Document:

goig_ex41

 

Exhibit 4.1

 

NEITHER
THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS
EXERCISABLE HAVE 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
AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN
SECURED BY SUCH SECURITIES.

 

[FORM OF] COMMON STOCK PURCHASE WARRANT

 

 CHARGE ENTERPRISES, INC.

 

	

Warrant
Shares: _____

	

Initial
Exercise Date: December 17, 2021

 

THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that,
for value received, ________ or its assigns (the
“Holder”)
is entitled, upon the terms and subject to the limitations on
exercise and the conditions hereinafter set forth, at any time on
or after December 17, 2021 (the “Initial Exercise Date”)
and on or prior to the close of business at 5:00 p.m. (New York
City time) on November 19, 2023 (the “Termination Date) but not
thereafter, to subscribe for and purchase from Charge Enterprises,
Inc., a Delaware corporation (the “Company”), up to _______
shares (as subject to adjustment hereunder, the “Warrant Shares”) of
Common Stock. The purchase price of one share of Common Stock under
this Warrant shall be equal to the Exercise Price, as defined in
Section 2(b).

 

Section
1.           
Definitions.
Capitalized terms used and not otherwise defined herein shall have
the meanings set forth in that certain Securities Purchase
Agreement (the “Purchase Agreement”),
dated December 17, 2021, among the Company and the purchasers
signatory thereto.

 

Section
2.             
Exercise.

 

a) Exercise
of Warrant. Exercise of the purchase rights represented by
this Warrant may be made, in whole or in part, at any time or times
on or after the Initial Exercise Date and on or before the
Termination Date by delivery to the Company of a duly executed
facsimile copy or PDF copy submitted by electronic (or e-mail
attachment) of the Notice of Exercise in the form annexed hereto
(“Notice of
Exercise”). Within the earlier of (i) two (2) Trading
Days and (ii) the number of Trading Days comprising the Standard
Settlement Period (as defined in Section 2(d)(i) herein) following
the date of exercise as aforesaid, the Holder shall deliver the
aggregate Exercise Price for the shares specified in the applicable
Notice of Exercise by wire transfer or cashier’s check drawn
on a United States bank unless the Cashless Exercise procedure
specified in Section 2(c) below is specified in the applicable
Notice of Exercise. No
ink-original Notice of Exercise shall be required, nor shall any
medallion guarantee (or other type of guarantee or notarization) of
any Notice of Exercise form be required. Notwithstanding anything
herein to the contrary, the Holder shall not be required to
physically surrender this Warrant to the Company until the Holder
has purchased all of the Warrant Shares available hereunder and the
Warrant has been exercised in full, in which case, the Holder shall
surrender this Warrant to the Company for cancellation within two
(2) Trading Days of the date the final Notice of Exercise is
delivered to the Company. Partial exercises of this Warrant
resulting in purchases of a portion of the total number of Warrant
Shares available hereunder shall have the effect of lowering the
outstanding number of Warrant Shares purchasable hereunder in an
amount equal to the applicable number of Warrant Shares purchased.
The Holder and the Company shall maintain records showing the
number of Warrant Shares purchased and the date of such purchases.
The Company shall deliver any objection to any Notice of Exercise
within one (1) Business Days of receipt of such notice.
The Holder and any assignee, by
acceptance of this Warrant, acknowledge and agree that, by reason
of the provisions of this paragraph, following the purchase of a
portion of the Warrant Shares hereunder, the number of Warrant
Shares available for purchase hereunder at any given time may be
less than the amount stated on the face hereof.

 

 

 

 

b) Exercise Price. The exercise
price per share of the Common Stock under this Warrant shall be
$4.00, subject to adjustment hereunder (the “Exercise
Price”).

 

c) Cashless Exercise. If at any
time after the six-month anniversary of the Closing Date, there is
no effective registration statement registering, or no current
prospectus available for, the resale of the Warrant Shares by the
Holder, then by delivering an Exercise Notice and in lieu of making
payment of the aggregate Exercise Price in cash or wire transfer,
the Holder may elect instead to receive upon such exercise the
“Net Number” of shares of Common Stock determined
according to the following formula (the “Cashless
Exercise”):

 

Net
Number = (A x B) –
(A x C)

                                      B

 

For
purposes of the foregoing formula:

 

A = the
total number of Warrant Shares with respect to which this Warrant
is then being exercised.

 

B = the
Closing Bid Price of the Common Stock on the date of exercise of
the Warrant.

 

C = the
Warrant Exercise Price then in effect for the applicable Warrant
Shares at the time of such exercise.

 

 

 

 

“Bid Price” 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 bid price of the Common Stock for the time in
question (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)), or (b)  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.

 

d)

Mechanics of
Exercise.

 

i. Delivery of Warrant Shares Upon
Exercise. Subject to the requirements of applicable law, the
Company shall cause the Warrant Shares purchased hereunder to be
transmitted by the Transfer Agent to the Holder by crediting the
account of the Holder’s or its designee’s balance
account with The Depository Trust Company through its Deposit or
Withdrawal at Custodian system (“DWAC”) if the Company is
then a participant in such system and either (A) there is an
effective registration statement permitting the issuance of the
Warrant Shares to or resale of the Warrant Shares by the Holder or
(B) the Warrant Shares are eligible for resale by the Holder
pursuant to Rule 144 (assuming Cashless Exercise of the Warrants),
and otherwise by physical delivery of a certificate, registered in
the Company’s share register in the name of the Holder or its
designee, for the number of Warrant Shares to which the Holder is
entitled pursuant to such exercise to the address specified by the
Holder in the Notice of Exercise by the date that is the earlier of
(i) the earlier of (A) three (3) Trading Days after the delivery to
the Company of the Notice of Exercise and (B) one (1) Trading Day
after delivery of the aggregate Exercise Price to the Company and
(ii) the number of Trading Days comprising the Standard Settlement
Period after the delivery to the Company of the Notice of Exercise
(such date, the “Warrant Share Delivery
Date”). Upon delivery of the Notice of Exercise, the
Holder shall be deemed for all corporate purposes to have become
the holder of record of the Warrant Shares with respect to which
this Warrant has been exercised, irrespective of the date of
delivery of the Warrant Shares, provided that payment of the
aggregate Exercise Price (other than in the case of a Cashless
Exercise) is received within the earlier of (i) three (3) Trading
Days and (ii) the number of Trading Days comprising the Standard
Settlement Period following delivery of the Notice of Exercise. If
the Company fails for any reason to deliver to the Holder the
Warrant Shares subject to a Notice of Exercise by the Warrant Share
Delivery Date, the Company shall pay to the Holder, in cash, as
liquidated damages and not as a penalty, for each $1,000 of Warrant
Shares subject to such exercise (based on the VWAP of the Common
Stock on the date of the applicable Notice of Exercise), $10 per
Trading Day (increasing to $20 per Trading Day on the fifth Trading
Day after such liquidated damages begin to accrue) for each Trading
Day after the first Business Day after the Warrant Share Delivery
Date until such Warrant Shares are delivered or Holder rescinds
such exercise. The Company agrees to maintain a transfer agent that
is a participant in the FAST program so long as this Warrant
remains outstanding and exercisable. 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 the Notice of
Exercise.

 

 

 

 

ii. Delivery of New Warrants Upon
Exercise. If this Warrant shall have been exercised in part,
the Company shall, at the request of a Holder and upon surrender of
this Warrant certificate, at the time of delivery of the Warrant
Shares, deliver to the Holder a new Warrant evidencing the rights
of the Holder to purchase the unpurchased Warrant Shares called for
by this Warrant, which new Warrant shall in all other respects be
identical with this Warrant.

 

iii. Rescission
Rights. If the Company fails to cause the Transfer Agent to
transmit to the Holder the Warrant Shares pursuant to Section
2(d)(i) by the Warrant Share Delivery Date, then the Holder will
have the right to rescind such exercise.

 

iv. Compensation for Buy-In on Failure to
Timely Deliver Warrant Shares Upon Exercise. In addition to
any other rights available to the Holder, if the Company fails to
cause the Transfer Agent to transmit to the Holder the Warrant
Shares in accordance with the provisions of Section 2(d)(i) above
pursuant to an exercise on or before the Warrant Share Delivery
Date, and if after such date the Holder is required by its broker
to purchase (in an open market transaction or otherwise) or the
Holder’s brokerage firm otherwise purchases, shares of Common
Stock to deliver in satisfaction of a sale by the Holder of the
Warrant Shares which the Holder anticipated receiving upon such
exercise (a “Buy-In”), then the
Company shall (A) pay in cash to the Holder the amount, if any, by
which (x) the Holder’s total purchase price (including
brokerage commissions, if any) for the shares of Common Stock so
purchased exceeds (y) the amount obtained by multiplying (1) the
number of Warrant Shares that the Company was required to deliver
to the Holder in connection with the exercise at issue times (2)
the price at which the sell order giving rise to such purchase
obligation was executed, and (B) at the option of the Holder,
either reinstate the portion of the Warrant and equivalent number
of Warrant Shares for which such exercise was not honored (in which
case such exercise shall be deemed rescinded) or deliver to the
Holder the number of shares of Common Stock that would have been
issued had the Company timely complied with its exercise and
delivery obligations hereunder. For example, if the Holder
purchases Common Stock having a total purchase price of $11,000 to
cover a Buy-In with respect to an attempted exercise of shares of
Common Stock with an aggregate sale price giving rise to such
purchase obligation of $10,000, under clause (A) of the immediately
preceding sentence the Company shall be required to pay the Holder
$1,000. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the
Buy-In and, upon request of the Company, evidence of the amount of
such loss. Nothing herein shall limit a Holder’s right to
pursue any other remedies available to it hereunder, at law or in
equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the
Company’s failure to timely deliver shares of Common Stock
upon exercise of the Warrant as required pursuant to the terms
hereof.

 

 

 

 

v. No Fractional Shares or Scrip.
No fractional shares or scrip representing fractional shares shall
be issued upon the exercise of this Warrant. As to any fraction of
a share which the Holder would otherwise be entitled to purchase
upon such exercise, the Company shall, at its election, either pay
a cash adjustment in respect of such final fraction in an amount
equal to such fraction multiplied by the Exercise Price or round up
to the next whole share.

 

vi. Charges, Taxes and Expenses.
Issuance of Warrant Shares shall be made without charge to the
Holder for any issue or transfer tax or other incidental expense in
respect of the issuance of such Warrant Shares, all of which taxes
and expenses shall be paid by the Company, and such Warrant Shares
shall be issued in the name of the Holder or in such name or names
as may be directed by the Holder; provided, however, that in the event that
Warrant Shares are to be issued in a name other than the name of
the Holder, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by
the Holder and the Company may require, as a condition thereto, the
payment of a sum sufficient to reimburse it for any transfer tax
incidental thereto. The Company shall pay all Transfer Agent fees
required for same-day processing of any Notice of Exercise and all
fees to the Depository Trust Company (or another established
clearing corporation performing similar functions) required for
same-day electronic delivery of the Warrant Shares.

 

vii. Closing
of Books. The Company will not close its stockholder books
or records in any manner which prevents the timely exercise of this
Warrant, pursuant to the terms hereof.

 

 

 

 

e)           Holder’s
Exercise Limitations. The Company shall not effect any
exercise of this Warrant, and a Holder shall not have the right to
exercise any portion of this Warrant, pursuant to Section 2 or
otherwise, to the extent that after giving effect to such issuance
after exercise as set forth on the applicable Notice of Exercise,
the Holder (together with the Holder’s Affiliates, and any
other Persons acting as a group together with the Holder or any of
the Holder’s Affiliates (such Persons, “Attribution Parties”)),
would beneficially own in excess of the Beneficial Ownership
Limitation (as defined below).  For purposes of the foregoing
sentence, the number of shares of Common Stock beneficially owned
by the Holder and its Affiliates and Attribution Parties shall
include the number of shares of Common Stock issuable upon exercise
of this Warrant with respect to which such determination is being
made, but shall exclude the number of shares of Common Stock which
would be issuable upon (i) exercise of the remaining, nonexercised
portion of this Warrant beneficially owned by the Holder or any of
its Affiliates or Attribution Parties and (ii) exercise or
conversion of the unexercised or nonconverted portion of any other
securities of the Company (including, without limitation, any other
Common Stock Equivalents) subject to a limitation on conversion or
exercise analogous to the limitation contained herein beneficially
owned by the Holder or any of its Affiliates or Attribution
Parties.  Except as set forth in the preceding sentence, for
purposes of this Section 2(e), beneficial ownership shall be
calculated in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder, it being
acknowledged by the Holder that the Company is not representing to
the Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and the Holder is solely responsible for
any schedules required to be filed in accordance therewith. To the
extent that the limitation contained in this Section 2(e) applies,
the determination of whether this Warrant is exercisable (in
relation to other securities owned by the Holder together with any
Affiliates and Attribution Parties) and of which portion of this
Warrant is exercisable shall be in the sole discretion of the
Holder, and the submission of a Notice of Exercise shall be deemed
to be the Holder’s determination of whether this Warrant is
exercisable (in relation to other securities owned by the Holder
together with any Affiliates and Attribution Parties) and of which
portion of this Warrant is exercisable, in each case subject to the
Beneficial Ownership Limitation, and the Company shall have no
obligation to verify or confirm the accuracy of such determination.
In addition, a determination as to any group status as contemplated
above shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder.
For purposes of this Section 2(e), in determining the number of
outstanding shares of Common Stock, a Holder may rely on the number
of outstanding shares of Common Stock as reflected in (A) the
Company’s most recent periodic or annual report filed with
the Commission, as the case may be, (B) a more recent public
announcement by the Company or (C) a more recent written notice by
the Company or the Transfer Agent setting forth the number of
shares of Common Stock outstanding.  Upon the written or oral
request of a Holder, the Company shall within two Trading Days
confirm orally and in writing to the Holder the number of shares of
Common Stock then outstanding.  In any case, the number of
outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company,
including this Warrant, by the Holder or its Affiliates or
Attribution Parties since the date as of which such number of
outstanding shares of Common Stock was reported. The
“Beneficial
Ownership Limitation” shall be 9.99% of the number of
shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock issuable upon
exercise of this Warrant. The Holder, upon notice to the Company,
may increase or decrease the Beneficial Ownership Limitation
provisions of this Section 2(e), provided that the Beneficial
Ownership Limitation in no event exceeds 9.99% of the number of
shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock upon exercise of
this Warrant held by the Holder and the provisions of this Section
2(e) shall continue to apply. Any increase in the Beneficial
Ownership Limitation will not be effective until the 61st day after such
notice is delivered to the Company. The provisions of this
paragraph shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 2(e) to
correct this paragraph (or any portion hereof) which may be
defective or inconsistent with the intended Beneficial Ownership
Limitation herein contained or to make changes or supplements
necessary or desirable to properly give effect to such limitation.
The limitations contained in this paragraph shall apply to a
successor holder of this Warrant.

 

 

 

 

Section
3.             
Certain
Adjustments.

 

a) Stock Dividends and Splits. If
the Company, at any time while this Warrant is outstanding: (i)
pays a stock dividend or otherwise makes a distribution or
distributions on shares of its Common Stock or any other equity or
equity equivalent securities payable in shares of Common Stock
(which, for avoidance of doubt, shall not include any shares of
Common Stock issued by the Company upon exercise of this Warrant),
(ii) subdivides outstanding shares of Common Stock into a larger
number of shares, (iii) combines (including by way of reverse stock
split) outstanding shares of Common Stock into a smaller number of
shares or (iv) issues by reclassification of shares of the Common
Stock any shares of capital stock of the Company, then in each case
the Exercise Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock (excluding
treasury shares, if any) outstanding immediately before such event
and of which the denominator shall be the number of shares of
Common Stock outstanding immediately after such event, and the
number of shares issuable upon exercise of this Warrant shall be
proportionately adjusted such that the aggregate Exercise Price of
this Warrant shall remain unchanged. Any adjustment made pursuant
to this Section 3(a) shall become effective immediately after the
record date for the determination of stockholders entitled to
receive such dividend or distribution and shall become effective
immediately after the effective date in the case of a subdivision,
combination or re-classification.

 

b) Intentionally
Omitted.

