Document:

EXHIBIT 10.1

SECURITIES PURCHASE AGREEMENT

This SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of
August 31, 2022, by and between GALAXY NEXT GENERATION, INC., a Nevada corporation, with headquarters located at 285 N. Big A Road, Toccoa, Georgia 30577 (the “Company”), and AJB CAPITAL INVESTMENTS, LLC, a Delaware limited liability company, with its address at 4700 Sheridan Street, Suite J, Hollywood, FL 33021 (the “Buyer”).

WHEREAS:

A. The Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by the rules and regulations as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “1933 Act”);

B. Buyer desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement a 12% promissory note of the Company, in the form attached hereto as Exhibit A, in the aggregate principal amount of US$900,000.00 (together with any note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance with the terms thereof, the “Note”), convertible following an Event of Default into shares of common stock, $0.0001 par value per share, of the Company (the “Common Stock”), upon the terms and subject to the limitations and conditions set forth in such Note;

C. The Buyer wishes to purchase, upon the terms and conditions stated in this Agreement, such principal amount of Note as is set forth immediately below its name on the signature pages hereto; and

D. Buyer desires to purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement a warrant to purchase up to 1,000,000 shares of the Common Stock, in the form attached hereto as Exhibit B (the “Warrant”), subject to adjustments and limitations as provided therein.

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NOW THEREFORE, the Company and the Buyer hereby agree as follows:

1. PURCHASE AND SALE OF NOTE.

a. Purchase of Note and the Warrant. On the Closing Date (as defined below), the Company shall issue and sell to the Buyer the Note and the Buyer shall purchase the Note from the Company such principal amount of Note as is set forth immediately below the Buyer’s name on the signature pages hereto, and the Warrant to purchase up to 1,000,000 shares of Common Stock, subject to adjustment as provided therein. The Agreement, the Note, the Warrant and those other documents executed in connection therewith shall be referred to herein as the “Transaction Documents.”

b. Form of Payment. On the Closing Date (as defined below), and subject to Section 4(q) below, (i) the Buyer shall pay the purchase price for the Note in the amount of US$765,000 (the “Purchase Price”) by wire transfer of immediately available funds to the Company, in accordance with the Company’s written wiring instructions, against delivery of the Note and the Warrant in the principal amount equal to the Purchase Price, and (ii) the Company shall deliver such duly executed Note, the Warrant, and the Commitment Fee Shares (as defined herein) on behalf of the Company, to the Buyer, against delivery of such Purchase Price.

c. Closing Date. Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Section 7 and Section 8 below, the date and time of the issuance and sale of the Note pursuant to this Agreement (the “Closing Date”) shall be 12:00 noon, Eastern Standard Time on the date hereof, or such other mutually agreed upon time. The closing of the transactions contemplated by this Agreement (the “Closing”) shall occur on the Closing Date by remote exchange of documents, or at such location as may be agreed to by the parties.

2. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer represents and warrants to the Company that:

a. Investment Purpose. As of the date hereof, the Buyer is purchasing the Commitment Fee Shares, the Note, the shares of Common Stock issuable upon conversion of or otherwise pursuant to the Note (including, without limitation, such additional shares of Common Stock, if any, as are issuable (i) on account of interest on the Note (ii) as a result of the events described in Sections 1.3 and 1.4(g) of the Note or (iii) in payment of the Standard Liquidated Damages Amount (as defined in Section 2(f) below) pursuant to this Agreement, such shares of Common Stock being collectively referred to herein as the “Conversion Shares”), the Warrant, and the shares of Common Stock issuable upon exercise of or otherwise pursuant to the Warrant (the “Warrant Shares”), for its own account and not with a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from registration under the 1933 Act; provided, however, that by making the representations herein, the Buyer does not agree to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption under the 1933 Act. For purposes of this Agreement, the Note and the transactions contemplated thereby, the Conversion Shares, the Commitment Fee Shares, the Warrant and the Warrant Shares, shall be referred to as the “Securities.”

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b. Accredited Investor Status. The Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D (an “Accredited Investor”).

c. Reliance on Exemptions. The Buyer understands that the Securities are being offered and sold to it in reliance upon specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of, and the Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire the Securities.

d. Information. The Buyer and its advisors, if any, have been, and for so long as the Note and the Warrant remain outstanding will continue to be, furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities which have been requested by the Buyer or its advisors. The Buyer and its advisors, if any, have been, and for so long as the Note and the Warrant remains outstanding will continue to be, afforded the opportunity to ask questions of the Company. Notwithstanding the foregoing, the Company has not disclosed to the Buyer any material nonpublic information and will not disclose such information unless such information is disclosed to the public prior to or promptly following such disclosure to the Buyer. Neither such inquiries nor any other due diligence investigation conducted by Buyer or any of its advisors or representatives shall modify, amend or affect Buyer’s right to rely on the Company’s representations and warranties contained in Section 3 below. The Buyer understands that its investment in the Securities involves a significant degree of risk. The Buyer is not aware of any facts that may constitute a breach of any of the Company’s representations and warranties made herein.

e. Governmental Review. The Buyer understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Securities.

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f. Transfer or Re-sale. The Buyer understands that (i) the Securities may not be transferred unless (a) the Securities are sold pursuant to an effective registration statement under the 1933 Act, (b) the Buyer shall have delivered to the Company, at the cost of the Company, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in comparable transactions to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from such registration, which opinion shall be accepted by the Company, (c) the Securities are sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under the 1933 Act (or a successor rule) (“Rule 144”)) of the Buyer who agrees to sell or otherwise transfer the Securities only in accordance with this Section 2(f) and who is an Accredited Investor, (d) the Securities are sold pursuant to Rule 144 or other applicable exemption, or (e) the Securities are sold pursuant to Regulation S under the 1933 Act (or a successor rule) (“Regulation S”), and the Buyer shall have delivered to the Company, at the cost of the Company, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactions, which opinion shall be accepted by the Company; (ii) any sale of such Securities made in reliance on Rule 144 may be made only in accordance with the terms of said Rule and further, if said Rule is not applicable, any re-sale of such Securities under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii) except as otherwise expressly provided in the Transaction Documents, neither the Company nor any other person is under any obligation to register such Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder (in each case). Notwithstanding the foregoing or anything else contained herein to the contrary, the Securities may be pledged as collateral in connection with a bona fide margin account or other lending arrangement. In the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144 or Regulation S, within three (3) business days of delivery of the opinion to the Company, the Company shall pay to the Buyer liquidated damages of two percent (2%) of the outstanding amount of the Note per day plus accrued and unpaid interest on the Note, prorated for partial months, in cash or shares at the option of the Buyer (“Standard Liquidated Damages Amount”). If the Buyer elects to be paid the Standard Liquidated Damages Amount in shares of Common Stock, such shares shall be issued at the Conversion Price (as defined in the Note) at the time of payment.

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g. Legends. The Buyer understands that the Note and, until such time as the Conversion Shares, the Commitment Fee Shares and the Warrant Shares have been registered under the 1933 Act may be sold pursuant to Rule 144 or Regulation S or other applicable exemption without any restriction as to the number of securities as of a particular date that can then be immediately sold, the Conversion Shares, the Commitment Fee Shares and the Warrant Shares may bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of the certificates for such Securities):

“NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT OR OTHER APPLICABLE EXEMPTION. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

The legend set forth above shall be removed and the Company shall issue a certificate or book entry statement without such legend to the holder of any Security upon which it is stamped, if, unless otherwise required by applicable state securities laws, (a) such Security is registered for sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144 or Regulation S or other applicable exemption without any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such holder provides the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Security may be made without registration under the 1933 Act, which opinion shall be accepted by the Company so that the sale or transfer is effected. The Buyer agrees to sell all Securities, including those represented by a certificate(s) or a book entry statement(s) from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any. In the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144 or Regulation S, at the Deadline, it will be considered an Event of Default pursuant to Section 3.2 of the Note.

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h. Authorization; Enforcement. This Agreement has been duly and validly authorized. This Agreement has been duly executed and delivered on behalf of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in accordance with its terms.

i. Residency.The Buyer is organized in the jurisdiction set forth in the preamble.

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and warrants to the Buyer that:

a. Organization and Qualification. The Company and each of its Subsidiaries (as defined below), if any, is a corporation or other entity duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power and authority (corporate and other) to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted. The Company and each of its Subsidiaries is duly qualified as a foreign corporation or other entity to do business and is in good standing in every jurisdiction in which its ownership or use of property or the nature of the business conducted by it makes such qualification necessary except where the failure to be so qualified or in good standing would not have a Material Adverse Effect. “Material Adverse Effect” means any material adverse effect on the business, operations, assets, financial condition or prospects of the Company or its Subsidiaries, if any, taken as a whole, or on the transactions contemplated hereby or by the agreements or instruments to be entered into in connection herewith. “Subsidiaries” means any corporation or other organization, whether incorporated or unincorporated, in which the Company owns, directly or indirectly, any equity or other ownership interest.

b. Authorization; Enforcement. (i) The Company has all requisite corporate power and authority to enter into and perform this Agreement and the Note and to consummate the transactions contemplated hereby and thereby and to issue the Securities, in accordance with the terms hereof and thereof, (ii) the execution and delivery of this Agreement, and the Note by the Company and the consummation by it of the transactions contemplated hereby and thereby (including without limitation, the issuance of the Note and the issuance and reservation for issuance of the Conversion Shares issuable upon conversion or exercise thereof) have been duly authorized by the Company’s Board of Directors (the “Board”) and no further consent or authorization of the Company, its Board, or its shareholders is required, (iii) this Agreement has been duly executed and delivered by the Company by its authorized representative, and such authorized representative is the true and official representative with authority to sign this Agreement and the other documents executed in connection herewith and bind the Company accordingly, and (iv) this Agreement constitutes, and upon execution and delivery by the Company of the Note, each of such instruments will constitute, a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms.

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c. Capitalization. As of the date hereof, the authorized capital stock of the Company consists of: 200,000,000 shares of Common Stock, of which approximately 17,430,503 shares are issued and outstanding; 200,000,000 shares of Preferred Stock, par value $0.0001 per share, of which zero shares are issued and outstanding; 750,000 shares of Preferred Stock – Class A, par value $0.0001 per share, of which zero shares are issued and outstanding; 1,000,000 shares of Preferred Stock – Class B, par value $0.0001 per share, of which zero shares are issued and outstanding; 9,000,000 shares of Preferred Stock – Class C, par value $0.0001 per share, of which zero shares are issued and outstanding; 15,000 shares of Preferred Stock – Class F, par value $0.0001 per share, of which approximately 11,414 shares are issued and outstanding; and 51 shares of Preferred Stock – Class G, par value $0.0001 per share, of which approximately 51 shares are issued and outstanding. Except as disclosed in the SEC Documents (as defined below), no shares are reserved for issuance pursuant to the Company’s stock option plans, no shares are reserved for issuance pursuant to securities (other than upon conversion of the Note or exercise of the Warrant) exercisable for, or convertible into or exchangeable for shares of Common Stock and 35,000,000 shares are reserved for issuance upon conversion of the Note or exercise of the Warrant (including any adjustments thereto pursuant to the Transaction Documents, the “Reserved Amount”). All of such outstanding shares of capital stock are, or upon issuance will be, duly authorized, validly issued, fully paid and non-assessable. No shares of capital stock of the Company are subject to preemptive rights or any other similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company. Except as disclosed in the SEC Documents, as of the effective date of this Agreement, (i) there are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act and (iii) there are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the issuance of the Note or the Conversion Shares. The Company has filed in the SEC Documents true and correct copies of the Company’s Articles of Incorporation as in effect on the date hereof (“Articles of Incorporation”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable for Common Stock of the Company and the material rights of the holders thereof in respect thereto.

