Document:

Exhibit

Exhibit 10.1

SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (this “Agreement”) is dated as of March 24, 2020, between Novan, Inc., a Delaware corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser” and collectively the “Purchasers”).
WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”), 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:

“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(j).
“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person as such terms are used in and construed under Rule 405 under the Securities Act.  
“Board of Directors” means the board of directors of the Company.
“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.
“Closing” means the closing of the purchase and sale of the Securities pursuant to Section 2.1.
“Closing Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s obligations to deliver the Securities, in each case, have been satisfied or waived, but in no event later than the second (2nd) Trading Day following the date hereof.
“Commission” means the United States Securities and Exchange Commission.
“Common Stock” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed. 

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“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Company Counsel” means Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, L.L.P., with offices located at Wells Fargo Capitol Center, 150 Fayetteville Street, Suite 2300, Raleigh, NC 27601.
“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 the Placement Agent, 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 the Placement Agent.
“Evaluation Date” shall have the meaning ascribed to such term in Section 3.1(s). 
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Exempt Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Company pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose for services rendered to the Company, (b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection with stock splits or combinations) or to extend the term of such securities, and (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided that such securities are issued as “restricted securities” (as defined in Rule 144) and carry no registration rights that require or permit the filing of any registration statement in connection therewith during the prohibition period in Section 4.12(a) herein, and provided that any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities. 
“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.

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“FDA” shall have the meaning ascribed to such term in Section 3.1(hh).
“FDCA” shall have the meaning ascribed to such term in Section 3.1(hh).
“GAAP” shall have the meaning ascribed to such term in Section 3.1(h).
“Indebtedness” shall have the meaning ascribed to such term in Section 3.1(aa).
“Intellectual Property Rights” shall have the meaning ascribed to such term in Section 3.1(p).
“Liens” means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Material Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).
“Material Permits” shall have the meaning ascribed to such term in Section 3.1(n).
“Per Share Purchase Price” equals $0.43, 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 and prior to the Closing Date.
“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.
“Pharmaceutical Product” shall have the meaning ascribed to such term in Section 3.1(hh). 
“Placement Agent” means H.C. Wainwright & Co., LLC.
“Pre-Funded Warrants” means, collectively, the Pre-Funded Common Stock purchase warrants delivered to the Purchasers at the Closing in accordance with Section 2.2(a) hereof, which Pre-Funded Warrants shall be exercisable immediately and shall expire when exercised in full, in the form of Exhibit A attached hereto.
“Pre-Funded Warrant Purchase Price” equals $0.4299, 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 and prior to the Closing Date.
“Pre-Funded Warrant Shares” means the shares of Common Stock issuable upon exercise of the Pre-Funded Warrants.
“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened.
“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.

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“Purchaser Party” shall have the meaning ascribed to such term in Section 4.8.
“Registration Statement” means the effective registration statement with Commission file No. 333-220761 which registers the sale of the Shares, the Pre-Funded Warrants and the Pre-Funded Warrant Shares to the Purchasers.
“Required Approvals” shall have the meaning ascribed to such term in Section 3.1(e).
“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule. 
“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h).
“Securities” means the Shares, the Pre-Funded Warrants and the Pre-Funded Warrant Shares. 
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Shares” means the shares of 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 shares of Common Stock). 
 “Subscription Amount” means, as to each Purchaser, the aggregate amount to be paid for Shares (and/or the Pre-Funded Warrants) purchased hereunder as specified below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,” in United States dollars and in immediately available funds.
 “Subsidiary” means any subsidiary of the Company as set forth on Schedule 3.1(a), and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.
“Trading Day” means a day on which the principal Trading Market is open for trading.
“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or any successors to any of the foregoing).
“Transaction Documents” means this Agreement, the Pre-Funded Warrants, all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.

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“Transfer Agent” means American Stock Transfer & Trust Company, LLC, the current transfer agent of the Company, with a mailing address of 6201 15th Avenue, 3rd Floor, Brooklyn, New York 11219, and any successor transfer agent of the Company, and any successor transfer agent of the Company.
“Variable Rate Transaction” shall have the meaning ascribed to such term in Section 4.12(b).
“VWAP” shall have the meaning ascribed to such term in Section 4.12(b).
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 $8.0 million of Shares (or Pre-Funded Warrants); provided, however, that, to the extent that a Purchaser determines, in its sole discretion, that such Purchaser (together with such Purchaser’s Affiliates, and any Person acting as a group together with such purchaser or any of such Holder’s Affiliates) would beneficially own in excess of the Beneficial Ownership Limitation, or as such Purchaser may otherwise choose, in lieu of purchasing Shares such Purchaser may elect to purchase Pre-Funded Warrants at the Pre-Funded Warrant Purchase Price in such manner to result in the same aggregate purchase price being paid by such Purchaser to the Company.  The “Beneficial Ownership Limitation” shall be 4.99% (or, at the election of the Purchaser, 9.99%) of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of the Securities on the Closing Date. Each Purchaser’s Subscription Amount as set forth on the signature page hereto executed by such Purchaser shall be made available for “Delivery Versus Payment” (“DVP”) settlement with the Company or its designees. The Company shall deliver to each Purchaser its respective Shares or Pre-Funded Warrants (as applicable to such Purchaser) as determined pursuant to Section 2.2(a), and the Company and each Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Closing.  Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of the Placement Agent or such other location as the parties shall mutually agree.  Unless otherwise directed by the Placement Agent, 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 the Placement Agent identified by each Purchaser; upon receipt of such Shares, the Placement Agent 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 the Placement Agent and Purchasers; 

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(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)    subject to the last sentence of Section 2.1, 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)    for each Purchaser of Pre-Funded Warrants, a Pre-Funded Warrant registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal to the portion of such Purchaser’s Subscription Amount applicable to the Pre-Funded Warrants divided by the Pre-Funded Warrant Purchase Price, with an exercise price equal to $0.0001, subject to adjustment therein; and

(vi)    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; 

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

(iii)    such Purchaser’s Subscription Amount with regard to the Pre-Funded Warrants purchased by such Purchaser, if any, by wire transfer to the account specified by the Company in Section 2.2(a)(iii) above, or as otherwise agreed by the Company and the Placement Agent.

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.

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

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

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

(iii)    the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;
 
(iv)    there shall have been no Material Adverse Effect with respect to the Company since the date hereof; and

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

ARTICLE III.
REPRESENTATIONS AND WARRANTIES

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

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

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

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

(d)    No Conflicts.  Except as set forth on Schedule 3.1(d), the execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, 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 

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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.  Except as set forth on Schedule 3.1(e), the Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings required pursuant to Section 4.4 of this Agreement, (ii) the filing with the Commission of the Prospectus Supplement, (iii) application(s) to each applicable Trading Market for the listing of the Shares and Pre-Funded Warrant Shares for trading thereon in the time and manner required thereby, and (iv) such filings as are required to be made under applicable state securities laws (collectively, the “Required Approvals”).

(f)    Issuance of the Securities; Registration.  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 nonassessable, free and clear of all Liens imposed by the Company.  The Pre-Funded Warrants are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, except as may be limited by bankruptcy, insolvency, reorganization, fraudulent transfer, fraudulent conveyance, moratorium or other laws now or hereafter in effect relating to or affecting enforcement of creditors' rights generally and by general principles of equity (including without limitation concepts of materiality, reasonableness, good faith and fair dealing), regardless of whether such enforcement is considered in a proceeding at law or in equity. The Pre-Funded Warrant Shares are duly authorized and, when issued in accordance with the terms of the Pre-Funded Warrants, will be validly issued, fully paid and nonassessable, 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 and the Pre-Funded Warrants. The Company has prepared and filed the Registration Statement in conformity with the requirements of the Securities Act, which became effective on October 10, 2017 (the “Effective Date”), including the Prospectus, and such amendments and supplements thereto as may have been required to the date of this Agreement.  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 as set forth in General Instruction I.B.1 of Form S-3.  The Registration Statement is effective under the Securities Act and no stop order preventing or suspending the effectiveness of the Registration Statement or suspending or preventing the use of the Prospectus has been issued by the Commission and no proceedings for that purpose have been instituted or, to the knowledge of the Company, are threatened by the Commission.  The Company, if required by the rules and regulations of the Commission, shall file the Prospectus Supplement with the Commission pursuant to Rule 424(b).  At the time the Registration Statement and any amendments thereto became effective, at the date of this Agreement and at the Closing Date, the Registration Statement and any amendments thereto conformed and will conform in all material respects to the requirements of the Securities Act and did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; and the Prospectus and any amendments or supplements thereto, at the time the Prospectus or any amendment 

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or supplement thereto was issued and at the Closing Date, conformed and will conform in all material respects to the requirements of the Securities Act and did not and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

(g)    Capitalization.  The capitalization of the Company as of March 23, 2020 is as set forth on Schedule 3.1(g), which Schedule 3.1(g) shall also include the number of shares of Common Stock owned beneficially, and of record, by Affiliates of the Company as of the date hereof and there have been no material changes to the capitalization of the Company since such Date. Except as set forth on Schedule 3.1(g), the Company has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act.  No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents.  Except as a result of the purchase and sale of the Securities and as set forth on Schedule 3.1(g), there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock or the capital stock of any Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents or capital stock of any Subsidiary.  The issuance and sale of the Securities will not obligate the Company or any Subsidiary to issue shares of Common Stock or other securities to any Person (other than the Purchasers). There are no outstanding securities or instruments of the Company or any Subsidiary 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 or any Subsidiary. There are no outstanding securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary. The Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities.  No further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities.  There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.