 

c) Subsequent Rights Offerings.
In addition to any adjustments
pursuant to Section 3(a) above, if at any time the Company grants,
issues or sells any Common Stock Equivalents or rights to purchase
stock, warrants, securities or other property pro rata to the
record holders of any class of shares of Common Stock (the
“Purchase
Rights”), then the Holder
will be entitled to acquire, upon the terms applicable to such
Purchase Rights, the aggregate Purchase Rights which the Holder
could have acquired if the Holder had held the number of shares of
Common Stock acquirable upon complete exercise of this Warrant
(without regard to any limitations on exercise hereof, including
without limitation, the Beneficial Ownership Limitation)
immediately before the date on which a record is taken for the
grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the grant, issue or sale
of such Purchase Rights (provided, however, to the extent that the
Holder’s right to participate in any such Purchase Right
would result in the Holder exceeding the Beneficial Ownership
Limitation, then the Holder shall not be entitled to participate in
such Purchase Right to such extent (or beneficial ownership of such
shares of Common Stock as a result of such Purchase Right to such
extent) and such Purchase Right to such extent shall be held in
abeyance for the Holder until such time, if ever, as its right
thereto would not result in the Holder exceeding the Beneficial
Ownership Limitation).

 

d) Pro
Rata Distributions. During such time as this Warrant is
outstanding, if the Company shall declare or make any dividend or
other distribution of its assets (or rights to acquire its assets)
to holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of
cash, stock or other securities, property or options by way of a
dividend, spin off, reclassification, corporate rearrangement,
scheme of arrangement or other similar transaction) (a
“Distribution”), at any
time after the issuance of this Warrant, then, in each such case,
the Holder shall be entitled to participate in such Distribution to
the same extent that the Holder would have participated therein if
the Holder had held the number of shares of Common Stock acquirable
upon complete exercise of this Warrant (without regard to any
limitations on exercise hereof, including without limitation, the
Beneficial Ownership Limitation) immediately before the date of
which a record is taken for such Distribution, or, if no such
record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the participation in such
Distribution (provided, however, to the extent that the
Holder's right to participate in any such Distribution would result
in the Holder exceeding the Beneficial Ownership Limitation, then
the Holder shall not be entitled to participate in such
Distribution to such extent (or in the beneficial ownership of any
shares of Common Stock as a result of such Distribution to such
extent) and the portion of such Distribution shall be held in
abeyance for the benefit of the Holder until such time, if ever, as
its right thereto would not result in the Holder exceeding the
Beneficial Ownership Limitation).

 

 

 

 

e) Fundamental Transaction. If, at
any time while this Warrant is outstanding, (i) the Company,
directly or indirectly, in one or more related transactions effects
any merger or consolidation of the Company with or into another
Person, (ii) the Company, directly or indirectly, effects any sale,
lease, license, assignment, transfer, conveyance or other
disposition of all or substantially all of its assets in one or a
series of related transactions, (iii) any, direct or indirect,
purchase offer, tender offer or exchange offer (whether by the
Company or another Person) is completed pursuant to which holders
of Common Stock are permitted to sell, tender or exchange their
shares for other securities, cash or property and has been accepted
by the holders of 50% or more of the outstanding Common Stock, (iv)
the Company, directly or indirectly, in one or more related
transactions effects any reclassification, reorganization or
recapitalization of the Common Stock or any compulsory share
exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property,
or (v) the Company, directly or indirectly, in one or more related
transactions consummates a stock or share purchase agreement or
other business combination (including, without limitation, a
reorganization, recapitalization, spin-off or scheme of
arrangement) with another Person or group of Persons whereby such
other Person or group acquires more than 50% of the outstanding
shares of Common Stock (not including any shares of Common Stock
held by the other Person or other Persons making or party to, or
associated or affiliated with the other Persons making or party to,
such stock or share purchase agreement or other business
combination) (each a “Fundamental
Transaction”), then, upon any subsequent exercise of
this Warrant, the Holder shall have the right to receive, for each
Warrant Share that would have been issuable upon such exercise
immediately prior to the occurrence of such Fundamental
Transaction, at the option of the Holder (without regard to any
limitation in Section 2(e) on the exercise of this Warrant), the
number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation,
and any additional consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder
of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such Fundamental Transaction
(without regard to any limitation in Section 2(e) on the exercise
of this Warrant). For purposes of any such exercise, the
determination of the Exercise Price shall be appropriately adjusted
to apply to such Alternate Consideration based on the amount of
Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall
apportion the Exercise Price among the Alternate Consideration in a
reasonable manner reflecting the relative value of any different
components of the Alternate Consideration. If holders of Common
Stock are given any choice as to the securities, cash or property
to be received in a Fundamental Transaction, then the Holder shall
be given the same choice as to the Alternate Consideration it
receives upon any exercise of this Warrant following such
Fundamental Transaction. The Company shall cause any successor
entity in a Fundamental Transaction in which the Company is not the
survivor (the “Successor Entity”) to
assume in writing all of the obligations of the Company under this
Warrant and the other Transaction Documents in accordance with the
provisions of this Section 3(e) pursuant to written agreements in
form and substance reasonably satisfactory to the Holder and
approved by the Holder (not to be unreasonably withheld,
conditioned or delayed) prior to such Fundamental Transaction and
shall, at the option of the Holder, deliver to the Holder in
exchange for this Warrant a security of the Successor Entity
evidenced by a written instrument substantially similar in form and
substance to this Warrant which is exercisable for a corresponding
number of shares of capital stock of such Successor Entity (or its
parent entity) equivalent to the shares of Common Stock acquirable
and receivable upon exercise of this Warrant (without regard to any
limitations on the exercise of this Warrant) prior to such
Fundamental Transaction, and with an exercise price which applies
the exercise price hereunder to such shares of capital stock (but
taking into account the relative value of the shares of Common
Stock pursuant to such Fundamental Transaction and the value of
such shares of capital stock, such number of shares of capital
stock and such exercise price being for the purpose of protecting
the economic value of this Warrant immediately prior to the
consummation of such Fundamental Transaction), and which is
reasonably satisfactory in form and substance to the Holder. Upon
the occurrence of any such Fundamental Transaction, the Successor
Entity shall succeed to, and be substituted for (so that from and
after the date of such Fundamental Transaction, the provisions of
this Warrant and the other Transaction Documents referring to the
“Company” shall refer instead to the Successor Entity),
and may exercise every right and power of the Company and shall
assume all of the obligations of the Company under this Warrant and
the other Transaction Documents with the same effect as if such
Successor Entity had been named as the Company herein. For the
avoidance of doubt, the provisions of this Section shall not apply
to the BW Acquisition and the EV Depot Acquisition.

 

 

 

 

f) Calculations. All calculations
under this Section 3 shall be made to the nearest cent or the
nearest 1/100th of a common share, as the case may be. For purposes
of this Section 3, the number of shares of Common Stock deemed to
be issued and outstanding as of a given date shall be the sum of
the number of shares of Common Stock (excluding treasury shares, if
any) issued and outstanding.

 

g) Notice to Holder.

 

i. Adjustment to Exercise Price.
Whenever the Exercise Price is adjusted pursuant to any provision
of this Section 3, the Company shall promptly deliver to the Holder
by facsimile or email a notice setting forth the Exercise Price
after such adjustment and any resulting adjustment to the number of
Warrant Shares and setting forth a brief statement of the facts
requiring such adjustment.

 

ii. Notice to Allow Exercise by
Holder. If (A) the Company shall declare a dividend (or any
other distribution in whatever form) on the Common Stock, (B) the
Company shall declare a special nonrecurring cash dividend on or a
redemption of the Common Stock, (C) the Company shall authorize the
granting to all holders of the Common Stock rights or warrants to
subscribe for or purchase any shares of capital stock of any class
or of any rights, (D) the approval of any stockholders of the
Company shall be required in connection with any reclassification
of the Common Stock, any consolidation or merger to which the
Company is a party, any sale or transfer of all or substantially
all of the assets of the Company, or any compulsory share exchange
whereby the Common Stock is converted into other securities, cash
or property, or (E) the Company shall authorize the voluntary or
involuntary dissolution, liquidation or winding up of the affairs
of the Company, then, in each case, the Company shall cause to be
delivered by facsimile or email to the Holder at its last facsimile
number or email address as it shall appear upon the Warrant
Register of the Company, at least 20 calendar days prior to the
applicable record or effective date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the
purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date as of which
the holders of the Common Stock of record to be entitled to such
dividend, distributions, redemption, rights or warrants are to be
determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer or share exchange is expected
to become effective or close, and the date as of which it is
expected that holders of the Common Stock of record shall be
entitled to exchange their shares of the Common Stock for
securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer or share
exchange; provided that the failure to deliver such notice or any
defect therein or in the delivery thereof shall not affect the
validity of the corporate action required to be specified in such
notice. To the extent that any notice provided in this Warrant
constitutes, or contains, material, non-public information
regarding the Company or any of the Subsidiaries, the Company shall
simultaneously publicly disseminate such notice. The Holder shall
remain entitled to exercise this Warrant during the period
commencing on the date of such notice to the effective date of the
event triggering such notice except as may otherwise be expressly
set forth herein.

 

 

 

 

Section
4.             
Transfer of
Warrant.

 

a) Transferability. Subject to
compliance with any applicable securities laws and the conditions
set forth in Section 4(d) hereof and to the provisions of Section
4.1 of the Purchase Agreement, this Warrant and all rights
hereunder (including, without limitation, any registration rights)
are transferable, in whole or in part, upon surrender of this
Warrant at the principal office of the Company or its designated
agent, together with a written assignment of this Warrant
substantially in the form attached hereto duly executed by the
Holder or its agent or attorney and funds sufficient to pay any
transfer taxes payable upon the making of such transfer. Upon such
surrender and, if required, such payment, the Company shall execute
and deliver a new Warrant or Warrants in the name of the assignee
or assignees, as applicable, and in the denomination or
denominations specified in such instrument of assignment, and shall
issue to the assignor a new Warrant evidencing the portion of this
Warrant not so assigned, and this Warrant shall promptly be
cancelled. Notwithstanding anything
herein to the contrary, the Holder shall not be required to
physically surrender this Warrant to the Company unless the Holder
has assigned this Warrant in full, in which case, the Holder shall
surrender this Warrant to the Company within three (3) Trading Days
of the date the Holder delivers an assignment form to the Company
assigning this Warrant full. The Warrant, if properly assigned in
accordance herewith, may be exercised by a new holder for the
purchase of Warrant Shares without having a new Warrant
issued.

 

b) New Warrants. This Warrant may
be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Company, together with a written
notice specifying the names and denominations in which new Warrants
are to be issued, signed by the Holder or its agent or attorney.
Subject to compliance with Section 4(a), as to any transfer which
may be involved in such division or combination, the Company shall
execute and deliver a new Warrant or Warrants in exchange for the
Warrant or Warrants to be divided or combined in accordance with
such notice. All Warrants issued on transfers or exchanges shall be
dated the original Issue Date and shall be identical with this
Warrant except as to the number of Warrant Shares issuable pursuant
thereto.

 

c) Warrant Register. The Company
shall register this Warrant, upon records to be maintained by the
Company for that purpose (the “Warrant Register”), in
the name of the record Holder hereof from time to time. The Company
may deem and treat the registered Holder of this Warrant as the
absolute owner hereof for the purpose of any exercise hereof or any
distribution to the Holder, and for all other purposes, absent
actual notice to the contrary.

 

d) Transfer
Restrictions. If, at the
time of the surrender of this Warrant
in connection with any transfer of this Warrant, the transfer of
this Warrant shall not be either (i) registered pursuant to an
effective registration
 statement under the
Securities Act and under
applicable state securities or blue sky laws or (ii) eligible for
resale pursuant to Rule 144, the Company may require, as a
condition of allowing such transfer, that the Holder or transferee
of this Warrant, as the case may be, comply with the provisions of
the Purchase Agreement.

 

e) Representation by the Holder.
The Holder, by the acceptance hereof, represents and warrants that
it is acquiring this Warrant and, upon any exercise hereof, will
acquire the Warrant Shares issuable upon such exercise, for its own
account and not with a view to or for distributing or reselling
such Warrant Shares or any part thereof in violation of the
Securities Act or any applicable state securities law, except
pursuant to sales registered or exempted under the Securities
Act.

 

 

 

 

Section
5.             
Miscellaneous.

 

a) No Rights as Stockholder Until
Exercise. This Warrant does not entitle the Holder to any
voting rights, dividends or other rights as a stockholder of the
Company prior to the exercise hereof as set forth in Section
2(d)(i), except as expressly set forth in Section 3.

 

b) Loss, Theft, Destruction or Mutilation
of Warrant. The Company covenants that upon receipt by the
Company of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss,
theft or destruction, of indemnity and/or security reasonably
satisfactory to it (which, in the case of the Warrant, shall not
include the posting of any bond), and upon surrender and
cancellation of such Warrant or stock certificate, if mutilated,
the Company will make and deliver a new Warrant or stock
certificate of like tenor and dated as of such cancellation, in
lieu of such Warrant or stock certificate.

 

c) 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.

 

d) Authorized Shares.

 

The
Company covenants that during the period the Warrant is
outstanding, it will reserve from its authorized and unissued
Common Stock a sufficient number of common shares to provide for
the issuance of the Warrant Shares upon the exercise of any
purchase rights under this Warrant. The Company further covenants
that its issuance of this Warrant shall constitute full authority
to its officers who are charged with the duty of issuing the
necessary Warrant Shares upon the exercise of the purchase rights
under this Warrant. The Company will take all such reasonable
action as may be necessary to assure that such Warrant Shares may
be issued as provided herein without violation of any applicable
law or regulation, or of any requirements of the Trading Market
upon which the Common Stock may be listed. The Company covenants
that all Warrant Shares which may be issued upon the exercise of
the purchase rights represented by this Warrant will, upon exercise
of the purchase rights represented by this Warrant and payment for
such Warrant Shares in accordance herewith, be duly authorized,
validly issued, fully paid and nonassessable and free from all
taxes, liens and charges created by the Company in respect of the
issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue).

 

Except
and to the extent as waived or consented to by the Holder, the
Company shall not by any action, including, without limitation,
amending its certificate of incorporation or other organizational
documents or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms
and in the taking of all such actions as may be necessary or
appropriate to protect the rights of Holder as set forth in this
Warrant against impairment. Without limiting the generality of the
foregoing, the Company will (i) not increase the par value of any
Warrant Shares above the amount payable therefor upon such exercise
immediately prior to such increase in par value, (ii) take all such
action as may be necessary or appropriate in order that the Company
may validly and legally issue fully paid and nonassessable Warrant
Shares upon the exercise of this Warrant and (iii) use commercially
reasonable efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction
thereof, as may be, necessary to enable the Company to perform its
obligations under this Warrant.

 

 

 

 

Before
taking any action which would result in an adjustment in the number
of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or
exemptions thereof, or consents thereto, as may be necessary from
any public regulatory body or bodies having jurisdiction
thereof.

 

e) Jurisdiction. All questions
concerning the construction, validity, enforcement, interpretation,
jurisdiction and governing law concerning this Warrant shall be
determined in accordance with the provisions of the Purchase
Agreement.

 

f) Restrictions. The Holder
acknowledges that the Warrant Shares acquired upon the exercise of
this Warrant, if not registered and the Holder does not utilize
Cashless Exercise, will have restrictions upon resale imposed by
state and federal securities laws.

 

g) Nonwaiver and Expenses. No
course of dealing or any delay or failure to exercise any right
hereunder on the part of Holder shall operate as a waiver of such
right or otherwise prejudice the Holder’s rights, powers or
remedies. Without limiting any other provision of this Warrant or
the Purchase Agreement, if the Company willfully and knowingly
fails to comply with any provision of this Warrant, which results
in any material damages to the Holder, the Company shall pay to the
Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys’
fees, including those of appellate proceedings, incurred by the
Holder in collecting any amounts due pursuant hereto or in
otherwise enforcing any of its rights, powers or remedies
hereunder.

 

h) Notices. Any notice, request or
other document required or permitted to be given or delivered to
the Holder by the Company shall be delivered in accordance with the
notice provisions of the Purchase Agreement.

 

i) Limitation of Liability. No
provision hereof, in the absence of any affirmative action by the
Holder to exercise this Warrant to purchase Warrant Shares, and no
enumeration herein of the rights or privileges of the Holder, shall
give rise to any liability of the Holder for the purchase price of
any Common Stock or as a stockholder of the Company, whether such
liability is asserted by the Company or by creditors of the
Company.

 

 

 

 

j) Remedies. The Holder, in
addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees
that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this
Warrant and hereby agrees to waive and not to assert the defense in
any action for specific performance that a remedy at law would be
adequate.

