pursuant to any such Award. If, after reasonable efforts,
the Company is unable to obtain from any such regulatory commission or agency the authority which counsel for the Company deems necessary
for the lawful issuance and sale of Shares under this Plan, the Company shall be relieved from any liability for failure to issue and
sell Shares upon exercise of such Awards unless and until such authority is obtained.

 

10.       Use
of Proceeds

 

10.1       Proceeds
from the sale of Shares issued pursuant to Awards, or upon exercise thereof, shall constitute general funds of the Company.

 

11.       Miscellaneous

 

11.1       Acceleration
of Exercisability and Vesting. Subject to the rules and policies of the TSXV while the Common Stock is listed on the TSXV, the Committee
shall have the power to accelerate the time at which an Award may first be exercised or the time during which an Award or any part thereof
will vest in accordance with this Plan, notwithstanding the provisions in the Award stating the time at which it may first be exercised
or the time during which it will vest.

 

    	-23-

     

    

 

11.2       Shareholder
Rights. Except as provided in this Plan or an Award Agreement, no Participant shall be deemed to be the holder of, or to have any
of the rights of a holder with respect to, any Shares subject to such Award unless and until such Participant has satisfied all requirements
for exercise of the Award pursuant to its terms and no adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distributions of other rights for which the record date is prior to the date such Share certificate
is issued, except as provided in Section 12 hereof.

 

11.3       No
Employment or Other Service Rights. Nothing in this Plan or any instrument executed or Award granted pursuant hereto shall confer
upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Award was granted
or shall affect the right of the Company or an Affiliate to terminate: (a) the employment of an Employee with or without notice and with
or without Cause; or (b) the service of a Director pursuant to the by-laws of the Company or an Affiliate, and any applicable provisions
of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be.

 

11.4       Transfer;
Approved Leave of Absence. For purposes of this Plan, no termination of employment by an Employee shall be deemed to result from
either: (a) a transfer to the employment of the Company from an Affiliate or from the Company to an Affiliate, or from one Affiliate
to another; or (b) an approved leave of absence for military service or sickness, or for any other purpose approved by the Company, if
the Employee’s right to reemployment is guaranteed either by a statute or by contract or under the policy pursuant to which the
leave of absence was granted or if the Committee otherwise so provides in writing, in either case, except to the extent inconsistent
with Section 409A of the Code if the applicable Award is subject thereto.

 

11.5       Withholding
Obligations. To the extent provided by the terms of an Award Agreement and subject to the discretion of the Committee, the Participant
may satisfy any federal, state or local tax withholding obligation relating to the exercise or acquisition of Shares under an Award by
any of the following means (in addition to the Company’s right to withhold from any compensation paid to the Participant by the
Company) or by a combination of such means: (a) tendering a cash payment; (b) authorizing the Company to withhold Shares from the Shares
otherwise issuable to the Participant as a result of the exercise of, or acquisition of Shares under, the Award, provided, however, that
no Shares are withheld with a value exceeding the minimum amount of tax required to be withheld by law; or (c) delivering to the Company
previously owned and unencumbered Shares.

 

12.       Adjustments
Upon Changes in Stock

 

In
the event of changes in the outstanding Shares or in the capital structure of the Company by reason of any stock or extraordinary cash
dividend, stock split, reverse stock split, an extraordinary corporate transaction such as any recapitalization, reorganization, merger,
consolidation, combination, exchange, or other relevant change in capitalization occurring after the Grant Date of any Award, Awards
granted under this Plan and any Award Agreements, the exercise price of Options and Stock Appreciation Rights, and the maximum number
of Shares underlying all Awards stated in Section 5, will be equitably adjusted or substituted, as to the number, price or kind of a
Share or other consideration subject to such Awards to the extent necessary to preserve the economic intent of such Award. In the case
of adjustments made pursuant to this Section 12, unless the Committee specifically determines that such adjustment is in the best interests
of the Company or any Affiliate, the Committee shall, in the case of Incentive Stock Options, ensure that any adjustments under this
Section 12 will not constitute a modification, extension or renewal of the Incentive Stock Options within the meaning of Section 424(h)(3)
of the Code, and in the case of Non-qualified Stock Options, ensure that any adjustments under this Section 12 will not constitute a
modification of such Non-qualified Stock Options within the meaning of Section 409A of the Code. Any adjustments made under this Section
12 shall be made in a manner which does not adversely affect the exemption provided pursuant to Rule 16b-3 under the Exchange Act. Further,
with respect to Awards intended to qualify as “performance-based compensation” under Section 162(m) of the Code, any adjustments
or substitutions will not cause the Company to be denied a tax deduction on account of Section 162(m) of the Code. The Company shall
give each Participant notice of an adjustment hereunder and, upon notice, such adjustment shall be conclusive and binding for all purposes.

 

    	-24-

     

    

 

13.       Effect
of Change in Control

 

13.1       Unless
otherwise provided in an Award Agreement, notwithstanding any provision of this Plan to the contrary, but subject to the rules and policies
of the TSXV while the Common Stock is listed on the TSXV:

 

	 	(a)	in
    the event of a Change in Control, all Options and Stock Appreciation Rights shall become immediately exercisable with respect to
    100% of the Shares subject to such Options or Stock Appreciation Rights, and/or the Restricted Period shall expire immediately with
    respect to 100% of the Shares of Restricted Stock or Restricted Stock Unit; and
	 	 	 
	 	(b)	with
    respect to Performance Compensation Awards, in the event of a Change in Control, all Performance Goals or other vesting criteria
    will be deemed achieved at 100% of target levels and all other terms and conditions will be deemed met.

 

To
the extent practicable, any actions taken by the Committee under subsections (a) and (b) shall occur in a manner and at a time which
allows affected Participants the ability to participate in the Change in Control with respect to the Shares underlying their Awards.

 

13.2       In
addition, in the event of a Change in Control, the Committee may, in its discretion and upon at least 10 days’ advance notice to
the affected Persons, cancel any outstanding Awards and pay to the holders thereof, in cash or stock, or any combination thereof, the
value of such Awards based upon the price per Share received or to be received by other Shareholders in connection therewith. In the
case of any Option or Stock Appreciation Right with an exercise price (or SAR Exercise Price in the case of a Stock Appreciation Right)
that equals or exceeds the price paid for a Share in connection with the Change in Control, the Committee may cancel the Option or Stock
Appreciation Right without the payment of consideration therefor.

 

13.3       The
obligations of the Company under this Plan shall be binding upon any successor corporation or organization resulting from the merger,
consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to all or substantially
all of the assets and business of the Company and its Affiliates, taken as a whole.

 

    	-25-

     

    

 

14.       Amendment
of Plan and Awards

 

14.1       Amendment
of Plan. The Board at any time, and from time to time, may amend or terminate this Plan. However, except as provided in Section 12
relating to adjustments upon changes in Shares and Section 14.4, no amendment shall be effective unless approved by the Shareholders
(to the extent Shareholder approval is necessary to satisfy any Applicable Laws). At the time of such amendment, the Board shall determine,
upon advice from counsel, whether such amendment will be contingent on Shareholder approval.

 

14.2       Shareholder
Approval. The Board may, in its sole discretion, submit any other amendment to this Plan for Shareholder approval, including, amendments
to this Plan intended to satisfy the requirements of Section 162(m) of the Code and the regulations thereunder regarding the exclusion
of performance-based compensation from the limit on corporate deductibility of compensation paid to certain executive officers.

 

14.3       Disinterested
Shareholder Approval

 

	 	(a)	In
    this section the following terms have the following meanings:
	 	 	 	 
	 	 	(i)	“Disinterested
    Shareholder Approval” shall have the meaning as described in the TSXV Policies;
	 	 	 	 
	 	 	(ii)	“Insider”
    means an insider as defined in the TSXV Policies; or as defined in securities legislation applicable to the Company; and
	 	 	 	 
	 	 	(iii)	“TSXV
    Policies” means the rules and policies of the TSXV, as amended from time to time.
	 	 	 	 
	 	(b)	If
    the Shares are listed on the TSXV, unless Disinterested Shareholder Approval is obtained, under no circumstances will this Plan,
    together with all of the Company’s other previously established and outstanding stock option or equity incentive plans or grants,
    result in:
	 	 	 	 
	 	 	(i)	the
    aggregate number of Shares reserved for issuance under Awards granted to Insiders (as a group) at any point in time exceeding 10%
    of the issued and outstanding Shares (on a non-diluted basis);
	 	 	 	 
	 	 	(ii)	the
    grant to Insiders (as a group), within a 12 month period, of Options where an aggregate number of Shares subject to such Options
    exceeds 10% of the issued and outstanding Shares (on a non-diluted basis), calculated on the date an Award is granted to any Insider;
	 	 	 	 
	 	 	(iii)	the
    grant to Insiders (as a group), within a 12 month period, of Non-Option Awards where an aggregate number of Shares subject to such
    Non-Option Awards exceeds 2% of the issued and outstanding Shares (on a non-diluted basis), calculated on the date a Non-Option Award
    is granted to any Insider; 

 

    	-26-

     

    

 

	 	 	(iv)	the
    aggregate number of Shares subject to Awards granted to any one Participant within a 12 month period exceeding 5% of the issued and
    outstanding Shares (on a non-diluted basis), calculated on the date an Award is granted to the Participant; 
	 	 	 	 
	 	 	(v)	the
    aggregate number of Shares subject to Non-Option Awards granted to any one Participant within a 12 month period exceeding 1% of the
    issued and outstanding Shares (on a non-diluted basis), calculated on the date a Non-Option Award is granted to the Participant;
	 	 	 	 
	 	 	(vi)	the
    aggregate number of Shares subject to Awards granted to any one Participant who is a Consultant (as defined by the policies of the
    TSXV) within a 12 month period exceeding 2% of the issued and outstanding Shares (on a non-diluted basis), calculated on the date
    an Award is granted to the Participant; or
	 	 	 	 
	 	 	(vii)	the
    aggregate number of Shares subject to Awards granted to all Participants (as a group) who are employed to perform Investor Relations
    Activities (as defined by the Policies of the TSXV) within a 12 month period exceeding 2% of the issued and outstanding Shares (on
    a non-diluted basis), calculated on the date an Award is granted to the Participant.
	 	 	 	 
	 	(c)	If
    the Shares are listed on the TSXV, the Company must obtain Disinterested Shareholder Approval for any amendment to Options held by
    Insiders that would have the effect of decreasing the exercise price of the Options.

 

14.4       Contemplated
Amendments. It is expressly contemplated that the Board may amend this Plan in any respect the Board deems necessary or advisable
to provide eligible Employees, Consultants and Directors with the maximum benefits provided or to be provided under the provisions of
the Code and the regulations promulgated thereunder relating to Incentive Stock Options or to the nonqualified deferred compensation
provisions of Section 409A of the Code and/or to bring the Plan and/or Awards granted under it into compliance therewith.

 

14.5       No
Impairment of Rights. Rights under any Award granted before amendment of this Plan shall not be impaired by any amendment of this
Plan unless: (a) the Company requests the consent of the Participant; and (b) the Participant consents in writing.

 

14.6       Amendment
of Awards. The Committee at any time, and from time to time, may amend the terms of any one or more Awards; provided, however, that
the Committee may not affect any amendment which would otherwise constitute an impairment of the rights under any Award unless: (a) the
Company requests the consent of the Participant; and (b) the Participant consents in writing.

 

    	-27-

     

    

 

15.       General
Provisions

 

15.1       Forfeiture
Events. The Committee may specify in an Award Agreement that the Participant’s rights, payments and benefits with respect to
an Award shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain events, in addition to
applicable vesting conditions of an Award. Such events may include, without limitation, breach of non-competition, non-solicitation,
confidentiality, or other restrictive covenants that are contained in the Award Agreement or otherwise applicable to the Participant,
a termination of the Participant’s Continuous Service for Cause, or other conduct by the Participant that is detrimental to the
business or reputation of the Company and/or any Affiliate.

