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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 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): August 15, 2023
ESPORTS
ENTERTAINMENT GROUP, INC.
(Exact
name of registrant as specified in its charter)
Nevada |
|
001-39262 |
|
26-3062752 |
(State or
other jurisdiction of |
|
(Commission |
|
(IRS Employer |
incorporation
or organization) |
|
File Number) |
|
Identification
No.) |
BLOCK
6,
TRIQ
PACEVILLE,
ST.
JULIANS STJ 3109
MALTA
(Address
of principal executive offices)
356
2713 1276
(Registrant’s
telephone number, including area code)
Not
Applicable
(Former
Name or Former Address, if Changed Since Last Report)
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) |
|
Name
of each exchange on which registered |
Common Stock |
|
GMBL |
|
The Nasdaq
Stock Market LLC |
Common Stock
Purchase Warrants |
|
GMBLW |
|
The Nasdaq
Stock Market LLC |
10.0% Series
A Cumulative Redeemable Convertible Preferred Stock |
|
GMBLP |
|
The Nasdaq
Stock Market LLC |
Common Stock
Purchase Warrants |
|
GMBLZ |
|
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.
August
2023 Registered Direct Offering
On
August 15, 2023, Esports Entertainment Group, Inc. (the “Company,” “we,” “our,” and “us”)
entered into a securities purchase agreement with the holder (the “Holder”) of our Series C Convertible Preferred Stock
and Series D Convertible Preferred Stock (“The SPA”). The SPA relates to an offering of (a) 1,000,000 shares of our common
stock (the “Common Stock”), $0.001 par value per share, for a price of $0.1935 per share, directly to the Holder
and (b) pre-funded warrants to purchase 4,167,959 shares of our Common Stock at a price of $0.1935 per warrant, directly
to such Holder (the “Pre-funded Warrants”), with all but $0.001 per warrant prepaid to the Company at the closing
of the offering. The pre-funded warrants are exercisable immediately upon issuance. The exercise price of each Pre-funded Warrant
is $0.001 per share of Common Stock. The offering is expected to close by August 16, 2023 subject to standard closing conditions.
The
Pre-funded Warrants may not be exercised to the extent that they cause the purchaser of the Pre-funded Warrants to become a “beneficial
owner” of more than 4.99% of our Common Stock for purposes of Section 13(d) of the Securities Exchange Act of 1934 (the “Beneficial
Ownership Limitation”). The Beneficial Ownership Limitation may be increased at the discretion of the purchaser of the Pre-funded
Warrants to any percentage less than or equal to 9.99% of our Common Stock upon 61 calendar days’ notice or decreased at any time.
We do not intend to list the Pre-funded Warrants sold in this offering on any securities exchange or other trading market.
The
SPA includes the Holder waiving its rights to require the Company to cause a Subsequent Placement Optional Redemption (as defined in
each of the Certificate of Designations governing the Series C Convertible Preferred Stock and Certificate of Designations governing
the Series D Convertible Preferred Stock) using the gross proceeds from the sale of the shares of Common Stock and Warrants (including
from the exercise thereof) and its rights to participate in an Eligible Subsequent Placement (as defined in each of the Certificate of
Designations governing the Series C Convertible Preferred Stock and Certificate of Designations governing the Series D Convertible Preferred
Stock) pursuant to Section 7(b) of the Certificate of Designations governing the Series C Convertible Preferred Stock and Section 7(b)
of the Certificate of Designations governing the Series D Convertible Preferred Stock, but only with respect to the offering and sale
of the Securities contemplated by the SPA. As a result, the Company will not make any payments from the gross proceeds to the Holder.
The
gross proceeds from the issuance and sale of the shares of Common Stock and Pre-funded Warrants, are expected to be approximately $1,000,000,
before deducting the estimated offering expenses payable by us. The Company is completing the offering without a placement agent and
no placement agent fees will be payable. We
will have broad discretion in the use of the remaining net proceeds, including for working capital and general corporate purposes to
support ongoing business operations.
The
shares of Common Stock and Pre-funded Warrants sold by us have been registered pursuant to a registration statement on Form S-3 (File
No. 333-252370), which the Securities and Exchange Commission (the “Commission”) declared effective on February 5, 2021.
A prospectus supplement and accompanying base prospectus will be filed promptly following the closing of the offering.
The
Securities Purchase Agreement contains customary representations and warranties and certain indemnification rights and obligations of
the parties.
Settlement Agreement
On
August 15, 2023, the Company also entered into a settlement agreement (“Settlement Agreement”) with the Holder to issue common
stock in partial settlement of Registration Rights Fees payable (“RRA Fees”) by the Company under the Registration Rights
Agreement, dated May 22, 2023 (the “Registration Rights Agreement”), between the Company and the Holder, in connection with
a delay in the filing of a registration statement for the purpose of registering the resale of the common stock issuable under the Holder’s
Series D Convertible Preferred Stock and common warrants, despite the Company’s best efforts to avoid such delay. As of the date
hereof, the Company is obligated to pay to the Holder a Registration Delay Payment of $21,500 (subject to increase with respect to any
additional RRA Fees that may accrue, from time to time, under the Registration Rights Agreement (and subject to decrease in accordance
with the Settlement Agreement as described below).
The
Company agreed to initially issue 10,000 shares at $0.10 per share (“Initial Settlement Price Per Share”) in partial settlement
of RRA Fees. The Company further agreed to settle an additional $1,000 (or such other amount as the parties shall mutually agree) on
each seven (7) day anniversary of the initial settlement (or another date mutually agreed between the parties), to satisfy up to the
remaining balance of the RRA Fees at a price per share equal to the lower of (1) 90% of the lowest volume weighted average price (“VWAP”)
per share of the Common Stock during the ten (10) consecutive trading day period ending and including the trading day immediately preceding
the additional share settlement, and (2) the Initial Settlement Price Per Share. As part of the settlement, the Holder also agreed to
waive, in part, applicable antidilution provisions within the Certificates of Designations governing the Series C Convertible Preferred
Stock and Series D Convertible Preferred Stock such that the issuances of any settlement shares in accordance with the Settlement Agreement
shall not result in a Conversion Price for the applicable Conversion Amount (as such terms are defined in the Certificates of Designations
governing the Series C Convertible Preferred Stock and Series D Convertible Preferred Stock) subject to such conversion less than the
lesser of (A) the Conversion Price then in effect (without giving effect to any adjustments to the Conversion Price arising solely as
a result of the issuances of the settlement shares under the Settlement Agreement) and (B) the greater of (x) the Conversion Price then
in effect (after giving effect to all adjustments to the Conversion Price (including, without limitation, such adjustments arising as
a result of the issuances of the settlement shares under the Settlement Agreement)) and (y) 90% of the lowest VWAP of the Common Stock
during the ten (10) consecutive trading day period ending and including such applicable conversion date under the terms of the Series
C Convertible Preferred Stock or Series C Convertible Preferred Stock, as applicable.
The
Settlement Agreement further provides that, notwithstanding anything in the applicable Certificate of Designations for the Series C Convertible
Preferred Stock or Certificate of Designations for the Series D Convertible Preferred Stock to the contrary, with respect to any given
conversion of any Series C Convertible Preferred Stock or Series D Convertible Preferred Stock, to the extent such Conversion Price,
as so adjusted, is greater than 90% of the lowest VWAP of the Common Stock during the ten (10) consecutive trading day period ending
and including the trading day of the applicable conversion notice, a Conversion Floor Price Condition (as defined in the Certificates
of Designations governing the Series C Convertible Preferred Stock and Series D Convertible Preferred Stock) shall be deemed to have
occurred with respect to such conversion of the Series C Convertible Preferred Stock or Series D Convertible Preferred Stock, as applicable.
Item
3.02 Unregistered Sales of Equity Securities
The
disclosure required by this Item is included in Item 1.01 of this Current Report on Form 8-K and is incorporated herein by
reference. Based in part upon the representations of the Holder to the Company, including that the Holder is an
“accredited investor” as defined under Rule 501(a) of Regulation D, the shares of Common Stock issuable under
the Settlement Agreement will be exempt from registration under Section 4(a)(2) of the Securities Act of
1933, as amended.
Item
3.03 Material Modifications to Rights of Security Holders
The
disclosure required by this Item and included in Item 1.01 of this Current Report is incorporated herein by reference.
Item
9.01. Financial Statement and Exhibits.
(d) Exhibits.
Forward-Looking
Statements
The information contained herein includes forward-looking
statements, as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified
by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,”
“predicts,” “projects,” “will be,” “will continue,” “will likely result,” and similar
expressions. These statements relate to future events or to our strategies, targeted markets, and future financial performance, and involve
known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements
to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking
statements, including, the ability to complete the transactions contemplated by the Offering and Settlement Agreement on satisfactory
terms or at all, and continued equity conversions under the Company’s preferred stock outstanding, including the conversion prices,
timing and other terms of such conversions. You should not place undue reliance on forward-looking statements since they involve known
and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially
affect actual results, levels of activity, performance or achievements. Factors that could cause or contribute to such differences include,
but are not limited to, those discussed in our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q,
and those discussed in other documents we file with the SEC, including our ability to maintain compliance with Nasdaq Listing Rules and
stay listed on Nasdaq, our obligations under our preferred stock outstanding, and our ability to continue as a going concern. Any forward-looking
statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions
relating to our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise
these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated
in these forward-looking statements, even if new information becomes available in the future, unless required by law. The safe harbor
for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 protects companies from liability for
their forward-looking statements if they comply with the requirements of such Act.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Date: August 16, 2023 |
|
|
|
|
|
|
ESPORTS ENTERTAINMENT
GROUP, INC. |
|
|
|
|
By: |
/s/
Michael Villani |
|
Name: |
Michael Villani |
|
Title: |
Interim Chief Financial Officer and Controller |
Exhibit
4.1
THE
NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT
TO SECTION 1(a) OF THIS WARRANT.
ESPORTS
ENTERTAINMENT GROUP, INC.
PREPAID WARRANT TO PURCHASE COMMON STOCK
Warrant
No.: 1
Date
of Issuance: August 16, 2023 (“Issuance Date”)
Esports
Entertainment Group, Inc., a Nevada corporation (the “Company”), hereby certifies that, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Alto Opportunity Master Fund, SPC - Segregated Master Portfolio B, the
registered holder hereof or its permitted assigns (the “Holder”), is entitled, subject to the terms set forth below,
to purchase from the Company, at the Exercise Price (as defined below) then in effect, upon exercise of this Warrant to Purchase Common
Stock (including any Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, the “Warrant”),
at any time or times on or after the Issuance Date, but not after 11:59 p.m., New York time, on the Expiration Date (as defined below),
4,167,959 (subject to adjustment as provided herein) fully paid and non-assessable shares of Common Stock (as defined below) (the
“Warrant Shares”, and such number of Warrant Shares, the “Warrant Number”). Except as otherwise
defined herein, capitalized terms in this Warrant shall have the meanings set forth in Section 19. This Warrant is one of the Warrants
to Purchase Common Stock (the “Registered Warrants”) issued pursuant to (i) Section 1 of that certain Securities Purchase
Agreement, dated as of August 15, 2023 (the “Subscription Date”), by and among the Company and the investors
(the “Buyers”) referred to therein, as amended from time to time (the “Securities Purchase Agreement”)
and (ii) the Company’s Registration Statement on Form S-3 (File number 333-252370) (the “Registration Statement”).
Notwithstanding
anything herein to the contrary, the Aggregate Exercise Price (as defined below) of this Warrant, except for a nominal exercise price
of $0.001 per Warrant Share, was pre-funded to the Company on or prior to the initial Issuance Date and, consequently, no additional
consideration (other than the nominal exercise price of $0.001 per Warrant Share) shall be required to be paid by the Holder to any Person
to effect any exercise of this Warrant.
1.
EXERCISE OF WARRANT.
(a)
Mechanics of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in
Section 1(f)), this Warrant may be exercised by the Holder on any day on or after the Issuance Date (an “Exercise Date”),
in whole or in part, by delivery (whether via facsimile or otherwise) of a written notice, in the form attached hereto as Exhibit
A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant. Within one (1) Trading
Day following an exercise of this Warrant as aforesaid, the Holder shall deliver payment to the Company of an amount equal to the Exercise
Price in effect on the date of such exercise multiplied by the number of Warrant Shares as to which this Warrant was so exercised (the
“Aggregate Exercise Price”) in cash or via wire transfer of immediately available funds if the Holder did not notify
the Company in such Exercise Notice that such exercise was made pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder
shall not be required to deliver the original of this Warrant in order to effect an exercise hereunder. Execution and delivery of an
Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original of this
Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. Execution and delivery
of an Exercise Notice for all of the then-remaining Warrant Shares shall have the same effect as cancellation of the original of this
Warrant after delivery of the Warrant Shares in accordance with the terms hereof. On or before the first (1st) Trading Day
following the date on which the Company has received an Exercise Notice, the Company shall transmit by facsimile or electronic mail an
acknowledgment of confirmation of receipt of such Exercise Notice, in the form attached hereto as Exhibit B, to the Holder
and the Company’s transfer agent (the “Transfer Agent”), which confirmation shall constitute an instruction
to the Transfer Agent to process such Exercise Notice in accordance with the terms herein. On or before the second (2nd) Trading Day
following the date on which the Company has received such Exercise Notice (or such earlier date as required pursuant to the 1934 Act
or other applicable law, rule or regulation for the settlement of a trade of such Warrant Shares initiated on the applicable Exercise
Date), the Company shall (X) provided that the Transfer Agent is participating in The Depository Trust Company (“DTC”)
Fast Automated Securities Transfer Program, upon the request of the Holder, credit such aggregate number of shares of Common Stock to
which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through
its Deposit/Withdrawal at Custodian system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer
Program (“FAST”), upon the request of the Holder, issue and deliver (via reputable overnight courier) to the address
as specified in the Exercise Notice, a certificate, registered in the name of the Holder or its designee, for the number of shares of
Common Stock to which the Holder shall be entitled pursuant to such exercise. Upon delivery of an Exercise Notice, the Holder shall be
deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been
exercised, irrespective of the date such Warrant Shares are credited to the Holder’s DTC account or the date of delivery of the
certificates evidencing such Warrant Shares (as the case may be). If this Warrant is submitted in connection with any exercise pursuant
to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of
Warrant Shares being acquired upon an exercise and upon surrender of this Warrant to the Company by the Holder, then, at the request
of the Holder, the Company shall as soon as practicable and in no event later than two (2) Business Days after any exercise and at its
own expense, issue and deliver to the Holder (or its designee) a new Warrant (in accordance with Section 7(d)) representing the right
to purchase the number of Warrant Shares purchasable immediately prior to such exercise under this Warrant, less the number of Warrant
Shares with respect to which this Warrant is exercised. No fractional shares of Common Stock are to be issued upon the exercise of this
Warrant, but rather the number of shares of Common Stock to be issued shall be rounded up to the nearest whole number. The Company shall
pay any and all transfer, stamp, issuance and similar taxes, costs and expenses (including, without limitation, fees and expenses of
the Transfer Agent) that may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant. Notwithstanding
the foregoing, except in the case where an exercise of this Warrant is validly made pursuant to a Cashless Exercise, the Company’s
failure to deliver Warrant Shares to the Holder on or prior to the later of (i) two (2) Trading Days after receipt of the applicable
Exercise Notice (or such earlier date as required pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement
of a trade of such Warrant Shares initiated on the applicable Exercise Date) and (ii) one (1) Trading Day after the Company’s receipt
of the Aggregate Exercise Price (or valid notice of a Cashless Exercise) (such later date, the “Share Delivery Date”)
shall not be deemed to be a breach of this Warrant. From the Issuance Date through and including the Expiration Date, the Company shall
maintain a transfer agent that participates in FAST.
(b)
Exercise Price. For purposes of this Warrant, “Exercise Price” means $0.1935, subject to adjustment
as provided herein.
(c)
Company’s Failure to Timely Deliver Securities. If the Company shall fail, for any reason or for no reason, on or prior
to the Share Delivery Date, either (I) if the Transfer Agent is not participating in FAST, to issue and deliver to the Holder (or its
designee) a certificate for the number of Warrant Shares to which the Holder is entitled and register such Warrant Shares on the Company’s
share register or, if the Transfer Agent is participating in FAST, to credit the balance account of the Holder or the Holder’s
designee with DTC for such number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise of this Warrant
(as the case may be) or (II) if the Registration Statement (or prospectus contained therein) covering the issuance of the Warrant Shares
that are the subject of the Exercise Notice (the “Unavailable Warrant Shares”) is not available for the issuance of
such Unavailable Warrant Shares and the Company fails to promptly (x) so notify the Holder and (y) deliver the Warrant Shares electronically
without any restrictive legend by crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such
exercise to the Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal At Custodian system (the
event described in the immediately foregoing clause (II) is hereinafter referred as a “Notice Failure” and together
with the event described in clause (I) above, a “Delivery Failure”), then, in addition to all other remedies available
to the Holder, (X) the Company shall pay in cash to the Holder on each day after the Share Delivery Date and during such Delivery Failure
an amount equal to 2% of the product of (A) the sum of the number of shares of Common Stock not issued to the Holder on or prior to the
Share Delivery Date and to which the Holder is entitled, multiplied by (B) any trading price of the Common Stock selected by the Holder
in writing as in effect at any time during the period beginning on the applicable Exercise Date and ending on the applicable Share Delivery
Date, and (Y) the Holder, upon written notice to the Company, may void its Exercise Notice with respect to, and retain or have returned,
as the case may be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice; provided that the voiding
of an Exercise Notice shall not affect the Company’s obligations to make any payments which have accrued prior to the date of such
notice pursuant to this Section 1(c) or otherwise. In addition to the foregoing, if on or prior to the Share Delivery Date either (I)
the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, the Company shall fail to issue and deliver
to the Holder (or its designee) a certificate and register such shares of Common Stock on the Company’s share register or, if the
Transfer Agent is participating in the DTC Fast Automated Securities Transfer Program, the Transfer Agent shall fail to credit the balance
account of the Holder or the Holder’s designee with DTC for the number of shares of Common Stock to which the Holder is entitled
upon the Holder’s exercise hereunder or pursuant to the Company’s obligation pursuant to clause (ii) below or (II) a Notice
Failure occurs, and if on or after such Share Delivery Date the Holder acquires (in an open market transaction, stock loan or otherwise)
shares of Common Stock corresponding to all or any portion of the number of shares of Common Stock issuable upon such exercise that the
Holder is entitled to receive from the Company and has not received from the Company in connection with such Delivery Failure or Notice
Failure, as applicable (a “Buy-In”), then, in addition to all other remedies available to the Holder, the Company
shall, within two (2) Business Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash to the
Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions, stock loan costs and other out-of-pocket
expenses, if any) for the shares of Common Stock so acquired (including, without limitation, by any other Person in respect, or on behalf,
of the Holder) (the “Buy-In Price”), at which point the Company’s obligation to so issue and deliver such certificate
(and to issue such shares of Common Stock) or credit the balance account of such Holder or such Holder’s designee, as applicable,
with DTC for the number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise hereunder (as the case may
be) (and to issue such Warrant Shares) shall terminate, or (ii) promptly honor its obligation to so issue and deliver to the Holder a
certificate or certificates representing such Warrant Shares or credit the balance account of such Holder or such Holder’s designee,
as applicable, with DTC for the number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise hereunder (as
the case may be) and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such
number of Warrant Shares multiplied by (B) the lowest Closing Sale Price of the Common Stock on any Trading Day during the period commencing
on the date of the applicable Exercise Notice and ending on the date of such issuance and payment under this clause (ii) (the “Buy-In
Payment Amount”). Nothing shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law
or in equity, including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver certificates representing shares of Common Stock (or to electronically deliver such shares of Common Stock)
upon the exercise of this Warrant as required pursuant to the terms hereof. While this Warrant is outstanding, the Company shall cause
its transfer agent to participate in FAST. In addition to the foregoing rights, (i) if the Company fails to deliver the applicable number
of Warrant Shares upon an exercise pursuant to Section 1 by the applicable Share Delivery Date, then the Holder shall have the right
to rescind such exercise in whole or in part and retain and/or have the Company return, as the case may be, any portion of this Warrant
that has not been exercised pursuant to such Exercise Notice; provided that the rescission of an exercise shall not affect the Company’s
obligation to make any payments that have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise, and (ii)
if a registration statement (which may be the Registration Statement) covering the issuance or resale of the Warrant Shares that are
subject to an Exercise Notice is not available for the issuance or resale, as applicable, of such Warrant Shares and the Holder has submitted
an Exercise Notice prior to receiving notice of the non-availability of such registration statement and the Company has not already delivered
the Warrant Shares underlying such Exercise Notice electronically without any restrictive legend by crediting such aggregate number of
Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account
with DTC through its Deposit / Withdrawal At Custodian system, the Holder shall have the option, by delivery of notice to the Company,
to (x) rescind such Exercise Notice in whole or in part and retain or have returned, as the case may be, any portion of this Warrant
that has not been exercised pursuant to such Exercise Notice; provided that the rescission of an Exercise Notice shall not affect the
Company’s obligation to make any payments that have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise,
and/or (y) switch some or all of such Exercise Notice from a cash exercise to a Cashless Exercise.
(d)
Cashless Exercise. Notwithstanding anything contained herein to the contrary (other than Section 1(f) below), the Holder may,
in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be
made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such exercise the “Net
Number” of Warrant Shares determined according to the following formula (a “Cashless Exercise”):
|
Net
Number = |
(A
x B) - (A x C) |
|
|
|
B |
|
|
|
|
|
|
For purposes of the foregoing formula: |
A=
the total number of shares with respect to which this Warrant is then being exercised.
B
= as elected by the Holder: (i) the VWAP of the shares of Common Stock on the Trading Day immediately preceding the date of the applicable
Exercise Notice if such Exercise Notice is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not a Trading
Day or (2) both executed and delivered pursuant to Section 1(a) hereof on a Trading Day prior to the opening of “regular trading
hours” (as defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii)
at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Exercise Notice
or (z) the Bid Price of the shares of Common Stock as of the time of the Holder’s execution of the applicable Exercise Notice if
such Exercise Notice is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter
pursuant to Section 1(a) hereof, or (iii) the Closing Sale Price of the Common Stock on the date of the applicable Exercise Notice if
the date of such Exercise Notice is a Trading Day and such Exercise Notice is both executed and delivered pursuant to Section 1(a) hereof
after the close of “regular trading hours” on such Trading Day.
C
= $0.001 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations and similar events).
If
the Warrant Shares are issued in a Cashless Exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the
1933 Act, the Warrant Shares take on the registered characteristics of the Warrants being exercised. For purposes of Rule 144(d) promulgated
under the 1933 Act, as in effect on the Subscription Date, it is intended that the Warrant Shares issued in a Cashless Exercise shall
be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the
date this Warrant was originally issued pursuant to the Securities Purchase Agreement.