 

k) Successors and Assigns. Subject
to applicable securities laws, this Warrant and the rights and
obligations evidenced hereby shall inure to the benefit of and be
binding upon the successors and permitted assigns of the Company
and the successors and permitted assigns of Holder. The provisions
of this Warrant are intended to be for the benefit of any Holder
from time to time of this Warrant and shall be enforceable by the
Holder or holder of Warrant Shares.

 

l) Amendment. This Warrant may be
modified or amended or the provisions hereof waived with the
written consent of the Company and the
Holder.

 

m) Severability. Wherever
possible, each provision of this Warrant shall be interpreted in
such manner as to be effective and valid under applicable law, but
if any provision of this Warrant shall be prohibited by or invalid
under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the
remainder of such provisions or the remaining provisions of this
Warrant.

 

n) Headings. The headings used in
this Warrant are for the convenience of reference only and shall
not, for any purpose, be deemed a part of this
Warrant.

 

 

********************

 

(Signature Page Follows)

 

 

 

 

 

IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed
by its officer thereunto duly authorized as of the date first above
indicated.

 

 

 

	

CHARGE ENTERPRISES, INC.

 

 

	

By:__________________________________________

     Name:
Andrew Fox

     Title:
Chief Executive Officer

 

 

 

 

 

 

NOTICE OF EXERCISE

 

TO:            

CHARGE
ENTERPRISES, INC.

 

(1) The undersigned
hereby elects to purchase ________ Warrant Shares of the Company
pursuant to the terms of the attached Warrant (only if exercised in
full), and tenders herewith payment of the exercise price in full,
together with all applicable transfer taxes, if any.

 

(2) Payment shall take
the form of lawful money of the United States; .

 

(3) Please issue said
Warrant Shares in the name of the undersigned or in such other name
as is specified below:

 

_______________________________

 

 

The
Warrant Shares shall be delivered to the following DWAC Account
Number:

 

_______________________________

 

_______________________________

 

_______________________________

 

(4)
Accredited
Investor. The undersigned is an “accredited
investor” as defined in Regulation D promulgated under the
Securities Act of 1933, as amended.

 

[SIGNATURE
OF HOLDER]

 

Name of
Investing Entity:
________________________________________________________________________

Signature of Authorized Signatory of Investing
Entity:
_________________________________________________

Name of
Authorized Signatory:
___________________________________________________________________

Title
of Authorized Signatory:
____________________________________________________________________

Date:
________________________________________________________________________________________

 

 

 

 

 

 

 

ASSIGNMENT FORM

 

 (To assign the foregoing Warrant, execute this form and
supply required information. Do not use this form to purchase
shares.)

 

FOR
VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to

 

	

Name:

	
 

	
 

	

(Please Print)

 

	

Address:

	
 

	

 

 

Phone Number:

Email Address:

 

	

(Please
Print)

______________________________________

______________________________________

 

	

Dated: _______________ __, ______

 

	
 

	

Holder’s
Signature:                                                                 

 

	
 

	

Holder’s
Address:goig_ex101

 

Exhibit
10.1

 

1. 

SECURITIES PURCHASE AGREEMENT

 

THIS
SECURITIES PURCHASE AGREEMENT (the “Agreement”) is made as of
December 17, 2021, by and among Charge Enterprises Inc., a Delaware
corporation (which was formerly known as Transworld Holdings, Inc.,
and prior to that as GoIP Global, Inc., a Colorado corporation)
(and together with all of its current and future, direct and/or
indirect, wholly owned and/or partially owned Subsidiaries,
collectively, the “Company”), and the Purchaser identified on the signature
pages hereto (including its successors and assigns, the
“Purchaser”).

 

RECITALS

 

A.           The
Company and the Purchaser are executing and delivering this
Agreement in reliance upon the exemption from securities
registration afforded by Section 4(a)(2) of the Securities Act (as
defined below), and/or Rule 506(b) of Regulation D
(“Regulation
D”) as promulgated by the United States Securities and
Exchange Commission under the Securities Act.

 

B.           The
Purchaser, wishes to purchase, and the Company wishes to sell at
closing, upon the terms and conditions stated in this Agreement,
the Securities (as defined herein), all in the amounts and for the
price set forth on Schedule 1
hereto.

 

C.           The
Company wishes to borrow from the Purchaser cash, all upon the
terms and subject to the conditions hereinafter set
forth.

 

D.           The
Company has agreed to secure performance of its obligations under
this Agreement and by pledging to the Purchaser (a) 100% of the
shares in BW (as defined below) and a first lien over all of
BW’s existing and future assets; and (b) 100% of the units in
EV Depot (as defined below) and a first lien on EV Depot’s
existing and future assets.

 

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 the Purchaser hereby agrees as follows:

 

ARTICLE 1 

DEFINITIONS

 

1.1 Defined Terms. In addition to
terms defined elsewhere in this Agreement or in any supplement,
amendment or exhibit hereto, when used herein, the following terms
shall have the following meanings:

 

(a)  “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 of the Securities Act, including, among others,
executive officers, directors, large stockholders, subsidiaries,
parent entities and sister companies.

 

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

 

 

-1-

 

 

(c) “BW”
means B W Electrical Services LLC, a New Jersey limited liability
company.

 

(d) “BW
Acquisition” means the
acquisition of 100% of the outstanding units of BW pursuant to the
terms of that certain unit purchase agreement, dated December __,
2021, by and between the members of BW and the
Company.

 

(e) “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 the parties’ obligations hereunder
have been satisfied or waived, including (i) the Purchaser’s
obligations to pay the Purchase Price, and (ii) the Company’s
obligations to deliver the Securities.

 

(f) “Collateral”
shall have the meaning ascribed to such term as set forth in the
Security Agreement.

 

(g)  “Common Stock” means (i)
the Company’s common stock, par value $0.0001 per share, and
(ii) any capital stock into which such common stock shall have been
changed or any share capital resulting from a reclassification of
such common stock.

 

(h) “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, rights,
options, warrants 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.

 

(i) “Contingent Obligation”
means, as to any Person, any direct or indirect liability,
contingent or otherwise, of that Person with respect to any
indebtedness, lease, dividend or other obligation of another Person
if the primary purpose or intent of the Person incurring such
liability, or the primary effect thereof, is to provide assurance
to the obligee of such liability that such liability will be paid
or discharged, or that any agreements relating thereto will be
complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect
thereto.

 

(j) “Conversion Date” has the
meaning set forth in the Preferred Designation.

 

 

-2-

 

 

(k)  “Conversion
Shares” means all shares of Common Stock issuable upon
conversion of any portion of the Preferred Stock (including, at the
Purchaser’s election pursuant to the conditions set forth in
the Preferred Designation, accrued and unpaid interest thereon and
Conversion Shares issuable pursuant to a Redemption), but solely to
the extent and subject to any conditions set forth in the Preferred
Designation.

 

(l)  “COVID-19”
means SARS-CoV-2 or COVID-19, and any evolutions thereof or any
other epidemics, pandemics or disease outbreaks.

 

(m) “COVID-19 Action” means an
inaction or action by the Company, including the establishment of
any policy, procedure or protocol, in response to COVID-19 or any
COVID-19 Measures (i) that is consistent with the past practice of
the Company in response to COVID-19 prior to the date of this
Agreement (but only to the extent in compliance with applicable
Law), or (ii) that would, given the totality of the circumstances
under which the Company acted or did not act, be unreasonable for
Purchaser to withhold, condition or delay consent with respect to
such action or inaction (whether or not Purchaser has a consent
right with respect thereto).

 

(n) “COVID-19 Measures” means
any quarantine, “shelter in place,” “stay at
home,” workforce reduction, social distancing, shut down,
closure, sequester or any other Law, Governmental Order, Action,
directive, guidelines or recommendations by any Governmental
Authority in connection with or in response to COVID-19, including,
but not limited to, the Coronavirus Aid, Relief, and Economic
Security (CARES) Act.

 

(o) “Dollar(s)” and
“$”
means lawful money of the United States.

 

(p) “Effective Date” means the
date that the initial Registration Statement filed by the Company
pursuant to the Registration Rights Agreement is first declared
effective by the Commission.

 

(q) “EV Depot” means
collectively, EV Holdings Group, LLC and Ecoship PA,
Inc.

 

(r) “EV
Depot Acquisition” means the
acquisition of EV Depot pursuant to the terms of those certain
non-binding letters of intent, dated December 1, 2021 by and
between the Company and EV Holdings Group, LLC and the Company and
Ecoship PA, Inc. and the Company.

 

(s) “Event of Default” shall
have the meaning set forth in the Notes and the
Warrant.

 

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

 

(u) “Exempt Issuance” means
the issuance of (a) shares of Common Stock or options to employees,
officers, consultants, advisors or directors of the Company in
consideration of services to the Company pursuant to any stock or
option plan duly adopted for such purpose by a majority of the
members of the Board of Directors or a majority of the members of a
committee of directors established for such purpose, (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, exchange or conversion price of such securities, (c)
Permitted Indebtedness incurred in accordance with Section 1.1(ee)
hereunder or (d) any securities issued to shareholders of
BW or EV
Depot in accordance with the BW Acquisition and/or the EV
Depot Acquisition, respectively.

 

 

-3-

 

 

(v) “GAAP” means generally
accepted accounting principles in the United States of America as
in effect from time to time.

 

(w) “Indebtedness” means, with
respect to any Person at any date, without duplication,
(a) all indebtedness of such Person for borrowed money,
(b) all obligations of such Person for the deferred purchase
price of property or services (but excluding trade payables
incurred in the ordinary course of business), (c) all
obligations of such Person evidenced by notes, bonds, debentures or
other similar instruments, (d) all indebtedness created or
arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or the Purchaser under
such agreement in the event of default are limited to repossession
or sale of such property), (e) all capital lease obligations
of such Person, (f) all obligations of such Person, contingent
or otherwise, as an account party or applicant under acceptance,
letter of credit, surety bond or similar facilities, (g) all
obligations of such Person, contingent or otherwise, to purchase,
redeem, retire or otherwise acquire for value any capital stock of
such Person, (h) all obligations for any earn-out consideration,
(i) the liquidation value of preferred capital stock of such
Person, (j) all guarantee obligations of such Person in respect of
obligations of the kind referred to in clauses (a) through (i)
above, (k) all obligations of the kind referred to in
clauses (a) through (i) above secured by (or for which the
holder of such obligation has an existing right, contingent or
otherwise, to be secured by) any lien on property (including,
without limitation, accounts and contract rights) owned by such
Person, whether or not such Person has assumed or become liable for
the payment of such obligation and all obligations of such Person
in respect of hedge agreements; and (l) all Contingent Obligations
in respect to indebtedness or obligations of any Person of the kind
referred to in clauses (a)-(k) above. The Indebtedness of any
Person shall include, without duplication, the Indebtedness of any
other entity (including any partnership in which such Person is a
general partner) to the extent such Person is liable therefor as a
result of such Person’s ownership interest in or other
relationship with such entity, except to the extent the terms of
such Indebtedness expressly provide that such Person is not liable
therefor.

 

(x) “Investment” means any
investment (including, without limitation, any loan or advance) in
or to any Person, whether payment therefor is made in cash or
capital stock or other equity interests or otherwise, and whether
such Investment is by acquisition of capital stock or other equity
interests or Indebtedness, or by loan, advance, transfer of
property out of the ordinary course of business, capital
contribution, equity or profit sharing interest, extension of
credit on terms other than those normal in the ordinary course of
business or otherwise.

 

(y) “IRR” means the interest rate
received for an investment consisting of payments (negative values)
and income (positive values) that occur at regular
intervals.

 

(z)  “Liens”
or “liens” means a lien,
mortgage, charge pledge, security interest, encumbrance, right of
first refusal, preemptive right or other restriction, or other
clouds on title.

 

 

-4-

 

 

(aa) “Liabilities”
means all direct or indirect liabilities, Indebtedness and
obligations of any kind of Company to the Purchaser, howsoever
created, arising or evidenced, whether now existing or hereafter
arising (including those acquired by assignment), absolute or
contingent, due or to become due, primary or secondary, joint or
several, whether existing or arising through discount, overdraft,
purchase, direct loan, participation, operation of law, or
otherwise, including, but not limited to, pursuant to the Notes,
this Agreement and/or any of the other Transaction Documents, all
accrued but unpaid interest on the Notes, the principal, any letter
of credit, any standby letter of credit, and/or outside
attorneys’ and paralegals’ fees or charges relating to
the preparation of the Transaction Documents and the enforcement of
the Purchaser’s rights, remedies and powers under this
Agreement, the Notes and/or the other Transaction
Documents.

 

(bb) “Material
Adverse Effect” means a material adverse effect on
(a) the business, assets, property, operations, or condition
(financial or otherwise) of the Company, (b) the validity or
enforceability of this Agreement or any of the other Transaction
Documents, (c) the rights or remedies of the Purchaser
hereunder or thereunder, or (d) the ability of the Company to
perform its obligations under any Transaction Document.
Notwithstanding anything to the contrary contained in this
Agreement, nothing herein shall prevent the Company from taking or
failing to take any COVID-19 Actions and (x) no such COVID-19
Actions shall be deemed to violate or breach this Agreement in any
way or be deemed a Material Adverse Effect, (y) all such COVID-19
Actions shall be deemed to constitute an action taken in the
ordinary course of business and (z) no such COVID-19 Actions shall
serve as a basis for Purchaser to terminate this Agreement or
assert that any of the conditions to the applicable Closing
contained herein have not been satisfied.

 

(cc) “May
2020 Financing” means the Company’s financing
which closed on May 8, 2020 involving the sale and issuance of
senior secured notes in an aggregate principal amount of
$3,000,000, warrants for the purchase of an aggregate of 7,600,000 shares of Common
Stock and 7.5 shares of series
G convertible preferred stock to Affiliates of the Purchaser
for an aggregate purchase price of $2,700,000.

 

(dd) “May
2021 Financing” means the Company’s financing
which closed on May 19, 2021 involving the sale and issuance of
senior secured convertible notes in an aggregate principal amount
of $16,642,609 and warrants for the purchase of an aggregate of 1,870,000 shares of Common
Stock for an aggregate purchase price of
$5,610,000.

 

(ee)  “Note”
means all of the Original Issue Discount Senior Secured
Non-convertible Promissory Notes due on November 19, 2023 that are
owned by the Purchaser, which, subject to the terms and conditions
set forth in this Agreement, shall be purchased from the Company
pursuant to this Agreement, and any and all Note(s) issued in
exchange, transfer or replacement of the Note(s); the form of the
Note is annexed hereto as Exhibit B.

 

(ff)  “November
2020 Financing” means the Company’s financing
which closed on November 3, 2020 involving the sale and issuance of
senior secured notes in an aggregate principal amount of
$3,888,889, for an aggregate purchase price of
$3,500,000.

 

 

-5-

 

 

(gg)  “Permitted
Indebtedness” means (a) the indebtedness evidenced by
the Notes, (b) the indebtedness of the Company outstanding as of
the date of this Agreement as set forth on Schedule 3.1(n) hereto,
(c) lease obligations and purchase money indebtedness incurred in
connection with the acquisition of capital assets and lease
obligations with respect to newly acquired or leased assets in the
ordinary course of business, and lease obligations incurred outside
the ordinary course of business shall be limited to a cumulative
maximum of $2,500,000, (d) any indebtedness issued by the Company
to any SBA-approved lender or SBA-approved financial institution up
to a cumulative maximum of $2,500,000, (e) any indebtedness issued
by BW and EV Depot or their subsidiaries upon consummation of the
transactions contemplated by the BW Acquisition and the EV Depot
Acquisition, provided such indebtedness is non-recourse to the
Company and its Subsidiaries (other than BW and EV Depot), (f) a
member loan held by a subsidiary of EV Depot in the aggregate
principal amount of $69,728.24 which shall be paid off in two
installments of $37,739.12 and $31,989.12 on each of January 1,
2022 and February 1, 2022, respectively, (g) existing indebtedness
of BW in the aggregate principal amount of $8,000,000 comprised of
a) a maximum of $3,000,000 shall be a secured line of credit with
Provident Bank and b) $5,000,000 which shall be used for bonding
purposes with Travelers offset by an equal amount of cash which
shall be held in a account at all times, (h) reserved, and (i)
additional bank debt to be obtained by EV Depot for up to an
aggregate principal amount up to $3,000,000.

