Document:

TONIX PHARMACEUTICALS HOLDING CORP. 8-K

 

Exhibit 10.2

 

Execution Version

 

REGISTRATION RIGHTS AGREEMENT

 

REGISTRATION RIGHTS
AGREEMENT (this “Agreement”), dated as of September 3, 2020, by and between TONIX PHARMACEUTICALS HOLDING
CORP., a Nevada corporation (the “Company”), and LINCOLN PARK CAPITAL FUND, LLC, an Illinois limited
liability company (together with its permitted assigns, the “Investor”). Capitalized terms used herein and not
otherwise defined herein shall have the respective meanings set forth in the Purchase Agreement by and between the parties hereto,
dated as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “Purchase
Agreement”).

 

WHEREAS:

 

A.       Upon
the terms and subject to the conditions of the Purchase Agreement, (i) the Company has agreed to issue to the Investor, and the
Investor has agreed to purchase, up to Thirty Million Dollars ($30,000,000) of the Company's common stock, par value $0.001 per
share (the “Common Stock”), pursuant to the Purchase Agreement (such shares, the “Purchase Shares”),
and (ii) the Company has agreed to issue to the Investor upon the execution of the Purchase Agreement such number of shares of
Common Stock as set forth in Section 5(e) of the Purchase Agreement (the “Commitment Shares”); and

 

B.       To
induce the Investor to enter into the Purchase Agreement, the Company has agreed to provide certain registration rights under the
Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the
“Securities Act”), and applicable state securities laws.

 

NOW, THEREFORE,
in consideration of the promises and the mutual covenants contained herein and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company and the Investor hereby agree as follows:

 

		1.	DEFINITIONS.

 

As used in this Agreement,
the following terms shall have the following meanings:

 

(a)          “Base Prospectus” means the Company’s final base prospectus, dated April 17, 2020, a preliminary form
of which is included in the Registration Statement (defined below), including the documents and information incorporated by reference
therein.

 

(b)          “Initial Prospectus Supplement” means the prospectus supplement of the Company dated September 3, 2020 relating
to the Securities, including the accompanying Base Prospectus, to be prepared and filed by the Company with the SEC pursuant to
Rule 424(b) under the Securities Act and in accordance herewith, together with all documents and information incorporated therein
by reference.

 

(c)          “Prospectus” means the Base Prospectus, as supplemented by any Prospectus Supplement (including the Initial
Prospectus Supplement), including the documents and information incorporated by reference therein.

 

(d)          “Prospectus Supplement” means any prospectus supplement to the Base Prospectus (including the Initial Prospectus
Supplement) filed with the SEC pursuant to Rule 424(b) under the Securities Act in connection with the transactions contemplated
by this Agreement, including the documents and information incorporated by reference therein.

 

     

     

    

 

(e)          “Register,” “Registered,” and “Registration” refer to a registration effected
by preparing and filing one or more registration statements of the Company in compliance with the Securities Act and pursuant to
Rule 415 under the Securities Act or any successor rule providing for offering securities on a continuous basis (“Rule
415”), and the declaration or ordering of effectiveness of such registration statement(s) by the SEC.

 

(f)           “Registrable Securities” means the Purchase Shares that may from time to time be issued or issuable to the Investor
upon purchases of the Available Amount under the Purchase Agreement (without regard to any limitation or restriction on purchases),
the Commitment Shares issued or issuable to the Investor, and any shares of capital stock issued or issuable with respect to the
Purchase Shares, the Commitment Shares or the Purchase Agreement as a result of any stock split, stock dividend, recapitalization,
exchange or similar event, without regard to any limitation on purchases under the Purchase Agreement.

 

(g)          “Registration
Statement” means the effective registration statement on Form S-3 (Commission File No. 333-237610) filed by the
Company with the SEC pursuant to the Securities Act for the registration of shares of its Common Stock, including the Securities,
and certain other securities of the Company, as such Registration Statement has been or may be amended and supplemented from time
to time, including the financial statements, exhibits and schedules thereto, and all other documents filed as part thereof or incorporated
by reference therein, and including all information deemed to be a part thereof at the time of effectiveness pursuant to Rule 430B
of the Securities Act, including (i) any registration statement filed by the Company pursuant to Rule 462(b) under the Securities
Act in connection with the transactions contemplated by the Transaction Documents and (ii) any comparable successor registration
statement filed by the Company with the SEC pursuant to the Securities Act for the registration of shares of its Common Stock,
including the Securities.

 

		2.	REGISTRATION.

 

(a)          Initial
Prospectus Supplement. The Company agrees that it shall, on the date hereof, file with the SEC the Initial Prospectus Supplement
pursuant to Rule 424(b) under the Securities Act, in the form agreed upon by the Investor prior to such filing, specifically relating
to the transactions contemplated by, and describing the material terms and conditions of, the Transaction Documents, containing
information previously omitted at the time of effectiveness of the Registration Statement in reliance on Rule 430B under the Securities
Act, and disclosing all information relating to the transactions contemplated by the Transaction Documents required to be disclosed
in the Registration Statement and the Prospectus as of the date of the Initial Prospectus Supplement, including, without limitation,
information required to be disclosed in the section captioned “Plan of Distribution” in the Prospectus. The Investor
acknowledges that it will be identified in the Initial Prospectus Supplement as an underwriter within the meaning of Section 2(a)(11)
of the Securities Act. The Company shall permit the Investor and its counsel to review and comment upon a substantially complete
pre-filing draft of the Initial Prospectus Supplement at least one (1) Business Day prior to the date of its filing with the SEC,
the Company shall give due consideration to all such comments, and the Company shall not file the Initial Prospectus Supplement
with the SEC in a form to which the Investor reasonably objects. The Investor shall use its reasonable best efforts to comment
upon such substantially complete pre-filing draft of the Initial Prospectus Supplement within one (1) Business Day from the date
the Investor receives such substantially complete pre-filing draft thereof from the Company. The Investor shall furnish to the
Company such information regarding itself, the Securities held by it and the intended method of distribution thereof, including
any arrangement between the Investor and any other Person relating to the sale or distribution of the Securities, as shall be reasonably
requested by the Company in connection with the preparation and filing of the Initial Prospectus Supplement, and shall otherwise
cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of the Initial
Prospectus Supplement with the SEC.

 

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(b)          Effective
Registration Statement; Current Prospectus; Securities Law Compliance. The Company shall use its reasonable best efforts to
keep the Registration Statement effective pursuant to Rule 415 promulgated under the Securities Act, and to keep the Registration
Statement and the Prospectus current and available for issuances and sales of all of the Securities by the Company to the Investor,
and for the resale by the Investor, at all times until the earliest of (i) the date on which the Investor shall have sold all the
Securities and no Available Amount remains under the Purchase Agreement, (ii) thirty (30) days following the Maturity Date and
(iii) ninety (90) days following the termination of the Purchase Agreement in accordance with Section 11 of the Purchase Agreement
(the “Registration Period”). Without limiting the generality of the foregoing, during the Registration Period,
the Company shall (a) take all action necessary to continue to be required to file reports with the Commission pursuant to Section
13 or 15(d) of the Exchange Act, shall comply with its reporting and filing obligations under the Exchange Act, and shall not take
any action or file any document (whether or not permitted by the Exchange Act) to terminate or suspend its reporting and filing
obligations under the Exchange Act and (b) prepare and file with the SEC, at the Company’s expense, such amendments (including,
without limitation, post-effective amendments) to the Registration Statement and such Prospectus Supplements pursuant to Rule 424(b)
under the Securities Act, in each case, as may be necessary to keep the Registration Statement effective pursuant to Rule 415 promulgated
under the Securities Act, and to keep the Registration Statement and the Prospectus current and available for issuances and sales
of all of the Securities by the Company to the Investor, and for the resale of all of the Securities by the Investor, at all times
during the Registration Period (it being hereby acknowledged and agreed that the Company shall prepare and file with the SEC, at
the Company’s expense, immediately prior to the third (3rd) anniversary of the initial effective date of the Registration
Statement (the “Renewal Date”), a new Registration Statement relating to the Securities, in a form satisfactory
to the Investor and its counsel, and the Company shall use its reasonable best efforts to cause such Registration Statement to
be declared effective within 180 days after the Renewal Date). The Investor shall furnish to the Company such information regarding
itself, the Securities held by it and the intended method of distribution thereof as shall be reasonably requested by the Company
in connection with the preparation and filing of any such amendment to the Registration Statement (or new Registration Statement)
or any such Prospectus Supplement, and shall otherwise cooperate with the Company as reasonably requested by the Company in connection
with the preparation and filing of any such amendment to the Registration Statement (or new Registration Statement) or any such
Prospectus Supplement. The Company shall comply with all applicable federal, state and foreign securities laws in connection with
the offer, issuance and sale of the Securities contemplated by the Transaction Documents.

 

		3.	RELATED OBLIGATIONS.

 

With respect to the
Registration Statement and the Prospectus, the Company shall use its reasonable best efforts to effect the registration of the
Registrable Securities in accordance with the intended method of disposition thereof and, pursuant thereto, the Company shall
have the following obligations: 

 

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(a)          Stop Orders. The Company shall advise the Investor promptly (but in no event later than 24 hours) and shall confirm
such advice in writing: (i) of the Company’s receipt of notice of any request by the SEC for amendment of or a supplement
to the Registration Statement, the Prospectus, any Prospectus Supplement or for any additional information; (ii) of the Company’s
receipt of notice of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement or prohibiting
or suspending the use of the Prospectus or any Prospectus Supplement, or of the Company’s receipt of any notification of
the suspension of qualification of the Securities for offering or sale in any jurisdiction or the initiation or contemplated initiation
of any proceeding for such purpose; and (iii) of the Company becoming aware of the happening of any event, which makes any statement
of a material fact made in the Registration Statement, the Prospectus or any Prospectus Supplement untrue or which requires the
making of any additions to or changes to the statements then made in the Registration Statement, the Prospectus or any Prospectus
Supplement in order to state a material fact required by the Securities Act to be stated therein or necessary in order to make
the statements then made therein (in the case of the Prospectus or any Prospectus Supplement, in light of the circumstances under
which they were made) not misleading, or of the necessity to amend the Registration Statement or supplement the Prospectus or any
Prospectus Supplement to comply with the Securities Act or any other applicable laws. The Company shall not be required to disclose
to the Investor the substance or specific reasons of any of the events set forth in clauses (i) through (iii) of the immediately
preceding sentence, but rather, shall only be required to disclose that the event has occurred. The Company shall not deliver to
the Investor any Regular Purchase Notice, Accelerated Purchase Notice or Additional Accelerated Purchase Notice, and the Investor
shall not be obligated to purchase any shares of Common Stock under the Purchase Agreement, during the continuation or pendency
of any of the foregoing events; provided, however, that the foregoing shall not affect the Company’s or the
Investor’s rights or obligations under the Purchase Agreement with respect to any then pending Regular Purchases, Accelerated
Purchases and Additional Accelerated Purchases, and the Company and the Investor shall complete their respective obligations with
respect to any such pending Regular Purchases, Accelerated Purchases and Additional Accelerated Purchases under the Purchase Agreement.
If at any time the SEC shall issue any stop order suspending the effectiveness of the Registration Statement or prohibiting or
suspending the use of the Prospectus or any Prospectus Supplement, the Company shall use its reasonable best efforts to obtain
the withdrawal of such order at the earliest possible time. The Company shall furnish to the Investor, without charge, a copy of
any correspondence from the SEC or the staff of the SEC to the Company or its representatives relating to the Registration Statement
or the Prospectus, as the case may be.

 

(b)          Investor
Review. Except as provided in this Agreement and other than periodic and current reports required to be filed pursuant to the
Exchange Act, the Company shall not file with the SEC any amendment to the Registration Statement or any supplement to the Prospectus
that refers to the Investor, the Transaction Documents or the transactions contemplated thereby (including, without limitation,
any Prospectus Supplement filed in connection with the transactions contemplated by the Transaction Documents), in each case with
respect to which (a) the Investor shall not previously have been advised and afforded the opportunity to review and comment thereon
at least one (1) Business Day prior to filing with the SEC, as the case may be, (b) the Company shall not have given due consideration
to any comments thereon received from the Investor or its counsel, or (c) the Investor shall reasonably object, unless the Company
reasonably has determined that it is necessary to amend the Registration Statement or make any supplement to the Prospectus to
comply with the Securities Act or any other applicable law or regulation, in which case the Company shall promptly (but in no event
later than 24 hours) so inform the Investor, the Investor shall be provided with a reasonable opportunity to review and comment
upon any disclosure referring to the Investor, the Transaction Documents or the transactions contemplated thereby, as applicable,
and the Company shall expeditiously furnish to the Investor a copy thereof. In addition, for so long as, in the reasonable opinion
of counsel for the Investor, the Prospectus is required to be delivered in connection with any acquisition or sale of Securities
by the Investor, the Company shall not file any Prospectus Supplement with respect to the Securities without furnishing to the
Investor as many copies of such Prospectus Supplement, together with the Prospectus, as the Investor may reasonably request.