(h)    SEC Reports; Financial Statements.  The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together with the Prospectus and the Prospectus Supplement, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension 

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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. The Company has never been an issuer subject to Rule 144(i) under the Securities Act. The financial statements of the Company included in the SEC Reports 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 United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), 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 GAAP, 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.

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

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

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is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company.  The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.  

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

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

(m)    Environmental Laws.    The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or approval where 

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in each clause (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.

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

(o)    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, and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties.  Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance.

(p)    Intellectual Property.  The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or required for use in connection with their respective businesses 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 notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement.  Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect.  To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights.  The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company has no knowledge of any facts that would preclude it from having valid license rights or clear title to the Intellectual Property Rights.  The Company has no knowledge that it lacks or will be unable to obtain any rights or licenses to use all Intellectual Property Rights that are necessary to conduct its business.

(q)    Insurance.  The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage at least equal to the aggregate Subscription Amount.  Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew 

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its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.

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

(s)    Sarbanes-Oxley; Internal Accounting Controls.  The Company and the Subsidiaries are in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date.  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 the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”).  The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date.  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 its Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.

(t)    Certain Fees.  Except as set forth in the Prospectus Supplement, no brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents.  The Purchasers shall 

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have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction Documents.

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

(v)    Registration Rights.  Except as set forth on Schedule 3.1(v), 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.

(w)    Listing and Maintenance Requirements.  The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration.  Except as set forth on Schedule 3.1(w), the Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. Other than for noncompliance with the market value of listed securities requirement, the market value of publicly held securities requirement and the minimum bid price requirement on the 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.

(x)    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 certificate of incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities.

(y)    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 

15

correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. The press releases disseminated by the Company during the twelve months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made and when made, not misleading.  The Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.

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

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

(bb)    Tax Status.  Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local income and all foreign income 

16

and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply.  There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such claim.

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

(dd)    Accountants.  The Company’s independent registered public accounting firm is BDO USA, LLP.  To the knowledge and belief of the Company, such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s Annual Report for the fiscal year ending December 31, 2020.
    
(ee)    Acknowledgment Regarding Purchasers’ Purchase of Securities.  The Company acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby.  The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Securities.  The Company further represents to each Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

(ff)    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 Securities for any specified term; (ii) past or future open market or other transactions by any Purchaser, specifically including, without limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private placement transactions, may negatively impact the market price of the Company’s publicly-traded securities; (iii) any Purchaser, and counter-parties in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, 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-

17

party in any “derivative” transaction.  The Company further understands and acknowledges that (y) one or more Purchasers may engage in hedging activities at various times during the period that the Securities are outstanding, and (z) such hedging activities (if any) could reduce the value of the existing stockholders' equity interests in the Company at and after the time that the hedging activities are being conducted.  The Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.

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

(hh)    FDA.  As to each product subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”) under the Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is manufactured, packaged, labeled, tested, distributed, sold, and/or marketed by the Company or any of its Subsidiaries (each such product, a “Pharmaceutical Product”), such Pharmaceutical Product is being manufactured, packaged, labeled, tested, distributed, sold and/or marketed by the Company in compliance with all applicable requirements under FDCA and similar laws, rules and regulations relating to registration, investigational use, premarket clearance, licensure, or application approval, good manufacturing practices, good laboratory practices, good clinical practices, product listing, quotas, labeling, advertising, record keeping and filing of reports, except where the failure to be in compliance would not have a Material Adverse Effect.  There is no pending, completed or, to the Company's knowledge, threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge, complaint, or investigation) against the Company or any of its Subsidiaries, and none of the Company or any of its Subsidiaries has received any notice, warning letter or other communication from the FDA or any other governmental entity, which (i) contests the premarket clearance, licensure, registration, or approval of, the uses of, the distribution of, the manufacturing or packaging of, the testing of, the sale of, or the labeling and promotion of any Pharmaceutical Product, (ii) withdraws its approval of, requests the recall, suspension, or seizure of, or withdraws or orders the withdrawal of advertising or sales promotional materials relating to, any Pharmaceutical Product, (iii) imposes a clinical hold on any clinical investigation by the Company or any of its Subsidiaries, (iv) enjoins production at any facility of the Company or any of its Subsidiaries, (v) enters or proposes to enter into a consent decree of permanent injunction with the Company or any of its Subsidiaries, or (vi) otherwise alleges any violation of any laws, rules or regulations by the Company or any of its Subsidiaries, and which, either individually or in the aggregate, would have a Material Adverse Effect.  The properties, business and operations of the Company have been and are being conducted in all material respects in accordance with all applicable laws, rules and regulations of the FDA.  The Company has not been informed by the FDA that the FDA will prohibit the marketing, sale, license or use in the United States of any product proposed to be developed, produced or marketed by the Company nor has the FDA expressed any concern as to approving or clearing for marketing any product being developed or proposed to be developed by the Company.

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

(jj)    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”).

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

(ll)    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 (25%) 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.

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

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 

19

contemplated by the Transaction Documents have been duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of such Purchaser.  Each Transaction Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

(b)    Understandings or Arrangements.  Such Purchaser is acquiring the Securities 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 Securities (this representation and warranty not limiting such Purchaser’s right to sell the Securities pursuant to the Registration Statement or otherwise in compliance with applicable federal and state securities laws).  Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business. 

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

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

(e)    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 SEC Reports 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 Securities and the merits and risks of investing in the Securities; (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 the Placement Agent nor any Affiliate of the Placement Agent has provided such Purchaser with any information or advice with respect to the Securities nor is such information or advice necessary or desired.  Neither the Placement Agent nor any Affiliate has made or makes any representation as to the Company or the quality of the Securities and the Placement Agent 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 Securities to such Purchaser, neither the Placement Agent nor any of its Affiliates has acted as a financial advisor or fiduciary to such Purchaser.

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(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 Securities 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, or preclude any actions, with respect to locating or borrowing shares in order to effect Short Sales or similar transactions in the future.

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    Pre-Funded Warrant Shares.  If all or any portion of a Pre-Funded Warrant is exercised at a time when there is an effective registration statement to cover the issuance or resale of the Pre-Funded Warrant Shares or if the Pre-Funded Warrant is exercised via cashless exercise, the Pre-Funded Warrant Shares issued pursuant to any such exercise shall be issued free of all legends.  If at any time following the date hereof the Registration Statement (or any subsequent registration statement registering the sale or resale of the Pre-Funded Warrant Shares) is not effective or is not otherwise available for the sale or resale of the Pre-Funded Warrant Shares, the Company shall immediately notify the holders of the Pre-Funded Warrants in writing that such registration statement is not then effective and thereafter shall promptly notify such holders when the registration statement is effective again and available for the sale or resale of the Pre-Funded Warrant Shares (it being understood and agreed that the foregoing shall not limit the ability of the Company to issue, or any Purchaser to sell, any of the Pre-Funded Warrant Shares in compliance with applicable federal and state securities laws).  The Company shall use reasonable best efforts to keep a registration statement (including the Registration Statement) registering the issuance or resale of the Pre-Funded Warrant Shares effective during the term of the Pre-Funded Warrants.

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4.2    Furnishing of Information.  Until the earlier of the time that (i) no Purchaser owns Securities and (ii) the Pre-Funded Warrants have expired, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act. 

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 Securities for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.
 
4.4    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 its Subsidiaries, or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents.  In addition, effective upon the issuance of such press release, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates on the one hand, and any of the Purchasers or any of their Affiliates on the other hand, shall terminate. The Company and each Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication.  Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except (a) as required by federal securities law in connection with 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 Securities 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 

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Purchaser or its agents or counsel with any information that constitutes, or the Company reasonably believes constitutes, material non-public information, unless prior thereto such Purchaser shall have consented to the receipt of such information and agreed with the Company to keep such information confidential.  The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.  To the extent that the Company delivers any material, non-public information to a Purchaser without such Purchaser’s consent, the Company hereby covenants and agrees that such Purchaser shall not have any duty of confidentiality to the Company, any of its Subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates, or a duty to the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates not to trade on the basis of, such material, non-public information, provided that the Purchaser shall remain subject to applicable law. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.  The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.

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

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 as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is solely based upon a material breach of such Purchaser Party’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser Party may have with any such stockholder or any violations by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which is finally judicially determined to constitute fraud, gross negligence or willful misconduct). If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party.  Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (x) the employment thereof has been specifically authorized 

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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 Shares pursuant to this Agreement and Pre-Funded Warrant Shares pursuant to any exercise of the Pre-Funded Warrants.

