Document:

Exhibit 10.1

 

SECURITIES
PURCHASE AGREEMENT

 

This Securities Purchase
Agreement (this “Agreement”) is dated as of March 31, 2020, between Phio Pharmaceuticals Corp., a Delaware corporation
(the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors
and assigns, a “Purchaser” and collectively the “Purchasers”).

 

WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant to (i) an effective registration statement under the Securities
Act of 1933, as amended (the “Securities Act”) as to the Shares and (ii) an exemption from the registration
requirements of Section 5 of the Securities Act contained in Section 4(a)(2) thereof and/or Regulation D thereunder as to the Warrants,
the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from
the Company, securities of the Company as more fully described in this Agreement.

 

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

 

ARTICLE I.

DEFINITIONS

 

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

 

“Acquiring Person”
shall have the meaning ascribed to such term in Section 4.5.

 

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

 

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

 

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

 

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

 

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

 

“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable
parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii)
the Company’s obligations to deliver the Securities, in each case, have been satisfied or waived, but in no event later than
the second (2nd) Trading Day following the date hereof.

 

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

 

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

 

 

 

    	 	1	 

     

    

 

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

 

“Company
Counsel” means Gibson, Dunn & Crutcher LLP, with offices located at 555 Mission Street, Suite 3000, San Francisco,
CA 94105.

 

“Disclosure
Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.

 

“Disclosure
Time” means, (i) if this Agreement is signed on a day that is not a Trading Day or after 9:00 a.m. (New York City time)
and before midnight (New York City time) on any Trading Day, 9:01 a.m. (New York City time) on the Trading Day immediately following
the date hereof, unless otherwise instructed as to an earlier time by the Placement Agent, and (ii) if this Agreement is signed
between midnight (New York City time) and 9:00 a.m. (New York City time) on any Trading Day, no later than 9:01 a.m. (New York
City time) on the date hereof, unless otherwise instructed as to an earlier time by the Placement Agent.

 

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

 

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

 

“Exempt
Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Company
pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors
or a majority of the members of a committee of non-employee directors established for such purpose for services rendered to the
Company, (b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder and/or other securities
exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement,
provided that such securities have not been amended since the date of this Agreement to increase the number of such securities
or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection with stock splits
or combinations) or to extend the term of such securities, and (c) securities issued pursuant to acquisitions or strategic transactions
approved by a majority of the disinterested directors of the Company, provided that such securities are issued as “restricted
securities” (as defined in Rule 144) and carry no registration rights that require or permit the filing of any registration
statement in connection therewith during the prohibition period in Section 4.12(a) herein, and provided that any such issuance
shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating company
or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional
benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities
primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.

 

“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.

 

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

 

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

 

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

 

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

 

 

 

 

    	 	2	 

     

    

 

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

 

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

 

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

 

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

 

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

 

“Per
Share Purchase Price” equals $2.335, subject to adjustment for reverse and forward stock splits, stock dividends, stock
combinations and other similar transactions of the Common Stock that occur after the date of this Agreement and prior to the Closing
Date.

 

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

 

“Pharmaceutical
Product” shall have the meaning ascribed to such term in Section 3.1(hh).

 

“Placement
Agent” means H.C. Wainwright & Co., LLC.

 

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

 

“Prospectus”
means the final base prospectus filed for the Registration Statement.

 

“Prospectus
Supplement” means the supplement to the Prospectus complying with Rule 424(b) of the Securities Act that is filed with
the Commission and delivered by the Company to each Purchaser at the Closing.

 

“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.8.

 

“Registration
Statement” means the effective registration statement with Commission file No. 333-224031 which registers the sale of
the Shares to the Purchasers.

 

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

 

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

 

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

 

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

 

 

 

 

    	 	3	 

     

    

 

“Securities”
means the Shares, the Warrants and the Warrant Shares.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Transfer
Agent” means Computershare Trust Company, N.A., the current transfer agent of the Company, with a mailing address of
150 Royall Street, Canton, MA 02021, and any successor transfer agent of the Company.

 

“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.12(b).

 

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

 

 

 

 

    	 	4	 

     

    

 

“Warrants”
means, collectively, the Common Stock purchase warrants delivered to the Purchasers at the Closing in accordance with Section 2.2(a)
hereof, which Warrants shall be exercisable immediately upon issuance and have a term of exercise equal to five and one-half (5.5)
years, in the form of Exhibit A attached hereto.

 

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

 

ARTICLE II.

PURCHASE AND SALE

 

2.1             
Closing. On the Closing Date, upon the terms and subject to the conditions set forth
herein, the Company agrees to sell, and the Purchasers, severally and not jointly, agree to purchase, up to an aggregate of approximately
$4.0 million of Shares and Warrants. Each Purchaser’s Subscription Amount as set forth on the signature page hereto executed
by such Purchaser shall be made available for “Delivery Versus Payment” settlement with the Company or its designees.
The Company shall deliver to each Purchaser its respective Shares and a Warrant as determined pursuant to Section 2.2(a), and the
Company and each Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Closing. Upon satisfaction
of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of the Placement Agent
or such other location as the parties shall mutually agree. Unless otherwise directed by the Placement Agent, settlement of the
Shares shall occur via “Delivery Versus Payment” (“DVP”) (i.e., on the Closing Date, the Company
shall issue the Shares registered in the Purchasers’ names and addresses and released by the Transfer Agent directly to the
account(s) at the Placement Agent identified by each Purchaser; upon receipt of such Shares, the Placement Agent shall promptly
electronically deliver such Shares to the applicable Purchaser, and payment therefor shall be made by the Placement Agent (or its
clearing firm) by wire transfer to the Company). Notwithstanding anything to the contrary herein and the Purchaser’s Subscription
Amount set forth on the signature pages attached hereto, the number of Shares purchased by a Purchaser (and its Affiliates) hereunder
shall not, when aggregated with all other Shares owned by such Purchaser (and its Affiliates) at such time, result in such Purchaser
beneficially owning (as determined in accordance with Section 13(d) of the Exchange Act) in excess of 9.9% of the then issued and
outstanding Shares outstanding at the Closing (the “Beneficial Ownership Maximum”), and such Purchaser’s Subscription
Amount, to the extent it would otherwise exceed the Beneficial Ownership Maximum immediately prior to the Closing, shall be conditioned
upon the issuance of Shares at the Closing to the other Purchasers signatory hereto. To the extent that a Purchaser’s beneficial
ownership of the Shares would otherwise be deemed to exceed the Beneficial Ownership Maximum, such Purchasers’ Subscription
Amount shall automatically be reduced as necessary in order to comply with this paragraph.

 

2.2             
Deliveries.

 

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

 

(i)               
this Agreement duly executed by the Company;

 

(ii)              
a legal opinion of Company Counsel, in a form reasonably acceptable to the Placement Agent
and Purchasers; 

 

(iii)            
the Company shall have provided each Purchaser with the Company’s wire instructions,
on Company letterhead and executed by the Chief Executive Officer or Chief Financial Officer;

 

 

 

 

    	 	5	 

     

    

 

(iv)            
subject to the last sentence of Section 2.1, a copy of the irrevocable instructions to the
Transfer Agent instructing the Transfer Agent to deliver on an expedited basis via The Depository Trust Company Deposit or Withdrawal
at Custodian system (“DWAC”) Shares equal to such Purchaser’s Subscription Amount divided by the Per Share
Purchase Price, registered in the name of such Purchaser;

 

(v)              
a Warrant registered in the name of such Purchaser to purchase up to a number of shares of
Common Stock equal to 100% of such Purchaser’s Shares, with an exercise price equal to $2.21, subject to adjustment therein;
and

 

(vi)            
the Prospectus and Prospectus Supplement (which may be delivered in accordance with Rule 172
under the Securities Act).

 

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

 

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

 

(ii)              
such Purchaser’s Subscription Amount, which shall be made available for “Delivery
Versus Payment” settlement with the Company or its designees.

 

2.3             
Closing Conditions.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

 

 

    	 	6	 

     

    

 

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

 

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

 

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

 

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

 

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

 

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

 

(b)              
Organization and Qualification. The Company and each of the Subsidiaries is an entity
duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation
or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as
currently conducted. Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective
certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries
is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in
which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure
to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material
adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results
of operations, assets, business, prospects 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.

 

 

 

 

    	 	7	 

     

    

 

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

 

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

 

(e)               
Filings, Consents and Approvals. The Company is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state,
local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company
of the Transaction Documents, other than: (i) the filings required pursuant to Section 4.4 of this Agreement, (ii) the filing with
the Commission of the Prospectus Supplement, (iii) application(s) to each applicable Trading Market for the listing of the Shares
and Warrant Shares for trading thereon in the time and manner required thereby, (iv) the filing of Form D with the Commission and
(v) such filings as are required to be made under applicable state securities laws (collectively, the “Required Approvals”).

 

 

 

 

    	 	8	 

     

    

 

(f)               
Issuance of the Securities; Registration. The Securities are duly authorized and, when
issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable,
free and clear of all Liens imposed by the Company. The Warrant Shares, when issued in accordance with the terms of the Warrants,
will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Company has reserved
from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement and the
Warrants. The Company has prepared and filed the Registration Statement in conformity with the requirements of the Securities Act,
which became effective on April 6, 2018 (the “Effective Date”), including the Prospectus, and such amendments
and supplements thereto as may have been required to the date of this Agreement. The Company was at the time of the filing of the
Registration Statement eligible to use Form S-3. The Company is eligible to use Form S-3 under the Securities Act and it meets
the transaction requirements with respect to the aggregate market value of securities being sold pursuant to this offering and
during the twelve (12) calendar months prior to this offering, as set forth in General Instruction I.B.6 of Form S-3. The Registration
Statement is effective under the Securities Act and no stop order preventing or suspending the effectiveness of the Registration
Statement or suspending or preventing the use of the Prospectus has been issued by the Commission and no proceedings for that purpose
have been instituted or, to the knowledge of the Company, are threatened by the Commission. The Company, if required by the rules
and regulations of the Commission, shall file the Prospectus Supplement with the Commission pursuant to Rule 424(b). At the time
the Registration Statement and any amendments thereto became effective, at the date of this Agreement and at the Closing Date,
the Registration Statement and any amendments thereto conformed and will conform in all material respects to the requirements of
the Securities Act and did not and will not contain any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not misleading; and the Prospectus and any amendments
or supplements thereto, at the time the Prospectus or any amendment or supplement thereto was issued and at the Closing Date, conformed
and will conform in all material respects to the requirements of the Securities Act and did not and will not contain an untrue
statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.

 

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

 

 

 

 

    	 	9	 

     

    

 

(h)              
SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms,
statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant
to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required
by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated
by reference therein, together with the Prospectus and the Prospectus Supplement, being collectively referred to herein as the
“SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any
such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material
respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Company
has never been an issuer subject to Rule 144(i) under the Securities Act. The financial statements of the Company included in the
SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission
with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United
States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company
and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods
then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

 

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

 

 

 

 

    	 	10	 

     

    

 

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

 

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

 

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

 

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

 

 

 

 

    	 	11	 

     

    

 

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

 

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

 

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

 

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

 

 

 

 

    	 	12	 

     

    

 

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

 

(s)               
Sarbanes-Oxley; Internal Accounting Controls. The Company and the Subsidiaries are
in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof,
and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof
and as of the Closing Date. The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide
reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization,
and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. The Company and the Subsidiaries have established disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls
and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the
Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules
and forms. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of
the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange
Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under
the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based
on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over
financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected,
or is reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.

 

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

 

 

 

 

    	 	13	 

     

    

 

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

 

(v)              
Registration Rights. No Person has any right to cause the Company or any Subsidiary
to effect the registration under the Securities Act of any securities of the Company or any Subsidiary.

 

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

 

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

 

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

 

 

 

 

    	 	14	 

     

    

 

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

 

(aa)           
Solvency. Based on the consolidated financial condition of the Company as of the Closing
Date, after giving effect to the receipt by the Company of the proceeds from the sale of the Securities hereunder, (i) the fair
saleable value of the Company’s assets exceeds the amount that will be required to be paid on or in respect of the Company’s
existing debts and other liabilities (including known contingent liabilities) as they mature, (ii) the Company’s assets do
not constitute unreasonably small capital to carry on its business as now conducted and as proposed to be conducted including its
capital needs taking into account the particular capital requirements of the business conducted by the Company, consolidated and
projected capital requirements and capital availability thereof, and (iii) the current cash flow of the Company, together with
the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses
of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid.
The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing
and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances which
lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction
within one year from the Closing Date. Schedule 3.1(aa) sets forth as of the date hereof all outstanding secured and unsecured
Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of
this Agreement, “Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess of $50,000
(other than trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent
obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated
balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business; and (z) the present value of any lease payments in excess of $50,000 due under
leases required to be capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is in default with respect to
any Indebtedness.

 

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

 

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

 

 

 

 

    	 	15	 

     

    

 

(dd)         
Accountants. The Company’s independent registered public accounting firm is BDO
USA, LLP. To the knowledge and belief of the Company, such accounting firm (i) is a registered public accounting firm as required
by the Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s
Annual Report for the fiscal year ended December 31, 2019.

 

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

 

(ff)            
Acknowledgment Regarding Purchaser’s Trading Activity. Anything in this Agreement
or elsewhere herein to the contrary notwithstanding (except for Sections 3.2(e) and 4.14 hereof), it is understood and acknowledged
by the Company that: (i) none of the Purchasers has been asked by the Company to agree, nor has any Purchaser agreed, to desist
from purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based on securities
issued by the Company or to hold the Securities for any specified term; (ii) past or future open market or other transactions
by any Purchaser, specifically including, without limitation, Short Sales or “derivative” transactions, before or
after the closing of this or future private placement transactions, may negatively impact the market price of the Company’s
publicly-traded securities; (iii) any Purchaser, and counter-parties in “derivative” transactions to which any such
Purchaser is a party, directly or indirectly, presently may have a “short” position in the Common Stock, and (iv)
each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative”
transaction. The Company further understands and acknowledges that (y) one or more Purchasers may engage in hedging activities
at various times during the period that the Securities are outstanding, including, without limitation, during the periods that
the value of the Warrant Shares deliverable with respect to Securities are being determined, and (z) such hedging activities (if
any) could reduce the value of the existing stockholders' equity interests in the Company at and after the time that the hedging
activities are being conducted.  The Company acknowledges that such aforementioned hedging activities do not constitute a
breach of any of the Transaction Documents.

 

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

 

 

 

 

    	 	16	 

     

    

 

(hh)          
FDA. As to each product subject to the jurisdiction of the U.S. Food and Drug Administration
(“FDA”) under the Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”)
that is manufactured, packaged, labeled, tested, distributed, sold, and/or marketed by the Company or any of its Subsidiaries (each
such product, a “Pharmaceutical Product”), such Pharmaceutical Product is being manufactured, packaged, labeled,
tested, distributed, sold and/or marketed by the Company in compliance with all applicable requirements under FDCA and similar
laws, rules and regulations relating to registration, investigational use, premarket clearance, licensure, or application approval,
good manufacturing practices, good laboratory practices, good clinical practices, product listing, quotas, labeling, advertising,
record keeping and filing of reports, except where the failure to be in compliance would not have a Material Adverse Effect. There
is no pending, completed or, to the Company's knowledge, threatened, action (including any lawsuit, arbitration, or legal or administrative
or regulatory proceeding, charge, complaint, or investigation) against the Company or any of its Subsidiaries, and none of the
Company or any of its Subsidiaries has received any notice, warning letter or other communication from the FDA or any other governmental
entity, which (i) contests the premarket clearance, licensure, registration, or approval of, the uses of, the distribution of,
the manufacturing or packaging of, the testing of, the sale of, or the labeling and promotion of any Pharmaceutical Product, (ii)
withdraws its approval of, requests the recall, suspension, or seizure of, or withdraws or orders the withdrawal of advertising
or sales promotional materials relating to, any Pharmaceutical Product, (iii) imposes a clinical hold on any clinical investigation
by the Company or any of its Subsidiaries, (iv) enjoins production at any facility of the Company or any of its Subsidiaries, (v)
enters or proposes to enter into a consent decree of permanent injunction with the Company or any of its Subsidiaries, or (vi)
otherwise alleges any violation of any laws, rules or regulations by the Company or any of its Subsidiaries, and which, either
individually or in the aggregate, would have a Material Adverse Effect. The properties, business and operations of the Company
have been and are being conducted in all material respects in accordance with all applicable laws, rules and regulations of the
FDA.  The Company has not been informed by the FDA that the FDA will prohibit the marketing, sale, license or use in the United
States of any product proposed to be developed, produced or marketed by the Company nor has the FDA expressed any concern as to
approving or clearing for marketing any product being developed or proposed to be developed by the Company.

