Document:

Exhibit 10.1

 

 

$25 MILLION DEBTOR IN POSSESSION

CREDIT FACILITY

 

June 3, 2020

 

Summary
of Terms and Conditions

 

This
summary of terms and conditions (this “Term Sheet”) is a binding agreement by the Term Agent (as defined
below) and the Lenders to provide the debtor-in-possession delayed draw term facility referred to below (the “DIP
Term Facility”). Such obligation of the Term Agent and the Lenders to provide the DIP Term Facility pursuant
to this Term Sheet is conditioned upon the execution and delivery of signature pages to this Term Sheet by each of the Term Agent,
the Lenders and the Debtors (as defined below) and shall be subject in all cases to the terms and conditions set forth herein.
This Term Sheet is not exhaustive as to all of the terms and conditions which would govern the transactions described herein.

 

  

	Borrower:	 	Tuesday Morning, Inc., a Texas corporation (the “DIP Borrower”), as a debtor and debtor in possession under chapter 11 of title 11 of the United States Code, 11 U.S.C. §§ 101 et seq., as amended (the “Bankruptcy Code”).
	Guarantors:	 	
        The obligations of the DIP Borrower will
        be unconditionally guaranteed by the following entities (collectively, the “Guarantors”; the Guarantors
        together with the DIP Borrower, the “Debtors”):

        ·        
        Tuesday Morning Corporation, a Delaware corporation

        ·        
        TMI Holdings, Inc., a Delaware corporation

        ·        
        Friday Morning, LLC, a Texas limited liability company

        ·        
        Days of the Week, Inc., a Delaware corporation

        ·        
        Nights of the Week, Inc., a Delaware corporation

        ·        
        Tuesday Morning Partners, Ltd., a Texas limited partnership

         

	Case:	 	The Debtors filed bankruptcy cases under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Northern District of Texas (the “Bankruptcy Court”) on May 27, 2020 (the “Petition Date”) that are being jointly administered under Case No. 20-31476-HDH-11.
	Term Agent:	 	BRF Finance Co., LLC and/or an affiliate thereof shall act as the agent for the Lenders (the “Term Agent”).
	Lenders:	 	BRF Finance Co., LLC and/or an affiliate thereof shall provide 100% of the DIP Term Facility (collectively, the “Lenders”).
	DIP Term Facility:	 	
        The DIP Term Facility to be provided by
        the Lenders to the DIP Borrower shall be a senior secured delayed draw term loan facility in a maximum principal amount of up to
        $25 million. The closing and the initial extension of credit under the DIP Term Facility (which initial extension of credit is
        expected to be, and shall not in any event be greater than, $10 million) will be subject to satisfaction of the conditions precedent
        set forth opposite the heading “Conditions Precedent to Closing, Loan Documentation and Other Information” below and
        the occurrence of the Closing Date (as hereinafter defined).

        

 

     

     

    

 

	 	 	Thereafter
        and only so long as the Final Order (as hereinafter defined) has been entered and is unstayed and in full force and effect, the
        DIP Borrower shall be permitted to make subsequent draws under the DIP Term Facility in minimum increments of $2.5 million and
        each such draw shall be subject to certain draw conditions (“Draw Conditions”). The Draw Conditions shall
        be the following: (i) there is no Default continuing at the time of the applicable borrowing or would result from such borrowing,
        (ii) the DIP Borrower shall have delivered a notice borrowing to the Term Agent at least three (3) business days prior to the requested
        borrowing date, and (iii) the representations and warranties of the Debtors set forth in the Loan Documents shall be true and correct
        in all material respects as of the applicable requested borrowing date, except (x) to the extent that such representations
        and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects as
        of such earlier date and (y) in the case of any representation and warranty qualified by materiality, they shall be true and correct
        in all respects.

 

	DIP ABL Facility:	 	The DIP Borrower has entered into a superpriority secured debtor-in-possession revolving credit facility (the “DIP ABL Facility”) pursuant to the terms and conditions set forth in that certain Senior Secured Super Priority Debtor-in-Possession Credit Agreement dated as of May 29, 2020 (the “DIP ABL Credit Agreement”), by and among, among others, the Debtors and JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the “ABL Agent”) and that certain Interim Order (I) Authorizing Debtors to (A) Use Cash Collateral on a Limited Basis and (B) Obtain Postpetition Financing on a Secured, Superpriority Basis, (II) Granting Adequate Protection, (III) Scheduling a Final Hearing, and (IV) Granting Related Relief [Docket No. 67] (the “Interim ABL DIP Order”).  The DIP ABL Facility is for a maximum principal amount of the lesser of (i) $100 million and (ii) a borrowing base as set forth in the DIP ABL Credit Agreement (the “ABL Borrowing Base”). The indebtedness under the DIP ABL Facility is entitled to super priority claim status pursuant to Section 364(c)(1) of the Bankruptcy Code and is secured by a fully perfected security interest pursuant to Section 364(c)(2), Section 364(c)(3) and Section 364(d)(1) of the Bankruptcy Code on all assets of the Debtors with the claim and lien priorities set forth in the Interim ABL DIP Order and the Intercreditor Agreement (as defined below) (it being understood and agreed that the ABL Agent’s lien on the Real Estate Assets securing the DIP ABL Facility shall be junior to the Term Agent’s lien on the Real Estate Assets securing the DIP Term Facility).
	Intercreditor Agreement:	 	The rights and obligations of the lenders under the DIP ABL Facility and the DIP Term Facility shall be governed by an intercreditor agreement in form and substance satisfactory to the Term Agent and the ABL Agent (the “Intercreditor Agreement”).  The Intercreditor Agreement shall set forth, inter alia, the lien priorities and enforcement rights with respect to the Real Estate Assets and the application of proceeds received therefrom.  The Intercreditor Agreement will also set forth certain customary restrictions acceptable to the Term Agent and the ABL Agent on the right of the Term Agent and the ABL Agent to amend their respective loan documents without the prior written consent of the other party.

 

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	Purpose:	 	The proceeds of the DIP Term Facility shall be used to (i) repay the obligations under the DIP ABL Facility and the Prepetition ABL Credit Agreement (as hereinafter defined), (ii) fund general working capital and (iii) fund operational expenses and restructuring expenses of the DIP Borrower (including for payment of professional fees and other costs of administering the bankruptcy case), in each case, solely to the extent permitted by the applicable DIP orders, the Budget (subject to the permitted variances in the Budget set forth in the DIP ABL Credit Agreement) and the DIP Term Loan Documents (as hereinafter defined), as applicable.
	Prepetition ABL Credit Agreement	 	“Prepetition ABL Credit Agreement” shall mean that certain Credit Agreement, dated as of August 18, 2015, by and among, among others, the Debtors, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders from time to time party thereto (as amended, supplemented or otherwise modified from time to time).
	Maturity Date:	 	The date (the “Maturity Date”) which is the earliest to occur of (a) the date that is one hundred eighty (180) days after the Petition Date, (b) the date of consummation of a sale of all or substantially all of the DIP Borrower’s and Guarantors’ assets under Section 363 of the Bankruptcy Code, (c) the effective date of any plan of reorganization, and (d) the date the Term Agent accelerates all obligations under the DIP Term Facility following the occurrence of an event of default under the DIP Term Facility.  All amounts outstanding under the DIP Term Facility shall be due and payable in full on the Maturity Date.
	Collateral:	 	The DIP Term Facility (a) will be entitled to super priority claim status pursuant to Section 364(c)(1) of the Bankruptcy Code and (b) will be secured by a fully perfected security interest pursuant to Section 364(c)(2) and Section 364(d)(1) of the Bankruptcy Code in the Debtors’ owned land and improvements at the Debtors’ corporate headquarters and warehouse/distribution complex, each in Dallas County, Texas at the following addresses: (i) 14601 Inwood Rd, Addison, Texas 75001; (ii) 14603 Inwood Rd, Addison, Texas 75001; (iii) 14621 Inwood Rd, Addison, Texas 75001; (iv) 14639-14647 Inwood Rd, Addison, Texas 75001; (v) 4404 S. Beltwood Parkway, Farmers Branch, Texas 75244; (vi) 14303 Inwood Road, Farmers Branch, Texas, 75244; and (vii) 6250 LBJ Freeway, Dallas, Texas, 75240, and all real estate improvements thereto and all leases, rents, permits, records, and proceeds thereof (collectively, the “Real Estate Assets”).  The DIP Term Facility shall not be secured by a lien on any assets of the Debtors other than the Real Estate Assets.  Pursuant to the terms of the Intercreditor Agreement, the ABL Agent’s lien on the Real Estate Assets shall be junior to the lien thereon in favor of the Term Agent.  In the event both the Term Agent and the ABL Agent hold superpriority claims that are not satisfied from their respective collateral, such claims shall be pari passu.

 

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	Mandatory Prepayments:	 	The DIP Borrower shall be required to prepay the DIP Term Facility upon certain asset sales and casualty or condemnation events with respect to the Real Estate Assets (subject to de minimis dollar carveouts), and the incurrence of unpermitted indebtedness.
	Interest Rate:	 	Non-default interest on the DIP Term Facility will accrue at the three-month LIBOR rate, plus 9.00% per annum, and shall be calculated based on the actual number of days elapsed in a 360-day year and payable monthly in arrears.  LIBOR shall have a floor of 1.00%.  Default interest on the DIP Term Facility will accrue at the rate that is 2.00% per annum higher than the otherwise applicable interest rate. All interest will be subject to normal and customary usury savings clauses.
	Guaranty:	 	Unlimited Guaranty and secured by all Real Estate Assets of the Guarantors, subject to the terms of the Intercreditor Agreement. 
	Covenants, Representations and Warranties:	 	The Loan Documents will contain such affirmative and negative covenants and representations and warranties as are customary in debtor-in-possession financings and acceptable to the Term Agent and Borrower, but in all events will be consistent with the DIP ABL Facility documentation and subject to normal and customary qualifications, baskets and other limitations.
	Store Closing Program:	 	The
DIP Borrower shall implement a store closing program acceptable to the ABL Agent. 
	Budget, Reporting, and Inspection Rights:	 	
        The DIP Term Facility will include usual
        and customary reporting requirements, consistent with requirements under the DIP ABL Facility, including without limitation:

         

        
        (i)          Weekly borrowing base certificates substantially similar
        to the certificates provided to ABL Agent along with customary back-up information with respect to accounts and inventory included
        in the ABL Borrowing Base.

         

        (ii)       
Monthly operating reports and all other notices, filings, motions, pleadings or other information concerning the financial
condition of the Debtors which are filed with the Bankruptcy Court or delivered to any appointed committee of unsecured creditors
or to the applicable U.S. Trustee, as the case may be.

         

        (iii)       
        Financial statements, including monthly DIP Borrower prepared interim financial statements due within thirty (30) days after
        end of each month.

         

        (iv)       
A 13-week cash flow budget updated on a weekly basis (the “Budget”) for the Debtors’ cash
receipts and expenses (including professional fees and expenses), which shall provide, among other things, for the payment of
interest in respect of the DIP Term Facility to the Lenders.

 

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	 	 	(v)          A weekly Budget update and reconciliation report showing variances of Budget amounts to actual amounts, detailing the Debtors’ receipts and disbursements for the previous calendar week and a comparison to the amounts set forth in the Budget therefor for such week (on an aggregate and a line item by line item basis in the case of disbursements).  

                        

                       Not later than 3:00 p.m. (Central time) on the Tuesday of each week commencing on June 23, 2020, the Debtors shall furnish to the Term Agent and the ABL Agent a weekly report that sets forth as of the preceding Saturday of each such week, for the prior week and on a cumulative basis from the Petition Date through the fourth (4th) full week after the Petition Date and then on a rolling four (4) week basis at all times thereafter (each such period referred to herein as a “Measurement Period”), the actual results for the following line items set forth in the Budget: (i) Total Operating Disbursements”; (ii) “Total Non-Operating Disbursements”; and (iii) “Professional Fees”.

                        

                       The DIP Term Facility shall also provide that the Term Agent will have the right, upon reasonable prior notice and reasonable coordination with Debtors, to visit the Debtors’ properties, inspect the Real Estate Assets, and audit and make extracts from the Debtors’ corporate, financial and operating records, all during normal business hours.

 

	Defaults:	 	
        An “Event
        of Default” under the DIP Term Facility shall include, but not be limiting to, the following:

         

        (a)      Any
        violation, or breach by any of the Debtors of any of the terms of the Interim Order (as hereinafter defined), or Final Order (as
        hereinafter defined; the Final Order, together with the Interim Order, the “Financing Orders”);

         

        (b)    the occurrence and continuation of
        any event of default as defined in any of the other DIP Term Loan Documents or the DIP ABL Facility;

         

        (c)      The
        failure of Debtors to obtain the Final Order from the Bankruptcy Court not later than 30 days after the date of entry of the Interim
        Order;

         

        (d)     Nonpayment
        of principal, interest, or mandatory prepayments when due;

         

        (e)      The
        failure or breach of any warranty or representation, in any material respect, or the breach of affirmative covenants of the Debtors
        (which in the case of certain affirmative covenants will be subject to a 15-day cure period), or the breach of any negative covenant
        of the Debtors, in each case as set forth in the DIP Term Loan Documents;

        

 

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	 	 	(f)       Entry
of an order for the dismissal or conversion to Chapter 7 of any Debtor’s bankruptcy case; the appointment of a bankruptcy
trustee, examiner or other fiduciary with decision making authority except with the express written consent of the Term Agent;
the granting of any other superpriority administrative expense claim (other than in favor of the ABL Agent) or the entry of an
order granting relief from the automatic stay (if not in favor of the Term Agent or the ABL Agent, and for the avoidance of doubt,
not including the Interim ABL DIP Order or a final order approving the DIP ABL Facility) except with the express written consent
of the Term Agent; any Debtor shall attempt to vacate or modify the Interim Order or the Final Order over the objection of the
Term Agent; or any Debtor shall institute any proceeding or investigation or support same by any other person who seeks to challenge
the status and/or validity of the liens of the Term Agent (as security for the Lenders);

 

(g)     The
Bankruptcy Court shall enter an order or orders granting relief from the automatic stay to the holder or holders of any security
interest or lien (other than the Lenders) to permit the pursuit of any judicial or non-judicial transfer or other remedy against
any assets of any of the Debtors, in each case involving assets with an aggregate value in excess of $75,000;

 

(h)     The
Debtors shall fail to deliver timely any report or information or meet timely any other deadline under the Interim Order, Final
Order, or the DIP ABL Facility;

 

(i)       Entry
of a Sale Order which includes the sale of the Real Estate Assets or a Real Estate Sale Order unless either such order contemplates
either indefeasible payment in full in cash of the DIP Term Facility upon consummation of the sale or is otherwise consented to
in writing by the Term Agent; and

 

(j)       The
filing or support by the Debtors of any plan of reorganization that is not acceptable to the Term Agent in its sole discretion
unless such plan of reorganization contemplates indefeasible payment in full in cash of the DIP Term Facility.

 

Upon the occurrence of any Event of Default, the Term Agent
may exercise rights and remedies in accordance with the DIP Term Loan Documents and applicable law, including, without limitation,
by foreclosing upon the Real Estate Assets.

 

	No Carve Out:	 	The liens and claims of the Term Agent shall not be subject to a carve-out for the payment of professional fees or expenses. 
	Fees/Costs: 	 	
        The
        DIP Borrower will pay the Term Agent, for the benefit of the Lenders, a nonrefundable upfront fee (the “Upfront Fee”)
        equal to 2.50% of the aggregate commitments under the DIP Term Facility, which Upfront Fee shall be fully earned (subject to the
        qualifications set forth below) upon the Bankruptcy Court’s approval of the DIP Term Facility on an interim basis as set
        forth in the Interim Order. The Upfront Fee shall be due and payable upon the earlier to occur of (i) the execution of the DIP
        Term Loan Documents (as hereinafter defined) following the Bankruptcy Court’s entry of the Interim Order and (ii) the date
        that the Debtors elect not to close the DIP Term Facility (for any reason other than the Bankruptcy Court denying the Debtors’
        motion seeking approval of the DIP Term Facility).

        

 

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	 	 	The DIP Borrower will pay the Term Agent,
for the benefit of the Lenders, a nonrefundable exit fee (the “Exit Fee”) equal to 2.50% of the aggregate
commitments under the DIP Term Facility (prior to giving effect to any reductions of such commitments during the term of the DIP
Term Facility), which Exit Fee shall be fully earned upon the occurrence of the Closing Date. The Exit Fee shall be due and payable
upon the earliest to occur of (i) the acceleration of the obligations under the DIP Term Facility, (ii) the occurrence of the Maturity
Date and (iii) the repayment in full of all obligations outstanding under the DIP Term Facility and the termination of the DIP
Term Facility.

 

The DIP Borrower will pay a nonrefundable collateral monitoring
fee of $200,000.00 which shall be due and payable in monthly installments of $33,333.33 (or $33,333.34 for the initial two months)
for each month until the Maturity Date. The entire collateral monitoring fee shall be fully earned upon the occurrence of the Closing
Date.

	 	 	The DIP Borrower will be responsible for all reasonable, documented out-of-pocket costs and expenses incurred by the Lenders and the Term Agent, including, but not limited to, amounts advanced for legal review and documentation, preparation, environmental, recording and filing expenses, field audits, and all reasonable and documented legal fees and charges of outside counsel, which shall be limited to expenses of one primary counsel to the Term Agent and the Lenders taken as a whole, one local counsel to the term and the Lenders taken as a whole in each applicable jurisdiction, and, solely in the case of an actual conflict of interest, one additional counsel in each relevant jurisdiction to each group of similarly situated affected parties.  The DIP Term Facility will also include customary indemnification provisions in favor of the Term Agent and the Lenders.  Without limiting the foregoing, it is acknowledged that on or around May 26, 2020, the DIP Borrower paid to the outside counsel of the Term Agent an initial, non-refundable expense deposit of $150,000.00 (the “Deposit”) to be used to pay the legal fees and charges of the Term Agent’s outside counsel in connection with the DIP Term Facility.  The Deposit shall not be refundable under any circumstance, regardless of whether the DIP Term Facility closes.
	Releases / Covenant Not To Sue:	 	The Debtors shall provide each of the Term Agent, the Lenders, and their respective partners, equityholders, directors, members, principals, agents advisors, officers, professionals (including, but not limited to, counsel), subsidiaries and affiliates a comprehensive release and covenant not to sue as to any and all claims and causes of action against any of them as of the date of such release, and the date of each advance made under the DIP Term Facility.  This release and covenant not to sue shall be without prejudice to any review period as to any appointed creditors’ committee or any other party in interest as more fully set forth in the Financing Orders.