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d. Issuance of Note and Shares. The issuance of the Note is duly authorized and, upon issuance in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable and free from all preemptive or similar rights, taxes, liens, charges and other encumbrances with respect to the issue thereof. The Conversion Shares are duly authorized and reserved for issuance and, upon conversion of the Note in accordance with its respective terms, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the Company and will not impose personal liability upon the holder thereof. The issuance of the Commitment Fee Shares is duly authorized and, upon issuance in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable and free from all preemptive or similar rights, taxes, liens, charges and other encumbrances with respect to the issue thereof. The issuance of the Warrant is duly authorized and, upon exercise of the Warrant, the Warrant Shares, will be validly issued, fully paid and non-assessable and free from all preemptive or similar rights, taxes, liens, charges and other encumbrances with respect to the issue thereof.

e. Acknowledgment of Dilution. The Company understands and acknowledges the potentially dilutive effect to the Common Stock upon the issuance of the Conversion Shares upon conversion of the Note and exercise of the Warrant. The Company further acknowledges that its obligation to issue Conversion Shares upon conversion of the Note in accordance with this Agreement and the Note and Warrant Shares upon exercise of the Warrant, is absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.

f. No Conflicts. The execution, delivery and performance of this Agreement, the Note and the Warrant by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance and reservation for issuance of the Conversion Shares) will not (i) conflict with or result in a violation of any provision of the Articles of Incorporation or By-laws, or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice or lapse of time or both could become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture, patent, patent license or instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and regulations of any self-regulatory organizations to which the Company or its securities are subject) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect). Neither the Company nor any of its Subsidiaries is in violation of its Articles of Incorporation, By-laws or other organizational documents and neither the Company nor any of its Subsidiaries is in default (and no event has occurred which with notice or lapse of time or both could put the Company or any of its Subsidiaries in default) under, and neither the Company nor any of its Subsidiaries has taken any action or failed to take any action that would give to others any rights of termination, amendment, 

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acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party or by which any property or assets of the Company or any of its Subsidiaries is bound or affected, except for possible defaults as would not, individually or in the aggregate, have a Material Adverse Effect. The businesses of the Company and its Subsidiaries, if any, are not being conducted, and shall not be conducted so long as the Buyer owns any of the Securities, in violation of any law, ordinance or regulation of any governmental entity. Except as specifically contemplated by this Agreement and as required under the 1933 Act and any applicable state securities laws, the Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court, governmental agency, regulatory agency, self-regulatory organization or stock market or any third party in order for it to execute, deliver or perform any of its obligations under this Agreement and the Note in accordance with the terms hereof or thereof or to issue and sell the Note in accordance with the terms hereof and to issue the Conversion Shares upon conversion of the Note. All consents, authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof. The Company is not in violation of the listing requirements of the OTCQB Market (the “OTCQB”) or any similar quotation system, and does not reasonably anticipate that the Common Stock will be delisted by the OTCQB or any similar quotation system, in the foreseeable future nor are the Company’s securities “chilled” by DTC. The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing.

g. SEC Documents; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “1934 Act”) since March 31, 2022 (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements and schedules thereto and documents (other than exhibits to such documents) incorporated by reference therein, being hereinafter referred to herein as the “SEC Documents”). The Company has delivered to the Buyer true and complete copies of the SEC Documents, except for such exhibits and incorporated documents. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, 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 light of the circumstances under which they were made, not misleading. None of the statements made in any such SEC Documents is, or has been, required to be amended or updated under applicable law (except for such statements as have been amended or updated in subsequent filings prior the date hereof). As of their respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with the applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with United States generally accepted accounting principles, consistently applied, during the periods involved and fairly present in all material respects the consolidated financial position of the Company and its 

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consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). Except as set forth in the financial statements of the Company included in the SEC Documents, the Company has no liabilities, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business subsequent to March 31, 2022, and (ii) obligations under contracts and commitments incurred in the ordinary course of business and not required under generally accepted accounting principles to be reflected in such financial statements, which, individually or in the aggregate, are not material to the financial condition or operating results of the Company. The Company is subject to the reporting requirements of the 1934 Act.  For the avoidance of doubt, filing of the documents required in this Section 3(g) via the SEC’s Electronic Date Gathering, Analysis, and Retrieval system (“EDGAR”) shall satisfy all delivery requirements of this Section 3(g). 

h. Absence of Certain Changes. Since March 31, 2022, there has been no material adverse change and no material adverse development in the assets, liabilities, business, properties, operations, financial condition, results of operations, prospects or 1934 Act reporting status of the Company or any of its Subsidiaries.

i. Absence of Litigation. There is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its Subsidiaries, threatened against or affecting the Company or any of its Subsidiaries, or their officers or directors in their capacity as such, that could have a Material Adverse Effect. Schedule 3(i) contains a complete list and summary description of any pending or, to the knowledge of the Company, threatened proceeding against or affecting the Company or any of its Subsidiaries, without regard to whether it would have a Material Adverse Effect. The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing.

j. Patents, Copyrights, etc. The Company and each of its Subsidiaries owns or possesses the requisite licenses or rights to use all patents, patent applications, patent rights, inventions, know-how, trade secrets, trademarks, trademark applications, service marks, service names, trade names and copyrights (“Intellectual Property”) necessary to enable it to conduct its business as now operated (and, as presently contemplated to be operated in the future). There is no claim or action by any person pertaining to, or proceeding pending, or to the Company’s knowledge threatened, which challenges the right of the Company or of a Subsidiary with respect to any Intellectual Property necessary to enable it to conduct its business as now operated (and, as presently contemplated to be operated in the future); to the best of the Company’s knowledge, the Company’s or its Subsidiaries’ current and intended products, services and processes do not infringe on any Intellectual Property or other rights held by any person; and the Company is unaware of any facts or circumstances which might give rise to any of the foregoing. The Company and each of its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of their Intellectual Property.

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k. No Materially Adverse Contracts, Etc. Neither the Company nor any of its Subsidiaries is subject to any charter, corporate or other legal restriction, or any judgment, decree, order, rule or regulation which in the judgment of the Company’s officers has or is expected in the future to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is a party to any contract or agreement which in the judgment of the Company’s officers has or is expected to have a Material Adverse Effect.

l. Tax Status. The Company and each of its Subsidiaries has made or filed all federal, state and foreign income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject (unless and only to the extent that the Company and each of its Subsidiaries has set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported taxes) and 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, except those being contested in good faith and has set aside on its books provisions reasonably adequate for the payment of all 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 know of no basis for any such claim. The Company has not executed a waiver with respect to the statute of limitations relating to the assessment or collection of any foreign, federal, state or local tax. None of the Company’s tax returns is presently being audited by any taxing authority.

m. Certain Transactions. Except for arm’s length transactions pursuant to which the Company or any of its Subsidiaries makes payments in the ordinary course of business upon terms no less favorable than the Company or any of its Subsidiaries could obtain from third parties, none of the officers, directors, or employees of the Company is presently a party to any transaction with the Company or any of its Subsidiaries (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, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.

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n. Disclosure. All information relating to or concerning the Company or any of its Subsidiaries set forth in this Agreement is true and correct in all material respects and the Company has not omitted to state any material fact necessary in order to make the statements made herein or therein, in light of the circumstances under which they were made, not misleading. No event or circumstance has occurred or exists with respect to the Company or any of its Subsidiaries or its or their business, properties, prospects, operations or financial conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so publicly announced or disclosed (assuming for this purpose that the Company’s reports filed under the 1934 Act are being incorporated by reference into an effective registration statement filed by the Company under the 1933 Act).

o. Acknowledgment Regarding Buyer’ Purchase of Securities. The Company acknowledges and agrees that the Buyer is acting solely in the capacity of arm’s length purchasers with respect to this Agreement and the transactions contemplated hereby. The Company further acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereby and any statement made by the Buyer or any of its representatives or agents in connection with this Agreement and the transactions contemplated hereby is not advice or a recommendation and is merely incidental to the Buyer’s purchase of the Securities. The Company further represents to the Buyer that the Company’s decision to enter into this Agreement has been based solely on the independent evaluation of the Company and its representatives.

p. No Integrated Offering. 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 in any security or solicited any offers to buy any security under circumstances that would require registration under the 1933 Act of the issuance of the Securities to the Buyer. The issuance of the Securities to the Buyer will not be integrated with any other issuance of the Company’s securities (past, current or future) for purposes of any shareholder approval provisions applicable to the Company or its securities.

q. [Reserved]. 

r. Permits; Compliance. The Company and each of its Subsidiaries is in possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and operate its properties and to carry on its business as it is now being conducted (collectively, the “Company Permits”), and there is no action pending or, to the knowledge of the Company, threatened regarding suspension or cancellation of any of the Company Permits. Neither the Company nor any of its Subsidiaries is in conflict with, or in default or violation of, any of the Company Permits, except for any such conflicts, defaults or violations which, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries has received any notification with respect to possible conflicts, defaults or violations of applicable laws, except for notices relating to possible conflicts, defaults or violations, which conflicts, defaults or violations would not have a Material Adverse Effect.

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s. Environmental Matters. (i) There are, to the Company’s knowledge, with respect to the Company or any of its Subsidiaries or any predecessor of the Company, no past or present violations of Environmental Laws (as defined below), releases of any material into the environment, actions, activities, circumstances, conditions, events, incidents, or contractual obligations which may give rise to any common law environmental liability or any liability under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 or similar federal, state, local or foreign laws and neither the Company nor any of its Subsidiaries has received any notice with respect to any of the foregoing, nor is any action pending or, to the Company’s knowledge, threatened in connection with any of the foregoing. The term “Environmental Laws” means all federal, state, local or foreign laws relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation, 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.

(ii) Other than those that are or were stored, used or disposed of in compliance with applicable law, no Hazardous Materials are contained on or about any real property currently owned, leased or used by the Company or any of its Subsidiaries, and no Hazardous Materials were released on or about any real property previously owned, leased or used by the Company or any of its Subsidiaries during the period the property was owned, leased or used by the Company or any of its Subsidiaries, except in the normal course of the Company’s or any of its Subsidiaries’ business.

(iii) There are no underground storage tanks on or under any real property owned, leased or used by the Company or any of its Subsidiaries that are not in compliance with applicable law.

t. Title to Property. The Company and its Subsidiaries have good and marketable title in fee simple to all real property and good and marketable title to all personal property owned by them which is material to the business of the Company and its Subsidiaries, in each case free and clear of all liens, encumbrances and defects or such as would not have a Material Adverse Effect. Any real property and facilities held under lease by the Company and its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as would not have a Material Adverse Effect.

u. Internal Accounting Controls. The Company and each of its Subsidiaries maintain a system of internal accounting controls sufficient, in the judgment of the Board, 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 generally accepted accounting principles 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.