 

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

 

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

 

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

 

 

 

 

    	 	17	 

     

    

 

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

 

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

 

(nn)          
Private Placement. Assuming the accuracy of the Purchasers’ representations and
warranties set forth in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Warrants
or the Warrant Shares by the Company to the Purchasers as contemplated hereby.

 

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

 

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

 

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

 

(rr)            Notice
of Disqualification Events. The Company will notify the Purchasers in writing, prior to the Closing Date of (i) any Disqualification
Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, reasonably be expected to
become a Disqualification Event relating to any Issuer Covered Person, in each case of which it is aware.

 

 

 

 

    	 	18	 

     

    

 

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

 

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

 

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

 

(c)               
Purchaser Status. At the time such Purchaser was offered the Securities, it was, and
as of the date hereof it is, and on each date on which it exercises any Warrants, it will be either: (i) an “accredited investor”
as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional
buyer” as defined in Rule 144A(a) under the Securities Act. 

 

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

 

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

 

 

 

 

    	 	19	 

     

    

 

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

 

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

 

The Company acknowledges
and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such Purchaser’s right
to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties
contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this
Agreement or the consummation of the transactions contemplated hereby. Notwithstanding the foregoing, for the avoidance of doubt,
nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to locating or borrowing
shares in order to effect Short Sales or similar transactions in the future.

 

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

 

4.1             
Removal of Legends.

 

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

 

 

 

 

    	 	20	 

     

    

 

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

 

NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAS BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND
THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED
BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a)
UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

(c)               
The Company acknowledges and agrees that a Purchaser may from time to time pledge pursuant
to a bona fide margin agreement with a registered broker-dealer or grant a security interest in some or all of the Warrants or
Warrant Shares to a financial institution that is an “accredited investor” as defined in Rule 501(a) under the Securities
Act and, if required under the terms of such arrangement, such Purchaser may transfer pledged or secured Warrants or Warrant Shares
to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company and no legal opinion
of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice shall be
required of such pledge. At the appropriate Purchaser’s expense, the Company will execute and deliver such reasonable documentation
as a pledgee or secured party of Warrants and Warrant Shares may reasonably request in connection with a pledge or transfer of
the Warrants or Warrant Shares.

 

(d)              
Certificates evidencing the Warrant Shares shall not contain any legend (including the legend
set forth in Section 4.1(b) hereof): (i) while a registration statement covering the resale of such security is effective under
the Securities Act, or (ii) following any sale of such Warrant Shares pursuant to Rule 144 (assuming cashless exercise of the Warrants),
or (iii) if such Warrant Shares are eligible for sale under Rule 144 (assuming cashless exercise of the Warrants), or (iv) if such
legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements
issued by the staff of the Commission). The Company shall cause its counsel to issue a legal opinion to the Transfer Agent or the
Purchaser promptly if required by the Transfer Agent to effect the removal of the legend hereunder, or if requested by a Purchaser,
respectively. If all or any portion of a Warrant is exercised at a time when there is an effective registration statement to cover
the resale of the Warrant Shares, or if such Warrant Shares may be sold under Rule 144 (assuming cashless exercise of the Warrants)
or if such legend is not otherwise required under applicable requirements of the Securities Act (including judicial interpretations
and pronouncements issued by the staff of the Commission) then such Warrant Shares shall be issued free of all legends. The Company
agrees that following such time as such legend is no longer required under this Section 4.1(c), the Company will, no later than
the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined
below) following the delivery by a Purchaser to the Company or the Transfer Agent of a certificate representing Warrant Shares,
as applicable, issued with a restrictive legend (such date, the “Legend Removal Date”), deliver or cause to
be delivered to such Purchaser a certificate representing such shares that is free from all restrictive and other legends. The
Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer
set forth in this Section 4. Warrant Shares subject to legend removal hereunder shall be transmitted by the Transfer Agent to the
Purchaser by crediting the account of the Purchaser’s prime broker with the Depository Trust Company System as directed by
such Purchaser. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number
of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery
of a certificate representing Warrant Shares issued with a restrictive legend.

 

 

 

 

    	 	21	 

     

    

 

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

 

(f)               
The Shares shall be issued free of legends.

 

4.2             
Furnishing of Information. 

 

(a)               
Until the earlier of the time that (i) no Purchaser owns Securities and (ii) the Warrants
have expired, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace
period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company
is not then subject to the reporting requirements of the Exchange Act. 

 

(b)              
At any time during the period commencing from the six (6) month anniversary of the date hereof
and ending at such time that all of the Warrant Shares (assuming cashless exercise) may be sold without the requirement for the
Company to be in compliance with Rule 144(c)(1) and otherwise without restriction or limitation pursuant to Rule 144, if the Company
(i) shall fail for any reason to satisfy the current public information requirement under Rule 144(c) or (ii) has ever been an
issuer described in Rule 144(i)(1)(i) or becomes an issuer in the future, and the Company shall fail to satisfy any condition set
forth in Rule 144(i)(2) (a “Public Information Failure”) then, in addition to such Purchaser’s other available
remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated damages and not as a penalty, by reason of any such
delay in or reduction of its ability to sell the Warrant Shares, an amount in cash equal to two percent (2.0%) of the aggregate
Exercise Price of such Purchaser’s Warrants on the day of a Public Information Failure and on every thirtieth (30th) day
(pro rated for periods totaling less than thirty days) thereafter until the earlier of (a) the date such Public Information Failure
is cured and (b) such time that such public information is no longer required for the Purchasers to transfer the Warrant Shares
pursuant to Rule 144. The payments to which a Purchaser shall be entitled pursuant to this Section 4.2(b) are referred to herein
as “Public Information Failure Payments.” Public Information Failure Payments shall be paid on the earlier of (i) the
last day of the calendar month during which such Public Information Failure Payments are incurred and (ii) the third (3rd) Business
Day after the event or failure giving rise to the Public Information Failure Payments is cured. In the event the Company fails
to make Public Information Failure Payments in a timely manner, such Public Information Failure Payments shall bear interest at
the rate of 1.5% per month (prorated for partial months) until paid in full. Nothing herein shall limit such Purchaser’s
right to pursue actual damages for the Public Information Failure, and such Purchaser shall have the right to pursue all remedies
available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.

 

4.3             
 Integration.
The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined
in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require
the registration under the Securities Act of the sale of the Warrants or Warrant Shares or that would be integrated with the offer
or sale of the Securities for purposes of the rules and regulations of any Trading Market such that it would require shareholder
approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent
transaction.

 

 

 

    	 	22	 

     

    

 

4.4             
Securities Laws Disclosure; Publicity. The Company shall (a) by the Disclosure Time,
issue a press release disclosing the material terms of the transactions contemplated hereby, and (b) file a Current Report on Form
8-K, including the Transaction Documents as exhibits thereto, with the Commission within the time required by the Exchange Act.
From and after the issuance of such press release, the Company represents to the Purchasers that it shall have publicly disclosed
all material, non-public information delivered to any of the Purchasers by the Company or any of its Subsidiaries, or any of their
respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents.
In addition, effective upon the issuance of such press release, the Company acknowledges and agrees that any and all confidentiality
or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their
respective officers, directors, agents, employees or Affiliates on the one hand, and any of the Purchasers or any of their Affiliates
on the other hand, shall terminate. The Company and each Purchaser shall consult with each other in issuing any other press releases
with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release
nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release of any
Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the Company, which consent shall
not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall
promptly provide the other party with prior notice of such public statement or communication. Notwithstanding the foregoing, the
Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission
or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except (a) as required by federal
securities law in connection with the filing of final Transaction Documents with the Commission and (b) to the extent such disclosure
is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers with prior notice of such
disclosure permitted under this clause (b).

 

4.5             
Shareholder Rights Plan. No claim will be made or enforced by the Company or, with
the consent of the Company, any other Person, that any Purchaser is an “Acquiring Person” under any control
share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover
plan or arrangement in effect or hereafter adopted by the Company, or that any Purchaser could be deemed to trigger the provisions
of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents or under any other agreement
between the Company and the Purchasers.

 

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

 

 

 

 

    	 	23	 

     

    

 

4.7             
Use of Proceeds. Except as set forth on Schedule 4.7 attached hereto, the Company
shall use the net proceeds from the sale of the Securities hereunder for working capital purposes and shall not use such proceeds:
(a) for the satisfaction of any portion of the Company’s debt (other than payment of trade payables in the ordinary course
of the Company’s business and prior practices), (b) for the redemption of any Common Stock or Common Stock Equivalents, (c)
for the settlement of any outstanding litigation or (d) in violation of FCPA or OFAC regulations.

 

4.8             
Indemnification of Purchasers. Subject to the provisions of this Section 4.8, the Company
will indemnify and hold each Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and
any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any
other title), each Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of
the Exchange Act), and the directors, officers, shareholders, agents, members, partners or employees (and any other Persons with
a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such
controlling persons (each, a “Purchaser Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable
attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of or relating to
(a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the
other Transaction Documents or (b) any action instituted against the Purchaser Parties in any capacity, or any of them or their
respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser Party, with respect to any of
the transactions contemplated by the Transaction Documents (unless such action is solely based upon a material breach of such Purchaser
Party’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings such
Purchaser Party may have with any such stockholder or any violations by such Purchaser Party of state or federal securities laws
or any conduct by such Purchaser Party which is finally judicially determined to constitute fraud, gross negligence or willful
misconduct), or (c) in connection with any registration statement of the Company providing for the resale by the Purchasers of
the Warrant Shares issued and issuable upon exercise of the Warrants, the Company will indemnify each Purchaser Party, to the fullest
extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without
limitation, reasonable attorneys’ fees) and expenses, as incurred, arising out of or relating to (i) any untrue or alleged
untrue statement of a material fact contained in such registration statement, any prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission
of a material fact required to be stated therein or necessary to make the statements therein (in the case of any prospectus or
supplement thereto, in the light of the circumstances under which they were made) not misleading, except to the extent, but only
to the extent, that such untrue statements or omissions are based solely upon information regarding such Purchaser Party furnished
in writing to the Company by such Purchaser Party expressly for use therein, or (ii) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act or any state securities law, or any rule or regulation thereunder in connection
therewith. If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this
Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the
defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the
right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Purchaser Party except to the extent that (x) the employment thereof has been specifically authorized
by the Company in writing, (y) the Company has failed after a reasonable period of time to assume such defense and to employ counsel
or (z) in such action there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position
of the Company and the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees
and expenses of no more than one such separate counsel. The Company will not be liable to any Purchaser Party under this Agreement
(1) for any settlement by a Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably
withheld or delayed; or (2) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any
Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party
in this Agreement or in the other Transaction Documents. The indemnification required by this Section 4.8 shall be made by periodic
payments of the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred.
The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against
the Company or others and any liabilities the Company may be subject to pursuant to law.

 

 

 

 

    	 	24	 

     

    

 

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

 

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

 

4.11           Reserved. 

 

4.12           Subsequent Equity Sales. 

 

(a)               
From the date hereof until forty-five (45) days after the Closing Date, neither the Company
nor any Subsidiary shall issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of
Common Stock or Common Stock Equivalents.

 

(b)              
From the date hereof until the nine (9) month anniversary of the Closing Date, the Company
shall be prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its Subsidiaries
of Common Stock or Common Stock Equivalents (or a combination of units thereof) involving a Variable Rate Transaction. “Variable
Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity securities that are
convertible into, exchangeable or exercisable for, or include the right to receive additional shares of Common Stock either (A)
at a conversion price, exercise price or exchange rate or other price that is based upon and/or varies with the trading prices
of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities, or (B)
with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of
such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business
of the Company or the market for the Common Stock or (ii) enters into, or effects a transaction under, any agreement, including,
but not limited to, an equity line of credit, whereby the Company may issue securities at a future determined price. Any Purchaser
shall be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy shall be in addition
to any right to collect damages.

 

(c)               
Notwithstanding the foregoing, this Section 4.12 shall not apply in respect of an Exempt Issuance,
except that no Variable Rate Transaction shall be an Exempt Issuance.

 

 

 

 

    	 	25	 

     

    

 

4.13         
Equal Treatment of Purchasers. No consideration (including any modification of this
Agreement) shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement
unless the same consideration is also offered to all of the parties to this Agreement. For clarification purposes, this provision
constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended
for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or
as a group with respect to the purchase, disposition or voting of Securities or otherwise. 

 

4.14         
Certain Transactions and Confidentiality. Each Purchaser, severally and not jointly
with the other Purchasers, covenants that neither it nor any Affiliate acting on its behalf or pursuant to any understanding with
it will execute any purchases or sales, including Short Sales of any of the Company’s securities during the period commencing
with the execution of this Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly
announced pursuant to the initial press release as described in Section 4.4.  Each
Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated
by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described in Section 4.4, such
Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information included in the
Disclosure Schedules.  Notwithstanding the foregoing, and notwithstanding anything contained
in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation,
warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that
the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described
in Section 4.4, (ii) no Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company
in accordance with applicable securities laws from and after the time that the transactions contemplated by this Agreement are
first publicly announced pursuant to the initial press release as described in Section 4.4 and (iii) no Purchaser shall have any
duty of confidentiality or duty not to trade in the securities of the Company to the Company or its Subsidiaries after the issuance
of the initial press release as described in Section 4.4.  Notwithstanding the foregoing, in the case of a Purchaser
that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s
assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing
other portions of such Purchaser’s assets, the covenant set forth above shall only apply with respect to the portion of assets
managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement.

 

4.15         
Capital Changes. Until the one year anniversary of the Closing Date, the Company shall
not undertake a reverse or forward stock split or reclassification of the Common Stock without the prior written consent of the
Purchasers holding a majority in interest of the Shares.

 

4.16         
Exercise Procedures. The form of Notice of Exercise included in the Warrants set forth
the totality of the procedures required of the Purchasers in order to exercise the Warrants. No additional legal opinion, other
information or instructions shall be required of the Purchasers to exercise their Warrants. Without limiting the preceding sentences,
no ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization)
of any Notice of Exercise form be required in order to exercise the Warrants. The Company shall honor exercises of the Warrants
and shall deliver Warrant Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents.

 

4.17         
Form D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to
the Warrant and Warrant Shares as required under Regulation D and to provide a copy thereof, promptly upon request of any Purchaser.
The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for,
or to qualify the Warrant and Warrant Shares for, sale to the Purchasers at the Closing under applicable securities or “Blue
Sky” laws of the states of the United States, and shall provide evidence of such actions promptly upon request of any Purchaser.

 

 

 

 

    	 	26	 

     

    

 

ARTICLE V.

MISCELLANEOUS

 

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

 

5.2             

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

 

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

 

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

 

5.5             
Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented
or amended except in a written instrument signed, in the case of an amendment, by the Company and Purchasers which purchased at
least 67% in interest of the Shares based on the initial Subscription Amounts hereunder or, in the case of a waiver, by the party
against whom enforcement of any such waived provision is sought, provided that if any amendment, modification or waiver disproportionately
and adversely impacts a Purchaser (or group of Purchasers), the consent of such disproportionately impacted Purchaser (or group
of Purchasers) shall also be required. No waiver of any default with respect to any provision, condition or requirement of this
Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any
manner impair the exercise of any such right. Any proposed amendment or waiver that disproportionately, materially and adversely
affects the rights and obligations of any Purchaser relative to the comparable rights and obligations of the other Purchasers shall
require the prior written consent of such adversely affected Purchaser. Any amendment effected in accordance with this Section
5.5 shall be binding upon each Purchaser and holder of Securities and the Company.

 

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

 

 

 

 

    	 	27	 

     

    

 

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

 

5.8             
No Third-Party Beneficiaries. The Placement Agent shall be the third party beneficiary
of the representations and warranties of the Company in Section 3.1 and the representations and warranties of the Purchasers in
Section 3.2. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns
and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in
Section 4.8 and this Section 5.8.

 

5.9             
Governing Law. All questions concerning the construction, validity, enforcement and
interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws
of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal Proceedings
concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction
Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members,
employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough
of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives,
and agrees not to assert in any Action or Proceeding, any claim that it is not personally subject to the jurisdiction of any such
court, that such Action or Proceeding is improper or is an inconvenient venue for such Proceeding. Each party hereby irrevocably
waives personal service of process and consents to process being served in any such Action or Proceeding by mailing a copy thereof
via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If
any party shall commence an Action or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the
obligations of the Company under Section 4.8, the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing
party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution
of such Action or Proceeding.