 

15.2       Clawback.
Notwithstanding any other provisions in this Plan, any Award which is subject to recovery under any Applicable Laws will be subject to
such deductions and clawback as may be required to be made pursuant to such Applicable Laws (or any policy adopted by the Company pursuant
to any such Applicable Laws).

 

15.3       Other
Compensation Arrangements. Nothing contained in this Plan shall prevent the Board from adopting other or additional compensation
arrangements, subject to Shareholder approval if such approval is required, and such arrangements may be either generally applicable
or applicable only in specific cases.

 

15.4       Sub-plans.
The Committee may from time to time establish sub-plans under the Plan for purposes of satisfying blue sky, securities, tax or other
laws of various jurisdictions in which the Company intends to grant Awards. Any sub-plans shall contain such limitations and other terms
and conditions as the Committee determines are necessary or desirable. All sub-plans shall be deemed a part of this Plan, but each sub-plan
shall apply only to the Participants in the jurisdiction for which the sub-plan was designed.

 

15.5       Deferral
of Awards. The Committee may establish one or more programs under this Plan to permit selected Participants the opportunity to elect
to defer receipt of consideration upon exercise of an Award, satisfaction of performance criteria, or other event that absent the election
would entitle the Participant to payment or receipt of Shares or other consideration under an Award. The Committee may establish the
election procedures, the timing of such elections, the mechanisms for payments of, and accrual of interest or other earnings, if any,
on amounts, shares or other consideration so deferred, and such other terms, conditions, rules and procedures that the Committee deems
advisable for the administration of any such deferral program.

 

15.6       Unfunded
Plan. This Plan shall be unfunded. Neither the Company, the Board nor the Committee shall be required to establish any special or
separate fund or to segregate any assets to assure the performance of its obligations under this Plan.

 

15.7       Delivery.
Upon exercise of a right granted under this Plan, the Company shall issue Shares or pay any amounts due within a reasonable period of
time thereafter. Subject to any statutory or regulatory obligations the Company may otherwise have, for purposes of this Plan, 30 days
shall be considered a reasonable period of time.

 

    	-28-

     

    

 

15.8       No
Fractional Shares. No fractional Shares shall be issued or delivered pursuant to this Plan. The Committee shall determine whether
cash, additional Awards or other securities or property shall be issued or paid in lieu of fractional Shares or whether any fractional
Shares should be rounded, forfeited or otherwise eliminated.

 

15.9       Other
Provisions. The Award Agreements authorized under this Plan may contain such other provisions not inconsistent with this Plan, including,
without limitation, restrictions upon the exercise of the Awards, as the Committee may deem advisable.

 

15.10       Section
409A. This Plan is intended to comply with Section 409A of the Code to the extent subject thereto, and, accordingly, to the maximum
extent permitted, this Plan shall be interpreted and administered to be in compliance therewith. Any payments described in this Plan
that are due within the “short-term deferral period” as defined in Section 409A of the Code shall not be treated as deferred
compensation unless Applicable Laws require otherwise. Notwithstanding anything to the contrary in this Plan, to the extent required
to avoid accelerated taxation and tax penalties under Section 409A of the Code, amounts that would otherwise be payable and benefits
that would otherwise be provided pursuant to the Plan during the six month period immediately following the Participant’s termination
of Continuous Service shall instead be paid on the first payroll date after the six month anniversary of the Participant’s separation
from service (or the Participant’s death, if earlier). Notwithstanding the foregoing, neither the Company nor the Committee shall
have any obligation to take any action to prevent the assessment of any excise tax or penalty on any Participant under Section 409A of
the Code, and neither the Company nor the Committee will have any liability to any Participant for such tax or penalty.

 

15.11       Disqualifying
Dispositions. Any Participant who shall make a “disposition” (as defined in Section 424 of the Code) of all or any portion
of the Shares acquired upon exercise of an Incentive Stock Option within two years from the Grant Date of such Incentive Stock Option
or within one year after the issuance of the Shares acquired upon exercise of such Incentive Stock Option (a “Disqualifying
Disposition”) shall be required to immediately advise the Company in writing as to the occurrence of the sale and the price
realized upon the sale of such Shares.

 

15.12       Section
16. It is the intent of the Company that this Plan satisfy, and be interpreted in a manner that satisfies, the applicable requirements
of Rule 16b-3 as promulgated under Section 16 of the Exchange Act so that Participants will be entitled to the benefit of Rule 16b-3,
or any other rule promulgated under Section 16 of the Exchange Act, and will not be subject to short-swing liability under Section 16
of the Exchange Act. Accordingly, if the operation of any provision of this Plan would conflict with the intent expressed in this Section
15.12, such provision to the extent possible shall be interpreted and/or deemed amended so as to avoid such conflict.

 

15.13       Section
162(m). To the extent the Committee issues any Award that is intended to be exempt from the deduction limitation of Section 162(m)
of the Code, the Committee may, without shareholder or grantee approval, amend this Plan or the relevant Award Agreement retroactively
or prospectively to the extent it determines necessary in order to comply with any subsequent clarification of Section 162(m) of the
Code required to preserve the Company’s federal income tax deduction for compensation paid pursuant to any such Award.

 

    	-29-

     

    

 

15.14       Beneficiary
Designation. Each Participant may from time to time name any beneficiary or beneficiaries by whom any right under this Plan is to
be exercised in case of such Participant’s death. Each designation will revoke all prior designations by the same Participant,
shall be in a form reasonably prescribed by the Committee, and shall be effective only when filed by the Participant in writing with
the Company during the Participant’s lifetime.

 

15.15       Expenses.
The costs of administering this Plan shall be paid by the Company.

 

15.16       Severability.
If any of the provisions of this Plan or any Award Agreement is held to be invalid, illegal or unenforceable, whether in whole or in
part, such provision shall be deemed modified to the extent, but only to the extent, of such invalidity, illegality or unenforceability
and the remaining provisions shall not be affected thereby.

 

15.17       Plan
Headings. The headings in this Plan are for purposes of convenience only and are not intended to define or limit the construction
of the provisions hereof.

 

15.18       Non-Uniform
Treatment. The Committee’s determinations under this Plan need not be uniform and may be made by it selectively among persons
who are eligible to receive, or actually receive, Awards. Without limiting the generality of the foregoing, the Committee shall be entitled
to make non-uniform and selective determinations, amendments and adjustments, and to enter into non-uniform and selective Award Agreements.

 

16.       Effective
Date of Plan

 

16.1       This
Plan shall become effective as of the Effective Date, but no Award shall be exercised (or, in the case of a stock Award, shall be granted)
unless and until this Plan has been approved by the Shareholders, which approval shall be within 12 months before or after the date this
Plan is adopted by the Board.

 

17.       Termination
or Suspension of this Plan

 

17.1       This
Plan shall terminate automatically on October 15, 2027. No Award shall be granted pursuant to this Plan after such date, but Awards granted
before may extend beyond that date. The Board may suspend or terminate this Plan at any earlier date pursuant to Section 14.1 hereof.
No Awards may be granted under this Plan while this Plan is suspended or after it is terminated. Unless the Company determines to submit
Section 8.3 of this Plan and the definition of “Performance Goal” and “Performance Criteria” to the Shareholders
at the first Shareholder meeting that occurs in the fifth year following the year in which this Plan was last approved by Shareholders
(or any earlier meeting designated by the Board), in accordance with the requirements of Section 162(m) of the Code, and such Shareholder
approval is obtained, then no further Performance Compensation Awards shall be made to Covered Employees under Section 8.3 after the
date of such annual meeting, but this Plan may continue in effect for Awards to Participants not in accordance with Section 162(m) of
the Code.

 

18.       Choice
of Law

 

18.1       The
law of the State of Nevada shall govern all questions concerning the construction, validity and interpretation of this Plan, without
regard to such state’s conflict of law rules.

 

As
adopted by the Board of Directors of CurrencyWorks Inc. on October 15, 2017, as amended on January 22, 2018, as amended on November 22,
2018, as amended on December 7, 2020 and as amended on May 27, 2021.

 

    	-30-eng_ex101

  Exhibit 10.1

SECURITIES PURCHASE
AGREEMENT

 

This
Securities Purchase Agreement (this “Agreement”) is dated as
of June 1, 2021 and is between ENGlobal Corporation, a corporation
incorporated under the laws of the state of Nevada (the
“Company”), and each
purchaser identified on the signature pages hereto (each, including
its successors and assigns, a “Purchaser” and
collectively the “Purchasers”).

 

WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant
to an effective registration statement under the Securities Act (as
defined below) as to the Shares, the Company desires to issue and
sell to each Purchaser, and each Purchaser, severally and not
jointly, desires to purchase from the Company, securities of the
Company as more fully described in this Agreement.

 

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

 

ARTICLE I.

DEFINITIONS

 

1.1     
Definitions. In
addition to the terms defined elsewhere in this Agreement, for all
purposes of this Agreement, the following terms have the meanings
set forth in this Section 1.1:

 

“A.G.P.” means
A.G.P./Alliance Global Partners, sole placement agent.

 

“Acquiring Person” shall
have the meaning ascribed to such term in Section 4.5.

 

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

 

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

 

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

 

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

 

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

 

“Business Day” means any day except
any Saturday, any Sunday, any day which is a federal legal holiday
in the United States or any day on which banking institutions in
the State of New York are authorized or required by law or other
governmental action to close.

 

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

 

“Closing Date” means the Trading
Day on which all of the Transaction Documents have been executed
and delivered by the applicable parties thereto, and all conditions
precedent to (i) the Purchasers’ obligations to pay the
Subscription Amount and (ii) the Company’s obligations to
deliver the Shares, in each case, have been satisfied or waived,
but in no event later than the second (2nd) Trading Day following
the date hereof.

 

 

 

 

“Code” means the United
States Internal Revenue Code of 1986, as amended.

 

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

 

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

 

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

 

“Company Counsel” means, Porter
Hedges LLP, 1000 Main St., 36th Floor, Houston,
Texas 77002 and Holland & Hart LLP, 5441 Kietzke Lane, Second
Floor, Reno, Nevada 89511.

 

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

 

“Disclosure Time” means,
(i) if this Agreement is signed on a day that is not a Trading Day
or after 9:00 a.m. (New York City time) and before midnight (New
York City time) on any Trading Day, 9:01 a.m. (New York City time)
on the Trading Day immediately following the date hereof, unless
otherwise instructed as to an earlier time by A.G.P., and (ii) if
this Agreement is signed between midnight (New York City time) and
9:00 a.m. (New York City time) on any Trading Day, no later than
9:01 a.m. (New York City time) on the date hereof, unless otherwise
instructed as to an earlier time by A.G.P.

 

“DWAC” shall have the
meaning ascribed to such term in Section 2.2(a)(iv).

 

“EDGAR” means the
Commission’s Electronic Data Gathering, Analysis and
Retrieval System.

 

“Environmental Law” shall have the
meaning ascribed to such term in Section 3.1(p).