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v. Foreign Corrupt Practices. Neither the Company, nor any of its Subsidiaries, nor any director, officer, agent, employee or other person acting on behalf of the Company or any Subsidiary has, in the course of his actions for, or on behalf of, the Company, used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.

w. Solvency. The Company (after giving effect to the transactions contemplated by this Agreement) is solvent (i.e., its assets have a fair market value in excess of the amount required to pay its probable liabilities on its existing debts as they become absolute and matured) and currently the Company has no information that would lead it to reasonably conclude that the Company would not, after giving effect to the transactions contemplated by this Agreement, have the ability to, nor does it intend to take any action that would impair its ability to, pay its debts from time to time incurred in connection therewith as such debts mature.  

x. No Investment Company. The Company is not, and upon the issuance and sale of the Securities as contemplated by this Agreement will not be an “investment company” required to be registered under the Investment Company Act of 1940 (an “Investment Company”). The Company is not controlled by an Investment Company.

y. Insurance. The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect. Upon written request the Company will provide to the Buyer true and correct copies of all policies relating to directors’ and officers’ liability coverage, errors and omissions coverage, and commercial general liability coverage.

z. Bad Actor. No officer or director of the Company would be disqualified under Rule 506(d) of the 1933 Act on the basis of being a “bad actor” as that term is defined in the Rule 506(d)(4) under the SEC 1933 Act.

aa. Shell Status. The Company represents that it is not a “shell” issuer and that if it previously has been a “shell” issuer, that at least twelve (12) months have passed since the Company has reported Form 10 type information indicating that it is no longer a “shell” issuer.  Further, the Company will instruct its counsel to either (i) write a 144 or 3(a)(9) opinion to allow for salability of the Conversion Shares or (ii) accept such opinion from Holder’s counsel.

bb. No-Off Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company or any of its Subsidiaries and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its SEC Documents and is not so disclosed or that otherwise could be reasonably likely to have a Material Adverse Effect.

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cc. Manipulation of Price. 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, or that could reasonably be expected to cause or 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.

dd. Sarbanes-Oxley Act. The Company and each Subsidiary is in material compliance with all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and all applicable rules and regulations promulgated by the SEC thereunder that are effective as of the date hereof.

ee. Employee Relations. Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or employs any member of a union. The Company believes that its and its Subsidiaries’ relations with their respective employees are good. No executive officer (as defined in Rule 501(f) promulgated under the 1933 Act) or other key employee of the Company or any of its Subsidiaries has notified the Company or any such Subsidiary that such officer intends to leave the Company or any such Subsidiary or otherwise terminate such officer’s employment with the Company or any such Subsidiary. To the knowledge of the Company, no executive officer or other key employee of the Company or any of its Subsidiaries is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement, non-competition agreement, or any other contract or agreement or any restrictive covenant, and the continued employment of each such executive officer or other key employee (as the case may be) 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 federal, state, local and foreign laws and regulations respecting labor, employment and employment practices and benefits, terms and conditions of employment and wages and hours, except where failure to be in compliance would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

ff. Breach of Representations and Warranties by the Company. The Company agrees that if the Company breaches any of the representations or warranties set forth in this Section 3, and in addition to any other remedies available to the Buyer pursuant to this Agreement and it being considered an Event of Default under Section 3.5 of the Note, the Company shall pay to the Buyer the Standard Liquidated Damages Amount in cash or in shares of Common Stock, at the option of the Buyer, until such breach is cured.  If the Buyer elects to receive the Standard Liquidated Damages Amounts in shares of Common Stock, such shares shall be issued at the Conversion Price at the time of payment.

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4. COVENANTS.

a. Best Efforts. The parties shall use their commercially reasonable best efforts to satisfy timely each of the conditions described in Section 7 and 8 of this Agreement.

b. Form D; Blue Sky Laws. If requested by Buyer, the Company agrees to file a Form D with respect to the Securities as required under Regulation D and to provide a copy thereof to the Buyer promptly after such filing. The Company shall, on or before the Closing Date, take such action as the Company shall reasonably determine is necessary to qualify the Securities for sale to the Buyer at the applicable closing pursuant to this Agreement under applicable securities or “blue sky” laws of the states of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken to the Buyer on or prior to the Closing Date.

c. Use of Proceeds. The Company shall use the proceeds from the sale of the Note for working capital and other general corporate purposes and shall not, directly or indirectly, use such proceeds for any loan to or investment in any other corporation, partnership, enterprise or other person (except in connection with its currently existing direct or indirect Subsidiaries).

d. Right of First Refusal. Unless it shall have first delivered to the Buyer, at least seventy two (72) hours prior to the closing of such Future Offering (as defined herein), written notice describing the proposed Future Offering, including the terms and conditions thereof, and providing the Buyer an option during the seventy two (72) hour period following delivery of such notice to purchase the securities being offered in the Future Offering on the same terms as contemplated by such Future Offering (the limitations referred to in this sentence and the preceding sentence are collectively referred to as the “Right of First Refusal”) (and subject to the exceptions described below), the Company will not conduct any equity financing (including debt with an equity component) (“Future Offerings”) during the period beginning on the Closing Date and ending twelve (12) months following the Closing Date. In the event the terms and conditions of a proposed Future Offering are amended in any respect after delivery of the notice to the Buyer concerning the proposed Future Offering, the Company shall deliver a new notice to the Buyer describing the amended terms and conditions of the proposed Future Offering and the Buyer thereafter shall have an option during the seventy two (72) hour period following delivery of such new notice to purchase its pro rata share of the securities being offered on the same terms as contemplated by such proposed Future Offering, as amended. The foregoing sentence shall apply to successive amendments to the terms and conditions of any proposed Future Offering. The Right of First Refusal shall not apply to any transaction involving (i) issuances of securities in a firm commitment underwritten public offering (excluding a continuous offering pursuant to Rule 415 under the 1933 Act), (ii) issuances to employees, officers, directors, contractors, consultants or other advisors approved by the Board, (iii) issuances to strategic partners or other parties in connection with a commercial relationship, or providing the Company with equipment leases, real property leases or similar transactions approved by the Board (iv) issuances of securities as consideration for a merger, consolidation or purchase of assets, or in connection with any strategic partnership or joint venture (the primary purpose of which is not to raise equity capital), or in connection with the disposition or acquisition of a business, product or license by the Company (each of the foregoing, an “Exempt Issuance”). The Right of First Refusal also shall not apply to the issuance of securities upon exercise or 

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   conversion of the Company’s options, warrants or other convertible securities outstanding as of the date hereof or to the grant of additional options or warrants, or the issuance of additional securities, under any Company stock option or restricted stock plan approved by the shareholders of the Company.

 

e.Expenses. The Company shall reimburse Buyer for any and all expenses incurred by them in connection with the negotiation, preparation, execution, delivery and performance of this Agreement and the other Transaction Documents, including, without limitation, reasonable attorneys’ and consultants’ fees and expenses, transfer agent fees, fees for stock quotation services, fees relating to any amendments or modifications of the Transaction Documents or any consents or waivers of provisions in the Transaction Documents, fees for the preparation of opinions of counsel, escrow fees, and costs of restructuring the transactions contemplated by the Transaction Documents. When possible, the Company must pay these fees directly, including, but not limited to, any and all wire fees, otherwise the Company must make immediate payment for reimbursement to the Buyer for all fees and expenses immediately upon written notice by the Buyer or the submission of an invoice by the Buyer. At Closing, the Company’s initial obligation with respect to this transaction is to reimburse Buyer’s legal and due diligence expenses shall be $12,500.00 plus the cost of wire fees.

f. Financial Information. The Company agrees to send or make available the following reports to the Buyer until the Buyer transfers, assigns, or sells all of the Securities: (i) within ten (10) days after the filing with the SEC, a copy of any Annual Report,  Quarterly Reports or Current Report; (ii) within one (1) day after release, copies of all press releases issued by the Company or any of its Subsidiaries; and (iii) contemporaneously with the making available or giving to the shareholders of the Company, copies of any notices or other information the Company makes available or gives to such shareholders. For the avoidance of doubt, filing the documents required in (i) above via EDGAR or releasing any documents set forth in (ii) above via a recognized wire service shall satisfy the delivery requirements of this Section 4(f).

g. Listing. The Company shall promptly secure the listing of the Conversion Shares upon each national securities exchange or automated quotation system, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and, so long as the Buyer owns any of the Securities, shall maintain, so long as any other shares of Common Stock shall be so listed, such listing of all Conversion Shares from time to time issuable upon conversion of the Note. The Company will obtain and, so long as the Buyer owns any of the Securities, maintain the listing and trading of its Common Stock on the OTC Pink, OTCQB or any equivalent replacement exchange, the Nasdaq National Market (“Nasdaq”), the Nasdaq SmallCap Market (“Nasdaq SmallCap”), the New York Stock Exchange (“NYSE”), or the NYSE American and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Financial Industry Regulatory Authority (“FINRA”) and such exchanges, as applicable. The Company shall promptly provide to the Buyer copies of any material notices it receives from the OTC Pink, OTCQB and any other exchanges or quotation systems on which the Common Stock is then listed regarding the continued eligibility of the Common Stock for listing on such exchanges and quotation systems. The Company shall pay any and all fees and expenses in connection with satisfying its obligation under this Section 4(g).

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h. Corporate Existence. So long as the Buyer beneficially owns the Note, the Company shall maintain its corporate existence and shall not sell all or substantially all of the Company’s assets, except in the event of a merger or consolidation or sale of all or substantially all of the Company’s assets, where the surviving or successor entity in such transaction (i) assumes the Company’s obligations hereunder and under the agreements and instruments entered into in connection herewith and (ii) is a publicly traded corporation whose Common Stock is listed for trading on the OTC Pink, OTCQB, Nasdaq, NasdaqSmallCap, NYSE or AMEX.

i. No Integration . The Company shall not make any offers or sales of any security (other than the Securities) under circumstances that would require registration of the Securities being offered or sold hereunder under the 1933 Act or cause the offering of the Securities to be integrated with any other offering of securities by the Company for the purpose of any stockholder approval provision applicable to the Company or its securities.

j. Failure to Comply with 1934 Act Requirements. So long as the Buyer beneficially owns the Note, the Company shall comply with the reporting requirements of the 1934 Act; and the Company shall continue to be subject to the reporting requirements of the 1934 Act.

k.Restriction on Activities. Commencing as of the date first above written, and until the sooner of the twelve (12) month anniversary of the date first written above or payment of the Note in full, or full conversion of the Note, the Company shall not, directly or indirectly, without the Buyer’s prior written consent, which consent shall not be unreasonably withheld: (a) change the nature of its business; (b) sell, divest, acquire, change the structure of any material assets other than in the ordinary course of business; or (c) solicit any offers for, respond to any unsolicited offers for, or conduct any negotiations with any other person or entity in respect of any variable rate debt transactions (i.e., transactions were the conversion or exercise price of the security issued by the Company varies based on the market price of the Common Stock) with a price per share below $0.25, whether a transaction similar to the one contemplated hereby or any other investment. 

l. Legal Counsel Opinions. Upon the request of the Buyer from to time
to time, the Company shall be responsible (at its cost) for promptly supplying to the Company’s Transfer Agent (the “Transfer Agent”) and the Buyer a customary legal opinion letter of its counsel (the “Legal Counsel Opinion”) to the effect that the sale of Conversion Shares by the Buyer or its affiliates, successors and assigns is exempt from the registration requirements of the 1933 Act pursuant to Rule 144 (provided the requirements of Rule 144 are satisfied and provided the Conversion Shares are not then registered under the 1933 Act for resale pursuant to an effective registration statement) or other applicable exemption. Should the Company’s legal counsel fail for any reason to issue the Legal Counsel Opinion, the Buyer may (at the Company’s cost) secure another legal counsel to issue the Legal Counsel Opinion, and the Company will instruct the Transfer Agent to accept such opinion.

