Document:

snwv_ex101

  Exhibit 10.1

 

SERIES D PREFERRED STOCK PURCHASE AGREEMENT

 

This Series D Preferred Stock Purchase Agreement (this
“Agreement”)
is dated as of May 14, 2020, between SANUWAVE Health, Inc.,
a Nevada corporation (the
“Company”),
and the purchasers identified on the signature page hereto
(including their successors and assigns, the
“Purchasers,” and each individually a
“Purchaser”).

 

WHEREAS, the Company and the Purchasers are executing and
delivering this Agreement in reliance upon the exemption from
securities registration afforded by Section 4(a)(2) of the
Securities Act of 1933, as amended (the “Securities
Act”).

 

WHEREAS, subject to the terms and conditions set forth in this
Agreement, the Company desires to sell to the Purchasers, and each
Purchaser desires to purchase from the Company, that aggregate
number of shares of the Company’s Series D Convertible
Preferred Stock, par value $0.001 per share (the
“Preferred
Stock”), set
forth opposite such Purchaser’s name on the signature page
hereto (which aggregate number for all Purchasers together shall
collectively be referred to herein as the
“Preferred
Shares”).

 

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

 

ARTICLE I

 

DEFINITIONS

 

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

 

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

 

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

 

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

 

“Closing Date” means the Trading Day on which all of
the Transaction Documents have been executed and delivered by the
applicable parties thereto, and all conditions precedent to (i) the
Purchaser’s obligations to pay the Subscription Amount, (ii)
the Company’s obligations to deliver the Preferred Shares, in
each case, have been satisfied or waived, and (iii) the Company has
received the full Subscription Amount for such Preferred Shares in
immediately available funds, but in no event later than the third
Trading Day following the date hereof.

 

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

 

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

 

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

 

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

 

“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.

 

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

 

“Rule 424” means Rule 424 promulgated by the Commission
pursuant to the Securities Act, as such Rule may be amended or
interpreted from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same
purpose and effect as such rule.

 

 

 

 

“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).

 

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

 

“Subsidiary” means
any subsidiary of the Company as set forth on Exhibit 21.1 to the
Company’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2019, and shall, where applicable, also include
any direct or indirect subsidiary of the Company formed or acquired after the date
hereof.

 

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

 

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

 

“Transaction Documents” means this Agreement and any
other documents or agreements executed in connection with the
transactions contemplated hereunder.

 

ARTICLE II

 

PURCHASE AND SALE OF PREFERRED SHARES

 

2.1 Purchase
of Preferred Shares; Closing. On the Closing Date, upon the terms
and subject to satisfaction of the conditions set forth in Section
2.3, below, substantially concurrent with the execution and
delivery of this Agreement by the parties hereto, the Company
agrees to sell, and the Purchaser agrees to purchase, the amount of
Preferred Shares as set forth on the signature page hereto. Upon
satisfaction of the covenants and conditions set forth in
Sections 2.2 and 2.3, the Closing shall occur at the
offices of the Company or such other location as the parties shall
mutually agree. The parties agree that the Closing may occur
remotely by the electronic delivery of the closing documents set
forth in Section 2.2(a) and (b), with delivery of original,
executed documents to follow promptly
thereafter.

 

2.2 Deliveries.

 

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

 

(i) this
Agreement duly executed by the Company;

 

(ii) evidence
that the Certificate of Designation of the Preferred Shares in the
form attached hereto as Exhibit
A (the
“Certificate of
Designation”)
has been filed and accepted by the Secretary of State of the State
of Nevada; and

 

(iii) a
certificate or certificates for the number of shares of Preferred
Stock, equal to the number of Preferred Shares set forth on the
signature page hereto.

 

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

 

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

 

(ii) immediately
available funds equal to the Purchaser’s Subscription Amount
by wire transfer in accordance with the Company’s written
wire instructions to the account as set forth on the signature page
hereto.

 

2.3 Closing
Conditions.

 

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

 

(i) the
accuracy in all material respects on the Closing Date of the
representations and warranties of each 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 Closing Date shall have been
performed;

 

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

 

(iv)  the
Certificate of Designation has been filed and accepted by the
Secretary of State of the State of Nevada.

 

 

 

 

(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 on the Closing Date of the
representations and warranties of the Company contained herein
(unless as of a specific date therein, in which case they shall be
accurate as of such date);

 

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

 

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

 

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

 

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

 

(vi) the
Certificate of Designation has been filed and accepted by the
Secretary of State of the State of Nevada.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

 

3.1 Representations
and Warranties of the Company. Except as described in the SEC
Reports (as defined in Section 3.1(h), below) or any information
contained or incorporated therein, which collectively 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 SEC Reports, the Company hereby
makes the following representations and warranties to the Purchaser
that, as of the date hereof and as of the Closing
Date:

 

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

 

(b) Organization and
Qualification. The
Company and each of the Subsidiaries is an entity duly incorporated
or otherwise organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or organization,
with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently
conducted. Neither the Company nor any Subsidiary is in violation
nor default of any of the provisions of its respective certificate
or articles of incorporation, bylaws or other organizational or
charter documents, except to the extent that any such default would
not have or reasonably be expected to result in: (i) a material
adverse effect on the legality, validity or enforceability of any
Transaction Document, (ii) a material adverse effect on the results
of operations, assets, business or condition (financial or
otherwise) of the Company and the Subsidiaries, taken as a whole,
or (iii) a material adverse effect on the Company’s ability
to perform in any material respect on a timely basis its
obligations under any Transaction Document (any of (i), (ii) or
(iii), a “Material Adverse
Effect”),
provided that none of the following alone shall be deemed, in and
of itself, to constitute a Material Adverse Effect: (i) a change in
the market price or trading volume of the Common Stock or (ii) a
change in general economic conditions or affecting the industry in
which the Company operates generally (as opposed to
Company-specific changes), so long as such changes do not have a
materially disproportionate effect on the Company. Each of the
Company and the Subsidiaries is duly qualified to conduct business
and is in good standing as a foreign corporation or other entity in
each jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the
case may be, would not reasonably be expected to result in a
Material Adverse Effect, and no Proceeding has been instituted in
any such jurisdiction revoking, limiting or curtailing, or seeking
to revoke, limit or curtail, such power and authority or
qualification.

 

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

 

 

 

 

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

 

(e) Filings, Consents
and Approvals. The
Company is not required to obtain any consent, waiver,
authorization or order of, give any notice to, or make any filing
or registration with, any court or other federal, state, local or
other governmental authority or other Person in connection with the
execution, delivery and performance by the Company of the
Transaction Documents, other than: (i) the filings required
pursuant to Section 4.6 of this Agreement and (ii) such filings
as are required to be made under applicable state securities laws
(collectively, the “Required
Approvals”).

 

(f) Issuance
of the Preferred Shares. The Preferred Shares are duly
authorized and, when issued and paid for in accordance with the
applicable Transaction Documents, will be duly and validly issued,
fully paid and nonassessable, free and clear of all Liens imposed
by the Company. Assuming the accuracy
of each of the representations and warranties of each Purchaser set
forth in Section 3.2 of this Agreement, the offer and issuance by
the Company of the Preferred Shares is exempt from registration
under the Securities Act.

 

(g) Capitalization.
As of the date hereof, the capitalization of the Company is
described in Schedule 3.1(g) attached hereto. The Company has not
issued any capital stock since its most recently filed Form 8-K
current report under the Securities Exchange Act of 1934, as
amended (the “Exchange
Act”), other
than pursuant to the exercise of employee stock options under the
Company’s stock option plans, the issuance of shares of
Common Stock to employees pursuant to the Company’s employee
stock purchase plans and pursuant to the conversion and/or exercise
of Common Stock Equivalents outstanding as of the date of the most
recently filed periodic report under the Exchange Act. No Person
has any right of first refusal, preemptive right, right of
participation or any similar right to participate in the
transactions contemplated by the Transaction Documents. Except as a
result of the purchase and sale of the Preferred Shares or as
disclosed in the SEC Reports, there are no outstanding options,
warrants, scrip rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities, rights or
obligations convertible into or exercisable or exchangeable for, or
giving any Person any right to subscribe for or acquire, any shares
of Common Stock, or contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may
become bound to issue additional shares of Common Stock or Common
Stock Equivalents. The issuance and sale of the Preferred Shares
will not obligate the Company to issue shares of Common Stock or
other securities to any Person (other than the Purchaser) and will
not result in a right of any holder of Company securities to adjust
the exercise, conversion, exchange or reset price under any of such
securities. All of the outstanding shares of capital stock of the
Company are validly issued, fully paid and nonassessable, have been
issued in compliance with all federal and state securities laws,
and none of such outstanding shares was issued in violation of any
preemptive rights or similar rights to subscribe for or purchase
securities. Other than the Required Approvals, no further approval
or authorization of any stockholder, the Board of Directors or
others is required for the issuance and sale of the Preferred
Shares. Except as disclosed in the SEC Reports, there are no
stockholders agreements, voting agreements or other similar
agreements with respect to the Company’s capital stock to
which the Company is a party or, to the knowledge of the Company,
between or among any of the Company’s
stockholders.

 

(h) SEC Reports;
Financial Statements. The Company has filed all reports,
schedules, forms, statements and other documents required to be
filed by the Company under the Securities Act and the Exchange Act,
including pursuant to Section 13(a) or 15(d) thereof, for the two
years preceding the date hereof (or such shorter period as the
Company was required by law or regulation to file such material)
(the foregoing materials, including the exhibits thereto and
documents incorporated by reference therein, are collectively
referred to herein as the “SEC
Reports”) on a
timely basis or has received a valid extension of such time of
filing and has filed any such SEC Reports prior to the expiration
of any such extension. As of their respective dates, the SEC
Reports complied in all material respects with the requirements of
the Securities Act and the Exchange Act, as applicable, and none of
the SEC Reports, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading. The financial statements of the Company
included in the SEC Reports comply in all material respects with
applicable accounting requirements and the rules and regulations of
the Commission with respect thereto as in effect at the time of
filing. Such financial statements have been prepared in accordance
with United States generally accepted accounting principles
(“GAAP”)
applied on a consistent basis during the periods involved, except
as may be otherwise specified in such financial statements or the
notes thereto and except that unaudited financial statements may
not contain all footnotes required by GAAP, and fairly present in
all material respects the financial position of the Company and its
consolidated Subsidiaries as of the dates thereof and the results
of operations and cash flows for the periods then ended, subject,
in the case of unaudited statements, to normal recurring
adjustments.

 

(i) Absence of Material
Changes. Since the
date of the latest audited financial statements included within the
SEC Reports, except as specifically disclosed in a subsequent SEC
Report filed prior to the date hereof, (i) there has been no event,
occurrence or development that has had or that would reasonably be
expected to result in a Material Adverse Effect, (ii) the Company
has not incurred any liabilities (contingent or otherwise) other
than (A) trade payables and accrued expenses incurred in the
ordinary course of business consistent with past practice and (B)
liabilities not required to be reflected in the Company’s
financial statements pursuant to GAAP or disclosed in filings made
with the Commission, (iii) the Company has not altered its method
of accounting, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its
stockholders or purchased, redeemed or made any agreements to
purchase or redeem any shares of its capital stock and (v) the
Company has not issued any equity securities to any officer,
director or Affiliate, except pursuant to existing Company stock
option plans.