(e)
Disputes. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the number of
Warrant Shares to be issued pursuant to the terms hereof, the Company shall promptly issue to the Holder the number of Warrant Shares
that are not disputed and resolve such dispute in accordance with Section 15.
(f)
Limitations on Exercises. The Company shall not effect the exercise of any portion of this Warrant, and the Holder shall not have
the right to exercise any portion of this Warrant, pursuant to the terms and conditions of this Warrant and any such exercise shall be
null and void and treated as if never made, to the extent that after giving effect to such exercise, the Holder together with the other
Attribution Parties collectively would beneficially own in excess of 4.99% (the “Maximum Percentage”) of the shares
of Common Stock outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number
of shares of Common Stock beneficially owned by the Holder and the other Attribution Parties shall include the number of shares of Common
Stock held by the Holder and all other Attribution Parties plus the number of shares of Common Stock issuable upon exercise of this Warrant
with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock which would be issuable
upon (A) exercise of the remaining, unexercised portion of this Warrant beneficially owned by the Holder or any of the other Attribution
Parties and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company (including, without
limitation, any convertible notes or convertible preferred stock or warrants, including other Registered Warrants) beneficially owned
by the Holder or any other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained
in this Section 1(f). For purposes of this Section 1(f)(i), beneficial ownership shall be calculated in accordance with Section 13(d)
of the 1934 Act. For purposes of determining the number of outstanding shares of Common Stock the Holder may acquire upon the exercise
of this Warrant without exceeding the Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as
reflected in (x) the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K
or other public filing with the SEC, as the case may be, (y) a more recent public announcement by the Company or (z) any other written
notice by the Company or the Transfer Agent, if any, setting forth the number of shares of Common Stock outstanding (the “Reported
Outstanding Share Number”). If the Company receives an Exercise Notice from the Holder at a time when the actual number of
outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Company shall (i) notify the Holder in writing
of the number of shares of Common Stock then outstanding and, to the extent that such Exercise Notice would otherwise cause the Holder’s
beneficial ownership, as determined pursuant to this Section 1(f), to exceed the Maximum Percentage, the Holder must notify the Company
of a reduced number of Warrant Shares to be acquired pursuant to such Exercise Notice (the number of shares by which such purchase is
reduced, the “Reduction Shares”) and (ii) as soon as reasonably practicable, the Company shall return to the Holder
any exercise price paid by the Holder for the Reduction Shares. For any reason at any time, upon the written or oral request of the Holder,
the Company shall within one (1) Business Day confirm orally and in writing or by electronic mail to the 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 Company, including this Warrant, by the Holder
and any other Attribution Party since the date as of which the Reported Outstanding Share Number was reported. In the event that the
issuance of shares of Common Stock to the Holder upon exercise of this Warrant results in the Holder and the other Attribution Parties
being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock
(as determined under Section 13(d) of the 1934 Act), the number of shares so issued by which the Holder’s and the other Attribution
Parties’ aggregate beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”) shall be deemed
null and void and shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer the Excess Shares. As
soon as reasonably practicable after the issuance of the Excess Shares has been deemed null and void, the Company shall return to the
Holder the exercise price paid by the Holder for the Excess Shares. Upon delivery of a written notice to the Company, the Holder may
from time to time increase (with such increase not effective until the sixty-first (61st) day after delivery of such notice)
or decrease the Maximum Percentage to any other percentage not in excess of 9.99% as specified in such notice; provided that (i) any
such increase in the Maximum Percentage will not be effective until the sixty-first (61st) day after such notice is delivered
to the Company and (ii) any such increase or decrease will apply only to the Holder and the other Attribution Parties and not to any
other holder of Registered Warrants that is not an Attribution Party of the Holder. For purposes of clarity, the shares of Common Stock
issuable pursuant to the terms of this Warrant in excess of the Maximum Percentage shall not be deemed to be beneficially owned by the
Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No prior inability to exercise this
Warrant pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any
subsequent determination of exercisability. The provisions of this paragraph shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 1(f)(i) to the extent necessary to correct this paragraph or any portion of
this paragraph which may be defective or inconsistent with the intended beneficial ownership limitation contained in this Section 1(f)(i)
or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitation contained in this
paragraph may not be waived and shall apply to a successor holder of this Warrant.
(g)
Reservation of Shares.
(i)
Required Reserve Amount. So long as this Warrant remains outstanding, the Company shall at all times keep reserved for issuance
under this Warrant a number of shares of Common Stock at least equal to 100% of the maximum number of shares of Common Stock as shall
be necessary to satisfy the Company’s obligation to issue shares of Common Stock under the Registered Warrants then outstanding
(without regard to any limitations on exercise) (the “Required Reserve Amount”); provided that at no time shall the
number of shares of Common Stock reserved pursuant to this Section 1(g)(i) be reduced other than proportionally in connection with any
exercise or redemption of Registered Warrants or such other event covered by Section 2(a) below. The Required Reserve Amount (including,
without limitation, each increase in the number of shares so reserved) shall be allocated pro rata among the holders of the Registered
Warrants based on number of shares of Common Stock issuable upon exercise of Registered Warrants held by each holder on the Closing Date
(without regard to any limitations on exercise) or increase in the number of reserved shares, as the case may be (the “Authorized
Share Allocation”). In the event that a holder shall sell or otherwise transfer any of such holder’s Registered Warrants,
each transferee shall be allocated a pro rata portion of such holder’s Authorized Share Allocation. Any shares of Common Stock
reserved and allocated to any Person which ceases to hold any Registered Warrants shall be allocated to the remaining holders of Registered
Warrants, pro rata based on the number of shares of Common Stock issuable upon exercise of the Registered Warrants then held by such
holders (without regard to any limitations on exercise).
(ii)
Insufficient Authorized Shares. If, notwithstanding Section 1(g)(i) above, and not in limitation
thereof, at any time while any of the Registered Warrants remain outstanding, the Company does not have a sufficient number of authorized
and unreserved shares of Common Stock to satisfy its obligation to reserve the Required Reserve Amount (an “Authorized Share
Failure”), then the Company shall immediately take all action necessary to increase the Company’s authorized shares of
Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount for all the Registered Warrants then
outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the occurrence of an
Authorized Share Failure, but in no event later than sixty (60) days after the occurrence of such Authorized Share Failure, the Company
shall hold a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection
with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its best efforts to solicit its stockholders’
approval of such increase in authorized shares of Common Stock and to cause its board of directors to recommend to the stockholders that
they approve such proposal. Notwithstanding the foregoing, if any such time of an Authorized Share Failure, the Company is able to obtain
the written consent of a majority of the shares of its issued and outstanding shares of Common Stock to approve the increase in the number
of authorized shares of Common Stock, the Company may satisfy this obligation by obtaining such consent and submitting for filing with
the SEC an Information Statement on Schedule 14C. In the event that the Company is prohibited from issuing shares of Common Stock upon
an exercise of this Warrant due to the failure by the Company to have sufficient shares of Common Stock available out of the authorized
but unissued shares of Common Stock (such unavailable number of shares of Common Stock, the “Authorization Failure Shares”),
in lieu of delivering such Authorization Failure Shares to the Holder, the Company shall pay cash in exchange for the cancellation of
such portion of this Warrant exercisable into such Authorization Failure Shares at a price equal to the sum of (i) the product of (x)
such number of Authorization Failure Shares and (y) the greatest Closing Sale Price of the Common Stock on any Trading Day during the
period commencing on the date the Holder delivers the applicable Exercise Notice with respect to such Authorization Failure Shares to
the Company and ending on the date of such issuance and payment under this Section 1(g); and (ii) to the extent the Holder purchases
(in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of Authorization
Failure Shares, any Buy-In Payment Amount, brokerage commissions and other out-of-pocket expenses, if any, of the Holder incurred in
connection therewith.
Nothing
contained in this Section 1(g) shall limit any obligations of the Company under any provision of the Securities Purchase Agreement.
2.
ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and number of Warrant Shares issuable upon exercise
of this Warrant are subject to adjustment from time to time as set forth in this Section 2.
(a)
Stock Dividends and Splits. Without limiting any provision of Section 1, Section 3 or Section 4, if the Company, at any
time on or after the Subscription Date, (i) pays a stock dividend on one or more classes of its then outstanding shares of Common Stock
or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides (by any stock
split, stock dividend, recapitalization or otherwise) one or more classes of its then outstanding shares of Common Stock into a larger
number of shares or (iii) combines (by combination, reverse stock split or otherwise) one or more classes of its then outstanding shares
of Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction of which
the numerator shall be the number of shares of Common Stock 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 clause (i) of this
paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend
or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective
date of such subdivision or combination. If any event requiring an adjustment under this paragraph occurs during the period that an Exercise
Price is calculated hereunder, then the calculation of such Exercise Price shall be adjusted appropriately to reflect such event.
(b)
Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to this Section 2(a), the number of
Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such
adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate
Exercise Price in effect immediately prior to such adjustment (without regard to any limitations on exercise contained herein).
(c)
Calculations. All calculations under this Section 2 shall be made by rounding to the nearest cent or the nearest 1/100th
of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or
held by or for the account of the Company, and the disposition of any such shares shall be considered an issuance or sale of Common Stock.
(d)
Voluntary Adjustment By Company. Subject to the rules and regulations of the Principal Market, the Company may at any time during
the term of this Warrant, with the prior written consent of the Required Holders (as defined in the Securities Purchase Agreement), reduce
the then current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors of the Company.
3.
RIGHTS UPON DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 2 above or Section 4(a) below, if the Company
shall declare or make 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, options, evidence of indebtedness or any other assets 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 Warrant, 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
exercise of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including without limitation,
the Maximum Percentage) immediately before the date on 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, that to the extent that the Holder’s right to participate in any such Distribution would result in the Holder and the
other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution
to the extent of the Maximum Percentage (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result
of such Distribution (and beneficial ownership) to the extent of any such excess) and the portion of such Distribution shall be held
in abeyance for the benefit of the Holder until such time or times, if ever, as its right thereto would not result in the Holder and
the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such Distribution
(and any Distributions declared or made on such initial Distribution or on any subsequent Distribution held similarly in abeyance) to
the same extent as if there had been no such limitation).
4.
PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.
(a)
Purchase Rights. In addition to any adjustments pursuant to Sections 2 or 3 above, if at any time the Company grants, issues or
sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record
holders of any class 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 exercise of this Warrant (without regard to any limitations or restrictions
on exercise of this Warrant, including without limitation, the Maximum Percentage) 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, issuance or sale of such Purchase Rights (provided, however, that to
the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder and the other Attribution
Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase Right to the extent of
the Maximum Percentage (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Purchase
Right (and beneficial ownership) to the extent of any such excess) and such Purchase Right to such extent shall be held in abeyance for
the benefit of the Holder until such time or times, if ever, as its right thereto would not result in the Holder and the other Attribution
Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such right (and any Purchase Right granted,
issued or sold on such initial Purchase Right or on
any subsequent Purchase Right held similarly in abeyance) to the same extent as if there had been no such limitation).
(b)
Fundamental Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity
assumes in writing all of the obligations of the Company under this Warrant and the other Transaction Documents (as defined in the Securities
Purchase Agreement) in accordance with the provisions of this Section 4(b) pursuant to written agreements in form and substance satisfactory
to the Holder and approved by the Holder prior to such Fundamental Transaction, including agreements to deliver to the Holder in exchange
for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to
this Warrant, including, without limitation, which is exercisable for a corresponding number of shares of capital stock equivalent to
the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise
of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise 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 adjustments to the number of shares of capital stock and such exercise price being
for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction)
and (ii) the Successor Entity (including its Parent Entity) is a publicly traded corporation whose common stock is quoted on or listed
for trading on an Eligible Market. Upon the consummation of each Fundamental Transaction, the Successor Entity shall succeed to, and
be substituted for (so that from and after the date of the applicable Fundamental Transaction, the provisions of this Warrant and the
other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every
right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents
with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation of each Fundamental Transaction,
the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any time after
the consummation of the applicable Fundamental Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets
or other property (except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter))
issuable upon the exercise of this Warrant prior to the applicable Fundamental Transaction, such shares of publicly traded common stock
(or its equivalent) of the Successor Entity (including its Parent Entity) which the Holder would have been entitled to receive upon the
happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction
(without regard to any limitations on the exercise of this Warrant), as adjusted in accordance with the provisions of this Warrant; provided,
that if the Fundamental Transaction is not within the Company’s control, including not approved by the Company’s Board of
Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity, upon exercise of such successor warrant,
the same type or form of consideration (and in the same proportion), that is being offered and paid to the holders of Common Stock of
the Company in connection with the Fundamental Transaction, whether that consideration be in the form of Common Stock (or other securities,
cash, assets or other property) or any combination thereof, or whether the holders of Common Stock are given the choice to receive from
among alternative forms of consideration in connection with the Fundamental Transaction. Notwithstanding
the foregoing, and without limiting Section 1(f) hereof, the Holder may elect, at its sole option, by delivery of written notice to the
Company to waive this Section 4(b) to permit the Fundamental Transaction without the assumption of this Warrant. In addition to and not
in substitution for any other rights hereunder, prior to the consummation of each Fundamental Transaction pursuant to which holders of
shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange for shares of Common Stock (a
“Corporate Event”), the Company shall make appropriate provision to insure that the Holder will thereafter have the
right to receive upon an exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction but prior
to the Expiration Date, in lieu of the shares of the Common Stock (or other securities, cash, assets or other property (except such items
still issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of the
Warrant prior to such Fundamental Transaction, such shares of stock, securities, cash, assets or any other property whatsoever (including
warrants or other purchase or subscription rights) which the Holder would have been entitled to receive upon the happening of the applicable
Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard to
any limitations on the exercise of this Warrant). Provision made pursuant to the preceding sentence shall be in a form and substance
reasonably satisfactory to the Holder.
(c)
Application. The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions and Corporate
Events and shall be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without regard to any limitations
on the exercise of this Warrant (provided that the Holder shall continue to be entitled to the benefit of the Maximum Percentage, applied
however with respect to shares of capital stock registered under the 1934 Act and thereafter receivable upon exercise of this Warrant
(or any such other warrant)).
5.
NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment
of its Articles of Incorporation (as defined in the Securities Purchase Agreement), Bylaws (as defined in the Securities Purchase Agreement)
or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance or sale of securities,
or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at
all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights of
the Holder. Without limiting the generality of the foregoing, the Company (a) shall not increase the par value of any shares of Common
Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, and (b) shall take all such actions as may
be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Common Stock
upon the exercise of this Warrant. Notwithstanding anything herein to the contrary, if after the sixty (60) calendar day anniversary
of the Issuance Date, the Holder is not permitted to exercise this Warrant in full for any reason (other than pursuant to restrictions
set forth in Section 1(f) hereof), the Company shall use its best efforts to promptly remedy such failure, including, without limitation,
obtaining such consents or approvals as necessary to permit such exercise into shares of Common Stock.
6.
WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein,
the Holder, solely in its capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder
of share capital of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder,
solely in its capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or
withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger,
conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to
the Holder of the Warrant Shares which it is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained
in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant
or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company.
Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices and other information given to the
stockholders of the Company generally, contemporaneously with the giving thereof to the stockholders.
7.
REISSUANCE OF WARRANTS.
(a)
Transfer of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the
Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as
the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less
than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section
7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.
(b)
Lost, Stolen or Mutilated Warrant. Upon receipt
by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant (as to
which a written certification and the indemnification contemplated below shall suffice as such evidence), and, in the case of loss, theft
or destruction, of any indemnification undertaking by the Holder to the Company in customary and reasonable form and, in the case of
mutilation, upon surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance
with Section 7(d)) representing the right to purchase the Warrant Shares then underlying this Warrant.
(c)
Exchangeable for Multiple Warrants. This Warrant
is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Warrant or Warrants (in accordance
with Section 7(d)) representing in the aggregate the right to purchase the number of Warrant Shares then underlying this Warrant, and
each such new Warrant will represent the right to purchase such portion of such Warrant Shares as is designated by the Holder at the
time of such surrender; provided, however, no warrants for fractional shares of Common Stock shall be given.
(d)
Issuance of New Warrants. Whenever the Company
is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of like tenor with this Warrant,
(ii) shall represent, as indicated on the face of such new Warrant, the right to purchase the Warrant Shares then underlying this Warrant
(or in the case of a new Warrant being issued pursuant to Section 7(a) or Section 7(c), the Warrant Shares designated by the Holder which,
when added to the number of shares of Common Stock underlying the other new Warrants issued in connection with such issuance, does not
exceed the number of Warrant Shares then underlying this Warrant), (iii) shall have an issuance date, as indicated on the face of such
new Warrant which is the same as the Issuance Date, and (iv) shall have the same rights and conditions as this Warrant.
8.
NOTICES. Whenever notice is required to be given under this Warrant, unless otherwise provided
herein, such notice shall be given in accordance with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the
Holder with prompt written notice of all actions taken pursuant to this Warrant (other than the issuance of shares of Common Stock upon
exercise in accordance with the terms hereof), including in reasonable detail a description of such action and the reason therefor. Without
limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon each adjustment of
the Exercise Price and the number of Warrant Shares, setting forth in reasonable detail, and certifying, the calculation of such adjustment(s),
(ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend
or distribution upon the shares of Common Stock, or (B) for determining rights to vote with respect to any Fundamental Transaction, dissolution
or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction with such notice
being provided to the Holder, and (iii) at least ten (10) Trading Days prior to the consummation of any Fundamental Transaction. To the
extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of
its Subsidiaries, the Company shall simultaneously file such notice with the SEC (as defined in the Securities Purchase Agreement) pursuant
to a Current Report on Form 8-K. If the Company or any of its Subsidiaries provides material non-public information to the Holder that
is not simultaneously filed in a Current Report on Form 8-K and the Holder has not agreed to receive such material non-public information,
the Company hereby covenants and agrees that the Holder shall not have any duty of confidentiality to the Company, any of its Subsidiaries
or any of their respective officers, directors, employees, affiliates or agents with respect to, or a duty to any of the foregoing not
to trade on the basis of, such material non-public information. It is expressly understood and agreed that the time of execution specified
by the Holder in each Exercise Notice shall be definitive and may not be disputed or challenged by the Company.
9.
DISCLOSURE. Upon delivery by the Company to the Holder (or receipt by the Company from the Holder) of any notice in accordance
with the terms of this Warrant, unless the Company has in good faith determined that the matters relating to such notice do not constitute
material, non-public information relating to the Company or any of its Subsidiaries, the Company shall on or prior to 9:00 am, New York
city time on the Business Day immediately following such notice delivery date, publicly disclose such material, non-public information
on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material, non-public information
relating to the Company or any of its Subsidiaries, the Company so shall indicate to the Holder explicitly in writing in such notice
(or immediately upon receipt of notice from the Holder, as applicable), and in the absence of any such written indication in such notice
(or notification from the Company immediately upon receipt of notice from the Holder), the Holder shall be entitled to presume that information
contained in the notice does not constitute material, non-public information relating to the Company or any of its Subsidiaries. Nothing
contained in this Section 9 shall limit any obligations of the Company, or any rights of the Holder, under Section 4(l) of the Securities
Purchase Agreement.
10.
ABSENCE OF TRADING AND DISCLOSURE RESTRICTIONS. The Company acknowledges and agrees that the Holder is not a fiduciary or agent
of the Company and that the Holder shall have no obligation to (a) maintain the confidentiality of any information provided by the Company
or (b) refrain from trading any securities while in possession of such information in the absence of a written non-disclosure agreement
signed by an officer of the Holder that explicitly provides for such confidentiality and trading restrictions. In the absence of such
an executed, written non-disclosure agreement, the Company acknowledges that the Holder may freely trade in any securities issued by
the Company, may possess and use any information provided by the Company in connection with such trading activity, and may disclose any
such information to any third party.
11.
AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant (other than Section 1(f)) may be amended
and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the
Company has obtained the written consent of the Holder. No waiver shall be effective unless it is in writing and signed by an authorized
representative of the waiving party.
12.
SEVERABILITY. If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by
a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended
to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall
not affect the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability
of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or
the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as
close as possible to that of the prohibited, invalid or unenforceable provision(s).
13.
GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance
with, and all questions concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the
internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the
State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State
of New York. The Company hereby irrevocably waives personal service of process and consents to process being served in any such suit,
action or proceeding by mailing a copy thereof to the Company at the address set forth in Section 9(f) of the Securities Purchase Agreement
and agrees that such service shall constitute good and sufficient service of process and notice thereof. The Company hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for
the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein,
and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject
to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of
such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking
other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to the Holder, to realize
on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the Holder.
THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.
14.
CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed
against any Person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or
affect the interpretation of, this Warrant. Terms used in this Warrant but defined in the other Transaction Documents shall have the
meanings ascribed to such terms on the Closing Date (as defined in the Securities Purchase Agreement) in such other Transaction Documents
unless otherwise consented to in writing by the Holder.
15.
DISPUTE RESOLUTION.
(a)
Submission to Dispute Resolution.
(i)
In the case of a dispute relating to the Exercise Price, the Closing Sale Price, the Bid Price or fair market value or the arithmetic
calculation of the number of Warrant Shares (as the case may be) (including, without limitation, a dispute relating to the determination
of any of the foregoing), the Company or the Holder (as the case may be) shall submit the dispute to the other party via facsimile (A)
if by the Company, within two (2) Business Days after the occurrence of the circumstances giving rise to such dispute or (B) if by the
Holder, at any time after the Holder learned of the circumstances giving rise to such dispute. If the Holder and the Company are unable
to promptly resolve such dispute relating to such Exercise Price, such Closing Sale Price, such Bid Price or such fair market value or
such arithmetic calculation of the number of Warrant Shares (as the case may be), at any time after the second (2nd) Business
Day following such initial notice by the Company or the Holder (as the case may be) of such dispute to the Company or the Holder (as
the case may be), then the Holder may, at its sole option, select an independent, reputable investment bank to resolve such dispute.
(ii)
The Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered in accordance
with the first sentence of this Section 15 and (B) written documentation supporting its position with respect to such dispute, in each
case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following the date on which the
Holder selected such investment bank (the “Dispute Submission Deadline”) (the documents referred to in the immediately
preceding clauses (A) and (B) are collectively referred to herein as the “Required Dispute Documentation”) (it being
understood and agreed that if either the Holder or the Company fails to so deliver all of the Required Dispute Documentation by the Dispute
Submission Deadline, then the party who fails to so submit all of the Required Dispute Documentation shall no longer be entitled to (and
hereby waives its right to) deliver or submit any written documentation or other support to such investment bank with respect to such
dispute and such investment bank shall resolve such dispute based solely on the Required Dispute Documentation that was delivered to
such investment bank prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by both the Company and the Holder
or otherwise requested by such investment bank, neither the Company nor the Holder shall be entitled to deliver or submit any written
documentation or other support to such investment bank in connection with such dispute (other than the Required Dispute Documentation).