 

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

 

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

 

“Exempt Issuance” means the
issuance of (a) shares of Common Stock or options to employees,
officers, directors, consultants or advisors of the Company
pursuant to any stock or option plan duly adopted for such purpose,
by a majority of the non-employee members of the Board of Directors
or a majority of the members of a committee of non-employee
directors established for such purpose, provided that any
securities issued to consultants or advisors pursuant to this
clause (a) are issued as “restricted securities” (as
defined in Rule 144) and carry no registration rights that require
or permit the filing of any registration statement in connection
therewith during the prohibition period in Section 4.12(a) herein,
(b) securities upon the exercise or exchange of or conversion of
any Securities issued hereunder and/or other securities exercisable
or exchangeable for or convertible into shares of Common Stock
issued and outstanding on the date of this Agreement, provided that
such securities have not been amended since the date of this
Agreement to increase the number of such securities or to decrease
the exercise price, exchange price or conversion price of such
securities (other than in connection with stock splits or
combinations, or as otherwise required by the existing terms of
such securities) or to extend the term of such securities, and (c)
securities issued pursuant to acquisitions or strategic
transactions approved by a majority of the disinterested directors
of the Company, provided that any such issuance shall only be to a
Person (or to the equityholders of a Person) which is, itself or
through its subsidiaries, an operating company or an owner of an
asset in a business synergistic with the business of the Company
and shall provide to the Company additional benefits in addition to
the investment of funds, but shall not include a transaction in
which the Company is issuing securities primarily for the purpose
of raising capital or to an entity whose primary business is
investing in securities and provided that any securities issued in
connection with strategic transactions pursuant to this clause (c)
are issued as “restricted securities” (as defined in
Rule 144) and carry no registration rights that require or permit
the filing of any registration statement in connection therewith
during the prohibition period in Section 4.11(a)
herein.

 

 

 

 

“FCPA” means the Foreign
Corrupt Practices Act of 1977, as amended, and the rules and
regulations thereunder.

 

“Federal Reserve” shall
have the meaning ascribed to such term in Section
3.1(oo).

  

“Hazardous Substances”
shall have the meaning ascribed to such term in Section
3.1(p).

 

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

 

“Issuer Free Writing Prospectus” shall have
the meaning ascribed to such term in Section
3.1(f)(ii).

 

“IT Systems” shall have the
meaning ascribed to such term in Section 3.1(qq).

 

“Lien” means a lien,
charge, mortgage, pledge, security interest, claim, right of first
refusal, pre-emptive right, or other encumbrance of any kind
whatsoever.

 

“Lock-Up Agreement” means the
Lock-Up Agreements, each dated as of the date hereof, by and
between the Company and the directors and executive officers and
ten percent (10%) or greater stockholders of the Company, in the
form of Exhibit A attached hereto.

 

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

 

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

  

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

 

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

 

“Per Share Purchase Price”
equals $2.80 per share.

 

“Personal Data” shall have the
meaning ascribed to such term in Section 3.1(qq).

 

“Proceeding” means an
action, claim, suit, investigation or proceeding (including,
without limitation, an informal investigation or partial
proceeding, such as a deposition) pending or, to the
Company’s knowledge, threatened in writing against or
affecting the Company, any Subsidiary or any of their respective
properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state,
county, local or foreign).

 

“Prospectus” means the
final base prospectus filed for the Registration
Statement.

 

“Prospectus Supplement” means the
supplement to the Prospectus complying with Rule 424(b) of the
Securities Act that is filed with the Commission and delivered by
the Company to each Purchaser at the Closing.

 

 

 

 

“Purchaser Party” shall have the
meaning ascribed to such term in Section 4.8.

  

“Registration Statement” shall have the
meaning ascribed to such term in Section 3.1(f)(ii).

 

“Related Entity” shall
mean with respect to a Person, any parent, subsidiary and any
business, corporation, partnership, limited liability company or
other entity in which such Person holds a substantial ownership
interest, directly or indirectly.

 

“Related Party” shall mean
with respect to a Person, any or its affiliates, or any of its or
its affiliate’s shareholders, directors, officers, employees,
managers, members, partners, representatives or
trustees.

 

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

 

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

 

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

 

“Shares” means the Common
Stock issued or issuable to each Purchaser pursuant to this
Agreement.

 

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

 

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

 

“Subsidiary” and
“Subsidiaries” shall have
the meanings ascribed to such terms in Section 3.1(a).

 

“Trading Day” means a day on which
the New York Stock Exchange is open for trading.

 

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

 

“Transaction Documents” means this
Agreement, the Lock-Up Agreements and the Placement Agency
Agreement, all exhibits and schedules thereto and hereto and any
other documents or agreements executed in connection with the
transactions contemplated hereunder.

 

“Transfer Agent” means
 Computershare Investor Services, LLC, the current transfer
agent of the Company, at its office P.O. Box 30170, College
Station, Texas 77842-3170, and any successor transfer agent of the
Company.

 

 

 

 

ARTICLE II.

PURCHASE AND
SALE

 

 

2.1   
  Closing. On
the Closing Date, upon the terms and subject to the conditions set
forth herein, the Company agrees to sell, and the Purchasers,
severally and not jointly, agree to purchase, up to an aggregate of
approximately $20 million of Shares. The Company shall deliver to
each Purchaser its respective Shares, and the Company and each
Purchaser shall deliver the other items set forth in Section 2.2
deliverable at the Closing. Upon satisfaction of the covenants and
conditions set forth in Sections 2.2 and 2.3, the Closing shall
occur at the offices of Sichenzia Ross Ference LLP or such other
location as the parties shall mutually agree. Unless otherwise
directed by A.G.P., settlement of the Shares shall occur via
“Delivery Versus Payment” (“DVP”) (i.e., on the Closing Date, the
Company shall issue the Shares registered in the Purchasers’
names and addresses and released by the Transfer Agent directly to
the account(s) at A.G.P. identified by each Purchaser; upon receipt
of such Shares, A.G.P. shall promptly electronically deliver such
Shares to the applicable Purchaser, and payment therefor shall be
made by the Placement Agent (or its clearing firm) by wire transfer
to the Company).

 

2.2   
  Deliveries.

 

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

 

(i)     this
Agreement duly executed by the Company;

 

(ii)     a
legal opinion of Company Counsel, in a form reasonably acceptable
to A.G.P. and the Purchasers;

 

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

 

(iv)     a
copy of the irrevocable instructions to the Transfer Agent
instructing the Transfer Agent to deliver on an expedited basis via
The Depository Trust Company Deposit or Withdrawal at Custodian
system (“DWAC”) Shares equal to
such Purchaser’s Subscription Amount divided by the Per Share
Purchase Price, registered in the name of such
Purchaser;

 

(v)
     Officer’s Certificate, in form
and substance satisfactory to the Purchasers;

 

(vi)
    Secretary’s Certificate, in form and
substance satisfactory to the Purchasers;

 

(vii)     the
Lock-Up Agreements; and

 

(viii)
     the Prospectus and Prospectus
Supplement (which may be delivered in accordance with Rule 172
under the Securities Act).

 

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

 

(i)     this
Agreement duly executed by such Purchaser; and

 

(ii)     such
Purchaser’s Subscription Amount, which shall be made
available for “Delivery Versus Payment” settlement with
the Company or its designees.

 

 

 

 

2.3     Closing
Conditions.

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

 

 

 

ARTICLE III.

REPRESENTATIONS AND
WARRANTIES

 

 

3.1     Representations
and Warranties of the Company. The Company hereby makes the
following representations and warranties to each
Purchaser:

 

(a)     Subsidiaries.
All of the direct and indirect subsidiaries of the Company are set
forth on Schedule 3.1(a) (each, a “Subsidiary”, and
collectively, the “Subsidiaries”). Except as
set forth on Schedule 3.1(a), the Company owns, directly or
indirectly, all of the capital stock or other equity interests of
each Subsidiary free and clear of any Liens, and all of the issued
and outstanding shares of capital stock of each Subsidiary are
validly issued and are fully paid, non-assessable and free of
preemptive and similar rights to subscribe for or purchase
securities. There are no outstanding options, warrants, scrip
rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities, rights or obligations
convertible into or exercisable or exchangeable for, or giving any
Person any right to subscribe for or acquire, any capital stock of
any Subsidiary, or contracts, commitments, understandings or
arrangements by which any Subsidiary is or may become bound to
issue capital stock.

 

(b)     Organization
and Qualification. The Company and each of the Subsidiaries
has been duly organized and validly exists as a corporation,
limited partnership or company in good standing (or the foreign
equivalent thereof, if any) under the laws of its jurisdiction of
organization. The Company and each of the Subsidiaries is duly
qualified to do business and is in good standing as a foreign or
extra-provincial corporation, partnership, company or limited
liability company in each jurisdiction in which the character or
location of its properties (owned, leased or licensed) or the
nature or conduct of its business makes such qualification
necessary, except for those failures to be so qualified or in good
standing which (individually and in the aggregate) would not have a
Material Adverse Effect. No Proceeding has been instituted in any
such jurisdiction revoking, limiting or curtailing or seeking to
revoke, limit or curtail such power and authority or qualification.
Neither the Company nor any Subsidiary is in violation nor default
of any of the provisions of its respective certificate or articles
of incorporation, bylaws or other organizational or charter
documents. The term “Material Adverse Effect”
means an effect, change, event or occurrence that, alone or in
conjunction with any other or others: (i) has or would reasonably
be expected to have a material adverse effect on: (A) the business,
general affairs, management, condition (financial or otherwise),
results of operations, shareholders’ equity, properties or
prospects of the Company and the Subsidiaries, taken as a whole, or
(B) the legality, validity or enforceability of any Transaction
Document, (ii) the Company’s ability to perform in any
material respect on a timely basis its obligations under any
Transaction Document or (iii) would result in the Prospectus or any
amendment thereto containing a misrepresentation within the meaning
of applicable securities laws; provided that a change in the market
price or trading volume of the Common Stock alone shall not be
deemed, in and of itself, to constitute a Material Adverse
Effect.

 

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

 

 

 

 

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

 

(e)     Filings,
Consents and Approvals. The Company is not required to
obtain any consent, waiver, authorization or order of, give any
notice to, or make any filing or registration with, any court or
other federal, state, local or other governmental authority or
other Person in connection with the execution, delivery and
performance by the Company of this Agreement, other than: (i) the
filings required pursuant to Section 4.4 of this Agreement, (ii)
the filing with the Commission of the Prospectus Supplement, (iii)
filings with FINRA, and (iv) application to the Nasdaq Capital
Market for the listing of the Shares for trading thereon in the
time and manner required thereby (collectively, the
“Required
Approvals”).

 

(f)   
  Issuance of the
Shares; Qualification; Registration.

 

(i)     The
Shares are duly authorized and, when issued and paid for in
accordance with the applicable Transaction Documents, will be duly
and validly issued, fully paid and non-assessable, free and clear
of all Liens imposed by the Company. The Company has reserved from
its duly authorized capital stock the maximum number of shares of
Common Stock issuable pursuant to this Agreement.

 

(ii)      The
Company was at the time of the filing of the Registration Statement
eligible to use Form S-3. The Company is eligible to use Form
S-3 under the Securities Act and it meets the transaction
requirements with respect to the aggregate market value of
securities being sold pursuant to this offering and during the
twelve (12) calendar months prior to this offering, as set forth in
General Instruction I.B.6 of Form S-3. The Company has prepared and
filed with the Commission a registration statement under the
Securities Act on Form S-3 (File No. 333-252572) on January 29,
2021, providing for the offer and sale, from time to time, of up to
$100,000,000 of the Company’s securities (the
“Registration
Statement”). The Registration Statement became
effective pursuant to Rule 467(a) under the Securities Act on March
19, 2021. The prospectus included in the Registration Statement at
the time it became effective, including documents incorporated
therein by reference, is referred to herein as the “Base
Prospectus”. No stop order suspending the effectiveness of
the Registration Statement has been issued under the Securities Act
and no proceedings for that purpose have been instituted or are
pending or, to the knowledge of the Company, are contemplated by
the Commission and any request on the part of the Commission for
additional information has been complied with.

 

Any
“issuer free writing prospectus” (as defined in Rule
433 under the Securities Act) relating to the Shares is hereafter
referred to as an “Issuer Free Writing Prospectus”. Any
reference herein to the Base Prospectus and the Prospectus shall be
deemed to refer to and include the documents incorporated by
reference therein as of the date of filing thereof; and any
reference herein to any “amendment” or
“supplement” with respect to any of the Base Prospectus
and the Prospectus shall be deemed to refer to and include (i) the
filing of any document with the Commission incorporated or deemed
to be incorporated therein by reference after the date of filing of
such Base Prospectus or Prospectus and (ii) any such document so
filed.