4.10    Listing of Common Stock. The Company hereby agrees to use reasonable best efforts to maintain the listing or quotation of the Common Stock on the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list or quote all of the Shares and Pre-Funded Warrant Shares on such Trading Market and promptly secure the listing of all of the Shares and Pre-Funded Warrant Shares on such Trading Market. 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 Pre-Funded Warrant Shares, and will take such other action as is necessary to cause all of the Shares and Pre-Funded Warrant 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.  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 30 days after the Closing Date, neither the Company nor any Subsidiary shall issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents.

(b)    From the date hereof until the one year anniversary of the Closing Date, the Company shall be prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its subsidiaries of Common Stock or any securities of the Company or its 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, 

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Common Stock (or a combination of units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional shares of Common Stock either (A) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock or (ii) enters into, or effects a transaction under, any agreement, including, but not limited to, an equity line of credit, whereby the Company may issue securities at a future determined price, including that certain Common Stock Purchase Agreement, dated as of August 30, 2019, between the Company and Aspire Capital Fund, LLC, provided that, for the avoidance of doubt, the presence of a customary anti-dilution protection provision shall not, in itself, cause a transaction to be deemed a Variable Rate Transaction. Notwithstanding the foregoing, in the event that, after the 60th day following the date of this Agreement, the VWAP (as defined below) is greater than the Per Share Purchase Price for five consecutive Trading Days (as defined below), the Company will no longer be subject to this Section 4.12(b) at such time. Any Purchaser shall be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages. “VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market (as defined below), the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the board of directors of the Company.

(c)    Notwithstanding the foregoing, this Section 4.12 shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction shall be an Exempt Issuance.

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

4.14    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 

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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 the Disclosure Schedules.  Notwithstanding the foregoing, and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4, (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 its 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 Securities covered by this Agreement.

4.15    Capital Changes.  Except as to reverse stock splits deemed necessary by the Company’s board of directors to regain compliance with the rules and regulations of the Trading Market, until the one year anniversary of the Closing Date, the Company shall not undertake a reverse or forward stock split or reclassification of the Common Stock without the prior written consent of the Purchasers holding a majority in interest of the Shares.

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

ARTICLE V.
MISCELLANEOUS

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

5.2    Fees and Expenses.  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 

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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 Securities to the Purchasers.

5.3    Entire Agreement.  The Transaction Documents, together with the exhibits and schedules thereto, the Prospectus and the Prospectus Supplement, 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 file such notice with the Commission pursuant to a Current Report on Form 8-K.

5.5    Amendments; Waivers.  No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and Purchasers which purchased at least 50.1% in interest of the sum of (i) the Shares and (ii) the Pre-Funded Warrant Shares initially issuable upon exercise of the Pre-Funded Warrants based on the initial Subscription Amounts hereunder or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought, provided that if any amendment, modification or waiver disproportionately and adversely impacts a Purchaser (or group of Purchasers), the consent of such disproportionately impacted Purchaser (or group of Purchasers) shall also be required.  No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right. Any proposed amendment or waiver that disproportionately, materially and adversely affects the rights and obligations of any Purchaser relative to the comparable rights and obligations of the other Purchasers shall require the prior written consent of such adversely affected Purchaser. Any amendment effected in accordance with this Section 5.5 shall be binding upon each Purchaser and holder of Securities and the Company.

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

5.7    Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.  The Company may not assign this Agreement or any 

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rights or obligations hereunder without the prior written consent of each Purchaser (other than by merger).  Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the “Purchasers.”

5.8    No Third-Party Beneficiaries.  The Placement Agent shall be the third party beneficiary 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 Securities.

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

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

28

way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

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

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

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

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

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 

29

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

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

5.21    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)

    

30

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.

	
		
	NOVAN, INC.
	Address for Notice:

	By:__________________________________________
     Name: Paula Brown Stafford
     Title:  President and Chief Executive Officer
	Fax: 
E-mail:

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

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]

31

[PURCHASER SIGNATURE PAGES TO NOVN 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: ______________________________________________________
Signature of Authorized Signatory of Purchaser: _________________________________
Name of Authorized Signatory: _______________________________________________
Title of Authorized Signatory: ________________________________________________
Email Address of Authorized Signatory:_________________________________________
Facsimile Number of Authorized Signatory: __________________________________________
Address for Notice to Purchaser:

Address for Delivery of Pre-Funded Warrants to Purchaser (if not same as address for notice):

DWAC for Shares:

Subscription Amount: $_________________

Shares: _________________

Pre-Funded Warrants: __________________

EIN Number: ____________________

  
☐ Notwithstanding anything contained in this Agreement to the contrary, by checking this box (i) the obligations of the above-signed to purchase the securities set forth in this Agreement to be purchased from the Company by the above-signed, and the obligations of the Company to sell such securities to the above-signed, shall be unconditional and all conditions to Closing shall be disregarded, (ii) the Closing shall occur by the second (2nd) Trading Day following the date of this Agreement and (iii) any condition to Closing contemplated by this Agreement (but prior to being disregarded by clause (i) above) that required delivery by the Company or the above-signed of any agreement, instrument, certificate or the like or purchase price (as applicable) shall no longer be a condition and shall instead be an unconditional obligation of the Company or the above-signed (as applicable) to deliver such agreement, instrument, certificate or the like or purchase price (as applicable) to such other party on the Closing Date.

[SIGNATURE PAGES CONTINUE] 

32EX-10.1

 Exhibit 10.1 
  

					
	 NDG: 000016251758
	 		  	- DATE:    20/03/2020

 Banco BPM S.p.A. - Share Capital of 7,100,000,000 euro fully paid-up - ABI 05034 - Tax
ID and Registration No. with the Milan Register of Companies Monza Brianza Lodi: 09722490969 - Banco BPM IVA Group Representative - VAT No. 10537050964 -Registered office: P.zza F. Meda, 4 - 20121 - MILAN - Tel. 02/77001-Administrative Headquarters:
P.zza Nogara,2 - 37121 - VERONA-Tel. 045/8675111 - Web: www.bancobpm.it - Member of the Interbank Deposit Protection Fund and the National Guarantee Fund - Parent Bank of the Banco BPM Banking Group - Registered with the Bank of Italy under no. 8065
and with the Register of Banking Groups under no. 237 - Virtual stamp duty, where due, Auth. Internal Revenue Agency, Milan 5 - Office - no. 3358/2017 of 10/01/2017 

SEGRATE, on    20 /03 /2020 
  

					
	  
 TO: KALEYRA SPA

VIA MARCO D’AVIANO 2
 20131 MILAN (MI)
	 	From     To     	 	  

TO: BANCO BPM S.P.A.
 SEGRATE - SAN FELICE (01726)

PIAZZA CENTRO COMMERCIALE, 36
 20090 - SEGRATE (MI)

 

  

	
	 GENERAL UNSECURED LOAN

LOAN NO. 04629747
  

  

	
	  

SUMMARY DOCUMENT
  

 This “Summary document”, by express mutual agreement of the parties, shall be considered an integral and
substantive part of the contract template, to which it is attached as its frontispiece. 
 ECONOMIC CONDITIONS 

The APR is equal to         3.4652        %. 

The Parties acknowledge that, at the time the contract is signed, the agreed economic conditions may not exceed the threshold rate set in the current quarter
for the specific category of credit operations pursuant to Italian Law no. 108 of 7 March 1996, containing provisions on usury. 
 The interest rate is
set on the basis of the following index parameter: 
 variable and automatically determined in the extent equal to 3.000 points over the
Euribor - Euro Interbank Offered Rate - 3 (three) months base 360 - punctual survey (quotation recorded at 11 a.m., Central European Time, by the Euribor management committee - EMMI - distributed on the main telematic circuits, e.g.
http://it.euribor-rates.eu, and published in the specialist press) by currency on the last business day of the calendar quarter. The interest rate thus determined is updated at the beginning of each subsequent calendar quarter. The “Reference
Business Day” refers to the date on which, for any payment in Euro, the Trans-European Automated Real-time Gross Settlement Express Transfer System (TARGET 2) is in effect. Currently the reference parameter value is equal to -0.390000% and,
thus, as of today’s date the interest rate is 2.6100% (percent) 
 In the case of a variable rate, the value indicated above is
indicative and refers to the current value at the time the contract is signed. 
 It remains understood between the parties that the interest
rate indicated above, and given by the sum of the Euribor (and, in the event of its failure and/or impossible future determination, the Libor) and the Spread, cannot, under any circumstances whatsoever, be less than zero. Therefore, it is expressly
agreed that, if the interest rate, as determined above, is equal to or lower than zero, the Bank will apply an interest rate equal to zero to this Loan until the interest rate returns to a value higher than zero. 