(iii)
The Company and the Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company and the
Holder of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline. The fees and expenses
of such investment bank shall be borne solely by the Company, and such investment bank’s resolution of such dispute shall be final
and binding upon all parties absent manifest error.
(b)
Miscellaneous. The Company expressly acknowledges and agrees that (i) this Section 15 constitutes an agreement to arbitrate between
the Company and the Holder (and constitutes an arbitration agreement) under the rules then in effect under § 7501, et seq. of the
New York Civil Practice Law and Rules (“CPLR”) and that the Holder is authorized to apply for an order to compel arbitration
pursuant to CPLR § 7503(a) in order to compel compliance with this Section 15, (ii) the terms of this Warrant and each other applicable
Transaction Document shall serve as the basis for the selected investment bank’s resolution of the applicable dispute, such investment
bank shall be entitled (and is hereby expressly authorized) to make all findings, determinations and the like that such investment bank
determines are required to be made by such investment bank in connection with its resolution of such dispute and in resolving such dispute
such investment bank shall apply such findings, determinations and the like to the terms of this Warrant and any other applicable Transaction
Documents, (iii) the Holder (and only the Holder), in its sole discretion, shall have the right to submit any dispute described in this
Section 15 to any state or federal court sitting in The City of New York, Borough of Manhattan in lieu of utilizing the procedures set
forth in this Section 15 and (v) nothing in this Section 15 shall limit the Holder from obtaining any injunctive relief or other equitable
remedies (including, without limitation, with respect to any matters described in this Section 15).
16.
REMEDIES, CHARACTERIZATION, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies
provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant and the other Transaction
Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall
limit the right of the Holder to pursue actual and consequential damages for any failure by the Company to comply with the terms of this
Warrant. The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as
expressly provided herein. Amounts set forth or provided for herein with respect to payments, exercises and the like (and the computation
thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other
obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will
cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that,
in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled, in addition to all other available
remedies, to specific performance and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of
competent jurisdiction in any such case without the necessity of proving actual damages and without posting a bond or other security.
The Company shall provide all information and documentation to the Holder that is requested by the Holder to enable the Holder to confirm
the Company’s compliance with the terms and conditions of this Warrant (including, without limitation, compliance with Section
2 hereof). The issuance of shares and certificates for shares as contemplated hereby upon the exercise of this Warrant shall be made
without charge to the Holder or such shares for any issuance tax or other costs in respect thereof, provided that the Company shall not
be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any certificate in
a name other than the Holder or its agent on its behalf.
17.
PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Warrant is placed in the hands of an attorney for collection or
enforcement or is collected or enforced through any legal proceeding or the holder otherwise takes action to collect amounts due under
this Warrant or to enforce the provisions of this Warrant or (b) there occurs any bankruptcy, reorganization, receivership of the company
or other proceedings affecting company creditors’ rights and involving a claim under this Warrant, then the Company shall pay the
costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership
or other proceeding, including, without limitation, attorneys’ fees and disbursements.
18.
TRANSFER. This Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company.
19.
CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:
(a)
“1933 Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.
(b)
“1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
(c)
“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled
by, or is under common control with, such Person, it being understood for purposes of this definition that “control” of a
Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of
directors of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
(d)
“Attribution Parties” means, collectively, the following Persons and entities: (i) any investment vehicle, including,
any funds, feeder funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed
or advised by the Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of
the Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or
any of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock would or could be aggregated
with the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the 1934 Act. For clarity, the purpose of
the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.
(e)
“Bid Price” means, for any security as of the particular time of determination,
the bid price for such security on the Principal Market as reported by Bloomberg as of such time of determination, or, if the Principal
Market is not the principal securities exchange or trading market for such security, the bid price of such security on the principal
securities exchange or trading market where such security is listed or traded as reported by Bloomberg as of such time of determination,
or if the foregoing does not apply, the bid price of such security in the over-the-counter market on the electronic bulletin board for
such security as reported by Bloomberg as of such time of determination, or, if no bid price is reported for such security by Bloomberg
as of such time of determination, the average of the bid prices of any market makers for such security as reported in The Pink Open Market
(or a similar organization or agency succeeding to its functions of reporting prices) as of such time of determination. If the Bid Price
cannot be calculated for a security as of the particular time of determination on any of the foregoing bases, the Bid Price of such security
as of such time of determination shall be the fair market value as mutually determined by the Company and the Holder. If the Company
and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with
the procedures in Section 15. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination
or other similar transaction during such period.
(f)
“Bloomberg” means Bloomberg, L.P.
(g)
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New
York are authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall not
be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”, “nonessential
employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental
authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York
generally are open for use by customers on such day.
(h)
“Closing Sale Price” means, for any security as of any date, the last closing trade price for such security on the
Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate
the closing trade price, then the last trade price of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or,
if the Principal Market is not the principal securities exchange or trading market for such security, the last trade price of such security
on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing
does not apply, the last trade price of such security in the over-the-counter market on the electronic bulletin board for such security
as reported by Bloomberg, or, if no last trade price is reported for such security by Bloomberg, the average of the ask prices of any
market makers for such security as reported in The Pink Open Market (or a similar organization or agency succeeding to its functions
of reporting prices). If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases,
the Closing Sale Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder.
If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in
accordance with the procedures in Section 15. All such determinations shall be appropriately adjusted for any stock dividend, stock split,
stock combination or other similar transaction during such period.
(i)
“Common Stock” means (i) the Company’s shares of common stock, $0.0001 par value per share, and (ii) any capital
stock into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.
(j)
“Convertible Securities” means any stock or other security (other than Options) that is at any time and under any
circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof
to acquire, any shares of Common Stock.
(k)
“Eligible Market” means The New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, the Nasdaq
Global Market or the Principal Market.
(l)
“Expiration Date” means the date that is the fifth (5th) anniversary of the Issuance Date or, if such date
falls on a day other than a Trading Day or on which trading does not take place on the Principal Market (a “Holiday”),
the next date that is not a Holiday.
(m)
“Fundamental Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries,
Affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the
surviving corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all
of the properties or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation
S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject
to or have its Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange offer that
is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of
Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated with any Subject
Entities making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares of Common Stock
such that all Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such purchase, tender or
exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934
Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate a stock or share purchase agreement or other business
combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Subject
Entities whereby all such Subject Entities, individually or in the aggregate, acquire, either (x) at least 50% of the outstanding shares
of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated as if any shares of Common Stock held by all the
Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such stock purchase agreement or other
business combination were not outstanding; or (z) such number of shares of Common Stock such that the Subject Entities become collectively
the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (v)
reorganize, recapitalize or reclassify its Common Stock, (B) that the Company shall, directly or indirectly, including through subsidiaries,
Affiliates or otherwise, in one or more related transactions, allow any Subject Entity individually or the Subject Entities in the aggregate
to be or become the “beneficial owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through
acquisition, purchase, assignment, conveyance, tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger,
consolidation, business combination, reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization
or reclassification or otherwise in any manner whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented
by issued and outstanding Common Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding
Common Stock not held by all such Subject Entities as of the date of this Warrant calculated as if any shares of Common Stock held by
all such Subject Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting power represented by issued and
outstanding shares of Common Stock or other equity securities of the Company sufficient to allow such Subject Entities to effect a statutory
short form merger or other transaction requiring other shareholders of the Company to surrender their shares of Common Stock without
approval of the shareholders of the Company or (C) directly or indirectly, including through subsidiaries, Affiliates or otherwise, in
one or more related transactions, the issuance of or the entering into any other instrument or transaction structured in a manner to
circumvent, or that circumvents, the intent of this definition in which case this definition shall be construed and implemented in a
manner otherwise than in strict conformity with the terms of this definition to the extent necessary to correct this definition or any
portion of this definition which may be defective or inconsistent with the intended treatment of such instrument or transaction.
(n)
“Group” means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5
thereunder.
(o)
“Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible
Securities.
(p)
“Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose
common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent
Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.
(q)
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust,
an unincorporated organization, any other entity or a government or any department or agency thereof.
(r)
“Principal Market” means the Nasdaq Capital Market.
(s)
“SEC” means the United States Securities and Exchange Commission or the successor thereto.
(t)
“Subject Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.
(u)
“Successor Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from
or surviving any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental
Transaction shall have been entered into.
(v)
“Trading Day” means, as applicable, (x) with respect to all price or trading volume determinations relating to the
Common Stock, any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading
market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded,
provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or
market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange
or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during
the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise designated as a Trading Day in writing by the Holder or
(y) with respect to all determinations other than price or trading volume determinations relating to the Common Stock, any day on which
The New York Stock Exchange (or any successor thereto) is open for trading of securities.
(w)
“VWAP” means, for any security as of any date, the dollar volume-weighted average
price for such security on the Principal Market (or, if the Principal Market is not the principal trading market for such security, then
on the principal securities exchange or securities market on which such security is then traded), during the period beginning at 9:30
a.m., New York time, and ending at 4:00 p.m., New York time, as reported by Bloomberg through its “VAP” function (set to
09:30 start time and 16:00 end time) or, if the foregoing does not apply, the dollar volume-weighted average price of such security in
the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30 a.m., New York time,
and ending at 4:00 p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such
security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market
makers for such security as reported in The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting
prices). If the VWAP cannot be calculated for such security on such date on any of the foregoing bases, the VWAP of such security on
such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable
to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in
Section 15. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization
or other similar transaction during such period.
[signature
page follows]
IN
WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out
above.
|
ESPORTS
ENTERTAINMENT GROUP, INC. |
|
|
|
|
By: |
/s/ Alex Igelman |
|
Name: |
Alex
Igelman |
|
Title: |
Chief
Executive Officer |
EXHIBIT
A
NOTICE
OF EXERCISE
TO
BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT TO PURCHASE COMMON STOCK
ESPORTS
ENTERTAINMENT GROUP, INC.
The
undersigned holder hereby elects to exercise the Warrant to Purchase Common Stock No. _______ (the “Warrant”) of Esports
Entertainment Group, Inc., a Nevada corporation (the “Company”) as specified below. Capitalized terms used herein
and not otherwise defined shall have the respective meanings set forth in the Warrant.
1.
Form of Exercise Price. The Holder intends that payment of the Aggregate Exercise Price shall be made as:
|
☐ |
a
“Cash Exercise” with respect to _________________ Warrant Shares; and/or |
|
☐ |
a
“Cashless Exercise” with respect to _______________ Warrant Shares. |
In
the event that the Holder has elected a Cashless Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto,
the Holder hereby represents and warrants that (i) this Exercise Notice was executed by the Holder at __________ [a.m.][p.m.] on the
date set forth below and (ii) if applicable, the Bid Price as of such time of execution of this Exercise Notice was $________.
2.
Payment of Exercise Price. In the event that the Holder has elected a Cash Exercise with respect to some or all of the Warrant
Shares to be issued pursuant hereto, the Holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company
in accordance with the terms of the Warrant.
3.
Delivery of Warrant Shares. The Company shall deliver to Holder, or its designee or agent as specified below, __________ shares
of Common Stock in accordance with the terms of the Warrant. Delivery shall be made to Holder, or for its benefit, as follows:
|
☐ |
Check
here if requesting delivery as a certificate to the following name and to the following address: |
Issue
to: _______________________________
|
☐ |
Check
here if requesting delivery by Deposit/Withdrawal at Custodian as follows: |
DTC
Participant: |
DTC
Number: |
Account
Number: |
Date:
_____________ __,
|
|
Name
of Registered Holder |
|
By:
|
|
|
Name: |
|
|
Title: |
|
|
Tax
ID: |
|
|
Facsimile: |
|
E-mail
address: |
|
EXHIBIT
B
ACKNOWLEDGEMENT
The
Company hereby acknowledges this Exercise Notice and hereby directs ______________ to issue the above indicated number of shares of Common
Stock in accordance with the Transfer Agent Instructions dated _________, 202_, from the Company and acknowledged and agreed to by _______________.
|
ESPORTS
ENTERTAINMENT GROUP, INC. |
|
|
|
|
By:
|
|
|
Name: |
|
|
Title: |
|
Exhibit
5.1
WESTWARD LAW, LLC |
3273 E. Wann Springs
Las Vegas, NV 89120 |
|
|
|
Telephone:
702-595-8005 |
|
Email:
keavery@westwardlaw.com |
August
16, 2023
Esports
Entertainment Group, Inc.
Block
6, Triq Paceville
St.
Julians, Malta, STJ 3109
Re:
Esports Entertainment Group, Inc., Registration Statement on Form S-3
Ladies
and Gentlemen:
We
have acted as Nevada corporate counsel for Esports Entertainment Group, Inc., a Nevada corporation (the “Company”), in
connection with the filing with the Securities and Exchange Commission (the “Commission”) of the Registration Statement
on Form S- 3 (the “Registration Statement”), pursuant to which the Company is registering under the Securities Act
of 1933, as amended (the “Act”) the sale of 1,000,000 shares (the “Shares”) of common stock of
the Company, par value $0.001 per share (the “Common Stock”); and 4,167,959 shares of Common Stock (the “Warrant
Shares”) issuable upon exercise of certain pre-funded Warrants (the “Warrants”). The Shares and Warrants
were sold pursuant to that certain Securities Purchase Agreement, dated August 15, 2023, by and among the Company and the investors set
forth on the Schedule of Buyers attached thereto.
This
opinion is being rendered in connection with the filing of the Registration Statement.
In
connection with this opinion, we have examined originals or copies, certified or otherwise identified to our satisfaction, of such documents,
corporate records, certificates of public officials, officer’s certificates, and such other instruments, obtained for this opinion
as well as prior opinions, as we have deemed necessary or advisable for the purpose of rendering this opinion. In rendering the opinions
set forth below, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all documents submitted to us as duplicates or certified or conformed
copies, the truth of representations made by officers of the Company and the authenticity of the originals of all documents.
As
to matters of fact material to this opinion, we have relied to the extent we deemed reasonably appropriate upon current and past representations
or certificates of officers or directors of the Company we have received, without independently verifying the accuracy of such documents,
records and instruments.
Our
opinion herein is expressed solely with respect to the corporate laws of the State of Nevada. Our opinion is based on these laws as in
effect on the date hereof. We express no opinion to the extent that any other laws are applicable to the subject matter hereof and express
no opinion and provide no assurance as to compliance with any other federal or state securities law, rule or regulation.
Esports
Entertainment Group, Inc.
August
16, 2023
Page
2
On
the basis of the foregoing, and in reliance thereon, we are of the opinion that, as of the date hereof, when the Shares and Warrants
have been issued in the name of the Purchaser as contemplated by the Securities Purchase Agreement: (i) the Shares shall be duly and
validly issued, fully paid and non-assessable, and (ii) the Warrant Shares shall have been duly authorized and reserved for issuance
pursuant to the terms of the Warrants and, when issued and delivered upon the exercise of the Warrants and against payment of the consideration
set forth therein, will be duly and validly issued, fully paid and non-assessable.
We
hereby consent to your filing this opinion as an exhibit to the Company’s Registration Statement referenced above, and further
consent to the reference of our name under the caption “Legal Matters” in the Prospectus, which is a part of the Registration
Statement. In giving this consent, we believe, but do not hereby guarantee or admit, that we are “experts” within the meaning
of such term as used in Section 11 of the Securities Act or the rules and regulations promulgated thereunder by the Commission with respect
to any part of the Registration Statement or related Prospectus, nor do we guarantee or admit that we are in the category of persons
whose consent is required under Section 7 of the Securities Act or the rules and regulations promulgated thereunder by the Commission.
Very
truly yours,
WESTWARD
LAW, LLC
Exhibit
5.2
Holland
& Knight
August
16, 2023
Esports
Entertainment Group, lnc.
Block
6, Triq Paceville
St.
Julians STJ 3109
Malta
Re:
Shelf Registration Statement on Form S-3
Ladies
and Gentlemen:
We
have acted as corporate counsel to Esports Entertainment Group, Inc., a Nevada corporation (the “Company”), in connection
with the filing with the Securities and Exchange Commission of a prospectus supplement, dated August 15, 2023 (the “Prospectus
Supplement”), to the prospectus, dated February 5, 2021 (the “Prospectus”), which forms a part of the Company’s
Registration Statement on Form S-3 (the “Registration Statement”), pursuant to which the Company is registering under the
Securities Act of 1933, as amended (the “Act”) the sale of 1,000,000 shares (the “Shares”) of common stock of
the Company, par value $0.001 per share (the “Common Stock”) and 4,167,959 shares of Common Stock (the “Warrant Shares”)
issuable upon exercise of certain pre-funded Warrants (the “Warrants”). The Shares and Warrants will be sold pursuant to
that certain Securities Purchase Agreement, dated August 15, 2023 (the “SPA”), by and among the Company and the investors
set forth on the Schedule of Buyers attached thereto.
As
your corporate counsel, we have examined all such documents that we have considered necessary in order to enable us to render this opinion
letter, including, but not limited to, (i) the Registration Statement and the Prospectus; (ii) the Prospectus Supplement; (iii) the SPA;
(iv) the Warrants; (v) the Company’s Articles of Incorporation, as amended; (vi) the Company’s Bylaws, as amended; (vii)
certain authorizations and approvals adopted by the Company’s Board of Directors and a committee thereof in connection with the
offering and sale of the Warrants (the “Board Authorizations”); (viii) certain corporate records and instruments; and (iv)
such laws and regulations as we have deemed necessary for the purposes of rendering the opinion set forth herein. In our examination,
we have assumed the genuineness of all signatures, the legal capacity of all natural persons, the authenticity of and conformity to originals
of such documents that have been presented to us as duplicates or certified or conformed copies, the accuracy, completeness and authenticity
of originals, the due execution and delivery of all documents (except that no such assumption is made as to the Company) where due execution
and delivery are a prerequisite to the effectiveness thereof, and that the Warrants will be issued against payment of valid consideration
as set forth in the Warrants and under applicable law. As to any facts material to the opinion expressed herein, which were not independently
established or verified, we have relied, to the extent we have deemed reasonably appropriate, upon statements and representations or
certificates of officers or directors of the Company.
August
16, 2023
Page
2
Based
on the foregoing, and subject to the assumptions and qualifications set forth herein, it is our opinion that, as of the date of this
opinion letter, the Warrants constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance
with their respective terms.
Our
opinion is subject to (a) bankruptcy, insolvency, receivership, preference, fraudulent conveyance, fraudulent transfer, reorganization,
moratorium, tum-over, preferential transfer, equitable subordination, automatic stay, conversion of a non-recourse obligation into a
recourse obligation, substantive consolidation and other similar laws affecting the rights and remedies of creditors generally, including
state laws regarding creditors’ rights, fraudulent transfers and conveyances, and state receivership laws and other similar laws
affecting the rights and remedies of creditors generally; (b) general principles of equity, including principles of materiality, commercial
reasonableness, good faith and fair dealing and applicable law relating to fiduciary duties (regardless of whether considered and applied
in a proceeding in equity or at law); and (c) the discretion of any court before which any proceeding in respect of the Warrants, or
the transactions contemplated thereby may be brought. We express no opinion regarding the effectiveness of (i) any waiver of stay, extension
or usury laws or of unknown future rights; or (ii) provisions that may be held unenforceable as contrary to federal or state securities
laws.
The
foregoing opinion is limited to the corporate laws of the State of New York, and we do not express any opinion herein concerning any
other law. We express no opinion as to the applicability or effect of any federal or state securities laws, including the securities
laws of the State of New York. To the extent that any matter as to which our opinion expressed herein would be governed by the laws of
any jurisdiction other than the State of New York, we do not express any opinion on such matter.
This
opinion letter is issued as of the date hereof and is necessarily limited to laws now in effect and facts and circumstances presently
existing and brought to our attention. We assume no obligation to supplement this opinion letter if any applicable laws change after
the date hereof, or if we become aware of any facts or circumstances that now exist or that occur or arise in the future and may change
the opinion expressed herein after the date hereof.
We
consent to your filing this opinion letter as an exhibit to the Company’s Current Report on Form 8-K (and its incorporation by
reference into the Registration Statement). We also consent to the identification of our firm as counsel to the Company in the section
of the Prospectus Supplement titled “Legal Matters.” In giving this consent, we do not admit that we are within the category
of persons whose consent is required by Section 7 of the Act.
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Very truly yours, |
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/s/
HOLLAND & KNIGHT LLP |
Exhibit
10.1
SECURITIES
PURCHASE AGREEMENT
This
SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of August 15, 2023, is by and among Esports
Entertainment Group, Inc., a Nevada corporation with headquarters located at Block 6, Triq Paceville, St. Julians, Malta, STJ 3109 (the
“Company”), and each of the investors listed on the Schedule of Buyers attached hereto (individually, a “Buyer”
and collectively, the “Buyers”).
RECITALS
A.
The Company and each Buyer desire to enter into this transaction to purchase (i) the Common Shares (as defined below), and (ii) Warrants
(as defined below) pursuant to a currently effective shelf registration statement on Form S-3, which has at least $1,000,000 of unallocated
securities, including Common Stock (as defined below) and warrants to purchase Common Stock registered thereunder (Registration Number
333-252370) (the “Registration Statement”), which Registration Statement has been declared effective in accordance
with the Securities Act of 1933, as amended (the “1933 Act”), by the United States Securities and Exchange Commission
(the “SEC”).
B.
Each Buyer wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, (i) such aggregate
number of shares of Common Stock as set forth opposite such Buyer’s name in column (3) on the Schedule of Buyers (which aggregate
amount for all Buyers shall collectively be referred to herein as the “Common Shares”), and (ii) warrants to initially
acquire up to such aggregate number of shares of Common Stock set forth opposite such Buyer’s name in column (4) on the Schedule
of Buyers, as evidenced by a certificate in the form attached hereto as Exhibit A (the “Warrants”) (as
exercised, collectively, the “Warrant Shares”).
C.
The Common Shares, the Warrants and the Warrant Shares are collectively referred to herein as the “Securities”.
AGREEMENT
NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and each Buyer hereby agree as follows:
1. |
PURCHASE AND SALE OF COMMON SHARES AND WARRANTS. |
(a)
Purchase of Common Shares and Warrants. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and
7 below, the Company shall issue and sell to each Buyer, and each Buyer severally, but not jointly, agrees to purchase from the Company
on the Closing Date (as defined below) (A) such aggregate number of Common Shares as is set forth opposite such Buyer’s name in
column (3) on the Schedule of Buyers, and (B) Warrants to initially acquire up to that aggregate number of Warrant Shares as is set forth
opposite such Buyer’s name in column (4) on the Schedule of Buyers.
