Document:

Exhibit 10.16

 

SECURITIES PURCHASE AGREEMENT

 

This SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of October 24, 2018, by and between U.S.
RARE EARTH MINERALS, INC., a Nevada corporation, with headquarters located at 233 Needham Street, Suite 300, Newton, MA 02464
(the “Company”), and AUCTUS FUND, LLC, a Delaware limited liability company, with its address at 545 Boylston
Street, 2nd Floor, Boston, MA 02116 (the “Buyer”).

 

WHEREAS:

 

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

 

B. Buyer desires to
purchase and the Company desires to issue and sell, upon the terms and conditions set forth in this Agreement two (2) 8% senior
secured convertible notes of the Company, in the form attached hereto as Exhibit A, in the aggregate principal amount of US$250,000.00
(together with any note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance
with the terms thereof, each a “Note,” collectively the “Notes”), convertible into shares of common stock,
$0.001 par value per share, of the Company (the “Common Stock”), upon the terms and subject to the limitations and
conditions set forth in such Note.

 

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

 

NOW THEREFORE,
the Company and the Buyer severally (and not jointly) hereby agree as follows:

 

1. PURCHASE AND SALE
OF NOTEs.

 

a. Purchase of Notes.
On the First Closing Date (as defined below), the Company shall issue and sell to the Buyer and the Buyer agrees to purchase from
the Company such principal amount of the initial Note (the “Initial Note”) as is set forth immediately below the Buyer’s
name on the signature pages hereto. On the Second Closing Date (as defined below), the Company shall issue and sell to the Buyer
and the Buyer agrees to purchase from the Company such principal amount of the second Note (the “Second Note”) as is
set forth immediately below the Buyer’s name on the signature pages hereto contemporaneously at the time that all material
comments raised by the SEC, with respect the Registration Statement to be filed by the Company on Form S-1 with the SEC registering
the shares underlying each Warrant and each Note purchased in connection with this Agreement (subject to any limitation by the
SEC to register such underlying Common Stock as a result of the application of Rule 415 promulgated by the SEC), are resolved by
the Company (a “Registration Event”). In connection with the issuance of each Note, the Company shall issue a common
stock purchase warrant to Buyer to purchase 208,333 shares of the Company’s common stock (the “Warrant”) as a
commitment fee upon the terms and subject to the limitations and conditions set forth in such Warrant.

 

    	 	 	 

     

    

  

b. Form of Payment.
On the Closing Dates (as defined below), (i) the Buyer shall pay the purchase price for each Note to be issued and sold to it at
each Closing (as defined below) (the “Purchase Price”) by wire transfer of immediately available funds to the Company,
in accordance with the Company’s written wiring instructions, against delivery of such Note in the principal amount equal
to the Purchase Price as is set forth immediately below the Buyer’s name on the signature pages hereto, and (ii) the
Company shall deliver such duly executed Note and Warrant on behalf of the Company, to the Buyer, against delivery of such Purchase
Price.

 

c. Closing Dates.
Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Section 7 and Section 8 below, the date
and time of the issuance and sale of the Initial Note pursuant to this Agreement (the “First Closing Date”) shall be
12:00 noon, Eastern Standard Time on or about October 24, 2018 or such other mutually agreed upon time, and the date and time of
the issuance and sale of the Second Note contemporaneously with the Registration Event (the “Second Closing Date,”
together with the First Closing Date, the “Closing Dates,” and each a “Closing Date”). The closing of each
of the transactions contemplated by this Agreement (each a “Closing,” together the “Closings”) shall occur
on the Closing Dates at such location as may be agreed to by the parties.

 

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

 

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

 

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

 

    	 	2	 

     

    

  

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

 

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

 

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

 

f. Transfer or Re-sale.
The Buyer understands that (i) the sale or re-sale of the Securities has not been and is not being registered under the 1933 Act
or any applicable state securities laws, and the Securities may not be transferred unless (a) the Securities are sold pursuant
to an effective registration statement under the 1933 Act, (b) the Buyer shall have delivered to the Company, at the cost
of the Company, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in comparable
transactions to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from
such registration, which opinion shall be accepted by the Company, (c) the Securities are sold or transferred to an “affiliate”
(as defined in Rule 144 promulgated under the 1933 Act (or a successor rule) (“Rule 144”)) of the Buyer who agrees
to sell or otherwise transfer the Securities only in accordance with this Section 2(f) and who is an Accredited Investor, (d) the
Securities are sold pursuant to Rule 144, or (e) the Securities are sold pursuant to Regulation S under the 1933 Act (or a
successor rule) (“Regulation S”), and the Buyer shall have delivered to the Company, at the cost of the Company, an
opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactions, which
opinion shall be accepted by the Company; (ii) any sale of such Securities made in reliance on Rule 144 may be made only in accordance
with the terms of said Rule and further, if said Rule is not applicable, any re-sale of such Securities under circumstances in
which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the
1933 Act) may require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC thereunder;
and (iii) neither the Company nor any other person is under any obligation to register such Securities under the 1933 Act or any
state securities laws or to comply with the terms and conditions of any exemption thereunder (in each case). Notwithstanding the
foregoing or anything else contained herein to the contrary, the Securities may be pledged as collateral in connection with a bona
fide margin account or other lending arrangement. In the event that the Company does not accept the opinion of counsel provided
by the Buyer with respect to the transfer of Securities pursuant to an exemption from registration, such as Rule 144 or Regulation
S, within three (3) business days of delivery of the opinion to the Company, the Company shall pay to the Buyer liquidated damages
of five percent (5%) of the outstanding amount of each Note per day plus accrued and unpaid interest on each Note, prorated for
partial months, in cash or shares at the option of the Buyer (“Standard Liquidated Damages Amount”). If the Buyer elects
to be pay the Standard Liquidated Damages Amount in shares of Common Stock, such shares shall be issued at the Conversion Price
(as defined in each Note) at the time of payment.

