Document:

twhi_ex10-15

  Exhibit 10.15

 

FIRST AMENDMENT AND WAIVER

 

This
First Amendment and Waiver (this “Amendment”) is made and
entered into as of December 8, 2020 by and among Transworld
Holdings, Inc., a Delaware
corporation (which was formerly known as GoIP Global, Inc.,
a Colorado corporation) (the “Company”)
and the purchasers signatory to the Purchase Agreement (as defined
below) (each a, “Purchaser” and
collectively, the “Purchasers”).

 

WHEREAS, pursuant to a Securities
Purchase Agreement, dated as of November 3, 2020 (as amended and in
effect from time to time, including any replacement agreement
therefor, the “Purchase Agreement”),
among the Company and the Purchaser, the Purchaser has extended
credit to the Company as evidenced by certain Original Issue
Discount Senior Secured Convertible Promissory Note in the
aggregate principal amount of $3,888,889.00 issued by the Company
to the Purchaser (together with any notes issued in exchange
therefor or replacement thereof, as the same may be amended,
supplemented, restated or otherwise modified from time to time, the
“Note”); and

 

WHEREAS, the Company and the Purchasers
desire to amend the Note to provide that the Alternative Conversion
Price may only be utilized for any Event of Default that occurs on
or after the Maturity Date.

 

NOW, THEREFORE, in consideration of the
mutual agreements herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 

1. Definitions;
Transaction Documents. Capitalized terms used herein without
definition shall have the meanings assigned to such terms in the
Purchase Agreement and the Note. This Amendment shall constitute a
Transaction Document for all purposes of the Purchase Agreement,
the Notes and the other Transaction Documents.

 

2. Not a
Novation. This Agreement is a modification only and not a
novation. This Agreement is to be considered attached to the Note
and made a part thereof.

 

3. Amendment to
Section 4(b) of the Note. Section 4(b) of the Note is hereby
amended and restated as follows.

 

“Conversion Price. Except as
expressly set forth herein, the conversion price in effect on any
Conversion Date shall be equal to $0.25, subject to adjustment
herein (the “Conversion Price”).
Notwithstanding the foregoing, at any time during the continuance
of any Event of Default which occurs after the Maturity Date, the
Conversion Price in effect shall be equal to the Alternate
Conversion Price. If at any time the Conversion Price as determined
hereunder for any conversion would be less than the par value of
the Common Stock, then at the sole discretion of the Holder, the
Conversion Price hereunder may equal such par value for such
conversion and the Conversion Amount for such conversion may be
increased to include Additional Principal, where “Additional
Principal” means such additional amount to be added to the
principal amount of this Note to the extent necessary to cause the
number of conversion shares issuable upon such conversion to equal
the same number of conversion shares as would have been issued had
the Conversion Price not been adjusted by the Holder to the par
value price. In the event the Borrower has a DTC
“Chill” on its shares, the Holder may convert the Note
at the Alternate Conversion Price after the Maturity Date while
that “Chill” is in effect. All such determinations to
be appropriately adjusted for any stock dividend, stock split,
stock combination, reclassification or similar transaction that
proportionately decreases or increases the Common Stock during such
measuring period.”

 

 

 

-1-

 

 

4. Amendment to
Section 1 of the Note. The definition of “Mandatory
Default Amount” in Section 1 of the Note is hereby amended
and restated in its entirety as follows:

 

“Mandatory Default Amount”
means either, at the Holder’s discretion (i) the conversion
of the outstanding principal amount of this Note, and, at the
Holder’s election, all accrued and unpaid interest hereon,
converted at the Conversion Price, or after the Maturity Date, at
the Alternate Conversion Price, or (ii) the payment of 100% of the
outstanding principal amount of this Note and accrued and unpaid
interest hereon, in addition to, for both (i) and (ii) above, the
payment in cash of all other amounts, costs, expenses and
liquidated damages due in respect of this Note. In the event the
Holder makes the election described in (i) above but does not elect
to receive Conversion Shares in respect of all accrued and unpaid
interest on the Note, all accrued and unpaid interest shall be paid
to the Holder in cash no later than the date the Conversion Shares
are required to be delivered to the Holder.”

 

5. Amendment to
Section 6 of the Note. Clause (b) of Section 6 of the Note
is hereby amended and restated as follows:

 

“Remedies Upon Event of Default.
If any Event of Default occurs, at the Holder’s election (i)
the outstanding principal amount of this Note, plus accrued but
unpaid interest, liquidated damages and other amounts owing in
respect thereof through the date of acceleration, shall become
immediately due and payable in cash pursuant to clause (ii) of the
definition of Mandatory Default Amount, or (ii) the outstanding
principal amount of this Note, and, if elected by the Holder, all
accrued and unpaid interest hereon, shall be converted into share
of Common Stock at the Conversion Price or if after the Maturity
Date, at the Alternate Conversion Price pursuant to clause (i) of
the definition of Mandatory Default Amount. In the event the Holder
makes the election described in clause (ii) of this Section above,
but does not elect to receive Conversion Shares in respect of all
accrued and unpaid interest on the Note, all accrued and unpaid
interest shall be paid to the Holder in cash no later than the date
the Conversion Shares are required to be delivered to the Holder.
Commencing on the occurrence of any Event of Default and for as
long an Event of Default is not cured, the interest rate on this
Note as set forth in Section 2 above shall accrue at
a rate equal to 20% per annum . Upon the payment in full of the
Mandatory Default Amount, the Holder shall promptly surrender this
Note to or as directed by the Company. In connection with such
acceleration described herein, the Holder need not provide, and the
Company hereby waives, any presentment, demand, protest or other
notice of any kind, and the Holder may immediately and without
expiration of any grace period enforce any and all of its rights
and remedies hereunder and all other remedies available to it under
applicable law. Such acceleration may be rescinded and annulled by
Holder at any time prior to payment hereunder and the Holder shall
have all rights as a holder of the Note until such time, if any, as
the Holder receives full payment pursuant to this Section 6(b). No such
rescission or annulment shall affect any subsequent Event of
Default or impair any right consequent thereon. No such rescission
or annulment shall affect any subsequent Event of Default or impair
any right consequent thereon; and in addition to any other rights
and remedies available to the Holder in an Event of Default, the
Conversion Price in effect on any Conversion Date shall be equal to
the Conversion Price, or if after the Maturity Date, at the
Alternate Conversion Price, subject to adjustment herein, without
any notice or any action taken by the Holder. The Borrower shall
pay the Holder hereof costs of collection, including reasonable
attorneys’ fees.”

 

 

 

-2-

 

 

6. Conditions to
Effectiveness. This Amendment shall become effective upon
receipt by the Company and the Purchasers of counterpart signatures
to this Amendment duly executed and delivered by the Company and
the Purchasers.