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m.Registration of Commitment Fee Shares. The Commitment Fee Shares (as defined below) shall be included in a registration statement filed by the Company with the SEC with respect to the public offering thereof no later than the date that is thirty (30) days following the later of (i) the consummation of the Uplist Offering, or (ii) the Maturity Date (as defined in the Note), and in either case the Company shall cause such registration statement to be declared effective within ninety (90) days of such filing. For purposes of this Agreement, “Uplist Offering” shall mean an offering of Common Stock (or units consisting of Common Stock and warrants to purchase Common Stock) that results in the immediate listing for trading of the Common Stock on the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, or any other national securities exchange (or any successors to any of the foregoing). 

n. Breach of Covenants. The Company agrees that if the Company breaches any of the covenants set forth in this Section 4, in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an Event of Default under Section 3.4 of the Note, the Company shall pay to the Buyer the Standard Liquidated Damages Amount in cash or in shares of Common Stock at the option of the Buyer, until such breach is cured or, with respect to Section 4(d) above, the Company shall pay to the Buyer the Standard Liquidated Damages Amount in cash or shares of Common Stock, at the option of the Buyer, upon each violation of such provision. If the Buyer elects to receive the Standard Liquidated Damages Amount in shares of Common Stock, such shares shall be issued at the Conversion Price in effect at the time of payment.

Commitment Fee Shares. The Company shall pay to Buyer, (i) as a commitment fee, Four Hundred Fifty Thousand and No/100 United States Dollars (US$450,000.00) (the “Commitment Fee”) by, at the time described below, issuing to Buyer that number of shares of the Company’s Common Stock equal to such amount. It is agreed that the number of shares of Common Stock issuable to Buyer under this Section 4(o) shall be 3,000,000 (the “Commitment Fee Shares”), reflecting a price per Commitment Fee Share of $0.15; provided, that if the Company issues any shares of Common Stock at a price per share of less than $0.15 prior to the end of the Adjustment Period (as defined below), the Company will issue to Buyer additional Commitment Fee Shares such that the price per share of the aggregate amount of Commitment Fee Shares (including such additional Commitment Fee Shares) equals such lower price per share. The Company shall instruct the Transfer Agent to issue two (2) certificates or book entry statements, representing the Commitment Fee Shares issuable to the Buyer, immediately upon (i) the consummation of the Uplist Offering, (ii) August 31, 2023, or (iii) the repayment in full of the Company’s obligations under the Note, and shall cause the Transfer Agent to deliver such certificates or book entry statements to Buyer within five (5) business days from such date; provided, the Buyer may elect, in its sole discretion, to defer such issuance upon written notice to the Company for a minimum of sixty-one (61) days. The Buyer shall never be in possession of an amount of Common Stock greater than 9.99% of the issued and outstanding Common Stock of the Company provided, however that this ownership restriction described in this Section may be waived by Buyer, in whole or in part, upon sixty-one (61) days’ prior written notice. In the event any certificate or book entry representing the Commitment Fee Shares issuable hereunder shall not be delivered to the Buyer within the applicable five (5) business day period, same shall be an immediate default under this Agreement and the other Transaction Documents. The Commitment Fee Shares, when issued, shall be deemed to be validly issued, fully paid, and non-assessable shares of the Company’s Common Stock. The Commitment Fee Shares shall be deemed fully earned as of the Effective Date, regardless of the amount or number of Loans made hereunder.

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(i) Adjustments. Subject to Section 4(o)(ii) below, it is the intention of the Company and Buyer that the Buyer shall be able to sell (if Buyer so elects, in Buyer’s sole and absolute discretion) the Commitment Fee Shares, and generate net proceeds (net of all brokerage commissions and other fees or charges payable by Buyer in connection with the sale thereof) from such sale equal to the Commitment Fee. The Buyer shall use its best efforts to sell the Commitment Fee Shares in the principal trading market of the Company’s Common Stock or otherwise, at any time in accordance with applicable securities laws. At any time, and from time to time, the Buyer may elect during the period beginning on the date which is the six (6) month anniversary of the Closing Date (the “Adjustment Period”), the Buyer may deliver to the Company a reconciliation statement showing the net proceeds actually received by the Buyer from the sale of the Commitment Fee Shares (the “Sale Reconciliation”). If, as of the date of the delivery by Buyer of the Sale Reconciliation (the “Sale Reconciliation Date”), the Buyer has not realized net proceeds from the sale of such Commitment Fee Shares equal to at least the Commitment Fee, as shown on the Sale Reconciliation, then the Company shall, within five (5) business days, either pay in cash the applicable shortfall amount or immediately take all required action necessary or required in order to cause the issuance of additional shares of Common Stock to the Buyer in an amount sufficient such that, when sold and the net proceeds thereof are added to the net proceeds from the sale of any of the previously issued and sold Commitment Fee Shares, the Buyer shall have received total net funds equal to the Commitment Fee. If additional shares of Common Stock are issued pursuant to this Section 4(o)(i), and after the sale of such additional issued shares of Common Stock the Buyer still has not received net proceeds equal to at least the Commitment Fee, then the Company shall again be required to immediately take all required action necessary or required in order to cause the issuance of additional shares of Common Stock (or the payment of cash) to the Buyer as contemplated above, and such additional issuances (or cash payments) shall continue until the Buyer has received net proceeds from the sale of such Common Stock equal to the Commitment Fee. In the event additional Common Stock is required to be issued as outlined above, the Company shall instruct the Transfer Agent to issue certificates or book entry statements representing such additional shares of Common Stock to the Buyer as promptly as practicable following the Sale Reconciliation Date, and the Company shall in any event cause the Transfer Agent to deliver such certificates or book entry statements to Buyer within five (5) business days following the Sale Reconciliation Date; provided, that if by the fifth (5th) business day following the Sale Reconciliation Date, the Buyer has not received such additional shares of Common Stock (or payment in cash), the Buyer may notify the Transfer Agent directly of the Company’s obligation to deliver such additional shares of Common Stock, and the Transfer Agent shall issue such additional shares of Common Stock from the Reserved Amount without any further action by the Company. In the event such certificates or book entry statements representing such additional shares of Common Stock issuable hereunder shall not be delivered to the Buyer within ten (10) business days of the Sale Reconciliation Date, same shall be an immediate default under this Agreement and the Transaction Documents. Nothing herein contained shall be interpreted to in any way limit the net proceeds from the sale of the Commitment Fee Shares which shall be generated by the Buyer. The Company’s obligation to pay the Commitment Fee contemplated by this Section 4(o) thru the sale of Commitment Fee Shares, shall be an obligation hereunder, secured by all Transaction Documents.

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p. Additional Financings (i). In the event the Company receives gross proceeds of at least $5,000,000 in connection with any debt or equity financing (a “Financing”), the Company agrees that it will apply a portion of the proceeds from such Financing to repay the Note in full, including all amounts principal and interest and any other amounts owed to the Buyer thereunder, with such amounts to be delivered to the Buyer in satisfaction of the Company’s obligations under the Note at the closing of the Financing or as promptly as practicable thereafter.

q. Use of Proceeds. As a material inducement for the Buyer to enter into this Agreement, the Company shall apply no less than $400,000 of the proceeds of the Note from the Purchase Price to repay the principal and interest obligations accrued through the Closing Date under that certain 12% Promissory Note dated June 21, 2022 issued by the Company in favor of the Buyer in the principal amount of $600,000.000 (the “June Note”) and, to the extent applicable, the Company may retain the excess of such proceeds. Except to the extent of the reduction in principal amount and/or interest obligations contemplated by the foregoing, upon the closing of the transactions contemplated by this Agreement, the June Note shall remain outstanding in all respects and the Company shall continue to be subject to its obligations thereunder and under each document executed in connection therewith, and all provisions thereof shall remain in full force and effect pursuant to their terms. 

5. Reserved.

6. Reserved. 

7. Transfer Agent Instructions. The Company shall issue irrevocable instructions to the Transfer Agent to issue certificates, registered in the name of the Buyer or its nominee, for the Conversion Shares in such amounts as specified from time to time by the Buyer to the Company upon conversion of the Note in accordance with the terms thereof and for the Warrant Shares in such amounts as specified from time to time by the Buyer to the Company upon exercise of the Warrant in accordance with the terms thereof (the “Irrevocable Transfer Agent Instructions”). In the event that the Company proposes to replace its transfer agent, the Company shall provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the amount of the Reserved Amount, as such term is defined in the Note) signed by the successor transfer agent to Company and the Company. Prior to registration of the Conversion Shares and the Warrant Shares under the 1933 Act or the date on which the Conversion Shares and the Warrant Shares may be sold pursuant to Rule 144 or other applicable exemption without any restriction as to the number of Securities as of a particular date that can then be immediately sold, all such certificates shall bear the restrictive legend specified in Section 2(g) of this Agreement. The Company warrants that: (i) no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section, and stop transfer instructions to give effect to Section 2(f) hereof (in the case of the Conversion Shares, prior to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares may be sold pursuant to Rule 144 or other applicable exemption without any restriction as to the number of Securities as of a particular date that can then be immediately sold and in the case of the Warrant Shares prior to registration of the Warrant Shares under the 1933 Act or the date on which the Warrant Shares may 

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be sold pursuant to Rule 144 or other applicable exemption without any restriction as to the number of Securities as of a particular date that can then be immediately sold), will be given by the Company to the Transfer Agent and that the Securities shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement and the Note; (ii) it will not direct the Transfer Agent not to transfer or delay, impair, and/or hinder the Transfer Agent in transferring (or issuing) (electronically or in certificated form) any certificate for Conversion Shares or the Warrant Shares under the 1933 Act or the date on which the Conversion Shares are to be issued to the Buyer upon conversion of or otherwise pursuant to the Note or the Warrant Shares are to be issued to the Buyer upon exercise of the Warrant as and when required by the Note and this Agreement; and (iii) it will not fail to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any Conversion Shares issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when required by the Note and this Agreement or any Warrant Shares issued to the Buyer upon exercise of or otherwise pursuant to the Warrant as and when required by the Warrant. Nothing in this Section shall affect in any way the Buyer’s obligations and agreement set forth in Section 2(g) hereof to comply with all applicable prospectus delivery requirements, if any, upon re-sale of the Securities. If the Buyer provides the Company, at the cost of the Company, with (i) an opinion of counsel in form, substance and scope customary for opinions in comparable transactions, to the effect that a public sale or transfer of such Securities may be made without registration under the 1933 Act and such sale or transfer is effected or (ii) the Buyer provides reasonable assurances that the Securities can be sold pursuant to Rule 144 or other applicable exemption, the Company shall permit the transfer, and, in the case of the Conversion Shares and the Warrant Shares, promptly instruct the Transfer Agent to issue one or more certificates, free from restrictive legend, in such name and in such denominations as specified by the Buyer. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer, by vitiating the intent and purpose of the transactions contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section may be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section, that the Buyer shall be entitled, in addition to all other available remedies, to an injunction restraining any breach and requiring immediate transfer, without the necessity of showing economic loss and without any bond or other security being required.

8. CONDITIONS PRECEDENT TO THE COMPANY’S OBLIGATIONS TO SELL. The obligation of the Company hereunder to issue and sell the Note to the Buyer at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions thereto, provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion:

a. The Buyer shall have executed this Agreement and delivered the same to the Company.

b. The Buyer shall have delivered the Purchase Price in accordance with Section 1(b) above.

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c. The representations and warranties of the Buyer shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as of a specific date), and the Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Buyer at or prior to the Closing Date.

d. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.

9. CONDITIONS PRECEDENT TO THE BUYER’S OBLIGATION TO PURCHASE. The obligation of the Buyer hereunder to purchase the Note and the Warrant at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions, provided that these conditions are for the Buyer’s sole benefit and may be waived by the Buyer at any time in its sole discretion:

a. The Company shall have executed this Agreement and delivered the same to the Buyer.

b. The Company shall have delivered to the Buyer the duly executed Note.

c. The Company shall have delivered to the Buyer the duly executed Warrant (in such denominations as the Buyer shall request) and in accordance with Section 1(b) above.

d. The Company shall have delivered to the Buyer a duly executed security agreement in a form acceptable to Buyer.

e. The Irrevocable Transfer Agent Instructions, in form and substance satisfactory to the Buyer, shall have been delivered to and acknowledged in writing by the Company’s Transfer Agent.

f. The representations and warranties of the Company shall be true and correct in all material respects as of the date when made and as of the Closing Date as though made at such time (except for representations and warranties that speak as of a specific date) and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date. The Buyer shall have received a certificate or certificates, executed by the chief executive officer of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by the Buyer including, but not limited to certificates with respect to the Company’s Articles of Incorporation, By-laws and Board resolutions relating to the transactions contemplated hereby.