 

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	Conditions Precedent to Closing, Loan Documentation and Other Information:	 	
        The loan shall be evidenced by final definitive
        loan documentation consisting of, among other things, a loan agreement (the “DIP Term Loan Agreement”),
        mortgage(s), guaranty(ies), the Intercreditor Agreement and other documents, instruments and agreements as shall be required by
        the Term Agent and its counsel in their sole discretion (collectively, the “DIP Term Loan Documents”).
        The DIP Term Loan Documents will contain definitions, additional terms, conditions, covenants, representations and warranties,
        and events of default customary to the Term Agent’s agreements for similar debtor in possession credit facilities, but in
        all events consistent with the DIP ABL Facility documentation (provided, however, the DIP Term Loan Documents shall give regard
        to the different collateral securing the DIP Term Facility compared to the DIP ABL Facility), and all such loan documentation shall
        be in form and substance satisfactory to the Term Agent in its sole discretion and, to the extent required under the terms of the
        DIP ABL Facility, in the sole and absolute discretion of the ABL Agent. A condition to making the proposed loan will be receipt
        by the Term Agent and the Lenders of such information and documentation as shall be reasonably required by the Term Agent and the
        Lenders, including, without limitation, articles of incorporation, corporate resolutions, partnership agreements, operating agreements,
        surveys (to the extent currently in Debtors’ possession), UCC searches, property insurance, and, solely to the extent applicable,
        flood insurance. The form and substance of such information and documentation must be satisfactory to the Term Agent. In addition
        to the above, conditions precedent to closing and the initial draw of loans under the DIP Term Facility will include the following
        (the date of satisfaction of all such conditions precedent being referred to herein as the “Closing Date”):

         

        (i)          
At least three (3) business days prior to the hearing on the proposed Interim Order, the
Term Agent shall have received a title report or other evidence reasonably satisfactory to the Term Agent evidencing that
title to the Real Estate Assets is vested in the Debtors subject only to liens and encumbrances satisfactory to the Term Agent
in its sole discretion.

         

        (ii)         Term
Agent’s receipt of the last three (3) years of annual financial statements and tax returns of the Debtors.

         

        (iii)        Term Agent’s receipt of current interim financial statements of the Debtors.

         

        (iv)        Term Agent’s receipt of desktop appraisals of the Debtors’ real estate.

         

        

         

 

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	 	 	(v)        
Term Agent’s receipt of the initial Budget and borrowing base certificate.

 

(vi)        
Execution and delivery of DIP Term Loan Documents.

 

(vii)      
Execution and delivery of the Intercreditor Agreement, in form and substance satisfactory to the ABL Agent and the Term Agent.

 

(viii)     
Payment of all reasonable and documented fees and out-of-pocket expenses that are due and payable on or prior to the Closing Date
in connection with the transactions contemplated hereby.

 

(ix)        
Entry of customary second day orders, which orders and all related pleadings shall be in form and substance satisfactory to the
Term Agent.

 

Additionally, prior to funds under the DIP Term Facility being
available to the DIP Borrower, the Bankruptcy Court shall have entered an order approving and authorizing the DIP Term Facility
on an interim basis, all provisions thereof and the priorities and liens granted under Bankruptcy Code section 364(c) and (d),
as applicable, in form and substance acceptable to the Term Agent (the “Interim Order”). For purposes
hereof, the “Final Order” shall mean the final order of the Bankruptcy Court, in form and substance acceptable
to the Term Agent, authorizing and approving the DIP Term Facility on a final basis.

 

	Governing Law:	 	The Loan Documents and the interpretation, construction and enforcement of the terms thereof, shall be governed by the laws of the State of New York (or, with respect to the mortgage, Texas) and (to the extent applicable) the Bankruptcy Code.
	Counterparts and Electronic Transmission:	 	This Term Sheet may be executed in any number of counterparts and by different parties hereto on separate counterparts, each of which when so executed and delivered, shall be deemed an original, and all of which, when taken together, shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Term Sheet by facsimile, “PDF” or other electronic transmission shall be effective as delivery of a manually executed counterpart of this Term Sheet.
	Counsel to the DIP Borrower:	 	Haynes and Boone, LLP
	Counsel to the Term Agent:	 	Choate, Hall & Stewart LLP (as lead restructuring counsel) and Quinn Emanuel Urquhart & Sullivan, LLP (as local restructuring counsel)

 

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IN WITNESS WHEREOF,
the parties hereto hereby agree to be bound by the terms and conditions in the Summary of Terms and Conditions for the DIP Term
Facility set forth herein and have caused this Summary of Terms and Conditions to be duly executed and delivered by their duly
authorized officers as of the date first written above.

 

	 	BRF FINANCE CO., LLC
	 	 
	 	 
	 	By: 	/s/ Bryant R. Riley
	 	Name: 	Bryant R. Riley
	 	Title: 	Chairman & Co-CEO

 

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	 	TUESDAY MORNING, INC.
	 	 
	 	 
	 	By:	/s/ Steven R. Becker
	 	Name:	Steven R. Becker
	 	Title:	Chief Executive Officer
	 	 
	 	TUESDAY MORNING CORPORATION
	 	 
	 	 
	 	By:	/s/ Steven R. Becker
	 	Name:	Steven R. Becker
	 	Title:	Chief Executive Officer
	 	 
	 	TMI HOLDINGS, INC.
	 	 
	 	 
	 	By:	/s/ Steven R. Becker
	 	Name:	Steven R. Becker
	 	Title:	Chief Executive Officer
	 	 
	 	FRIDAY MORNING, LLC
	 	 
	 	 
	 	By:	/s/ Steven R. Becker
	 	Name:	Steven R. Becker
	 	Title:	Chief Executive Officer
	 	 
	 	DAYS OF THE WEEK, INC.
	 	 
	 	 
	 	By:	/s/ Steven R. Becker
	 	Name:	Steven R. Becker
	 	Title:	Chief Executive Officer

 

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	 	NIGHTS OF THE WEEK, INC.
	 	 
	 	 
	 	By:	/s/ Steven R. Becker
	 	Name:	Steven R. Becker
	 	Title:	Chief Executive Officer
	 	 
	 	TUESDAY MORNING PARTNERS,
    LTD.
	 	 
	 	 
	 	By:	/s/ Steven R. Becker
	 	Name:	Steven R. Becker
	 	Title:	Chief Executive Officer

 

    12Exhibit 10.1

 

EXECUTION COPY

 

SECURITIES
PURCHASE AGREEMENT

 

This SECURITIES
PURCHASE AGREEMENT (the “Agreement”), dated as of June 8, 2020, is by and among Akerna Corp., a Delaware
corporation with offices located at 1630 Welton Street, Denver, Colorado 80202 (the “Company”), and each of
the investors listed on the Schedule of Buyers attached hereto (individually, a “Buyer” and collectively, the
“Buyers”).

 

RECITALS

 

A. The
Company and each Buyer is executing and delivering this Agreement in reliance upon the exemption from the securities registration
requirements of the Securities Act of 1933, as amended (the “1933 Act”) afforded by Section 4(a)(2) thereof,
and Rule 506(b) of Regulation D (“Regulation D”) as promulgated by the United States Securities and Exchange
Commission (the “SEC”) under the 1933 Act.

 

B. The
Company has authorized a new series of senior secured convertible notes of the Company, in the aggregate original principal amount
of $17,000,000, substantially in the form attached hereto as Exhibit A (the “Notes”), which Notes
shall be convertible into shares of Common Stock (as defined below) (the shares of Common Stock issuable pursuant to the terms
of the Notes, including, without limitation, upon conversion or otherwise, collectively, the “Conversion Shares”),
in accordance with the terms of the Notes.

 

C. Each
Buyer wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, a Note in the
aggregate original principal amount set forth opposite such Buyer’s name in column (3) on the Schedule of Buyers attached
hereto (which aggregate principal amount of Notes for all Buyers shall be $17,000,000).

 

D. The
Notes and the Conversion Shares are collectively referred to herein as the “Securities.”

 

F. The
Notes will rank senior to all outstanding and future indebtedness of the Company, and its Subsidiaries (as defined below) the Notes
will be secured by a first priority perfected security interest (subject to Permitted Liens under and as defined in the Notes)
in all of the existing and future assets of the Company and its direct and indirect U.S. Subsidiaries, including a pledge of all
of the capital stock of each of the Subsidiaries, as evidenced by (i) a security agreement in the form attached hereto as Exhibit
B (the “Security Agreement”), (ii) account control agreements with respect to certain accounts described
in the Note and the Security Agreement, in form and substance acceptable to each Buyer, duly executed by the Company and each depositary
bank (each, an “Controlled Account Bank”) in which each such account is maintained (the “Controlled
Account Agreements”, and together with the Security Agreement, the Perfection Certificate (as defined below) and the
other security documents and agreements entered into in connection with this Agreement and each of such other documents and agreements,
as each may be amended or modified from time to time, collectively, the “Security Documents”), and (iii) a guaranty
executed by each U.S. Subsidiary of the Company, in the form attached hereto as Exhibit C (collectively, the “Guaranties”)
pursuant to which each of them guarantees the obligations of the Company under the Transaction Documents (as defined below).

 

     

     

    

 

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 NOTES.

 

(a) Purchase
of Notes. 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 on the Closing Date
(as defined below) a Note in the original principal amount as is set forth opposite such Buyer’s name in column (3) on the
Schedule of Buyers.

 

(b) Closing.
The closing (the “Closing”) of the purchase of the Notes by the Buyers shall occur at the offices of Kelley
Drye & Warren LLP, 101 Park Avenue, New York, NY 10178. The date and time of the Closing (the “Closing Date”)
shall be 10:00 a.m., New York time, on the first (1st) 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). As used herein
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City
of New York are authorized or required by law to remain closed; provided, however,
for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay
at home”, “shelter-in-place”, “non-essential employee”  or any other similar orders or restrictions
or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds
transfer systems (including for wire transfers) of commercial banks in The City of New York generally are open for use by customers
on such day.

 

(c) Purchase
Price. The aggregate purchase price for the Notes to be purchased by each Buyer (the “Purchase Price”) shall
be the amount set forth opposite such Buyer’s name in column (4) on the Schedule of Buyers. Each Buyer shall pay $880 for
each $1,000 of principal amount of Notes to be purchased by such Buyer at the Closing.

 

(d) Form
of Payment. On the Closing Date, (i) each Buyer shall pay its respective Purchase Price (less, in the case of any Buyer, the
amounts withheld pursuant to Section 4(g)) to the Company for the Notes to be issued and sold to such Buyer at the Closing,
by wire transfer of immediately available funds in accordance with the Flow of Funds Letter (as defined below) and (ii) the
Company shall deliver to each Buyer a Note in the aggregate original principal amount as is set forth opposite such Buyer’s
name in column (3) of the Schedule of Buyers, duly executed on behalf of the Company, allocated in the principal amounts as such
Buyer shall request and registered in the name of such Buyer or its designee.

 

    2

     

    

 

2. BUYER’S
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 the Closing
Date:

 

(a) 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.

 

(b) No
Public Sale or Distribution. Such Buyer (i) is acquiring its Note, and (ii) upon conversion of its Note will acquire the Conversion
Shares issuable upon conversion thereof, in each case, for its own account and not with a view towards, or for resale in connection
with, the public sale or distribution thereof in violation of applicable securities laws, except pursuant to sales registered or
exempted under the 1933 Act and in accordance with any applicable securities laws of any state of the United States; provided,
however, by making the representations herein, such Buyer does not agree, or make any representation or warranty, to hold any of
the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance
with or pursuant to a registration statement or an exemption from the registration requirements under the 1933 Act and in accordance
with any applicable securities laws of any state of the United States. Such Buyer does not presently have any agreement or understanding,
directly or indirectly, with any Person to distribute any of the Securities in violation of applicable securities laws. For purposes
of this Agreement, “Person” means an individual, a limited liability company, a partnership, a joint venture,
a corporation, a trust, an unincorporated organization, any other entity and any Governmental Entity or any department or agency
thereof.

 

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

 

(d) Reliance
on Exemptions. Such Buyer understands that the Securities have not been and will not be registered under the 1933 Act or any
applicable securities laws of any state of the United States and are being offered and sold to it in reliance on the exemptions
from registration under the 1933 Act provided by Section 4(a)(2) of the 1933 Act and Rule 506(b) of Regulation D under the 1933
Act and pursuant to similar exemption from any applicable securities laws of any state of the United States 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.

 

(e) Information.
Such Buyer and its advisors, if any, have had access to the SEC Documents (as defined in Section 3(k) below) filed electronically
on EDGAR and available at www.sec.gov and have been furnished with all materials relating to the business, finances and operations
of the Company and materials relating to the offer and sale of the Securities that have been requested by such Buyer. Such Buyer
and its advisors, if any, have been afforded the opportunity to ask questions of the Company. Neither such inquiries nor any other
due diligence investigations conducted by such Buyer or its advisors, if any, or its representatives shall modify, amend or affect
such Buyer's right to rely on the Company's representations and warranties contained herein. Such Buyer understands that its investment
in the Securities involves a high degree of risk. Such 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.

 

    3

     

    

 

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

 

(g) Transfer
or Resale. Such Buyer understands that, except for the pledge of Securities in accordance with the requirements of Section
4(h) hereof: (i) the Securities may not be offered for sale, sold, assigned, pledged or otherwise transferred, directly or indirectly,
unless (A) subsequently registered thereunder, (B) such sale, offer, assignment or transfer is to the Company, (C) the offer, sale,
assignment, pledge or transfer is made pursuant to the exemption from the registration requirements under the U.S. Securities Act
provided by Rule 144 (“Rule 144”) or Rule 144A (“Rule 144A”) thereunder, if available, and
in accordance with any applicable securities laws of any state of the United States provided that such Buyer has validly executed
and furnished to the Company a representation letter in the form attached hereto as Exhibit D (each, a “144
Rep Letter”) that such sale, offer, assignment or transfer can be made in compliance with Rule 144 or Rule 144A, in form
and substance reasonably satisfactory to the Company and its transfer agent (which shall not include an opinion of counsel) or
(D) such offer, sale, pledge, assignment or transfer is pursuant to a transaction that does not require registration under the
1933 Act or any applicable securities laws of any state of the United States provided that such Buyer has furnished to the Company
an opinion of counsel of recognized standing, in form and substance reasonably satisfactory to the Company and its transfer agent,
that registration is not required under the 1933 Act to affect such offer, sale, pledge, assignment or transfer; (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 offer, sale, assignment, pledge or transfer 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 1933 Act) may
require compliance with some other exemption under the 1933 Act or the rules and regulations of the SEC promulgated thereunder;
and (iii) neither the Company nor any other Person is under any obligation to register the Securities under the 1933 Act or any
applicable securities laws of any state of the United States or to comply with the terms and conditions of any exemption thereunder,
including, but not limited to, Rule 144.

 

(h) Validity;
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 their respective
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 and thereby will not (i) result in a violation of the organizational documents of such Buyer,
or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument
to which such 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.

 

    4

     

    

 

(j) Residency.
Such Buyer is a resident of that jurisdiction specified below its address on the Schedule of Buyers.

 

(k) No
Commission. Except for such fees as otherwise provided for in this Agreement (including, without limitation, fees payable by
the Company to the Placement Agent (as defined below)), the purchase of the Notes by such Buyer and the performance by such Buyer
under the Notes will not result in any placement agent or other agent being entitled to, or the Company being responsible for the
payment of, any placement agent’s fees, financial advisory fees, or brokers’ commissions in connection with any placement
agent or other agents engaged by such Buyer.

 

3. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.

 

The Company represents
and warrants to each of the Buyers that, as of the date hereof and as of the Closing Date (except for representations and warranties
that speak as of a specific date which shall be true and correct as of such specified date):

 

(a) Organization
and Qualification. Each of the Company and each of its Subsidiaries are entities duly organized and 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. Except as set forth
on Schedule 3(a) attached hereto, each of 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), condition (financial or otherwise) or prospects of the Company or any Subsidiary, individually or 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 in connection herewith or therewith or (iii) the authority or ability of the Company or any of its Subsidiaries
to perform any of their respective obligations under any of the Transaction Documents (as defined below). Other than the Persons
(as defined below) set forth on Schedule 3(a), the Company has no Subsidiaries. “Subsidiaries” means any
Person (other than an Excluded Subsidiary (as defined below)) in which the Company, directly or indirectly, (I) owns more than
50% of the outstanding capital stock, any equity or similar interest of such Person or (II) controls all or substantially all of
the business, operations or administration of such Person, and each of the foregoing, is individually referred to herein as a “Subsidiary.”
Each of MJ Freeway Exports, Inc., Mtech Acquisition Corp., Numbered company, Akerna Canada Holdings Inc. and Akerna Canada Ample
Exchange Inc. (each, an “Excluded Subsidiary”) have no assets or liabilities as of the date hereof and as of
the Closing Date; provided, that any such entity shall cease to be an Excluded Subsidiary hereunder at any time such Excluded Subsidiary
incurs any liabilities or obtains any assets.

 

    5

     

    

 

(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. Each
Subsidiary has the requisite power and authority to enter into and perform its obligations under the Transaction Documents to which
it is a party. The execution and delivery of this Agreement and the other Transaction Documents by the Company and its Subsidiaries,
and the consummation by the Company and its Subsidiaries of the transactions contemplated hereby and thereby (including, without
limitation, the issuance of the Notes and the reservation for issuance and issuance of the Conversion Shares issuable upon conversion
of the Notes) have been duly authorized by the Company’s board of directors and each of its Subsidiaries’ board of
directors or other governing body, as applicable, and (other than the filing of a Form D with the SEC and any other filings as
may be required by any state securities agencies) no further filing, consent or authorization is required by the Company, its Subsidiaries,
their respective boards of directors or their stockholders or other governing body. This Agreement has been, and the other Transaction
Documents to which it 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. Prior
to the Closing, the Transaction Documents to which each Subsidiary is a party will be duly executed and delivered by each such
Subsidiary, and shall constitute the legal, valid and binding obligations of each such Subsidiary, enforceable against each such
Subsidiary in accordance with their 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 Notes, the Security Documents, the Guarantees, the Voting Agreement, the Irrevocable Transfer Agent Instructions (as defined
below) and each of the other agreements and instruments entered into or delivered by any of the parties hereto in connection with
the transactions contemplated hereby and thereby, as may be amended from time to time.