 

 

 

 

(j) No Undisclosed
Events, Liabilities or Developments. Except for the issuance of the
Preferred Shares contemplated by this Agreement or as disclosed in
the SEC Reports, 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 on a
registration statement on Form S-1 filed with the SEC relating to
an issuance and sale by the Company of its Common Stock and which
has not been publicly announced.

 

(k) Absence of
Litigation. There is
no action, suit, inquiry, notice of violation, proceeding or
investigation pending or, to the knowledge of the Company,
threatened against or affecting the Company, any Subsidiary or any
of their respective properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an
“Action”)
that (i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Preferred
Shares or (ii) would reasonably be expected to result in a Material
Adverse Effect. Neither the Company nor any Subsidiary, nor, to the
knowledge of the Company, 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 that would be required to be disclosed
in SEC Reports. 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, to the knowledge of the
Company, 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.

 

(l) Employee
Relations. No labor
dispute exists or, to the knowledge of the Company, is imminent
with respect to any of the employees of the Company that would
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 United States 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 would not,
individually or in the aggregate, reasonably be expected to result
in a Material Adverse Effect.

 

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

 

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

 

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

 

(p) Intellectual
Property Rights.
Except as set forth in the SEC Reports, the Company and the
Subsidiaries have, or have rights to use, all patents, patent
applications, trademarks, trademark applications, service marks,
trade names, trade secrets, inventions, copyrights, licenses and
other similar intellectual property rights that are used in and
necessary for the conduct of their respective businesses as
currently conducted as described in the SEC Reports and which the
failure to so have would reasonably be expected to result in a
Material Adverse Effect (collectively, the
“Intellectual
Property Rights”). Neither the Company nor any
Subsidiary has received notice (written or otherwise) that the
conduct of its business as currently conducted as described in the
SEC Reports violates or infringes upon the intellectual property
rights of others, except for such conflicts or infringements that,
individually or in the aggregate, are not reasonably likely to
result in a Material Adverse Effect. To the knowledge of the
Company, all of the Intellectual Property Rights of the Company and
its Subsidiaries are enforceable. The Company and its Subsidiaries
have taken reasonable security measures to protect the secrecy and
confidentiality of all of their Intellectual Property Rights,
except where failure to do so would not, individually or in the
aggregate, reasonably be expected to result in a Material Adverse
Effect.

 

 

 

 

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

  

(r) Transactions with
Affiliates and Employees. Except as set forth in the SEC
Reports, 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 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
$150,000, other than for (i) payment of salary or consulting fees
for services rendered, (ii) reimbursement for expenses incurred on
behalf of the Company and (iii) other employee benefits, including
stock option agreements under any stock option plan of the
Company.

 

(s) Sarbanes-Oxley
Act. The Company is
in compliance with any and all applicable requirements of the
Sarbanes-Oxley Act of 2002, as amended, that are effective as of
the date hereof, and any and all applicable rules and regulations
promulgated by the Commission thereunder that are effective as of
the date hereof and as of the Closing Date, except where the
failure to be in compliance would not result in a Material Adverse
Effect.

 

(t) Internal Accounting
and Disclosure Controls. The Company and the Subsidiaries
maintain a system of internal accounting controls sufficient to
provide reasonable assurance that: (i) transactions are executed in
accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP
and to maintain asset accountability, (iii) access to assets is
permitted only in accordance with management’s general or
specific authorization, and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
The Company has established disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e) under the
Exchange Act) for the Company and designed such disclosure controls
and procedures to ensure that information required to be disclosed
by the Company in the reports it files or submits under the
Exchange Act is recorded, processed, summarized and reported within
the time periods specified in the Commission’s rules and
forms. The Company’s certifying officers have evaluated the
effectiveness of the Company’s disclosure controls and
procedures as of the end of the period covered by the most recently
filed periodic report under the Exchange Act (such date, the
“Evaluation
Date”). The
Company presented in its most recently filed periodic report under
the Exchange Act the conclusions of the certifying officers about
the effectiveness of the disclosure controls and procedures based
on their evaluations as of the Evaluation Date. Since the
Evaluation Date, there have been no changes in the Company’s
internal control over financial reporting (as such term is defined
in the Exchange Act) that has materially affected, or is reasonably
likely to materially affect, the Company’s internal control
over financial reporting.

 

(u) Certain
Fees. No brokerage
or finder’s fees or commissions are or will be payable by the
Company or any Subsidiary to any broker, financial advisor or
consultant, finder, placement agent, investment banker, bank or
other Person with respect to the transactions contemplated by the
Transaction Documents. The 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.

 

(v) Investment Company
Status. The Company
is not, and is not an Affiliate of, and immediately after receipt
of payment for the Preferred Shares, will not be or be an Affiliate
of, and for so long as the Purchasers hold any Preferred Shares,
will not be or be an Affiliate of, an “investment
company” within the meaning of the Investment Company Act of
1940, as amended (the “Investment Company
Act”). The
Company shall conduct its business in a manner so that it will not
become an “investment company” subject to registration
under the Investment Company Act. To the Company’s knowledge,
the Company is not controlled by an “investment
company.”

 

(w) 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 Company is,
and has no reason to believe that it will not in the foreseeable
future continue to be, in compliance with all such listing and
maintenance requirements.

 

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

 

 

 

 

(y) Disclosure.
Except with respect to the material terms and conditions of the
transactions contemplated by the Transaction Documents, the Company
confirms that neither it nor any other Person acting on its behalf
has provided the Purchaser or its agents or counsel with any
information that it believes constitutes material, non-public
information. The Company understands and confirms that the
Purchaser will rely on the foregoing representation in effecting
transactions in securities of the Company. The press releases
disseminated by the Company during the twelve months preceding the
date of this Agreement, each as of the date of its issuance, did
not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they were made and when made, not misleading. The
Company acknowledges and agrees that the Purchaser does not make
and has not made any representations or warranties with respect to
the transactions contemplated hereby, other than those specifically
set forth in Section 3.2 hereof.

 

(z) No Integrated
Offering. Assuming
the accuracy of the Purchaser’s 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 behalves, has,
directly or indirectly, made any offers or sales of any security or
solicited any offers to buy any security under circumstances that
would cause this offering of the Preferred Shares to be integrated
with prior offerings by the Company for purposes of any applicable
shareholder approval provisions of any Trading Market on which any
of the securities of the Company are listed or
designated.

 

(aa) Solvency.
As disclosed in the SEC Reports, the Company does not currently
generate significant recurring revenue. The SEC Reports set forth,
as of the date hereof, all outstanding secured and unsecured
Indebtedness of the Company or any Subsidiary, or for which the
Company or any Subsidiary has commitments. For the purposes of this
Agreement, “Indebtedness”
means (x) any liabilities for borrowed money or amounts owed in
excess of $50,000 (other than trade accounts payable incurred in
the ordinary course of business), (y) all guaranties, endorsements
and other contingent obligations in respect of indebtedness of
others, whether or not the same are or should be reflected in the
Company’s consolidated balance sheet (or the notes thereto),
except guaranties by endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary
course of business; and (z) the present value of any lease payments
in excess of $50,000 due under leases required to be capitalized in
accordance with GAAP. Neither the Company nor any Subsidiary is in
default with respect to any Indebtedness, except where such default
would not reasonably be expected to result, individually or in the
aggregate, in a Material Adverse Effect.

 

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

 

(cc) Anti-Bribery.
Neither the Company nor any Subsidiary, nor to the knowledge of the
Company or any Subsidiary, any officer, employee, agent or other
person acting on behalf of the Company or any Subsidiary, has (i)
directly or indirectly, used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign
or domestic political activity, (ii) made any unlawful payment to
foreign or domestic government officials or employees or to any
foreign or domestic political parties or campaigns from corporate
funds, (iii) failed to disclose fully any contribution made by the
Company or any Subsidiary (or made by any person acting on its
behalf of which the Company is aware) that is in violation of law,
or (iv) violated, in any material respect, any provision of the
U.S. Foreign Corrupt Practices Act of 1977, as amended (the
“FCPA”).

 

(dd) Acknowledgment
Regarding Purchaser’s Purchase of Preferred
Shares. The Company
acknowledges and agrees that the Purchaser is acting solely in the
capacity of an arm’s length purchaser with respect to the
Transaction Documents and the transactions contemplated thereby.
The Company further acknowledges that 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 thereby, and any advice given by the
Purchaser or any of its respective representatives or agents in
connection with the Transaction Documents and the transactions
contemplated thereby, is merely incidental to the Purchaser’s
purchase of the Preferred Shares. The Company further represents to
the Purchaser that the Company’s decision to enter into this
Agreement and the other Transaction Documents has been based solely
on the independent evaluation of the transactions contemplated
hereby by the Company and its representatives.

 

(ee) Acknowledgement
Regarding Purchaser’s Trading Activity. Anything in the Transaction Documents
to the contrary notwithstanding, it is understood and acknowledged
by the Company that: (i) the Purchaser has not been asked by the
Company to agree, nor has the Purchaser agreed, to desist from
purchasing or selling, long and/or short, securities of the
Company, or “derivative” securities based on securities
issued by the Company or to hold the Preferred Shares for any
specified term; (ii) past or future open market or other
transactions by the Purchaser, specifically including, without
limitation, Short Sales or “derivative” transactions,
before or after the closing of this or future private placement
transactions, may negatively impact the market price of the
Company’s publicly-traded securities; (iii) the Purchaser,
and counter-parties in “derivative” transactions to
which the Purchaser is a party, directly or indirectly, presently
may have a “short” position in the Common Stock, and
(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. The Company further
understands and acknowledges that (y) the Purchaser may engage in
hedging activities at various times during the period that the
Preferred Shares are outstanding and (z) such hedging activities
(if any) could reduce the value of the existing stockholders’
equity interests in the Company at and after the time that the
hedging activities are being conducted. The Company acknowledges
that such aforementioned hedging activities do not constitute a
breach of any of the Transaction Documents.

 

(ff) 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 Preferred Shares, (ii) sold, bid for, or
purchased, or paid any compensation for soliciting purchases of,
any of the Preferred Shares, or (iii) paid or agreed to pay to any
Person any compensation for soliciting another Person to purchase
any other securities of the Company.

 

 

 

 

(gg) No
Conflicts with Sanctions Laws. Neither the Company nor any
Subsidiary nor, to the Company’s knowledge, any director,
officer, agent, employee or Affiliate of the Company or any
Subsidiary, is currently subject to any U.S. sanctions administered
or enforced by the U.S. government (including, without limitation,
the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”)).

  

(hh) U.S.
Real Property Holding Corporation. The Company is not and has never
been, and so long as any of the Preferred Shares are held by any of
the purchasers, shall become, a U.S. real property holding
corporation within the meaning of Section 897 of the Internal
Revenue Code of 1986, as amended, and the Company shall so certify
upon Purchaser’s request.

 

(ii) Bank
Holding Company Act.
Neither the Company nor any of its Subsidiaries or Affiliates is
subject to the Bank Holding Company Act of 1956, as amended (the
“BHCA”),
and to regulation by the Board of Governors of the Federal Reserve
System (the “Federal
Reserve”).
Neither the Company nor any of its Subsidiaries or Affiliates owns
or controls, directly or indirectly, five percent (5%) or more of
the outstanding shares of any class of voting securities or
twenty-five percent (25%) or more of the total equity of a bank or
any entity that is subject to the BHCA and to regulation by the
Federal Reserve. Neither the Company nor any of its Subsidiaries or
Affiliates exercises a controlling influence over the management or
policies of a bank or any entity that is subject to the BHCA and to
regulation by the Federal Reserve.