 

7. No Implied
Amendment or Waiver. Except as expressly set forth in this
Amendment, this Amendment shall not, by implication or otherwise,
limit, impair, constitute a waiver of or otherwise affect any
rights or remedies of the Purchasers under the Purchase Agreement,
the Note or the other Transaction Documents, or alter, modify,
amend or in any way affect any of the terms, obligations or
covenants contained in the Purchase Agreement, the Note or the
other Transaction Documents, all of which shall continue in full
force and effect. Nothing in this Amendment shall be construed to
imply any willingness on the part of the Purchasers to agree to or
grant any similar or future amendment, consent or waiver of any of
the terms and conditions of the Purchase Agreement, the Note or the
other Transaction Documents.

 

8. Counterparts. This
Amendment may be executed by the parties hereto in several
counterparts, each of which shall be an original and all of which
shall constitute together but one and the same agreement. Delivery
of an executed counterpart of a signature page of this Amendment by
e-mail (e.g., “pdf” or “tiff”) or fax
transmission shall be effective as delivery of a manually executed
counterpart of this Amendment.

 

9. Governing
Law. THIS AMENDMENT SHALL BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE
TO CONTRACTS MADE AND TO BE PREPARED ENTIRELY WITHIN SUCH STATE,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.

 

[Remainder of Page Intentionally Left
Blank.]

 

 

-3-

 

IN WITNESS WHEREOF, the parties hereto
have caused this Amendment to be executed by their respective
officers thereunto duly authorized as of the day and year first
above written.

 

 

 

	

TRANSWORLD HOLDINGS, INC.

 

	
 

	

By: /s/
Andrew
Fox                                                                   

	

Name:

	

Title:

 

 

	

ARENA STRUCTURED PRIVATE INVESTMENTS (CAYMAN), LLC

as
Purchaser

 

 

	
 

	

By: /s/
Lawrence
Cutler                                                                   

	

Name:
Lawrence Cutler

	

Title: Authorized
Signatory

 

 

-4-twhi_ex10-16

  Exhibit 10.16

 

SECURITIES
PURCHASE AGREEMENT

 

This
Securities Purchase Agreement (this “Agreement”) is dated as
of December 3, 2020, between Transworld Holdings, Inc., a Delaware
corporation (the “Company”), and each
purchaser identified on the signature pages hereto (each, including
its successors and assigns, a “Purchaser” and
collectively, the “Purchasers”).

 

WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant
to Section 4(a)(2) of the Securities Act of 1933, as amended (the
“Securities
Act”), and Rule 506 promulgated thereunder, the
Company desires to issue and sell to each Purchaser, and each
Purchaser, severally and not jointly, desires to purchase from the
Company, securities of the Company as more fully described in this
Agreement.

 

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

 

 

ARTICLE I.

DEFINITIONS

 

1.1           Definitions.
In addition to the terms defined elsewhere in this Agreement,
capitalized terms that are not otherwise defined herein have the
meanings set forth in this Section 1.1:

 

“Acquiring Person” shall
have the meaning ascribed to such term in Section 4.7.

 

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

 

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

 

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

 

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

 

“Business Day” means any
day other than Saturday, Sunday or other day on which commercial
banks in The City of New York are authorized or required by law to
remain closed; provided,
however,
for clarification, commercial banks shall not be deemed to be
authorized or required by law to remain closed due to “stay
at home”, “shelter-in-place”,
“non-essential employee”  or any other similar
orders or restrictions or the closure of any physical branch
locations at the direction of any governmental authority so long as
the electronic funds transfer systems (including for wire
transfers) of commercial banks in The City of New York generally
are open for use by customers on such day.

 

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

 

 

 

-1-

 

 

“Closing Date” means the
Trading Day on which all of the Transaction Documents have been
executed and delivered by the applicable parties thereto, and all
conditions precedent to (i) the Purchasers’ obligations to
pay the Subscription Amount and (ii) the Company’s
obligations to deliver the Securities, in each case, have been
satisfied or waived.

 

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

 

“Closing Statement” means
the Closing Statement in the form on Annex A attached
hereto.

 

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

 

“Common Stock” means the
common stock of the Company, par value $0.0001 per share, and any other
class of securities into which such securities may hereafter be
reclassified or changed.

 

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

 

“Company Auditor” means
Seligson & Giannattasio, LLP, with offices located at 723 N.
Broadway, White Plains, New York 10603, and any successor
accounting firm of the Company.

 

“Company Counsel” means
Sheppard, Mullin, Richter & Hampton LLP, with offices located
at 30 Rockefeller Plaza, New York, New York 10112.

 

“Disclosure Schedules”
shall have the meaning ascribed to such term in Section
3.1.

 

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

 

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

 

 “Exempt
Issuance” means the issuance of (a) shares of Common
Stock or options to employees, officers or directors of the Company
pursuant to any stock or option plan duly adopted for such purpose,
by a majority of the non-employee members of the Board of Directors
or a majority of the members of a committee of non-employee
directors established for such purpose for services rendered to the
Company, (b) securities upon the exercise or exchange of or
conversion of any Securities issued hereunder and/or other
securities exercisable or exchangeable for or convertible into
shares of Common Stock issued and outstanding on the date of this
Agreement, provided that such securities have not been amended
since the date of this Agreement to increase the number of such
securities or to decrease the exercise price, exchange price or
conversion price of such securities (other than in connection with
stock splits or combinations) or to extend the term of such
securities, and (c) securities issued pursuant to acquisitions or
strategic transactions approved by a majority of the disinterested
directors of the Company, provided that such securities are issued
as “restricted securities” (as defined in Rule 144) and
carry no registration rights that require or permit the filing of
any registration statement in connection therewith during the
prohibition period in Section 4.13(a) herein, and provided that any
such issuance shall only be to a Person (or to the equityholders of
a Person) which is, itself or through its subsidiaries, an
operating company or an owner of an asset in a business synergistic
with the business of the Company and shall provide to the Company
additional benefits in addition to the investment of funds, but
shall not include a transaction in which the Company is issuing
securities primarily for the purpose of raising capital or to an
entity whose primary business is investing in
securities.

 

 

 

-2-

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Per Share Purchase Price”
equals $0.25.

 

“Placement Agent” means
The Special Equities Group, LLC a division of Bradley Woods &
Co. Ltd.

 

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

 

“Public Company
Date” means the date on
which the Company (or any successor/surviving entity in a reverse
merger or other business combination transaction) becomes subject
to the reporting requirements of the Exchange
Act.

 

“Public Information
Failure” shall have the meaning ascribed to such term
in Section 4.3(b).

 

“Public Information Failure
Payments” shall have the meaning ascribed to such term
in Section 4.3(b).

 

 

 

-3-

 

 

“Purchaser Party” shall
have the meaning ascribed to such term in Section
4.10.

 

“Registration Statement”
means a registration statement meeting the requirements set forth
in the Section 4.12 of this Agreement and covering the resale of
the Shares by each Purchaser.

 

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

 

“Required Registration
Statement(s)” means the registration statement(s)
required to be filed pursuant to the Registration Rights Agreements
entered into in connection with the financings completed by the
Company in March 2020 and November 2020.

 

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

 

 “Securities”
means the Shares.

