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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of Report (date of earliest event reported): June 27, 2023
International
Land Alliance, Inc.
(Exact
name of registrant as specified in charter)
Wyoming
(State
or other jurisdiction of incorporation)
000-56111 |
|
46-3752361 |
(Commission
File
Number) |
|
(IRS
Employer
Identification
No.) |
350
10th Avenue, Suite 1000
San
Diego, CA 92101
(Address
of principal executive offices and zip code)
(877)
661-4811
(Registrant’s
telephone number including area code)
N/A
(Former
Name and Former Address)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of 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: None
Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered |
N/A |
|
N/A |
|
N/A |
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 checkmark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item
1.01 Entry into a Material Definitive Agreement.
On
June 2, 2023, International Land Alliance, Inc., a Wyoming corporation (the “Company”) entered into a securities purchase
agreement (the “Purchase Agreement”) with a certain investor (the “Purchaser”). Pursuant to the Purchase Agreement,
the Purchaser agreed to purchase, and the Company agreed to sell and issue to the Purchaser, 3,100 shares of Series C Convertible Preferred
Stock (the “Series C Shares”) at a price per share of $100. The Company shall use the net proceeds from the sale for working
capital purposes. The closing of the Purchase Agreement occurred on July 13, 2023, when the Company issued the Series C Shares
to the Purchaser.
As
previously disclosed, on July 26, 2021, the Company and the Purchaser entered into a Securities Purchase Agreement (the “2021
Purchase Agreement”) whereby the Company issued to the Purchaser warrants to purchase common stock at an exercise price of
$0.68 (the “Existing Warrants”). As consideration for the Purchaser to enter into the Purchase Agreement, the Purchaser
is entitled to receive an additional 1,240,000 warrants to purchase common stock at an
exercise price of $0.07 and reduced the exercise price of the Existing Warrants to $0.07 per
Warrant Share.
The
foregoing descriptions of the Purchase Agreement, the 2021 Purchase Agreement, and the Existing Warrant set forth above do not
purport to be complete and are qualified in their entirety by reference to the full text of such documents, forms of which are filed
as Exhibit 10.2, Exhibit 10.1, and Exhibit 4.1, respectively, to this Current Report on Form 8-K and are incorporated
herein by reference.
Item
5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
The
information set forth above under Item 1.01 is hereby incorporated by reference to this Item 5.03.
On June 27, 2023, the Company filed a Certificate of Designations, Preferences
and Rights of the Series C Shares with the Wyoming Secretary of State (the “Certificate of Designations”), authorizing the
issuance of up to 10,000 Series C Shares, par value $0.001 per share, each having a stated value equal to $100.00 (the “Stated Value”).
The
Series C Preferred Stock has no stated maturity and is subject to a mandatory partial redemption equal to 110% of the Stated Value.
The
Series C Preferred Stock will rank senior with respect to the preferences as to dividends, distributions and payments upon the liquidation,
dissolution and winding up of the Company and all other shares of capital stock of the Company, including all other outstanding shares
of preferred stock as of the filing date of this Certificate of Designations. The Company shall be permitted to
issue capital stock, including preferred stock, that is junior in rank to all Series C with respect to the preferences as to dividends,
distributions and payments upon the liquidation, dissolution and winding up of the Company.
Holders
of shares of the Series C Preferred Stock are entitled to receive, on each Dividend Payment Date, (i) cumulative cash dividends on each
share of Series C Preferred Stock, payable to the Holder(s), on a quarterly basis, at a rate of 12% per annum of the Stated Value, plus
the Additional Amount thereon, and (ii) dividends in the form of shares of Common Stock on each share of Series C Preferred Stock, on
a quarterly basis, at a rate of 8% per annum on the Stated Value.
At
any time or times on or after the Initial Issuance Date, each Holder of Series C Preferred Stock shall be entitled to convert any portion
of the outstanding Series C Preferred Stock, including any Additional Amount, held by such Holder into Conversion Shares by following
the mechanics of conversion set forth in the Certificate of Designations.
The Purchaser shall have the right to convert
its Series C Shares at anytime after their issuance into shares of common stock at the Conversion Price (as defined below). The amount
of shares of common stock issuable upon a conversion for each Series C Share shall be the Stated Value of such share plus all
unpaid dividends in respect of such share (the “Additional Amount”) divided by the Conversion Price. The “Conversion
Price” for each Series C Share is, the lower of $0.07 or eighty percent (80%) of the average of the closing sale price for the
ten (10) consecutive trading days immediately preceding, but not including, the effective date of the applicable conversion notice; provided
that, if the conversion occurs in the ten trading days following an offering of the common stock (or units consisting of common stock
and warrants to purchase common stock) resulting in the listing for trading of the common stock on the NYSE American, the Nasdaq Capital
Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or any successors to any of the foregoing)
(a “Qualified Offering”), the Purchaser shall be entitled to convert its Series C Shares in units of common stock
and warrants to purchase Common Stock, if units are offered to the public in the Qualified Offering.
The
foregoing description of the Certificate of Designations does not purport to be complete and is qualified in its entirety by reference
to the Certificate of Designations, a copy of which is filed as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated
herein by reference.
Item
9.01 Financial Statements and Exhibits.
(d)
|
Exhibits. |
|
|
|
The
following exhibits are filed with this Current Report on Form 8-K: |
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Dated:
July 26, 2023 |
INTERNATIONAL LAND ALLIANCE, INC. |
|
|
|
|
By: |
/s/ Jason
Sunstein |
|
Name: |
Jason Sunstein |
|
Title: |
Chief Financial Officer |
Exhibit
3.1
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF THE SERIES C
CONVERTIBLE PREFERRED STOCK OF
INTERNATIONAL LAND ALLIANCE,
INC.
The
undersigned, Roberto Valdes, the Chief Executive Officer of International Land Alliance, Inc. (the “Corporation” or
the “Company”), a Wyoming corporation, hereby does certify:
That
pursuant to the authority expressly conferred upon the Board of Directors of the Corporation by the Corporation’s Certificate of
Incorporation, as amended (the “Certificate of Incorporation”), the Board of Directors on June 2, 2023, adopted the
following resolution determining it desirable and in the best interests of the Corporation and its shareholders for the Corporation to
create a series of Ten Thousand (10,000) shares of preferred stock designated as “Series C Convertible Preferred Stock.”
RESOLVED,
that the Board of Directors designates the Series C Convertible Preferred Stock and the number of shares constituting such series, and
fixes the rights, powers, preferences, privileges and restrictions relating to such series in addition to any set forth in the Certificate
of Incorporation as follows:
TERMS
OF SERIES C CONVERTIBLE PREFERRED STOCK
1.
Certain Defined Terms. For purposes of this Certificate of Designations, the following terms shall have the following
meanings:
(a)
“1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
(b)
“Additional Amount” means, as of the applicable date of determination, with respect to each share of Series C, all
unpaid dividends, whether declared or not, on such share of Series C.
(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)
“Authorized Failure Shares” shall
have the meaning given to it in Section 11 hereto.
(e)
“Authorized Share Allocation”
shall have the meaning given to it in Section 11 hereto.
(f)
“Authorized Share Failure” shall
have the meaning given to it in Section 11 hereto.
(g)
“Business Day” means any day
except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions
in the State of New York are authorized or required by law or other governmental action to close.
(h)
“Buy-In Price” shall have the
meaning given to it in Section 5 hereto.
(i) “Certificate
of Designations” means this Certificate of Designations, Preferences and Rights of the Series C Convertible Preferred Stock
of the Corporation.
(j)
“Closing Sale Price” means, for any security as of any date, the last closing price for such security on the Principal
Market, as reported by NASDAQ or the OTCQB, or, (2) if no such closing price is reported, the average of the closing bid and ask prices
or, if more than one in either case, the average of the average closing bid and the average closing ask prices.
(k)
“Common Stock” means (i) the Corporation’s shares of common stock, $0.001 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.
(l)
“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder
thereof to acquire Common Stock at any time, including, without limitation, any debt, preferred stock, right, option, warrant or other
instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive,
Common Stock.
(m)
“Conversion Amount” shall have the meaning given to it in Section 5 hereto.
(n)
“Conversion Date” shall have the meaning given to it in Section 5 hereto.
(o)
“Conversion Failure” shall have the meaning given to it in Section 5 hereto.
(p)
“Conversion Notice” shall have the meaning given to it in Section 5 hereto.
(q)
“Conversion Price” shall have the meaning given to it in Section 5 hereto.
(r)
“Conversion Rate” shall have the meaning given to it in Section 5 hereto.
(s)
“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.
(t)
“Corporate Event” shall have the meaning given to it in Section 6 hereto.
(u)
“Corporation” shall have the meaning given to it in the preamble hereto.
(v)
“Dispute Submission Deadline” shall have the meaning given to it in Section 21 hereto.
(w)
“Distributions” shall have the meaning given to it in Section 13 hereto.
(x)
“DTC” shall have the meaning given to it in Section 5 hereto.
(y)
“Excess Shares” shall have the meaning given to it in Section 5 hereto.
(z)
“Exempted Indebtedness” shall mean Indebtedness resulting in net proceeds to the Company of less than $1,000,000.00
(aa)
“Exempt Issuance” means the issuance of (a) shares of Common Stock, restricted stock units or options to employees,
officers or directors of the Company pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee
members of the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose
for services rendered to the Company, (b) securities upon the exercise, exchange of or conversion of any Securities issued hereunder,
(c) other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of
this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of
such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection with
stock splits or combinations) or to extend the term of such securities, (d) securities issued pursuant to acquisitions or strategic transactions
approved by a majority of the disinterested directors of the Company, provided that such securities are issued as “restricted securities”
(as defined in Rule 144) and carry no registration rights that require or permit the filing of any registration statement in connection
therewith, and provided that any such issuance shall only be to a Person (or to the equity holders of a Person) which is, itself or through
its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide
to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is
issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, (e)
restricted stock units, restricted stock and options to consultants of the Company provided, however, any such issuances to consultants
shall not exceed, in the aggregate, shares of underlying Common Stock valued at $500,000, (f) securities issued in an aggregate dollar
amount not to exceed $2,000,000, (g) Securities pursuant to the Transaction Documents, and (h) securities in the Qualified Offering.
