Document:

mmen_ex104.htm

EXHIBIT 10.4
  
 EXECUTION VERSION
  
 LADERA VENTURES CORP.
   
 CONFIDENTIAL
  
 April 27, 2018
  
 MM Enterprises USA, LLC
 10115 Jefferson Blvd.
 Culver City, California  90232
  
 Attention: Adam Bierman, Co-Founder and Chief Executive Officer
  
 Dear Sirs:
  
 Re: Acquisition of Issued and Outstanding Voting Units of MM Enterprises USA, LLC 
  
 This letter agreement (“Letter Agreement”) sets out our mutual understanding of the basic terms and conditions upon which Ladera Ventures Corp. (“Acquiror”) will become the indirect holder of all of the issued and outstanding voting units of MM Enterprises USA, LLC (“MedMen”). Acquiror is a “reporting issuer” in the Provinces of British Columbia and Alberta (together, the “Reporting Provinces”), and it is intended that the Transaction (as defined herein) will result in a reverse take-over of the Acquiror by MedMen and its members and the listing of the shares of Acquiror on the Canadian Securities Exchange (“CSE”) as of the effective time of the Transaction.
  
 The acceptance of this Letter Agreement will be followed by the negotiation of definitive documentation (the “Transaction Documents”) setting forth the detailed terms of the Transaction and containing the material terms and conditions set out in this Letter Agreement and such other terms and conditions as are customary for transactions of the nature and magnitude contemplated herein. All documentation shall be in form and content satisfactory to each of Acquiror and MedMen, each acting reasonably.
  
 Subject to the conditions set forth herein, the terms of this Letter Agreement are intended to create binding obligations on Acquiror and MedMen.
  
 Terms of Transaction and Related Matters
  
 	 1. 
	 Subject to the terms hereof, Acquiror and MedMen will enter into a business combination by way of an amalgamation, arrangement, takeover bid, share purchase or other similar form of transaction or a series of transactions that have a similar effect (the “Transaction”). The parties agree that the final structure of the Transaction is subject to receipt of final tax, corporate and securities law advice for both Acquiror and MedMen; provided that the Transaction shall be structured so as to provide the holders of MedMen Units (as defined herein) with the tax benefits previously contemplated by MedMen.

	  
	  

	 2. 
	 It is understood that MedMen may issue an unlimited number of units with the consent of the manager of MedMen and the consent of members of MedMen holding a majority of units of MedMen then-outstanding. Notwithstanding the foregoing, the manager of MedMen without any further consent of the members of MedMen may cause MedMen to issue Class A Units or Class B Units (collectively, the “MedMen Units”) in exchange for capital contributions of up to an aggregate of two hundred million dollars (US$200,000,000); provided that such Class A Units or Class B Units must be issued for a purchase price of not less than four dollars (US$4.00) per unit. As of the date of this Letter Agreement, 5,181,786 Class A Units of MedMen and 220,113,217 Class B Units of MedMen are issued and outstanding and Class B Units are issuable pursuant to the outstanding convertible notes (the “MedMen Convertible Notes”) and warrants of MedMen (the “MedMen Warrants”), the terms of which are based on the Subscription Receipt Offering Price (as defined herein). Notwithstanding the foregoing, MedMen may issue additional Units, MedMen Convertible Notes or MedMen Warrants or other convertible or equity linked securities either before or after the effective date of the Transaction.

 
  
 	 
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 	 3. 
	 It is understood that the authorized share capital of Acquiror consists of an unlimited number of common shares without nominal or par value (the “Acquiror Shares”) and an unlimited number of preferred shares (the “Acquiror Preferred Shares”), of which, immediately prior to the closing of the Transaction (i) no more than such number of Acquiror Shares will be issued and outstanding such that existing holders of Acquiror Shares will receive upon completion of the Transaction Acquiror Consolidated Shares (as defined below) in an amount that are equivalent to in aggregate US$6,000,000, based on the Subscription Receipt Offering Price (the “Maximum Acquiror Shares”) and no other Acquiror Consolidated Shares will be reserved for issuance or be issuable, whether pursuant to any convertible securities of Acquiror or otherwise, and (ii) no Acquiror Preferred Shares will be issued and outstanding nor be reserved for issuance or be issuable, whether pursuant to any convertible securities of Acquiror or otherwise.

	  
	  

	 4. 
	 Prior to the completion of the Transaction, the Acquiror will diligently seek shareholder approval, including by way of calling and holding a meeting of its shareholders (the “Acquiror Shareholder Meeting”) in accordance with applicable corporate and securities laws, to effect (i) the creation of a new class of non-participating super voting shares of the Acquiror (the “Super Voting Shares”) and the creation of a new class of shares of the Acquiror (the “Alternate Shares”), if determined to be necessary by MedMen upon receipt of final tax, corporate and securities law advice, which Alternate Shares shall have economic and voting rights equivalent or subordinate to the Acquiror Consolidated Shares and shall be convertible into or exchangeable or redeemable for Acquiror Consolidated Shares, in each case with such terms and conditions as proposed by MedMen; (ii) the election of nominees of MedMen to the board of directors of Acquiror, and the creation of the applicable number of casual vacancies on the board of directors of Acquiror as requested by MedMen, conditional upon the completion of the Transaction; (iii) the Transaction or a component thereof (as may be required by the CSE, the TSX Venture Exchange or the NEX board of the TSX Venture Exchange (together, the “TSXV”) or as appropriate in lieu of one or more of the foregoing resolutions); and (iv) such other matters as MedMen may reasonably request in connection with the completion of the Transaction. 

	  
	  

	 5. 
	 Prior to the completion of the Transaction, MedMen will complete a private placement of subscription receipts (the “Subscription Receipts”) directly or through a special purpose corporation (“Finco”) at a price per Subscription Receipt (the “Subscription Receipt Offering Price”) to be determined in the context of the market, to raise aggregate gross proceeds of up to US$50,000,000, or such larger amount as may be agreed to by the applicable parties to such private placement (the “Private Placement”). All Subscription Receipts issued would be convertible, for no additional consideration, into one common share of Finco (each, a “Finco Share”) for each Subscription Receipt, which securities of Finco shall be exchanged by the holders thereof for economically equivalent securities of Acquiror, by way of an amalgamation (the “Amalgamation”) among Acquiror and/or Finco and a subsidiary of Acquiror or other appropriate entity, such as a member of MedMen, by way of a share exchange transaction between Acquiror and the holders of Finco Shares that occurs in connection with an Amalgamation or by way of a transaction with similar effect, in connection with the completion of the Transaction, and which securities of Acquiror shall be freely-tradable in each of the provinces and territories of Canada.

 
  
 	 
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 	 6. 
	 Pursuant to the applicable steps of the Transaction, including the Amalgamation, the equity capital of Acquiror and MedMen shall be reorganized such that:

 
  
 	  
	 (a) 
	 existing shareholders of Acquiror and holders of Finco Shares shall become holders of post-Consolidation (as defined below), post-Amalgamation Acquiror Shares (each, an “Acquiror Consolidated Share”);

	  
	  
	  

	  
	 (b) 
	 Acquiror shall become the indirect holder of all voting units of MedMen, which units shall have economic participation rights in MedMen; 

	  
	  
	  

	  
	 (c) 
	 some or all of the existing holders of MedMen Units shall become holders of non-voting units of MedMen or shares of an affiliate thereof (each, a “Redeemable MedMen Security”), which securities shall have economic participation rights in MedMen or its applicable affiliate and which securities shall be redeemable at the election of their holders for, on a 1:1 basis, Acquiror Consolidated Shares or for cash (such determination to be made by MedMen or its applicable affiliate); 

	  
	  
	  

	  
	 (d) 
	 some of the existing MedMen Units may be reorganized such that they are converted or otherwise exchanged for Alternate Shares; 

	  
	  
	  

	  
	 (e) 
	 Messrs. Bierman and Modlin in their personal capacity will subscribe for the applicable Super Voting Shares, which Super Voting Shares shall not have any economic participation rights in Acquiror;

	  
	  
	  

	  
	 (f) 
	 the MedMen Convertible Notes shall be reorganized as may be determined to be appropriate by MedMen; 

	  
	  
	  

	  
	 (g) 
	 the MedMen Warrants shall be reorganized as may be determined to be appropriate by MedMen; and

	  
	  
	  

	  
	 (h) 
	 holders of any other convertible securities of MedMen shall become entitled to receive Redeemable MedMen Securities.

 
  
 	 7. 
	 MedMen covenants and agrees to forthwith complete the preparation of financial statements as required by the CSE and applicable securities laws, which will include audited annual financial statements for its most recently completed fiscal year and if, and as required, interim financial statements for its most recently completed interim period following its most recently completed fiscal year, all as audited or reviewed by the auditors of MedMen as required by, and in accordance with, applicable securities regulations and the policies of the CSE. 

	  
	  

	 8. 
	 Upon closing of the Transaction, all directors of the Acquiror shall resign and the board of directors of the Acquiror shall be reconstituted in accordance with the applicable approval at the Acquiror Shareholder Meeting (including with the applicable number of casual vacancies on the board of directors of the Acquiror as requested by MedMen), and all officers of the Acquiror shall resign and be replaced by nominees of MedMen, in a manner that complies with the requirements of the CSE and applicable securities and corporate laws. 

 
  
 	 
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 Conditions Precedent
  
 	 9. 
	 The completion of the Transaction shall be subject to the following conditions precedent being satisfied prior to the date of closing of the Transaction (the “Closing Date”):

 
  
 	  
	 (a) 
	Conditions Precedent for the Benefit of Acquiror:

 
  
 	  
	 (i) 
	 other than approval of the board of directors of Acquiror, receipt of all required approvals and consents for the Transaction and all related matters and for this Letter Agreement and the Transaction Documents, including without limitation:

 
  
 	  
	 A. 
	 the receipt of all requisite approvals of Acquiror’s shareholders, as required by the CSE, the TSXV or applicable corporate or securities laws to implement the Transaction;

	  
	  
	  

	  
	 B. 
	 the approval of CSE for the listing of the Acquiror Consolidated Shares (including Acquiror Consolidated Shares issuable upon redemption of the Redeemable MedMen Securities and upon exercise, exchange or conversion of convertible securities of Acquiror and MedMen); 

	  
	  
	  

	  
	 C. 
	 the approval of the TSXV in respect of the delisting of the Acquiror Shares from the TSXV; and

	  
	  
	  

	  
	 D. 
	 the approval of any third parties from whom MedMen must obtain consent including any lenders or financial institutions; 

 
  
 	  
	 (ii) 
	 no material adverse change shall have occurred in the business, results of operations, assets, liabilities, condition (financial or otherwise) or affairs of MedMen (considered on a consolidated basis) between the date that an external auditor issues an opinion as to the applicable financial statements of MedMen and the completion of the Transaction;

	  
	  
	  

	  
	 (iii) 
	 the representations and warranties of MedMen contained in this Letter Agreement and the Transaction Documents addressed to Acquiror shall be true and correct in all material respects as of the Closing Date, other than as a result of any change, agreed upon by the parties, in any component of the Transaction or any transactions related thereto;

	  
	  
	  

	  
	 (iv) 
	 there being no prohibition under applicable laws against consummation of the Transaction;

	  
	  
	  

	  
	 (v) 
	 no legal proceeding shall be pending or threatened in writing wherein an unfavourable judgment, order, decree, stipulation or injunction would (A) prevent consummation of any component of the Transaction or any transaction related to the Transaction, or (B) cause any component of the Transaction or any transaction related to the Transaction to be rescinded following consummation;

	  
	  
	  

	  
	 (vi) 
	 no inquiry or investigation (whether formal or informal) in relation to MedMen or its directors, members, managers, or officers, as applicable, shall have been commenced or threatened by the CSE, the TSXV, any relevant securities commission or other federal, state or local regulatory body having jurisdiction, such that the outcome of such inquiry or investigation could have a material adverse effect on Acquiror after giving effect to the Transaction; 

 
  
 	 
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	 (vii) 
	 MedMen shall be in compliance in all material respects with the terms of this Letter Agreement and the Transaction Documents; 

	  
	  
	  

	  
	 (viii) 
	 the Private Placement shall have been completed; 

	  
	  
	  

	  
	 (ix) 
	 the existing letter agreement dated as of April 11, 2018 (the “Existing Letter Agreement”) between MedMen and OutdoorPartner Media Corporation in respect of a business combination shall have been terminated; and

	  
	  
	  

	  
	 (x) 
	 all directors, officers and members of management of Acquiror and any subsidiary of Acquiror shall have received releases from the Acquiror in form and substance acceptable to them, acting reasonably.