 

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

 

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

 

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

 

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

 

 “Subsidiary”
means any subsidiary of the Company as set forth on Schedule 3.1(a) and shall,
where applicable, also include any direct or indirect subsidiary of
the Company formed or acquired after the date hereof.

 

“Trading Day” means a day
on which the principal Trading Market is open for
trading.

 

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

 

 

 

-4-

 

 

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

 

“Transfer Agent” means
Manhattan Stock Transfer Co., the current transfer agent of the
Company, with a mailing address of 38B Sheep Pasture Rd., Port
Jefferson, NY 11777, and any successor transfer agent of the
Company.

 

“Variable Rate
Transaction” shall have
the meaning ascribed to such term in Section
4.13(b).

 

“VWAP” means, for any
date, the price determined by the first of the following clauses
that applies: (a) if the Common Stock is then listed or quoted on a
Trading Market, the daily volume weighted average price of the
Common Stock for such date (or the nearest preceding date) on the
Trading Market on which the Common Stock is then listed or quoted
as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)),
(b)  if the Common Stock is quoted for trading on the OTCQB or
OTCQX, as applicable, and if the OTCQB or OTCQX is not a Trading
Market, the volume weighted average price of the Common Stock for
such date (or the nearest preceding date) on OTCQB or OTCQX as
applicable, (c) if the Common Stock is not then listed or quoted
for trading on OTCQB or OTCQX and if prices for the Common Stock
are then reported in The Pink Open Market (or a similar
organization or agency succeeding to its functions of reporting
prices), the most recent bid price per share of the Common Stock so
reported, or (d) in all other cases, the fair market value of
a share of Common Stock as determined by an independent appraiser
selected in good faith by the Purchasers of a majority in interest
of the Securities then outstanding and reasonably acceptable to the
Company, the fees and expenses of which shall be paid by the
Company.

 

 

ARTICLE II.

PURCHASE AND SALE

 

2.1 Closing. On the Closing Date,
upon the terms and subject to the conditions set forth herein,
substantially concurrent with the execution and delivery of this
Agreement by the parties hereto, the Company agrees to sell, and
the Purchasers, severally and not jointly, agree to purchase, up to
an aggregate of $2,500,000 of shares of Common Stock for each
Purchaser equal to such Purchaser’s Subscription Amount at
the Per Share Purchase Price as set forth on the signature page
hereto executed by such Purchaser, as determined by pursuant to
Section 2.2(a). The aggregate number of shares of Common Stock sold
hereunder shall be up to 10,000,000. Each Purchaser shall deliver
directly to the Company, via wire transfer or a certified check,
immediately available funds equal to such Purchasers Subscription
Amount and the Company shall deliver to each Purchaser its
respective shares of Common Stock as determined pursuant to Section
2.2(a), and the Company and each Purchaser shall deliver the other
items set forth in Section 2.2 deliverable at the Closing. Upon
satisfaction of the covenants and conditions set forth in Sections
2.2 and 2.3, the Closing shall occur at the offices of the Company
or such other location as the parties shall mutually
agree.

 

 

 

-5-

 

 

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

 

(i) this Agreement duly
executed by the Company;

 

(ii) a
legal opinion of Company Counsel, substantially in the form of
Exhibit A attached
hereto;

 

(iii) a
certificate evidencing a number of Shares (or in lieu thereof
evidence of Shares held in book-entry form) equal to such
Purchaser’s Subscription Amount at the Closing divided by the
Per Share Purchase Price, registered in the name of such Purchaser;
and

 

(iv) the
Company shall have provided each Purchaser with the Company’s
wire instructions, on Company letterhead and executed by the Chief
Executive Officer.

 

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

 

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

 

(ii) such
Purchaser’s Subscription Amount by wire transfer to the
Company to the account specified in writing by the
Company.

 

2.2

Closing
Conditions.

 

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

 

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

 

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

 

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

 

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

 

 

 

-6-

 

 

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

 

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

 

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

 

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

 

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

 

 

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

 

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

 

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

 

 

 

-7-

 

 

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

 

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

 

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

 

 

 

-8-

 

 

(e) Filings, Consents and
Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal,
state, local or other governmental authority or other Person in
connection with the execution, delivery and performance by the
Company of the Transaction Documents, other than: (i) the filings
required pursuant to Section 4.6 of this Agreement, (ii) the filing
with the Commission required pursuant to the Section 4.12 of this
Agreement, (iii) the notice and/or application(s) to each
applicable Trading Market for the issuance and sale of the
Securities thereon in the time and manner required thereby, and
(iv) the filing of Form D with the Commission and such filings as
are required to be made under applicable state securities laws
(collectively, the “Required
Approvals”).

 

(f) Issuance of the Securities. The
Securities are duly authorized and, when issued and paid for in
accordance with the applicable Transaction Documents, will be duly
and validly issued, fully paid and nonassessable, free and clear of
all Liens imposed by the Company other than restrictions on
transfer provided for in the Transaction Documents.

 

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

 

 

 

-9-

 

 

(h) Financial Statements.
Attached hereto
as Schedule
3.1(h) are the annual
financial statements of the Company for the past two fiscal years
and the unaudited financial statements for the Company for the
period ended September 30, 2020. The financial statements of the
Company on Schedule
3.1(h) comply in all
material respects with applicable accounting requirements and the
rules and regulations of the Commission with respect thereto as in
effect at the time of filing. Such financial statements have been
prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the
periods involved (“GAAP”),
except as may be otherwise specified in such financial statements
or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present
in all material respects the financial position of the Company and
its consolidated Subsidiaries as of and for the dates thereof and
the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments. For purposes of this
Section 3.1, September 30, 2020 is referred to as the
“Balance Sheet
Date”.

 

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

 

(j) Litigation. There is no action,
suit, inquiry, notice of violation, proceeding or investigation
pending or, to the knowledge of the Company, threatened against or
affecting the Company, any Subsidiary or any of their respective
properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state,
county, local or foreign) (collectively, an “Action”) except as set
forth on Schedule
3.1(j). None of the Actions set
forth on Schedule 3.1(j)
(i) adversely effects or challenges
the legality, validity or enforceability of any of the Transaction
Documents or the Securities or (ii) could, if there were an
unfavorable decision, have or reasonably be expected to result in a
Material Adverse Effect. Neither the Company nor any
Subsidiary, nor any director or officer thereof, is or has been the
subject of any Action involving a claim of violation of or
liability under federal or state securities laws or a claim of
breach of fiduciary duty. There has not been, and to the knowledge
of the Company, there is not pending or contemplated, any
investigation by the Commission involving the Company or any
current or former director or officer of the Company.

 

 

 

-10-

 

 

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

 

(l) Compliance. Except as set forth
on Schedule 3.1(l),
neither the Company nor any Subsidiary: (i) is in default under or
in violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a
default by the Company or any Subsidiary under), nor has the
Company or any Subsidiary received notice of a claim that it is in
default under or that it is in violation of, any indenture, loan or
credit agreement or any other agreement or instrument to which it
is a party or by which it or any of its properties is bound
(whether or not such default or violation has been waived), (ii) is
in violation of any judgment, decree or order of any court,
arbitrator or other governmental authority or (iii) is or has been
in violation of any statute, rule, ordinance or regulation of any
governmental authority, including without limitation all foreign,
federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product quality and
safety and employment and labor matters, except in each case as
could not have or reasonably be expected to result in a Material
Adverse Effect.