 

(c) Issuance
of Securities. The issuance of the Notes has been duly authorized and, upon issuance in accordance with the terms of the Transaction
Documents, the Notes 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, subject to Permitted Liens (under and as defined
in the Notes). As of the Closing, the Company shall have reserved from its duly authorized capital stock not less than 8,854,167
Conversion Shares issuable upon conversion of the Notes (without taking into account any limitations on the conversion of the Notes
set forth in the Notes). Upon issuance or conversion in accordance with the Notes, 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 holder of Common Stock. Subject to the accuracy of the representations
and warranties of the Buyers in this Agreement, and, assuming issuance of the Conversion Shares is in accordance with the terms
and conditions of the Notes, the offer and issuance by the Company of the Securities is exempt from registration under the 1933
Act.

 

    6

     

    

 

(d) No
Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and its Subsidiaries and the
consummation by the Company and its Subsidiaries of the transactions contemplated hereby and thereby (including, without limitation,
the issuance of the Notes and the Conversion Shares and the reservation for issuance of the Conversion Shares) will not (i) result
in a violation of the Certificate of Incorporation (as defined below) (including, without limitation, any certificate of designation
contained therein), Bylaws (as defined below), certificate of formation, memorandum of association, articles of association, bylaws
or other organizational documents of the Company or any of its Subsidiaries, or any capital stock or other securities of the Company
or any of its Subsidiaries, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both
would become a default) in any respect under, or give to others any rights of termination, amendment, acceleration or cancellation
of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in a violation
of any law, rule, regulation, order, judgment or decree (including, without limitation, foreign, federal and state securities laws
and regulations and the rules and regulations of the Nasdaq Capital Market (the “Principal Market”) and including
all applicable foreign, federal and state laws, rules and regulations) 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)
above, where such would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

(e) Consents.
Neither the Company nor any Subsidiary is required to obtain any consent from, authorization or order of, or make any filing or
registration with (except for such consents, authorizations, orders, filings or registrations that (A) have already been obtained
or made or will be obtained or made prior to the Closing Date or (B) failure to obtain or make would not, either individually or
in the aggregate, reasonably be expected to result in a Material Adverse Effect and other than the filing of a Form D with the
SEC and any other filings as may be required by any state securities agencies), 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 respective 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 the 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 Common Stock 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,
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.

 

    7

     

    

 

(f) Acknowledgment
Regarding Buyer’s Purchase of Securities. The Company acknowledges and agrees that each Buyer is acting solely in the
capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby
and thereby and that no Buyer is (i) an officer or director of the Company or any of its Subsidiaries, (ii) to its knowledge, an
“affiliate” (as defined in Rule 144) of the Company or any of its Subsidiaries or (iii) to its knowledge, a “beneficial
owner” of more than 10% of the shares of Common Stock (as defined for purposes of Rule 13d-3 of the Securities Exchange Act
of 1934, as amended (the “1934 Act”)). 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. The Company further represents to each Buyer that the Company’s and each Subsidiary’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,
each Subsidiary and their respective representatives.

 

(g) No
General Solicitation; Placement Agent’s Fees. Neither the Company, nor any of its Subsidiaries or 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) in connection with the offer or sale of the Securities. The Company shall be responsible for the payment of any
placement agent’s fees, financial advisory fees, or brokers’ commissions (other than for Persons engaged by any Buyer
or its investment advisor) relating to or arising out of the transactions contemplated hereby, including, without limitation, placement
agent fees payable to Alliance Global Partners, as placement agent (the “Placement
Agent”) in connection with the sale of the Securities. The fees and expenses of the Placement Agent to be paid by the
Company or any of its Subsidiaries are as set forth on Schedule 3(g) attached hereto. The Company shall pay, and hold each Buyer
harmless against, any liability, loss or expense (including, without limitation, attorney's fees and out-of-pocket expenses) arising
in connection with any such claim. The Company acknowledges that it has engaged the Placement Agent in connection with the sale
of the Securities. Other than the Placement Agent, neither the Company nor any of its Subsidiaries has engaged any placement agent
or other agent in connection with the offer or sale of the Securities.

 

(h) 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 require registration of the issuance of any of the Securities under the 1933 Act, whether through integration with prior
offerings or otherwise, or cause this offering of the Securities to require approval of stockholders of the Company for purposes
of the 1933 Act or under any applicable stockholder 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 require registration of the issuance of any of the Securities under the 1933 Act or cause the offering of any of the Securities
to be integrated with other offerings of securities of the Company.

 

    8

     

    

 

(i) Dilutive
Effect. The Company understands and acknowledges that the number of Conversion Shares will increase in certain circumstances.
The Company further acknowledges that its obligation to issue the Conversion Shares pursuant to the terms of the Notes in accordance
with this Agreement and the Notes is, in each case, absolute and unconditional regardless of the dilutive effect that such issuance
may have on the ownership interests of other stockholders of the Company.

 

(j) 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 Certificate of Incorporation, Bylaws 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. The Company
has not adopted a stockholder rights plan or similar arrangement relating to accumulations of beneficial ownership of Common Stock
or a change in control of the Company or any of its Subsidiaries.

 

(k) SEC
Documents; Financial Statements. Except as set forth on Schedule 3(k) attached hereto, during the two (2) years prior to the
date hereof or such shorter period as the Company has been required to file reports with the SEC pursuant to the requirements of
the 1934 Act, 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”). The Company has delivered
or has made available to the Buyers or their respective representatives true, correct and complete copies of each of the SEC Documents
not available on the EDGAR system. As of their respective filing 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 referred
to in Section 2(e) of this Agreement or 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

     

    

 

(l) Absence
of Certain Changes. Since the date of the Company’s most recent audited financial statements contained in a Form 10-K,
there has been no adverse change and no adverse development in the business, assets, liabilities, properties, operations (including
results thereof), condition (financial or otherwise) or prospects of the Company or any of its Subsidiaries, except such as would
not be reasonably likely to cause a Material Adverse Effect. Except as set forth in the SEC Documents, since the date of the Company’s
most recent audited financial statements contained in a Form 10-K, neither the Company nor any of its Subsidiaries has (i) declared
or paid any dividends, (ii) sold any assets, individually or in the aggregate, outside of the ordinary course of business, (iii)
made any capital expenditures, individually or in the aggregate, outside of the ordinary course of business or (iv) made any revaluation
of any of their respective assets, including, without limitation, writing down the value of capitalized inventory or writing off
notes or accounts receivable or any sale of assets other than in 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. The Company and its Subsidiaries, individually and on a consolidated basis, are not as of
the date hereof, and after giving effect to the transactions contemplated hereby to occur at the Closing, will not be Insolvent
(as defined below). For purposes of this Section 3(l), “Insolvent” means, (i) with respect to the Company and
its Subsidiaries, on a consolidated basis, (A) the present fair saleable value of the Company’s and its Subsidiaries’
assets is less than the amount required to pay the Company’s and its Subsidiaries’ total Indebtedness (as defined below),
(B) the Company and its Subsidiaries are unable to pay their debts and liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured or (C) the Company and its Subsidiaries intend to incur or believe that they
will incur debts that would be beyond their ability to pay as such debts mature; and (ii) with respect to the Company and each
Subsidiary, individually, (A) the present fair saleable value of the Company’s or such Subsidiary’s (as the case may
be) assets is less than the amount required to pay its respective total Indebtedness, (B) the Company or such Subsidiary (as the
case may be) is unable to pay its respective debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities
become absolute and matured or (C) the Company or such Subsidiary (as the case may be) intends to incur or believes that it will
incur debts that would be beyond its respective ability to pay as such debts mature. Neither the Company nor any of its Subsidiaries
has engaged in any business or in any transaction, and is not about to engage in any business or in any transaction, for which
the Company’s or such Subsidiary’s remaining assets constitute unreasonably small capital with which to conduct the
business in which it is engaged as such business is now conducted and is proposed to be conducted.

 

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(m) 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 with respect 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
(i) would be required to be disclosed by the Company under applicable securities laws on a registration statement on Form S-1 filed
with the SEC relating to an issuance and sale by the Company of its Common Stock and which has not been publicly announced, (ii)
could have a material adverse effect on any Buyer’s investment hereunder or (iii) could have a Material Adverse Effect.

 

(n) Conduct
of Business; Regulatory Permits. Neither the Company nor any of its Subsidiaries is in violation of any term of or in default
under its Certificate of Incorporation, any certificate of designation, preferences or rights of any other outstanding series of
preferred stock of the Company or any of its Subsidiaries or Bylaws or their organizational charter, certificate of formation,
memorandum of association, articles of association, Certificate of Incorporation 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 possible violations which could not, individually or
in the aggregate, have a Material Adverse Effect. Except as described on Schedule 3(n) attached hereto, 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 Common Stock by the
Principal Market in the foreseeable future. Since the date the Common Stock has been listed or designated for quotation on the
Principal Market, (i) trading in the Common Stock has not been suspended by the SEC or the Principal Market and (ii) the Company
has received no communication, written or oral, from the SEC or the Principal Market regarding the suspension or delisting of the
Common Stock from the Principal Market. 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 have, individually or in the aggregate, a Material Adverse Effect,
and neither the Company nor any such Subsidiary has received any notice of proceedings relating to the revocation or modification
of any such certificate, authorization or permit. 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.

 

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(o) Foreign Corrupt
Practices. Neither the Company, any Subsidiary nor, to the Company’s knowledge, any director, officer, agent, employee,
nor any other person acting for or on behalf of the foregoing (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, to the Company’s knowledge, 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 or was aware of a high probability 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 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.

 

(p) Sarbanes-Oxley
Act. The Company and each Subsidiary is in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of
2002, as amended, and any and all applicable rules and regulations promulgated by the SEC thereunder.

 

(q) Transactions
With Affiliates. Except as set forth on Schedule 3(q) attached hereto, no employee, director or officer or, to the knowledge
of the Company, any affiliate of any thereof is presently (i) a party to any transaction with the Company or its Subsidiaries (including
any contract, agreement or other arrangement providing for the furnishing of services by, or rental of real or personal property
from, or otherwise requiring payments to, any such director, officer or stockholder or such associate or affiliate or relative
Subsidiaries (other than for ordinary course services as employees, officers or directors of the Company or any of its Subsidiaries))
or (ii) the direct or indirect owner of an interest in any corporation, firm, association or business organization which is a competitor,
supplier or customer of the Company or its Subsidiaries (except for a passive investment (direct or indirect) in less than 5% of
the common stock of a company whose securities are traded on or quoted through an Eligible Market (as defined in the Notes)), nor
does any such Person receive income from any source other than the Company or its Subsidiaries which relates to the business of
the Company or its Subsidiaries or should properly accrue to the Company or its Subsidiaries. No employee, officer, or director
of the Company or any of its Subsidiaries or member of his or her immediate family is indebted to the Company or its Subsidiaries,
as the case may be, nor is the Company or any of its Subsidiaries indebted (or committed to make loans or extend or guarantee credit)
to any of them, other than (i) for payment of salary for services rendered, (ii) reimbursement for reasonable expenses incurred
on behalf of the Company, and (iii) for other standard employee benefits made generally available to all employees or executives
(including equity incentive agreements outstanding under any equity incentive plan approved by the Board of Directors of the Company).

 

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(r) Equity Capitalization.

 

(i) Definitions:

 

(A) “Common
Stock” means (x) the Company’s shares of common stock, $0.0001 par value per share, and (y) any capital stock
into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.

 

(B) “Preferred
Stock” means (x) the Company’s blank check preferred stock, $0.0001 par value per share, the terms of which may
be designated by the board of directors of the Company in a certificate of designations and (y) any capital stock into which such
preferred stock shall have been changed or any share capital resulting from a reclassification of such preferred stock (other than
a conversion of such preferred stock into Common Stock in accordance with the terms of such certificate of designations).

 

(ii) Authorized
and Outstanding Capital Stock. As of the date hereof, the authorized capital stock of the Company consists of (A) 75,000,000
shares of Common Stock, of which, 13,258,707 are issued and outstanding and 6,214,579 shares are reserved for issuance pursuant
to Convertible Securities (as defined below) (other than the Notes) exercisable or exchangeable for, or convertible into, shares
of Common Stock and (B) 5,000,000 shares of Preferred Stock, none of which are issued and outstanding. No shares of Common Stock
are held in the treasury of the Company. “Convertible Securities” means any capital stock or other security
of the Company or any of its Subsidiaries that is at any time and under any circumstances directly or indirectly convertible into,
exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any capital stock or other security
of the Company (including, without limitation, Common Stock) or any of its Subsidiaries.

 

(iii) Valid
Issuance; Available Shares; Affiliates. All of such outstanding shares are duly authorized and have been, or upon issuance
will be, validly issued and are fully paid and nonassessable. Schedule 3(r)(iii) sets forth the number of shares of Common
Stock that are (A) reserved for issuance pursuant to Convertible Securities (as defined below) (other than the Notes) and (B) that
are, as of the date hereof, owned by Persons who are “affiliates” (as defined in Rule 405 of the 1933 Act and calculated
based on the assumption that only officers, directors and holders of at least 10% of the Company’s issued and outstanding
Common Stock are “affiliates” without conceding that any such Persons are “affiliates” for purposes of
federal securities laws) of the Company or any of its Subsidiaries. Except as set forth on Schedule 3(r)(iii) attached hereto,
to the Company’s knowledge, no Person owns 10% or more of the Company’s issued and outstanding shares of Common Stock
(calculated based on the assumption that all Convertible Securities (as defined below), whether or not presently exercisable or
convertible, have been fully exercised or converted (as the case may be) taking account of any limitations on exercise
or conversion (including “blockers”) contained therein without conceding that such identified Person is a 10% stockholder
for purposes of federal securities laws).

 

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(iv) Existing
Securities; Obligations. Except as disclosed in Schedule 3(r)(iv) attached hereto: (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; (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 (F) neither the Company nor any Subsidiary
has any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement.

 

(v) Organizational
Documents. The Company has furnished to the Buyers true, correct and complete copies of the Company’s Certificate of
Incorporation, as amended and as in effect on the date hereof (the “Certificate of Incorporation”), and the
Company’s bylaws, as amended and as in effect on the date hereof (the “Bylaws”), and the terms of all
Convertible Securities and the material rights of the holders thereof in respect thereto.

 

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(s) Indebtedness
and Other Contracts. Neither the Company nor any of its Subsidiaries, (i) except as disclosed on Schedule 3(s),
has any outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments
evidencing Indebtedness of the Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries is or may
become bound, (ii) is a party to any contract, agreement or instrument, the violation of which, or default under which, by the
other party(ies) to such contract, agreement or instrument could reasonably be expected to result in a Material Adverse Effect,
(iii) has any financing statements securing obligations in any amounts filed in connection with the Company or any of its Subsidiaries;
(iv) is in violation of any term of, or in default under, any contract, agreement or instrument relating to any Indebtedness, except
where such violations and defaults would not result, individually or in the aggregate, in a Material Adverse Effect, or (v) is
a party to any contract, agreement or instrument relating to any Indebtedness, the performance of which, in the judgment of the
Company’s officers, has or is expected to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries
have any liabilities or obligations required to be disclosed in the SEC Documents which are not so disclosed in the SEC Documents,
other than those incurred in the ordinary course of the Company’s or its Subsidiaries’ respective businesses and which,
individually or in the aggregate, do not or could not have a Material Adverse Effect. For purposes of this Agreement: (x) “Indebtedness”
of any Person means, without duplication (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed
as the deferred purchase price of property or services (including, without limitation, “capital leases” in accordance
with GAAP) (other than trade payables entered into in the ordinary course of business consistent with past practice), (C) all reimbursement
or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (D) all obligations evidenced
by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition
of property, assets or businesses, (E) all indebtedness created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness
(even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession
or sale of such property), (F) all monetary obligations under any leasing or similar arrangement which, in connection with GAAP,
consistently applied for the periods covered thereby, is classified as a capital lease, (G) all indebtedness referred to in clauses
(A) through (F) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien upon or in any property or assets (including accounts and contract rights) owned by any Person, even
though the Person which owns such assets or property has not assumed or become liable for the payment of such indebtedness, and
(H) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (A) through
(G) above; and (y) “Contingent Obligation” means, as to any Person, any direct or indirect liability, contingent
or otherwise, of that Person with respect to any Indebtedness, lease, dividend or other obligation of another Person if the primary
purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee
of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with,
or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto.

 

(t) Litigation.
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, the Common Stock 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, except as set forth in
Schedule 3(t) or such that would not result, individually or in the aggregate, in a Material Adverse Effect. No director,
officer or employee of the Company or any of its subsidiaries has willfully violated 18 U.S.C. §1519 or engaged in spoliation
in reasonable anticipation of litigation. 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. The SEC has not issued any stop order or other
order suspending the effectiveness of any registration statement filed by the Company under the 1933 Act or the 1934 Act. Neither
the Company nor any of its Subsidiaries is subject to any order, writ, judgment, injunction, decree, determination or award of
any Governmental Entity.

 

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(u) Insurance.
The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and
risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company
and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has 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.

 

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

 

(w) Title.

 

(i) Real
Property. Each of the Company and its Subsidiaries holds good title to all real property, leases in real property, facilities
or other interests in real property owned or held by the Company or any of its Subsidiaries (the “Real Property”)
owned by the Company or any of its Subsidiaries (as applicable). The Real Property is free and clear of all Liens and is not subject
to any rights of way, building use restrictions, exceptions, variances, reservations, or limitations of any nature except for (a)
Permitted Liens (as defined in the Notes), (b) Liens for current taxes not yet due and (c) zoning laws and other land use restrictions
that do not impair the present or anticipated use of the property subject thereto. Any Real Property held under lease by the Company
or any of its Subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material
and do not interfere with the use made and proposed to be made of such property and buildings by the Company or any of its Subsidiaries.

 

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(ii) Fixtures
and Equipment. Each of the Company and its Subsidiaries (as applicable) has good title to, or a valid leasehold interest in,
the tangible personal property, equipment, improvements, fixtures, and other personal property and appurtenances that are used
by the Company or its Subsidiary in connection with the conduct of its business (the “Fixtures and Equipment”).
The Fixtures and Equipment are structurally sound, are in good operating condition and repair, are adequate for the uses to which
they are being put, are not in need of maintenance or repairs except for ordinary, routine maintenance and repairs and are sufficient
for the conduct of the Company’s and/or its Subsidiaries’ businesses (as applicable) in the manner as conducted prior
to the Closing. Each of the Company and its Subsidiaries owns all of its Fixtures and Equipment free and clear of all Liens except
for (a) Permitted Liens (as defined in the Notes), (b) liens for current taxes not yet due and (c) zoning laws and other land use
restrictions that do not impair the present or anticipated use of the property subject thereto.

