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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
——————
FORM 8-K
——————
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported):
July 31, 2023
——————
Duos Technologies Group, Inc.
(Exact name of registrant as specified in its
charter)
——————
Florida |
001-39227 |
65-0493217 |
(State or Other Jurisdiction |
(Commission |
(I.R.S. Employer |
of Incorporation) |
File Number) |
Identification No.) |
7660 Centurion Parkway, Suite 100, Jacksonville,
Florida 32256
(Address of Principal Executive Offices) (Zip
Code)
(904) 296-2807
(Registrant’s telephone number, including
area code)
Check the appropriate box below
if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
|
Trading Symbol(s) |
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Name of each exchange on which registered |
Common Stock (par value $0.001 per share) |
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DUOT |
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The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the
Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry
into a Material Definitive Agreement
On
August 1, 2023, Duos Technologies Group, Inc. (the “Company”) entered into a Securities Purchase Agreement (the
“Purchase Agreement”) with certain existing investors in the Company (the “Purchasers”). Pursuant to the
Purchase Agreement, on August 2, 2023 the Purchasers purchased an aggregate of 5,000 shares of a newly-authorized Series F
Convertible Preferred Stock (the “Series F Preferred Stock”), and the Company received aggregate proceeds of $5,000,000.
The Series F Preferred Stock was sold at $1,000 a share. The Purchase Agreement contains customary representations, warranties,
agreements and indemnification rights and obligations of the parties.
The
Purchase Agreement provides that the Company will not, with certain exceptions, sell or issue common stock or Common Stock
Equivalents (as defined in the Purchase Agreement) on or prior to December 31, 2023 that entitles any person to acquire shares of
common stock at an effective price per share less than the then conversion price of the Series F Preferred Stock without the consent
of the Purchasers.
In
connection with the Purchase Agreement, the Company also entered into a Registration Rights Agreement with the Purchasers.
Pursuant to the Registration Rights Agreement, the Company shall file with the SEC a registration statement covering the
resale by the Purchasers of the shares of common stock into which the shares of Series F Preferred Stock are convertible. Subject to
certain conditions, the Company must cause the registration statement to be declared effective by 90 days after closing (or in the
event of a full review by the SEC, by 120 days). The Registration Rights Agreement contains customary representations, warranties,
agreements and indemnification rights and obligations of the parties.
The
forgoing descriptions of the Purchase Agreement and the Registration Rights Agreement do not purport to be complete and are subject to,
and qualified in their entirety by, such documents, forms of which are attached as exhibits to this Current Report on Form 8-K and incorporated
herein by reference.
Item
3.02 Unregistered Sales of Equity Securities
The
information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02.
The
issuances of the shares of Series F Preferred Stock were not registered under the Securities Act of 1933, as amended (the
“Securities Act”), but qualified for an exemption under Section 4(a)(2) of the Securities Act and by Rule 506 of
Regulation D promulgated thereunder as transactions by an issuer not involving a public offering.
Item
3.03. Material Modification to Rights of Security Holders
The
information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.03.
On
July 31, 2023, the Company amended its Certificate of Incorporation by filing the Certificate of Designation of Preferences, Rights
and Limitations of Series F Convertible Preferred Stock (the “Certificate of Designation”) with the Secretary of State
of the State of Florida, which authorized the Series F Preferred Stock with such preferences, rights and limitations as set forth in
the Certificate of Designation.
General.
The Company’s Board of Directors has designated 5,000 shares as the Series F Preferred Stock. Each share of the
Series F Preferred Stock has a stated value of $1,000.
Voting
Rights. The holders of the Series F Preferred Stock, the holders of the common stock and the holders of any other class or
series of shares entitled to vote with the common stock shall vote together as one class on all matters submitted to a vote of
shareholders of the Company. Each share of Series F Preferred Stock has 161 votes (subject to adjustment); provided that in no
event may a holder of Series F Preferred Stock be entitled to vote a number of shares in excess of such holder’s Beneficial
Ownership Limitation (as defined in the Certificate of Designation and as described below).
Dividends.
There is no separate dividend payable on the Series F Preferred Stock but holders of Series F Preferred Stock shall be entitled
to receive dividends on shares of Series F Preferred Stock equal (on an as-if-converted to common stock basis, without giving effect to
the Beneficial Ownership Limitation) to and in the same form as dividends actually paid on shares of common stock.
Conversion.
Each share of Series F Preferred Stock is convertible, at any time and from time to time, at the option of the holder, into that
number of shares of common stock (subject to the Beneficial Ownership Limitation) determined by dividing the stated value of such share
($1,000) by the conversion price, which is $6.20 (subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations
and other similar transactions).
Beneficial
Ownership Limitation. The Company shall not effect any conversion of the Series F Preferred Stock, and a holder shall not have
the right to convert any portion of the Series F Preferred Stock, to the extent that after giving effect to the conversion sought by the
holder such holder (together with such holder’s Attribution Parties (as defined in the Certificate of Designation)) would beneficially
own more than 4.99% (or upon election by a holder, 19.99%) of the number of shares of common stock outstanding immediately after giving
effect to the issuance of shares of common stock issuable upon such conversion. The Purchasers have elected to have the 19.99% Beneficial
Ownership Limitation be applicable to their shares.
Liquidation
Preference. Upon any liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, the holders of
Series F Preferred Stock shall be entitled to participate on an as-converted-to-common stock basis (without giving effect to the Beneficial
Ownership Limitation) with holders of the common stock in any distribution of assets of the Company to holders of the common stock.
The
foregoing description of the Certificate of Designation does not purport to be complete and is subject to, and qualified in its entirety
by, the Certificate of Designation, a copy of which is attached as an exhibit to this Current Report on Form 8-K and is incorporated herein
by reference.
Item
5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
The
information set forth in Item 3.03 of this Current Report on Form 8-K is incorporated by reference into this Item 5.03.
Item 9.01
Financial Statements and Exhibits.
(d) Exhibits
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
|
DUOS TECHNOLOGIES GROUP, INC. |
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Dated: August 3, 2023 |
By: |
/s/ Andrew W. Murphy |
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Andrew W. Murphy
Chief Financial Officer |
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Exhibit 3.1
DUOS
TECHNOLOGIES GROUP, INC.
ARTICLES
OF AMENDMENT
DESIGNATING
PREFERENCES,
RIGHTS AND LIMITATIONS
OF
SERIES F CONVERTIBLE PREFERRED STOCK
PURSUANT
TO SECTIONS 607.1003 AND 607.1006 OF THE
FLORIDA BUSINESS CORPORATION ACT
Duos
Technologies Group, Inc., a corporation organized and existing under the Florida Business Corporation Act (the “Corporation”),
certifies that pursuant to the authority contained in Article Fifth, Section B of its Articles of Incorporation (the “Articles
of Incorporation”) and in accordance with the provisions of Sections 607.1003 and 607.1006 of the Florida Business Corporation
Act, the board of directors of the Corporation (the “Board of Directors”) by unanimous written consent dated July
28, 2023 duly approved and adopted the following resolution which resolution remains in full force and effect on the date hereof:
RESOLVED,
that pursuant to the authority vested in the Board of Directors by its Articles of Incorporation, the Board of Directors does hereby
designate, create, authorize and provide for the issue of Series F Convertible Preferred Stock, par value $0.001 per share (the “Series
F Preferred Stock”), consisting of Five Thousand (5,000) shares, having the voting powers, preferences and relative, participating,
optional and other special rights, and qualifications, limitations and restrictions thereof as follows:
TERMS
OF SERIES F PREFERRED STOCK
Section 1. Definitions. For the purposes hereof, the following
terms shall have the following meanings:
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 of the Securities Act.
“Alternate
Consideration” shall have the meaning set forth in Section 7(d).
“Beneficial
Ownership Limitation” shall have the meaning set forth in Section 6(d).
“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day
on which banking institutions in the State of Florida are authorized or required by law or other governmental action to close.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means the Corporation’s common stock, par value $0.001 per share, and stock of any other class of securities into
which such securities may hereafter be reclassified or changed.
“Common
Stock Equivalents” means any securities of the Corporation or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that
is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Conversion
Amount” means the sum of the Stated Value at issue.
“Conversion
Date” shall have the meaning set forth in Section 6(a).
“Conversion
Price” shall have the meaning set forth in Section 6(b).
“Conversion
Shares” means, collectively, the shares of Common Stock issuable upon conversion of the shares of Series F Preferred Stock
in accordance with the terms hereof.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
““Fundamental
Transaction” shall have the meaning set forth in Section 7(d).
“GAAP”
means United States generally accepted accounting principles.
“Holder”
shall have the meaning set forth in Section 2.
“Notice
of Conversion” shall have the meaning set forth in Section 6(a).
“Original
Issue Date” means the date of the first issuance of any shares of the Series F Preferred Stock regardless of the number
of transfers of any particular shares of Series F Preferred Stock and regardless of the number of certificates which may be issued to
evidence such Series F Preferred Stock.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Series
F Preferred Stock” shall have the meaning set forth in Section 2.
“Share
Delivery Date” shall have the meaning set forth in Section 6(c)(i).
“Stated
Value” shall have the meaning set forth in Section 2, as the same may be increased pursuant to Section 3.
“Subsidiary”
means any subsidiary of the Corporation and shall, where applicable, also include any direct or indirect subsidiary of the Corporation
formed or acquired after the date hereof.
“Successor
Entity” shall have the meaning set forth in Section 7(d).
“Trading
Day” means a day on which the principal Trading Market is open for business.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).
“Transfer
Agent” means Continental Stock Transfer & Trust, the current transfer agent of the Corporation, with a mailing address
of 1 State Street, 30th Floor, New York, NY 10004, and any successor transfer agent of the Corporation.
Section 2. Designation, Amount and Par Value. The series
of preferred stock shall be designated as its Series F Convertible Preferred Stock (the “Series F Preferred Stock”)
and the number of shares so designated shall be Five Thousand (5,000) (which shall not be subject to increase without the written consent
of the holders of a majority of the outstanding Series F Preferred Stock (each, a “Holder” and collectively, the “Holders”)).
Each share of Series F Preferred Stock shall have a par value of $0.001 per share and a stated value equal to one thousand dollars ($1,000.00)
(the “Stated Value”).
Section 3. Dividends. Except for stock dividends or distributions
for which adjustments are to be made pursuant to Section 7, Holders shall be entitled to receive, and the Corporation shall pay, dividends
on shares of Series F Preferred Stock equal (on an as-if-converted-to-Common-Stock basis (without giving effect to the Beneficial Ownership
Limitation)) to and in the same form as dividends actually paid on shares of the Common Stock when, as and if such dividends are paid
on shares of the Common Stock. Other than as set forth in the previous sentence, no other dividends shall be paid on shares of Series
F Preferred Stock, and the Corporation shall pay no dividends (other than dividends in the form of Common Stock) on shares of the Common
Stock unless it simultaneously complies with the previous sentence.
Section 4. Voting Rights. Except as otherwise expressly
provided herein or in the Articles of Incorporation, or as provided by the Florida Business Corporation Act, the holders of shares of
Series F Preferred Stock, the holders of shares of Common Stock and the holders of any other class or series of shares entitled to vote
with the Common Stock shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation. In any
such vote, each share of Series F Preferred Stock shall entitle the holder thereof to cast the number of votes equal to the number of
votes determined by dividing the Stated Value of such share of Series F Preferred Stock by $6.20 (such dollar amount being subject to
adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock
that occur after the Original Issue Date), provided, however, that in no event will a holder of shares of Series F Preferred
Stock be entitled to vote a number of shares in excess of such holder’s Beneficial Ownership Limitation. However, as long as any
shares of Series F Preferred Stock are outstanding, the Corporation shall not, without the affirmative vote of the Holders of a majority
of the then outstanding shares of the Series F Preferred Stock, (a) alter or change adversely the powers, preferences or rights given
to the Series F Preferred Stock or alter or amend this Certificate of Designation, (b) amend its articles of incorporation or other charter
documents in any manner that adversely affects any rights of the Holders, (c) increase the number of authorized shares of Series F Preferred
Stock, or (d) enter into any agreement with respect to any of the foregoing.
Section 5. Liquidation. Upon any liquidation, dissolution
or winding-up of the Corporation, whether voluntary or involuntary (a “Liquidation”), the Holders shall be entitled
to participate on an as-converted-to-Common Stock basis (without giving effect to the Beneficial Ownership Limitation) with holders of
the Common Stock in any distribution of assets of the Corporation to the holders of the Common Stock.
Section 6. Conversion.
a)
Conversions at Option of Holder. Each share of Series F Preferred Stock shall be convertible, at any time and from time to time
from and after the Original Issue Date at the option of the Holder thereof, into that number of shares of Common Stock (subject to the
limitations set forth in Section 6(d)) determined by dividing the Stated Value of such share of Series F Preferred Stock by the Conversion
Price then in effect. Holders shall effect conversions by providing the Corporation with the form of conversion notice attached hereto
as Annex A (a “Notice of Conversion”). Each Notice of Conversion shall specify the number of shares of Series
F Preferred Stock to be converted, the number of shares of Series F Preferred Stock owned prior to the conversion at issue, the number
of shares of Series F Preferred Stock owned subsequent to the conversion at issue and the date on which such conversion is to be effected,
which date may not be prior to the date the applicable Holder delivers by e-mail such Notice of Conversion to the Corporation (such date,
the “Conversion Date”). Upon delivery of the Notice of Conversion, the Holder shall be deemed for all corporate purposes
to have become the holder of record of the Conversion Shares with respect to which the shares of Series F Preferred Stock have been converted
irrespective of the date of delivery of the Conversion Shares. If no Conversion Date is specified in a Notice of Conversion, the Conversion
Date shall be the date that such Notice of Conversion to the Corporation is deemed delivered hereunder. No ink original Notice of Conversion
shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be
required. To effect conversion of shares of Series F Preferred Stock, a Holder shall not be required to surrender the certificate(s)
representing such shares of Series F Preferred Stock to the Corporation unless and until all shares of Series F Preferred Stock represented
thereby are so converted, in which case such Holder shall deliver such certificate(s) within five (5) Trading Days after delivery of
the Notice of Conversion relating to the conversion of the last shares of Series F Preferred Stock. The calculations and entries set
forth in the Notice of Conversion shall control in the absence of manifest or mathematical error. Shares of Series F Preferred Stock
converted into Common Stock or redeemed in accordance with the terms hereof shall be canceled and shall not be reissued.
b)
Conversion Price. The conversion price for the Series F Preferred Stock shall equal $6.20, subject to adjustment herein (the “Conversion
Price”).
c)
Mechanics of Conversion.
i.