 

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(c)          Prospectus
Delivery. The Company consents to the use of the Prospectus (and of each Prospectus Supplement thereto) in accordance with
the provisions of the Securities Act and with the securities or “blue sky” laws of the jurisdictions in which the Securities
may be sold by the Investor, in connection with the offering and sale of the Securities and for such period of time thereafter
as the Prospectus is required by the Securities Act to be delivered in connection with sales of the Securities. The Company will
make available to the Investor upon request, and thereafter from time to time will furnish to the Investor, as many copies of the
Prospectus (and each Prospectus Supplement thereto) as the Investor may reasonably request for the purposes contemplated by the
Securities Act within the time during which the Prospectus is required by the Securities Act to be delivered in connection with
sales of the Securities. If during such period of time any event shall occur that in the reasonable judgment of the Company and
its counsel, or in the reasonable judgment of the Investor and its counsel, is required to be set forth in the Registration Statement,
the Prospectus or any Prospectus Supplement or should be set forth therein in order to make the statements made therein (in the
case of the Prospectus or any Prospectus Supplement, in light of the circumstances under which they were made) not misleading,
or if in the reasonable judgment of the Company and its counsel, or in the reasonable judgment of the Investor and its counsel,
it is otherwise necessary to amend the Registration Statement or supplement the Prospectus or any Prospectus Supplement to comply
with the Securities Act or any other applicable law or regulation, the Company shall forthwith prepare and, subject to Section
3(b) above, file with the SEC an appropriate amendment to the Registration Statement or an appropriate Prospectus Supplement and
in each case shall expeditiously furnish to the Investor, at the Company’s expense, such amendment to the Registration Statement
or such Prospectus Supplement, as applicable, as may be necessary to reflect any such change or to effect such compliance. The
Company shall have no obligation to separately advise the Investor of, or deliver copies to the Investor of, the SEC Documents,
all of which the Investor shall be deemed to have notice of.

 

(i)           Delivery
of Shares. The Company shall cooperate with the Investor to facilitate the timely preparation and delivery of DWAC Shares (not
bearing any restrictive legend) representing the Registrable Securities to be offered pursuant to the Registration Statement and
the Prospectus and enable such DWAC Shares to be in such denominations or amounts as the Investor may reasonably request and registered
in such names as the Investor may request

 

(j)           Transfer
Agent. The Company shall at all times maintain the services of the Transfer Agent with respect to its Common Stock.

 

(k)          Approvals.
The Company shall use its reasonable best efforts to cause the Registrable Securities covered by any Registration Statement to
be Registered with or approved by such other governmental agencies or authorities in the United States as may be necessary to consummate
the disposition of such Registrable Securities.

 

(l)           Confirmation
of Effectiveness. If reasonably requested in writing by the Investor at any time, the Company shall deliver to the Investor
a written confirmation from Company’s counsel of whether or not the effectiveness of such Registration Statement has lapsed
at any time for any reason (including, without limitation, the issuance of a stop order) and whether or not the Registration Statement
is currently effective and available to the Company for sale of all of the Registrable Securities..

 

(m)       Further
Assurances. The Company agrees to take all other reasonable actions as necessary and reasonably requested in writing by the
Investor to expedite and facilitate disposition by the Investor of Registrable Securities pursuant to any Registration Statement.

 

(n)       Transfer
Agent Instructions. On or before the date the Initial Prospectus Supplement is filed with the SEC, the Company shall issue
to the Transfer Agent the Irrevocable Transfer Agent Instructions in the form agreed to prior to the date hereof, and on the date
any Registration Statement which includes the Registrable Securities is ordered effective by the SEC, the Company shall deliver,
and shall cause legal counsel for the Company to deliver, to the Transfer Agent for such Registrable Securities (with copies to
the Investor) confirmation that such Registration Statement has been declared effective by the SEC. Thereafter, if requested by
the Investor at any time, the Company shall require its legal counsel to deliver to the Investor a written confirmation whether
or not the effectiveness of such Registration Statement has lapsed at any time for any reason (including, without limitation, the
issuance of a stop order) and whether or not the Registration Statement is current and available to the Investor for sale of all
of the Registrable Securities.

 

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		4.	OBLIGATIONS OF THE INVESTOR.

 

(a)          Investor
Information. The Investor has furnished to the Company in Exhibit A hereto such information regarding itself, the Registrable
Securities held by it, the Registrable Securities held by it and the intended method of disposition thereof, including any arrangement
between the Investor and any other Person relating to the sale or distribution of the Securities, as required to effect the registration
of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably
request. The Company shall notify the Investor in writing of any other information the Company reasonably requires from the Investor
in connection with any Registration Statement hereunder. The Investor will as promptly as practicable notify the Company of any
material change in the information set forth in Exhibit A, other than changes in its ownership of Common Stock.

 

(b)          Suspension
of Sales. The Investor agrees that, upon receipt of any notice from the Company of the existence of any suspension or stop
order as set forth in Section 3(a), the Investor will immediately discontinue disposition of Registrable Securities pursuant to
any Registration Statement covering such Registrable Securities until the Investor's receipt of the copies of a notice regarding
the resolution or withdrawal of the suspension or stop order as contemplated by Section 3(a). Notwithstanding anything to the contrary,
the Company shall cause its transfer agent to promptly deliver to the Investor DWAC Shares without any restrictive legend in accordance
with the terms of the Purchase Agreement in connection with any sale of Registrable Securities with respect to which the Investor
has entered into a contract for sale prior to the Investor’s receipt of a notice from the Company of the happening of any
event of the kind described in Section 3(a) and for which the Investor has not yet settled.

 

(c)          Investor
Cooperation. The Investor agrees to cooperate with the Company as reasonably requested by the Company in connection with the
preparation and filing of any amendments and supplements to any Registration Statement or the Prospectus hereunder.

 

		5.	EXPENSES OF REGISTRATION.

 

All reasonable expenses
of the Company, other than sales or brokerage commissions and fees and disbursements of counsel for, and other expenses of, the
Investor, incurred in connection with registrations, filings or qualifications pursuant to Sections 2 and 3, including, without
limitation, all registration, listing and qualifications fees, printers and accounting fees, and fees and disbursements of counsel
for the Company, shall be paid by the Company.

 

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		6.	INDEMNIFICATION.

 

(a)          To
the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend the Investor, each
Person, if any, who controls the Investor, the members, the directors, officers, partners, employees, agents, representatives of
the Investor and each Person, if any, who controls the Investor within the meaning of the Securities Act or the Securities Exchange
Act of 1934, as amended (the "Exchange Act") (each, an "Indemnified Person"), against any losses,
claims, damages, liabilities, judgments, fines, penalties, charges, costs, attorneys' fees, amounts paid in settlement or expenses,
joint or several, (collectively, "Claims") incurred in investigating, preparing or defending any action, claim,
suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental, administrative
or other regulatory agency, body or the SEC, whether pending or threatened, whether or not an indemnified party is or may be a
party thereto ("Indemnified Damages"), to which any of them may become subject insofar as such Claims (or actions
or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or
alleged untrue statement of a material fact contained, or incorporated by reference, in the Registration Statement or any amendment
thereto or any omission or alleged omission to state therein, or in any document incorporated by reference therein, a material
fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged
untrue statement of a material fact contained, or incorporated by reference, in the Prospectus or any Prospectus Supplement, or
any omission or alleged omission to state therein, or in any document incorporated by reference therein, a material fact required
to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not
misleading, or (iii) any violation or alleged violation by the Company or any of its Subsidiaries, affiliates, officers, directors
or employees, of the Securities Act, the Exchange Act, state securities or “Blue Sky” laws, or the rules and regulations
of the Principal Market relating to the offer or sale of the Registrable Securities pursuant to the Registration Statement or the
Prospectus (the matters in the foregoing clauses (i) through (iii) being, collectively, “Violations”). The Company
shall reimburse each Indemnified Person promptly as such expenses are incurred and are due and payable, for any reasonable out-of-pocket
legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding
anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a): (A) shall not apply to
a Claim by an Indemnified Person to the extent, but only to the extent, arising out of or based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in reliance upon and in conformity with written information furnished to
the Company by or on behalf of the Investor expressly for use in any Prospectus Supplement (it being hereby acknowledged and agreed
that the written information set forth on Exhibit A attached hereto, as the same may be updated from time to time
in writing by the Investor, is the only written information furnished to the Company by or on behalf of the Investor expressly
for use in any Prospectus Supplement), if the Prospectus was timely made available by the Company to the Investor pursuant to Section
3(c); (B) shall not be available to the extent such Claim is based on a failure of the Investor to deliver, or to cause to be delivered,
the Prospectus made available by the Company, if such Prospectus was theretofore made available by the Company pursuant to Section
3(c), and if delivery of the Prospectus would have cured the defect giving rise to such Claim; and (C) shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent
shall not be unreasonably withheld, delated or conditioned. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of the Indemnified Person and shall survive the transfer of the Registrable Securities by
the Investor pursuant to Section 8.

 

(b)          In
connection with any Prospectus Supplement, the Investor agrees to indemnify, hold harmless and defend, to the same extent and in
the same manner as is set forth in Section 6(a), the Company, each of its directors, each of its officers who signed the Registration
Statement, and each Person, if any, who controls the Company within the meaning of the Securities Act or the Exchange Act (collectively
and together with an Indemnified Person, an “Indemnified Party”), against any Claim or Indemnified Damages to
which any of them may become subject, under the Securities Act, the Exchange Act or otherwise, insofar as such Claim or Indemnified
Damages arise out of or are based upon any Violation, in each case to the extent, and only to the extent, that such Violation occurs
in reliance upon and in conformity with written information about the Investor set forth on Exhibit A attached hereto
(as the same may be updated from time to time in writing by the Investor) and furnished to the Company by the Investor expressly
for inclusion any Prospectus Supplement; and, subject to Section 6(d), the Investor will reimburse any reasonable out-of-pocket
legal or other expenses reasonably incurred by them in connection with investigating or defending any such Claim; provided,
however, that the indemnity agreement contained in this Section 6(b) and the agreement with respect to contribution contained
in Section 7 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written
consent of the Investor, which consent shall not be unreasonably withheld, delayed or conditioned; and provided, further,
that the Investor shall be liable under this Section 6(b) for only that amount of a Claim or Indemnified Damages as does not exceed
the net proceeds to the Investor as a result of the sale of Registrable Securities pursuant to such Registration Statement. Such
indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such Indemnified Party
and shall survive the transfer of the Registrable Securities by the Investor pursuant to Section 8.

 

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(c)       Promptly
after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any action or
proceeding (including any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified Party shall,
if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party
a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense
thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party, as the
case may be; provided, however, that an Indemnified Person or Indemnified Party shall have the right to retain its own counsel
with the fees and expenses to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying
party, the representation by such counsel of the Indemnified Person or Indemnified Party and the indemnifying party would be inappropriate
due to actual or potential differing interests between such Indemnified Person or Indemnified Party and any other party represented
by such counsel in such proceeding. The Indemnified Party or Indemnified Person shall cooperate with the indemnifying party in
connection with any negotiation or defense of any such action or claim by the indemnifying party and shall furnish to the indemnifying
party all information reasonably available to the Indemnified Party or Indemnified Person which relates to such action or claim.
The indemnifying party shall keep the Indemnified Party or Indemnified Person fully apprised as to the status of the defense or
any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action, claim
or proceeding effected without its written consent, provided, however, that the indemnifying party shall not unreasonably withhold,
delay or condition its consent. No indemnifying party shall, without the consent of the Indemnified Party or Indemnified Person,
consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person of a release from all liability
in respect to such claim or litigation. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated
to all rights of the Indemnified Party or Indemnified Person with respect to all third parties, firms or corporations relating
to the matter for which indemnification has been made. The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified
Person or Indemnified Party under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability
to defend such action.

 

(d)       The
indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or Indemnified Damages are incurred. Any Person receiving a payment pursuant to this
Section 6 which person is later determined to not be entitled to such payment shall return such payment to the person making it.

 

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(e)       The
indemnity agreements contained herein shall be in addition to (i) any cause of action or similar right of the Indemnified Party
or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject
to pursuant to the law.

 

		7.	CONTRIBUTION.

 

To the extent any indemnification
by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect
to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however,
that: (i) no seller of Registrable Securities guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any seller of Registrable Securities who was not guilty of fraudulent misrepresentation;
and (ii) contribution by any seller of Registrable Securities shall be limited in amount to the net amount of proceeds received
by such seller from the sale of such Registrable Securities.

 

		8.	ASSIGNMENT OF REGISTRATION RIGHTS.

 

The Company shall not
assign this Agreement or any rights or obligations hereunder without the prior written consent of the Investor; provided, however,
that any transaction, whether by merger, reorganization, restructuring, consolidation, financing or otherwise, whereby the Company
remains the surviving entity immediately after such transaction shall not be deemed an assignment. The Investor may not assign
its rights under this Agreement without the prior written consent of the Company, other than to an affiliate of the Investor controlled
by Jonathan Cope or Josh Scheinfeld, in which case the assignee must agree in writing to be bound by the terms and conditions of
this Agreement.

 

		9.	AMENDMENT OR WAIVER OF REGISTRATION RIGHTS.

 

No provision of this
Agreement may be (i) amended other than by a written instrument signed by both parties hereto or (ii) waived other than in a written
instrument signed by the party against whom enforcement of such waiver is sought. Failure of any party to exercise any right or
remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver
thereof.