Should it not prove possible to determine the rate of the index parameter as defined above, the 3-month
Libor referring to the Euro will be taken as an index parameter, as published on the second business day prior to the end of each calendar quarter as reported in the specialist press, increased by the spread mentioned above; in instances of any
increase or decrease of the latter reference parameter, the interest rate shall be adjusted to the extent of the intervening variations beginning 1/1, 1/4, 1/7, 1/10 following the aforementioned variation, and shall remain in effect for the entire
calendar quarter in question. 
 Pre-amortisation interest, if due, shall be calculated at the
interest rate referred to above. 
 Interest (both repayment and pre-amortisation) shall be
calculated using the nominal rates described with respect to the actual numbers of lapsed days, with the divisor referring to 360 days. 

The default rate is equal to the rate applied to the Loan in effect on the instalment due date, with an additional 2.000 (two/000) points. 

Further economic conditions at your expense are: 

					
	NDG: 000016251758	 		 	- DATE:    20/03/2020                    

 
 - Underwriting expenses to be repaid through an 87,000.00 euro
withholding on the amount disbursed; 
 - Management costs 0.00 euro; 

- Instalment collection fees 2.75 euro; 

- Fees for sending communications in paper format 1.25 euro; 

- Fees for sending communications in electronic format 0.00 euro; 

- Fees for novations, replacements of guarantee, authorised delays, extensions as well as supplemental deeds of any kind 0.500% of the residual
debt (minimum 200.00 euro, maximum 2,000.00 euro); 
 - Fees for deferring an instalment payment 0.00 euro; 

- Fees for notice of instalment due date 1.25 euro (charged only where the instalment is not paid through direct debit against an account held
at the disbursing institution); 
 - Fees requesting certifications, legal/accounting documents, interest 1.25 euro; 

- Charges for prepayments calculated based on the prepaid principal amount 4.500 %; 

- Fees for administrative costs deriving from variations of the economic conditions not in conformity with the contractual terms made through a
bilateral agreement between the parties 50.00 euro. 
 - Alternative tax with respect to the disbursed amount 0.250000 % 

(where an election has been made under Italian Presidential Decree no. 601/1973 and as amended); 

- Fees to issue a certified copy of the Contract suitable for it to be agreed 0.00 euro; 

- Fees for postal stamp duties and other duties not listed above in the applicable statutory amount. 

 

CONTRACT CONDITIONS 

Whereas 
  

	a)	 the Company KALEYRA SPA SOCIETA’ PER AZIONI with registered offices at VIA MARCO D’AVIANO 2 -
20131 - MILAN (MI) Tax ID/VAT number 0000012716960153 and registration with the Company Register of MILAN (MI) number 0000012716960153 Share Capital € 111,000.00 fully
paid-up, (hereinafter the “Borrower”) in the person of the legal representative, Dario Leopoldo Omero Calogero , born in Milan (MI), on [***], Tax ID
[***] , as the legal representative, has asked the Bank to grant a Loan for the amount of 6,000,000.00 euro (six million/00) (hereinafter the “Loan”) to be used to support the company’s activities, as may be better
specified in the epigraph. 

  

	b)	 the Bank, in relation to this request, has agreed to grant the Loan, on the basis of: 

(1) the truthfulness, completeness and accuracy of the economic, financial and legal data and information provided by the Borrower regarding
its legal, administrative, equity, financial and technical situation; 
 (2) the assumption of and full compliance with the commitments
provided for in this Contract (as defined below) as set forth below. 
 Given the above, the Bank and the Borrower, which will be referred to
hereinafter as the “Parties”, where necessary, jointly intend, by signing this deed, to implement the aforementioned Loan operation. 

CONTRACT RULES 
 Art. 1 - Value of the
preamble and attachments 
 The preamble and any attachments form an integral and substantive part of this Contract. 

Art. 2 – Definitions 
 The terms and expressions used
in this Contract, unless defined otherwise herein, shall have the meanings set forth below: 
 “Bullet repayment” means the amount that
provides for the repayment of the principal, paid in a lump sum upon the Loan’s due date, together with the payment of the related interest. In the period prior to the Loan’s due date, the Borrower shall pay, if provided for in the
Contract, instalments consisting solely of interest. 

  
 2 

 

			
	Customer	 	
		
	copy	 	
		
	 BANCO BPM S.p.A.
 Capogruppo del Gruppo
Bancario BANCO BPM
 Sede Legale: Piazza F. Meda, 4-20121 Milano - Tel. 02 77001

Sede Amministrativa: Piazza Nagara, 2 - 37121 Verona - Tel. 045 8675111

www.bancobpm.it
	 	 Capitale Sociale al 7.4.2018 Euro 7.100.000.000.00 int. vers. - ABI 05034

C.F. e lscr. al Registro delle Imprese di Milano n. 09722490969 - Rappresentante

del Gruppo IVA Banco BPM - P.IVA10537050964 - Aderente al Fondo

Interbancario di Tutela dei Depositi e al Fondo Nazionale di Garanzia

Iscritto all’Albo delle Banche della Banca d’Italia e all’Albo dei Gruppi Bancari

					
	NDG: 000016251758	 		 	- DATE:    20/03/2020                    

 
 “Progressive amortisation” or “French amortisation” means
amortisation in instalments consisting of increasing portions of principal to be repaid calculated on the basis of the commercial calendar (360/360) and calculated interest portions, on the residual debt, with reference to the number of days
actually elapsed for each period of interest and fixed divisor 360. Without prejudice to the principal portion calculation indicated above, the overall amount (total) of the individual instalments changes due to the different number of calendar days
included in each interest period. 
 “Uniform Amortisation” or “Italian Amortisation” means the amortisation that provides for
instalments with constant principal repayment instalments (i.e. equal for all instalments, determined by dividing the principal borrowed by the number of repayment instalments) and calculated interest portions on the residual debt, which decrease
over time. 
 “Bank”: means the Bank whose data is shown in the epigraph to this Contract; 

“Contract” or “Loan Contract”: means this Contract, including all its attachments, and any subsequent contracts or
agreements by which it may be supplemented, amended or renewed; 
 “Summary Document”: means the document giving the economic conditions
applied to the Loan and which, by express agreement between the Parties, is considered an integral and substantive part of this Contract and which is the frontispiece of the same; 

“Substantially prejudicial effect”: means the direct and/or indirect consequence of a Significant Event, a fact, a circumstance that can:
(i) negatively and significantly affect the Borrower’s legal, equity, financial, economic, administrative or technical situation or its production capacity or its prospects; or (ii) result in serious prejudice to the Bank’s
credit rating; or (iii) compromise, in the reasonable and reasoned opinion of the Bank, the prospects for the Loan’s repayment; 

“Significant Event” (plural “Significant Events”): means any event, fact or circumstance qualified as such under article 16
(Significant Events) of this Contract; 
 “Loan”: means the Loan of 6,000,000.00 euro (six million/00) granted under this Contract; 

“Business Day”: means a day calculated on the basis of the TARGET2 (Trans-European Automated Real-time Gross Settlement Express Transfer
System) international payment system calendar on which banks are authorised to be open to the public to carry out their normal business activities. 

“Group”: means any parent company of the Borrower and the other companies that are or will be directly or indirectly controlled by the
Borrower itself pursuant to article 2359, first and second paragraphs of the Italian Civil Code, and any other company that has given information that it is subject to the Borrower’s management and coordination; 

“Encumbrance”: means any lien that gives a right of first refusal on the proceeds of the sale (even compulsory) of an asset, including by way
of example, a pledge, mortgage or lien; 
 “Party” (plural “Parties”): means, individually or jointly, as the case may be,
the parties to this Contract as better identified in the header to the same; 
 “Borrower”: means KALEYRA SPA with registered offices at
VIA MARCO D’AVIANO 2 - 20131 - MILAN (MI) Tax ID/VAT number 0000012716960153 and registration with the Company Register of MILAN (MI) number 0000012716960153, as better identified in the epigraph of this Contract; 

“Spread”: means, with reference to the Loan, the annual surcharge applied to the Euribor (and, in the event of its failure and/or impossible
future recognition, the Libor) as indicated in the Summary Document; 
 “Repayment Schedule”: table representing the breakdown by principal
and interest (and possibly other cost items) of the loan repayment instalments to be paid by the Borrower to the Bank, calculated using the interest rate as defined in the Contract. For variable rate loans, the table is purely indicative. 

“Interest Rate”: means, with reference to the Loan, the sum of the Euribor (and, in the event of its failure and/or impossible future
recognition, the Libor) and the Spread as indicated in the Summary Document. 
 Art. 3 - The Contract subject and related regulation 

The Bank declares that it will grant and make available to the Borrower, who has requested it, a Loan of 6,000,000.00 euro (six million/00) for a term of 045
months, in addition to any period of pre-amortisation and instalment alignment, under the conditions set out below and to be understood as a firm commitment by the Bank, as defined in article 4 below. 

The identification report for the Loan in question may be transferred by the Bank to another branch without a new contract being required. Any change in the
distinct number of the banking relationship (including where such a change is prompted by such a transfer) shall not constitute a novation of the same. 