(b)
Closing. The closing (the “Closing”) of the purchase of the Common Shares and the Warrants by the Buyers shall
occur at the offices of Kelley Drye & Warren LLP, 3 World Trade Center, 175 Greenwich Street, New York, NY 10007. The date and time
of the Closing (the “Closing Date”) shall be 10:00 a.m., New York time, on the first (1st) Business Day (as defined
below) on which the conditions to the Closing set forth in Sections 6 and 7 below are satisfied or waived (or such other date as is mutually
agreed to by the Company and each Buyer). As used herein “Business Day” means any day other than Saturday, Sunday
or other day on which commercial banks in The City of New York are authorized or required by law to remain closed; provided, however,
for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”,
“shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure of any
physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including
for wire transfers) of commercial banks in The City of New York generally are open for use by customers on such day.
(c)
Purchase Price. The aggregate purchase price for the Common Shares and the Warrants to be purchased by each Buyer (the “Purchase
Price”) shall be the amount set forth opposite such Buyer’s name in column (5) on the Schedule of Buyers.
(d)
Form of Payment; Deliveries. On the Closing Date, (i) each Buyer shall pay its respective Purchase Price to the Company for the
Common Shares and the Warrants to be issued and sold to such Buyer at the Closing, by wire transfer of immediately available funds in
accordance with the Flow of Funds Letter (as defined below) (less, in the case of the lead Buyer, the amounts withheld pursuant to Section
4(j)) and (ii) the Company shall (A) cause VStock Transfer, LLC (together with any subsequent transfer agent, the “Transfer
Agent”) through the Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program, to credit
such aggregate number of Common Shares that each Buyer is purchasing as is set forth opposite such Buyer’s name in column (3) of
the Schedule of Buyers to such Buyer’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian
system, and (B) deliver to each Buyer the Warrants pursuant to which such Buyer shall have the right to initially acquire up to such
aggregate number of Warrant Shares as is set forth opposite such Buyer’s name in column (4) of the Schedule of Buyers, in each
case, duly executed on behalf of the Company and registered in the name of such Buyer or its designee.
(e)
Sales During Pre-Settlement Period. Notwithstanding anything herein to the contrary, if at any time on or after the time of execution
of this Agreement by the Company and an applicable Buyer, through, and including the time immediately prior to the Closing (the “Pre-Settlement
Period”), such Buyer sells (excluding “short sales” as defined in Rule 200 of Regulation SHO) to any Person all,
or any portion, of any Common Shares to be issued hereunder to such Buyer at the Closing (collectively, the “Pre-Settlement
Common Shares”), such Buyer shall, automatically hereunder (without any additional required actions by such Buyer or the Company),
be deemed to be unconditionally bound to purchase, and the Company shall be deemed unconditionally bound to sell, such Pre-Settlement
Common Shares to such Buyer at the Closing; provided, that the Company shall not be required to deliver any Pre-Settlement Common Shares
to such Buyer prior to the Company’s receipt of the purchase price of such Pre-Settlement Common Shares hereunder; and provided
further that the Company hereby acknowledges and agrees that the forgoing shall not constitute a representation or covenant by such Buyer
as to whether or not during the Pre-Settlement Period such Buyer shall sell any Common Shares to any Person and that any such decision
to sell any Common Shares by such Buyer shall be made, in the sole discretion of such Buyer, at the time such Buyer elects to effect
any such sale, if any.
2. |
BUYER’S REPRESENTATIONS AND WARRANTIES. |
Each
Buyer, severally and not jointly, represents and warrants to the Company with respect to only itself that, as of the date hereof and
as of the Closing Date:
(a)
Organization; Authority. Such Buyer is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction
of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated by the Transaction
Documents (as defined below) to which it is a party and otherwise to carry out its obligations hereunder and thereunder.
(b)
Validity; Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of such Buyer and
shall constitute the legal, valid and binding obligations of such Buyer enforceable against such Buyer in accordance with its terms,
except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights
and remedies.
(c)
No Conflicts. The execution, delivery and performance by such Buyer of this Agreement and the consummation by such Buyer of the
transactions contemplated hereby will not (i) result in a violation of the organizational documents of such Buyer, (ii) conflict with,
or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Buyer is a party
or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws)
applicable to such Buyer, except, in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which
could not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Buyer to
perform its obligations hereunder.
3. |
REPRESENTATIONS AND WARRANTIES OF THE COMPANY. |
The
Company represents and warrants to each of the Buyers that, as of the date hereof and as of the Closing Date:
(a)
Organization and Qualification. Each of the Company and each of its Subsidiaries are entities duly organized and validly existing
and in good standing under the laws of the jurisdiction in which they are formed, and have the requisite power and authority to own their
properties and to carry on their business as now being conducted and as presently proposed to be conducted. Each of the Company and each
of its Subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction in which its ownership
of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to
be so qualified or be in good standing would not reasonably be expected to have a Material Adverse Effect (as defined below). As used
in this Agreement, “Material Adverse Effect” means any material adverse effect on (i) the business, properties, assets,
liabilities, operations (including results thereof), condition (financial or otherwise) or prospects of the Company or any Subsidiary,
individually or taken as a whole, (ii) the transactions contemplated hereby or in any of the other Transaction Documents or any other
agreements or instruments to be entered into in connection herewith or therewith or (iii) the authority or ability of the Company or
any of its Subsidiaries to perform any of their respective obligations under any of the Transaction Documents (as defined below). “Subsidiaries”
means any Person in which the Company, directly or indirectly, (A) owns any of the outstanding capital stock or holds any equity or similar
interest of such Person or (B) controls or operates all or any part of the business, operations or administration of such Person; provided,
that solely for the purpose of this Section 3(a), Subsidiaries shall mean any Person listed on Schedule 3(a) and any other Person that would be a “significant subsidiary” of the Company as
defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the 1933 Act, and any such Person, as applicable, individually,
is referred to herein as a “Subsidiary”.
(b)
Authorization; Enforcement; Validity. The Company has the requisite power and authority to enter into and perform its obligations
under this Agreement and the other Transaction Documents and to issue the Securities in accordance with the terms hereof and thereof.
The execution and delivery of this Agreement and the other Transaction Documents by the Company and the consummation by the Company of
the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Common Shares, the issuance of the
Warrants and the reservation for issuance and issuance of the Warrant Shares issuable upon exercise of the Warrants) have been duly authorized
by the Company’s board of directors and (other than the filing with the SEC of the prospectus supplement required by the Registration
Statement pursuant to Rule 424(b) under the 1933 Act (the “Prospectus Supplement”) supplementing the base prospectus
forming part of the Registration Statement (the “Prospectus”) and any other filings as may be required by any state
securities agencies) no further filing, consent or authorization is required by the Company, its board of directors or its stockholders
or other governing body. This Agreement has been, and the other Transaction Documents will be prior to the Closing, duly executed and
delivered by the Company, and each constitutes the legal, valid and binding obligations of the Company, enforceable against the Company
in accordance with its respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or other laws relating to, or affecting generally, the enforcement of applicable
creditors’ rights and remedies and except as rights to indemnification and to contribution may be limited by federal or state securities
law. “Transaction Documents” means, collectively, this Agreement, the Common Shares, the Warrants, the Irrevocable
Transfer Agent Instructions (as defined below) and each of the other agreements and instruments entered into or delivered by any of the
parties hereto in connection with the transactions contemplated hereby and thereby, as may be amended from time to time.
(c)
Issuance of Securities; Registration Statement. The issuance of the Common Shares and the Warrants are duly authorized and, upon
issuance and payment in accordance with the terms of the Transaction Documents shall be validly issued, fully paid and non-assessable
and free from all preemptive or similar rights, mortgages, defects, claims, liens, pledges, charges, taxes, rights of first refusal,
encumbrances, security interests and other encumbrances (collectively “Liens”) with respect to the issuance thereof.
As of the Closing, the Company shall have reserved from its duly authorized capital stock not less than 100% of the maximum number of
shares of Common Stock issuable upon exercise of the Warrants (without taking into account any limitations on the exercise of the Warrants
set forth in the Warrants). Upon exercise in accordance with the Warrants, the Warrant Shares, when issued, will be validly issued, fully
paid and nonassessable and free from all preemptive or similar rights or Liens with respect to the issue thereof, with the holders being
entitled to all rights accorded to a holder of Common Stock. The issuance by the Company of the Securities has been registered under
the 1933 Act, the Securities are being issued pursuant to the Registration Statement and all of the Securities are freely transferable
and freely tradable by each of the Buyers without restriction, whether by way of registration or some exemption therefrom. The Registration
Statement is effective and available for the issuance of the Securities thereunder and the Company has not received any notice that the
SEC has issued or intends to issue a stop-order with respect to the Registration Statement or that the SEC otherwise has suspended or
withdrawn the effectiveness of the Registration Statement, either temporarily or permanently, or intends or has threatened in writing
to do so. The “Plan of Distribution” section under the Registration Statement permits the issuance and sale of the Securities
hereunder and as contemplated by the other Transaction Documents. Upon receipt of the Securities, each of the Buyers will have good and
marketable title to the Securities. The Registration Statement and any prospectus included therein, including the Prospectus and the
Prospectus Supplement, complied in all material respects with the requirements of the 1933 Act and the Securities Exchange Act of 1934,
as amended (the “1934 Act”) and the rules and regulations of the SEC promulgated thereunder and all other applicable
laws and regulations. At the time the Registration Statement and any amendments thereto became effective, at the date of this Agreement
and at each deemed effective date thereof pursuant to Rule 430B(f)(2) of the 1933 Act, the Registration Statement and any amendments
thereto complied and will comply in all material respects with the requirements of the 1933 Act and did not and will not contain any
untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements
therein not misleading. The Prospectus and any amendments or supplements thereto (including, without limitation the Prospectus Supplement),
at the time the Prospectus or any amendment or supplement thereto was issued and at the Closing Date, complied, and will comply, in all
material respects with the requirements of the 1933 Act and did not, and will not, contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were
made, not misleading. The Company meets all of the requirements for the use of Form S-3 under the 1933 Act for the offering and sale
of the Securities contemplated by this Agreement and the other Transaction Documents, and the SEC has not notified the Company of any
objection to the use of the form of the Registration Statement pursuant to Rule 401(g)(1) under the 1933 Act. The Registration Statement
meets the requirements set forth in Rule 415(a)(1)(x) under the 1933 Act. At the earliest time after the filing of the Registration Statement
that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the 1933 Act) relating
to any of the Securities, the Company was not and is not an “Ineligible Issuer” (as defined in Rule 405 under the 1933 Act).
The Company (i) has not distributed any offering material in connection with the offer or sale of any of the Securities and (ii) until
no Buyer holds any of the Securities, shall not distribute any offering material in connection with the offer or sale of any of the Securities
to, or by, any of the Buyers (if required), in each case, other than the Registration Statement, the Prospectus or the Prospectus Supplement.
In accordance with Rule 5110(b)(7)(C)(i) of the Financial Industry Regulatory Authority Manual, the offering of the Securities has been
registered with the SEC on Form S-3 under the 1933 Act pursuant to the standards for Form S-3 in effect prior to October 21, 1992, and
the Securities are being offered pursuant to Rule 415 promulgated under the 1933 Act.
(d)
No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Common Shares, the Warrants
and the Warrant Shares and the reservation for issuance of the Warrant Shares) will not (i) result in a violation of the Articles of
Incorporation (as defined below) (including, without limitation, any certificate of designation contained therein), Bylaws (as defined
below), certificate of formation, memorandum of association, articles of association, bylaws or other organizational documents of the
Company or any of its Subsidiaries, or any capital stock or other securities of the Company or any of its Subsidiaries, (ii) conflict
with, or constitute a default (or an event which with notice or lapse of time or both would become a default) in any respect under, or
give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which
the Company or any of its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree
(including, without limitation, foreign, federal and state securities laws and regulations and the rules and regulations of the Nasdaq
Capital Market (the “Principal Market”) and including all applicable foreign, federal and state laws, rules and regulations)
applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound
or affected.
(e)
Consents. Neither the Company nor any Subsidiary is required to obtain any consent from, authorization or order of, or make any
filing or registration with (other than the filing with the SEC of the Prospectus Supplement and any other filings as may be required
by any state securities agencies), any Governmental Entity (as defined below) or any regulatory or self-regulatory agency or any other
Person in order for it to execute, deliver or perform any of its respective obligations under or contemplated by the Transaction Documents,
in each case, in accordance with the terms hereof or thereof. All consents, authorizations, orders, filings and registrations which the
Company or any Subsidiary is required to obtain pursuant to the preceding sentence have been or will be obtained or effected on or prior
to the Closing Date, and neither the Company nor any of its Subsidiaries are aware of any facts or circumstances which might prevent
the Company or any of its Subsidiaries from obtaining or effecting any of the registration, application or filings contemplated by the
Transaction Documents. The Company is not in violation of the requirements of the Principal Market and has no knowledge of any facts
or circumstances which could reasonably lead to delisting or suspension of the Common Stock in the foreseeable future. “Governmental
Entity” means any nation, state, county, city, town, village, district, or other political jurisdiction of any nature, federal,
state, local, municipal, foreign, or other government, governmental or quasi-governmental authority of any nature (including any governmental
agency, branch, department, official, or entity and any court or other tribunal), multinational organization or body; or body exercising,
or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any
nature or instrumentality of any of the foregoing, including any entity or enterprise owned or controlled by a government or a public
international organization or any of the foregoing.
(f)
Acknowledgment Regarding Buyer’s Purchase of Securities. The Company acknowledges and agrees that each Buyer is acting solely
in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby
and thereby and that no Buyer is (i) an officer or director of the Company or any of its Subsidiaries, (ii) an “affiliate”
(as defined in Rule 144 promulgated under the 1933 Act (or a successor rule thereto) (collectively, “Rule 144”)) of
the Company or any of its Subsidiaries or (iii) to its knowledge, a “beneficial owner” of more than 10% of the shares of
Common Stock (as defined for purposes of Rule 13d-3 of the 1934 Act). The Company further acknowledges that no Buyer is acting as a financial
advisor or fiduciary of the Company or any of its Subsidiaries (or in any similar capacity) with respect to the Transaction Documents
and the transactions contemplated hereby and thereby, and any advice given by a Buyer or any of its representatives or agents in connection
with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to such Buyer’s purchase
of the Securities. The Company further represents to each Buyer that the Company’s decision to enter into the Transaction Documents
has been based solely on the independent evaluation by the Company and its representatives.
(g)
Placement Agent’s Fees. The Company shall be responsible for the payment of any placement agent’s fees, financial
advisory fees, or brokers’ commissions (other than for Persons engaged by any Buyer or its investment advisor) relating to or arising
out of the transactions contemplated hereby. The Company shall pay, and hold each Buyer harmless against, any liability, loss or expense
(including, without limitation, attorney’s fees and out-of-pocket expenses) arising in connection with any such claim. Neither
the Company nor any of its Subsidiaries has engaged any placement agent or other agent in connection with the offer or sale of the Securities.
(h)
No Integrated Offering. None of the Company, its Subsidiaries or any of their affiliates, nor any Person acting on their behalf
has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances
that would cause this offering of the Securities to require approval of stockholders of the Company under any applicable stockholder
approval provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation system on
which any of the securities of the Company are listed or designated for quotation. None of the Company, its Subsidiaries, their affiliates
nor any Person acting on their behalf will take any action or steps that would cause the offering of any of the Securities to be integrated
with other offerings of securities of the Company.
(i)
Dilutive Effect. The Company acknowledges that its obligation to issue the Warrant Shares upon exercise of the Warrants in accordance
with this Agreement and the Warrants is, absolute and unconditional regardless of the dilutive effect that such issuance may have on
the ownership interests of other stockholders of the Company.
(j)
Application of Takeover Protections; Rights Agreement. The Company and its board of directors have taken all necessary action,
if any, in order to render inapplicable any control share acquisition, interested stockholder, business combination, poison pill (including,
without limitation, any distribution under a rights agreement), stockholder rights plan or other similar antitakeover provision under
the Articles of Incorporation, Bylaws or other organizational documents or the laws of the jurisdiction of its incorporation or otherwise
which is or could become applicable to any Buyer as a result of the transactions contemplated by this Agreement, including, without limitation,
the Company’s issuance of the Securities and any Buyer’s ownership of the Securities. The Company and its board of directors
have taken all necessary action, if any, in order to render inapplicable any stockholder rights plan or similar arrangement relating
to accumulations of beneficial ownership of shares of Common Stock or a change in control of the Company or any of its Subsidiaries.
(k)
SEC Documents; Financial Statements. During the twelve (12) months prior to the date hereof, the Company has timely filed all
reports, schedules, forms, proxy statements, statements and other documents required to be filed by it with the SEC pursuant to the reporting
requirements of the 1934 Act (all of the foregoing filed prior to the date hereof and all exhibits and appendices included therein and
financial statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the
“SEC Documents”). The Company has delivered or has made available to the Buyers or their respective representatives
true, correct and complete copies of each of the SEC Documents not available on the EDGAR system. As of their respective dates, the SEC
Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated
thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements
of the Company included in the SEC Documents complied in all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto as in effect as of the time of filing. Such financial statements have been prepared
in accordance with generally accepted accounting principles (“GAAP”), consistently applied, during the periods involved
(except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects
the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit adjustments which will not be material, either individually or
in the aggregate). The reserves, if any, established by the Company or the lack of reserves, if applicable, are reasonable based upon
facts and circumstances known by the Company on the date hereof and there are no loss contingencies that are required to be accrued by
the Statement of Financial Accounting Standard No. 5 of the Financial Accounting Standards Board which are not provided for by the Company
in its financial statements or otherwise. No other information provided by or on behalf of the Company to any of the Buyers which is
not included in the SEC Documents (including, without limitation, information in the disclosure schedules to this Agreement) contains
any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein not misleading,
in the light of the circumstance under which they are or were made. The Company is not currently contemplating to amend or restate any
of the financial statements (including, without limitation, any notes or any letter of the independent accountants of the Company with
respect thereto) included in the SEC Documents (the “Financial Statements”), nor is the Company currently aware of
facts or circumstances which would require the Company to amend or restate any of the Financial Statements, in each case, in order for
any of the Financials Statements to be in compliance with GAAP and the rules and regulations of the SEC. The Company has not been informed
by its independent accountants that they recommend that the Company amend or restate any of the Financial Statements or that there is
any need for the Company to amend or restate any of the Financial Statements.
(l)
Absence of Certain Changes. Except as disclosed in the SEC Documents, since the date of the Company’s most recent audited
financial statements contained in a Form 10-K, there has been no material adverse change and no material adverse development in the business,
assets, liabilities, properties, operations (including results thereof), condition (financial or otherwise) or prospects of the Company
or any of its Subsidiaries. Except as disclosed in the SEC Documents, since the date of the Company’s most recent audited financial
statements contained in a Form 10-K, neither the Company nor any of its Subsidiaries has (i) declared or paid any dividends, (ii) sold
any assets, individually or in the aggregate, outside of the ordinary course of business or (iii) made any capital expenditures, individually
or in the aggregate, outside of the ordinary course of business. Neither the Company nor any of its Subsidiaries has taken any steps
to seek protection pursuant to any law or statute relating to bankruptcy, insolvency, reorganization, receivership, liquidation or winding
up, nor does the Company or any Subsidiary have any knowledge or reason to believe that any of their respective creditors intend to initiate
involuntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so.
(m)
No Undisclosed Events, Liabilities, Developments or Circumstances. No event, liability, development or circumstance has occurred
or exists, or is reasonably expected to exist or occur with respect to the Company, any of its Subsidiaries or any of their respective
businesses, properties, liabilities, prospects, operations (including results thereof) or condition (financial or otherwise), that (i)
would be required to be disclosed by the Company under applicable securities laws in its periodic reports filed with the SEC and which
has not been publicly announced, (ii) could have a material adverse effect on any Buyer’s investment hereunder or (iii) could have
a Material Adverse Effect.
(n)
Conduct of Business; Regulatory Permits. Neither the Company nor any of its Subsidiaries is in violation of any term of or in
default under its Articles of Incorporation, any certificate of designation, preferences or rights of any other outstanding series of
preferred stock of the Company or any of its Subsidiaries or Bylaws or their organizational charter, certificate of formation, memorandum
of association, articles of association, Articles of Incorporation or certificate of incorporation or bylaws, respectively. Neither the
Company nor any of its Subsidiaries is in violation of any judgment, decree or order or any statute, ordinance, rule or regulation applicable
to the Company or any of its Subsidiaries, and neither the Company nor any of its Subsidiaries will conduct its business in violation
of any of the foregoing, except in all cases for possible violations which could not, individually or in the aggregate, have a Material
Adverse Effect. During the two years prior to the date hereof, (i) the Common Stock has been listed or designated for quotation on the
Principal Market, and (ii) trading in the Common Stock has not been suspended by the SEC or the Principal Market. The Company and each
of its Subsidiaries possess all certificates, authorizations and permits issued by the appropriate regulatory authorities necessary to
conduct their respective businesses, except where the failure to possess such certificates, authorizations or permits would not have,
individually or in the aggregate, a Material Adverse Effect, and neither the Company nor any such Subsidiary has received any notice
of proceedings relating to the revocation or modification of any such certificate, authorization or permit. There is no agreement, commitment,
judgment, injunction, order or decree binding upon the Company or any of its Subsidiaries or to which the Company or any of its Subsidiaries
is a party which has or would reasonably be expected to have the effect of prohibiting or materially impairing any business practice
of the Company or any of its Subsidiaries, any acquisition of property by the Company or any of its Subsidiaries or the conduct of business
by the Company or any of its Subsidiaries as currently conducted other than such effects, individually or in the aggregate, which have
not had and would not reasonably be expected to have a Material Adverse Effect on the Company or any of its Subsidiaries.
(o)
Foreign Corrupt Practices. Neither the Company, the Company’s subsidiary or any director, officer, agent, employee, nor
any other person acting for or on behalf of the foregoing (individually and collectively, a “Company Affiliate”) have
violated the U.S. Foreign Corrupt Practices Act (the “FCPA”) or any other applicable anti-bribery or anti-corruption
laws, nor has any Company Affiliate offered, paid, promised to pay, or authorized the payment of any money, or offered, given, promised
to give, or authorized the giving of anything of value, to any officer, employee or any other person acting in an official capacity for
any Governmental Entity to any political party or official thereof or to any candidate for political office (individually and collectively,
a “Government Official”) or to any person under circumstances where such Company Affiliate knew or was aware of a
high probability that all or a portion of such money or thing of value would be offered, given or promised, directly or indirectly, to
any Government Official, for the purpose of:
(i)
(A) influencing any act or decision of such Government Official in his/her official capacity, (B) inducing such Government Official to
do or omit to do any act in violation of his/her lawful duty, (C) securing any improper advantage, or (D) inducing such Government Official
to influence or affect any act or decision of any Governmental Entity, or
(ii)
assisting the Company or its Subsidiaries in obtaining or retaining business for or with, or directing business to, the Company or its
Subsidiaries.