 

(x) Intellectual
Property.

 

(i) Except
as set forth on Schedule 3(x)(i), the Company and its Subsidiaries own all right, title and interest in and to, or have a valid
and enforceable license to use all the Intellectual Property (as defined below) used by them in connection with their respective
businesses, which represents all intellectual property rights necessary to the conduct of their business as now conducted. The
Company and its Subsidiaries are in compliance with all contractual obligations relating to the protection of such of the Intellectual
Property as they use pursuant to license or other agreement, except where failure to be in compliance would not, either individually
or in the aggregate, reasonably be expected to result in a Material Adverse Effect. The conduct of the business of the Company
and its Subsidiaries, to the knowledge of the Company, as currently conducted, or as reasonably be expected to be conducted, does
not, and is not reasonably expected to, conflict with or infringe any proprietary right or Intellectual Property Rights of any
third party, including, without limitation, the transmission, reproduction, use, display or modification of any content or material
(including framing, and linking web site content) on a web site, bulletin board or other like medium hosted by or on behalf of
the Company or any of its Subsidiaries, except for such infringements and conflicts which would not reasonably be expected to have
a Material Adverse Effect. There is no claim, suit, action or proceeding pending or, to the knowledge of the Company, threatened
against the Company or any Subsidiary: (i) alleging any such conflict or infringement with any third party’s proprietary
rights; or (ii) challenging the Company’s or any Subsidiary’s ownership or use of, or the validity or enforceability
of any Intellectual Property.

 

(ii) Schedule
3(x)(ii) sets forth a complete and current list of registered trademarks or copyrights, issued patents, applications therefor,
or other forms of Intellectual Property registration anywhere in the world that is owned by the Company or a Subsidiary (“Listed
Intellectual Property”) and the owner of record, date of application or issuance and relevant jurisdiction as to each.
All Listed Intellectual Property is owned by the Company or a Subsidiary, free and clear of security interests, liens, encumbrances
or claims of any nature. All Listed Intellectual Property is valid, subsisting, unexpired, in proper form and enforceable and all
renewal fees and other maintenance fees that have fallen due on or prior to the effective date of this Agreement have been paid
except where such failure would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse
Effect. No Listed Intellectual Property is the subject of any proceeding before any governmental, registration or other authority
in any jurisdiction, including any office action or other form of preliminary or final refusal of registration, except as noted
on Schedule 3(x)(ii). The consummation of the transactions contemplated hereby will not alter or impair any Intellectual Property
that is owned or licensed by the Company or a Subsidiary.

 

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(iii) Schedule
3(x)(iii) sets forth a complete list of all agreements relating to Intellectual Property to which the Company or a Subsidiary is
a party, subject or bound (the “Intellectual Property Contracts”) (other than agreements involving (A) the license
of the Company of standard, generally commercially available “off-the-shelf” third party products that are not and
will not to any extent be part of any product, service or intellectual property offering of the Company or (B) non-disclosure or
non-use of information). Each Intellectual Property Contract: (i) is valid and binding on the Company or a Subsidiary, as the case
may be, and, to the Company’s knowledge, the counterparties thereto, and is in full force and effect and (ii) upon consummation
of the transactions contemplated hereby shall continue in full force and effect without penalty or other adverse consequence, except
in each case, where such would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse
Effect.

 

(iv) Except
as set forth on Schedule 3(x)(iv), the Company and its Subsidiaries are not under any obligation to pay royalties or other payments
in connection with any agreement, nor restricted from assigning their rights respecting Intellectual Property nor will the Company
or any Subsidiary otherwise be, as a result of the execution and delivery of this Agreement or the performance of the Company’s
obligations under this Agreement, in breach of any agreement relating to the Intellectual Property.

 

(v) Except
as set forth on Schedule 3(x)(v), no present or former employee, officer or director of the Company or any Subsidiary, or agent
or outside contractor of the Company or any Subsidiary, holds any right, title or interest, directly or indirectly, in whole or
in part, in or to any Intellectual Property that is owned or licensed by the Company or any Subsidiary.

 

(vi) To
the Company’s knowledge: (i) none of the Listed Intellectual Property has been used, disclosed or appropriated to the detriment
of the Company or any Subsidiary for the benefit of any Person other than the Company; and (ii) no employee, independent contractor
or agent of the Company or any Subsidiary has misappropriated any trade secrets or other confidential information of any other
Person in the course of the performance of his or her duties as an employee, independent contractor or agent of the Company or
any Subsidiary.

 

(vii) Any
programs, modifications, enhancements or other inventions, improvements, discoveries, methods or works of authorship (“Works”)
that were created by employees of the Company or any Subsidiary were made in the regular course of such employees’ employment
or service relationships with the Company or its Subsidiary using the Company’s or the Subsidiary’s facilities and
resources and, as such, constitute either works made for hire or all rights and title to and in such Works have been fully assigned
to the Company or a Subsidiary, except such as would not, either individually or in the aggregate, reasonably be expected to result
in a Material Adverse Effect. Each such employee who has created Works or any employee who in the regular course of his employment
may create Works and all consultants have signed an assignment or similar agreement with the Company or the Subsidiary confirming
the Company’s or the Subsidiary’s ownership or, in the alternate, transferring and assigning to the Company or the
Subsidiary all right, title and interest in and to such programs, modifications, enhancements or other inventions including copyright
and other intellectual property rights therein.

 

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(viii) For
the purpose of this Agreement, “Intellectual Property” or “Intellectual Property Rights”
shall mean all of the following: (A) trademarks and service marks, trade dress, product configurations, trade names and other indications
of origin, applications or registrations in any jurisdiction pertaining to the foregoing and all goodwill associated therewith;
(B) inventions, discoveries, improvements, ideas, know-how, formula methodology, processes, technology, software (including password
unprotected interpretive code or source code, object code, development documentation, programming tools, drawings, specifications
and data) and applications and patents in any jurisdiction pertaining to the foregoing, including re-issues, continuations, divisions,
continuations-in-part, renewals or extensions; (C) trade secrets, including confidential information and the right in any jurisdiction
to limit the use or disclosure thereof; (D) copyrights in writings, designs software, mask works or other works, applications or
registrations in any jurisdiction for the foregoing and all moral rights related thereto; (E) database rights; (F) Internet Web
sites, domain names and applications and registrations pertaining thereto and all intellectual property used in connection with
or contained in all versions of the Company’s Web sites; (G) rights under all agreements relating to the foregoing; (H) books
and records pertaining to the foregoing; and (I) claims or causes of action arising out of or related to past, present or future
infringement or misappropriation of the foregoing.

 

(y) Environmental
Laws. (i) The Company and its Subsidiaries (A) are in compliance with any and all Environmental Laws (as defined below), (B)
have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective
businesses and (C) are in compliance with all terms and conditions of any such permit, license or approval where, in each of the
foregoing clauses (A), (B) and (C), the failure to so comply could be reasonably expected to have, individually or in the aggregate,
a Material Adverse Effect. The term “Environmental Laws” means all federal, state, local or foreign laws relating
to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater,
land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened
releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous
Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand
letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated
or approved thereunder.

 

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(ii) No
Hazardous Materials:

 

(A) have
been disposed of or otherwise released from any Real Property of the Company or any of its Subsidiaries in violation of any Environmental
Laws; or

 

(B) are
present on, over, beneath, in or upon a Real Property or any portion thereof in quantities that would constitute a violation of
any Environmental Laws. No prior use by the Company or any of its Subsidiaries of any Real Property has occurred that violates
any Environmental Laws, which violation would have a material adverse effect on the business of the Company or any of its Subsidiaries.

 

(iii) Neither
the Company nor any of its Subsidiaries knows of any other person who or entity which has stored, treated, recycled, disposed of
or otherwise located on any Real Property any Hazardous Materials, including, without limitation, such substances as asbestos and
polychlorinated biphenyls.

 

(iv) None
of the Real Properties are on any federal or state “Superfund” list or Liability Information System (“CERCLIS”)
list or any state environmental agency list of sites under consideration for CERCLIS, nor subject to any environmental related
Liens.

 

(z) Subsidiary
Rights. The Company or one of its Subsidiaries has the unrestricted right to vote, and (subject to limitations imposed by applicable
law) to receive dividends and distributions on, all capital securities of its Subsidiaries as owned by the Company or such Subsidiary.

 

(aa) Tax Status.
The Company and each of its Subsidiaries (i) has timely made or filed (allowing for all lawful extensions) all foreign, federal
and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii)
has timely paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be
due on such returns, reports and declarations, except those being contested in good faith and (iii) has set aside on its books
provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction,
and the officers of the Company and its Subsidiaries know of no basis for any such claim. The Company is not operated in such a
manner as to qualify as a passive foreign investment company, as defined in Section 1297 of the Internal Revenue Code of 1986,
as amended (the “Code”). The net operating loss carryforwards (“NOLs”) for United States
federal income tax purposes of the consolidated group of which the Company is the common parent, if any, shall not be adversely
effected by the transactions contemplated hereby. The transactions contemplated hereby do not constitute an “ownership change”
within the meaning of Section 382 of the Code, thereby preserving the Company’s ability to utilize such NOLs.

 

(bb) Internal
Accounting and Disclosure Controls. Except for the current material weaknesses as disclosed in the SEC Documents, the Company
and each of its Subsidiaries maintains internal control over financial reporting (as such term is defined in Rule 13a-15(f) under
the 1934 Act) that is effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally accepted accounting principles, including that (i) transactions
are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with GAAP and to maintain asset and liability accountability, (iii)
access to assets or incurrence of liabilities is permitted only in accordance with management’s general or specific authorization
and (iv) the recorded accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable
intervals and appropriate action is taken with respect to any difference. Except for the current material weaknesses as disclosed
in the SEC Documents, the Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under
the 1934 Act) that are effective in ensuring that information required to be disclosed by the Company in the reports that it files
or submits under the 1934 Act is recorded, processed, summarized and reported, within the time periods specified in the rules and
forms of the SEC, including, without limitation, controls and procedures designed to ensure that information required to be disclosed
by the Company in the reports that it files or submits under the 1934 Act is accumulated and communicated to the Company’s
management, including its principal executive officer or officers and its principal financial officer or officers, as appropriate,
to allow timely decisions regarding required disclosure. Except as set forth on Schedule 3(bb) attached hereto, neither the Company
nor any of its Subsidiaries has received any notice or correspondence from any accountant, Governmental Entity or other Person
relating to any potential material weakness or significant deficiency in any part of the internal controls over financial reporting
of the Company or any of its Subsidiaries.

 

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

 

(dd) Investment
Company Status. The Company is not, and upon consummation of the sale of the Securities will not be, an “investment company,”
an affiliate of an “investment company,” a company controlled by an “investment company” or an “affiliated
person” of, or “promoter” or “principal underwriter” for, an “investment company” as
such terms are defined in the Investment Company Act of 1940, as amended.

 

(ee) Acknowledgement
Regarding Buyers’ Trading Activity. It is understood and acknowledged by the Company that (i) following the public disclosure
of the transactions contemplated by the Transaction Documents, in accordance with the terms thereof, none of the Buyers have been
asked by the Company or any of its Subsidiaries to agree, nor has any Buyer agreed with the Company or any of its Subsidiaries,
to desist from effecting any transactions in or with respect to (including, without limitation, purchasing or selling, long and/or
short) any securities of the Company, or “derivative” securities based on securities issued by the Company or to hold
any of the Securities for any specified term; (ii) any Buyer, and counterparties in “derivative” transactions to which
any such Buyer is a party, directly or indirectly, presently may have a “short” position in the Common Stock which
was established prior to such Buyer’s knowledge of the transactions contemplated by the Transaction Documents; (iii) each
Buyer shall not be deemed to have any affiliation with or control over any arm’s length counterparty in any “derivative”
transaction; and (iv) each Buyer may rely on the Company’s obligation to timely deliver shares of Common Stock upon conversion
or exchange, as applicable, of the Securities as and when required pursuant to the Transaction Documents for purposes of effecting
trading in the Common Stock of the Company. The Company further understands and acknowledges that following the public disclosure
of the transactions contemplated by the Transaction Documents pursuant to the Press Release (as defined below) one or more Buyers
may engage in hedging and/or trading activities (including, without limitation, the location and/or reservation of borrowable shares
of Common Stock) at various times during the period that the Securities are outstanding, including, without limitation, during
the periods that the value and/or number of the Conversion Shares deliverable with respect to the Securities are being determined
and such hedging and/or trading activities (including, without limitation, the location and/or reservation of borrowable shares
of Common Stock), if any, can reduce the value of the existing stockholders’ equity interest in the Company both at and after
the time the hedging and/or trading activities are being conducted. The Company acknowledges that such aforementioned hedging and/or
trading activities do not constitute a breach of this Agreement, the Notes or any other Transaction Document or any of the documents
executed in connection herewith or therewith.

 

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(ff) Manipulation
of Price. Neither the Company nor any of its Subsidiaries has, and, to the knowledge of the Company, no 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 (other than the Placement
Agent), (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 or (iv) paid or agreed to pay any Person for research services with respect to any securities
of the Company or any of its Subsidiaries.

 

(gg) U.S. Real
Property Holding Corporation. Neither the Company nor any of its Subsidiaries is, or has ever been, and so long as any of the
Securities are held by any of the Buyers, shall become, a U.S. real property holding corporation within the meaning of Section 897
of the Code, and the Company and each Subsidiary shall so certify upon any Buyer’s request.

 

(hh) Transfer
Taxes. On the Closing Date, all stock transfer or other taxes (other than income or similar taxes) which are required to be
paid in connection with the issuance, sale and transfer of the Securities to be sold to each Buyer hereunder will be, or will have
been, fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with.

 

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

 

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(jj) Illegal
or Unauthorized Payments; Political Contributions. Neither the Company nor any of its Subsidiaries nor, to the best of the
Company’s knowledge (after reasonable inquiry of its officers and directors), any of the officers, directors, employees,
agents or other representatives of the Company or any of its Subsidiaries or any other business entity or enterprise with which
the Company or any Subsidiary is or has been affiliated or associated, has, directly or indirectly, made or authorized any payment,
contribution or gift of money, property, or services, whether or not in contravention of applicable law, (i) as a kickback or bribe
to any Person or (ii) to any political organization, or the holder of or any aspirant to any elective or appointive public office
except for personal political contributions not involving the direct or indirect use of funds of the Company or any of its Subsidiaries.

 

(kk) 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, without limitation, the laws, regulations
and Executive Orders and sanctions programs administered by the U.S. Office of Foreign Assets Control, including, but not limited,
to (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 (ii) any regulations contained in
31 CFR, Subtitle B, Chapter V.

 

(ll) Management.
Except as set forth in Schedule 3(nn) hereto, during the past five year period, no current or former officer or director
or, to the knowledge of the Company, no current ten percent (10%) or greater stockholder of the Company or any of its Subsidiaries
has been the subject of:

 

(i) a
petition under bankruptcy laws or any other insolvency or moratorium law or the appointment by a court of a receiver, fiscal agent
or similar officer for such Person, or any partnership in which such person was a general partner at or within two years before
the filing of such petition or such appointment, or any corporation or business association of which such person was an executive
officer at or within two years before the time of the filing of such petition or such appointment;

 

(ii) a
conviction in a criminal proceeding or a named subject of a pending criminal proceeding (excluding traffic violations that do not
relate to driving while intoxicated or driving under the influence);

 

(iii) any
order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently
or temporarily enjoining any such person from, or otherwise limiting, the following activities:

 

(1) Acting
as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage
transaction merchant, any other person regulated by the United States Commodity Futures Trading Commission or an associated person
of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person,
director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing
any conduct or practice in connection with such activity;

 

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(2) Engaging
in any particular type of business practice; or

 

(3) Engaging
in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of securities
laws or commodities laws;

 

(iv) any
order, judgment or decree, not subsequently reversed, suspended or vacated, of any authority barring, suspending or otherwise limiting
for more than sixty (60) days the right of any such person to engage in any activity described in the preceding sub paragraph,
or to be associated with persons engaged in any such activity;

 

(v) a
finding by a court of competent jurisdiction in a civil action or by the SEC or other authority to have violated any securities
law, regulation or decree and the judgment in such civil action or finding by the SEC or any other authority has not been subsequently
reversed, suspended or vacated; or

 

(vi) a
finding by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated
any federal commodities law, and the judgment in such civil action or finding has not been subsequently reversed, suspended or
vacated.

 

(mm) Stock Option
Plans. The Company has no outstanding stock options.

 

(nn) No Disagreements
with Accountants and Lawyers. There are no material disagreements of any kind presently existing, or reasonably anticipated
by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and
the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability
to perform any of its obligations under any of the Transaction Documents. In addition, on or prior to the date hereof, the Company
had discussions with its accountants about its financial statements previously filed with the SEC. Based on those discussions,
the Company has no reason to believe that it will need to restate any such financial statements or any part thereof.

 

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

 

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(pp) Other Covered
Persons. The Company is not aware of any Person (other than the Placement Agent) that has been or will be paid (directly or
indirectly) remuneration for solicitation of Buyers or potential purchasers in connection with the sale of any Regulation D Securities.

 

(qq) No Additional
Agreements. The Company does not have any agreement or understanding with any Buyer with respect to the transactions contemplated
by the Transaction Documents other than as specified in the Transaction Documents.

 

(rr) Public Utility
Holding Act. None of the Company nor any of its Subsidiaries is a “holding company,” or an “affiliate”
of a “holding company,” as such terms are defined in the Public Utility Holding Act of 2005.

 

(ss) Federal
Power Act. None of the Company nor any of its Subsidiaries is subject to regulation as a “public utility” under
the Federal Power Act, as amended.

 

(tt) Ranking
of Notes. No Indebtedness of the Company, at the Closing, will be senior to, or pari passu with, the Notes in right
of payment, whether with respect to payment or redemptions, interest, damages, upon liquidation or dissolution or otherwise.