(bb)
“Fundamental Transaction” shall have the meaning given to it in Section 6.
(cc)
“Holder” or “Holders” means a holder of Series C.
(dd)
“Indebtedness” means (i) any liabilities for borrowed money or amounts owed in excess of $100,000 (other than trade
accounts payable incurred in the ordinary course of business), (ii) all guaranties, endorsements and other contingent obligations in
respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet
(or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions
in the ordinary course of business; and (iii) the present value of any lease payments in excess of $100,000 due under leases required
to be capitalized in accordance with GAAP.
(ee)
“Initial Issuance Date” means the date the first share of Series C is issued to any Holder hereof.
(ff)
“Junior Stock” shall have the meaning given to it in Section 3 hereto.
(gg)
“Liquidation Event” means, whether in a single transaction or series of transactions, the voluntary or involuntary
liquidation, dissolution or winding up of the Corporation or such Subsidiaries the assets of which constitute all or substantially all
of the assets of the business of the Corporation and its Subsidiaries, taken as a whole.
(hh)
“Liquidation Funds” shall have the meaning given to it in Section 12 hereto.
(ii)
“Maximum Percentage” shall have the meaning given to it in Section 5 hereto.
(jj)
“Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible
Securities.
(kk)
“Parity Stock” shall have the meaning given to it in Section 3 hereto.
(ll)
“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.
(mm)
“Principal Market” means The New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, the Nasdaq
Global Market, the Nasdaq Capital Market, OTCPink, OTCQB, or OTCQX and any successor markets thereto.
(nn)
“Purchase Rights” shall have the meaning given to it in Section 6 hereto.
(oo)
“Qualified Offering” shall mean an offering of Common Stock (or units consisting of Common Stock and warrants to purchase
Common Stock) resulting in the listing for trading of the Common Stock on the NYSE American, the Nasdaq Capital Market, the Nasdaq Global
Market, the Nasdaq Global Select Market or the New York Stock Exchange (or any successors to any of the foregoing).
(pp)
“Register” shall have the meaning given to it in Section 5 hereto.
(qq)
“Registered Series C” shall have the meaning given to it in Section 5 hereto.
(rr)
“Reported Outstanding Share Number” shall have the meaning given to it in Section 5 hereto.
(ss)
“Required Dispute Documentation” shall have the meaning given to it in Section 21 hereto.
(tt)
“Required Reserve Amount” shall have the meaning given to it in Section 11 hereto.
(uu)
“SEC” means the Securities and Exchange Commission or the successor thereto.
(vv)
“Securities Purchase Agreement” means that certain Securities Purchase Agreement by and among the Corporation and
the holders of Series C, effective as of the Initial Issuance Date, as may be amended from time in accordance with the terms thereof.
(ww)
“Senior Preferred Stock” shall have the meaning given to it in Section 3 hereto.
(xx)
“Series C” shall have the meaning given to it in Section 2 hereto.
(yy)
“Series C Certificates” shall have the meaning given to it in Section 5 hereto.
(zz)
“Share Delivery Deadline” shall have the meaning given to it in Section 5 hereto.
(aaa)
“Stated Value” shall mean $100 per share of Series C, subject to adjustment for stock splits, stock dividends, recapitalizations,
reorganizations, reclassifications, combinations, subdivisions or other similar events occurring after the Initial Issuance Date with
respect to the Series C. In the event that the Qualified Offering has not occurred by December 31, 2023, then the Stated Value as of
such time shall be increased by 30%.
(bbb)
“Subsidiary” when used with respect to any Person, means any corporation or other organization, whether incorporated
or unincorporated, of which (A) at least a majority of the securities or other interests having by their terms ordinary voting power
to elect a majority of the board of directors or others performing similar functions with respect to such corporation or other organization
is directly or indirectly owned or controlled by such Person (through ownership of securities, by contract or otherwise) or (B) such
Person or any subsidiary of such Person is a general partner of any general partnership or a manager of any limited liability company.
(ccc)
“Trading Day” means any day on which the Common Stock is eligible to be traded on the Principal Market 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 p.m., Eastern time) unless such day is otherwise designated
as a Trading Day in writing by the Holder.
(ddd)
“Transaction Documents” means the Securities Purchase Agreement, this Certificate of Designations,
the Warrants and each of the other agreements and instruments entered into or delivered by the Corporation in connection with the
transactions contemplated by the Securities Purchase Agreement, all as may be amended from time to time in accordance with the terms
thereof.
(eee)
“Transfer Agent” means Globex Transfer, LLC.
(fff)
“WBCA” means Wyoming Business Corporation Act.
2.
Designation and Number of Shares. There shall hereby be created and established a series of preferred stock of the Corporation
designated as “Series C Convertible Preferred Stock” (the “Series C”). The authorized number of Series
C shall be Ten Thousand (10,000) shares. Each share of Series C shall have a par value of $0.001.
3.
Ranking. Until such time as the Holders of at least a majority of the outstanding
Series C (the “Majority”), expressly consent to the creation of a series of capital stock in parity with the Series
C (“Parity Stock”) or Senior Preferred Stock (each as defined below) in accordance with Section 14, the Series C shall
rank senior with respect to the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding
up of the Corporation and all other shares of capital stock of the Corporation, including all other outstanding shares of preferred stock
as of the filing date of this Certificate of Designations. The Company shall be permitted to issue capital stock, including preferred
stock, that is junior in rank to all Series C with respect to the preferences as to dividends, distributions and payments upon the liquidation,
dissolution and winding up of the Corporation (such junior stock is referred to herein collectively as “Junior Stock”).
The rights of all such Junior Stock shall be subject to the rights, powers, preferences and privileges of the Series C. Without limiting
any other provision of this Certificate of Designations, without the prior express consent of the Majority, the Corporation shall not
hereafter authorize or issue any additional or other shares of capital stock that is (i) of senior rank to the Series C in respect of
the preferences as to dividends, distributions and payments upon the liquidation, dissolution and winding up of the Corporation (collectively,
the “Senior Preferred Stock”), or (ii) Parity Stock. Except as provided for herein, in the event of the merger or consolidation
of the Corporation into another corporation, the Series C shall maintain their relative rights, powers, designations, privileges and preferences
provided for herein for a period of at least two years following such merger or consolidation.
4.
Dividends; Redemptions.
(a)
Accrual and Payment of Dividends. From the Initial Issuance Date, (i) cumulative cash dividends on each share of Series C shall
be paid to the Holders on a quarterly basis (with dividends for any partial quarter being paid on a pro-rata basis), at the rate of twelve
percent (12%) per annum on the Stated Value, plus the Additional Amount thereon, and (ii) subject to the provisions of Section 5(d),
dividends in the form of shares of Common Stock on each share of Series C shall be delivered to the Holders (the “Stock Dividends”),
on a quarterly basis, at a rate of eight percent (8%) per annum on the Stated Value (the “Stock Dividend Accrued Amount”).
Dividends shall be paid within 15 days after the end of each fiscal quarter (“Dividend Payment Date”). The amount
of shares of Common Stock issuable in respect of each share of Series C for each Stock Dividend shall be determined by dividing the Stock
Dividend Accrued Amount for such share of Series C for the applicable quarter by the average of the Closing Sale Price over the final
ten (10) consecutive trading days of the applicable fiscal quarter.
(b)
Participating Dividends. Each Holder of Series C shall be entitled to receive dividends or distributions on each share of Series
C on an “as converted” into Common Stock basis as provided in Section 4 hereof when and if dividends are declared on the
Common Stock by the Board of Directors.
(c)
Redemption at Twenty-Four (24) Months. The Company shall redeem each outstanding share of Series C, on the date that is twenty-four
(24) months from the date of the issuance of such share for a price per share payable in cash to the holder thereof equal to 110% of
the Stated Value, plus the Additional Amount thereon.
(d)
Mandatory Partial Redemptions. Each Holder shall have the right to redeem its shares of Series C for a price per share payable
in cash to the Holder thereof equal to 110% of the Stated Value, plus the Additional Amount thereon, with 25% of the proceeds of the
following transactions:
(i)
asset sales and down payments on asset sales of entire portfolio;
(ii)
net proceeds on full payments or deposits for construction on entire portfolio;
(iii)
the incurrence of Indebtedness, other than Exempted Indebtedness;
(iv)
the sale of equity securities of the Company, other than in an Exempt Issuance.
5.
Conversion. At any time after the Initial Issuance Date, each share of Series C shall be convertible into validly issued, fully
paid and non-assessable shares of Common Stock, on the terms and conditions set forth in this Section 5.
(a)
Holder’s Conversion Right. Subject to the provisions of Section 5(d), at any time or times on or after the Initial Issuance
Date, each Holder shall be entitled to convert any portion of the outstanding Series C, including any Additional Amount, held by such
Holder into validly issued, fully paid and non-assessable shares of Common Stock in accordance with Section 5(c) at the Conversion Rate
(“Optional Conversion”). The Corporation shall not issue any fraction of a share of Common Stock upon any conversion.