Delivery of Conversion Shares Upon Conversion. Promptly after each Conversion Date, but in any case within the earlier of (i)
two (2) Trading Days and (ii) the Standard Settlement Period, thereof (the “Share Delivery Date”), the Corporation
shall deliver, or cause to be delivered, to the converting Holder the number of Conversion Shares being acquired upon the conversion
of the Series F Preferred Stock and a wire transfer of immediately available funds in the amount of accrued and unpaid dividends, if
any. Conversion Shares issuable hereunder shall be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s
or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”)
if the Corporation is then a participant in such system and either (A) there is an effective registration statement permitting the issuance
of the Conversion Shares to or resale of the Conversion Shares by the Holder or (B) the Conversion Shares are eligible for resale by
the Holder without volume or manner-of-sale limitations pursuant to Rule 144, and otherwise by physical delivery of a certificate,
registered in the Corporation’s share register in the name of the Holder or its designee, for the number of Conversion Shares to
which the Holder is entitled pursuant to such conversion to the address specified by the Holder in the Notice of Conversion. The Corporation
shall deliver (or cause to be delivered) to the converting Holder (A) a certificate or certificates for the number of shares of Common
Stock issuable upon conversion, and (B) if less than the number of shares of Series F Preferred Stock evidenced by the surrendered certificate
or certificates are being converted, a new certificate or certificates, of like tenor, for the number of shares evidenced by any surrendered
Series F Preferred Stock certificate or certificates (if applicable) less the number of shares converted. The Corporation agrees to maintain
a transfer agent that is a participant in the FAST program so long as any shares of Series F Preferred Stock remain outstanding. As used
herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days,
on the Corporation’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Notice
of Conversion.
ii.
Failure to Deliver Conversion Shares. If, in the case of any Notice of Conversion, such Conversion Shares are not delivered to
or as directed by the applicable Holder by the Share Delivery Date, in addition to any other rights herein, the Holder shall be entitled
to elect by written notice to the Corporation at any time on or before its receipt of such Conversion Shares, to rescind such Conversion,
in which event the Corporation shall promptly return to the Holder any original Series F Preferred Stock certificate delivered to the
Corporation and the Holder shall promptly return to the Corporation the Conversion Shares issued to such Holder pursuant to the rescinded
Notice of Conversion.
iii.
Obligation Absolute; Partial Liquidated Damages. The Corporation’s obligation to issue and deliver the Conversion Shares
upon conversion of Series F Preferred Stock in accordance with the terms hereof are absolute and unconditional, irrespective of any action
or inaction by a Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment
against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach
or alleged breach by such Holder or any other Person of any obligation to the Corporation or any violation or alleged violation of law
by such Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Corporation
to such Holder in connection with the issuance of such Conversion Shares; provided, however, that such delivery shall not
operate as a waiver by the Corporation of any such action that the Corporation may have against such Holder. In the event a Holder shall
elect to convert any or all of the Stated Value of its Series F Preferred Stock, the Corporation may not refuse conversion based on any
claim that such Holder or any one associated or affiliated with such Holder has been engaged in any violation of law, agreement or for
any other reason, unless an injunction from a court, on notice to Holder, restraining and/or enjoining conversion of all or part of the
Series F Preferred Stock of such Holder shall have been sought and obtained. In the absence of such injunction, the Corporation shall
issue Conversion Shares and, if applicable, cash, upon a properly noticed conversion. Nothing herein shall limit a Holder’s right
to pursue actual damages for the Corporation’s failure to deliver Conversion Shares within the period specified herein and such
Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity including a decree of specific performance
and/or injunctive relief. The exercise of any such rights shall not prohibit a Holder from seeking to enforce damages pursuant to any
other Section hereof or under applicable law.
iv.
Reservation of Shares Issuable Upon Conversion. The Corporation covenants that it will at all times reserve and keep available
out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of the Series F Preferred
Stock as herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder
(and the other holders of the Series F Preferred Stock), not less than such aggregate number of shares of the Common Stock as shall be
issuable (taking into account the adjustments and restrictions of Section 7) upon the conversion of the then outstanding shares of Series
F Preferred Stock. The Corporation covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized,
validly issued, fully paid and nonassessable.
v.
Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of the Series
F Preferred Stock. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Corporation
shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied
by the Conversion Price or round to the next whole share, with 0.5 shares being rounded up to one whole share. Subject to the foregoing,
fractional shares of Series F Preferred Stock may be issued and / or converted hereunder.
vi.
Transfer Taxes and Expenses. The issuance of Conversion Shares on conversion of this Series F Preferred Stock shall be made without
charge to any Holder for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such Conversion
Shares, provided that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in
the issuance and delivery of any such Conversion Shares upon conversion in a name other than that of the Holders of such shares of Series
F Preferred Stock and the Corporation shall not be required to issue or deliver such Conversion Shares unless or until the Person or
Persons requesting the issuance thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction
of the Corporation that such tax has been paid. The Corporation shall pay all Transfer Agent fees required for same-day processing of
any Notice of Conversion and all fees to the Depository Trust Company (or another established clearing corporation preforming similar
functions) required for same-day electronic delivery of the Conversion Shares.
d)
Beneficial Ownership Limitation. The Corporation shall not effect any conversion of the Series F Preferred Stock, and a Holder
shall not have the right to convert any portion of the Series F Preferred Stock, to the extent that, after giving effect to the conversion
set forth on the applicable Notice of Conversion, such Holder (together with such Holder’s Affiliates, and any Persons acting as
a group together with such Holder or any of such Holder’s Affiliates (such Persons, “Attribution Parties”))
would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by such Holder and its Affiliates and Attribution Parties shall include the number
of shares of Common Stock issuable upon conversion of the Series F Preferred Stock with respect to which such determination is being
made, but shall exclude the number of shares of Common Stock which are issuable upon (i) conversion of the remaining, unconverted Stated
Value of the Series F Preferred Stock beneficially owned by such Holder or any of its Affiliates or Attribution Parties and (ii) exercise
or conversion of the unexercised or unconverted portion of any other securities of the Corporation subject to a limitation on conversion
or exercise analogous to the limitation contained herein (including, without limitation, the Series F Preferred Stock) beneficially owned
by such Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section
6(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder. To the extent that the limitation contained in this Section 6(d) applies, the determination of whether the Series F Preferred
Stock is convertible (in relation to other securities owned by such Holder together with any Affiliates and Attribution Parties) and
of how many shares of Series F Preferred Stock are convertible shall be in the sole discretion of such Holder, and the submission of
a Notice of Conversion shall be deemed to be such Holder’s determination of whether the shares of Series F Preferred Stock may
be converted (in relation to other securities owned by such Holder together with any Affiliates and Attribution Parties) and how many
shares of the Series F Preferred Stock are convertible, in each case subject to the Beneficial Ownership Limitation. To ensure compliance
with this restriction, each Holder will be deemed to represent to the Corporation each time it delivers a Notice of Conversion that such
Notice of Conversion has not violated the restrictions set forth in this paragraph and the Corporation shall have no obligation to verify
or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined
in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section
6(d), in determining the number of outstanding shares of Common Stock, a Holder may rely on the number of outstanding shares of Common
Stock as stated in the most recent of the following: (i) the Corporation’s most recent periodic or annual report filed with the
Commission, as the case may be, (ii) a more recent public announcement by the Corporation or (iii) a more recent written notice by the
Corporation or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of
a Holder (which may be via email), the Corporation shall, within two Trading Days, confirm orally and in writing to such Holder the number
of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Corporation, including the Series F Preferred Stock, by such Holder or its
Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial
Ownership Limitation” shall initially be 4.99% (or upon the election by a Holder prior to the original issuance by the Corporation
of any shares of Series F Preferred Stock to such Holder, 19.99%) of the number of shares of the Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock issuable upon conversion of Series F Preferred Stock held by the applicable
Holder. A Holder, upon notice to the Corporation, may increase or decrease the Beneficial Ownership Limitation provisions of this Section
6(d) applicable to its Series F Preferred Stock provided that the Beneficial Ownership Limitation in no event exceeds 19.99% of the number
of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of
this Series F Preferred Stock held by the Holder and the provisions of this Section 6(d) shall continue to apply. Any such increase in
the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Corporation and shall
only apply to such Holder and no other Holder. The provisions of this paragraph shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 6(d) to correct this paragraph (or any portion hereof) which may be defective
or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable
to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of Series F
Preferred Stock.
Section 7. Certain Adjustments.
a)
Stock Dividends and Stock Splits. If the Corporation, at any time while this Series F Preferred Stock is outstanding: (i) pays
a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any
other Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Corporation
upon conversion of, or payment of a dividend on, this Series F Preferred Stock), (ii) subdivides outstanding shares of Common Stock into
a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller
number of shares, or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the
Corporation, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common
Stock (excluding any treasury shares of the Corporation) outstanding immediately before such event, and of which the denominator shall
be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section 7(a) shall
become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a subdivision, combination or reclassification.
b)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 7(a) above, if at any time the Corporation grants,
issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record
holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire,
upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had
held the number of shares of Common Stock acquirable upon complete conversion of such Holder’s Series F Preferred Stock (without
regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the
date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as
of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided,
however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding
the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial
ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall
be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial
Ownership Limitation).
c)
Pro Rata Distributions. During such time as this Series F Preferred Stock is outstanding, if the Corporation declares or makes
any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return
of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way
of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Series F Preferred Stock, then, in each such case, the Holder shall be entitled to participate
in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of
Common Stock acquirable upon complete conversion of this Series F Preferred Stock (without regard to any limitations on conversion hereof,
including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution,
or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation
in such Distribution (provided, however, to the extent that the Holder’s right to participate in any such Distribution
would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such
Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent)
and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto
would not result in the Holder exceeding the Beneficial Ownership Limitation).
d)
Fundamental Transaction. If, at any time while this Series F Preferred Stock is outstanding, (i) the Corporation, directly or
indirectly, in one or more related transactions effects any merger or consolidation of the Corporation with or into another Person, (ii)
the Corporation, directly or indirectly, effects any sale, lease, exclusive license, assignment, transfer, conveyance or other disposition
of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer,
tender offer or exchange offer (whether by the Corporation or another Person) is completed pursuant to which holders of Common Stock
are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of
50% or more of the outstanding Common Stock, (iv) the Corporation, directly or indirectly, in one or more related transactions effects
any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common
Stock is effectively converted into or exchanged for other securities, cash or property, or (v) the Corporation, directly or indirectly,
in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires
more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons
making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or
other business combination) (each a “Fundamental Transaction”), then, upon any subsequent conversion of this Series
F Preferred Stock, the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion
immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation in Section 6(d) on the conversion
of this Series F Preferred Stock), the number of shares of Common Stock of the successor or acquiring corporation or of the Corporation,
if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as
a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Series F Preferred Stock
is convertible immediately prior to such Fundamental Transaction (without regard to any limitation in Section 6(d) on the conversion
of this Series F Preferred Stock). For purposes of any such conversion, the determination of the Conversion Price shall be appropriately
adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of
Common Stock in such Fundamental Transaction, and the Corporation shall apportion the Conversion Price among the Alternate Consideration
in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common
Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall
be given the same choice as to the Alternate Consideration it receives upon any conversion of this Series F Preferred Stock following
such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Corporation or surviving
entity in such Fundamental Transaction shall file a new Certificate of Designation with the same terms and conditions and issue to the
Holders new preferred stock consistent with the foregoing provisions and evidencing the Holders’ right to convert such preferred
stock into Alternate Consideration. The Corporation shall cause any successor entity in a Fundamental Transaction in which the Corporation
is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Corporation under
this Certificate of Designation in accordance with the provisions of this Section 7(d) pursuant to written agreements in form and substance
reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and
shall, at the option of the holder of this Series F Preferred Stock, deliver to the Holder in exchange for this Series F Preferred Stock
a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Series F Preferred
Stock which is convertible for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent
to the shares of Common Stock acquirable and receivable upon conversion of this Series F Preferred Stock (without regard to any limitations
on the conversion of this Series F Preferred Stock) prior to such Fundamental Transaction, and with a conversion price which applies
the conversion price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock
pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such
conversion price being for the purpose of protecting the economic value of this Series F Preferred Stock immediately prior to the consummation
of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any
such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such
Fundamental Transaction, the provisions of this Certificate of Designation referring to the “Corporation” shall refer instead
to the Successor Entity), and may exercise every right and power of the Corporation and shall assume all of the obligations of the Corporation
under this Certificate of Designation with the same effect as if such Successor Entity had been named as the Corporation herein.
e)
Calculations. All calculations under this Section 7 shall be made to the nearest cent or the nearest 1/100th of a share, as the
case may be. For purposes of this Section 7, the number of shares of Common Stock deemed to be issued and outstanding as of a given date
shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Corporation) issued and outstanding.
f)
Notice to the Holders.
i.
Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 7, the Corporation
shall promptly deliver to each Holder by email or nationally recognized overnight courier service a notice setting forth the Conversion
Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.
ii.
Notice to Allow Conversion by Holder. If (A) the Corporation shall declare a dividend (or any other distribution in whatever form)
on the Common Stock, (B) the Corporation shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C)
the Corporation shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any
shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Corporation shall be required in connection
with any reclassification of the Common Stock, any consolidation or merger to which the Corporation is a party, any sale or transfer
of all or substantially all of the assets of the Corporation, or any compulsory share exchange whereby the Common Stock is converted
into other securities, cash or property or (E) the Corporation shall authorize the voluntary or involuntary dissolution, liquidation
or winding up of the affairs of the Corporation, then, in each case, the Corporation shall cause to be filed at each office or agency
maintained for the purpose of conversion of this Series F Preferred Stock, and shall cause to be delivered by email or nationally recognized
overnight courier service to each Holder at its last email address or address as it shall appear upon the stock books of the Corporation,
at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date
on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not
to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption,
rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share
exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record
shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in
the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that
any notice provided hereunder constitutes, or contains, material, non-public information regarding the Corporation or any of the Subsidiaries,
the Corporation shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall
remain entitled to convert the Conversion Amount of this Series F Preferred Stock (or any part hereof) during the 20-day period commencing
on the date of such notice through the effective date of the event triggering such notice except as may otherwise be expressly set forth
herein.