 

		10.	MISCELLANEOUS.

 

(a)          Holder. A Person is deemed to be a holder of Registrable Securities whenever such Person owns or is deemed to own
of record such Registrable Securities. If the Company receives conflicting instructions, notices or elections from two or more
Persons with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election
received from the registered owner of such Registrable Securities.

 

(b)          Notices.
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must
be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent
by facsimile or email (provided confirmation of transmission is mechanically or electronically generated and kept on file by the
sending party); or (iii) one (1) Business Day after deposit with a nationally recognized overnight delivery service, in each case
properly addressed to the party to receive the same. The addresses for such communications shall be:

 

    9 

     

    

 

If to the Company:

Tonix Pharmaceuticals Holding
Corp.

509 Madison Avenue, Suite 1608

New York, New York 10022

		Telephone:	(212) 980-9155

		Facsimile:	(212) 923-5700

		E-mail:	bradley.saenger@tonixpharma.com

		Attention:	Bradley Saenger

 

With a copy to (which shall not
constitute notice or service of process):

Lowenstein Sandler LLP

One Lowenstein Drive

Roseland, NJ 07068

		Telephone:	(973) 597-2900

		Facsimile:	(973) 597-2400

		E-mail:	sskolnick@lowenstein.com

		Attention:	Steven M. Skolnick, Esq.

 

If to the Investor:

Lincoln Park Capital Fund, LLC

440 North Wells, Suite 410

Chicago, IL 60654

		Telephone:	(312) 822-9300

		Facsimile:	(312) 822-9301

		E-mail:	jscheinfeld@lpcfunds.com/jcope@lpcfunds.com

		Attention:	Josh Scheinfeld/Jonathan Cope

 

With a copy to (which
shall not constitute notice or service of process):

Dorsey &
Whitney LLP

51 West 52nd
Street

New York,
NY 10019

		Telephone:	(212) 415-9214

		Facsimile:	(212) 953-7201

		E-mail:	marsico.anthony@dorsey.com

		Attention:	Anthony J. Marsico, Esq.

 

or at such other address and/or facsimile
number and/or to the attention of such other person as the recipient party has specified by written notice given to each other
party three (3) Business Days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient
of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender's facsimile
machine or email account containing the time, date, recipient facsimile number or email address, as applicable, and an image of
the first page of such transmission or (C) provided by a nationally recognized overnight delivery service, shall be rebuttable
evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.

  

    10 

     

    

 

(c)       Governing
Law. The corporate laws of the State of Nevada shall govern all issues concerning the relative rights of the Company and its
stockholders. All other questions concerning the construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of Illinois, without giving effect to any choice of law or conflict of law provision
or rule (whether of the State of Illinois or any other jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of Illinois. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting the State of Illinois, County of Cook, for the adjudication of any dispute hereunder or in connection herewith or
with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party
hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof to such party at the address for such 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 manner permitted by law. If any provision of this Agreement shall be invalid or unenforceable
in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this
Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF
ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

(d)       Integration.
This Agreement, the Purchase Agreement and the other Transaction Documents constitute the entire understanding among the parties
hereto with respect to the subject matter hereof and thereof. There are no restrictions, promises, warranties or undertakings,
other than those set forth or referred to herein and therein. This Agreement, the Purchase Agreement and the other Transaction
Documents supersede all other prior oral or written agreements between the Investor, the Company, their affiliates and persons
acting on their behalf with respect to the subject matter hereof and thereof.

 

(e)       No
Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and any permitted successors and
assigns of the Company and, except as set forth in Section 9, is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.

 

(f)       Headings.
The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

(g)       Counterparts.
This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile
signature or signature delivered by e-mail in a “.pdf” format data file, including any electronic signature complying
with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com, www.echosign.adobe.com, etc., shall be considered due execution
and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original signature.

 

(h)       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.

 

    11 

     

    

 

(i)       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.

  

** Signature Page Follows **

 

    12 

     

    

 

IN WITNESS WHEREOF,
the parties have caused this Registration Rights Agreement to be duly executed as of day and year first above written. 

 

	 	THE COMPANY:
	 	 	 
	 	TONIX PHARMACEUTICALS HOLDING CORP.
	 	 	 
	 	By:	/s/ Bradley Saenger
	 	Name: Bradley Saenger
	 	Title:   Chief Financial Officer
	 	 	 
	 	INVESTOR:
	 	 	 
	 	LINCOLN PARK CAPITAL FUND, LLC
	 	BY: LINCOLN PARK CAPITAL, LLC
	 	BY: ROCKLEDGE CAPITAL CORPORATION
	 	 	 
	 	By:	/s/ Josh Scheinfeld
	 	Name: Josh Scheinfeld
	 	Title:   President

 

    13 

     

    

 

EXHIBIT A

 

Information About The Investor Furnished
To The Company By The Investor Expressly For Use In Connection With Each Registration Statement and Prospectus Supplement

  

Information With Respect to Lincoln
Park Capital

 

As of the date of the Purchase Agreement,
Lincoln Park Capital Fund, LLC, beneficially owned 610,090 shares of our common stock. Josh Scheinfeld and Jonathan Cope, the Managing
Members of Lincoln Park Capital, LLC, the manager of Lincoln Park Capital Fund, LLC, are deemed to be beneficial owners of all
of the shares of common stock owned by Lincoln Park Capital Fund, LLC. Messrs. Cope and Scheinfeld have shared voting and investment
power over the shares being offered under the prospectus supplement filed with the SEC in connection with the transactions contemplated
under the Purchase Agreement. Lincoln Park Capital, LLC is not a licensed broker dealer or an affiliate of a licensed broker dealer.Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

THIS SECURITIES
PURCHASE AGREEMENT (this “Agreement”), dated as of September 3, 2020, by and among SAMSARA LUGGAGE, INC.,
a Nevada corporation (the “Company”), and YAII PN, LTD., a Cayman Islands exempt company (“Investor”).

 

WITNESSETH

 

WHEREAS, the
Company and the Investor are executing and delivering this Agreement in reliance upon an exemption from securities registration
pursuant to Section 4(2) and/or Rule 506 of Regulation D (“Regulation D”) as promulgated by the U.S. Securities
and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “Securities Act”);

 

WHEREAS, the
parties desire that, upon the terms and subject to the conditions contained herein, the Company shall issue and sell to the Investor,
as provided herein, and the Investor shall purchase convertible debentures, each substantially in the form attached hereto as “Exhibit
A”, in the aggregate principal amount of USD$220,000 (individually a “Convertible Debenture” and collectively
the “Convertible Debentures”), which shall be convertible into shares of the Company’s common stock, par
value $0.0001 (the “Common Stock”) (as converted, the “Conversion Shares”), of which a Convertible
Debenture (the “First Convertible Debenture”) in the principal amount of USD$150,000 (the “First Convertible
Debenture Purchase Price”) shall be issued within 1 business day following the date hereof, subject to notification of
satisfaction of the conditions to the First Closing set forth herein and in Sections 7(a) and 8(a) herein (the “First
Closing” or “First Closing Date”), and a Convertible Debenture (the “Second Convertible Debenture”)
in the principal amount of USD$70,000 (the “Second Convertible Debenture Purchase Price”) shall be issued within
30 calendar days from the First Closing Date and following notification of satisfaction of the conditions to the Second Closing
set forth herein and in Sections 7(b) and 8(b) herein (the “Second Closing” or “Second Closing Date”)
(the First Closing, First Closing Date, Second Closing, and Second Closing Date, can each be referred to as a “Closing”
or a “Closing Date” or collectively as the “Closings” or “Closing Dates”)
and (collectively the First Convertible Debenture Purchase Price and the Second Convertible Debenture Purchase Price shall collectively
be referred to as the “Purchase Price”);

 

WHEREAS, contemporaneously
with the First Closing the Company shall issue to the Investor a warrant, in the form attached hereto as “Exhibit B”,
to purchase 12,500,000 shares of the Company’s Common Stock (the “First Closing Warrant” and (the “Warrant
Shares”) and contemporaneously with Second Closing the Company shall issue to the Investor a warrant to purchase 5,833,333
Warrant Shares (the “Second Closing Warrant”) (collectively the First Closing Warrant and the Second Closing
Warrant shall be referred to as the “Warrants”);

 

WHEREAS, within
90 calendar days from the Closing Date the parties shall execute and deliver Irrevocable Transfer Agent Instructions in the form
attached hereto as “Exhibit C” (the “Irrevocable Transfer Agent Instructions”); and

 

     

     

    

 

WHEREAS, the
Convertible Debentures, the Conversion Shares, the Warrants and the Warrant Shares, collectively are referred to herein as the
“Securities”);

 

NOW, THEREFORE,
in consideration of the mutual covenants and other agreements contained in this Agreement the Company and the Investor hereby agree
as follows:

 

1. CERTAIN DEFINITIONS.

 

(a) “Anti-Bribery
Laws” shall mean of any provision of any applicable law or regulation implementing the OECD Convention on Combating Bribery
of Foreign Public Officials in International Business Transactions or any applicable provision of the U.S. Foreign Corrupt Practices
Act of 1977, as amended (the “FCPA”), the U.K. Bribery Act 2010, or any other similar law of any other jurisdiction
in which the Company operates its business, including, in each case, the rules and regulations thereunder.

 

(b) “Applicable
Laws” shall mean applicable laws, statutes, rules, regulations, orders, executive orders, directives, policies, guidelines,
ordinance or regulation of any governmental entity and codes having the force of law, whether local, national, or international,
as amended from time to time, including without limitation (i) all applicable laws that relate to money laundering, terrorist financing,
financial record keeping and reporting, (ii) all applicable laws that relate to anti-bribery, anti-corruption, books and records
and internal controls, including the Anti-Bribery Laws, (iii) OFAC and any Sanctions Laws or Sanctions Programs, and (iv) CAATSA
and any CAATSA Sanctions Programs, Anti-Money Laundering Laws.

 

(c) “BHCA”
shall mean the Bank Holding Company Act of 1956, as amended.

 

(d) “CAATSA”
shall mean Public Law No. 115-44 The Countering America’s Adversaries Through Sanctions Act.

 

(e) “CAATSA
Sanctions Programs” shall mean a country or territory that is, or whose government is, the subject of sanctions imposed
by CAATSA.

 

(f) “Anti-Money
Laundering Laws” shall mean applicable financial recordkeeping and reporting requirements and all other applicable U.S.
and non-U.S. anti-money laundering laws, rules and regulations, including, but not limited to, those of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the United States Bank Secrecy Act, as amended by the USA PATRIOT Act of 2001,
and the United States Money Laundering Control Act of 1986 (18 U.S.C. §§1956 and 1957), as amended, as well as the implementing
rules and regulations promulgated thereunder, and the applicable money laundering statutes of all applicable jurisdictions, the
rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced
by any governmental agency or self-regulatory.

 

(g) “OFAC”
shall mean the U.S. Department of Treasury’s Office of Foreign Asset Control.

 

    2

     

    

 

(h) “Sanctioned
Country” shall mean a country or territory that is the subject or target of a comprehensive embargo or Sanctions Laws
prohibiting trade with the country or territory, including, without limitation, Crimea, Cuba, Iran, North Korea, Sudan and Syria.

 

(i) “Sanctions
Laws” shall mean any sanctions administered or enforced by OFAC or the U.S. Departments of State or Commerce and including,
without limitation, the designation as a “Specially Designated National” or on the “Sectoral Sanctions Identifications
List”, collectively “Blocked Persons”), the United Nations Security Council (“UNSC”), the
European Union, Her Majesty’s Treasury (“HMT”) or any other relevant sanctions authority.

 

(j) “Sanctions
Programs” shall mean any OFAC, HMT or UNSC economic sanction program including, without limitation, programs related
to a Sanctioned Country.

 

(k) “Sarbanes-Oxley
Act” means the Sarbanes-Oxley Act of 2002, as amended.

 

2. PURCHASE AND SALE
OF THE CONVERTIBLE DEBENTURES.

 

(a) Purchase of
the Convertible Debentures. Subject to the satisfaction (or waiver) of the terms and conditions of this Agreement, the Investor
agrees, to purchase at each Closing, and the Company agrees to sell and issue to Investor, at each Closing the respective Convertible
Debenture.

 

(b) Closing Dates.
The Closing of the purchase and sale of each Convertible Debenture shall take place at 10:00 a.m. Eastern Standard Time on the
applicable Closing Date, subject to notification of satisfaction of the conditions to each Closing set forth herein and in Sections
7 and 8 below (or such later date as is mutually agreed to by the Company and the Investor (each a “Closing Date”).

 

(c) Form of Payment.
Subject to the satisfaction of the terms and conditions of this Agreement, on each Closing Date, (i) the Investor shall deliver
to the Company such aggregate proceeds for the Convertible Debenture to be issued and sold to the Investor at the Closing, minus
the fees to be paid directly from the proceeds of such Closing as set forth in Section 5(n)(ii) below and (ii) the Company
shall deliver to the Investor a Convertible Debenture which the Investor is purchasing at each Closing duly executed on behalf
of the Company.