 

    	 	3	 

     

    

  

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

 

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

 

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

 

    	 	4	 

     

    

  

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

 

i. Residency.
The Buyer is a resident of the jurisdiction set forth in the preamble.

 

j. Bad
Actor. Buyer is not subject to any “bad actor” disqualifying event described in Rule 506(d)(1)(i)-(viii) of
the Securities Act of 1933, as amended.

 

k. To the best of the
Buyer’s knowledge, neither the Buyer nor its beneficial owners:  (i) is under investigation by any governmental authority
for, or has been charged with, or convicted of, money laundering, drug trafficking, terrorist related activities, any crimes which
in the United States would be predicate crimes to money laundering, or any violation of any Anti-Money Laundering Laws (as hereinafter
defined); (ii) has been assessed civil or criminal penalties under any Anti-Money Laundering Laws; or (iii) has had any of its
funds seized or forfeited in any action under any Anti-Money Laundering Laws. For purposes of this paragraph, the term “Anti-Money
Laundering Laws” shall mean laws, regulations and sanctions, state and federal, criminal and civil, that: (i) limit the use
of and/or seek the forfeiture of proceeds from illegal transactions; (ii) limit commercial transactions with designated countries
or individuals believed to be terrorists, narcotics dealers or otherwise engaged in activities contrary to the interests of the
United States; (iii) require identification and documentation of the parties with whom a Financial Institution conducts business;
or (iv) are designed to disrupt the flow of funds to terrorist organizations. Such laws, regulations and sanctions shall be deemed
to include the USA Patriot Act of 2001, Pub. L. No. 107-56 (the “Patriot Act”), the Bank Secrecy Act, 31 U.S.C. Section
5311 et. seq. (the “Bank Secrecy Act”), the Trading with the Enemy Act, 50 U.S.C. Appendix, the International Emergency
Economic Powers Act, 50 U.S.C. Section 1701 et. seq., and the sanction regulations promulgated pursuant thereto by the OFAC, as
well as laws relating to prevention and detection of money laundering in 18 U.S.C. Sections 1956 and 1957.

 

    	 	5	 

     

    

  

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

 

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

 

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

 

    	 	6	 

     

    

  

c. Capitalization.
As of the date hereof, the authorized capital stock of the Company consists of: (i) 300,000,000 shares of Common Stock, of which
approximately 85,103,673 shares are issued and outstanding; and (ii) 50,000,000 shares of preferred stock, of which 440,500 are
issued and outstanding. Except as disclosed in the SEC Documents, no shares are reserved for issuance pursuant to the Company’s
stock option plans, no shares are reserved for issuance pursuant to securities (other than the Notes and any other convertible
promissory note issued to the Buyer) exercisable for, or convertible into or exchangeable for shares of Common Stock and 100,000,000
shares are reserved for issuance upon conversion of the Notes. All of such outstanding shares of capital stock are, or upon issuance
will be, duly authorized, validly issued, fully paid and non-assessable. No shares of capital stock of the Company are subject
to preemptive rights or any other similar rights of the shareholders of the Company or any liens or encumbrances imposed through
the actions or failure to act of the Company. Except as disclosed in the SEC Documents, as of the effective date of this Agreement,
(i) there are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of first refusal, agreements,
understandings, claims or other commitments or rights of any character whatsoever relating to, or securities or rights convertible
into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, or arrangements by which the Company
or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries,
(ii) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale
of any of its or their securities under the 1933 Act and (iii) there are no anti-dilution or price adjustment provisions contained
in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by the
issuance of the Notes or the Conversion Shares. The Company has filed in its SEC Documents true and correct copies of the Company’s
Certificate of Incorporation as in effect on the date hereof (“Certificate of Incorporation”), the Company’s
By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible into or exercisable
for Common Stock of the Company and the material rights of the holders thereof in respect thereto. The Company shall provide the
Buyer with a written update of this representation signed by the Company’s Chief Executive on behalf of the Company as of
each Closing Date.