If the issuance would result in the issuance of a fraction of a share of Common Stock, the Corporation shall, in its sole discretion,
round such fraction of a share of Common Stock up to the nearest whole share or pay to the Holder a cash adjustment in respect of such
final fraction in an amount equal to such fraction multiplied by the Conversion Price. The Corporation shall pay any and all transfer,
stamp, issuance and similar taxes, costs and expenses (including fees and expenses of the Transfer Agent that may be payable with respect
to the issuance and delivery of Common Stock upon conversion of any Conversion Amount provided that the Corporation shall not be required
to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such conversion shares upon
conversion in a name other than that of the Holder of such shares of Series C and the Corporation shall not be required to issue or deliver
such conversion shares unless or until the Person or Persons requesting the issuance thereof shall have paid to the Corporation the amount
of such tax or shall have established to the satisfaction of the Corporation that such tax has been paid. Notwithstanding the foregoing,
upon the consummation of a Qualified Offering, each Holder then holding shares of Series C shall be entitled to convert such shares into
shares of Common Stock (or units of Common Stock and warrants to purchase Common Stock, if units are offered to the public in the Qualified
Offering (“Qualified Offering Units”)), including any Additional Amount, at the Conversion Price (as defined below);
provided that such conversion shall occur within ten (10) Trading Days of such Qualified Offering (“Special Conversion”).
If a Holder shall be entitled to receive Qualified Offering Units in respect of a conversion, the warrants issuable for every share of
Common Stock issued in of such conversion shall be equal to the proportion of warrants to shares of Common Stock issued in connection
with the Qualified Offering.
(b)
Conversion Rate. The number of shares of Common Stock issuable upon conversion of any share of Series C pursuant to Section 5(a)
(each such date, a “Conversion Date”) shall be determined by dividing (x) the Conversion Amount of such share of Series
C by (y) the Conversion Price (the “Conversion Rate”);
(i)
“Conversion Amount” means, with respect to each share of Series C, as of the applicable date of determination, the
sum of (1) the Stated Value thereof plus (2) the Additional Amount thereon; and
(ii)
“Conversion Price” means, (A) with respect to an Optional Conversion, for each share of Series C as of the Conversion
Date, the lower of $0.07 or eighty percent (80%) of the average of the Closing Sale Price for the ten (10) consecutive Trading Days immediately
preceding, but not including, the effective date of the Conversion Notice, and (B) with respect to a Special Conversion, for each share
of Series C as of the Conversion Date, the lower of $0.07 or eighty percent (80%) of the average of the Closing Sale Price of the Common
Stock that is being offered in the Qualified Offering for the ten (10) consecutive Trading Days immediately preceding, but not including,
the effective date of the Conversion Notice.
(c)
Mechanics of Conversion. The conversion of each share of Series C shall be conducted in the following manner:
(i)
Optional Conversion. To convert a share of Series C into shares of Common Stock, a Holder shall deliver, via electronic mail or
otherwise, for receipt on or prior to 11:59 p.m., Eastern time, on such date, a copy of an executed notice of conversion of the share(s)
of Series C subject to such conversion in the form attached hereto as Exhibit I (the “Conversion Notice”)
to the Corporation. If required by Section 5(c)(iii), within three (3) Trading Days following a conversion of any such Series C as aforesaid,
such Holder shall surrender to a nationally recognized overnight delivery service for delivery to the Corporation the original certificates
representing the Series C (the “Series C Certificates”) so converted as aforesaid (or an indemnification undertaking
with respect to the Series C in the case of its loss, theft or destruction as contemplated by Section 16). On or before the first Trading
Day following the date of receipt of a Conversion Notice, the Corporation shall transmit by electronic mail an acknowledgment of confirmation,
in the form attached hereto as Exhibit II, of receipt of such Conversion Notice to such Holder and the Corporation’s
Transfer Agent, which confirmation shall constitute an instruction to the Transfer Agent to process such Conversion Notice in accordance
with the terms herein. On or before the second Trading Day following the date of receipt of a Conversion Notice (or such earlier date
as required pursuant to the 1934 Act or other applicable law, rule, or regulation, including the rules of the Principal Market or other
customary applicable policy for the settlement of a trade initiated on the applicable Conversion Date of such shares of Common Stock
issuable pursuant to such Conversion Notice) (the “Share Delivery Deadline”), the Corporation shall (1) provided that
the Transfer Agent is participating in The Depository Trust Corporation’s (“DTC”) Fast Automated Securities
Transfer Program, credit such aggregate number of shares of Common Stock to which such Holder shall be entitled to such Holder’s
or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system, or (2) if the Transfer Agent is
not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver (via reputable overnight courier) to the address
as specified in such Conversion Notice, a certificate, registered in the name of such Holder or its designee, for the number of shares
of Common Stock to which such Holder shall be entitled. If the number of Series C represented by the Series C Certificate(s) submitted
for conversion pursuant to Section 5(c)(i) is greater than the number of Series C being converted, then the Corporation shall, as soon
as practicable and in no event later than two Trading Days after receipt of the Series C Certificate(s) and at its own expense, issue
and deliver to such Holder (or its designee) a new Series C Certificate (in accordance with Section 16(d)) representing the number of
Series C not converted. The Person or Persons entitled to receive the shares of Common Stock issuable upon a conversion of Series C shall
be treated for all purposes as the record holder or holders of such shares of Common Stock on the Conversion Date.
(ii)
Corporation’s Failure to Timely Convert. If the Corporation shall fail, for any reason or for no reason, on or prior to
the applicable Share Delivery Deadline, to issue to such Holder a certificate for the number of shares of Common Stock to which such
Holder is entitled and register such shares of Common Stock on the Corporation’s share register or to credit such Holder’s
or its designee’s balance account with DTC for such number of shares of Common Stock to which such Holder is entitled upon such
Holder’s conversion of any Conversion Amount (as the case may be) (a “Conversion Failure”), then such Holder,
upon written notice to the Corporation, may void its Conversion Notice with respect to, and retain or have returned, as the case may
be, all, or any portion, of such Series C that has not been converted pursuant to such Conversion Notice; provided that the voiding of
a Conversion Notice shall not affect the Corporation’s obligations to make any payments which have accrued prior to the date of
such notice pursuant to this Section 5(c)(ii) or otherwise. In addition to the foregoing, if on or prior to the Share Delivery Deadline
the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, the Corporation shall fail to issue and
deliver to such Holder (or its designee) a certificate and register such shares of Common Stock on the Corporation’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 such Holder or such Holder’s designee with DTC for the number of shares of Common Stock to which such Holder
is entitled upon such Holder’s exercise hereunder or pursuant to the Corporation’s obligation pursuant to clause (II) below
and if on or after such Share Delivery Deadline such Holder purchases (in an open market transaction or otherwise) shares of Common Stock
to deliver in satisfaction of a sale by such Holder of all or any portion of the number of shares of Common Stock, or a sale of a number
of shares of Common Stock equal to all or any portion of the number of shares of Common Stock, issuable upon such conversion that such
Holder so is entitled to receive from the Corporation, then, in addition to all other remedies available to such Holder, the Corporation
shall, within two (2)Trading Days after receipt of such Holder’s request and in such Holder’s discretion, either: (I) pay
cash to such Holder in an amount equal to such Holder’s total purchase price (including brokerage commissions and other out-of-pocket
expenses, if any) for the shares of Common Stock so purchased (including by any other Person in respect, or on behalf, of such Holder)
(the “Buy-In Price”), at which point the Corporation’s obligation to so issue and deliver such certificate or
credit such Holder’s balance account with DTC for the number of shares of Common Stock to which such Holder is entitled upon such
Holder’s conversion hereunder (as the case may be) (and to issue such shares of Common Stock) shall terminate, or (II) promptly
honor its obligation to so issue and deliver to such Holder a certificate or certificates representing such shares of Common Stock or
credit such Holder’s balance account with DTC for the number of shares of Common Stock to which such Holder is entitled upon such
Holder’s conversion hereunder (as the case may be) and pay cash to such Holder in an amount equal to the excess (if any) of the
Buy-In Price over the product of (x) such number of shares of Common Stock to which such Holder is entitled multiplied by (y) the lowest
Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date of the applicable Conversion Notice
and ending on the date of such issuance and payment under this clause (ii).