The Loan in question is governed by Italian Legislative Decree no. 385/1993 (the Consolidated Law on Banking and Credit, hereinafter the “TUB”) and
the previous regulations, insofar as they are applicable; it is also governed, in addition to the rules set out below, by the “General Conditions relating to the Bank - Customer relationship” already known and approved by the Borrower.

 The Borrower declares that it does not qualify as a “consumer”, with the consequent inapplicability of the current provisions of the law on
“Consumer credit” referred to in article 121 of the TUB. 
 Article 4 - Firm commitment 

The Bank undertakes not to withdraw from the Contract for its term, except in those scenarios contemplated in article 16, below. 

Art. 5 - Guarantees issued 
 The Loan is backed by the
following guarantees given in favour of the Bank, established by a separate deed: 
 None 

  
 3 

 

			
	Customer	 	
		
	copy	 	
		
	 BANCO BPM S.p.A.
 Capogruppo del Gruppo
Bancario BANCO BPM
 Sede Legale: Piazza F. Meda, 4-20121 Milano - Tel. 02 77001

Sede Amministrativa: Piazza Nagara, 2 - 37121 Verona - Tel. 045 8675111

www.bancobpm.it
	 	 Capitale Sociale al 7.4.2018 Euro 7.100.000.000.00 int. vers. - ABI 05034

C.F. e lscr. al Registro delle Imprese di Milano n. 09722490969 - Rappresentante

del Gruppo IVA Banco BPM - P.IVA10537050964 - Aderente al Fondo

Interbancario di Tutela dei Depositi e al Fondo Nazionale di Garanzia

Iscritto all’Albo delle Banche della Banca d’Italia e all’Albo dei Gruppi Bancari

					
	NDG: 000016251758	 		 	- DATE:    20/03/2020                    

 
 Art. 6 - Loan Disbursement 

The Borrower hereby declares to receive the sum of 6,000,000.00 euro (six million/00) gross of the amounts related to commissions, expenses and fees,
and taxes, by the crediting of its current account no. 000000003180 held at the Branch of SEGRATE - SAN FELICE net of the amounts related to commissions, expenses and fees, and taxes, or by delivery of
“non-transferable” bank drafts for the corresponding amount marked by the numbers... (please indicate the bank drafts’ matrix numbers). The Borrower therefore grants the Bank a comprehensive and
discharging release, acknowledging its debt to the Bank and obliged to repay it in accordance with the provisions of article 9, below. 
 Art. 7 -
Interest on the Loan 
 From the date on which the Loan is disbursed, the Borrower undertakes to pay interest on the same at the amount and frequency
agreed in the Summary Document and the repayment schedule. 
 The Borrower acknowledges and accepts that, in the case of interest applied at variable rates,
the Bank will redetermine the amount of the instalments in the event of an increase or decrease in the variable rate and consequently the repayment schedule is to be understood as being purely indicative as indicated in article 11 below. 

Any delay or non-delivery of the payment notice shall not release the Borrower from the obligation to pay within the
due term, nor may this situation be invoked as a reason not to apply the default interest due, as referred to in article 8, below, for late payment. 
 The
Parties acknowledge that, at the time the contract is signed, the agreed economic conditions may not exceed the threshold rate set in the current quarter for the specific category of credit operations pursuant to Italian Law no. 108 of 7 March
1996, containing provisions on usury. 
 Art. 8 - Late-payment interest 

In the event of a delay, with respect to the agreed due dates, in the total or partial payment of the loan repayment instalments and/or related interest, as
well as of any other sum due under this Contract and not paid by the agreed due dates, the Borrower shall pay interest on the unpaid amount calculated by using the rate indicated in the economic conditions contained in the Summary Document. 

This late-payment interest will be calculated on all overdue receivables for the principal, interest and ancillary charges and will run automatically without
the need for any notice or default, but only for the expiry of the term. 
 Art. 9 - Repayment of the Loan 

The Borrower undertakes, on its own behalf as well as that of its successors and assignees, to repay any amount due in relation to this Loan, through the
payment of: 
 - 015 instalments, on a quarterly basis, in addition to any pre-amortisation period, as per the
Repayment Schedule attached to this deed to form an integral and substantive part of it. 
 The Borrower therefore undertakes to build up, in good time,
the necessary funds to repay the Loan and expressly authorises the Bank, granting it an irrevocable mandate, to debit the amounts due at each due date from the current account in the Borrower’s name and held with the same Bank. 

The Bank has the right, but not the obligation, to charge, upon each individual due date, against the aforementioned account, the repayment instalment for the
Loan, regardless of whether overdrawn, and by the same token the Bank shall have the right to collect any other amount owed to the Bank by the Borrower pursuant to the Loan. 

Art. 9 bis - Payments 
 Any payment due to the Bank under
this Contract shall be made on the established due date. 
 If the due date falls on a day which is not a Business Day for the Bank, payment shall be taken
as being due on the first non-holiday calendar day immediately following, unless that day falls in the following month, in which case payment shall be made on the
non-holiday calendar day preceding the actual due date. 
 Art. 10 - Expenses for credit collection 

For any amount of money or for any reason which, to protect its own receivables, the Bank pays on the Borrower’s behalf, and any expense (including out-of-court expenses) that the Bank might incur in protecting and collecting its own receivables shall be immediately repaid by the Borrower along with interest accruing
thereto in the amount contemplated for late-payment interest from the date of disbursement, with the right of recovery by the Bank including when the first payment is to be made by the Borrower, with the waiver by the Borrower of any different
charge. By the same token, the Bank shall have the right to request that the Borrower immediately repay any charge or increase following a change and/or new interpretation (including by an administrative authority) of the rules and provisions
governing the transaction. 
 Art. 11 - Repayment schedule 

The Repayment Schedule - including any pre-amortisation period and instalment alignment - is attached to the Summary
Document. 
 The Borrower acknowledges and accepts that, if a variable interest rate has been agreed, the Bank will, where there is an increase or decrease
in the interest rate, adjust the loan’s repayment schedule accordingly, using the “principal” of the remaining principal, the “terms” of the remaining term and the “interest rate” or the rate as provided for above.
The aforementioned Repayment Schedule shall, therefore, be considered “indicative”, as it is only intended to demonstrate what the amount of each instalment would be if the interest rate given at the time the Contract was signed remained
unchanged for the entire amortisation duration and is, therefore, not intended to establish the exact amount of each instalment, since the same may vary in relation to the principal portion, or in relation to the interest portion (in the case of
“Progressive Amortisation” or “French Amortisation”), or only in relation to the interest portion (in the case of “Uniform Amortisation” or “Italian Amortisation” or “Bullet Repayment”) and, in any
case, in relation to the total amount of each instalment. 

  
 4 

 

			
	Customer	 	
		
	copy	 	
		
	 BANCO BPM S.p.A.
 Capogruppo del Gruppo
Bancario BANCO BPM
 Sede Legale: Piazza F. Meda, 4-20121 Milano - Tel. 02 77001

Sede Amministrativa: Piazza Nagara, 2 - 37121 Verona - Tel. 045 8675111

www.bancobpm.it
	 	 Capitale Sociale al 7.4.2018 Euro 7.100.000.000.00 int. vers. - ABI 05034

C.F. e lscr. al Registro delle Imprese di Milano n. 09722490969 - Rappresentante

del Gruppo IVA Banco BPM - P.IVA10537050964 - Aderente al Fondo

Interbancario di Tutela dei Depositi e al Fondo Nazionale di Garanzia

Iscritto all’Albo delle Banche della Banca d’Italia e all’Albo dei Gruppi Bancari

					
	NDG: 000016251758	 		 	- DATE:    20/03/2020                    

 
 If the interest rate applied on the borrowed principal is fixed, the Repayment Schedule
indicated above must - vice versa - be considered effective. 
 Art. 12 - Voluntary early repayment 

The Borrower, in conjunction with an interest due date, has the right to repay the Loan, in whole or in part, with a written notice to be given at least 30
business days prior to the proposed repayment date; in this case the Borrower shall pay to the Bank, in addition to the principal, interest, expenses and fees, and other charges accrued, in accordance with the procedures to be agreed with the Bank
itself, a penalty for early repayment, calculated on the principal amount repaid in advance, as indicated in the Summary Document. Each prepayment shall serve to lower the amount of the subsequent instalments; the number of instalments as originally
negotiated shall stand, unless otherwise agreed between the Bank and the Borrower. 
 Art. 13 - Declarations and guarantees 

The Borrower declares and guarantees the following: 
  

	a)	 that it is a validly incorporated and on-going company in accordance
with the regulations in effect and that it is able to exercise its rights in full; 

  

	b)	 that the corporate bodies, in the forms and in the manner provided for in their respective articles of
association, have taken all the necessary resolutions to approve this Contract being stipulated and executed. The powers as conferred above are effective and have not been subject to revocation and/or amendment, even partial; 

 

	c)	 that it has not submitted debt restructuring plans pursuant to article 67, paragraph 3, letter d) of Italian
Royal Decree no. 267 of 16/03/1942 (“Bankruptcy Law”), or debt restructuring agreements pursuant to article 182 bis of the aforementioned Bankruptcy Law; 

 

	d)	 that it has not been declared insolvent or subject to insolvency proceedings of any kind, nor is it aware of
any action taken against it which might result in it being subject to insolvency proceedings of any kind; 

  

	e)	 that it has not undertaken voluntary liquidation procedures; 

 

	f)	 that it is not in a situation of “capital reduction due to losses” or “capital reduction below
the legal limit”. 