 

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

 

 

 

-11-

 

 

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

 

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

 

(p) Intellectual Property. The
Company and the Subsidiaries have, or have rights to use, all
patents, patent applications, trademarks, trademark applications,
service marks, trade names, trade secrets, inventions, copyrights,
licenses and other intellectual property rights and similar rights
as necessary or required for use in connection with their
respective businesses and which the failure to so have could have a
Material Adverse Effect (collectively, the “Intellectual Property
Rights”). None of, and neither the Company nor any
Subsidiary has received a notice (written or otherwise) that any
of, the Intellectual Property Rights has expired, terminated or
been abandoned, or is expected to expire or terminate or be
abandoned, within two (2) years from the date of this Agreement.
Neither the Company nor any Subsidiary has received, since the
Balance Sheet Date, a written notice of a claim or otherwise has
any knowledge that the Intellectual Property Rights violate or
infringe upon the rights of any Person, except as could not have or
reasonably be expected to not have a Material Adverse Effect. To
the knowledge of the Company, all such Intellectual Property Rights
are enforceable and there is no existing infringement by another
Person of any of the Intellectual Property Rights. The Company and
its Subsidiaries have taken reasonable security measures to protect
the secrecy, confidentiality and value of all of their intellectual
properties, except where failure to do so could not, individually
or in the aggregate, reasonably be expected to have a Material
Adverse Effect.

 

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

 

 

 

-12-

 

 

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

 

(s) Internal Accounting
Controls. The Company and the
Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that: (i) transactions
are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as
necessary to permit preparation of financial statements in
conformity with GAAP and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with
management’s general or specific authorization, and (iv) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.

 

(t) Certain Fees. Except for the
fees and expenses of the Placement Agent, no brokerage or
finder’s fees or commissions are or will be payable by the
Company or any Subsidiary to any broker, financial advisor or
consultant, finder, placement agent, investment banker, bank or
other Person with respect to the transactions contemplated by the
Transaction Documents. The Purchasers shall have no obligation with
respect to any fees or with respect to any claims made by or on
behalf of other Persons for fees of a type contemplated in this
Section that may be due in connection with the transactions
contemplated by the Transaction Documents.

 

(u) Private Placement. Assuming the
accuracy of the Purchasers’ representations and warranties
set forth in Section 3.2, no registration under the Securities Act
is required for the offer and sale of the Securities by the Company
to the Purchasers as contemplated hereby. The issuance and sale of
the Securities hereunder does not contravene the rules and
regulations of the Trading Market.

 

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

 

 

 

-13-

 

 

(w) Registration Rights. Other than
as set forth on Schedule
3.1(w), and except for the rights granted to the Purchasers,
no Person has any right to cause the Company or any Subsidiary to
effect the registration under the Securities Act of any securities
of the Company or any Subsidiary.

 

(x) Maintenance Requirements; DTC.
The Company has not, in the 12 months
preceding the date hereof, received notice from any Trading Market
on which the Common Stock is or has been listed or quoted to the
effect that the Company is not in compliance with the listing or
maintenance requirements of such Trading Market. The Company is,
and has no reason to believe that it will not in the foreseeable
future continue to be, in compliance with all applicable listing
and maintenance requirements. The Common Stock is currently
eligible for electronic transfer through the Depository Trust
Company or another established clearing corporation and the Company
is current in payment of the fees to the Depository Trust Company
(or such other established clearing corporation) in connection with
such electronic transfer.

 

(y) Application of Takeover
Protections. Except as set forth on Schedule 3.1(v), there are no
control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or other
similar anti-takeover provision under the Company’s
certificate of incorporation (or similar charter documents) or the
laws of its state of incorporation that is or could become
applicable to the Purchasers as a result of the Purchasers and the
Company fulfilling their obligations or exercising their rights
under the Transaction Documents, including without limitation as a
result of the Company’s issuance of the Securities and the
Purchasers’ ownership of the Securities.

 

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

 

 

 

-14-

 

 

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

 

(bb) Solvency.
Based on the consolidated financial condition of the Company as of
the Closing Date, after giving effect to the receipt by the Company
of the proceeds from the sale of the Securities hereunder, the
Company’s assets do not constitute unreasonably small capital
to carry on its business as now conducted and as proposed to be
conducted including its capital needs taking into account the
particular capital requirements of the business conducted by the
Company, consolidated and projected capital requirements and
capital availability thereof. The Company does not intend to incur
debts beyond its ability to pay such debts as they mature (taking
into account the timing and amounts of cash to be payable on or in
respect of its debt). The Company has no knowledge of any facts or
circumstances which lead it to believe that it will file for
reorganization or liquidation under the bankruptcy or
reorganization laws of any jurisdiction within one year from the
Closing Date. Schedule
3.1(bb) sets forth as of the date hereof all outstanding
secured and unsecured Indebtedness of the Company or any
Subsidiary, or for which the Company or any Subsidiary has
commitments. For the purposes of this Agreement,
“Indebtedness”
means (x) any liabilities for borrowed money or amounts owed in
excess of $10,000 (other than trade accounts payable incurred in
the ordinary course of business), (y) all guaranties, endorsements
and other contingent obligations in respect of indebtedness of
others, whether or not the same are or should be reflected in the
Company’s consolidated balance sheet (or the notes thereto),
except guaranties by endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary
course of business; and (z) the present value of any lease payments
in excess of $10,000 due under leases required to be capitalized in
accordance with GAAP. Neither the Company nor any Subsidiary is in
default with respect to any Indebtedness.

 

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

 

 

 

-15-

 

 

(dd) No
General Solicitation. Neither the Company nor any Person
acting on behalf of the Company has offered or sold any of the
Securities by any form of general solicitation or general
advertising. The Company has offered the Securities for sale only
to the Purchasers and certain other “accredited
investors” within the meaning of Rule 501 under the
Securities Act.

 

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

 

(ff) Intentionally
Omitted.

 

(gg) No
Disagreements with Accountants and Lawyers. There are no
disagreements of any kind presently existing, or reasonably
anticipated by the Company to arise, between the Company and the
accountants and lawyers formerly or presently employed by the
Company and the Company is current with respect to any fees owed to
its accountants and lawyers which could affect the Company’s
ability to perform any of its obligations under any of the
Transaction Documents.

 

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

 

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

 

 

 

-16-

 

 

(jj) Regulation
M Compliance.  The Company has not, and to its
knowledge no one acting on its behalf has, (i) taken, directly or
indirectly, any action designed to cause or to result in the
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of any of the 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.

 

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

 

(ll) Office
of Foreign Assets Control. Neither the Company nor any
Subsidiary nor, to the Company's knowledge, any director, officer,
agent, employee or affiliate of the Company or any Subsidiary is
currently subject to any U.S. sanctions administered by the Office
of Foreign Assets Control of the U.S. Treasury Department
(“OFAC”).