 

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

 

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

 

    	 	7	 

     

    

  

f. No Conflicts.
The execution, delivery and performance of this Agreement and each Note by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby (including, without limitation, the issuance and reservation for issuance of the Conversion
Shares) will not (i) conflict with or result in a violation of any provision of the Certificate of Incorporation or By-laws, or
(ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or an event which with notice
or lapse of time or both could become a default) under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture, patent, patent license or instrument to which the Company or any of its Subsidiaries
is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state
securities laws and regulations and regulations of any self-regulatory organizations to which the Company or its securities are
subject) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries
is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations
as would not, individually or in the aggregate, have a Material Adverse Effect). Neither the Company nor any of its Subsidiaries
is in violation of its Certificate of Incorporation, By-laws or other organizational documents and neither the Company nor any
of its Subsidiaries is in default (and no event has occurred which with notice or lapse of time or both could put the Company or
any of its Subsidiaries in default) under, and neither the Company nor any of its Subsidiaries has taken any action or failed to
take any action that would give to others any rights of termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company or any of its Subsidiaries is a party or by which any property or assets of the Company
or any of its Subsidiaries is bound or affected, except for possible defaults as would not, individually or in the aggregate, have
a Material Adverse Effect. The businesses of the Company and its Subsidiaries, if any, are not being conducted, and shall not be
conducted so long as the Buyer owns any of the Securities, in violation of any law, ordinance or regulation of any governmental
entity. Except as specifically contemplated by this Agreement and as required under the 1933 Act and any applicable state securities
laws, the Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, any
court, governmental agency, regulatory agency, self-regulatory organization or stock market or any third party in order for it
to execute, deliver or perform any of its obligations under this Agreement, each Note in accordance with the terms hereof or thereof
or to issue and sell each Note in accordance with the terms hereof and to issue the Conversion Shares upon conversion of the Notes.
All consents, authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding
sentence have been obtained or effected on or prior to the date hereof. The Company is not in violation of the listing requirements
of the OTC Pink (the “OTC Pink”), the OTCQB or any similar quotation system, and does not reasonably anticipate that
the Common Stock will be delisted by the OTC Pink, the OTCQB or any similar quotation system, in the foreseeable future nor are
the Company's securities “chilled” by DTC. The Company and its Subsidiaries are unaware of any facts or circumstances
which might give rise to any of the foregoing.

 

    	 	8	 

     

    

  

g. SEC Documents;
Financial Statements. The Company has timely filed all reports, schedules, forms, statements and other documents required to
be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “1934
Act”) (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements and
schedules thereto and documents (other than exhibits to such documents) incorporated by reference therein, being hereinafter referred
to herein as the “SEC Documents”). The Company has delivered to the Buyer true and complete copies of the SEC Documents,
except for such exhibits and incorporated documents. As of their respective dates, the SEC Documents complied in all material respects
with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. None of the statements made in any such SEC Documents is, or has been, required to
be amended or updated under applicable law (except for such statements as have been amended or updated in subsequent filings prior
the date hereof). As of their respective dates, the financial statements of the Company included in the SEC Documents complied
as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC
with respect thereto. Such financial statements have been prepared in accordance with United States generally accepted accounting
principles, consistently applied, during the periods involved and fairly present in all material respects the consolidated financial
position of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations
and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).
Except as set forth in the financial statements of the Company included in the SEC Documents, the Company has no liabilities, contingent
or otherwise, other than (i) liabilities incurred in the ordinary course of business subsequent to June 30, 2018, and (ii) obligations
under contracts and commitments incurred in the ordinary course of business and not required under generally accepted accounting
principles to be reflected in such financial statements, which, individually or in the aggregate, are not material to the financial
condition or operating results of the Company. The Company is subject to the reporting requirements of the 1934 Act. For the avoidance
of doubt, filing of the documents required in this Section 3(g) via the SEC’s Electronic Data Gathering, Analysis, and Retrieval
system (“EDGAR”) shall satisfy all delivery requirements of this Section 3(g).

 

h. Absence of Certain
Changes. Since June 30, 2018, there has been no material adverse change and no material adverse development in the assets,
liabilities, business, properties, operations, financial condition, results of operations, prospects or 1934 Act reporting status
of the Company or any of its Subsidiaries.

 

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

 

    	 	9	 

     

    

  

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

 

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

 

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

 

    	 	10	 

     

    

  

m. Certain Transactions.
Except for arm’s length transactions pursuant to which the Company or any of its Subsidiaries makes payments in the ordinary
course of business upon terms no less favorable than the Company or any of its Subsidiaries could obtain from third parties and
other than the grant of stock options disclosed on Schedule 3(c), none of the officers, directors, or employees of the Company
is presently a party to any transaction with the Company or any of its Subsidiaries (other than for services as employees, officers
and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing
for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee
or, to the knowledge of the Company, any corporation, partnership, trust or other entity in which any officer, director, or any
such employee has a substantial interest or is an officer, director, trustee or partner.

 

n. Disclosure.
All information relating to or concerning the Company or any of its Subsidiaries set forth in this Agreement and provided to the
Buyer pursuant to Section 2(d) hereof and otherwise in connection with the transactions contemplated hereby is true and correct
in all material respects and the Company has not omitted to state any material fact necessary in order to make the statements made
herein or therein, in light of the circumstances under which they were made, not misleading. No event or circumstance has occurred
or exists with respect to the Company or any of its Subsidiaries or its or their business, properties, prospects, operations or
financial conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company
but which has not been so publicly announced or disclosed (assuming for this purpose that the Company’s reports filed under
the 1934 Act are being incorporated into an effective registration statement filed by the Company under the 1933 Act).