 

3. INVESTOR’S
REPRESENTATIONS AND WARRANTIES.

 

The Investor represents
and warrants, that:

 

(a) Investment Purpose.
The Investor is acquiring the Securities for its own account for investment only and not with a view towards, or for resale in
connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the Securities
Act; provided, however, that by making the representations herein, the Investor reserves the right to dispose of the Securities
at any time in accordance with or pursuant to an effective registration statement covering such Securities or an available exemption
under the Securities Act. The Investor does not presently have any agreement or understanding, directly or indirectly, with any
corporation, association, partnership, organization, business, individual, government or political subdivision thereof or governmental
agency (“Person”) to distribute any of the Securities.

 

    3

     

    

 

(b) Accredited Investor
Status. The Investor is an “Accredited Investor” as that term is defined in Rule 501(a)(3) of Regulation
D.

 

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

 

(d) Information.
The Investor and its advisors (and his or, its counsel), if any, have been furnished with all materials relating to the business,
finances and operations of the Company and information he deemed material to making an informed investment decision regarding his
purchase of the Securities, which have been requested by the Investor. The Investor and its advisors, if any, have been afforded
the opportunity to ask questions of the Company and its management. Neither such inquiries nor any other due diligence investigations
conducted by the Investor or its advisors, if any, or its representatives shall modify, amend or affect the Investor’s right
to rely on the Company’s representations and warranties contained in Section 4 below. The Investor understands that its investment
in the Securities involves a high degree of risk. The Investor is in a position regarding the Company, which, based upon employment,
family relationship or economic bargaining power, enabled and enables the Investor to obtain information from the Company in order
to evaluate the merits and risks of this investment. The Investor has sought such accounting, legal and tax advice, as it has considered
necessary to make an informed investment decision with respect to its acquisition of the Securities.

 

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

 

    4

     

    

 

(f) Transfer or
Resale. The Investor understands that: (i) the Securities have not been and are not being registered under the Securities Act
or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered
thereunder, (B) the Investor shall have delivered to the Company an opinion of counsel, in a generally acceptable form, to the
effect that such Securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from
such registration requirements, or (C) the Investor provides the Company with reasonable assurances (in the form of seller and
broker representation letters) that such Securities can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated
under the Securities Act, as amended (or a successor rule thereto) (collectively, “Rule 144”), in each case
following the applicable holding period set forth therein; (ii) any sale of the Securities made in reliance on Rule 144 may be
made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the 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 Securities Act) may require compliance with some other exemption under the Securities 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 the Securities
under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder.

 

(g) Legends.
The Investor agrees to the imprinting, so long as is required by this Section 3(g), of a restrictive legend in substantially the
following form:

 

THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES
HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TOWARD RESALE AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS.

 

Certificates evidencing the Conversion
Shares and the Warrant Shares, shall not contain any legend (including the legend set forth above), (i) while a registration statement
covering the resale of such security is effective under the Securities Act, (ii) following any sale of such Conversion Shares or
Warrant Shares pursuant to Rule 144, (iii) if such Conversion Shares or Warrant Shares are eligible for sale under Rule 144, or
(iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and
pronouncements issued by the staff of the SEC). The Company shall cause its counsel to issue a legal opinion to the Company’s
transfer agent promptly after the effective date (the “Effective Date”) of a registration statement covering
the resale of the Conversion Shares and/or the Warrant Shares if required by the Company’s transfer agent to effect the removal
of the legend hereunder. If all or any portion of a Convertible Debenture is converted and/or a Warrant is exercised by the Investor
that is not an Affiliate of the Company (a “Non-Affiliated Investor”) at a time when there is an effective registration
statement to cover the resale of the Conversion Shares and Warrant Shares, such Conversion Shares and/or Warrant Shares shall be
issued free of all legends. The Company agrees that following the Effective Date or at such time as such legend is no longer required
under this Section 3(g), it will, no later than 3 Trading Days following the delivery by a Non-Affiliated Investor to the Company
or the Company’s transfer agent of a certificate representing the Conversion Shares and/or the Warrant Shares, issued with
a restrictive legend (such 3rd Trading Day, the “Legend Removal Date”), deliver or cause to be delivered
to such Non-Affiliated Investor a certificate representing such shares that is free from all restrictive and other legends. The
Company may not make any notation on its records or give instructions to any transfer agent of the Company that enlarge the restrictions
on transfer set forth in this Section. The Investor acknowledges that the Company’s agreement hereunder to remove all legends
from the Conversion Shares and/or the Warrant Shares is not an affirmative statement or representation that such Conversion Shares
and/or Warrant Shares are freely tradable. The Investor, agrees that the removal of the restrictive legend from certificates representing
Securities as set forth in this Section 3(g) is predicated upon the Company’s reliance that the Investor will sell any Securities
pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements,
or an exemption therefrom, and that if Securities are sold pursuant to a registration statement, they will be sold in compliance
with the plan of distribution set forth therein.

 

    5

     

    

 

(h) Authorization,
Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Investor and is a
valid and binding agreement of the Investor enforceable in accordance with its terms, except as such enforceability may be limited
by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar
laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.

 

(i) Receipt of Documents.
The Investor and his or its counsel has received and read in their entirety: (i) this Agreement and each representation, warranty
and covenant set forth herein and the Transaction Documents (as defined herein); (ii) all due diligence and other information necessary
to verify the accuracy and completeness of such representations, warranties and covenants; (iii) all EDGAR filings, including but
not limited to the Company’s Form 10-K for the fiscal year ended December 31, 2019; (iv) the Company’s Form 10-Q for
the fiscal quarter ended June 30, 2020, March 31, 2020 and (v) answers to all questions the Investor submitted to the Company regarding
an investment in the Company; and the Investor has relied on the information contained therein and has not been furnished any other
documents, literature, memorandum or prospectus.

 

(j) Due Formation
of Corporate and Other Investors. If the Investor is a corporation, trust, partnership or other entity that is not an individual
person, it has been formed and validly exists and has not been organized for the specific purpose of purchasing the Securities
and is not prohibited from doing so.

 

(k) No Legal Advice
From the Company. The Investor acknowledges, that it had the opportunity to review this Agreement and the transactions contemplated
by this Agreement with his or its own legal counsel and investment and tax advisors. The Investor is relying solely on such counsel
and advisors and not on any statements or representations of the Company or any of its representatives or agents for legal, tax
or investment advice with respect to this investment, the transactions contemplated by this Agreement or the securities laws of
any jurisdiction.

 

    6

     

    

 

4. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.

 

Except as set forth
under the corresponding section of the Disclosure Schedules which Disclosure Schedules shall be deemed a part hereof and to qualify
any representation or warranty otherwise made herein to the extent of such disclosure, the Company hereby makes the representations
and warranties set forth below to the Investor:

 

(a) Subsidiaries.
All of the direct and indirect subsidiaries of the Company are set forth on Schedule 4(a). The Company owns, directly or
indirectly, all of the capital stock or other equity interests of each subsidiary free and clear of any liens, and all the issued
and outstanding shares of capital stock of each subsidiary are validly issued and are fully paid, non-assessable and free of preemptive
and similar rights to subscribe for or purchase securities.

 

(b) Security Interests
Granted. Except as set forth on Disclosure Schedule 4(b) there are no security interests granted, issued or allowed
to exist in any assets of the Company or subsidiary.

 

(c) Organization
and Qualification. The Company and its subsidiaries are corporations duly organized and validly existing in good standing under
the laws of the jurisdiction in which they are incorporated, and have the requisite corporate power to own their properties and
to carry on their business as now being conducted. Each of the Company and its subsidiaries is duly qualified as a foreign corporation
to do business and is in good standing in every jurisdiction in which the nature of the business conducted by it makes such qualification
necessary, except to the extent that the failure to be so qualified or be in good standing would not have or reasonably be expected
to result in (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material
adverse effect on the results of operations, assets, business or condition (financial or otherwise) of the Company and the subsidiaries,
taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely
basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”)
and no proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or
curtail such power and authority or qualification as the Company is currently organized.

 

(d) Authorization,
Enforcement, Compliance with Other Instruments. (i) The Company has the requisite corporate power and authority to enter
into and perform its obligations under this Agreement, the Convertible Debentures, the Irrevocable Transfer Agent Instructions,
the Warrants, and each of the other agreements entered into by the parties hereto in connection with the transactions contemplated
by this Agreement (collectively the “Transaction Documents”) and to issue the Securities in accordance with
the terms hereof and thereof, (ii) the execution and delivery of the Transaction Documents by the Company and the consummation
by it of the transactions contemplated hereby and thereby, including, without limitation, the issuance of the Securities, the reservation
for issuance and the issuance of the Conversion Shares and the Warrant Shares, have been duly authorized by the Company’s
Board of Directors and no further consent or authorization is required by the Company, its Board of Directors or its stockholders,
(iii) the Transaction Documents have been duly executed and delivered by the Company, (iv) the Transaction Documents constitute
the valid and binding obligations of the Company enforceable against the Company in accordance with their terms, except as such
enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally, the enforcement of creditors’ rights and remedies. The authorized
officer of the Company executing the Transaction Documents knows of no reason why the Company cannot perform any of the Company’s
other obligations under the Transaction Documents.

 

    7

     

    

 

(e) Capitalization.
The authorized capital stock of the Company consists of 5,000,000,000 shares of Common Stock and 5,000,000 shares of Preferred
Stock, par value $0.0001 (“Preferred Stock”) of which 3,929,161,576 shares of Common Stock and -0-shares of
Preferred Stock are issued and outstanding. All of the outstanding shares of capital stock of the Company are validly issued, fully
paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding
shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. Except as disclosed
in Schedule 4(e): (i) none of the Company’s capital stock is subject to preemptive rights or any other similar rights
or any liens or encumbrances suffered or permitted by the Company; (ii) there are no outstanding options, warrants, scrip, rights
to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable
or exchangeable for, any capital stock of the Company or any of its subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its subsidiaries is or may become bound to issue additional capital stock of the Company
or any of its subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, or exercisable or exchangeable for, any capital stock of the Company or
any of its subsidiaries; (iii) there are no outstanding debt securities, notes, credit agreements, credit facilities or other agreements,
documents or instruments evidencing indebtedness of the Company or any of its subsidiaries or by which the Company or any of its
subsidiaries is or may become bound; (iv) there are no financing statements securing obligations in any material amounts, either
singly or in the aggregate, filed in connection with the Company or any of its subsidiaries; (v) there are no outstanding securities
or instruments of the Company or any of its subsidiaries which contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or any of its subsidiaries is or may become bound to redeem a
security of the Company or any of its subsidiaries; (vi) there are no securities or instruments containing anti-dilution or similar
provisions that will be triggered by the issuance of the Securities; (vii) the Company does not have any stock appreciation rights
or “phantom stock” plans or agreements or any similar plan or agreement; and (viii) the Company and its subsidiaries
have no liabilities or obligations required to be disclosed in the SEC Documents but not so disclosed in the SEC Documents, other
than those incurred in the ordinary course of the Company’s or its subsidiaries’ respective businesses and which, individually
or in the aggregate, do not or would not have a Material Adverse Effect. The Company has furnished to the Investor true, correct
and complete copies of the Company’s Articles of Incorporation, as amended and as in effect on the date hereof (the “Certificate
of Incorporation”), and the Company’s Bylaws, as amended and as in effect on the date hereof (the “Bylaws”),
and the terms of all securities convertible into, or exercisable or exchangeable for, shares of Common Stock and the material rights
of the holders thereof in respect thereto. No further approval or authorization of any stockholder, the Board of Directors of the
Company or others is required for the issuance and sale of the Securities. There are no stockholders agreements, voting agreements
or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge
of the Company, between or among any of the Company’s stockholders.

 

    8

     

    

 

(f) Issuance of
Securities. The issuance of the Convertible Debentures and the Warrants are duly authorized and free from all taxes, liens
and charges with respect to the issue thereof. Upon issuance of the Conversion Shares in accordance with the terms of the Convertible
Debentures and the Warrant Shares upon exercise of the Warrants pursuant to its terms, the Conversion Shares and/or the Warrant
Shares, when issued will be validly issued, fully paid and nonassessable, free from all taxes, liens and charges with respect to
the issue thereof. The Company shall increase its authorized share capital such that it shall have sufficient shares to be able
to reserve from its duly authorized capital stock the appropriate number of shares of Common Stock as set forth in this Agreement.

 

(g) No Conflicts.
The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby (including, without limitation, the issuance of the Convertible Debentures, and the
undertaking to reserve for issuance and issuance of the Conversion Shares, the issuance of the Warrants, and the issuance of the
Warrant Shares) will not (i) result in a violation of any certificate of incorporation, certificate of formation, any certificate
of designations or other constituent documents of the Company or any of its subsidiaries, any capital stock of the Company or any
of its subsidiaries or bylaws of the Company or any of its subsidiaries or (ii) conflict with, or constitute a default (or an event
which with notice or lapse of time or both would become a default) in any respect under, or 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 (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including foreign, federal
and state securities laws and regulations and the rules and regulations of the National Association of Securities Dealers Inc.’s
OTC Markets) 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 in the case of each of clauses (ii) and (iii), such as could not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse Effect. The business of the Company and its subsidiaries
is not being conducted, and shall not be conducted in violation of any material law, ordinance, or regulation of any governmental
entity. Except as specifically contemplated by this Agreement and as required under the Securities 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 or governmental agency in order for it to execute, deliver or perform any of its obligations under or contemplated
by this Agreement in accordance with the terms hereof. 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 and its subsidiaries are unaware of any facts or circumstance, which might give rise to any of the foregoing.