 

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

 

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

 

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

 

 

 

-17-

 

 

(pp) No
Disqualification Events.  With respect to the
Securities to be offered and sold hereunder in reliance on Rule 506
under the Securities Act, none of the Company, any of its
predecessors, any affiliated issuer, any director, executive
officer, other officer of the Company participating in the offering
hereunder, any beneficial owner of 20% or more of the
Company’s outstanding voting equity securities, calculated on
the basis of voting power, nor any promoter (as that term is
defined in Rule 405 under the Securities Act) connected with the
Company in any capacity at the time of sale (each, an
“Issuer Covered
Person” and, together, “Issuer Covered Persons”)
is subject to any of the “Bad Actor” disqualifications
described in Rule 506(d)(1)(i) to (viii) under the Securities Act
(a “Disqualification
Event”), except for a Disqualification Event covered
by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable
care to determine whether any Issuer Covered Person is subject to a
Disqualification Event. The Company has complied, to the extent
applicable, with its disclosure obligations under Rule 506(e), and
has furnished to the Purchasers a copy of any disclosures provided
thereunder, a copy of which is set forth on Schedule 3.1(pp).

 

(qq) Other
Covered Persons. Other than the Placement Agent, the Company
is not aware of any person (other than any Issuer Covered Person)
that has been or will be paid (directly or indirectly) remuneration
for solicitation of purchasers in connection with the sale of any
Securities.

 

(rr) Notice
of Disqualification Events. The Company will notify the
Purchasers and the Placement Agent in writing, prior to the Closing
Date of (i) any Disqualification Event relating to any Issuer
Covered Person and (ii) any event that would, with the passage of
time, become a Disqualification Event relating to any Issuer
Covered Person.

 

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

 

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

 

 

 

-18-

 

 

(b)           Own
Account. Such Purchaser understands that the Securities are
“restricted securities” and have not been registered
under the Securities Act or any applicable state securities law and
is acquiring the Securities as principal for its own account and
not with a view to or for distributing or reselling such Securities
or any part thereof in violation of the Securities Act or any
applicable state securities law, has no present intention of
distributing any of such Securities in violation of the Securities
Act or any applicable state securities law and has no direct or
indirect arrangement or understandings with any other persons to
distribute or regarding the distribution of such Securities in
violation of the Securities Act or any applicable state securities
law (this representation and warranty not limiting such
Purchaser’s right to sell the Securities pursuant to the
Registration Statement or otherwise in compliance with applicable
federal and state securities laws). Such Purchaser is acquiring the
Securities hereunder in the ordinary course of its
business.

 

 (c)           Purchaser
Status. At the time such Purchaser was offered the Shares,
it was, and as of the date hereof it is, an “accredited
investor” as defined in Rule 501(a) under the Securities
Act.

 

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

 

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

 

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

 

 

 

-19-

 

 

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

 

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

 

 

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

 

4.1           Transfer
Restrictions.

 

(a) The Securities may
only be disposed of in compliance with state and federal securities
laws. In connection with any transfer of Securities other than
pursuant to an effective registration statement or Rule 144, to the
Company or to an Affiliate of a Purchaser or in connection with a
pledge as contemplated in Section 4.1(b), the Company may require
the transferor thereof to provide to the Company an opinion of
counsel selected by the transferor and reasonably acceptable to the
Company, the form and substance of which opinion shall be
reasonably satisfactory to the Company, to the effect that such
transfer does not require registration of such transferred
Securities under the Securities Act. As a condition of transfer,
any such transferee shall agree in writing to be bound by the terms
of this Agreement and shall have the rights and obligations of a
Purchaser under this Agreement.

 

 

 

-20-

 

 

(b) The Purchasers
agree to the imprinting, so long as is required by this Section
4.1, of a legend on any of the Securities in the following
form:

 

THIS
SECURITY HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A
REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION
THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE
501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH
SECURITIES.

 

The
Company acknowledges and agrees that a Purchaser may from time to
time pledge pursuant to a bona fide margin agreement with a
registered broker-dealer or grant a security interest in some or
all of the Securities to a financial institution that is an
“accredited investor” as defined in Rule 501(a) under
the Securities Act and, if required under the terms of such
arrangement, such Purchaser may transfer pledged or secured
Securities to the pledgees or secured parties. Such a pledge or
transfer would not be subject to approval of the Company and no
legal opinion of legal counsel of the pledgee, secured party or
pledgor shall be required in connection therewith. Further, no
notice shall be required of such pledge. At the appropriate
Purchaser’s expense, the Company will execute and deliver
such reasonable documentation as a pledgee or secured party of
Securities may reasonably request in connection with a pledge or
transfer of the Securities, including, if the Securities are
subject to registration statement required pursuant Section 4.12 of
this Agreement, the preparation and filing of any required
prospectus supplement under Rule 424(b)(3) under the Securities Act
or other applicable provision of the Securities Act to
appropriately amend the list of selling stockholders
thereunder.

 

(c) Each Purchaser,
severally and not jointly with the other Purchasers, agrees with
the Company that such Purchaser will sell any Securities pursuant
to either the registration requirements of the Securities Act,
including any applicable prospectus delivery requirements, or an
exemption therefrom, and that if Securities are sold pursuant to a
Registration Statement, they will be sold in compliance with the
plan of distribution set forth therein, and acknowledges that the
removal of the restrictive legend from certificates representing
Securities as set forth in this Section 4.1 is predicated upon the
Company’s reliance upon this understanding.

 

 

 

-21-

 

 

(d) Certificates
evidencing the Shares shall not contain any legend (including the
legend set forth in Section 4.1(b) hereof): (i) when they have been sold while a registration
statement (including the Registration Statement) covering the
resale of such security is effective under the Securities Act, (ii)
following any sale of such Shares pursuant to Rule 144, (iii) if
such Shares are eligible for sale under Rule 144 and a sale or
transfer will be taking place prior to the Company’s next
periodic report becomes due under the Exchange Act or (iv) if such
legend is not required under applicable requirements of the
Securities Act (including judicial interpretations and
pronouncements issued by the staff of the Commission). The Company
shall cause its counsel to issue a legal opinion to the Transfer
Agent promptly after the Effective Date or at such time as such
legend is no longer required under this Section 4.1(d) if required
by the Transfer Agent to effect the removal of the legend
hereunder, or if requested by the Purchaser. If such Shares have
been sold under Rule 144 and the Company is then in compliance with
the current public information required under Rule 144, or if the
Shares may be sold under Rule 144 without the requirement for the
Company to be in compliance with the current public information
required under Rule 144 as to such Shares and without volume or
manner-of-sale restrictions provided the conditions of Rule
144(i)(2) have been satisfied and a sale of such shares will be
taking place prior to the Company’s next annual or quarterly
report becoming due under its reporting obligations under the
Exchange Act or if such legend is not otherwise required under
applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the
Commission) then such Shares shall be issued free of all legends.
The Company agrees that following the Effective Date or at such
time as such legend is no longer required under this Section
4.1(d), it will, no later than the earlier of (i) three (3) Trading
Days and (ii) the number of Trading Days comprising the Standard
Settlement Period (as defined below) following the delivery by the
Purchaser to the Company or the Transfer Agent of certificate(s)
representing the Shares issued with a restrictive legend (such
date, the “Legend Removal
Date”), deliver or
cause to be delivered to the Purchaser a certificate representing
such shares that is free from all restrictive and other legends.
The Company may not make any notation on its records or give
instructions to the Transfer Agent that enlarge the restrictions on
transfer set forth in this Section 4. Certificates for Shares
subject to legend removal hereunder shall be transmitted by the
Transfer Agent to the Purchaser by crediting the account of the
Purchaser’s prime broker with the Depository Trust Company
System as directed by the Purchaser. As used herein,
“Standard Settlement
Period” means the
standard settlement period, expressed in a number of Trading Days,
on the Company’s primary Trading Market with respect to the
Common Stock as in effect on the date of delivery of a certificate
representing the Shares issued with a restrictive
legend.