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g. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.

h. No event shall have occurred which could reasonably be expected to have a Material Adverse Effect on the Company including but not limited to a change in the 1934 Act reporting status of the Company or the failure of the Company to be timely in its 1934 Act reporting obligations.

i. The Conversion Shares and the Warrant Shares shall have been authorized for quotation on the OTC Pink, OTCQB or any similar quotation system and trading in the Common Stock on the OTC Pink, OTCQB or any similar quotation system shall not have been suspended by the SEC or the OTC Pink, OTCQB or any similar quotation system.

j. The Buyer shall have received an officer’s certificate in a form acceptable to Buyer, dated as of the Closing Date.

10.GOVERNING LAW; MISCELLANEOUS.

a. Governing Law

. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Agreement, the Note or any other agreement, certificate, instrument or document contemplated hereby shall be brought only in the state courts located in the State of New York or in the federal courts located in the State of New York. The parties to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY. The prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs. In the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction Document 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.

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b. Counterparts; Signatures. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. This Agreement, once executed by a party, may be delivered to the other party hereto by electronic or digital transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement.

c. Construction; Headings. This Agreement shall be deemed to be jointly drafted by the Company and the Buyer and shall not be construed against any person as the drafter hereof. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation of, this Agreement.

d. Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision hereof.

e. Entire Agreement; Amendments. This Agreement, the Note, the Warrant and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the Buyer.

f. Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram, email, or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon hand delivery or delivery by email or facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:

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If to the Company, to:

Galaxy Next Generation, Inc.

285 N. Big A Road

Toccoa, Georgia 30577 

Attn: Gary LeCroy

E-mail: gary@galaxynext.us

If to the Buyer:

AJB Capital Investments LLC

4700 Sheridan Street, Suite J

Hollywood, FL 33021 26

Attn: Ari Blaine

Email: ari@ajbcapitalinvestments.com

Each party shall provide notice to the other party of any change in address.

g. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. Neither the Company nor the Buyer shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other. Notwithstanding the foregoing, subject to Section 2(f), the Buyer may assign its rights hereunder to any person that purchases Securities in a private transaction from the Buyer or to any of its “affiliates,” as that term is defined under the 1934 Act, without the consent of the Company.

h. Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

i. Survival. The representations and warranties of the Company and the agreements and covenants set forth in this Agreement shall survive the closing hereunder not withstanding any due diligence investigation conducted by or on behalf of the Buyer. 

j. Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

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k. No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

l. Remedies. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Agreement will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Agreement, that the Buyer shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Agreement and to enforce specifically the terms and provisions hereof, without the necessity of showing economic loss and without any bond or other security being required.

m. Publicity. The Company agrees that the Buyer shall have the right to review a reasonable period of time before issuance, any press releases, SEC, OTCQB or FINRA filings, or any other public statements with respect to the transactions contemplated hereby; provided, however, that the Company shall be entitled, without the prior approval of the Buyer, to make any press release or SEC, OTCQB (or other applicable trading market) or FINRA filings with respect to such transactions as is required by applicable law and regulations (although the Buyer shall be consulted by the Company in connection with any such press release prior to its release and shall be provided with a copy thereof and be given an opportunity to comment thereon).

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n. Indemnification. In consideration of the Buyer’s execution and delivery of this Agreement and acquiring the Securities hereunder, and in addition to all of the Company’s other obligations under this Agreement or the Note, the Company shall defend, protect, indemnify and hold harmless the Buyer and its stockholders, partners, members, officers, directors, employees and direct or indirect investors and any of the foregoing persons’ agents or other representatives (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by the Company in this Agreement or the Note or any other agreement, certificate, instrument or document contemplated hereby or thereby, (b) any breach of any covenant, agreement or obligation of the Company contained in this Agreement or the Note or any other agreement, certificate, instrument or document contemplated hereby or thereby or (c) any cause of action, suit or claim brought or made against such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company) and arising out of or resulting from (i) the execution, delivery, performance or enforcement of this Agreement or the Note or any other agreement, certificate, instrument or document contemplated hereby or thereby, (ii) any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of the issuance of the Securities, or (iii) the status of the Buyer or holder of the Securities as an investor in the Company pursuant to the transactions contemplated by this Agreement, other than in the case of this clause (c), as result of the gross negligence, willful misconduct or violation of law by the Buyer or any Indemnitee. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities that is permissible under applicable law.

[signature page follows]

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IN WITNESS WHEREOF, the undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above written.

 

GALAXY NEXT GENERATION, INC.

 

By: /s/ Gary LeCroy

Name:Gary LeCroy 

Title: CEO-Chairman

 

AJB CAPITAL INVESTMENTS, LLC

 

By: /s/ Ari Blaine

Name:Ari Blaine

Title: Partner

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EXHIBIT A

Form of Make Whole Notice

COMMITMENT FEE SHARES MAKE WHOLE NOTICE

Reference is made to that certain Securities Purchase Agreement (the “Purchase Agreement”), dated as of August __, 2022 among Galaxy Next Generation, Inc., a Nevada corporation (the “Borrower”) and AJB Capital Investments, LLC, a Delaware limited liability company (the “Buyer”). Pursuant to Section 4(o)(i) of the Purchase Agreement, the undersigned hereby directs you to issue that number of shares of Common Stock constituting the “Make Whole Amount” as set forth below, of the Borrower, within two days of the date hereof or the next succeeding business day. No fee will be charged to the Buyer for any such issuance, except for transfer taxes, if any.

Box Checked as to applicable instructions:

[ ] The Borrower shall electronically transmit the Common Stock issuable pursuant to this Commitment Fee Shares Make Whole Notice to the account of the undersigned or its nominee with DTC through its Deposit Withdrawal Agent Commission system (“DWAC Transfer”).

Name of DTC Prime Broker: 

Account Number:

[ ] The undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock set forth below (which numbers are based on the Buyer’s calculation attached hereto) in the name(s) specified immediately below or, if additional space is necessary, on an attachment hereto:

Make Whole Amount (number of shares of common stock to be issued) ________________ 

AJB Capital Investments, LLC

 

By:

Name:

Title:

Date:

 

-30-Exhibit 10.1

 

 

Freight
Technologies, Inc.

2022
Equity Incentive Plan

 

1. Purposes
of the Plan. The purposes of this Plan are:

 

	●	to
    replace the Hudson Capital, Inc. 2021 Equity Incentive Plan (the “2021 Plan”) approved and adopted by the Board
    on 13 December 2021 and pursuant to which no awards were issued. Further to this, on the date of adoption of this Plan, the board
    approved the termination of the 2021 Plan in accordance with its terms,
	 	 
	●	to
    attract and retain the best available personnel for positions of substantial responsibility,
	 	 
	●	to
    provide additional incentive to Employees, Directors and Consultants, and
	 	 
	●	to
    promote the success of the Company’s business.

 

The
Plan permits the grant of Incentive Stock Options, Non-statutory Stock Options, Restricted Stock, Stock Appreciation Rights, Restricted
Stock Units, Performance Units, Performance Shares, and Other Stock Based Awards.

 

2. Definitions.
As used herein, the following definitions will apply:

 

(a)
“162(m) Award” means an Award that is granted to a Covered Employee and is intended to qualify as
“performance-based” under Section 162(m) of the Code.

 

(b)
“Administrator” means the Board or any of its Committees as will be administering the Plan, in accordance with Section 4
of the Plan.

 

(c)
“Applicable Laws” means the requirements relating to the administration of equity-based awards or equity compensation plans
under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the
Ordinary Share is listed or quoted and the applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted
under the Plan.

 

(d)
“Award” means, individually or collectively, a grant under the Plan of Options, SARs, Restricted Stock, Restricted Stock
Units, Performance Units, Performance Shares or Other Stock Based Awards.

 

(e)
“Award Agreement” means the written or electronic agreement setting forth the terms and provisions applicable to each Award
granted under the Plan. The Award Agreement is subject to the terms and conditions of the Plan.

 

(f)
“Awarded Stock” means the Ordinary Share subject to an Award.

 

(g)
“Board” means the Board of Directors of the Company.

 

(h)
“Change in Control” means the occurrence of any of the following events:

 

(i)
Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner”
(as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%)
or more of the total voting power represented by the Company’s then outstanding voting securities;

 

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(ii)
The consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets;

 

(iii)
A change in the composition of the Board occurring within a two-year period, as a result of which fewer than a majority of the directors
are Incumbent Directors. “Incumbent Directors” means directors who either (A) are Directors as of the effective date of the
Plan, or (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the Incumbent
Directors at the time of such election or nomination (but will not include an individual whose election or nomination is in connection
with an actual or threatened proxy contest relating to the election of directors to the Company); or

 

(iv)
The consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding
or by being converted into voting securities of the surviving entity or its parent) more than fifty percent (50%) of the total voting
power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger
or consolidation.

 

(i)
“Code” means the Internal Revenue Code of 1986, as amended. Any reference to a section of the Code herein will be a reference
to any successor or amended section of the Code.

 

(j)
“Committee” means a committee of Directors or other individuals satisfying Applicable Laws appointed by the Board in accordance
with Section 4 of the Plan

 

(k)
“Ordinary Share” means the ordinary shares of the Company, with a par value of US$0.011 each as may be amended from time
to time pursuant to the M&A.

 

(l)
“Company” means Freight Technologies, Inc.

 

(m)
“Consultant” means any person, including an advisor, engaged by the Company or a Parent or Subsidiary to render services
to such entity.

 

(n)
“Covered Employees” means those persons who the Committee determines are subject to the limitations of Section 162(m) of
the Code.

 

(o)
“Director” means a member of the Board.

 

(p)
“Disability” means total and permanent disability as defined in Section 22(e)(3) of the Code, provided that in the case of
Awards other than Incentive Stock Options, the Administrator in its discretion may determine whether a permanent and total disability
exists in accordance with uniform and non-discriminatory standards adopted by the Administrator from time to time.

 

(q)
“Dividend Equivalent” means a credit, made at the discretion of the Administrator, to the account of a Participant in an
amount equal to the value of dividends paid on one Share for each Share represented by an Award held by such Participant.

 

(r)
“Employee” means any person, including Officers and Directors, employed by the Company or any Parent or Subsidiary of the
Company. Neither service as a Director nor payment of a director’s fee by the Company will be sufficient to constitute “employment”
by the Company.

 

(s)
“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

    	2 | P a g e

     

    

 

(t)
“Exchange Program” means a program under which (i) outstanding Awards are surrendered or cancelled in exchange for Awards
of the same type (which may have lower exercise prices and different terms), Awards of a different type, and/or cash, and/or (ii) the
exercise price of an outstanding Award is reduced. The terms and conditions of any Exchange Program will be determined by the Administrator
in its sole discretion.

 

(u)
“Fair Market Value” means, as of any date, the value of Ordinary Share determined as follows:

 

(i)
If the Ordinary Share is listed on any established stock exchange or a national market system, including without limitation the Nasdaq
Capital Market, its Fair Market Value will be the closing sales price for such stock (or the closing bid, if no sales were reported)
as quoted on such exchange or system for the last market trading day on or prior to the date of determination, as reported in The Wall
Street Journal or such other source as the Administrator deems reliable;

 

(ii)
If the Ordinary Share is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value
of one Ordinary Share will be the mean between the high bid and low asked prices for the Ordinary Share for the last market trading day
on or prior to the date of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;
or

 

(iii)
In the absence of an established market for the Ordinary Share, the Fair Market Value will be determined in good faith by the Administrator.