 

(uu) Cybersecurity.
The Company and its Subsidiaries’ information technology assets and equipment, computers, systems, networks, hardware, software,
websites, applications, and databases (collectively, “IT Systems”) are adequate for, and operate and perform
in all material respects as required in connection with the operation of the business of the Company and its subsidiaries as currently
conducted, free and clear of all material bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants that
would reasonably be expected to have a Material Adverse Effect on the Company’s business. The Company and its Subsidiaries
have implemented and maintained commercially reasonable physical, technical and administrative controls, policies, procedures,
and safeguards to maintain and protect their material confidential information and the integrity, continuous operation, redundancy
and security of all IT Systems and data, including “Personal Data,” used in connection with their businesses. “Personal
Data” means (i) a natural person’s name, street address, telephone number, e-mail address, photograph, social security
number or tax identification number, driver’s license number, passport number, credit card number, bank information, or customer
or account number; (ii) any information which would qualify as “personally identifying information” under the Federal
Trade Commission Act, as amended; (iii) “personal data” as defined by the European Union General Data Protection Regulation
(“GDPR”) (EU 2016/679); (iv) any information which would qualify as “protected health information”
under the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic
and Clinical Health Act (collectively, “HIPAA”); and (v) any other piece of information that allows the identification
of such natural person, or his or her family, or permits the collection or analysis of any data related to an identified person’s
health or sexual orientation. There have been no breaches, violations, outages or unauthorized uses of or accesses to same, except
for those that have been remedied without material cost or liability or the duty to notify any other person or such , nor any incidents
under internal review or investigations relating to the same except in each case, where such would not, either individually or
in the aggregate, reasonably be expected to result in a Material Adverse Effect. The Company and its Subsidiaries are presently
in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator
or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of
IT Systems and Personal Data and to the protection of such IT Systems and Personal Data from unauthorized use, access, misappropriation
or modification except in each case, where such would not, either individually or in the aggregate, reasonably be expected to result
in a Material Adverse Effect.

 

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(vv) Compliance
with Data Privacy Laws. The Company and its Subsidiaries are, and at all prior times were, in compliance with all applicable
state and federal data privacy and security laws and regulations, including without limitation HIPAA, and the Company and its Subsidiaries
have taken commercially reasonable actions to prepare to comply with, and since May 25, 2018, have been and currently are in compliance
with, the GDPR (EU 2016/679) (collectively, the “Privacy Laws”) except in each case, where such would not, either
individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. To ensure compliance with the
Privacy Laws, the Company and its Subsidiaries have in place, comply with, and take appropriate steps reasonably designed to ensure
compliance in all material respects with their policies and procedures relating to data privacy and security and the collection,
storage, use, disclosure, handling, and analysis of Personal Data (the “Policies”). The Company and its Subsidiaries
have at all times made all disclosures to users or customers required by applicable laws and regulatory rules or requirements,
and none of such disclosures made or contained in any Policy have, to the knowledge of the Company, been inaccurate or in violation
of any applicable laws and regulatory rules or requirements in any material respect. The Company further certifies that neither
it nor any Subsidiary: (i) has received notice of any actual or potential liability under or relating to, or actual or potential
violation of, any of the Privacy Laws, and has no knowledge of any event or condition that would reasonably be expected to result
in any such notice; (ii) is currently conducting or paying for, in whole or in part, any investigation, remediation, or other corrective
action pursuant to any Privacy Law; or (iii) is a party to any order, decree, or agreement that imposes any obligation or liability
under any Privacy Law.

 

(ww) Disclosure.
The Company confirms that neither it nor any other 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 disclosure 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 is true and correct and does not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. 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, will be true and correct in all material respects as of the date on which such information is so provided and
will 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,
prospects, 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 each Buyer 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.

 

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4. COVENANTS.

 

(a) Best
Efforts. Each Buyer shall use its best efforts to timely satisfy each of the covenants hereunder and conditions to be satisfied
by it as provided in Section 6 of this Agreement. The Company shall use its best efforts to timely satisfy each of the covenants
hereunder and conditions to be satisfied by it as provided in Section 7 of this Agreement.

 

(b) Form
D and Blue Sky. The Company shall file a Form D with respect to the Securities as required under Regulation D and to provide
a copy thereof to each Buyer promptly after such filing. The Company shall, on or before the Closing Date, take such action as
the Company shall reasonably determine is necessary in order to obtain an exemption for, or to, qualify the Securities for sale
to the Buyers at the Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of the states
of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken
to the Buyers on or prior to the Closing Date. Without limiting any other obligation of the Company under this Agreement, the Company
shall timely make all filings and reports relating to the offer and sale of the Securities required under all applicable securities
laws (including, without limitation, all applicable federal securities laws and all applicable “Blue Sky” laws), and
the Company shall comply with all applicable foreign, federal, state and local laws, statutes, rules, regulations and the like
relating to the offering and sale of the Securities to the Buyers.

 

(c) Reporting
Status. Until the date on which no Notes remain outstanding and the earlier to occur of (x) the second anniversary of the Closing
Date and (y) such time as the Buyers shall have sold all of the Underlying Securities (as defined below) (the “Reporting
Period”), the Company shall timely file all reports required to be filed with the SEC pursuant to the 1934 Act, including
the timely filing of all quarterly reports on Form 10-Q and annual reports on Form 10-K, 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. “Underlying Securities” means (i) the Conversion Shares,
and (ii) any capital stock of the Company issued or issuable with respect to the Conversion Shares or the Notes respectively, 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 shares of Common Stock are converted or exchanged and shares of capital
stock of a Successor Entity (as defined in the Notes) into which the shares of Common Stock are converted, exercised or exchanged,
in each case, without regard to any limitations on conversion of the Notes.

 

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(d) Use
of Proceeds. The Company will use the proceeds from the sale of the Securities for general corporate purposes, but not, directly
or indirectly, for (i) except as set forth on Schedule 4(d), the satisfaction of any indebtedness of the Company or any of its
Subsidiaries, (ii) the redemption or repurchase of any securities of the Company or any of its Subsidiaries, or (iii) the settlement
of any outstanding litigation.

 

(e) Financial
Information. The Company agrees to send the following to each holder of Notes (each, an “Investor”) during
the Reporting Period (i) unless the following are filed with the SEC through EDGAR and are available to the public through the
EDGAR system, within one (1) Business Day after the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K and
Quarterly Reports on Form 10-Q, any interim reports or any consolidated balance sheets, income statements, stockholders’
equity statements and/or cash flow statements for any period other than annual, any Current Reports on Form 8-K and any registration
statements (other than on Form S-8) or amendments filed pursuant to the 1933 Act, (ii) unless the following are either filed with
the SEC through EDGAR or are otherwise widely disseminated via a recognized news release service (such as PR Newswire), on the
same day as the release thereof, facsimile copies of all press releases issued by the Company or any of its Subsidiaries and (iii)
unless the following are filed with the SEC through EDGAR, copies of any notices and other information made available or given
to the stockholders of the Company generally, contemporaneously with the making available or giving thereof to the stockholders.

 

(f) Listing.
The Company shall promptly secure the listing or designation for quotation (as the case may be) of all of the Underlying Securities
upon each national securities exchange and automated quotation system, if any, upon which the Common Stock is then listed or designated
for quotation (as the case may be) (subject to official notice of issuance) and shall 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 national securities exchange or automated quotation system. During the Reporting Period (as defined above), the Company
shall maintain the Common Stock’s listing or authorization for quotation (as the case may be) on the Principal Market, The
New York Stock Exchange, the NYSE American, the Nasdaq Global Market or the Nasdaq Global Select Market (each, an “Eligible
Market”). During 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 Common Stock on an Eligible Market. The Company shall pay
all fees and expenses in connection with satisfying its obligations under this Section 4(f).

 

(g) Fees.
The Company shall pay the lead Buyer a nonaccountable amount of $120,000 for all costs and expenses incurred by it or its
affiliates in connection with the structuring, documentation, negotiation and closing of the transactions contemplated by the
Transaction Documents (including, without limitation, as applicable, all reasonable legal fees of outside counsel and
disbursements of Kelley Drye & Warren LLP, counsel to the lead Buyer, any other reasonable fees
and expenses in connection with the structuring, documentation, negotiation and closing of the transactions contemplated by
the Transaction Documents and due diligence and regulatory filings in connection therewith) (the “Transaction
Expenses”) and shall be withheld by the lead Buyer from its Purchase Price at the Closing, less $75,000 previously
paid by the Company to the lead Buyer; provided, that the Company shall promptly reimburse Kelley Drye & Warren LLP on
demand for all Transaction Expenses not so reimbursed through such withholding at the Closing. The Company shall be
responsible for the payment of any placement agent’s fees, financial advisory fees, Controlled Account Bank fees,
transfer agent fees, DTC (as defined below) fees or broker’s commissions (other than for Persons engaged by any Buyer)
relating to or arising out of the transactions contemplated hereby (including, without limitation, any fees or commissions
payable to the Placement Agent, who is the Company’s sole placement agent in connection with the transactions
contemplated by this Agreement). The Company shall pay, and hold each Buyer harmless against, any liability, loss or expense
(including, without limitation, reasonable attorneys’ fees and out-of-pocket expenses) arising in connection with any
claim relating to any such payment. Except as otherwise set forth in the Transaction Documents, each party to this Agreement
shall bear its own expenses in connection with the sale of the Securities to the Buyers.

 

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(h) Pledge
of Securities. Notwithstanding anything to the contrary contained in this Agreement, the Company acknowledges and agrees that
the Securities may be pledged by an Investor in connection with a bona fide margin agreement or other loan or financing arrangement
that is secured by the Securities. The pledge of Securities shall not be deemed to be a transfer, sale or assignment of the Securities
hereunder, and no Investor effecting a pledge of Securities shall be required to provide the Company with any notice thereof or
otherwise make any delivery to the Company pursuant to this Agreement or any other Transaction Document, including, without limitation,
Section 2(g) hereof; provided that an Investor and its pledgee shall be required to comply with the provisions of Section
2(g) hereof in order to effect a sale, transfer or assignment of Securities to such pledgee. 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.

 

(i) Disclosure
of Transactions and Other Material Information.

 

(i) Disclosure
of Transaction. The Company shall, on or before 9:30 a.m., New York time, on the first (1st) Business Day after
the date of this Agreement, issue a press release (the “Press Release”) reasonably acceptable to the Buyers
disclosing all the material terms of the transactions contemplated by the Transaction Documents. On or before 9:30 a.m., New York
time, on the first (1st) Business Day after the date of this Agreement, the Company shall file a Current Report on Form
8-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), the form of Notes, the form of Voting Agreement, the form of Security Documents and the form of Guaranty) (including
all attachments, the “8-K Filing”). From and after the filing of the 8-K Filing, 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 8-K Filing, the Company acknowledges and agrees that any and all confidentiality
or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their
respective officers, directors, affiliates, employees or agents, on the one hand, and any of the Buyers or any of their affiliates,
on the other hand, shall terminate.

 

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(ii) Limitations
on Disclosure. 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 the express prior written consent of such Buyer (which may be
granted or withheld in such Buyer’s sole discretion). In the event of a breach of any of the foregoing covenants, or any
of the covenants or agreements contained in any other Transaction Document, by the Company, any of its Subsidiaries, or any of
its or their respective officers, directors, employees and agents (as determined in the reasonable good faith judgment of such
Buyer), in addition to any other remedy provided herein or in the Transaction Documents, such Buyer shall have the right to make
a public disclosure, in the form of a press release, public advertisement or otherwise, of such breach or such material, non-public
information, as applicable, without the prior approval by the Company, any of its Subsidiaries, or any of its or their respective
officers, directors, employees or agents. No Buyer shall have any liability to the Company, any of its Subsidiaries, or any of
its or their respective officers, directors, employees, affiliates, stockholders or agents, for any such disclosure. To the extent
that the Company delivers any material, non-public information to a Buyer without such Buyer’s consent, the Company hereby
covenants and agrees that such Buyer shall not have any duty of confidentiality with respect to, or a duty not to trade on the
basis of, such material, non-public information. Subject to the foregoing, neither the Company, its Subsidiaries nor any Buyer
shall issue any press releases or any other public statements with respect to the transactions contemplated hereby; provided, however,
the Company shall be entitled, without the prior approval of any Buyer, to make the Press Release and any press release or other
public disclosure with respect to such transactions (i) in substantial conformity with the 8-K Filing and contemporaneously therewith
and (ii) as is required by applicable law and regulations (provided that in the case of clause (i) each Buyer shall be consulted
by the Company in connection with any such press release or other public disclosure prior to its release). Without the prior written
consent of the applicable Buyer (which may be granted or withheld in such Buyer’s sole discretion), the Company shall not
(and shall cause each of its Subsidiaries and affiliates to not) disclose the name of such Buyer in any filing, announcement, release
or otherwise. Notwithstanding anything contained in this Agreement to the contrary and without implication that the contrary would
otherwise be true, the Company expressly acknowledges and agrees that no Buyer shall have (unless expressly agreed to by a particular
Buyer after the date hereof in a written definitive and binding agreement executed by the Company and such particular Buyer (it
being understood and agreed that no Buyer may bind any other Buyer with respect thereto)), any duty of confidentiality with respect
to, or a duty not to trade on the basis of, any material, non-public information regarding the Company or any of its Subsidiaries.

 

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(iii) Other
Confidential Information. Disclosure Failures; Disclosure Delay Payments. In addition to other remedies set forth in this Section
4(i), and without limiting anything set forth in any other Transaction Document, at any time after the Closing Date if the Company,
any of its Subsidiaries, or any of their respective officers, directors, employees or agents, provides any Buyer with material
non-public information relating to the Company or any of its Subsidiaries without such Buyers prior written consent to receive
material, non-public information (each, the “Confidential Information”), the Company shall, on or prior to the
applicable Required Disclosure Date (as defined below), publicly disclose such Confidential Information on a Current Report on
Form 8-K or otherwise (each, a “Disclosure”). From and after such Disclosure, the Company shall have disclosed
all Confidential Information provided to such Buyer 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 such Disclosure, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement,
whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, affiliates,
employees or agents, on the one hand, and any of the Buyers or any of their affiliates, on the other hand, shall terminate. In
the event that the Company fails to effect such Disclosure on or prior to the Required Disclosure Date and such Buyer shall have
possessed Confidential Information for at least ten (10) consecutive Trading Days (each, a “Disclosure Failure”),
then, as partial relief for the damages to such Buyer by reason of any such delay in, or reduction of, its ability to buy or sell
shares of Common Stock after such Required Disclosure Date (which remedy shall not be exclusive of any other remedies available
at law or in equity), the Company shall pay to such Buyer an amount in cash equal to the greater of (I) one percent (1%) of the
aggregate Purchase Price and (II) the applicable Disclosure Restitution Amount, on each of the following dates (each, a “Disclosure
Delay Payment Date”): (i) on the date of such Disclosure Failure and (ii) on every thirty (30) day anniversary such Disclosure
Failure until the earlier of (x) the date such Disclosure Failure is cured and (y) such time as all such non-public information
provided to such Buyer shall cease to be Confidential Information (as evidenced by a certificate, duly executed by an authorized
officer of the Company to the foregoing effect) (such earlier date, as applicable, a “Disclosure Cure Date”).
Following the initial Disclosure Delay Payment for any particular Disclosure Failure, without limiting the foregoing, if a Disclosure
Cure Date occurs prior to any thirty (30) day anniversary of such Disclosure Failure, then such Disclosure Delay Payment (prorated
for such partial month) shall be made on the second (2nd) Business Day after such Disclosure Cure Date. The payments to which an
Investor shall be entitled pursuant to this Section 4(bb) are referred to herein as “Disclosure Delay Payments.”
In the event the Company fails to make Disclosure Delay Payments in a timely manner in accordance with the foregoing, such Disclosure
Delay Payments shall bear interest at the rate of two percent (2%) per month (prorated for partial months) until paid in full.

 

(iv) For
the purpose of this Agreement the following definitions shall apply:

 

(1)
“Disclosure Failure Market Price” means, as of any Disclosure Delay Payment Date, the price computed as the
quotient of (I) the sum of the five (5) highest VWAPs (as defined in the Notes) of the Common Stock during the applicable Disclosure
Restitution Period (as defined below), divided by (II) five (5) (such period, the “Disclosure Failure Measuring Period”).
All such determinations to be appropriately adjusted for any share dividend, share split, share combination, reclassification or
similar transaction that proportionately decreases or increases the Common Stock during such Disclosure Failure Measuring Period.

 

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(2) “Disclosure
Restitution Amount” means, as of any Disclosure Delay Payment Date, the product of (x) difference of (I) the Disclosure
Failure Market Price less (II) the lowest purchase price, per share of Common Stock, of any Common Stock issued or issuable to
such Buyer pursuant to this Agreement or any other Transaction Documents, multiplied by (y) 10% of the aggregate daily dollar trading
volume (as reported on Bloomberg (as defined in the Notes)) of the Common Stock on the Principal Market for each Trading Day (as
defined in the Notes) either (1) with respect to the initial Disclosure Delay Payment Date, during the period commencing on the
applicable Required Disclosure Date through and including the Trading Day immediately prior to the initial Disclosure Delay Payment
Date or (2) with respect to each other Disclosure Delay Payment Date, during the period commencing the immediately preceding Disclosure
Delay Payment Date through and including the Trading Day immediately prior to such applicable Disclosure Delay Payment Date (such
applicable period, the “Disclosure Restitution Period”).

 

(3) “Required
Disclosure Date” means (x) if such Buyer authorized the delivery of such Confidential Information, either (I) if the
Company and such Buyer have mutually agreed upon a date (as evidenced by an e-mail or other writing) of Disclosure of such Confidential
Information, such agreed upon date or (II) otherwise, the seventh (7th) calendar day after the date such Buyer first
received any Confidential Information or (y) if such Buyer did not authorize the delivery of such Confidential Information, the
first (1st) Business Day after such Buyer’s receipt of such Confidential Information.