 

 

 

-22-

 

 

(e) From and after the Public Company
Date, in addition to such Purchaser’s other
available remedies, the Company shall pay to a Purchaser, in cash,
(i) as partial liquidated damages and not as a penalty, for each
$1,000 of Shares (based on the VWAP of the Common Stock on the date
such Securities are submitted to the Transfer Agent) delivered for
removal of the restrictive legend and subject to Section 4.1(d),
$10 per Trading Day (increasing to $20 per Trading Day five (5)
Trading Days after such damages have begun to accrue) for each
Trading Day after the Legend Removal Date until such certificate is
delivered without a legend and (ii) if the Company fails to (a)
issue and deliver (or cause to be delivered) to a Purchaser by the
Legend Removal Date a certificate representing the Securities so
delivered to the Company by such Purchaser that is free from all
restrictive and other legends and (b) if after the Legend Removal
Date such Purchaser purchases (in an open market transaction or
otherwise) shares of Common Stock to deliver in satisfaction of a
sale by such Purchaser of all or any portion of the number of
shares of Common Stock, or a sale of a number of shares of Common
Stock equal to all or any portion of the number of shares of Common
Stock that such Purchaser anticipated receiving from the Company
without any restrictive legend, then, an amount equal to the excess
of such Purchaser’s total purchase price (including brokerage
commissions and other out-of-pocket expenses, if any) for the
shares of Common Stock so purchased (including brokerage
commissions and other out-of-pocket expenses, if any) (the
“Buy-In
Price”) over the product of (A) such number of Shares
that the Company was required to deliver to such Purchaser by the
Legend Removal Date multiplied by (B) the lowest closing sale price
of the Common Stock on any Trading Day during the period commencing
on the date of the delivery by such Purchaser to the Company of the
applicable Shares and ending on the date of such delivery and
payment under this clause (ii).

 

4.2           Acknowledgment
of Dilution. The Company acknowledges that the issuance of
the Securities may result in dilution of the outstanding shares of
Common Stock, which dilution may be substantial under certain
market conditions. The Company further acknowledges that its
obligations under the Transaction Documents, are unconditional and
absolute and not subject to any right of set off, counterclaim,
delay or reduction, regardless of the effect of any such dilution
or any claim the Company may have against any Purchaser and
regardless of the dilutive effect that such issuance may have on
the ownership of the other stockholders of the
Company.

 

4.3           Furnishing
of Information; Public Information.

 

(a)            If
the Common Stock is not registered under Section 12(b) or 12(g) of
the Exchange Act on the date hereof, the Company agrees to cause
the Common Stock to be registered under Section 12(g) of the
Exchange Act on or prior to the one hundred and eighty (180) days
following the date hereof. Following the Public Company Date, for a
period of at least twelve (12) months, the Company covenants to
maintain the registration of the Common Stock under Section 12(b)
or 12(g) of the Exchange Act and to timely file (or obtain
extensions in respect thereof and file within the applicable grace
period) all reports required to be filed by the Company pursuant to
the Exchange Act, provided that, if after becoming subject to the
Exchange Act, the Company is thereafter no longer required to file
reports pursuant to the Exchange Act, the Company will, for as long
as any Purchaser owns Securities, prepare and furnish to the
Purchasers and make publicly available in accordance with Rule
144(c) such information as is required for the Purchasers to sell
the Securities, including without limitation, under Rule 144. The
Company further covenants that it will take such further action as
any holder of Securities may reasonably request, to the extent
required from time to time to enable such Person to sell such
Securities without registration under the Securities Act,
including, without limitation, within the requirements of the
exemption provided by Rule 144.

 

 

 

-23-

 

 

(b)           At
any time during the period commencing from the twelve (12) month
anniversary of the date hereof and ending at such time that all of
the Securities may be sold without the requirement for the Company
to be in compliance with Rule 144(c)(1) and otherwise without
restriction or limitation pursuant to Rule 144, if the Company (i)
shall fail for any reason to satisfy the current public information
requirement under Rule 144(c) or (ii) has ever been an issuer
described in Rule 144(i)(1)(i) or becomes an issuer in the future,
and the Company shall fail to satisfy any condition set forth in
Rule 144(i)(2) (a “Public Information
Failure”) then, in addition to such Purchaser’s
other available remedies, the Company shall pay to a Purchaser, in
cash, as partial liquidated damages and not as a penalty, by reason
of any such delay in or reduction of its ability to sell the
Securities, an amount in cash equal to one percent (1.0%) of the
aggregate Subscription Amount of such Purchaser’s Securities
on the day of a Public Information Failure and on every thirtieth
(30th) day
(pro-rated for periods totaling less than thirty days) thereafter
until the earlier of (a) the date such Public Information Failure
is cured and (b) such time that such public information is no
longer required  for the Purchasers to transfer the Shares
pursuant to Rule 144.  The payments to which a Purchaser shall
be entitled pursuant to this Section 4.3(b) are referred to herein
as “Public
Information Failure Payments.”  Public
Information Failure Payments shall be paid on the
earlier of (i) the last day of the calendar month during which such
Public Information Failure Payments are incurred and (ii) the
third (3rd) Business Day after
the event or failure giving rise to the Public Information
Failure Payments is
cured.  In the event the Company fails to make Public
Information Failure Payments in a timely manner, such
Public Information Failure Payments shall bear interest at
the rate of 1.5% per month (prorated for partial months) until paid
in full. Nothing herein shall limit such Purchaser’s right to
pursue actual damages for the Public Information Failure, and such
Purchaser shall have the right to pursue all remedies available to
it at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief.