 
  
 	  
	 (b) 
	Conditions Precedent for the Benefit of MedMen:

 
  
 	  
	 (i) 
	 other than approval of the manager of MedMen and MedMen members, receipt of all required approvals and consents for the Transaction and all related matters and for this Letter Agreement and the Transaction Documents, including without limitation:

 
  
 	  
	 A. 
	 the receipt of all requisite approvals of Acquiror’s shareholders, as required by the CSE, the TSXV or applicable corporate or securities laws to implement the Transaction; 

	  
	  
	  

	  
	 B. 
	 the approval of CSE for the listing of the Acquiror Consolidated Shares (including Acquiror Consolidated Shares issuable upon redemption of the Redeemable MedMen Securities and upon exercise, exchange or conversion of convertible securities of Acquiror and MedMen); 

	  
	  
	  

	  
	 C. 
	 the approval of the TSXV in respect of the delisting of the Acquiror Shares from the TSXV; 

	  
	  
	  

	  
	 D. 
	 the approval of any third parties from whom MedMen must obtain consent including any lenders or financial institutions, state and local regulators, licensors and strategic partners; 

	  
	  
	  

	  
	 E. 
	 the approval of the board of directors of Acquiror of a change of its name to such name as may be requested by MedMen and acceptable to the applicable regulatory authorities; and

	  
	  
	  

	  
	 F. 
	 the approval of the board of directors of Acquiror of a consolidation of the Acquiror Shares on a basis required to ensure that the Acquiror has no more than the Maximum Acquiror Shares issued and outstanding as of immediately prior to the Closing Date (the “Consolidation”); 

 
  
 	  
	 (ii) 
	 each Acquiror Consolidated Share, Super Voting Share and Alternate Share issuable pursuant to the Transaction or upon redemption of the Redeemable MedMen Securities shall be issued or be issuable as fully paid and non-assessable shares in the capital of the Acquiror, free and clear of any and all encumbrances, liens, charges, demands of whatsoever nature, except those imposed pursuant to the escrow restrictions of the CSE, and shall be exempt from the prospectus requirements of applicable Canadian securities laws in each of the provinces and territories of Canada either by virtue of exemptive relief from the securities regulatory authorities of each of the provinces and territories of Canada or by virtue of applicable exemptions under such Canadian securities laws and such securities shall not be subject to resale restrictions under applicable Canadian securities laws (other than as applicable to control persons, pursuant to section 2.6 of National Instrument 45-102 – Resale of Securities);

 
  
 	 
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	 (iii) 
	 the director nominees of MedMen shall have been elected to the board of directors of Acquiror, and the applicable number of casual vacancies on the board of directors of Acquiror as requested by MedMen shall have been created, conditional upon the completion of the Transaction, and the management nominees of MedMen (the “MedMen Management Nominees”) shall have been duly appointed as the management of Acquiror as of the time of closing of the Transaction;

	  
	  
	  

	  
	 (iv) 
	 no material adverse change shall have occurred in the business, results of operations, assets, liabilities, condition (financial or otherwise) or affairs of Acquiror or any subsidiary of Acquiror between the date of signing this Letter Agreement and the completion of the Transaction except for the expenditure of funds or incurrence of accrued liabilities required to maintain Acquiror’s status as a reporting issuer in good standing in the Reporting Provinces, or as otherwise required in connection with the completion of the transactions contemplated in this Letter Agreement;

	  
	  
	  

	  
	 (v) 
	 the representations and warranties of Acquiror contained in this Letter Agreement and the Transaction Documents shall be true and correct in all material respects as of the Closing Date, other than as a result of any change in the issued and outstanding securities of Acquiror as a result of the Transaction;

	  
	  
	  

	  
	 (vi) 
	 there being no prohibition under applicable laws against consummation of the Transaction;

	  
	  
	  

	  
	 (vii) 
	 no legal proceeding shall be pending or threatened in writing wherein an unfavourable judgment, order, decree, stipulation or injunction would (A) prevent consummation of any component of the Transaction or any transaction related to the Transaction, or (B) cause any component of the Transaction or any transaction related to the Transaction to be rescinded following consummation;

	  
	  
	  

	  
	 (viii) 
	 no inquiry or investigation (whether formal or informal) in relation to Acquiror or any subsidiary of Acquiror or its directors, officers or shareholders shall have been commenced or threatened by the CSE, the TSXV, any securities commission or other federal, state, provincial or local regulatory body having jurisdiction, such that the outcome of such inquiry or investigation could have a material adverse effect on Acquiror after giving effect to the Transaction; 

	  
	  
	  

	  
	 (ix) 
	 Acquiror shall be in compliance in all material respects with the terms of this Letter Agreement and the Transaction Documents;

	  
	  
	  

	  
	 (x) 
	 all directors, officers and members of management of Acquiror and any subsidiary of Acquiror shall have delivered resignations and releases in form and substance acceptable to MedMen, acting reasonably, and no termination, severance or other fees shall be payable to any such directors, officers or members of management of Acquiror and any subsidiary of Acquiror in connection with such resignations and releases; 

 
  
 	 
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	 (xi) 
	 the CSE shall not have objected to the appointment of the MedMen nominees to the board of directors of Acquiror, or of the MedMen Management Nominees to the management of Acquiror, each upon closing of the Transaction; 

	  
	  
	  

	  
	 (xii) 
	 immediately prior to the Closing Date, no more than the Maximum Acquiror Shares will be issued and outstanding and no other Acquiror Shares will be reserved for issuance or be issuable, whether pursuant to any convertible securities of Acquiror or otherwise; 

	  
	  
	  

	  
	 (xiii) 
	 the Private Placement shall have been completed on terms and conditions acceptable to MedMen, acting reasonably; 

	  
	  
	  

	  
	 (xiv) 
	 the Voting Support Agreements (as defined herein) shall have been entered into in accordance with Section 13(k) and complied with in all material respects; 

	  
	  
	  

	  
	 (xv) 
	 the 8,000,000 subscription receipts in the capital of the Acquiror (the “Acquiror Subscription Receipts”) issued by the Acquiror pursuant to a non-brokered private placement completed on March 7, 2018 (the “Acquiror Subscription Receipt Offering”) shall have been converted into their underlying securities, such securities being one Acquiror Share and one Acquiror Share purchase warrant (each, an “Acquiror Warrant”) in respect of each Acquiror Subscription Receipt, in accordance with the terms thereof and in compliance with applicable laws and the rules and policies of the TSXV;

	  
	  
	  

	  
	 (xvi) 
	 the aggregate gross proceeds raised from the Acquiror Subscription Receipt Offering, being C$600,000, shall have been released unconditionally by the escrow agent for the Acquiror Subscription Receipt Offering to the Acquiror; 

	  
	  
	  

	  
	 (xvii) 
	 MedMen shall have received evidence satisfactory to MedMen, acting reasonably, as to the cancellation of all Acquiror Warrants and/or any entitlement thereto upon conversion of the Acquiror Subscription Receipts, without payment or delivery by the Acquiror of any consideration for such cancellation to the holders or contemplated holders of the Acquiror Warrants; 

	  
	  
	  

	  
	 (xviii) 
	 immediately prior to the Closing Date, and prior to the payment of (A) any costs associated with the transactions contemplated herein, which costs shall be no more than C$30,000, and (B) any CSE listing fees, the Acquiror shall have a working capital position of not less than C$317,000 and a cash position of not less than C$317,000, provided that if the Closing Date occurs after June 30, 2018, such working capital and cash position amounts will decrease by approximately C$12,000 per month; and

	  
	  
	  

	  
	 (xix) 
	 the Existing Letter Agreement shall have been terminated.

 
  
 	  
	 (c) 
	Conditions Precedent and Right of Waiver:

 
  
 	  
	 (i) 
	 The conditions precedent set out in Section 9(a) are inserted for the sole benefit of Acquiror and the conditions precedent set out in Section 9(b) are inserted for the sole benefit of MedMen. 

	  
	  
	  

	  
	 (ii) 
	 The said conditions precedent may be waived in whole or in part by the party or parties for whose benefit they are inserted in that party’s or those parties’ sole and absolute discretion. No such waiver shall be of any effect unless it is in writing signed by the party or parties granting the waiver. 

 
  
 	 
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 Representations and Warranties of MedMen
  
 	 10. 
	 MedMen represents and warrants to Acquiror as of the date hereof as follows:

 
  
 	  
	 (a) 
	 the issued unit capital of MedMen, as of the date of this Letter Agreement, consists of a total of 5,181,786 Class A Units and 220,113,217 Class B Units, which are validly issued and outstanding as fully paid and non-assessable units in the capital of MedMen and all MedMen Units issued and outstanding immediately prior to the closing of the Transaction shall be validly issued and outstanding as fully paid and non-assessable units in the capital of MedMen; provided that notwithstanding the foregoing, MedMen may issue additional Units, MedMen Convertible Notes or MedMen Warrants or other convertible or equity linked securities either before or after the effective date of the Transaction;

	  
	  
	  

	  
	 (b) 
	 MedMen has been formed and is existing under the laws of the State of Delaware, and is not and will not be a reporting issuer or the equivalent in any jurisdiction at the time of the Transaction; 

	  
	  
	  

	  
	 (c) 
	 there are no material claims, actions, suits, judgments, litigation or proceedings outstanding, pending, or to MedMen’s knowledge, threatened against MedMen (considered on a consolidated basis);

	  
	  
	  

	  
	 (d) 
	 MedMen has the corporate power and authority to enter into this Letter Agreement and to carry out the transactions contemplated hereby, subject to approvals from state and local regulatory agencies, and the execution and delivery of this Letter Agreement and the completion of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of MedMen, subject to those approvals that will be obtained prior to completion of the Transaction, including receipt of all applicable approvals of members of MedMen; and

	  
	  
	  

	  
	 (e) 
	 other than the approval of the CSE and the manager and members of MedMen, no permit, authorization or consent of any party is necessary on the part of MedMen for the consummation by MedMen of the Transaction, and the execution and delivery of this Letter Agreement and the consummation by MedMen of the Transaction will not result in a material violation or material breach of, or constitute (with or without due notice or lapse of time or both) a material default under any material indenture, agreement or other instrument to which MedMen is a party or by which it is bound.

 
  
 Representations and Warranties of Acquiror
  
 	 11. 
	Acquiror represents and warrants to MedMen, both as of the date hereof, and as of the Closing Date (except as otherwise noted below), as follows:

 
  
 	  
	 (a) 
	 5,423,790 Acquiror Shares are validly issued and outstanding as fully paid and non-assessable shares in the capital of Acquiror as of the date hereof and no more than the Maximum Acquiror Shares will be issued and outstanding as of immediately prior to the Closing Date and no other Acquiror Shares will be reserved for issuance or be issuable as of immediately prior to the Closing Date. No Acquiror Preferred Shares are issued and outstanding in the capital of Acquiror as of the date hereof and no Acquiror Preferred Shares will be issued and outstanding as of immediately prior to the Closing Date and no Acquiror Preferred Shares will be reserved for issuance or be issuable as of immediately prior to the Closing Date; 

 
  
 	 
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	 (b) 
	 other than 8,000,000 Acquiror Subscription Receipts held by the persons and companies disclosed by the Acquiror to MedMen, each being convertible into one Acquiror Share and one Acquiror Warrant, no person has any agreement, right or option (whether direct, indirect or contingent or whether pre-emptive, contractual or by law) to purchase or otherwise acquire any of the unissued shares in the capital of Acquiror or for the issue of any other unissued securities of any nature or kind of Acquiror;

	  
	  
	  

	  
	 (c) 
	 Acquiror is incorporated, existing and in good standing under the laws of the Province of British Columbia and is a “reporting issuer” in the Reporting Provinces within the meaning of applicable securities legislation in good standing and not included in a list of defaulting reporting issuers maintained by the applicable securities regulators in such provinces, and no securities commission, securities exchange or court has issued any order or obtained any undertaking adversely impacting or preventing the Transaction, as currently contemplated, or the trading of any securities of Acquiror, and no proceedings for such purpose are pending or, to the best knowledge of Acquiror, are threatened. The issued and outstanding Acquiror Shares are listed and posted for trading on the NEX board of the TSXV and Acquiror has not taken any action which would be reasonably expected to result in the delisting or suspension of such Acquiror Shares on or from the NEX board and Acquiror is currently in compliance with the rules and policies of the TSXV. All material filings and fees required to be made and paid by Acquiror pursuant to applicable securities laws and the rules and policies of the TSXV have been made and paid;

	  
	  
	  

	  
	 (d) 
	 Acquiror does not have any subsidiaries or any equity or other interests in any other person or incorporated or unincorporated entity; 

	  
	  
	  

	  
	 (e) 
	 there is no bankruptcy, liquidation, winding-up or other similar proceeding pending or in progress or, to the knowledge of Acquiror, threatened of or against Acquiror before any court, regulatory or administrative agency or tribunal; 

	  
	  
	  