 

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

 

p. No Integrated
Offering. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has directly or indirectly
made any offers or sales in any security or solicited any offers to buy any security under circumstances that would require registration
under the 1933 Act of the issuance of the Securities to the Buyer. The issuance of the Securities to the Buyer will not be integrated
with any other issuance of the Company’s securities (past, current or future) for purposes of any shareholder approval provisions
applicable to the Company or its securities.

 

    	 	11	 

     

    

  

q. No Brokers.
The Company has taken no action which would give rise to any claim by any person for brokerage commissions, transaction fees or
similar payments relating to this Agreement or the transactions contemplated hereby.

 

r. Permits; Compliance.
The Company and each of its Subsidiaries is in possession of all franchises, grants, authorizations, licenses, permits, easements,
variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and operate its properties and to carry
on its business as it is now being conducted (collectively, the “Company Permits”), and there is no action pending
or, to the knowledge of the Company, threatened regarding suspension or cancellation of any of the Company Permits. Neither the
Company nor any of its Subsidiaries is in conflict with, or in default or violation of, any of the Company Permits, except for
any such conflicts, defaults or violations which, individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect. Since June 30, 2018, neither the Company nor any of its Subsidiaries has received any notification with
respect to possible conflicts, defaults or violations of applicable laws, except for notices relating to possible conflicts, defaults
or violations, which conflicts, defaults or violations would not have a Material Adverse Effect.

 

s. Environmental
Matters.

 

(i) There are, to the
Company’s knowledge, with respect to the Company or any of its Subsidiaries or any predecessor of the Company, no past or
present violations of Environmental Laws (as defined below), releases of any material into the environment, actions, activities,
circumstances, conditions, events, incidents, or contractual obligations which may give rise to any common law environmental liability
or any liability under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 or similar federal, state,
local or foreign laws and neither the Company nor any of its Subsidiaries has received any notice with respect to any of the foregoing,
nor is any action pending or, to the Company’s knowledge, threatened in connection with any of the foregoing. The term “Environmental
Laws” means all federal, state, local or foreign laws relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without
limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants contaminants, or toxic
or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters,
orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.

 

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

 

    	 	12	 

     

    

  

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

 

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

 

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

 

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

 

w. Solvency.
The Company (after giving effect to the transactions contemplated by this Agreement) is solvent (i.e., its assets have a
fair market value in excess of the amount required to pay its probable liabilities on its existing debts as they become absolute
and matured) and currently the Company has no information that would lead it to reasonably conclude that the Company would not,
after giving effect to the transaction contemplated by this Agreement, have the ability to, nor does it intend to take any action
that would impair its ability to, pay its debts from time to time incurred in connection therewith as such debts mature. The Company
did not receive a qualified opinion from its auditors with respect to its most recent fiscal year end and, after giving effect
to the transactions contemplated by this Agreement, does not anticipate or know of any basis upon which its auditors might issue
a qualified opinion in respect of its current fiscal year. For the avoidance of doubt any disclosure of the Borrower’s ability
to continue as a “going concern” shall not, by itself, be a violation of this Section 3(w).

 

    	 	13	 

     

    

  

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

 

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

 

z. Bad Actor.  No
officer or director of the Company would be disqualified under Rule 506(d) of the Securities Act as amended on the basis of being
a “bad actor” as that term is established in the September 19, 2013 Small Entity Compliance Guide published by
the SEC.

 

aa. Shell Status.
The Company represents that it is not a “shell” issuer and has never been a “shell” issuer, or that if
it previously has been a “shell” issuer, that at least twelve (12) months have passed since the Company has reported
Form 10 type information indicating that it is no longer a “shell” issuer. Further, the Company will instruct its counsel
to either (i) write a 144- 3(a)(9) opinion to allow for salability of the Conversion Shares or (ii) accept such opinion from Holder’s
counsel.

 

bb. No-Off Balance
Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company or any of its Subsidiaries
and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its 1934 Act filings
and is not so disclosed or that otherwise could be reasonably likely to have a Material Adverse Effect.

 

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

 

    	 	14	 

     

    

  

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

 

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

 

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

 

4. COVENANTS.

 

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

 

    	 	15	 

     

    

  

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

 

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

 