(p)
Sarbanes-Oxley Act. The Company and each Subsidiary is in compliance with any and all applicable requirements of the Sarbanes-Oxley
Act of 2002, as amended, and any and all applicable rules and regulations promulgated by the SEC thereunder.
(q)
Transactions With Affiliates. Except as disclosed in the SEC Documents, no current or former employee, partner, director, officer
or stockholder (direct or indirect) of the Company or its Subsidiaries, or any associate, or, to the knowledge of the Company, any affiliate
of any thereof, or any relative with a relationship no more remote than first cousin of any of the foregoing, is presently, or has ever
been, (i) a party to any transaction with the Company or its Subsidiaries (including any contract, agreement or other arrangement providing
for the furnishing of services by, or rental of real or personal property from, or otherwise requiring payments to, any such director,
officer or stockholder or such associate or affiliate or relative Subsidiaries (other than for ordinary course services as employees,
officers or directors of the Company or any of its Subsidiaries)) or (ii) the direct or indirect owner of an interest in any corporation,
firm, association or business organization which is a competitor, supplier or customer of the Company or its Subsidiaries (except for
a passive investment (direct or indirect) in less than 5% of the common stock of a company whose securities are traded on or quoted through
an Eligible Market (as defined below)), nor does any such Person receive income from any source other than the Company or its Subsidiaries
which relates to the business of the Company or its Subsidiaries or should properly accrue to the Company or its Subsidiaries. No employee,
officer, stockholder or director of the Company or any of its Subsidiaries or member of his or her immediate family is indebted to the
Company or its Subsidiaries, as the case may be, nor is the Company or any of its Subsidiaries indebted (or committed to make loans or
extend or guarantee credit) to any of them, other than (i) for payment of salary for services rendered, (ii) reimbursement for reasonable
expenses incurred on behalf of the Company, and (iii) for other standard employee benefits made generally available to all employees
or executives (including stock option agreements outstanding under any stock option plan approved by the Board of Directors of the Company).
(r)
Equity Capitalization.
(i)
Definitions:
(A)
“Common Stock” means (x) the Company’s shares of common stock, $0.001 par value per share, and (y) any capital
stock into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.
(B)
“Preferred Stock” means (x) the Company’s blank check preferred stock, $0.001 par value per share, the terms
of which may be designated by the board of directors of the Company in a certificate of designations and (y) any capital stock into which
such preferred stock shall have been changed or any share capital resulting from a reclassification of such preferred stock (other than
a conversion of such preferred stock into Common Stock in accordance with the terms of such certificate of designations).
(ii) Authorized
and Outstanding Capital Stock. As of the date hereof, the authorized capital stock of the Company consists of (A) 500,000,000
shares of Common Stock, of which, 22,357,628 shares are issued and outstanding and 521,602 shares are reserved for issuance
pursuant to Convertible Securities (as defined below) (other than the Common Shares and the Warrant Shares and shares issuable
upon conversion of the Company’s outstanding Series C Convertible Preferred Stock and Series D Convertible Preferred
Stock) exercisable or exchangeable for, or convertible into, shares of Common Stock and (B) (i) 1,725,000 shares of 10% Series A
cumulative redeemable convertible preferred stock, $0.001 par value, 835,950 of which are issued and outstanding (ii) 20,000 shares
of Series C Convertible Preferred Stock, $0.001 par value, 6,894 of which are issued and outstanding, and (iii) 10,000 shares of
Series D Convertible Preferred Stock, $0.001 par value, 4,300 of which are issued and outstanding. “Convertible
Securities” means any capital stock or other security of the Company or any of its Subsidiaries that is at any time and
under any circumstances directly or indirectly convertible into, exercisable or exchangeable for, or which otherwise entitles the
holder thereof to acquire, any capital stock or other security of the Company (including, without limitation, Common Stock) or any
of its Subsidiaries.
(iii)
Valid Issuance; Available Shares; Affiliates. All of such outstanding shares are duly authorized and have been, or upon issuance
will be, validly issued and are fully paid and nonassessable. To the Company’s knowledge, no Person owns 10% or more of the Company’s
issued and outstanding shares of Common Stock (calculated based on the assumption that all Convertible Securities (as defined below),
whether or not presently exercisable or convertible, have been fully exercised or converted (as the case may be) taking account of any
limitations on exercise or conversion (including “blockers”) contained therein without conceding that such identified Person
is a 10% stockholder for purposes of federal securities laws).
(iv)
Existing Securities; Obligations. Except
as disclosed in the SEC Documents: (A) none of the Company’s or any Subsidiary’s shares, interests or capital stock is subject
to preemptive rights or any other similar rights or Liens suffered or permitted by the Company or any Subsidiary; (B) there are no outstanding
options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any shares, interests or capital stock of the Company or any of its Subsidiaries,
or contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue
additional shares, interests or capital stock of the Company or any of its Subsidiaries or options, warrants, scrip, rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable
for, any shares, interests or capital stock of the Company or any of its Subsidiaries; (C) there are no agreements or arrangements under
which the Company or any of its Subsidiaries is obligated to register the sale of any of their securities under the 1933 Act (except
pursuant to this Agreement); (D) there are no outstanding securities or instruments of the Company or any of its Subsidiaries which contain
any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or
any of its Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries; (E) there are no securities
or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities; and (F) neither
the Company nor any Subsidiary has any stock appreciation rights or “phantom stock” plans or agreements or any similar plan
or agreement.
(v)
Organizational Documents. The Company has furnished to the Buyers true, correct and complete copies of the Company’s Articles
of Incorporation, as amended and as in effect on the date hereof (the “Articles of Incorporation”), and the Company’s
bylaws, as amended and as in effect on the date hereof (the “Bylaws”), and the terms of all Convertible Securities
and the material rights of the holders thereof in respect thereto.
(s)
Indebtedness and Other Contracts. Neither the Company nor any of its Subsidiaries, (i) except as set forth in the SEC Documents,
has any outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments evidencing
Indebtedness of the Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries is or may become bound, (ii)
except as set forth in the SEC Documents, is a party to any contract, agreement or instrument, the violation of which, or default under
which, by the other party(ies) to such contract, agreement or instrument could reasonably be expected to result in a Material Adverse
Effect, (iii) has any financing statements securing obligations in any amounts filed in connection with the Company or any of its Subsidiaries;
(iv) except as set forth in the SEC Documents, is in violation of any term of, or in default under, any contract, agreement or instrument
relating to any Indebtedness, except where such violations and defaults would not result, individually or in the aggregate, in a Material
Adverse Effect, or (v) except as set forth in the SEC Documents, is a party to any contract, agreement or instrument relating to any
Indebtedness, the performance of which, in the judgment of the Company’s officers, has or is expected to have a Material Adverse
Effect. Neither the Company nor any of its Subsidiaries have any liabilities or obligations required to be disclosed in the SEC Documents
which are not so disclosed in the SEC Documents, other than those incurred in the ordinary course of the Company’s or its Subsidiaries’
respective businesses and which, individually or in the aggregate, do not or could not have a Material Adverse Effect. For purposes of
this Agreement: (x) “Indebtedness” of any Person means, without duplication (A) all indebtedness for borrowed money,
(B) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (including, without limitation,
“capital leases” in accordance with GAAP) (other than trade payables entered into in the ordinary course of business consistent
with past practice), (C) all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments,
(D) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses, (E) all indebtedness created or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such
indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession
or sale of such property), (F) all monetary obligations under any leasing or similar arrangement which, in connection with GAAP, consistently
applied for the periods covered thereby, is classified as a capital lease, (G) all indebtedness referred to in clauses (A) through (F)
above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any
Lien upon or in any property or assets (including accounts and contract rights) owned by any Person, even though the Person which owns
such assets or property has not assumed or become liable for the payment of such indebtedness, and (H) all Contingent Obligations in
respect of indebtedness or obligations of others of the kinds referred to in clauses (A) through (G) above; (y) “Contingent
Obligation” means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect
to any Indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person incurring
such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid
or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability will be protected
(in whole or in part) against loss with respect thereto; and (z) “Person” means an individual, a limited liability
company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and any Governmental
Entity or any department or agency thereof.
(t)
Litigation. Except as disclosed in the SEC Documents, there is no action, suit, arbitration, proceeding, inquiry or investigation
before or by the Principal Market, any court, public board, other Governmental Entity, self-regulatory organization or body pending or,
to the knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries, the Common Stock or any of the
Company’s or its Subsidiaries’ officers or directors, whether of a civil or criminal nature or otherwise, in their capacities
as such, which is outside of the ordinary course of business or individually or in the aggregate material to the Company or any of its
Subsidiaries. No director, officer or employee of the Company or any of its subsidiaries has willfully violated 18 U.S.C. §1519
or engaged in spoliation in reasonable anticipation of litigation. Without limitation of the foregoing, there has not been, and to the
knowledge of the Company, there is not pending or contemplated, any investigation by the SEC involving the Company, any of its Subsidiaries
or any current or former director or officer of the Company or any of its Subsidiaries. The SEC has not issued any stop order or other
order suspending the effectiveness of any registration statement filed by the Company under the 1933 Act or the 1934 Act, including,
without limitation, the Registration Statement. After reasonable inquiry of its employees, the Company is not aware of any fact which
might result in or form the basis for any such action, suit, arbitration, investigation, inquiry or other proceeding. Neither the Company
nor any of its Subsidiaries is subject to any order, writ, judgment, injunction, decree, determination or award of any Governmental Entity.
(u)
Insurance. The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the
Company and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has been refused any insurance coverage sought
or applied for, and neither the Company nor any such Subsidiary has any reason to believe that it will be unable to renew its existing
insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a Material Adverse Effect.
(v)
Employee Relations. Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or employs
any member of a union. The Company and its Subsidiaries believe that their relations with their employees are good. No executive officer
(as defined in Rule 501(f) promulgated under the 1933 Act) or other key employee of the Company or any of its Subsidiaries has notified
the Company or any such Subsidiary that such officer intends to leave the Company or any such Subsidiary or otherwise terminate such
officer’s employment with the Company or any such Subsidiary. No executive officer or other key employee of the Company or any
of its Subsidiaries is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure
or proprietary information agreement, non-competition agreement, or any other contract or agreement or any restrictive covenant, and
the continued employment of each such executive officer or other key employee (as the case may be) does not subject the Company or any
of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance
with all federal, state, local and foreign laws and regulations respecting labor, employment and employment practices and benefits, terms
and conditions of employment and wages and hours, except where failure to be in compliance would not, either individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.
(w)
Title.
(i)
Real Property. Each of the Company and its Subsidiaries holds good title to all real property, leases in real property, facilities
or other interests in real property owned or held by the Company or any of its Subsidiaries (the “Real Property”)
owned by the Company or any of its Subsidiaries (as applicable). The Real Property is free and clear of all Liens and is not subject
to any rights of way, building use restrictions, exceptions, variances, reservations, or limitations of any nature except for (a) Liens
for current taxes not yet due and (b) zoning laws and other land use restrictions that do not impair the present or anticipated use of
the property subject thereto. Any Real Property held under lease by the Company or any of its Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be
made of such property and buildings by the Company or any of its Subsidiaries.
(ii)
Fixtures and Equipment. Each of the Company and its Subsidiaries (as applicable) has good title to, or a valid leasehold interest
in, the tangible personal property, equipment, improvements, fixtures, and other personal property and appurtenances that are used by
the Company or its Subsidiary in connection with the conduct of its business (the “Fixtures and Equipment”). The Fixtures
and Equipment are structurally sound, are in good operating condition and repair, are adequate for the uses to which they are being put,
are not in need of maintenance or repairs except for ordinary, routine maintenance and repairs and are sufficient for the conduct of
the Company’s and/or its Subsidiaries’ businesses (as applicable) in the manner as conducted prior to the Closing. Each of
the Company and its Subsidiaries owns all of its Fixtures and Equipment free and clear of all Liens except for (a) Liens for current
taxes not yet due and (b) zoning laws and other land use restrictions that do not impair the present or anticipated use of the property
subject thereto.
(x)
Intellectual Property Rights. The Company and its Subsidiaries own or possess adequate rights or licenses to use all trademarks,
trade names, service marks, service mark registrations, service names, original works of authorship, patents, patent rights, copyrights,
inventions, licenses, approvals, governmental authorizations, trade secrets and other intellectual property rights and all applications
and registrations therefor (“Intellectual Property Rights”) necessary to conduct their respective businesses as now
conducted. None of the Company’s Intellectual Property Rights have expired or terminated or have been abandoned or are expected
to expire or terminate or are expected to be abandoned, within three years from the date of this Agreement, except where such expiration,
termination or abandonment would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse
Effect. The Company does not have any knowledge of any infringement by the Company or its Subsidiaries of Intellectual Property Rights
of others. There is no claim, action or proceeding being made or brought, or to the knowledge of the Company or any of its Subsidiaries,
being threatened, against the Company or any of its Subsidiaries regarding its Intellectual Property Rights. Neither the Company nor
any of its Subsidiaries is aware of any facts or circumstances which might give rise to any of the foregoing infringements or claims,
actions or proceedings. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality
and value of all of their Intellectual Property Rights.
(y)
Environmental Laws. (i) The Company and its Subsidiaries (A) are in compliance with any and all Environmental Laws (as defined
below), (B) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their
respective businesses and (C) are in compliance with all terms and conditions of any such permit, license or approval where, in each
of the foregoing clauses (A), (B) and (C), the failure to so comply could be reasonably expected to have, individually or in the aggregate,
a Material Adverse Effect. The term “Environmental Laws” means all federal, state, local or foreign laws relating to pollution
or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface
or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals,
pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the
environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling
of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices
or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.
(ii)
No Hazardous Materials:
(A)
have been disposed of or otherwise released into any Real Property (as defined below) in violation of any Environmental Laws; or
(B)
are present on, over, beneath, in or upon any Real Property or any portion thereof in quantities that would constitute a violation of
any Environmental Laws. No prior use by the Company or any of its Subsidiaries of any Real Property has occurred that violates any Environmental
Laws, which violation would have a material adverse effect on the business of the Company or any of its Subsidiaries.
(iii)
Neither the Company nor any of its Subsidiaries knows of any other person who or entity which has stored, treated, recycled, disposed
of or otherwise located any Hazardous Materials on any Real Property, including, without limitation, such substances as asbestos and
polychlorinated biphenyls.
(iv)
None of the Real Properties are on any federal or state “Superfund” list or Liability Information System (“CERCLIS”)
list or any state environmental agency list of sites under consideration for CERCLIS, nor subject to any environmental related Liens.
(z)
Subsidiary Rights. The Company or one of its Subsidiaries has the unrestricted right to vote, and (subject to limitations imposed
by applicable law) to receive dividends and distributions on, all capital securities of its Subsidiaries as owned by the Company or such
Subsidiary.
(aa)
Tax Status. The Company and each of its Subsidiaries (i) has timely made or filed all foreign, federal and state income and all
other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has timely paid all taxes and other
governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations,
except those being contested in good faith and (iii) has set aside on its books provision reasonably adequate for the payment of all
taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company and its Subsidiaries know of no
basis for any such claim. The Company is not operated in such a manner as to qualify as a passive foreign investment company, as defined
in Section 1297 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”). The net operating loss carryforwards
(“NOLs”) for United States federal income tax purposes of the consolidated group of which the Company is the common
parent, if any, shall not be adversely effected by the transactions contemplated hereby. The transactions contemplated hereby do not
constitute an “ownership change” within the meaning of Section 382 of the Code, thereby preserving the Company’s ability
to utilize such NOLs.
(bb)
Internal Accounting and Disclosure Controls. Except as disclosed in the SEC Documents, the Company and each of its Subsidiaries
maintains internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the 1934 Act) that is effective
to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles, including that (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset and liability accountability, (iii) access to assets or incurrence of liabilities
is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets
and liabilities is compared with the existing assets and liabilities at reasonable intervals and appropriate action is taken with respect
to any difference. The Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the 1934
Act) that are effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits
under the 1934 Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC,
including, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in
the reports that it files or submits under the 1934 Act is accumulated and communicated to the Company’s management, including
its principal executive officer or officers and its principal financial officer or officers, as appropriate, to allow timely decisions
regarding required disclosure. Neither the Company nor any of its Subsidiaries has received any notice or correspondence from any accountant,
Governmental Entity or other Person relating to any potential material weakness or significant deficiency in any part of the internal
controls over financial reporting of the Company or any of its Subsidiaries.
(cc)
Off Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company or any of its
Subsidiaries and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its 1934 Act
filings and is not so disclosed or that otherwise could be reasonably likely to have a Material Adverse Effect.
(dd)
Investment Company Status. The Company is not, and upon consummation of the sale of the Securities will not be, an “investment
company,” an affiliate of an “investment company,” a company controlled by an “investment company” or an
“affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company”
as such terms are defined in the Investment Company Act of 1940, as amended.
(ee)
Acknowledgement Regarding Buyers’ Trading Activity. It is understood and acknowledged by the Company that (i) following
the public disclosure of the transactions contemplated by the Transaction Documents, in accordance with the terms thereof, none of the
Buyers have been asked by the Company or any of its Subsidiaries to agree, nor has any Buyer agreed with the Company or any of its Subsidiaries,
to desist from effecting any transactions in or with respect to (including, without limitation, purchasing or selling, long and/or short)
any securities of the Company, or “derivative” securities based on securities issued by the Company or to hold any of the
Securities for any specified term; (ii) any Buyer, and counterparties in “derivative” transactions to which any such Buyer
is a party, directly or indirectly, presently may have a “short” position in the Common Stock which was established prior
to such Buyer’s knowledge of the transactions contemplated by the Transaction Documents; (iii) each Buyer shall not be deemed to
have any affiliation with or control over any arm’s length counterparty in any “derivative” transaction; and (iv) each
Buyer may rely on the Company’s obligation to timely deliver shares of Common Stock upon exercise or exchange, as applicable, of
the Securities as and when required pursuant to the Transaction Documents for purposes of effecting trading in the Common Stock of the
Company. The Company further understands and acknowledges that following the public disclosure of the transactions contemplated by the
Transaction Documents pursuant to the 8-K Filing (as defined below) one or more Buyers may engage in hedging and/or trading activities
(including, without limitation, the location and/or reservation of borrowable shares of Common Stock) at various times during the period
that the Securities are outstanding, including, without limitation, during the periods that the value and/or number of the Warrant Shares
deliverable with respect to the Securities are being determined and such hedging and/or trading activities (including, without limitation,
the location and/or reservation of borrowable shares of Common Stock), if any, can reduce the value of the existing stockholders’
equity interest in the Company both at and after the time the hedging and/or trading activities are being conducted. The Company acknowledges
that such aforementioned hedging and/or trading activities do not constitute a breach of this Agreement, the Warrants or any other Transaction
Document or any of the documents executed in connection herewith or therewith.
(ff)
Manipulation of Price. Neither the Company nor any of its Subsidiaries has, and, to the knowledge of the Company, no Person acting
on their behalf has, directly or indirectly, (i) taken any action designed to cause or to result in the stabilization or manipulation
of the price of any security of the Company or any of its Subsidiaries to facilitate the sale or resale of any of the Securities, (ii)
sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities, (iii) paid or agreed to pay to
any Person any compensation for soliciting another to purchase any other securities of the Company or any of its Subsidiaries or (iv)
paid or agreed to pay any Person for research services with respect to any securities of the Company or any of its Subsidiaries.
(gg)
U.S. Real Property Holding Corporation. Neither the Company nor any of its Subsidiaries is, or has ever been, and so long as any
of the Securities are held by any of the Buyers, shall become, a U.S. real property holding corporation within the meaning of Section
897 of the Code, and the Company and each Subsidiary shall so certify upon any Buyer’s request.
(hh)
Registration Eligibility. The Company is eligible to register the issuance of the Securities by the Company using Form S-3 promulgated
under the 1933 Act.
(ii)
Transfer Taxes. On the Closing Date, all stock transfer or other taxes (other than income or similar taxes) which are required
to be paid in connection with the issuance, sale and transfer of the Securities to be sold to each Buyer hereunder will be, or will have
been, fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with.
(jj)
Bank Holding Company Act. Neither the Company nor any of its Subsidiaries is subject to the Bank Holding Company Act of 1956,
as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”). Neither the Company nor any of its Subsidiaries or affiliates owns or controls, directly or indirectly, five percent
(5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total equity of
a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries
or affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and
to regulation by the Federal Reserve.
(kk)
Shell Company Status. The Company is not, and has never been, an issuer identified in, or subject to, Rule 144(i).
(ll)
Illegal or Unauthorized Payments; Political Contributions. Neither the Company nor any of its Subsidiaries nor, to the best of
the Company’s knowledge (after reasonable inquiry of its officers and directors), any of the officers, directors, employees, agents
or other representatives of the Company or any of its Subsidiaries or any other business entity or enterprise with which the Company
or any Subsidiary is or has been affiliated or associated, has, directly or indirectly, made or authorized any payment, contribution
or gift of money, property, or services, whether or not in contravention of applicable law, (i) as a kickback or bribe to any Person
or (ii) to any political organization, or the holder of or any aspirant to any elective or appointive public office except for personal
political contributions not involving the direct or indirect use of funds of the Company or any of its Subsidiaries.
(mm)
Money Laundering. The Company and its Subsidiaries are in compliance with, and have not previously violated, the USA Patriot Act
of 2001 and all other applicable U.S. and non-U.S. anti-money laundering laws and regulations, including, but not limited to, the laws,
regulations and Executive Orders and sanctions programs administered by the U.S. Office of Foreign Assets Control, including, without
limitation, (i) Executive Order 13224 of September 23, 2001 entitled, “Blocking Property and Prohibiting Transactions With Persons
Who Commit, Threaten to Commit, or Support Terrorism” (66 Fed. Reg. 49079 (2001)); and (ii) any regulations contained in 31 CFR,
Subtitle B, Chapter V.
(nn)
Management. To the Company’s knowledge, during the past five year period, no current or former officer or director or, to
the knowledge of the Company, no current ten percent (10%) or greater stockholder of the Company or any of its Subsidiaries has been
the subject of:
(i)
a petition under bankruptcy laws or any other insolvency or moratorium law or the appointment by a court of a receiver, fiscal agent
or similar officer for such Person, or any partnership in which such person was a general partner at or within two years before the filing
of such petition or such appointment, or any corporation or business association of which such person was an executive officer at or
within two years before the time of the filing of such petition or such appointment;
(ii)
a conviction in a criminal proceeding or a named subject of a pending criminal proceeding (excluding traffic violations that do not relate
to driving while intoxicated or driving under the influence);
(iii)
any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or
temporarily enjoining any such person from, or otherwise limiting, the following activities:
(1)
Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage
transaction merchant, any other person regulated by the United States Commodity Futures Trading Commission or an associated person of
any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director
or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct
or practice in connection with such activity;
(2)
Engaging in any particular type of business practice; or
(3)
Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of
securities laws or commodities laws;
(iv)
any order, judgment or decree, not subsequently reversed, suspended or vacated, of any authority barring, suspending or otherwise limiting
for more than sixty (60) days the right of any such person to engage in any activity described in the preceding sub paragraph, or to
be associated with persons engaged in any such activity;
(v)
a finding by a court of competent jurisdiction in a civil action or by the SEC or other authority to have violated any securities law,
regulation or decree and the judgment in such civil action or finding by the SEC or any other authority has not been subsequently reversed,
suspended or vacated; or
(vi)
a finding by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any
federal commodities law, and the judgment in such civil action or finding has not been subsequently reversed, suspended or vacated.