 

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

 

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

 

 

 

-24-

 

 

4.6           Securities
Laws Disclosure; Publicity. From and after the Public Company Date, the
Company acknowledges and agrees that (i) all material, non-public
information delivered to any of the Purchasers by the Company or
any of its Subsidiaries, or any of their respective officers,
directors, employees or agents in connection with the transactions
contemplated by the Transaction Documents shall have been publicly
disclosed and (ii) any and all confidentiality or similar
obligations under any agreement, whether written or oral, between
the Company, any of its Subsidiaries or any of their respective
officers, directors, agents, employees or Affiliates on the one
hand, and any of the Purchasers or any of their Affiliates on the
other hand, shall terminate. From and after the Public Company
Date, upon a Closing hereunder, the Company shall promptly issue a
press release disclosing the material terms of such closing and
shall filed a Current Report on Form 8-K as required by the
Exchange Act. From and after the Public Company Date, the Company
shall not publicly disclose the name of any Purchaser in any press
release, or include the name of any Purchaser in any filing with
the Commission or any regulatory agency or Trading Market, without
the prior written consent of such Purchaser, except: (a) as
required by federal securities law in connection with any
registration statement contemplated by the Section 4.12 of this
Agreement or the Company’s reporting requirements under the
Exchange Act and (b) to the extent such disclosure is required by
law or Trading Market regulations, in which case the Company shall
provide the Purchasers with prior notice of such disclosure
permitted under this clause (b).

 

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

 

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

 

 

 

-25-

 

 

4.9           Use
of Proceeds. Except as set forth on Schedule 4.9 attached hereto,
the Company shall use the net proceeds from the sale of the
Securities hereunder for working capital purposes (including,
without limitation, marketing, advertising and brand awareness) and
shall not use such proceeds: (a) for the satisfaction of any
portion of the Company’s debt (other than payment of trade
payables in the ordinary course of the Company’s business and
prior practices), (b) for the redemption of any Common Stock or
Common Stock Equivalents, (c) for the settlement of any outstanding
litigation or (d) in violation of FCPA or OFAC
regulations.

 

4.10           Indemnification
of Purchasers. Subject to the provisions of this Section
4.10, the Company will indemnify and hold each Purchaser and its
directors, officers, shareholders, members, partners, employees and
agents (and any other Persons with a functionally equivalent role
of a Person holding such titles notwithstanding a lack of such
title or any other title), each Person who controls such Purchaser
(within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with
a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title) of such
controlling persons (each, a “Purchaser Party”)
harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, including all
judgments, amounts paid in settlements, court costs and reasonable
attorneys’ fees and costs of investigation that any such
Purchaser Party may suffer or incur as a result of or relating to
(a) any breach of any of the representations, warranties, covenants
or agreements made by the Company in this Agreement or in the other
Transaction Documents or (b) any action instituted against the
Purchaser Parties in any capacity, or any of them or their
respective Affiliates, by any stockholder of the Company who is not
an Affiliate of such Purchaser Party, with respect to any of the
transactions contemplated by the Transaction Documents (unless such
action is solely based upon a material breach of such Purchaser
Party’s representations, warranties or covenants under the
Transaction Documents or any agreements or understandings such
Purchaser Party may have with any such stockholder or any
violations by such Purchaser Party of state or federal securities
laws or any conduct by such Purchaser Party which is finally
judicially determined to constitute fraud, gross negligence or
willful misconduct). If any action shall be brought against any
Purchaser Party in respect of which indemnity may be sought
pursuant to this Agreement, such Purchaser Party shall promptly
notify the Company in writing, and the Company shall have the right
to assume the defense thereof with counsel of its own choosing
reasonably acceptable to the Purchaser Party. Any Purchaser Party
shall have the right to employ separate counsel in any such action
and participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Purchaser Party
except to the extent that (i) the employment thereof has been
specifically authorized by the Company in writing, (ii) the Company
has failed after a reasonable period of time to assume such defense
and to employ counsel or (iii) in such action there is, in the
reasonable opinion of counsel, a material conflict on any material
issue between the position of the Company and the position of such
Purchaser Party, in which case the Company shall be responsible for
the reasonable fees and expenses of no more than one such separate
counsel. The Company will not be liable to any Purchaser Party
under this Agreement (y) for any settlement by a Purchaser Party
effected without the Company’s prior written consent, which
shall not be unreasonably withheld or delayed; or (z) to the
extent, but only to the extent that a loss, claim, damage or
liability is attributable to any Purchaser Party’s breach of
any of the representations, warranties, covenants or agreements
made by such Purchaser Party in this Agreement or in the other
Transaction Documents. The
indemnification required by this Section 4.10 shall be made by
periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or are
incurred. The indemnity agreements contained herein shall be in
addition to any cause of action or similar right of any Purchaser
Party against the Company or others and any liabilities the Company
may be subject to pursuant to law.

 

 

 

-26-

 

 

4.11           Listing
of Securities. The Company hereby agrees to use best efforts
to maintain the listing or quotation of the Common Stock on the
Trading Market on which it is currently listed. The Company further
agrees, if the Company applies to have the Common Stock traded on
any other Trading Market, it will then include in such application
all of the Shares. The Company will then take all action reasonably
necessary to continue the listing or quotation and trading of its
Common Stock on a Trading Market and will comply in all respects
with the Company’s reporting, filing and other obligations
under the bylaws or rules of the Trading Market. The Company shall
establish and maintain the eligibility of the Common Stock for
electronic transfer through the Depository Trust Company or another
established clearing corporation, including, without limitation, by
timely payment of fees to the Depository Trust Company or such
other established clearing corporation in connection with such
electronic transfer.

 

4.12           

Demand
Registration.

 

 

(a)      If at any time
after thirty (30) days following the effectiveness of the
Required Registration Statement(s), the Company receives a request
from Purchasers holding at least 50% of the Shares then outstanding
that the Company file a Form S-1 registration statement,
then the Company shall (i) within ten (10) days after the
date such request is given, give notice thereof (the
“Demand
Notice”) to all
Purchasers; and (ii) as soon as practicable, and in any event
within thirty (30) days after the date such request, file a
Form S-1 registration statement under the Securities Act
covering all Shares requested to be registered, as specified by
notice given by each such Purchaser to the Company within twenty
(20) days of the date the Demand Notice is given, and in each
case, subject to the limitations set forth below.

 

(b)     Notwithstanding
the foregoing obligations, if the Company furnishes to Purchasers
requesting a registration pursuant to this Section 4.12 a
certificate signed by the Company’s chief executive officer
stating that in the good faith judgment of the Company’s
Board of Directors it would be materially detrimental to the
Company and its stockholders for such registration statement to
either become effective or remain effective for as long as such
registration statement otherwise would be required to remain
effective, because such action would (i) materially interfere
with a significant acquisition, corporate reorganization, or other
similar transaction involving the Company; (ii) require
premature disclosure of material information that the Company has a
bona fide business purpose for preserving as confidential; or
(iii) render the Company unable to comply with requirements
under the Securities Act or Exchange Act, then the Company shall
have the right to defer taking action with respect to such filing,
and any time periods with respect to filing or effectiveness
thereof shall be tolled correspondingly, for a period of not more
than ninety (90) days after the request is
given; provided, however,
that the Company may not invoke this right more than once in any
twelve (12) month period; and provided, further,
that the Company shall not register any securities for its own
account or that of any other stockholder during such ninety
(90) day period.