 Art. 14 - Solidarity bond 

All obligations shall be deemed assumed by the Borrower individually as well as on behalf of all guarantors, with joint and several liability amongst them, and
with the duty of joint and several liability attaching to their heirs, successors, and assignees. Should more than one debt connect the Borrower to the Bank, the Borrower shall have the right to state - pursuant to article 1193, paragraph 1 of the
Italian Civil Code - at the time of payment which debt the Borrower is intending to repay. In the absence of such a statement, the Bank may allocate (as a waiver of the statutory-default provision otherwise available under article 1193, paragraph 2
of the Italian Civil Code) the payments made by the Borrower, or any payments received by a third party, to discharge or lessen any duty assumed by the Borrower by providing notice to the latter. 

Art. 15 - The Borrower’s additional obligations 
 The
Borrower, in addition to the obligations assumed under this Contract, also undertakes, on its own behalf as well as that of any companies belonging to the same Group, also pursuant to and for the purposes of article 1381 of the Italian Civil Code
and until all the Bank’s claims have been settled, to comply with the following provisions, acknowledging their essential nature within the context of this Contract: 

Disclosure obligations 
  

	-	 to notify the Bank immediately in writing of any event, fact, act, circumstance - even if well-known - that may
have a Substantially Prejudicial Effect; 

  

	-	 to send to the Bank, as soon as they become available, but in any case no later than 30 business days after
being approved by the corporate bodies: its annual financial statements and/or its consolidated financial statements (or a pro forma version of the same where the elements required by law for the mandatory preparation of consolidated financial
statements do not exist) together with, where the Borrower is required to do so by law, by-laws or otherwise, a certification report from a leading auditing firm and the report by the Board of Directors and
the Board of Statutory Auditors; 

  

	-	 to provide the Bank, within 15 days of the relevant request, with the statements, documentation and any other
information or data regarding its financial and economic conditions as may be reasonably requested by the Bank; 

 Obligations to
act 
  

	-	 to maintain all the authorisations, permits or administrative licences necessary or appropriate to enable the
proper conduct of its business; 

  

	-	 to allow, at the request of the Bank and depending on the performance of the company’s activities, any
technical and administrative checks to be carried out by the Bank in order to ascertain the regularity of its business performance and, in general, compliance with all the obligations under this Contract; 

 

	-	 to pay correctly, punctually and in full, all taxes, duties, social security contributions and any other sums
due under legal or regulatory provisions; 

  

	-	 to keep the Loan guarantees in effect and not to perform any act that might jeopardise or in any way make it
more difficult for the Bank to satisfy its loans through the performance of the Loan guarantees; if the assets covered by the Loan guarantees perish or deteriorate or reduce in value for any reason, the Borrower shall provide new guarantees on those
assets which are substantially equivalent in value to the assets that have perished or deteriorated or that have lost value; 

  

	-	 to maintain insurance coverage with leading insurance companies to cover the risks associated with its business
and its assets, in accordance with market practice and for the limits that are normally insured within the sector in which it operates; 

  
 5 

 

			
	Customer	 	
		
	copy	 	
		
	 BANCO BPM S.p.A.
 Capogruppo del Gruppo
Bancario BANCO BPM
 Sede Legale: Piazza F. Meda, 4-20121 Milano - Tel. 02 77001

Sede Amministrativa: Piazza Nagara, 2 - 37121 Verona - Tel. 045 8675111

www.bancobpm.it
	 	 Capitale Sociale al 7.4.2018 Euro 7.100.000.000.00 int. vers. - ABI 05034

C.F. e lscr. al Registro delle Imprese di Milano n. 09722490969 - Rappresentante

del Gruppo IVA Banco BPM - P.IVA10537050964 - Aderente al Fondo

Interbancario di Tutela dei Depositi e al Fondo Nazionale di Garanzia

Iscritto all’Albo delle Banche della Banca d’Italia e all’Albo dei Gruppi Bancari

					
	NDG: 000016251758	 		 	- DATE:    20/03/2020                    

 
 Obligations not to act 

 

	-	 not to make any changes to its articles of association that might have a “substantially prejudicial
effect” without the Bank’s prior written consent. It is understood, however, that the Bank’s consent will not be necessary in relation to: (i) amendments to the articles of association of a formal and non-substantial nature (such as, by way of example, transferring the registered office within the Italian territory, changing the company’s name and its duration); and (ii) amendments to the articles of
association that may become necessary in application of state laws or regulations; 

  

	-	 not to suspend, interrupt or modify the business currently carried out or a
non-marginal part of it; 

  

	-	 not to resolve to reduce its share capital, except in accordance with legal obligations; 

 

	-	 not to propose voluntary liquidation; 

 

	-	 if established as an Italian joint-stock company [“società per azioni”], not to
constitute assets allocated to a specific transaction pursuant to article 2447 bis et seq. of the Italian Civil Code and to request financing allocated to a specific transaction pursuant to article 2447 decies of the Italian Civil Code;

 Art. 16 - Significant events 
 In
addition to the events which, pursuant to the law, allow the Bank to terminate and/or to withdraw from the Contract, or to activate the acceleration clause against the Borrower, each of the events described in this article constitutes a Significant
Event: 
  

	a)	 failure to make timely and full payment of any amount due to the Bank in respect of the principal or interest
on the Loan or in respect of any expenses or fees, commissions or otherwise under this Contract; 

  

	b)	 the Loan is used, in whole or in part, for a purpose other than that stated and indicated in the preamble;

  

	c)	 the failure to comply with any of the obligations referred to in article 15 - where possible - is not remedied
within 30 business days from the date of notification by the Bank; 

  

	d)	 substantial inaccuracy and/or untruthfulness of any of the declarations and guarantees made by the Borrower
pursuant to article 13; 

  

	e)	 opening, at the expense of the Borrower, any procedure, even out of court, referred to in Italian Royal Decree
no. 267 of 16 March 1942 (“Bankruptcy Law”) or its voluntary or judicial liquidation; 

  

	f)	 the Borrower has been declared, or declares that it has become, insolvent or one of the situations referred to
in article 2446 paragraph 2 or paragraph 2447, or article 2482 bis, paragraph 4 or 2482 ter of the Italian Civil Code has occurred; 

  

	g)	 initiation of actions by one or more enforcement procedures by third parties against the Borrower’s
assets; 

  

	h)	 initiation of actions, suits, disputes, complaints or arbitration, administrative or judicial proceedings in
general, of any kind and with any public or private counterparty against the Borrower that might have a Substantially Prejudicial Effect, unless the Borrower provides the Bank with documentary evidence of the groundlessness of the proceedings
initiated; 

  

	i)	 submission of debt restructuring plans pursuant to article 67 paragraph 3, letter d) of Italian Royal Decree
no. 267 of 16 March 1942 (“Bankruptcy Law”), or debt restructuring agreements pursuant to article 182 bis of the aforementioned Bankruptcy Law. 

Art. 17 - Activating the acceleration clause – Terminating the Contract 

1. Activating the acceleration clause 

The occurrence of any situation referred to in article 1186 (Acceleration clause) of the Italian Civil Code, to which the Significant
Events referred to in article 16 letters e), f), g), h), i) of this Contract shall constitute grounds for activating the acceleration clause by the Borrower. 

Effectiveness of the acceleration clause 

The Bank will have the right to inform the Borrower of its intention to exercise its rights under this article, by means of a communication
sent by registered letter with return receipt or by certified email; activating the acceleration clause shall become effective ipso iure, without any judicial ruling, from the date on which the aforementioned communication is received. 

Repayment of the Loan 

Within 20 business days from the date on which the acceleration clause becomes effective pursuant to the previous paragraph, the Borrower shall
repay to the Bank the amounts of the Loan not yet repaid together with the accrued interest and any late-payment interest, up to the date of the actual repayment. 

2. Terminating the Contract 

This Contract will be legally terminated upon the initiative and at the discretion of the Bank pursuant to article 1456 (Express termination
clause) of the Italian Civil Code, should even one of the Significant Events referred to in article 16 letters a), b), c), d) of this Contract occur. 

Effectiveness of the termination 

The Bank will inform the Borrower of its intention to exercise its right to terminate the Contract with respect to the same by means of a
communication sent by registered letter with return receipt or by certified email; termination of the Contract shall take effect from the date on which the aforementioned communication is received. 

Repayment of the Loan 

Within 20 business days from the date on which the contract’s termination becomes effective pursuant to the previous paragraph, the
Borrower shall repay to the Bank the amounts of the Loan not yet repaid , together with the accrued interest and any late-payment interest, up to the date of the actual repayment. 