(oo)
Stock Option Plans. Each stock option granted by the Company was granted (i) in accordance with the terms of the applicable stock
option plan of the Company and (ii) with an exercise price at least equal to the fair market value of the Common Stock on the date such
stock option would be considered granted under GAAP and applicable law. No stock option granted under the Company’s stock option
plan has been backdated. The Company has not knowingly granted, and there is no and has been no policy or practice of the Company to
knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release or other public
announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects.
(pp)
No Disagreements with Accountants and Lawyers. There are no material disagreements of any kind presently existing, or reasonably
anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company
and the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability
to perform any of its obligations under any of the Transaction Documents. In addition, on or prior to the date hereof, the Company had
discussions with its accountants about its financial statements previously filed with the SEC. Based on those discussions, the Company
has no reason to believe that it will need to restate any such financial statements or any part thereof.
(qq)
No Additional Agreements. The Company does not have any agreement or understanding with any Buyer with respect to the transactions
contemplated by the Transaction Documents other than as specified in the Transaction Documents.
(rr)
Public Utility Holding Act None of the Company nor any of its Subsidiaries is a “holding company,” or an “affiliate”
of a “holding company,” as such terms are defined in the Public Utility Holding Act of 2005.
(ss)
Federal Power Act. None of the Company nor any of its Subsidiaries is subject to regulation as a “public utility”
under the Federal Power Act, as amended.
(tt)
Registration Rights. Except as disclosed in the SEC Reports, no holder of securities of the Company has rights to the registration
of any securities of the Company because of the filing of the Registration Statement or the issuance of the Securities hereunder that
could expose the Company to material liability or any Buyer to any liability or that could impair the Company’s ability to consummate
the issuance and sale of the Securities in the manner, and at the times, contemplated hereby, which rights have not been waived by the
holder thereof as of the date hereof.
(uu)
Compliance With FINRA Rule 5110. At the time the Registration Statement was declared effective by the SEC, and as of the date
hereof and as of the Closing Date, the Company has (i) a 1934 Act reporting history in excess of 36 months and (ii) a non-affiliate,
public common float of at least $100 million and annual trading volume of at least three million shares.
(vv)
Disclosure. The Company confirms that neither it nor any other Person acting on its behalf has provided any of the Buyers or their
agents or counsel with any information that constitutes or could reasonably be expected to constitute material, non-public information
concerning the Company or any of its Subsidiaries, other than the existence of the transactions contemplated by this Agreement and the
other Transaction Documents. The Company understands and confirms that each of the Buyers will rely on the foregoing representations
in effecting transactions in securities of the Company. All disclosure provided to the Buyers regarding the Company and its Subsidiaries,
their businesses and the transactions contemplated hereby, furnished by or on behalf of the Company or any of its Subsidiaries is true
and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under which they were made, not misleading. All of the written information
furnished after the date hereof by or on behalf of the Company or any of its Subsidiaries to each Buyer pursuant to or in connection
with this Agreement and the other Transaction Documents, taken as a whole, will be true and correct in all material respects as of the
date on which such information is so provided and will not contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.
Each press release issued by the Company or any of its Subsidiaries during the twelve (12) months preceding the date of this Agreement
did not at the time of release contain any untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading.
No event or circumstance has occurred or information exists with respect to the Company or any of its Subsidiaries or its or their business,
properties, liabilities, prospects, operations (including results thereof) or conditions (financial or otherwise), which, under applicable
law, rule or regulation, requires public disclosure at or before the date hereof or announcement by the Company but which has not been
so publicly disclosed. All financial projections and forecasts that have been prepared by or on behalf of the Company or any of its Subsidiaries
and made available to you have been prepared in good faith based upon reasonable assumptions and represented, at the time each such financial
projection or forecast was delivered to each Buyer, the Company’s best estimate of future financial performance (it being recognized
that such financial projections or forecasts are not to be viewed as facts and that the actual results during the period or periods covered
by any such financial projections or forecasts may differ from the projected or forecasted results). The Company acknowledges and agrees
that no Buyer makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those
specifically set forth in Section 2.
(a)
Best Efforts. Each Buyer shall use its best efforts to timely satisfy each of the covenants hereunder and conditions to be satisfied
by it as provided in Section 6 of this Agreement. The Company shall use its best efforts to timely satisfy each of the covenants hereunder
and conditions to be satisfied by it as provided in Section 7 of this Agreement.
(b)
Amendments to the Registration Statement; Prospectus Supplements; Free Writing Prospectuses.
(i)
Amendments to the Registration Statement; Prospectus Supplements; Free Writing Prospectuses. Except as provided in this Agreement
and other than periodic reports required to be filed pursuant to the 1934 Act, the Company shall not file with the SEC any amendment
to the Registration Statement that relates to the Buyer, this Agreement or the transactions contemplated hereby or thereby or file with
the SEC any Prospectus Supplement that relates to the Buyer, this Agreement or the transactions contemplated hereby or thereby with respect
to which (a) the Buyer shall not previously have been advised, (b) the Company shall not have given due consideration to any comments
thereon received from the Buyer or its counsel, or (c) the Buyer shall reasonably object after being so advised, unless the Company reasonably
has determined that it is necessary to amend the Registration Statement or make any supplement to the Prospectus to comply with the 1933
Act or any other applicable law or regulation, in which case the Company shall promptly (but in no event later than 24 hours) so inform
the Buyer, the Buyer shall be provided with a reasonable opportunity to review and comment upon any disclosure relating to the Buyer
and the Company shall expeditiously furnish to the Buyer an electronic copy thereof. In addition, for so long as, in the reasonable opinion
of counsel for the Buyer, the Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the 1933 Act) is required to
be delivered in connection with any acquisition or sale of Securities by the Buyer, the Company shall not file any Prospectus Supplement
with respect to the Securities without delivering or making available a copy of such Prospectus Supplement, together with the Prospectus,
to the Buyer promptly.
(ii)
The Company has not made, and agrees that unless it obtains the prior written consent of the Buyer it will not make, an offer relating
to the Securities that would constitute an “issuer free writing prospectus” as defined in Rule 433 promulgated under the
1933 Act (an “Issuer Free Writing Prospectus”) or that would otherwise constitute a “free writing prospectus”
as defined in Rule 405 promulgated under the 1933 Act (a “Free Writing Prospectus”) required to be filed by the Company
or the Buyer with the SEC or retained by the Company or the Buyer under Rule 433 under the 1933 Act. The Buyer has not made, and agrees
that unless it obtains the prior written consent of the Company it will not make, an offer relating to the Securities that would constitute
a Free Writing Prospectus required to be filed by the Company with the SEC or retained by the Company under Rule 433 under the 1933 Act.
Any such Issuer Free Writing Prospectus or other Free Writing Prospectus consented to by the Buyer or the Company is referred to in this
Agreement as a “Permitted Free Writing Prospectus.” The Company agrees that (x) it has treated and will treat, as
the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus and (y) it has complied and will comply,
as the case may be, with the requirements of Rules 164 and 433 under the 1933 Act applicable to any Permitted Free Writing Prospectus,
including in respect of timely filing with the SEC, legending and record keeping.
(c)
Prospectus Delivery. Immediately prior to execution of this Agreement, the Company shall have delivered to the Buyer, and as soon
as practicable after execution of this Agreement the Company shall file, Prospectus Supplements with respect to the Securities to be
issued on the Closing Date, as required under, and in conformity with, the 1933 Act, including Rule 424(b) thereunder. The Company shall
provide the Buyer a reasonable opportunity to comment on a draft of each Prospectus Supplement and any Issuer Free Writing Prospectus,
shall give due consideration to all such comments and, subject to the provisions of Section 4(b) hereof, shall deliver or make available
to the Buyer, without charge, an electronic copy of each form of Prospectus Supplement, together with the Prospectus, and any Permitted
Free Writing Prospectus on the Closing Date. The Company consents to the use of the Prospectus (and of any Prospectus Supplements thereto)
in accordance with the provisions of the 1933 Act and with the securities or “blue sky” laws of the jurisdictions in which
the Securities may be sold by the Buyer, in connection with the offering and sale of the Securities and for such period of time thereafter
as the Prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the 1933 Act) is required by the 1933 Act to be delivered
in connection with sales of the Securities. If during such period of time any event shall occur that in the judgment of the Company and
its counsel is required to be set forth in the Registration Statement or the Prospectus or any Permitted Free Writing Prospectus or should
be set forth therein in order to make the statements made therein (in the case of the Prospectus, in light of the circumstances under
which they were made) not misleading, or if it is necessary to amend the Registration Statement or supplement or amend the Prospectus
or any Permitted Free Writing Prospectus to comply with the 1933 Act or any other applicable law or regulation, the Company shall forthwith
prepare and, subject to Section 4(b) above, file with the SEC an appropriate amendment to the Registration Statement or Prospectus Supplement
to the Prospectus (or supplement to the Permitted Free Writing Prospectus) and shall expeditiously furnish or make available to the Buyer
an electronic copy thereof.
(d)
Stop Orders. The Company shall advise the Buyer promptly (but in no event later than 24 hours) and shall confirm such advice in
writing: (i) of the Company’s receipt of notice of any request by the SEC for amendment of or a supplement to the Registration
Statement, the Prospectus, any Permitted Free Writing Prospectus or for any additional information; (ii) of the Company’s receipt
of notice of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement or prohibiting or suspending
the use of the Prospectus or any Prospectus Supplement, or of the suspension of qualification of the Securities for offering or sale
in any jurisdiction, or the initiation or contemplated initiation of any proceeding for such purpose; (iii) of the Company becoming aware
of the happening of any event, which makes any statement of a material fact made in the Registration Statement, the Prospectus or any
Permitted Free Writing Prospectus untrue or which requires the making of any additions to or changes to the statements then made in the
Registration Statement, the Prospectus or any Permitted Free Writing Prospectus in order to state a material fact required by the 1933
Act to be stated therein or necessary in order to make the statements then made therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading, or of the necessity to amend the Registration Statement or supplement the Prospectus
or any Permitted Free Writing Prospectus to comply with the 1933 Act or any other law or (iv) if at any time following the date hereof
the Registration Statement is not effective or is not otherwise available for the issuance of the Securities or any Prospectus contained
therein is not available for use for any other reason. Thereafter, the Company shall promptly notify such holders when the Registration
Statement, the Prospectus, any Permitted Free Writing Prospectus and/or any amendment or supplement thereto, as applicable, is effective
and available for the issuance of the Securities. If at any time the SEC shall issue any stop order suspending the effectiveness of the
Registration Statement or prohibiting or suspending the use of the Prospectus or any Prospectus Supplement, the Company shall use best
efforts to obtain the withdrawal of such order at the earliest possible time.
(e)
Blue Sky. The Company shall, on or before the Closing Date, take such action as the Company shall reasonably determine is necessary
in order to obtain an exemption for, or to, qualify the Securities for sale to the Buyers at the Closing pursuant to this Agreement under
applicable securities or “Blue Sky” laws of the states of the United States (or to obtain an exemption from such qualification),
and shall provide evidence of any such action so taken to the Buyers on or prior to the Closing Date. Without limiting any other obligation
of the Company under this Agreement, the Company shall timely make all filings and reports relating to the offer and sale of the Securities
required under all applicable securities laws (including, without limitation, all applicable federal securities laws and all applicable
“Blue Sky” laws), and the Company shall comply with all applicable foreign, federal, state and local laws, statutes, rules,
regulations and the like relating to the offering and sale of the Securities to the Buyers.
(f)
Reporting Status. Until the date on which the Buyers shall have sold all of the Securities (the “Reporting Period”),
the Company shall timely file all reports required to be filed with the SEC pursuant to the 1934 Act, and the Company shall not terminate
its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would
no longer require or otherwise permit such termination.
(g)
Use of Proceeds. The Company will use the proceeds from the sale of the Securities as described in the Prospectus Supplement,
but not, directly or indirectly, for (i) the satisfaction of any other indebtedness of the Company or any of its Subsidiaries, (ii) the
redemption or repurchase of any securities of the Company or any of its Subsidiaries, or (iii) the settlement of any outstanding litigation.
(h)
Financial Information. The Company agrees to send the following to each holder of Warrants (each, an “Investor”)
during the Reporting Period (i) unless the following are filed with the SEC through EDGAR and are available to the public through the
EDGAR system, within one (1) Business Day after the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K and Quarterly
Reports on Form 10-Q, any interim reports or any consolidated balance sheets, income statements, stockholders’ equity statements
and/or cash flow statements for any period other than annual, any Current Reports on Form 8-K and any registration statements (other
than on Form S-8) or amendments filed pursuant to the 1933 Act, (ii) unless the following are either filed with the SEC through EDGAR
or are otherwise widely disseminated via a recognized news release service (such as PR Newswire), on the same day as the release thereof,
facsimile copies of all press releases issued by the Company or any of its Subsidiaries and (iii) unless the following are filed with
the SEC through EDGAR, copies of any notices and other information made available or given to the stockholders of the Company generally,
contemporaneously with the making available or giving thereof to the stockholders.
(i)
Listing. The Company shall promptly secure the listing or designation for quotation (as the case may be) of all of the Underlying
Securities (as defined below) upon each national securities exchange and automated quotation system, if any, upon which the Common Stock
is then listed or designated for quotation (as the case may be) (subject to official notice of issuance) and shall maintain such listing
or designation for quotation (as the case may be) of all Underlying Securities from time to time issuable under the terms of the Transaction
Documents on such national securities exchange or automated quotation system. The Company shall maintain the Common Stock’s listing
or authorization for quotation (as the case may be) on the Principal Market, The New York Stock Exchange, the NYSE American, the Nasdaq
Global Market or the Nasdaq Global Select Market (each, an “Eligible Market”). Neither the Company nor any of its
Subsidiaries shall take any action which could be reasonably expected to result in the delisting or suspension of the Common Stock on
an Eligible Market. The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 4(i).
“Underlying Securities” means the (i) the Common Shares, (ii) the Warrant Shares and (iii) any capital stock of the
Company issued or issuable with respect to the Common Shares, the Warrant Shares, or the Warrants, respectively, including, without limitation,
(1) as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise and (2) shares of capital
stock of the Company into which the shares of Common Stock are converted or exchanged and shares of capital stock of a Successor Entity
(as defined in the Warrants) into which the shares of Common Stock are converted or exchanged, in each case, without regard to any limitations
on exercise of the Warrants.
(j)
Fees. The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees, transfer
agent fees, DTC fees or broker’s commissions (other than for Persons engaged by any Buyer) relating to or arising out of the transactions
contemplated hereby. The Company shall pay, and hold each Buyer harmless against, any liability, loss or expense (including, without
limitation, reasonable attorneys’ fees and out-of-pocket expenses) arising in connection with any claim relating to any such payment.
Except as otherwise set forth in the Transaction Documents, each party to this Agreement shall bear its own expenses in connection with
the sale of the Securities to the Buyers.
(k)
Pledge of Securities. Notwithstanding anything to the contrary contained in this Agreement, the Company acknowledges and agrees
that the Securities may be pledged by an Investor in connection with a bona fide margin agreement or other loan or financing arrangement
that is secured by the Securities. The pledge of Securities shall not be deemed to be a transfer, sale or assignment of the Securities
hereunder, and no Investor effecting a pledge of Securities shall be required to provide the Company with any notice thereof or otherwise
make any delivery to the Company pursuant to this Agreement or any other Transaction Document. The Company hereby agrees to execute and
deliver such documentation as a pledgee of the Securities may reasonably request in connection with a pledge of the Securities to such
pledgee by a Buyer.
(l)
Disclosure of Transactions and Other Material Information.
(i) Disclosure
of Transaction. The Company shall, on or before 9:30 a.m., New York time, on the date of this Agreement, issue a press release
(the “Press Release”) reasonably acceptable to the Buyers disclosing all the material terms of the transactions
contemplated by the Transaction Documents. On or before 9:30 a.m., New York time, on the first (1st) Business Day after
the date of this Agreement, the Company shall file a Current Report on Form 8-K describing (w) all the material terms of the
transactions contemplated by the Transaction Documents in the form required by the 1934 Act and attaching all the material
Transaction Documents (including, without limitation, this Agreement (and all schedules to this Agreement) and the form of the
Warrants), and (x) any other material update disclosed to any Buyer (including all attachments, the “8-K
Filing”). From and after the filing of the Press Release, the Company shall have disclosed all material, non-public
information (if any) provided to any of the Buyers by the Company or any of its Subsidiaries or any of their respective officers,
directors, employees or agents in connection with the transactions contemplated by the Transaction Documents. In addition, effective
upon the filing of the Press Release, the Company acknowledges and agrees that any and all confidentiality or similar obligations
under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers,
directors, affiliates, employees or agents, on the one hand, and any of the Buyers or any of their affiliates, on the other hand,
shall terminate.
(ii)
Limitations on Disclosure. The Company shall not, and the Company shall cause each of its Subsidiaries and each of its and their
respective officers, directors, employees and agents not to, provide any Buyer with any material, non-public information regarding the
Company or any of its Subsidiaries from and after the date hereof without the express prior written consent of such Buyer (which may
be granted or withheld in such Buyer’s sole discretion). In the event of a breach of any of the foregoing covenants, or any of
the covenants or agreements contained in any other Transaction Document, by the Company, any of its Subsidiaries, or any of its or their
respective officers, directors, employees and agents (as determined in the reasonable good faith judgment of such Buyer), in addition
to any other remedy provided herein or in the Transaction Documents, such Buyer shall have the right to make a public disclosure, in
the form of a press release, public advertisement or otherwise, of such breach or such material, non-public information, as applicable,
without the prior approval by the Company, any of its Subsidiaries, or any of its or their respective officers, directors, employees
or agents. No Buyer shall have any liability to the Company, any of its Subsidiaries, or any of its or their respective officers, directors,
employees, affiliates, stockholders or agents, for any such disclosure. To the extent that the Company delivers any material, non-public
information to a Buyer without such Buyer’s consent, the Company hereby covenants and agrees that such Buyer shall not have any
duty of confidentiality with respect to, or a duty not to trade on the basis of, such material, non-public information. Subject to the
foregoing, neither the Company, its Subsidiaries nor any Buyer shall issue any press releases or any other public statements with respect
to the transactions contemplated hereby; provided, however, the Company shall be entitled, without the prior approval of any Buyer, to
make the Press Release and any press release or other public disclosure with respect to such transactions (i) in substantial conformity
with the 8-K Filing and contemporaneously therewith and (ii) as is required by applicable law and regulations (provided that in the case
of clause (i) each Buyer shall be consulted by the Company in connection with any such press release or other public disclosure prior
to its release). Without the prior written consent of the applicable Buyer (which may be granted or withheld in such Buyer’s sole
discretion), the Company shall not (and shall cause each of its Subsidiaries and affiliates to not) disclose the name of such Buyer in
any filing, announcement, release or otherwise. Notwithstanding anything contained in this Agreement to the contrary and without implication
that the contrary would otherwise be true, the Company expressly acknowledges and agrees that no Buyer shall have (unless expressly agreed
to by a particular Buyer after the date hereof in a written definitive and binding agreement executed by the Company and such particular
Buyer (it being understood and agreed that no Buyer may bind any other Buyer with respect thereto)), any duty of confidentiality with
respect to, or a duty not to trade on the basis of, any material, non-public information regarding the Company or any of its Subsidiaries.
(m)
Additional Issuance of Securities. So long as any Buyer beneficially owns any Securities, the Company will not, without the prior
written consent of the Required Holders issue any other securities that would cause a breach or default under the Warrants. The Company
agrees that for the period commencing on the date hereof and ending 15 days after the date hereof (the “Restricted Period”),
neither the Company nor any of its Subsidiaries shall directly or indirectly:
(i) file
a registration statement under the 1933 Act relating to securities that are not the Underlying Securities (other than a registration
statement on Form S-8 or such supplements or amendments to registration statements that are outstanding and have been declared effective
by the SEC as of the date hereof (solely to the extent necessary to keep such registration statements effective and available and not
with respect to any Subsequent Placement));
(ii) except
as set forth on Schedule 4(m)(ii), amend or modify (whether by an amendment, waiver, exchange of securities, or otherwise) any of the
Company’s warrants to purchase Common Stock that are outstanding as of the date hereof; or
(iii) issue,
offer, sell, grant any option or right to purchase, or otherwise dispose of (or announce any issuance, offer, sale, grant of any option
or right to purchase or other disposition of) any equity security or any equity-linked or related security (including, without limitation,
any “equity security” (as that term is defined under Rule 405 promulgated under the 1933 Act)), any Convertible Securities,
any debt, any preferred stock or any purchase rights (any such issuance, offer, sale, grant, disposition or announcement (whether occurring
during the Restricted Period or at any time thereafter) is referred to as a “Subsequent Placement”). Notwithstanding
the foregoing, this Section 4(m)(iii) shall not apply in respect of the issuance of (A) shares of Common Stock or standard options to
purchase Common Stock to directors, officers or employees of the Company in their capacity as such pursuant to an Approved Stock Plan
(as defined below), provided that (x) all such issuances (taking into account the shares of Common Stock issuable upon exercise of such
options) after the date hereof pursuant to this clause (A) do not, in the aggregate, exceed more than 5% of the Common Stock issued and
outstanding immediately prior to the date hereof, (y) the exercise price of any such options is not lowered, none of such options are
amended to increase the number of shares issuable thereunder and none of the terms or conditions of any such options are otherwise materially
changed in any manner that adversely affects any of the Buyers and (z) each such director, officer and/or employee, as applicable, executes
a voting agreement, in form and substance reasonable satisfactory to the Buyers; (B) shares of Common Stock issued upon the conversion
or exercise of Convertible Securities (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan
that are covered by clause (A) above) issued prior to the date hereof, provided that the conversion, exercise or other method of issuance
(as the case may be) of any such Convertible Security is made solely pursuant to the conversion, exercise or other method of issuance
(as the case may be) provisions of such Convertible Security that were in effect on the date immediately prior to the date of this Agreement,
the conversion, exercise or issuance price of any such Convertible Securities (other than standard options to purchase Common Stock issued
pursuant to an Approved Stock Plan that are covered by clause (A) above) is not lowered, none of such Convertible Securities (other than
standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (A) above) are amended
to increase the number of shares issuable thereunder and none of the terms or conditions of any such Convertible Securities (other than
standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (A) above) are otherwise
materially changed in any manner that adversely affects any of the Buyers; (C) the Common Shares and (D) the Warrant Shares, and (E)
shares of the Common Stock issuable upon conversion of the Series C Convertible Preferred Stock and Series D Convertible Preferred Stock; provided that the conversion,
exercise or other method of issuance (as the case may be) of any such Convertible Security is made solely pursuant to the conversion,
exercise or other method of issuance (as the case may be) provisions of such Convertible Security that were in effect on the date immediately
prior to the date of this Agreement, the conversion, exercise or issuance price of any such Convertible Securities is not lowered, none
of such Convertible Securities are amended to increase the number of shares issuable thereunder and none of the terms or conditions of
any such Convertible Securities are otherwise materially changed in any manner that adversely affects any of the Buyers (each of the
foregoing in clauses (A) through (E), collectively the “Excluded Securities”). “Approved Stock Plan”
means any employee benefit plan which has been approved by the board of directors of the Company prior to or subsequent to the date hereof
pursuant to which shares of Common Stock and standard options to purchase Common Stock may be issued to any employee, officer or director
for services provided to the Company in their capacity as such. “Convertible Securities” means any capital stock or
other security of the Company or any of its Subsidiaries that is at any time and under any circumstances directly or indirectly convertible
into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any capital stock or other security
of the Company (including, without limitation, Common Stock) or any of its Subsidiaries.