 

(hh) “Permitted
Lien” means the individual and collective reference to
the following: (a) Liens for taxes, assessments and other
governmental charges or levies not yet due or Liens for taxes,
assessments and other governmental charges or levies being
contested in good faith and by appropriate proceedings for which
adequate reserves (in the good faith judgment of the management of
the Company) have been established in accordance with GAAP; (b)
Liens imposed by law which were incurred in the ordinary course of
the Company’s business, such as carriers’,
warehousemen’s and mechanics’ Liens, statutory
landlords’ Liens, and other similar Liens arising in the
ordinary course of the Company’s business, and which (x) do
not individually or in the aggregate materially detract from the
value of such property or assets or materially impair the use
thereof in the operation of the business of the Company and its
consolidated Subsidiaries or (y) are being contested in good faith
by appropriate proceedings, which proceedings have the effect of
preventing for the foreseeable future the forfeiture or sale of the
property or asset subject to such Lien; (c) Liens incurred in
connection with Permitted Indebtedness thereunder; (d) pledges and
deposits made in the ordinary course of business in compliance with
workers’ compensation, unemployment insurance and other
social security laws or regulations; (e) Deposits to secure the
performance of bids, trade contracts, leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course
of business; (f) any Liens in favor of the Purchaser; and (g) Liens
securing Indebtedness of the type described in clauses (g) and (h)
of the definition of Permitted Indebtedness.

 

(ii) “Person”
means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association,
corporation, institution, entity, party or government (whether
national, federal, state, county, city, municipal or otherwise
including, without limitation, any instrumentality, division,
agency, body or department thereof).

 

 

-6-

 

 

(jj) “Preferred
Designation” means that certain designation of rights
and preferences to be filed with the Delaware Secretary of State on
or before closing.

 

(kk)    “Preferred
Stock” means the Company’s Series C convertible
preferred stock, par value $0.0001 per share, convertible in whole
or in part, at the holder’s option, into shares of Common
Stock at a conversion price of $3.125 per share.

 

(ll)  “Principal
Market” means the principal Trading Market on which
the Common Stock is listed or quoted for trading on the date in
question.

 

(mm) “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.

 

(nn)  “Purchase
Price” shall have the
meaning as set forth on 
Schedule 1 next to the heading
“Purchase Price,” in United States
Dollars.

 

(oo) “Redemption”
means the redemption rights granted to Purchasers to put any
unconverted shares of Preferred Stock, in whole or in part, on the
4-year anniversary of the Closing Date to the Company at Stated
Value plus additional cash consideration in order for the
Purchasers to achieve a 20% IRR, and such IRR calculation shall not
include the Preferred Stock’s dividend payments of 6% per
annum.

 

(pp) “Registration
Rights Agreement” means the Registration Rights
Agreement, dated as of the Closing Date, by and between the Company
and the Purchaser as hereinafter amended and/or supplemented
altogether with all exhibits, schedules and annexes to such
Registration Rights Agreement, which Registration Rights Agreement
is annexed hereto as Exhibit E.

 

(qq)  “Registration
Statement” means a
registration statement meeting the requirements set forth in the
Registration Rights Agreement and covering the resale of the
Conversion
Shares issuable upon conversion of the Preferred Stock and the
Warrant Shares issuable upon exercise of the Warrant as provided
for in the Registration Rights Agreement.

 

(rr)  “SEC”
or “Commission” means the
United States Securities and Exchange Commission.

 

(ss) “Securities”
means the Preferred Stock and the Warrants
purchased pursuant to this Agreement and all Underlying Shares and
any securities of the Company issued to the Purchaser in
replacement, substitution and/or in connection with any exchange,
conversion, exercise and/or any other transaction involving all or
any of such securities of the Company.

 

 

-7-

 

 

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

 

(uu) “Security
Agreement” means the Amended and Restated Security
Agreement, dated on or about the date hereof, by and among the
Company, the Subsidiaries of the Company, and the Purchaser as
hereinafter amended and/or supplemented altogether with all
exhibits, schedules and annexes to such Security Agreement,
pursuant to which the Notes are secured by the Collateral, which
security interest in the Collateral shall be perfected by the
Purchaser’s UCC-1, filed with the Secretary of State of the
State of Delaware, to the extent perfectable by the filing of a
UCC-1 Financing Statement and such other documents and instruments
related thereto, which Security Agreement is annexed hereto as
Exhibit D.

 

(vv) “Senior
Secured Loan” means a loan with a face value of
$14,814,814 from the Purchaser to the Company with an original
issue discount of 10%, a fee of up to $50,000 payable to the
Purchaser, with a maturity date of November 19, 2023, as evidenced
by the Note, as set forth on Schedule 1 hereto.

 

(ww) “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 the location and/or reservation of borrowable
shares of Common Stock).

 

(xx) “SMRH”
means Sheppard, Mullin, Richter & Hampton LLP, with offices
located at 30 Rockefeller Plaza, 39th
Floor, New
York, New York 10112. “Subsidiary” means, with
respect to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock
or such other ownership interests having such power only by reason
of the happening of a contingency) to elect a majority of the board
of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or more
intermediaries, or both, by such Person. All of the Company’s
Subsidiaries are set forth on Schedule 3.1(a)
hereto.

 

(yy) “Stated
Value” means the price per share of Preferred Stock
paid by the Purchasers hereunder.

 

(zz) “Subsidiary
Guaranty Agreement” means each Guaranty Agreement,
substantially in the form of annexed hereto as Exhibit F, between a Subsidiary
and the Purchaser, as amended, restated, supplemented or otherwise
modified from time to time.

 

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

 

(bbb) “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 MKT, the Nasdaq Capital Market,
the Nasdaq Global Market, the Nasdaq Global Select Market, the New
York Stock Exchange, any market or quotation service of the OTC
Markets Group or the OTC Bulletin Board (or any successors to any
of the foregoing).

 

 

-8-

 

 

(ccc) “Transaction
Documents” means, collectively, this Agreement, the
Notes, the Warrants, the Preferred Designation, the Registration
Rights Agreement, the Security Agreement, each Subsidiary Guaranty
Agreement, and all financing statements (or comparable documents
now or hereafter filed in accordance with the UCC or other
comparable or similar laws, rules or regulations) in favor of the
Purchaser as secured parties perfecting all Liens the Purchaser
have on the Collateral (which security interests and Liens of the
Purchaser shall be senior to all Indebtedness of the Company), any
control agreement or similar agreement, and such other documents,
instruments, certificates, supplements, amendments, exhibits and
schedules required and/or attached pursuant to this Agreement
and/or any of the above documents, and/or any other document and/or
instrument related to the above agreements, documents and/or
instruments, and the transactions hereunder and/or thereunder
and/or any other agreement, documents or instruments required or
contemplated hereunder or thereunder, whether now existing or at
any time hereafter arising.

 

(ddd) “Transfer
Agent” means Manhattan Transfer Registrar Co. the
current transfer agent of the Company, with a mailing address of
38B Sheep Pasture Road, Port Jefferson, NY 11777 and a phone number
of 631-928-7655,
and any successor transfer agent of the Company.

 

(eee) “UCC”
means the Uniform Commercial Code as in effect from time to time in
the State of New York; provided, however, that, in the event
that, by reason of mandatory provisions of law, any or all of the
attachment, perfection, priority, or remedies with respect to the
Purchaser’s Liens on any Collateral is governed by the
Uniform Commercial Code as enacted and in effect in a jurisdiction
other than the State of New York, the term “UCC” shall mean the
Uniform Commercial code as enacted and in effect in such other
jurisdiction solely for purposes of the provisions thereof relating
to such attachment, perfection, priority, or remedies.

 

(fff) “Underlying
Shares” means all Conversion Shares and Warrant
Shares.

 

(ggg) “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 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 Sheets” published by OTC
Markets, Inc. (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 Purchaser 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.

 

 

-9-

 

 

(hhh) “Warrants”
means, the Common Stock purchase warrants delivered to the
Purchasers at the Closing in accordance with Section 2.2(a) hereof,
which Warrants shall be exercisable immediately at an exercise
price of $4.00 per share of Common Stock and have a term of
exercise that expires on November 19, 2022 in the form of
Exhibit
C attached
hereto.

 

(iii) “Warrant
Shares” means the shares
of Common Stock issuable upon exercise of the
Warrants.

 

1.2 Other Definitional
Provisions.

 

(a) Use of Defined Terms. Unless
otherwise specified therein, all terms defined in this Agreement
shall have the defined meanings when used in the other Transaction
Documents or any certificate or
other document made or delivered pursuant hereto or
thereto.

 

(b) Accounting Terms. As used
herein and in the other Transaction Documents, and any certificate
or other document made or delivered pursuant hereto or thereto,
accounting terms relating to the Company not defined in
Section 1.1
and accounting terms partly
defined in Section 1.1, to the extent not
defined, shall have the respective meanings given to them under
GAAP (provided that
all terms of an accounting or financial nature used herein shall be
construed, and all computations of amounts referred to herein shall
be made without giving effect to (i) any election under Accounting
Standards Codification 825-10-25 (previously referred to as
Statement of Financial Accounting Standards 159) (or any other
Accounting Standards Codification or Financial Accounting Standard
having a similar result or effect) to value any Indebtedness or
other liabilities of the Company at “fair value”, as
defined therein, and (ii) any treatment of Indebtedness in respect
of convertible debt instruments under Accounting Standards
Codification 470-20 (or any other Accounting Standards Codification
or Financial Accounting Standard having a similar result or effect)
to value any such Indebtedness in a reduced or bifurcated manner as
described therein, and such Indebtedness shall at all times be
valued at the full stated principal amount thereof).

 

(c) Construction. The words
“hereof”,
“herein” and
“hereunder” and words of
similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement, and section, schedule and exhibit references are to this
Agreement unless otherwise specified. The meanings given to terms
defined herein shall be equally applicable to both the singular and
plural forms of such
terms.

 

(d) UCC Terms. Terms used in this
Agreement that are defined in the UCC shall, unless the context
indicates otherwise or are
otherwise defined in this Agreement, have the meanings provided for
by the UCC.

 

 

-10-

 

 

ARTICLE 2 

PURCHASE
AND SALE

 

2.1 Closing.

 

(a)           
On the Closing Date, time being of the essence, subject to the
occurrence of other conditions set forth in Section 2.3 and upon
the terms and subject to the conditions set forth herein, the
Company agrees to sell, and the Purchaser agrees to purchase, the
Securities in such amounts as indicated on 
Schedule 1 hereto. The
Purchaser shall deliver to the Company, via wire transfer,
immediately available funds equal to the Purchase Price, and the
Company shall deliver to the Purchaser the Preferred Stock and the
Warrant on the Closing Date, and the Company and the 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 SMRH or such other location as the parties shall
mutually agree.

 

(b)           On
the Closing Date, time being of the essence, subject to the
occurrence of the other conditions set forth in Section 2.3 and
upon the terms and subject to the conditions set forth herein, the
Purchaser shall provide to the Company the Senior Secured Loan in
consideration for the Note in such amount as indicated on
Schedule 1 hereto.
The Purchaser shall deliver to the Company, via wire transfer,
immediately available funds equal to the Senior Secured Loan on the
Closing Date, and the Company shall deliver to the Purchaser the
Note on the Closing Date, and the Company and the 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
SMRH or such other location as the parties shall mutually
agree.

 

2.2 Deliveries.

 

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

 

(i)           this
Agreement duly executed by the Company;

 

(ii)           a
Security Agreement providing the Purchaser with a lien on all of
the assets of the Company, duly executed by the
Company;

 

(iii)           a
Note registered in the name of the Purchaser with such principal
amount as set forth on Schedule 1;

 

(iv)           shares
of Preferred Stock registered in the name of the Purchaser with
such Face Amount as set forth on Schedule 1;

 

(v)           a
Warrant registered in the name of the Purchaser to purchase up to
2,370,370 shares of Common Stock with an exercise price equal to
$4.00 per share of Common Stock, subject to adjustment
therein;

 

(vi)           the
Registration Rights Agreement duly executed by the
Company;

 

(vii)           a
certificate, in the form acceptable to the Purchaser and its
counsel, executed by the secretary of the Company dated as of the
Closing Date, as to (i) the resolutions as adopted by the
Company’s board of directors relating to the transactions
contemplated by this Agreement in a form acceptable to the
Purchaser, (ii) Certificate of Incorporation or other similar
organizational document of the Company, and (iii) the Bylaws or
other similar organizational document of the Company, each as in
effect at the Closing;

 

(viii)       
a certificate for each Subsidiary of
the Company, in the form acceptable to the Purchaser and its
counsel, executed by the secretary of such Subsidiary dated as of
the Closing Date, as to (i) the resolutions as adopted by the
Subsidiary’s board of directors or other governing body
relating to the transactions contemplated by this Agreement in a
form acceptable to the Purchaser, (ii) Certificate of Incorporation
or other similar organizational document of such Subsidiary, and
(iii) the Bylaws or other similar organizational document of such
Subsidiary, each as in effect at the Closing;

 

 

-11-

 

 

(ix)           a
certificate, duly executed by the Chief Executive Officer of the
Company, dated as of the Closing Date, confirming compliance with
Section 2.3(a)(i) and (ii) below and as to such other matters as
may be reasonably requested by the Purchaser and its counsel in the
form acceptable to the Purchaser;

 

(x)           certificates
evidencing the good standing of the Company and each Company
Subsidiary in such entity’s jurisdiction of incorporation
issued by the Secretary of State (or comparable office) of such
jurisdiction of formation as of a date within five (5) days of the
Closing Date;

 

(xi)           an
opinion of counsel to the Company, in such form as reasonably
acceptable to the Purchaser;

 

(xii)           a
Subsidiary Guaranty Agreement for each Subsidiary of the Company;
and

 

(xiii)                      such
other documents, instruments, opinions or certificates relating to
the transactions contemplated by this Agreement as the Purchaser or
its counsel may reasonably request.

 

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

 

(i)           this
Agreement duly executed by the Purchaser;

 

(ii)           the
Purchase Price subject to the closing by wire
transfer;

 

(iii)           the
Security Agreement duly executed by the Purchaser; and

 

(iv)           
the Registration Rights Agreement duly executed by
thePurchaser.

 

2.3 Conditions to Purchase the
Securities. Subject to the terms and conditions of this
Agreement, the Purchaser will at the Closing purchase from the
Company the Securities in the amounts and for the Purchase Price as
set forth on Schedule 1, provided the
following:

 

 

-12-

 

 

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

 

(i)           the
accuracy in all material respects (or, to the extent
representations or warranties are qualified by materiality or
Material Adverse Effect, in all respects) when made and on the date
of the Closing of the representations and warranties of the
Purchaser 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 Purchaser required to
be performed at or prior to the date of the Closing shall have been
performed;

 

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

 

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

 

(v)           no
statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or
endorsed by any court or other federal, state, local or
other governmental authority of
competent jurisdiction that prohibits the consummation of any of
the transactions contemplated by the Transaction
Documents.

 

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

 

(i)           the
accuracy in all material respects (or, to the extent
representations or warranties are qualified by materiality or
Material Adverse Effect, in all respects) when made and on the date
of the Closing 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 shall have been performed in
all material respects;

 

(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;

 

(v)           the
Company shall have obtained all governmental, regulatory and third
party consents and approvals, if any, necessary for the entry into
the Transaction Documents and the sale of the
Securities;

 

(vi)           the
Company shall have filed the Preferred Designation with Delaware;
and

 

 (vi)           no
statute, rule, regulation, executive order, decree, ruling or
injunction shall have been enacted, entered, promulgated or
endorsed by any court or other federal, state, local or
other governmental authority of
competent jurisdiction that prohibits the consummation of any of
the transactions contemplated by the Transaction
Documents.

 

 

-13-

 

 

2.4 Purchase Price and Payment of the
Purchase Price for the Securities. The Purchase Price for
the Securities to be purchased by the Purchaser at the Closing
shall be as set forth on Schedule 1 and shall be
paid at the Closing (less all of the Purchaser’s Expenses (as
defined below)) by the Purchaser by wire transfer of immediately
available funds to the Company in accordance with the
Company’s written wiring instructions, against delivery of
the Securities.

 

ARTICLE
3

REPRESENTATIONS
AND WARRANTIES; OTHER ITEMS

 

3.1 Representation 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 (but in no
event shall qualify any indemnity obligation of the Company
hereunder), the Company (which for purposes of this
Section 3.1
means the Company and all of its Subsidiaries) represents and
warrants to the Purchaser that on the Closing Date (unless as of a
specific date set forth below):

 

(a) Subsidiaries. All of the direct
and indirect subsidiaries of the Company and the locations thereof
are set forth on Schedule
3.1(a). The Company owns, directly or indirectly, all of the
capital stock or other equity interests of each Subsidiary free and
clear of any Liens, and all of the issued and outstanding shares of
capital stock or other interests 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. Schedule 3.1(a) sets forth, as
of the Closing Date, the jurisdiction of organization and the
location of the Company’s and its subsidiaries’
executive offices and other places of business.