d. Right of First
Refusal. Unless it shall have first delivered to the Buyer, at least seventy two (72) hours prior to the closing of such Future
Offering (as defined herein), written notice describing the proposed Future Offering, including the terms and conditions thereof,
and providing the Buyer an option during the seventy two (72) hour period following delivery of such notice to purchase the securities
being offered in the Future Offering on the same terms as contemplated by such Future Offering (the limitations referred to in
this sentence and the preceding sentence are collectively referred to as the “Right of First Refusal”) (and subject
to the exceptions described below), the Company will not conduct any equity financing (including debt with an equity component)
(“Future Offerings”) during the period beginning on the First Closing Date and ending eighteen (18) months following
the Closing Date. In the event the terms and conditions of a proposed Future Offering are amended in any respect after delivery
of the notice to the Buyer concerning the proposed Future Offering, the Company shall deliver a new notice to the Buyer describing
the amended terms and conditions of the proposed Future Offering and the Buyer thereafter shall have an option during the seventy
two (72) hour period following delivery of such new notice to purchase its pro rata share of the securities being offered on the
same terms as contemplated by such proposed Future Offering, as amended. The foregoing sentence shall apply to successive amendments
to the terms and conditions of any proposed Future Offering. The Right of First Refusal shall not apply to any transaction involving
(i) issuances of securities in a firm commitment underwritten public offering (excluding a continuous offering pursuant to Rule
415 under the 1933 Act), (ii) issuances to employees, officers, directors, contractors, consultants or other advisors approved
by the Board, (iii) issuances to strategic partners or other parties in connection with a commercial relationship, or providing
the Company with equipment leases, real property leases or similar transactions approved by the Board (iv) issuances of securities
as consideration for a merger, consolidation or purchase of assets, or in connection with any strategic partnership or joint venture
(the primary purpose of which is not to raise equity capital), or in connection with the disposition or acquisition of a business,
product or license by the Company. The Right of First Refusal also shall not apply to the issuance of securities upon exercise
or conversion of the Company’s options, warrants or other convertible securities outstanding as of the date hereof or to
the grant of additional options or warrants, or the issuance of additional securities, under any Company stock option or restricted
stock plan approved by the shareholders of the Company.

 

    	 	16	 

     

    

  

e. Expenses.
The Company shall reimburse Buyer for any and all expenses incurred by them in connection with the negotiation, preparation, execution,
delivery and performance of this Agreement and the other agreements to be executed in connection herewith (“Documents”),
including, without limitation, reasonable attorneys’ and consultants’ fees and expenses, transfer agent fees, fees
for stock quotation services, fees relating to any amendments or modifications of the Documents or any consents or waivers of provisions
in the Documents, fees for the preparation of opinions of counsel, escrow fees, and costs of restructuring the transactions contemplated
by the Documents. When possible, the Company must pay these fees directly, including, but not limited to, any and all wire fees,
otherwise the Company must make immediate payment for reimbursement to the Buyer for all fees and expenses immediately upon written
notice by the Buyer or the submission of an invoice by the Buyer. At each Closing, the Company’s initial obligation with
respect to this transaction is to reimburse Buyer’s legal expenses shall be $2,750.00 plus the cost of wire fees.

 

f. Financial Information.
The Company agrees to send or make available the following reports to the Buyer until the Buyer transfers, assigns, or sells all
of the Securities: (i) within ten (10) days after the filing with the SEC, a copy of its Annual Report on Form 10-K its Quarterly
Reports on Form 10-Q and any Current Reports on Form 8-K; (ii) within one (1) day after release, copies of all press releases
issued by the Company or any of its Subsidiaries; and (iii) contemporaneously with the making available or giving to the shareholders
of the Company, copies of any notices or other information the Company makes available or gives to such shareholders. For the avoidance
of doubt, filing the documents required in (i) above via EDGAR or releasing any documents set forth in (ii) above via a recognized
wire service shall satisfy the delivery requirements of this Section 4(f).

 

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

 

    	 	17	 

     

    

  

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

 

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

 

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

 

k. [Intentionally Omitted].

l. Restriction on
Activities. Commencing as of the date first above written, and until the sooner of the six month anniversary of the date first
written above or payment of each Note in full, or full conversion of each Note, the Company shall not, directly or indirectly,
without the Buyer’s prior written consent, which consent shall not be unreasonably withheld: (a) change the nature of its
business; (b) sell, divest, acquire, change the structure of any material assets other than in the ordinary course of business;
or (c) solicit any offers for, respond to any unsolicited offers for, or conduct any negotiations with any other person or entity
in respect of any variable rate debt transactions (i.e., transactions were the conversion or exercise price of the security issued
by the Company varies based on the market price of the Common Stock) above $500,000, whether a transaction similar to the one contemplated
hereby or any other investment; or (d) file any registration statements with the SEC.

 

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

 

    	 	18	 

     

    

  

n. Par Value. 
If the closing bid price at any time the Note is outstanding falls below $0.001, the Company shall cause the par value of its
Common Stock to be reduced to $0.0001 or less.

 

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

 

5. Transaction Expense
Amount.  Upon each Closing, the Company shall pay Twenty Five Thousand and 00/100 United States Dollars (US$25,000.00)
to Auctus Fund Management, LLC (“Auctus Management”) to cover the Holder's due diligence, monitoring, and other transaction
costs incurred for services rendered in connection herewith (the “Transaction Expense Amount”).  The Transaction
Expense Amount shall be offset against the proceeds of each Note and shall be paid to Auctus Management upon the execution hereof.