 

(j) Additional
Registration Statements. During the Restricted Period (as defined below), the Company shall not file a registration statement
or an offering statement under the 1933 Act relating to securities that are not the Underlying Securities (other than (i) a registration
statement on Form S-8, (ii) such supplements or amendments to registration statements that are outstanding and have been declared
effective by the SEC as of the date hereof (solely to the extent necessary to keep such registration statements effective and available
and not with respect to any Subsequent Placement), (iii) a registration statement on appropriate form relating to the issuance
of securities pursuant to the Company’s arrangement agreement and plan of arrangement with Ample Organics Inc. as amended
through the date hereof, (iv) a registration statement on appropriate form related to the resale of securities issued in the Company’s
acquisition of Trellis Solutions Inc. which are not subject to escrow pursuant to the terms of the Company’s share exchange
agreement with Trellis Solutions, as amended through the date hereof, (v) a registration statement on appropriate form necessary
for the issuance of Strategic Acquisition Securities in compliance with the registration requirements of the 1933 Act, and (vi)
during the last 20 calendar days of the Restricted Period, solely if the Closing Bid Price (as defined in the Note) of the Common
Stock for each of five (5) consecutive days prior to such date of determination exceeds $15.00 (as adjusted for stock splits, stock
dividends, stock combinations, recapitalizations and similar events) the Company may file a bulleted preliminary S-1 without any
pricing information in relation to a Subsequent Placement to be offered and sold entirely after the Restricted Period).

 

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(k) Additional
Issuance of Securities. So long as any Buyer beneficially owns any Securities, the Company will not, without the prior written
consent of the Required Holders, issue any Notes (other than to the Buyers as contemplated hereby) and the Company shall not issue
any other securities that would cause a breach or default under the Notes. The Company agrees that for the period commencing on
the date hereof and ending on the date immediately following the 90th calendar day after the Closing Date (the “Restricted
Period”), neither the Company nor any of its Subsidiaries shall directly or indirectly issue, offer, sell, grant any
option or right to purchase, or otherwise dispose of (or announce any issuance, offer, sale, grant of any option or right to purchase
or other disposition of) any equity security or any equity-linked or related security (including, without limitation, any “equity
security” (as that term is defined under Rule 405 promulgated under the 1933 Act), any Convertible Securities (as defined
below), any debt, any preferred stock or any purchase rights) (any such issuance, offer, sale, grant, disposition or announcement
(whether occurring during the Restricted Period or at any time thereafter) is referred to as a “Subsequent Placement”).
Notwithstanding the foregoing, this Section 4(k) shall not apply in respect of the issuance of (i) shares of Common Stock, restricted
shares of Common Stock, restricted stock units or standard stock options to purchase Common Stock to directors, officers or employees
of the Company in their capacity as such pursuant to an Approved Stock Plan (as defined below), provided that (1) all such issuances
(taking into account the shares of Common Stock issuable upon exercise of such options or vesting of restricted stock or restricted
stock units) after the date hereof pursuant to this clause (i) do not, in the aggregate, exceed more than 5% of the Common Stock
issued and outstanding immediately prior to the date hereof and (2) the exercise price of any stock options is not lowered, none
of such stock options are amended to increase the number of shares issuable thereunder and none of the terms or conditions of any
such stock options are otherwise materially changed in any manner that adversely affects any of the Buyers; (ii) shares of Common
Stock issued upon the conversion or exercise of Convertible Securities (other than standard options to purchase Common Stock issued
pursuant to an Approved Stock Plan that are covered by clause (i) above) issued prior to the date hereof, provided that the conversion,
exercise or other method of issuance (as the case may be) of any such Convertible Security is made solely pursuant to the conversion,
exercise or other method of issuance (as the case may be) provisions of such Convertible Security that were in effect on the date
immediately prior to the date of this Agreement, the conversion, exercise or issuance price of any such Convertible Securities
(other than standard stock options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause
(i) above) is not lowered, none of such Convertible Securities (other than standard stock options to purchase Common Stock issued
pursuant to an Approved Stock Plan that are covered by clause (i) above) are amended to increase the number of shares issuable
thereunder and none of the terms or conditions of any such Convertible Securities (other than standard options to purchase Common
Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) are otherwise materially changed in any manner
that adversely affects any of the Buyers; (iii) any shares of Common Stock issued or issuable in connection with any bona fide
strategic or commercial alliances, acquisitions, mergers, licensing arrangements, and strategic partnerships, provided, that (x)
the primary purpose of such issuance is not to raise capital as reasonably determined, and (y) the purchaser or acquirer or recipient
of the securities in such issuance solely consists of either (I) the actual participants in such strategic or commercial alliance,
strategic or commercial licensing arrangement or strategic or commercial partnership, (II) the actual owners of such assets or
securities acquired in such acquisition or merger or (III) the stockholders, partners, employees, consultants, officers, directors
or members of the foregoing Persons, in each case, which is, itself or through its subsidiaries, an operating company or an owner
of an asset, in a business synergistic with the business of the Company and shall provide to the Company additional benefits in
addition to the investment of funds, and (z) the number or amount of securities issued to such Persons by the Company shall not
be disproportionate to each such Person’s actual participation in (or fair market value of the contribution to) such strategic
or commercial alliance or strategic or commercial partnership or ownership of such assets or securities to be acquired by the Company,
as applicable (collectively the securities issuable under this clause (iii), the “Strategic Acquisition Securities”);
or (iv) the Conversion Shares (each of the foregoing in clauses (i) through (iv), collectively the “Excluded Securities”).
“Approved Stock Plan” means any employee benefit plan which has been approved by the board of directors of the
Company prior to or subsequent to the date hereof pursuant to which shares of Common Stock, restricted stock, restricted stock
units and standard options to purchase Common Stock may be issued to any employee, officer or director for services provided to
the Company in their capacity as such.

 

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(l) Reservation
of Shares. So long as any of the Notes 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 8,854,167 shares of Common Stock (the “Required Reserve
Amount”); provided that at no time shall the number of shares of Common Stock reserved pursuant to this Section 4(l)
be reduced other than proportionally in connection with any conversion, exercise and/or redemption, as applicable of Notes. If
at any time the number of shares of Common Stock authorized and reserved for issuance is not sufficient to meet the Required Reserve
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 stockholders 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, obtain stockholder approval
of an increase in such authorized number of shares, and voting the management shares of the Company in favor of an increase in
the authorized shares of the Company to ensure that the number of authorized shares is sufficient to meet the Required Reserve
Amount.

 

(m) 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.

 

(n) Variable
Securities. So long as any Notes remain outstanding, the Company and each Subsidiary shall be prohibited from effecting or
entering into an agreement to effect any Subsequent Placement (as defined in the Notes) involving a Variable Rate Transaction.
“Variable Rate Transaction” means a transaction in which the Company or any Subsidiary (i) issues or sells any
Convertible Securities either (A) at a conversion, exercise or exchange rate or other price that is based upon and/or varies with
the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such Convertible Securities,
or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance
of such Convertible Securities or upon the occurrence of specified or contingent events directly or indirectly related to the business
of the Company or the market for the Common Stock, other than pursuant to a customary “weighted average” anti-dilution
provision or (ii) enters into any agreement (including, without limitation, an equity line of credit, but excluding an “at-the-market”
offering) whereby the Company or any Subsidiary may sell securities at a future determined price (other than standard and customary
“preemptive” or “participation” rights). Each Buyer shall be entitled to obtain injunctive relief against
the Company and its Subsidiaries to preclude any such issuance, which remedy shall be in addition to any right to collect damages.

 

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(o) Subsequent
Placements. For so long as any Notes remain outstanding, the Company shall not, in any manner, enter into or affect any Subsequent
Placement (as defined in the Notes) if the effect of such Subsequent Placement is to cause the Company to be required to issue
upon conversion of any Notes any shares of Common Stock in excess of that number of shares of Common Stock which the Company may
issue upon conversion of the Notes without breaching the Company’s obligations under the rules or regulations of the Principal
Market.

 

(p) Passive
Foreign Investment Company. The Company shall conduct its business, and shall cause its Subsidiaries to conduct their respective
businesses, in such a manner as will ensure that the Company will not be deemed to constitute a passive foreign investment company
within the meaning of Section 1297 of the Code.

 

(q) Restriction
on Redemption and Cash Dividends. So long as any Notes are outstanding, the Company shall not, directly or indirectly, redeem,
or declare or pay any cash dividend or distribution on, any securities of the Company without the prior express written consent
of the Buyers.

 

(r) Corporate
Existence. So long as any Buyer beneficially owns any Notes, the Company shall not be party to any Fundamental Transaction
(as defined in the Notes) unless the Company is in compliance with the applicable provisions governing Fundamental Transactions
set forth in the Notes.

 

(s) Stock
Splits. Until the Notes are no longer outstanding, the Company shall not effect any stock combination, reverse stock split
or other similar transaction (or make any public announcement or disclosure with respect to any of the foregoing) without the prior
written consent of the Required Holders (as defined below).

 

(t) Conversion
Procedures. Each of the form of Conversion Notice (as defined in the Notes) included in the Notes set forth the totality of
the procedures required of the Buyers in order to convert the Notes. Except as provided in Section 5(d), no additional legal opinion,
other information or instructions shall be required of the Buyers to convert their Notes. The Company shall honor conversions of
the Notes and shall deliver the Conversion Shares in accordance with the terms, conditions and time periods set forth in the Notes.

 

(u) Collateral
Agent. Each Buyer hereby (i) appoints HT Investments MA LLC, as the collateral agent hereunder and under the other Security
Documents (in such capacity, the “Collateral Agent”), and (ii) authorizes the Collateral Agent (and its officers,
directors, employees and agents) to take such action on such Buyer’s behalf in accordance with the terms hereof and thereof.
The Collateral Agent shall not have, by reason hereof or any of the other Security Documents, a fiduciary relationship in respect
of any Buyer. Neither the Collateral Agent nor any of its officers, directors, employees or agents shall have any liability to
any Buyer for any action taken or omitted to be taken in connection hereof or any other Security Document except to the extent
caused by its own gross negligence or willful misconduct, and each Buyer agrees to defend, protect, indemnify and hold harmless
the Collateral Agent and all of its officers, directors, employees and agents (collectively, the “Collateral Agent Indemnitees”)
from and against any losses, damages, liabilities, obligations, penalties, actions, judgments, suits, fees, costs and expenses
(including, without limitation, reasonable attorneys’ fees, costs and expenses) incurred by such Collateral Agent Indemnitee,
whether direct, indirect or consequential, arising from or in connection with the performance by such Collateral Agent Indemnitee
of the duties and obligations of Collateral Agent pursuant hereto or any of the Security Documents. The Collateral Agent shall
not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall
be fully protected in so acting or refraining from acting) upon the instructions of the Required Holders, and such instructions
shall be binding upon all holders of Notes; provided, however, that the Collateral Agent shall not be required to take any action
which, in the reasonable opinion of the Collateral Agent, exposes the Collateral Agent to liability or which is contrary to this
Agreement or any other Transaction Document or applicable law. The Collateral Agent shall be entitled to rely upon any written
notices, statements, certificates, orders or other documents or any telephone message believed by it in good faith to be genuine
and correct and to have been signed, sent or made by the proper Person, and with respect to all matters pertaining to this Agreement
or any of the other Transaction Documents and its duties hereunder or thereunder, upon advice of counsel selected by it.

 

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(v) Successor
Collateral Agent.

 

(i) The
Collateral Agent may resign from the performance of all its functions and duties hereunder and under the other Transaction Documents
at any time by giving at least ten (10) Business Days’ prior written notice to the Company and each holder of Notes. Such
resignation shall take effect upon the acceptance by a successor Collateral Agent of appointment pursuant to clauses (ii) and (iii)
below or as otherwise provided below. If at any time the Collateral Agent (together with its affiliates) beneficially owns less
than $100,000 in aggregate principal amount of Notes, the Required Holders may, by written consent, remove the Collateral Agent
from all its functions and duties hereunder and under the other Transaction Documents.

 

(ii) Upon
any such notice of resignation or removal, the Required Holders shall appoint a successor collateral agent. Upon the acceptance
of any appointment as Collateral Agent hereunder by a successor agent, such successor collateral agent shall thereupon succeed
to and become vested with all the rights, powers, privileges and duties of the collateral agent, and the Collateral Agent shall
be discharged from its duties and obligations under this Agreement and the other Transaction Documents. After the Collateral Agent’s
resignation or removal hereunder as the collateral agent, the provisions of this Section 4(v) shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was the Collateral Agent under this Agreement and the other Transaction
Documents.

 

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(iii) If
a successor collateral agent shall not have been so appointed within ten (10) Business Days of receipt of a written notice of resignation
or removal, the Collateral Agent shall then appoint a successor collateral agent who shall serve as the Collateral Agent until
such time, if any, as the Required Holders appoint a successor collateral agent as provided above.

 

(iv) In
the event that a successor Collateral Agent is appointed pursuant to the provisions of this Section 4(v) that is not a Buyer or
an affiliate of any Buyer (or the Required Holders or the Collateral Agent (or its successor), as applicable, the Required Holders
shall notify the Company that they or it wants to appoint such a successor Collateral Agent pursuant to the terms of this Section
4(v)), the Company and each Subsidiary thereof covenants and agrees to promptly take all actions reasonably requested by the Required
Holders or the Collateral Agent (or its successor), as applicable, from time to time, to secure a successor Collateral Agent satisfactory
to the requesting part(y)(ies), in their sole discretion, including, without limitation, by paying all reasonable and customary
fees and expenses of such successor Collateral Agent, by having the Company and each Subsidiary thereof agree to indemnify any
successor Collateral Agent pursuant to reasonable and customary terms and by each of the Company and each Subsidiary thereof executing
a collateral agency agreement or similar agreement and/or any amendment to the Security Documents reasonably requested or required
by the successor Collateral Agent.

 

(w) Regulation
M. The Company will not take any action prohibited by Regulation M under the 1934 Act, in connection with the distribution
of the Securities contemplated hereby.

 

(x) General Solicitation.
None of the Company, any of its affiliates (as defined in Rule 501(b) under the 1933 Act) or any person acting on behalf of the
Company or such affiliate will solicit any offer to buy or offer or sell the Securities by means of any form of general solicitation
or general advertising within the meaning of Regulation D, including: (i) any advertisement, article, notice or other communication
published in any newspaper, magazine or similar medium or broadcast over television or radio; and (ii) any seminar or meeting
whose attendees have been invited by any general solicitation or general advertising.

 

(y) Integration.
None of the Company, any of its affiliates (as defined in Rule 501(b) under the 1933 Act), or any person acting on behalf of the
Company or such affiliate will sell, offer for sale, or solicit offers to buy or otherwise negotiate in respect of any security
(as defined in the 1933 Act) which will be integrated with the sale of the Securities in a manner which would require the registration
of the Securities under the 1933 Act or require stockholder approval under the rules and regulations of the Principal Market and
the Company will take all action that is appropriate or necessary to assure that its offerings of other securities will not be
integrated for purposes of the 1933 Act or the rules and regulations of the Principal Market, with the issuance of Securities
contemplated hereby.

 

(z) Notice of
Disqualification Events. The Company will notify the Buyers in writing, prior to the Closing Date of (i) any Disqualification
Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a Disqualification
Event relating to any Issuer Covered Person.

 

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(aa) Subsidiary
Guarantee. For so long as any Notes remain outstanding, upon any entity becoming a direct, or indirect, Subsidiary of
the Company, but only to the extent that such Subsidiary is required to become a Grantor under the Security Agreement as required
by Section 5(m) of the Security Agreement, before such Subsidiary, directly or indirectly, owns, holds or otherwise is entitled
to receive any assets or incurs any liabilities or otherwise engages in any business, the Company shall cause each such Subsidiary
to become party to the Guaranty by executing a joinder to the Guaranty reasonably satisfactory in form and substance to the Required
Holders.

 

(bb) Current
Public Information. At any time during the period commencing from the six (6) month anniversary of the Closing Date and ending
at the end of the Reporting Period, if the Company shall (i) fail for any reason to satisfy the requirements of Rule 144(c)(1),
including, without limitation, the failure to satisfy the current public information requirement under Rule 144(c) or (ii) fail
to satisfy any condition set forth in Rule 144(i)(2) (a “Current Public Information Failure”) then, as partial
relief for the damages to any holder of Securities by reason of any such delay in or reduction of its ability to sell the Securities
(which remedy shall not be exclusive of any other remedies available at law or in equity), the Company shall pay to each such
holder an amount in cash equal to one percent (1%) of the aggregate Purchase Price of such holder’s Securities on the day
of a Current Public Information Failure and on every thirtieth day (pro-rated for periods totaling less than thirty days) thereafter
until the earlier of (i) the date such Current Public Information Failure is cured and (ii) such time that such Current Public
Information Failure no longer prevents a holder of Securities from selling such Securities pursuant to Rule 144 without any restrictions
or limitations. The payments to which a holder shall be entitled pursuant to this Section 4(bb) are referred to herein as “Current
Public Information Failure Payments”. Current Public Information Failure Payments shall be paid on the earlier of (I)
the last day of the calendar month during which such Current Public Information Failure Payments are incurred and (II) the third
Business Day after the event or failure giving rise to the Current Public Information Failure Payments is cured. In the event
the Company fails to make Current Public Information Failure Payments in a timely manner, such Current Public Information Failure
Payments shall bear interest at the rate of 2.0% per month (prorated for partial months) until paid in full.

 

(cc)
Stockholder Approval. The Company shall provide each stockholder entitled to vote at an annual or special meeting
of stockholders of the Company (the “Stockholder Meeting”), which shall be promptly called and held not
later than November 30, 2020 (the “Stockholder Meeting Deadline”), a proxy statement, in a form reasonably
acceptable to the Buyers and Kelley Drye & Warren LLP, at the expense of the Company, with the Company obligated to
reimburse the expenses of Kelley Drye & Warren LLP incurred in connection therewith in an amount not exceed $5,000,
soliciting each such stockholder’s affirmative vote at the Stockholder Meeting for approval of resolutions
(“Stockholder Resolutions”) providing for the issuance of the Securities in compliance with the rules and
regulations of the Principal Market (the “Stockholder Approval”, and the date the Stockholder Approval is
obtained, the “Stockholder Approval Date”), and the Company shall use its reasonable best efforts to
solicit its stockholders’ approval of such resolutions and to cause the Board of Directors of the Company to recommend
to the stockholders that they approve such resolutions. The Company shall be obligated to seek to obtain the Stockholder
Approval by the Stockholder Meeting Deadline. If, despite the Company’s reasonable best efforts the Stockholder
Approval is not obtained on or prior to the Stockholder Meeting Deadline, the Company shall cause an additional Stockholder
Meeting to be held on or prior to February 28, 2021. If, despite the Company’s reasonable best efforts the Stockholder
Approval is not obtained after such subsequent stockholder meetings, the Company shall cause an additional Stockholder
Meeting to be held quarterly thereafter until such Stockholder Approval is obtained.

 

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(dd) No
Waiver of Voting Agreement. The Company shall not amend, waive, modify or fail to use best efforts to enforce any
provision of the Voting Agreement.