 

(c)     The Company shall not
be obligated to effect, or to take any action to effect, any
registration pursuant to this Section 4.12 during the period
that is sixty (60) days before the Company’s good faith
estimate of the date of filing of, and ending on a date that is one
hundred eighty (180) days after the effective date of, a
registration statement filed in connection with a Company-initiated
registration, provided,
that the Company is actively employing in good faith commercially
reasonable efforts to cause such registration statement to become
effective.

 

 

 

-27-

 

 

4.13           Subsequent
Equity Sales. (a)From the date hereof until the date that is
twelve (12) months following the effective date of the Registration
Statement, the Company shall be prohibited from incurring any
Indebtedness or effecting or entering into an agreement to effect
any issuance by the Company or any of its Subsidiaries of Common
Stock or Common Stock Equivalents (or a combination of units
thereof) involving a Variable Rate Transaction. “Variable Rate
Transaction” means a transaction in which the Company
(i) issues or sells any debt or equity securities that are
convertible into, exchangeable or exercisable for, or include the
right to receive, additional shares of Common Stock either (A) at a
conversion price, exercise price or exchange rate or other price
that is based upon, and/or varies with, the trading prices of or
quotations for the shares of Common Stock at any time after the
initial issuance of such debt or equity securities or (B) with a
conversion, exercise or exchange price that is subject to being
reset at some future date after the initial issuance of such debt
or equity security or upon the occurrence of specified or
contingent events directly or indirectly related to the business of
the Company or the market for the Common Stock or (ii) enters into,
or effects a transaction under, any agreement, including, but not
limited to, an equity line of credit or at-the-market offering,
whereby the Company may issue securities at a future determined
price; provided that the Company shall be permitted to enter into
and utilize an at-the-market offering facility with a registered
broker dealer as selling agent commencing 180 days following the
Public Company Date. Any Purchaser shall be entitled to obtain
injunctive relief against the Company to preclude any such
issuance, which remedy shall be in addition to any right to collect
damages.

 

(b)Notwithstanding
the foregoing, this Section 4.13 shall not apply in respect of an
Exempt Issuance, except that no Variable Rate Transaction shall be
an Exempt Issuance.

 

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

 

4.15 Company
Acknowledgement on Certain Transactions. The Company expressly acknowledges and agrees
that (i) no Purchaser makes any representation, warranty or
covenant hereby that it will not engage in effecting transactions
in any securities of the Company following the Public Company Date,
(ii) no Purchaser shall be restricted or prohibited from effecting
any transactions in any securities of the Company in accordance
with applicable securities laws from and after the Public Company
Date and (iii) no Purchaser shall have any duty of confidentiality
or duty not to trade in the securities of the Company to the
Company or its Subsidiaries from and after the Public Company Date.
Notwithstanding anything herein to the contrary, each Purchaser
agrees, severally and not jointly with any other Purchaser, that
such Purchaser will not enter into any Short Sales from the period
commencing on the Closing Date and ending on the date that such
Purchaser no longer holds any Securities.

 

 

 

-28-

 

 

4.16 Form
D; Blue Sky Filings. The Company agrees to timely file a
Form D with respect to the Securities as required under Regulation
D and to provide a copy thereof, promptly upon request of any
Purchaser. The Company shall take such action as the Company shall
reasonably determine is necessary in order to obtain an exemption
for, or to qualify the Securities for, sale to the Purchasers at
the Closing under applicable securities or “Blue Sky”
laws of the states of the United States, and shall provide evidence
of such actions promptly upon request of any
Purchaser.

 

 

ARTICLE V.

MISCELLANEOUS

 

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

 

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

 

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

 

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

 

 

 

-29-

 

 

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

 

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

 

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

 

5.8           No
Third-Party Beneficiaries. The Placement Agent shall be the
third party beneficiary of the representations and warranties of
the Company in Section 3.1 hereof and with respect to the
representations and warranties of the Purchasers in Section 3.2
hereof. This Agreement is intended for the benefit of the parties
hereto and their respective successors and permitted assigns and is
not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except as otherwise set forth in Section
4.10.

 

 

 

-30-

 

 

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

 

5.10           Survival.
The representations and warranties contained herein shall survive
the Closing and the delivery of the Securities.

 

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

 

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

 

 

 

-31-

 

 

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

 

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

 

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

 

5.16           

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

 

5.17           

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

 

 

 

-32-

 

 

5.18           

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

 

5.19           

Saturdays, Sundays, Holidays,
etc.                                                                           

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

 

5.20           

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

 

 

 

-33-

 

 

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

 

 

 

(Signature Pages Follow)

 

 

-34-

 

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

 

 

	

TRANSWORL HOLDINGS, INC.

 

	

Address
for Notice:

 

 

	

By:__________________________________________

     Name:

     Title:

 

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

	

Email:

Fax:

 

	
 

	
 

 

 

 

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE
PAGE FOR PURCHASER FOLLOWS]

 

 

 

-35-

 

[PURCHASER
SIGNATURE PAGES TO TRWO SECURITIES PURCHASE AGREEMENT]

 

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

 

Name of
Purchaser:
____________________________________________________

Signature of Authorized Signatory of
Purchaser: __________________________

Name of
Authorized Signatory:
____________________________________

Title
of Authorized Signatory:
_____________________________________

Email
Address of Authorized Signatory:
___________________________________________

Facsimile Number of
Authorized Signatory:
_________________________________________

 

Address
for Notice to Purchaser:

 

 

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

 

 

 

Subscription
Amount: $____________

Shares
of Common Stock: _____________

EIN
Number: _______________________

 

 

 

[SIGNATURE
PAGES CONTINUE]

 

 

 

-36-

 

Annex A

 

CLOSING STATEMENT

 

Pursuant
to the attached Securities Purchase Agreement, dated as of the date
hereto, the purchasers shall purchase up to $_____ of Common Stock
from Transworld Holdings, Inc., a Delaware corporation (the
“Company”). All funds will
be wired into an account maintained by the Company. All funds will
be disbursed in accordance with this Closing
Statement.

 

Disbursement Date: 

_____ ___,
2020

 

 

	

I. PURCHASE PRICE

 

	
 

	

Gross Proceeds to be Received

	

$

	
 

	
 

	
 

	
 

	
 

	

II.                                                                                      DISBURSEMENTS

 

	
 

	
 

	

$

	
 

	
 

	
 

	
 

	

$

	
 

	
 

	
 

	
 

	

$

	
 

	
 

	
 

	
 

	

$

	
 

	
 

	
 

	
 

	

$

	
 

	
 

	
 

	
 

	
 

	

Total Amount Disbursed:

	

$

	
 

	
 

	
 

	
 

	
 

	
 

	

WIRE INSTRUCTIONS:

Please see attached.

 

	
 

	
 

 

Acknowledged
and agreed to

this
___ day of _________, 2020

 

TRANSWORLD HOLDINGS, INC.

 

 

By:
_________________________

Name:

Title:

 

-37-

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