 

    9

     

    

 

(h) SEC Documents;
Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be filed
by it with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) during
the 2 years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material)
(all of the foregoing filed within the 2 years preceding the date hereof as amended after the date hereof and all exhibits included
therein and financial statements and schedules thereto and documents incorporated by reference therein, being hereinafter referred
to as the “SEC Documents”) on a timely basis or has received a valid extension of such time of filing and has
filed any such SEC Document prior to the expiration of any such extension (including pursuant to SEC from 12b-25). The Company
has delivered to the Investor or its representatives, or made available through the SEC’s website at http://www.sec.gov,
true and complete copies of the SEC Documents. As of their respective dates, the SEC Documents complied in all material respects
with the requirements of the Exchange 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
the light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements
of the Company and its subsidiaries 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 generally accepted accounting principles, consistently applied, during the periods involved (except
(i) as may be otherwise indicated in such financial statements or (ii) in the case of unaudited interim statements, to the extent
they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject,
in the case of unaudited statements, to normal year-end audit adjustments). No other information provided by or on behalf of the
Company to the Investor which is not included in the SEC Documents contains any untrue statement of a material fact or omits to
state any material fact necessary in order to make the statements therein, in the light of the circumstance under which they are
or were made, not misleading.

 

(i) 10(b)-5.
The SEC Documents do not include any untrue statements of material fact, nor do they omit to state any material fact required to
be stated therein necessary to make the statements made, in light of the circumstances under which they were made, not misleading.

 

(j) Absence of Litigation.
There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory
organization or body pending against or affecting the Company, the Common Stock or any of the Company’s subsidiaries, wherein
an unfavorable decision, ruling or finding would have a Material Adverse Effect.

 

(k) CAATSA.
Neither the Company or its subsidiaries, nor, to Company’s knowledge, any director, officer, agent, employee or affiliate
of the Company or subsidiaries, is a Person that is, or is owned or controlled by a Person that has a place of business in, or
is operating, organized, resident or doing business in a country or territory that is, or whose government is, the subject of the
CAATSA Sanctions Programs.

 

(l) Sarbanes-Oxley
Act. The Company and its subsidiaries are in compliance with any and all applicable requirements of the Sarbanes-Oxley Act,
that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the SEC thereunder that
are applicable to the Company and its subsidiaries and effective as of the date hereof.

 

    10

     

    

 

(m) BHCA. Neither
the Company nor any of its Subsidiaries or affiliates is subject to BHCA and to regulation by the Board of Governors of the Federal
Reserve System (the “Federal Reserve). Neither the Company nor any of its Subsidiaries or affiliates owns or controls, directly
or indirectly, 5% or more of the outstanding shares of any class of voting securities or 25% or more of the total equity of a bank
or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries
or affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the
BHCA and to regulation by the Federal Reserve.

 

(n) No Disagreements
with Accountants and Lawyers. There are no material disagreements of any kind presently existing, or reasonably anticipated
by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and
except as set forth in Schedule 4(n) hereto the Company is current with respect to any fees owed to its accountants and lawyers
which could affect the Company’s ability to perform any of its obligations under any of the Transaction Documents.

 

(o) Compliance with
Applicable Laws. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance
Applicable Laws and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator
involving the Company or any of its Subsidiaries with respect to Applicable Laws is pending or, to the knowledge of the Company,
threatened.

 

(p) No Conflicts
with Sanctions Laws. Neither the Company nor any of its Subsidiaries, nor any director, officer, employee, agent, affiliate
or other person associated with or acting on behalf of the Company or any of its Subsidiaries or affiliates is, or is directly
or indirectly owned or controlled by, a Person that is currently the subject or the target of any Sanctions Laws or is a Blocked
Person; neither the Company, any of its Subsidiaries, nor any director, officer, employee, agent, affiliate or other person associated
with or acting on behalf of the Company or any of its Subsidiaries or affiliates, is located, organized or resident in a country
or territory that is the subject or target of a comprehensive embargo, Sanctions Laws or Sanctions Programs prohibiting trade with
a Sanctioned Country; the Company maintains in effect and enforces policies and procedures designed to ensure compliance by the
Company and its Subsidiaries with applicable Sanctions Laws and Sanctions Programs; neither the Company, any of its Subsidiaries,
nor any director, officer, employee, agent, affiliate or other person associated with or acting on behalf of the Company or any
of its Subsidiaries or affiliates, acting in any capacity in connection with the operations of the Company, conducts any business
with or for the benefit of any Blocked Person or engages in making or receiving any contribution of funds, goods or services to,
from or for the benefit of any Blocked Person, or deals in, or otherwise engages in any transaction relating to, any property or
interests in property blocked or subject to blocking pursuant to any applicable Sanctions Laws or Sanctions Programs; no action
of the Company or any of its Subsidiaries in connection with (i) the execution, delivery and performance of this Agreement and
the other Transaction Documents, (ii) the issuance and sale of the Securities, or (iii) the direct or indirect use of proceeds
from the Securities or the consummation of any other transaction contemplated hereby or by the other Transaction Documents or the
fulfillment of the terms hereof or thereof, will result in the proceeds of the transactions contemplated hereby and by the other
Transaction Documents being used, or loaned, contributed or otherwise made available, directly or indirectly, to any Subsidiary,
joint venture partner or other person or entity, for the purpose of (i) unlawfully funding or facilitating any activities of or
business with any person that, at the time of such funding or facilitation, is the subject or target of Sanctions Laws or Sanctions
Programs, (ii) unlawfully funding or facilitating any activities of or business in any Sanctioned Country or (iii) in any other
manner that will result in a violation by any Person (including any Person participating in the transaction, whether as underwriter,
advisor, investor or otherwise) of Sanctions Laws or Sanctions Programs. For the past 5 years, the Company and its Subsidiaries
have not knowingly engaged in and are not now knowingly engaged in any dealings or transactions with any person that at the time
of the dealing or transaction is or was the subject or the target of Sanctions Laws, Sanctions Programs or with any Sanctioned
Country.

 

    11

     

    

 

(q) No Conflicts
with Anti-Bribery Laws. Neither the Company nor any of the Subsidiaries has made any contribution or other payment to any official
of, or candidate for, any federal, state or foreign office in violation of any law. Neither the Company, nor any of its Subsidiaries
or affiliates, nor any director, officer, agent, employee or other person associated with or acting on behalf of the Company, or
any of its Subsidiaries or affiliates, has (i) used any funds for any unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity, (ii) made any direct or indirect unlawful payment to any foreign or domestic government
official or employee, to any employee or agent of a private entity with which the Company does or seeks to do business (a “Private
Sector Counterparty”) or to foreign or domestic political parties or campaigns, (iii) violated or is in violation of
any provision of any Anti-Bribery Laws, (iv) taken, is currently taking or will take any action in furtherance of an offer, payment,
gift or anything else of value, directly or indirectly, to any person while knowing that all or some portion of the money or value
will be offered, given or promised to anyone to improperly influence official action, to obtain or retain business or otherwise
to secure any improper advantage or (v) otherwise made any offer, bribe, rebate, payoff, influence payment, unlawful kickback or
other unlawful payment; the Company and each of its respective Subsidiaries has instituted and has maintained, and will continue
to maintain, policies and procedures reasonably designed to promote and achieve compliance with the laws referred to in (iii) above
and with this representation and warranty; none of the Company, nor any of its Subsidiaries or affiliates will directly or indirectly
use the proceeds of the Securities or lend, contribute or otherwise make available such proceeds to any subsidiary, affiliate,
joint venture partner or other person or entity for the purpose of financing or facilitating any activity that would violate the
laws and regulations referred to in (iii) above; to the knowledge of the Company, there are, and have been, no allegations, investigations
or inquiries with regard to a potential violation of any Anti-Bribery Laws by the Company, its Subsidiaries or affiliates, or any
of their respective current or former directors, officers, employees, stockholders, representatives or agents, or other persons
acting or purporting to act on their behalf.

 

(r) No Disqualification
Events. With respect to Securities to be offered and sold hereunder in reliance on Rule 506(b) under the 1933 Act (“Regulation
D Securities”), none of the Company, any of its predecessors, any affiliated issuer, any director, executive officer,
other officer of the Company participating in the offering hereunder, any beneficial owner of 20% or more of the Company’s
outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule
405 under the 1933 Act) connected with the Company in any capacity at the time of sale (each, an “Issuer Covered Person”
and, together, “Issuer Covered Persons”) is subject to any of the “Bad Actor” disqualifications
described in Rule 506(d)(1)(i) to (viii) under the 1933 Act (a “Disqualification Event”), except for a Disqualification
Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person
is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under
Rule 506(e), and has furnished to the Investor a copy of any disclosures provided thereunder.

 

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

 

(t) No General Solicitation.
Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with the offer
or sale of the Securities.

 

(u) 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 of any security or solicited any offers to buy any security, under circumstances that would require registration
of the Securities under the Securities Act or cause this offering of the Securities to be integrated with prior offerings by the
Company for purposes of the Securities Act.

 

(v) Employee Relations.
Neither the Company nor any of its subsidiaries is involved in any labor dispute or, to the knowledge of the Company or any of
its subsidiaries, is any such dispute threatened. None of the Company’s or its subsidiaries’ employees is a member
of a union and the Company and its subsidiaries believe that their relations with their employees are good.

 

(w) Intellectual
Property Rights. The Company and its subsidiaries own or possess adequate rights or licenses to use all trademarks, trade names,
service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals,
governmental authorizations, trade secrets and rights necessary to conduct their respective businesses as now formulated. The Company
and its subsidiaries do not have any knowledge of any infringement by the Company or its subsidiaries of trademark, trade name
rights, patents, patent rights, copyrights, inventions, licenses, service names, service marks, service mark registrations, trade
secret or other similar rights of others, and, to the knowledge of the Company there is no claim, action or proceeding being made
or brought against, or to the Company’s knowledge, being threatened against, the Company or its subsidiaries regarding trademark,
trade name, patents, patent rights, invention, copyright, license, service names, service marks, service mark registrations, trade
secret or other infringement; and the Company and its subsidiaries are unaware of any facts or circumstances which might give rise
to any of the foregoing.

 

    13

     

    

 

(x) Environmental
Laws. The Company and its subsidiaries are (i) in compliance with any and all applicable foreign, federal, state and local
laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants (“Environmental Laws”), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) are in compliance
with all terms and conditions of any such permit, license or approval.

 

(y) Title. All
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 are not material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company and its subsidiaries.

 

(z) Insurance.
The Company and each of its subsidiaries is 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 been refused any insurance coverage sought or
applied for and 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 materially and adversely affect the condition, financial or otherwise, or the earnings,
business or operations of the Company and its subsidiaries, taken as a whole.

 

(aa) Regulatory
Permits. The Company and its subsidiaries possess all material certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct their respective businesses, and neither the Company nor
any such subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate,
authorization or permit.

 

(bb) Internal Accounting
Controls. The Company and each of its subsidiaries maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability, and (iii) the recorded amounts for assets are compared with the existing
assets at reasonable intervals and appropriate action is taken with respect to any differences.

 

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(cc) No Material
Adverse Breaches, 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 on the business, properties, operations, financial condition, results
of operations or prospects of the Company or its subsidiaries. Neither the Company nor any of its subsidiaries is in breach of
any contract or agreement which breach, in the judgment of the Company’s officers, has or is expected to have a Material
Adverse Effect on the business, properties, operations, financial condition, results of operations or prospects of the Company
or its subsidiaries.

 

(dd) Tax Status.
Except as set forth on Schedule 4(dd), the Company and each of its subsidiaries has made and filed all federal and state income
and all other tax returns, reports and declarations required by any jurisdiction to which it is subject and (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) 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 provision 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.

 

(ee) Certain Transactions.
Except for arm’s length transactions pursuant to which the Company makes payments in the ordinary course of business upon
terms no less favorable than the Company could obtain from third parties and other than the grant of stock options disclosed in
the SEC Documents, none of the officers, directors, or employees of the Company is presently a party to any transaction with the
Company (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.

 

(ff) Except with respect
to the material terms and conditions of the transactions contemplated by this Agreement, all of which shall be publicly disclosed
by the Company as soon as possible after the date hereof, the Company covenants and agrees that neither the Company, nor any other
person acting on its behalf, will provide the Investor or its agents or counsel with any information that the Company believes
constitutes material non-public information, unless prior thereto the Investor shall have entered into a written agreement with
the Company regarding the confidentiality and use of such information. The Company understands and confirms that the Investor shall
be relying on the foregoing covenant in effecting transactions in securities of the Company.

 

(gg) Fees and Rights
of First Refusal. The Company is not obligated to offer the securities offered hereunder on a right of first refusal basis
or otherwise to any third parties including, but not limited to, current or former shareholders of the Company, underwriters, brokers,
agents or other third parties.

 

    15

     

    

 

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

 

(ii) Registration
Rights. Except as set forth on Schedule 4(ii), no Person has any right to cause the Company to effect the registration under
the Securities Act of any securities of the Company. There are no outstanding registration statements not yet declared effective
and there are no outstanding comment letters from the SEC or any other regulatory agency.