 

(b) Organization, Etc. The Company
and each of the Subsidiaries is duly organized, validly existing
and in good standing under the laws of the state of their
respective organization and are duly qualified and in good standing or has
applied for qualification as a foreign corporation authorized to do
business in each jurisdiction where, because of the nature of its
activities or properties, such qualification is required except
where the failure to be so qualified would not reasonably be
expected to have a Material Adverse Effect.

 

(c) Authorization: No Conflict. The
execution, delivery and performance of the Transaction Documents
and the transactions contemplated thereby by the Company,
including, but not limited to, the sale and issuance of the
Securities for the Purchase Price, the reservation for issuance of the Underlying
Shares required to be reserved pursuant to the terms of the
Preferred Stock and the Warrant, and
the issuance of the Underlying Shares from which the Preferred
Stock is convertible and the Warrant is exercisable (i) are
within the Company’s corporate powers, (ii) have been
duly authorized by all
necessary action by or on behalf of the Company (and/or its
stockholders to the extent required by law), (iii) have
received all necessary and/or required governmental, regulatory and
other approvals and consents (if any shall be required), (iv) do
not and shall not contravene or conflict in any material respect
with any provision of, or require any consents under (1) any law,
rule, regulation or ordinance, (2) the Company’s
organizational documents; and/or (3) 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, and
(v) other than the Liens granted to the Purchaser pursuant to the
Transaction Documents, do not result in, or require, the creation
or imposition of any Lien and/or encumbrance on any of the
Company’s properties or revenues pursuant to any law, rule,
regulation or ordinance or otherwise.

 

 

-14-

 

 

(d) Validity and Binding Nature.
The Transaction Documents to which the Company is a party are the
legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization and other similar laws of general application
affecting the rights and remedies of creditors and by general
equitable principles (whether enforcement is sought by proceedings
in equity or at law).

 

(e) Title to Assets. The Company
and the Subsidiaries have good and marketable title in fee simple
to all real property owned by them and good and marketable title in
all personal property owned by them that is material to the
business of the Company and the Subsidiaries, in each case free and clear
of all Liens, except for (i) Liens as do not materially affect the
value of such property and do not materially interfere with the use
made and proposed to be made of such property by the Company and
the Subsidiaries, (ii) Liens for the payment of federal, state or
other taxes, for which appropriate reserves have been made therefor
in accordance with GAAP and the payment of which is not delinquent,
and (iii) Permitted Liens. 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.

 

(f) Compliance.
Neither the Company nor any Subsidiary: (i) is in default under or
in violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a
default by the Company or any Subsidiary under), nor has the
Company or any Subsidiary received notice of a claim that it is in
default under or that it is in violation of, any indenture, loan or
credit agreement or any other agreement or instrument to which it
is a party or by which it or any of its properties is bound
(whether or not such default or violation has been waived), (ii) is
in violation of any judgment, decree or order of any court,
arbitrator or other governmental authority or (iii) is or has been
in violation of any statute, rule, ordinance or regulation of any
governmental authority, including without limitation all foreign,
federal, state and local laws relating to securities, corporate
law, 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.

 

(g) Taxes. 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-

 

 

(h) Licenses and
Permits. The Company possesses
all certificates, authorizations, consents, approvals, orders,
licenses and permits issued by the appropriate federal, state or
foreign regulatory authorities (collectively, the
“Permits”),
necessary to conduct its business as now conducted. All of such
Permits are valid and in full force and effect. There is no pending
or, to the Company’s knowledge, threatened action, suit,
proceeding or investigation that individually or in the aggregate
would reasonably be expected to lead to the revocation,
modification, termination, suspension or any other impairment of
the rights of the holder of any such Permit.

 

(i) Investment Company. The Company
is not (i) an “investment company” or a company
“controlled”, whether directly or indirectly, by an
“investment company”, within the meaning of the
Investment Company Act of 1940, as amended; or (ii) engaged principally, or as one of its
important activities, in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning
of Regulation U of the Board of Governors of the Federal Reserve
System).

 

(j) Absence of Defaults
and Conflicts.
The Company
is not (i) in violation of its charter, by-laws or similar
incorporation or organizational documents or (ii) in violation
or default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which
the Company is a party or by which it may be bound, or to which any
of the property or assets of the Company is subject
(collectively, “Agreements and
Instruments”). The execution,
delivery and performance of this Agreement and the consummation of
the transactions contemplated in this Agreement and the other
Transaction Documents, and compliance by the Company with its
obligations under this Agreement and the other Transaction
Documents, do not and will not, whether with or without the giving
of notice or passage of time or both, (w) conflict with or result
in a breach of any of the terms and provisions of, or constitute a
default or Repayment Event (as defined below) under, (x) result in
the creation or imposition of any lien, charge or encumbrance
(other than Permitted Liens) upon any property or assets of the
Company pursuant to, the Agreements and Instruments, (y) result in
any violation of the provisions of the charter, by-laws or similar
organizational documents of the Company, or (z) result in any
applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any of
its assets, properties or operations, except in the case of this
clause (z) for such conflicts, violations, breaches or defaults
which would not reasonably be expected to result in a Material
Adverse Effect on the Company. As used herein, a
“Repayment
Event”
means any
event or condition which gives the holder of any note, debenture or
other evidence of indebtedness that is material to the operations
or financial results of the Company (or any person acting on such
holder’s behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by
the Company.

 

 

-16-

 

 

(k) Foreign Corrupt
Practices Act. Neither the Company
nor, to the Company’s knowledge, any of its affiliates,
directors, officers, employees, agents or other person acting on
behalf of the Company is aware of or has taken any action, directly
or indirectly, that would result in a material violation by such
person of the Foreign Corrupt Practices Act of 1977, as amended,
and the rules and regulations thereunder (the “FCPA”),
including, without limitation, making use of the mails or any means
or instrumentality of interstate commerce corruptly in furtherance
of an offer, payment, promise to pay or authorization of the
payment of money, or other property, gift, promise to give, or
authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the
FCPA) or any foreign political party or official thereof or any
candidate for foreign political office, in contravention of the
FCPA and the Company and, to the Company’s knowledge, its
affiliates have conducted their businesses in material compliance
with the FCPA and have instituted and maintain policies and
procedures designed to ensure, and which are reasonably expected to
continue to ensure, continued compliance
therewith.

 

(l) Rule 506(d) Bad Actor Disqualification
Representations and Covenants.

 

(i) No Disqualification Events.
Neither the Company, nor any of its predecessors, affiliates, any
manager, executive officer, other officer of the Company
participating in the offering, any beneficial owner (as that term
is defined in Rule 13d-3 under the Exchange Act) 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 as of the date of this Agreement
and on the Closing Date (each, a “Company Covered Person”
and, together, “Company 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 (A) the identity of each person that is a
Company Covered Person; and (B) whether any Company Covered
Person is subject to a Disqualification Event. The Company has
complied with its disclosure obligations under Rule 506(e) as set
forth on Schedule 3.1(l).

 

(ii) Other
Covered Persons. The Company is not aware of any person
(other than any Company Covered Person) who has been or will be
paid (directly or indirectly) remuneration in connection with the
purchase and sale of the Notes and the Warrant who is subject to a
Disqualification Event (each, an “Other Covered
Person”).

 

 

-17-

 

 

(iii) Reasonable
Notification Procedures. With respect to each Company
Covered Person, the Company has established procedures reasonably
designed to ensure that the Company receives notice from each such
Company Covered Person of (A) any Disqualification Event relating
to that Company Covered Person, and (B) any event that would, with
the passage of time, become a Disqualification Event relating to
that Company Covered Person; in each case occurring up to and
including the Closing Date.

 

(iv) Notice
of Disqualification Events. The Company will notify the
Purchaser immediately in writing upon becoming aware of (A) any
Disqualification Event relating to any Company Covered Person and
(B) any event that would, with the passage of time, become a
Disqualification Event relating to any Company Covered Person
and/or Other Covered Person.

 

(m) Accuracy of Information, etc.
No statement or information contained in this Agreement, any other
Transaction Document or any other document, certificate or
statement furnished to the Purchaser by or on behalf of the Company
in writing for use in connection with the transactions contemplated
by this Agreement and/or the other Transaction Documents contained,
as of the date such statement, information, document or certificate
was made or furnished, as the case may be, any untrue statement of
a material fact or omitted to state a material fact necessary to
make the statements contained herein or therein, taken as a whole,
not materially misleading. There is no fact known to the Company
that would reasonably be expected to materially affect the Company
that has not been expressly disclosed herein, in the other
Transaction Documents, or in any other documents, certificates and
written statements furnished to the Purchaser for use in connection
with the transactions contemplated hereby and by the other
Transaction Documents.

 

(n) Solvency.
Based on the consolidated financial condition of the Company as of
the Closing Date, after giving effect to the receipt by the Company
of the proceeds from the sale of the Securities hereunder: (i) the
fair saleable value of the Company’s assets exceeds the
amount that will be required to be paid on or in respect of the
Company’s existing debts and other liabilities (including
known contingent liabilities) as they mature, (ii) the
Company’s assets do not constitute unreasonably small capital
to carry on its business as now conducted and as proposed to be
conducted including its capital needs taking into account the
particular capital requirements of the business conducted by the
Company, consolidated and projected capital requirements and
capital availability thereof, and (iii) the current cash flow of
the Company, together with the proceeds the Company would receive,
were it to liquidate all of its assets, after taking into account
all anticipated uses of the cash, would be sufficient to pay all
amounts on or in respect of its liabilities when such amounts are
required to be paid. The Company does not intend to incur debts
beyond its ability to pay such debts as they mature (taking into
account the timing and amounts of cash to be payable on or in
respect of its debt). The Company has no knowledge of any facts or
circumstances which lead it to believe that it will file for
reorganization or liquidation under the bankruptcy or
reorganization laws of any jurisdiction within one year from the
Closing Date. Schedule 3.1(n)
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. Neither the Company nor
any Subsidiary is in default with respect to any
Indebtedness.

 

 

-18-

 

 

(o) Transactions With
Affiliates and Employees. Except as set forth
on the financial statements included in Schedule 3.1(x), 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.

 

(p) Intellectual Property. The
Company has, or has 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 described
on Schedule 3.1(p)
that are material to the conduct of its business (collectively, the
“Intellectual
Property Rights”). The Company has not received a
notice (written or otherwise) that any material Intellectual
Property Right has expired, terminated or been abandoned, or is
expected to expire or terminate or be abandoned. The Company has
not 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
would not have or reasonably be expected to 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 has taken commercially reasonable security
measures to protect the secrecy, confidentiality and value of all
of its intellectual property.

 

(q) USA Patriot Act. The Company is
in compliance, in all material respects, with (i) the Trading with
the Enemy Act, as amended, and each of the foreign assets control
regulations of the United States Treasury Department (31 C.F.R.,
Subtitle B, Chapter V, as amended) and any other enabling
legislation or executive order relating thereto, and (ii) the USA
Patriot Act (Title III of Pub. L. 107-56, signed into law on
October 26, 2001) (the “Act”). No part of the
proceeds of the Notes or Warrant will be used, directly or
indirectly, for any payments to any governmental official or
employee, political party, official of a political party, candidate
for political office, or anyone else acting in an official
capacity, in order to obtain, retain or direct business or obtain
any improper advantage, in violation of the United States Foreign
Corrupt Practices Act of 1977, as amended.

 

(r) Office of Foreign
Assets Control. Neither the
Company nor any Subsidiary nor, to the Company’s knowledge,
any director, officer, agent, joint venture employee or affiliate
of the Company or any Subsidiary is currently, or in the past 5
years, has been subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Treasury Department
(“OFAC”).

 

 

-19-

 

 

(s) 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 the
Registration Rights Agreement and the declaration of effectiveness
by the SEC of the Registration Statement, (ii) the notice and/or
application(s) to each applicable Trading Market for the issuance
and sale of the Securities and the listing of the Conversion Shares
and Warrant Shares for trading thereon in the time and manner
required thereby, and (iii) 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”).

 

(t) Authorization; Enforcement. All
corporate action on the part of the Company, its officers,
directors and stockholders necessary for the authorization,
execution and delivery of the Transaction Documents and the
performance of all obligations of the Company under the Transaction
Documents and have been taken on or prior to the date hereof. Each
of the Transaction Documents has 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 applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as
limited by general equitable principles regardless of whether such
enforcement is considered in a proceeding in equity or at law,
(iii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iv)
insofar as indemnification and contribution provisions may be
limited by applicable law.

 

(u) Valid Issuance of Securities.
The Preferred Stock and Warrant have been duly authorized and, when
issued and paid for in accordance with this Agreement, will be duly
and validly issued, fully paid and nonassessable, free and clear of
all Liens and all restrictions on transfer other than those
expressly imposed by the federal securities laws and vest in the
Purchaser full and sole title and power to the Preferred Stock and
Warrant purchased hereby by the Purchaser, free and clear of all
Liens, and restrictions on transfer other than those imposed by the
federal securities laws. All Conversion Shares, when issued
pursuant to conversion of the Preferred Stock, and all Warrant
Shares, when issued pursuant to exercise of the Warrants, when
issued pursuant to this Agreement, will be duly and validly issued,
fully paid and nonassessable, will be free and clear of all Liens
and vest in the holder full and sole title and power to such
securities. The Company has reserved from its duly authorized
unissued Common Stock, the Required Minimum (as defined in the
Preferred Designation), which Required Minimum shall be
continuously determined by the Company to ensure that the Required
Minimum is in reserve with the Transfer Agent at all
times.

 

 

-20-

 

 

(v) Offering. The offer and sale of
the Preferred Stock and the Warrant, when issued pursuant to this
Agreement, as contemplated by this Agreement, are exempt from the
registration requirements of the Securities Act, and the
qualification or registration requirements of state securities laws
or other applicable blue sky laws. Neither the Company nor any
authorized agent acting on its behalf will take any action
hereafter that would cause the loss of such
exemptions.

 

(w) Capitalization and Voting
Rights. The capitalization of
the Company is as set forth on Schedule
3.1(w), which
Schedule
3.1(w) 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. The
authorized capital stock of the Company and all securities of the
Company issued and outstanding are set forth on Schedule 3.1(w) as of the dates
reflected therein. All of the outstanding shares of Common Stock
and other securities of the Company have been duly authorized and
validly issued, and are fully paid and nonassessable. Except as set forth
on Schedule
3.1(w), 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 set forth on Schedule 3.1(w), there are no
agreements or arrangements under which the Company is obligated to
register the sale of any of the Company’s securities under
the Securities Act. Except as set forth on Schedule 3.1(w), no shares of
Common Stock and/or other securities of the Company are entitled to
preemptive rights and there are no outstanding debt securities and
no contracts, commitments, understandings, or arrangements by which
the Company is or may become bound to issue additional shares of
the capital stock and/or other securities of the Company or
options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities
or rights convertible into or exchangeable for, any shares of
capital stock of the Company other than those issued or granted in
the ordinary course of business pursuant to the Company’s
equity incentive and/or compensatory plans or arrangements. Except
for customary transfer restrictions contained in agreements entered
into by the Company to sell restricted securities and/or as set
forth on Schedule
3.1(w), the Company is not a party to, and it has no
knowledge of, any agreement restricting the voting or transfer of
any shares of the capital stock and/or other securities of the
Company. Except as set forth on Schedule 3.1(w), the offer and
sale of all capital stock, convertible or exchangeable securities,
rights, warrants, options and/or any other securities of the
Company, when any such securities of the Company were issued,
complied in all material respects with all applicable federal and
state securities laws, and no current and/or prior holder of any
securities of the Company has any right of rescission or damages or
any “put” or similar right with respect thereto. Except
as set forth on Schedule
3.1(w), there are no securities or instruments of the
Company containing anti-dilution or similar provisions that will be
triggered by the issuance and/or sale of the Securities and/or the
consummation of the transactions described herein or in any of the
other Transaction Documents.

 

(x) Shell Company Status; Financial
Statements. The Company has been an issuer subject to Rule
144(i) under the Securities Act. The unaudited financial statements
of the Company as of September 30, 2021 is included in Schedule 3.1(x) hereto. The
financial statements of the Company included on Schedule 3.1(x) have been
prepared in accordance with 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 to
normal, immaterial, year-end audit adjustments. For purposes of
this Section 3.1, September 30, 2021 is referred to as the
“Balance Sheet
Date”.