	  
	 (f) 
	 Acquiror is not in breach or default of, and the execution and delivery of this Letter Agreement and the performance by Acquiror of its obligations hereunder, do not and will not conflict with or result in a breach or violation of any of the terms of or provisions of, or constitute a default under, whether after notice or lapse of time or both (i) any applicable laws, including applicable securities laws; (ii) the articles, by-laws or resolutions of Acquiror; (iii) any agreement, debt instrument or other instrument or arrangement of or binding Acquiror; or (iv) any judgment, decree or order binding Acquiror or its properties or assets; 

	  
	  
	  

	  
	 (g) 
	 there are no claims, actions, suits, judgments, orders, litigation or proceedings outstanding, pending against or affecting Acquiror, and Acquiror is not aware of any existing ground on which any such claim, action, suit, judgment, order, litigation or proceeding might be commenced;

	  
	  
	  

	  
	 (h) 
	 Acquiror has the corporate power and authority to enter into this Letter Agreement and to carry out the transactions contemplated hereby and the execution and delivery of this Letter Agreement and the completion of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of Acquiror, subject to the receipt of all requisite shareholder approvals of Acquiror; 

 
  
 	 
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	 (i) 
	 this Letter Agreement constitutes a valid and binding obligation of Acquiror enforceable against it in accordance with its terms subject, however, to limitations with respect to enforcement imposed by law in connection with bankruptcy, insolvency, reorganization or other laws affecting creditors’ rights generally and to the extent that equitable remedies such as specific performance and injunctions are only available in the discretion of the court from which they are sought;

	  
	  
	  

	  
	 (j) 
	 other than the approval of the CSE, the shareholders of Acquiror and, in respect of the delisting of the Acquiror Shares from the TSXV, the TSXV, no permit, authorization or consent of any party is necessary for the consummation by Acquiror of the Transaction, and the execution and delivery of this Letter Agreement and the consummation by Acquiror of the Transaction will not result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default under any statute, regulation, law, judgment, order or decree to which Acquiror is subject or by which it is bound or any indenture, agreement or other instrument to which Acquiror is a party or by which it is bound; 

	  
	  
	  

	  
	 (k) 
	 since October 31, 2017: (i) there has not been any material change in the business, assets, liabilities, obligations (absolute, accrued, contingent or otherwise), condition (financial or otherwise), prospects or results of operations of Acquiror; (ii) there has not been any material change in the equity capital or long-term debt of Acquiror, other than the completion by Acquiror of the Acquiror Subscription Receipt Offering; and (iii) Acquiror has carried on business in the ordinary course; 

	  
	  
	  

	  
	 (l) 
	 since October 31, 2001, Acquiror has carried on no active business other than seeking assets or businesses to merge with or acquire; 

	  
	  
	  

	  
	 (m) 
	 all documents and information filed by the Acquiror on SEDAR subsequent to January 1, 2014 were true and correct in all material respects as of the respective dates of such documents and information and contains all material facts pertaining to the securities of the Acquiror and does not omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading. Since January 1, 2014, Acquiror has been in compliance in all material respects with its timely and continuous disclosure obligations under applicable securities laws in Canada, including insider reporting obligations, and, without limiting the generality of the foregoing, there has been no material change or material fact as to Acquiror that has occurred, which has not been publicly disclosed. Acquiror has not filed any confidential material change reports which remain confidential as at the date hereof and there are no circumstances presently existing under which liability is or would reasonably be expected to be incurred under Part 16.1 – Civil Liability for Secondary Market Disclosure of the Securities Act (British Columbia) and analogous provisions under applicable securities laws in the Province of Alberta. All documents and information filed by the Acquiror on SEDAR subsequent to January 1, 2018 together constitute full, true and plain disclosure of all material facts relating to the Acquiror and the securities of Acquiror;

	  
	  
	  

	  
	 (n) 
	 all information relating to the Acquiror and its business, assets, properties and liabilities, provided or made available to MedMen by the Acquiror is true and correct in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading. The Acquiror has provided to MedMen all, and not withheld from MedMen any, material facts relating to the Acquiror and the securities of the Acquiror; 

 
  
 	 
	10
	

	 

 
  
 	  
	 (o) 
	as of the date hereof the Acquiror has a working capital deficiency of C$126,718, including a cash position of C$2,751; and
	  
	  
	  

	  
	 (p) 
	 the Acquiror is no longer carrying on any activities in connection with its previous businesses within the mineral resources and oil and gas sectors and in that respect no longer holds any mineral or oil and gas assets or other operations or liabilities or obligations (absolute, accrued, contingent or otherwise), environmental or otherwise, in connection with such previous businesses. To the best of the Acquiror’s knowledge, all such previous businesses of the Acquiror within the mineral resources and oil and gas sectors were conducted in compliance with all applicable environmental laws and workplace health and safety laws, regulations and policies. There are no environmental claims, actions, proceedings, investigations, audits, evaluations, assessments, or reclamation or closure obligations outstanding, pending or, to the knowledge of the Acquiror, threatened against the Acquiror and the Acquiror knows of no basis for any such matters to arise against the Acquiror in the future. The Acquiror is no longer subject to any reporting obligations under National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities. 

 
  
 Standstill and Agreement to Support Transactions
  
 	 12. 
	 MedMen hereby agrees from the date hereof until the Termination Date (as hereinafter defined):

 
  
 	  
	 (a) 
	 not to initiate, propose, assist or participate in any activities or solicitations in opposition to or in competition with the Transaction and, without limiting the generality of the foregoing, not to induce or attempt to induce any other person to initiate any shareholder proposal, acquisition of MedMen securities (other than in connection with any private placements or asset acquisitions by MedMen) or any other form of transaction inconsistent with completion of the Transaction, and not to take actions of any kind which may be reasonably expected to reduce the likelihood of success of the Transaction, except as required by statutory law; 

	  
	  
	  

	  
	 (b) 
	 to disclose to Acquiror any unsolicited offer it has received: (i) for the purchase of its securities, or any portion thereof, or (ii) of any amalgamation, arrangement, merger, business combination, take-over bid, tender or exchange offer, variation of a take-over bid, tender or exchange offer or similar transaction involving MedMen made to the manager or officers of MedMen, or directly to MedMen’s securityholders; 

	  
	  
	  

	  
	 (c) 
	 to use its reasonable commercial efforts to complete the Transaction and to not take any action contrary to or in opposition to the Transaction;

	  
	  
	  

	  
	 (d) 
	 not to alter or amend MedMen’s constating documents or MedMen’s articles or by-laws in any manner which may adversely affect the success of the Transaction, except as is agreed to by Acquiror in writing or required to give effect to the matters contemplated herein; 

	  
	  
	  

	  
	 (e) 
	 to use its reasonable commercial efforts to obtain all approvals required in respect of the Transaction, including any lenders or financial institutions, state and local regulators, licensors and strategic partners; and

	  
	  
	  

	  
	 (f) 
	 to cooperate fully with Acquiror and to use all reasonable commercial efforts to assist Acquiror in its efforts to complete the Transaction unless such cooperation and efforts would subject Acquiror to liability.

 
  
 	 
	11
	

	 

 
  
 	 13. 
	 Acquiror hereby agrees from the date hereof until the Termination Date:

 
  
 	  
	 (a) 
	 not to carry on any business except as contemplated herein;

	  
	  
	  

	  
	 (b) 
	 not to issue any debt or equity or other securities, except as contemplated herein and agreed to by MedMen, or declare or pay any dividends or distribute any of Acquiror’s property or assets to shareholders;

	  
	  
	  

	  
	 (c) 
	 not to borrow any money or incur any indebtedness (except for trades payable incurred in the ordinary course, or funds borrowed for ongoing operations in advance of the release to the Acquiror of the aggregate gross proceeds raised from the Acquiror Subscription Receipt Offering);

	  
	  
	  

	  
	 (d) 
	 not to alter or amend Acquiror’s articles or by-laws except as contemplated herein and agreed to by MedMen; 

	  
	  
	  

	  
	 (e) 
	 not to enter into any transaction or contract, except as contemplated herein, without the prior written consent of MedMen; 

	  
	  
	  

	  
	 (f) 
	 not to initiate, propose, assist or participate in any activities or solicitations in opposition to or in competition with the Transaction and, without limiting the generality of the foregoing, not to take any actions to give effect to the completion of any transactions other than the Transaction, not induce or attempt to induce any other person to initiate any shareholder proposal, acquisition of Acquiror Shares or any other form of transaction inconsistent with completion of the Transaction, not to complete any fundraising activities and not to take actions of any kind which may reduce the likelihood of success of the Transaction, except as required by statutory law;

	  
	  
	  

	  
	 (g) 
	 to disclose to MedMen any unsolicited offer it has received: (i) for the purchase of its shares, or any portion thereof, or (ii) of any amalgamation, arrangement, merger, business combination, take-over bid, tender or exchange offer, variation of a take-over bid, tender or exchange offer or similar transaction involving Acquiror made to the board of directors or management of Acquiror, or directly to Acquiror’s shareholders; 

	  
	  
	  

	  
	 (h) 
	 to use its reasonable commercial efforts to obtain any third parties approvals required in respect of the Transaction; 

	  
	  
	  

	  
	 (i) 
	 to cooperate fully with MedMen, and to use all reasonable commercial efforts to assist MedMen to complete the Transaction and to take all actions as are otherwise necessary to complete the Transaction, including satisfaction of all conditions precedent to the completion of the Transaction hereunder that are for the benefit of MedMen; 

	  
	  
	  

	  
	 (j) 
	 to use its reasonable commercial efforts to cause all Acquiror shareholders to vote their Acquiror Shares in favour of the Transaction and related matters, and otherwise approve the Transaction and related matters as required; 

	  
	  
	  

	  
	 (k) 
	 to use its commercially reasonable efforts to obtain prior to May 9, 2018, voting support agreements with MedMen (collectively, the “Voting Support Agreements”), in a form as reasonably agreed to by MedMen, from existing securityholders of Acquiror who, legally or beneficially own, or exercise control or discretion over, directly or indirectly, in aggregate at least 37% of the outstanding Acquiror Shares and 100% of the outstanding Acquiror Subscription Receipts (or any transferee who acquires any Acquiror Shares or Acquiror Subscription Receipts from any such securityholder after the date hereof), in each case pursuant to which such parties will, among other things, agree to vote their Acquiror Shares in favour of the Transaction and related matters and to not take any action of any kind which might reasonably be regarded as likely to reduce the success of, or delay or interfere with, the completion of the Transaction or any related transactions contemplated in connection with the Transaction; and 

 
  
 	 
	12
	

	 

 
  
 	  
	 (l) 
	 prior to the payment of (i) any costs associated with the transactions contemplated herein, which costs shall be no more than C$30,000, and (ii) any CSE listing fees, to have a working capital position of not less than C$317,000 and a cash position of not less than C$317,000 as of the Closing Date, provided that if the Closing Date occurs after June 30, 2018, such working capital and cash position amounts will decrease by approximately C$12,000 per month. 

 
  
 Escrow
  
 	 14. 
	 The parties acknowledge that a portion of the Acquiror Consolidated Shares, the Super Voting Shares and the Alternate Shares may be subject to escrow provisions which shall be imposed by the policies of the CSE. The parties further acknowledge that these escrowed shares shall be held in escrow and released, over time, as determined by the CSE. The parties agree that the terms of the escrow shall be negotiated by counsel for MedMen, in consultation with counsel for Acquiror, and the CSE, and the parties hereto agree to accept such terms as imposed by the CSE provided such escrow is in compliance with the published policies of the CSE. All parties agree to use their reasonable commercial efforts to obtain the most advantageous escrow terms for members of MedMen and the contemplated holders of the Super Voting Shares and of the Alternate Shares.

 
  
 Expenses 
  
 	 15. 
	 Notwithstanding any other provision herein, each of the parties hereto shall be responsible for its own costs and expenses incurred with respect to the transactions contemplated herein including, without limitation, all costs and expenses incurred prior to the date of this Letter Agreement and all legal and accounting fees and disbursements relating to preparing the Transaction Documents, calling and holding shareholder meetings, the application to the CSE for the listing of Acquiror Consolidated Shares, the application to the NEX board of the TSXV for the delisting of Acquiror Shares and preparing all other documentation and filings in connection with the Transaction, or otherwise relating to the transactions contemplated herein; provided that MedMen shall be responsible for all costs incurred by the Acquiror in connection with the rescheduling of the Acquiror’s shareholder meeting which had been contemplated to occur on May 15, 2018. Other than the application to the NEX board of the TSXV for the delisting of Acquiror Shares, the parties agree that MedMen and its counsel shall be primarily responsible, at MedMen’s cost, for preparation of all documentation and filings in connection with the Transaction, including, without limitation, the application to the CSE for the listing of Acquiror Consolidated Shares following completion of the Transaction, while the Acquiror and its counsel shall perform a review function and diligently cooperate and assist in the preparation of such documentation and required filings, at the Acquiror’s cost; however, each party shall permit the other party and its counsel to review the preparation of all documentation to be sent to shareholders of such party or otherwise used in connection with the approval of the Transaction and related matters by the shareholders of such party, the CSE and the TSXV.