Section 8. Miscellaneous.
a)
Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without
limitation, any Notice of Conversion, shall be in writing and delivered personally, by e-mail or sent by a nationally recognized overnight
courier service, addressed to the Corporation at 7660 Centurion Parkway, Suite 100, Jacksonville, Florida 32256, Attention: Chief Financial
Officer, email address: awm@duostech.com, or such other e-mail address or address as the Corporation may specify for such purposes by
notice to the Holders delivered in accordance with this Section 8. Any and all notices or other communications or deliveries to be provided
by the Corporation hereunder shall be in writing and delivered personally, by e-mail or sent by a nationally recognized overnight courier
service addressed to each Holder at the address of such Holder appearing on the books of the Corporation, or if no such address appears
on the books of the Corporation, at the principal place of business of such Holder. Any notice or other communication or deliveries hereunder
shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via
e-mail at the e-mail address set forth in this Section prior to 5:30 p.m. (New York City time) on a Trading Day, (ii) the next Trading
Day after the date of transmission, if such notice or communication is delivered via e-mail at the e-mail address set forth in this Section
on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following
the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom
such notice is required to be given. To the extent that any notice provided pursuant to this Certificate of Designation constitutes,
or contains, material, non-public information regarding the Corporation or any Subsidiaries, the Corporation shall simultaneously file
such notice with the Commission pursuant to a Current Report on Form 8-K.
b)
Absolute Obligation. Except as expressly provided herein, no provision of this Certificate of Designation shall alter or impair
the obligation of the Corporation, which is absolute and unconditional, to pay liquidated damages and accrued dividends, as applicable,
on the shares of Series F Preferred Stock at the time, place, and rate, and in the coin or currency, herein prescribed.
c)
Lost or Mutilated Series F Preferred Stock Certificate. If a Holder’s Series F Preferred Stock certificate shall be mutilated,
lost, stolen or destroyed, the Corporation shall execute and deliver, or cause to be executed and delivered, in exchange and substitution
for and upon cancellation of a mutilated certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a
new certificate for the shares of Series F Preferred Stock so mutilated, lost, stolen or destroyed, but only upon receipt of evidence
of such loss, theft or destruction of such certificate, and of the ownership hereof reasonably satisfactory to the Corporation with the
actual third-party costs of the replacement of such certificate to be borne by the Holder (including customary indemnity).
d)
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Certificate of Designation
shall be governed by and construed and enforced in accordance with the internal laws of the State of Florida, without regard to the principles
of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the
transactions contemplated by this Certificate of Designation (whether brought against a party hereto or its respective Affiliates, directors,
officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough
of Manhattan (the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of
the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is
not personally subject to the jurisdiction of the New York Courts, or the New York Courts are an improper or inconvenient venue for such
proceeding. 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 via registered or certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Certificate of Designation and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process
in any other manner permitted by applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Certificate of Designation or the
transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of this Certificate of
Designation, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorneys’ fees
and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.
e)
Waiver. Any waiver by the Corporation or a Holder of a breach of any provision of this Certificate of Designation shall not operate
as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Certificate of
Designation or a waiver by any other Holders. The failure of the Corporation or a Holder to insist upon strict adherence to any term
of this Certificate of Designation on one or more occasions shall not be considered a waiver or deprive that party (or any other Holder)
of the right thereafter to insist upon strict adherence to that term or any other term of this Certificate of Designation on any other
occasion. Any waiver by the Corporation or a Holder must be in writing.
f)
Severability. If any provision of this Certificate of Designation is invalid, illegal or unenforceable, the balance of this Certificate
of Designation shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain
applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder
violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the
maximum rate of interest permitted under applicable law.
g)
Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day.
h)
Headings. The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designation
and shall not be deemed to limit or affect any of the provisions hereof.
i)
Status of Converted or Redeemed Series F Preferred Stock. If any shares of Series F Preferred Stock shall be converted, redeemed
or reacquired by the Corporation, such shares shall resume the status of authorized but unissued shares of preferred stock and shall
no longer be designated as Series F Convertible Preferred Stock.
*********************
IN
WITNESS WHEREOF, the Corporation has caused this certificate to be duly executed this 31st day of July, 2023.
|
Duos
Technologies Group, Inc.
By:
/s/ Charles P. Ferry
Name:
Charles P. Ferry
Title:
Chief Executive Officer |
ANNEX
A
NOTICE
OF CONVERSION
(TO
BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO
CONVERT SHARES OF SERIES F PREFERRED STOCK)
The
undersigned hereby elects to convert the number of shares of Series F Convertible Preferred Stock indicated below into shares of common
stock, par value $0.001 per share (the “Common Stock”), of Duos Technologies Group, Inc., a Florida corporation (the
“Corporation”), according to the conditions hereof, as of the date written below. If shares of Common Stock are to
be issued in the name of a Person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto.
No fee will be charged to the Holders for any conversion, except for any such transfer taxes.
Conversion
calculations:
Date
to Effect Conversion: _____________________________________________
Number
of shares of Series F Preferred Stock owned prior to Conversion: _____________
Number
of shares of Series F Preferred Stock to be Converted: ______________________
Stated
Value of shares of Series F Preferred Stock to be Converted: __________________
Number
of shares of Common Stock to be Issued: ___________________________
Applicable
Conversion Price: ___________________________________________
Number
of shares of Series F Preferred Stock subsequent to Conversion: ______________
Address
for Delivery: ______________________
Or
DWAC
Instructions:
Broker
no: _________
Account
no: ___________
|
[HOLDER]
By:
__________________________________________
Name:
Title: |
Exhibit 10.1
FORM
OF
SECURITIES PURCHASE AGREEMENT
This
Securities Purchase Agreement (this “Agreement”) is dated as of August 1, 2023, between Duos Technologies Group,
Inc., a Florida corporation (the “Company”), and each purchaser identified on the signature pages hereto (each,
including its successors and assigns, a “Purchaser” and collectively, the
“Purchasers”).
WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended
(the “Securities Act”), and Rule 506 promulgated thereunder, the Company desires to issue and sell to each Purchaser,
and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described
in this Agreement.
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:
ARTICLE
I.
DEFINITIONS
1.1
Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following
terms have the meanings set forth in this Section 1.1:
“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.5.
“Action”
shall have the meaning ascribed to such term in Section 3.1(j).
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“BHCA”
shall have the meaning ascribed to such term in Section 3.1(mm).
“Board
of Directors” means the board of directors of the Company.
“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day
on which banking institutions in the State of Florida are authorized or required by law or other governmental action to close; provided,
however, for clarification, banking institutions shall not be deemed to be authorized or required by law or other governmental
actions to close due to “stay at home,” “shelter-in-place,” “non-essential employee” or 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 system (including for wire transfers) of banks in the State of Florida generally are open for use by customers
on such day.
“Closing”
means the closing of the purchase and sale of the Shares pursuant to Section 2.1.
“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties
thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s
obligations to deliver the Shares, in each case, have been satisfied or waived.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means the common stock of the Company, par value $0.001 per share, and any other class of securities into which such
securities may hereafter be reclassified or changed.
“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is
at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Company
Counsel” means Shutts & Bowen LLP, 200 S. Biscayne Blvd, Suite 4100, Miami, Florida 33131.
“Conversion
Shares” means the shares of Common Stock issuable upon conversion of the Preferred Stock.
“Disclosure
Schedules” shall have the meaning ascribed to such term in Section 3.1.
“Disqualification
Event” shall have the meaning ascribed to such term in Section 3.1(oo).
“Effective
Date” means the earliest of the date that (a) the initial Registration Statement has been declared effective by the Commission,
(b) all of the Conversion Shares have been sold pursuant to Rule 144 or may be sold pursuant to Rule 144 without the requirement for
the Company to be in compliance with the current public information required under Rule 144 and without volume or manner-of-sale restrictions
or (c) following the one-year anniversary of the Closing Date provided that a holder of Conversion Shares is not an Affiliate of the
Company, all of the Conversion Shares may be sold pursuant to an exemption from registration under Section 4(1) of the Securities Act
without volume or manner-of-sale restrictions and Company Counsel has delivered to the Transfer Agent for the benefit of such holders
(and, if required by a holder, to such holder or such holder’s custodian or prime broker) a standing written unqualified opinion
that resales may then be made by such holders of the Conversion Shares pursuant to such exemption which opinion shall be in form and
substance reasonably acceptable to such holders.
“Environmental
Laws” shall have the meaning ascribed to such term in Section 3.1(m).
“Evaluation
Date” shall have the meaning ascribed to such term in Section 3.1(s).
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.
“GAAP”
shall have the meaning ascribed to such term in Section 3.1(h).
“Indebtedness”
shall have the meaning ascribed to such term in Section 3.1(bb).
“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(p).
“Legend
Removal Date” shall have the meaning ascribed to such term in Section 4.1(c).
“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Material
Adverse Effect” shall have the meaning ascribed to such term in Section 3.1(b).
“Material
Permits” shall have the meaning ascribed to such term in Section 3.1(m).
“Per
Share Purchase Price” equals $1,000.00 per share of Preferred Stock.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Preferred
Stock” means the preferred stock of the Company, par value $0.001 per share, designated as Series F Preferred Stock which shall
have the rights, preferences, restrictions and other matters relating to a series of preferred stock as set forth in the Certificate
of Designation of Preferences, Rights and Limitations attached as Exhibit A hereto (the “Certificate of Designation”).
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.
“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.8.
“Registration
Rights Agreement” means the Registration Rights Agreement, dated as of the date hereof, among the Company and the Purchasers,
in the form of Exhibit B attached hereto.
“Registration
Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and covering
the resale by the Purchasers of the Conversion Shares.
“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).
“Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect
as such Rule.
“Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect
as such Rule.
“SEC
Reports” shall have the meaning ascribed to such term in Section 3.1(h).
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Shares”
means the shares of Preferred Stock issuable at Closing to each Purchaser pursuant to this Agreement.
“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act.
“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for the Shares purchased hereunder as specified below
such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,” in United
States dollars and in immediately available funds.
“Subsidiary”
means any subsidiary of the Company as set forth on Schedule 3.1(a) and shall, where applicable, also include any direct or indirect
subsidiary of the Company formed or acquired after the date hereof.
“Trading
Day” means a day on which the principal Trading Market is open for trading.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).
“Transaction
Documents” means this Agreement, the Certificate of Designation, the Registration Rights Agreement, all exhibits and schedules
thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.
“Transfer
Agent” means Continental Stock Transfer & Trust, the current transfer agent of the Company, with a mailing address of 1
State Street, 30th Floor, New York, New York 10004, and any successor transfer agent of the Company.
ARTICLE
II.
PURCHASE AND SALE
2.1
Closing. On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with
the execution and delivery of this Agreement by the parties hereto, the Company shall sell, and the Purchasers, severally and not jointly,
shall purchase, up to an aggregate of $5,000,000 of Preferred Stock. Each Purchaser shall deliver to the Company, via wire transfer,
immediately available funds equal to such Purchaser’s Subscription Amount as set forth on the signature page hereto executed by
such Purchaser, and the Company shall deliver to each Purchaser its respective Shares, and the Company and each Purchaser shall deliver
the other items set forth in Section 2.2 deliverable at the Closing. Upon satisfaction of the covenants and conditions set forth in Sections
2.2 and 2.3, the Closing shall occur at the offices of Company Counsel or such other location as the parties shall mutually agree. All
share prices set forth herein are subject to automatic adjustment for any stock split or reverse stock split occurring prior to Closing.
2.2
Deliveries.
(a)
On or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:
(i)
this Agreement duly executed by the Company;
(ii)
a legal opinion of Company Counsel, substantially in the form of Exhibit C attached hereto;
(iii)
a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver, on an expedited basis,
a certificate evidencing a number of Shares purchased by such Purchaser, registered in the name of such Purchaser;
(iv)
a stamped filed copy of the Certificate of Designation, as filed with the Secretary of State of the State of Florida; and
(v)
the Registration Rights Agreement duly executed by the Company.
(b)
On or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company, the following:
(i)
this Agreement duly executed by such Purchaser;
(ii)
to the Company, such Purchaser’s Subscription Amount by wire transfer to the account specified in writing by the Company;
and
(iii)
the Registration Rights Agreement duly executed by such Purchaser.
2.3
Closing Conditions.
(a)
The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:
(i)
the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material
Adverse Effect, in all respects) on the Closing Date of the representations and warranties of the Purchasers contained herein (unless
as of a specific date therein in which case they shall be accurate as of such date);
(ii)
all obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have
been performed; and
(iii)
the delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.
(b)
The respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions
being met:
(i)
the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material
Adverse Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Company contained herein
(unless as of a specific date therein in which case they shall be accurate as of such date);
(ii)
all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been
performed;
(iii)
the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;
(iv)
there shall have been no Material Adverse Effect with respect to the Company since the date hereof; and
(v)
from the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or the Company’s
principal Trading Market, and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall
not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such
service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or Florida State authorities
nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such
magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of
such Purchaser, makes it impracticable or inadvisable to purchase the Shares at the Closing.
ARTICLE
III.
REPRESENTATIONS AND WARRANTIES
3.1
Representations and Warranties of the Company. Except as set forth in the Disclosure Schedules, which Disclosure Schedules
are delivered under separate cover from this Agreement, but shall be deemed a part hereof and shall qualify any representation or warranty
otherwise made herein to the extent of the disclosure contained in the corresponding section of the Disclosure Schedules to the extent
that it is reasonably apparent on its face that such disclosure is relevant to such section, the Company hereby makes the following representations
and warranties to each Purchaser as of the date hereof and as of the Closing Date (unless as of a specific date, in which case they shall
be accurate as of such date):
(a)
Subsidiaries. All of the direct and indirect Subsidiaries of the Company are set forth on Schedule 3.1(a). The Company
owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and
all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and
free of preemptive and similar rights to subscribe for or purchase securities.
(b)
Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized,
validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power
and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any
Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or
other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good
standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned
by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could
not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction
Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise)
of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in
any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material
Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking
to revoke, limit or curtail such power and authority or qualification.
(c)
Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate
the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder. The execution and delivery of each of this Agreement and the other Transaction Documents by the Company and
the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part
of the Company and no further action is required by the Company, the Board of Directors or the Company’s stockholders in connection
herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction Document to which
the Company is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with
the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance
with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law or public policy.
(d)
No Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents
to which it is a party, the issuance and sale of the Shares and the consummation by it of the transactions contemplated hereby and thereby
do not and will not: (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles
of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default (or an event that
with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or
assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or
without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary
debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the
Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of
any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the
Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of
the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably
be expected to result in a Material Adverse Effect.
(e)
Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of,
give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority
or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i)
the filings required pursuant to Section 4.4 of this Agreement, (ii) the filings with the Commission pursuant to the Registration Rights
Agreement, (iii) the notice and/or application(s) to each applicable Trading Market for the issuance and sale of the Shares and the listing
of the Conversion Shares for trading thereon in the time and manner required thereby, and (iv) the filing of Form D with the Commission
and such filings as are required to be made under applicable state securities laws (collectively, the “Required Approvals”).
(f)
Issuance of the Shares. The Shares are duly authorized and, when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company
other than restrictions on transfer provided for in the Transaction Documents. The Conversion Shares, when issued in accordance with
the Preferred Stock and the Transaction Documents will be validly issued, fully paid and non-assessable, free and clear of all Liens
imposed by the Company other than restrictions on transfer provided for in the Transaction Documents. The Company has reserved from its
duly authorized capital stock the maximum number of Conversion Shares issuable pursuant to this Agreement, the Certificate of Designation
and the Preferred Stock.
(g)
Capitalization. The capitalization of the Company is as set forth on Schedule 3.1(g), which Schedule 3.1(g)
shall also include the number of shares of Common Stock owned beneficially, and of record, by Affiliates of the Company as of the date
hereof. Except as set forth on Schedule 3.1(g), the Company has not issued any capital stock since its most recently filed periodic
report under the Exchange Act, other than pursuant to the exercise of employee stock options under the Company’s stock option plans,
the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plans and pursuant to the
conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report under the
Exchange Act. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate
in the transactions contemplated by the Transaction Documents. Except as a result of the purchase and sale of the Shares or as set forth
in Schedule 3.1(g), there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person
any right to subscribe for or acquire any shares of Common Stock or the capital stock of any Subsidiary, or contracts, commitments, understandings
or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock
Equivalents or capital stock of any Subsidiary. The issuance and sale of the Shares will not obligate the Company or any Subsidiary to
issue shares of Common Stock or other securities to any Person (other than the Purchasers) and will not result in a right of any holder
of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. There are no outstanding
securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the
Company or such Subsidiary. The Company does not have any stock appreciation rights or “phantom stock” plans or any similar
plan or agreement. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and
nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued
in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization
of any stockholder, the Board of Directors or others is required for the issuance and sale of the Shares. There are no stockholder agreements,
voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to
the knowledge of the Company, between or among any of the Company’s stockholders.