 

 

-21-

 

 

(y) Material Changes; Undisclosed Events,
Liabilities or Developments. Since the Balance Sheet Date:
(i) there has been no event, occurrence or development that has had
or that could reasonably be expected to be materially adverse to
the Company, (ii) the Company has not incurred any liabilities
(contingent or otherwise) other than (A) trade payables and accrued
expenses incurred in the ordinary course of business consistent
with past practice and (B) liabilities not required to be reflected
in the Company’s financial statements pursuant to GAAP or
disclosed in filings made with the Commission (if the Company is an
issuer required to file periodic reports under the Exchange Act),
(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 or as set forth on
Schedule
3.1(y), 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, 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.

 

(z) Litigation.
Except as
set forth on Schedule 3.1(z), there is no action, suit, inquiry,
notice of violation, proceeding or investigation pending or, to the
knowledge of the Company, threatened against or affecting the
Company, any Subsidiary or any of their respective properties
before or by any court, arbitrator, governmental or administrative
agency or regulatory authority (federal, state, county, local or
foreign) (collectively, an “Action”)
which (i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the
Securities or (ii) could, if there were an unfavorable decision,
have or reasonably be expected to result in a Material Adverse
Effect. Neither the Company nor any Subsidiary, nor any director or
officer thereof, is or has been the subject of any Action involving
a claim of violation of or liability under federal or state
securities laws or a claim of breach of fiduciary duty. There has
not been, and to the knowledge of the Company, there is not pending
or contemplated, any investigation by the Commission involving the
Company or any current or former director or officer of the
Company. The Commission has not issued any stop order or other
order suspending the effectiveness of any registration statement
filed by the Company or any Subsidiary under the Exchange Act or
the Securities Act.

 

 

-22-

 

 

(aa) 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 Purchaser or its respective agents or counsel with
any information that constitutes material, non-public information.
The Company understands that the Purchaser may rely on the
Transaction Documents, the information included therein, including,
but not limited to, the foregoing representation in purchasing the
Securities. All of the disclosure furnished by or on behalf of the
Company to the Purchaser in the Transaction Documents regarding,
among other matters relating to the Company, its business and the
transactions contemplated in the Transaction Documents, is true and
correct in all material respects as of the date made 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 light of the circumstances under which they were made,
not misleading. The Company acknowledges and agrees that the
Purchaser does not make nor has made any representations or
warranties with respect to the transactions contemplated in the
Transaction Documents other than those specifically set forth in
Section 3.2
hereof.

 

(bb) No
Integrated Offering. Assuming the accuracy of the
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 the issuance and/or sale of the
Securities to be integrated with prior offerings of securities by
the Company for purposes of (i) the Securities Act that would
require the registration of any such Securities and/or any other
securities of the Company under the Securities Act, or that would
invalidate the exemptions from registration relied upon by the
Company, or (ii) any stockholder-approval provisions of any Trading
Market on which any of the securities of the Company are listed,
eligible for quotation and/or designated.

 

(cc) Insurance.
The Company
is insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent
and customary in the business in which it is engaged; the Company
has not been refused any coverage sought or applied for; and the
Company does not have 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.

 

(dd) 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.

 

(ee) Registration
Rights. Except as set forth
on Schedule
3.1(ee), no Person has any
right to cause the Company to effect the registration under the
Securities Act of any securities of the Company or any
Subsidiaries.

 

 

-23-

 

 

(ff) 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.

 

(gg) Dilutive
Effect. The Company understands and acknowledges that the
number of Underlying Shares issuable upon conversion of the
Preferred Stock and exercise of the Warrant, pursuant to the terms
thereof, will increase in certain circumstances. The Company
further acknowledges that its obligations to issue Underlying
Shares pursuant to the terms of the Preferred Designation and
Warrant in accordance with this Agreement, the Preferred Stock and
Warrant is absolute and unconditional regardless of the dilutive
effect that any such issuances may have on the percentage ownership
interests of other stockholders of the Company.

 

(hh) Application
of Takeover Protections; Rights Agreement.  The Company
and its board of directors have taken all necessary action, if any,
in order to render inapplicable any control share acquisition,
business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provisions under
the Company’s certificate of incorporation, as amended, or
the laws of the jurisdiction of its formation that are or could
become applicable to the Purchaser as a result of the transactions
contemplated by this Agreement and/or the other Transaction
Documents, including, without limitation, the Company’s
issuance of the Securities and the Purchaser’s ownership of
the Securities. The Company has not adopted a stockholder rights
plan or similar arrangement relating to accumulations of beneficial
ownership of Common Stock or a change in control of the
Company.

 

(ii) Manipulation
of Price. The Company has not, and to its knowledge no one
acting on its behalf has, (i) taken, directly or indirectly, any
action designed to cause or to result, or that could reasonably be
expected to cause or result, in the stabilization or manipulation
of the price of any security of the Company to facilitate the sale
or resale of any of the Securities, (ii) sold, bid for, purchased,
or paid any compensation for soliciting purchases of, any of the
Securities, or (iii) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other
securities of the Company.

 

 

-24-

 

 

(jj) DTC
Eligible. The Common Stock is DTC eligible and DTC has not
placed a “freeze” or a “chill” on the
Common Stock and the Company has no reason to believe that DTC has
any intention to make the Common Stock not DTC eligible, or place a
“freeze” or “chill” on the Common Stock. No
federal or state regulatory authority has indicated that it will
prohibit the listing of the Company’s securities based upon
its prior business in the cannabis or cannabis-related markets nor
will the Purchaser be prohibited from depositing, clearing or
settling the Securities, including through the DTC or
otherwise, on account of the Company’s prior business in the
cannabis or cannabis-related markets.

 

(kk) Listing
and Maintenance Requirements. 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 Common Stock is
eligible for quotation on the Principal Market and the Company has
no reason to believe that the Principal Market has any intention of
delisting or no longer quoting the Common Stock from the Principal
Market. The issuance and sale of the
Securities hereunder does not contravene the rules and regulations
of the Trading Market. All Underlying Shares have been
approved, if so required, for listing or quotation on the Trading
Market, subject only to notice of issuance.

 

(ll) No
General Solicitation.  Neither the Company, nor any of
its affiliates, nor, to the knowledge of the Company, any Person
acting on its behalf, has engaged in any form of general
solicitation or general advertising (within the meaning of
Regulation D) in connection with the offer or sale of the
Securities. 

 

(mm) Acknowledgment
Regarding the Purchaser’s Purchase of Securities.
 The Company acknowledges and agrees that the Purchaser is
acting solely in the capacity of an arm’s length purchaser
with respect to the other Transaction Documents and the
transactions contemplated hereby and thereby and that the Purchaser
is not (i) an officer or director of the Company, (ii) an
Affiliate of the Company or (iii) to the knowledge of the
Company, a “beneficial owner” of more than 10% of the
shares of Common Stock (as defined for purposes of Rule 13d-3
of the Exchange Act).  The Company further acknowledges that
the Purchaser is not 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 hereby and
thereby, and any advice given by the Purchaser or any of its
representatives or agents in connection with the Transaction
Documents and the transactions contemplated hereby and thereby is
merely incidental to the Purchaser’s purchase of the
Securities.  The Company further represents to the Purchaser
that the Company’s decision to enter into the Transaction
Documents has been based solely on the independent evaluation by
the Company and its representatives.

 

(nn) Off-Balance
Sheet Arrangements.  There is no transaction,
arrangement, or other relationship between the Company and an
unconsolidated or other off-balance sheet entity that is required
to be disclosed by the Company in its Exchange Act filings and is
not so disclosed.

 

 

-25-

 

 

(oo) Certain
Fees. No brokerage or
finder’s fees or commissions are or will be payable by the
Company or any Subsidiaries 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 Purchaser 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.

 

(pp) Anti-Money
Laundering, Anti-Bribery and Anti-Corruption;
Sanctions.

 

(i) Neither the Company
nor, any of its Subsidiaries or Affiliates or any director or
officer of any of them is an individual or entity currently, or has
not in the past 5 years been, subject to any Sanctions or is on any
Sanctions List.

 

(ii) Each
of the Company, any of its Subsidiaries and Affiliates and their
respective directors, officers, employees and, to the knowledge of
the Company, agents and any other person or entity acting on behalf
of the Company, has complied with the Money Laundering,
Anti-Corruption and Anti-Bribery Laws, in each case as applicable
to them, and no action, suit or proceeding by or before any court
or any arbitrator or any governmental agency, authority or body
involving the Company and any of its Subsidiaries or their
respective directors or officers and, to the knowledge of the
Company, the employees, agents, or representatives of each of them,
is pending or threatened with respect to Money Laundering,
Anti-Corruption and Anti-Bribery Laws.

 

(iii) Neither
the Company nor any of its Subsidiaries nor their respective
directors or officers, nor, to the knowledge of the Company, the
employees or agents of any of them has:

 

A.

used any corporate
funds (nor will it use any proceeds from the Notes and Warrants)
for any unlawful contribution, gift, entertainment or unlawful
expense relating to political activity;

 

B.

taken any action in
furtherance of an unlawful offer, payment, promise to pay, or
authorization or approval of the payment or giving of money,
property, gifts or (anything else of value, directly or indirectly,
to any “government official” (including any officer or
employee of a government or government owned or controlled entity
or of a public international organization, or any person acting in
an official capacity for or on behalf of any of the foregoing, or
any political party or party official or candidate for public
office) or made any other bribe, rebate, payoff, influence payment
or kickback intended to improperly influence official action or
secure an improper advantage;

 

 

-26-

 

 

C.

nor will it use any
proceeds from the Notes and Warrants in furtherance of any such
unlawful payment or violation of Sanctions or Money Laundering,
Anti-Corruption and Anti-Bribery Laws.

 

(iv) The
Company and each Subsidiary will promote and ensure compliance with
Money Laundering, Anti-Corruption and Anti-Bribery Laws in all
jurisdictions where they operate and with the representations and
warranties contained herein.

 

(v) As used in this
Section 3.1(pp):

 

A.

 “Money
Laundering, Anti-Corruption and Anti-Bribery Laws”
means money laundering and anti- corruption statutes of all
jurisdictions (including, the Foreign Corrupt Practices Act of
1977, the OECD Convention on Bribery of Foreign Public Officials in
International Business Transactions, and any similar national or
local law or regulation in the United Kingdom or elsewhere where
the Company and each other Subsidiary conducts business), the rules
and regulations thereunder and any related or similar rules,
regulations or guidelines, issued, administered or enforced by any
governmental agency or any such jurisdiction.

 

B.

“Sanctions” means any laws
or regulations or restrictive measures relating to economic or
financial sanctions or trade embargoes imposed, administered or
enforced from time to time by a Sanctions Authority.

 

C.

 “Sanctions
Authority” means (i) the United Nations Security
Council; (ii) the United States government; (iii) the European
Union; (iv) the United Kingdom government; (v) the respective
governmental institutions and agencies of any of the foregoing,
including without limitation, OFAC, the United States Department of
State and Department of Commerce, and Her Majesty's Treasury; and
(vi) any other governmental institution or agency with
responsibility for imposing, administering or enforcing Sanctions
with jurisdiction over the Company or any of its subsidiaries
(together, “Sanctions
Authorities”).

 

D.

 “Sanctions
List” means the Specially Designated Nationals and
Blocked Persons List maintained by OFAC, the Denied Persons List
maintained by the U.S. Department of Commerce, the Consolidated
List of Financial Sanctions Targets maintained by Her Majesty's
Treasury, or any other list issued or maintained by any Sanctions
Authority of persons subject to Sanctions (including investment or
related restrictions), each as amended, supplemented or substituted
from time to time.

 

 

-27-

 

 

(qq) Environmental
Laws. The Company and its
Subsidiaries, to the best of the Company’s knowledge, (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.

 

(rr) Seniority.
As of the Closing Date, (i) all Indebtedness, other than the Notes
and the indebtedness issued to Affiliates of the Purchaser in the
May 2021 Financing, the May 2020 Financing and November 2020
Financing, are subordinated to the Notes and the indebtedness
issued to Affiliates of the Purchaser in the May 2020 Financing and
the November 2020 Financing, and (ii) no Indebtedness or other
claim against the Company is senior to or pari passu with the Notes
or indebtedness issued to Affiliates of the Purchaser in the May
2021 Financing, the May 2020 Financing and November 2020 Financing
in right of payment (except that the Notes and the indebtedness
issued to Affiliates of the Purchaser in the May 2021 Financing,
the May 2020 Financing and November 2020 Financing are pari passu
with each other), whether with respect to interest or upon
liquidation or dissolution, or otherwise, other than indebtedness
secured by purchase money security interests (which is senior only
as to underlying assets covered thereby) and capital lease
obligations (which is senior only as to the property covered
thereby).

 

3.2 Representation and Warranties of the
Purchaser. The Purchaser, severally and not jointly, hereby
represents and warrants as of the date hereof and as of the Closing
Date to the Company as follows:

 

(a) Organization;
Authority. The 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 the
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 the Purchaser. Each Transaction Document
to which it is a party has been duly executed by the Purchaser, and
when delivered by the Purchaser in accordance with the terms
hereof, will constitute the valid and legally binding obligation of
the 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.

 

 

-28-

 

 

(b)  Own
Account. The 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 the Purchaser’s
right to sell the Securities pursuant to an effective registration
statement or otherwise in compliance with applicable federal and
state securities laws). The Purchaser is acquiring the Securities
hereunder in the ordinary course of its
business.

 

(c) Purchaser
Status. At the time the
Purchaser was offered the Securities, 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
Purchaser. The 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. The 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. The Purchaser is not,
to the 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 any other general solicitation or general
advertisement.

 

(f) Access to
Information. The 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. 

 

 

-29-

 

 

(g) Certain Transactions and
Confidentiality. The Purchaser has not directly or
indirectly, nor has any Person acting on behalf of or pursuant to
any understanding with the Purchaser, executed any purchases or
sales, including Short Sales, of the securities of the Company
during the period commencing as of the time that the 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, if the Purchaser is a multi-managed investment
vehicle, whereby separate portfolio managers manage separate
portions of the Purchaser’s assets and the portfolio managers
have no direct knowledge of the investment decisions made by the
portfolio managers managing other portions of the 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 the Purchaser's representatives, including,
without limitation, its officers, directors, partners, legal and
other advisors, employees, agents and Affiliates, the Purchaser has
maintained the confidentiality of all disclosures made to it in
connection with this transaction (including the existence and terms
of this transaction).

 

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 transaction contemplated hereby.

 

ARTICLE 4 

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 the
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 the Purchaser under this Agreement.

 

(b) The
Purchaser agrees 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:

 

NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS
CONVERTIBLE HAS 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
AND THE SECURITIES ISSUABLE UPON CONVERSION/EXERCISE OF 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.

 

 

-30-

 

  

 The
Company acknowledges and agrees that the 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 who agrees to be bound by the provisions of
this Agreement and, if required under the terms of such
arrangement, the 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 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 then registered for
resale on a registration statement, 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) Certificates
evidencing the Underlying 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 Underlying Shares pursuant to Rule 144,
(iii) if such Underlying 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(c) if required by the Transfer Agent to effect the
removal of the legend hereunder, or if requested by the Purchaser.
If any portion of the Preferred Stock is converted at a time when
there is an effective registration statement to cover any sale of
the Underlying Shares, or if such Underlying 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
Underlying 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 Underlying
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 Underlying 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(c), 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 Underlying
Shares, as applicable, 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 Underlying
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 Underlying Shares, as applicable, issued with a
restrictive legend.

 

 

-31-

 

 

(d) In
addition to the Purchaser’s other available remedies, the
Company shall pay to the Purchaser, in cash, the greater of (i) as
partial liquidated damages and not as a penalty, for each $1,000 of
Underlying 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(c), $5 per Trading Day (increasing to $10 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 (x)
issue and deliver (or cause to be delivered) to the Purchaser by
the Legend Removal Date a certificate representing the Securities
so delivered to the Company by the Purchaser that is free from all
restrictive and other legends or (y) if after the Legend Removal
Date the Purchaser purchases (in an open market transaction or
otherwise) shares of Common Stock to deliver in satisfaction of a
sale by the 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 the Purchaser anticipated receiving from the Company without
any restrictive legend, then, an amount equal to the excess of the
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 Conversion Shares, as applicable,
that the Company was required to deliver to the 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 the Purchaser to the Company of the
applicable Underlying Shares and ending on the date of such
delivery and payment under this clause (ii).