 

(jj) Private Placement.
Assuming the accuracy of the Investor’s representations and warranties set forth in Section 3, no registration under the
Securities Act is required for the offer and sale of the Securities by the Company to the Investor as contemplated hereby. The
issuance and sale of the Securities hereunder does not contravene the rules and regulations of the OTC Markets Group Pink Market
(the “Primary Market”).

 

(kk) Listing and
Maintenance Requirements. The Company’s Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange
Act, and the Company has taken no action designed to terminate, or which to its knowledge is likely to have the effect of, terminating
the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the SEC is contemplating
terminating such registration. The Company has not, in the 12 months preceding the date hereof, received notice from the Primary
Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing
or maintenance requirements of such Primary Market. The Company is, and has no reason to believe that it will not in the foreseeable
future continue to be, in compliance with all such listing and maintenance requirements.

 

(ll) Reporting Status. 
With a view to making available to the Investor the benefits of Rule 144 or any similar rule or regulation of the SEC that may
at any time permit the Investor to sell securities of the Company to the public without registration, and as a material inducement
to the Investor’s purchase of the Securities, the Company represents and warrants to the following: (i) the Company is, and
has been for a period of at least 90 days immediately preceding the date hereof, subject to the reporting requirements of section
13 or 15(d) of the Exchange Act (ii) the Company filed all required reports under section 13 or 15(d) of the Exchange, as applicable,
for the time period of the 12 months preceding the date hereof (or for such shorter period that the Company was required to file
such reports), and (iii) the Company is not an issuer defined as a “Shell Company”. For the purposes hereof, the term
“Shell Company” shall mean an issuer that meets the description defined in paragraph (i)(1)(i) of Rule 144.

 

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(mm) Disclosure. 
The Company has made available to the Investor and its counsel all the information reasonably available to the Company that the
Investor or its counsel have requested for deciding whether to acquire the Securities.  No representation or warranty of the
Company contained in this Agreement (as qualified by the Disclosure Schedule) or any of the other Transaction Documents, and no
certificate furnished or to be furnished to the Investor at the Closing, or any due diligence evaluation materials furnished by
the Company or on behalf of the Company, including without limitation, due diligence questionnaires, or any other documents, presentations,
correspondence, or information contains any untrue statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein or therein not misleading in light of the circumstances under which they were made.

 

(nn) 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 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, other than, in the case of clauses (ii) and (iii), compensation paid to the Company’s placement
agent in connection with the placement of the Securities.

 

(oo) Dilutive Effect.
The Company understands and acknowledges that the number of Conversion Shares issuable upon conversion of the Convertible Debentures
and the number of Warrant Shares issuable upon exercise of the Warrants, will increase in certain circumstances. The Company further
acknowledges that its obligation to issue Conversion Shares upon conversion of the Convertible Debentures in accordance with this
Agreement and the Convertible Debentures and Warrant Shares upon the exercise of the Warrants in accordance with this Agreement
and the Warrants is absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests
of other stockholders of the Company.

 

(pp) Relationship
of the Parties. Neither the Company, nor any of its subsidiaries, affiliates, nor any person acting on its or their behalf
is a client or customer of the Investor or any of its affiliates and neither the Investor nor any of its affiliates has provided,
or will provide, any services to the Company or any of its affiliates, its subsidiaries, or any person acting on its or their behalf.
The Investor’s relationship to Company is solely as investor as provided for in the Transaction Documents. 

 

5. COVENANTS.

 

(a) Best Efforts.
Each party shall use its best efforts to timely satisfy each of the conditions to be satisfied by it as provided in Sections 7
and 8 of this Agreement.

 

(b) Compliance with
Applicable Laws. While the Investor owns any Securities the Company shall comply with all Applicable Laws and will not take
any action which will cause the Investor to be in violation of any such Applicable Laws.

 

(c) Conduct of Business.
While the Investor owns any Securities, the business of the Company shall not be conducted in violation of Applicable Laws and
will not take any action which will cause the Investor to be in violation of any such Applicable Laws.

 

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(d) While the Investor
owns any Securities, neither the Company, nor any of its Subsidiaries or affiliates, directors, officers, employees, representatives
or agents shall:

 

(i) conduct any business
or engage in any transaction or dealing with or for the benefit of any Blocked Person, including the making or receiving of any
contribution of funds, goods or services to, from or for the benefit of any Blocked Person;

 

(ii) deal in, or otherwise
engage in any transaction relating to, any property or interests in property blocked or subject to blocking pursuant to the applicable
Sanctions Laws, Sanctions Programs, located in a Sanctioned Country, or CAATSA or CAATSA Sanctions Programs;

 

(iii) use any of
the proceeds of the transactions contemplated by this Agreement to finance, promote or otherwise support in any manner any illegal
activity, including, without limitation, in contravention of any Anti-Money Laundering Laws, Sanctions Laws, Sanctioned Program,
Anti-Bribery Laws or in any Sanctioned Country.

 

(iv) violate, attempt
to violate, or engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding,
any of the Anti-Money Laundering Laws, Sanctions Laws, Sanctions Program, Anti-Bribery Laws, CAATSA or CAATSA Sanctions Programs.

 

(e) While the Investor
owns any Securities, the Company shall maintain in effect and enforce policies and procedures designed to ensure compliance by
the Company and its Subsidiaries and their directors, officers, employees, agents representatives and affiliates with Applicable
Laws.

 

(f) While the Investor
owns any Securities, the Company will promptly notify the Investor in writing if any of the Company, or any of its Subsidiaries
or affiliates, directors, officers, employees, representatives or agents, shall become a Blocked Person, or become directly or
indirectly owned or controlled by a Blocked Person.

 

(g) The Company shall
provide such information and documentation it may have as the Investor or any of their affiliates may reasonably request to satisfy
compliance with Applicable Laws.

 

(h) The covenants set
forth above shall be ongoing while the Investor owns any Securities. The Company shall promptly notify the Investor in writing
should it become aware during such period (a) of any changes to these covenants, or (b) if it cannot comply with the covenants
set forth herein. The Company shall also promptly notify the Investor in writing during such period should it become aware of an
investigation, litigation or regulatory action relating to an alleged or potential violation of Applicable Laws.

 

(i) Form D.
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 Investor promptly after such filing. The Company shall, on or before the Closing Date, take such action as the Company shall
reasonably determine is necessary to qualify the Securities, or obtain an exemption for the Securities for sale to the Investor
at the Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of the states of the United
States, and shall provide evidence of any such action so taken to the Investor on or prior to the Closing Date.

 

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(j) Reporting Status.
With a view to making available to the Investor the benefits of Rule 144 or any similar rule or regulation of the SEC that may
at any time permit the Investor to sell securities of the Company to the public without registration, and as a material inducement
to the Investor’s purchase of the Securities, the Company represents, warrants, and covenants to the following:

 

(i) The Company
is subject to the reporting requirements of section 13 or 15(d) of the Exchange Act and has filed all required reports under section
13 or 15(d) of the Exchange Act during the 12 months prior to the date hereof (or for such shorter period that the issuer was required
to file such reports), other than Form 8-K reports;

 

(ii) From the
date hereof until all the Securities either have been sold by the Investor, or may permanently be sold by the Investor without
any restrictions pursuant to Rule 144, (the “Holding Period”) the Company, as soon as practical, shall file
with the SEC in a timely manner all required reports under section 13 or 15(d) of the Exchange Act and such reports shall conform
to the requirement of the Exchange Act and the SEC for filing thereunder;

 

(iii) The Company
shall furnish to the Investor so long as the Investor owns Securities, promptly upon request, (i) a written statement by the Company
that it has complied with the reporting requirements of Rule 144, (ii) a copy of the most recent annual or quarterly report of
the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably
requested to permit the Investor to sell such securities pursuant to Rule 144 without registration; and

 

(iv) During
the Holding Period the Company shall not terminate its status as an issuer required to file reports under the Exchange Act even
if the Exchange Act or the rules and regulations thereunder would otherwise permit such termination.

 

(k) Use of Proceeds.
The Company shall use the proceeds from the issuance of the Convertible Debentures for working capital and other general corporate
purposes. So long as any amounts are outstanding on the Convertible Debentures, the Company shall not pay any related party obligations
all of which related party obligations shall be subordinated to the obligations owed to the Investor. Neither the Company nor any
subsidiary shall, directly or indirectly, use any portion of the proceeds of the transactions contemplated herein, or lend, contribute,
facilitate or otherwise make available such proceeds to any Person (i) to make any payment towards any indebtedness or other
obligations of the Company or subsidiary, except to the extent set forth in the Use of Proceeds Confirmation; (ii) to pay any obligations
of any nature or kind due or owing to any officers, directors, employees, or shareholders of the Company or subsidiary, other than
salaries or fees due and payable to service providers payable in the ordinary course of business of the Company; (iii) to fund,
either directly or indirectly, any activities or business of or with any Blocked Person, in any Sanctioned Country, (iv) or in
any manner or in a country or territory, that, at the time of such funding, is, or whose government is, the subject of CAATSA Sanctions
Programs or (iv) in any other manner that will result in a violation of Anti-Money Laundering Laws, Sanctions Laws, Sanctioned
Program, Anti-Bribery Laws or CAATSA Sanctions Programs.

 

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(l) Increase of
Authorized Shares of Common Stock. Within 90 calendar days from the Closing Date hereof the Company shall have increased its
authorized shares of Common Stock to no less than 7,000,000,000.

 

(m) Within 1 business
day of the Company increasing its authorized shares of Common Stock it shall execute an Irrevocable Transfer Agent Instruction
in a form attached hereto as Exhibit C reserving a minimum of 3 times the total number of Conversion Shares issuable upon
conversion of the Convertible Debentures calculated at the Market Price.

 

(n) Reservation
of Shares. Within 90 calendar days from the Closing Date, the Company shall reserve for issuance to the Investor a minimum
of 3 times the total number of Conversion Shares issuable upon conversion of the Convertible Debentures calculated at the Market
Price and the Company shall also reserve such Warrant Shares for issuance to the Investor upon exercise of the Warrants (the “Share
Reserve”). The Company represents that following the increase in its authorized share capital it will have sufficient
authorized and unissued shares of Common Stock available to create the Share Reserve after considering all other commitments that
may require the issuance of Common Stock. The Company shall take all action reasonably necessary to at all times have authorized,
and reserved for the purpose of issuance, such number of shares of Common Stock as shall be necessary to effect the full conversion
of the Convertible Debentures and exercise of the Warrants. If at any time the Share Reserve is insufficient to effect the full
conversion of the Convertible Debentures and exercise of the Warrants, if applicable, the Company shall increase the Share Reserve
accordingly. If the Company does not have sufficient authorized and unissued shares of Common Stock available to increase the Share
Reserve, the Company shall call and hold a special meeting of the shareholders within 30 days of such occurrence, for the sole
purpose of increasing the number of shares authorized and the Company’s management shall recommend to the shareholders to
vote in favor of increasing the number of shares of Common Stock authorized. Management shall also vote all of its shares in favor
of increasing the number of authorized shares of Common Stock.

 

(o) Listings or
Quotation. The Company’s Common Stock shall be listed or quoted for trading on the Primary Market.

 

(p) Fees and Expenses.

 

(i) The Company
shall pay all of its costs and expenses incurred by it connection with the negotiation, investigation, preparation, execution and
delivery of the Transaction Documents.

 

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(ii) On the
First Closing Date, the Company shall pay to YA Global II SPV, LLC as a designee of the Investor a due diligence and structuring
fee of $13,500 which amount shall be deducted by the Investor from the gross proceeds of the First Convertible Debenture Purchase
Price at the First Closing and paid by the Investor to Designee on behalf of the Company.

 

(iii) On the
Second Closing Date, the Company shall pay to YA Global II SPV, LLC as a designee of the Investor a due diligence and structuring
fee of $6,300 which amount shall be deducted by the Investor from the gross proceeds of the Second Convertible Debenture Purchase
Price at the Second Closing and paid by the Investor to Designee on behalf of the Company

 

(iv) On the
First and Second Closing Date the Company shall issue to the Investor the Warrants attributable to each Closing.

 

(q) Corporate Existence.
So long as the Convertible Debentures remain outstanding, the Company shall not directly or indirectly consummate any merger, reorganization,
restructuring, reverse stock split consolidation, sale of all or substantially all of the Company’s assets or any similar
transaction or related transactions (each such transaction, an “Organizational Change”) unless, prior to the
consummation an Organizational Change, the Company obtains the written consent of the Investor. In any such case, the Company will
make appropriate provision with respect to such holders’ rights and interests to insure that the provisions of this Section
5(o) will thereafter be applicable to the Convertible Debenture.