(iii)
Registration; Book-Entry. The Corporation shall maintain a register (the “Register”) for the recordation of
the names and addresses of the Holders of each share of Series C and the Stated Value of the Series C (the “Registered Series
C”). The entries in the Register shall be conclusive and binding for all purposes absent manifest error. The Corporation and
each Holder of the Series C shall treat each Person whose name is recorded in the Register as the owner of a share of Series C for all
purposes (including the right to receive payments and dividends hereunder) notwithstanding notice to the contrary. A registered share
of Series C may be assigned, transferred or sold only by registration of such assignment or sale on the Register. Upon its receipt of
a written request to assign, transfer or sell one or more Registered Series C by such Holder thereof, the Corporation shall record the
information contained therein in the Register and issue one or more new shares of Series C in the same aggregate Stated Value as the
Stated Value of the surrendered Series C to the designated assignee or transferee pursuant to Section 17, provided that if the Corporation
does not so record an assignment, transfer or sale (as the case may be) of such Series C shares within two Trading Days of such a request,
then the Register shall be automatically deemed updated to reflect such assignment, transfer or sale (as the case may be). Notwithstanding
anything to the contrary set forth in this Section, following conversion of any Series C in accordance with the terms hereof, the applicable
Holder shall not be required to physically surrender such Series C to the Corporation unless (A) the full or remaining number of Series
C shares represented by the applicable Series C Certificate are being converted (in which event such certificate(s) shall be delivered
to the Corporation as contemplated by this Section 5(c)(iii)) or (B) such Holder has provided the Corporation with prior written notice
(which notice may be included in a Conversion Notice) requesting reissuance of Series C upon physical surrender of the applicable Series
C Certificate. Each Holder and the Corporation shall maintain records showing the Stated Value and dividends converted and/or paid (as
the case may be) and the dates of such conversions and/or payments (as the case may be) or shall use such other method, reasonably satisfactory
to such Holder and the Corporation, so as not to require physical surrender of a Series C Certificate upon conversion. If the Corporation
does not update the Register to record such Stated Value and dividends converted and/or paid (as the case may be) and the dates of such
conversions and/or payments (as the case may be) within two Trading Days of such occurrence, then the Register shall be automatically
deemed updated to reflect such occurrence. In the event of any dispute or discrepancy, such records of such Holder establishing the number
of Series C to which the record holder is entitled shall be controlling and determinative in the absence of manifest error. A Holder
and any transferee or assignee, by acceptance of a certificate, acknowledge and agree that, by reason of the provisions of this paragraph,
following conversion of any Series C, the number of Series C represented by such certificate may be less than the number of Series C
stated on the face thereof. Each Series C Certificate shall bear the following legend:
ANY
TRANSFEREE OR ASSIGNEE OF THIS CERTIFICATE SHOULD CAREFULLY REVIEW THE TERMS OF THE CORPORATION’S CERTIFICATE OF DESIGNATIONS RELATING TO THE SHARES OF SERIES C CONVERTIBLE PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE. THE NUMBER OF SHARES
OF SERIES C CONVERTIBLE PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE MAY BE LESS THAN THE NUMBER OF SHARES OF SERIES C CONVERTIBLE
PREFERRED STOCK STATED ON THE FACE HEREOF
(iv)
Pro Rata Conversion; Disputes. In the event that the Corporation receives a Conversion Notice from more than one Holder for the
same Conversion Date and the Corporation can convert some, but not all, of such Series C submitted for conversion, the Corporation shall
convert from each Holder electing to have Series C converted on such date a pro rata amount of such Holder’s Series C submitted
for conversion on such date based on the number of Series C submitted for conversion on such date by such Holder relative to the aggregate
number of Series C submitted for conversion on such date. In the event of a dispute as to the number of shares of Common Stock issuable
to a Holder in connection with a conversion of Series C, the Corporation shall issue to such Holder the number of shares of Common Stock
not in dispute and resolve such dispute in accordance with Section 22.
(d)
Limitation on Beneficial Ownership. The Corporation shall not effect the conversion of any of the Series C held by a Holder, and
such Holder shall not have the right to convert any of the Series C held by such Holder pursuant to the terms and conditions of this
Certificate of Designations and any such conversion shall be null and void and treated as if never made, to the
extent that after giving effect to such conversion, such Holder (together with such Holder’s Affiliates) would beneficially own
in excess of 4.99% (the “Maximum Percentage”) of the shares of Common Stock outstanding immediately after giving effect
to such conversion (which provision may be increased to a maximum of 9.99% by such Holder by written notice from such Holder to the Corporation,
which notice shall be effective 61 calendar days after the date of such notice). For purposes of the foregoing sentence, the aggregate
number of shares of Common Stock beneficially owned by such Holder shall include the number of shares of Common Stock held by such Holder
plus the number of shares of Common Stock issuable upon conversion of the Series C 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) conversion of the remaining, nonconverted Series
C beneficially owned by such Holder and (B) exercise or conversion of the unexercised or nonconverted portion of any other securities
of the Corporation (including any Convertible Securities and Options) beneficially owned by such Holder subject to a limitation on conversion
or exercise analogous to the limitation contained in this Section 5(d). For purposes of this Section 5(d), beneficial ownership shall
be calculated in accordance with Section 13(d) of the 1934 Act and the rules thereunder. For purposes of determining the number of outstanding
shares of Common Stock a Holder may acquire upon the conversion of such Series C without exceeding the Maximum Percentage, such Holder
may rely on the number of outstanding shares of Common Stock as reflected in (x) the Corporation’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 Corporation or (z) any other written notice by the Corporation or the Transfer Agent, if any, setting
forth the number of shares of Common Stock outstanding (the “Reported Outstanding Share Number”). Notwithstanding
the preceding, the Holder may rely on the Transfer Agent’s records if the Reported Outstanding Share Number is different than what
the Corporation reports. If the Corporation receives a Conversion Notice from a Holder at a time when the actual number of outstanding
shares of Common Stock is less than the Reported Outstanding Share Number, the Corporation shall notify such Holder in writing of the
number of shares of Common Stock then outstanding and, to the extent that such Conversion Notice would otherwise cause such Holder’s
beneficial ownership, as determined pursuant to this Section 5(d), to exceed the Maximum Percentage, such Holder must notify the Corporation
of a reduced number of shares of Common Stock to be purchased pursuant to such Conversion Notice. For any reason at any time, upon the
written or oral request of any Holder, the Corporation shall within one Trading Day confirm orally and in writing or by electronic mail
to such Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall
be determined after giving effect to the conversion or exercise of securities of the Corporation, including such Series C, by such Holder
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 a Holder upon conversion of such Series C results in such Holder 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 such Holder’s beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”)
shall be held in abeyance for the benefit of the Holder until such time or times as its right thereto would not result in the Holder
exceeding the Maximum Percentage, at which time or times the Holder shall be granted such shares of Common Stock to the same extent as
if there had been no such limitation. For purposes of clarity, the shares of Common Stock issuable to a Holder pursuant to the terms
of this Certificate of Designations in excess of the Maximum Percentage shall not be deemed to be beneficially owned
by such 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 convert
such Series C pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph with respect
to any subsequent determination of convertibility. The provisions of this paragraph shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this Section 5(d) 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 5(d) or
to make changes or supplements necessary or desirable to properly give effect to such limitation. The provisions of this Section 5(d)
shall be of no further force or effect if the Holder participates in a subsequent transaction with the Corporation which results in the
Holder beneficially owning in excess of 4.99% of the number of shares of the Common Stock outstanding which shall include securities
convertible into Common Stock which do not contain a beneficial ownership limitation. To ensure compliance with this restriction, each
Holder will be deemed to represent to the Corporation each time it delivers a Conversion Notice that such Conversion Notice has not violated
the restrictions set forth in this Section 5(d) and the Corporation shall have no obligation to verify or confirm the accuracy of such
determination. The limitations contained in this Section 5(d) shall apply to a successor holder of Series C.
6.
Rights Upon Issuance of Purchase Rights and Other Corporate Events.
(a)
Purchase Rights. In addition to any adjustments pursuant to Section 7 and 8 below, if at any time the Corporation grants, issues
or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to all or substantially
all of the record holders of any class of Common Stock (the “Purchase Rights”), then each Holder will be entitled
to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such Holder could have acquired if
such Holder had held the number of shares of Common Stock acquirable upon complete conversion of all the Series C (without taking into
account any limitations or restrictions on the convertibility of the Series C) held by such Holder immediately prior to the date on which
a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record
holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the
extent that such Holder’s right to participate in any such Purchase Right would result in such Holder exceeding the Maximum Percentage,
then such 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 such Holder until such time or times,
if ever, as its right thereto would not result in such Holder exceeding the Maximum Percentage), at which time or times such 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
to be held similarly in abeyance) to the same extent as if there had been no such limitation.
(b)
Other Corporate Events. In addition to and not in substitution for any other rights hereunder,
prior to the consummation of any 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 Corporation shall
make appropriate provision to insure that each Holder will thereafter have the right to receive upon a conversion of all the Series C
held by such Holder (i) in addition to the shares of Common Stock receivable upon such conversion, such securities or other assets to
which such Holder would have been entitled with respect to such shares of Common Stock had such shares of Common Stock been held by such
Holder upon the consummation of such Corporate Event (without taking into account any limitations or restrictions on the convertibility
of the Series C contained in this Certificate of Designations) or (ii) in lieu of the shares of Common Stock otherwise receivable upon
such conversion, such securities or other assets received by the holders of shares of Common Stock in connection with the consummation
of such Corporate Event in such amounts as such Holder would have been entitled to receive had the Series C held by such Holder initially
been issued with conversion rights for the form of such consideration (as opposed to shares of Common Stock) at a conversion rate for
such consideration commensurate with the Conversion Rate. The provision made pursuant to the preceding sentence shall be in a form and
substance satisfactory to the Holder. The provisions of this Section 6 shall apply similarly and equally to successive Corporate Events
and shall be applied without regard to any limitations on the conversion of the Series C contained in this Certificate of Designations.
“Fundamental Transaction” means the occurrence of the Corporation (i) directly or indirectly, including through subsidiaries,
Affiliates or otherwise, in one or more related transactions, (A) consolidating or merging with or into (if the Corporation is the surviving
corporation) another Person, (B) selling, assigning, transferring, conveying or otherwise disposing of all or substantially all of the
properties or assets of the Corporation or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation S-X)
to one or more Persons, (C) making, or allowing one or more Persons to make, or allowing the Corporation to be subject to or have its
Common Stock be subject to or party to one or more Persons 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 Persons making or party to, or affiliated with any Persons 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 Persons making or party to,
or affiliated with any Person 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, (D) consummating a stock or share
purchase agreement or other business combination (including a reorganization, recapitalization, spin-off or scheme of arrangement) with
one or more Persons whereby all such Persons, 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
Persons making or party to, or affiliated with any Persons 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 Persons 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 (E) reorganize, recapitalize or
reclassify its Common Stock other than a stock split.
7.
Price Protection. Except for any Exempt Issuance, in the event the Corporation issues or sells any securities including Options
or Convertible Securities (or amends any outstanding securities of the Company), at an effective price of, or with an exercise or conversion
price of less than the Conversion Price, then upon such issuance or sale, the Conversion Price shall be reduced to the sale price or
the exercise or conversion price of the securities issued or sold.