 

6. Transfer Agent
Instructions. The Company shall issue irrevocable instructions to its transfer agent to issue certificates, registered in the
name of the Buyer or its nominee, for the Conversion Shares in such amounts as specified from time to time by the Buyer to the
Company upon conversion of each Note in accordance with the terms thereof (the “Irrevocable Transfer Agent Instructions”). 
In the event that the Borrower proposes to replace its transfer agent, the Borrower shall provide, prior to the effective date
of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the
Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount)
signed by the successor transfer agent to Borrower and the Borrower. Prior to registration of the Conversion Shares under the 1933
Act or the date on which the Conversion Shares may be sold pursuant to Rule 144 without any restriction as to the number of Securities
as of a particular date that can then be immediately sold, all such certificates shall bear the restrictive legend specified in
Section 2(g) of this Agreement.  The Company warrants that: (i) no instruction other than the Irrevocable Transfer Agent Instructions
referred to in this Section, and stop transfer instructions to give effect to Section 2(f) hereof (in the case of the Conversion
Shares, prior to registration of the Conversion Shares under the 1933 Act or the date on which the Conversion Shares may be sold
pursuant to Rule 144 without any restriction as to the number of Securities as of a particular date that can then be immediately
sold), will be given by the Company to its transfer agent and that the Securities shall otherwise be freely transferable on the
books and records of the Company as and to the extent provided in this Agreement and each Note; (ii) it will not direct its transfer
agent not to transfer or delay, impair, and/or hinder its transfer agent in transferring (or issuing)(electronically or in certificated
form) any certificate for Conversion Shares to be issued to the Buyer upon conversion of or otherwise pursuant to each Note as
and when required by each Note and this Agreement; and (iii) it will not fail to remove (or directs its transfer agent not to remove
or impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions
in respect thereof) on any certificate for any Conversion Shares issued to the Buyer upon conversion of or otherwise pursuant to
each Note as and when required by each Note and this Agreement.  Nothing in this Section shall affect in any way the Buyer’s
obligations and agreement set forth in Section 2(g) hereof to comply with all applicable prospectus delivery requirements, if any,
upon re-sale of the Securities.  If the Buyer provides the Company, at the cost of the Company, with (i) an opinion of counsel
in form, substance and scope customary for opinions in comparable transactions, to the effect that a public sale or transfer of
such Securities may be made without registration under the 1933 Act and such sale or transfer is effected or (ii) the Buyer provides
reasonable assurances that the Securities can be sold pursuant to Rule 144, the Company shall permit the transfer, and, in the
case of the Conversion Shares, promptly instruct its transfer agent to issue one or more certificates, free from restrictive legend,
in such name and in such denominations as specified by the Buyer.  The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Buyer, by vitiating the intent and purpose of the transactions contemplated hereby. 
Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section may be inadequate
and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section, that the Buyer shall
be entitled, in addition to all other available remedies, to an injunction restraining any breach and requiring immediate transfer,
without the necessity of showing economic loss and without any bond or other security being required.

 

    	 	19	 

     

    

  

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

 

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

 

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

 

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

 

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

 

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

 

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

 

    	 	20	 

     

    

  

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

 

c. The Irrevocable
Transfer Agent Instructions, in form and substance satisfactory to a majority-in-interest of the Buyer, shall have been delivered
to and acknowledged in writing by the Company’s Transfer Agent.

 

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

 

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

 

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

 

g. The Conversion Shares
shall have been authorized for quotation on the OTC Pink, OTCQB or any similar quotation system and trading in the Common Stock
on the OTC Pink, OTCQB or any similar quotation system shall not have been suspended by the SEC or the OTC Pink, OTCQB or any similar
quotation system. [Isn’t this already satisfied? Let’s dsicss]

 

h. The Buyer shall
have received an officer’s certificate described in Section 3(c) above, dated as of each Closing Date.

 

    	 	21	 

     

    

  

9. GOVERNING
LAW; MISCELLANEOUS.

 

a. Governing Law.
This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada without regard to principles
of conflicts of laws. Any action brought by either party against the other concerning the transactions contemplated by this Agreement,
the Notes or any other agreement, certificate, instrument or document contemplated hereby shall be brought only in the state courts
of Massachusetts or in the federal courts located in the state of Massachusetts. The parties to this Agreement hereby irrevocably
waive any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack
of jurisdiction or venue or based upon forum non conveniens. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE
TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT
OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR
THEREBY. The prevailing party shall be entitled to recover from the other party its reasonable attorney's fees and costs. In
the event that any provision of this Agreement or any other agreement delivered in connection herewith is invalid or unenforceable
under any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid
or unenforceable under any law shall not affect the validity or enforceability of any other provision of any agreement. Each party
hereby irrevocably waives personal service of process and consents to process being served in any suit, action or proceeding in
connection with this Agreement or any other Transaction Document by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and
agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any other manner permitted by law.

 

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

 

    	 	22	 

     

    

  

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

 

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

 

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

 

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

 

    	 	23	 

     

    

  

If to the
Company, to:

 

U.S. Rare Earth Minerals, Inc.

233 Needham Street, Suite 300

Newton, MA 02464

Attn: David
Platt

E-mail: info@us-rem.com

 

If to the
Buyer:

 

Auctus Fund,
LLC

545 Boylston
Street, 2nd Floor

Boston, MA
02116

Attn: Lou
Posner

Facsimile:
(617) 532-6420

 

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

 

Chad Friend,
Esq., LL.M.