 

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

 

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

 

 

 

 

 

    	 	28	 

     

    

 

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

 

5.13         
Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained
in (and without limiting any similar provisions of) any of the other Transaction Documents, whenever any Purchaser exercises a
right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations
within the periods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon
written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions
and rights; provided, however, that in the case of a rescission of an exercise of a Warrant, the applicable Purchaser shall be
required to return any shares of Common Stock subject to any such rescinded exercise notice concurrently with the return to such
Purchaser of the aggregate exercise price paid to the Company for such shares and the restoration of such Purchaser’s right
to acquire such shares pursuant to such Purchaser’s Warrant (including, issuance of a replacement warrant certificate evidencing
such restored right).

 

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

 

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

 

5.16         
Payment Set Aside. To the extent that the Company makes a payment or payments to any
Purchaser pursuant to any Transaction Document or a Purchaser enforces or exercises its rights thereunder, and such payment or
payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent
or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, state or federal law,
common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement
or setoff had not occurred.

 

 

 

 

    	 	29	 

     

    

 

5.17         
Independent Nature of Purchasers’ Obligations and Rights. The obligations of
each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser
shall be responsible in any way for the performance or non-performance of the obligations of any other Purchaser under any Transaction
Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Purchaser pursuant hereto or
thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity,
or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or
the transactions contemplated by the Transaction Documents. Each Purchaser shall be entitled to independently protect and enforce
its rights including, without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and
it shall not be necessary for any other Purchaser to be joined as an additional party in any Proceeding for such purpose. Each
Purchaser has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents. For
reasons of administrative convenience only, each Purchaser and its respective counsel have chosen to communicate with the Company
through the legal counsel of the Placement Agent. The legal counsel of the Placement Agent does not represent any of the Purchasers
and only represents the Placement Agent. The Company has elected to provide all Purchasers with the same terms and Transaction
Documents for the convenience of the Company and not because it was required or requested to do so by any of the Purchasers. It
is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between
the Company and a Purchaser, solely, and not between the Company and the Purchasers collectively and not between and among the
Purchasers.

 

5.18         
Liquidated Damages. The Company’s obligations to pay any partial liquidated damages
or other amounts owing under the Transaction Documents is a continuing obligation of the Company and shall not terminate until
all unpaid partial liquidated damages and other amounts have been paid notwithstanding the fact that the instrument or security
pursuant to which such partial liquidated damages or other amounts are due and payable shall have been canceled.

 

5.19         
Saturdays, Sundays, Holidays, etc.If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken
or such right may be exercised on the next succeeding Business Day.

 

5.20         
Construction. The parties agree that each of them and/or their respective counsel have
reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect
that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction
Documents or any amendments thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction
Document shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar
transactions of the Common Stock that occur after the date of this Agreement.

 

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

 

(Signature Pages Follow)

 

 

 

    	 	30	 

     

    

 

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

 

	
        Phio Pharmaceuticals
        Corp. 

         
	Address for Notice:
	
        By:__________________________________________

        Name:

        Title:

         

         

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

        E-mail:

	
         

         

         

         
	 

 

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

 

 

 

    	 	31	 

     

    

 

[PURCHASER SIGNATURE PAGES TO PHIO SECURITIES
PURCHASE AGREEMENT]

 

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

 

Name of Purchaser: ________________________________________________________

 

Signature of Authorized Signatory of
Purchaser: _________________________________

 

Name of Authorized Signatory: _______________________________________________

 

Title of Authorized Signatory: ________________________________________________

 

Email Address of Authorized Signatory:_________________________________________

 

Facsimile Number of Authorized Signatory: ______________________________________

 

Address for Notice to Purchaser:

 

 

 

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

 

 

DWAC for Shares:

 

 

Subscription Amount: $_________________

 

Shares: _________________

 

Warrant Shares: __________________

 

EIN Number: ____________________

 

o
Notwithstanding anything contained in this Agreement to the contrary, by checking this box (i) the obligations of the above-signed
to purchase the securities set forth in this Agreement to be purchased from the Company by the above-signed, and the obligations
of the Company to sell such securities to the above-signed, shall be unconditional and all conditions to Closing shall be disregarded,
(ii) the Closing shall occur by the second (2nd) Trading Day following the date of this Agreement and (iii) any condition to Closing
contemplated by this Agreement (but prior to being disregarded by clause (i) above) that required delivery by the Company or the
above-signed of any agreement, instrument, certificate or the like or purchase price (as applicable) shall no longer be a condition
and shall instead be an unconditional obligation of the Company or the above-signed (as applicable) to deliver such agreement,
instrument, certificate or the like or purchase price (as applicable) to such other party on the Closing Date.

 

[SIGNATURE PAGES CONTINUE]

 

 

 

    	 	32	 

     

    

 

Disclosure Schedules

 

This Disclosure Schedule is made and given
pursuant to Article 3 of the Securities Purchase Agreement, dated as of March 31, 2020 (the “Agreement”), between
Phio Pharmaceuticals Corp., a Delaware corporation (the “Company”), and the Purchasers listed on the signature
pages thereto. All capitalized terms used but not defined herein shall have the meanings as defined in the Agreement, unless otherwise
provided. The section numbers below correspond to the section numbers of the representations and warranties in the Agreement. Nothing
in this Disclosure Schedules is intended to broaden the scope of any representation or warranty contained in the Agreement or to
create any covenant. Inclusion of any item in this Disclosure Schedules (1) does not represent a determination that such item is
material or establish a standard of materiality, (2) does not represent a determination that such item did not arise in the ordinary
course of business, (3) does not represent a determination that the transactions contemplated by the Agreement require the consent
of third parties, and (4) shall not constitute, or be deemed to be, an admission to any third party concerning such item. This
Disclosure Schedules includes brief descriptions or summaries of certain agreements and instruments, copies of which are available
upon reasonable request.

 

Schedule 3.1(a)

MirImmune, LLC

 

Schedule 3.1(g) 

Common outstanding: 2,867,851

Non-affiliate Common outstanding: 2,833,500

 

Schedule 3.1(i)

None.

 

Schedule 3.1(r)

None

 

Schedule 3.1(v)

Registration Rights Agreement, dated August 8, 2017, by and
between the Company and Lincoln Park Capital Fund, LLC.

Registration Rights Agreement, dated August 7, 2019, by and
between the Company and Lincoln Park Capital Fund, LLC.

 

Schedule 3.1(aa)

None.

 

Schedule 4.7

Not applicable. The Company will be using the proceeds for working
capital purposes.

 

 

 

 

 

 

    	 	33tsamermaidexecutionversi

                                                                                                                                                              EXECUTION VERSION                                     DATED                                 2018                                  MERMAID INTERNATIONAL VENTURES                       MERMAID MARITIME PUBLIC COMPANY LIMITED                                      SEADRILL LIMITED                                              and                              ASIA OFFSHORE DRILLING LIMITED                          __________________________________________                            TRANSACTION SUPPORT AGREEMENT                      __________________________________________                                                                                                                  551054107 

 

                                                                                      CONTENTS                                                                                       Page   1.      Interpretation                                                                5   2.      Effectiveness of this Agreement                                              12   3.      New Seadrill Accession Notice                                                11   4.      RigCo Accession Notice                                                       12   5.      Mermaid Parent Undertaking                                                   13   6.      Chapter 11 Filing                                                            13   7.      Undertakings                                                                 13   8.      Put Option and Call Option                                                   16   9.      Valuation of Mermaid AOD Shares                                              19   10.     Amendments to terms                                                          20   11.     Releases                                                                     20   12.     Other rights                                                                 21   13.     Representations, Warranties and Covenants                                    21   14.     Information updates                                                          21   15.     Termination                                                                  22   16.     Remedies and Waivers                                                         22   17.     Entire Agreement                                                             22   18.     Notices                                                                      23   19.     Language                                                                     25   20.     Costs and Expenses                                                           25   21.     Execution of Agreement                                                       25   22.     Invalidity                                                                   25   23.     Permitted Disclosures                                                        25 

 

                                               24.     Third Parties and Assignment                                                 26   25.     Specific Performance                                                         26   26.     Governing law and Jurisdiction                                               26                                         SCHEDULES   Schedule 1 (Term Sheet)                                                              29   Schedule 2 (Put Option Notice and Call Option Notice)                                35   Schedule 3 (RSA)                                                                     37   Schedule 4 (Valuation Principles)                                                   592   Schedule 5 (Form of RigCo Accession Notice)                                         597   Schedule 6 (Form of New Seadrill Accession Notice)                                  598 

 

                                               THIS AGREEMENT is made on                                       2018   AMONG:    1.     MERMAID   INTERNATIONAL VENTURES,        a company incorporated under the laws of          the Cayman Islands, whose principal office is at Clifton House, 75 Fort Street, P.O. Box          1350, Grand Cayman KY1-1108, Cayman Islands (“Mermaid”);     2.     MERMAID  MARITIME  PUBLIC  COMPANY  LIMITED,        a  company  incorporated  under          the  laws  of  the  Kingdom  of  Thailand,  with  registered  number  0107550000017  and          whose principal office is at 26/28-29, Orakarn Building, 9th Floor, Soi Chidlom, Ploenchit          Road, Lumpinee, Pathumwan, Bangkok 10330, Thailand (“Mermaid Parent”);    3.     SEADRILL  LIMITED,  a  company  incorporated  under  the  laws  of  Bermuda,  with          organization number 36832 and whose principal office is at Par-la-Ville Place, 4th Floor,          14 Par-la-Ville Road, Hamilton, HM 08 Bermuda (“Seadrill Limited”); and    4.     ASIA  OFFSHORE  DRILLING  LIMITED,     a  company  incorporated  under  the  laws  of          Bermuda, with organization number 44712 and whose   principal office is at Par-la-Ville          Place, 4th Floor, 14 Par-la-Ville Road, Hamilton, HM 08 Bermuda (“AOD”),    each a “Party” and together the “Parties”.   BACKGROUND:   (A)     Seadrill  is  undertaking  a  restructuring  and  recapitalisation  in  respect  of  the  Seadrill          group’s capital structure, as contemplated in the RSA (defined below).   (B)     Seadrill, amongst others, is a party to the RSA.  It is anticipated that AOD will become a          party to the RSA on or around the date of this Agreement.   (C)     As  part  of  the restructuring,  it  is  anticipated that  certain  amendments  will  be made  in          relation to the US$360,000,000 senior secured credit facility agreement originally dated          9 April  2013  between,  amongst  others,  Asia  Offshore  Rig  1  Limited  (“AOD  1”),  Asia          Offshore  Rig  2  Limited  (“AOD  2”)  and Asia  Offshore  Rig  3  Limited  (“AOD  3)”  and          together  with  AOD  1  and  AOD  2,  the  “AOD  Subsidiaries”)  as  borrowers  and  ABN          AMRO  Bank  N.V.  as  agent,  as  summarised  in  the Term  Sheet and  the  RSA  Term          Sheets (as defined below).   (D)     It  is  anticipated  that  Seadrill  will transfer  its  shareholding  in  AOD  to  a  new  holding          company (“RigCo”), which will be a wholly-owned Subsidiary of an intermediate holding          company (“IHCo”). IHCo will be a wholly-owned Subsidiary of Seadrill.   (E)     It is also anticipated that certain amendments will need to be made to, amongst other          documents,  the AOD  Shareholders’ Agreement  (as  defined  below)  and  the AOD  Bye-         Laws  (as  defined  below)  in  order  to  implement  and  give  effect  to  the  transactions          contemplated in the Term Sheet. 

 

                                               THE PARTIES AGREE as follows:   1.      Interpretation   1.1     Terms  defined  in  the  RSA,  unless  otherwise  defined  herein  or  the  context  otherwise          requires,  shall  have  the  same meanings  when  used  in  this Agreement  (but  excluding          Schedule 1) and in addition:              “Additional Valuer”            has  the  meaning  given  to  it  in  Clause 1.5(C) of                                          Schedule 4.            “Affiliate”                    means, in relation to any person, a Subsidiary of that                                          person or a Holding Company of that person or any                                          other Subsidiary of that Holding Company.            “Approved Restructuring        means     (A)   the   restructuring   transactions           Transaction”                   contemplated  by  the  RSA  (which  at  the  time  of                                          signing  this  Agreement  have  the  requisite  levels  of                                          support  to  be  approved  by  the  United  States                                          Bankruptcy Court, which approval is expected to be                                          obtained at a hearing on or around 17 April 2018) or                                          (B) a restructuring transaction which is approved by                                          each of Seadrill, AOD (including the directors of AOD                                          appointed  by  Mermaid  and  the  directors  of  AOD                                          appointed by RigCo) and by Mermaid whether under                                          a  replacement  restructuring  support  and  lock-up                                          agreement or otherwise.            “AOD Bye-Laws”                 means the bye-laws of AOD originally adopted on 1                                          November 2010 and as subsequently amended from                                          time to time.            “AOD Facility Agreement”       means  the  US$360,000,000  senior  secured  credit                                          facility  agreement  originally  dated  9  April  2013                                          between,  amongst  others, the AOD  Subsidiaries as                                          borrowers,  AOD  and  Seadrill  as  guarantors, and                                          ABN AMRO Bank N.V. as agent.            “AOD Shareholders’             means  the  shareholders’  agreement  in  respect  of           Agreement”                     AOD  dated  8  March  2013  between  Seadrill  and                                          Mermaid.            “AOD Transactions”             means  the  transactions  contemplated  in  the  Term                                          Sheet.            “Arbitrator”                   means  a  sole  arbitrator  located  in  Singapore  to  be                                          appointed under the SIAC Rules.            “Authorisation”                means    any   authorisation,  consent,  approval,                                          resolution,  licence,  exemption,  filing,  notarisation  or 

 

                                                                     registration.   “Business Day”                 means  a day  that  is  not  a  Saturday, a Sunday  or a                                 national public holiday in Bangkok, London or Oslo.   “Calculated Share Price”       means the amount determined by multiplying (a) the                                 Fair Market Value by (b) a number, the numerator of                                 which equals the  number of shares in AOD held by                                 Mermaid  and  the  denominator  of  which  equals  the                                 total  number  of  shares  of  AOD  issued  and                                 outstanding.   “Call Option Period”           means,  subject  to  Clause  8.6,  the  six month period                                 commencing  on  1  October  2020 and  ending  on 31                                 March 2021.   “Cause of Action”              means  any  action,  Claim,  cause  of  action,                                 controversy, demand, right, action, charge against or                                 interest  in  property  to  secure  payment  of  a  debt  or                                 performance  of  an  obligation,  indemnity,  guaranty,                                 suit, obligation, liability, damage, judgment, account,                                 defense,  offset,  power,  privilege,  license,  and                                 franchise  of  any  kind  or  character  whatsoever,                                 whether    known,    unknown,     contingent   or                                 noncontingent, matured or unmatured, suspected or                                 unsuspected,  liquidated  or  unliquidated,  disputed  or                                 undisputed,  secured  or  unsecured,  assertable                                 directly or derivatively, in contract or in tort, in law or                                 in equity, or pursuant to any other theory of law.   “Ceiling Price”                means US$125,000,000.   “Chapter 11”                   means  title 11 of the United States Code, 11 U.S.C.                                 §§ 101–1532.    “Chapter 11 Cases”             means  the  procedurally  consolidated  Chapter  11                                 cases  pending  for Seadrill  and  certain  of  the                                 Subsidiaries  of  Seadrill in  the  United  States                                 Bankruptcy Court for the Southern District of Texas,                                 Victoria  Division  (or  such  other  court  having                                 jurisdiction  over  the  Chapter  11  Cases) pursuant  to                                 the Order (i) Directing Joint Administration of Chapter                                 11 Cases and (ii) Granting Related Relief Docket No.                                 40.    “Claim”                        means  (i)  a  right  to  payment,  whether  or  not  such                                 right is reduced to judgment, liquidated, unliquidated,                                 fixed,  contingent,  matured,  unmatured,  disputed,                                 undisputed,  legal,  equitable,  secured,  or  unsecured                                 and  calculated  together  with  all  applicable  accrued 

 

                                                                     interest, fees and commission due, owing or incurred                                 from  time  to  time  by  any  Party or  (ii)  a  right  to  an                                 equitable  remedy  for  breach of  performance if  such                                 breach  gives  rise  to  a  right  to  payment,  whether  or                                 not such right to an  equitable remedy  is reduced to                                 judgment,  fixed,  contingent,  matured,  unmatured,                                 disputed, undisputed, secured, or unsecured. For the                                 avoidance of doubt, the definition of Claim as defined                                 in this Agreement is no less broad than the definition                                 of claim as defined in section 101(5) of title 11 of the                                 United States Code.   “Completion”                   means a date, which shall be agreed between RigCo                                 and  Mermaid  (but  which  shall  be  no  later  than 15                                 calendar days after the Option Exercise Date) as the                                 date on which RigCo and Mermaid take each action                                 set  out  in  Clause  8.14  in  connection  with  the  sale                                 and purchase of the Mermaid AOD Shares.   “Contingent Liability”         means any contingent liability which is:                                  (A)    noted in AOD’s audited financial statements;                                        or                                  (B)    as determined by an Expert,                                  in  each  case  above, in  accordance  with  accounting                                 standards,  and  principally  in  accordance  with  ASC                                 450 of the U.S. GAAP and which is considered owed                                 to a third party pursuant to a valid court order or valid                                 legal  action  undertaken  or  made  by  that  third  party                                 and not owed to RigCo or Mermaid, or to any Affiliate                                 of  RigCo  or  Mermaid  or  to  the  shareholders  of  any                                 such Affiliate.   “Corporate Management          means  the  corporate  management  agreement  Agreement”                     originally entered into between AOD and Mermaid on                                 30 November 2010, and novated to different parties,                                 most  recently  to  the  AOD  Subsidiaries,  Seadrill                                 Management UK Ltd and Seadrill Management AME                                 Ltd,  and  as  amended  supplemented  or  restated  by                                 this Agreement or otherwise.    “Corporate Management          means the daily corporate management fee for day- Fees”                          to-day  corporate  management  of  AOD  and  its                                 Subsidiaries  as  further  described  in  Schedule  1  of                                 the Corporate Management Agreement. 