 

Notwithstanding
the preceding, for federal, state, and local income tax reporting purposes and for such other purposes as the Administrator deems appropriate,
the Fair Market Value shall be determined by the Administrator in accordance with uniform and nondiscriminatory standards adopted by
it from time to time.

 

(v)
“Fiscal Year” means the fiscal year of the Company.

 

(w)
“Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422
of the Code and the regulations promulgated thereunder.

 

(x)
“Non-statutory Stock Option” means an Option that by its terms does not qualify or is not intended to qualify as an Incentive
Stock Option.

 

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

 

(z)
“Option” means a stock option granted pursuant to the Plan.

 

(aa)
“Other Stock Based Awards” means any other awards not specifically described in the Plan that are valued in whole or in part
by reference to, or are otherwise based on, Shares and are created by the Administrator pursuant to Section 12.

 

(bb)
“Outside Director” means a Director who is not an Employee.

 

(cc)
“Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the
Code.

 

(dd)
“Participant” means the holder of an outstanding Award granted under the Plan.

 

    	3 | P a g e

     

    

 

(ee)
“Performance Goals” means one or more objective measurable performance goals established by the Committee with respect to
a Performance Period based upon one or more of the following criteria: (i) operating income; (ii) earnings before interest, taxes, depreciation
and amortization; (iii) earnings; (iv) cash flow; (v) market share; (vi) sales or revenue; (vii) expenses; (vii) profit/loss or profit
margin; (ix) working capital; (x) return on equity or assets; (xi) earnings per share; (xii) total shareholder return; (xiii) price/earnings
ratio; (xiv) debt or debt-to-equity; (xv) accounts receivable; (xvi) write offs; (xvii) cash; (xviii) assets; (xix) liquidity; (xx) operations;
(xxi) borrowers; (xxii) investors; (xxiii) strategic partners; (xxiv) mergers or acquisitions; (xxv) loans facilitated; (xxvi) product
offerings; and/or (xxvii) stock price. Any criteria used may be measured, as applicable, (a) in absolute terms, (b) in relative terms
(including but not limited to, the passage of time and/or against other companies or financial metrics), (c) on a per

 

share
and/or share per capita basis, (d) against the performance of the Company as a whole or against particular entities, segments, operating
units or products of the Company and /or (e) on a pre-tax or after tax basis. Awards issued to persons who are not Covered Employees
may take into account any other factors deemed appropriate by the Committee.

 

(ff)
“Performance Period” means any period not exceeding 120 months as determined by the Committee, in its sole discretion. The
Committee may establish different Performance Periods for different Participants, and the Committee may establish concurrent or overlapping
Performance Periods.

 

(gg)
“Performance Share” means an Award granted to a Service Provider pursuant to Section 10 of the Plan.

 

(hh)
“Performance Unit” means an Award granted to a Service Provider pursuant to Section 10 of the Plan.

 

(ii)
“Period of Restriction” means the period during which the transfer of Shares of Restricted Stock are subject to restrictions
and therefore, the Shares are subject to a substantial risk of forfeiture. Such restrictions may be based on the passage of time, the
achievement of target levels of performance, or the occurrence of other events as determined by the Administrator.

 

(jj)
“Plan” means this 2022 Equity Incentive Plan.

 

(kk)
“Restricted Stock” means Shares issued pursuant to a Restricted Stock award under Section 8 or issued pursuant to the early
exercise of an option.

 

(ll)
“Restricted Stock Unit” means an Award that the Administrator permits to be paid in installments or on a deferred basis pursuant
to Sections 4 and 11 of the Plan.

 

(mm)
“Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when discretion is being exercised
with respect to the Plan.

 

(nn)
“Section 16(b)” means Section 16(b) of the Exchange Act.

 

(oo)
“Service Provider” means an Employee, Director or Consultant.

 

(pp)
“Share” means one Ordinary Share, as adjusted in accordance with Section 15 of the Plan.

 

(qq)
“Stock Appreciation Right” or “SAR” means an Award that pursuant to Section 9 of the Plan is designated as a
SAR.

 

    	4 | P a g e

     

    

 

(rr)
“Subsidiary” means a “subsidiary corporation”, whether now or hereafter existing, as defined in Section 424(f)
of the Code.

 

3.
Stock Subject to the Plan.

 

(a)
Stock Subject to the Plan. Subject to the provisions of Section 16 of the Plan, the maximum aggregate number of Shares that may be issued
under the Plan is 10,000,000 Shares. The Shares may be authorized, but unissued, or reacquired Ordinary Share. Shares shall not be deemed
to have been issued pursuant to the Plan with respect to any portion of an Award that is settled in cash. Upon payment in Shares pursuant
to the exercise of an Award, the number of Shares available for issuance under the Plan shall be reduced only by the number of Shares
actually issued in such payment. If a Participant pays the exercise price (or purchase price, if applicable) of an Award through the
tender of Shares, or if Shares are tendered or withheld to satisfy any Company withholding obligations, the number of Shares so tendered
or withheld shall again be available for issuance pursuant to future Awards under the Plan. A total of 10,000,000 Shares, which such
amount is included in the limit set forth in the first sentence of this Section 3(a), may be issued under the Plan pursuant to the exercise
of Incentive Stock Options.

 

(b)
Lapsed Awards. If any outstanding Award expires or is terminated or canceled without having been exercised or settled in full, or if
Shares acquired pursuant to an Award subject to forfeiture or repurchase are forfeited or repurchased by the Company, the Shares allocable
to the terminated portion of such Award or such forfeited or repurchased Shares shall again be available for grant under the Plan.

 

(c)
Share Reserve. The Company, during the term of the Plan, shall at all times reserve and keep available such number of Shares as will
be sufficient to satisfy the requirements of the Plan.

 

4.
Administration of the Plan.

 

(a)
Procedure.

 

(i)
Multiple Administrative Bodies. Different Committees with respect to different groups of Service Providers may administer the Plan.

 

(ii)
Section 162(m). To the extent that the Administrator determines it to be desirable and necessary to qualify Awards granted hereunder
as “performance-based compensation” within the meaning of Section 162(m) of the Code, the Plan will be administered by a
Committee of two or more “outside directors” within the meaning of Section 162(m) of the Code.

 

(iii)
Rule 16b-3. To the extent desirable to qualify transactions hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder
will be structured to satisfy the requirements for exemption under Rule 16b-3.

 

(iv)
Other Administration. Other than as provided above, the Plan will be administered by (A) the Board or (B) a Committee, which committee
will be constituted to satisfy Applicable Laws.

 

(v)
Delegation of Authority for Day-to-Day Administration. Except to the extent prohibited by Applicable Law, the Administrator may delegate
to one or more individuals the day-to-day administration of the Plan and any of the functions assigned to it in this Plan. Such delegation
may be revoked at any time.

 

    	5 | P a g e

     

    

 

(b)
Powers of the Administrator. Subject to the provisions of the Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator will have the authority, in its discretion:

 

(i)
to determine the Fair Market Value;

 

(ii)
to select the Service Providers to whom Awards may be granted hereunder;

 

(iii)
to determine the number of Shares to be covered by each Award granted hereunder;

 

(iv)
to approve forms of agreement for use under the Plan;

 

(v)
to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder. Such terms and conditions
include, but are not limited to, the exercise price, the time or times when Awards may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture or repurchase restrictions, and any restriction or limitation regarding any
Award or the Shares relating thereto, based in each case on such factors as the Administrator, in its sole discretion, will determine;

 

(vi)
to institute an Exchange Program;

 

(vii)
to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan;

 

(viii)
to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to subplans established
for the purpose of satisfying applicable foreign laws and/or qualifying for preferred tax treatment under applicable foreign tax laws;

 

(ix)
to modify or amend each Award (subject to Section 19(c) of the Plan), including (A) the discretionary authority to extend the post-termination
exercisability period of Awards longer than is otherwise provided for in the Plan and (B) accelerate the satisfaction of any vesting
criteria or waiver of forfeiture or repurchase restrictions;

 

(x)
to allow Participants to satisfy withholding tax obligations by electing to have the Company withhold from the Shares or cash to be issued
upon exercise or vesting of an Award that number of Shares or cash having a Fair Market Value equal to the minimum amount required to
be withheld. The Fair Market Value of any Shares to be withheld will be determined on the date that the amount of tax to be withheld
is to be determined. All elections by a Participant to have Shares or cash withheld for this purpose will be made in such form and under
such conditions as the Administrator may deem necessary or advisable;

 

(xi)
to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted
by the Administrator,

 

(xii)
to allow a Participant to defer the receipt of the payment of cash or the delivery of Shares that would otherwise be due to such Participant
under an Award;

 

(xiii)
to determine whether Awards will be settled in Shares, cash or in any combination thereof;

 

(xiv)
to determine whether Awards will be adjusted for Dividend Equivalents;

 

(xv)
to create Other Stock Based Awards for issuance under the Plan;

 

(xvi)
to establish a program whereby Service Providers designated by the Administrator can reduce compensation otherwise payable in cash in
exchange for Awards under the Plan;

 

(xvii)
to impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any resales by a Participant
or other subsequent transfers by the Participant of any Shares issued as a result of or under an Award, including without limitation,
(A) restrictions under an insider trading policy, and (B) restrictions as to the use of a specified brokerage firm for such resales or
other transfers; and

 

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(xviii)
to make all other determinations deemed necessary or advisable for administering the Plan.

 

(c)
Effect of Administrator’s Decision. The Administrator’s decisions, determinations, and interpretations will be final and
binding on all Participants and any other holders of Awards.

 

5.
Eligibility. Non-statutory Stock Options, Restricted Stock, Stock Appreciation Rights, Performance Units, Performance Shares, Restricted
Stock Units and Other Stock Based Awards may be granted to Service Providers. Incentive Stock Options may be granted only to Employees.

 

6.
Limitations.

 

(a)
ISO $100,000 Rule. Each Option will be designated in the Award Agreement as either an Incentive Stock Option or a Non-statutory Stock
Option. However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which
Incentive Stock Options are exercisable for the first time by the Participant during any calendar year (under all plans of the Company
and any Parent or Subsidiary) exceeds $100,000, such Options will be treated as Non-statutory Stock Options. For purposes of this Section
6(a), Incentive Stock Options will be taken into account in the order in which they were granted. The Fair Market Value of the Shares
will be determined as of the time the Option with respect to such Shares is granted.

 

(b)
Special Limits for Grants of Options and Stock Appreciation Rights. Subject to Section 16 of the Plan, the following special limits shall
apply to Shares available for Awards under the Plan:

 

(i)
the maximum number of Shares that may be subject to Options granted to any Service Provider in any calendar year shall equal 10,000,000
Shares; and (ii) the maximum number of Shares that may be subject to Stock Appreciation Rights granted to any Service Provider in any
calendar year shall equal 10,000,000 Shares.

 

(c)
No Rights as a Service Provider. Neither the Plan nor any Award shall confer upon a Participant any right with respect to continuing
his or her relationship as a Service Provider, nor shall they interfere in any way with the right of the Participant or the right of
the Company or its Parent or Subsidiaries to terminate such relationship at any time, with or without cause.

 

7.
Stock Options.

 

(a)
Term of Option. The term of each Option will be stated in the Award Agreement and will not exceed ten (10) years from the date of grant.
Moreover, in the case of an Incentive Stock Option granted to a Participant who, at the time the Incentive Stock Option is granted, owns
shares representing more than ten percent (10%) of the total combined voting power of all classes of shares of the Company or any Parent
or Subsidiary, the term of the Incentive Stock Option will be five (5) years from the date of grant or such shorter term as may be provided
in the Award Agreement.