(h)
SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents
required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material)
(the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred
to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has
filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all
material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when
filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Company has
never been an issuer subject to Rule 144(i) under the Securities Act. The financial statements of the Company included in the SEC Reports
comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise
specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes
required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries
as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal, immaterial, year-end audit adjustments.
(i)
Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements
included within the SEC Reports, except as set forth on Schedule 3.1(i) or in the SEC Reports: (i) there has been no event, occurrence
or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred
any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business
consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to
GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has
not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements
to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director
or Affiliate, except pursuant to existing Company stock option or purchase plans. The Company does not have pending before the Commission
any request for confidential treatment of information. Except for the issuance of the Shares contemplated by this Agreement or as set
forth on Schedule 3.1(i), no event, liability, fact, circumstance, occurrence or development has occurred or exists, or is reasonably
expected to occur or exist, with respect to the Company or its Subsidiaries or their respective businesses, properties, operations, assets
or financial condition, that would be required to be disclosed by the Company under applicable securities laws at the time this representation
is made or deemed made that has not been publicly disclosed at least 1 Trading Day prior to the date that this representation is made.
(j)
Litigation. There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge
of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court,
arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an
“Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction
Documents or the Shares or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material
Adverse Effect. Neither the Company nor any Subsidiary, nor, to the knowledge of the Company, any director or officer thereof, is or
has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of
breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation
by the Commission involving the Company or any current or former director or officer of the Company. The Commission has not issued any
stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the
Exchange Act or the Securities Act.
(k)
Labor Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees
of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’
employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither
the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe
that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary
is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary
information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third
party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability
with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal, state, local
and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours,
except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse
Effect.
(l)
Compliance. Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred
that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under),
nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound
(whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree, or order of any court, arbitrator
or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental
authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational
health and safety, product quality and safety and employment and labor matters, except in each case as could not have or reasonably be
expected to result in a Material Adverse Effect.
(m)
Environmental Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws
relating to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface
or subsurface strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants,
or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters,
orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”);
(ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective
businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i),
(ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.
(n)
Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the
appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in
the SEC Reports, except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect
(“Material Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to
the revocation or modification of any Material Permit.
(o)
Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned
by them and good and marketable title in all personal property owned by them that is material to the business of the Company and the
Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and
do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens
for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and
the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company
and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are
in compliance.
(p)
Intellectual Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications,
trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual
property rights and similar rights as described in the SEC Reports as necessary or required for use in connection with their respective
businesses and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”).
None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual Property
Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the
date of this Agreement. Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements
included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate
or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect.
To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another
Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable security measures to protect
the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(q)
Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged,
including, but not limited to, directors and officers insurance coverage at least equal to the dollar amount specified on Schedule
3.1(q). Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business
without a significant increase in cost.
(r)
Transactions With Affiliates and Employees. None of the officers or directors of the Company or any Subsidiary and, to
the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with the
Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, providing
for the borrowing of money from or lending of money to or otherwise requiring payments to or from any officer, director or such employee
or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is
an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000 other than for: (i) payment of salary
or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee
benefits, including stock option agreements under any stock option plan of the Company.
(s)
Sarbanes-Oxley; Internal Accounting Controls. The Company and the Subsidiaries are in material compliance with any and
all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules
and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. The Company
and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions
are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted
only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company and the
Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company
and the Subsidiaries and designed such disclosure controls and procedures to ensure that information required to be disclosed by the
Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods
specified in the Commission’s rules and forms. The Company’s certifying officers have evaluated the effectiveness of the
disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently filed
periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently
filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls
and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal
control over financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially
affected, or is reasonably likely to materially affect, the internal control over financial reporting of the Company or its Subsidiaries.
(t)
Certain Fees. No brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiary
to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the
transactions contemplated by the Transaction Documents. The Purchasers shall have no obligation with respect to any fees or with respect
to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with
the transactions contemplated by the Transaction Documents.
(u)
Private Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2,
no registration under the Securities Act is required for the offer and sale of the Shares by the Company to the Purchasers as contemplated
hereby. The issuance and sale of the Shares hereunder do not contravene the rules and regulations of the Trading Market.
(v)
Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Shares,
will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
The Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration
under the Investment Company Act of 1940, as amended.
(w)
Registration Rights. Other than each of the Purchasers, no Person has any right to cause the Company to effect a registration
under the Securities Act of any securities of the Company or any Subsidiary.
(x)
Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange
Act, and the Company has taken no action designed to terminate, or which to its knowledge is likely to have the effect of terminating,
the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating
terminating such registration. Other than as disclosed in the SEC Reports, the Company has not, in the 12 months preceding the date hereof,
received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not
in compliance with the listing or maintenance requirements of such Trading Market. Other than as disclosed in the SEC Reports, the Company
is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance
requirements. The Common Stock is currently eligible for electronic transfer through the Depository Trust Company or another established
clearing corporation and the Company is current in payment of the fees to the Depository Trust Company (or such other established clearing
corporation) in connection with such electronic transfer.
(y)
Application of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in
order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights
agreement) or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents)
or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the
Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation as a result
of the Company’s issuance of the Shares and the Purchasers’ ownership of the Shares.
(z)
Disclosure. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction
Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their
agents or counsel with any information that it believes constitutes or might constitute material, non-public information. The Company
understands and confirms that the Purchasers will rely on the foregoing representation in effecting transactions in securities of the
Company. All of the disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company and its Subsidiaries,
their respective businesses and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, is true and
correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were made, not misleading. The press releases disseminated by
the Company during the 12 months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made and when made, not misleading. The Company acknowledges and agrees that no Purchaser makes
or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set
forth in Section 3.2 hereof.
(aa)
No Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section
3.2, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any
offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the
Shares to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which would require the registration
of any such securities under the Securities Act, or (ii) any applicable shareholder approval provisions of any Trading Market on which
any of the securities of the Company are listed or designated.
(bb)
Solvency. Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect
to the receipt by the Company of the proceeds from the sale of the Shares hereunder: (i) the fair saleable value of the Company’s
assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities
(including known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital
to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular
capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability
thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all
of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of
its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such
debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has
no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy
or reorganization laws of any jurisdiction within one year from the Closing Date. Schedule 3.1(bb) sets forth as of the date hereof
all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments.
Neither the Company nor any Subsidiary is in default with respect to any Indebtedness. For the purposes of this Agreement, “Indebtedness”
means (x) any liabilities for borrowed money or amounts owed in excess of $100,000 (other than trade accounts payable incurred in the
ordinary course of business); (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others,
whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties
by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z)
the present value of any lease payments in excess of $100,000 due under leases required to be capitalized in accordance with GAAP.
(cc)
Tax Status. Except as set forth on Schedule 3.1(cc) and for matters that would not, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all
United States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by
any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in
amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably
adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply.
There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the
Company or of any Subsidiary know of no basis for any such claim.
(dd)
No General Solicitation. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of
the Shares by any form of general solicitation or general advertising. Assuming the accuracy of the Purchasers’ representations
and warranties under this Agreement, the Company has offered the Shares for sale only to the Purchasers and certain other “accredited
investors” within the meaning of Rule 501 under the Securities Act.
(ee)
Foreign Corrupt Practices. Neither the Company nor any Subsidiary nor, to the knowledge of the Company or any Subsidiary,
any agent or other person acting on behalf of the Company or any Subsidiary, has: (i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful
payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate
funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf
of which the Company is aware) which is in violation of law or (iv) violated in any material respect any provision of FCPA.
(ff)
Accountants. The Company’s accounting firm is set forth on Schedule 3.1(ff) of the Disclosure Schedules. To
the knowledge and belief of the Company, such accounting firm: (i) is a registered public accounting firm as required by the Exchange
Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s Annual Report for
the fiscal year ended December 31, 2023.
(gg)
No Disagreements with Accountants and Lawyers. There are no 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.
(hh)
Acknowledgment Regarding Purchasers’ Purchase of Shares. To the Company’s knowledge, the Company acknowledges
and agrees that each of the Purchasers is acting solely in the capacity of an arm’s-length purchaser with respect to the Transaction
Documents and the transactions contemplated thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor
or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated
thereby and any advice given by any Purchaser or any of their respective representatives or agents in connection with the Transaction
Documents and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Shares. The Company
further represents to each Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents
has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.
(ii)
Acknowledgment Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary
notwithstanding (except for Sections 3.2(g) and 4.14 herein), it is understood and acknowledged by the Company that: (i) none of the
Purchasers has been asked by the Company to agree, nor has any Purchaser under this Agreement agreed, to desist from purchasing or selling,
long and/or short, securities of the Company, or “derivative” securities based on securities issued by the Company or to
hold the Shares for any specified term, (ii) past or future open market or other transactions by any Purchaser, specifically including,
without limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private placement
transactions, may negatively impact the market price of the Company’s publicly-traded securities, (iii) any Purchaser, and counter-parties
in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, may presently have a “short”
position in the Common Stock and (iv) each Purchaser shall not be deemed to have any affiliation with or control over any arm’s
length counter-party in any “derivative” transaction. The Company further understands and acknowledges that (y) one or more
Purchasers may engage in hedging activities at various times during the period that the Shares are outstanding, and (z) such hedging
activities (if any) could reduce the value of the existing stockholders’ equity interests in the Company at and after the time
that the hedging activities are being conducted. The Company acknowledges that such aforementioned hedging activities do not constitute
a breach of any of the Transaction Documents.
(jj)
Regulation M Compliance. Within the past 12 months, the Company has not, and to its knowledge no one acting on its behalf
has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of any of the Shares, (ii) sold, bid for, purchased, or paid any compensation
for soliciting purchases of, any of the Shares, or (iii) paid or agreed to pay to any Person any compensation for soliciting another
to purchase any other securities of the Company, other than compensation paid to the Placement Agent in connection with the placement
of the Series D Convertible Preferred Stock and any compensation payable to Northland Securities, Inc. in connection with the Series
E Convertible Preferred Stock.
(kk)
Office of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director,
officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Treasury Department.
(ll)
U.S. Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation
within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s
request.
(mm)
Bank Holding Company Act. Neither the Company nor any of its Subsidiaries or, to the knowledge of the Company, Affiliates
is subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”), and to regulation by the Board of Governors
of the Federal Reserve System (the “Federal Reserve”). Neither the Company nor any of its Subsidiaries or, to the
knowledge of the Company, 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, to the knowledge of the Company, 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.
(nn)
Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times
in compliance in all material respects with applicable financial record-keeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder
(collectively, the “Money Laundering Laws”), and no Action or Proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or,
to the knowledge of the Company or any Subsidiary, threatened.
(oo)
No Disqualification Events. With respect to the Shares to be offered and sold hereunder in reliance on Rule 506 under the
Securities Act, none of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of
the Company participating in the offering hereunder, any beneficial owner of 20% or more of the Company’s outstanding voting equity
securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act)
connected with the Company in any capacity at the time of sale (each, an “Issuer Covered Person” 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 Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2)
or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification
Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the
Purchasers a copy of any disclosures provided thereunder.
(pp)
Other Covered Persons. The Company is not aware of any person (other than any Issuer Covered Person) that has been or will
be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of any Shares.
(qq)
Notice of Disqualification Events. The Company will notify the Purchasers in writing, prior to the Closing Date of (i)
any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a Disqualification
Event relating to any Issuer Covered Person.
3.2
Representations and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents
and warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which
case they shall be accurate as of such date):
(a)
Organization; Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited
liability company or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents
and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance
by such Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate,
partnership, limited liability company or similar action, as applicable, on the part of such Purchaser. Each Transaction Document to
which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof
and thereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its
terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other
laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability
of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions
may be limited by applicable law or public policy.
(b)
Own Account. Such Purchaser understands that the Shares and Conversion Shares are “restricted securities” and
have not been registered under the Securities Act or any applicable state securities law and is acquiring the Shares and Conversion Shares
as principal for its own account and not with a view to or for distributing or reselling such Shares or Conversion Shares or any part
thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such
Shares or Conversion Shares in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement
or understandings with any other persons to distribute or regarding the distribution of such Shares or Conversion Shares in violation
of the Securities Act or any applicable state securities law (this representation and warranty not limiting such Purchaser’s right
to sell the Conversion Shares pursuant to the Registration Statement or otherwise in compliance with applicable federal and state securities
laws). Such Purchaser is acquiring the Shares and Conversion Shares hereunder in the ordinary course of its business.
(c)
Purchaser Status. At the time such Purchaser was offered the Shares, it was, and as of the date hereof it is, either: (i)
an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(5), (a)(7), (a)(8) or (a)(9) under the Securities
Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.
(d)
Experience of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication
and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment
in the Shares and Conversion Shares, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the
economic risk of an investment in the Shares and Conversion Shares and, at the present time, is able to afford a complete loss of such
investment.
(e)
General Solicitation. Such Purchaser is not purchasing the Shares or the Conversion Shares as a result of any advertisement,
article, notice or other communication regarding the Shares or the Conversion Shares published in any newspaper, magazine or similar
media or broadcast over television or radio or presented at any seminar or, to such Purchaser’s knowledge, any other general solicitation
or general advertisement.
(f)
Access to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents
(including all exhibits and schedules thereto) and the SEC Reports and has been afforded (i) the opportunity to ask such questions as
it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering
of the Shares and Conversion Shares and the merits and risks of investing in the Shares and Conversion Shares; (ii) access to information
about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable
it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire
without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment.
(g)
Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser
has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, executed
any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such
Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the
material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding the foregoing,
in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of
such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers
managing other portions of such Purchaser’s assets, the representation set forth above shall only apply with respect to the portion
of assets managed by the portfolio manager that made the investment decision to purchase the Shares covered by this Agreement. Other
than to other Persons party to this Agreement or to such Purchaser’s representatives, including, without limitation, its officers,
directors, partners, legal and other advisors, agents and Affiliates, such Purchaser has maintained the confidentiality of all disclosures
made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing,
for avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect
to the identification of the availability of, or securing of, available shares to borrow in order to effect Short Sales or similar transactions
in the future.
The
Company acknowledges and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such Purchaser’s
right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties
contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement
or the consummation of the transaction contemplated hereby.
ARTICLE
IV.
OTHER AGREEMENTS OF THE PARTIES
4.1
Transfer Restrictions.
(a)
The Shares and Conversion Shares may only be disposed of in compliance with state and federal securities laws. In connection with
any transfer of Shares or Conversion Shares other than pursuant to an effective registration statement or Rule 144, to the Company or
to an Affiliate of a Purchaser or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor
thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form
and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration
of such transferred Shares or Conversion Shares under the Securities Act. As a condition of transfer, any such transferee shall agree
in writing to be bound by the terms of this Agreement and the Registration Rights Agreement and shall have the rights and obligations
of a Purchaser under this Agreement and the Registration Rights Agreement.