 
  
 	 
	13
	

	 

 
  
 Closing and Good Faith Negotiations
  
 	 16. 
	 Acquiror and MedMen agree to proceed diligently and in good faith to negotiate and settle the terms of the Transaction Documents for execution, and to complete all transactions contemplated herein as soon as possible. 

 
  
 Confidentiality and Notice Obligations
  
 	 17. 
	 No disclosure or announcement, public or otherwise, in respect of this Letter Agreement or the transactions contemplated herein will be made by any party without the prior agreement of the other party as to timing, content and method, provided that the obligations herein will not prevent any party from making such disclosure or announcement as its counsel advises is required by applicable law or the rules and policies of the CSE or the TSXV, as applicable. If a party is required by applicable law or the rules and policies of the CSE or the TSXV, as applicable, to make such disclosure or announcement, such party will use commercially reasonable efforts to provide reasonable notice of such disclosure or announcement to the other party, including the proposed text of such disclosure or announcement, and provide the other party with a reasonable opportunity to review and comment on the same, which comments shall be reasonably considered by the first party. MedMen shall have the right to receive advance notice of any public filings to be made by Acquiror and Acquiror shall provide MedMen and its legal counsel with a reasonable period in advance to review and comment on such proposed public filings, which comments shall be reasonably considered by Acquiror.

	  
	  

	 18. 
	 The parties acknowledge that their rights and obligations under this Letter Agreement shall in no way derogate from their rights and obligations in any confidentiality agreement that may be entered into by the parties in connection with the Transaction. 

 
  
 Termination
  
 	 19. 
	 This Letter Agreement shall terminate with the parties having no obligations to each other, other than in respect of the cost and expense provisions contained in Section 15 and the confidentiality provisions contained in Sections 17 and 18, and other than in respect of the liability of a party for breach of any of the terms or conditions set forth herein before the termination, on the day (the “Termination Date”) on which the earliest of the following events occurs:

 
  
 	  
	 (a) 
	 written agreement of the parties to terminate this Letter Agreement; 

	  
	  
	  

	  
	 (b) 
	 the Transaction is not completed on or prior to July 31, 2018;

	  
	  
	  

	  
	 (c) 
	 upon written notice from MedMen to Acquiror, in the event that there shall be any material change or change in a material fact in respect of Acquiror, or there should be discovered any previously undisclosed material fact required to be disclosed by Acquiror or new material fact in respect of Acquiror, which, in the reasonable opinion of MedMen, has or would be expected to have an adverse effect on the business, affairs, prospects, results of operations, assets, liabilities, capital or condition (financial or otherwise) of Acquiror (post-Transaction) or MedMen (each considered on a consolidated basis); and

	  
	  
	  

	  
	 (d) 
	 upon written notice from MedMen to Acquiror, in the event that Acquiror is in breach of any material term, condition or covenant of this Letter Agreement or any representation or warranty given by Acquiror in this Letter Agreement becomes or is false in any material respect. 

 
  
 	 
	14
	

	 

 
  
 Miscellaneous
  
 	 20. 
	 This Letter Agreement shall be governed in all respects, including validity, interpretation and effect, in accordance with the laws of the Province of British Columbia and the federal laws of Canada applicable therein and the undersigned hereby irrevocably attorn to the non-exclusive jurisdiction of the Courts of the Province of British Columbia in respect of any matter arising hereunder or in connection herewith.

	  
	  

	 21. 
	 No amendment, modification, restatement or supplement of this Letter Agreement or any provision of this Letter Agreement is binding unless it is in writing and executed each party hereto. 

	  
	  

	 22. 
	 All dollar amounts expressed herein are in Canadian currency, unless otherwise specified.

	  
	  

	 23. 
	 This Letter Agreement will be binding upon, and will enure to the benefit of and be enforceable by, the parties hereto and their respective successors, permitted assigns, executors and administrators. No assignment of this Letter Agreement will be permitted without the written consent of the other party. 

	  
	  

	 24. 
	 This Letter Agreement contains the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings with respect thereto.

	  
	  

	 25. 
	 This Letter Agreement may be executed in counterparts and evidenced by a facsimile or PDF email copy thereof and all such counterparts or facsimile or PDF counterparts shall constitute one document.

 
  
 If  the terms of this Letter Agreement are acceptable, please communicate your acceptance by executing the duplicate copy hereof in the appropriate space below and returning such executed copy to us by facsimile or PDF copy to the attention of the undersigned. 
  
 [Signature Page Follows]
  
 	 
	15
	

	 

 
  
 Yours very truly, 
  
 LADERA VENTURES CORP.
  
 	 Per:
	 /s/ Scott Ackerman
	  

	  
	 Name: Scott Ackerman
	  

	  
	 Title: President & Chief Executive Officer
	  

 
  
 THE TERMS OF THIS LETTER AGREEMENT are hereby accepted as of the 27th day of April, 2018.
  
 MM ENTERPRISES USA, LLC, 
 a Delaware limited liability company
  
 By: MM Enterprises Manager, LLC,
 a Delaware limited liability company
 Its Manager
  
 	 /s/ Adam Bierman
	  

	 By: Adam Bierman
	  

	 Its: Manager
	  

	  
	  

	 /s/ Andrew Modlin
	  

	 By: Andrew Modlin
	  

	 Its: Manager
	  

 
  
 	 
	16Exhibit 10.1

 

SECURITIES
PURCHASE AGREEMENT

 

THIS
SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of January 14, 2021, is between DRAGON VICTORY
INTERNATIONAL LIMITED, a company incorporated under the laws of the Cayman Islands, with principal executive offices located
at Room 1803, Yintai International Building, Kejiguan Road, Binjiang District, Hangzhou, Zhejiang Province, China (the “Company”),
and each of the investors listed on the Schedule of Buyers attached hereto (individually, a “Buyer” and collectively
the “Buyers”).

 

WITNESSETH

 

WHEREAS,
the Company and each Buyer desire to enter into this transaction for the Company to sell and the Buyers to purchase the Convertible
Debentures (as defined below) pursuant to an exemption from registration pursuant to Section 4(2) and/or Rule 506 of Regulation
D (“Regulation D”) as promulgated by the U.S. Securities and Exchange Commission (the “SEC”)
under the Securities Act of 1933, as amended (the “Securities Act”);

 

WHEREAS,
the parties desire that, upon the terms and subject to the conditions contained herein, the Company shall issue and sell to the
Buyer(s), as provided herein, and the Buyer(s) shall purchase up to $2,000,000 of convertible debentures in the form attached
hereto as “Exhibit A” (the “Convertible Debentures”), which shall be convertible into the
Company’s ordinary shares, $0.0001 par value per share (“Ordinary Shares” and the Ordinary Shares issued
upon conversion of the Convertible Debentures, the “Conversion Shares”), of which $1,000,000 shall be purchased
upon the signing this Agreement (the “First Closing”), and $1,000,000 shall be purchased upon the filing of
a Registration Statement with the U.S. Securities and Exchange Commission registering the resale of the Conversion Shares by the
Buyers and satisfaction of other conditions (the “Second Closing”) (individually referred to as a “Closing”
collectively referred to as the “Closings”), in the respective amounts set forth opposite each Buyer(s) name
on Schedule I (the “Subscription Amount”) for a purchase price equal to 97% of the Subscription Amount (the
“Purchase Price”);

 

WHEREAS,
contemporaneously with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Registration
Rights Agreement (the “Registration Rights Agreement”) pursuant to which the Company has agreed to provide
certain registration rights under the Securities Act and the rules and regulations promulgated there under, and applicable state
securities laws;

 

WHEREAS,
contemporaneously with the execution and delivery of this Agreement, the Company is delivering Irrevocable Transfer Agent Instructions
(the “Irrevocable Transfer Agent Instructions”) to its transfer agent; and

 

WHEREAS,
the Convertible Debentures and the Conversion Shares are collectively referred to herein as the “Securities.”

 

    

     

    

 

AGREEMENT

 

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

 

		1.	PURCHASE
                                         AND SALE OF CONVERTIBLE DEBENTURES.

 

(a) Purchase
of Convertible Debentures. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below, the
Company shall issue and sell to each Buyer, and each Buyer severally, but not jointly, agrees to purchase from the Company at
each Closing Convertible Debentures with principal amount corresponding with the Subscription Amount set forth opposite each Buyer’s
name on the Schedule of Buyers attached as Schedule I hereto.

 

(b) Closing
Dates. Each Closing of the purchase of Convertible Debentures by the Buyers shall occur at the offices Yorkville Advisors Global,
LP, 1012 Springfield Avenue, Mountainside, NJ 07092. The date and time of each Closing shall be as follows: (i) the First Closing
shall be 10:00 a.m., New York time, on the first Business Day on which the conditions to the Closing set forth in Sections 6 and
7 below are satisfied or waived (or such other date as is mutually agreed to by the Company and each Buyer) (the “First
Closing Date”), and (ii) the Second Closing shall be 10:00 a.m., New York time, by the third Business Day after the date
on which the Registration Statement is filed by the Company with the SEC, provided the conditions to the Closing set forth in
Sections 6 and 7 below are satisfied or waived (or such other date as is mutually agreed to by the Company and each Buyer) (the
“Second Closing Date” and collectively referred to as the “Closing Dates”). As used herein “Business
Day” means any day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized
or required by law to remain closed.

 

(c) Form
of Payment; Deliveries. Subject to the satisfaction of the terms and conditions of this Agreement, on each Closing Date,
(i) the Buyers shall deliver to the Company such aggregate proceeds for the Convertible Debentures to be issued and sold to such
Buyer at such Closing, minus the fees to be paid directly from the proceeds of such Closing as set forth herein, and (ii) the
Company shall deliver to each Buyer, Convertible Debentures which such Buyer is purchasing at such Closing with a principal amount
corresponding with the Subscription Amount set forth opposite each Buyer’s name on the Schedule of Buyers attached as Schedule
I hereto, duly executed on behalf of the Company.

 

(d) Maximum
Shares. Notwithstanding anything in this Agreement to the contrary, the Company shall not issue any Ordinary Shares pursuant
to the transactions contemplated hereby or any other Transaction Documents (including the Conversion Shares) if the issuance of
such Ordinary Shares, together with Ordinary Shares issued pursuant to the Securities Purchase Agreement dated November 17, 2020
between the Company and the investors listed on the Schedule of Buyers attached thereto (the “November SPA”),
would exceed the aggregate number of Ordinary Shares that the Company may issue in this transaction in compliance with the Company’s
obligations under the rules or regulations of Nasdaq Stock Market LLC (the “Nasdaq”) (the number of shares
which may be issued without violating such rules and regulations is 2,283,136 (which is 19.99% of 11,421,393 outstanding Ordinary
Shares as of January 14, 2021) and shall be referred to as the “Exchange Cap”), except that such limitation
shall not apply in the event that the Company (A) obtains the approval of its shareholders as required by the applicable rules
of the Nasdaq for issuances of shares in excess of such amount or (B) obtains a written opinion from counsel to the Company that
such approval is not required, which opinion shall be reasonably satisfactory to the Buyers. The Exchange Cap shall be appropriately
adjusted for any stock dividend, stock split, reverse stock split or similar transaction.

 

    2

     

    

 

		2.	BUYERS’
                                         REPRESENTATIONS AND WARRANTIES.

 

Each
Buyer, severally and not jointly, represents and warrants to the Company with respect to only itself that, as of the date hereof
and as of each Closing Date:

 

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

 

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

 

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

 

(d) Information.
The Buyer and its counsel, if any, have been furnished with all materials relating to the business, finances and operations of
the Company and information he deemed material to making an informed investment decision regarding his purchase of the Securities,
which have been requested by such Buyer. The Buyer and its counsel, if any, have been afforded the opportunity to ask questions
of the Company and its management. Neither such inquiries nor any other due diligence investigations conducted by such Buyer or
its counsel, if any, or its representatives shall modify, amend or affect such Buyer’s right to rely on the Company’s
representations and warranties contained in Section 3 below. The Buyer understands that its investment in the Securities involves
a high degree of risk. The Buyer has sought such accounting, legal and tax advice, as it has considered necessary to make an informed
investment decision with respect to its acquisition of the Securities. The Buyer acknowledges and agrees that the Company does
not make or has not made any representations or warranties with respect to the transactions contemplated hereby other than those
specifically set forth in Section 3.