 

(b)
Option Exercise Price and Consideration.

 

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(i)
Exercise Price. The per Share exercise price for the Shares to be issued pursuant to exercise of an Option will be determined by the
Administrator, subject to the following:

 

(1)
In the case of an Incentive Stock Option

 

(A)
granted to an Employee who, at the time the Incentive Stock Option is granted, owns shares representing more than ten percent (10%) of
the total combined voting power of all classes of shares of the Company or any Parent or Subsidiary, the per Share exercise price will
be no less than 110% of the Fair Market Value per Share on the date of grant.

 

(B)
granted to any Employee other than an Employee described in paragraph (A) immediately above, the per Share exercise price will be no
less than 100% of the Fair Market Value per Share on the date of grant.

 

(2)
In the case of a Non-statutory Stock Option, the per Share exercise price will be determined by the Administrator. In the case of a Non-statutory
Stock Option intended to qualify as “performance-based compensation” within the meaning of Section 162 (m) of the Code, or
in the event of the grant of a Non-statutory Stock Option to an Employee, Director, or Consultant who is a U.S. taxpayer, the per Share
exercise price will be no less than 100% of the Fair Market Value per Share on the date of grant.

 

(3)
Notwithstanding the foregoing, Incentive Stock Options may be granted with a per Share exercise price of less than 100% of the Fair Market
Value per Share on the date of grant pursuant to a transaction described in, and in a manner consistent with, Section 424(a) of the Code.

 

(ii)
Waiting Period and Exercise Dates. At the time an Option is granted, the Administrator will fix the period within which the Option may
be exercised and will determine any conditions that must be satisfied before the Option may be exercised. The Administrator, in its sole
discretion, may accelerate the satisfaction of such conditions at any time.

 

(c)
Form of Consideration. The Administrator will determine the acceptable form of consideration for exercising an Option, including the
method of payment. In the case of an Incentive Stock Option, the Administrator shall determine the acceptable form of consideration at
the time of grant. Such consideration, to the extent permitted by Applicable Laws, may consist entirely of:

 

(i)
cash;

 

(ii)
check;

 

(iii)
promissory note;

 

(iv)
other Shares which meet conditions established by the Administrator;

 

(v)
consideration received by the Company under a cashless exercise program implemented by the Company in connection with the Plan;

 

(vi)
a reduction in the amount of any Company liability to the Participant, including any liability attributable to the Participant’s
participation in any Company-sponsored deferred compensation program or arrangement;

 

(vii)
any combination of the foregoing methods of payment; or

 

(viii)
such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws.

 

(d)
Exercise of Option.

 

    	8 | P a g e

     

    

 

(i)
Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder will be exercisable according to the terms of the Plan
and at such times and under such conditions as determined by the Administrator and set forth in the Award Agreement. An Option may not
be exercised for a fraction of a Share.

 

An
Option will be deemed exercised when the Company receives: (x) written or electronic notice of exercise (in accordance with the Award
Agreement) from the person entitled to exercise the Option, and (y) full payment for the Shares with respect to which the Option is exercised
(including provision for any applicable tax withholding). Full payment may consist of any consideration and method of payment authorized
by the Administrator and permitted by the Award Agreement and the Plan. Shares issued upon exercise of an Option will be issued in the
name of the Participant or, if requested by the Participant, in the name of the Participant and his or her spouse. Until the Shares are
issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no
right to vote or receive dividends or any other rights as a stockholder will exist with respect to the Awarded Stock, notwithstanding
the exercise of the Option. The Company will issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment
will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in
Section 16 of the Plan or the applicable Award Agreement.

 

Exercising
an Option in any manner will decrease the number of Shares thereafter available for sale under the Option, by the number of Shares as
to which the Option is exercised.

 

(ii)
Termination of Relationship as a Service Provider. If a Participant ceases to be a Service Provider, other than upon the Participant’s
death or Disability, the Participant may exercise his or her Option within such period of time as is specified in the Award Agreement
to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option
as set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the Option will remain exercisable for
three (3) months following the Participant’s termination. Unless otherwise provided by the Administrator, if on the date of termination
the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to
the Plan. If after termination the Participant does not exercise his or her Option as to all of the vested Shares within the time specified
by the Administrator, the Option will terminate, and the remaining Shares covered by such Option will revert to the Plan. If a Participant
ceases to be a Service Provider, other than upon the Participant’s death or Disability, all unvested Shares of such Participant
at such time shall be deemed to be immediately cancelled and returned to the Company (at no cost to the Company) and such Participant
shall immediately surrender his respective Shares to the Company in accordance with the provision of section 59(1A) of the BVI Business
Companies Act (As Revised) by virtue of his or her signature to the Award Agreement in respect of such shares.

 

(iii)
Disability of Participant. If a Participant ceases to be a Service Provider as a result of the Participant’s Disability, the Participant
may exercise his or her Option within such period of time as is specified in the Award Agreement to the extent the Option is vested on
the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement). In
the absence of a specified time in the Award Agreement, the Option will remain exercisable for twelve (12) months following the Participant’s
termination. Unless otherwise provided by the Administrator, if on the date of termination the Participant is not vested as to his or
her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan. If after termination the Participant
does not exercise his or her Option as to all of the vested Shares within the time specified by the Administrator, the Option will terminate,
and the remaining Shares covered by such Option will revert to the Plan.

 

    	9 | P a g e

     

    

 

(iv)
Death of Participant. If a Participant dies while a Service Provider, the Option may be exercised following the Participant’s death
within such period of time as is specified in the Award Agreement to the extent that the Option is vested on the date of death (but in
no event may the Option be exercised later than the expiration of the term of such Option as set forth in the Award Agreement), by the
Participant’s designated beneficiary, provided such beneficiary has been designated prior to the Participant’s death in a
form acceptable to the Administrator. If no such beneficiary has been designated by the Participant, then such Option may be exercised
by the personal representative of the Participant’s estate or by the persons) to whom the Option is transferred pursuant to the
Participant’s will or in accordance with the laws of descent and distribution. In the absence of a specified time in the Award
Agreement, the Option will remain exercisable for twelve (12) months following the Participant’s death. Unless otherwise provided
by the Administrator, if at the time of death the Participant is not vested as to his or her entire Option, the Shares covered by the
unvested portion of the Option will immediately revert to the Plan. If the Option is not exercised as to all of the vested Shares within
the time specified by the Administrator, the Option will terminate, and the remaining Shares covered by such Option will revert to the
Plan.

 

8.
Restricted Stock.1

 

(a)
Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the Administrator, at any time and from time to time, may
grant Shares of Restricted Stock to Service Providers in such amounts as the Administrator, in its sole discretion, will determine.

 

(b)
Restricted Stock Agreement. Each Award of Restricted Stock will be evidenced by an Award Agreement that will specify the Period of Restriction,
the number of Shares granted, and such other terms and conditions as the Administrator, in its sole discretion, will determine. [Unless
the Administrator determines otherwise, Shares of Restricted Stock will be held by the Company as escrow agent until the restrictions
on such Shares have lapsed.]2

 

(c)
Transferability. Except as provided in this Section 8, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated until the end of the applicable Period of Restriction.

 

(d)
Other Restrictions. The Administrator, in its sole discretion, may impose such other restrictions on Shares of Restricted Stock as it
may deem advisable or appropriate.

 

(e)
Removal of Restrictions. Except as otherwise provided in this Section 8, Shares of Restricted Stock covered by each Restricted Stock
grant made under the Plan will be released from escrow as soon as practicable after the last day of the Period of Restriction. The Administrator,
in its discretion, may accelerate the time at which any restrictions will lapse or be removed.

 

(f)
Voting Rights. During the Period of Restriction, Service Providers holding Shares of Restricted Stock granted hereunder may exercise
full voting rights with respect to those Shares, unless the Administrator determines otherwise.

 

(g)
Dividends and Other Distributions. During the Period of Restriction, Service Providers holding Shares of Restricted Stock will be entitled
to receive all dividends and other distributions paid with respect to such Shares unless otherwise provided in the Award Agreement. If
any such dividends or distributions are paid in Shares, the Shares will be subject to the same restrictions on transferability and forfeitability
as the Shares of Restricted Stock with respect to which they were paid.

 

 

 

1
Maples Note: Under BVI law, there is no concept of “Restricted Stock”. Once a person is registered as a holder of the
shares in question, they will have all rights as to voting, dividends and return on capital as set out in the company’s M&A.

 

2
Ben to confirm the intention here. Will the Shares of Restricted Stock be issued (and thus held by the Company in treasury) or
simply not issued until the restrictions have lapsed?

 

    	10 | P a g e

     

    

(h)
Return of Restricted Stock to Company. On the date set forth in the Award Agreement, the Restricted Stock for which restrictions have
not lapsed will revert to the Company and again will become available for grant under the Plan.

 

9.
Stock Appreciation Rights.

 

(a)
Grant of SARs. Subject to the terms and conditions of the Plan, a SAR may be granted to Service Providers at any time and from time to
time as will be determined by the Administrator, in its sole discretion.

 

(b)
Number of Shares. The Administrator will have complete discretion to determine the number of SARs granted to any Service Provider.

 

(c)
Exercise Price and Other Terms. The Administrator, subject to the provisions of the Plan, will have complete discretion to determine
the terms and conditions of SARs granted under the Plan.

 

(d)
Exercise of SARs. SARs will be exercisable on such terms and conditions as the Administrator, in its sole discretion, will determine.
The Administrator, in its sole discretion, may accelerate exercisability at any time.

 

(e)
SAR Agreement. Each SAR grant will be evidenced by an Award Agreement that will specify the exercise price, the term of the SAR, the
conditions of exercise, and such other terms and conditions as the Administrator, in its sole discretion, will determine.

 

(f)
Expiration of SARs. An SAR granted under the Plan will expire upon the date determined by the Administrator, in its sole discretion,
and set forth in the Award Agreement. Notwithstanding the foregoing, the rules of Sections 7(d)(ii), 7(d)(iii) and 7(d)(iv) also will
apply to SARs.

 

(g)
Payment of SAR Amount. Upon exercise of an SAR, a Participant will be entitled to receive payment from the Company in an amount determined
by multiplying:

 

(i)
The difference between the Fair Market Value of a Share on the date of exercise over the exercise price; times

 

(ii)
The number of Shares with respect to which the SAR is exercised.

 

At
the discretion of the Administrator, the payment upon SAR exercise may be in cash, in Shares of equivalent value, or in some combination
thereof.

 

10.
Performance Units and Performance Shares.

 

(a)
Grant of Performance Units/Shares. Subject to the terms and conditions of the Plan, Performance Units and Performance Shares may be granted
to Service Providers at any time and from time to time, as will be determined by the Administrator, in its sole discretion. The Administrator
will have complete discretion in determining the number of Performance Units and Performance Shares granted to each Participant.

 

    	11 | P a g e

     

    

 

(b)
Value of Performance Units/Shares. Each Performance Unit will have an initial value that is established by the Administrator on or before
the date of grant. Each Performance Share will have an initial value equal to the Fair Market Value of a Share on the date of grant.

 

(c)
Performance Objectives and Other Terms. The Administrator will set performance objectives in its discretion which, depending on the extent
to which they are met, will determine the number or value of Performance Units/Shares that will be paid out to the Participant. Each
Award of Performance Units/Shares will be evidenced by an Award Agreement that will specify the Performance Period, and such other terms
and conditions as the Administrator, in its sole discretion, will determine. The Administrator may set performance objectives based upon
the achievement of Company-wide, divisional, or individual goals (including solely continued service), applicable federal or state securities
laws, or any other basis determined by the Administrator in its discretion; provided, however, that if the Award is a 162(m) Award, then
the Award will be subject to achievement of Performance Goals with respect to a Performance Period established by the Committee and the
Award shall be granted and administered in accordance with the requirements of Section 162(m) of the Code.