8.
Adjustment of Conversion Price upon Subdivision or Combination of Common Stock. If the Corporation at any time on or after the
Initial Issuance Date subdivides (by any stock split, stock dividend, recapitalization or other similar transaction) one or more classes
of its outstanding shares of Common Stock into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision
will be proportionately reduced. If the Corporation at any time on or after the Initial Issuance Date combines (by any reverse split,
recapitalization or other similar transaction) one or more classes of its outstanding shares of Common Stock into a smaller number of
shares, the Conversion Price in effect immediately prior to such combination will be proportionately increased. Any adjustment pursuant
to this Section 8 shall become effective immediately after the effective date of such subdivision or combination. If any event requiring
an adjustment under this Section 8 occurs during the period that a Conversion Price is calculated hereunder, then the calculation of
such Conversion Price shall be adjusted appropriately to reflect such event.
9.
Participation in Future Financing.
(a)
Until the date that is three (3) years after the date from which none of the Holders hold any of the Series C, upon any issuance by the
Corporation of Common Stock or Common Stock Equivalents for cash consideration or a combination of units hereof in a transaction exempt
from registration under the Securities Act (a “Subsequent Financing”), the Holders of the outstanding Series C shall
have the right to participate in an amount equal to an aggregate of 30% of the Subsequent Financing (the “Participation Maximum”)
on the same terms, conditions and price provided for in the Subsequent Financing. At least twenty-four hours prior to the expected announcement
or closing of the Subsequent Financing (whichever is first), the Corporation shall deliver to each Holder a written notice of its intention
to effect a Subsequent Financing (“Pre-Notice”). Within eight hours of a Holder’s receipt of a Pre-Notice, if
a Holder desires to receive additional information in respect of the Subsequent Financing such Holder shall request an additional notice
from the Company, which notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds
intended to be raised thereunder and the person or persons through or with whom such Subsequent Financing is proposed to be effected
(such additional notice, a “Subsequent Financing Notice”). If the Holder desires to participate in such Subsequent
Financing it must provide written notice to the Company within eight hours of the time the Subsequent Financing Notice is delivered to
such Holder (the “Notice Termination Time”) that such Holder is willing to participate in the Subsequent Financing,
the amount of such Holder’s participation, and representing and warranting that such Holder has such funds ready, willing, and
available for investment on the terms set forth in the Subsequent Financing Notice, holds a number of shares of Common Stock acquired
pursuant to this Agreement equal to or greater than the number proposed to be purchased in the Subsequent Financing, and will not as
a result of such purchase beneficially own more than 9.99% of shares of Common Stock, either individually or as part of a Group as defined
in Section 13(d) of the Exchange Act. If the Company receives no such notice from a Holder as of such Notice Termination Time, such Holder
shall be deemed to have notified the Company that it does not elect to participate in such Subsequent Financing. Notwithstanding the
foregoing, a “Subsequent Financing” shall not include any greenshoe financing in connection with the offering of the Series
C preferred shares.
(b)
If by the Notice Termination time, the Corporation receives responses to a Subsequent Financing Notice from Holders seeking to purchase
more than the aggregate amount of the Participation Maximum, each such Holder shall have the right to purchase its Pro Rata Portion (as
defined below) of the Participation Maximum. “Pro Rata Portion” means the ratio of (x) the amount of Series C issued
on the Initial Issuance Date to the Holder participating under this Section 9 and (y) the sum of the aggregate amount of Series C issued
on the Initial Issuance Date to all Holders participating under this Section 9.
(c)
The Corporation must provide the Holders with a second Subsequent Financing Notice, and the Holders will again have the right of participation
set forth above in this Section 9, if the Subsequent Financing subject to the initial Subsequent Financing Notice is not consummated
for any reason on the terms set forth in such Subsequent Financing Notice within 30 Trading Days after the date of the initial Subsequent
Financing Notice.
(d)
The Corporation and each Holder agree that if any Holder elects to participate in the Subsequent Financing, the transaction documents
related to the Subsequent Financing shall not include any term or provision whereby such Holder shall be required to agree to any restrictions
on trading as to any of the securities held by it or be required to consent to any amendment to or termination of, or grant any waiver,
release or the like under or in connection with, this Agreement, without the prior written consent of such Holder.
(e)
Notwithstanding anything to the contrary in this Section 9 and unless otherwise agreed to by such Holder, the Corporation shall either
confirm in writing to such Holder that the transaction with respect to the Subsequent Financing has been abandoned or shall publicly
disclose its intention to issue the securities in the Subsequent Financing, in either case in such a manner such that such Holder will
not be in possession of any material, non-public information, by the 10th Business Day following delivery of the Subsequent
Financing Notice. If by such 10th Business Day, no public disclosure regarding a transaction with respect to the Subsequent
Financing has been made, and no notice regarding the abandonment of such transaction has been received by such Holder, such transaction
shall be deemed to have been abandoned and such Holder shall not be deemed to be in possession of any material, non-public information
with respect to the Corporation or any of its Subsidiaries.
(f)
Notwithstanding the foregoing, this Section 9 shall not apply in respect of an Exempt Issuance.
10.
Non-Circumvention. The Corporation hereby covenants and agrees that the Corporation will not,
by amendment of its Certificate of Incorporation, bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme
of arrangement, dissolution, issue 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 Certificate of Designations, and will at all times in good faith carry out all the provisions of this Certificate
of Designations and take all action as may be required to protect the rights of the Holders. Without limiting the generality of the foregoing
or any other provision of this Certificate of Designations, the Corporation (a) shall not increase the par value of any shares of Common
Stock receivable upon the conversion of any Series C above the Conversion Price then in effect, (b) shall take all such actions as may
be necessary or appropriate in order that the Corporation may validly and legally issue fully paid and non-assessable shares of Common
Stock upon the conversion of Series C and (c) shall, so long as any Series C are outstanding, and upon the filing of an amendment to the
Corporation’s Certificate of Incorporation to increase the number of shares of the Corporation’s Common Stock that the Corporation
is authorized to issue with the Secretary of State of the State of Wyoming, take all action necessary to reserve and keep available out
of its authorized and unissued shares of Common Stock, solely for the purpose of effecting the conversion of the Series C, the number
of shares of Common Stock as shall from time to time be necessary to effect the conversion of the Series C then outstanding (without regard
to any limitations on conversion contained herein).
11.
[Reserved].
12.
Liquidation, Dissolution, Winding-Up. In the event of a Liquidation Event, the Holders shall be entitled to receive in cash out
of the assets of the Corporation, whether from capital or from earnings available for distribution to its stockholders (the “Liquidation
Funds”), before any amount shall be paid to the holders of any of shares of Junior Stock, but pari passu with any Parity Stock
then outstanding, an amount per share of Series C equal to the greater of (A) the Conversion Amount thereof on the date of such payment
or (B) the amount per share such Holder would receive if such Holder converted such Series C into Common Stock immediately prior to the
date of such payment, provided that if the Liquidation Funds are insufficient to pay the full amount due to the Holders and holders of
shares of Parity Stock, then each Holder and each holder of Parity Stock shall receive a percentage of the Liquidation Funds equal to
the full amount of Liquidation Funds payable to such Holder and such holder of Parity Stock as a liquidation preference, in accordance
with their respective certificate of designations (or equivalent), as a percentage of the full amount of Liquidation Funds payable to
all holders of Series C and all holders of shares of Parity Stock. To the extent necessary, the Corporation shall cause such actions
to be taken by each of its Subsidiaries so as to enable, to the maximum extent permitted by law, the proceeds of a Liquidation Event
to be distributed to the Holders in accordance with this Section 12. All the preferential amounts to be paid to the Holders under this
Section 12 shall be paid or set apart for payment before the payment or setting apart for payment of any amount for, or the distribution
of any Liquidation Funds of the Corporation to the holders of shares of Junior Stock in connection with a Liquidation Event as to which
this Section 12 applies.
13.
Distribution of Assets. In addition to any adjustments pursuant to Section 7 and 8, if the Corporation shall declare or make any
dividend or other distributions of its assets (or rights to acquire its assets) to any or all holders of shares of Common Stock, by way
of return of capital or otherwise (including any distribution of cash, stock or other securities, property or options by way of a dividend,
spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (the “Distributions”),
then each Holder, as holders of Series C, will be entitled to such Distributions as if such Holder had held the number of shares of Common
Stock acquirable upon complete conversion of the Series C (without taking into account any limitations or restrictions on the conversion
of the Series C) immediately prior to 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 Common Stock are to be determined for such Distributions (provided, however, that to
the extent that such Holder’s right to participate in any such Distribution would result in such Holder exceeding the Maximum Percentage,
then such 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 such Holder until such time or times as its right
thereto would not result in such Holder exceeding the Maximum Percentage, at which time or times, if any, such Holder shall be granted
such rights (and any rights under this Section 13 on such initial rights or on any subsequent such rights to be held similarly in abeyance)
to the same extent as if there had been no such limitation).
14.
Vote To Change the Terms of or Issue Series C. In addition to any other rights provided by law, except where the vote or written
consent of the holders of a greater number of shares is required by law, without first obtaining the affirmative vote at a meeting duly
called for such purpose, or the written consent without a meeting, of a Majority, voting together as a single class, the Corporation
shall not: (a) amend or repeal any provision of, or add any provision to, its Certificate of Incorporation or bylaws, or file any certificate
of designations or articles of amendment of any series of shares of preferred stock, if such action would adversely alter or change in
any respect the preferences, rights, privileges or powers, or restrictions provided for the benefit, of the Series C, regardless of whether
any such action shall be by means of amendment to the Certificate of Incorporation or by merger, consolidation or otherwise; (b) increase
or decrease (other than by conversion) the authorized number of Series C; (c) without limiting any provision of Section 2, create or
authorize (by reclassification or otherwise) any new class or series of shares that has a preference over or is on a parity with the
Series C with respect to dividends or the distribution of assets on the liquidation, dissolution or winding up of the Corporation; (d)
pay dividends or make any other distribution on any shares of any capital stock of the Corporation junior in rank to the Series C; (e)
issue any Series C other than as provided in Section 2; or (f) without limiting any provision of Section 7 and 8, whether or not prohibited
by the terms of the Series C, circumvent a right of the Series C.