 

(r) Transactions
With Affiliates. So long as the Convertible Debentures is outstanding, the Company shall not, and shall cause each of its subsidiaries
not to, enter into, amend, modify or supplement, or permit any subsidiary to enter into, amend, modify or supplement any agreement,
transaction, commitment, or arrangement with any of its or any subsidiary’s officers, directors, person who were officers
or directors at any time during the previous 2 years, stockholders who beneficially own 5% or more of the Common Stock, or Affiliates
(as defined below) or with any individual related by blood, marriage, or adoption to any such individual or with any entity in
which any such entity or individual owns a 5% or more beneficial interest (each a “Related Party”), except for
(a) customary employment arrangements and benefit programs on reasonable terms, (b) any investment in an Affiliate of the Company,
(c) any agreement, transaction, commitment, or arrangement on an arms-length basis on terms no less favorable than terms which
would have been obtainable from a person other than such Related Party, (d) any agreement, transaction, commitment, or arrangement
which is approved by a majority of the disinterested directors of the Company. “Affiliate” for purposes hereof
means, with respect to any person or entity, another person or entity that, directly or indirectly, (i) has a 10% or more equity
interest in that person or entity, (ii) has 10% or more common ownership with that person or entity, (iii) controls that person
or entity, or (iv) shares common control with that person or entity. “Control” or “controls”
for purposes hereof means that a person or entity has the power, direct or indirect, to conduct or govern the policies of another
person or entity.

 

(s) Transfer Agent.
The Company covenants and agrees that, in the event that the Company’s agency relationship with the transfer agent should
be terminated for any reason prior to a date which is 2 years after the Closing Date, the Company shall immediately appoint a new
transfer agent and shall require that the new transfer agent execute and agree to be bound by the terms of the Irrevocable Transfer
Agent Instructions (as defined herein).

 

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(t) Restriction
on Issuance of the Capital Stock. Except with regard to the Company’s existing obligations and undertakings, so long
as the Convertible Debentures are outstanding, the Company shall not, without the prior written consent of the Investor, (i) issue
or sell shares of Common Stock or Preferred Stock without consideration or for a consideration per share less than the bid price
of the Common Stock determined immediately prior to its issuance, (ii) issue any preferred stock, warrant, option, right, contract,
call, or other security or instrument granting the holder thereof the right to acquire Common Stock without consideration or for
a consideration less than such Common Stock’s Bid Price, as quoted by Bloomberg, LP and determined immediately prior to its
issuance, (iii) enter into any security instrument granting the holder a security interest in any and all assets of the Company,
or (iv) other than for bona-fide employee stock option plans, file any registration statement on Form S-8.

 

(u) Neither the Investor
nor any of its affiliates have an open short position in the Common Stock of the Company, and the Investor agrees that it shall
not, and that it will cause its affiliates not to, engage in any short sales of or hedging transactions with respect to the Common
Stock as long as any Convertible Debentures shall remain outstanding.

 

(v) Additional Registration
Statements. So long as the Convertible Debentures are outstanding, if the Securities are not eligible for resale under Rule
144, the Company will not file a registration statement under the Securities Act relating to securities that are not the Securities
without including the Securities.

 

(w) Review of Public
Disclosures. All SEC filings (including, without limitation, all filings required under the Exchange Act, which include Forms
10-Q and 10-QSB, 10-K and 10K-SB, 8-K, etc) and other public disclosures made by the Company, including, without limitation, all
press releases, investor relations materials, and scripts of analysts meetings and calls, shall be reviewed and approved for release
by the Company’s attorneys and, if containing financial information, such as financial statements, the Company’s independent
certified public accountants.

 

(x) Disclosure of
Transaction. Within 4 Business Days following the date of this Agreement, the Company shall file a Current Report on Form 8-K
describing the terms of the transactions contemplated by the Transaction Documents in the form required by the Exchange Act and
attaching the material Transaction Documents (including, without limitation, this Agreement, the form of the Convertible Debentures
and the Warrants) as exhibits to such filing.

 

(y) Granting of
Security. So long as any portion of the Convertible Debentures is outstanding neither the Company nor any subsidiary may grant,
issue or allow to exist any security interest in any or all of the assets of the Company and or subsidiary.

 

6. TRANSFER AGENT
INSTRUCTIONS.

 

The Company
shall issue the Irrevocable Transfer Agent Instructions to its transfer agent in a form acceptable to the Investor.

 

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7. CONDITIONS TO THE
COMPANY’S OBLIGATION TO SELL.

 

(a) The obligation
of the Company hereunder to issue and sell the First Convertible Debenture to the Investor at First Closing is subject to the satisfaction,
at or before First Closing Date, of each of the following conditions, 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:

 

(i) The Investor shall
have executed the Transaction Documents and delivered them to the Company.

 

(ii) The Investor shall
have delivered to the Company the First Convertible Debenture Purchase Price, minus any fees to be paid directly from the proceeds
the Closing as set forth in Section 5(p)(ii) hereto, by wire transfer of immediately available U.S. funds pursuant to the wire
instructions provided by the Company.

 

(iii) The representations
and warranties of the Investor shall be true and correct in all material respects as of the date when made and as of the First
Closing Date as though made at that time (except for representations and warranties that speak as of a specific date), and the
Investor 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 Investor at or prior to the First Closing Date.

 

(b) The obligation
of the Company hereunder to issue and sell the Second Convertible Debenture to the Investor at the Second Closing is subject to
the satisfaction, at or before the Second Closing Date, of each of the following conditions, 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:

 

(i) The Investor shall
have executed the Transaction Documents and delivered them to the Company.

 

(ii) The Investor shall
have delivered to the Company the Second Convertible Debenture Purchase Price, minus any fees to be paid directly from the proceeds
of the Second Closing as set forth in Section 5(p)(iii) hereto, by wire transfer of immediately available U.S. funds pursuant to
the wire instructions provided by the Company.

 

(iii) The representations
and warranties of the Investor shall be true and correct in all material respects as of the date when made and as of the Second
Closing Date as though made at that time (except for representations and warranties that speak as of a specific date), and the
Investor 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 Investor at or prior to the Second Closing Date.

 

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8. CONDITIONS TO THE
INVESTOR’S OBLIGATION TO PURCHASE.

 

(a) The obligation
of the Investor hereunder to purchase the First Convertible Debenture at the First Closing is subject to the satisfaction, at or
before the First Closing Date, of each of the following conditions, provided that these conditions are for the Investor’s
sole benefit and may be waived by the Investor at any time in its sole discretion:

 

(i) The Company shall
have executed the Transaction Documents and delivered the same to the Investor.

 

(ii) The Company shall
have issued the First Closing Warrant to the Investor.

 

(iii) The Common Stock
shall be authorized for quotation or trading on the Primary Market, trading in the Common Stock shall not have been suspended for
any reason.

 

(iv) The representations
and warranties of the Company shall be true and correct in all material respects (except to the extent that any of such representations
and warranties is already qualified as to materiality in Section 4 above, in which case, such representations and warranties shall
be true and correct without further qualification) as of the date when made and as of the First Closing Date as though made at
that time (except for representations and warranties that speak as of a specific date) and the Company shall have performed, satisfied
and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed,
satisfied or complied with by the Company at or prior to the First Closing Date.

 

(v) The Company shall
have executed and delivered to the Investor the First Convertible Debenture.

 

(vi) The Investor
shall have received an opinion of counsel from counsel to the Company in a form satisfactory to the Investor which shall include
but not be limited to whether the Company is an issuer defined as a “Shell Company,” as defined in paragraph (i)(1)(i)
of Rule 144 or has been at any time previously an issuer defined as a “Shell Company.”

 

(vii) The Company shall
have provided to the Investor an executed Officer’s Certificate in a form satisfactory to the Investor.

 

(viii) The Company
shall have provided Investor a true copy of a certificate of good standing evidencing the formation and good standing of the Company
from the secretary of state (or comparable office) from the jurisdiction in which the Company is incorporated, as of a date within
10 days of the First Closing Date.

 

(ix) The Company shall
have delivered to the Investor a certificate, executed by an officer of the Company in a form satisfactory to the Investor and
dated as of the First Closing Date, as to (i) the Company’s Article of Incorporation, (ii) the Bylaws of the Company, (iii)
the resolutions as adopted by the Company’s Board of Directors in a form reasonably acceptable to the Investor, (iv) the
Company’s Certificate of Good, each as in effect at the First Closing.

 

(x) The Company shall
have undertaken to create the Share Reserve.

 

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(b) The obligation
of the Investor hereunder to purchase the Second Convertible Debenture at the Second Closing is subject to the satisfaction, at
or before the Second Closing Date, of each of the following conditions, provided that these conditions are for the Investor’s
sole benefit and may be waived by the Investor at any time in its sole discretion:

 

(i) Thirty (30) calendar
days shall have elapsed from the First Closing Date.

 

(ii) The Common Stock
shall be authorized for quotation or trading on the Primary Market and trading in the Common Stock shall not have been suspended
for any reason.

 

(iii) The representations
and warranties of the Company shall be true and correct in all material respects (except to the extent that any of such representations
and warranties is already qualified as to materiality in Section 5 above, in which case, such representations and warranties shall
be true and correct without further qualification) as of the date when made and as of the Second Closing Date as though made at
that time (except for representations and warranties that speak as of a specific date) and the Company shall have performed, satisfied
and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed,
satisfied or complied with by the Company at or prior to the Second Closing Date.

 

(iv) The Company shall
have executed and delivered to the Investor the Second Convertible Debenture.

 

(v) The Company shall
have issued to the Investor the Second Closing Warrant.

 

(vi) The Company shall
have provided to the Investor an executed Officer’s Certificate in a form satisfactory to the Investor.

 

9. INDEMNIFICATION.

 

(a) In consideration
of the Investor’s execution and delivery of this Agreement and acquiring the Convertible Debentures, the Conversion Shares
upon conversion of the Convertible Debentures, the Warrants and the Warrant Shares issued upon exercise of the Warrants and in
addition to all of the Company’s other obligations under this Agreement, the Company shall defend, protect, indemnify and
hold harmless the Investor, and all of their officers, directors, employees and agents (including, without limitation, those
retained in connection with the transactions contemplated by this Agreement) (collectively, the “Investor 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 Investor 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 the Investor Indemnitees or any of them 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, the Convertible Debentures or the other Transaction
Documents or any other 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 other Transaction Documents or any other certificate, instrument
or document contemplated hereby or thereby, or (c) any cause of action, suit or claim brought or made against such Investor Indemnitee
and arising out of or resulting from the execution, delivery, performance or enforcement of this Agreement or any other instrument,
document or agreement executed pursuant hereto by any of the parties hereto, any transaction financed or to be financed in whole
or in part, directly or indirectly, with the proceeds of the issuance of the Convertible Debentures or the status of the Investor
or holder of the Convertible Debentures or the Conversion Shares, as an Investor of Convertible Debentures in the Company. 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, which is permissible under applicable law.

 

    25

     

    

 

Notwithstanding the foregoing,
(a) the aggregate liability of the Company under this Agreement for breach of any representation or warranty, except for a breach
of the representations and warranties contained in Section 4 (i), (k), (o), (p), (q), and (r) and covenants contained in Section
5 (b), (c), (d), (e) and (f), shall be limited to the aggregate Purchase Price paid to the Company; and (b) the Company shall not
be liable for any claim for indemnification unless and until the aggregate amount of Indemnified Liabilities equals or exceeds
US$50,000 (the “Threshold”), provided that in case of a claim or claims in excess of the Threshold, the claim may be
submitted for the entire amount. For the avoidance of doubt, the aggregate liability of the Company for damages, including trading
losses, suffered by the Investor as a result of the Company’s breach of the covenant to issue Common Stock upon conversion
of one or both of the Convertible Debentures shall not be capped.

 

(b) In consideration
of the Company’s execution and delivery of this Agreement, and in addition to all of the Investor’s other obligations
under this Agreement, the Investor shall defend, protect, indemnify and hold harmless the Company and all of its officers, directors,
employees and agents (including, without limitation, those retained in connection with the transactions contemplated by this Agreement)
(collectively, the “Company Indemnitees”) from and against any and all Indemnified Liabilities incurred by the
Indemnitees or any of them as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation
or warranty made by the Investor(s) in this Agreement, instrument or document contemplated hereby or thereby executed by the Investor,
(b) any breach of any covenant, agreement or obligation of the Investor(s) contained in this Agreement, the Transaction Documents
or any other certificate, instrument or document contemplated hereby or thereby executed by the Investor, or (c) any cause of action,
suit or claim brought or made against such Company Indemnitee based on material misrepresentations or due to a material breach
and arising out of or resulting from the execution, delivery, performance or enforcement of this Agreement, the Transaction Documents
or any other instrument, document or agreement executed pursuant hereto by any of the parties hereto. To the extent that the foregoing
undertaking by the Investor may be unenforceable for any reason, the Investor shall make the maximum contribution to the payment
and satisfaction of each of the Indemnified Liabilities, which is permissible under applicable law.

 

Notwithstanding
the foregoing, (a) the aggregate liability of the Investor under this Agreement for breach of any representation, warranty, or
covenant shall be limited to the aggregate Purchase Price paid to the Company; and (b) the Investor shall not be liable for any
claim for indemnification unless and until the aggregate amount of Indemnified Liabilities equals or exceeds US$50,000 (the “Threshold”),
provided that in case of a claim or claims in excess of the Threshold, the claim may be submitted for the entire amount.

 

    26

     

    

 

10. COMPANY LIABILITY.

 

(a) The Company shall
be liable for all debt, principal, interest, and other amounts owed to the Investor by Company pursuant to this Agreement, the
Transaction Documents, or any other agreement, whether absolute or contingent, due or to become due, now existing or hereafter
arising (the “Obligations”) and the Investor may proceed against the Company to enforce the Obligations without
waiving its right to proceed against any other party. This Agreement and the Convertible Debentures are a primary and original
obligation of the Company and shall remain in effect notwithstanding future changes in conditions, including any change of law
or any invalidity or irregularity in the creation or acquisition of any Obligations or in the execution or delivery of any agreement
between the Investor and the Company. The Company shall be liable for existing and future Obligations as fully as if all of the
funds advanced by the Investor hereunder were advanced to the Company.