(b)
The Purchasers agree to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Shares and Conversion
Shares in the following form:
THIS SECURITY
HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR
IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A
FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED
BY SUCH SECURITIES.
The
Company acknowledges and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered
broker-dealer or grant a security interest in some or all of the Shares or Conversion Shares to a financial institution that is an “accredited
investor” as defined in Rule 501(a) under the Securities Act and who agrees to be bound by the provisions of this Agreement and
the Registration Rights Agreement and, if required under the terms of such arrangement, such Purchaser may transfer pledged or secured
Shares or Conversion Shares to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company
and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no
notice shall be required of such pledge. At the appropriate Purchaser’s expense, the Company will execute and deliver such reasonable
documentation as a pledgee or secured party of Shares or Conversion Shares may reasonably request in connection with a pledge or transfer
of the Shares or Conversion Shares, including, if the Conversion Shares are subject to registration pursuant to the Registration Rights
Agreement, the preparation and filing of any required prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable
provision of the Securities Act to appropriately amend the list of Selling Stockholders (as defined in the Registration Rights Agreement)
thereunder.
(c)
Certificates evidencing the Shares or Conversion Shares shall not contain any legend (including the legend set forth in Section
4.1(b) hereof), (i) while a registration statement (including the Registration Statement) covering the resale of such security is effective
under the Securities Act, (ii) following any sale of such Shares or Conversion Shares pursuant to Rule 144, (iii) if such Shares are
eligible for sale under Rule 144, and the Company is then in compliance with the current public information required under Rule 144 or
if the Conversion Shares may be sold without the requirement for the Company to be in compliance with the current public information
required under Rule 144 as to such Shares or Conversion Shares and without volume or manner-of-sale restrictions, or (iv) if such legend
is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by
the staff of the Commission), the Company shall instruct its Transfer Agent to remove the legend from certificates evidencing the Shares
or Conversion Shares. The Company shall, at its expense, cause its counsel to issue a legal opinion to the Transfer Agent promptly after
the Effective Date if required by the Transfer Agent to effect the removal of the legend hereunder or if requested by a Purchaser and
shall instruct its Transfer Agent to remove the legend without requiring a medallion guarantee and provide such indemnity to its Transfer
Agent as the Transfer Agent may require to waive any medallion guarantee requirement. The Company agrees that following the Effective
Date or at such time as such legend is no longer required under this Section 4.1(c), it will, no later than the earlier of (i) two (2)
Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined below), in each case following
the delivery by a Purchaser to the Company or the Transfer Agent of a certificate representing Shares and Conversion Shares issued with
a restrictive legend (such earlier date, the “Legend Removal Date”), deliver or cause to be delivered to such Purchaser
a certificate representing such shares that is free from all restrictive and other legends. The Company may not make any notation on
its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section 4. The Company
shall cause certificates for Shares or Conversion Shares subject to legend removal hereunder to be transmitted by the Transfer Agent
to the Purchaser by crediting the account of the Purchaser’s prime broker with the Depository Trust Company System as directed
by such Purchaser. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in
a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of
delivery of a stock certificate for removal of legends.
(d)
Each Purchaser, severally and not jointly with the other Purchasers, agrees that such Purchaser may only sell any Shares or Conversion
Shares pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements,
or an exemption therefrom, and that if Shares or Conversion Shares are sold pursuant to a Registration Statement, they will be sold in
compliance with the plan of distribution set forth therein, and acknowledges that the removal of the restrictive legend from certificates
representing Shares or Conversion Shares as set forth in this Section 4.1 is predicated upon the Company’s reliance upon this understanding.
4.2
Furnishing of Information; Public Information. Until the time that (i) no Purchaser owns Shares or (ii) 24 months after
the date hereof, the Company covenants to maintain the registration of the Common Stock under Section 12(b) or 12(g) of the Exchange
Act and to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to
be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements
of the Exchange Act.
4.3
Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Shares in a manner that
would require the registration under the Securities Act of the sale of the Shares or that would be integrated with the offer or sale
of the Shares for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to
the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.
4.4
Securities Laws Disclosure; Publicity. The Company shall file a Current Report on Form 8-K disclosing the material terms
of the transactions contemplated hereby, including the Transaction Documents as exhibits thereto, with the Commission within the time
required by the Exchange Act. From and after the filing of such Form 8-K, the Company represents to the Purchasers that it shall have
publicly disclosed all material, non-public information delivered to any of the Purchasers by the Company or any of its Subsidiaries,
or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction
Documents. The Company and each Purchaser shall consult with each other in issuing any press releases with respect to the transactions
contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public
statement without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent
of each Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except
if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of
such public statement or communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser,
or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior
written consent of such Purchaser, except: (a) as required by federal securities law in connection with (i) any registration statement
contemplated by the Registration Rights Agreement and (ii) the filing of final Transaction Documents with the Commission and (b) to the
extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers with
prior notice of such disclosure permitted under this clause (b).
4.5
Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other
Person, that any Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by
the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving
Shares under the Transaction Documents or under any other agreement between the Company and the Purchasers.
4.6
Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated by the
Transaction Documents, which shall be disclosed pursuant to Section 4.4, the Company covenants and agrees that neither it, nor any other
Person acting on its behalf will provide any Purchaser or its agents or counsel with any information that constitutes, or the Company
reasonably believes constitutes, material non-public information, unless prior thereto such Purchaser shall have consented to the receipt
of such information and agreed with the Company to keep such information confidential. The Company understands and confirms that each
Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company. To the extent that the Company
delivers any material, non-public information to a Purchaser without such Purchaser’s consent, the Company hereby covenants and
agrees that such Purchaser shall not have any duty of confidentiality to the Company, any of its Subsidiaries, or any of their respective
officers, directors, agents, employees or Affiliates, or a duty to the Company, and of its Subsidiaries or any of their respective officers,
directors, agents, employees or Affiliates not to trade on the basis of, such material, non-public information, provided that the Purchaser
shall remain subject to applicable law. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains,
material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the
Commission pursuant to a Current Report on Form 8-K. The Company understands and confirms that each Purchaser shall be relying on the
foregoing covenant in effecting transactions in securities of the Company.
4.7
Use of Proceeds. Except as set forth on Schedule 4.7 attached hereto, the Company shall use the net proceeds from
the sale of the Shares hereunder for working capital purposes.
4.8
Indemnification of Purchasers. Subject to the provisions of this Section 4.8, the Company will indemnify and hold each
Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally
equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such
Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding
a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any
and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in
settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or
incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company
in this Agreement or in the other Transaction Documents or (b) any action instituted against the Purchaser Parties in any capacity, or
any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser Parties, with
respect to any of the transactions contemplated by the Transaction Documents (unless such action is based upon a breach of such Purchaser
Party’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser
Parties may have with any such stockholder or any violations by such Purchaser Parties of state or federal securities laws or any conduct
by such Purchaser Parties which constitutes fraud, gross negligence, willful misconduct or malfeasance). If any action shall be brought
against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly
notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably
acceptable to the Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel in any such action and participate
in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent
that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable
period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a
material conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the
Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will not be
liable to any Purchaser Party under this Agreement (y) for any settlement by such Purchaser Party effected without the Company’s
prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss,
claim, damage or liability is attributable to such Purchaser Party’s breach of any of the representations, warranties, covenants
or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents. The indemnification required by this
Section 4.8 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills
are received or are incurred. The indemnity agreements contained herein shall be in addition to any cause of action or similar right
of any Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant to law.
4.9
Reservation of Common Stock. As of the date hereof, the Company has reserved and the Company shall continue to reserve
and keep available at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling
the Company to issue Conversion Shares upon conversion of the Preferred Stock.
4.10
Listing of Common Stock. The Company hereby agrees to use best efforts to maintain the listing or quotation of the Common
Stock on the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list or quote
all of the Conversion Shares on such Trading Market and promptly secure the listing or quotation of all of the Conversion Shares on such
Trading Market. The Company further agrees, if the Company applies to have the Common Stock traded on any other Trading Market, it will
then include in such application all of the Conversion Shares, and will take such other action as is necessary to cause all of the Conversion
Shares to be listed or quoted on such other Trading Market as promptly as possible. The Company will then take all action reasonably
necessary to continue the listing or quotation and trading of its Common Stock on a Trading Market and will comply in all respects with
the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market. The Company shall maintain
the eligibility of the Common Stock for electronic transfer through the Depository Trust Company or another established clearing corporation,
including, without limitation, by timely payment of fees to the Depository Trust Company or such other established clearing corporation
in connection with such electronic transfer.
4.11
Equal Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered
or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement or any of the Transaction Documents
unless the same consideration is also offered to all of the parties to this Agreement or any of the Transaction Documents. For clarification
purposes, this provision constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser,
and is intended for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in
concert or as a group with respect to the purchase, disposition or voting of Shares or Conversion Shares or otherwise.
4.12
Certain Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants
that neither it, nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales,
including Short Sales, of any of the Company’s securities during the period commencing with the execution of this Agreement and
ending at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the Form 8-K as described
in Section 4.4. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions
contemplated by this Agreement are publicly disclosed by the Company pursuant to the Form 8-K as described in Section 4.4, such Purchaser
will maintain the confidentiality of the existence and terms of this transaction and the information included in the Transaction Documents
and the Disclosure Schedules. Notwithstanding the foregoing, and notwithstanding anything contained in this Agreement to the contrary,
the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will
not engage in effecting transactions in any securities of the Company after the time that the transactions contemplated by this Agreement
are first publicly announced pursuant to the Form 8-K as described in Section 4.4, (ii) no Purchaser shall be restricted or prohibited
from effecting any transactions in any securities of the Company in accordance with applicable securities laws from and after the time
that the transactions contemplated by this Agreement are first publicly announced pursuant to the Form 8-K as described in Section 4.4
and (iii) this Agreement shall impose no duty on any Purchaser of confidentiality or to not trade in the securities of the Company to
the Company or its Subsidiaries after the issuance of the Form 8-K as described in Section 4.4. Notwithstanding the foregoing, in the
case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s
assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other
portions of such Purchaser’s assets, the covenant set forth above shall only apply with respect to the portion of assets managed
by the portfolio manager that made the investment decision to purchase the Shares covered by this Agreement.
4.13
Form D; Blue Sky Filings. The Company shall timely file a Form D with respect to the Shares and Conversion Shares as required
under Regulation D and provide a copy thereof, promptly upon request of any Purchaser. The Company shall take such action as the Company
shall reasonably determine is necessary in order to obtain an exemption for, or to qualify the Shares for, sale to the Purchasers at
the Closing under applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence
of such actions promptly upon request of any Purchaser.
4.14
Acknowledgment of Dilution. The Company acknowledges that the issuance of the Shares may result in dilution of the outstanding
shares of Common Stock, which dilution may be substantial. The Company further acknowledges that its obligations under the Transaction
Documents, including, without limitation, its obligation to issue the Shares and Conversion Shares pursuant to the Transaction Documents,
are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of
any such dilution or any claim the Company may have against any Purchaser and regardless of the dilutive effect that such issuance may
have on the ownership of the other stockholders of the Company.
4.15
Subsequent Financing. From the date hereof until the date that is the twenty four (24) month anniversary of the Effective
Date, the Company shall use its commercially reasonable efforts to, prior to any issuance by the Company or any of its Subsidiaries of
Common Stock or Common Stock Equivalents for cash consideration, or a combination of units thereof (a “Subsequent Financing”),
provide each Purchaser with (x) written notice of the Subsequent Financing (including the contemplated terms and conditions of the Subsequent
Financing, the amount of proceeds intended to be raised thereunder and the Person or Persons through or with whom such Subsequent Financing
is proposed to be effected) and (y) the opportunity to consult reasonably with the Company with respect to the terms and conditions of
such Subsequent Financing.
4.16
Subsequent Equity Sales. Without the prior written consent of the Purchasers, the Company or any Subsidiary as applicable
shall not, on or prior to December 31, 2023, sell or issue Common Stock or Common Stock Equivalents (a "Subsequent Issuance"),
if such Subsequent Issuance entitles any Person to acquire shares of Common Stock at an effective price per share that is lower than
the then Conversion Price (as defined in the Preferred Stock) (such lower price, the "Base Conversion Price"). If the
Purchasers do consent to a Subsequent Issuance, the Company shall authorize a new series of its preferred stock, par value $0.001 per
share (the "New Preferred"), which shall contain the identical rights, preferences and terms as the Preferred Stock
except that the conversion price of the New Preferred shall be the Base Conversion Price. The Company shall thereupon issue to each Purchaser
(in exchange for such Purchaser's shares of Preferred Stock) a number of shares of New Preferred equal to the number of shares then held
by such Purchaser of the Preferred Stock. Any such exchange shall be pursuant to the terms of Section 3(a)(9) of the Securities Act.
Any shares of New Preferred, upon issuance to a Purchaser pursuant hereto, and any shares of Common Stock issuable upon conversion of
the New Preferred, upon conversion pursuant to the terms thereof, shall be duly authorized, validly issued, fully paid and nonassessable.
Any shares of Preferred Stock exchanged for shares of New Preferred shall be cancelled. This Section 4.16 shall not be applicable in
respect to an Exempt Issuance.
ARTICLE
V.
MISCELLANEOUS
5.1
Termination. This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only
and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties,
if the Closing has not been consummated on or before August 15, 2023; provided, however, that such termination will not affect the right
of any party to sue for any breach by any other party (or parties).
5.2
Fees and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the
fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident
to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees
(including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company), stamp
taxes and other taxes and duties levied in connection with the delivery of any Shares and Conversion Shares to the Purchasers.
5.3
Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding
of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written,
with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.
5.4
Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall
be in writing and shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication
is delivered via email at the address set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time)
on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via email at
the address set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City
time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices
and communications shall be as set forth on the signature pages attached hereto. To the extent that any notice provided pursuant to any
Transaction Document constitutes, or contains material, non-public information regarding the Company or any of the Subsidiaries, the
Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.
5.5
Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written
instrument signed, in the case of an amendment, by the Company and the Purchasers holding at least 51% in interest of the Shares then
outstanding or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought; provided, that
if any amendment, modification or waiver disproportionately and adversely impacts a Purchaser (or group of Purchasers), the consent of
such disproportionately impacted Purchaser (or group of Purchasers) shall also be required. No waiver of any default with respect to
any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any
subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party
to exercise any right hereunder in any manner impair the exercise of any such right.
5.6
Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed
to limit or affect any of the provisions hereof.
5.7
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors
and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent
of each Purchaser (other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom
such Purchaser assigns or transfers any Shares or Conversion Shares, provided that such transferee agrees in writing to be bound, with
respect to the transferred Shares or Conversion Shares, by the provisions of the Transaction Documents that apply to the “Purchasers.”
5.8
No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors
and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise
set forth in Section 4.8.
5.9
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents
shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement and
defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto
or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively
in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in the City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement
of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Action or Proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, or that such Action or Proceeding is improper or is an inconvenient
venue for such Proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any
such Action or Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process
in any other manner permitted by law. If any party hereto shall commence an Action or Proceeding to enforce any provisions of the
Transaction Documents, then, in addition to the obligations of the Company under Section 4.8, the prevailing party in such Action or
Proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys’ fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such Action or Proceeding.