 

(ee) Closing
Documents. On or prior to fourteen (14) calendar days after the Closing Date, the Company agrees to deliver, or cause to be
delivered, to each Buyer and Kelley Drye & Warren LLP a complete closing set of the executed Transaction Documents, Securities
and any other document required to be delivered to any party pursuant to Section 7 hereof or otherwise.

 

5. REGISTER;
TRANSFER AGENT INSTRUCTIONS; LEGEND.

 

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

 

(b) Transfer
Agent Instructions. The Company shall issue irrevocable instructions to its transfer agent and any subsequent transfer agent
(as applicable, the “Transfer Agent”) in a form acceptable to each of the Buyers (the “Irrevocable
Transfer Agent Instructions”) to issue certificates or credit shares to the applicable balance accounts at The Depository
Trust Company (“DTC”), registered in the name of each Buyer or its respective nominee(s), for the Conversion
Shares in such amounts as specified from time to time by each Buyer to the Company upon conversion of the Notes. The Company represents
and warrants that no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5(b),
and stop transfer instructions to give effect to Section 2(g) hereof, will be given by the Company to its transfer agent with respect
to the Securities, and that the Securities shall otherwise be freely transferable on the books and records of the Company, as applicable,
to the extent provided in this Agreement and the other Transaction Documents. If a Buyer effects a sale, assignment or transfer
of the Securities in accordance with Section 2(g), the Company shall permit the transfer and shall promptly instruct its transfer
agent to issue one or more certificates or credit shares to the applicable balance accounts at DTC in such name and in such denominations
as specified by such Buyer to effect such sale, transfer or assignment. In the event that such sale, assignment or transfer involves
Conversion Shares sold, assigned or transferred pursuant to an effective registration statement or in compliance with Rule 144,
the transfer agent shall issue such shares to such Buyer, assignee or transferee (as the case may be) without any restrictive legend
in accordance with Section 5(d) below. The Company acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to a Buyer. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under
this Section 5(b) will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions
of this Section 5(b), that a Buyer shall be entitled, in addition to all other available remedies, to an order and/or injunction
restraining any breach and requiring immediate issuance and transfer, without the necessity of showing economic loss and without
any bond or other security being required. Any fees (with respect to the transfer agent, counsel to the Company or otherwise) associated
with the issuance of such opinion or the removal of any legends on any of the Securities shall be borne by the Company.

 

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(c) Legends.
Each Buyer understands that the Securities have been issued (or will be issued in the case of the Conversion Shares) pursuant to
an exemption from registration or qualification under the 1933 Act and applicable state securities laws, and except as set forth
below, the Securities shall bear any legend as required by the “blue sky” laws of any state and a restrictive legend
in substantially the following form (and a stop-transfer order may be placed against transfer of such stock certificates):

 

NEITHER THE ISSUANCE AND SALE
OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE [NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE] HAVE
BEEN OR WILL BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE
SECURITIES LAWS. THESE SECURITIES MAY BE OFFERED FOR SALE, SOLD, PLEDGED ASSIGNED OR TRANSFERRED, DIRECTLY OR INDIRECTLY, ONLY
(A) TO THE COMPANY, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS, (C) IN COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES
ACT IN ACCORDANCE WITH RULE (I) 144 OR (II) RULE 144A THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES
LAWS PROVIDED THAT THE HOLDER HAS FURNISHED TO THE COMPANY REASONABLE ASSURANCES, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY
TO THE COMPANY AND ITS TRANSFER AGENT, THAT REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES
LAWS, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE LAWS AND REGULATIONS
GOVERNING THE OFFER AND SALE OF SECURITIES PROVIDED THAT THE HOLDER HAS FURNISHED TO THE COMPANY AN OPINION OF COUNSEL OF RECOGNIZED
STANDING IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.

 

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(d) Removal
of Legends. Certificates evidencing Securities shall not be required to contain the legend set forth in Section 5(c) above
or any other legend (i) while a registration statement covering the resale of such Securities is effective under the 1933 Act,
(ii) following any sale of such Securities pursuant to Rule 144 (assuming the transferor is not an affiliate of the Company), (iii)
if such Securities are eligible to be sold, assigned or transferred under Rule 144 (provided that a Buyer duly executes and delivers
to the Company a valid 144 Rep (which shall not include an opinion of Buyer’s counsel), (iv) in connection with a sale, assignment
or other transfer (other than under Rule 144), provided that such Buyer provides the Company with an opinion of counsel to such
Buyer, in form and substance reasonable acceptable to the Company and its transfer agent, to the effect that such sale, assignment
or transfer of the Securities may be made without registration under the applicable requirements of the 1933 Act or (v) if such
legend is not required under applicable requirements of the 1933 Act (including, without limitation, controlling judicial interpretations
and pronouncements issued by the SEC) provided that such Buyer provides the Company with an opinion of counsel to such Buyer, in
form and substance reasonably acceptable to the Company and its transfer agent, to the effect that such legend is no longer required.
If a legend is not required pursuant to the foregoing, the Company shall no later than two (2) Trading Days (or such earlier date
as required pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement of a trade initiated on the
date such Buyer delivers such legended certificate representing such Securities to the Company) following the delivery by a Buyer
to the transfer agent (with notice to the Company) of a legended certificate representing such Securities (endorsed or with stock
powers attached, signatures guaranteed, and otherwise in form necessary to affect the reissuance and/or transfer, if applicable),
together with any other deliveries from such Buyer as may be required above in this Section 5(d), as directed by such Buyer,
either: (A) provided that the Company’s transfer agent is participating in the DTC Fast Automated Securities Transfer Program
and such Securities are Conversion Shares, credit the aggregate number of shares of Common Stock to which such Buyer shall be entitled
to such Buyer’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system or (B)
if the Company’s transfer agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver
(via reputable overnight courier) to such Buyer, a certificate representing such Securities that is free from all restrictive and
other legends, registered in the name of such Buyer or its designee (the date by which such credit is so required to be made to
the balance account of such Buyer’s or such Buyer’s designee with DTC or such certificate is required to be delivered
to such Buyer pursuant to the foregoing is referred to herein as the “Required Delivery Date”, and the date
such shares of Common Stock are actually delivered without restrictive legend to such Buyer or such Buyer’s designee with
DTC, as applicable, the “Share Delivery Date”). The Company shall be responsible for any transfer agent fees
or DTC fees with respect to any issuance of Securities or the removal of any legends with respect to any Securities in accordance
herewith.

 

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(e) Failure
to Timely Deliver; Buy-In. If the Company fails, for any reason or for no reason, to issue and deliver (or cause to be delivered)
to a Buyer (or its designee) by the Required Delivery Date, if the Transfer Agent is not participating in the DTC Fast Automated
Securities Transfer Program, a certificate for the number of Conversion Shares to which such Buyer is entitled and register such
Conversion Shares on the Company’s share register or, if the Transfer Agent is participating in the DTC Fast Automated Securities
Transfer Program, to credit the balance account of such Buyer or such Buyer’s designee with DTC for such number of Conversion
Shares submitted for legend removal by such Buyer pursuant to Section 5(d) above (a “Delivery Failure”), then,
in addition to all other remedies available to such Buyer, the Company shall pay in cash to such Buyer on each day after the Share
Delivery Date and during such Delivery Failure an amount equal to 1% of the product of (A) the sum of the number of shares of Common
Stock not issued to such Buyer on or prior to the Required Delivery Date and to which such Buyer is entitled, and (B) any trading
price of the Common Stock selected by such Buyer in writing as in effect at any time during the period beginning on the date of
the delivery by such Buyer to the Company of the applicable Conversion Shares and ending on the applicable Share Delivery Date.
In addition to the foregoing, if on or prior to the Required Delivery Date if the Transfer Agent is not participating in the DTC
Fast Automated Securities Transfer Program, the Company shall fail to issue and deliver a certificate to a Buyer and register such
shares of Common Stock on the Company’s share register or, if the Transfer Agent is participating in the DTC Fast Automated
Securities Transfer Program, credit the balance account of such Buyer or such Buyer’s designee with DTC for the number of
shares of Common Stock to which such Buyer submitted for legend removal by such Buyer pursuant to Section 5(d) above (ii) below,
and if on or after such Required Delivery Date such Buyer purchases (in an open market transaction or otherwise) shares of Common
Stock to deliver in satisfaction of a sale by such Buyer of shares of Common Stock submitted for legend removal by such Buyer pursuant
to Section 5(d) above that such Buyer is entitled to receive from the Company (a “Buy-In”), then the Company
shall, within two (2) Trading Days after such Buyer’s request and in such Buyer’s discretion, either (i) pay cash to
such Buyer in an amount equal to such Buyer’s total purchase price (including brokerage commissions and other out-of-pocket
expenses, if any, for the shares of Common Stock so purchased) (the “Buy-In Price”), at which point the Company’s
obligation to so deliver such certificate or credit such Buyer’s balance account shall terminate and such shares shall be
cancelled, or (ii) promptly honor its obligation to so deliver to such Buyer a certificate or certificates or credit the balance
account of such Buyer or such Buyer’s designee with DTC representing such number of shares of Common Stock that would have
been so delivered if the Company timely complied with its obligations hereunder and pay cash to such Buyer in an amount equal to
the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Conversion Shares that the Company was
required to deliver to such Buyer by the Required Delivery Date multiplied by (B) the lowest Closing Sale Price (as defined in
the Notes) of the Common Stock on any Trading Day during the period commencing on the date of the delivery by such Buyer to the
Company of the applicable Conversion Shares and ending on the date of such delivery and payment under this clause (ii). Nothing
shall limit such Buyer’s right to pursue any other remedies available to it hereunder, at law or in equity, including, without
limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver
certificates representing shares of Common Stock (or to electronically deliver such shares of Common Stock) as required pursuant
to the terms hereof. Notwithstanding anything herein to the contrary, with respect to any given Delivery Failure, this Section
5(e) shall not apply to the applicable Buyer the extent the Company has already paid such amounts in full to such Buyer with respect
to such Delivery Failure, as applicable, pursuant to the analogous sections of the Note held by such Buyer.

 

(f) FAST
Compliance. While any Notes remain outstanding, the Company shall maintain a transfer agent that participates in the DTC Fast
Automated Securities Transfer Program.

 

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

 

(a) The
obligation of the Company hereunder to issue and sell the Notes to each Buyer at the Closing is subject to the satisfaction, at
or before the 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: 

 

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

 

(ii) 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(g)) for the Note being purchased by such Buyer at the Closing by wire transfer of immediately
available funds in accordance with the Flow of Funds Letter.

 

(iii) Such
Buyer shall have executed and delivered to the Company the 144 representation letter, in the form attached hereto as Exhibit
E (the “Standby 144 Representation Letter”).

 

(iv) 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 the 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 the Closing Date.

 

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

 

(a) The
obligation of each Buyer hereunder to purchase its Note at the Closing is subject to the satisfaction, at or before the 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: 

 

(i) The
Company and each Subsidiary (as the case may be) 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 Note in such original principal amount
as is set forth across from such Buyer’s name in column (3) of the Schedule of Buyers as being purchased by such Buyer at
the Closing pursuant to this Agreement.

 

(ii) Such
Buyer shall have received the opinion of Dorsey & Whitney LLP, the Company’s counsel, dated as of the Closing Date, in
the form acceptable to such Buyer.

 

(iii) The
Company shall have delivered to such Buyer a copy of the Irrevocable Transfer Agent Instructions, in the form acceptable to such
Buyer, which instructions shall have been delivered to and acknowledged in writing by the Company’s transfer agent.

 

(iv) The
Company shall have delivered to such Buyer a certificate evidencing the formation and good standing of the Company and each of
its Subsidiaries in each such entity’s jurisdiction of formation issued by the Secretary of State (or comparable office)
of such jurisdiction of formation as of a date within ten (10) days of the Closing Date.

 

(v) The
Company shall have delivered to such Buyer a certificate evidencing the Company’s and each Subsidiary’s qualification
as a foreign corporation and good standing issued by the Secretary of State (or comparable office) of each jurisdiction in which
the Company and each Subsidiary conducts business and is required to so qualify, as of a date within ten (10) days of the Closing
Date.

 

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(vi) The
Company shall have delivered to such Buyer a certified copy of the Certificate of Incorporation as certified by the Delaware Secretary
of State within ten (10) days of the Closing Date.

 

(vii) Each
Subsidiary shall have delivered to such Buyer a certified copy of its Certificate of Incorporation (or such equivalent organizational
document) as certified by the Secretary of State (or comparable office) of such Subsidiary’s jurisdiction of incorporation
within ten (10) days of the Closing Date.

 

(viii) The
Company and each Subsidiary shall have delivered to such Buyer a certificate, in the form acceptable to such Buyer, executed by
the Secretary of the Company and each Subsidiary and dated as of the Closing Date, as to (i) the resolutions consistent with Section 3(b)
as adopted by the Company’s and each Subsidiary’s board of directors in a form reasonably acceptable to such Buyer,
(ii) the Certificate of Incorporation of the Company and the organizational documents of each Subsidiary and (iii) the Bylaws
of the Company and the bylaws of each Subsidiary, each as in effect at the Closing.

 

(ix) Each
and every representation and warranty of the Company shall be true and correct as of the date when made and as of the 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 the
Closing Date. Such Buyer shall have received a certificate, duly executed by the Chief Executive Officer of the Company, dated
as of the Closing Date, to the foregoing effect and as to such other matters as may be reasonably requested by such Buyer in the
form acceptable to such Buyer.

 

(x) The
Company shall have delivered to such Buyer a letter from the Company’s transfer agent certifying the number of shares of
Common Stock outstanding on the Closing Date immediately prior to the Closing.

 

(xi) The
Common Stock (A) shall be designated for quotation or listed (as applicable) on the Principal Market and (B) shall not have been
suspended, as of the 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 the 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.

 

(xii) 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.

 

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(xiii) 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.

 

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

 

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

 

(xvi) In
accordance with the terms of the Security Documents, the Company shall have delivered to the Collateral Agent (A) original certificates
(I) representing the Subsidiaries’ shares of capital stock to the extent such subsidiary is a corporation or otherwise has
certificated equity and (II) representing all other equity interests and all promissory notes required to be pledged thereunder,
in each case, accompanied by undated stock powers and allonges executed in blank and other proper instruments of transfer and (B)
appropriate financing statements on Form UCC-1 to be duly filed in such office or offices as may be necessary or, in the opinion
of the Collateral Agent, desirable to perfect the security interests purported to be created by each Security Document (the “Perfection
Certificate”).

 

(xvii) Within
two (2) Business Days prior to the Closing, the Company shall have delivered or caused to be delivered to each Buyer and the Collateral
Agent (A) certified copies of requests for copies of information on Form UCC-11, listing all effective financing statements which
name as debtor the Company or any of its Subsidiaries and which are filed in such office or offices as may be necessary or, in
the opinion of the Collateral Agent or the Buyers, desirable to perfect the security interests purported to be created by the Security
Agreement, together with copies of such financing statements, none of which, except as otherwise agreed in writing by the Collateral
Agent, shall cover any of the Collateral (as defined in the Security Agreement), and the results of searches for any tax Lien and
judgment Lien filed against such Person or its property, which results, except as otherwise agreed to in writing by the Collateral
Agent and the Buyers, shall not show any such Liens; and (B) a perfection certificate, duly completed and executed by the Company
and each of its Subsidiaries, in form and substance satisfactory to the Buyers.

 

(xviii) The
Collateral Agent shall have received the Security Agreement, duly executed by the Company and each of its Subsidiaries, together
with the original stock certificates representing all of the equity interests and all promissory notes required to be pledged thereunder,
accompanied by undated stock powers and allonges executed in blank and other proper instruments of transfer.

 

(xix) With
respect to the Intellectual Property Rights, if any, of the Company or any of its Subsidiaries, the Company and/or such Subsidiaries,
as applicable, shall have duly executed and delivered to such Buyer each Assignment For Security for the Intellectual Property
Rights of the Company and its Subsidiaries, in the form attached as Exhibit A to the Security Agreement.

 

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(xx) Each
Controlled Account Bank (as defined in the Notes) and the Collateral Agent shall have duly executed and delivered to such Buyer
a Controlled Account Agreement (as defined in the Notes) with respect to each account of the Company or any of its Subsidiaries
held at such Controlled Account Bank.

 

(xxi) Such
Buyer shall have received a letter on the letterhead of the Company, duly executed by the Chief Executive Officer of the Company,
setting forth the wire amounts of each Buyer and the wire transfer instructions of the Company (the “Flow of Funds Letter”).

 

(xxii) The
Company shall have duly executed and delivered to such Buyer the voting agreement in the form of Exhibit F hereof
(the “Voting Agreement”), by and between the Company and the stockholders listed on Schedule 7(a)(xxii) attached
hereto (the “Stockholders”) and the Stockholders shall have duly executed and delivered to such Buyer the Voting
Agreement.

 

(xxiii) 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.

 

8. TERMINATION.

 

In the event that the
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 Notes 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 in Section 4(g)
above. 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.

 

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 hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder
or in connection herewith or under any of the other Transaction Documents or with any transaction contemplated hereby or thereby,
and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that
the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address
for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted
by law. Nothing contained herein shall be deemed or operate to preclude any Buyer from bringing suit or taking other legal action
against the Company in any other jurisdiction to collect on the Company’s obligations to such Buyer or to enforce a judgment
or other court ruling in favor of such Buyer. 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.

 

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(b) Counterparts.
This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to the other party. 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) Severability;
Maximum Payment Amounts. If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable
by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed
amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified
continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited
nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations
or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the
parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).
Notwithstanding anything to the contrary contained in this Agreement or any other Transaction Document (and without implication
that the following is required or applicable), it is the intention of the parties that in no event shall amounts and value paid
by the Company and/or any of its Subsidiaries (as the case may be), or payable to or received by any of the Buyers, under the Transaction
Documents (including without limitation, any amounts that would be characterized as “interest” under applicable law)
exceed amounts permitted under any applicable law. Accordingly, if any obligation to pay, payment made to any Buyer, or collection
by any Buyer pursuant the Transaction Documents is finally judicially determined to be contrary to any such applicable law, such
obligation to pay, payment or collection shall be deemed to have been made by mutual mistake of such Buyer, the Company and its
Subsidiaries and such amount shall be deemed to have been adjusted with retroactive effect to the maximum amount or rate of interest,
as the case may be, as would not be so prohibited by the applicable law. Such adjustment shall be effected, to the extent necessary,
by reducing or refunding, at the option of such Buyer, the amount of interest or any other amounts which would constitute unlawful
amounts required to be paid or actually paid to such Buyer under the Transaction Documents. For greater certainty, to the extent
that any interest, charges, fees, expenses or other amounts required to be paid to or received by such Buyer under any of the Transaction
Documents or related thereto are held to be within the meaning of “interest” or another applicable term to otherwise
be violative of applicable law, such amounts shall be pro-rated over the period of time to which they relate.