 

    3

     

    

 

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

 

(f) Legends.
The Buyer agrees to the imprinting, so long as its required by this Section 2(f), of a restrictive legend on the Securities in
substantially the following form:

 

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

 

Certificates
evidencing the Conversion Shares shall not contain any legend (including the legend set forth above), (i) while a registration
statement covering the resale of such security is effective under the Securities Act, (ii) following any sale of such Conversion
Shares pursuant to Rule 144, (iii) if such Conversion Shares are eligible for sale under Rule 144, or (iv) if such legend is not
required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by
the staff of the SEC). The Buyer agrees that the removal of restrictive legend from certificates representing Securities as set
forth in this Section 3(f) is predicated upon the Company’s reliance that the Buyer will sell any Securities pursuant to
either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption
therefrom, and that if Securities are sold pursuant to a registration statement, they will be sold in compliance with the plan
of distribution set forth therein.

 

    4

     

    

 

(g) Organization;
Authority. Such Buyer is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of
its organization with the requisite power and authority to enter into and to consummate the transactions contemplated by the Transaction
Documents (as defined below) to which it is a party and otherwise to carry out its obligations hereunder and thereunder.

 

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

 

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

 

(j) Certain
Trading Activities. The Buyer has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding
with the Buyer, engaged in any transactions in the securities of the Company (including, without limitation, any Short Sales (as
defined below) involving the Company’s securities) during the period commencing as of the time that the Buyer first contacted
the Company or the Company’s agents regarding the specific investment in the Company contemplated by this Agreement and ending
immediately prior to the execution of this Agreement by such Buyer. The Buyer hereby agrees that it shall not directly or indirectly,
engage in any Short Sales involving the Company’s securities during the period commencing on the date hereof and ending
when no Convertible Debentures remain outstanding. “Short Sales” means all “short sales” as defined in Rule
200 promulgated under Regulation SHO under the Securities Exchange Act of 1934, as amended (the “1934 Act”).
The Buyer is aware that Short Sales and other hedging activities may be subject to applicable federal and state securities laws,
rules and regulations and the Buyer acknowledges that the responsibility of compliance with any such federal or state securities
laws, rules and regulations is solely the responsibility of the Buyer.

 

    5

     

    

 

(k) Trading
Information. Upon the Company’s request, the Buyer agrees to provide the Company with trading reports setting forth
the number and average sales prices of Conversion Shares sold the Buyer during the prior trading week.

 

(l) Buyer’s
Status. The Buyer represents and warrants that it is not (i) an officer or director of the Company or any of its Subsidiaries,
(ii) an “affiliate” (as defined in Rule 144) of the Company or any of its Subsidiaries or (iii) a “beneficial
owner” of more than 10% of the Ordinary Shares (as defined for purposes of Rule 13d-3 of the 1934 Act). The Buyer further
represents that it is not (nor any affiliate of Buyer) acting as a financial advisor or fiduciary of the Company or any of its
Subsidiaries (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and
thereby, and any advice given by Buyer or any of its representatives or agents in connection with the Transaction Documents and
the transactions contemplated hereby and thereby is merely incidental to such Buyer’s purchase of the Securities.

 

		3.	REPRESENTATIONS
                                         AND WARRANTIES OF THE COMPANY.

 

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

 

(a) Organization
and Qualification. The Company and each of its Subsidiaries are entities duly formed, validly existing and in good standing under
the laws of the jurisdiction in which they are formed, and have the requisite power and authority to own their properties and
to carry on their business as now being conducted and as presently proposed to be conducted. The Company and each of its Subsidiaries
is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction in which its ownership of property
or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be
so qualified or be in good standing would not reasonably be expected to have a Material Adverse Effect (as defined below). As
used in this Agreement, “Material Adverse Effect” means any material adverse effect on (i) the business, properties,
assets, liabilities, operations (including results thereof), or condition (financial or otherwise) of the Company and its Subsidiaries,
taken as a whole, (ii) the transactions contemplated hereby or in any of the other Transaction Documents or any other agreements
or instruments to be entered into by the Company in connection herewith or therewith or (iii) the authority or ability of the
Company to perform any of its obligations under any of the Transaction Documents (as defined below). “Subsidiaries”
means any Person in which the Company, directly or indirectly, owns a majority of the outstanding capital stock having voting
power or holds a majority of the equity or similar interest of such Person, and each of the foregoing, is individually referred
to herein as a “Subsidiary”.

 

    6

     

    

 

(b) Authorization;
Enforcement; Validity. The Company has the requisite power and authority to enter into and perform its obligations under
this Agreement and the other Transaction Documents and to issue the Securities in accordance with the terms hereof and thereof.
The execution and delivery of this Agreement and the other Transaction Documents by the Company and the consummation by the Company
of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Convertible Debentures,
the reservation for issuance and issuance of the Conversion Shares issuable upon conversion of the Convertible Debentures), have
been duly authorized by the Company’s board of directors and no further filing, consent or authorization is required by the Company,
its board of directors or its shareholders or other governmental body. This Agreement has been, and the other Transaction Documents
to which the Company is a party will be prior to the Closing, duly executed and delivered by the Company, and each constitutes
the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with its respective terms,
except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and
remedies and except as rights to indemnification and to contribution may be limited by federal or state securities law. “Transaction
Documents” means, collectively, this Agreement, the Registration Rights Agreement, the Convertible Debentures, and the Irrevocable
Transfer Agent Instructions.

 

(c) Issuance
of Securities. The issuance of the Securities are duly authorized and, upon issuance and payment in accordance with the terms
of the Transaction Documents the Securities shall be validly issued, fully paid and non-assessable and free from all preemptive
or similar rights, mortgages, defects, claims, liens, pledges, charges, taxes, rights of first refusal, encumbrances, security
interests and other encumbrances (collectively “Liens”) with respect to the issuance thereof. Upon issuance or conversion
in accordance with the Convertible Debentures, the Conversion Shares, when issued, will be validly issued, fully paid and nonassessable
and free from all preemptive or similar rights or Liens with respect to the issue thereof, with the holders being entitled to
all rights accorded to a shareholder of the Company.

 

(d) No
Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company
of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Convertible Debentures,
the Conversion Shares, and the reservation for issuance of the Conversion Shares) will not (i) result in a violation of the Memorandum
of Association (as defined below), Articles of Association (as defined below), certificate of incorporation, memorandum of association,
articles of association, bylaws or other organizational documents of the Company or any of its Subsidiaries, (ii) conflict with,
or constitute a default under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in a violation of any law,
rule, regulation, order, judgment or decree (including, without limitation, U.S. federal and state securities laws and regulations,
the securities laws of the jurisdictions of the Company’s incorporation or in which it or its subsidiaries operate and the rules
and regulations of the Nasdaq Capital Market (the “Principal Market”) applicable to the Company or any of its Subsidiaries
or by which any property or asset of the Company or any of its Subsidiaries is bound or affected, except in the case of (ii) and
(iii) for any conflict, default, right or violation that would not reasonably be expected to result in a Material Adverse Effect.

 

    7

     

    

 

(e) Consents.
The Company is not required to obtain any material consent from, authorization or order of, or make any filing or registration
with (other than any filings as may be required by any federal or state securities agencies and any filings as may be required
by the Principal Market), any Governmental Entity (as defined below) or any regulatory or self-regulatory agency or any other Person
in order for it to execute, deliver or perform any of its obligations under or contemplated by the Transaction Documents, in each
case, in accordance with the terms hereof or thereof. All consents, authorizations, orders, filings and registrations which the
Company or any Subsidiary is required to obtain pursuant to the preceding sentence have been or will be obtained or effected on
or prior to each Closing Date, and neither the Company nor any of its Subsidiaries are aware of any facts or circumstances which
might prevent the Company or any of its Subsidiaries from obtaining or effecting any of the registration, application or filings
contemplated by the Transaction Documents. The Company is not in violation of the requirements of the Principal Market and has
no knowledge of any facts or circumstances which could reasonably lead to delisting or suspension of the Ordinary Shares in the
foreseeable future. “Governmental Entity” means any nation, state, county, city, town, village, district, or other
political jurisdiction of any nature, federal, state, local, municipal, foreign, or other government, governmental or quasi-governmental
authority of any nature (including any governmental agency, branch, department, official, or entity and any court or other tribunal),
multi-national organization or body; or body exercising, or entitled to exercise, over the Company or any Subsidiary, any
administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature or instrumentality
of any of the foregoing, including any entity or enterprise owned or controlled by a government or a public international organization
or any of the foregoing.

 

(f) Independent
Evaluation. The Company represents to each Buyer that the Company’s decision to enter into the Transaction Documents to which
it is a party has been based solely on the independent evaluation by the Company and its representatives. The Company further
acknowledges that no Buyer is acting as a financial advisor or fiduciary of the Company or any of its Subsidiaries (or in any
similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby, and any advice
given by a Buyer or any of its representatives or agents in connection with the Transaction Documents and the transactions contemplated
hereby and thereby is merely incidental to such Buyer’s purchase of the Securities.

 

(g) No
Integrated Offering. None of the Company, its Subsidiaries or any of their affiliates, nor any Person acting on 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 require approval of shareholders of the Company under any applicable shareholder
approval provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation system
on which any of the securities of the Company are listed or designated for quotation. None of the Company, its Subsidiaries, their
affiliates nor any Person acting on their behalf will take any action or steps that would cause the offering of any of the Securities
to be integrated with other offerings of securities of the Company.

 

    8

     

    

 

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

 

(i) Application
of Takeover Protections; Rights Agreement. The Company and its board of directors have taken all necessary action, if any,
in order to render inapplicable any control share acquisition, interested stockholder, business combination, poison pill (including,
without limitation, any distribution under a rights agreement), stockholder rights plan or other similar anti-takeover provision
under the Memorandum of Association, Articles of Association or other organizational documents or the laws of the jurisdiction
of its incorporation or otherwise which is or could become applicable to any Buyer as a result of the transactions contemplated
by this Agreement, including, without limitation, the Company’s issuance of the Securities and any Buyer’s ownership of the Securities.

 

(j) 
SEC Documents; Financial Statements. During the two (2) years prior to the date hereof, the Company has timely filed all
reports, schedules, forms, proxy statements, statements and other documents required to be filed by it with the SEC pursuant to
the reporting requirements of the 1934 Act (all of the foregoing filed prior to the date hereof and all exhibits and appendices
included therein and financial statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter
referred to as the “SEC Documents”). As of their respective dates, the SEC Documents complied in all material respects
with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements of the
Company included in the SEC Documents complied in all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto as in effect as of the time of filing. Such financial statements have been
prepared in accordance with generally accepted accounting principles (“GAAP”), consistently applied, during the periods
involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited
interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in
all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash
flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments which will
not be material, either individually or in the aggregate). The reserves, if any, established by the Company or the lack of reserves,
if applicable, are reasonable based upon facts and circumstances known by the Company on the date hereof and there are no loss
contingencies that are required to be accrued by the Statement of Financial Accounting Standard No. 5 of the Financial Accounting
Standards Board which are not provided for by the Company in its financial statements or otherwise. No other information provided
by or on behalf of the Company to any of the Buyers which is not included in the SEC Documents (including, without limitation,
information in the disclosure schedules to this Agreement) contains any untrue statement of a material fact or omits to state
any material fact necessary in order to make the statements therein not misleading, in the light of the circumstance under which
they are or were made. The Company is not currently contemplating to amend or restate any of the financial statements (including,
without limitation, any notes or any letter of the independent accountants of the Company with respect thereto) included in the
SEC Documents (the “Financial Statements”), nor is the Company currently aware of facts or circumstances which would
require the Company to amend or restate any of the Financial Statements, in each case, in order for any of the Financials Statements
to be in compliance with GAAP and the rules and regulations of the SEC. The Company has not been informed by its independent accountants
that they recommend that the Company amend or restate any of the Financial Statements or that there is any need for the Company
to amend or restate any of the Financial Statements.

 

    9

     

    

 

(k) Absence
of Certain Changes. Since the date of the Company’s most recent audited financial statements contained in a Form 20-F, there has
been no Material Adverse Effect, nor any event or occurrence specifically affecting the Company or its Subsidiaries that would
be reasonably expected to result in a Material Adverse Effect. Since the date of the Company’s most recent audited financial statements
contained in a Form 20-F, neither the Company nor any of its Subsidiaries has (i) declared or paid any dividends, (ii) sold any
material assets, individually or in the aggregate, outside of the ordinary course of business or (iii) made any material capital
expenditures, individually or in the aggregate, outside of the ordinary course of business. Neither the Company nor any of its
Subsidiaries has taken any steps to seek protection pursuant to any law or statute relating to bankruptcy, insolvency, reorganization,
receivership, liquidation or winding up, nor does the Company or any Subsidiary have any knowledge or reason to believe that any
of their respective creditors intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which
would reasonably lead a creditor to do so.