 

(jj) Compliance
with Anti-Money Laundering Laws. The operations of the Company and its
Subsidiaries are and have been conducted at all times in compliance
with applicable financial record-keeping and reporting requirements
of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, the USA Patriot Act of 2001 and the applicable money
laundering statutes and applicable rules and regulations thereunder
(collectively, the “Money Laundering
Laws”), and no
action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company
or any Subsidiary with respect to the Money Laundering Laws is
pending or, to the knowledge of the Company or any Subsidiary,
threatened.

 

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

 

(a) Organization;
Authority. The
Purchaser is 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 this Agreement and otherwise to carry out its
obligations hereunder and thereunder.

 

(b) Validity;
Enforcement. The
execution and delivery of this Agreement and performance by the
Purchaser of the transactions contemplated by this Agreement 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.

 

(c) No
Conflicts. The
execution, delivery and performance by such Purchaser of this
Agreement and the consummation by such Purchaser of the
transactions contemplated hereby and thereby will not (i) result in
a violation of the organizational documents of such Purchaser or
(ii) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration
or cancellation of, any agreement, indenture or instrument to which
such Purchaser is a party, or (iii) result in a violation of any
law, rule, regulation, order, judgment, or decree (including
federal and state securities laws) applicable to such Purchaser,
except in the case of clauses (ii) and (iii) above, for such
conflicts, defaults, rights or violations which would not,
individually or in the aggregate, reasonably be expected to result
in a Material Adverse Effect on the ability of such Purchaser to
perform its obligations hereunder or consummate the transactions
contemplated hereby and thereby on a timely
basis.

 

(d) No Public Sale or
Distribution; No Understandings or Arrangements. Such Purchaser understands
that the Preferred Shares, and the shares of Common Stock
underlying the Preferred Shares (together, 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 (this representation and
warranty not limiting the Purchaser’s right to sell the
Securities otherwise in compliance with applicable federal and
state securities laws). The Purchaser is acquiring the Securities
hereunder in the ordinary course of its
business.

 

(e) Accredited Investor
Status. Such
Purchaser is an “accredited investor” as
defined in Regulation D under the Securities
Act.

 

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

 

 

 

 

(g) Experience of the
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
requested, received, reviewed and considered all information it
deemed relevant in making an informed decision to purchase the
Securities. 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.

 

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

 

(i) General Solicitation. Such Purchaser is
not 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.

 

(j) Certain Transactions
and Confidentiality.
Such Purchaser has not, nor has any Person acting on behalf of or
pursuant to any understanding with the Purchaser, directly or
indirectly, executed any purchases or sales, including Short Sales,
of the securities of the Company during the period commencing as of
the time that 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.
Other than to other Persons party to this Agreement or to such
Purchaser’s representatives, including, without limitation,
its officers, directors, partners, legal and other advisors,
employees, agents and Affiliates, such Purchaser has maintained the
confidentiality of all disclosures made to it in connection with
this transaction (including the existence and terms of this
transaction). Notwithstanding the foregoing, for avoidance of
doubt, nothing contained herein shall constitute a representation
or warranty, or preclude any actions, with respect to the
identification of the availability of, or securing of, available
shares to borrow in order to effect Short Sales or similar
transactions in the future.

 

(k) Ownership of
Securities. The
Purchaser, together with the Purchaser’s Affiliates and
associates and any Person with which the Purchaser is acting
jointly or in concert, will upon Closing beneficially own less than
10% of the issued and outstanding shares of Common Stock, and,
solely for purposes of calculating such beneficial ownership for
purposes of this Agreement, any such Person will be deemed to
beneficially own any shares of Common Stock that such Person
otherwise has the right to acquire within 60 days (including upon
the occurrence of a contingency or the making of a payment)
pursuant to any convertible security, agreement, arrangement,
pledge or understanding, whether or not in
writing.

 

(l) No Governmental
Review. Such
Purchaser understands that no United States federal or state agency
or any other government or governmental agency has passed on or
made any recommendation or endorsement of the Securities or the
fairness or suitability of the investment in the Securities nor
have such authorities passed upon or endorsed the merits of the
offering of the Securities.

 

(m) Brokers or
Finders. Neither
such Purchaser nor any of its affiliates (as defined in Rule 144)
or any of their respective officers or directors has employed any
broker or finder or incurred any liability for any financial
advisory fee, brokerage fees, commissions or finder’s fee,
and no broker or finder has acted directly or indirectly for such
Purchaser or any of its affiliates or any of their respective
officers or directors in connection with this Agreement or the
transactions contemplated hereby.

 

(n) Transfer or Resale. Such Purchaser
understands that the Securities may only be disposed of in
compliance with state and federal securities laws. In connection
with any transfer of Securities other than pursuant to an effective
registration statement or Rule 144, to the Company or to an
Affiliate of a Purchaser or in connection with a pledge as
contemplated in Section 3.2(o), the Company may require the
transferor thereof to provide the Company an opinion of counsel
selected by the transferor and reasonably acceptable to the
Company, the form and substance of which opinion shall be
reasonably satisfactory to the Company, to the effect that such
transfer does not require registration of such transferred
Securities under the Securities Act. As a condition of transfer,
any such transferee shall agree in writing to be bound by the terms
of this Agreement and shall have the rights and obligations of a
Purchaser under this Agreement.

 

 

 

 

(o) Legends. Such Purchaser understands that
the book-entry or other instruments representing the Securities
shall bear a restrictive legend in substantially the following form
(and a stop-transfer order may be placed against transfer of such
Securities):

 

THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES
ACT”), OR APPLICABLE STATE SECURITIES LAWS, AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR
ASSIGNED 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 AS EVIDENCED BY A LEGAL OPINION OF
COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH
SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.

 

The Company acknowledges and agrees that the representations
contained in Section 3.2 shall not modify, amend or affect the
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 IV

 

COVENANTS

 

4.1 Best
Efforts. Each party shall use its reasonable best efforts to
timely satisfy each of the covenants and the conditions to be
satisfied by it as provided in Section 2.3 of this
Agreement.

 

 

4.2 Blue Sky.
The Company shall take such action as the Company shall reasonably
determine is necessary in order to obtain an exemption for, or to
qualify the Preferred Shares for, sale to the Purchasers at the
applicable Closing under applicable securities or “Blue
Sky” laws of the states of the United States, and shall
provide evidence of such actions promptly upon request of any
Purchaser.

 

 

4.3 Conversion of
Preferred Shares. Within five (5) Business Days following
the Initial Convertibility Date (as such term is defined in the
Certificate of Designation), each Purchaser hereby agrees to effect
the conversion of all of its Preferred Shares into Common Stock in
accordance with Section 6 of the Certificate of Designation by
delivering a Notice of Conversion (as defined in the Certificate of
Designation) to the Company with a Conversion Date (as defined in
the Certificate of Designation) of no later than ten (10) Business
Days following the date on which Notice of Conversion is mailed or
delivered to the Company. In the event that the Purchaser fails to
deliver such Notice of Conversion within the time period required
by this Section 4.3, the Purchaser hereby constitutes and appoints
the Chief Executive Officer and the Chief Financial Officer of the
Company, and each of them, with full power of substitution, as the
proxies of such Purchaser with respect to the execution and
delivery of the Notice of Conversion in accordance with this
Section 4.3 on behalf of such Purchaser. The proxy granted pursuant
to the immediately preceding sentence is given in consideration of
the agreements and covenants of the Company and the parties in
connection with the transactions contemplated by this Agreement
and, as such, is coupled with an interest and shall be
irrevocable.

 

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

 

4.5 Securities
Laws Disclosure; Publicity. The Company shall (a) by 9:00 a.m.
(New York City time) on the fourth Trading Day immediately
following the date hereof, issue a press release disclosing the
material terms of the transactions contemplated hereby, and (b)
file a Current Report on Form 8-K with the Commission within the
time required by the Exchange Act. From and after the issuance of
such press release, the Company 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.

 

4.6 Non-Public
Information. Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction
Documents, the Company covenants and agrees that neither it, nor
any other Person acting on its behalf, will provide any Purchaser
or its agents or counsel with any information that the Company
believes constitutes material non-public information, unless prior
thereto such Purchaser shall have entered into a written agreement
with the Company regarding the confidentiality and use of such
information. The Company understands and confirms that each
Purchaser shall be relying on the foregoing covenant in effecting
transactions in securities of the Company.

 

4.7 Use
of Proceeds. The
Company shall use the net proceeds from the sale of the Preferred
Shares hereunder for general corporate purposes, repayment of
Indebtedness, business development, working capital and general and
administrative expenses and shall not use such proceeds in
violation of FCPA, OFAC regulations and Anti-Money Laundering Laws,
except where such violations would not reasonably be expected to
result, either individually or in the aggregate, in a Material
Adverse Effect.

 

 

 

 

4.8 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 4.6. 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 4.6, the Purchaser will maintain the
confidentiality of the existence and terms of this transaction.
Notwithstanding the foregoing and notwithstanding anything
contained in this Agreement to the contrary, the Company expressly
acknowledges and agrees that (i) the Purchaser does not make any
representation, warranty or covenant hereby that it will not engage
in effecting transactions in any securities of the Company after
the time that the transactions contemplated by this Agreement are
first publicly announced pursuant to the initial press release as
described in Section 4.6, (ii) the Purchaser shall not 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 4.6 and (iii) the Purchaser shall not have
any duty of confidentiality to the Company or its Subsidiaries
after the issuance of the initial press release as described in
Section 4.6.

 

ARTICLE V

 

TERMINATION

 

5.1 Termination.
If the Closing shall not been consummated by May 8, 2020, this
Agreement shall automatically terminate without any further action
by the parties hereto; provided, however, that no such termination
will affect the right of either party to sue for any breach by the
other party.

 

ARTICLE VI

 

MISCELLANEOUS

 

6.1 Fees
and Expenses. Except
as expressly set forth in the Transaction Documents to the
contrary, each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all
other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement.
The Company shall pay all transfer agent fees, stamp taxes and
other taxes and duties levied in connection with the delivery of
any Preferred Shares to the Purchaser.

 

6.2 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.

 

6.3 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 at the facsimile number set forth on the signature page
attached hereto at or prior to 5:30 p.m. (New York City time) on a
Trading Day, (b) the next Trading Day after the date of
transmission, if such notice or communication is delivered via
facsimile at the facsimile number set forth on the signature page
attached hereto on a day that is not a Trading Day or later than
5:30 p.m. (New York City time) on any Trading Day, (c) the second
(2nd) Trading Day following the date of mailing, if sent by U.S.
nationally recognized overnight courier service, (d) upon actual
receipt by the party to whom such notice is required to be given,
or (e) upon delivery, when sent by electronic mail (provided that
the sending party does not receive an automated rejection notice).
The addresses, facsimile numbers and e-mail addresses for such
notices and communications shall be as set forth on the signature
page attached hereto.

 

6.4 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 holders of at least a majority of
the aggregate amount of Preferred Shares issued hereunder, 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 either party to exercise any right hereunder in any
manner impair the exercise of any such right.