 

                                      “Encumbrance”                  means  any  mortgage,  charge,  pledge,  lien, option,                                 restriction,  right of  first  refusal,  right  of  pre-emption,                                 third  party  right  or  interest,  other  encumbrance  or                                 security  interest  of  any  kind,  and  any  other  type  of                                 preferential  arrangement    (including,  without                                 limitation,  title  transfer  and  retention  arrangements)                                 having a similar effect.   “Expert”                       means  the  Copenhagen  office  or  branch  of  one  of                                 the following accounting firms:                                   (A)    Deloitte Touche Tohmatsu Limited;                                   (B)    Ernst & Young;                                   (C)    PricewaterhouseCoopers; or                                   (D)    KPMG.   “Fair Market Value”            means:                                   (A)    the  value  agreed  between  the  Parties                                        pursuant to Clause 9.1; or                                  (B)    the  value  determined  by  the  Expert  in                                        accordance with the Valuation Principles.   “Floor Price”                  means US$75,000,000.   “Holding Company”              means a person from time to time which:                                  (A)    has  direct  or  indirect  control of  another                                        person; or                                  (B)    owns directly or indirectly more than fifty per                                        cent (50%) (votes and/or capital) of another                                        person.   “Mermaid AOD Shares”           means all the shares in AOD legally and beneficially                                 owned by Mermaid or a Subsidiary of Mermaid.   “New Seadrill”                 means a company to be incorporated under the laws                                 of Bermuda and whose principal office will be at Par-                                la-Ville  Place,  4th  Floor,  14  Par-la-Ville  Road,                                 Hamilton, HM 08 Bermuda.     “New Seadrill Accession        means the accession notice substantially in the form  Notice”                        as  set  out  in  Schedule 6 (Form  of New  Seadrill                                 Accession Notice) or any other form agreed between 

 

                                                                     the Parties.   “NYSE”                         means the New York Stock Exchange.   “Option Exercise Date”         means the date on which (as applicable) RigCo and                                 Seadrill  receive  an  Option  Notice  in  respect  of  the                                 Put Option or Mermaid receives an Option Notice in                                 respect of the Call Option.    “Option Notice”                means a notice in the form set out in Schedule 2 in                                 relation  to  the  exercise  of (as  applicable)  the  Put                                 Option or  the  Call  Option under the  terms  of  this                                 Agreement.   “OSE”                          means the Oslo Stock Exchange.   “Other Net Assets”             means  all  of AOD’s  assets  and  property  other  than                                 the  Rigs,  minus  all  liabilities  and  also taking  into                                 consideration Contingent Liabilities.    “Put Option Period”            means,  subject  to  Clause  8.4, the  12 month  period                                 commencing  on  1  October  2019  and  ending  on  30                                 September 2020.   “Restructuring Fees”           means the restructuring fees incurred by Seadrill and                                 members of the Seadrill group in connection with the                                 Restructuring Transactions, as defined in the RSA.   “Rig Management Fees”          means  the  daily  management  fee  per  rig  for  the                                 operation of each of the jack-up rigs AOD I, AOD II                                 and  AOD  III  as  set  out  in the  applicable  rig                                 management agreements pursuant to Clause 3.2 of                                 the Corporate Management Agreement.   “RigCo Accession Notice”       means the accession notice substantially in the form                                 as set out in Schedule 5 (Form of RigCo Accession                                 Notice)  or  any  other  form  agreed  between  the                                 Parties.   “Rigs”                         means  the  three  (3)  KFELS  Mod  V-B  Class  mobile                                 offshore drilling units owned and operated by AOD or                                 the AOD Subsidiaries, such Rigs being AOD I, AOD                                 II and AOD III respectively.   “Rigs Market Value”            means  the  value  of the  Rigs  as  determined  in                                 accordance with Schedule 4 (Valuation Principles).   “RSA”                          means  the  restructuring  support  and  lock-up                                 agreement  dated  12  September  2017  entered  into                                 between,  amongst  others,  Seadrill,  certain  of 

 

                                                                     Seadrill’s direct and indirect Subsidiaries and certain                                 of  Seadrill’s  stakeholders  in  substantially  the  same                                 form as set out in Schedule 3 (RSA).   “RSA Term Sheets”              means  the  term  sheets  set  out  at  Exhibit  A  to  the                                 RSA.   “Scheme of Arrangement”        means a creditor scheme of arrangement under:                                  (A)    Part  26  of  the  Companies Act  2006  (United                                        Kingdom);                                  (B)    Section  99  of  the  Companies  Act  1981                                        (Bermuda); or                                  (C)    the  Laws  of  any  other  relevant  jurisdiction,                                        as determined by the Parties,                                  with respect to the AOD Facility Agreement.   “Seadrill”                     means  Seadrill  Limited  until  the  Restructuring                                 Effective Date as defined in the RSA at which point                                 references to Seadrill shall mean New Seadrill.   “Seadrill Debtors”             means  Seadrill  and  the  Subsidiaries  of  Seadrill  in                                 respect  of  which  the  Chapter  11  Cases  were                                 commenced.   “SIAC Rules”                   means  the  Arbitration  Rules  of  the  Singapore                                 International Arbitration Centre in effect from time to                                 time.   “Subsidiary”                   means an entity from time to time of which a person:                                  (A)    has direct or indirect control; or                                  (B)    owns directly or indirectly more than fifty per                                        cent (50%) (votes and/or capital).   “Term Sheet”                   means the Term Sheet set out in Schedule 1  (Term                                 Sheet).   “Transaction Documents”        means  all  agreements  and  other  documents                                 necessary or desirable to implement or give effect to                                 the AOD Transactions.   “Valuation Notice”             means  a  notice  served  by  Mermaid  or  RigCo  (as                                 applicable),  requesting  a  valuation  of  the  Mermaid                                 AOD  Shares  in  accordance  with  Clause  9  and  the 

 

                                                                                       Valuation Principles.            “Valuation Principles”         means the valuation principles set out in Schedule 4                                          (Valuation Principles).            “Valuer”                       means either:                                            (A)    an  internationally recognised  independent                                                 valuation expert or appraiser with at least ten                                                 (10) years of experience in or relating to the                                                 offshore  drilling  rig  industry,  including                                                 experience  during  the  five  (5)  years                                                 immediately    preceding    a    proposed                                                 appointment  hereunder,  in  valuing  rigs                                                 similar  to  the  Rigs,  and who is  capable  of                                                 providing   a   professional  independent                                                 valuation in  respect  of the  Rigs  Market                                                 Value; or                                            (B)    a rig brokerage firm with industry-recognized                                                 key employees with at least ten (10) years of                                                 experience  in  or  relating  to  the  offshore                                                 drilling  rig  industry,  including  experience                                                 during  the  five  (5)  years  immediately                                                 preceding    a    proposed    appointment                                                 hereunder, in valuing rigs similar to the Rigs,                                                 and   which  is  capable  of  providing  a                                                 professional  independent    valuation  in                                                 respect of the Rigs Market Value; or                                           (C)    a  valuer  that  may  not  meet  the  aforesaid                                                 qualifications  but  is  mutually   agreed by                                                 Mermaid and RigCo.            “Valuer’s Report”              means the report issued by a Valuer setting out their                                          valuation of the Rigs in accordance with Schedule 4                                          (Valuation Principles).   1.2            In this Agreement, unless otherwise specified:           (A)    references to clauses and Schedules are to clauses of, and Schedules to, this                 Agreement;           (B)    in  the  appropriate  context,  each  term,  whether  stated  in  the  singular  or  the                 plural, shall include both the singular and the plural, and pronouns stated in the                 masculine, feminine or neuter gender shall include the masculine, feminine and                 the neuter gender;           (C)    capitalised  terms  defined  only  in  the  plural  or  singular  form  shall  nonetheless                 have their defined meanings when used in the opposite form; 

 

                                                       (D)    any  reference  to  a  contract  or  other  agreement  or  document  being  in  a                 particular form or on particular terms and conditions means that such document                 shall be substantially in such form or substantially on such terms and conditions;           (E)    a  reference  to  any  statute  or  statutory  provision  shall  be  construed  as  a                 reference  to  the  same  as  it  may  have  been,  or  may  from  time  to  time  be,                 amended, modified or re-enacted and shall include any subordinate legislation                 made from time to time under that statute or statutory provision;           (F)    any reference to a document shall mean such document as it may have been or                 may be amended, modified, supplemented and/or novated (other than in breach                 of the provisions of this Agreement) from time to time;           (G)    references to a “company” shall be construed so as to include any corporation                 or other body corporate, wherever and however incorporated or established;           (H)    references to a “person” shall be construed so as to include any individual, firm,                 company, corporation, body corporate, government, state or agency of a state,                 local  or  municipal  authority  or  government  body  or  any  joint  venture,                 association,  partnership  or  other  unincorporated  body  (whether  or  not  having                 separate legal personality);           (I)    the use of “include” or “including” is without limitation, whether stated or not;           (J)    all headings and titles are inserted for convenience only and do not affect the                 interpretation of this Agreement; and           (K)    the Schedules form part of this Agreement and any reference to this Agreement                 shall include the Schedules.   2.      Effectiveness of this Agreement           This Agreement  shall  become  effective  and  binding  upon  each  of  the Parties  on  and          from the date on which all Parties have duly executed this Agreement.   3.      New Seadrill Accession Notice    3.1     The  Parties  irrevocably  agree  that  New  Seadrill  shall  accede  to  this  Agreement  by          delivering the New Seadrill Accession Notice to Mermaid and AOD.   3.2     Seadrill undertakes to incorporate New Seadrill as soon as reasonably practicable and          procure that New Seadrill will deliver the New Seadrill Accession Notice to Mermaid and          AOD as soon as is reasonably practicable following New Seadrill’s incorporation.   4.      RigCo Accession Notice    4.1     The Parties irrevocably agree that RigCo shall accede to this Agreement by delivering          the RigCo Accession Notice to Mermaid and AOD. 

 

                                               4.2     Seadrill  undertakes  to  incorporate  RigCo  as  soon  as  reasonably  practicable  and          procure  that RigCo  will  deliver  the  RigCo Accession  Notice  to  Mermaid  and AOD  as          soon as is reasonably practicable following RigCo’s incorporation.   5.      Mermaid Parent Undertaking            Mermaid Parent undertakes to procure that Mermaid will fulfil its obligations under this          Agreement.   6.      Chapter 11 Filing   6.1     Subject to Clause 6.2, the Parties acknowledge and agree that it is the current intention          of  the  Parties  to  use  reasonable  efforts  to  avoid AOD  commencing  a  voluntary  case          under  Chapter  11.  If  (and  only  for  so  long  as)  each  lender (including  any  successor          thereof) under the AOD Facility supports an Approved Restructuring Transaction, AOD          shall  not  commence  a  voluntary  case  under  Chapter  11  or  any  other  insolvency          proceeding without the unanimous approval of the board of directors of AOD.   6.2     Clause 6.1 is not intended to limit the requirement for the directors of AOD to comply          with their fiduciary duties and to consider alternative options if facts and circumstances          change after this Agreement becomes effective.   7.      Undertakings   7.1     Each  of  Seadrill,  Mermaid,  Mermaid  Parent,  RigCo  and AOD  undertakes  that  it  shall,          and AOD undertakes to procure that its Subsidiaries shall:           (A)    without prejudice to Clause 7.1(B), take all actions and exercise all rights and                 powers available to it (including any rights or powers it has as a shareholder) in                 order  to  implement,  consummate  or  otherwise  give  effect  to  the  AOD                 Transactions and the Transaction Documents, including to support and take all                 commercially reasonable actions necessary or reasonably requested by Seadrill                 or AOD to give effect to a Scheme of Arrangement, provided that there are no                 changes to the Term Sheet or provisions in the Transaction Documents which                 are materially prejudicial to Seadrill, AOD, Mermaid or Mermaid Parent (as the                 case may be) or materially alter the economic substance and commercial terms                 of the AOD Transactions;            (B)    enter into amendments to the AOD Shareholders’ Agreement and the AOD Bye-                Laws which are necessary in order to:                  (i)     reflect  that  Seadrill’s  stake  in AOD  will  be  hived  down  to  a  newly                        incorporated indirect Subsidiary, RigCo (as set out in section 2 (Equity                        in AOD) of the Term Sheet);                  (ii)    implement and give effect to the contemplated rights of AOD to make,                        and the rights of the shareholders of AOD to receive, distributions as set                        out in section 3 (AOD Participation in Cross-Collateralisation and Cash                        Pooling) of the Term Sheet; 

 

                                              (iii)   implement and give effect to the contemplated rights and obligations of                AOD to make loans to the shareholders of AOD as set out in section 3                (AOD Participation in Cross-Collateralisation  and Cash Pooling)  of the                Term Sheet and to call for repayment of such loans on a pro rata basis                as set out in section 3 (AOD Participation in Cross-Collateralisation and                Cash Pooling) of the Term Sheet; and   (C)    implement and give effect to:          (i)     the obligations of each shareholder of AOD to repay any loan made by                AOD to it (as referred to in Clause 7.1(B)(iii) above and as set out in                section 3 (AOD Participation in Cross-Collateralisation and Cash                Pooling) of the Term Sheet); and          (ii)    implement and give effect to the contemplated rights and obligations of                each director of AOD appointed by Mermaid or by RigCo with regards to                consents  and  approvals  concerning  the  making  of  loans  to  Mermaid                and/or  to RigCo and/or  the borrowing  of  loan  amounts from  RigCo by                AOD or its Subsidiaries,          and  provided  that  Seadrill  and  Mermaid  shall  first  discuss  in  good  faith  the         precise  form  of  such  amendments  and  that  all  amendments  to  the  AOD         Shareholders’  Agreement  and  the  AOD  Bye-Laws  shall be  subject  to  the         express consent and approval of Seadrill and Mermaid;    (D)    take all actions and exercise all rights and powers available to it (including any         rights or powers it has as a shareholder) in order to make such amendments to:          (i)     bye-law 49 in the AOD Bye-Laws (a) to enable the AOD Transactions to                be  implemented,  consummated  and  carried  out  without  requiring  any                further  resolutions,  vote  or  approvals  (whether  of  the  directors  or                shareholders of AOD or otherwise) and (b) so that bye-law 49 applies                only where  the  relevant  actions,  transactions  or  arrangements  involve                AOD and/or its Subsidiaries; and          (ii)    bye-law 51 in the AOD Bye-Laws so that bye-law 51 does not apply to                loans  made  by  AOD  to  its  shareholders  or  to  any  of  the  AOD                Transactions,          and  provided  that  Seadrill  and  Mermaid  shall  first  discuss  in  good  faith  the         precise  form  of  such  amendments  and  that  all  amendments  to  the AOD  Bye-        Laws  shall  be  subject  to  the  express  consent  and  approval  of  Seadrill  and         Mermaid;   (E)    negotiate  in  good  faith  and  consult  with each  other Party,  any  relevant  third         party  and  their  respective  advisers  to  agree  and  finalise  the  Transaction         Documents  in  a  timely  manner  in  a  form  which  is  consistent  in  all  material         respects  with  the Term  Sheet  and  this Agreement  and  satisfactory  to  each  of         Seadrill, Mermaid and AOD (acting reasonably); and 