(n)
Reservation of Shares. So long as any of the Warrants remain outstanding, the Company shall take all action necessary to at all
times have authorized, and reserved for the purpose of issuance, no less than 100% of the sum of the maximum number of Warrant Shares
issuable upon exercise of all the Warrants then outstanding (without regard to any limitations on the exercise of the Warrants set forth
therein) (collectively, the “Required Reserve Amount”); provided that at no time shall the number of shares of Common
Stock reserved pursuant to this Section 4(n) be reduced other than proportionally in connection with any exercise of the Warrants. If
at any time the number of shares of Common Stock authorized and reserved for issuance is not sufficient to meet the Required Reserve
Amount, the Company will promptly take all corporate action necessary to authorize and reserve a sufficient number of shares, including,
without limitation, calling a special meeting of stockholders to authorize additional shares to meet the Company’s obligations
pursuant to the Transaction Documents, in the case of an insufficient number of authorized shares, obtain stockholder approval of an
increase in such authorized number of shares, and voting the management shares of the Company in favor of an increase in the authorized
shares of the Company to ensure that the number of authorized shares is sufficient to meet the Required Reserve Amount.
(o)
Conduct of Business. The business of the Company and its Subsidiaries shall not be conducted in violation of any law, ordinance
or regulation of any Governmental Entity, except where such violations would not reasonably be expected to result, either individually
or in the aggregate, in a Material Adverse Effect.
(p)
Dilutive Issuances. For so long as any Warrants remain outstanding, the Company shall not, in any manner, enter into or affect
any Dilutive Issuance (as defined in the Warrants) if the effect of such Dilutive Issuance is to cause the Company to be required to
issue upon exercise of any Warrant any shares of Common Stock in excess of that number of shares of Common Stock which the Company may
issue upon exercise of the Warrants without breaching the Company’s obligations under the rules or regulations of the Principal
Market.
(q)
Passive Foreign Investment Company. The Company shall conduct its business, and shall cause its Subsidiaries to conduct their
respective businesses, in such a manner as will ensure that the Company will not be deemed to constitute a passive foreign investment
company within the meaning of Section 1297 of the Code.
(r)
Corporate Existence. So long as any Buyer beneficially owns any Warrants, the Company shall not be party to any Fundamental Transaction
(as defined in the Warrants) unless the Company is in compliance with the applicable provisions governing Fundamental Transactions set
forth in the Warrants.
(s)
Stock Splits. So long as any Warrants remain outstanding, the Company shall not effect any stock combination, reverse stock split
or other similar transaction (or make any public announcement or disclosure with respect to any of the foregoing) without the prior written
consent of the Required Holders (as defined below).
(t)
Exercise Procedures. The form of Exercise Notice (as defined in the Warrants) included in the Warrants sets forth the totality
of the procedures required of the Buyers in order to exercise the Warrants. No legal opinion or other information or instructions shall
be required of the Buyers to exercise their Warrants. The Company shall honor exercises of the Warrants and shall deliver the Warrant
Shares in accordance with the terms, conditions and time periods set forth in the Warrants. Without limiting the preceding sentences,
no ink-original Exercise Notice shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of
any Exercise Notice form be required in order to exercise the Warrants.
(u)
Regulation M. The Company will not take any action prohibited by Regulation M under the 1934 Act, in connection with the distribution
of the Securities contemplated hereby.
(v)
Subsequent Placement Optional Redemption and Eligible Subsequent Placement. The Buyers hereby waive their rights to require the
Company to cause a Subsequent Placement Optional Redemption (as defined in each of the Certificate of Designations governing the Series
C Convertible Preferred Stock and Certificate of Designations governing the Series D Convertible Preferred Stock) using the gross proceeds
from the sale of the Common Shares and Warrants (including from the exercise thereof) and their rights to participate in an Eligible
Subsequent Placement (as defined in each of the Certificate of Designations governing the Series C Convertible Preferred Stock and Certificate
of Designations governing the Series D Convertible Preferred Stock) pursuant to Section 7(b) of the Certificate of Designations governing
the Series C Convertible Preferred Stock and Section 7(b) of the Certificate of Designations governing the Series D Convertible Preferred
Stock, but only with respect to the offering and sale of the Securities contemplated by this Agreement and not with respect to any
future Subsequent Placement.
(w)
Restricted Issuances. Notwithstanding the terms of Section 13(b) of the Certificate of Designations governing the Series C Convertible
Preferred Stock and Section 13(b) of the Certificate of Designations governing the Series D Convertible Preferred Stock, the Buyers hereby
consent to the offering and sale of the Securities contemplated by this Agreement but only with respect to the offering and sale of the
Securities contemplated by this Agreement and not with respect to any future Subsequent Placement.
(x)
Closing Documents. On or prior to fourteen (14) calendar days after the Closing Date, the Company agrees to deliver, or cause to be delivered,
to each Buyer and Kelley Drye & Warren, LLP a complete closing set of the executed Transaction Documents, Securities and any other
document required to be delivered to any party pursuant to Section 7 hereof or otherwise.
5. |
REGISTER; TRANSFER AGENT INSTRUCTIONS; LEGEND. |
(a)
Register. The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may
designate by notice to each holder of Securities), a register for the Common Shares and the Warrants in which the Company shall record
the name and address of the Person in whose name the Common Shares and the Warrants have been issued (including the name and address
of each transferee), the number of Common Shares held by such Person and the number of Warrant Shares issuable upon exercise of the Warrants
held by such Person. The Company shall keep the register open and available at all times during business hours for inspection of any
Buyer or its legal representatives.
(b)
Transfer Agent Instructions. The Company shall issue irrevocable instructions to its Transfer Agent and any subsequent transfer
agent in a form acceptable to each of the Buyers (the “Irrevocable Transfer Agent Instructions”) to issue certificates
or credit shares to the applicable balance accounts at DTC, registered in the name of each Buyer or its respective nominee(s), for the
Common Shares and the Warrant Shares in such amounts as specified from time to time by each Buyer to the Company upon the exercise of
the Warrants (as the case may be). The Company represents and warrants that no instruction other than the Irrevocable Transfer Agent
Instructions referred to in this Section 5(b) will be given by the Company to its Transfer Agent with respect to the Securities, and
that the Securities shall otherwise be freely transferable on the books and records of the Company, as applicable, to the extent provided
in this Agreement and the other Transaction Documents. If a Buyer effects a sale, assignment or transfer of the Securities, the Company
shall permit the transfer and shall promptly instruct its Transfer Agent to issue one or more certificates or credit shares to the applicable
balance accounts at DTC in such name and in such denominations as specified by such Buyer to effect such sale, transfer or assignment.
The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to a Buyer. Accordingly, the Company
acknowledges that the remedy at law for a breach of its obligations under this Section 5(b) will be inadequate and agrees, in the event
of a breach or threatened breach by the Company of the provisions of this Section 5(b), that a Buyer shall be entitled, in addition to
all other available remedies, to an order and/or injunction restraining any breach and requiring immediate issuance and transfer, without
the necessity of showing economic loss and without any bond or other security being required. The Company shall cause its counsel to
issue each legal opinion referred to in the Irrevocable Transfer Agent Instructions to the Transfer Agent as follows: (i) at the Closing
with respect to the Common Shares, (ii) upon each exercise of the Warrants (unless such issuance is covered by a prior legal opinion
previously delivered to the Transfer Agent), and (iii) on each date a registration statement with respect to the issuance or resale of
any of the Securities is declared effective by the SEC. Any fees (with respect to the Transfer Agent, counsel to the Company or otherwise)
associated with the issuance of such opinions or the removal of any legends on any of the Securities shall be borne by the Company.
(c)
Legends. Certificates and any other instruments evidencing the Securities shall not bear any restrictive or other legend.
(d)
FAST Compliance. While any Warrants remain outstanding, the Company shall maintain a transfer agent that participates in the DTC
Fast Automated Securities Transfer Program.
6. |
CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL. |
The
obligation of the Company hereunder to issue and sell the Common Shares and the related Warrants to each Buyer at the Closing is subject
to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Company’s
sole benefit and may be waived by the Company at any time in its sole discretion by providing each Buyer with prior written notice thereof:
(a)
Such Buyer shall have executed each of the other Transaction Documents to which it is a party and delivered the same to the Company.
(b)
Such Buyer and each other Buyer shall have delivered to the Company the Purchase Price for the Common Shares and the related Warrants
being purchased by such Buyer at the Closing by wire transfer of immediately available funds in accordance with the Flow of Funds Letter.
(c)
The representations and warranties of such Buyer shall be true and correct in all material respects as of the date when made and as of
the Closing Date as though originally made at that time (except for representations and warranties that speak as of a specific date,
which shall be true and correct as of such specific date), and such Buyer shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by such
Buyer at or prior to the Closing Date.
7. |
CONDITIONS TO EACH BUYER’S OBLIGATION TO PURCHASE. |
The
obligation of each Buyer hereunder to purchase its Common Shares and its related Warrants at the Closing is subject to the satisfaction,
at or before the Closing Date, of each of the following conditions, provided that these conditions are for each Buyer’s sole benefit
and may be waived by such Buyer at any time in its sole discretion by providing the Company with prior written notice thereof:
(a)
The Company shall have duly executed and delivered to such Buyer each of the Transaction Documents and the Company shall have duly executed
and delivered to such Buyer (x) such aggregate number of Common Shares set forth across from such Buyer’s name in column (3) of
the Schedule of Buyers, and (y) Warrants (initially for such aggregate number of Warrant Shares as is set forth across from such Buyer’s
name in column (4) of the Schedule of Buyers), in each case, as being purchased by such Buyer at the Closing pursuant to this Agreement.
(b)
Such Buyer shall have received the opinions of Holland and Knight, LLP, the Company’s counsel, and Westward Law Group, the Company’s
Nevada counsel, dated as of the Closing Date, in the forms acceptable to such Buyer.
(c)
The Company shall have delivered to such Buyer a copy of the Irrevocable Transfer Agent Instructions, in the form acceptable to such
Buyer, which instructions shall have been delivered to and acknowledged in writing by the Company’s transfer agent.
(d)
The Company shall have delivered to such Buyer a certificate evidencing the formation and good standing of the Company in such entity’s
jurisdiction of formation issued by the Secretary of State (or comparable office) of such jurisdiction of formation as of a date within
ten (10) days of the Closing Date.
(e)
The Company shall have delivered to such Buyer a certificate evidencing the Company’s qualification as a foreign corporation and
good standing issued by the Secretary of State (or comparable office) of each jurisdiction in which the Company conducts business and
is required to so qualify, as of a date within ten (10) days of the Closing Date.
(f)
The Company shall have delivered to such Buyer a certificate, in the form acceptable to such Buyer, executed by the Secretary of the
Company and dated as of the Closing Date, as to (i) the resolutions consistent with Section 3(b) as adopted by the Company’s board
of directors in a form reasonably acceptable to such Buyer, (ii) the Articles of Incorporation of the Company and (iii) the Bylaws of
the Company, each as in effect at the Closing.
(g)
Each and every representation and warranty of the Company shall be true and correct as of the date when made and as of the Closing Date
as though originally made at that time (except for representations and warranties that speak as of a specific date, which shall be true
and correct as of such specific date) and the Company shall have performed, satisfied and complied in all respects with the covenants,
agreements and conditions required to be performed, satisfied or complied with by the Company at or prior to the Closing Date. Such Buyer
shall have received a certificate, duly executed by the Chief Financial Officer of the Company, dated as of the Closing Date, to the
foregoing effect and as to such other matters as may be reasonably requested by such Buyer in the form acceptable to such Buyer.
(h)
The Company shall have delivered to such Buyer a letter from the Company’s transfer agent certifying the number of shares of Common
Stock outstanding on the Closing Date immediately prior to the Closing.
(i)
The Common Stock (A) shall be designated for quotation or listed (as applicable) on the Principal Market and (B) shall not have been
suspended, as of the Closing Date, by the SEC or the Principal Market from trading on the Principal Market nor shall suspension by the
SEC or the Principal Market have been threatened, as of the Closing Date, either (I) in writing by the SEC or the Principal Market or
(II) by falling below the minimum maintenance requirements of the Principal Market.
(j)
The Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the sale of
the Securities, including without limitation, those required by the Principal Market, if any.
(k)
No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or Governmental Entity of competent jurisdiction that prohibits the consummation of any of the transactions contemplated
by the Transaction Documents.
(l)
Since the date of execution of this Agreement, no event or series of events shall have occurred that reasonably would have or result
in a Material Adverse Effect.
(m)
The Company shall have notified the Principal Market of the listing for the Common Shares and the Warrant Shares.
(n)
Such Buyer shall have received a letter on the letterhead of the Company, duly executed by the Chief Financial Officer of the Company,
setting forth the wire amounts of each Buyer and the wire transfer instructions of the Company (the “Flow of Funds Letter”).
(o)
From the date hereof to the Closing Date, (i) trading in the Common Stock shall not have been suspended by the SEC or the Principal Market
(except for any suspension of trading of limited duration agreed to by the Company, which suspension shall be terminated prior to the
Closing), and, (ii) 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 the Principal Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities
nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such
magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of
each Buyer, makes it impracticable or inadvisable to purchase the Securities at the Closing
(p)
The Registration Statement shall be effective and available for the issuance and sale of the Securities hereunder and the Company shall
have delivered to such Buyer the Prospectus and the Prospectus Supplement as required thereunder.
(q)
The Company and its Subsidiaries shall have delivered to such Buyer such other documents, instruments or certificates relating to the
transactions contemplated by this Agreement as such Buyer or its counsel may reasonably request.
In
the event that the Closing shall not have occurred with respect to a Buyer within five (5) days of the date hereof, then such Buyer shall
have the right to terminate its obligations under this Agreement with respect to itself at any time on or after the close of business
on such date without liability of such Buyer to any other party; provided, however, (i) the right to terminate this Agreement under this
Section 8 shall not be available to such Buyer if the failure of the transactions contemplated by this Agreement to have been consummated
by such date is the result of such Buyer’s breach of this Agreement and (ii) the abandonment of the sale and purchase of the Common
Shares and the Warrants shall be applicable only to such Buyer providing such written notice, provided further that no such termination
shall affect any obligation of the Company under this Agreement to reimburse such Buyer for the expenses described in Section 4(j) above.
Nothing contained in this Section 8 shall be deemed to release any party from any liability for any breach by such party of the terms
and provisions of this Agreement or the other Transaction Documents or to impair the right of any party to compel specific performance
by any other party of its obligations under this Agreement or the other Transaction Documents.
(a)
Governing Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of
this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict
of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of
any jurisdictions other than the State of New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state
and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection
herewith or under any of the other Transaction Documents or with any transaction contemplated hereby or thereby, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding
is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit,
action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to
limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude
any Buyer from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s
obligations to such Buyer or to enforce a judgment or other court ruling in favor of such Buyer. EACH PARTY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION
DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY
OR THEREBY.
(b)
Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the
same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event
that any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an
executed signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such signature page were an original thereof.
(c)
Headings; Gender. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation
of, this Agreement. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine,
neuter, singular and plural forms thereof. The terms “including,” “includes,” “include” and words
of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,”
“hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the provision in
which they are found.
(d)
Severability; Maximum Payment Amounts. If any provision of this Agreement is prohibited by law or otherwise determined to be invalid
or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall
be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues
to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature,
invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal
obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties
will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s),
the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s). Notwithstanding anything
to the contrary contained in this Agreement or any other Transaction Document (and without implication that the following is required
or applicable), it is the intention of the parties that in no event shall amounts and value paid by the Company and/or any of its Subsidiaries
(as the case may be), or payable to or received by any of the Buyers, under the Transaction Documents (including without limitation,
any amounts that would be characterized as “interest” under applicable law) exceed amounts permitted under any applicable
law. Accordingly, if any obligation to pay, payment made to any Buyer, or collection by any Buyer pursuant the Transaction Documents
is finally judicially determined to be contrary to any such applicable law, such obligation to pay, payment or collection shall be deemed
to have been made by mutual mistake of such Buyer, the Company and its Subsidiaries and such amount shall be deemed to have been adjusted
with retroactive effect to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by the applicable
law. Such adjustment shall be effected, to the extent necessary, by reducing or refunding, at the option of such Buyer, the amount of
interest or any other amounts which would constitute unlawful amounts required to be paid or actually paid to such Buyer under the Transaction
Documents. For greater certainty, to the extent that any interest, charges, fees, expenses or other amounts required to be paid to or
received by such Buyer under any of the Transaction Documents or related thereto are held to be within the meaning of “interest”
or another applicable term to otherwise be violative of applicable law, such amounts shall be pro-rated over the period of time to which
they relate.
(e)
Entire Agreement; Amendments. This Agreement, the other Transaction Documents and the schedules and exhibits attached hereto and
thereto and the instruments referenced herein and therein supersede all other prior oral or written agreements between the Buyers, the
Company, its Subsidiaries, their affiliates and Persons acting on their behalf, including, without limitation, any transactions by any
Buyer with respect to Common Stock or the Securities, and the other matters contained herein and therein, and this Agreement, the other
Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments referenced herein and therein contain
the entire understanding of the parties solely with respect to the matters covered herein and therein; provided, however, nothing contained
in this Agreement or any other Transaction Document shall (or shall be deemed to) (i) have any effect on any agreements any Buyer has
entered into with, or any instruments any Buyer has received from, the Company or any of its Subsidiaries prior to the date hereof with
respect to any prior investment made by such Buyer in the Company or (ii) waive, alter, modify or amend in any respect any obligations
of the Company or any of its Subsidiaries, or any rights of or benefits to any Buyer or any other Person, in any agreement entered into
prior to the date hereof between or among the Company and/or any of its Subsidiaries and any Buyer, or any instruments any Buyer received
from the Company and/or any of its Subsidiaries prior to the date hereof, and all such agreements and instruments shall continue in full
force and effect. Except as specifically set forth herein or therein, neither the Company nor any Buyer makes any representation, warranty,
covenant or undertaking with respect to such matters. For clarification purposes, the Recitals are part of this Agreement. No provision
of this Agreement may be amended other than by an instrument in writing signed by the Company and the Required Holders (as defined below),
and any amendment to any provision of this Agreement made in conformity with the provisions of this Section 9(e) shall be binding on
all Buyers and holders of Securities, as applicable, provided that no such amendment shall be effective to the extent that it (A) applies
to less than all of the holders of the Securities then outstanding or (B) imposes any obligation or liability on any Buyer without such
Buyer’s prior written consent (which may be granted or withheld in such Buyer’s sole discretion). No waiver shall be effective
unless it is in writing and signed by an authorized representative of the waiving party, provided that the Required Holders may waive
any provision of this Agreement, and any waiver of any provision of this Agreement made in conformity with the provisions of this Section
9(e) shall be binding on all Buyers and holders of Securities, as applicable, provided that no such waiver shall be effective to the
extent that it (1) applies to less than all of the holders of the Securities then outstanding (unless a party gives a waiver as to itself
only) or (2) imposes any obligation or liability on any Buyer without such Buyer’s prior written consent (which may be granted
or withheld in such Buyer’s sole discretion). No consideration (other than reimbursement of legal fees) shall be offered or paid
to any Person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same consideration
also is offered to all of the parties to the Transaction Documents, all holders of the Common Shares, or all holders of the Warrants
(as the case may be). From the date hereof and while any Warrants are outstanding, the Company shall not be permitted to receive any
consideration from a Buyer or a holder of Warrants that is not otherwise contemplated by the Transaction Documents in order to, directly
or indirectly, induce the Company or any Subsidiary (i) to treat such Buyer or holder of Warrants in a manner that is more favorable
than to other similarly situated Buyers or holders of Warrants, as applicable, or (ii) to treat any Buyer(s) or holder(s) of Warrants
in a manner that is less favorable than the Buyer or holder of Warrants that is paying such consideration; provided, however, that the
determination of whether a Buyer has been treated more or less favorably than another Buyer shall disregard any securities of the Company
purchased or sold by any Buyer. The Company has not, directly or indirectly, made any agreements with any Buyers relating to the terms
or conditions of the transactions contemplated by the Transaction Documents except as set forth in the Transaction Documents. Without
limiting the foregoing, the Company confirms that, except as set forth in this Agreement, no Buyer has made any commitment or promise
or has any other obligation to provide any financing to the Company, any Subsidiary or otherwise. As a material inducement for each Buyer
to enter into this Agreement, the Company expressly acknowledges and agrees that (x) no due diligence or other investigation or inquiry
conducted by a Buyer, any of its advisors or any of its representatives shall affect such Buyer’s right to rely on, or shall modify
or qualify in any manner or be an exception to any of, the Company’s representations and warranties contained in this Agreement
or any other Transaction Document and (y) unless a provision of this Agreement or any other Transaction Document is expressly preceded
by the phrase “except as disclosed in the SEC Documents,” nothing contained in any of the SEC Documents shall affect such
Buyer’s right to rely on, or shall modify or qualify in any manner or be an exception to any of, the Company’s representations
and warranties contained in this Agreement or any other Transaction Document. “Required Holders” means Alto Opportunity
Master Fund, SPC - Segregated Master Portfolio B (“Alto”).
(f)
Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement
must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent
by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party)
or electronic mail (provided that such sent email is kept on file (whether electronically or otherwise) by the sending party and the
sending party does not receive an automatically generated message from the recipient’s email server that such e-mail could not
be delivered to such recipient); or (iii) one (1) Business Day after deposit with an overnight courier service with next day delivery
specified, in each case, properly addressed to the party to receive the same. The addresses, facsimile numbers and e-mail addresses for
such communications shall be:
If
to the Company:
Esports
Entertainment Group, Inc.