5.10
Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Shares.
5.11
Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered
one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party,
it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission,
by electronic mail (including “.pdf” or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g.,
docusign.com) or other transmission method, such signature shall create a valid and binding obligation of the party executing (or on
whose behalf such signature is executed) with the same force and effect as if it were an original thereof.
5.12
Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction
to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would
have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
5.13
Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar
provisions of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction
Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may
rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election
in whole or in part without prejudice to its future actions and rights.
5.14
Replacement of Shares. If any certificate or instrument evidencing any Shares or Conversion Shares is mutilated, lost,
stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in
the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such
circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement
Shares or Conversion Shares.
5.15
Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of
damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties
agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in
the Transaction Documents and hereby agree to waive and not to assert in any Action for specific performance of any such obligation the
defense that a remedy at law would be adequate.
5.16
Payment Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction
Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement
or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged
by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law
(including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent
of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force
and effect as if such payment had not been made or such enforcement or setoff had not occurred.
5.17
Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction
Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for
the performance or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein
or in any other Transaction Document, and no action taken by any Purchaser pursuant hereof or thereto, shall be deemed to constitute
the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers
are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents.
Each Purchaser shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out
of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an
additional party in any proceeding for such purpose. Each Purchaser has been represented by its own separate legal counsel in its review
and negotiation of the Transaction Documents. The Company has elected to provide all Purchasers with the same terms and Transaction Documents
for the convenience of the Company and not because it was required or requested to do so by any of the Purchasers.
5.18
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right
required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding
Business Day.
5.19
Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity
to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition,
each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the
date of this Agreement.
5.20
WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY,
THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY,
IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
(Signature
Pages Follow)
IN
WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
DUOS TECHNOLOGIES GROUP, INC.
By: ________________________________________
Name: _____________________________________
Title: ______________________________________
|
Address for Notice:
7660 Centurion Parkway
Suite 100
Jacksonville, Florida 32256
Attn:
Email: |
With a copy to
(which shall not constitute notice):
Shutts & Bowen LLP
200 South Biscayne Boulevard
Suite 4100
Miami, Florida 33131
Attn: J. Thomas Cookson
Email: tcookson@shutts.com
|
|
[REMAINDER OF
PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE
FOR PURCHASER FOLLOWS]
[PURCHASER SIGNATURE
PAGES TO DUOS TECHNOLOGIES GROUP, INC. SECURITIES PURCHASE AGREEMENT]
IN
WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories
as of the date first indicated above.
Name of Purchaser: __________________________________________________________
Signature of Authorized Signatory
of Purchaser: ___________________________________
Name of Authorized Signatory: _________________________________________________
Title of Authorized Signatory: __________________________________________________
Email Address of Authorized
Signatory: __________________________________________
Facsimile Number of Authorized
Signatory: _______________________________________
Address for Notice to Purchaser: ________________________________________________
Address for Delivery of Securities
to Purchaser (if not same as address for notice):
__________________________________________________________________________
Subscription Amount: $________
Number of Shares: __________________
EIN Number: ______________________
Exhibit 10.2
FORM OF
REGISTRATION
RIGHTS AGREEMENT
This
Registration Rights Agreement (this “Agreement”) is made and entered into as of August 1, 2023, between Duos
Technologies Group, Inc., a Florida corporation (the “Company”), and each of the several purchasers signatory
hereto (each such purchaser, a “Purchaser” and, collectively, the “Purchasers”).
This
Agreement is made pursuant to the Securities Purchase Agreement, dated as of the date hereof, between the Company and each Purchaser
(the “Purchase Agreement”).
The
Company and each Purchaser hereby agrees as follows:
1.
Definitions.
Capitalized
terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given such terms in the
Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:
“Advice”
shall have the meaning set forth in Section 6(b).
“Effectiveness
Date” means, with respect to the Initial Registration Statement required to be filed hereunder, the 90th calendar
day following the date hereof (or, in the event of a “full review” by the Commission, the 120th calendar day following
the date hereof) and with respect to any additional Registration Statements which may be required pursuant to Section 2(c) or Section
3(c), the 45th calendar day following the date on which an additional Registration Statement is required to be filed hereunder
(or, in the event of a “full review” by the Commission, the 75th calendar day following the date such additional
Registration Statement is required to be filed hereunder); provided, however, that in the event the Company is notified
by the Commission that one or more of the above Registration Statements will not be reviewed or is no longer subject to further review
and comments, the Effectiveness Dates as to such Registration Statement shall be the fifth Trading Day following thes date on which the
Company is so notified if such date precedes the dates otherwise required above, subject to the Commission agreeing to the five Trading
Day or shorter period, provided, further, if such Effectiveness Date falls on a day that is not a Trading Day, then the Effectiveness
Date shall be the next succeeding Trading Day.
“Effectiveness
Period” shall have the meaning set forth in Section 2(a).
“Event”
shall have the meaning set forth in Section 2(d).
“Event
Date” shall have the meaning set forth in Section 2(d).
“Filing
Date” means, with respect to the Initial Registration Statement required hereunder, the 45th calendar day following
the date hereof and, with respect to any additional Registration Statements which may be required pursuant to Section 2(c) or Section
3(c), the earliest practical date on which the Company is permitted by SEC Guidance to file such additional Registration Statement related
to the Registrable Securities.
“Holder”
or “Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities.
“Indemnified
Party” shall have the meaning set forth in Section 5(c).
“Indemnifying
Party” shall have the meaning set forth in Section 5(c).
“Initial
Registration Statement” means the initial Registration Statement filed pursuant to this Agreement.
“Losses”
shall have the meaning set forth in Section 5(a).
“Plan
of Distribution” shall have the meaning set forth in Section 2(a).
“Prospectus”
means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated by the
Commission pursuant to the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to
the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference
in such Prospectus.
“Registrable
Securities” means, as of any date of determination, (a) all Conversion Shares then issued and issuable to the Purchasers upon
conversion of the Series F Preferred Stock (assuming on such date the Series F Preferred Stock is converted in full without regard to
any limitations on conversions of the Series F Preferred Stock); and (b) any securities issued or then issuable to the Purchasers upon
any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing; provided, however,
that any such Registrable Securities shall cease to be Registrable Securities (and the Company shall not be required to maintain the
effectiveness of any, or file another, Registration Statement hereunder with respect thereto) for so long as (a) a Registration Statement
with respect to the sale of such Registrable Securities is declared effective by the Commission under the Securities Act and such Registrable
Securities have been disposed of by the Holder in accordance with such effective Registration Statement, (b) such Registrable Securities
have been previously sold in accordance with Rule 144, or (c) such securities become eligible for resale without volume or manner-of-sale
restrictions and without current public information pursuant to Rule 144 as set forth in a written opinion letter to such effect, addressed,
delivered and acceptable to the Transfer Agent and the affected Holders (solely in the case that such securities and any securities issuable
upon exercise, conversion or exchange of which, or as a dividend upon which, such securities were issued or are issuable, were at no
time held by any Affiliate of the Company, as reasonably determined by the Company, upon the advice of counsel to the Company).
“Registration
Statement” means any registration statement required to be filed hereunder pursuant to Section 2(a) and any additional registration
statements contemplated by Section 2(c) or Section 3(c), including (in each case) the Prospectus, amendments and supplements to any such
registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference in any such registration statement.
“Rule
415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect
as such Rule.
“Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect
as such Rule.
“Selling
Stockholder Questionnaire” shall have the meaning set forth in Section 3(a).
“SEC
Guidance” means (i) any publicly-available written or oral guidance of the Commission staff, or any comments, requirements
or requests of the Commission staff and (ii) the Securities Act.
2.
Shelf Registration.
(a)
On or prior to each Filing Date, the Company shall prepare and file with the Commission a Registration Statement covering the
resale of all of the Registrable Securities that are not then registered on an effective Registration Statement for an offering to be
made on a continuous basis pursuant to Rule 415. Each Registration Statement filed hereunder shall be on Form S-3 (except if the Company
is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another
appropriate form in accordance herewith, subject to the provisions of Section 2(e)) and shall contain (unless otherwise directed by at
least 51% in interest of the Holders) substantially the “Plan of Distribution” attached hereto as Annex A and
substantially the “Selling Stockholder” section attached hereto as Annex B; provided, however,
that no Holder shall be required to be named as an “underwriter” without such Holder’s express prior written consent.
Subject to the terms of this Agreement, the Company shall use its best efforts to cause a Registration Statement filed under this Agreement
(including, without limitation, under Section 3(c)) to be declared effective under the Securities Act as promptly as possible after the
filing thereof, but in any event no later than the applicable Effectiveness Date, and shall use its best efforts to keep such Registration
Statement continuously effective under the Securities Act until the date that all Registrable Securities covered by such Registration
Statement (i) have been sold, thereunder or pursuant to Rule 144, or (ii) may be sold without volume or manner-of-sale restrictions pursuant
to Rule 144 and without the requirement for the Company to be in compliance with the current public information requirement under Rule
144, as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the
Transfer Agent and the affected Holders (the “Effectiveness Period”). The Company shall request effectiveness of a
Registration Statement as of 5:00 p.m. Eastern Time on a Trading Day. The Company shall notify the Holders via facsimile or by e-mail
of the effectiveness of a Registration Statement on the same Trading Day that the Company confirms effectiveness with the Commission,
which shall be the date requested for effectiveness of such Registration Statement. The Company shall, by 9:30 a.m. Eastern Time on the
Trading Day after the effective date of such Registration Statement, file a final Prospectus with the Commission as required by Rule
424. Failure to so notify the Holder within one (1) Trading Day of such notification of effectiveness or failure to file a final Prospectus
as foresaid shall be deemed an Event under Section 2(d).
(b)
Notwithstanding the registration obligations set forth in Section 2(a), if the staff of the Commission informs the Company that
all of the Registrable Securities cannot, as a result of the application of Rule 415, be registered for resale as a secondary offering
on a single registration statement, the Company shall promptly inform each of the Holders thereof and use its commercially reasonable
efforts to file amendments to the Initial Registration Statement as required by the staff of the Commission, covering the maximum number
of Registrable Securities permitted to be registered by the staff of the Commission, on Form S-3 or such other form available to register
for resale the Registrable Securities as a secondary offering, subject to the provisions of Section 2(e), with respect to filing on Form
S-3 or other appropriate form, and subject to the provisions of Section 2(d) with respect to the payment of liquidated damages; provided,
however, that prior to filing such amendment, the Company shall use diligent efforts to advocate with the staff of the Commission
for the registration of all of the Registrable Securities in accordance with the SEC Guidance, including without limitation, Compliance
and Disclosure Interpretation 612.09.
(c)
Notwithstanding any other provision of this Agreement and subject to the payment of liquidated damages pursuant to Section 2(d),
if the staff of the Commission or any SEC Guidance sets forth a limitation on the number of Registrable Securities permitted to be registered
on a particular Registration Statement as a secondary offering (and notwithstanding that the Company used diligent efforts to advocate
with the staff of the Commission for the registration of all or a greater portion of Registrable Securities), unless otherwise directed
in writing by a Holder as to its Registrable Securities to register a lesser number, the number of Registrable Securities to be registered
on such Registration Statement will be reduced as follows:
a.
First, the Company shall reduce or eliminate any securities to be included other than Registrable Securities; and
b.
Second, the Company shall reduce Registrable Securities represented by the Conversion Shares on a pro rata basis based on the
total number of unregistered Conversion Shares held by such Holders.
In the event
of a cutback hereunder, the Company shall give the Holder at least five (5) Trading Days prior written notice along with the calculations
as to such Holder’s allotment. In the event the Company amends the Initial Registration Statement in accordance with the foregoing,
the Company will use its best efforts to file with the Commission, as promptly as allowed by the staff of the Commission or SEC Guidance
provided to the Company or to registrants of securities in general, one or more registration statements on Form S-3 or such other form
available to register for resale those Registrable Securities that were not registered for resale on the Initial Registration Statement,
as amended.
(d)
If: (i) the Initial Registration Statement is not filed on or prior to its Filing Date (if the Company files the Initial Registration
Statement without affording the Holders the opportunity to review and comment on the same as required by Section 3(a) herein, the Company
shall be deemed to have not satisfied this clause (i)), or (ii) prior to the effective date of a Registration Statement, the Company
fails to file a pre-effective amendment and otherwise respond in writing to comments made by the staff of the Commission in respect of
such Registration Statement within ten (10) Trading Days after the receipt of comments by or notice from staff of the Commission that
such amendment is required in order for such Registration Statement to be declared effective or (iii) a Registration Statement registering
for resale Registrable Securities is not declared effective by the Commission by the Effectiveness Date of the Initial Registration Statement,
or (iv) after the effective date of a Registration Statement, such Registration Statement ceases for any reason to remain continuously
effective as to the Registrable Securities included in such Registration Statement, or the Holders are otherwise not permitted to utilize
the Prospectus therein to resell such Registrable Securities, for more than twenty (20) consecutive calendar days or more than an aggregate
of thirty (30) Trading Days (which need not be consecutive Trading Days) during any 12-month period (any such failure or breach being
referred to as an “Event”, and for purposes of clauses (i) and (ii), the date on which such Event occurs, and for
purpose of clause (iii) the date on which such ten (10) Trading Day period is exceeded, and for the purpose of clause (iv) the date on
which such twenty (20) calendar day or thirty (30) Trading Day period, as applicable, is exceeded being referred to as “Event
Date”), then, in addition to any other rights the Holders may have hereunder or under applicable law, on each such Event Date
and on each monthly anniversary of each such Event Date (if the applicable Event shall not have been cured by such date) until the applicable
Event is cured, the Company shall pay to each Holder an amount in cash, as partial liquidated damages and not as a penalty, equal to
the product of 1.00% multiplied by the aggregate Subscription Amount paid by such Holder pursuant to the Purchase Agreement. If the Company
fails to pay any partial liquidated damages pursuant to this Section in full within thirty (30) days after the date payable, the Company
will pay interest thereon at a rate of 4.00% per annum (or such lesser maximum amount that is permitted to be paid by applicable law)
to the Holder, accruing daily from the date such partial liquidated damages are due until such amounts, plus all such interest thereon,
are paid in full. The partial liquidated damages pursuant to the terms hereof shall apply on a daily pro rata basis for any portion of
a month prior to the cure of an Event.
(e)
If Form S-3 is not available for the registration of the resale of Registrable Securities hereunder, the Company shall (i) register
the resale of the Registrable Securities on another appropriate form and (ii) undertake to register the Registrable Securities on Form
S-3 as soon as such form is available, provided that the Company shall maintain the effectiveness of the Registration Statement then
in effect until such time as a Registration Statement on Form S-3 covering the Registrable Securities has been declared effective by
the Commission.
(f)
Notwithstanding anything to the contrary contained herein, in no event shall the Company be permitted to name any Holder or affiliate
of a Holder as any Underwriter without the prior written consent of such Holder.
3.
Registration Procedures.