 

                                                       (F)    use commercially reasonable efforts to execute and deliver in a timely manner                 those Transaction Documents to which it will be a party,           in  each  case,  provided  that  such  action  is  consistent  in  all  material  respects  with  the          terms of this Agreement.   7.2     Each  of  Mermaid,  Seadrill  and AOD  agrees  that  it  shall  not,  and AOD undertakes  to          procure  that  its  Subsidiaries  shall  not,  object  to,  delay,  impede  or  prevent  the          implementation or consummation of the AOD Transactions, provided that:           (A)    AOD has entered into the RSA or the board of directors of AOD has approved                 the AOD Transactions; and           (B)    nothing in this Agreement shall limit the right of any Party to exercise any right                 or remedy provided under any Definitive Document (as defined in the RSA) or                 Transaction Document.   7.3     Except as required by the terms of this Agreement, Mermaid and Seadrill shall continue          to perform their respective obligations under the AOD Shareholders’ Agreement.   7.4     The  Parties  acknowledge  and  agree  that  AOD  has  been  charged  US$5,000,000  of          Restructuring  Fees  incurred  by AOD  prior  to  the  date  of  this Agreement. The  Parties          further  acknowledge and  agree  that  a discount  of  50%  shall  be applied to AOD’s  pro          rata share of the Restructuring Fees incurred from and after 1 November 2017 and that          in any event AOD shall not be required to pay an amount that exceeds US$2,000,000 in          respect  of  the  Restructuring  Fees  incurred  from  and  after  1  November  2017.  Seadrill          further represents, warrants and covenants that the amount of the Restructuring Fees          incurred by AOD shall not be more than the pro rata amount of the Restructuring Fees          that is determined by applying a percentage to the Restructuring Fees that represents          the total amount outstanding under the AOD Facility as a proportion of the total debt of          the Seadrill group under each of the secured facility agreements entered into by Seadrill          and  various  Subsidiaries  of  Seadrill,  excluding  costs  specifically  related  to  Seadrill’s          voluntary  Chapter  11  Cases.  Seadrill  shall  provide  Mermaid  a  summary  of  the          Restructuring Fees incurred.   7.5     The Parties agree that AOD will reimburse Mermaid’s documented external legal costs          incurred in connection with this Agreement, subject to a cap of US$250,000.   7.6     The Rig Management Fees incurred by AOD and the AOD Subsidiaries on and from 1          January 2018 will be reduced to US$7,500 per day per rig, unless otherwise reduced or          increased with the prior written agreement of RigCo and Mermaid.   7.7     The Corporate Management Fees incurred by AOD and the AOD Subsidiaries on and          from 1 January 2018 will be reduced to US$2,000 per day, unless otherwise agreed to          be reduced or increased with the prior written consent of RigCo and Mermaid.   7.8     Seadrill shall provide Mermaid copies of documents which demonstrate:  

 

                                                       (A)    the basis on which the Rig Management Fees  which are incurred and paid by                 AOD and the AOD Subsidiaries are calculated including regional, corporate and                 pro-rata allocation mechanisms; and            (B)    that the Rig Management Fees represent only the costs and expenses actually                 incurred  by  Seadrill  in  connection  with  the  operation  of  each  of  the  Rigs  and                 that, notwithstanding applicable  compulsory  transfer  pricing  regulations,  no                 profit will accrue to Seadrill or its Subsidiaries from the Rig Management Fees.   8.      Put Option and Call Option    8.1     Mermaid  shall  have  the  right  (with  no  obligation)  at  any  time  during  the  Put  Option          Period  to  sell  the  Mermaid AOD  Shares  to  RigCo  (the  “Put  Option”).  Mermaid  may          issue  a  Valuation  Notice  to  RigCo  (or  otherwise  prepare  for  the  exercise  of  the  Put          Option)  from  up  to  three  (3)  months  prior  to  the  commencement  of  the  Put  Option          Period  and  at  any  time  until  the  end  of  the  Put  Option  Period  (the  “Put  Option          Valuation Notice Period”), and RigCo shall co-operate accordingly.   8.2     RigCo shall have the right (with no obligation) at any time during the Call Option Period          to purchase the Mermaid AOD Shares (the “Call Option”). RigCo may issue a Valuation          Notice to Mermaid (or otherwise prepare for the exercise of the Call Option) at any time          from up to three (3) months prior to the commencement of the Call Option Period and at          any  time  until  the  end  of  the  Call  Option  Period  (the  “Call Option  Valuation  Notice          Period”), and Mermaid shall co-operate accordingly.   8.3     If Mermaid has issued a Valuation Notice, Mermaid may in its discretion issue an Option          Notice to RigCo with a copy to Seadrill within three (3) months of receipt by RigCo and          Mermaid  of  a  Valuer’s  Report.  On  receipt  of  the  Option  Notice,  and  upon  receipt  of          notice of the Fair Market Value and the Calculated Share Price and notwithstanding any          other  provisions  to  the  contrary,  RigCo  unconditionally  and  irrevocably  undertakes  to          purchase during the  Put Option Period the  Mermaid AOD  Shares  at  Completion. The          purchase price for the Mermaid AOD Shares  pursuant to this Clause 8.3 shall be the          lesser of the Calculated Share Price and the Ceiling Price (the “Put Option Price”).   8.4     If, for any reason  whatsoever,  Seadrill Limited does  not emerge from Chapter  11 with          AOD signed up  to an Approved Restructuring Transaction by 30 September 2018, the          Put Option  Period shall  instead  commence  one  year  and  one  day  after  the  date  on          which Seadrill  Limited  emerges  from  Chapter  11  with AOD  signed  up  to an Approved          Restructuring Transaction and the Put Option Period shall end twelve months later.   8.5     If  RigCo  has  issued  a  Valuation  Notice,  RigCo  may  in  its  discretion  issue  an  Option          Notice to Mermaid with a copy to Seadrill within three (3) months of receipt by RigCo          and Mermaid of a Valuer’s Report. On receipt of the Option Notice, and upon receipt of          notice of the Fair Market Value and the Calculated Share Price and notwithstanding any          other provisions to the contrary, Mermaid unconditionally and irrevocably undertakes to          sell  during  the  Call  Option  Period the  Mermaid  AOD  Shares  at  Completion.  The          purchase  price  for  Mermaid’s  AOD  Shares  pursuant  to  this  Clause 8.5 shall  be  the          greater of the Calculated Share Price and the Floor Price (the “Call Option Price”). 

 

                                               8.6     If, for any reason  whatsoever, Seadrill Limited does  not emerge from Chapter  11 with          AOD signed up to an Approved Restructuring Transaction by 30 September 2018, the          Call Option  Period  shall  instead  commence two years and  one  day  after  the  date  on          which Seadrill  Limited  emerges  from  Chapter  11  with AOD signed  up  to an Approved          Restructuring Transaction and the Call Option Period shall end on  the date falling six          months thereafter.   8.7     For the avoidance of doubt, there shall be no limit on the number of Valuation Notices          that  Mermaid  or  RigCo  may  issue  in  accordance  with  Clause  8.1  or  Clause  8.2  (as          applicable) during the Put Option Valuation Notice Period or the Call Option Valuation          Notice Period.   8.8     In the event that any disagreement or dispute is referred to an Additional Valuer or an          Arbitrator  in accordance with the Valuation  Principles, the Call  Option Period and Put          Option Period shall be extended by the equivalent duration of any delay caused by the          disagreement  or  dispute.  The  cost  of a  third  Valuer  and/or  Arbitrator  shall  be  borne          equally by RigCo and Mermaid.  Where a Party issues a Valuation Notice and does not          proceed  to  issue  an  Option  Notice  within  three  (3)  months  of receipt  of  a  Valuer’s          Report,  the cost of the third Valuer shall be borne solely by that Party.     8.9     An Option Notice may not be withdrawn once given.   8.10    On the receipt of an Option Notice, the recipient shall, no  later than two (2) Business          Days following receipt, sign the acknowledgement at the back of the Option Notice and          return it to the sender.   8.11    If the Call Option or the Put Option is exercised, then:           (A)    subject  to  the  terms  of  this  Agreement, Mermaid shall  sell  and RigCo shall                 purchase  the Mermaid AOD   Shares free  from  all  Encumbrances  and  with  all                 rights  attached  or  accruing  to  them  at  Completion,  in  accordance  with  the                 provisions of this Agreement;            (B)    all dividends and other distributions resolved or declared to be paid or made by                 AOD   in  respect  of  the Mermaid  AOD Shares  by  reference  to  a  record  date                 which  falls  on  or  before  Completion  shall  belong  to,  and  be  payable  to,                 Mermaid; and           (C)    Mermaid shall repay the total amount outstanding under the loans advanced to                 it  by AOD,  including  pursuant  to  Schedule  1  of  this Agreement,  including  any                 accrued interest (the “AOD Mermaid Loan Amount”) prior to Completion.    8.12    If  Mermaid  has  not  repaid  to AOD  the AOD  Mermaid  Loan Amount one  (1)  Business          Day prior to Completion, RigCo shall be entitled to deduct an amount equal to the AOD          Mermaid Loan Amount from the cash consideration payable in accordance with Clause          8.14(A)(i) below (the “AOD Mermaid Loan Set Off”).    8.13    If RigCo elects to make the AOD Mermaid Loan Set Off, RigCo undertakes to pay an          amount  equal  to  the AOD  Mermaid  Loan  Amount to  AOD  on  Completion  and  AOD          irrevocably consents to RigCo making the AOD Mermaid Loan Set Off. 

 

                                               8.14    At Completion:           (A)    Consideration for the Mermaid AOD Shares shall be satisfied by:                  (i)     Subject  to  Clause 8.12,  RigCo  paying  US$50  million  in  cash  into                        Mermaid’s nominated bank account; and                  (ii)    Seadrill  issuing  ordinary  shares  to  Mermaid  or  a Mermaid  nominated                        entity.  The  value  of  each  share  to  be  issued  to  Mermaid  shall  be                        calculated  by  reference  to  and  shall  be  the  volume-weighted  average                        price  during  the  sixty  (60)  calendar  day  period  ending  two  (2)  Stock                        Exchange Trading Days prior to Completion (the “New Seadrill Share                        Value”).  The  quantity  of  shares  to  be  issued  shall  be  determined  by                        subtracting  US$50  million  from  the  Put  Option  Price  or  Call  Option                        Price,  as  applicable  (the  difference being  the  “Excess Amount”),  and                        dividing the Excess Amount by the New Seadrill Share Value (the “New                        Seadrill  Share  Consideration”),  where  “Stock  Exchange  Trading                        Day” means:                                 (1)    (where  the  New  Seadrill  Share  Consideration  will  be                                       issued in the form of ordinary shares that are listed on                                       the NYSE) a day on which the NYSE is open;                                 (2)    (where  the  New  Seadrill  Share  Consideration  will  be                                       issued in the form of ordinary shares that are listed on                                       the OSE) a day on which the OSE is open; and                                 (3)    (where  the  New  Seadrill  Share  Consideration  will  be                                       issued in the form of ordinary shares that are listed and                                       freely  tradeable  on  any  other  recognised  stock                                       exchange  agreed  by  the  Parties  in  accordance  with                                       Clause 8.14(B)) a day on which that stock exchange is                                       open.           (B)    Seadrill  shall  issue  to  Mermaid  or  its  designee  the  whole  of  the  New  Seadrill                 Share Consideration in ordinary shares that are  listed and freely tradeable on                 the  NYSE,  the  OSE  and/or  any  recognised  stock  exchange  agreed  by  the                 Parties. If the shares are listed on multiple stock exchanges, Mermaid shall be                 entitled  to  specify  the  stock  exchange  on  which  the  shares  to  be  issued  to                 Mermaid are listed.            (C)    If at Completion the shares representing the New Seadrill Share Consideration                 are  not  listed  on  the  NYSE,  the  OSE  and/or  any  recognised  stock  exchange                 agreed by the Parties at Completion, Seadrill shall pay to Mermaid at or prior to                 Completion the full  amount  of  the  New  Seadrill  Consideration  in cash  (unless                 otherwise agreed by Seadrill and Mermaid).           (D)    Mermaid will:                   (i)     deliver to RigCo a duly executed instrument of transfer, together with all 

 

                                                                     relevant share certificates and other documents of title, in respect of the                        Mermaid AOD Shares, executed in favour of RigCo or its nominee;                   (ii)    deliver to RigCo all waivers or consents as may be required by law, any                        regulatory requirement, the bye-laws of AOD or any agreement to which                        AOD is a party in order to enable RigCo or its nominee to be registered                        as legal and beneficial holder of the Mermaid AOD Shares; and                  (iii)   at  the  expense  of  Mermaid,  do  such  things  and  execute  such                        documents as shall be necessary or as RigCo may reasonably request                        to  give  effect  to  the  sale  of  the  Mermaid  AOD  Shares  with  full  title                        guarantee and free from any Encumbrance.   8.15    Mermaid agrees that it will not (or enter into any agreement or arrangement to) directly          or  indirectly  sell,  assign,  transfer  or  otherwise  dispose  of  or  convey  any  legal  or          beneficial  interest  in  any  of  the  Mermaid  AOD  Shares (a  “Proposed AOD Share          Transfer”) to any person (a “Proposed Purchaser”) without the prior written consent of          RigCo which shall not be subject to unreasonable conditions, nor unreasonably withheld          or delayed.    8.16    As  a  condition  to  any  consent  to  a Proposed  AOD  Share  Transfer,  Mermaid  must          procure  that  any  person  to  whom  it  proposes  to sell,  assign,  transfer  or  otherwise          dispose  of  or  convey the  Mermaid  AOD  Shares  accedes  to  or  otherwise  becomes          bound  by  the  terms  of  this  Agreement  in  the  place  of  Mermaid  (the  “Mermaid  TSA          Obligations”).    8.17    RigCo  may, acting  reasonably,  make  its  consent  to  a Proposed AOD  Share  Transfer          subject  to  conditions  in  addition  to  the  condition  in  Clause 8.16,  including  without          limitation,  receipt  of  financial  information  and  other  information  relating  to  the          incorporation  and  corporate  status  of  a  Proposed  Purchaser,  the  shareholders  and          activities of a Proposed Purchaser and information that demonstrates the ability of the          Proposed Purchaser to perform the Mermaid TSA Obligations.   9.      Valuation of Mermaid AOD Shares   9.1     Mermaid  and  RigCo  shall within  five  (5)  Business  Days  after  receipt of  a  Valuation          Notice promptly meet in person or telephonically and use reasonable efforts to agree on          the Fair Market Value.   9.2     If within ten (10) Business Days of receipt of a Valuation Notice, Mermaid and RigCo fail          for any reason to agree on the Fair Market Value:            (A)    Mermaid  and  RigCo  shall  promptly  and  in  no  event  later  than  fifteen  (15)                 Business Days of receipt by the recipient of the Valuation Notice (i) each select                 a  Valuer  and  (ii)  give  notice  to  the  other  Party  of  such  Valuer’s  name  and                 address. If either Mermaid or RigCo fails to select a Valuer and give notice of                 such selection to the other Party as provided herein, the Party who has selected                 a Valuer shall appoint two Valuers each of whom shall prepare and provide to                 the  Parties  a  Valuer’s Report. Each  Valuer  shall  provide  a  Valuer’s  Report  to                 Mermaid and RigCo within one (1) month from the date of its appointment; and    

 