15.
Transfer of Series C. A Holder may transfer some or all of its Series C without the consent of the Corporation subject to compliance
with securities laws.
16.
Reissuance of Preferred Certificates.
(a)
Transfer. If any Series C are to be transferred, the applicable Holder shall surrender the applicable Series C Certificate to
the Corporation, whereupon the Corporation will forthwith issue and deliver upon the order of such Holder a new Series C Certificate
(in accordance with Section 16(d)), registered as such Holder may request, representing the outstanding number of Series C being transferred
by such Holder and, if less than the entire outstanding number of Series C is being transferred, a new Series C Certificate (in accordance
with Section 16(d)) to such Holder representing the outstanding number of Series C not being transferred. Such Holder and any assignee,
by acceptance of the Series C Certificate, acknowledge and agree that, by reason of the provisions of Section 5(c)(i) following conversion
of any of the Series C, the outstanding number of Series C represented by the Series C may be less than the number of Series C stated
on the face of the Series C Certificate.
(b)
Lost, Stolen or Mutilated Series C Certificate. Upon receipt by the Corporation of evidence reasonably satisfactory to the Corporation
of the loss, theft, destruction or mutilation of a Series C Certificate (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 applicable Holder to the Corporation in customary and reasonable form without the requirement to post a bond or other security
and, in the case of mutilation, upon surrender and cancellation of such Series C Certificate, the Corporation shall execute and deliver
to such Holder a new Series C Certificate (in accordance with Section 16(d)) representing the applicable outstanding number of Series
C.
(c)
Series C Certificate Exchangeable for Different Denominations. Each Series C Certificate is exchangeable, upon the surrender hereof
by the applicable Holder at the principal office of the Corporation, for a new Series C Certificate or Series C Certificate(s) (in accordance
with Section 16(d)) representing in the aggregate the outstanding number of the Series C in the original Series C Certificate, and each
such new certificate will represent such portion of such outstanding number of Series C from the original Series C Certificate as is
designated by such Holder at the time of such surrender.
(d)
Issuance of New Series C Certificate. Whenever the Corporation is required to issue a new Series C Certificate
pursuant to the terms of this Certificate of Designations, such new Series C Certificate (i) shall represent, as indicated on the face
of such Series C Certificate, the number of Series C remaining outstanding (or in the case of a new Series C Certificate being issued
pursuant to Section 16(a) or Section 16(c), the number of Series C designated by such Holder which, when added to the number of Series
C represented by the other new Series C Certificates issued in connection with such issuance, does not exceed the number of Series C remaining
outstanding under the original Series C Certificate immediately prior to such issuance of new Series C Certificate), and (ii) shall have
an issuance date, as indicated on the face of such new Series C Certificate, which is the same as the issuance date of the original Series
C Certificate.
(e)
Book Entry. If the Corporation’s Transfer Agent issues the Series C in book entry format, all provisions of this Certificate of Designations as to delivery of Series C certificates shall be disregarded, and the Transfer Agent shall make entries
in the stock transfer records in connection with conversions and transfers, as appropriate.
17.
Remedies, Characterizations, Other Obligations. The remedies provided in this Certificate of Designations
shall be cumulative and in addition to all other remedies available under this Certificate of Designations and any
of 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 any Holder’s right to pursue actual and consequential damages for any failure by the Corporation
to comply with the terms of this Certificate of Designations. The Corporation covenants to each 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, conversion and the like (and the computation thereof) shall be the amounts to be received by a Holder and shall
not, except as expressly provided herein, be subject to any other obligation of the Corporation (or the performance thereof). The Corporation
shall provide all information and documentation to a Holder that is requested by such Holder to enable such Holder to confirm the Corporation’s
compliance with the terms and conditions of this Certificate of Designations.
18.
Attorneys’ Fees.
(a)
If (i) any shares of Series C are placed in the hands of an attorney to
enforce the provisions of this Certificate of Designations or (ii) there occurs any bankruptcy, reorganization, receivership of the Corporation
or other proceedings affecting Corporation creditors’ rights and involving a claim under this Certificate of Designations, then
the Corporation shall pay the costs incurred by such Holder for such collection, enforcement or action or in connection with such bankruptcy,
reorganization, receivership or other proceeding, including attorneys’ fees and disbursements.
(b)
In addition to the obligations under Section 18(a), in connection with the removal of restrictive legends from shares of Series C, the
Corporation shall pay the reasonable attorney’s fees of counsel to any Holder in any amount not to exceed $500 per opinion of counsel.
Such payment(s) shall be made within one Trading Day after receipt of a Conversion Notice or other notice from a Holder.
19.
Construction; Headings. This Certificate of Designations shall be deemed to be jointly drafted
by the Corporation and the Holders and shall not be construed against any such Person as the drafter hereof. The headings of this Certificate
of Designations are for convenience of reference and shall not form part of, or affect the interpretation of, this Certificate of Designations.
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 Certificate of Designations instead of just the provision in which
they are found. Unless expressly indicated otherwise, all section references are to sections of this Certificate of Designations.
20.
Failure or Indulgence Not Waiver. No failure or delay on the part of a Holder in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or privilege. No waiver shall be effective unless it is in writing and
signed by an authorized representative of the waiving party. Notwithstanding the foregoing, nothing contained in this Section 20 shall
permit any waiver of any provision of Section 17.
21.
Dispute Resolution.
(a)
In the case of a dispute relating to the Closing Sale Price, a Conversion Price or a fair market value or the arithmetic calculation
of a Conversion Rate, (including a dispute relating to the determination of any of the foregoing), the Corporation or the applicable
Holder (as the case may be) shall submit the dispute to the other party via electronic mail (A) if by the Corporation, within two Trading
Days after the occurrence of the circumstances giving rise to such dispute or (B) if by such Holder at any time after such Holder learned
of the circumstances giving rise to such dispute. If such Holder and the Corporation are unable to promptly resolve such dispute relating
to such Closing Sale Price, such Conversion Price or such fair market value, or the arithmetic calculation of such Conversion Rate, at
any time after the second Trading Day following such initial notice by the Corporation or such Holder (as the case may be) of such dispute
to the Corporation or such Holder (as the case may be), then such Holder may, at its sole option, select an independent, reputable investment
bank to resolve such dispute.
(b)
Such Holder and the Corporation 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 21(a) and (B) written documentation supporting its position with respect to such
dispute, in each case, no later than 5:00 p.m. (Eastern time) by the fifth Trading Day immediately following the date on which such 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 such Holder or the Corporation 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 Corporation and such
Holder or otherwise requested by such investment bank, neither the Corporation nor such 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).
(c)
The Corporation and such Holder shall cause such investment bank to determine the resolution of such dispute and notify the Corporation
and such Holder of such resolution no later than 10 Trading Days immediately following the Dispute Submission Deadline. The fees and
expenses of such investment bank shall be borne solely by the Corporation, and such investment bank’s resolution of such dispute
shall be final and binding upon all parties absent manifest error.
22.
Notices. The Corporation shall provide each Holder of Series C with prompt written
notice of all actions taken pursuant to the terms of this Certificate of Designations, including in reasonable detail a description of
such action and the reason therefor. Whenever notice is required to be given under this Certificate of Designations, unless otherwise
provided herein, such notice must be in writing and shall be given in accordance with Section 5.4 of the Securities Purchase Agreement
or in accordance with any other instructions provided by the Holder to the Corporation. The Corporation shall provide each Holder with
prompt written notice of all actions taken pursuant to this Certificate of Designations, including in reasonable detail a description
of such action and the reason therefore. Without limiting the generality of the foregoing, the Corporation shall give written notice to
each Holder (i) immediately upon any adjustment of the Conversion Price, setting forth in reasonable detail, and certifying, the calculation
of such adjustment and (ii) at least 4 days prior to the date on which the Corporation closes its books or takes a record (A) with respect
to any dividend or distribution upon the Common Stock, (B) with respect to any grant, issuances, or sales of any Options, Convertible
Securities or rights to purchase stock, warrants, securities or other property to holders of shares of Common Stock or (C) 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 such Holder. All notices shall be by email or
recognized overnight delivery service, next Trading Day delivery using the addresses of the Corporation as provided to the Holders and
the addresses of any Holder as provided by such Holder to the Corporation. The Corporation and the Holders may change their addresses
by notice by the Corporation to all Holders or any Holder to the Corporation.
23.
Governing Law; Exclusive Jurisdiction. This Certificate of Designations shall be construed and enforced in accordance
with, and all questions concerning the construction, validity, interpretation and performance of this Certificate of Designations shall
be governed by, the internal laws of the State of Wyoming, without giving effect to any choice of law or conflict of law provision or
rule (whether of the State of Wyoming or any other jurisdictions) that would cause the application of the laws of any jurisdictions other
than the State of Wyoming. Except as otherwise required by this Certificate of Designations, the Corporation hereby irrevocably submits
to the exclusive jurisdiction of the state and federal courts sitting in New York County, New York, 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 (i) shall be deemed or operate to preclude any Holder from bringing suit or taking other legal action against the Corporation in
any other jurisdiction to collect on the Corporation’s obligations to such Holder, or to enforce a judgment or other court ruling
in favor of such Holder or (ii) shall limit, or shall be deemed or construed to limit, any provision of Section 21. The Corporation and
each Holder hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Certificate of Designations or the transactions contemplated hereby.