 

(l) No
Undisclosed Events, Liabilities, Developments or Circumstances. No event, liability, development or circumstance has occurred
or exists, or is reasonably expected to exist or occur specific to the Company, any of its Subsidiaries or any of their respective
businesses, properties, liabilities, prospects, operations (including results thereof) or condition (financial or otherwise),
that has not been publicly disclosed and would reasonably be expected to have a Material Adverse Effect.

 

    10

     

    

 

(m) Conduct
of Business; Regulatory Permits. Neither the Company nor any of its Subsidiaries is in violation of any term under its Memorandum
of Association, any certificate of designation, preferences or rights of any other outstanding series of preferred stock of the
Company or any of its Subsidiaries or Articles of Association or their organizational charter, certificate of formation, memorandum
of association, articles of association, Memorandum of Association or certificate of incorporation or bylaws, respectively. Neither
the Company nor any of its Subsidiaries is in violation of any judgment, decree or order or any statute, ordinance, rule or regulation
applicable to the Company or any of its Subsidiaries, and neither the Company nor any of its Subsidiaries will conduct its business
in violation of any of the foregoing, except in all cases for violations which would not reasonably be expected to have a Material
Adverse Effect. Without limiting the generality of the foregoing, the Company is not in violation of any of the rules, regulations
or requirements of the Principal Market and has no knowledge of any facts or circumstances that could reasonably lead to delisting
or suspension of the Ordinary Shares by the Principal Market in the foreseeable future. During the one year prior to the date
hereof, (i) the Ordinary Shares have been listed or designated for quotation on the Principal Market, (ii) trading in the Ordinary
Shares has not been suspended by the SEC or the Principal Market and (iii) the Company has received no communication, written
or oral, from the SEC or the Principal Market regarding the suspension or delisting of the Ordinary Shares from the Principal
Market, which has not been publicly disclosed. The Company and each of its Subsidiaries possess all certificates, authorizations
and permits issued by the appropriate regulatory authorities necessary to conduct their respective businesses, except where the
failure to possess such certificates, authorizations or permits would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, and neither the Company nor any of its Subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such certificate, authorization or permit. There is no agreement, commitment,
judgment, injunction, order or decree binding upon the Company or any of its Subsidiaries or to which the Company or any of its
Subsidiaries is a party which has or would reasonably be expected to have the effect of prohibiting or materially impairing any
business practice of the Company or any of its Subsidiaries, any acquisition of property by the Company or any of its Subsidiaries
or the conduct of business by the Company or any of its Subsidiaries as currently conducted other than such effects, individually
or in the aggregate, which have not had and would not reasonably be expected to have a Material Adverse Effect on the Company
or any of its Subsidiaries.

 

(n) Foreign
Corrupt Practices. Neither the Company nor any of its Subsidiaries nor any director, officer, agent, employee, nor any other person
acting for or on behalf of the Company or any of its Subsidiaries (individually and collectively, a “Company Affiliate”)
have violated the U.S. Foreign Corrupt Practices Act (the “FCPA) or any other applicable anti-bribery or anti corruption
laws, nor has any Company Affiliate offered, paid, promised to pay, or authorized the payment of any money, or offered, given,
promised to give, or authorized the giving of anything of value, to any officer, employee or any other person acting in an official
capacity for any Governmental Entity to any political party or official thereof or to any candidate for political office (individually
and collectively, a “Government Official”) or to any person under circumstances where such Company Affiliate knew
that all or a portion of such money or thing of value would be offered, given or promised, directly or indirectly, to any Government
Official, for the purpose, in violation of applicable law, of: (i) (A) influencing any act or decision of such Government Official
in his/her official capacity, (B) inducing such Government Official to do or omit to do any act in violation of his/her lawful
duty, (C) securing any improper advantage, or (D) inducing such Government Official to influence or affect any act or decision
of any Governmental Entity, or (ii) assisting the Company or its Subsidiaries in obtaining or retaining business for or with,
or directing business to, the Company or its Subsidiaries.

 

    11

     

    

 

(o) Equity
Capitalization.

 

(i) Authorized
and Outstanding Capital Stock. As of the date hereof, the Company has authority to issue 500,000,000 Ordinary Shares, of which
11,471,393 are issued and outstanding.

 

(ii) Valid
Issuance; Available Shares. All of such outstanding Ordinary Shares are duly authorized and have been validly issued and
are fully paid and nonassessable.

 

(iii) Existing
Securities; Obligations. Except as disclosed in the SEC Documents: (A) none of the Company’s or any Subsidiary’s shares,
interests or capital stock is subject to preemptive rights or any other similar rights or Liens suffered or permitted by the Company
or any Subsidiary; (B) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of
any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares,
interests or capital stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements
by which the Company or any of its Subsidiaries is or may become bound to issue additional shares, interests or capital stock
of the Company or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares, interests or
capital stock of the Company or any of its Subsidiaries; (C) there are no agreements or arrangements under which the Company
or any of its Subsidiaries is obligated to register the sale of any of their securities under the 1933 Act (except pursuant to
this Agreement); (D) there are no outstanding securities or instruments of the Company or any of its Subsidiaries which contain
any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company
or any of its Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries; (E) there
are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities;
and (G) neither the Company nor any Subsidiary has any stock appreciation rights or “phantom stock” plans or agreements
or any similar plan or agreement.

 

(iv) Organizational
Documents. The Company has furnished to the Buyers or filed on EDGAR true, correct and complete copies of the Company’s Memorandum
of Association, as amended and as in effect on the date hereof (the “Memorandum of Association”), and the Company’s
Articles of Association, as amended and as in effect on the date hereof (the “Articles of Association”).

 

    12

     

    

 

(p) Litigation.
Except as disclosed in the SEC Documents, there is no action, suit, arbitration, proceeding, inquiry or investigation before or
by the Principal Market, any court, public board, other Governmental Entity, self-regulatory organization or body pending or, to
the knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries, or any of the Company’s
or its Subsidiaries’ officers or directors, whether of a civil or criminal nature or otherwise, in their capacities as such, which
would reasonably be expected to result in a Material Adverse Effect. After reasonable inquiry of its employees, the Company is
not aware of any event which might result in or form the basis for any such action, suit, arbitration, investigation, inquiry
or other proceeding. Without limitation of the foregoing, there has not been, and to the knowledge of the Company, there is not
pending or contemplated, any investigation by the SEC involving the Company, any of its Subsidiaries or any current or former
director or officer of the Company or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries is the subject
of any order, writ, judgment, injunction, decree, determination or award of any Governmental Entity that would reasonably be expected
to result in a Material Adverse Effect.

 

(q) Insurance.
The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and
risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company
and its Subsidiaries are engaged. In accordance with the previous sentence, the Company currently maintains no insurance policies.
Neither the Company nor any such Subsidiary has been refused any insurance coverage sought or applied for, and neither the Company
nor any such Subsidiary has any reason to believe that it will be unable to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost
that would not have a Material Adverse Effect.

 

(r) Manipulation
of Price. Neither the Company nor any of its Subsidiaries has, and, to the knowledge of the Company, no authorized Person acting
on their behalf has, directly or indirectly, (i) taken any action designed to cause or to result in the stabilization or manipulation
of the price of any security of the Company or any of its Subsidiaries 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 or any of its Subsidiaries.

 

(s) Shell
Company Status. The Company is not, and has never been, an issuer identified in, or subject to, Rule 144(i).

 

(t) Money
Laundering. The Company and its Subsidiaries are in compliance with, and have not previously violated, the USA Patriot Act of
2001 and all other applicable U.S. and non-U.S. anti-money laundering laws and regulations, including, but not limited to, the laws,
regulations and Executive Orders and sanctions programs (“Sanctions Programs”) administered by the U.S. Office of
Foreign Assets Control (“OFAC”), including, without limitation, (i) Executive Order 13224 of September 23, 2001 entitled,
“Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism” (66
Fed. Reg. 49079 (2001)); and any regulations contained in 31 CFR, Subtitle B, Chapter V.

 

    13

     

    

 

(u) Disclosure.
The Company confirms that neither it nor any other authorized Person acting on its behalf has provided any of the Buyers or their
agents or counsel with any information that constitutes or could reasonably be expected to constitute material, non-public information
concerning the Company or any of its Subsidiaries, other than the existence of the transactions contemplated by this Agreement
and the other Transaction Documents. The Company understands and confirms that each of the Buyers will rely on the foregoing representations
in effecting transactions in securities of the Company. All disclosures provided to the Buyers regarding the Company and its Subsidiaries,
their businesses and the transactions contemplated hereby, including the schedules to this Agreement, furnished by or on behalf
of the Company or any of its Subsidiaries, taken as a whole, were true and correct and do 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. All of the written information furnished after the date hereof by or
on behalf of the Company or any of its Subsidiaries to each Buyer pursuant to or in connection with this Agreement and the other
Transaction Documents, taken as a whole, were true and correct in all material respects as of the date on which such information
was so provided and did 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. No event or
circumstance has occurred or information exists with respect to the Company or any of its Subsidiaries or its or their business,
properties, liabilities, operations (including results thereof) or conditions (financial or otherwise), which, under applicable
law, rule or regulation, requires public disclosure at or before the date hereof or announcement by the Company but which has
not been so publicly disclosed. All financial projections and forecasts that have been prepared by or on behalf of the Company
or any of its Subsidiaries and made available to the Buyers have been prepared in good faith based upon reasonable assumptions
and represented, at the time each such financial projection or forecast was delivered to each Buyer, the Company’s best estimate
of future financial performance (it being recognized that such financial projections or forecasts are not to be viewed as facts
and that the actual results during the period or periods covered by any such financial projections or forecasts may differ from
the projected or forecasted results). The Company acknowledges and agrees that no Buyer makes or has made any representations
or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 2.

 

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

 

(w) Private
Placement. Assuming the accuracy of the Buyers’ representations and warranties set forth in Section 2, no registration under
the Securities Act is required for the offer and sale of the Securities by the Company to the Buyers as contemplated hereby. The
issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Primary Market.

 

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		4.	COVENANTS.

 

(a) Reporting
Status. For the period beginning on the date hereof, and ending six (6) months after the date on which all the Convertible
Debentures are no longer outstanding (the “Reporting Period”), the Company shall use its commercially reasonable
efforts to file on a timely basis all reports required to be filed with the SEC pursuant to the 1934 Act, and the Company shall
not terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations
thereunder would no longer require or otherwise permit such termination.

 

(b) Use
of Proceeds. Neither the Company nor any Subsidiary will, directly or indirectly, use the proceeds of the transactions contemplated
herein to repay any loans to any executives or employees of the Company. Neither the Company nor any Subsidiary will knowingly
use the proceeds of the transactions contemplated herein, or lend, contribute, facilitate or otherwise make available such
proceeds to any Person (i) to fund, either directly or indirectly, any activities or business of or with any Person that is identified
on the list of Specially Designated Nationals and Blocker Persons maintained by OFAC, or in any country or territory, that, at
the time of such funding, is, or whose government is, the subject of Sanctions Programs, or (ii) in any other manner that will
result in a violation of Sanctions Programs.

 

(c) Listing.
To the extent applicable, the Company shall promptly secure the listing or designation for quotation (as the case may be) of all
of the Underlying Securities (as defined below) upon each national securities exchange and automated quotation system, if any,
upon which the Ordinary Shares is then listed or designated for quotation (as the case may be, each an “Eligible Market”),
subject to official notice of issuance, and shall use reasonable efforts to maintain such listing or designation for quotation
(as the case may be) of all Underlying Securities from time to time issuable under the terms of the Transaction Documents on such
Eligible Market for the Reporting Period. Neither the Company nor any of its Subsidiaries shall take any action which could be
reasonably expected to result in the delisting or suspension of the Ordinary Shares on an Eligible Market during the Reporting
Period. The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 4(c). “Underlying
Securities” means the (i) the Conversion Shares, and (ii) any shares of Ordinary Shares of the Company issued or issuable
with respect to the Conversion Shares, including, without limitation, (1) as a result of any stock split, stock dividend, recapitalization,
exchange or similar event or otherwise and (2) shares of capital stock of the Company into which the Ordinary Shares are converted
or exchanged without regard to any limitations on conversion of the Convertible Debentures.

 

(d) Fees.
The Company shall issue to YA II PN, Ltd. as the lead Buyer (the “YA II PN”), 50,000 Ordinary Shares (the “Commitment
Shares”) as commitment fee. The Commitment Shares shall be issuable to YA II PN at the First Closing. The Company shall
pay to YA Global II SPV, LLC, an affiliate of the lead Buyer (the “Subsidiary Fund”) a one-time structuring
and due diligence fee in the amount of $10,000 (“Structuring Fee”). The structuring and due diligence fee shall
be deducted from the gross proceeds of the First Closing and paid to the Subsidiary Fund. The Company authorizes YA II PN to deduct
the balance pf the Structuring Fee from the gross process of the purchase of any Convertible Debentures.