                                                       (B)    AOD shall promptly, and by mutual agreement by RigCo and Mermaid, and in                 no event later than fifteen (15) Business Days of receipt of the Valuation Notice                 appoint  the  Expert,  to  conduct  a  valuation  of  the  Other  Net  Assets  and  to                 determine the Fair Market Value based on the Rigs Market Value and the value                 of  the  Other  Net  Assets. If  Mermaid  and  RigCo  have  failed  to  agree  on an                 Expert within this fifteen (15) Business Day period, then either Party shall have                 the right to refer the matter to an Arbitrator who shall appoint an Expert within                 fifteen  (15)  calendar  days  of  his  appointment. The  Expert  shall  provide  its                 valuation  of the  value of  the  Other  Net Assets  within one (1) month  from  the                 date of its appointment.   9.3     The  Parties  agree  and  acknowledge  that  the  provisions  set  out  in  Schedule  4  shall          apply  to  the  appointment  of,  and  the  work  to  be  performed  by,  the Valuers  and  the          Expert and that breach of the provisions of Schedule 4 which has a material effect on          the Rigs  Market  Value or  Other  Net  Assets  shall  give  rise  to  the  Parties’  rights  to          arbitration as provided under Clause 26 (Governing Law and Jurisdiction).    10.     Amendments to terms           Each Party hereby acknowledges that the Term Sheet and the RSA (including the RSA          Term Sheets) set out in summary only the key terms and steps which may be pursued          in order to effect the AOD Transactions, and the Parties agree that Seadrill may make          any  amendment,  variation  and/or  addition  to  the  Term  Sheet,  the  RSA  and  the  RSA          Term Sheets, provided that:           (A)    any  such  amendment,  variation  or  addition  is  not  materially  adverse  to  the                 interests of Mermaid, Mermaid Parent or AOD; and           (B)    the  provisions  of  this Agreement  (excluding  (i)  the Term  Sheet  other  than  the                 provisions of the Term Sheet that relate to AOD’s participation in the RigCo cash                 pooling  arrangements  and  the  application  of  Excess  Sales  Proceeds  (as                 defined  in  the  Term  Sheet)  as  far  as  they  relate  to  rigs  owned  by  the  AOD                 Subsidiaries and (ii) the RSA other than the provisions in Exhibit A to the RSA                 that  relate  to  AOD,  its  creditors  and  its shareholders)  may  only  be  modified,                 amended, varied or waived in accordance with Clause 17.2 (Entire Agreement).           For  the  avoidance  of  doubt,  any  amendment,  variation  and/or  addition  to  the  Term          Sheet, the RSA or the RSA Term Sheets which is materially adverse to the interests of          Mermaid, Mermaid Parent or AOD or affecting the AOD Shareholders’ Agreement shall          require the prior written consent of Mermaid, Mermaid Parent and/or AOD (as the case          may be).   11.     Releases           (A)    For good and valuable consideration, effective upon bankruptcy court approval                 of this Agreement, each Party hereby releases and discharges each other Party                 from  any  and  all  Causes  of Action,  whether  known  or  unknown,  asserted  on                 behalf  of  such  releasing  Party  or  that  such  releasing  Party  would  have  been                 legally  entitled  to  assert  (whether  individually  or  collectively),  arising  on  or 

 

                                                              before  the date  of  this  Agreement directly from  any  Party’s  negotiation  of or                 entry into this Agreement.            (B)    The  releases  set  forth  in Clause 11(A) above  do  not  release  any  Causes  of                 Action to the extent any such Cause of Action, as determined by a final order of                 a court of competent jurisdiction, arises out of or relates to any act or omission                 of a Party that constitutes actual fraud, wilful misconduct, or gross negligence.    12.     Other rights           Notwithstanding anything contained in this Agreement, nothing in this Agreement shall:            (A)    be constructed to prohibit any Party from contesting whether any matter, fact or                 thing is a breach of, or is inconsistent with, this Agreement;            (B)    prevent any Party from enforcing this Agreement;            (C)    require any Party to take any action which is prohibited by applicable law;           (D)    prevent  any Party  from  taking  any  action  which  is  required by  applicable law;                 and           (E)    prevent any Party by reason of this Agreement or the AOD Transactions from                 making, seeking or receiving any Authorisations.   13.     Representations, Warranties and Covenants           Each of the Parties represents, warrants and covenants to each other Party, as of the          date such party executed and delivers this Agreement:           (A)    it  is  validly  existing  and  in  good  standing  under  the  laws  of  the  state  of its                 organisation, and this Agreement is a legal, valid and binding obligation of such                 Party,  enforceable  against  it  in  accordance  with  its  terms,  except  as                 enforcement may be limited by equitable principles relating to enforceability;           (B)    the entry into and performance by it of, and the transactions contemplated by,                 this Agreement do not, and will not, conflict in any material respect with any law                 or  regulation  applicable  to  it  or  with  any  of  its  articles  of  association,                 memorandum of association or other constitutional documents; and           (C)    except  as  expressly  provided  in  this  Agreement,  it  has  (or  will  have,  at  the                 relevant time) all requisite corporate or other power and authority to enter into,                 execute and deliver this Agreement and to effectuate the AOD Transactions as                 contemplated by, and perform its respective obligations under, this Agreement.   14.     Information updates           Seadrill agrees to keep AOD and Mermaid informed as to the progress of the material          aspects  of  Seadrill’s  restructuring  process  which  are  relevant  to  AOD  and  Mermaid 

 

                                                       (including  Seadrill’s  voluntary  case  under  Chapter  11)  on  a  monthly  basis,  or  at such          other frequency or times as requested by AOD or Mermaid (acting reasonably).   15.     Termination   15.1    This Agreement may be terminated by agreement in writing between the Parties.   15.2    This  Agreement  may  be  terminated  by  any  Party  upon the  breach  in  any  material          respect by one or more of the other Parties of any provision set forth in this Agreement          that remains uncured for a period of ten (10) Business Days after the receipt by the non-         terminating Parties of notice of such breach.    15.3    This  Agreement  shall  terminate  automatically  without  any  further  required  action  or          notice  on  termination  of  the  RSA  in  accordance  with  its  terms,  other  than  if  the  RSA          terminates under section 13.07 (Automatic Termination) of the RSA.   15.4    If  this Agreement  terminates  in  accordance  with  this  Clause  15  all  obligations  of  the          Parties shall end (except for the provisions of Clause 7.6, Clause 7.7, Clauses 8 (Put          Option  and  Call  Option),  Clause  9  (Valuation  of  Mermaid  AOD  Shares),  Clause  11          (Releases),  17 (Entire  Agreement),  18  (Notices),  19  (Language),  20  (Costs  and          Expenses), 21 (Execution of Agreement), 22 (Invalidity), 23 (Permitted Disclosures) 24          (Third  Parties  and  Assignment),  25 (Specific  Performance),  26  (Governing  law and          Jurisdiction) and Schedule 4. For the avoidance of doubt all rights and liabilities of the          Parties which have accrued before termination shall continue to exist.   16.     Remedies and Waivers   16.1    No delay or omission by any Party in exercising any right, power or remedy provided by          law or under this Agreement shall:           (A)    affect that right, power or remedy; or           (B)    operate as a waiver of it.   16.2    All rights, powers, and remedies provided under this Agreement or otherwise available          in  respect  hereof  at  law  or  in  equity  shall  be  cumulative  and  not  alternative,  and  the          exercise  of  any  right,  power  or  remedy  thereof  by  any Party  shall  not  preclude  the          simultaneous or later exercise of any other such right, power or remedy by such Party.   17.     Entire Agreement   17.1    This Agreement constitutes the entire agreement among the Parties with respect to the          subject matter hereof and supersedes all prior agreements, oral or written, among the          Parties with respect thereto, other than the RSA.   17.2    This  Agreement (excluding  (i)  the  Term  Sheet  other  than  the  provisions  of  the  Term          Sheet that relate to AOD’s participation in the RigCo cash pooling arrangements and the          application  of  Excess  Sales  Proceeds  (as  defined  in  the  Term  Sheet)  as  far  as  they          relate to rigs owned by the AOD Subsidiaries and (ii) the RSA) may only be varied in 

 

                                                       writing signed by each of the Parties.  For this purpose, a variation to this Agreement          shall include any addition, deletion, supplement or replacement, howsoever effected.   18.     Notices   18.1    All  notices  hereunder  shall  be  deemed  given  if  in  writing  and  delivered,  if  sent  by          electronic mail, courier, or  registered or certified mail  (return receipt requested) to the          following addresses (or at such other addresses as shall be specified by like notice):          Party and title of individual  Address          Mermaid Maritime Public        26/28-29, Orakarn Building, 9th Floor          Company Limited                Soi Chidlom, Ploenchit Road, Lumpinee,                                        Pathumwan, Bangkok 10330,                                         Thailand                                         Attention: Vincent Siaw, Chief Operating Officer                                         E-mail address: vincent.s@mermaid-group.com                                         With copies for information only (which shall not                                        constitute notice) to:                                                                                Attention: Phiboon Buakhunngamcharoen                                        E-mail address: phiboon.b@mermaid-group.com                                                                                Attention: Wuthichai Chongcharoenrungrot                                        E-mail address: wuthichai.c@mermaid-group.com                                                  Mermaid International          Clifton House,          Ventures                       75 Fort Street,                                         P.O. Box 1350,                                         Grand Cayman KY1-1108,                                         Cayman Islands                                         Attention: Vincent Siaw, Chief Operating Officer                                         E-mail address: vincent.s@mermaid-group.com                                         With copies for information only (which shall not                                        constitute notice) to:                                                                                Attention: Phiboon Buakhunngamcharoen                                        E-mail address: phiboon.b@mermaid-group.com                                                                                 Attention: Wuthichai Chongcharoenrungrot                                        E-mail address: wuthichai.c@mermaid-group.com                                                 New Seadrill                   New Seadrill                                        Par-la-Ville Place 

 

                                                                                     14 Par-la-Ville Road                                        Hamilton HM 08, Bermuda                                        Attention: Georgina Sousa                                        E-mail address: Gsousa@front.bm                                         with copies for information only (which shall not                                        constitute notice) to:                                         Seadrill Management Ltd.                                        (Corporate Headquarters)                                        2nd Floor                                        Building 11                                        Chiswick Business Park                                        566 Chiswick High Road                                        London W4 5YS                                        United Kingdom                                        Attention:  Chris Edwards                                        E-mail address:  Chris.Edwards@seadrill.com          Seadrill Limited               Seadrill Limited                                        Par-la-Ville Place                                        14 Par-la-Ville Road                                        Hamilton HM 08, Bermuda                                        Attention: Georgina Sousa                                        E-mail address: Gsousa@front.bm                                                                                with copies for information only (which shall not                                        constitute notice) to:                                         Seadrill Management Ltd.                                        (Corporate Headquarters)                                        2nd Floor                                        Building 11                                        Chiswick Business Park                                        566 Chiswick High Road                                        London W4 5YS                                        United Kingdom                                        Attention:  Chris Edwards                                        E-mail address:  Chris.Edwards@seadrill.com          Asia Offshore Drilling Limited Asia Offshore Drilling Limited                                        Par-la-Ville Place                                        14 Par-la-Ville Road                                        Hamilton HM 08, Bermuda                                        Attention:  Clare Burnard                                        E-mail address:  cburnard@front.bm                                        Attention:  Jon Olav Østhus                                        E-mail address:  jon.olav.osthus@seadrill.com    18.2    Any notice given by delivery, mail or courier shall be effective when received. 

 

                                               19.     Language   19.1    Each notice or  other  communication  under  or  in connection  with this Agreement  shall          be:           (A)    in English; or           (B)    if not in English, accompanied by an English translation made by a translator,                 and certified by an officer of the Party giving the notice to be accurate,           and in the case of any conflict between a notice and its English translation, the English          translation shall prevail.   19.2    The  receiving Party  shall  be  entitled  to  assume  the  accuracy  of  and  rely  upon  any          English translation of any document provided pursuant to Clause 19.1(B).   20.     Costs and Expenses           Except as otherwise stated in this Agreement, each Party shall pay its own costs and          expenses in relation to the negotiation, preparation, execution and carrying into effect of          this Agreement.   21.     Execution of Agreement           This Agreement may be executed and delivered in any number of counterparts and by          way  of  electronic  signature  and  delivery,  each  such  counterpart,  when  executed  and          delivered,  shall  be  deemed  an  original,  and  all  of  which  together  shall  constitute  the          same  agreement.   Except  as  expressly  provided  in  this  Agreement, each  individual          executing  this  Agreement  on  behalf  of  a Party  has  been  duly  authorised  and          empowered to execute and deliver this Agreement on behalf of said Party.   22.     Invalidity           If  at  any  time  any  provision  of  this  Agreement  is  or  becomes  illegal,  invalid  or          unenforceable in any respect under the law of any jurisdiction, that shall not affect or          impair:           (A)    the legality, validity or enforceability in that jurisdiction of any other provision of                 this Agreement; or           (B)    the  legality,  validity  or  enforceability  under  the law  of  any  other  jurisdiction  of                 that or any other provision of this Agreement.   23.     Permitted Disclosures   23.1    Each of the Parties may disclose this Agreement (or the contents of this Agreement) to          their Affiliates, to their and their Affiliates’ legal and professional advisers, to any person          to whom information is required to be disclosed by any governmental, banking, taxation          or  other  regulatory  authority  or  similar  body,  or  by  the  rules  of  any  relevant  stock          exchange  or  pursuant  to  a  request  by  any  such  body  with which  a  person  would  be 

 

                                                       reasonably expected to comply, or pursuant to any applicable law or regulation, in each          case on a confidential basis.    23.2    Without prejudice to Clause 23.1, RigCo and Seadrill may also disclose this Agreement          (or  the  contents  of  this  Agreement)  to  the  lenders  under  each  of  the  secured  credit          facility agreements entered into by Seadrill, RigCo and their respective Subsidiaries, to          each  other  “Consenting  Stakeholder”  under  and  as  defined  in  the  RSA,  and  to  each          other  bank,  financial  institution  or  entity  that  participates  in  the  restructuring  and          recapitalisation  in  respect  of  the  Seadrill  group’s  capital  structure,  as  contemplated  in          the  RSA,  in  each  case  only  to  the  extent  required  in  order  for  RigCo  or  Seadrill  to          comply with its obligations under the RSA, and in each case on a confidential basis.   23.3    Subject as provided in Clause 23.4, no Party shall make any public announcement in          relation to this Agreement and the transactions or arrangements hereby contemplated          or herein referred to or any matter ancillary hereto or thereto without the respective prior          written consent of the other Parties (which consent shall not be unreasonably withheld          or delayed).   23.4    This Clause shall not apply to any announcement required to be made pursuant to any          stock exchange listing rules or as required to be made as part of the Chapter 11 Cases           as to the contents of  which the Party making the same shall  have obtained the other          Parties’ consent (which consent shall not be unreasonably withheld or delayed).   24.     Third Parties and Assignment           This  Agreement  is  intended  to  bind  and  inure  to  the  benefit  of  the Parties  and  their          respective successors and permitted assigns, as applicable.  There are no  third party          beneficiaries under this Agreement, and the rights or obligations of any Party under this          Agreement may not be assigned, delegated or transferred to any other person or entity          (other than, for the avoidance of doubt, any successor of Seadrill or any entity to which          all or substantially all of Seadrill’s material assets are directly or indirectly transferred)          without the prior written consent of the other Parties.    25.     Specific Performance           It is understood and agreed by the Parties that money damages would be an insufficient          remedy for any breach of this Agreement by any Party and each non-breaching Party          shall be entitled to specific performance and injunctive or other equitable relief (without          the posting of any bond and without proof of actual damages) as a remedy of any such          breach, including an order of any court of competent jurisdiction requiring any Party to          comply promptly with any of its obligations hereunder.   26.     Governing law and Jurisdiction    26.1    This Agreement is governed by the laws of England and Wales.   26.2    Any dispute arising out of or in connection with this Agreement including any question          regarding its existence, validity or termination, shall be referred to and finally resolved          by  arbitration  administered  by  the  Singapore  International  Arbitration  Centre  in 

 

                                                       accordance  with  the  SIAC  Rules,  which  rules  are  deemed  to  be  incorporated  by          reference in this clause.    26.3    The  seat  of  the  arbitration  shall  be  Singapore.  The  Tribunal  shall  consist  of  one  (1)          arbitrator. The language of the arbitration shall be the English language.  