 

All
references in this Agreement to the Registration Statement, the
Base Prospectus, or the Prospectus, or any Issuer Free Writing
Prospectus, or any amendments or supplements to any of the
foregoing, shall be deemed to include any copy thereof filed with
the Commission on EDGAR.

 

The
Company has filed the registration statement with FINRA or meets
the definition of an Eligible Issuer.

 

 

 

 

(g)     Securities
Act Compliance. The Registration Statement complies, and the
Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus will comply, with the
applicable provisions of the Securities Act. Each part of the
Registration Statement, when such part became effective, did not
and will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary
to make the statements therein not misleading The Prospectus, as of
its filing date, and any amendment thereof or supplement thereto,
did not and will not contain an untrue statement of a material fact
or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading.

 

(h)     No
Stop Orders. No order preventing or suspending the use of
the Base Prospectus or any Issuer Free Writing Prospectus has been
issued by the Commission.

 

(i)   
  Capitalization. The
capitalization of the Company is as set forth on Schedule 3.1(i). All of the
issued and outstanding shares of Common Stock are duly authorized,
validly issued, fully paid and non-assessable and have been duly
and validly authorized and issued, in compliance with all federal
and state securities laws and not in violation of or subject to any
preemptive or similar right that entitles any person to acquire
from the Company any Common Stock or other security of the Company
or any security convertible into, or exercisable or exchangeable
for, Common Stock or any other such security, except for such
rights as may have been fully satisfied or waived prior to the date
hereof. Except as set forth on Schedule 3.1(i), the Company
has no outstanding options, warrants, scrip rights to subscribe to,
calls or commitments of any character whatsoever relating to, or
securities, rights or obligations convertible into or exercisable
or exchangeable for, or giving any Person any right to subscribe
for or acquire, any Common Stock, or contracts, commitments,
understandings or arrangements by which the Company is or may
become bound to issue additional Common Stock or Common Stock
Equivalents. No Person has any right of first refusal, pre-emptive
right, right of participation, or any similar right to participate
in the transactions contemplated by the Transaction Documents. The
issuance and sale of the Shares will not obligate the Company to
issue Common Stock or other securities to any Person (other than
the Purchasers) and will not result in a right of any holder of
Company securities to adjust the exercise, conversion, exchange or
reset price under any of such securities. There are no outstanding
securities or instruments of the Company with any provision that
adjusts the exercise, conversion, exchange or reset price of such
security or instrument upon an issuance of securities by the
Company. There are no outstanding securities or instruments of the
Company that contain any redemption or similar provisions, and
there are no contracts, commitments, understandings or arrangements
by which the Company is or may become bound to redeem a security of
the Company. Except for the Required Approvals, no further approval
or authorization of any shareholder of the Company, the Board of
Directors or others is required for the issuance and sale of the
Shares. There are no shareholders agreements, voting agreements or
other similar agreements with respect to the Company’s
capital stock to which the Company is a party or, to the knowledge
of the Company, between or among any of the Company’s
shareholders.

 

(j)  
   Reports. The Company has filed
all reports, schedules, forms, statements and other documents
required to be filed by the Company under the Securities Act and
Exchange Act, including pursuant to Section 13(a) or 15(d) thereof
(the foregoing materials, including the exhibits thereto and
documents incorporated by reference therein, together with the
Prospectus and the Prospectus Supplements, being collectively
referred to herein as the “SEC Reports”) on a timely
basis or has received a valid extension of such time of filing and
has filed any such SEC Reports prior to the expiration of any such
extension. As of their respective dates, the SEC Reports complied
in all material respects with the requirements of the Securities
Act and the Exchange Act, as applicable, and none of the SEC
Reports, when filed, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading.

 

(k)     Financial
Statements. The consolidated financial statements, including
the notes thereto, included or incorporated by reference in the
Registration Statement and the Prospectus comply in all material
respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at
the time of filing. Such financial statements have been prepared in
accordance with generally accepted accounting principles applied on
a consistent basis during the periods involved, except as may be
otherwise specified in such financial statements or the notes
thereto and except that unaudited financial statements may not
contain all footnotes required by generally accepted accounting
principles, and fairly present in all material respects the
financial position of the Company and its consolidated Subsidiaries
as of and for the dates thereof and the results of operations and
cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, immaterial, year-end audit
adjustments.

 

(l)  
   Material
Changes; Undisclosed Events, Liabilities or Developments.
Since the date of the latest consolidated financial statements
included in or incorporated by reference into the Registration
Statement and the Prospectus, except as set forth on Schedule
3.1(l), (i) there has been no event, occurrence or development that
has had or that could reasonably be expected to result in a
Material Adverse Effect, (ii) neither the Company nor any
Subsidiary has incurred any liabilities (contingent or otherwise)
other than (A) trade payables and accrued expenses incurred in the
ordinary course of business consistent with past practice and (B)
liabilities not required to be reflected in the Company’s
financial statements pursuant to generally accepted accounting
principles or disclosed in filings made with the Commission, (iii)
the Company has not altered its method of accounting, (iv) the
Company has not declared or made any dividend or distribution of
cash or other property to its stockholders or purchased, redeemed
or made any agreements to purchase or redeem any shares of its
capital stock and (v) the Company has not issued any equity
securities to any officer, director or Affiliate, except pursuant
to existing Company stock option plans. The Company does not have
pending before the Commission any request for confidential
treatment of information. Except for the issuance of the Shares
contemplated by this Agreement and the related transactions
contemplated hereby or as set forth on Schedule 3.1(l), no event,
liability, fact, circumstance, occurrence or development has
occurred or exists or is reasonably expected to occur or exist with
respect to the Company or its Subsidiaries or their respective
businesses, prospects, properties, operations, assets or financial
condition that would be required to be disclosed by the Company
under applicable securities laws at the time this representation is
made or deemed made that has not been publicly disclosed at least 1
Trading Day prior to the date that this representation is
made.

 

 

 

 

(m)     Litigation.
Except as set forth on Schedule 3.1(m), there is no
material action, suit, inquiry, notice of violation, proceeding or
investigation pending or, to the knowledge of the Company,
threatened against or affecting the Company, any Subsidiary or any
of their respective properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an
“Action”). None of the
Actions set forth on Schedule 3.1(m), if any, (i)
adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Shares,
or (ii) is expected to result in a Material Adverse Effect. The
Company has disclosed, in the documents filed by the Company
pursuant to Sections 12, 13, 14 or 15 of the Exchange Act and
incorporated or deemed to be incorporated by reference into the
Prospectus, all such information that it is required to disclose in
respect of any Action pursuant to the requirements of the
Securities Act and the Exchange Act, as applicable. Neither the
Company nor any Subsidiary, nor any director or officer thereof, is
or has been the subject of any Action involving a claim of
violation of or liability under federal or state securities laws or
a claim of breach of fiduciary duty. There has not been, and to the
knowledge of the Company, there is not pending or contemplated, any
material investigation by the Commission involving the Company or
any current or former director or officer of the Company which is
required to be disclosed in the SEC Reports. The Commission has not
issued any stop order or other order suspending the effectiveness
of any registration statement filed by the Company or any
Subsidiary under the Exchange Act or the Securities
Act.

  

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

 

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

 

(p)     Environmental
Law. There has been no storage, generation, transportation,
handling, use, treatment, disposal, discharge, emission,
contamination, release or other activity involving any kind of
hazardous, toxic or other wastes, pollutants, contaminants,
petroleum products or other hazardous or toxic substances,
chemicals or materials (“Hazardous Substances”)
by, due to, on behalf of, or caused by the Company or any
Subsidiary (or, to the Company’s knowledge, any other entity
for whose acts or omissions the Company is or may be liable) upon
any property now or previously owned, operated, used or leased by
the Company or any Subsidiary, or upon any other property, which
would be a violation of or give rise to any liability under any
applicable law, rule, regulation, order, judgment, decree or
permit, common law provision or other legally binding standard
relating to pollution or protection of human health and the
environment (“Environmental Law”),
except for violations and liabilities which, individually or in the
aggregate, would not have a Material Adverse Effect. There has been
no disposal, discharge, emission contamination or other release of
any kind at, onto or from any such property or into the environment
surrounding any such property of any Hazardous Substances with
respect to which the Company or any Subsidiary has knowledge,
except as would not, individually or in the aggregate, have a
Material Adverse Effect. There is no pending or, to the best of the
Company’s knowledge, threatened administrative, regulatory or
judicial action, claim or notice of noncompliance or violation,
investigation or proceedings relating to any Environmental Law
against the Company or any Subsidiary, except as would not,
individually or in the aggregate, have a Material Adverse Effect.
No property of the Company or any Subsidiary is subject to any Lien
under any Environmental Law. Except as disclosed in the Prospectus,
neither the Company nor any Subsidiary is subject to any order,
decree, agreement or other individualized legal requirement related
to any Environmental Law, which, in any case (individually or in
the aggregate), would have a Material Adverse Effect. The Company
and each Subsidiary are in compliance in all material respects with
all applicable federal, state, local and Environmental Laws and has
all permits, authorizations and approvals required under any
applicable Environmental Laws and are each in compliance with their
requirements. In the ordinary course of its business, the Company
periodically reviews the effect of Environmental Laws on the
business, operations and properties of the Company and the
Subsidiaries, in the course of which it identifies and evaluates
associated costs and liabilities (including, without limitation,
any capital or operating expenditures required for clean-up,
closure or remediation of properties or compliance with
Environmental Laws, or any permit, license or approval, any related
constraints on operating activities and any potential liabilities
to third parties). On the basis of such review, the Company has
reasonably concluded that such associated costs and liabilities
would not, individually or in the aggregate, have a Material
Adverse Effect.

 

 

 

 

(q)     Title
to Assets. The Company and the Subsidiaries have good and
marketable title in fee simple to all real property owned by them
and good and marketable title in all personal property owned by
them that is material to the business of the Company and the
Subsidiaries, in each case free and clear of all Liens, except for
(i) Liens as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to
be made of such property by the Company and the Subsidiaries, (ii)
Liens for the payment of federal, state or other taxes, for which
appropriate reserves have been made therefor in accordance with
generally accepted accounting principles and, the payment of which
is neither delinquent nor subject to penalties, and (iii) Liens
under the Revolving Credit Facility with Pacific Western Bank dba
Pacific Western Business Finance and under capital lease
financings. Any real property and facilities held under lease by
the Company and the Subsidiaries are held by them under valid,
subsisting and enforceable leases with which the Company and the
Subsidiaries are in compliance in all material
respects.