  
 6 

 

			
	Customer	 	
		
	copy	 	
		
	 BANCO BPM S.p.A.
 Capogruppo del Gruppo
Bancario BANCO BPM
 Sede Legale: Piazza F. Meda, 4-20121 Milano - Tel. 02 77001

Sede Amministrativa: Piazza Nagara, 2 - 37121 Verona - Tel. 045 8675111

www.bancobpm.it
	 	 Capitale Sociale al 7.4.2018 Euro 7.100.000.000.00 int. vers. - ABI 05034

C.F. e lscr. al Registro delle Imprese di Milano n. 09722490969 - Rappresentante

del Gruppo IVA Banco BPM - P.IVA10537050964 - Aderente al Fondo

Interbancario di Tutela dei Depositi e al Fondo Nazionale di Garanzia

Iscritto all’Albo delle Banche della Banca d’Italia e all’Albo dei Gruppi Bancari

					
	NDG: 000016251758	 		 	- DATE:    20/03/2020                    

 
 Art. 18 - Fees, taxes and charges 

The Bank, in agreement with the Borrower, confirms that it will exercise the option to apply the substitute tax as per articles 15 and 17 of Italian
Presidential Decree no. 601/73 as amended and supplemented. 
 The application of the substitute tax regime concerns both this Loan operation and all other
acts, contracts, formalities, including any guarantees, which will be carried out in connection with and/or as a consequence of the operation covered by this Contract. 

The Borrower declares that it has been fully informed of all the consequences that will arise or that might arise in the future from the application of the
substitute tax. 
 Furthermore, all taxes, duties and other tax charges that may arise, including following any assessment by the competent authorities, by
virtue of this Loan operation, shall be borne by the Borrower. 
 Any taxes, duties, costs, fees and charges (including legal fees, notary fees, taxes and
duties) reasonably incurred and duly documented, including those of a tax and administrative nature (including any tax liability and any penalties imposed), by this Contract, with the exception of income tax payable by the Bank, shall, in any case,
be borne by the Borrower, it being understood that the Bank shall receive the amounts contractually provided for, without any deduction or withholding. 

If, as a result of laws, regulations or interpretations of the law or for other reasons, a tax withholding needs to be done, or an amount needs to be withheld
for any other reason, the payments made by the Borrower shall be supplemented to such an extent that the Bank will, in any case, receive the amounts originally agreed upon in this Contract, except for taxes that are due by the Bank on the total
income deriving from the lending activities. 
 Art. 19 - Unilateral amendment to the conditions by the Bank 

The Borrower, pursuant to article 118 of Italian Legislative Decree no. 385 of 1 September 1993 (Consolidated Law on Banking and Credit) and the
related regulatory and supervisory regulations, specifically approves the Bank’s right to unilaterally amend the fees relating to expenses if there is a justified reason, including to the detriment of the Borrower itself. 

Any proposed change shall be expressly communicated by the Bank to the Borrower, in writing or on a durable medium, 2 months in advance of the new condition
becoming effective, indicating “Proposed unilateral amendment to the Contract”. 
 The amendment shall be considered as accepted if the
Borrower fails to withdraw from the Contract by the date set for the new condition to become effective. Withdrawal is not subject to a charge and, when the relationship is settled, the Borrower shall have the right to apply the conditions previously
stipulated. Clauses relating to the interest rate are expressly excluded from the right to unilateral amendment. 
 The Borrower specifically approves,
pursuant to article 118, paragraph 2 of Italian Legislative Decree no. 385 of 1 September 1993 (Consolidated Law on Banking and Credit), this right of the Bank. 

Art. 20 Election of domicile, communications and proof of accounting records 

Letters, notifications and any other declaration or communication from the Bank shall be sent to the Borrower with full effect to the address to which this
Contract is addressed, which shall be understood as an election of domicile, or subsequently made known in writing. All communications and notices from the Borrower to the Bank regarding the ongoing relationship shall be made in writing to the
branch where the relationship was established. 
 The Borrower undertakes to notify the Bank, within fifteen days by registered letter, of any change of
domicile as elected above, releasing the Bank from all liability relating to any delay and/or non-receipt of correspondence concerning this Loan as a result of the Borrower’s failure to comply with the
aforementioned obligation. 
 Pursuant to article 119 of the Consolidated Law on Banking, the Bank shall supply the Borrower (at the contract’s expiry
and, in any case, at least once per year) a detailed notice, with a complete, straight-forward advisory on the performance of the relationship, and an updated framework for the economic conditions applied. 

The methods for sending periodic communications include by paper and by electronic means; the Borrower expressly declares that it wishes to receive periodic
communications in a/an ....................... form; at any time during the relationship the Borrower has the right to change the communication technique used, by sending a suitable request by registered letter to the Bank
Branch at which the ongoing relationship is held. The Borrower also has the right to request further or more frequent information than the above. Any such request must be made in writing as indicated above. In the event that the Borrower makes a
request to receive the above communications with a frequency other than and greater than that indicated above, the Bank may charge fees as contractually provided for and indicated in the Summary Document for sending paper communications. Between the
Bank and the Borrower, the Bank’s books and accounting records will always constitute full evidence in any location and to all intents and purposes 

Without prejudice to the provisions of article 119 of the Consolidated Law on Banking, the Bank’s statements of account, records and accounting entries
in general shall always, unless proven otherwise at a later date, constitute full evidence in any place and to all intents and purposes of the receivables claimed by the Bank itself from the Borrower in relation to this Contract. 

Art. 21 Applicable law and jurisdiction 
 This Contract is
governed by Italian law. 
 For any dispute relating to the interpretation, conclusion, execution or termination of this Contract, or in any case related to
it, the Court of Milan shall have exclusive jurisdiction, without prejudice to the mandatory powers established by the Italian Civil Procedure Code for precautionary and executive measures and without prejudice to the provisions of article 22,
below. 

  
 7 

 

			
	Customer	 	
		
	copy	 	
		
	 BANCO BPM S.p.A.
 Capogruppo del Gruppo
Bancario BANCO BPM
 Sede Legale: Piazza F. Meda, 4-20121 Milano - Tel. 02 77001

Sede Amministrativa: Piazza Nagara, 2 - 37121 Verona - Tel. 045 8675111

www.bancobpm.it
	 	 Capitale Sociale al 7.4.2018 Euro 7.100.000.000.00 int. vers. - ABI 05034

C.F. e lscr. al Registro delle Imprese di Milano n. 09722490969 - Rappresentante

del Gruppo IVA Banco BPM - P.IVA10537050964 - Aderente al Fondo

Interbancario di Tutela dei Depositi e al Fondo Nazionale di Garanzia

Iscritto all’Albo delle Banche della Banca d’Italia e all’Albo dei Gruppi Bancari

					
	NDG: 000016251758	 		 	- DATE:    20/03/2020                    

 
 Art. 22 Complaints -
out-of-court settlements - Mediation aimed at conciliation - Condition of admissibility 

The Bank informs the Borrower that in the event of a dispute arising as a result of this Contract or related and consequent acts, the Borrower may: 

 

	a)	 submit a complaint to the Bank by registered letter with return receipt addressed to: Banco BPM SpA - Gestione
Reclami [Complaints Management] - Via Polenghi Lombardo, 13 - 26900 Lodi, Italy, or by email to www.bancobpm.it section - “Reclami” [Complaints]. The Bank shall respond within thirty days from receiving the complaint;

 if the Borrower is not satisfied with the outcome of the claim, or has not received a response within the deadline, it may 

 

	b)	 after having followed the complaint procedure referred to in letter a) and within 12 (twelve) months from
lodging the complaint, appeal, pursuant to article 128-bis of Italian Legislative Decree no. 385 (1 September 1993) of the Consolidated Law on Banking and Credit, to the Arbitro Bancario Finanziario
(ABF) [the Italian Banking and Financial Arbitrator] where the amount of the complaint is no greater than 100,000.00 euro (one hundred thousand/00), if the complaint involves a demand for money, or for any amount in all other cases of dispute. The
appeal must be signed by the Borrower; it may be presented on the Borrower’s behalf by an industry association of which the Borrower is a member, or by another duly authorised representative. In such cases, the appeal shall likewise be signed
by the Borrower or shall be accompanied by a power of attorney. The appeal shall be drawn up using the forms posted on the ABF website, and available from any Bank of Italy branch open to the public. Alternatively, the appeal may be: sent directly
to the technical secretariat of the ABF Council with jurisdiction over the matter (following the instructions stated on the forms) or to any Bank of Italy branch, or presented at any Bank of Italy branch open to the public. Should the Borrower wish
to file a complaint, as above, the Borrower shall provide prompt notice of the same to the Bank by sending a copy of the appeal by registered letter with return receipt or by certified email. Further information on the dispute-resolution system
established under article 128-bis of the TUB is available on the ABF’s website (www.arbitrobancariofinanziario.it); 

or, alternatively, 
  

	c)	 institute, even without having followed the complaint procedure referred to in letter a), above, the mediation
procedure with the Bank Conciliation Entity formed under the Banking and Financial Conciliator - Association for Banking, Financial, and Corporate Dispute Resolution - ADR (enrolled in the register of conciliation bodies held by the Italian Ministry
of Justice) as the Body specialising in banking and financial disputes, which has a network of conciliators across Italy (information available at www.conciliatorebancario.it). An equivalent right is reserved to Bank. 