 

                                               IN WITNESS WHEREOF, the Parties have executed this Agreement on the date which first  appears above.      MERMAID MARITIME PUBLIC COMPANY LIMITED      By: _____________________________________   Name:   Title:      MERMAID INTERNATIONAL VENTURES      By: _____________________________________   Name:   Title:      SEADRILL LIMITED      By: _____________________________________   Name:   Title:      ASIA OFFSHORE DRILLING LIMITED      By: _____________________________________   Name:   Title: 

 

                                                                                       Schedule 1                                        (Term Sheet)                  SEADRILL LIMITED - RECAPITALISATION PLAN PROPOSAL           ASIA OFFSHORE DRILLING LIMITED - SUMMARY OF PROPOSED TERMS    This  document  sets  out a  summary  of the  terms  and  conditions  for  Asia  Offshore  Drilling  Limited’s (“AOD”) participation  in  the  RigCo  cross-collateralisation  and  cash  pooling  structure  under the recapitalisation plan for Seadrill Limited and its subsidiaries (including AOD) pursuant  to the RSA.  Further details of the terms and conditions of the recapitalisation plan are set out in  the term sheets at Exhibit A of the RSA and which are referenced in this term sheet.   1.      OVERVIEW OF SEADRILL LIMITED GROUP RECAPITALISATION PLAN   IHCo-RigCo-          A  new  intermediate  holding  company,  IHCo,  is  to  be  put  in  place  as  a  direct  NSNCo Structure      wholly-owned subsidiary of Seadrill Limited.                        A second new intermediate holding company, NSNCo, is to be put in place as a                       direct  wholly-owned  subsidiary  of  IHCo.   Seadrill  Limited’s  interests  in  certain                       entities to be hived down to sit directly or indirectly below NSNCo.                        A third new  intermediate  holding  company,  RigCo, is  to  be  put  in  place  as  a                       direct  wholly-owned  subsidiary  of  IHCo.  Rig-owners  and  intra-group  charterers                       and  Seadrill  Limited’s  interest  in  North  Atlantic  Drilling  Limited,  Asia  Offshore                       Drilling Limited and Sevan Drilling Limited to be hived down to sit directly below                       RigCo.  Seadrill  Management  Limited  and  Seadrill  Global  Services  Limited  to                       also be hived down to sit below RigCo.                        Subject  to  ongoing  discussions  with  lenders  under  the existing secured  facility                       agreements  entered  into  by  various  members  of   the  Seadrill  Limited                       consolidated group (the “Secured Facility Agreements”), it is currently intended                       that  a  new  UK-incorporated  entity  (“Cash  Pool  Co”)  will  be  established  as  a                       wholly  owned  subsidiary  of  RigCo  and  will  be  the  header  of  the  RigCo  Group                       cash pool.                        As part of the implementation of the recapitalisation plan, Seadrill  Limited may                       transfer  all  or  substantially  all  of  its  assets  to  a  new  holding  company,  with                       Seadrill  Limited  subsequently  liquidated.   For  the  purposes  of  this  term  sheet,                       references  to  “Seadrill  Limited”  therefore  include any  successor  of  Seadrill                       Limited or any entity to which all or substantially all of Seadrill Limited’s material                       assets are directly or indirectly transferred.   Secured Facility     Various amendments will be made to the Secured Facility Agreements, including  Agreements           the US$360,000,000 senior secured credit facility  agreement originally  dated 9                       April 2013 between, amongst others, Asia Offshore Rig 1 Limited, Asia Offshore                       Rig  2  Limited  and Asia  Offshore  Rig  3  Limited  as  borrowers  and ABN AMRO                       Bank  N.V. as  agent  (the  “AOD  Facility  Agreement”).  These  amendments  are                       intended to create an approximately five year runway, including by reprofiling the    551054107 

 

                                                                    maturity and amortisation schedules, and involve, amongst other things:                        •   maturity extensions of approximately 4 to 5.5 years;                        •   amendments  to  the  amortisation  profile  such  that  amended  amortisation                           payments commence from Q1 2020 with a  semi-annual mandatory sweep                           of 75% of excess cash held by RigCo and its subsidiaries above US$1.25                           billion to the lenders under the Secured Facility Agreements from 30 June                           2021 (the “Bank Mandatory Cash Sweep”); and                         •   a reset of financial covenants with the ability to equity cure.  Other than a                           RigCo  minimum  liquidity  covenant  which  applies  at  all  times,  no  financial                           covenants  which  trigger  an  event  of  default  will  apply  until  2022.   From                           2022,  there  will  be  new  RigCo  Debt  Service  Cover  Ratio  and  RigCo  Net                           Leverage financial covenants.  All  other financial covenants (including  the                           minimum market value covenant) to be deleted or waived.                        In return, amongst other things margins across the Secured Facility Agreements                       will  increase  by  100bps  and  consent  fees  will  be  payable.   In  addition,  the                       lenders under the Secured Facility Agreements will retain the benefit of existing                       security interests and guarantees granted in their favour and in addition will be                       cross-collateralised by being granted a shared guarantee and security package.                          Given  the  ownership  structure  of  AOD,  it  is  proposed  that  the  cross-                      collateralisation and cash pooling arrangements be modified in relation to AOD’s                       participation in the structure.  This is set out in further detail in Section 3 (AOD                       Participation in Cross-collateralisation and Cash Pooling) below.                        Refer to the term sheets at Exhibit A of the RSA for further detail on the terms of                       the  amendments  to  the  Secured  Facility  Agreements. In  the  event  of any                       inconsistency between the terms detailed in this Term Sheet and the provisions                       of the term sheets at Exhibit A of the RSA that relate to AOD, its creditors and its                       shareholders, this Term Sheet shall prevail.   New capital          Seadrill Limited will raise new capital in the amount of approximately US$1,080                       million which it is currently expected will be through:                        •  US$880 million of notes issued by NSNCo (the “New Secured Notes”); and                        •  US$200 million of new equity issued by Seadrill Limited.                        The form of the new capital is subject to change, including in a non-consensual                       implementation scenario.                        Refer to the term sheet for the New Secured Notes at Exhibit A of the RSA for                       further detail.   Implementation       It is anticipated that the Seadrill Limited recapitalisation plan will be implemented                       under voluntary cases commenced under chapter 11 of the US Bankruptcy Code 

 

                                                                    (“Chapter 11”).   2.      EQUITY IN AOD     Equity in AOD        Seadrill  Limited’s  shares  in  AOD  will  be  transferred  to  RigCo. Mermaid                       International Ventures (“Mermaid”) will retain its existing shares in AOD (subject                       to  the  exercise  of  put  option  and  call  option  rights  under  the  terms  of  a                       transaction  support  agreement  entered  into  between  Seadrill,  RigCo,  Mermaid                       and Mermaid Maritime Public Company Limited.   3.      AOD PARTICIPATION IN CROSS-COLLATERALISATION AND CASH POOLING   Cross-               The existing bank security and guarantee package (including as far as it applies  collateralisation    to assets of AOD and its subsidiaries) will remain in place.  First ranking security  security and         will also be granted in favour of the lenders under the respective Secured Facility  guarantee            Agreements  over  intercompany  loans  owed  to  RigCo  or  Cash  Pool  Co  by  a  structure            subsidiary  of  RigCo  subject  to  existing  share  security.  For  the  avoidance  of                       doubt, no additional security will be granted over AOD or any of its subsidiaries                       or any of their assets in favour of the lenders under any of the Secured Facility                       Agreements other than the AOD Facility Agreement.                         In  addition  cross-collateralisation to  be  implemented between the  Secured                       Facility Agreements by providing the following in favour of the lenders under the                       Secured Facility Agreements collectively:                        •   First ranking security over the shares in RigCo and Cash Pool Co                        •   First ranking security over intercompany loans made by RigCo to IHCo and                           by Cash Pool Co to RigCo                         •   First ranking security over intercompany loans made by IHCo to RigCo and                           by RigCo to Cash Pool Co                        •   First  ranking  security  over the  excess  sales  proceeds  escrow  accounts                           established  by  RigCo  and  any  other  members  of  the  RigCo  Group                           (excluding, for the avoidance of doubt, AOD or any of its subsidiaries), the                           bank  account  into  which  IHCo  (via  RigCo)  funds  contributions  and  the                           periodic  cash  sweep  accounts  established  by  cash  Pool  Co  and  other                           members of the RigCo Group (excluding, for the avoidance of doubt, AOD                           or any of its subsidiaries)                        •   First  ranking  security  (pari  passu  with  the  New  Secured  Notes)  over  the                           IHCo bank accounts                        •   First  ranking  security  over  the  bank  account  at  RigCo  which  will  hold                           contributions from RigCo which RigCo will pass on to Cash Pool Co                         •   First ranking security over the shares in certain newbuild entities, subject to 

 

                                                                        certain conditions                        •   First ranking guarantee from RigCo                        Refer to the term sheets at Exhibit A of the RSA for further detail.   RigCo cash           The  movement  of  cash  within  the  Seadrill  Limited  group  will  be  subject  to  the  pooling              terms  set  out  in  the  cash  pooling  term  sheet  at  Exhibit  A  of  the  RSA.   The                       provisions of the cash pooling term sheet will apply to AOD on the modified basis                       that is set out directly below.                         In  particular,  there  will  be  a  periodic  cash sweep of  cash  balances  held  by                       subsidiaries  of  RigCo but this  will  not apply  to AOD  in the  same way  as  it  will                       apply  to the  wholly-owned  subsidiaries  of RigCo. The cash pooling term sheet                       will allow AOD excess cash to be paid to Mermaid and RigCo in pro rata shares                       in the form of dividends or loans, on the terms set out below. The cash pooling                       term  sheet  will  require  that  any  pro  rata  share  of AOD  cash  paid  to  RigCo  is                       applied in accordance with cash sweep mechanics agreed with Seadrill’s lenders                       and investors. These principles will not apply to any pro rata share of AOD cash                       paid to Mermaid.                        •   AOD  will  not  pay  dividends  until  after 15 June  2021  (being  the  date  on                           which the Bank Mandatory Cash Sweep commences).                        •   Up to 15 June 2021, any cash held by AOD and its subsidiaries in excess                          of the higher of US$20 million and the amount of cash required by AOD and                          its subsidiaries to (i) meet its debt service obligations under the AOD Facility                          Agreement  (or  any  replacement  secured  credit  facility  agreement) for  the                          next  six  months,  (ii)  repay  any  loans  made  by RigCo  or  Cash  Pool  Co  to                          AOD  or AOD’s  subsidiaries and  (iii)  meet  ongoing  financial  and  operating                          costs and liabilities, may at the election of the directors of AOD appointed by                          Mermaid and the directors of AOD appointed by RigCo be paid  pro rata to                          RigCo and Mermaid (in each case pro rata to its equity stake in AOD) by way                          of  an  intercompany  loan  on  terms  to  be  agreed  (but  provided  that  the                          interest rate on such loans shall not be lower than the interest rate payable                          on  the  AOD  Facility  Agreement  and  AOD  shall  be  entitled  to  request                          repayment of such loans  on demand to the extent  that it requires funds to                          meet  its  operational  commitments,  and  provided  further  that  where  AOD                          requests  repayment  of  such  loans,  AOD  shall  request  repayment  of  such                          loans  by  each  of  RigCo  and  Mermaid,  in  each  case  pro  rata  to  its  equity                          stake in AOD) and on payment terms to be agreed between AOD and each                          of RigCo and Mermaid, respectively prior to drawdown.                        •   Mermaid,  RigCo  and  AOD  may  also  agree  that  guarantees  may  be                           provided by a Mermaid entity or by Seadrill Limited on terms to be agreed                           to  provide  credit  support  in  relation  to  repayment  of  the  loans  described                           above and directly below.                        •   On the last day of each semi-annual period, starting with the semi-annual 

 

                                                                        period  ending 15 June  2021,  any  cash held  by AOD  and  its  subsidiaries                           over the amount of cash required by AOD and its subsidiaries to (i) meet its                           debt service obligations for the next six months, (ii) fund any cash sweep as                           described in section C2 of the Secured Facilities term sheet in relation to                           the  AOD  Facility  Agreement on that  date,  (iii)  repay  any  loans  made  by                           RigCo  or  Cash  Pool  Co to  AOD  or  AOD’s  subsidiaries  and  (iv)  meet                           ongoing financial and operating costs and liabilities, shall be paid pro rata to                           RigCo and  Mermaid  (in each case pro rata to its equity stake in AOD) by                           way  of  intercompany  loans  on  terms  to  be  agreed  (but  provided  that  the                           interest rate on such loans shall not be lower than the interest rate payable                           on  the  AOD  Facility  Agreement  and  AOD  shall  be  entitled  to request                           repayment of such loans, on demand to the extent that it requires funds to                           meet its financial and operational costs and liabilities, and provided further                           that  where  AOD  requests  repayment  of  such  loans,  AOD  shall  request                           repayment of such loans by each of RigCo and Mermaid, in each case pro                           rata  to  its  equity  stake  in  AOD) and on  payment  terms  to  be  agreed                           between  AOD  and  each  of  RigCo  and  Mermaid,  respectively  prior  to                           drawdown.                             During  this  period  provided  that  the  cash  required  to  meet  the  items                           described in paragraphs (i) to (iv) above has been retained by AOD and its                           subsidiaries  and  AOD  and  its  subsidiaries  additionally  have  (and  will                           continue to have after any such dividend is paid) at least a free cash float in                           an  amount  to  be  agreed  with  the  lenders  under  the Secured  Facility                           Agreements  generated  from  its  own funds, the board  of  directors  of AOD                           may,  if  they  consider  it  appropriate,  elect  to  pay  dividends  to  the                           shareholders  of  AOD  instead  of  making  these  upstream  loans,  such                           dividends  to  be  paid  on a  pro  rata  basis  according  to  the  shareholders’                           shareholdings.     Excess sale          An excess sales proceeds escrow account will be established at RigCo. Further  proceeds             excess  sales proceeds  escrow  accounts  may  also  be  established  in other                       members  of  the  RigCo  group where  necessary  or  where  there  are  legal                       restrictions on upstreaming moneys to Cash Pool Co.                        Security  will  be  granted  over  the  excess  sales  proceeds  escrow  account(s) in                       favour of the lenders  under the Secured Facility Agreements on a first ranking                       basis and the holders of the New Secured Notes on a second ranking basis.                          Where  any  disposal  proceeds  remain  after  application  pursuant  to  the                       mandatory  prepayment requirements of a Secured Facilities Agreement (in the                       case  of  a  non-distressed  disposal) or  after  application  pursuant  to  a  Secured                       Facilities Agreement of recoveries following an enforcement sale (in the case of                       a distressed disposal) and after the payment of costs and expenses (including                       taxation)  of  the  disposal  (“Excess  Sales  Proceeds”), then such  Excess  Sales                       Proceeds  will  be  paid  into  the  relevant  excess  sales  proceeds  escrow                       account(s), provided that, for so long as there is a minority shareholder of AOD,                       any Excess Sale Proceeds relating to the AOD Facility Agreement will be applied 

 

                                                                    as follows:                        (A)    first,  to  repay  any  loans  made  by  RigCo  or  Cash  Pool  Co  to AOD  or                              AOD’s  subsidiaries,  and  such  amounts  shall  be  paid  into  the  relevant                              excess sales proceeds escrow account(s) at RigCo;                         (B)    RigCo’s  pro  rata  portion  (pro  rata  to  its  equity  stake  in  AOD)  of  any                              remaining  amounts  after  application  in  accordance  with  paragraph  (A)                              above  will  be  paid  into  the  relevant  excess  sales  proceeds  escrow                              account(s) at RigCo; and                        (C)    Mermaid’s  pro  rata  portion  (pro  rata  to  its  equity  stake in AOD)  of  any                              remaining  amounts  after  application  in  accordance  with  paragraph  (A)                              above will be available to be distributed to Mermaid.     4.      OTHER   Documentation        Amendments to the Secured Facility Agreements to be implemented by way  of                       amendment  and  restatement  agreements,  together  with  other  related                       documentation   including  security  documents,   intercreditor  agreement,                       contribution agreement and others to be agreed with the relevant parties.                        Seadrill Limited, RigCo and Mermaid to enter into an amendment in relation to                       the  existing  shareholders’  agreement  relating  to  AOD  in  order  to  reflect  the                       transactions contemplated in this Term Sheet.                        AOD’s bye-laws to be amended to reflect the transactions contemplated in this                       Term Sheet.    