 

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

 

(s)
     Intellectual Property. The
Company and the Subsidiaries have, or have rights to use, all
patents, patent applications, trademarks, trademark applications,
service marks, trade names, trade secrets, inventions, copyrights,
licenses and other intellectual property rights and similar rights
necessary or required for use in connection with their respective
businesses as described in the SEC Reports and which the failure to
so have could have a Material Adverse Effect (collectively, the
“Intellectual
Property Rights”). None of, and neither the Company
nor any Subsidiary has received a written notice that any of, the
Intellectual Property Rights has expired, terminated or been
abandoned, or is expected to expire or terminate or be abandoned,
within two (2) years from the date of this Agreement except as
would not reasonably be expected to have a Material Adverse Effect.
Neither the Company nor any Subsidiary has received, since the date
of the latest audited financial statements included within the SEC
Reports, a written notice of a claim or otherwise has any knowledge
that the Intellectual Property Rights violate or infringe upon the
rights of any Person and neither is aware of any facts which would
form a reasonable basis for any such claim, except as could not
have or reasonably be expected to not have a Material Adverse
Effect. To the knowledge of the Company, all such Intellectual
Property Rights are enforceable and there is no existing
infringement by another Person of any of the Intellectual Property
Rights. The Company and its Subsidiaries have taken reasonable
security measures to protect the secrecy, confidentiality and value
of all of their intellectual properties, except where failure to do
so could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. None of the
Intellectual Property Rights used by the Company or any of its
Subsidiaries in their respective businesses has been obtained or is
being used by the Company or such Subsidiary in violation of any
contractual obligation binding on the Company or any of its
subsidiaries in violation of the rights of any person. The Company
and its subsidiaries have taken all reasonable steps in accordance
with normal industry practice to protect and maintain the
Intellectual Property Rights including, without limitation, the
execution of appropriate nondisclosure and invention assignment
agreements. The consummation of the transactions contemplated by
this Agreement will not result in the loss or impairment of, or
payment of, and additional material amounts with respect to, nor
require the consent of, any other person regarding the
Company’s or any of its subsidiaries’ right to own or
use any of the Intellectual Property Rights as owned or used in the
conduct of such party’s business as currently conducted. To
the knowledge of the Company and its Subsidiaries, no employee of
any of the Company or its subsidiaries is the subject of any
pending claim or proceeding involving a violation of any term of
any employment contract, invention disclosure agreement, patent
disclosure agreement, noncompetition agreement, non-solicitation
agreement, nondisclosure agreement or restrictive covenant to or
with a former employer, where the basis of such violation relates
to such employee’s employment with the Company or its
subsidiaries or actions undertaken by the employee while employed
with the Company or its Subsidiaries.

 

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

 

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

 

 

 

 

(v)     Sarbanes-Oxley;
Internal Accounting Controls. The Company and the
Subsidiaries and their respective officers and directors are in
compliance with the applicable provisions of the Sarbanes-Oxley Act
of 2002, as amended. The Company and the Subsidiaries maintain a
system of internal accounting controls sufficient to provide
reasonable assurance that: (i) transactions are executed in
accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP
and to maintain asset accountability, (iii) access to assets is
permitted only in accordance with management’s general or
specific authorization, and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
The Company and the Subsidiaries have established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) for the Company and the Subsidiaries and designed
such disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports it files or
submits under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the
Commission’s rules and forms. The Company’s certifying
officers have evaluated the effectiveness of the disclosure
controls and procedures of the Company and the Subsidiaries as of
applicable dates specified under the Exchange Act (such date, the
“Evaluation
Date”). The Company presented in its most recently
filed annual report on Form 10-K the conclusions of the certifying
officers about the effectiveness of the disclosure controls and
procedures based on their evaluations as of the Evaluation Date.
Except as set forth in the Prospectus, since the Evaluation Date,
there have been no changes in the internal control over financial
reporting (as such term is defined in the Exchange Act) of the
Company and the Subsidiaries that have materially affected, or is
reasonably likely to materially affect, the internal control over
financial reporting of the Company and the
Subsidiaries.

 

(w)   
Certain Fees.
Except for fees payable to A.G.P as will be as set forth in the
Prospectus, no brokerage or finder’s fees or commissions are
or will be payable by the Company, any Subsidiary or any Related
Entity to any broker, financial advisor or consultant, finder,
placement agent, investment banker, bank or other Person with
respect to the transactions contemplated by the Transaction
Documents. The Purchasers shall have no obligation with respect to
any fees or with respect to any claims made by or on behalf of
other Persons for fees of a type contemplated in this Section that
may be due in connection with the transactions contemplated by the
Transaction Documents.

 

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

 

(y)    
Registration
Rights. No Person has any right to cause the Company or any
Subsidiary to effect the registration under the Securities Act of
any securities of the Company or any Subsidiary.

 

(z)     Listing
and Maintenance Requirements. The Company is subject to the
reporting requirements of Section 13 of the Exchange Act and files
periodic reports with the SEC; the Shares are registered with the
SEC under Section 12(b) of the Exchange Act and the Company is not
in breach of any filing or other requirements under the Exchange
Act. The Company taken no action designed to or which is likely to
have the effect of terminating the registration of its Common Stock
under the Exchange Act nor has not received any notice from that
the Commission is contemplating terminating such registration.
Except as disclosed in the SEC Reports, the Company has not, in the
12 months preceding the date hereof, received notice from any
Trading Market on which the Common Stock are or have been listed or
quoted to the effect that the Company is not in compliance with the
listing or maintenance requirements of such Trading Market. The
Company is, and has no reason to believe that it will not in the
foreseeable future continue to be, in compliance with all such
listing and maintenance requirements. The Common Stock is currently
eligible for electronic transfer through the Depository Trust
Company or another established clearing corporation and the Company
is current in payment of the fees to the Depository Trust Company
(or such other established clearing corporation) in connection with
such electronic transfer.

 

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

 

 

 

 

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

 

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

 

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

 

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

 

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

 

(gg)   
Accountants. The
Company’s independent registered public accounting firm is as
set forth in the Prospectus. To the knowledge and belief of the
Company, such accounting firm (i) is a registered public accounting
firm as required by the Exchange Act and (ii) shall express its
opinion with respect to the financial statements to be included in
the Company’s Annual Report on Form 10-K for the 2021 fiscal
year.

 

 

 

 

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

 

(ii)     Acknowledgment
Regarding Purchaser’s Trading Activity. Anything in
this Agreement or elsewhere herein to the contrary notwithstanding
(except for Sections 3.2(e) and 4.14 hereof), it is understood and
acknowledged by the Company that: (i) none of the Purchasers has
been asked by the Company to agree, nor has any Purchaser agreed,
to desist from purchasing or selling, long and/or short, securities
of the Company, or “derivative” securities based on
securities issued by the Company or to hold the Shares for any
specified term; (ii) past or future open market or other
transactions by any Purchaser, specifically including, without
limitation, Short Sales or “derivative” transactions,
before or after the closing of this or future private placement
transactions, may negatively impact the market price of the
Company’s publicly-traded securities; (iii) any Purchaser,
and counter-parties in “derivative” transactions to
which any such Purchaser is a party, directly or indirectly,
presently may have a “short” position in the Common
Stock, and (iv) each Purchaser shall not be deemed to have any
affiliation with or control over any arm’s length
counter-party in any “derivative” transaction. The
Company further understands and acknowledges that (y) one or more
Purchasers may engage in hedging activities (in material compliance
with applicable laws) at various times during the period that the
Shares are outstanding, and (z) such hedging activities (if any)
could reduce the value of the existing shareholders’ equity
interests in the Company at and after the time that the hedging
activities are being conducted. The Company acknowledges that such
aforementioned hedging activities do not constitute a breach of any
of the Transaction Documents.

 

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

 

(kk)   
Office of Foreign Assets
Control. Neither the Company nor any Subsidiary nor, to the
Company's knowledge, any director, officer, agent, employee or
affiliate of the Company or any Subsidiary is currently subject to
any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”) and
the Company will not, directly or indirectly, use the proceeds of
the Offering hereunder, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or
other person or entity, for the purpose of financing the activities
of any person currently subject to any U.S. sanctions administered
by OFAC.

 

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

 

(mm)  
Intentionally
Omitted.

 

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

 

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

 

 

 

 

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

 

(qq)   
Information
Technology. The Company’s, the Subsidiaries’
and, to the knowledge of the Company, the Related Parties’
information technology assets and equipment, computers, systems,
networks, hardware, software, websites, applications, and databases
(collectively, “IT
Systems”) operate and perform in all material respects
as required in connection with the operation of the business of the
Company, the Subsidiaries and the Related Entities as currently
conducted. The Company, the Subsidiaries and, to the knowledge of
the Company, the Related Parties maintain commercially reasonable
controls, policies, procedures, and safeguards to maintain and
protect their material confidential information and the integrity,
continuous operation, redundancy and security of all IT Systems and
all personal, personally identifiable, sensitive, confidential or
regulated data (“Personal Data”) processed
and stored thereon, and to the knowledge of the Company, there have
been no breaches, incidents, violations, outages, compromises or
unauthorized uses of or accesses to same, except for those that
have been remedied without material cost or liability or the duty
to notify any other person, nor any incidents under internal review
or investigations relating to the same. The Company, the
Subsidiaries and, to the knowledge of the Company, the Related
Parties are presently in compliance in all material respects with
all applicable laws or statutes and all applicable judgments,
orders, rules and regulations of any court or arbitrator or
governmental or regulatory authority, internal policies and
contractual obligations relating to the privacy and security of IT
Systems and Personal Data and to the protection of such IT Systems
and Personal Data from unauthorized use, access, misappropriation
or modification, except for any such noncompliance that would not
have a Material Adverse Effect.

 

(rr)     Other
Covered Persons. Other than A.G.P., the Company is not aware
of any person that has been or will be paid (directly or
indirectly) remuneration for solicitation of purchasers in
connection with the sale of any Shares.

 

(ss)     Regulatory.
Except as set forth on Schedule 3.1(ss), as
applicable, the Company and its Subsidiaries (i) have not received
any notice from any court or arbitrator or governmental or
regulatory authority or third party alleging or asserting
noncompliance with any laws or any licenses, exemptions,
certificates, approvals, clearances, authorizations, permits,
registrations and supplements or amendments thereto required to
conduct the Company’s business as presently conducted
(“Authorizations”); (ii) possess all material
Authorizations and such Authorizations are valid and in full force
and effect and are not in violation of any term of any such
Authorizations; (iii) have not received any written notice that any
court or arbitrator or governmental or regulatory authority has
taken, is taking or intends to take, action to limit, suspend,
materially modify or revoke any Authorizations nor is any such
limitation, suspension, modification or revocation threatened; (iv)
have filed, obtained, maintained or submitted all material reports,
documents, forms, notices, applications, records, claims,
submissions and supplements or amendments as required by any
Authorizations and that all such reports, documents, forms,
notices, applications, records, claims, submissions and supplements
or amendments were complete and accurate on the date filed (or were
corrected or supplemented by a subsequent submission); and (v) are
not a party to any corporate integrity agreements, monitoring
agreements, consent decrees, settlement orders, or similar
agreements with or imposed by any governmental or regulatory
authority.

 

(tt)     Material
Agreements. The agreements and documents described in the
Registration Statement or Prospectus conform in all material
respects to the descriptions thereof contained or incorporated by
reference therein conformed in all material respects to the
requirements of the Securities Act or the Exchange Act, as
applicable at the time filed, and were filed on a timely basis with
the Commission and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; any
further documents so filed and there are no agreements or other
documents required by the Securities Act and the rules and
regulations thereunder to be described in the Prospectus or to be
filed with the Commission as exhibits to the Registration Statement
or to be incorporated by reference in the Registration Statement or
Prospectus, that have not been so described or filed or
incorporated by reference.

 

(uu)   
[Reserved].

  

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

 

 

 

 

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

 

(b)     Understandings
or Arrangements. Such Purchaser is acquiring the Shares as
principal for its own account and has no direct or indirect
arrangement or understandings with any other persons to distribute
or regarding the distribution of such Shares (this representation
and warranty not limiting such Purchaser’s right to sell the
Shares pursuant to the Registration Statement or otherwise in
compliance with applicable federal and state securities laws). Such
Purchaser is acquiring the Shares hereunder in the ordinary course
of its business. Such Purchaser is acquiring such Shares as
principal for his, her or its own account and not with a view to or
for distributing or reselling such Shares or any part thereof in
violation of the Securities Act or any applicable state securities
law, has no present intention of distributing any of such Shares in
violation of the Securities Act or any applicable state securities
law and has no direct or indirect arrangement or understandings
with any other persons to distribute or regarding the distribution
of such Shares in violation of the Securities Act or any applicable
state securities law (this representation and warranty not limiting
such Purchaser’s right to sell such Shares pursuant to a
registration statement or otherwise in compliance with applicable
federal and state securities laws).