 

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

 

6.6 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. Following the
Closing, the Purchaser may assign any or all of its rights under
this Agreement to any Person to whom the Purchaser assigns or
transfers any Securities, provided that such transferee agrees in
writing to be bound, with respect to the transferred Securities, by
the provisions of the Transaction Documents that apply to the
“Purchaser.”

 

6.7 No
Third-Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective successors and
permitted assigns only, and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person, except that each
Indemnitee shall have the right to enforce the obligations of the
Company with respect to Section 4.11.

 

 

 

 

6.8 Governing
Law. All questions
concerning the construction, validity, enforcement and
interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of
the State of New York, without regard to the principles of
conflicts of law thereof. Each party agrees that all legal
proceedings concerning the interpretations, enforcement and defense
of the transactions contemplated by this Agreement and any other
Transaction Documents (whether brought against a party hereto or
its respective affiliates, directors, officers, shareholders,
partners, members, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of
New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of
New York 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 suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such
court, or that such court is an improper or inconvenient venue for
such suit, action or proceeding. Each party hereby irrevocably
waives personal service of process and consents to process being
served in any such suit, 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 either party shall commence an suit, action or proceeding
to enforce any provisions of the Transaction Documents, then, in
addition to the obligations of the Company under Section
4.11, the prevailing party in such suit,
action or proceeding shall be reimbursed by the other party for its
reasonable attorneys’ fees and other reasonable costs and
expenses incurred with the investigation, preparation and
prosecution of such suit, action or proceeding.

 

6.9 Survival.
Unless this Agreement is terminated under Section 5, the
representations and warranties contained in Sections 3.1(a) and (b)
shall survive the Closing, and the agreements and covenants
contained in Article IV shall survive the Closing until fully
performed. Each Purchaser shall be responsible only for its own
representations, warranties, agreements, and covenants
hereunder.

 

6.10 Counterparts.
This Agreement may be executed in two or more identical
counterparts, both of which when taken together shall be considered
one and the same agreement and this Agreement shall become
effective when each party has delivered its signature to the other
party. 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.

 

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

 

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

 

6.13 Rescission
and Withdrawal Right. Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions
of) any of the other Transaction Documents, whenever 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.

 

6.14 Remedies.
In addition to being entitled to exercise all rights provided
herein or granted by law, including recovery of damages, the
Purchaser and the Company will be entitled to specific performance
under the Transaction Documents. The parties agree that monetary
damages would not be adequate compensation for any loss incurred by
reason of any breach of obligations contained in the Transaction
Documents and the Company therefore agrees that the Purchasers
shall be entitled to seek temporary and permanent injunctive relief
in any such case without the necessity of proving actual damages
and without posting a bond or other security.

 

6.15 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, disgorged or
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.

 

 

 

 

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

 

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

 

6.18 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.

 

6.19 WAIVER
OF JURY TRIAL. IN
ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY
EITHER PARTY AGAINST THE OTHER PARTY FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY, THE PARTIES EACH
KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY
APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND
EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

 

 

(Signature Pages Follow)

 

 

 

 

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

 

	

SANUWAVE HEALTH, INC.

 

 

	

Address
for Notice:

 

3360
Martin Farm Road, Suite 100

Suwanee,
GA 30024

Attn:
Chief Financial Officer

 

E-mail
lisa.sundstrom@sanuwave.com

	

By: Lisa E.
Sundstrom

     Name:
Lisa E. Sundstrom

     Title:
Chief Financial Officer

 

	

Fax:
678-569-0881

	
 

	
 

 

 

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

 

 

Murray Indick, Esq. 

Morrison & Foerster LLP 

425 Market Street 

San Francisco, California 94105 

Phone: (415) 268-7000 

E-mail
address: MIndick@mofo.com

 

 

 

 

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

 

 

 

 

PURCHASER SIGNATURE PAGE TO SANUWAVE HEALTH, INC. SERIES D
PREFERRED STOCK STOCK PURCHASE AGREEMENT

 

IN WITNESS WHEREOF, the undersigned has caused this Series D
Preferred Stock Purchase Agreement to be duly executed by an
authorized signatory as of the date first indicated
above.

 

	
Name of
Purchaser:

	

5 Trivedi LLC

	
Signature
of Authorized Signatory of Purchaser:

	

__/s/Marle
Trivedi________________ 

	
Name of Authorized
Signatory:

	
Marle
Trivedi

	
Title of Authorized
Signatory:

	

Managing Director

	
Email Address of
Authorized Signatory:

	

marle.trivedi@tstcap.com 

	

Facsimile Number of Authorized Signatory:

	

_______________________________ 

 

Address for Notice to Purchaser:

 

2203 Vaquero Estates Blvd.

 

Westlake, TX 76262

 

Address for Delivery of the Preferred Shares to Purchaser (if not
same as address for notice):

 

	
Subscription
Amount:

	
$200,000

	
Shares:

	

8 Preferred Shares

	
EIN Number (if applicable):	

____________________

	

Broker Name:

	

_______________________________

	

DTC Participant Number:

	

______________________

 

 

 

 

 

SCHEDULE 3.1(g)

 

COMPANY CAPITALIZATION TABLE

 

COMMON STOCK AND COMMON STOCK EQUIVALENTS

ISSUED, OUTSTANDING AND RESERVED

 

 

	

DESCRIPTION

	

AMOUNT

	

Authorized
Capital Stock

	
 

	

               355,000,000

	

Authorized
Common Stock

	
 

	

               350,000,000

	
 

	

Issued
Common Stock

	

               298,663,672

	
 

	

Outstanding
Common Stock

	

               298,663,672

	
 

	

Treasury
Stock

	

 zero

	

Authorized,
but unissued

	
 

	

                 48,083,419

	
 

	
 

	
 

	

Authorized
Preferred Stock

	
 

	

                   5,000,000

	

Issued
Preferred Stock

	
 

	

                          6,558

	
 

	
 

	
 

	

Reserved
for Equity Incentive Plans

	
 

	

 2,028,281

	

Reserved
for Convertible Debt

	
 

	

 zero

	

Reserved
for Options and Warrants

	
 

	

                 48,083,419

	

Reserved
for Other Purposes

	
 

	

 zero

	
 

	
 

	
 

	

TOTAL
COMMON STOCK AND COMMON STOCK EQUIVALENTS OUTSTANDING

	

               348,775,372Exhibit 10.1

 

 

The Howard Hughes Corporation

2020 Equity Incentive Plan

 

	Article 1.	Establishment & Purpose

 

1.1 Establishment.
The Howard Hughes Corporation, a Delaware corporation, hereby establishes The Howard Hughes Corporation 2020 Equity Incentive Plan,
subject to approval of the Company’s stockholders at the Company’s 2020 Annual Meeting of Stockholders (as amended
or modified from time to time, the “Plan”), as set forth in this document.

 

1.2 Purpose of the
Plan. The purpose of this Plan is to attract, retain and motivate officers, employees, non-employee directors and consultants
providing services to the Company or any of its Subsidiaries or Affiliates and to promote the success of the Company’s business
by providing the participants of the Plan with appropriate incentives.

 

	Article 2.	Definitions

 

Whenever capitalized
in the Plan, the following terms shall have the meanings set forth below.

 

2.1
 “Affiliate” means any entity that the Company, either directly or indirectly, is in common control
with, is controlled by or controls; provided, however, to the extent that Awards must cover “service
recipient stock” in order to comply with Section 409A, “Affiliate” shall be limited to those entities
which could qualify as an “eligible issuer” under Section 409A.

 

2.2
 “Award” means any Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit or Other
Stock-Based Award that is granted under the Plan.

 

2.3
 “Award Agreement” means a written agreement entered into by the Company and a Participant setting
forth the terms and provisions applicable to an Award granted under this Plan.

 

2.4
 “Beneficial Owner” or “Beneficial Ownership” shall have the meaning ascribed
to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act.

 

2.5
 “Board” means the Board of Directors of the Company.

 

2.6
 “Cause” means, as to any Participant, unless the applicable Award Agreement states otherwise,
(i) if such Participant is party to an employment, consulting, or similar type of agreement (each, an
 “Employment Agreement”) that contains a definition of “Cause” at the applicable time of
determination, “Cause” as defined therein, or (ii) if the Participant is not so a party, (A) the
Participant is charged with (x) a felony, or (y) a misdemeanor relating to the business of the Company or any of
its Affiliates or involving moral turpitude; (B) the Participant’s willful failure to substantially perform his or
her duties with the Company or any of its Affiliates (other than any such failure resulting from incapacity due to physical
or mental illness); (C) the Participant’s engaging in (x) material misconduct or wrongdoing, or illegal
conduct in the course of carrying out the Participant’s duties with the Company or any of its Affiliates, or
(y) any act of material dishonesty involving the Participant’s employment with the Company or any of its
Affiliates (including, without limitation, fraud, misappropriation, or embezzlement); (D) the Participant’s
material breach of any written agreement with the Company or any of its Affiliates; (E) the Participant’s material
violation of the Company’s (or any of its Affiliates’) code of conduct, employee handbook or other policies
applicable to the Participant (including, without limitation, any policy regarding sexual harassment or discrimination); or
(F) the Participant’s failure to reasonably cooperate with an investigation by any governmental authority; provided,
in any case, that a Participant’s resignation after an event that would be grounds for a termination for Cause will be
treated as a termination for Cause hereunder.

 

    1

     

    

 

2.7
 “Change of Control” unless otherwise specified in the Award Agreement, means the occurrence of any of
the following events:

 

		(a)	any consolidation, amalgamation, or merger of the
Company with or into any other Person, or any other corporate reorganization, business combination, transaction or transfer of
securities of the Company by its stockholders, or a series of transactions (including the acquisition of capital stock of the
Company), whether or not the Company is a party thereto, in which the stockholders of the Company immediately prior to such consolidation,
merger, reorganization, business combination or transaction, collectively have Beneficial Ownership, directly or indirectly, of
capital stock representing directly, or indirectly through one or more entities, less than fifty percent (50%) of the equity (measured
by economic value or voting power (by contract, share ownership or otherwise)) of the Company or other surviving entity immediately
after such consolidation, merger, reorganization, business combination or transaction;

 

		(b)	the sale or disposition, in one transaction or a series of related transactions, of all or substantially
all of the assets of the Company to any Person;

 

		(c)	during any period of twelve consecutive months, individuals who as of the beginning of such period
constituted the entire Board (together with any new directors whose election by such Board or nomination for election by the Company’s
shareholders was approved by a vote of at least two-thirds of the directors of the Company, then still in office, who were directors
at the beginning of the period or whose election or nomination for election was previously so approved) cease for any reason to
constitute a majority thereof; or

 

		(d)	approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.

 

Notwithstanding the foregoing, if a Change
of Control constitutes a payment event with respect to any Award (or any portion of an Award) that provides for the deferral of
compensation that is subject to Section 409A, to the extent required to avoid the imposition of additional taxes under Section 409A,
the transaction or event described in clause (a), (b), (c), or (d) above with respect to such Award (or portion thereof)
shall only constitute a Change of Control for purposes of the payment timing of such Award if such transaction also constitutes
a “change in control event,” as defined in Treasury Regulation Section 1.409A-3(i)(5).