 

                                                                                      Schedule 2                          (Put Option Notice and Call Option Notice)                                                                                                                   FORM OF PUT OPTION NOTICE / CALL OPTION NOTICE   To:                                     With a copy to                          For the attention of                                                                                                     Date [●]   Dear Sirs,   Transaction  Support  Agreement  between  Mermaid  International  Ventures,     Mermaid  Maritime  Public  Company  Limited,  Seadrill  Limited, [New  Seadrill], [RigCo]  and  Asia  Offshore Drilling Limited dated [●] (the “Agreement”)   We refer to the Agreement. Terms defined in the Agreement shall have the same meaning when  used in this letter.   We hereby:           (A)    give notice in accordance with Clause [8.1]/[8.2] of the Agreement that we are                 exercising the [Call] [Put] Option; and           (B)    acknowledge that this notice is irrevocable.   Clause 26 (Governing law and Jurisdiction) is incorporated into this letter as if set out in full and  as if references therein to “this Agreement” were references to “this letter”.   Yours faithfully,      ....................................................  For and on behalf of  [●]   

 

                                               ____________________________________________________________________________                                     ACKNOWLEDGMENT   [RigCo / Mermaid] acknowledges that it has received the [Put/Call] Option Notice from [RigCo /  Mermaid] given pursuant to the Transaction Support Agreement between Mermaid International  Ventures, Mermaid Maritime Public Company Limited, Seadrill Limited, [New Seadrill], [RigCo]  and Asia Offshore Drilling Limited dated [●]  (the “Agreement”) and that there subsists a binding  contract for the sale and purchase of the Mermaid AOD Shares (as that term is defined in that  Agreement) between Mermaid and RigCo on such terms and subject to such conditions as set  out in the Agreement.   Dated: [●]   Signed by............................................................     For and on behalf of [●]     

 

        Schedule 3     (RSA) 

 

                                                                                      Schedule 4                                    (Valuation Principles)   1.      Valuation Principles    1.1     For the avoidance of doubt, a reference to “Party” in this Schedule 4 is a reference to          either Mermaid or RigCo and a reference to “Parties” is to both Mermaid and RigCo.   1.2     With  respect  to  respective  appointments  of  and  work  to  be  performed  by  the  Valuers          and the Expert pursuant hereto, the following provisions shall apply:           (A)    the Parties (or in the case where both Valuers are selected by one Party then                 that  Party)  shall  enter  into  an  appropriate  form  of  appointment in  respect  of                 each of the Valuers and AOD with respect to the Expert, as soon as reasonably                 practicable  following  the  selection  of  the  Valuers  and  the  appointment  of  the                 Expert.  The  Parties  (or  in  the  case where  both  Valuers  are  selected by  one                 Party then that Party) shall act reasonably in agreeing the terms and conditions                 of such appointment, including (without limitation) in respect of fees, customary                 confidentiality  and  non-disclosure  obligations,  and  any  exclusions  and                 limitations of liability where it can be reasonably demonstrated that such terms                 and conditions reflect market standard provisions for such appointments;           (B)    the  Parties  shall  use  all  reasonable  endeavours  to  procure  that  each  of  the                 Valuers and the Expert appointed pursuant to this Agreement is promptly given                 all  such  assistance  and  access  to  all  such  information,  documentation  and                 personnel in its possession or control as each such Valuer and such Expert may                 each reasonably require in order to make his determination. This shall include                 without limitation unrestricted access to the books and records of AOD, the Rigs                 and Other Net Assets and the employees of AOD as well as to the employees of                 either Party having information about AOD and its business;             (C)    the  Valuers  and  the  Expert  shall  act  as  independent  experts  and  not  as                 arbitrators; and save in the case of fraud or manifest error (including the case                 where any Valuer fails to take into account any of the factors listed out in clause                 1.6  of  Schedule 4  which has  a material  effect  on  the  value  of  the  Rig  Market                 Value or Other Net Assets), the determination of the Rigs Market Value based                 on the valuations provided by the Valuers and the determination of the value of                 the Other Net Assets by the Expert as provided herein shall be final and binding                 on the Parties;            (D)    the  costs  of  each  of  the  Valuers  and  of  the  Expert  shall  be approved  by                 Mermaid and RigCo prior to their engagement and shall be borne by Mermaid                 and RigCo in equal amounts. Where a Party issues a Valuation Notice and does                 not proceed to issue an Option Notice within three (3) months of receipt of the                 Valuer’s  Report,   the  cost  of  each  of  the  Valuers  and  of  the  Expert  shall  be                 borne solely by that Party; and             (E)    each Party shall act reasonably and co-operate to give effect to the provisions                 of  this  Clause 1.2 and  otherwise  do  nothing  to  hinder  or  prevent  the  Valuers                 from reaching their valuation and the Expert from reaching its determination. 

 

                                               1.3     If the Valuer appointed by an Arbitrator in accordance with Clause 1.5(C) below fails for          any reason to render a determination on the Rigs Market Value within the relevant time          period,  either  Party  may  refer  the  matter  to  an  Arbitrator  who  shall  appoint  another          Valuer  that  he  considers  appropriate  to  replace this  additional Valuer  within  fourteen          (14) calendar days of his or her appointment.    1.4     If either  Party  determines  that  there  is a  manifest  error (which  is  supported  by          reasonably detailed evidence and includes the case where any Valuer fails to take into          account any of the factors listed in Clause 1.6 of Schedule 4 which has a material effect          on  the Rigs  Market  Value or  Other  Net  Assets) in the  calculation  of either  the  Rigs          Market Value or the Other Net Assets, the relevant Party may notify the Valuer and the          Expert within three (3) Business Days of such manifest error being determined by the          relevant Party. If, the Valuer or Expert (as applicable) fails to rectify the manifest error          within three (3) Business Days of notification by the relevant Party (the “Rectification          Period”), either Party may refer such manifest error to an Arbitrator by no later than the          date falling three (3) Business Days after the end of the Rectification Period.   1.5     Unless  otherwise  mutually agreed  by  the  Parties,  the  price  payable  for the  Mermaid          AOD Shares shall be determined as follows:            (A)    In the case of RigCo exercising the Call Option, if the Calculated Share Price of                 the Mermaid AOD Shares is less than the Floor Price, such valuation shall be                 deemed  to  be  the  Floor  Price  for  all  purposes  hereunder.  In  the  case  of                 Mermaid  exercising the  Put  Option,  if  the Calculated  Share  Price of  the                 Mermaid AOD Shares is greater than the Ceiling Price such valuation shall be                 deemed to be the Ceiling Price for all purposes hereunder.           (B)    In the event the value of the Rigs provided by the two Valuers are not equal, but                 the lower valuation is at least 90% of the higher valuation, then the Rigs Market                 Value shall be the average of the valuations provided by the two Valuers.           (C)    In the event the value of the Rigs provided by the two Valuers are not equal and                 the lower  valuation  is less  than 90% of the higher valuation, then either Party                 may,  within  ten  (10)  Business  Days  after  its  receipt  of  the  Valuer’s  Report,                 object  to  the  Rigs  Market  Value  being  the  average  of  the  two  valuations  and                 notify  the  other  Party  accordingly.  Both  Parties  shall  then  jointly  instruct  the                 Valuers  to  appoint  a  third  Valuer (an  “Additional  Valuer”).  If  within  ten  (10)                 Business Days of receipt of notice of objection the Valuers cannot agree upon                 an Additional Valuer, then either Party shall have the right to refer the matter to                 an Arbitrator who shall appoint an Additional Valuer within fifteen (15) calendar                 days  of  his  appointment. The  Arbitrator need  not  have  the  credentials  of  a                 Valuer or an Expert, but shall be an arbitrator with experience and expertise in                 handling  international  commercial  disputes  arising  in  the  offshore  oil  and  gas                 sector.                  Within ten (10) Business Days after its appointment, the Additional Valuer shall                 deliver  to  each  Party  a  valuation  report  that  sets  out  its  determination  of  the                 value of the Rigs, together with a detailed explanation of its rationale and bases                 for such determination. The Rigs Market Value shall be the average of the value                 of  the  Rigs provided  by  the Additional Valuer  and  the value  of  the  Rigs 

 

                                                              determined by the one of the first two Valuers whose value determination was                 closest  to  that  determined  by  the Additional Valuer;  provided,  however,  if  the                 Additional Valuer’s valuation is  within ten  percent (10%) of the average of the                 first two valuations, whether higher or lower, then the Rigs Market Value will be                 the average of all three Valuers’ valuations.                   If RigCo and Mermaid fail to object to the valuation with ten (10) Business Days                 after its receipt of the Valuer’s Report, the Rig Market Value will be the average                 of the two valuations provided by the two Valuers.   1.6     Each of the Valuers shall:           (A)    make  its  valuation  on  the  basis  that  the  price  shall  be  no  less  than  the  most                 probable price which a willing purchaser would offer to a willing seller at arm’s                 length transaction for the Rigs;           (B)    take  into  account  the  technical  specification  and  status  of  the  Rigs,  including                 customized  modifications,  age,  type,  design,  classification  status,  overall                 performance  capabilities,  water  depth  range,  variable  load  capacity  and                 environmental criteria;            (C)    take  into  account  the  supply  and  demand  for  offshore  mobile  drilling  units  of                 similar  age, type, design,  overall  performance capabilities,  water  depth range,                 variable  load  capacity  and  environmental  criteria  as  the  Rigs,  located  and                 operating in the same region and in other major oil and gas regions around the                 world;           (D)    take into account the principal commercial and legal terms of prevailing drilling                 contracts including options and potential drilling contracts under negotiation for                 the Rigs that are effective at the time of valuation as well as then-applicable day                 rates in the relevant region and world-wide, for offshore mobile drilling units of                 similar age, type, design, classification status, overall performance capabilities,                 water  depth  range,  variable  load  capacity  and  environmental  criteria  as  the                 Rigs;           (E)    take  into  account  the  cost  of  replacement  of  offshore  mobile  drilling  units,                 construction  and  delivery  to  the  same  region  and  world-wide  of  new  offshore                 mobile drilling units similar to the Rigs;           (F)    take  into  account  the  cash  flow  and  earnings  potential  of  the  Rigs  including                 appropriate cash flow discount rates and terminal value;           (G)    take  into  account general  market  information  collected  by  the  Valuers  (or  the                 Expert) in the ordinary course of business;            (H)    take  into  account  regular  discussions  with  participants  in  the  offshore  drilling                 market,  including  owners  and/or  operators  of  offshore  mobile  drilling units,  oil                 companies, shipyards, financial institutions and other market participants; and 

 

                                                       (I)    not  take  into  account  distressed  sales  or  transactions  in  which  the  sale  of                 offshore mobile drilling units operating in the same market segment as the Rigs                 is affected by special adverse circumstances except to the extent that any such                 distressed sale or specific adverse circumstances is  affecting the overall world-                wide offshore jack-up drilling market.    1.7     If any Valuer provides a range for its Rigs Market Value, the Parties agree to use the          mid-point of such range as the Rigs Market Value of the respective Valuer.   1.8     The Expert appointed by AOD shall provide its valuation of the Other Net Assets within          the  time  period  set  out in  Clause 9.2(B) of  the  Agreement and  shall  provide  its          determination  of  the  Fair  Market  Value and  the  Calculated  Share  Price including  its          detailed rationale and bases for its decision within ten (10) calendar days after receiving          written  notice  from  AOD of  the  Rigs  Market  Value.  The  Fair  Market  Value  shall  be          calculated as the sum of the Rigs Market Value and the value of the Other Net Assets   1.9     The Expert shall determine the Fair Market Value on the basis that it would be the most          probable price for the entire share capital of AOD that is available or could be obtained          in  an  open  and  unrestricted  market  in  a  transaction  between  an  informed  and  willing          buyer and an informed and willing seller acting at arms’ length and under no compulsion          to act, expressed  in terms  of money  or  money’s  worth and disregarding  (i)  any  value          that might be assigned by a purchaser or seller with a special interest, (ii) any value that          might be assigned in the event of a distressed sale or (iii) another situation where the          sale is affected by special circumstances.   1.10    If a Party  does  not  agree  on  the  Expert’s  valuation  of  the  Contingent  Liabilities,  the          Parties  shall  use  good  faith  reasonable  efforts  to  agree  on  a  valuation of  such          Contingent  Liabilities.  If  the  Parties  cannot  agree  on  a valuation of  the Contingent          Liabilities within  (10)  Business  Days  of  receiving  the  Expert’s  valuation,  the  Expert’s          valuation  shall  stand and  AOD  shall  use  its  best  efforts  to  resolve  such  Contingent          Liabilities  as  promptly  as  reasonably  possible  with  time  being  of  the  essence. With          respect to:            (A)    any  Contingent  Liability  less  than  or  equal  to  US$  1,000,000 that crystallises                 within 12 months of Completion, the difference between the Expert’s valuation                 of  the  Contingent  Liability  and  the amount  the Contingent Liability  crystallised                 for will be multiplied by the percentage the Mermaid AOD Shares represent of                 the entire issued share capital of AOD; and            (B)    any Contingent Liability in excess of US$ 1,000,000 that crystallises  within 18                 months  of  Completion,  the  difference  between  the  Expert’s  valuation  of  the                 Contingent Liability and the amount the Contingent Liability crystallised for will                 be  multiplied  by  the  percentage  the  Mermaid  AOD  Shares  represent  of  the                 entire issued share capital of AOD,            (the result of such multiplication in either case, being the “Contingent Liability True Up          Amount”). Where the Contingent Liability True Up Amount is a positive number, RigCo          will pay this  amount to  Mermaid. Where the Contingent  Liability True  Up Amount is a          negative amount, Mermaid will pay this amount to RigCo. The Contingent Liability True 

 

                                                       Up Amount  shall  be  paid  within  fifteen  (15)  Business  Days  of  the  Contingent  Liability          True Up Amount being determined.   1.11    Any Arbitrator appointed pursuant to this Agreement shall be instructed to, among other          issues,  take into  relevant  consideration this Agreement  and  the  input  provided  by  the          Valuers and/or an Expert, as applicable.     

 

                                                                                      Schedule 5                              (Form of RigCo Accession Notice)   To:     Mermaid Maritime Public Company Limited           Mermaid International Ventures           Asia Offshore Drilling Limited    From:   [RigCo] (the “Acceding Party”)   Date:   [●]   TRANSACTION  SUPPORT  AGREEMENT  ENTERED  INTO  BETWEEN  MERMAID  INTERNATIONAL  VENTURES,  MERMAID  MARITIME  PUBLIC  COMPANY  LIMITED,  SEADRILL  LIMITED  AND  ASIA  OFFSHORE  DRILLING  LIMITED  DATED  [●]  AS  SUPPLEMENTED, EXTENDED, RESTATED OR REPLACED (THE AGREEMENT)   We  refer  to the  Agreement. Terms  defined  in  the  Agreement  have  the  same meaning  in this  Accession Notice.   For  the  benefit  of  all  of  the  other  Parties,  the  Acceding  Party  undertakes  to  perform  all  the  obligations  expressed  in  the Agreement  to  be  assumed  by  RigCo and  agrees  that  it  shall  be  bound  by  all  the  provisions  of  the  Agreement,  as  if  it  had  been  an  original  party  to  the  Agreement.   The address, telephone number, email address and attention details for notices to the Acceding  Party are [●].   Clause 26 (Governing law  and Jurisdiction) is incorporated into this Accession Notice as if set  out  in full  and as  if  references  therein to “this Agreement”  were  references  to “this Accession  Notice”.   This Accession Notice has been executed into on the date stated above.   SIGNED by                                                     _________________________________________                     for and on behalf of [RigCo]                

 

                                                                                      Schedule 6                           (Form of New Seadrill Accession Notice)   To:     Mermaid Maritime Public Company Limited           Mermaid International Ventures           Asia Offshore Drilling Limited    From:   [New Seadrill] (the “Acceding Party”)   Date:   [●]   TRANSACTION  SUPPORT  AGREEMENT  ENTERED  INTO  BETWEEN  MERMAID  INTERNATIONAL  VENTURES,  MERMAID            MARITIME  PUBLIC  COMPANY  LIMITED,  SEADRILL  LIMITED  AND  ASIA  OFFSHORE  DRILLING  LIMITED  DATED  [●]  AS  SUPPLEMENTED, EXTENDED, RESTATED OR REPLACED (THE AGREEMENT)   We refer  to the  Agreement. Terms  defined  in  the  Agreement  have  the  same meaning  in this  Accession Notice.   For  the  benefit  of  all  of  the  other  Parties,  the  Acceding  Party  undertakes  to  perform  all  the  obligations expressed in the Agreement to be assumed by [New Seadrill] and agrees that it shall  be  bound  by  all  the  provisions  of  the  Agreement,  as  if  it had  been  an  original  party  to  the  Agreement.   The address, telephone number, email address and attention details for notices to the Acceding  Party are [●].   Clause 26 (Governing law  and Jurisdiction) is incorporated into this Accession Notice as if set  out  in full  and as  if  references  therein to “this Agreement”  were  references  to “this Accession  Notice”.   This Accession Notice has been executed into on the date stated above.   SIGNED by                                                     _________________________________________                     for and on behalf of [New Seadrill]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00307-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00307-of-00352.parquet"}]]