 

    15

     

    

 

(e) Pledge
of Securities. Notwithstanding anything to the contrary contained in this Agreement, the Company acknowledges and agrees that,
subject to compliance with applicable federal and state securities laws, the Securities may be pledged by a Buyer in connection
with a bona fide margin agreement or other loan or financing arrangement that is secured by the Securities. The Company hereby
agrees to execute and deliver such documentation as a pledgee of the Securities may reasonably request in connection with a pledge
of the Securities to such pledgee by a Buyer.

 

(f) Disclosure
of Transactions and Other Material Information. On or before 9:30 a.m., New York time, on the second Business Day after the
date of this Agreement, the Company shall file a report of Foreign Private Issuer on Form 6-K describing all the material terms
of the transactions contemplated by the Transaction Documents in the form required by the 1934 Act and attaching all the material
Transaction Documents (including, without limitation, this Agreement (and all schedules to this Agreement) (including all attachments,
the “Current Report”). From and after the filing of the Current Report, the Company shall have disclosed all
material, non-public information (if any) provided to any of the Buyers 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 filing of the Current Report, the Company acknowledges and agrees that any and all confidentiality
or similar obligations with respect to the transactions contemplated by the Transaction Documents under any agreement, whether
written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, affiliates, employees
or agents, on the one hand, and any of the Buyers or any of their affiliates, on the other hand, shall terminate. The Company
shall not, and the Company shall cause each of its Subsidiaries and each of its and their respective officers, directors, employees
and agents not to, provide any Buyer with any material, non-public information regarding the Company or any of its Subsidiaries
from and after the date hereof without first obtaining the express prior written consent of such Buyer (which may be granted or
withheld in such Buyer’s sole discretion).

 

(g) Reservation
of Shares. So long as any of the Convertible Debentures remain outstanding, the Company shall take all action necessary to
at all times have authorized, and reserved for the purpose of issuance, no less than the maximum number of Ordinary Shares issuable
upon conversion of all Convertible Debentures then outstanding (assuming for purposes hereof that (x) the Convertible Debentures
are convertible at the Floor Price (as defined in the Convertible Debentures) then in effect, and (y) any such conversion shall
not take into account any limitations on the conversion of the Convertible Debentures) (the “Required Reserve Amount”);
provided that at no time shall the number of Ordinary Shares reserved pursuant to this Section 4(g) be reduced other than proportionally
in connection with any conversion and/or redemption, or reverse stock split. If at any time the number of Ordinary Shares authorized
and reserved for issuance is not sufficient to meet the Required Reserved Amount, the Company will promptly take all corporate
action necessary to authorize and reserve a sufficient number of shares, including, without limitation, calling a special meeting
of shareholders to authorize additional shares to meet the Company’s obligations pursuant to the Transaction Documents, in the
case of an insufficient number of authorized shares, recommending that shareholders vote in favor of an increase in such authorized
number of shares sufficient to meet the Required Reserved Amount.

 

    16

     

    

 

(h) Conduct
of Business. The business of the Company and its Subsidiaries shall not be conducted in violation of any law, ordinance or
regulation of any Governmental Entity, except where such violations would not reasonably be expected to result, either individually
or in the aggregate, in a Material Adverse Effect.

 

(i) Shareholder
Approval. If at any time the number of Ordinary Shares issuable upon the full conversion of all the Convertible Debentures
issuable hereunder and issuable pursuant to the convertible debentures issued under the November SPA (assuming for purposes hereof
that (x) such Convertible Debentures are convertible at the applicable Conversion Price then in effect, and (y) any such conversion
shall not take into account any limitations on the conversion of the Convertible Debentures) exceeds the Exchange Cap (an “Exchange
Cap Breach”), the Company shall call and hold a special meeting of its shareholders within 45 days of the occurrence
of the Exchange Cap Breach seeking approval of its shareholders as required by the applicable rules of the Nasdaq for issuances
of shares in excess of the Exchange Cap.

 

(j) From
the date hereof until all the Convertible Debentures have been repaid, unless the holders of at least 75% in principal amount
of the then outstanding Convertible Debentures shall have given prior written consent, the Company shall not, and shall not permit
any of its subsidiaries (whether or not a subsidiary on the date hereof) to, directly or indirectly (i) other than Permitted Indebtedness,
enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed money of any kind, including, but
not limited to, a guarantee, on or with respect to any of its property or assets now owned or hereafter acquired or any interest
therein or any income or profits therefrom, (ii) other than Permitted Liens, enter into, create, incur, assume or suffer to exist
any lien, security interest, option or other charge or encumbrance (each, a “Lien”) of any kind, on or with
respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom,
(iii) amend its charter documents, including, without limitation, its certificate of incorporation and bylaws, in any manner that
materially and adversely affects any rights of the holders of the Convertible Debentures, (iv) make any payments in respect of
any related party debt, or (v) enter into, or drawdown on any variable rate equity financing facility (including in particular
the issuance of any Ordinary Shares at a variable price or any securities for which the conversion price or exercise price is
variable, such as equity lines) (“Variable Rate Instrument”). “Permitted Indebtedness” shall mean:
(i) indebtedness evidenced by the Convertible Debentures; (ii) indebtedness incurred solely for the purpose of financing the acquisition
or lease of any equipment, including capital lease obligations with no recourse other than to such equipment; (iv) indebtedness
(A) the repayment of which has been subordinated to the payment of the Convertible Debentures, including with regard to interest
payments and repayment of principal, (B) which does not mature or otherwise require or permit redemption or repayment prior to
or on the 91st day after the maturity date of any Convertible Debentures then outstanding; and (C) which is not secured by any
assets of the Company or its subsidiaries; (v) indebtedness associated with acquiring new intellectual property assets and licenses,
so long as the proceeds are going to the party(ies) from which the Company is acquiring the assets, licenses, and other properties
and (vi) any indebtedness (other than the indebtedness set out in (i) – (v) above) incurred after the date hereof, provided
that such indebtedness does not exceed $20,000 at any given time. “Permitted Liens” shall mean (1) any security
interest, if any, granted to the Buyers to secure the obligations under the Convertible Debentures, (2) any prior security interest
granted to the Buyers, (3) existing Liens disclosed by the Company on a Disclosure Schedule attached hereto; (4) inchoate Liens
for taxes, assessments or governmental charges or levies not yet due, as to which the grace period, if any, related thereto has
not yet expired, or being contested in good faith and by appropriate proceedings for which adequate reserves have been established
in accordance with GAAP; (5) Liens of carriers, materialmen, warehousemen, mechanics and landlords and other similar Liens which
secure amounts which are not yet overdue by more than 60 days or which are being contested in good faith by appropriate proceedings
for which adequate reserves have been established in accordance with GAAP; (6) licenses, sublicenses, leases or subleases granted
to other persons not materially interfering with the conduct of the business of the Company; (7) Liens securing capitalized lease
obligations and purchase money indebtedness incurred solely for the purpose of financing an acquisition or lease; (8) easements,
rights-of-way, restrictions, encroachments, municipal zoning ordinances and other similar charges or encumbrances, and minor title
deficiencies, in each case not securing debt and not materially interfering with the conduct of the business of the Company and
not materially detracting from the value of the property subject thereto; (9) Liens arising out of the existence of judgments
or awards which judgments or awards do not constitute an Event of Default; (10) Liens incurred in the ordinary course of business
in connection with workers compensation claims, unemployment insurance, pension liabilities and social security benefits and Liens
securing the performance of bids, tenders, leases and contracts in the ordinary course of business, statutory obligations, surety
bonds, performance bonds and other obligations of a like nature (other than appeal bonds) incurred in the ordinary course of business
(exclusive of obligations in respect of the payment for borrowed money); (11) Liens in favor of a banking institution arising
by operation of law encumbering deposits (including the right of set-off) and contractual set-off rights held by such banking
institution and which are within the general parameters customary in the banking industry and only burdening deposit accounts
or other funds maintained with a creditor depository institution; (12) usual and customary set-off rights in leases and other
contracts; (13) escrows in connection with acquisitions and dispositions and (14) royalties and other rights to revenue derived
from the sale of the Company’s products that are granted in the ordinary course of business.

 

    17

     

    

 

		5.	REGISTER;
                                         TRANSFER AGENT INSTRUCTIONS; LEGEND.

 

(a) Register.
The Company shall maintain at its principal executive offices or with the Transfer Agent (or at such other office or agency of
the Company as it may designate by notice to each holder of Securities), a register for the Convertible Debentures in which the
Company shall record the name and address of the Person in whose name the Convertible Debentures have been issued (including the
name and address of each transferee), the amount of Convertible Debentures held by such Person, and the number of Conversion Shares
issuable upon conversion of the Convertible Debentures held by such Person. The Company shall keep the register open and available
at all times, upon prior written notice and during business hours for inspection of any Buyer or its legal representatives.

 

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

 

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

 

The
obligation of the Company hereunder to issue and sell the Convertible Debentures to each Buyer at each Closing is subject to the
satisfaction, at or before each Closing Date, of each of the following conditions, provided that these conditions are for the
Company’s sole benefit and may be waived by the Company at any time in its sole discretion by providing each Buyer with prior
written notice thereof:

 

(a) Such
Buyer shall have executed each of the Transaction Documents to which it is a party and delivered the same to the Company.

 

(b) Such
Buyer and each other Buyer shall have delivered to the Company the Purchase Price (less, in the case of any Buyer, the amounts
withheld pursuant to Section 4(d)) for the Convertible Debentures being purchased by such Buyer at the Closing by wire transfer
of immediately available funds in accordance with the Closing Statement.

 

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

 

		7.	CONDITIONS
                                         TO EACH BUYER’S OBLIGATION TO PURCHASE.

 

The
obligation of each Buyer hereunder to purchase its Convertible Debentures at each Closing is subject to the satisfaction, at or
before each Closing Date, of each of the following conditions, provided that these conditions are for each Buyer’s sole benefit
and may be waived by such Buyer at any time in its sole discretion by providing the Company with prior written notice thereof:

 

(a) The
Company shall have duly executed and delivered to such Buyer each of the Transaction Documents to which it is a party and the
Company shall have duly executed and delivered to such Buyer a Convertible Debenture with a principal amount corresponding to
the Subscription Amount set forth opposite such Buyer’s name on Schedule of Buyers attached as Schedule I for the Closing.

 

    18

     

    

 

(b) Such
Buyer shall have received the reasonable opinion of counsel to the Company, dated as of the First Closing Date, in the form reasonably
acceptable to such Buyer.

 

(c) The
Company shall have delivered to such Buyer a certificate evidencing the incorporation and good standing of the Company as of a
date within ten (10) days of the Closing Date.

 

(d) Each
and every representation and warranty of the Company shall be true and correct in all material respects (other than representations
and warranties qualified by materiality, which shall be true and correct in all respects) as of the date when made and as of each
Closing Date as though originally made at that time (except for representations and warranties that speak as of a specific date,
which shall be true and correct as of such specific date) and the Company shall have performed, satisfied and complied in all
respects with the covenants, agreements and conditions required to be performed, satisfied or complied with by the Company at
or prior to each Closing Date, as set forth in section 3 and 4.

 

(e) The
Ordinary Shares (A) shall be designated for quotation or listed (as applicable) on the Principal Market and (B) shall not have
been suspended, as of each Closing Date, by the SEC or the Principal Market from trading on the Principal Market nor shall suspension
by the SEC or the Principal Market have been threatened, as of each Closing Date, either (I) in writing by the SEC or the Principal
Market or (II) by falling below the minimum maintenance requirements of the Principal Market.

 

(f) The
Company shall have obtained all governmental, regulatory or third-party consents and approvals, if any, necessary for the sale
of the Securities, including without limitation, those required by the Principal Market, if any.

 

(g) No
statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or Governmental Entity of competent jurisdiction that prohibits the consummation of any of the transactions contemplated
by the Transaction Documents.

 

(h) Since
the date of execution of this Agreement, no event or series of events shall have occurred that has resulted in or would reasonably
be expected to result in a Material Adverse Effect.

 

(i) The
Company shall have obtained approval of the Principal Market to list or designate for quotation (as the case may be) the Conversion
Shares, if applicable.

 

(j) Such
Buyer shall have received a letter, duly executed by an officer of the Company, setting forth the wire amounts of each Buyer and
the wire transfer instructions of the Company (the “Closing Statement”).

 

    19

     

    

 

(k) From
the date hereof to the applicable Closing Date, (i) trading in the Ordinary Shares shall not have been suspended by the SEC or
the Principal Market (except for any suspension of trading of limited duration agreed to by the Company, which suspension shall
be terminated prior to the Closing), (ii) the closing price of the Ordinary Shares during each of the five (5) consecutive Trading
Days immediately prior to the applicable Closing Date shall be at least 120% of the Floor Price (as defined in the Convertible
Debentures), and (iii) at any time prior to the applicable 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 the Principal 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 each Buyer, makes it impracticable or inadvisable to purchase the Securities at the Closing.