 

(d)
Earning of Performance Units/Shares. After the applicable Performance Period has ended, the holder of Performance Units/Shares will be
entitled to receive a payout of the number of Performance Units/Shares earned by the Participant over the Performance Period, to be determined
as a function of the extent to which the corresponding performance objectives have been achieved. After the grant of a Performance Unit/Share,
the Administrator, in its sole discretion, may reduce or waive any performance objectives for such Performance Unit/Share unless such
Award is a 162(m) Award.

 

(e)
Form and Timing of Payment of Performance Units/Shares. Payment of earned Performance Units/Shares will be made after the expiration
of the applicable Performance Period at the time determined by the Administrator. The Administrator, in its sole discretion, may pay
earned Performance Units/Shares in the form of cash, in Shares (which have an aggregate Fair Market Value equal to the value of the earned
Performance Units/Shares at the close of the applicable Performance Period) or in a combination of cash and Shares.

 

(f)
Cancellation of Performance Units/Shares. On the date set forth in the Award Agreement, all unearned or unvested Performance Units/Shares
will be forfeited to the Company, and again will be available for grant under the Plan.

 

11.
Restricted Stock Units. Restricted Stock Units shall consist of a Restricted Stock, Performance Share or Performance Unit Award that
the Administrator, in its sole discretion permits to be paid out in installments or on a deferred basis, in accordance with rules and
procedures established by the Administrator

 

12.
Other Stock Based Awards. Other Stock Based Awards may be granted either alone, in addition to, or in tandem with, other Awards granted
under the Plan and/or cash awards made outside of the Plan. The Administrator shall have authority to determine the Service Providers
to whom and the time or times at which Other Stock Based Awards shall be made, the amount of such Other Stock Based Awards, and all other
conditions of the Other Stock Based Awards including any dividend and/or voting rights.

 

13.
Leaves of Absence. Unless the Administrator provides otherwise, vesting of Awards granted hereunder will be suspended during any unpaid
leave of absence and will resume on the date the Participant returns to work on a regular schedule as determined by the Company; provided,
however, that no vesting credit will be awarded for the time vesting has been suspended during such leave of absence. A Service Provider
will not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations
of the Company or between the Company, its Parent, or any Subsidiary. For purposes of Incentive Stock Options, no leave of absence may
exceed ninety (90) days, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon
expiration of a leave of absence approved by the Company is not so guaranteed, then three months following the 91st day of such leave
any Incentive Stock Option held by the Participant will cease to be treated as an Incentive Stock Option and will be treated for tax
purposes as a Non-statutory Stock Option.

 

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14.
Non-Transferability of Awards. Unless determined otherwise by the Administrator, an Award may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Participant, only by the Participant. If the Administrator makes an Award transferable, such Award will contain such
additional terms and conditions as the Administrator deems appropriate.

 

15.
Adjustments; Dissolution or Liquidation; Change in Control.

 

(a)
Adjustments. In the event that any dividend or other distribution (whether in the form of cash, Shares, other securities, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase,
or exchange of Shares or other securities of the Company, or other change in the corporate structure of the Company affecting the Shares
occurs such that an adjustment is determined by the Administrator (in its sole discretion) to be appropriate in order to prevent dilution
or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Administrator shall, in such
manner as it may deem equitable, adjust the number and class of Shares which may be delivered under the Plan, the number, class and price
of Shares subject to outstanding awards, and the numerical limits in Section 6. Notwithstanding the preceding, the number of Shares subject
to any Award always shall be a whole number.

 

(b)
Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator will notify each
Participant as soon as practicable prior to the effective date of such proposed transaction. The Administrator in its discretion may
provide for a Participant to have the right to exercise his or her Award, to the extent applicable, until ten (10) days prior to such
transaction as to all of the Awarded Stock covered thereby, including Shares as to which the Award would not otherwise be exercisable.
In addition, the Administrator may provide that any Company repurchase option or forfeiture rights applicable to any Award shall lapse
100%, and that any Award vesting shall accelerate 100%, provided the proposed dissolution or liquidation takes place at the time and
in the manner contemplated. To the extent it has not been previously exercised or vested, an Award will terminate immediately prior to
the consummation of such proposed action.

 

(c)
Change in Control.

 

(i)
Stock Options and SARs. In the event of a Change in Control, each outstanding Option and SAR shall be assumed or an equivalent option
or SAR substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. Unless determined otherwise by
the Administrator, in the event that the successor corporation refuses to assume or substitute for the Option or SAR, the Participant
shall fully vest in and have the right to exercise the Option or SAR as to all of the Awarded Stock, including Shares as to which it
would not otherwise be vested or exercisable. If an Option or SAR is not assumed or substituted in the event of a Change in Control,
the Administrator shall notify the Participant in writing or electronically that the Option or SAR shall be exercisable, to the extent
vested, for a period of up to fifteen (15) days from the date of such notice, and the Option or SAR shall terminate upon the expiration
of such period. For the purposes of this paragraph, the Option or SAR shall be considered assumed if, following the Change in Control,
the option or SAR confers the right to purchase or receive, for each Share of Awarded Stock subject to the Option or SAR immediately
prior to the Change in Control, the consideration (whether stock, cash, or other securities or property) received in the Change in Control
by holders of Ordinary Share for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration,
the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration
received in the Change in Control is not solely Ordinary Share of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be received upon the exercise of the Option or SAR, for each
share of Awarded Stock subject to the Option or SAR, to be solely Ordinary Share of the successor corporation or its Parent equal in
fair market value to the per share consideration received by holders of Ordinary Share in the Change in Control. Notwithstanding anything
herein to the contrary, an Award that vests, is earned, or is paid-out upon the satisfaction of one or more performance goals will not
be considered assumed if the Company or its successor modifies any of such performance goals without the Participant’s consent;
provided, however, a modification to such performance goals only to reflect the successor corporation’s post-Change in Control
corporate structure will not be deemed to invalidate an otherwise valid Award assumption.

 

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(ii)
Restricted Stock, Performance Shares, Performance Units, Restricted Stock Units and Other Stock Based Awards. In the event of a Change
in Control, each outstanding Award of Restricted Stock, Performance Share, Performance Unit, Other Stock Based Award and Restricted Stock
Unit shall be assumed or an equivalent Restricted Stock, Performance Share, Performance Unit, Other Stock Based Award and Restricted
Stock Unit award substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. Unless determined otherwise
by the Administrator, in the event that the successor corporation refuses to assume or substitute for the Award, the Participant shall
fully vest in the Award, including as to Shares/Units that would not otherwise be vested, all applicable restrictions will lapse, and
all performance objectives and other vesting criteria will be deemed achieved at targeted levels. For the purposes of this paragraph,
an Award of Restricted Stock, Performance Shares, Performance Units, Other Stock Based Awards and Restricted Stock Units shall be considered
assumed if, following the Change in Control, the award confers the right to purchase or receive, for each Share subject to the Award
immediately prior to the Change in Control (and if a Restricted Stock Unit or Performance Unit, for each Share as determined based on
the then current value of the unit), the consideration (whether stock, cash, or other securities or property) received in the Change
in Control by holders of Ordinary Share for each Share held on the effective date of the transaction (and if holders were offered a choice
of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if
such consideration received in the Change in Control is not solely Ordinary Share of the successor corporation or its Parent, the Administrator
may, with the consent of the successor corporation, provide that the consideration to be received for each Share (and if a Restricted
Stock Unit or Performance Unit, for each Share as determined based on the then current value of the unit) be solely Ordinary Share of
the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Ordinary Share
in the Change in Control. Notwithstanding anything herein to the contrary, an Award that vests, is earned, or is paid-out upon the satisfaction
of one or more performance goals will not be considered assumed if the Company or its successor modifies any of the performance goals
without the Participant’s consent; provided, however, a modification to the performance goals only to reflect the successor corporation’s
post-Change in Control corporate structure will not be deemed to invalidate an otherwise valid Award assumption.

 

(iii)
Outside Director Awards. Notwithstanding any provision of Section 15(c)(i) or 15(c)(ii) to the contrary, with respect to Awards granted
to an Outside Director that are assumed or substituted for, if on the date of or following the assumption or substitution the Participant’s
status as a Director or a director of the successor corporation, as applicable, is terminated other than upon a voluntary resignation
by the Participant, then the Participant shall fully vest in and have the right to exercise his or her Options and Stock Appreciation
Rights as to all of the Awarded Stock, including Shares as to which such Awards would not otherwise be vested or exercisable, all restrictions
on Restricted Stock and Restricted Stock Units, as applicable, will lapse, and, with respect to Performance Shares, Performance Units,
and Other Stock Based Awards, all performance goals and other vesting criteria will be deemed achieved at target levels and all other
terms and conditions met.

 

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(iv)
Administrator Discretion. Notwithstanding any provision of Section 15(c)(i), 15(c)(ii), or 15(c)(iii) to the contrary, the Administrator
(or in the case of 162(m) Awards, the Committee) may determine alternative treatment that shall apply to the Award in the event of a
Change in Control by specifying such alternative treatment in the Award Agreement. In the event of such alternative treatment, the treatment
specified in Sections 15(c)(i), 15(c)(ii), and 15(c)(iii), as applicable, shall not apply.

 

16.
Date of Grant. The date of grant of an Award will be, for all purposes, the date on which the Administrator makes the determination granting
such Award, or such other later date as is determined by the Administrator. Notice of the determination will be provided to each Participant
within a reasonable time after the date of such grant.

 

17.
Term of Plan. Subject to Section 22 of the Plan, the Plan will become effective upon its adoption by the Board. It will continue in effect
for a term of ten (10) years unless terminated earlier under Section 18 of the Plan.

 

18.
Amendment and Termination of the Plan.

 

(a)
Amendment and Termination. The Board may at any time amend, alter, suspend, or terminate the Plan.

 

(b)
Stockholder Approval. The Company will obtain stockholder approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws.

 

(c)
Effect of Amendment or Termination. No amendment, alteration, suspension, or termination of the Plan will impair the rights of any Participant,
unless mutually agreed otherwise between the Participant and the Administrator, which agreement must be in writing and signed by the
Participant and the Company. Termination of the Plan will not affect the Administrator’s ability to exercise the powers granted
to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.

 

19.
Conditions Upon Issuance of Shares.

 

(a)
Legal Compliance. Shares will not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance and
delivery of such Shares will comply with Applicable Laws and will be further subject to the approval of counsel for the Company with
respect to such compliance.

 

(b)
Investment Representations. As a condition to the exercise or receipt of an Award, the Company may require the person exercising or receiving
such Award to represent and warrant at the time of any such exercise or receipt that the Shares are being purchased only for investment
and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation
is required.

 

20.
Severability. Notwithstanding any contrary provision of the Plan or an Award to the contrary, if any one or more of the provisions (or
any part thereof) of this Plan or the Awards shall be held invalid, illegal, or unenforceable in any respect, such provision shall be
modified so as to make it valid, legal, and enforceable, and the validity, legality, and enforceability of the remaining provisions (or
any part thereof) of the Plan or Award, as applicable, shall not in any way be affected or impaired thereby.

 

21.
Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, will relieve the Company
of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority will not have been obtained.

 

22.
Governing Law. Except as otherwise provided herein, the Plan shall be construed in accordance with the laws of the State of Delaware,
without regard to principles of conflicts of law.

 

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