 

The Committee shall
have full and final authority, which shall be exercised in its sole discretion, to construe or resolve any ambiguity in the foregoing
definition; provided that any exercise of authority in conjunction with a determination of whether a Change of Control is
a “change in control event” as defined in Treasury Regulation Section 1.409A-3(i)(5) shall be consistent
with such regulation.

 

2.8
 “Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time.

 

2.9
 “Committee” means the Compensation Committee of the Board or any other committee designated by the
Board to administer this Plan. To the extent applicable, the Committee shall have at least two members, each of whom shall be
(i) a Non-Employee Director and (ii) an “independent director” within the meaning of the listing
requirements of any exchange on which the Company is listed.

 

2.10
 “Consultant” means any person or entity that provides bona fide services to the Company or any
Affiliate or Subsidiary as a consultant or advisor, excluding any Employee or Director, and that may be offered securities
registrable pursuant to a registration statement on Form S-8 under the Securities Act of 1933, as amended, and any
successor thereto.

 

2.11
 “Company” means The Howard Hughes Corporation, a Delaware corporation, and any successor thereto.

 

2.12
 “Director” means a member of the Board who is not an Employee.

 

2.13
 “Director Award Limit” shall have the meaning set forth in Section 5.2.

 

2.14
 “Effective Date” means the date set forth in Section 13.20.

 

    2

     

    

 

2.15
 “Employee” means an officer or other employee of the Company, a Subsidiary or Affiliate, including a
member of the Board who is an employee of the Company, a Subsidiary or Affiliate.

 

2.16
 “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.

 

2.17
 “Fair Market Value” means, as of any date, the per Share value determined as follows, in accordance
with applicable provisions of Section 409A:

 

		(a)	The closing price of a Share on a recognized national exchange or any established over-the-counter
trading system on which dealings take place, or if no trades were made on any such day, the immediately preceding day on which
trades were made; or

 

		(b)	In the absence of an established market for the Shares of the type described in (a) above,
the per Share Fair Market Value thereof shall be determined by the Committee in good faith and in accordance with applicable provisions
of Section 409A.

 

2.18
 “Incentive Stock Option” means an Option intended to meet the requirements of an incentive stock
option as defined in Section 422 of the Code and designated as an Incentive Stock Option.

 

2.19
 “Non-Employee Director” means a person defined in Rule 16b-3(b)(3) promulgated by the
Securities and Exchange Commission under the Exchange Act, or any successor definition adopted by the Securities and Exchange
Commission.

 

2.20
 “Nonqualified Stock Option” means an Option that is not an Incentive Stock Option.

 

2.21
 “Other Stock-Based Award” means any right granted under Article 9 of the Plan.

 

2.22
 “Option” means any stock option granted under Article 6 of the Plan.

 

2.23
 “Option Price” means the purchase price per Share subject to an Option, as determined pursuant to
Section 6.2 of the Plan.

 

2.24
 “Participant” means any eligible Employee, Director, or Consultant as set forth in Section 4.1 to
whom an Award is granted.

 

2.25
 “Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act
and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in
Section 13(d) thereof.

 

2.26
 “Plan” shall have the meaning ascribed to such term in Section 1.1 hereof.

 

2.27
 “Restricted Stock” means an Award of Shares, which Shares are subject to forfeiture upon the
occurrence of specified events (or failure of specified events) to occur, granted under Article 8 of the Plan.

 

2.28
 “Restricted Stock Unit” or “RSU” means an unfunded and unsecured promise to
deliver Shares, cash, other securities, or other property, subject to certain restrictions (which may include, without
limitation, a requirement that the Participant remain continuously employed or provide continuous services for a specified
period of time, or a requirement that certain subjective or objective performance goals are satisfied).

 

2.29
 “Restriction Period” means the period during which Restricted Stock awarded under Article 8 of
the Plan is subject to forfeiture.

 

2.30
 “Service” means service as an Employee, Director or Consultant.

 

2.31
 “Share” means a share of common stock of the Company, par value $0.01 per share, or such other class
or kind of shares or other securities resulting from the application of Article 11 hereof.

 

2.32
 “Stock Appreciation Right” means any right granted under Article 7 of the Plan.

 

    3

     

    

 

2.33
 “Subsidiary” means any corporation, partnership, limited liability company or other legal entity of
which the Company, directly or indirectly, owns stock or other equity interests possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock or other equity interests (as determined in a manner consistent with
Section 409A).

 

2.34
 “Ten Percent Shareholder” means a person who on any given date owns, either directly or indirectly
(taking into account the attribution rules contained in Section 424(d) of the Code), stock possessing more
than ten percent (10%) of the total combined voting power of all classes of stock of the Company or a Subsidiary or
Affiliate.

 

	Article 3.	 Administration

 

3.1 Authority of
the Committee. The Plan shall be administered by the Committee, which shall have full power to interpret and administer the
Plan and Award Agreements and full authority to select the Employees, Directors and Consultants to whom Awards will be granted,
and to determine the type and amount of Awards to be granted to each such Employee, Director or Consultant, and the terms and conditions
of Awards and Award Agreements. Without limiting the generality of the foregoing, the Committee may, in its sole discretion but
subject to the limitations in Article 12, clarify, construe or resolve any ambiguity in any provision of the Plan or any Award
Agreement, extend the term or period of exercisability of any Awards, or waive any terms or conditions applicable to any Award.
Awards may, in the discretion of the Committee, be made under the Plan in assumption of, or in substitution for, outstanding awards
previously granted by the Company or any of its Subsidiaries or Affiliates or a company acquired by the Company or with which the
Company combines. The Committee shall have full and exclusive discretionary power to adopt rules, forms, instruments, and guidelines
for administering the Plan as the Committee deems necessary or proper. All actions taken and all interpretations and determinations
made by the Committee or by the Board (or any other committee or sub-committee thereof), as applicable, shall be final and binding
upon the Participants, the Company, and all other interested individuals. Notwithstanding anything to the contrary in the Plan
or in any Award Agreement, the Board may, in its sole discretion, at any time and from time to time, grant Awards and administer
the Plan with respect to Awards, or interpret the terms and provisions of the Plan and any applicable Award Agreement, in each
case subject to the applicable rules of the securities exchange or inter-dealer quotation system on which the Shares are listed
or quoted. In any such case, the Board shall have all the authority granted to the Committee under the Plan and any Award Agreement.

 

3.2 Delegation.
The Committee may delegate to one or more of its members or one or more executive officers of the Company such administrative duties
or powers as it may deem advisable; provided that no delegation shall be permitted under the Plan that is prohibited by
applicable law.

 

3.3 Indemnification.
No member of the Board, the Committee, or any employee or agent of the Company or any of its Affiliates (each such Person, an “Indemnifiable
Person”) shall be liable for any action taken or omitted to be taken or any determination made with respect to the Plan
or any Award hereunder (except as provided in this Section 3.3). Each Indemnifiable Person shall be indemnified and held harmless
by the Company against and from any loss, cost, liability, or expense (including attorneys’ fees) that may be imposed upon
or incurred by such Indemnifiable Person in connection with or resulting from any action, suit, or proceeding to which such Indemnifiable
Person may be a party or in which such Indemnifiable Person may be involved by reason of any action taken or omitted to be taken
or determination made with respect to the Plan or any Award hereunder and against and from any and all amounts paid by such Indemnifiable
Person with the Company’s approval, in settlement thereof, or paid by such Indemnifiable Person in satisfaction of any judgment
in any such action, suit, or proceeding against such Indemnifiable Person, and the Company shall advance to such Indemnifiable
Person any such expenses promptly upon written request (which request shall include an undertaking by the Indemnifiable Person
to repay the amount of such advance if it shall ultimately be determined, as provided below, that the Indemnifiable Person is not
entitled to be indemnified); provided, that the Company shall have the right, at its own expense, to assume and defend any
such action, suit, or proceeding and once the Company gives notice of its intent to assume the defense, the Company shall have
sole control over such defense with counsel of the Company’s choice. The foregoing right of indemnification shall not be
available to an Indemnifiable Person to the extent that such right of indemnification is otherwise prohibited by law, by the organizational
documents of the Company or its applicable Affiliate, or the applicable directors’ and officers’ indemnification insurance
policy maintained by the Company or its applicable Affiliate. The foregoing right of indemnification shall not be exclusive of
or otherwise supersede any other rights of indemnification to which such Indemnifiable Persons may be entitled under the organizational
documents of the Company or its applicable Affiliates, as a matter of law, under an individual indemnification agreement or contract,
or otherwise, or any other power that the Company may have to indemnify such Indemnifiable Persons or hold such Indemnifiable Persons
harmless.

 

    4

     

    

 

	Article 4.	 Eligibility and Participation; Vesting

 

4.1 Eligibility.
Participants will consist of such Employees, Directors and Consultants as the Committee in its sole discretion determines and whom
the Committee may designate from time to time to receive Awards. Designation of a Participant in any year shall not require the
Committee to designate such person to receive an Award in any other year or, once designated, to receive the same type or amount
of Award as granted to the Participant in any other year.

 

4.2 Type of Awards.
Awards under the Plan may be granted in any one or a combination of: (a) Options, (b) Stock Appreciation Rights, (c) Restricted
Stock, (d) RSUs and (e) Other Stock-Based Awards. Awards granted under the Plan shall be evidenced by Award Agreements
(which need not be identical) that provide additional terms and conditions associated with such Awards, as determined by the Committee
in its sole discretion; provided, however, that, except as otherwise contemplated by the terms of the Plan, in the
event of any conflict between the provisions of the Plan and any such Award Agreement, the provisions of the Plan shall prevail.

 

4.3 Vesting.
The Committee may condition the grant of any Award under the Plan or the vesting of any such Award upon the achievement or satisfaction
of one or more condition(s) (including, without limitation, a requirement that the Participant remain continuously employed
or provide continuous services for a specified period of time, or a requirement that certain subjective or objective performance
goals are satisfied), as specified in the applicable Award Agreement; provided, however, that a number of Shares
equal to no more than five percent (5%) of the Absolute Share Limit (as adjusted pursuant to Article 11) shall be subject
to Awards granted to Participants with vesting conditions that lapse over a period of less than one (1) year (it being understood
that, in the case of a Non-Employee Director, an Award may be granted to such Non-Employee Director on or promptly following the
Company’s annual meeting of stockholders in a given year that vests upon the Company’s annual meeting of stockholders
in the following year that occurs at least fifty (50) weeks following such preceding meeting without counting against this
limitation). If the specified conditions are not so achieved or satisfied, the Committee shall not grant such Award to such Participant
or the Award shall not vest and shall be forfeited, as applicable, unless otherwise determined by the Committee in its sole discretion.

 

	Article 5.	 Shares Subject to the Plan and Maximum Awards

 

5.1 General.
Subject to adjustment as provided in Article 11 hereof, the maximum number of Shares available for issuance to Participants
pursuant to Awards under the Plan is 1,350,000 Shares (the “Absolute Share Limit”). The number of Shares available
for granting Incentive Stock Options under the Plan shall not exceed the Absolute Share Limit, subject to Article 11 hereof
and the provisions of Sections 422 or 424 of the Code and any successor provisions. The Shares available for issuance under
the Plan may consist, in whole or in part, of authorized and unissued Shares or treasury Shares.