Legal &
Compliance, LLC

330 Clematis
Street, Suite 217

West Palm
Beach, FL 33401

E-mail: CFriend@LegalandCompliance.com

 

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

 

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

 

    	 	24	 

     

    

  

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

 

i. Survival.
The representations and warranties of the Company and the agreements and covenants set forth in this Agreement shall survive each
closing hereunder not withstanding any due diligence investigation conducted by or on behalf of the Buyer. The Company agrees to
indemnify and hold harmless the Buyer and all their officers, directors, employees and agents for loss or damage arising as a result
of or related to any breach or alleged breach by the Company of any of its representations, warranties and covenants set forth
in this Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as they are incurred.

 

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

 

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

 

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

 

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

 

    	 	25	 

     

    

  

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

 

[signature page follows]

 

    	 	26	 

     

    

  

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

 

	U.S. RARE EARTH MINERALS, INC.	 
	 	 
	By:	 	 
	Name: 	David Platt	
	Title:	Chief Executive Officer	 

 

	AUCTUS FUND, LLC	 
	 	 	 
	By:	 	 
	Name:	 Lou Posner	 
	Title:	Managing Director	 

 

	AGGREGATE SUBSCRIPTION AMOUNT:	 
	 	 
	Aggregate Principal Amount of Initial Note:	US$250,000.00
	 	 
	Aggregate Purchase Price of Initial Note:	US$250,000.00
	 	 
	Aggregate Principal Amount of Second Note:	US$250,000.00
	 	 
	Aggregate Purchase Price of Second Note:	US$250,000.00

 

    	 	27medp-ex101_247.htm

Exhibit 10.1

Medpace Holdings, Inc.  

Non-Employee Director Compensation Policy  

(Revised as of October 25, 2018)

Non-employee members of the board of directors (the “Board”) of Medpace Holdings, Inc. (the “Company”) shall be eligible to receive cash and equity compensation as set forth in this Non-Employee Director Compensation Policy (this “Policy”). The cash and equity compensation described in this Policy shall be paid or be made, as applicable, automatically and without further action of the Board (subject to Section 1(c)(ii)), to each member of the Board who is not an employee of the Company or any parent or subsidiary of the Company (each, a “Non-Employee Director”) who may be eligible to receive such cash or equity compensation, unless such Non-Employee Director declines the receipt of such cash or equity compensation by written notice to the Company. This Policy became effective after the effectiveness of the Company’s initial public offering (the date of such effectiveness, the “Effective Date”) and has been revised as of October 25, 2018.  This Policy shall remain in effect until it is revised or rescinded by further action of the Board. This Policy may be amended, modified or terminated by the Board at any time in its sole discretion. The terms and conditions of this Policy shall supersede any prior cash and/or equity compensation arrangements for service as a member of the Board between the Company and any of its Non-Employee Directors and between any subsidiary of the Company and any of its non-employee directors. No Non-Employee Director shall have any rights hereunder, except with respect to non-qualified stock options or restricted stock units granted pursuant to this Policy.  

 

1.  Annual Retainers. Non-Employee Directors shall be granted the retainers described below.  

	
 
	
(a)
	
Annual Retainers. Each Non-Employee Director shall receive an annual retainer with a value of $40,000 for service on the Board.  

	
 
	
(b)
	
Additional Annual Retainers. In addition, a Non-Employee Director shall receive the following annual retainers:  

	
 
	
(i)
	
Audit Committee. A Non-Employee Director serving as Chairperson of the Audit Committee shall receive an additional annual retainer with a value of $20,000 for such service. A Non-Employee Director serving as a member of the Audit Committee (other than the Chairperson) shall receive an additional annual retainer with a value of $7,500 for such service.  

 

	
 
	
(ii)
	
 Compensation Committee. A Non-Employee Director serving as a member of the Compensation Committee shall receive an additional annual retainer with a value of $7,500 for such service.

 

	
 
	
(c)
	
Payment of Retainers.  

	
 
	
(i)
	
Timing. The annual retainers described in Sections 1(a) and 1(b) shall be earned on a quarterly basis based on a calendar quarter and shall be paid by the Company in arrears not later than the fifteenth day following the end of each calendar quarter.  

 

	
 
	
(ii)
	
 Form. The annual retainers shall be paid in the form of cash; provided that the Board may, in its discretion, permit a Non-Employee Director to elect to receive any portion of the annual retainer in the form of shares of common stock of the Company (“Common Stock”) in lieu of cash. If such an election is permitted by the Board and made by a Non-Employee Director, the number of shares of Common Stock to be paid shall be determined by dividing the portion of the annual retainer payable in the form of Common Stock by the Fair Market Value (as defined in the Company’s 2016 Incentive Award Plan or any other applicable Company equity plan then maintained by the Company (such plan, as may be amended from time to time, the “Equity Plan”)) per share of Common Stock on the date the retainer is payable. Shares issued in lieu of cash shall be fully vested and unrestricted shares of Common Stock. Any election by a Non-Employee Director to receive a portion of the annual retainer in shares of Common Stock must be made prior to the applicable payment date for such portion of the annual retainer and pursuant to an election form to be provided by the Company. An election must comply with all rules established from time to time by the Board, including the Company’s Insider Trading Compliance Policy. A Non-Employee Director may not make an election pursuant to this Section 1(c)(ii) during a Company blackout period or when the Non-Employee Director is otherwise in possession of material non-public information.  