 

4.2 Furnishing of
Information. Beginning on the
Closing Date, the Company shall use commercially reasonable efforts
to comply with the Pink Basic Disclosure Guidelines which set forth
the disclosure obligations that make up the “Alternative
Reporting Standard” for OTC Pink companies as such
obligations are published by the OTC Markets Group, Inc. In
addition, the Company shall file a Registration Statement on Form
8-A as soon as practicable, but in no event no later than five (5)
Trading Days, after the effective date of first registration
statement filed by the Company that is declared effective by the
SEC which registers securities held by the Purchaser or any of its
Affiliates. If after the date hereof the Company becomes
subject to the rules and regulations of the Exchange Act and as
long as the Purchaser
owns Securities, the Company covenants to timely file (or obtain
extensions in respect thereof and file within the applicable grace
period) all reports required to be filed by the Company after the
date hereof pursuant to the Exchange Act. As long as the Purchaser
owns Securities, if the Company is not required to file reports
pursuant to the Exchange Act, it will prepare and furnish to the
Purchaser and make publicly available in accordance with Rule
144(c) such information as is required for the Purchaser to sell
the Securities, including without limitation, under Rule 144. In
addition, the Company shall file with Commission current
“Form 10 information”, as defined in Rule 144(i)(3), as
soon as practicable after the date the Company becomes subject to
the rules and regulations of the Exchange Act, reflecting its
status as an entity that is no longer an issuer described in Rule
144(i)(1)(i). 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.

 

4.3 Integration.
The Company shall not sell, offer for sale or solicit offers to buy
or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with
the offer or sale of the Securities 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.

 

 

-32-

 

 

4.4 Securities
Laws Disclosure; Publicity. The
Company shall by 9:00am on the 2nd
Trading Day after the date of this
Agreement, issue a press release disclosing the material terms of
the transactions contemplated hereby, which press release shall
have been approved by the Purchaser prior to its release (which
approval shall not unreasonably be withheld or delayed). From and
after the issuance of such press release, the Company represents to
the Purchaser that it shall have publicly disclosed all material,
non-public information delivered to the Purchaser by the Company or
any of its Subsidiaries, or any of their respective officers,
directors, employees or agents in connection with the transactions
contemplated by the Transaction Documents. In addition, effective
upon the issuance of such press release, the Company acknowledges
and agrees that any and all confidentiality or similar obligations
under any agreement, whether written or oral, between the Company,
any of its Subsidiaries or any of their respective officers,
directors, agents, employees or Affiliates on the one hand, and the
Purchaser or any of its Affiliates on the other hand, shall
terminate. The Company and the Purchaser shall consult with each
other in issuing any other press releases with respect to the
transactions contemplated hereby, and neither the Company nor the
Purchaser shall issue any such press release nor otherwise make any
such public statement without the prior consent of the Company,
with respect to any press release of the Purchaser, or without the
prior consent of the Purchaser, with respect to any press release
of the Company, which consent shall not unreasonably be withheld or
delayed, except if such disclosure is required by law, in which
case the disclosing party shall promptly provide the other party
with prior notice of such public statement or communication.
Notwithstanding the foregoing, the Company shall not, without the
prior written consent of the Purchaser, (a) use the name of the
Purchaser, “Arena Investors LP,” “Arena
Management Company LLC,” “Arena Finance Company
LLC,” “Arena” or any other derivative thereof
(each, a “Trade
Name”) in any press
releases or other public disclosures (including in any filing with
the Commission or any regulatory agency or Trading Market),
offering documents, sales materials, brochures or similar publicity
or promotional materials, or for promotional purposes, whether
orally or in writing, except (x) as required by federal
securities law and the rules and regulations promulgated thereunder
in connection with the filing of final Transaction Documents, any
disclosure required pursuant to any reports required to be
filed by the Company pursuant to the Exchange Act after the date
hereof or the Registration Statement
with the Commission, (y) to the extent such disclosure is
required by law or Trading Market regulations, including
the
“Alternative Reporting Standard” required by OTC
Markets, in which case the
Company shall provide the Purchaser with prior notice of such
disclosure permitted under this clause (y), or (z) as required
under Delaware General Corporation Law or (b) represent that an
investment in the Company or any product or any service provided by
the Company has been approved or endorsed by the Purchaser.
Following any such written consent, which shall not be
unreasonably withheld or delayed, the Company shall provide the Purchaser with a
copy of such written or other materials using the Trade Name if
requested by the Purchaser. The Purchaser shall be deemed to
have provided prior written consent of the disclosure of the
Purchaser’s name to other stockholders and investors in the
Company, and to potential investors in the Company (that to the
extent such information has not already been publicly disclosed,
have been informed of the confidential nature thereof) that in the
course of their due diligence require disclosure of the identity of
the existing investors in the Company.

 

4.5 Shareholder Rights
Plan. No claim will be made
or enforced by the Company or, with the consent of the Company, any
other Person, that the 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 the Purchaser could be deemed to trigger the
provisions of any such plan or arrangement, by virtue of receiving
Securities under the Transaction Documents.

 

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

 

 

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4.7 Use of
Proceeds. Subject to the terms
and conditions set forth on Schedule 4.7
attached
hereto, the Company shall use the net proceeds from the sale of the
Securities hereunder for working capital purposes and shall not use
such proceeds: (a) for the satisfaction of any portion of the
Company’s debt (other than payment of trade payables in the
ordinary course of the Company’s business and prior
practices), (b) for the redemption of any Common Stock or Common
Stock Equivalents, (c) for the settlement of any outstanding
litigation or (d) in violation of FCPA, OFAC regulations or
Money Laundering, Anti-Corruption and Anti-Bribery Laws.
Notwithstanding anything to the contrary in the Transaction
Documents or otherwise, neither the Company nor its Subsidiaries
may use any portion of the Purchase Price or any other
proceeds from the Purchaser or any of its Affiliates (including the
proceeds from the sale of the senior secured notes issued to
Affiliates of the Purchaser in the May 2021 Financing, the May 2020
Financing and November 2020 Financing) to pay any liquidated
damages, penalties, fees or other amounts due and payable to the
Purchaser or its Affiliates under the Transaction Documents, the
transaction documents relating to the May 2021 Financing, the May
2020 Financing, November 2020 Financing or otherwise without the
express advance written consent of the Purchaser.

 

4.8 Indemnification of
Purchaser.    Subject
to the provisions of this Section 4.8, the Company will
indemnify and hold the Purchaser and its respective 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 the 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, as incurred, arising
out of or relating to (i) any untrue or alleged untrue
statement of a material fact contained in any registration
statement filed by the Company, any prospectus or any form of
prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or relating to any
omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein (in the
case of any prospectus or supplement thereto, in the light of the
circumstances under which they were made) not misleading, except to
the extent, but only to the extent, that such untrue statements or
omissions are based solely upon information regarding such
Purchaser Party furnished in writing to the Company by such
Purchaser Party expressly for use therein, or (ii) any
violation or alleged violation by the Company of the Securities
Act, the Exchange Act or any state securities law, or any rule or
regulation thereunder in connection therewith. If any action shall
be brought against any Purchaser Party in respect of which
indemnity may be sought pursuant to this Agreement, such Purchaser
Party shall promptly notify the Company in writing, and the Company
shall have the right to assume the defense thereof with counsel of
its own choosing reasonably acceptable to the Purchaser Party. Any
Purchaser Party shall have the right to employ separate counsel in
any such action and participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such
Purchaser Party except to the extent that (x) the employment
thereof has been specifically authorized by the Company in writing,
(y) the Company has failed after a reasonable period of time
to assume such defense and to employ counsel or (z) in such
action there is, in the reasonable opinion of counsel, a material
conflict on any material issue between the position of the Company
and the position of such Purchaser Party, in which case the Company
shall be responsible for the reasonable fees and expenses of no
more than one such separate counsel. The Company will not be liable
to any Purchaser Party under this Agreement (1) for any
settlement by a Purchaser Party effected without the
Company’s prior written consent, which shall not be
unreasonably withheld or delayed; or (2) to the extent, but
only to the extent that a loss, claim, damage or liability is
attributable to any Purchaser Party’s breach of any of the
representations, warranties, covenants or agreements made by such
Purchaser Party in this Agreement or in the other Transaction
Documents. The indemnification required by this Section 4.8
shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are
received or are incurred. The indemnity agreements contained herein
shall be in addition to any cause of action or similar right of any
Purchaser Party against the Company or others and any liabilities
the Company may be subject to pursuant to law.

 

 

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4.9 Reservation of Common
Stock. As of the date
hereof, the Company has reserved and the Company shall continue to
reserve and keep available at all times, free of preemptive rights,
a sufficient number of shares of Common Stock equal to the Required
Minimum (as defined in the Preferred Designation) for the purpose
of enabling the Company to issue the Underlying Shares and any
other shares that may be issuable pursuant to the Preferred Stock
and Warrant. If, on any date, the number of authorized but
unissued (and otherwise unreserved) shares of Common Stock is less
than the Required Minimum on such date, then the Board of Directors
shall use commercially reasonable efforts to amend the
Company’s certificate or articles of incorporation to
increase the number of authorized but unissued shares of Common
Stock to at least the Required Minimum at such time, as soon as
possible and in any event not later than the 75th day after such
date

 

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

 

4.11 Certain
Transactions and Confidentiality. The Purchaser
covenants that neither it nor any Affiliate acting on its behalf or
pursuant to any understanding with it will execute any purchases or
sales, including Short Sales of any of the Company’s
securities during the period commencing with the execution of this
Agreement and ending at such time that the transactions
contemplated by this Agreement are first publicly announced
pursuant to the initial press release as described in
Section 4.4.  The Purchaser covenants that until such
time as the transactions contemplated by this Agreement are
publicly disclosed by the Company pursuant to the initial press
release as described in Section 4.4, such Purchaser will
maintain the confidentiality of the existence and terms of this
transaction and the information included in the Disclosure
Schedules. Notwithstanding the foregoing and notwithstanding
anything contained in this Agreement to the contrary, the Company
expressly acknowledges and agrees that (i) no Purchaser makes
any representation, warranty or covenant hereby that it will not
engage in effecting transactions in any securities of the Company
after the time that the transactions contemplated by this Agreement
are first publicly announced, (ii) no Purchaser shall be restricted
or prohibited from effecting any transactions in any securities of
the Company in accordance with applicable securities laws from and
after the time that the transactions contemplated by this Agreement
are first publicly announced pursuant to the initial press release
as described in Section 4.4, (iii) the Purchaser has
not been asked by the Company to agree, nor has the Purchaser
agreed, to desist from purchasing or selling Securities which have
been issued under the terms of this Agreement, the Preferred
Designation or any other Transaction Document, or
“derivative” securities based on securities issued by
the Company or to hold the Securities for any specified term,
(iv)  the Purchaser shall not be deemed to have any
affiliation with or control over any arm’s length
counter-party in any “derivative” transaction,
(v) the Purchaser may engage in hedging activities, other than
Short Sales at various times during the period that the Securities
are outstanding,  and (vi) no
Purchaser shall have any duty of confidentiality or duty not to
trade in the securities of the Company to the Company or its
Subsidiaries after the issuance of the initial press
release.  Except as contemplated above, Company
acknowledges that such aforementioned hedging activities do not
constitute a breach of any of the Transaction
Documents.

 

 

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4.12 Conversion
Procedures. The form of Notice of
Conversion in the Preferred Designation sets forth the totality of
the procedures required of the Purchaser in order to convert the
Preferred Stock. No additional legal opinion, other information or
instructions shall be required of the Purchaser to convert the
Preferred Stock. Without limiting the preceding sentences,
no ink-original
Notice of
Conversion shall be required, nor shall any medallion guarantee (or
other type of guarantee or notarization) of any Notice of
Conversion form be required in order to covert the Preferred Stock.
The Company shall honor conversions of the Preferred Stock and
shall deliver the Underlying Shares in accordance with the terms,
conditions and time periods set forth in the Transaction
Documents.

 

4.13 Form
D; Blue Sky Filings. The Company agrees to
timely file a Form D with respect to the Securities with the
Commission as required under Regulation D, and with the applicable
securities regulators in the states in which the Securities were
sold, and to provide copies thereof, promptly upon request of the
Purchaser. The Company shall take such further 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
Purchaser 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 the
Purchaser.

 

4.14 Maintenance
of Property. So long as the Preferred Stock, Notes and
Warrant remain outstanding, the Company shall use its commercially
reasonable efforts to keep all of its property, which is necessary
or useful to the conduct of its business, in good working order and
condition, ordinary wear and tear excepted.

 

4.15 Preservation
of Corporate Existence. So long as the Preferred Stock,
Notes and Warrant remain outstanding, the Company shall preserve
and maintain its corporate existence, rights, privileges and
franchises in the jurisdiction of its incorporation, and qualify
and remain qualified, as a foreign corporation in each jurisdiction
in which such qualification is necessary in view of its business or
operations and where the failure to qualify or remain qualified
would reasonably be expected to have a Material Adverse
Effect.

 

4.16 DTC
Program. At all times that the Securities are outstanding,
the Company will employ as the transfer agent for the Common Stock
and Conversion Shares a participant in the Depository Trust Company
Automated Securities Transfer Program and cause the Common Stock to
be transferable pursuant to such program.

 

4.17 Subsequent
Equity Sales. From the date hereof until such time as
the
Purchaser no longer holds the Preferred Stock and the Warrant, the
Company shall be prohibited from effecting or entering into an
agreement to effect any issuance by the Company or any of its
Subsidiaries of Common Stock or Common Stock Equivalents (or a
combination of units thereof) involving a Variable Rate
Transaction. “Variable Rate
Transaction” means a transaction which is not
Permitted Indebtedness and in which the Company (i) issues or sells
any debt or equity securities that are convertible into,
exchangeable or exercisable for, or include the right to receive
additional shares of Common Stock either (A) at a conversion price,
exercise price or exchange rate or other price that is based upon
and/or varies with the trading prices of or quotations for the
shares of Common Stock at any time after the initial issuance of
such debt or equity securities, or (B) with a conversion, exercise
or exchange price that is subject to being reset at some future
date after the initial issuance of such debt or equity security or
upon the occurrence of specified or contingent events directly or
indirectly related to the business of the Company or the market for
the Common Stock or (ii) enters into, or effects a transaction
under, any agreement, including, but not limited to, an equity line
of credit, whereby the Company may issue securities at a future
determined price. The foregoing restrictions shall not include any
agreement for an at-the-market offering. The 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. From the date hereof until ninety
(90) days after the effectiveness of the Registration Statement,
the Company shall be prohibited from effecting any registration
statement, or amendment or supplement thereto, with the Commission,
other than a prospectus filed with the Commission pursuant to Rule
424(b) in connection with the Registration Statement.

 

 

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4.18 Transfer
Agent Instructions. The Company shall issue irrevocable
instructions to the Transfer Agent in a form acceptable to the
Purchaser (the “Irrevocable Transfer Agent
Instructions”) to issue certificates or credit shares
via DWAC or otherwise to the applicable balance accounts at The
Depository Trust Company (“DTC”), registered in the
name of the Purchaser or its respective nominee(s), for the
Underlying Shares in such amounts as specified from time to time by
the Purchaser to the Company upon conversion of the Preferred Stock
or exercise of the Warrant. The Company represents and warrants
that no instruction other than the Irrevocable Transfer Agent
Instructions referred to in this Section will be given by the
Company to its Transfer Agent with respect to the Securities, and
that the Securities shall otherwise be freely transferable on the
books and records of the Company, as applicable, to the extent
provided in this Agreement and the other Transaction Documents. In
the event that such sale, assignment or transfer involves
Conversion Shares sold, assigned or transferred pursuant to an
effective registration statement or in compliance with Rule 144,
the transfer agent shall issue such shares to such Buyer, assignee
or transferee (as the case may be) without any restrictive legend
in accordance with Section 4.1. The Company acknowledges that a
breach by it of its obligations hereunder will cause irreparable
harm to Purchaser. Accordingly, the Company acknowledges that the
remedy at law for a breach of its obligations under this Section
will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Section,
that Purchaser shall be entitled, in addition to all other
available remedies, to an order and/or injunction restraining any
breach and requiring immediate issuance and transfer, without the
necessity of showing economic loss and without any bond or other
security being required. The Company shall cause its counsel to
issue the legal opinion referred to in the Irrevocable Transfer
Agent Instructions to the Company’s transfer agent from and
after the Applicable Date. Any fees (with respect to the transfer
agent, counsel to the Company or otherwise) associated with the
issuance of such opinion or the removal of any legends on any of
the Securities shall be borne by the Company. “Applicable Date” means
the first date on which all of the Underlying Shares are eligible
to be resold by the Purchaser pursuant to Rule 144 or an effective
registration statement is in effect.