 

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(e) Entire
Agreement; Amendments. This Agreement, the other Transaction Documents and the schedules and exhibits attached hereto and thereto
and the instruments referenced herein and therein supersede all other prior oral or written agreements between the Buyers, the
Company, its Subsidiaries, their affiliates and Persons acting on their behalf, including, without limitation, any transactions
by any Buyer with respect to Common Stock or the Securities, and the other matters contained herein and therein, and this Agreement,
the other Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments referenced herein and
therein contain the entire understanding of the parties solely with respect to the matters covered herein and therein; provided,
however, nothing contained in this Agreement or any other Transaction Document shall (or shall be deemed to) (i) have any effect
on any agreements any Buyer has entered into with, or any instruments any Buyer has received from, the Company or any of its Subsidiaries
prior to the date hereof with respect to any prior investment made by such Buyer in the Company or (ii) waive, alter, modify or
amend in any respect any obligations of the Company or any of its Subsidiaries, or any rights of or benefits to any Buyer or any
other Person, in any agreement entered into prior to the date hereof between or among the Company and/or any of its Subsidiaries
and any Buyer, or any instruments any Buyer received from the Company and/or any of its Subsidiaries prior to the date hereof,
and all such agreements and instruments shall continue in full force and effect. 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. For
clarification purposes, the Recitals are part of this Agreement. No provision of this Agreement may be amended other than by an
instrument in writing signed by the Company and the Required Holders (as defined below), and any amendment to any provision of
this Agreement made in conformity with the provisions of this Section 9(e) shall be binding on all Buyers and holders of Securities,
as applicable; provided that no such amendment shall be effective to the extent that it (A) applies to less than all of the holders
of the Securities then outstanding or (B) imposes any obligation or liability on any Buyer without such Buyer’s prior written
consent (which may be granted or withheld in such Buyer’s sole discretion); and provided further that the provisions of Sections
4(u) and 4(v) above cannot be amended or waived without the additional prior written approval of the Collateral Agent or its successor.
No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party, provided
that the Required Holders may waive any provision of this Agreement, and any waiver of any provision of this Agreement made in
conformity with the provisions of this Section 9(e) shall be binding on all Buyers and holders of Securities, as applicable,
provided that no such waiver shall be effective to the extent that it (1) applies to less than all of the holders of the Securities
then outstanding (unless a party gives a waiver as to itself only) or (2) imposes any obligation or liability on any Buyer without
such Buyer’s prior written consent (which may be granted or withheld in such Buyer’s sole discretion). No consideration
(other than reimbursement of legal fees) shall be offered or paid to any Person to amend or consent to a waiver or modification
of any provision of any of the Transaction Documents unless the same consideration also is offered to all of the parties to the
Transaction Documents, all holders of the Notes. From the date hereof and while any Notes are outstanding, the Company shall not
be permitted to receive any consideration from a Buyer or a holder of Notes that is not otherwise contemplated by the Transaction
Documents in order to, directly or indirectly, induce the Company or any Subsidiary (i) to treat such Buyer or holder of Notes
in a manner that is more favorable than to other similarly situated Buyers or holders of Notes, or (ii) to treat any Buyer(s) or
holder(s) of Notes in a manner that is less favorable than the Buyer or holder of Notes that is paying such consideration; provided,
however, that the determination of whether a Buyer has been treated more or less favorably than another Buyer shall disregard any
securities of the Company purchased or sold by any Buyer. The Company has not, directly or indirectly, made any agreements with
any Buyers relating to the terms or conditions of the transactions contemplated by the Transaction Documents except as set forth
in the Transaction Documents. Without limiting the foregoing, the Company confirms that, except as set forth in this Agreement,
no Buyer has made any commitment or promise or has any other obligation to provide any financing to the Company, any Subsidiary
or otherwise. As a material inducement for each Buyer to enter into this Agreement, the Company expressly acknowledges and agrees
that (x) no due diligence or other investigation or inquiry conducted by a Buyer, any of its advisors or any of its representatives
shall affect such Buyer’s right to rely on, or shall modify or qualify in any manner or be an exception to any of, the Company’s
representations and warranties contained in this Agreement or any other Transaction Document and (y) unless a provision of this
Agreement or any other Transaction Document is expressly preceded by the phrase “except as disclosed in the SEC Documents,”
nothing contained in any of the SEC Documents shall affect such Buyer’s right to rely on, or shall modify or qualify in any
manner or be an exception to any of, the Company’s representations and warranties contained in this Agreement or any other
Transaction Document. “Required Holders” means (I) prior to the Closing Date, each Buyer entitled to purchase
Notes at the Closing and (II) on or after the Closing Date, HT Investments MA LLC (or any of its affiliates) (“HT”)
as long as HT holds any of the Securities or, thereafter, the holders of a majority of the Underlying Securities as of such time
(excluding any Underlying Securities held by the Company or any of its Subsidiaries as of such time) issued or issuable hereunder
or pursuant to the Notes.

 

    48

     

    

 

(f) Notices.
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must
be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent
by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending
party) or electronic mail (provided that such sent email is kept on file (whether electronically or otherwise) by the sending party
and the sending party does not receive an automatically generated message from the recipient's email server that such e-mail could
not be delivered to such recipient); or (iii) 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. The addresses, facsimile numbers and e-mail
addresses for such communications shall be:

 

If to the Company:

 

Akerna Corp.

1630 Welton Street, 4th Floor

Denver, Colorado 80202

Telephone: (720) 710-3146

Attention: Chief Financial Officer

E-Mail: john.fowle@akerna.com

 

With a copy (for informational purposes only) to:

 

Dorsey & Whitney LLP

1400 Wewatta Street, Suite 400

Denver, Colorado 80202

Telephone: (303) 352-1133

Facsimile: (303) 629-3450

Attention: Jason K. Brenkert, Esq.

E-Mail: brenkert.jason@dorsey.com

 

If to the Transfer Agent:

 

Continental Stock Transfer & Trust Company

1 State Street, Floor 30

New York, NY 10004

Telephone: (212) 509-4000

Facsimile: (212) 509-5150

Attention: Henry Farrell

E-Mail: hfarrell@continentalstock.com

 

If to a Buyer, to its address, e-mail address
and facsimile number set forth on the Schedule of Buyers, with copies to such Buyer’s representatives as set forth on the
Schedule of Buyers,

 

with a copy (for informational purposes only) to:

 

Kelley Drye & Warren LLP

101 Park Avenue

New York, NY 10178

Telephone: (212) 808-7540

Facsimile: (212) 808-7897

Attention: Michael A. Adelstein, Esq.

E-mail: madelstein@kelleydrye.com

 

    49

     

    

 

or to such other address, e-mail address
and/or facsimile number and/or to the attention of such other Person as the recipient party has specified by written notice given
to each other party five (5) days prior to the effectiveness of such change, provided that Kelley Drye & Warren LLP shall only
be provided copies of notices sent to the lead Buyer. Written confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine or
e-mail containing the time, date, recipient facsimile number and, with respect to each facsimile transmission, an image of the
first page of such transmission 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.

 

(g) 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 Notes. The Company shall not assign this Agreement or any rights or obligations
hereunder without the prior written consent of the Required Holders, including, without limitation, by way of a Fundamental Transaction
(as defined in the Notes) (unless the Company is in compliance with the applicable provisions governing Fundamental Transactions
set forth in the Notes). A Buyer may assign some or all of its rights hereunder in connection with any transfer of any of its Securities
without the consent of the Company, in which event such assignee shall be deemed to be a Buyer hereunder with respect to such assigned
rights.

 

(h) No
Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, other than
the Indemnitees referred to in Section 9(k).

 

(i) Survival.
The representations, warranties, agreements and covenants shall survive the Closing. Each Buyer shall be responsible only for its
own representations, warranties, agreements and covenants hereunder.

 

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

 

(k) 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 each holder of Notes and all of their stockholders, partners, members, officers, directors,
employees and direct or indirect investors and any of the foregoing Persons’ agents or other representatives (including,
without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”)
from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages,
and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification
hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”),
incurred by any Indemnitee as a result of, or arising out of, or relating to (i) any misrepresentation or breach of any representation
or warranty made by the Company or any Subsidiary 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 or (iii) any cause of action, suit,
proceeding or claim brought or made against such Indemnitee by a third party (including for these purposes a derivative action
brought on behalf of the Company or any Subsidiary) or which otherwise involves such Indemnitee that arises out of or results from
(A) the execution, delivery, performance or enforcement of any of the Transaction Documents by the Company or its Subsidiaries,
(B) any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of the issuance of
the Securities, (C) any disclosure properly made by such Buyer pursuant to Section 4(i), or (D) the status of such Buyer or
holder of the Notes either as an investor in the Company pursuant to the transactions contemplated by the Transaction Documents
or as a party to this Agreement (including, without limitation, as a party in interest or otherwise in any action or proceeding
for injunctive or other equitable relief); provided however that the Company will not be required to indemnify any Indemnitees
to the extent that such actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and
expenses finally determined by a court of competent jurisdiction to arise directly and primarily from the gross negligence, fraud
or willful misconduct of such Indemnitee or the Buyer or holder of the Notes to which such Indemnitee is related. 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.

 

    50

     

    

 

(ii) Promptly
after receipt by an Indemnitee under this Section 9(k) 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 Company under this Section 9(k), deliver to the Company a written notice of the commencement thereof, and
the Company shall have the right to participate in, and, to the extent the Company so desires, to assume control of the defense
thereof with counsel mutually satisfactory to the Company 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 Company if: (A) the Company has
agreed in writing to pay such fees and expenses; (B) the Company 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 Company, 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 Company in writing that it elects to employ separate
counsel at the expense of the Company, then the Company shall not have the right to assume the defense thereof and such counsel
shall be at the expense of the Company), provided further, that in the case of clause (C) above the Company 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 Company in connection with any negotiation or defense of any such action or Indemnified Liability by the Company
and shall furnish to the Company all information reasonably available to the Indemnitee which relates to such action or Indemnified
Liability. The Company shall keep the Indemnitee reasonably apprised at all times as to the status of the defense or any settlement
negotiations with respect thereto. The Company shall not be liable for any settlement of any action, claim or proceeding effected
without its prior written consent, provided, however, that the Company shall not unreasonably withhold, delay or condition its
consent. The Company 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 Company 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 Company 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(k), except to the extent that the Company is materially and adversely prejudiced in its ability to defend such action.

 

    51

     

    

 

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

 

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

 

(l) 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. No specific representation or warranty shall limit the generality
or applicability of a more general representation or warranty. Each and every reference to share prices, shares of Common Stock
and any other numbers in this Agreement that relate to the Common Stock shall be automatically adjusted for any stock splits, stock
dividends, stock combinations, recapitalizations or other similar transactions that occur with respect to the Common Stock after
the date of this Agreement. Notwithstanding anything in this Agreement to the contrary, for the avoidance of doubt, nothing contained
herein shall constitute a representation or warranty against, or a prohibition of, any actions with respect to the borrowing of,
arrangement to borrow, identification of the availability of, and/or securing of, securities of the Company in order for such Buyer
(or its broker or other financial representative) to effect short sales or similar transactions in the future.

 

(m) Remedies.
Each Buyer and in the event of assignment by Buyer of its rights and obligations hereunder, each holder of Securities, shall have
all rights and remedies set forth in the Transaction Documents and all rights and remedies which such holders have been granted
at any time under any other agreement or contract and all of the rights which such holders have under any law. Any Person having
any rights under any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond
or other security), to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights
granted by law. Furthermore, the Company recognizes that in the event that it or any Subsidiary fails to perform, observe, or discharge
any or all of its or such Subsidiary’s (as the case may be) obligations under the Transaction Documents, any remedy at law
would inadequate relief to the Buyers. The Company therefore agrees that the Buyers shall be entitled to specific performance and/or
temporary, preliminary and permanent injunctive or other equitable relief from any court of competent jurisdiction in any such
case without the necessity of proving actual damages and without posting a bond or other security. The remedies provided in this
Agreement and the other Transaction Documents shall be cumulative and in addition to all other remedies available under this Agreement
and the other Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief).

 

    52

     

    

 

(n) Withdrawal
Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction
Documents, whenever any Buyer exercises a right, election, demand or option under a Transaction Document and the Company or any
Subsidiary does not timely perform its related obligations within the periods therein provided, then such Buyer may rescind or
withdraw, in its sole discretion from time to time upon written notice to the Company or such Subsidiary (as the case may be),
any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights.

 

(o) Payment
Set Aside; Currency. To the extent that the Company makes a payment or payments to any Buyer hereunder or pursuant to any of
the other Transaction Documents or any of the Buyers enforce or exercise their rights hereunder or thereunder, and such payment
or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent
or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, foreign, state or federal
law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement
or setoff had not occurred. Unless otherwise expressly indicated, all dollar amounts referred to in this Agreement and the other
Transaction Documents are in United States Dollars (“U.S. Dollars”), and all amounts owing under this Agreement
and all other Transaction Documents shall be paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall be
converted into the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange
Rate” means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Agreement, the
U.S. Dollar exchange rate as published in the Wall Street Journal on the relevant date of calculation.

 

(p) Judgment
Currency.

 

(i) If
for the purpose of obtaining or enforcing judgment against the Company in connection with this Agreement or any other Transaction
Document in any court in any jurisdiction it becomes necessary to convert into any other currency (such other currency being hereinafter
in this Section 9(p) referred to as the “Judgment Currency”) an amount due in US Dollars under this Agreement,
the conversion shall be made at the Exchange Rate prevailing on the Trading Day immediately preceding:

 

(1) the
date actual payment of the amount due, in the case of any proceeding in the courts of New York or in the courts of any other jurisdiction
that will give effect to such conversion being made on such date: or

 

    53

     

    

 

(2) the
date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date as
of which such conversion is made pursuant to this Section 9(p)(i)(2) being hereinafter referred to as the “Judgment
Conversion Date”).

 

(ii) If
in the case of any proceeding in the court of any jurisdiction referred to in Section 9(p)(i)(2) above, there is a change
in the Exchange Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable
party shall pay such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted
at the Exchange Rate prevailing on the date of payment, will produce the amount of US Dollars which could have been purchased with
the amount of Judgment Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment Conversion
Date.

 

(iii) Any
amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being obtained
for any other amounts due under or in respect of this Agreement or any other Transaction Document.

 

(q) Independent
Nature of Buyers’ Obligations and Rights. The obligations of each Buyer under the Transaction Documents are several and
not joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of the obligations
of any other Buyer under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action
taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as, and the Company acknowledges that the
Buyers do not so constitute, a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption
that the Buyers are in any way acting in concert or as a group or entity, and the Company shall not assert any such claim with
respect to such obligations or the transactions contemplated by the Transaction Documents or any matters, and the Company acknowledges
that the Buyers are not acting in concert or as a group, and the Company shall not assert any such claim, with respect to such
obligations or the transactions contemplated by the Transaction Documents. The decision of each Buyer to purchase Securities pursuant
to the Transaction Documents has been made by such Buyer independently of any other Buyer. Each Buyer acknowledges that no other
Buyer has acted as agent for such Buyer in connection with such Buyer making its investment hereunder and that no other Buyer will
be acting as agent of such Buyer in connection with monitoring such Buyer’s investment in the Securities or enforcing its
rights under the Transaction Documents. The Company and each Buyer confirms that each Buyer has independently participated with
the Company and its Subsidiaries in the negotiation of the transaction contemplated hereby with the advice of its own counsel and
advisors. Each Buyer shall be entitled to independently protect and enforce its rights, including, without limitation, the rights
arising out of this Agreement or out of any other Transaction Documents, and it shall not be necessary for any other Buyer to be
joined as an additional party in any proceeding for such purpose. The use of a single agreement to effectuate the purchase and
sale of the Securities contemplated hereby was solely in the control of the Company, not the action or decision of any Buyer, and
was done solely for the convenience of the Company and its Subsidiaries and not because it was required or requested to do so by
any Buyer. It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction
Document is between the Company, each Subsidiary and a Buyer, solely, and not between the Company, its Subsidiaries and the Buyers
collectively and not between and among the Buyers.

 

[signature pages follow]

 

    54

     

    

 

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

 

	 	COMPANY:
	 	 
	 	AKERNA CORP.
	 	 
	 	By:	                                
	 	 	Name:
	 	 	Title:

 

     

     

    

 

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

  

	 	BUYER:
	 	 
	 	HT Investments MA LLC
	 	 
	 	By:	                     
	 	 	Name:
	 	 	Title:

 

     

     

    

 

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

  

	 	
        BUYER:

         

	 	Alto Opportunity Master Fund, SPC - Segregated Master Portfolio B
	 	 
	 	By:	                         
	 	 	Name:
	 	 	Title:

 

     

     

    

 

SCHEDULE
OF BUYERS

 

	(1)	(2)	(3)	(4)	(5)
	 	 	 	 	 
	
        Buyer
	
        Address
        and Facsimile Number
	
        Original
        Principal Amount of Notes
	
        Purchase
        Price
	
        Legal
        Representative’s

        Address and Facsimile Number

	 	 	 	 	 
	HT Investments MA LLC	
        c/o High Trail Capital LP

        221 River Street, 9th Floor

        Hoboken, NJ 07030

        Facsimile: (917)-905-9799

        E-mail: notifces@hightrailcap.com

        Residence: Delaware

         
	$9,000,000	$7,920,000	
        Kelley Drye & Warren LLP

        101 Park Avenue

        New York, NY 10178

        Telephone: (212) 808-7540

        Facsimile: (212) 808-7897

        Attention: Michael A. Adelstein, Esq.

	Alto Opportunity Master Fund, SPC - Segregated Master Portfolio B	
        c/o Ayrton Capital LLC

        222 Broadway, 19th Floor

        New York, NY 10038

        Attention Waqas Khatri

        E-mail: wk@ayrtonllc.com

         
	$8,000,000	$7,040,000	N/A
	TOTAL	$17,000,000	$14,960,000

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