 

(iii) Termination of Service. In the event a Non-Employee Director does not serve as a Non-Employee Director, or in the applicable positions described in Section 1(b), for an entire calendar quarter, such Non-Employee Director shall receive a prorated portion of the retainer(s) otherwise payable to such Non-Employee Director for such calendar quarter pursuant to Sections 1(a) and 1(b), with such prorated portion determined by multiplying such otherwise payable retainer(s) by a fraction, the numerator of which is the number of days during which the Non-Employee Director serves as a Non-Employee Director or in the applicable positions described in Section 1(b) during the applicable calendar quarter and the denominator of which is the number of days in the applicable calendar quarter.  

 

2.Equity Compensation. Non-Employee Directors shall be granted the equity awards described below.  

	
 
	
(a)
	
Annual Awards. Each Non-Employee Director who (i) serves on the Board as of the date of any annual meeting of the Company’s stockholders (an “Annual Meeting”) after the Effective Date and (ii) will continue to serve as a Non-Employee Director immediately following such Annual Meeting shall be automatically granted, on the date of such Annual Meeting, an option to purchase the number of shares of Common Stock (at a per-share exercise price equal to the closing price per share of the Common Stock on the date of such annual meeting (or on the last preceding trading day if the date of the annual meeting is not a trading day)) that has an aggregate fair value on the date of grant of $90,000 (calculated in accordance with FASB Accounting Codification Topic 718 (“ASC 718”) using the same formula and assumptions as the Company utilized for the purpose of valuing outstanding options in its then-most recently prepared audited annual financial statement). The awards described in this Section 2(a) shall be referred to as the “Annual Awards.” For the avoidance of doubt, a Non-Employee Director elected for the first time to the Board at an Annual Meeting shall receive only an Annual Award in connection with such election, and shall not receive any Initial Award on the date of such Annual Meeting as well.  

 

	
 
	
(b)
	
Initial Awards. Except as otherwise determined by the Board, each Non-Employee Director who is initially elected or appointed to the Board after the Effective Date on any date other than the date of an Annual Meeting shall be automatically granted, on the date of such Non-Employee Director’s initial election or appointment (such Non-Employee Director’s “Start Date”), an award of an option to purchase shares of Common Stock (at a per-share exercise price equal to the closing price of the Common Stock on the date of such initial election or appointment (or on the last preceding trading day if the date of the initial election or appointment is not a trading day)) that has an aggregate fair value on such Non-Employee Director’s Start Date equal to the product of (i) $90,000 (calculated in accordance with ASC 718 using the same formula and assumptions as the Company utilized for the purpose of valuing outstanding options in its  then most recently prepared audited annual financial statement) and (ii) a fraction, the numerator of which is (x) 365 minus (y) the number of days in the period beginning on the date of the Annual Meeting immediately preceding such Non-Employee Director’s Start Date (or, if no such Annual Meeting has occurred, the Effective Date) and ending on such Non-Employee Director’s Start Date and the denominator of which is 365. The awards described in this Section 2(b) shall be referred to as “Initial Awards.” Notwithstanding the foregoing, the Board in its sole discretion may determine that the Initial Award for any Non-Employee Director be granted in the form of restricted stock units with equivalent value on the date of grant. For the avoidance of doubt, no Non-Employee Director shall be granted more than one Initial Award.  

 

	
 
	
(c)
	
Termination of Employment of Employee Directors. Members of the Board who are employees of the Company or any parent or subsidiary of the Company who subsequently terminate their employment with the Company and any parent or subsidiary of the Company and remain on the Board will not receive an Initial Award pursuant to Section 2(b) above, but to the extent that they are otherwise eligible, will be eligible to receive, after termination from service with the Company and any parent or subsidiary of the Company, Annual Awards as described in Section 2(a) above.  

 

	
 
	
(d)
	
Vesting of Awards Granted to Non-Employee Directors. Each Annual Award and Initial Award shall vest and become exercisable on the earlier of (x) the day immediately preceding the date of the first Annual Meeting following the date of grant and (y) the first anniversary of the date of grant, subject to the Non-Employee Director continuing in service through the applicable vesting date. No portion of an Annual Award or Initial Award that is unvested or unexercisable at the time of a Non-Employee Director’s termination of service on the Board shall become vested and exercisable thereafter. All of a Non-Employee Director’s Annual Awards and Initial Awards shall vest in full immediately prior to the occurrence of a Change in Control (as defined in the Equity Plan), to the extent outstanding at such time.  

 

3.General. The annual retainers (whether provided in the form of cash or equity) and equity awards described herein shall be granted under and shall be subject to the terms and provisions, including the limitations on the numbers of shares, of the Equity Plan. The equity awards described in Section 2 shall be granted subject to the execution and delivery of award agreements, including attached exhibits, in forms to be approved by the Board. All applicable terms of the Equity Plan apply to this Policy as if fully set forth herein, and all retainers and equity grants hereunder are subject in all respects to the terms of the Equity Plan. All numbers of shares determined hereunder shall be rounded down to the nearest whole share and subject to adjustment as provided in the Equity Plan.  

  

* * * * *

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00288-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00288-of-00352.parquet"}]]