 

4.19 Public
Information. At any time during the period commencing from
the six (6) month anniversary of the Closing Date 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 shall fail for any reason to satisfy the
current public information requirement under Rule 144(c) (a
“Public Information
Failure”) then, in addition to the Purchaser’s
other available remedies, the Company shall pay to the 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 two percent (2.0%) of the
aggregate Purchase Price of the
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 Purchaser to transfer the Underlying Shares
pursuant to Rule 144. The payments to which the Purchaser
shall be entitled pursuant to this Section 4.19 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. If an Event (as defined in the Registration Rights
Agreement) is occurring at the time of a Public Information
Failure, and the Company is (x) then obligated to pay, and (y)
timely pays the Purchaser partial liquidated damages under Section
2(d) of the Registration Rights Agreement for the period occurring
simultaneous with the applicable Public Information Failure (such
payments, the “Simultaneous Registration Rights
Partial Liquidated Damages”) and (z) has timely paid
the Purchaser all previously accrued partial liquidated damages
under Section 2(d) of the Registration Rights Agreement, the
Company may deduct the amounts paid in connection with such
Simultaneous Registration Rights Partial Liquidated Damages from
such Public Information Failure Payments due for such simultaneous
Public Information Failure. 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
the
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.

 

 

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

 

4.21 Litigation.
For as long as the Notes and Warrants are outstanding, the Company
shall promptly, to the extent not prohibited by law, give the
Purchaser notice in writing of any Action before or by any
court,
arbitrator, governmental or administrative agency or regulatory
authority (federal, state, county, local or foreign)
affecting the Company, any Subsidiary, any director and/or officer
including but not limited to, any Action involving a claim of
violation of or liability under federal or state securities laws, a
claim of breach of fiduciary duty or any investigation by a
governmental or administrative agency or regulatory authority
(federal, state county, local or foreign). Any such
information provided to the Purchaser
shall comply with the requirements of Section 4.6
above.

 

4.22 Access
to Records. The Company shall provide the Purchaser
and/or any of its duly authorized representatives, attorneys or
accountants access to any and all bank records at the premises of
the Company where such records are kept, such access being afforded
without charge, but only during normal business hours. Any such
information provided to the Purchaser
shall comply with the requirements of Section 4.6
above.

 

 

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4.23 OTC
Markets; National Securities Exchange.  

 

(a) As
soon as reasonably practicable after the Closing, the Company shall
use its reasonable best efforts to meet the eligibility
requirements for listing its shares of Common Stock on the OTCQB or
OTCQX and upon meeting such requirements, the Company shall
promptly take all necessary and appropriate actions to quote its
shares of Common Stock on such over-the-counter
market.

 

(b) As soon as reasonably
practicable after the Company meets the qualitative and
quantitative listing standards for listing on a national securities
exchange, the Company shall use reasonable best efforts to
take all necessary and appropriate actions to list its shares of
Common Stock for trading on such national securities
exchange.

 

4.24 Post-Closing
Actions. The
Company shall and shall cause each of its relevant Subsidiaries to
execute and deliver the documents and complete the tasks set forth
in this Section as soon as reasonably practicable and in each case
no later than the time limit specified in this Section or such
longer time as the Purchaser may agree in its sole
discretion:

 

(a) Any Person acquired
by the Company, or that otherwise becomes a Subsidiary of the
Company, on or after the date of this Agreement shall enter into a
Subsidiary Guaranty Agreement and be joined to the Security
Agreement as a debtor not later than one (1) calendar day after the
consummation of such acquisition by the Company or the date the
Person otherwise becomes a Subsidiary of the Company;
and

 

(b) The Company shall
consummate the BW Acquisition within thirty (30) calendar days
following the Closing Date. If the BW Acquisition is not
consummated within the time limit specified herein, it will
constitute an Event of Default.

 

(c) The Company shall
consummate the acquisition of EV Depot Acquisition within thirty
(30) calendar days following the Closing Date. If the EV Depot
Acquisition is not consummated within the time limit specified
herein, it will constitute an Event of Default.

 

4.25 Future
Financings. Except
for Permitted Indebtedness and for so long as Liabilities are
outstanding, neither the Company, nor any of its Subsidiaries,
shall enter into, create, incur, assume, guarantee or suffer
to exist any Indebtedness. Despite the foregoing prohibition and
for so long as Liabilities are outstanding, if at any time the
Company or any of its Subsidiaries issues or incurs any
Indebtedness other than Permitted Indebtedness, in addition to the
Purchaser’s other available remedies, the Company shall pay
to the Purchaser, in cash, as partial liquidated damages and not as
a penalty, on each date of any such issuance or incurrence of
Indebtedness, $30,000. Any such Indebtedness shall be expressly
subordinated to the Notes and the convertible promissory notes
issued to Affiliates of the Purchaser in the May 2020 Financing ,
the November 2020 Financing and May 2021 Financing, and the holders
of such Indebtedness shall not be granted any registration rights,
nor shall the Company register, or cause to be registered, with the
SEC or any state securities commission the notes or other debt
instruments representing such Indebtedness or any equity securities
issuable in connection with such Indebtedness. In addition, all
entry into future Permitted Indebtedness shall be subject to a
subordination and intercreditor agreements in form satisfactory to
the Purchaser, with the exception of clauses (f), (g) and (h) of
Permitted Indebtedness.

 

 

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4.26 Most
Favored Nations. If, while the Note, Warrant or Preferred
Stock are outstanding, the Company issues other securities to
persons other than the Purchasers or
their Affiliates (“Other Securities”)
and a Purchaser reasonably believes
that any of the terms and conditions appurtenant to such issuance
are more favorable to such investors than are the terms and
conditions granted to the Purchaser hereunder, upon notice to the
Company by such Purchaser, then the Purchaser will be
provided with an opportunity to exchange the Securities issuable
pursuant to the Transaction Documents for such Other Securities.
The Company shall provide each
Purchaser with notice of any such issuance or sale not later than
five (5) Trading Days before such issuance.

 

ARTICLE
5

MISCELLANEOUS

 

5.1 Fees and Expenses. Except as
expressly set forth below and in the Transaction Documents to the
contrary, each party shall pay the reasonable, documented fees and
expenses of its advisers, counsel, accountants and other experts,
if any, and all other expenses incurred by such party incident to
the negotiation, preparation, execution, delivery and performance
of this Agreement. The Company shall pay all Transfer Agent fees
(including, without limitation, any fees required for same-day
processing of any instruction letter delivered by the Company and
any exercise notice delivered by the Purchaser),
stamp taxes and other taxes and duties levied in connection with
the delivery of any Securities to the Purchaser. Notwithstanding
the foregoing, the Company agrees to pay all direct and indirect
costs and expenses of the Purchaser related to the negotiation, due
diligence, preparation, closing, and all other items regarding or
related to this Agreement and the other Transaction Documents and
all of the transactions contemplated herein and/or therein,
including, but not limited to, the legal fees and expenses of the
Purchaser’s legal counsel (collectively, the
“Purchaser’s
Expenses”), all of which will be deducted and paid on
Closing Date.

 

5.2 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.

 

5.3 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 date of transmission, if
such notice or communication is delivered via facsimile or email
attachment at the facsimile number or email address as set forth on
the signature pages attached hereto at or prior to 5:30 p.m. (New
York City time) on a Business Day, (b) the next Business Day after
the date of transmission, if such notice or communication is
delivered via facsimile or email attachment at the facsimile number
or email address as set forth on the signature pages attached
hereto on a day that is not a Business Day or later than 5:30 p.m.
(New York City time) on any Business Day, (c) the second
(2nd)
Business 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.

 

 

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5.4 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 the Purchaser or, in the case of a
waiver, by the party against whom enforcement of any such waived
provision is sought. 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 amendment effected in accordance with
accordance with this Section 5.4 shall be binding upon the
Purchaser and holder of Securities and the Company.

 

5.5 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 the Purchaser then holding the
outstanding Notes and Warrant (other than by merger). Purchaser may
assign any or all of its rights under this Agreement to any Person
to whom Purchaser assigns or transfers any Securities in compliance
with the Transaction Documents, 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 “Purchaser,” and provided further that (i)
such transferee is an “accredited investor” within the
meaning of Rule 501 under the Securities Act and (ii) such
transferee is not a direct competitor of the Company or any
Subsidiary.

 

5.6 No Third-Party Beneficiaries.
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.

 

5.7 Governing Law; Exclusive
Jurisdiction. 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 elsewhere in this Agreement, 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.

 

 

-41-

 

 

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

 

5.9 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.

 

5.10 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, as long as the essential terms and
conditions of the Notes and Warrant for each party remain valid,
binding, and enforceable. The parties 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.

 

5.11 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 the 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 the Purchaser may rescind or withdraw, in its sole
discretion from time to time upon written notice to the Company,
any relevant notice, demand or election in whole or in part without
prejudice to its future actions and rights; provided,
however,
that, in the case of a rescission of a conversion of the Preferred
Stock or of an exercise of the Warrant, the Purchaser shall be
required to return any shares of Common Stock subject to any such
rescinded conversion or exercise notice concurrently with the
return to the Purchaser of the aggregate exercise price paid to the
Company for such shares.

 

5.12 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.

 

 

-42-

 

 

5.13 Remedies.
In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, each of
the Purchaser 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.

 

5.14 Payment
Set Aside. To the extent that
the Company makes a payment or payments to the Purchaser pursuant
to any Transaction Document or the 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.

 

5.15 Usury.
To the extent it may lawfully do so, the Company hereby agrees not
to insist upon or plead or in any manner whatsoever claim, and will
resist any and all efforts to be compelled to take the benefit or
advantage of, usury laws wherever enacted, now or at any time
hereafter in force, in connection with any Action or Proceeding
that may be brought by the Purchaser in order to enforce any right
or remedy under any Transaction Document. Notwithstanding any
provision to the contrary contained in any Transaction Document, it
is expressly agreed and provided that the total liability of the
Company under the Transaction Documents for payments in the nature
of interest shall not exceed the maximum lawful rate authorized
under applicable law (the “Maximum
Rate”), and, without
limiting the foregoing, in no event shall any rate of interest or
default interest, or both of them, when aggregated with any other
sums in the nature of interest that the Company may be obligated to
pay under the Transaction Documents exceed such Maximum Rate. It is
agreed that if the maximum contract rate of interest allowed by law
and applicable to the Transaction Documents is increased or
decreased by statute or any official governmental action subsequent
to the date hereof, the new maximum contract rate of interest
allowed by law will be the Maximum Rate applicable to the
Transaction Documents from the effective date thereof forward,
unless such application is precluded by applicable law. If under
any circumstances whatsoever, interest in excess of the Maximum
Rate is paid by the Company to the Purchaser with respect to
indebtedness evidenced by the Transaction Documents, such excess
shall be applied by the Purchaser to the unpaid principal balance
of any such indebtedness or be refunded to the Company, the manner
of handling such excess to be at the Purchaser’s
election.

 

 

-43-

 

 

5.16 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.

 

5.17 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.

 

5.18 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.

 

5.19 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)

 

	
	
	
 

	
 

	
 

	
 

 

-44-

 

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.

 

 

	

CHARGE ENTERPRISES, INC.

 

 

	

Address
for Notice:

 

125 Park Avenue,
25th
Floor

New York, NY
10017

 

	

By:_/s/
Andrew
Fox________________________

 Name:
Andrew Fox

 Title:
Chief Executive Officer

 

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

	

Email:
a@charge.us

	

 

Sheppard,
Mullin, Richter & Hampton LLP

30
Rockefeller Plaza, 39th Floor

New
York, NY 10112

Attn:
Richard A. Friedman and Stephen A. Cohen

Email:
rafriedman@sheppardmullin.com,
scohen@sheppardmullin.com

 

 

	
 

 

 

 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK

 

SIGNATURE
PAGE FOR PURCHASER FOLLOWS]

 

 

-45-

 

PURCHASER
SIGNATURE PAGES TO CRGE 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: Arena Origination Co., LLC

 

Signature of Authorized Signatory of
Purchaser: ___/s/ Lawrence
Cutler _____________

 

Name of
Authorized Signatory: Lawrence Cutler

 

Title
of Authorized Signatory: Authorized Signatory

 

Email
Address of Authorized Signatory: lcutler@arenaco.com

 

Facsimile Number of
Authorized Signatory:
__________________________________

 

Address
for Notice to Purchaser:

 

405
Lexington Avenue, 59th Floor

 

New
York, NY 10174

 

 

 

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

 

 

 

 

 

FEIN
Number: __________________________________

 

 

 

 

 

 

 

-46-

 

 

PURCHASER
SIGNATURE PAGES TO CRGE 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: Arena Special Opportunities Fund, LP

 

Signature of Authorized Signatory of
Purchaser: ___/s/ Lawrence
Cutler _____________

 

Name of
Authorized Signatory: Lawrence Cutler

 

Title
of Authorized Signatory: Authorized Signatory

 

Email
Address of Authorized Signatory: lcutler@arenaco.com

 

Facsimile Number of
Authorized Signatory:
__________________________________

 

Address
for Notice to Purchaser:

 

405
Lexington Avenue, 59th Floor

 

New
York, NY 10174

 

 

 

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

 

 

 

 

 

FEIN
Number: __________________________________

 

 

 

 

 

-47-

 

 

PURCHASER
SIGNATURE PAGES TO CRGE 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: Arena Special Opportunities Partners I, LLC

 

Signature of Authorized Signatory of
Purchaser: ___/s/ Lawrence
Cutler _____________

 

Name of
Authorized Signatory: Lawrence Cutler

 

Title
of Authorized Signatory: Authorized Signatory

 

Email
Address of Authorized Signatory: lcutler@arenaco.com

 

Facsimile Number of
Authorized Signatory:
__________________________________

 

Address
for Notice to Purchaser:

 

405
Lexington Avenue, 59th Floor

 

New
York, NY 10174

 

 

 

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

 

 

 

 

 

FEIN
Number: __________________________________

 

 

 

 

 

 

 

-48-

 

 

PURCHASER
SIGNATURE PAGES TO CRGE 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: Mt. Whitney Securities, LLC

 

Signature of Authorized Signatory of
Purchaser: ___/s/ Lawrence
Cutler _____________

 

Name of
Authorized Signatory: Lawrence Cutler

 

Title
of Authorized Signatory: Authorized Signatory

 

Email
Address of Authorized Signatory: lcutler@arenaco.com

 

Facsimile Number of
Authorized Signatory:
__________________________________

 

Address
for Notice to Purchaser:

 

405
Lexington Avenue, 59th Floor

 

New
York, NY 10174

 

 

 

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

 

 

 

 

 

FEIN
Number: __________________________________

 

 

-49-

 

EXHIBIT A

 

Form of Preferred Designation

 

[omitted]

 

 

 

-50-

 

 

EXHIBIT B

 

Form of Note

 

[omitted]

 

 

 

 

 

-51-

 

 

EXHIBIT C

 

Form of Warrant

 

[omitted]

 

 

-52-

 

EXHIBIT D

 

Form of Amended and Restated Security Agreement

 

[omitted]

 

 

-53-

 

EXHIBIT E

 

Form of Registration Rights Agreement

 

[omitted]

 

 

 

-54-

 

EXHIBIT F

 

Form of Subsidiary Guaranty Agreement

 

[omitted]

 

 

 

-55-

 

 

Schedule 1

 

Purchase Price; Securities Purchased

 

 

	

Name of
Purchaser

	

Purchase
Price

	

Aggregate
Stated Value (Rounded) of Preferred Stock being

Purchased

	

Aggregate
Face Value (Rounded) of Notes being

Purchased

	

Number
of Warrants (Rounded)

to be
Issued

	

Arena
Origination Co., LLC

	

$560,005

	

$207,409.26

	

$414,818.52

	

66,371

	

Arena
Special Opportunities Fund, LP

	

$3,104,705

	

$1,149,890.77

	

$2,299,781.46

	

367,965

	

Arena
Special Opportunities Partners I, LP

	

$10,332,305

	

$3,826,779.71

	

$7,653,559.18

	

1,224,569

	

Mt.
Whitney Securities, LLC

	

$6,002,985

	

$2,223,327.82

	

$4,446,655.51

	

711,465

	

TOTAL

	

$20,000,000

	

$7,407,407.56

	

$14,814,814.67

	

2,370,370

 

 

 

 

 

 

 

 

 

 

 

-56-

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