 

(c)     Purchaser
Status. At the time such Purchaser was offered the Shares,
it was, and as of the date hereof it is, either: (i) an
“accredited investor” as defined in Rule 501(a)(1),
(a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a
“qualified institutional buyer” as defined in Rule
144A(a) under the Securities Act.

 

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

 

(e)     Access
to Information. Such Purchaser acknowledges that it has had
the opportunity to review the Transaction Documents (including all
exhibits and schedules thereto) and the reports filed with the
Commission and has been afforded: (i) the opportunity to ask such
questions as it has deemed necessary of, and to receive answers
from, representatives of the Company concerning the terms and
conditions of the offering of the Shares and the merits and risks
of investing in the Shares; (ii) access to information about the
Company and its financial condition, results of operations,
business, properties, management and prospects sufficient to enable
it to evaluate its investment; and (iii) the opportunity to obtain
such additional information that the Company possesses or can
acquire without unreasonable effort or expense that is necessary to
make an informed investment decision with respect to the
investment. Such Purchaser acknowledges and agrees that neither
A.G.P. nor any Affiliate of A.G.P. has provided such Purchaser with
any information or advice with respect to the Shares nor is such
information or advice necessary or desired. Neither A.G.P. nor any
Affiliate has made or makes any representation as to the Company or
the quality of the Shares and A.G.P. and any Affiliate may have
acquired non-public information with respect to the Company which
such Purchaser agrees need not be provided to it. In connection
with the issuance of the Shares to such Purchaser, neither A.G.P.
nor any of their Affiliates has acted as a financial advisor or
fiduciary to such Purchaser.

 

 

 

 

(f)  
   Certain
Transactions and Confidentiality. Other than consummating
the transactions contemplated hereunder, such Purchaser has not,
nor has any Person acting on behalf of or pursuant to any
understanding with such Purchaser, directly or indirectly executed
any purchases or sales, including Short Sales, of the securities of
the Company during the period commencing as of the time that such
Purchaser first received a term sheet (written or oral) from the
Company or any other Person representing the Company setting forth
the material terms of the transactions contemplated hereunder and
ending immediately prior to the execution hereof. Notwithstanding
the foregoing, in the case of a Purchaser that is a multi-managed
investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser’s assets and the
portfolio managers have no direct knowledge of the investment
decisions made by the portfolio managers managing other portions of
such Purchaser’s assets, the representation set forth above
shall only apply with respect to the portion of assets managed by
the portfolio manager that made the investment decision to purchase
the Shares covered by this Agreement. Other than to other Persons
party to this Agreement or to such Purchaser’s
representatives, including, without limitation, its officers,
directors, partners, legal and other advisors, employees, agents
and Affiliates, such Purchaser has maintained the confidentiality
of all disclosures made to it in connection with this transaction
(including the existence and terms of this transaction).
Notwithstanding the foregoing, for the avoidance of doubt, nothing
contained herein shall constitute a representation or warranty
against, or a prohibition of, any actions with respect to the
borrowing of, arrangement to borrow, identification of the
availability of, and/or securing of, securities of the Company in
order for such Purchaser (or its broker or other financial
representative) to effect Short Sales or similar transactions in
the future.

 

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

 

The
Company acknowledges and agrees that the representations contained
in this Section 3.2 shall not modify, amend or affect such
Purchaser’s right to rely on the Company’s
representations and warranties contained in this Agreement or any
representations and warranties contained in any other Transaction
Document or any other document or instrument executed and/or
delivered in connection with this Agreement or the consummation of
the transactions contemplated hereby. Notwithstanding the
foregoing, for the avoidance of doubt, nothing contained herein
shall constitute a representation or warranty, or preclude any
actions, with respect to locating or borrowing shares in order to
effect Short Sales or similar transactions in the
future.

 

ARTICLE IV.

OTHER AGREEMENTS
OF THE PARTIES

 

4.1     Legends.
The Shares shall be issued free of legends.

 

4.2    Lock-Up.
 The Company shall not amend, modify, waive or terminate any
provision of any of the Lock-Up Agreements except to extend the
term of the lock-up period and shall enforce the provisions of each
Lock-Up Agreement in accordance with its terms. If any party to a
Lock-Up Agreement breaches any provision of a Lock-Up Agreement,
the Company shall promptly use its commercially reasonable efforts
to seek specific performance of the terms of such Lock-Up
Agreement.

 

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

 

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

 

 

 

 

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

 

 4.6     Non-Public
Information. Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction
Documents, which shall be disclosed pursuant to Section 4.4, the
Company covenants and agrees that neither it, nor any other Person
acting on its behalf will provide any Purchaser or any
Purchaser’s agents or counsel with any information that
constitutes, or the Company reasonably believes constitutes,
material non-public information, unless prior thereto such
Purchaser shall have consented to the receipt of such information
and agreed with the Company to keep such information confidential.
The Company understands and confirms that each Purchaser shall be
relying on the foregoing covenant in effecting transactions in
securities of the Company. To the extent that the Company delivers
any material, non-public information to a Purchaser without such
Purchaser’s consent, the Company hereby covenants and agrees
that such Purchaser shall not have any duty of confidentiality to
the Company, any of the Subsidiaries, or any of their respective
officers, directors, agents, employees or Affiliates, or a duty to
the Company, any of the Subsidiaries or any of their respective
officers, directors, agents, employees or Affiliates not to trade
on the basis of, such material, non-public information, provided
that the Purchaser shall remain subject to applicable law. To the
extent that any notice provided pursuant to any Transaction
Document constitutes, or contains, material, non-public information
regarding the Company or any Subsidiaries, the Company shall
simultaneously file such material non-public information on with
the Commission pursuant to a Current Report on Form 8-K. The
Company understands and confirms that each Purchaser shall be
relying on the foregoing covenant in effecting transactions in
securities of the Company.

 

4.7     Use
of Proceeds. The Company shall use the net proceeds from the
sale of the Shares hereunder for working capital and general
corporate purposes and shall not use such proceeds: (a) for the
satisfaction of any portion of the Company’s debt (other than
payment of trade payables in the ordinary course of the
Company’s business and prior practices), (b) for the
redemption of any Common Stock or Common Stock Equivalents, (c) for
the settlement of any outstanding litigation, or (d) in violation
of FCPA or OFAC regulations.

 

4.8     Indemnification
of Purchasers. Subject to the provisions of this Section
4.8, the Company will indemnify and hold each Purchaser and its
directors, officers, shareholders, members, partners, employees and
agents (and any other Persons with a functionally equivalent role
of a Person holding such titles notwithstanding a lack of such
title or any other title), each Person who controls such Purchaser
(within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with
a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title) of such
controlling persons (each, a “Purchaser Party”)
harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, including all
judgments, amounts paid in settlements, court costs and reasonable
attorneys’ fees and costs of investigation that any such
Purchaser Party may suffer or incur caused by or based upon (a) any
breach of any of the representations or warranties made by the
Company in this Agreement or in the other Transaction Documents or
(b) any action instituted against the Purchaser Parties in any
capacity, or any of them or their respective Affiliates, by any
shareholder of the Company who is not an Affiliate of such
Purchaser Party, with respect to any of the transactions
contemplated by the Transaction Documents (unless such action is
solely based upon a material breach of such Purchaser Party’s
representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser Party
may have with any such shareholder or any violations by such
Purchaser Party of state or federal securities laws or any conduct
by such Purchaser Party which is finally judicially determined to
constitute fraud, gross negligence or willful misconduct). The
Company will indemnify each Purchaser Party, to the fullest extent
permitted by applicable law, from and against any and all losses,
claims, damages, liabilities, reasonable and documented out of
pocket costs (including, without limitation, reasonable
attorneys’ fees) and expenses, as incurred, caused by or
based upon (i) any untrue or alleged untrue statement of a material
fact contained in the Registration Statement or any amendment
thereto, any Issuer Free Writing Prospectus, the Prospectus or any
amendment or supplement thereto, or caused by or based upon any
omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein (in the
case of any prospectus or supplement thereto, in the light of the
circumstances under which they were made) not misleading, except to
the extent, but only to the extent, that such untrue statements or
omissions are based solely upon information regarding such
Purchaser Party furnished in writing to the Company by such
Purchaser Party expressly for use therein, or (ii) any violation or
alleged violation by the Company of the Securities Act, the
Exchange Act or any state securities law, or any rule or regulation
thereunder in connection therewith. If any action shall be brought
against any Purchaser Party in respect of which indemnity may be
sought pursuant to this Agreement, such Purchaser Party shall
promptly notify the Company in writing, and the Company shall have
the right to assume the defense thereof with counsel of its own
choosing reasonably acceptable to the Purchaser Party. Any
Purchaser Party shall have the right to employ separate counsel in
any such action and participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such
Purchaser Party except to the extent that (x) the employment
thereof has been specifically authorized by the Company in writing,
(y) the Company has failed after a reasonable period of time to
assume such defense and to employ counsel or (z) in such action
there is, in the reasonable opinion of counsel, a material conflict
on any material issue between the position of the Company and the
position of such Purchaser Party, in which case the Company shall
be responsible for the reasonable fees and expenses of no more than
one such separate counsel. The Company will not be liable to any
Purchaser Party under this Agreement (1) for any settlement by a
Purchaser Party effected without the Company’s prior written
consent, which shall not be unreasonably withheld or delayed; or
(2) to the extent, but only to the extent that a loss, claim,
damage or liability is attributable to any Purchaser Party’s
breach of any of the representations, warranties, covenants or
agreements made by such Purchaser Party in this Agreement or in the
other Transaction Documents. The indemnification required by this
Section 4.8 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as and
when bills are received or are incurred. The indemnity agreements
contained herein shall be in addition to any cause of action or
similar right of any Purchaser Party against the Company or others
and any liabilities the Company may be subject to pursuant to
law.

 

 

 

 

4.9     Reservation
of Common Stock. As of the date hereof, the Company has
reserved and the Company shall continue to reserve and keep
available at all times, free of preemptive rights, a sufficient
number of shares of Common Stock for the purpose of enabling the
Company to issue the Shares pursuant to this
Agreement.

 

4.10   
Listing of Common
Stock. The Company hereby agrees to use best efforts to
maintain the listing or quotation of the Common Stock on the
Nasdaq, and concurrently with the Closing, the Company shall apply
to list or quote all of the Shares on the Nasdaq and promptly
secure the listing of all of the Shares on the Nasdaq. The Company
further agrees, if the Company applies to have the Common Stock
traded on any other Trading Market, it will then include in such
application all of the Shares, and will take such other action as
is necessary to cause all of the Shares to be listed or quoted on
such other Trading Market as promptly as possible. The Company will
then take all action reasonably necessary to continue the listing
and trading of its Common Stock on a Trading Market and will comply
in all respects with the Company’s reporting, filing and
other obligations under the bylaws or rules of the Trading Market.
For so long as the Company maintains a listing or quotation of the
Common Stock on a Trading Market, the Company agrees to maintain
the eligibility of the Common Stock for electronic transfer through
the Depository Trust Company or another established clearing
corporation, including, without limitation, by timely payment of
fees to the Depository Trust Company or such other established
clearing corporation in connection with such electronic
transfer.

 

4.11   
[Reserved].

 

4.12   
Subsequent Equity
Sales.

 

(a)     From
the date hereof until 60 days after the Closing Date, neither the
Company nor any Subsidiary shall (i) issue, enter into any
agreement to issue or announce the issuance or proposed issuance of
any Common Stock or Common Stock Equivalents or (ii) file any
registration statement or any amendment or supplement thereto,
other than the Prospectus Supplement or a registration statement on
Form S-8 with respect to a shareholder approved equity incentive
plan, so long as such registration statement on Form S-8 is not
filed prior to June 14 2021.