 

5.2 Director Award
Limits. The aggregate Awards granted under the Plan to any Director in any fiscal year shall not exceed a total value of $675,000,
calculating the value of any such Awards based on the grant date fair value of such Awards for financial reporting purposes (the
 “Director Award Limit”).

 

5.3 Share Recycling.
In the event that any outstanding Award expires, is forfeited, canceled or otherwise terminated without the issuance of Shares
or is otherwise settled for cash, the Shares subject to such Award, to the extent of any such forfeiture, cancellation, expiration,
termination or settlement for cash, shall again be available for Awards under the Plan; provided, however, that any
Shares (x) withheld or tendered in payment of any applicable Option Price, grant price, strike price, or taxes relating to
any Award, or (y) repurchased by the Company using proceeds from exercise of an Option, shall be deemed to constitute Shares
issued to the applicable Participant and shall not again be available for Awards under the Plan. For the avoidance of doubt, the
gross number of Shares underlying a stock-settled Stock Appreciation Right shall reduce the Absolute Share Limit when such Stock
Appreciation Right is settled in Shares.

 

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5.4 Substitute Awards.
Awards may, in the sole discretion of the Committee, be granted under the Plan in assumption of, or in substitution for, outstanding
Awards previously granted by an entity directly or indirectly acquired by the Company or with which the Company combines (“Substitute
Awards”). Substitute Awards shall not be counted against the Absolute Share Limit or a Participant’s Director Award
Limit; provided, that Substitute Awards issued in connection with the assumption of, or in substitution for, outstanding
Options intended to qualify as Incentive Stock Options shall be counted against the aggregate number of Shares available for Awards
of Incentive Stock Options under the Plan. Subject to applicable stock exchange requirements and applicable law, available shares
under a stockholder-approved plan of an entity directly or indirectly acquired by the Company or with which the Company combines
(as appropriately adjusted to reflect the acquisition or combination transaction) may be used for Awards under the Plan and shall
not reduce the number of Shares available for issuance under the Plan.

 

	Article 6.	 Stock Options

 

6.1 Grant of Options.
The Committee is hereby authorized to grant Options to Participants. Each Option shall permit a Participant to purchase from the
Company a stated number of Shares at an Option Price established by the Committee, subject to the terms and conditions described
in this Article 6 and to such additional terms and conditions, as established by the Committee, in its sole discretion, that
are consistent with the provisions of the Plan. Options shall be designated as either Incentive Stock Options or Nonqualified Stock
Options, provided that Options granted to Directors shall be Nonqualified Stock Options. An Option granted as an Incentive
Stock Option shall, to the extent it fails to qualify as an Incentive Stock Option, be treated as a Nonqualified Stock Option.
Neither the Committee, the Board, the Company, any of its Subsidiaries or Affiliates, nor any of their employees and representatives
shall be liable to any Participant or to any other Person if it is determined that an Option intended to be an Incentive Stock
Option does not qualify as an Incentive Stock Option. Each Option shall be evidenced by an Award Agreement which shall state the
number of Shares covered by such Option. Such agreements shall conform to the requirements of the Plan, and may contain such other
provisions, as the Committee shall deem advisable.

 

6.2 Terms of Option
Grant. The Option Price shall be determined by the Committee at the time of grant, but shall not be less than one-hundred percent
(100%) of the Fair Market Value of a Share on the date of grant. In the case of any Incentive Stock Option granted to a Ten Percent
Shareholder, the Option Price shall not be less than one-hundred-ten percent (110%) of the Fair Market Value of a Share on the
date of grant.

 

6.3 Option Term.
The term of each Option shall be determined by the Committee at the time of grant and shall be stated in the Award Agreement, but
in no event shall such term be greater than ten (10) years (or, in the case of an Incentive Stock Option granted to a Ten
Percent Shareholder, five (5) years).

 

6.4 Method of Exercise.
Except as otherwise provided in the Plan or in an Award Agreement, an Option may be exercised for all, or from time to time any
part, of the Shares for which it is then vested and/or exercisable. For purposes of this Article 6, the exercise date of an
Option shall be the later of the date a notice of exercise is received by the Company and, if applicable, the date payment is received
by the Company pursuant to clauses (i), (ii), (iii) or (iv) of the following sentence (including the applicable
tax withholding pursuant to Section 13.4 of the Plan). The aggregate Option Price for the Shares as to which an Option is
exercised shall be paid to the Company in full at the time of exercise at the election of the Participant (i) in cash or its
equivalent (e.g., by cashier’s check), (ii) to the extent permitted by the Committee, in Shares (whether or not
previously owned by the Participant) having a Fair Market Value equal to the aggregate Option Price for the Shares being purchased
and satisfying such other requirements as may be imposed by the Committee, (iii) partly in cash and, to the extent permitted
by the Committee, partly in such Shares (as described in (ii) above) or (iv) if there is a public market for the Shares
at such time, subject to such requirements as may be imposed by the Committee, through the delivery of irrevocable instructions
to a broker to sell Shares obtained upon the exercise of the Option and to deliver promptly to the Company an amount out of the
proceeds of such sale equal to the aggregate Option Price for the Shares being purchased. The Committee may prescribe any other
method of payment that it determines to be consistent with applicable law and the purpose of the Plan.

 

6.5 Limitations
on Incentive Stock Options. Incentive Stock Options may be granted only to employees of the Company or of a “parent corporation”
or “subsidiary corporation” (as such terms are defined in Section 424 of the Code) at the date of grant. The aggregate
Fair Market Value (generally determined as of the time the Option is granted) of the Shares with respect to which Incentive Stock
Options are exercisable for the first time by a Participant during any calendar year under all plans of the Company and of any
 “parent corporation” or “subsidiary corporation” shall not exceed one hundred thousand dollars ($100,000),
or the Option shall be treated as a Nonqualified Stock Option. For purposes of the preceding sentence, Incentive Stock Options
will be taken into account generally in the order in which they are granted. Each provision of the Plan and each Award Agreement
relating to an Incentive Stock Option shall be construed so that each Incentive Stock Option shall be an incentive stock option
as defined in Section 422 of the Code, and any provisions of the Award Agreement thereof that cannot be so construed shall
be disregarded.

 

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	Article 7.	Stock Appreciation Rights

 

7.1 Grant of Stock
Appreciation Rights. The Committee is hereby authorized to grant Stock Appreciation Rights to Participants, including a grant
of Stock Appreciation Rights in tandem with any Option at the same time such Option is granted (a “Tandem SAR”).
Stock Appreciation Rights shall be evidenced by Award Agreements that shall conform to the requirements of the Plan and may contain
such other provisions, as the Committee shall deem advisable. Subject to the terms of the Plan and any applicable Award Agreement,
a Stock Appreciation Right granted under the Plan shall confer on the holder thereof a right to receive, upon exercise thereof,
the excess of (a) the Fair Market Value of a specified number of Shares on the date of exercise over (b) the grant price
or strike price of the right as specified by the Committee on the date of the grant. Such payment may be in the form of cash, Shares,
other property or any combination thereof, as the Committee shall determine in its sole discretion.

 

7.2 Terms of Stock
Appreciation Right. Subject to the terms of the Plan and any applicable Award Agreement, the grant price or strike price (which
shall not be less than one hundred percent (100%) of the Fair Market Value of a Share on the date of grant), term, methods of exercise,
methods of settlement, and any other terms and conditions of any Stock Appreciation Right shall be as determined by the Committee.
The Committee may impose such other conditions or restrictions on the exercise of any Stock Appreciation Right as it may deem appropriate.
No Stock Appreciation Right shall have a term of more than ten (10) years from the date of grant.

 

7.3 Tandem Stock
Appreciation Rights and Options. A Tandem SAR shall be exercisable only to the extent that the related Option is exercisable
and shall expire no later than the expiration of the related Option. Upon the exercise of all or a portion of a Tandem SAR, a Participant
shall be required to forfeit the right to purchase an equivalent portion of the related Option (and, when a Share is purchased
under the related Option, the Participant shall be required to forfeit an equivalent portion of the Stock Appreciation Right).

 

	Article 8.	Restricted Stock and Restricted Stock Units

 

8.1 Grant of Restricted
Stock and Restricted Stock Units. An Award of Restricted Stock is a grant by the Committee of a specified number of Shares
to the Participant, which Shares are subject to forfeiture upon the occurrence of specified events (or failure of specified events
to occur). An Award of Restricted Stock Units (or RSUs) is a grant by the Committee of an unfunded and unsecured promise to deliver
a specified number of Shares or a specified amount of cash, other securities, or other property (which may be valued by reference
to a specified number of Shares or otherwise) upon the occurrence of specified events. Restricted Stock and RSUs shall be evidenced
by an Award Agreement, which shall conform to the requirements of the Plan and may contain such other provisions, as the Committee
shall deem advisable.

 

8.2 Terms of Restricted
Stock and RSU Awards. Each Award Agreement evidencing a Restricted Stock or RSU grant shall specify the period(s) of restriction,
the number of Shares subject to the Award, the performance, employment or other conditions (including the termination of a Participant’s
Service whether due to death, disability or other reason) under which the Restricted Stock or RSUs may vest or be forfeited to
the Company and such other provisions as the Committee shall determine.

 

8.3 Stock Certificates
and Book-Entry Notation; Escrow or Similar Arrangement. Upon the grant of Restricted Stock, the Committee shall cause a stock
certificate registered in the name of the Participant to be issued or shall cause Shares to be registered in the name of the Participant
and held in book-entry form subject to the Company’s directions and, if the Committee determines that the Restricted Stock
shall be held by the Company or in escrow rather than issued to the Participant pending the release of the applicable restrictions,
the Committee may require the Participant to additionally execute and deliver to the Company (i) an escrow agreement satisfactory
to the Committee, if applicable, and (ii) the appropriate stock power (endorsed in blank) with respect to the Restricted Stock
covered by such agreement. If a Participant shall fail to execute and deliver (in a manner permitted under an Award Agreement or
as otherwise determined by the Committee) an agreement evidencing an Award of Restricted Stock and, if applicable, an escrow agreement
and blank stock power within the amount of time specified by the Committee, the Award shall be null and void. To the extent shares
of Restricted Stock are forfeited, any stock certificates issued to the Participant evidencing such shares shall be returned to
the Company, and all rights of the Participant to such shares and as a stockholder with respect thereto shall terminate without
further obligation on the part of the Company.

 

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8.4 Voting and Dividend
Rights. Unless otherwise provided in an Award Agreement, Participants shall have none of the rights of a stockholder of the
Company with respect to Restricted Stock until the end of the Restriction Period; provided, that, except as otherwise
provided in an Award Agreement and subject to any restrictions contained therein, Participants shall have the right to vote and
receive dividends on Restricted Stock during the Restriction Period subject to the restrictions in Section 13.3. A Participant
shall have no rights or privileges as a stockholder as to Restricted Stock Units, except as otherwise expressly set forth in an
Award Agreement.

 

8.5 Issuance of
Restricted Stock and Settlement of Restricted Stock Units.

 

(a)   Upon
the expiration of the Restriction Period with respect to any shares of Restricted Stock, the restrictions set forth in the applicable
Award Agreement shall be of no further force or effect with respect to such shares, except as set forth in the applicable Award
Agreement. If an escrow arrangement is used, upon such expiration the Company shall issue to the Participant or the Participant’s
beneficiary, without charge, the stock certificate (or, if applicable, a notice evidencing a book-entry notation) evidencing the
shares of Restricted Stock which have not then been forfeited and with respect to which the Restriction Period has expired.