 

(b) Notwithstanding
any other provision of this Agreement or any other Transaction Documents the Company irrevocably waives, until all obligations
are paid in full, all rights that it may have at law or in equity (including, without limitation, any law subrogating the Company
to the rights of Investor under the Transaction Documents) to seek contribution, indemnification, or any other form of reimbursement
from the Company, or any other person now or hereafter primarily or secondarily liable for any of the Obligations, for any payment
made by the Company with respect to the Obligations in connection with the Transaction Documents or otherwise and all rights that
it might have to benefit from, or to participate in, any security for the Obligations as a result of any payment made by the Company
with respect to the Obligations in connection with the Transaction Documents or otherwise. Any agreement providing for indemnification,
reimbursement or any other arrangement prohibited under this Section shall be null and void. If any payment is made to the Company
in contravention of this Section, the Company shall hold such payment in trust for the Investor and such payment shall be promptly
delivered to the Investor for application to the Obligations, whether matured or unmatured.

 

(c) Other than for
direct losses and direct damages, including trading losses, suffered by the Investor as a result of the Company’s breach
of the representations, warranties and covenants hereunder including the covenant to issue Common Stock upon conversion of one
or both of the Convertible Debentures the Company shall not be liable hereunder for any indirect, special or consequential losses
or damages of any kind or nature whatsoever, including but not limited to loss profits, regardless of whether arising from breach
of contract, warranty, tort, strict liability or otherwise, even if advised of the possibility of such loss or damage, or if such
loss or damage could have reasonably been foreseen.

 

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11. GOVERNING LAW:
MISCELLANEOUS.

 

(a) Governing Law;
Mandatory Jurisdiction. TO INDUCE INVESTOR TO PURCHASE THE DEBENTURES, THE COMPANY IRREVOCABLY AGREES THAT ANY DISPUTE ARISING
UNDER, RELATING TO, OR IN CONNECTION WITH, DIRECTLY OR INDIRECTLY, THIS AGREEMENT OR RELATED TO ANY MATTER WHICH IS THE SUBJECT
OF OR INCIDENTAL TO THIS AGREEMENT ANY OTHER TRANSACTION DOCUMENT (WHETHER OR NOT SUCH CLAIM IS BASED UPON BREACH OF CONTRACT OR
TORT) SHALL BE SUBJECT TO THE EXCLUSIVE JURISDICTION AND VENUE OF THE STATE COURTS SITTING IN UNION COUNTY, NEW JERSEY AND THE
FEDERAL COURTS SITTING IN NEWARK, NEW JERSEY; THIS PROVISION IS INTENDED TO BE A “MANDATORY” FORUM SELECTION CLAUSE
AND GOVERNED BY AND INTERPRETED CONSISTENT WITH NEW JERSEY LAW. THE COMPANY HEREBY CONSENTS TO THE EXCLUSIVE JURISDICTION AND VENUE
OF ANY STATE OR FEDERAL COURT HAVING ITS SITUS IN SAID COUNTY, AND WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS. THE COMPANY
HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND CONSENT THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, DIRECTED TO THE COMPANY AS SET FORTH HEREIN IN THE MANNER PROVIDED BY APPLICABLE STATUTE, LAW, RULE OF
COURT OR OTHERWISE

 

(b) Counterparts.
This Agreement may be executed in 2 or more identical counterparts, all of which shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and physically or electronically delivered to the other
party.

 

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

 

    28

     

    

 

(d) Headings.
The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this
Agreement.

 

(e) Severability.
If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability
of any provision of this Agreement in any other jurisdiction.

 

(f) Entire Agreement,
Amendments. This Agreement supersedes all other prior oral or written agreements between the Investor, the Company, their affiliates
and persons acting on their behalf with respect to the matters discussed herein, and this Agreement 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 any Investor 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 party to be charged with enforcement.

 

12. Notices. Any
notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be
in writing and will be deemed to have been delivered upon: (i) receipt, when delivered personally, (ii) 1 Business Day after deposit
with an overnight courier service with next day delivery specified, in each case, properly addressed to the party to receive the
same, or (iii) receipt, when sent by electronic mail (provided that the electronic mail transmission is not returned in error or
the sender is not otherwise notified of any error in transmission. The addresses and e-mail addresses for such communications shall
be:

 

	If to the Company, to:	Samsara Luggage, Inc.
	 	One University Plaza – Suite 505
	 	Hackensack, NJ 07601
	 	Attention: 	Atara Dzikowski
	 	Telephone: 	(855) 256-7477
	 	Email:	atara@samsaraluggage.com
	 	 
	With a copy to:	SRK Kronengold Law Offices
	 	Oppenheimer Offices 7
	 	Rabin Science Park
	 	Rehovot, Israel
	 	Attention:	Steven Kronengold, Esq.
	 	Telephone:	+972 8 936 0998
	 	Email:	steve@kronengold.com

 

    29

     

    

 

	If to the Investor:	YAII PN, Ltd.
	 	c/o Yorkville Advisors Global, LP
	 	1012 Springfield Avenue
	 	Mountainside, NJ  07092
	 	Attention:	 Matthew Beckman
	 	Telephone: 	(732) 213-1864
	 	Email:	mbeckman@yorkvilleadvisors.com
	 	 
	With a copy to:	David Gonzalez, Esq.
	 	1012 Springfield Avenue
	 	Mountainside, NJ  07092
	 	Telephone:	(201) 536-5109
	 	Email:	dgonzalez@yorkvilleadvisors.com

 

or at such other address and/or electronic
email address and/or to the attention of such other person as the recipient party has specified by written notice given to each
other party 3 Business Days prior to the effectiveness of such change. Written confirmation of receipt (i) given by the recipient
of such notice, consent, waiver or other communication, (ii) mechanically or electronically generated by the sender’s computer
containing the time, date, recipient’s electronic mail address and the text of such electronic mail or (iii) provided by
a nationally recognized overnight delivery service, shall be rebuttable evidence of personal service, receipt by electronic mail
or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.

 

(a) Successors and
Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns.
Neither the Company nor any Investor shall assign this Agreement or any rights or obligations hereunder without the prior written
consent of the other party hereto.

 

(b) No 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.

 

(c) Survival.
Unless this Agreement is terminated under Section 11(f), all agreements, representations and warranties contained in this Agreement
or made in writing by or on behalf of any party in connection with the transactions contemplated by this Agreement shall survive
the execution and delivery of this Agreement and the Closing.

 

(d) Publicity.
The Company and the Investor shall have the right to approve, before issuance any press release or any other public statement with
respect to the transactions contemplated hereby made by any party; provided, however, that the Company shall be entitled, without
the prior approval of the Investor, to issue any press release or other public disclosure with respect to such transactions required
under applicable securities or other laws or regulations (the Company shall use its best efforts to consult the Investor in connection
with any such press release or other public disclosure relating to the Transaction Documents prior to its release and Investor
shall be provided with a copy thereof upon release thereof).

 

    30

     

    

 

(e) 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.

 

(f) Termination.
In the event that the Closing shall not have occurred on or before 5th business days from the date hereof due to the
Company’s or the Investor’s failure to satisfy the conditions set forth in Sections 7 and 8 above (and the non-breaching
party’s failure to waive such unsatisfied condition(s)), the non-breaching party shall have the option to terminate this
Agreement with respect to such breaching party at the close of business on such date without liability of any party to any other
party.

 

(g) Brokerage.
The Company represents that no broker, agent, finder or other party has been retained by it in connection with the transactions
contemplated hereby and that no other fee or commission has been agreed by the Company to be paid for or on account of the transactions
contemplated hereby.

 

(h) 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.

 

[REMAINDER
PAGE INTENTIONALLY LEFT BLANK]

 

    31

     

    

 

IN WITNESS WHEREOF,
each of the Investor and the Company has affixed their respective signatures to this Securities Purchase Agreement as of the date
first written above.

 

	 	COMPANY:
	 	 
	 	SAMSARA LUGGAGE, INC.
	 	 	 
	 	By:	/s/ Atara Dzikowski
	 	Name:	Atara Dzikowski
	 	Title:	Chief Executive Officer
	 	 
	 	INVESTOR:
	 	 
	 	YA II PN, LTD.
	 	By:	Yorkville Advisors Global, LP
	 	Its:	Investment Manager
	 	 
	 	By:	Yorkville Advisors Global II, LLC
	 	Its:	General Partner
	 	 	 
	 	By:	/s/ David Gonzalez
	 	Name: 	David Gonzalez
	 	Title:	Member and General Counsel

 

    32

     

    

  

LIST OF EXHIBITS:

 

Disclosure Schedule

 

Exhibit A – Form of Convertible Debenture

 

Exhibit B – Form of Warrant

 

Exhibit C – Form of Irrevocable Transfer Agent Instructions

 

     

     

    

 

DISCLOSURE SCHEDULE

 

Schedule
4(a) – Subsidiaries 

 

None

 

Schedule
4(b) – Security Interests Granted 

 

None

 

Schedule
4(e) – Capitalization

 

		1.	On June 5, 2019, the Company entered into a Securities
Purchase Agreement (“YAII SPA”) with YAII PN, Ltd. (“YAII”), pursuant to which YAII agreed to provide
the Company with a convertible loan in the aggregate amount of $1,100,000 in three tranches, and the Company agreed to issue convertible
debentures and a warrant to the YAII. The first tranche of the convertible debentures in the amount of $210,000 was provided upon
execution of the YAII SPA. The second tranche in the amount of $300,000 was provided on October 23, 2019 upon the Company filing
of a Registration Statement on Form S-4 in connection with the merger with Samsara Delaware. The third tranche in the amount of
$600,000 was provided on November 18, 2019 upon consummation of the merger with Samsara Delaware and the fulfillment of all conditions
required for the merger. Each tranche of the loan will bear interest at an annual rate of ten percent (10%). The principal amount
together with the accrued and unpaid interest will be repayable after two years. Each tranche of the loan together with the accrued
and unpaid interest (or any portion at the discretion of the Investor) will be convertible at any time six months following the
issuance date, into shares of Company’s common stock at a conversion price equal to the lower of $0.003 per share or 80%
of the lowest volume-weighted average price (VWAP) of Company’s share during the period of 10 days preceding the conversion
date. In addition, the Company issued to YAII a warrant to purchase 91,666,666 shares of common stock, at an exercise price equal
to $0.003. The warrants may be exercised within 5 years from the issuance date by cash payment or through cashless exercise by
the surrender of warrants shares having a value equal to the exercise price of the portion of the warrant being exercised.

 

On December 9, 2019 and pursuant
to the YAII SPA, YAII exercised its option to convert the first convertible promissory note in the amount of $210,000 into 69,917,807
shares of Common Stock of the Company. On July 23, 2020 and pursuant to the YAII SPA, YAII exercised its option to convert $72,684.93
of its second convertible note into 90,856,163 shares of Common Stock of the Company. On August 3, 2020 and pursuant to the YAII
SPA, YAII exercised its option to convert $75,753.42 of its second convertible note into 151,506,840 shares of Common Stock of
the Company. On August 13 and pursuant to the YAII SPA, YAII exercised its option to convert $75,431.51 of its second convertible
note into 150,863,020 shares of Common Stock of the Company.

 

     

     

    

 

		2.	On June 26, 2020, the Company entered into a Securities
Purchase Agreement (“Power-Up SPA”) with Power Up Lending Group Ltd. (the “Power-Up”), pursuant to which
Power-Up agreed to provide the Company with an initial investment in the form of a convertible loan in the principal amount of
$67,000 (the “Power-Up Initial Investment”). The Power-Up SPA contemplates additional financing of up to $925,000
in the aggregate, subject to the agreement of both parties. The convertible loan will bear interest at an annual rate of eight
percent (8%) with a maturity date of June 25, 2021 (the “Power-Up Maturity Date”). The loan will be convertible after
six months into shares of the Company’s common stock at a conversion price equal to seventy-five percent (75%) of the average
of the lowest trading price for the Company’s common stock during the twenty (20) trading day period prior to the conversion
date.

 

		3.	Power-Up has a pre-emptive right pursuant to Section 4(h)
of the Power-Up SPA with respect to any equity (or debt with an equity component) financing in an amount less than $150,000 (“Future
Offering(s)”) during the period beginning on the Power-Up Closing Date and ending nine (9) months following the Power-Up
Closing Date.

 

Schedule
4(n) – No Disagreements with Accountants and Lawyers

 

		1.	The Company owes SRK Law USD $15,000.

		2.	The Company owes $6,000 to its independent auditor, Ilanit
Halperin

 

Schedule
4(dd) – Tax Status 

 

The Company was late in filing its tax returns for
the years ending July 31, 2017 and July 31, 2018.

 

Schedule
4 (ii) – Registration Rights 

 

Pursuant to Section 5(z) of the YAII SPA, YAII PN,
Ltd. has a Piggyback registration right.

 

     

     

    

 

EXHIBIT A

 

     

     

    

  

EXHIBIT B

 

     

     

    

 

EXHIBIT C

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