The Lending Bank also informs the Borrower that a condition of admissibility of legal claims relating to disputes arising from this Contract or
related and consequent acts, pursuant to article 5, paragraph 1-bis, of Italian Legislative Decree no. 28 of 4 March 2010, introduced by Italian Law no. 98 of 9 August 2013, converting Italian Decree
Law no. 69 of 21 June 2013, is the initiation of an out-of-court settlement or mediation procedure for conciliation. 

In relation to the provision referred to in article 5, paragraph 1-bis of Italian Legislative Decree no. 28/2010, and in implementation
of paragraph 5 of the same article, the Parties hereby agree to submit any disputes arising from this Contract to the Banking and Financial Conciliator - Association for Banking, Financial, and Corporate Dispute Resolution - ADR (enrolled in the
register of conciliation bodies held by the Italian Ministry of Justice) as the Body specialising in banking and financial disputes, which has a network of conciliators across Italy. 

Art. 23 - Disclosing information 
 The Borrower
acknowledges and agrees that the Bank may disclose the personal data provided by the Borrower, as well as the content of this Contract and any information relating to the Borrower that the Bank considers appropriate: 

 

	a)	 as part of a dispute arising from, or otherwise relating to, this Contract; or 

 

	b)	 if so requested by a judicial order of any kind; or 

 

	c)	 if so requested by any government, tax, banking authority of any competent jurisdiction; or

  

	d)	 to its own auditors and professional consultants and to the Borrower’s, provided that they have signed a
confidentiality agreement in advance; or 

  

	e)	 to the European Central Bank and/or to the Bank of Italy in the context of refinancing operations under the
“Abaco” procedure (collateralised bank assets), as governed by the rules governing the “Eurosystem monetary policy instruments” in force from time to time; or 

 

	f)	 to any person potentially interested in becoming an assignee within the meaning of article 24, below.

 Art. 24 - Assignment of rights and obligations under the Contract 

The Bank may, at any time, assign all or some of its receivables, rights, guarantees, benefits and obligations under this Contract or, in whole or in part,
this Contract to a third party or third parties, with the Bank being subsequently released for that part of the obligations subject to the assignment and excluding any joint and several obligations between the assignor and the assignee. 

Furthermore, it is expressly agreed that the Bank will be able to use, without restriction, the receivables deriving from the Loan as “non-negotiable assets” to be used as guarantees in favour of the European Central Bank and/or the Bank of Italy for refinancing operations granted by the latter under the “Abaco” procedure
(collateralised bank assets), as governed by the rules governing the “Eurosystem monetary policy instruments” in force from time to time. 
 The
Parties expressly agree that the Borrower will not have the right to assign nor to transfer any of its rights, benefits and obligations under this Contract, except for the legal effect resulting from a merger or demerger operation previously
permitted by the Bank. 

  
 8 

 

			
	Customer	 	
		
	copy	 	
		
	 BANCO BPM S.p.A.
 Capogruppo del Gruppo
Bancario BANCO BPM
 Sede Legale: Piazza F. Meda, 4-20121 Milano - Tel. 02 77001

Sede Amministrativa: Piazza Nagara, 2 - 37121 Verona - Tel. 045 8675111

www.bancobpm.it
	 	 Capitale Sociale al 7.4.2018 Euro 7.100.000.000.00 int. vers. - ABI 05034

C.F. e lscr. al Registro delle Imprese di Milano n. 09722490969 - Rappresentante

del Gruppo IVA Banco BPM - P.IVA10537050964 - Aderente al Fondo

Interbancario di Tutela dei Depositi e al Fondo Nazionale di Garanzia

Iscritto all’Albo delle Banche della Banca d’Italia e all’Albo dei Gruppi Bancari

					
	NDG: 000016251758	 		 	- DATE:    20/03/2020                    

 

SIGNATURES 

 If you
agree with the foregoing, we ask that you kindly return a signed copy of this document, using (verbatim) the text appearing infra, by way of your acceptance, and of all the provisions subject to your express approval, and with all
representations as required. 
 Best regards, 
  

	
	BANCO BPM S.P.A.
	
	/s/ Luca Restocchi
	BPM Milan and Northern Lombardy Head
	THE REPRESENTATIVE

                   
                         , born in
                                
(        ) on     /    /             

 
  

TO: 
 BANCO BPM S.P.A. 

I/WE HAVE received your proposal as it appears above, which I/we hereby sign by way of full and unconditional acceptance. 

I/We state: 
  

	☐	 I/we have, prior to concluding the Contract, made use of the right to obtain: 

 

	 	☐	 a copy of the Contract suitable for execution at the cost set forth in the Summary Document, not to exceed the
underwriting fees 

  

	 	☐	 a Contract template without the economic conditions and cost estimate based on the information supplied by
me/us 

  

	☐	 I/We did not make use of the right to obtain a copy of the Contract or a Contract template;

 that this document, together with the documents attached to the same, was signed by me/us after a “guarantee seal” was
affixed which ensures its inseparability and unchangeability. 
  

			
	  
	  	  

	                Date                	  	Address

  

	
	THE BORROWER
	
	Kaleyra S.p.A.
	
	/s/ Luca Giardina Papa
	Kaleyra VP Corporate Projects

 I/We declare that I/we expressly approve, in accordance with article 1341, paragraph 2 of the Italian Civil Code -
the following provisions of the foregoing terms and conditions of your: 
 “GENERAL UNSECURED LOAN” 

- Art. 8) Late-payment interest; 

- Art. 9) Repayment of the Loan (in the part where the overdraft charge is available); 

- Art. 10) Expenses for credit collection; 

- Art. 12) Voluntary early repayment; 

- Art. 14) Solidarity bond; 

- Art. 15) The Borrower’s additional obligations; 

- Art. 16) Significant events; 

  
 9 

 

			
	Customer	 	
		
	copy	 	
		
	 BANCO BPM S.p.A.
 Capogruppo del Gruppo
Bancario BANCO BPM
 Sede Legale: Piazza F. Meda, 4-20121 Milano - Tel. 02 77001

Sede Amministrativa: Piazza Nagara, 2 - 37121 Verona - Tel. 045 8675111

www.bancobpm.it
	 	 Capitale Sociale al 7.4.2018 Euro 7.100.000.000.00 int. vers. - ABI 05034

C.F. e lscr. al Registro delle Imprese di Milano n. 09722490969 - Rappresentante

del Gruppo IVA Banco BPM - P.IVA10537050964 - Aderente al Fondo

Interbancario di Tutela dei Depositi e al Fondo Nazionale di Garanzia

Iscritto all’Albo delle Banche della Banca d’Italia e all’Albo dei Gruppi Bancari

					
	NDG: 000016251758	 		 	- DATE:    20/03/2020                    

 
 - Art. 17) Activating the acceleration clause – Terminating
the Contract; 
 - Art. 18) Fees, taxes and charges; 

- Art. 19) Unilateral amendment to the conditions by the Bank; 

- Art. 20) Election of domicile, communications and proof of accounting records (in the part in which proof of accounting records is
available); 
 - Art. 22) Complaints –
out-of-court remedies – Mediation aimed at conciliation – conditions of admissibility; 

- Art 24) Assignment of rights and obligations under the Contract. 

 

	
	THE BORROWER
	
	Kaleyra S.p.A.
	
	/s/ Luca Giardina Papa
	Kaleyra VP Corporate Projects

 I/We state that I/we have received a copy of this contract agreed between the undersigned party/parties and the Bank,
together with a copy of every other document that may be attached to the same. 
  

	
	THE BORROWER
	
	Kaleyra S.p.A.
	
	/s/ Luca Giardina Papa
	Kaleyra VP Corporate Projects

  

	
	  

Stamp for signature

authenticity
  

  
 10 

 

			
	Customer	 	
		
	copy	 	
		
	 BANCO BPM S.p.A.
 Capogruppo del Gruppo
Bancario BANCO BPM
 Sede Legale: Piazza F. Meda, 4-20121 Milano - Tel. 02 77001

Sede Amministrativa: Piazza Nagara, 2 - 37121 Verona - Tel. 045 8675111

www.bancobpm.it
	 	 Capitale Sociale al 7.4.2018 Euro 7.100.000.000.00 int. vers. - ABI 05034

C.F. e lscr. al Registro delle Imprese di Milano n. 09722490969 - Rappresentante

del Gruppo IVA Banco BPM - P.IVA10537050964 - Aderente al Fondo

Interbancario di Tutela dei Depositi e al Fondo Nazionale di Garanzia

Iscritto all’Albo delle Banche della Banca d’Italia e all’Albo dei Gruppi Bancari

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