 

(l) The
Company and its Subsidiaries shall have delivered to such Buyer such other documents, instruments or certificates relating to
the transactions contemplated by this Agreement as such Buyer or its counsel may reasonably request.

 

(m) Solely
with respect to the Second Closing, the Company shall have filed the Registration Statement with the SEC in accordance with the
rules and regulations for the filing thereof.

 

(n) No
Exchange Cap Breach shall have occurred, unless shareholder approval to exceed the Exchange Cap shall have been obtained.

 

		8.	TERMINATION.

 

In
the event that the First Closing shall not have occurred with respect to a Buyer within five (5) days of the date hereof, then
such Buyer shall have the right to terminate its obligations under this Agreement with respect to itself at any time on or after
the close of business on such date without liability of such Buyer to any other party; provided, however, (i) the right to
terminate this Agreement under this Section 8 shall not be available to such Buyer if the failure of the transactions contemplated
by this Agreement to have been consummated by such date is the result of such Buyer’s breach of this Agreement and (ii) the abandonment
of the sale and purchase of the Convertible Debentures shall be applicable only to such Buyer providing such written notice, provided
further that no such termination shall affect any obligation of the Company under this Agreement to reimburse such Buyer for the
expenses described herein. Nothing contained in this Section 8 shall be deemed to release any party from any liability for any
breach by such party of the terms and provisions of this Agreement or the other Transaction Documents or to impair the right of
any party to compel specific performance by any other party of its obligations under this Agreement or the other Transaction Documents.

 

    20

     

    

 

		9.	MISCELLANEOUS.

 

(a) Governing
Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law
or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of New York. The Company and each Buyer hereby irrevocably submit 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 under any of the other Transaction Documents or with any transaction contemplated
hereby or thereby, and hereby irrevocably waive, and agree not to assert in any suit, action or proceeding, any claim that either
is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient
forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service
of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party
at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service
of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. Nothing contained herein shall be deemed or operate to preclude any party from bringing suit or taking
other legal action against the other party in any other jurisdiction to collect on the other party’s obligations to such party
or to enforce a judgment or other court ruling in favor of such party. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION
DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY OR THEREBY.

 

(b) Counterparts.
This Agreement may be executed in one or more identical counterparts, all of which shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event that
any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an
executed signature page, such signature page 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 signature page were an original thereof.

 

(c) Headings;
Gender. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation
of, this Agreement. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine,
feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,” “include”
and words of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,”
“hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the provision
in which they are found.

 

(d) Entire
Agreement, Amendments. This Agreement supersedes all other prior or contemporaneous oral or written agreements between the
Buyer, the Company, their affiliates and persons acting on their behalf with respect to the matters discussed herein, and this
Agreement and the instruments referenced herein contain the entire understanding of the parties with respect to the matters covered
herein and therein and, except as specifically set forth herein or therein, neither the Company nor any Buyer makes any representation,
warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other
than by an instrument in writing signed by the party to be charged with enforcement.

 

    21

     

    

 

(e) Notices.
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must
be in writing by letter and email and will be deemed to have been delivered: upon the later of (A) either (i) receipt, when delivered
personally or (ii) one (1) Business Day after deposit with an overnight courier service with next day delivery specified, in each
case, properly addressed to the party to receive the same and (B) receipt, when sent by electronic mail. The addresses and e-mail
addresses for such communications shall be:

 

	If
to the Company, to:
	DRAGON
    VICTORY INTERNATIONAL LIMITED
	 	Room
        1803, Yintai International Building, Kejiguan Road, Binjiang District, Hangzhou, Zhejiang Province

        Peoples
        Republic of China

        Telephone:
        +86 137-3814-6896

        Attention: Amanda Yang

        E-Mail: yangy@dvintinc.com

         

	With
    Copy to:	Hunter
        Taubman Fischer & Li LLC

        800
        Third Avenue, Suite 2800

        New
        York, NY 10022

        Attention:
        Ying Li, Esq.

        Telephone:
        212 530-2206

        Email:
        yli@htflawyers.com

	 	 
	If
    to a Buyer, to its address and e-mail address set forth on the Schedule of Buyers, with copies to such Buyer’s representatives
    as set forth on the Schedule of Buyers,
	 	 
	With
    copy to:	David
        Fine, Esq.

        c/o
        Yorkville Advisors Global, LP

        1012
        Springfield Avenue

        Mountainside,
        NJ 07092

        Email:
        legal@yorkvilleadvisors.com

	 	 

or
to such other address, e-mail address and/or to the attention of such other Person as the recipient party has specified by written
notice given to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A)
given by the recipient of such notice, consent, waiver or other communication, (B) electronically generated by the sender’s e-mail
service provider containing the time, date, recipient e-mail address or (C) provided by an overnight courier service shall be
rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight courier service in accordance with
clause (i), (ii) or (iii) above, respectively

 

    22

     

    

 

(f) Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors
and assigns, including any purchasers of any of the Convertible Debentures (but excluding any purchasers of Underlying Securities,
unless pursuant to a written assignment by such Buyer). The Company shall not assign this Agreement or any rights or obligations
hereunder without the prior written consent of the Buyers. In connection with any transfer of any or all of its Securities, a
Buyer may assign all, or a portion, of its rights and obligations hereunder in connection with such Securities without the consent
of the Company, but with written notice to the Company, in which event such assignee shall be deemed to be a Buyer hereunder with
respect to such transferred Securities.

 

(g) Indemnification.

 

(i) In
consideration of each Buyer’s execution and delivery of the Transaction Documents and acquiring the Securities thereunder and
in addition to all of the Company’s other obligations under the Transaction Documents, the Company shall defend, protect, indemnify
and hold harmless each Buyer and all of their stockholders, partners, members, officers, directors, employees and any of the foregoing
Persons’ agents or other representatives (including, without limitation, those retained in connection with the transactions contemplated
by this Agreement) (collectively, the “Buyer Indemnitees”) from and against any and all third party claims,
actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection
therewith, and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred
by any Indemnitee as a result of, or arising out of, or relating to (i) any misrepresentation or breach of any express representation
or warranty made by the Company in any of the Transaction Documents, (ii) any breach of any covenant, agreement or obligation
of the Company or any Subsidiary contained in any of the Transaction Documents. To the extent that the foregoing undertaking by
the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities which is permissible under applicable law.

 

(ii) In
consideration of the Company’s execution and delivery of the Transaction Documents and issuing the Securities thereunder and in
addition to all of the Buyers’ other obligations under the Transaction Documents, each Buyer, individually and not jointly, shall
defend, protect, indemnify and hold harmless the Company and its shareholders officers, directors, employees and any of the foregoing
Persons’ agents or other representatives (including, without limitation, those retained in connection with the transactions contemplated
by this Agreement) (collectively, the “Company Indemnitees”) from and against any and all Indemnified Liabilities
incurred by any Company Indemnitee as a result of, or arising out of, or relating to (i) any misrepresentation or breach of any
express representation or warranty made by a Buyer in any of the Transaction Documents, (ii) any breach of any covenant, agreement
or obligation of a Buyer contained in any of the Transaction Documents. To the extent that the foregoing undertaking by a Buyer
may be unenforceable for any reason, such Buyer shall make the maximum contribution to the payment and satisfaction of each of
the Company Indemnified Liabilities which is permissible under applicable law.

 

    23

     

    

 

(iii) Promptly
after receipt by an Indemnitee under this Section 9(g) of notice of the commencement of any action or proceeding (including any
governmental action or proceeding) involving an Indemnified Liability, such Indemnitee shall, if a claim in respect thereof is
to be made against the indemnifying party under this Section 9(g), deliver to the indemnifying party a written notice of the commencement
thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires,
to assume control of the defense thereof with counsel mutually reasonably satisfactory to the indemnifying party and the Indemnitee;
provided, however, that an Indemnitee shall have the right to retain its own counsel with the fees and expenses of such counsel
to be paid by the indemnifying party if: (A) the indemnifying party has agreed in writing to pay such fees and expenses;
(B) the indemnifying party shall have failed promptly to assume the defense of such Indemnified Liability and to employ counsel
reasonably satisfactory to such Indemnitee in any such Indemnified Liability; or (C) the named parties to any such Indemnified
Liability (including any impleaded parties) include both such Indemnitee and the indemnifying party, and such Indemnitee shall
have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnitee
and the Company (in which case, if such Indemnitee notifies the indemnifying party in writing that it elects to employ separate
counsel at the expense of the Company, then the indemnifying party shall not have the right to assume the defense thereof and
such counsel shall be at the expense of the indemnifying party), provided further, that in the case of clause (C) above the indemnifying
party shall not be responsible for the reasonable fees and expenses of more than one (1) separate legal counsel for the Indemnitees.
The Indemnitee shall reasonably cooperate with the indemnifying party in connection with any negotiation or defense of any such
action or Indemnified Liability by the indemnifying party and shall furnish to the indemnifying party all information reasonably
available to the Indemnitee which relates to such action or Indemnified Liability. The indemnifying party shall keep the Indemnitee
reasonably apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. The indemnifying
party shall not be liable for any settlement of any action, claim or proceeding effected without its prior written consent, provided,
however, that the indemnifying party shall not unreasonably withhold, delay or condition its consent. The indemnifying party shall
not, without the prior written consent of the Indemnitee, consent to entry of any judgment or enter into any settlement or other
compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnitee
of a release from all liability in respect to such Indemnified Liability or litigation, and such settlement shall not include
any admission as to fault on the part of the Indemnitee. Following indemnification as provided for hereunder, the indemnifying
party shall be subrogated to all rights of the Indemnitee with respect to all third parties, firms or corporations relating to
the matter for which indemnification has been made. The failure to deliver written notice to the indemnifying party within a reasonable
time of the commencement of any such action shall not relieve the Company of any liability to the Indemnitee under this Section
9(g), except to the extent that the indemnifying party is materially and adversely prejudiced in its ability to defend such action.

 

(iv) The
indemnification required by this Section 9(g) shall be made by periodic payments of the amount thereof during the course of the
investigation or defense, within ten (10) days after bills supporting the Indemnified Liabilities are received by the indemnifying
party.

 

    24

     

    

 

(v) The
indemnity agreement contained herein shall be in addition to (A) any cause of action or similar right of the Indemnitee against
the indemnifying party or others, and (B) any liabilities the indemnifying party may be subject to pursuant to the law.

 

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

 

[REMAINDER
PAGE INTENTIONALLY LEFT BLANK]

 

    25

     

    

 

IN
WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.

 

	 
	COMPANY:

	 	 
	 	DRAGON
    VICTORY INTERNATIONAL LIMITED
	 	 
	 	By:	/s/
Liu Limin
	 	Name: 	Liu Limin
	 	Title:	Chief
Executive Officer

 

    26

     

    

 

IN
WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.

 

	 
	BUYER:

	 	 
	 	YA
    II PN, LTD. 
	 	 
	 	By:
    	Yorkville
    Advisors Global, LP
	 	Its:	Investment
    Manager
	 	 
	 	By:
    	Yorkville
    Advisors Global II, LLC
	 	Its: 	General Partner
	 	 
	 	By:	/s/ David
    Gonzalez
	 	Name: 	David Gonzalez
	 	Title: 	Member

 

    27

     

    

 

EXHIBIT
A

 

FORM
OF CONVERTIBLE DEBENTURES

 

    28

     

    

 

SCHEDULE
OF BUYERS

 

	Buyer	 	 	 	Subscription Amount	 	 	Purchase Price	 
	 	 	 	 	 	 	 	 	 
	YA II PN, Ltd.	 	 	 	 	 	 	 	 
	1012 Springfield Avenue	 	First Closing	 	$	1,000,000	 	 	$	970,000	 
	Mountainside, NJ 07092	 	Second Closing	 	$	1,000,000	 	 	$	970,000	 
	Facsimile: (201) 985-8266	 	 	 	 	 	 	 	 	 	 
	Email: Legal@yorkvilleadvisors.com	 	 	 	 	 	 	 	 	 	 
	 	 	Aggregate:	 	$	2,000,000	 	 	$	1,940,000	 
	 	 	 	 	 	 	 	 	 	 	 
	Legal Representative’s Address and Facsimile Number	 	 	 	 	 	 	 	 	 	 
	David Fine, Esq.	 	 	 	 	 	 	 	 	 	 
	1012 Springfield Avenue	 	 	 	 	 	 	 	 	 	 
	Mountainside, NJ 07092	 	 	 	 	 	 	 	 	 	 
	Facsimile: (201) 985-8266	 	 	 	 	 	 	 	 	 	 
	Email: Legal@yorkvilleadvisors.com

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00319-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00319-of-00352.parquet"}]]