Block
6, Triq Paceville
St.
Julians, STJ 3109
Telephone:
356 2757 7000
Attention:
Interim CFO
E-Mail:
michael@esportsentertainmentgroup.com
With
a copy (for informational purposes only) to:
Holland
& Knight LLP
701
Brickell Avenue, Suite 3300
Miami,
FL 33131
Telephone:
(305) 789-7568
Attention:
Shane Segarra
E-Mail:
shane.segarra@hklaw.com
If
to the Transfer Agent:
VStock
Transfer, LLC
18
Lafayette Place
Woodmere,
NY 11598
Telephone:
(212) 828-8436
Attention:
Compliance Group
E-Mail:
info@vstocktransfer.com
If
to a Buyer, to its address, e-mail address and facsimile number set forth on the Schedule of Buyers, with copies to such Buyer’s
representatives as set forth on the Schedule of Buyers,
with
a copy (for informational purposes only) to:
Kelley
Drye & Warren LLP
3
World Trade Center
175
Greenwich Street
New
York, NY 10007
Telephone:
(212) 808-7540
Attention:
Michael A. Adelstein, Esq.
E-mail:
madelstein@kelleydrye.com
or
to such other address, e-mail address and/or facsimile number and/or to the attention of such other Person as the recipient party has
specified by written notice given to each other party five (5) days prior to the effectiveness of such change, provided that Kelley Drye
& Warren LLP shall only be provided copies of notices sent to the lead Buyer. Written confirmation of receipt (A) given by the recipient
of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile
machine or e-mail containing the time, date, recipient facsimile number and, with respect to each facsimile transmission, an image of
the first page of such transmission or (C) provided by an overnight courier service shall be rebuttable evidence of personal service,
receipt by facsimile or receipt from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively.
(g)
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors
and assigns, including any purchasers of any of the Warrants (but excluding any purchasers of Underlying Securities, unless pursuant
to a written assignment by such Buyer). The Company shall not assign this Agreement or any rights or obligations hereunder without the
prior written consent of the Required Holders, including, without limitation, by way of a Fundamental Transaction (as defined in the
Warrants) (unless the Company is in compliance with the applicable provisions governing Fundamental Transactions set forth in the Warrants).
A Buyer may assign some or all of its rights hereunder in connection with any transfer of any of its Securities without the consent of
the Company, in which event such assignee shall be deemed to be a Buyer hereunder with respect to such assigned rights.
(h)
No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, other than the
Indemnitees referred to in Section 9(k).
(i)
Survival. The representations, warranties, agreements and covenants shall survive the Closing. Each Buyer shall be responsible
only for its own representations, warranties, agreements and covenants hereunder.
(j)
Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and
shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.
(k)
Indemnification.
(i)
In consideration of each Buyer’s execution and delivery of the Transaction Documents and acquiring the Securities thereunder and
in addition to all of the Company’s other obligations under the Transaction Documents, the Company shall defend, protect, indemnify
and hold harmless each Buyer and each holder of any Securities and all of their stockholders, partners, members, officers, directors,
employees and direct or indirect investors and any of the foregoing Persons’ agents or other representatives (including, without
limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”)
from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses
in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred
by any Indemnitee as a result of, or arising out of, or relating to (i) any misrepresentation or breach of any representation or warranty
made by the Company or any Subsidiary in any of the Transaction Documents, (ii) any breach of any covenant, agreement or obligation of
the Company or any Subsidiary contained in any of the Transaction Documents or (iii) any cause of action, suit, proceeding or claim brought
or made against such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company or
any Subsidiary) or which otherwise involves such Indemnitee that arises out of or results from (A) the execution, delivery, performance
or enforcement of any of the Transaction Documents, (B) any transaction financed or to be financed in whole or in part, directly or indirectly,
with the proceeds of the issuance of the Securities, (C) any disclosure properly made by such Buyer pursuant to Section 4(l), or (D)
the status of such Buyer or holder of the Securities either as an investor in the Company pursuant to the transactions contemplated by
the Transaction Documents or as a party to this Agreement (including, without limitation, as a party in interest or otherwise in any
action or proceeding for injunctive or other equitable relief). To the extent that the foregoing undertaking by the Company may be unenforceable
for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities
which is permissible under applicable law.
(ii)
Promptly after receipt by an Indemnitee under this Section 9(k) of notice of the commencement of any action or proceeding (including
any governmental action or proceeding) involving an Indemnified Liability, such Indemnitee shall, if a claim in respect thereof is to
be made against the Company under this Section 9(k), deliver to the Company a written notice of the commencement thereof, and the Company
shall have the right to participate in, and, to the extent the Company so desires, to assume control of the defense thereof with counsel
mutually satisfactory to the Company and the Indemnitee; provided, however, that an Indemnitee shall have the right to retain its own
counsel with the fees and expenses of such counsel to be paid by the Company if: (A) the Company has agreed in writing to pay such fees
and expenses; (B) the Company shall have failed promptly to assume the defense of such Indemnified Liability and to employ counsel reasonably
satisfactory to such Indemnitee in any such Indemnified Liability; or (C) the named parties to any such Indemnified Liability (including
any impleaded parties) include both such Indemnitee and the Company, and such Indemnitee shall have been advised by counsel that a conflict
of interest is likely to exist if the same counsel were to represent such Indemnitee and the Company (in which case, if such Indemnitee
notifies the Company in writing that it elects to employ separate counsel at the expense of the Company, then the Company shall not have
the right to assume the defense thereof and such counsel shall be at the expense of the Company), provided further, that in the case
of clause (C) above the Company shall not be responsible for the reasonable fees and expenses of more than one (1) separate legal counsel
for the Indemnitees. The Indemnitee shall reasonably cooperate with the Company in connection with any negotiation or defense of any
such action or Indemnified Liability by the Company and shall furnish to the Company all information reasonably available to the Indemnitee
which relates to such action or Indemnified Liability. The Company shall keep the Indemnitee reasonably apprised at all times as to the
status of the defense or any settlement negotiations with respect thereto. The Company shall not be liable for any settlement of any
action, claim or proceeding effected without its prior written consent, provided, however, that the Company shall not unreasonably withhold,
delay or condition its consent. The Company shall not, without the prior written consent of the Indemnitee, consent to entry of any judgment
or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnitee of a release from all liability in respect to such Indemnified Liability or litigation, and such settlement
shall not include any admission as to fault on the part of the Indemnitee. Following indemnification as provided for hereunder, the Company
shall be subrogated to all rights of the Indemnitee with respect to all third parties, firms or corporations relating to the matter for
which indemnification has been made. The failure to deliver written notice to the Company within a reasonable time of the commencement
of any such action shall not relieve the Company of any liability to the Indemnitee under this Section 9(k), except to the extent that
the Company is materially and adversely prejudiced in its ability to defend such action.
(iii)
The indemnification required by this Section 9(k) shall be made by periodic payments of the amount thereof during the course of the investigation
or defense, within ten (10) days after bills are received or Indemnified Liabilities are incurred.
(iv)
The indemnity agreement contained herein shall be in addition to (A) any cause of action or similar right of the Indemnitee against the
Company or others, and (B) any liabilities the Company may be subject to pursuant to the law.
(l)
Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party. No specific representation or warranty shall limit the
generality or applicability of a more general representation or warranty. Each and every reference to share prices, shares of Common
Stock and any other numbers in this Agreement that relate to the Common Stock shall be automatically adjusted for any stock splits, stock
dividends, stock combinations, recapitalizations or other similar transactions that occur with respect to the Common Stock after the
date of this Agreement. Notwithstanding anything in this Agreement to the contrary, for the avoidance of doubt, nothing contained herein
shall constitute a representation or warranty against, or a prohibition of, any actions with respect to the borrowing of, arrangement
to borrow, identification of the availability of, and/or securing of, securities of the Company in order for such Buyer (or its broker
or other financial representative) to effect short sales or similar transactions in the future. Notwithstanding the fact that this Agreement
references “Buyers”, as of the date hereof, Alto is the sole purchaser of Common Shares and Warrants hereunder.
(m)
Remedies. Each Buyer and in the event of assignment by Buyer of its rights and obligations hereunder, each holder of Securities,
shall have all rights and remedies set forth in the Transaction Documents and all rights and remedies which such holders have been granted
at any time under any other agreement or contract and all of the rights which such holders have under any law. Any Person having any
rights under any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other security),
to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. Furthermore,
the Company recognizes that in the event that it or any Subsidiary fails to perform, observe, or discharge any or all of its or such
Subsidiary’s (as the case may be) obligations under the Transaction Documents, any remedy at law would inadequate relief to the
Buyers. The Company therefore agrees that the Buyers shall be entitled to specific performance and/or temporary, preliminary and permanent
injunctive or other equitable relief from any court of competent jurisdiction in any such case without the necessity of proving actual
damages and without posting a bond or other security. The remedies provided in this Agreement and the other Transaction Documents shall
be cumulative and in addition to all other remedies available under this Agreement and the other Transaction Documents, at law or in
equity (including a decree of specific performance and/or other injunctive relief).
(n)
Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction
Documents, whenever any Buyer exercises a right, election, demand or option under a Transaction Document and the Company or any Subsidiary
does not timely perform its related obligations within the periods therein provided, then such Buyer may rescind or withdraw, in its
sole discretion from time to time upon written notice to the Company or such Subsidiary (as the case may be), any relevant notice, demand
or election in whole or in part without prejudice to its future actions and rights.
(o)
Payment Set Aside; Currency. To the extent that the Company makes a payment or payments to any Buyer hereunder or pursuant to
any of the other Transaction Documents or any of the Buyers enforce or exercise their rights hereunder or thereunder, and such payment
or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent
or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, foreign, state or federal law,
common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended
to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff
had not occurred. Unless otherwise expressly indicated, all dollar amounts referred to in this Agreement and the other Transaction Documents
are in United States Dollars (“U.S. Dollars”), and all amounts owing under this Agreement and all other Transaction
Documents shall be paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall be converted into the U.S. Dollar
equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange Rate” means, in relation
to any amount of currency to be converted into U.S. Dollars pursuant to this Agreement, the U.S. Dollar exchange rate as published in
the Wall Street Journal on the relevant date of calculation.
(p)
Judgment Currency.
(i)
If for the purpose of obtaining or enforcing judgment against the Company in connection with this Agreement or any other Transaction
Document in any court in any jurisdiction it becomes necessary to convert into any other currency (such other currency being hereinafter
in this Section 9(p) referred to as the “Judgment Currency”) an amount due in US Dollars under this Agreement, the
conversion shall be made at the Exchange Rate prevailing on the Trading Day immediately preceding:
(1)
the date actual payment of the amount due, in the case of any proceeding in the courts of New York or in the courts of any other jurisdiction
that will give effect to such conversion being made on such date: or
(2)
the date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date as of
which such conversion is made pursuant to this Section 9(p)(i)(1) being hereinafter referred to as the “Judgment Conversion
Date”).
(ii)
If in the case of any proceeding in the court of any jurisdiction referred to in Section 9(p)(i)(1) above, there is a change in the Exchange
Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable party shall pay
such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the Exchange Rate
prevailing on the date of payment, will produce the amount of US Dollars which could have been purchased with the amount of Judgment
Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment Conversion Date.
(iii)
Any amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being obtained
for any other amounts due under or in respect of this Agreement or any other Transaction Document.
(q)
Independent Nature of Buyers’ Obligations and Rights. The obligations of each Buyer under the Transaction Documents are
several and not joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of the
obligations of any other Buyer under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no
action taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as, and the Company acknowledges that
the Buyers do not so constitute, a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption
that the Buyers are in any way acting in concert or as a group or entity, and the Company shall not assert any such claim with respect
to such obligations or the transactions contemplated by the Transaction Documents or any matters, and the Company acknowledges that the
Buyers are not acting in concert or as a group, and the Company shall not assert any such claim, with respect to such obligations or
the transactions contemplated by the Transaction Documents. The decision of each Buyer to purchase Securities pursuant to the Transaction
Documents has been made by such Buyer independently of any other Buyer. Each Buyer acknowledges that no other Buyer has acted as agent
for such Buyer in connection with such Buyer making its investment hereunder and that no other Buyer will be acting as agent of such
Buyer in connection with monitoring such Buyer’s investment in the Securities or enforcing its rights under the Transaction Documents.
The Company and each Buyer confirms that each Buyer has independently participated with the Company and its Subsidiaries in the negotiation
of the transaction contemplated hereby with the advice of its own counsel and advisors. Each Buyer shall be entitled to independently
protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction
Documents, and it shall not be necessary for any other Buyer to be joined as an additional party in any proceeding for such purpose.
The use of a single agreement to effectuate the purchase and sale of the Securities contemplated hereby was solely in the control of
the Company, not the action or decision of any Buyer, and was done solely for the convenience of the Company and its Subsidiaries and
not because it was required or requested to do so by any Buyer. It is expressly understood and agreed that each provision contained in
this Agreement and in each other Transaction Document is between the Company, each Subsidiary and a Buyer, solely, and not between the
Company, its Subsidiaries and the Buyers collectively and not between and among the Buyers.
[signature
pages follow]
IN
WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as
of the date first written above.
|
COMPANY: |
|
|
|
ESPORTS
ENTERTAINMENT GROUP, INC. |
|
|
|
|
By: |
/s/ Alex Igelman |
|
Name: |
Alex
Igelman |
|
Title: |
Chief
Financial Officer |
IN
WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as
of the date first written above.
|
BUYER: |
|
|
|
Alto
Opportunity Master Fund, SPC - Segregated Master Portfolio B |
|
|
|
|
By: |
/s/ Waqas Khatri |
|
Name:
|
Waqas
Khatri |
|
Title:
|
Director |
SCHEDULE
OF BUYERS
(1) | |
(2) | |
| (3) | | |
| (4) | | |
| (5) | | |
(6) |
Buyer | |
Address and Facsimile Number | |
| Aggregate Number of Common Shares | | |
| Aggregate Number of Warrant Shares | | |
|
Purchase Price | | |
Legal Representative’s Address and Facsimile Number |
Alto Opportunity Master Fund, SPC – Segregated Master Portfolio B | |
c/o Ayrton Capital LLC 222
Broadway, 19th Floor New York, NY 10038 Attention: Waqas Khatri E-mail: wk@ayrtonllc.com | |
| 1,000,000 | | |
| 4,167,959 | | |
$ | 1,000,000 | | |
Kelley Drye & Warren LLP 3 World Trade Center 175 Greenwich Street New York, NY 10007 Telephone: (212) 808-7540 Attention: Michael A. Adelstein, Esq.
|
Schedule
3(a)
Subsidiaries
of Esports Entertainment Group, Inc. *
Name
of Entity |
|
Jurisdiction |
ggCircuit
LLC |
|
Indiana |
Esports
Services (Malta) Limited |
|
Malta |
Esports
Entertainment (Malta) Limited |
|
Malta |
* |
The names of certain subsidiaries
have been omitted from this Schedule in accordance with applicable rules. |
The
omitted subsidiaries, considered in the aggregate as a single subsidiary, did not constitute a “significant subsidiary” (as
defined in Rule 1-02(v) of Regulation S-X).
Exhibit
10.2
|
|
|
|
|
Esports
Entertainment Group |
|
Block
6, |
|
Triq
Paceville, |
|
St.
Julians, STJ 3109 |
|
Malta |
August
15, 2023
Alto
Opportunity Master Fund, SPC - Segregated Master Portfolio B
c/o
Ayrton Capital LLC
55
Post Rd W
Westport,
CT 06880
Re: |
Partial
Settlement of Registration Delay Payments under Registration Rights Agreement |
Dear
Sirs:
Reference
is hereby made to (a) that certain Securities Purchase Agreement, dated April 30, 2023, by and among Esports Entertainment Group, Inc.,
a Nevada corporation (the “Company”) and the undersigned (“you” or the “Holder”)
(the “Securities Purchase Agreement”) and (b) that certain Registration Rights Agreement, dated May 22, 2023, by and
among the Company and the Holder (the “Registration Rights Agreement”), pursuant to which the Company granted you
certain registration rights with respect to the Registrable Securities. Capitalized terms not defined herein shall have the meaning as
set forth in the Securities Purchase Agreement, the Registration Rights Agreement or the applicable COD (as defined below).
As
of the date hereof, the Company is obligated to pay to the Holder a Registration Delay Payment of $21,500 (subject to increase with respect
to any additional Registration Delay Payments that may accrue, from time to time, under the Registration Rights Agreement (and subject
to decrease in accordance herewith upon any issuance of Settlement Shares (as defined below) on each applicable Share Settlement Date
(as defined below)), the “Registration Delay Balance”) with respect to certain Registrable Securities of the Holder
required to be registered on a Registration Statement pursuant to the terms of the Registration Rights Agreement.
In
partial satisfaction and settlement of the Registration Delay Payment, the Company hereby agrees to promptly issue you 10,000 shares
of Common Stock of the Company (the “Initial Settlement Shares”) at a price per share of $0.10 within two (2) Trading
Days of the date hereof (the “Initial Share Settlement Date”). The Company further agrees to settle an additional
$1,000 (or either (x) if less, the remaining Registration Delay Balance or (y) such other amount as the parties shall mutually agree)
of the Registration Delay Balance on each 7 day anniversary of the date hereof (or such other date as the parties shall mutually agree)
(each, an “Additional Share Settlement Date”, and together with the Initial Share Settlement Date, each a “Share
Settlement Date”) until the earlier of (A) September 30, 2023 (or such other date as the parties shall mutually agree) and
(B) such time as the Registration Delay Balance has been paid in full, as applicable, by issuing you on each such Additional Share Settlement
Date, additional shares of Common Stock (the “Additional Settlement Shares”, and together with the Initial Settlement
Shares, the “Settlement Shares”) at a price per share equal to the lower of (1) 90% of the lowest VWAP of the Common
Stock during the ten (10) consecutive Trading Day period ending and including the Trading Day immediately preceding such applicable Additional
Share Settlement Date, and (2) $0.10. The parties hereto acknowledge and agree for the purpose of the Securities Purchase Agreement,
the defined term “Conversion Shares” shall be deemed to include the Settlement Shares, mutatis mutandis, and definition
of “Transaction Documents” shall be amended to include this letter agreement.
Reference
is also made to the Certificates of Designations (the “Series C Preferred Stock COD”) governing the Series C Convertible
Preferred Stock (the “Series C Preferred Shares”) and the Certificate of Designations (the “Series D Preferred
Stock COD”, and together with the Series C Preferred Stock COD, the “CODs” and each, a “COD”)
governing the Series D Convertible Preferred Stock (the “Series D Preferred Shares,” and together with the Series
C Preferred Shares, the “Preferred Shares”). Pursuant to Section 9(a) of each of the CODs (collectively, the “Antidilution
Provisions”), upon any issuance by the Company of shares of Common Stock in which the New Issuance Price is less than the price
equal to the Conversion Price in effect immediately prior to such issuance, the Conversion Price(s) then in effect under each of the
Series C Preferred Stock COD and Series D Preferred Stock COD shall be reduced to an amount equal to the New Issuance Price. The parties
hereto acknowledge and agree (x) that any issuance of Common Stock hereunder at a New Issuance Price less than the Conversion Price then
in effect shall result in an adjustment to each Conversion Price in the CODs pursuant to the Antidilution Provisions, subject to the
partial waiver in the next paragraph applicable to certain conversions of Preferred Shares after the date hereof and (y) notwithstanding
anything in the applicable COD to the contrary, with respect to any given conversion of any Preferred Shares, to the extent such Conversion
Price, as so adjusted, is greater than 90% of the lowest VWAP of the Common Stock during the ten (10) consecutive Trading Day period
ending and including the Trading Day of the applicable Conversion Notice, a Conversion Floor Price Condition shall be deemed to have
occurred with respect to such conversion.
Notwithstanding
the foregoing, with respect to any conversion of any Series C Preferred Shares and/or Series D Preferred Shares, as applicable, after
the date hereof, the Holder hereby waives, in part, the Antidilution Provisions applicable thereto such that the issuances of any Settlement
Shares in accordance herewith shall not result in a Conversion Price for the applicable Conversion Amount subject to such conversion
less than the lesser of (A) the Conversion Price then in effect (without giving effect to any adjustments to the Conversion Price arising
solely as a result of the issuances of the Settlement Shares hereunder) and (B) the greater of (x) the Conversion Price then in effect
(after giving effect to all adjustments to the Conversion Price (including, without limitation, such adjustments arising as a result
of the issuances of the Settlement Shares hereunder)) and (y) 90% of the lowest VWAP of the Common Stock during the ten (10) consecutive
Trading Day period ending and including such applicable Conversion Date.
The
Company shall, on or before 9:30 a.m., New York City time, on the Trading Date immediately following the date of this letter, file a
Current Report on Form 8-K with the SEC disclosing all material terms of the transactions contemplated hereby and attaching the form
of this letter as an exhibit thereto (collectively with all exhibits attached thereto, the “8-K Filing”). From and
after the filing of the 8-K Filing with the SEC, to the Company’s knowledge, the Buyers shall not be in possession of any material,
nonpublic information received from the Company or any of its Subsidiaries or any of their respective officers, directors, employees,
affiliates or agents, that is not disclosed in the 8-K Filing. In addition, effective upon the issuance of the 8-K Filing, the Company
acknowledges and agrees that any and all confidentiality or similar obligations under any letter, whether written or oral, between the
Company, any of its Subsidiaries or any of their respective officers, directors, affiliates, employees or agents, on the one hand, and
the Buyers or any of their affiliates, on the other hand, shall terminate and be of no further force or effect. The Company understands
and confirms that the Buyers will rely on the foregoing representations in effecting transactions in securities of the Company.
Section
9 of the Securities Purchase Agreement is hereby incorporated by reference herein, in its entirety, mutatis mutandis.
If
you have any questions regarding the foregoing, please feel free to contact Michael Villani at ***-***-**** or by email to michael@esportsentertainmentgroup.com.
[Signature
Page Follows]
|
Sincerely, |
|
|
|
Esports
Entertainment Group, Inc. |
|
|
|
|
By: |
/s/
Michael Villani |
|
Name: |
Michael
Villani |
|
Title: |
Interim
Chief Financial Officer |
Agreed
to and Acknowledged:
Alto
Opportunity Master Fund, SPC - Segregated Master Portfolio B
By: |
/s/
Waqas Khatri |
|
Name: |
Waqas
Khatri |
|
Title: |
Director |
|
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Esports Entertainment (NASDAQ:GMBLP)
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부터 5월(5) 2024 으로 6월(6) 2024
Esports Entertainment (NASDAQ:GMBLP)
과거 데이터 주식 차트
부터 6월(6) 2023 으로 6월(6) 2024