 

(b)     Notwithstanding
the foregoing, this Section 4.12 shall not apply in respect of an
Exempt Issuance; provided, however that such securities are issued
as “restricted securities” (as defined in Rule 144 of
the Securities Act) and carry no registration rights that require
or permit the filing of any registration statement in connection
therewith during the prohibition period in Section 4.12(a)
herein.

  

4.13  
Equal Treatment of
Purchasers. No consideration (including any modification of
any Transaction Document) shall be offered or paid to any Person to
amend or consent to a waiver or modification of any provision of
the Transaction Documents unless the same consideration is also
offered to all of the parties to such Transaction Documents. For
clarification purposes, this provision constitutes a separate right
granted to each Purchaser by the Company and negotiated separately
by each Purchaser, and is intended for the Company to treat the
Purchasers as a class and shall not in any way be construed as the
Purchasers acting in concert or as a group with respect to the
purchase, disposition or voting of Shares or
otherwise.

 

4.14  
Certain Transactions and
Confidentiality. Each Purchaser, severally and not jointly
with the other Purchasers, covenants that neither it nor any
Affiliate acting on its behalf or pursuant to any understanding
with it will execute any purchases or sales, including Short Sales
of any of the Company’s securities during the period
commencing with the execution of this Agreement and ending at such
time that the transactions contemplated by this Agreement are first
publicly announced pursuant to the initial press release as
described in Section 4.4. Each Purchaser, severally and not jointly
with the other Purchasers, covenants that until such time as the
transactions contemplated by this Agreement are publicly disclosed
by the Company pursuant to the initial press release as described
in Section 4.4, such Purchaser will maintain the confidentiality of
the existence and terms of this transaction and the information
included in this Agreement, including the schedules hereto.
Notwithstanding the foregoing, and notwithstanding anything
contained in this Agreement to the contrary, the Company expressly
acknowledges and agrees that (i) no Purchaser makes any
representation, warranty or covenant hereby that it will not engage
in effecting transactions in any securities of the Company after
the time that the transactions contemplated by this Agreement are
first publicly announced pursuant to the initial press release as
described in Section 4.4, (ii) no Purchaser shall be restricted or
prohibited from effecting any transactions in any securities of the
Company in accordance with applicable securities laws from and
after the time that the transactions contemplated by this Agreement
are first publicly announced pursuant to the initial press release
as described in Section 4.4 and (iii) no Purchaser shall have any
duty of confidentiality or duty not to trade in the securities of
the Company to the Company or the Subsidiaries after the issuance
of the initial press release as described in Section 4.4.
Notwithstanding the foregoing, in the case of a Purchaser that is a
multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Purchaser’s assets
and the portfolio managers have no direct knowledge of the
investment decisions made by the portfolio managers managing other
portions of such Purchaser’s assets, the covenant set forth
above shall only apply with respect to the portion of assets
managed by the portfolio manager that made the investment decision
to purchase the Shares covered by this Agreement.

 

 

 

 

ARTICLE V.

MISCELLANEOUS

 

 

5.1     Termination.
This Agreement may be terminated by any Purchaser, as to such
Purchaser’s obligations hereunder only and without any effect
whatsoever on the obligations between the Company and the other
Purchasers, by written notice to the other parties, if the Closing
has not been consummated on or before June 8, 2021; provided,
however,
that no such termination will affect the right of any party to sue
for any breach by any other party (or parties).

 

5.2     Fees
and Expenses. Except as expressly set forth in the
Transaction Documents to the contrary, each party shall pay the
fees and expenses of its advisers, counsel, accountants and other
experts, if any, and all other expenses incurred by such party
incident to the negotiation, preparation, execution, delivery and
performance of this Agreement. The Company shall pay all Transfer
Agent fees (including, without limitation, any fees required for
same-day processing of any instruction letter delivered by the
Company and any exercise notice delivered by a Purchaser), stamp
taxes and other taxes and duties levied in connection with the
delivery of any Shares to the Purchasers.

 

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

 

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

 

5.5     Amendments;
Waivers. No provision of this Agreement may be waived,
modified, supplemented or amended except in a written instrument
signed, in the case of an amendment, by the Company and Purchasers
which purchased a majority in interest of the Shares based on the
initial Subscription Amounts hereunder (or, prior to the Closing,
the Company and each of the Purchasers) or, in the case of a
waiver, by the party (or with respect to the Purchasers, a majority
thereof) against whom enforcement of any such waived provision is
sought, provided that if any amendment, modification or waiver
disproportionately and adversely impacts a Purchaser (or group of
Purchasers), the consent of such disproportionately impacted
Purchaser (or group of Purchasers) shall also be required. No
waiver of any default with respect to any provision, condition or
requirement of this Agreement shall be deemed to be a continuing
waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of any party to exercise any right
hereunder in any manner impair the exercise of any such
right.

 

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

  

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

 

5.8     No
Third-Party Beneficiaries. A.G.P. shall be the third party
beneficiaries of the representations and warranties of the Company
in Section 3.1 and the representations and warranties of the
Purchasers in Section 3.2. This Agreement is intended for the
benefit of the parties hereto and their respective successors and
permitted assigns and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person, except as
otherwise set forth in Section 4.8 and this Section
5.8.

 

 

 

 

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

 

5.10  
Survival. The
representations and warranties contained herein shall survive the
Closing and the delivery of the Shares for a period of not longer
than two (2) years from the Closing.

 

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

 

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

 

5.13  
Rescission and Withdrawal
Right. Notwithstanding anything to the contrary contained in
(and without limiting any similar provisions of) any of the other
Transaction Documents, whenever any Purchaser exercises a right,
election, demand or option under a Transaction Document and the
Company does not timely perform its related obligations within the
periods therein provided, then such Purchaser may rescind or
withdraw, in its sole discretion from time to time upon written
notice to the Company, any relevant notice, demand or election in
whole or in part without prejudice to its future actions and
rights.

 

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

 

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

 

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

 

 

 

 

5.17  
Independent Nature of
Purchasers’ Obligations and Rights. The obligations of
each Purchaser under any Transaction Document are several and not
joint with the obligations of any other Purchaser, and no Purchaser
shall be responsible in any way for the performance or
non-performance of the obligations of any other Purchaser under any
Transaction Document. Nothing contained herein or in any other
Transaction Document, and no action taken by any Purchaser pursuant
hereto or thereto, shall be deemed to constitute the Purchasers as
a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Purchasers are in any way
acting in concert or as a group with respect to such obligations or
the transactions contemplated by the Transaction Documents. Each
Purchaser shall be entitled to independently protect and enforce
its rights including, without limitation, the rights arising out of
this Agreement or out of the other Transaction Documents, and it
shall not be necessary for any other Purchaser to be joined as an
additional party in any proceeding for such purpose. Each Purchaser
has been represented by its own separate legal counsel in its
review and negotiation of the Transaction Documents. For reasons of
administrative convenience only, each Purchaser and its respective
counsel have chosen to communicate with the Company through the
legal counsel of A.G.P. The legal counsel of A.G.P. does not
represent any of the Purchasers and only represents A.G.P. The
Company has elected to provide all Purchasers with the same terms
and Transaction Documents for the convenience of the Company and
not because it was required or requested to do so by any of the
Purchasers. It is expressly understood and agreed that each
provision contained in this Agreement and in each other Transaction
Document is between the Company and a Purchaser, solely, and not
between the Company and the Purchasers collectively and not between
and among the Purchasers.

 

5.18  
Sales During
Pre-Settlement Period. Notwithstanding anything herein to
the contrary, if at any time on or after the time of execution of
this Agreement by the Company and an applicable Purchaser, through,
and including the time immediately prior to the Closing (the
“Pre-Settlement Period”), such Purchaser sells to any
Person all, or any portion, of any Common Stock to be issued
hereunder to such Purchaser at the Closing (collectively, the
“Pre-Settlement Shares”), such Purchaser shall,
automatically hereunder (without any additional required actions by
such Purchaser or the Company), be deemed to be unconditionally
bound to purchase, and the Company shall be deemed unconditionally
bound to sell, such Pre-Settlement Shares to such Purchaser at the
Closing; provided, that the Company shall not be required to
deliver any Pre-Settlement Shares to such Purchaser prior to the
Company’s receipt of the purchase price of such
Pre-Settlement Shares hereunder; and provided further that the
Company hereby acknowledges and agrees that the forgoing shall not
constitute a representation or covenant by such Purchaser as to
whether or not during the Pre-Settlement Period such Purchaser
shall sell any shares of Common Stock to any Person and that any
such decision to sell any shares of Common Stock by such Purchaser
shall solely be made at the time such Purchaser elects to effect
any such sale, if any.

 

5.19   
Saturdays, Sundays,
Holidays, etc.     If the last or
appointed day for the taking of any action or the expiration of any
right required or granted herein shall not be a Business Day, then
such action may be taken or such right may be exercised on the next
succeeding Business Day.

 

5.20  
Currency. Unless
otherwise stated, all dollar amounts and references to
“$” in this Agreement refer to the lawful currency of
the United States.

 

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

 

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

 

 

(Signature Pages
Follow)

 

 

 

 

 

 

 

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

 

 

 

	

ENGLOBAL CORPORATION

	

Address for Notice:

	
 

	
 

	
 

	
 

	

By: /s/
Mark A. Hess              
             
 

     
Name: Mark A. Hess

     
Title: Chief Executive Officer

 

	

ENGlobal
Corporation

654 N.
Sam Houston Parkway E.,

Suite
400

Houston,
Texas 77060-5914

Attention:
Mark A. Hess

E-mail:
mark.hess@englobal.com

 

 

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE
PAGE FOR PURCHASER FOLLOWS]

 

 

 

 

 

 

[PURCHASER
SIGNATURE PAGES TO ENGLOBAL CORPORATION

 SECURITIES
PURCHASE AGREEMENT]

 

 

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

 

 

 

	

Name of
Purchaser:

	

 Sabby
Volatility Warrant Master Fund, Ltd.

 

	

Signature of Authorized Signatory of Purchaser:

	

 /s/
Robert Grundstein

 

	

Name of
Authorized Signatory:

	

 Robert
Grundstein

 

	

Title
of Authorized Signatory:

	

 COO
of Purchaser’s Investment Manager

 

	

Email
Address of Authorized Signatory:

	

 rgrundstein@sabbymanagement.com

 

	

Facsimile
Number of Authorized Signatory:

	
 

	
 

	

Address
for Notice to Purchaser: c/o Sabby Management, LLC, 10 Mountainview
Road, Suite 205,

Upper
Saddle River, NJ 07458

 

 

 

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

Attn:
Client Settlement, Wedbush Securities, 1000 Blvd Ste
850

Los
Angeles, CA 90017. Please include account name and number for
deposit, Sabby Volatility Warrant Master Fund LTD
71793754

 

 

	

Subscription
Amount: $6,666,668.40

 

	

Shares:

	

2,380,953
@ $2.80

	
 

 

	

EIN
Number:

	
 

	
 

 

 

 

[PURCHASER
SIGNATURE PAGES TO ENGLOBAL CORPORATION

 SECURITIES
PURCHASE AGREEMENT]

 

 

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

 

 

 

	

Name of
Purchaser:

	

 CVI
Investments, Inc., By: Heights Capital Management, Inc., its
authorized agent

 

	

Signature of Authorized Signatory of Purchaser:

	

 /s/
Martin Kobinger

 

	

Name of
Authorized Signatory:

	

Martin
Kobinger

 

	

Title
of Authorized Signatory:

	

Investment
Manager

 

	

Email
Address of Authorized Signatory:

	

kobinger@sig.com and winer@sig.com

 

	

Facsimile
Number of Authorized Signatory:

	
 

	
 

	

Address
for Notice to Purchaser:

c/o
Heights Capital Management, Inc.

101
California Street, Suite 3250 

 

DWAC
for Shares:

 

	
Name of DTC
Participant

	
Merrill Lynch
Professional Clearing Corp

	
DTC Participant
Number

	
5198

	
Account
Name

	
CVI Investments,
Inc.