24.
Severability. If any provision of this Certificate of Designations 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 Certificate of Designations so
long as this Certificate of Designations 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).
25.
Amendment. This Certificate of Designations or any provision hereof (other than Section
5(d)) may be modified or amended or the provisions hereof waived with the written consent of the Corporation and the Holders of 50.1%
of the outstanding shares of Series C at the time of the waiver. No waiver shall be effective unless it is in writing and signed by an
authorized representative of the waiving party.
*
* * * *
IN
WITNESS WHEREOF, the Corporation has caused this Certificate of Designations of International Land Alliance, Inc. to be signed by its President on this 2nd day of June, 2023.
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INTERNATIONAL
LAND ALLIANCE, INC. |
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By: |
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Roberto
Valdes, Chief Executive Officer |
EXHIBIT
I
INTERNATIONAL
LAND ALLIANCE , INC.
CONVERSION
NOTICE
Reference is made to the Certificate of Designations, Preferences and Rights
of the Series C Convertible Preferred Stock of International Land Alliance, Inc. (the “Certificate of Designations”).
In accordance with and pursuant to the Certificate of Designations, the undersigned hereby elects to convert the number of shares of Series
C Convertible Preferred Stock, $0.001 par value per share (the “Series C”), of International Land Alliance, Inc., a
Wyoming corporation (the “Corporation”), indicated below into shares of common stock, $0.001 par value per share (the
“Common Stock”), of the Corporation, as of the date specified below.
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Aggregate
number of Series C to be converted |
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Aggregate
Stated Value of such Series C to be converted: |
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Aggregate
accrued and unpaid dividends and accrued with respect to such Series C and such aggregate dividends to be converted: |
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AGGREGATE
CONVERSION AMOUNT TO BE CONVERTED: |
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Please
confirm the following information:
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Conversion
Price: |
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Number
of shares of Common Stock to be issued: |
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Please issue the Common Stock into which
the applicable Series C are being converted to Holder, or for its benefit, as follows:
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Check here if
requesting delivery as a certificate to the following name and to the following address:
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Issue
to: |
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Check
here if requesting delivery by Deposit/Withdrawal at Custodian as follows: |
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DTC
Participant: |
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Date: |
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Name
of Registered Holder |
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By:
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Name:
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Title: |
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EXHIBIT
II
ACKNOWLEDGMENT
The
Corporation hereby acknowledges this Conversion Notice and hereby directs _________________ to issue the above indicated number of shares
of Common Stock in accordance with the Transfer Agent Instructions dated _____________, 20__ from the Corporation and acknowledged and
agreed to by ________________________.
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INTERNATIONAL
LAND ALLIANCE, INC. |
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By: |
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Name:
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Title: |
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Exhibit
10.2
SECURITIES
PURCHASE AGREEMENT
This
Securities Purchase Agreement (this “Agreement”) is dated as of June 2, 2023, between International Land Alliance,
Inc., a Wyoming corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including
its successors and assigns, a “Purchaser” and collectively the “Purchasers”).
WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to an exemption from the registration requirements of Section
5 of the Securities Act contained in Section 4(a)(2) thereof and/or Rule 506(b) thereunder, the Company desires to issue and sell to
each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more
fully described in this Agreement.
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt
and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:
ARTICLE
1.
DEFINITIONS
1.1. Definitions.
For the purposes of this Agreement, the following capitalized terms have the meanings set forth in this Section 1.1 and certain capitalized
terms used but not otherwise defined herein have the meanings ascribed to them in the Series C COD:
“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.5.
“Action”
shall have the meaning ascribed to such term in Section 3.1(j).
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person as such terms are used in and construed under Rule 405 under the Securities Act.
“Agreement”
shall have the meaning ascribed to such term in the preamble.
“BHCA”
shall have the meaning ascribed to such term in Section 3.1(nn).
“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 are generally are open for use by customers on such day.
“Board
of Directors” means the board of directors of the Company.
“Charter”
means the Certificate of Incorporation of the Company.
“Closing”
shall have the meaning ascribed to such term in Section 2.2.
“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties
thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s
obligations to deliver the Securities to be issued and sold, in each case, have been satisfied or waived, but in no event later than
the second Trading Day following the date hereof.
“Common
Stock” means the common stock of the Company, par value $0.001 per share, and any other class of securities into which such
securities may hereafter be reclassified or changed.
“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
Common Stock at any time, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is
at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Company”
shall have the meaning ascribed to such term in the preamble.
“Consent”
shall have the meaning ascribed to such term in Section 4.6.
“Conversion
Shares” means the shares of Common Stock issuable upon conversion of the Series C Shares.
“Disqualification
Event” shall have the meaning ascribed to such term in Section 3.1(jj).
“DTC”
shall have the meaning ascribed to such term in Section 3.1(w).
“Effective
Date” shall have the meaning ascribed to such term in Section 4.1(c).
“Environmental
Laws” shall have the meaning ascribed to such term in Section 3.1(m).
“Evaluation
Date” shall have the meaning ascribed to such term in Section 3.1(s).
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exempt
Issuance” means the issuance of (a) shares of Common Stock, restricted stock units or options to employees, officers or directors
of the Company pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board
of Directors or a majority of the members of a committee of non-employee directors established for such purpose for services rendered
to the Company, (b) securities upon the exercise, exchange of or conversion of any Securities issued hereunder, (c) other securities
exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided
that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease
the exercise price, exchange price or conversion price of such securities (other than in connection with stock splits or combinations)
or to extend the term of such securities, (d) securities issued pursuant to acquisitions or strategic transactions approved by a majority
of the disinterested directors of the Company, provided that such securities are issued as “restricted securities” (as defined
in Rule 144) and carry no registration rights that require or permit the filing of any registration statement in connection therewith,
and provided that any such issuance shall only be to a Person (or to the equity holders of a Person) which is, itself or through its
subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide
to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is
issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, (e)
restricted stock units, restricted stock and options to consultants of the Company provided, however, any such issuances to consultants
shall not exceed, in the aggregate, shares of underlying Common Stock valued at $500,000, and (f) securities issued in an aggregate dollar
amount not to exceed $2,000,000, (g) Securities pursuant to the Transaction Documents, and (h) securities issued in the Qualified Offering..
“Existing
Warrant Amendment Letter” means a letter dated as of the date hereof, in form an substance acceptable to the Lead Investor,
amending the exercise price of those warrants of the Company to $0.07, among the Company and the Lead Investor.
“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.
“Federal
Reserve” shall have the meaning ascribed to such term in Section 3.1(nn).
“GAAP”
shall have the meaning ascribed to such term in Section 3.1(h).
“Hazardous
Materials” shall have the meaning ascribed to such term in Section 3.1(m).
“Indebtedness”
shall have the meaning ascribed to such term in Section 3.1(aa).
“Initial
Closing” shall have the meaning ascribed to such term in Section 2.2.
“Intellectual
Property” means all of the following in any jurisdiction throughout the world: (a) all inventions (whether patentable or unpatentable
and whether or not reduced to practice), all improvements thereto, and all U.S. and foreign patents, patent applications, and patent
disclosures, together with all reissuances, continuations, continuations-in-part, revisions, extensions, and reexaminations thereof,
(b) all trademarks, service marks, brand names, certification marks, trade dress, logos, trade names, domain names, assumed names and
corporate names, together with all colorable imitations thereof, and including all goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith, (c) all copyrights, and all applications, registrations, and renewals in connection
therewith, (d) all trade secrets under applicable state laws and the common law and know-how (including formulas, techniques, technical
data, designs, drawings, specifications, customer and supplier lists, pricing and cost information, and business and marketing plans
and proposals), (e) all computer software (including source code, object code, diagrams, data and related documentation), and (f) all
copies and tangible embodiments of the foregoing (in whatever form or medium).
“Issuer
Covered Person” and “Issuer Covered Persons” shall have the meanings ascribed to such terms in Section
3.1(jj).
“Laws”
means any U.S. federal, state, local, foreign or other laws, rules regulations, guidelines, orders, injunctions, building and other codes,
ordinances, permits, licenses, authorizations, judgements, decrees of federal, state, local, foreign or other authorities, and all orders,
writs, decrees and consents of any governmental or political subdivision or agency thereof, or any court of similar tribunal established
by any such governmental or political subdivision or agency thereof.
“Lead
Investor” means Bigger Capital Fund, LP.
“Legend
Removal Date” shall have the meaning ascribed to such term in Section 4.1(c).
“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).
“Material
Permits” shall have the meaning ascribed to such term in Section 3.1(n).
“Money
Laundering Laws” shall have the meaning ascribed to such term in Section 3.1(oo).
“OFAC”
shall have the meaning ascribed to such term in Section 3.1(ll).
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether pending or to the Company’s knowledge, threatened in writing against or affecting the Company, any
Subsidiary or any of their respective properties before any court, arbitrator, governmental or administrative agency or regulatory authority.
“Purchaser”
and “Purchasers” shall have the meanings ascribed thereto in the preamble.
“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.8.
“Regulation
FD” means Regulation FD promulgated by the SEC pursuant to the Exchange Act, as such Regulation may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the SEC having substantially the same purpose and effect as
such Regulation.
“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).
“Rule
144” means Rule 144 promulgated by the SEC pursuant to the Securities Act, as such Rule may be amended or interpreted from
time to time, or any similar rule or regulation hereafter adopted by the SEC (or similar United States law) having substantially the
same purpose and effect as such Rule.