In
connection with the Company’s registration obligations hereunder, the Company shall:
(a)
Not less than five (5) Trading Days prior to the filing of each Registration Statement and not less than one (1) Trading Day prior
to the filing of any related Prospectus or any amendment or supplement thereto, the Company shall (i) furnish to each Holder copies of
all such documents proposed to be filed, which documents will be subject to the review of such Holders, and (ii) cause its officers and
directors, counsel and independent registered public accountants to respond to such inquiries as shall be necessary, in the reasonable
opinion of respective counsel to each Holder, to conduct a reasonable investigation within the meaning of the Securities Act. The Company
shall not file a Registration Statement or any such Prospectus or any amendments or supplements thereto to which any Holder shall reasonably
object in good faith, provided that, the Company is notified of such objection in writing no later than three (3) Trading Days after
the Holders have been so furnished copies of a Registration Statement or one (1) Trading Day after the Holders have been so furnished
copies of any related Prospectus or amendments or supplements thereto. Each Holder agrees to furnish to the Company a completed questionnaire
in the form attached to this Agreement as Annex C (a “Selling Stockholder Questionnaire”) on a date that is
not less than two (2) Trading Days prior to the Filing Date or by the end of the fourth (4th) Trading Day following the date
on which such Holder receives draft materials in accordance with this Section.
(b)
(i) Prepare and file with the Commission such amendments, including post-effective amendments, to a Registration Statement and
the Prospectus used in connection therewith as may be necessary to keep a Registration Statement continuously effective as to the applicable
Registrable Securities for the Effectiveness Period and prepare and file with the Commission such additional Registration Statements
in order to register for resale under the Securities Act all of the Registrable Securities, (ii) cause the related Prospectus to be amended
or supplemented by any required Prospectus supplement (subject to the terms of this Agreement), and, as so supplemented or amended, to
be filed pursuant to Rule 424, (iii) respond as promptly as reasonably possible to any comments received from the Commission with respect
to a Registration Statement or any amendment thereto and provide as promptly as reasonably possible to the Holders true and complete
copies of all correspondence from and to the Commission relating to a Registration Statement (provided that, the Company shall excise
any information contained therein which would constitute material non-public information regarding the Company or any of its Subsidiaries),
and (iv) comply in all material respects with the applicable provisions of the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Securities covered by a Registration Statement during the applicable period in accordance (subject to
the terms of this Agreement) with the intended methods of disposition by the Holders thereof set forth in such Registration Statement
as so amended or in such Prospectus as so supplemented.
(c)
If during the Effectiveness Period, the number of Registrable Securities at any time exceeds 100% of the number of shares of Common
Stock then registered in a Registration Statement, then the Company shall file as soon as reasonably practicable, but in any case prior
to the applicable Filing Date (subject to SEC Guidance), an additional Registration Statement covering the resale by the Holders of not
less than the number of such Registrable Securities.
(d)
Notify the Holders of Registrable Securities to be sold (which notice shall, pursuant to clauses (iii) through (vi) hereof, be
accompanied by an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably
possible (and, in the case of (i)(A) below, not less than one (1) Trading Day prior to such filing) and (if requested by any such Person)
confirm such notice in writing no later than one (1) Trading Day following the day (i)(A) when a Prospectus or any Prospectus supplement
or post-effective amendment to a Registration Statement is proposed to be filed, (B) when the Commission notifies the Company whether
there will be a “review” of such Registration Statement and whenever the Commission comments in writing on such Registration
Statement, and (C) with respect to a Registration Statement or any post-effective amendment, when the same has become effective, (ii)
of any request by the Commission or any other federal or state governmental authority for amendments or supplements to a Registration
Statement or Prospectus or for additional information, (iii) of the issuance by the Commission or any other federal or state governmental
authority of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities
or the initiation of any Proceedings for that purpose, (iv) of the receipt by the Company of any notification with respect to the suspension
of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation
or threatening of any Proceeding for such purpose, (v) of the occurrence of any event or passage of time that makes the financial statements
included in a Registration Statement ineligible for inclusion therein or any statement made in a Registration Statement or Prospectus
or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions
to a Registration Statement, Prospectus or other documents so that, in the case of a Registration Statement or the Prospectus, as the
case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and (vi) of the
occurrence or existence of any pending corporate development with respect to the Company that the Company believes may be material and
that, in the determination of the Company, makes it not in the best interest of the Company to allow continued availability of a Registration
Statement or Prospectus, provided, however, in no event shall any such notice contain any information which would constitute
material, non-public information regarding the Company or any of its Subsidiaries.
(e)
Use its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order stopping or suspending the
effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, at the earliest practicable moment.
(f)
Furnish to each Holder, without charge, at least one conformed copy of each such Registration Statement and each amendment thereto,
including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference to the extent
requested by such Person, and all exhibits to the extent requested by such Person (including those previously furnished or incorporated
by reference) promptly after the filing of such documents with the Commission; provided, that any such item which is available on the
EDGAR system (or successor thereto) need not be furnished in physical form.
(g)
Subject to the terms of this Agreement, the Company hereby consents to the use of such Prospectus and each amendment or supplement
thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus
and any amendment or supplement thereto, except after the giving of any notice pursuant to Section 3(d).
(h)
Prior to any resale of Registrable Securities by a Holder, use its commercially reasonable efforts to register or qualify or cooperate
with the selling Holders in connection with the registration or qualification (or exemption from the registration or qualification) of
such Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such jurisdictions within the United
States as any Holder reasonably requests in writing, to keep each registration or qualification (or exemption therefrom) effective during
the Effectiveness Period and to do any and all other acts or things reasonably necessary to enable the disposition in such jurisdictions
of the Registrable Securities covered by each Registration Statement; provided, that, the Company shall not be required to qualify generally
to do business in any jurisdiction where it is not then so qualified, subject the Company to any material tax in any such jurisdiction
where it is not then so subject or file a general consent to service of process in any such jurisdiction.
(i)
If requested by a Holder, cooperate with such Holder to facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be delivered to a transferee pursuant to a Registration Statement, which certificates shall be free, to the
extent permitted by the Purchase Agreement, of all restrictive legends, and to enable such Registrable Securities to be in such denominations
and registered in such names as any such Holder may request.
(j)
Upon the occurrence of any event contemplated by Section 3(d), as promptly as reasonably possible under the circumstances taking
into account the Company’s good faith assessment of any adverse consequences to the Company and its stockholders of the premature
disclosure of such event, prepare a supplement or amendment, including a post-effective amendment, to a Registration Statement or a supplement
to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required
document so that, as thereafter delivered, neither a Registration Statement nor such Prospectus will contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. If the Company notifies the Holders in accordance with clauses (iii) through
(vi) of Section 3(d) above to suspend the use of any Prospectus until the requisite changes to such Prospectus have been made, then the
Holders shall suspend use of such Prospectus. The Company will use its best efforts to ensure that the use of the Prospectus may be resumed
as promptly as is practicable. The Company shall be entitled to exercise its right under this Section 3(j) to suspend the availability
of a Registration Statement and Prospectus, subject to the payment of partial liquidated damages otherwise required pursuant to Section
2(d), for a period not to exceed 60 calendar days (which need not be consecutive days) in any 12-month period.
(k)
Otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the Commission under the
Securities Act and the Exchange Act, including, without limitation, Rule 172 under the Securities Act, file any final Prospectus, including
any supplement or amendment thereof, with the Commission pursuant to Rule 424 under the Securities Act, promptly inform the Holders in
writing if, at any time during the Effectiveness Period, the Company does not satisfy the conditions specified in Rule 172 and, as a
result thereof, the Holders are required to deliver a Prospectus in connection with any disposition of Registrable Securities and take
such other actions as may be reasonably necessary to facilitate the registration of the Registrable Securities hereunder.
(l)
The Company shall use its best efforts to acquire and maintain eligibility for use of Form S-3 (or any successor form thereto)
for the registration of the resale of Registrable Securities.
(m)
The Company may require each selling Holder to furnish to the Company a certified statement as to the number of shares of Common
Stock beneficially owned by such Holder and, if required by the Commission, the natural persons thereof that have voting and dispositive
control over the shares. During any periods that the Company is unable to meet its obligations hereunder with respect to the registration
of the Registrable Securities solely because any Holder fails to furnish such information within three Trading Days of the Company’s
request, any liquidated damages that are accruing at such time as to such Holder only shall be tolled and any Event that may otherwise
occur solely because of such delay shall be suspended as to such Holder only, until such information is delivered to the Company.
4.
Registration Expenses. All fees and expenses incident to the performance of or compliance with, this Agreement by the Company
shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses
referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses of the Company’s counsel and independent registered public accountants) (A) with respect to filings made with
the Commission, (B) with respect to filings required to be made with any Trading Market on which the Common Stock is then listed for
trading, and (C) in compliance with applicable state securities or Blue Sky laws reasonably agreed to by the Company in writing (including,
without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions of the
Registrable Securities), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act liability
insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection
with the consummation of the transactions contemplated by this Agreement. In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without
limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual
audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required
hereunder. In no event shall the Company be responsible for any broker or similar commissions of any Holder or, except to the extent
provided for in the Transaction Documents, any legal fees or other costs of the Holders.
5.
Indemnification.
(a)
Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold
harmless each Holder, the officers, directors, members, partners, agents, brokers (including brokers who offer and sell Registrable Securities
as principal as a result of a pledge or any failure to perform under a margin call of Common Stock), investment advisors and employees
(and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any
other title) of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) and the officers, directors, members, stockholders, partners, agents and employees (and any other Persons with
a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of each such
controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities,
costs (including, without limitation, reasonable attorneys’ fees) and expenses (collectively, “Losses”), as
incurred, arising out of or relating to (1) any untrue or alleged untrue statement of a material fact contained in a Registration Statement,
any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of
or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements
therein (in the case of any Prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading
or (2) any violation or alleged violation by the Company of the Securities Act, the Exchange Act or any state securities law, or any
rule or regulation thereunder, in connection with the performance of its obligations under this Agreement, except to the extent, but
only to the extent, that (i) such untrue statements or omissions are based solely upon information regarding such Holder furnished in
writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to such Holder or such
Holder’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder
expressly for use in a Registration Statement, such Prospectus or in any amendment or supplement thereto (it being understood that the
Holder has approved Annex A hereto for this purpose) or (ii) in the case of an occurrence of an event of the type specified in Section
3(d)(iii)-(vi), the use by such Holder of an outdated, defective or otherwise unavailable Prospectus after the Company has notified such
Holder in writing that the Prospectus is outdated, defective or otherwise unavailable for use by such Holder and prior to the receipt
by such Holder of the Advice contemplated in Section 6(d). The Company shall notify the Holders promptly of the institution, threat or
assertion of any Proceeding arising from or in connection with the transactions contemplated by this Agreement of which the Company is
aware. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such indemnified
person and shall survive the transfer of any Registrable Securities by any of the Holders in accordance with Section 6(e).
(b)
Indemnification by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its
directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent
permitted by applicable law, from and against all Losses, as incurred, to the extent arising out of or based solely upon: any untrue
or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus, or in any amendment or supplement
thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading (i) to the extent, but only to the extent, that such untrue statement or omission
is contained in any information so furnished in writing by such Holder to the Company expressly for inclusion in such Registration Statement
or such Prospectus or (ii) to the extent, but only to the extent, that such information relates to such Holder’s information provided
in the Selling Stockholder Questionnaire or the proposed method of distribution of Registrable Securities and was reviewed and expressly
approved in writing by such Holder expressly for use in a Registration Statement (it being understood that the Holder has approved Annex
A hereto for this purpose), such Prospectus or in any amendment or supplement thereto. In no event shall the liability of a selling Holder
be greater in amount than the dollar amount of the proceeds (net of all expenses paid by such Holder in connection with any claim relating
to this Section 5 and the amount of any damages such Holder has otherwise been required to pay by reason of such untrue statement or
omission) received by such Holder upon the sale of the Registrable Securities included in the Registration Statement giving rise to such
indemnification obligation.
(c)
Conduct of Indemnification Proceedings. If any Proceeding shall be brought or asserted against any Person entitled to indemnity
hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is
sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume the defense
thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses
incurred in connection with defense thereof; provided, that, the failure of any Indemnified Party to give such notice shall not relieve
the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be
finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure
shall have materially and adversely prejudiced the Indemnifying Party.
An
Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party
has agreed in writing to pay such fees and expenses, (2) the Indemnifying Party shall have failed promptly to assume the defense of such
Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding or (3) the named parties to
any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and counsel to
the Indemnified Party shall reasonably believe that a material conflict of interest is likely to exist if the same counsel were to represent
such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing
that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to
assume the defense thereof and the reasonable fees and expenses of no more than one separate counsel shall be at the expense of the Indemnifying
Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld or delayed. No Indemnifying Party shall, without the prior written consent of the Indemnified
Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes
an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.
Subject
to the terms of this Agreement, all reasonable fees and expenses of the Indemnified Party (including reasonable fees and expenses to
the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section)
shall be paid to the Indemnified Party, within thirty (30) Trading Days of written notice thereof to the Indemnifying Party; provided,
that, the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and expenses applicable to
such actions for which such Indemnified Party is finally determined by a court of competent jurisdiction (which determination is not
subject to appeal or further review) not to be entitled to indemnification hereunder.
(d)
Contribution. If the indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party or insufficient
to hold an Indemnified Party harmless for any Losses, then each Indemnifying Party shall contribute to the amount paid or payable by
such Indemnified Party, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified
Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether
any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material
fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’
relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount
paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in this Agreement,
any reasonable attorneys’ or other fees or expenses incurred by such party in connection with any Proceeding to the extent such
party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such
party in accordance with its terms.
The
parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately
preceding paragraph. In no event shall the contribution obligation of a Holder of Registrable Securities be greater in amount than the
dollar amount of the proceeds (net of all expenses paid by such Holder in connection with any claim relating to this Section 5 and the
amount of any damages such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission) received by it upon the sale of the Registrable Securities giving rise to such contribution obligation.
The
indemnity and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have
to the Indemnified Parties.
6.
Miscellaneous.
(a)
Remedies. In the event of a breach by the Company or by a Holder of any of their respective obligations under this Agreement,
each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement,
including recovery of damages, shall be entitled to specific performance of its rights under this Agreement. Each of the Company and
each Holder agrees that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it
of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect
of such breach, it shall not assert or shall waive the defense that a remedy at law would be adequate.
(b)
No Piggyback on Registrations; Prohibition on Filing Other Registration Statements. Unless otherwise consented to in writing
by the Holders of 51% or more of the then outstanding Registrable Securities, (x) neither the Company nor any of its security holders
(other than the Holders in such capacity pursuant hereto) may include securities of the Company in any Registration Statements other
than the Registrable Securities, and (y) the Company shall not file any other registration statements until all Registrable Securities
are registered pursuant to a Registration Statement that is declared effective by the Commission, provided that this Section 6(b) shall
not prohibit the Company from filing amendments to registration statements filed prior to the date of this Agreement or a Registration
Statement on Form S-8 relating to any stock option or similar plan.