	
Account
Number

	
11401315D0

 

	

Subscription
Amount: $

	

6,666,668.40

	
 

 

	

Shares:

	

 2,380,953

	
 

 

	

EIN
Number:

	

	
 

 

 

 

 

[PURCHASER
SIGNATURE PAGES TO ENGLOBAL CORPORATION

 SECURITIES
PURCHASE AGREEMENT]

 

 

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

 

 

 

	

Name of
Purchaser:

	

 Empery
Asset Master, LTD

	
 

	
 

 

 

By:
Empery Asset Management, LP, its authorized agent

 

	

Signature of Authorized Signatory of Purchaser:

	

 /s/
Brett Director

 

	

Name of
Authorized Signatory:

	

 Brett
Director

 

	

Title
of Authorized Signatory:

	

 General
Counsel of Empery Asset Management, LP

 

	

Email
Address of Authorized Signatory:

	

 notices@emperyam.com

 

	

Address
for Notice to Purchaser: c/o Empery Asset Management,
LP

                                                     1
Rockefeller Plaza, Suite 1205

                                                     New
York, NY 10020

 

 

	

Subscription
Amount: $3,455,020.80

	
 

	
 

 

	

Shares:

	

1,233,936 

	
 

 

	

EIN
Number:

	

	
 

 

 

 

[PURCHASER
SIGNATURE PAGES TO ENGLOBAL CORPORATION

 SECURITIES
PURCHASE AGREEMENT]

 

 

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

 

 

 

	

Name of
Purchaser:

	

 Empery
Tax Efficient, LP

	
 

	
 

 

 

By:
Empery Asset Management, LP, its authorized agent

 

	

Signature of Authorized Signatory of Purchaser:

	

 /s/
Brett Director

 

	

Name of
Authorized Signatory:

	

 Brett
Director

 

	

Title
of Authorized Signatory:

	

 General
Counsel of Empery Asset Management, LP

 

	

Email
Address of Authorized Signatory:

	

 notices@emperyam.com

 

	

Address
for Notice to Purchaser: c/o Empery Asset Management,
LP

                                                     1
Rockefeller Plaza, Suite 1205

                                                     New
York, NY 10020

 

 

	

Subscription
Amount: $

	

1,009,044.40 

	
 

 

	

Shares:

	

 360,373

	
 

 

	

EIN
Number:

	

	
 

 

 

 

[PURCHASER
SIGNATURE PAGES TO ENGLOBAL CORPORATION

 SECURITIES
PURCHASE AGREEMENT]

 

 

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

 

 

 

	

Name of
Purchaser:

	

 Empery
Tax Efficient III, LP

	
 

	
 

 

 

By:
Empery Asset Management, LP, its authorized agent

 

	

Signature of Authorized Signatory of Purchaser:

	

 /s/
Brett Director

 

	

Name of
Authorized Signatory:

	

 Brett
Director

 

	

Title
of Authorized Signatory:

	

 General
Counsel of Empery Asset Management, LP

 

	

Email
Address of Authorized Signatory:

	

 notices@emperyam.com

 

	

Address
for Notice to Purchaser: c/o Empery Asset Management,
LP

                                                     1
Rockefeller Plaza, Suite 1205

                                                     New
York, NY 10020

 

 

 

	

Subscription
Amount: $

	

2,202,603.20 

	
 

 

	

Shares:

	

 786,644

	
 

 

	

EIN
Number:

	

	
 

 

 

 

 

 

 

 

Exhibit A

 

FORM LOCK-UP AGREEMENT

 

June ,
2021

 

A.G.P./Alliance
Global Partners

590
Madison Avenue, 28th Floor

New
York, New York 10022

 

Re: 

Securities Purchase
Agreement, dated as of June 1, 2021 (the “Purchase
Agreement”), between ENGlobal Corporation (the
“Company”) and the purchasers signatory thereto (each,
a “Purchaser” and, collectively, the
“Purchasers”)

 

Ladies
and Gentlemen:

 

Defined
terms not otherwise defined in this letter agreement (the
“Letter
Agreement”) shall have the meanings set forth in the
Purchase Agreement. Pursuant to Section 2.2(a) of the Purchase
Agreement and in satisfaction of a condition of the Company’s
obligations under the Purchase Agreement, the undersigned
irrevocably agrees with the Company that, from the date hereof
until 60 days following the Closing Date (such period, the
“Restriction
Period”), the undersigned will not offer, sell,
contract to sell, hypothecate, pledge or otherwise dispose of (or
enter into any transaction which is designed to, or might
reasonably be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash
settlement or otherwise) by the undersigned or any Affiliate of the
undersigned or any person in privity with the undersigned or any
Affiliate of the undersigned), directly or indirectly, or establish
or increase a put equivalent position or liquidate or decrease a
call equivalent position within the meaning of Section 16 of the
Securities Exchange Act of 1934, as amended (the
“Exchange
Act”), with respect to, any Common Stock of the
Company or securities convertible, exchangeable or exercisable
into, Common Stock of the Company beneficially owned, held or
hereafter acquired by the undersigned (the “Securities”). Beneficial
ownership shall be calculated in accordance with Section 13(d) of
the Exchange Act. In order to enforce this covenant, the Company
shall impose irrevocable stop-transfer instructions preventing the
transfer agent of the Company from effecting any actions in
violation of this Letter Agreement.

 

Notwithstanding the
foregoing, and subject to the conditions below, the undersigned may
transfer the Securities provided that (1) the Company receives
a signed lock-up letter agreement (in the form of this Letter
Agreement) for the balance of the Restriction Period from each
donee, trustee, distributee, or transferee, as the case may be,
prior to such transfer (2) any such transfer shall not involve
a disposition for value, (3) such transfer is not required to
be reported with the Securities and Exchange Commission in
accordance with the Exchange Act and no report of such transfer
shall be made voluntarily, and (4) neither the undersigned nor
any donee, trustee, distributee or transferee, as the case may be,
otherwise voluntarily effects any public filing or report regarding
such transfers, with respect to transfer:

 

i)

as a
bona fide gift or
gifts;

 

ii)

to any
immediate family member or to any trust for the direct or indirect
benefit of the undersigned or the immediate family of the
undersigned (for purposes of this Letter Agreement,
“immediate family” shall mean any relationship by
blood, marriage or adoption, not more remote than first
cousin);

 

iii)

to any
corporation, partnership, limited liability company, or other
business entity all of the equity holders of which consist of the
undersigned and/or the immediate family of the
undersigned;

 

iv)

if the
undersigned is a corporation, partnership, limited liability
company, trust or other business entity (a) to another corporation,
partnership, limited liability company, trust or other business
entity that is an Affiliate of the undersigned or (b) in the form
of a distribution to limited partners, limited liability company
members or stockholders of the undersigned;

 

v)

if the
undersigned is a trust, to the beneficiary of such trust;
or

 

vi)

by
will, other testamentary document or intestate succession to the
legal representative, heir, beneficiary or a member of the
immediate family of the undersigned.

   

 

 

 

In
addition, notwithstanding the foregoing, this Letter Agreement
shall not restrict the delivery of Common Stock to the undersigned
upon exercise any options granted under any employee benefit plan
of the Company; provided that any Common Stock or other securities
acquired in connection with any such exercise will be subject to
the restrictions set forth in this Letter Agreement.

 

Furthermore, the
undersigned may enter into any new plan established in compliance
with Rule 10b5-1 of the Exchange Act; provided that (i) such plan
may only be established if no public announcement or filing with
the Securities and Exchange Commission, or other applicable
regulatory authority, is made in connection with the establishment
of such plan during the Restriction Period and (ii) no sale of
Common Stock is made pursuant to such plan during the Restriction
Period. For the avoidance of doubt, the undersigned’s plan
established in compliance with Rule 10b5-1 of the Exchange Act
shall be excluded from the restrictions set forth in this Letter
Agreement in all respects.

 

Notwithstanding the
foregoing, the undersigned may transfer the Securities (i) by will
or intestacy, (ii) by operation of law, such as pursuant to a
qualified domestic order, divorce settlement, divorce decree or
separation agreement, (iii) to the Company in connection with the
vesting, settlement, or exercise of restricted stock units,
options, warrants or other rights to purchase shares of Common
Stock (including, in each case, by way of “net” or
“cashless” exercise), including for the payment of
exercise price and tax and remittance payments due as a result of
the vesting, settlement, or exercise of such restricted stock
units, options, warrants or rights or (iv) pursuant to a bona fide
third-party tender offer, merger, consolidation or other similar
transaction that is approved by the Board of Directors of the
Company and made to all holders of the Company’s capital
stock involving a Change of Control (as defined below) of the
Company (for purposes hereof, “Change of Control” shall
mean the transfer (whether by tender offer, merger, consolidation
or other similar transaction), in one transaction or a series of
related transactions, to a person or group of affiliated persons,
of shares of capital stock if, after such transfer, such person or
group of affiliated persons would hold at least a majority of the
outstanding voting securities of the Company (or the surviving
entity)).

 

 

The
undersigned acknowledges that the execution, delivery and
performance of this Letter Agreement is a material inducement to
each Purchaser to complete the transactions contemplated by the
Purchase Agreement and the Company shall be entitled to specific
performance of the undersigned’s obligations hereunder. The
undersigned hereby represents that the undersigned has the power
and authority to execute, deliver and perform this Letter
Agreement, that the undersigned has received adequate consideration
therefor and that the undersigned will indirectly benefit from the
closing of the transactions contemplated by the Purchase
Agreement.

 

This
Letter Agreement may not be amended or otherwise modified in any
respect without the written consent of each of the Company and the
undersigned. This Letter Agreement shall be construed and enforced
in accordance with the laws of the State of New York without regard
to the principles of conflict of laws. The undersigned hereby irrevocably submits to the exclusive
jurisdiction of the United States District Court sitting in the
Southern District of New York and the courts of the State of New
York located in Manhattan, for the purposes of any suit, action or
proceeding arising out of or relating to this Letter Agreement, and
hereby waives, and agrees not to assert in any such suit, action or
proceeding, any claim that (i) it is not personally subject to the
jurisdiction of such court, (ii) the suit, action or proceeding is
brought in an inconvenient forum, or (iii) the venue of the suit,
action or proceeding is improper. The undersigned hereby
irrevocably waives personal service of process and consents to
process being served in any such suit, action or proceeding by
receiving a copy thereof sent to the Company at the address in
effect for notices to it under the Purchase Agreement and agrees
that such service shall constitute good and sufficient service of
process and notice thereof. The undersigned hereby waives any right
to a trial by jury. Nothing contained herein shall be deemed to
limit in any way any right to serve process in any manner permitted
by law. The undersigned agrees and understands that this Letter
Agreement does not intend to create any relationship between the
undersigned and any Purchaser and that no Purchaser is entitled to
cast any votes on the matters herein contemplated and that no
issuance or sale of the Securities is created or intended by virtue
of this Letter Agreement.

 

This
Letter Agreement shall be binding on successors and assigns of the
undersigned with respect to the Securities and any such successor
or assign shall enter into a similar agreement for the benefit of
the Purchasers.

 

 

 

***
SIGNATURE PAGE FOLLOWS***

 

 

 

 

This
Letter Agreement may be executed in two or more counterparts, all
of which when taken together may be considered one and the same
agreement.

 

 

_________________________

Signature

 

__________________________

Print
Name

 

__________________________

Position
in Company, if any

 

Address
for Notice:

 

 

 

 

 

 

Number
of Common Shares

 

_____________________________________________________________________________

Number
of Common Shares underlying subject to warrants, options,
debentures or other convertible securities

 

 

 

By
signing below, the Company agrees to enforce the restrictions on
transfer set forth in this Letter Agreement.

 

ENGLOBAL CORPORATION

 

 

By:
_________________________________

Name:

Title:

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