 

(b)   Unless
otherwise provided by the Committee in an Award Agreement or otherwise, upon vesting or lapse of any restrictions applicable to
any outstanding Restricted Stock Units, the Company shall issue to the Participant or the Participant’s beneficiary, without
charge, one Share (or other securities or other property, as applicable) for each such outstanding Restricted Stock Unit; provided,
however, that the Committee may, in its sole discretion, elect to pay cash or part cash and part Shares in lieu of issuing
only Shares in respect of such Restricted Stock Units. If a cash payment is made in lieu of issuing Shares in respect of such Restricted
Stock Units, the amount of such payment shall be equal to the Fair Market Value per Share as of the date on which such Restricted
Stock Units have vested or any applicable restrictions thereon have lapsed.

 

8.6 Legends on Restricted
Stock. Each certificate, if any, or book entry representing Restricted Stock awarded under the Plan, if any, shall bear a legend
or book entry notation substantially in the form of the following, in addition to any other information the Company deems appropriate,
until the lapse of all restrictions with respect to such Shares:

 

TRANSFER OF THIS CERTIFICATE
AND THE SHARES REPRESENTED HEREBY IS RESTRICTED PURSUANT TO THE TERMS OF THE HOWARD HUGHES CORPORATION 2020 EQUITY INCENTIVE PLAN
AND A RESTRICTED STOCK AWARD AGREEMENT BETWEEN THE HOWARD HUGHES CORPORATION AND THE PARTICIPANT. A COPY OF SUCH PLAN AND AWARD
AGREEMENT IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF THE HOWARD HUGHES CORPORATION.

 

8.7 Section 83(b) Election.
If a Participant makes an election pursuant to Section 83(b) of the Code concerning Restricted Stock, the Participant
shall be required to file promptly a copy of such election with the Company.

 

	Article 9.	 Other Stock-Based Awards

 

The Committee, in its
sole discretion, may grant Awards of Shares and Awards that are valued, in whole or in part, by reference to, or are otherwise
based on the Fair Market Value of, Shares (the “Other Stock-Based Awards”), including without limitation, deferred
stock units and other “phantom” awards. Such Other Stock-Based Awards shall be in such form, and dependent on such
conditions, as the Committee shall determine, including, without limitation, the right to receive one or more Shares (or the equivalent
cash value of such Shares) upon the completion of a specified period of Service, the occurrence of an event and/or the attainment
of performance objectives. Other Stock-Based Awards may be granted alone or in addition to any other Awards granted under the Plan.
Subject to the provisions of the Plan, the Committee shall determine to whom and when Other Stock-Based Awards will be made, the
number of Shares to be awarded under (or otherwise related to) such Other Stock-Based Awards, whether such Other Stock-Based Awards
shall be settled in cash, Shares or a combination of cash and Shares, and all other terms and conditions of such Awards (including,
without limitation, the vesting provisions thereof and provisions ensuring that all Shares so awarded and issued shall be fully
paid and non-assessable).

 

    8

     

    

 

	Article 10.	Compliance with Section 409A of the Code and Section 457A of the Code

 

10.1 General.
The Company intends that any Awards be structured in compliance with, or to satisfy an exemption from, Section 409A of the
Code and all regulations, guidance, compliance programs and other interpretative authority thereunder (“Section 409A”),
such that there are no adverse tax consequences, interest, or penalties as a result of the Awards. In the event any Award is subject
to Section 409A, the Committee may, in its sole discretion and without a Participant’s prior consent, amend the Plan
and/or Awards, adopt policies and procedures, or take any other actions (including amendments or implementation of policies, procedures
and actions with retroactive effect) as are necessary or appropriate to (i) exempt the Plan and/or any Award from the application
of Section 409A, (ii) preserve the intended tax treatment of any such Award, or (iii) comply with the requirements
of Section 409A, including, without limitation, any such regulations, guidance, compliance programs and other interpretative
authority that may be issued after the date of grant of an Award.

 

10.2 Payments to
Specified Employees. Notwithstanding any contrary provision in the Plan or an Award Agreement, any payment(s) of “nonqualified
deferred compensation” (within the meaning of Section 409A) that are otherwise required to be made under the Plan to
a “specified employee” (as defined under Section 409A) as a result of his or her separation from Service (other
than a payment that is not subject to Section 409A) shall be delayed for the first six months following such separation from
service (or, if earlier, the date of death of the specified employee) and shall instead be paid (in a manner set forth in the Award
Agreement) on the payment date that immediately follows the end of such six-month period or as soon as administratively practicable
within ninety days thereafter, but in no event later than the end of the applicable taxable year in which such six-month period
ends.

 

10.3 Separation
from Service. A termination of Service shall not be deemed to have occurred for purposes of any provision of the Plan or any
Award Agreement providing for the payment of any amounts or benefits that are considered nonqualified deferred compensation under
Section 409A upon or following a termination of Service, unless such termination is also a “separation from service”
within the meaning of Section 409A and the payment thereof prior to a “separation from service” would violate
Section 409A. For purposes of any such provision of the Plan or any Award Agreement relating to any such payments or benefits,
references to a “termination,” “termination of employment,” “termination of Service” or like
terms shall mean “separation from service.”

 

10.4 Section 457A.
In the event any Award is subject to Section 457A of the Code (“Section 457A”), the Committee may,
in its sole discretion and without a Participant’s prior consent, amend the Plan and/or Awards, adopt policies and procedures,
or take any other actions (including amendments, policies, procedures and actions with retroactive effect) as are necessary or
appropriate to (i) exempt the Plan and/or any Award from the application of Section 457A, (ii) preserve the intended
tax treatment of any such Award, or (iii) comply with the requirements of Section 457A, including without limitation
any such regulations, guidance, compliance programs and other interpretative authority that may be issued after the date of the
grant.

 

	Article 11.	 Adjustments

 

11.1 Adjustments
in Authorized Shares and Awards. In the event of any corporate event or transaction involving the Company, a Subsidiary and/or
an Affiliate (including, but not limited to, a change in the Shares of the Company or the capitalization of the Company or a Change
of Control) such as a merger, consolidation, reorganization, recapitalization, separation, stock dividend, stock split, reverse
stock split, split up, spin-off, combination of Shares, exchange of Shares, dividend in kind, amalgamation, or other like change
in capital structure (other than regular cash dividends to shareholders of the Company), or any similar corporate event or transaction
that the Committee determines, in its sole discretion, could result in dilution or enlargement of the rights intended to be granted
to, or available for, Participants, the Committee shall substitute or adjust, as it deems equitable in its sole discretion, the
number and kind of Shares or other property that may be issued under the Plan (including, without limitation, the Absolute Share
Limit) or under particular forms of Awards, the number and kind of Shares or other property subject to outstanding Awards, the
Option Price, grant price, strike price or purchase price applicable to outstanding Awards, the Director Award Limit, and/or other
value determinations applicable to the Plan or outstanding Awards.

 

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11.2 Change of Control.
Upon the occurrence of a Change of Control after the Effective Date, unless otherwise specifically prohibited under applicable
laws or by the rules and regulations of any governing governmental agencies or national securities exchanges, or unless otherwise
provided in an applicable Employment Agreement or the Committee shall determine otherwise in an Award Agreement, the Committee
shall make one or more of the following adjustments to the terms and conditions of outstanding Awards: (i) continuation or
assumption of such outstanding Awards under the Plan by the Company (if it is the surviving company or corporation) or by the surviving
company or corporation or its parent; or (ii) substitution by the surviving company or corporation or its parent of awards
with substantially the same value (as determined by the Committee in its sole discretion, and which may be based on the intrinsic
(or “spread”) value in the case of Options and Stock Appreciation Rights) and vesting terms for such outstanding Awards;
provided, that, any Options and Stock Appreciation Rights with an Option Price, grant price, or strike price, as
applicable, that is equal to or greater than the per Share value to be paid in the Change of Control transaction to holders of
Shares (or, if no such consideration is paid, the Fair Market Value of a Share at the time of such Change of Control transaction)
shall be canceled immediately upon the consummation of such Change of Control for no consideration. Except as otherwise provided
in an applicable Employment Agreement or Award Agreement, any unvested portion of such continued, assumed, or substituted Awards
shall vest in full upon an applicable Participant’s termination without Cause that occurs within twelve (12) months
following the consummation of such Change of Control, with any applicable performance metrics deemed achieved at a level established
by the Committee in its sole discretion prior to such consummation.

 

	Article 12.	 Duration, Amendment, Modification, Suspension and Termination

 

12.1 Duration of
the Plan. Unless sooner terminated as provided in Section 12.2, the Plan shall terminate on May 14, 2030.

 

12.2 Amendment,
Modification, Suspension and Termination of Plan. The Committee may amend, alter, suspend, discontinue, or terminate (for purposes
of this Section 12.2, an “Action”) the Plan or any portion thereof or any Award (or Award Agreement) thereunder
at any time; provided that no such Action shall be made, other than as permitted under Article 10 or 11, (i) without
shareholder approval (A) if such approval is necessary to comply with any tax or regulatory requirement applicable to the
Plan, (B) if such Action increases the number of Shares available under the Plan (other than an increase permitted under Article 5
absent shareholder approval), (C) if such Action results in a material increase in benefits permitted under the Plan (but
excluding increases that are immaterial or that are minor and to benefit the administration of the Plan, to take account of any
changes in applicable law, or to obtain or maintain favorable tax, exchange, or regulatory treatment for the Company, a Subsidiary,
and/or an Affiliate) or a change in eligibility requirements under the Plan, or (D) for any Action that results in (x) a
reduction of the Option Price, grant price or strike price per Share, as applicable, of any outstanding Options or Stock Appreciation
Rights, (y) cancellation of any outstanding Options or Stock Appreciation Rights in exchange for (I) cash, or (II) a
new Option or Stock Appreciation Right (with a lower Option Price, grant price or strike price per Share, as the case may be) or
other Awards, in each case with greater intrinsic value (if any) than the canceled option or Stock Appreciation Right or (z) a
 “repricing” for purposes of the stockholder approval rules of any securities exchange or inter-dealer quotation
system on which the Shares are listed or quoted, and (ii) without the written consent of the affected Participant, if such
Action would materially diminish the rights of any Participant under any Award theretofore granted to such Participant under the
Plan; provided, further, that the Committee may amend the Plan, any Award or any Award Agreement without such consent
of the Participant in such manner as it deems necessary to comply with applicable laws, including without limitation, the Dodd-Frank
Wall Street Reform and Consumer Protection Act.

 

	Article 13.	General Provisions

 

13.1 No Right to
Service. The granting of an Award under the Plan shall impose no obligation on the Company, any Subsidiary or any Affiliate
to continue the Service of a Participant and shall not lessen or affect any right that the Company, any Subsidiary or any Affiliate
may have to terminate the Service of such Participant. No Participant or other Person shall have any claim to be granted any Award,
and there is no obligation for uniformity of treatment of Participants, or holders or beneficiaries of Awards. The terms and conditions
of Awards and the Committee’s determinations and interpretations with respect thereto need not be the same with respect to
each Participant (whether or not such Participants are similarly situated).