(c)
Discontinued Disposition. By its acquisition of Registrable Securities, each Holder agrees that, upon receipt of a notice
from the Company of the occurrence of any event of the kind described in Section 3(d)(iii) through (vi), such Holder will forthwith discontinue
disposition of such Registrable Securities under a Registration Statement until it is advised in writing (the “Advice”)
by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed. The Company will
use its best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company agrees and acknowledges
that any periods during which the Holder is required to discontinue the disposition of the Registrable Securities hereunder shall be
subject to the provisions of Section 2(d).
(d)
Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be
in writing and signed by the Company and the Holders of 51% or more of the then outstanding Registrable Securities, provided that, if
any amendment, modification or waiver disproportionately and adversely impacts a Holder (or group of Holders), the consent of such disproportionately
impacted Holder (or group of Holders) shall be required. If a Registration Statement does not register all of the Registrable Securities
pursuant to a waiver or amendment done in compliance with the previous sentence, then the number of Registrable Securities to be registered
for each Holder shall be reduced pro rata among all Holders and each Holder shall have the right to designate which of its Registrable
Securities shall be omitted from such Registration Statement. Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of a Holder or some Holders and that does not directly or indirectly
affect the rights of other Holders may be given only by such Holder or Holders of all of the Registrable Securities to which such waiver
or consent relates; provided, however, that the provisions of this sentence may not be amended, modified, or supplemented
except in accordance with the provisions of the first sentence of this Section 6(d). No consideration shall be offered or paid to any
Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration also is offered
to all of the parties to this Agreement.
(e)
Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall
be delivered as set forth in the Purchase Agreement.
(f)
Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns
of each of the parties and shall inure to the benefit of each Holder. The Company may not assign (except by merger) its rights or obligations
hereunder without the prior written consent of all of the Holders of the then outstanding Registrable Securities. Each Holder may assign
their respective rights hereunder in the manner and to the Persons as permitted under Section 5.7 of the Purchase Agreement.
(g)
No Inconsistent Agreements. Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall
the Company or any of its Subsidiaries, on or after the date of this Agreement, enter into any agreement with respect to its securities,
that would have the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions
hereof. Except as set forth on Schedule 6(g), neither the Company nor any of its Subsidiaries has previously entered into any
agreement granting any registration rights with respect to any of its securities to any Person that have not been satisfied in full.
(h)
Execution and Counterparts. This Agreement may be executed in two or more counterparts, all of which when taken together
shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered
to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered
by facsimile transmission, by electronic mail (including “.pdf” or any electronic signature complying with the U.S. federal
ESIGN Act of 2000, e.g. docusign.com) or other transmission method, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same force and effect as if it were an original thereof.
(i)
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall
be determined in accordance with the provisions of the Purchase Agreement.
(j)
Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any other remedies provided by law.
(k)
Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction
to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would
have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
(l)
Headings. The headings in this Agreement are for convenience only, do not constitute a part of this Agreement and shall
not be deemed to limit or affect any of the provisions hereof.
(m)
Independent Nature of Holders’ Obligations and Rights. The obligations of each Holder hereunder are several and not
joint with the obligations of any other Holder hereunder, and no Holder shall be responsible in any way for the performance of the obligations
of any other Holder hereunder. Nothing contained herein or in any other agreement or document delivered at any closing, and no action
taken by any Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture
or any other kind of group or entity, or create a presumption that the Holders are in any way acting in concert or as a group or entity
with respect to such obligations or the transactions contemplated by this Agreement or any other matters, and the Company acknowledges
that the Holders are not acting in concert or as a group, and the Company shall not assert any such claim, with respect to such obligations
or transactions. Each Holder shall be entitled to protect and enforce its rights, including without limitation the rights arising out
of this Agreement, and it shall not be necessary for any other Holder to be joined as an additional party in any proceeding for such
purpose. The use of a single agreement with respect to the obligations of the Company contained herein was solely in the control of the
Company, not the action or decision of any Holder, and was done solely for the convenience of the Company and not because it was required
or requested to do so by any Holder. It is expressly understood and agreed that each provision contained in this Agreement is between
the Company and a Holder, solely, and not between the Company and the Holders collectively and not between and among Holders.
********************
(Signature Pages
Follow)
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.
DUOS TECHNOLOGIES GROUP, INC.
By: ______________________________________
Name: ____________________________________
Title: _____________________________________
[SIGNATURE PAGES OF
HOLDERS FOLLOW]
SIGNATURE PAGE OF HOLDERS TO REGISTRATION
RIGHTS AGREEMENT OF DUOS TECHNOLOGIES GROUP, INC.
Name of Holder: _____________________________________
Signature of Authorized
Signatory of Holder: ______________________________
Name of Authorized
Signatory: __________________________
Title of Authorized
Signatory: ___________________________
Annex A
Plan of Distribution
Each
Selling Stockholder (the “Selling Stockholders”) of the securities and any of their pledgees, assignees and successors-in-interest
may, from time to time, sell, separately or together, any or all of their securities covered hereby on the principal Trading Market or
any other stock exchange, market or trading facility on which the securities are traded or in private transactions. These sales may be
at fixed or negotiated prices. To the extent the Selling Stockholders gift, pledge or otherwise transfer the securities offered hereby,
such transferees may offer and sell the securities from time to time under this prospectus, provided that, if required under the Securities
Act, and the rules and regulations promulgated thereunder, this prospectus has been amended under Rule 424(b)(3) or other applicable
provision of the Securities Act, to include the name of such transferee in the list of selling securityholders under this prospectus.
A Selling Stockholder may use any one or more of the following methods when selling securities:
| · | ordinary
brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
| · | block
trades in which the broker-dealer will attempt to sell the securities as agent but may position
and resell a portion of the block as principal to facilitate the transaction; |
| · | purchases
by a broker-dealer as principal and resale by the broker-dealer for its account; |
| · | an
exchange distribution in accordance with the rules of the applicable exchange; |
| · | privately
negotiated transactions; |
| · | through
one or more underwritten offerings on a firm commitment or best efforts basis; |
| · | settlement
of short sales that are not in violation of Regulation SHO; |
| · | in
transactions through broker-dealers that agree with the Selling Stockholders to sell a specified
number of such securities at a stipulated price per security; |
| · | through
the writing or settlement of options or other hedging transactions, whether through an options
exchange or otherwise; |
| · | through
the distribution of securities by any Selling Stockholder to its partners, members or securityholders; |
| · | a
combination of any such methods of sale; or |
| · | any
other method permitted pursuant to applicable law. |
The
Selling Stockholders may also sell securities under Rule 144 or any other exemption from registration under the Securities Act of 1933,
as amended (the “Securities Act”), if available, rather than under this prospectus. The Selling Stockholders have
the sole and absolute discretion not to accept any purchase offer or make any sale of securities if they deem the purchase price to be
unsatisfactory at any particular time.
Broker-dealers
engaged by the Selling Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser)
in amounts to be negotiated, but, except as set forth in a supplement to this prospectus, in the case of an agency transaction not in
excess of a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction a markup or
markdown in compliance with FINRA IM-2440.
In
connection with the sale of the securities or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers
or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they
assume. The Selling Stockholders may also sell securities short and deliver these securities to close out their short positions, or loan
or pledge the securities to broker-dealers that in turn may sell these securities. The Selling Stockholders may also enter into option
or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the
delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer
or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The
Selling Stockholders may from time to time pledge or grant a security interest in some or all of their securities to their broker-dealers
under the margin provisions of customer agreements or to other parties to secure other obligations. If a Selling Stockholder defaults
on a margin loan or other secured obligation, the broker-dealer or secured party may, from time to time, offer and sell the securities
pledged or secured thereby pursuant to this prospectus. The Selling Stockholders and any other persons participating in the sale or distribution
of the securities will be subject to applicable provisions of the Securities Act and the Exchange Act, and the rules and regulations
thereunder, including, without limitation, Regulation M. These provisions may restrict certain activities of, and limit the timing of
purchases and sales of any of the securities by, the Selling Stockholders or any other person, which limitations may affect the marketability
of the securities.
The
Selling Stockholders also may transfer the shares of our securities in other circumstances, in which case the transferees, pledgees or
other successors-in-interest will be the selling beneficial owners for purposes of this prospectus.
A
Selling Stockholder that is an entity may elect to make a pro rata in-kind distribution of securities to its members, partners or shareholders
pursuant to the registration statement of which this prospectus is part by delivering a prospectus. To the extent that such members,
partners or shareholders are not affiliates of ours, such members, partners or shareholders would thereby receive freely tradeable securities
pursuant to the distribution through a registration statement.
The
Selling Stockholders and any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters”
within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers
or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act. Each Selling Stockholder has informed the Company that it does not have any written or oral agreement or understanding,
directly or indirectly, with any person to distribute the securities.
The
Company is required to pay certain fees and expenses incurred by the Company incident to the registration of the securities. The Company
has agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under
the Securities Act.
We
agreed to keep this prospectus effective until the earlier of the date on which (i) the securities may be resold by the Selling Stockholders
without registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for
the Company to be in compliance with the current public information under Rule 144 under the Securities Act or any other rule of similar
effect or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule
of similar effect. The resale securities will be sold only through registered or licensed brokers or dealers if required under applicable
state securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered
or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is
complied with.
Under
applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously
engage in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation M,
prior to the commencement of the distribution. In addition, the Selling Stockholders will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the
common stock by the Selling Stockholders or any other person. We will make copies of this prospectus available to the Selling Stockholders
and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including
by compliance with Rule 172 under the Securities Act).
Annex
b
SELLING
STOCKHOLDERS
The
common stock being offered by the selling stockholders are those [previously issued] [issuable to] the selling stockholders upon conversion
of the preferred stock. For additional information regarding the issuances of those shares of preferred stock, see “Private Placement
of Preferred Shares” above. We are registering the shares of common stock in order to permit the selling stockholders to offer
the shares for resale from time to time. Except for the ownership of the shares of preferred stock and common stock and as otherwise
set forth in this prospectus, the selling stockholders have not had any material relationship with us within the past three years.
The
table below lists the selling stockholders and other information regarding the beneficial ownership of the shares of common stock by
each of the selling stockholders. The second column lists the number of shares of common stock beneficially owned by each selling stockholder,
based on its ownership of the shares of preferred stock, common stock and warrants, as of ________________, 2023, assuming conversion
of the preferred stock and exercise of the warrants held by the selling stockholders on that date, without regard to any limitations
on conversions or exercises.
The
third column lists the shares of common stock being offered by this prospectus by the selling stockholders.
In
accordance with the terms of a registration rights agreement with the selling stockholders, this prospectus generally covers the resale
of the maximum number of shares of common stock issuable upon conversion of the preferred stock, determined as if the outstanding shares
of preferred stock were converted in full as of the trading day immediately preceding the date this registration statement was initially
filed with the SEC as of the trading day immediately preceding the applicable date of determination and subject to adjustment as provided
in the registration rights agreement, without regard to any limitations on the conversion of the preferred stock. The fourth column assumes
the sale of all of the shares offered by the selling stockholders pursuant to this prospectus.
Under
the terms of the Certificate of Designation, a selling stockholder may not convert the preferred stock to the extent such conversion
would cause such selling stockholder, together with its affiliates and attribution parties, to beneficially own a number of shares of
common stock which would exceed [4.99%][19.99%] of our then outstanding common stock following such conversion, excluding for purposes
of such determination shares of common stock issuable upon conversion of the preferred stock which has not been converted. The number
of shares in the second column does not reflect this limitation. The selling stockholders may sell all, some or none of their shares
in this offering. See “Plan of Distribution.”
Name of Selling Stockholder |
Number of shares of Common Stock Owned Prior to Offering |
Maximum Number of shares of Common Stock to be Sold Pursuant
to this Prospectus |
Number of shares of Common Stock Owned After Offering |
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Annex C
DUOS
TECHNOLOGIES GROUP, INC.
Selling
Stockholder Notice and Questionnaire
The
undersigned beneficial owner of common stock (the “Registrable Securities”) of Duos Technologies Group, Inc., a Florida
corporation (the “Company”), understands that the Company has filed or intends to file with the Securities and Exchange
Commission (the “Commission”) a registration statement (the “Registration Statement”) for the registration
and resale under Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), of the Registrable Securities,
in accordance with the terms of the Registration Rights Agreement (the “Registration Rights Agreement”) to which this
document is annexed. A copy of the Registration Rights Agreement is available from the Company upon request at the address set forth
below. All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement.
Certain
legal consequences arise from being named as a selling stockholder in the Registration Statement and the related prospectus. Accordingly,
holders and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences
of being named or not being named as a selling stockholder in the Registration Statement and the related prospectus.
NOTICE
The
undersigned beneficial owner (the “Selling Stockholder”) of Registrable Securities hereby elects to include the Registrable
Securities owned by it in the Registration Statement.
The
undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate:
QUESTIONNAIRE
1.
Name.
(a)
Full Legal Name of Selling Stockholder:
(b)
Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities are held:
(c)
Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power
to vote or dispose of the securities covered by this Questionnaire):
2.
Address for Notices to Selling Stockholder:
Telephone:
Fax:
Email:
Contact
Person:
3.
Broker-Dealer Status:
(a)
Are you a broker-dealer?
Yes [_] No [_]
(b)
If “yes” to Section 3(a), did you receive your Registrable Securities as compensation for investment banking services
to the Company?
Yes [_] No [_]
Note: If “no” to Section
3(b), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.
(c)
Are you an affiliate of a broker-dealer?
Yes [_] No [_]
(d)
If you are an affiliate of a broker-dealer, do you certify that you purchased the Registrable Securities in the ordinary course
of business, and at the time of the purchase of the Registrable Securities to be resold, you had no agreements or understandings, directly
or indirectly, with any person to distribute the Registrable Securities?
Yes [_] No [_]
Note: If “no” to Section
3(d), the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement.
4.
Beneficial Ownership of Securities of the Company Owned by the Selling Stockholder.
Except as set forth below in this
Item 4, the undersigned is not the beneficial or registered owner of any securities of the Company other than the securities issuable
pursuant to the Purchase Agreement.
(a)
Type and Amount of other securities beneficially owned by the Selling Stockholder:
5.
Relationships with the Company:
Except as set forth below, neither
the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% of more of the equity securities
of the undersigned) has held any position or office or has had any other material relationship with the Company (or its predecessors
or affiliates) during the past three years.
State any exceptions here:
The
undersigned agrees to promptly notify the Company of any material inaccuracies or changes in the information provided herein that may
occur subsequent to the date hereof at any time while the Registration Statement remains effective; provided, that the undersigned shall
not be required to notify the Company of any changes to the number of securities held or owned by the undersigned or its affiliates.
By
signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through 5 and
the inclusion of such information in the Registration Statement and the related prospectus and any amendments or supplements thereto.
The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment
of the Registration Statement and the related prospectus and any amendments or supplements thereto.
IN
WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either
in person or by its duly authorized agent.
Date: Beneficial Owner:
By: _____________________________________
Name: ___________________________________
Title: ____________________________________
PLEASE FAX A COPY (OR EMAIL A
..PDF COPY) OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE TO:
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Duos Technologies (NASDAQ:DUOT)
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Duos Technologies (NASDAQ:DUOT)
과거 데이터 주식 차트
부터 5월(5) 2023 으로 5월(5) 2024