 

13.2
Settlement of Awards; Fractional Shares. Each Award Agreement shall establish the form in which the Award shall be settled.
The Committee shall determine whether cash, Awards, other securities or other property shall be issued or paid in lieu of fractional
Shares or whether such fractional Shares or any rights thereto shall be rounded, forfeited or otherwise eliminated.

 

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13.3 Dividends and
Dividend Equivalents.

 

(a)     Subject
to Section 13.3(b) and 13.3(c), the Committee may, in its sole discretion, provide a Participant as part of an Award
with dividends, dividend equivalents, or similar payments in respect of Awards, payable in cash, Shares, other securities, other
Awards or other property, on a current or deferred basis, on such terms and conditions as may be determined by the Committee in
its sole discretion, including, without limitation, payment directly to the Participant, withholding of such amounts by the Company
subject to vesting of the Award or reinvestment in additional Shares, Restricted Stock or other Awards.

 

(b)     Without
limiting the foregoing, any dividend otherwise payable in respect of any share of Restricted Stock that remains subject to vesting
conditions at the time of payment of such dividend shall be retained by the Company, remain subject to the same vesting conditions
as the share of Restricted Stock to which the dividend relates and shall be delivered (without interest) to the Participant within
fifteen days following the date on which such restrictions on such Restricted Stock lapse (and the right to any such accumulated
dividends shall be forfeited upon the forfeiture of the Restricted Stock to which such dividends relate).

 

(c)     To
the extent provided in an Award Agreement, the holder of an outstanding Award (other than Restricted Stock) shall be entitled to
be credited with dividend equivalent payments (upon the payment by the Company of dividends on Shares) either in cash or, in the
sole discretion of the Committee, in Shares having a Fair Market Value equal to the amount of such dividends (and interest may,
in the sole discretion of the Committee, be credited on the amount of cash dividend equivalents at a rate and subject to such terms
as determined by the Committee), which accumulated dividend equivalents (and interest thereon, if applicable) shall be payable
at the same time as the underlying Award is settled following the date on which such Award vests (or other restrictions applicable
thereto lapse), and if such Award is forfeited, the Participant shall have no right to such dividend equivalent payments (or interest
thereon, if applicable).

 

13.4 Tax Withholding.
The Company shall have the power and the right to deduct or withhold automatically from any amount deliverable under the Award
or otherwise, or require a Participant to remit to the Company, the maximum statutory amount to satisfy federal, state, and local
taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising as a result
of the Plan. With respect to required withholding, Participants may elect (subject to the Company’s automatic withholding
right set out above), subject to the approval of the Committee, to satisfy the withholding requirement, in whole or in part, by
having the Company withhold Shares having a Fair Market Value on the date the tax is to be determined equal to the maximum statutory
total tax that could be imposed on the transaction.

 

13.5 No Guarantees
Regarding Tax Treatment. Participants (or their beneficiaries) shall be responsible for all taxes with respect to any Awards
under the Plan. The Committee and the Company make no guarantees to any Person regarding the tax treatment of Awards or payments
made under the Plan. Neither the Committee nor the Company has any obligation to take any action to prevent the assessment of any
tax on any Person with respect to any Award under Section 409A or Section 457A or otherwise and none of the Company,
any of its Subsidiaries or Affiliates, or any of their employees or representatives shall have any liability to a Participant with
respect thereto.

 

13.6 Non-Transferability
of Awards. Unless otherwise determined by the Committee, an Award shall not be transferable or assignable by the Participant
except in the event of his death (subject to the applicable laws of descent and distribution) and any such purported assignment,
alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or any Affiliate.
No transfer shall be permitted for value or consideration. An award exercisable after the death of a Participant may be exercised
by the heirs, legatees, personal representatives or distributees of the Participant. Any permitted transfer of the Awards to heirs,
legatees, personal representatives or distributees of the Participant shall not be effective to bind the Company unless the Committee
shall have been furnished with written notice thereof and a copy of such evidence as the Committee may deem necessary to establish
the validity of the transfer and the acceptance by the transferee or transferees of the terms and conditions hereof.

 

    11

     

    

 

13.7 Termination
of Service. Except as otherwise provided in an Award Agreement, unless determined otherwise by the Committee at any point following
such event: (i) neither a temporary absence from employment or Service due to illness, vacation, or leave of absence (including,
without limitation, a call to active duty for military service through a Reserve or National Guard unit) nor a transfer from employment
or service with the Company or its Affiliate to employment or service with the Company or another Affiliate (or vice-versa) shall
be considered a termination of Service; and (ii) if a Participant undergoes a termination of Service, but such Participant
continues to provide services to the Company or its Affiliates in a non-employee capacity, such change in status shall not be considered
a termination of Service for purposes of the Plan. Further, unless otherwise determined by the Committee or to the extent necessary
to comply with Section 409A or Section 457A, in the event that any entity ceases to be Affiliated with the Company (by
reason of sale, divestiture, spin-off, or other similar transaction), unless a Participant’s employment or service is transferred
to another Affiliate immediately following such transaction, such Participant shall be deemed to have suffered a termination of
Service hereunder as of the date of the consummation of such transaction.

 

13.8 Clawback/Repayment.
All Awards shall be subject to reduction, cancellation, forfeiture or recoupment to the extent necessary to comply with (i) any
clawback, forfeiture or other similar policy adopted by the Board or the Committee and as in effect from time to time; and (ii) applicable
law. Further, unless otherwise determined by the Committee, to the extent that the Participant receives any amount in excess of
the amount that the Participant should otherwise have received under the terms of the Award for any reason (including, without
limitation, by reason of a financial restatement, mistake in calculations, or other administrative error), the Participant shall
be required to repay any such excess amount to the Company.

 

13.9 Detrimental
Activity. Notwithstanding anything to the contrary herein, if a Participant has, as determined by the Committee, engaged in
(i) unauthorized disclosure of any confidential or proprietary information of the Company or any of its Affiliates; (ii) any
activity that would be grounds to terminate the Participant’s Service for Cause; (iii) a breach by the Participant of
any restrictive covenant by which such Participant is bound, including, without limitation, any covenant not to compete or not
to solicit, in any agreement with the Company or any of its Affiliates, or (iv) fraud or conduct contributing to any financial
restatements or irregularities, as determined by the Committee in its sole discretion, then the Committee may, in its sole discretion,
provide for one or more of the following:

 

		(a)	cancellation of any or all of such Participant’s
outstanding Awards; or

 

		(b)	forfeiture by the Participant of any gain realized
on the vesting or exercise of Awards, and repayment of any such gain promptly to the Company.

 

13.10 Right of Offset.
The Company will have the right to offset against its obligation to deliver Shares (or other property or cash) under the Plan or
any Award Agreement any outstanding amounts (including, without limitation, travel and entertainment or advance account balances,
loans, repayment obligations under any Awards, or amounts repayable to the Company pursuant to tax equalization, housing, automobile,
or other employee programs) that the Participant then owes to the Company or any of its Affiliates and any amounts the Committee
otherwise deems appropriate pursuant to any tax equalization policy or agreement. Notwithstanding the foregoing, if an Award is
 “deferred compensation” subject to Section 409A, the Committee will have no right to offset against its obligation
to deliver Shares (or other property or cash) under the Plan or any Award Agreement if such offset could subject the Participant
to the additional tax imposed under Section 409A in respect of an outstanding Award.

 

13.11 Conditions
and Restrictions on Shares. The Committee may impose such other conditions or restrictions on any Shares received in connection
with an Award as it may deem advisable or desirable. These restrictions may include, but shall not be limited to, a requirement
that the Participant hold the Shares received for a specified period of time or a requirement that a Participant represent and
warrant in writing that the Participant is acquiring the Shares for investment and without any present intention to sell or distribute
such Shares. The certificates for Shares may include any legend which the Committee deems appropriate to reflect any conditions
and restrictions applicable to such Shares.

 

    12

     

    

 

13.12 Compliance
with Law. The granting of Awards and the issuance of Shares under the Plan shall be subject to all applicable laws, rules,
and regulations, and to such approvals by any governmental agencies, or any stock exchanges on which the Shares are admitted to
trading or listed, as may be required. The Company shall have no obligation to issue or deliver evidence of title for Shares issued
under the Plan prior to:

 

		(a)	Obtaining any approvals from governmental agencies
that the Company determines are necessary or advisable; and

 

(b)    Completion
of any registration or other qualification of the Shares under any applicable national, state or foreign law or ruling of any governmental
body that the Company determines to be necessary or advisable.

 

The restrictions contained
in this Section 13.12 shall be in addition to any conditions or restrictions that the Committee may impose pursuant to Section 13.11.
The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the
Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company, its
Subsidiaries and Affiliates, and all of their employees and representatives of any liability in respect of the failure to issue
or sell such Shares as to which such requisite authority shall not have been obtained.

 

13.13 Rights as
a Shareholder. Except as otherwise provided herein or in the applicable Award Agreement, a Participant shall have none of the
rights of a shareholder with respect to Shares covered by any Award until the Participant becomes the record holder of such Shares.

 

13.14 Severability.
If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction,
or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such
provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be so construed or deemed amended
without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be
stricken as to such jurisdiction, Person, or Award, and the remainder of the Plan and any such Award shall remain in full force
and effect.

 

13.15 Unfunded Plan.
Participants shall have no right, title, or interest whatsoever in or to any investments that the Company or any of its Subsidiaries
or Affiliates may make to aid it in meeting its obligations under the Plan. Nothing contained in the Plan, and no action taken
pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship between the
Company and any Participant, beneficiary, legal representative, or any other Person. To the extent that any Person acquires a right
to receive payments from the Company under the Plan, such right shall be no greater than the right of an unsecured general creditor
of the Company. All payments to be made hereunder shall be paid from the general funds of the Company and no special or separate
fund shall be established and no segregation of assets shall be made to assure payment of such amounts. The Plan is not subject
to the U.S. Employee Retirement Income Security Act of 1974, as amended from time to time.

 

13.16 No Constraint
on Corporate Action. Nothing in the Plan shall be construed to (i) limit, impair, or otherwise affect the Company’s
right or power to make adjustments, reclassifications, reorganizations, or changes of its capital or business structure, or to
merge or consolidate, or dissolve, liquidate, sell, or transfer all or any part of its business or assets, or (ii) limit the
right or power of the Company to take any action which such entity deems to be necessary or appropriate.

 

13.17 Successors.
All obligations of the Company under the Plan with respect to Awards granted hereunder shall be binding on any successor to the
Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise,
of all or substantially all of the business or assets of the Company.

 

13.18 Governing
Law. The Plan and each Award Agreement shall be governed by the laws of the State of Delaware, excluding any conflicts or choice
of law rule or principle that might otherwise refer construction or interpretation of the Plan to the substantive law of another
jurisdiction.

 

13.19 Data Protection.
By participating in the Plan, the Participant consents to the collection, processing, transmission and storage by the Company in
any form whatsoever, of any data of a professional or personal nature which is necessary for the purposes of introducing and administering
the Plan. The Company may share such information with any Subsidiary or Affiliate, the trustee of any employee benefit trust, its
registrars, trustees, brokers, other third party administrator or any Person who obtains control of the Company or acquires the
Company, undertaking or part-undertaking which employs the Participant, wherever situated.

 

13.20 Effective
Date. The Plan originally became effective on May 14, 2020 (the “Effective Date”).

 

* * *

 

    13

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