“SEC”
means the United States Securities and Exchange Commission.
“SEC
Reports” shall have the meaning ascribed to such term in Section 3.1(h).
“Securities”
shall have the meaning ascribed to such term in Section 2.1(b).
“Securities
Act” means the Securities Act of 1933, and the rules and regulations promulgated thereunder.
“Series
C COD” shall have the meaning ascribed to such term in Section 2.1(a).
“Series
C Shares” shall have the meaning ascribed to such term in Section 2.1(b).
“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be
deemed to include the location and/or reservation of borrowable shares of Common Stock).
“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for the Series C Shares purchased hereunder as specified
below such Purchaser’s name on the signature page of this Agreement and next to the heading.
“Subsidiary”
means with respect to any entity at any date, any direct or indirect corporation, limited or general partnership, limited liability company,
trust, estate, association, joint venture or other business entity of which (a) more than 50% of (i) the outstanding capital stock having
(in the absence of contingencies) ordinary voting power to elect a majority of the board of directors or other managing body of such
entity, (ii) in the case of a partnership or limited liability company, the interest in the capital or profits of such partnership or
limited liability company or (iii) in the case of a trust, estate, association, joint venture or other entity, the beneficial interest
in such trust, estate, association or other entity business is, at the time of determination, owned or controlled directly or indirectly
through one or more intermediaries, by such entity, or (b) is under the actual control of the Company.
“Trading
Day” means a day on which the principal Trading Market is open for trading.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the NYSE
American, the OTCQB, the OTCQX, or the OTC Pink Marketplace (or any successors to any of the foregoing).
“Transaction
Documents” means this Agreement, the Series C COD, the Existing Warrant Amendment Letters, and all schedules and exhibits thereto
and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.
“Transfer
Agent” means TranShare Securities Transfer and Registrar, and any successor transfer agent of the Company.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market (or
a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common
Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the Purchasers and the Company, the fees and expenses of which shall be paid by the Company.
ARTICLE
2.
PURCHASE
AND SALE
2.1. Sale
and Issuance of the Series C Shares.
(a)
The Company shall have adopted and filed with the Secretary of State of
the State of Wyoming on or before the Initial Closing (as defined below) the Certificate of Designations, Preferences and Rights of the
Series C Convertible Preferred Stock of International Land Alliance, Inc. in the form of Exhibit A attached to this Agreement (the
“Series C COD”).
(b) Subject
to the terms and conditions of this Agreement, each Purchaser agrees to purchase at the applicable Closing (as defined below) and the
Company agrees to sell and issue to each Purchaser at the applicable Closing such number of shares Series C Convertible Preferred Stock,
$0.001 par value (the “Series C Shares”), as set forth on such Purchaser’s signature page hereto, at a purchase
price of $100.00 per Series C Share. The Series C Shares and the Conversion Shares issued
or issuable to the Purchasers pursuant to this Agreement shall be referred to in this Agreement as the “Securities.”
2.2. Closing.
The initial purchase and sale of the Securities shall take place remotely via the exchange of documents and signatures, 12:00
p.m., on June 2, 2023, or at such other time and place as the Company and the Purchasers mutually agree upon, orally or in writing
(which time and place are designated as the “Initial Closing”). In the event there is more than one closing, the term
“Closing” shall apply to each such closing unless otherwise specified.
2.3. Deliveries.
(a) On
or prior to the applicable Closing, the Company shall deliver or cause to be delivered to the Lead Investor on behalf of each Purchaser
the following:
(i) this
Agreement duly executed by the Company;
(ii) a
reservation letter executed by the Company’s Transfer Agent and the Company in the form attached as Exhibit C;
(iii) a
Existing Warrant Amendment Letter executed by the Company in respect of each Lead Investor;
(iv) a
copy of a good standing certificate of the Company, dated as of a date reasonably close to the Closing Date;
(v) a
certificate, dated as of the Closing Date, duly executed, and delivered by an officer of the Company certifying the resolutions of the
Company’s Board of Directors, then in full force and effect authorizing, all aspects of the transaction and the execution, delivery
and performance by the Company of each Transaction Document to be executed to which the Company is a party, as applicable, and the transactions
contemplated hereby and thereby; and
(vi) such
other approvals, opinions of counsel to the Company, or documents as the Lead Investor and/or Purchasers may request in form and substance
reasonably satisfactory to the Lead Investor and/or Purchasers, as applicable.
(b) On
or prior to the applicable Closing, each Purchaser shall deliver or cause to be delivered to the Lead Investor the following:
(i) this
Agreement duly executed by such Purchaser; and
(ii) such
Purchaser’s Subscription Amount by wire transfer to the Company.
2.4. Closing
Conditions.
(a) The
obligations of the Company hereunder in connection with each applicable Closing are subject to the following conditions being met:
(i) the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect,
in all respects) on the applicable Closing Date of the representations and warranties of each Purchaser contained herein (unless as of
a specific date therein in which case they shall be accurate as of such date);
(ii) all
obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been performed;
and
(iii) the
delivery by each Purchaser of the items set forth in Section 2.3(b) of this Agreement.
(b) The
respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being met:
(i) the
accuracy in all respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in
all respects) when made and on the Closing Date of the representations and warranties of the Company contained herein (unless as of a
specific date therein);
(ii) all
obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;
(iii) the
delivery by the Company of the items set forth in Section 2.3(a) of this Agreement;
(iv) there
shall have been no Material Adverse Effect with respect to the Company since the date hereof;
(v) the
Purchasers shall have received a certificate of an officer of the Company, dated as of the date of such Closing, certifying, as to the
fulfillment of the conditions set forth in subparagraphs (i), (ii), (iii) and (iv) above; and
(vi) from
the date hereof to the Closing Date trading in the Common Stock shall not have been suspended by the SEC or the Company’s principal
Trading Market, and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have
been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service,
or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities
nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such
magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of
such Purchaser, makes it impracticable or inadvisable to purchase the Securities at the Closing.
ARTICLE
3.
REPRESENTATIONS
AND WARRANTIES
3.1.
Representations and Warranties of the Company. The Company hereby represents and warrants to each Purchaser that, except as set
forth on the Disclosure Schedule to this Agreement, which exceptions shall be deemed to be part of the representations and warranties
made hereunder, the following representations are true and complete as of the date of the Initial Closing, except as otherwise indicated.
The Disclosure Schedule shall be arranged in sections corresponding to the numbered and lettered sections contained in this Section
3.1, and the disclosures in any section of the Disclosure Schedule shall qualify other sections in this Section 3.1 only to
the extent it is readily apparent from a reading of the disclosure that such disclosure is applicable to such other sections.
(a) Subsidiaries.
All of the direct and indirect Subsidiaries of the Company are set forth on Schedule 3.1(a). Except as set forth on Schedule
3.1(a), the Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and
clear of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully
paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities. If the Company has no subsidiaries,
all other references to the Subsidiaries or any of them in the Transaction Documents shall be disregarded.
(b) Organization
and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority
to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary
is in violation nor default of any of the provisions of its respective Charter, bylaws or other organizational or charter documents.
Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other
entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary,
except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result
in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect
on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries,
taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis
its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding
has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority
or qualification.
(c) Authorization;
Enforcement. The Company has the requisite power and authority to enter into and to consummate the transactions contemplated by this
Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution
and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions
contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is
required by the Company, the Board of Directors or the Company’s shareholders in connection herewith or therewith other than in
connection with the Required Approvals. Subject to obtaining the Required Approvals, this Agreement and each other Transaction Document
to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with
the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance
with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution
provisions may be limited by applicable law.
(d) No
Conflicts. Except as set forth in Schedule 3.1(d), the execution, delivery and performance by the Company of this Agreement
and the other Transaction Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the
transactions contemplated hereby and thereby do not and will not (i) subject to the Required Approvals, conflict with or violate any
provision of the Company’s or any Subsidiary’s Charter, bylaws or other organizational or charter documents, or (ii) constitute
a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon
any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration
or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing
a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property
or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in
a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority
to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property
or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not
have or reasonably be expected to result in a Material Adverse Effect.
(e) Filings,
Consents and Approvals. Except as set forth on Schedule 3.1(e), the Company is not required to obtain any consent, waiver,
authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents,
other than: (i) the filings required pursuant to Section 4.4 of this Agreement, (ii) application(s) to each applicable Trading
Market for the listing of the Conversion Shares for trading thereon in the time and manner required thereby, and (iii) such filings as
are required to be made under applicable state or federal securities laws (collectively, the “Required Approvals”).
(f) Issuance
of the Securities. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Conversion
Shares, when issued upon conversion of the Series C Shares in accordance with the terms of the Series C COD, will be validly issued,
fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Company shall reserve from its duly authorized
capital stock a number of shares of Common Stock issuable pursuant to the Series C Shares equal to the amount set forth in Section
4.9.
(g) Capitalization.
The capitalization of the Company as of the date hereof, including as a result of the purchase and sale of the Securities, is as set
forth on Schedule 3.1(g), which Schedule 3.1(g) includes (i) the number and type of all securities of the Company issued
and outstanding, including without limitation the number shares of Common Stock and other classes capital stock of the Company issued
and outstanding, the number and type of all securities of the Company convertible or exercisable into, or exchangeable or redeemable
for, shares of Common Stock, and for any such securities, the number of shares of Common Stock into which such securities are currently
convertible, exercisable, exchangeable or redeemable, as applicable and (ii) the number of shares of Common Stock owned beneficially,
and of record, by Affiliates of the Company as of the date hereof. The Company has not issued any capital stock since its most recently
filed periodic report under the Exchange Act, other than as set forth on Schedule 3.1(g) other than pursuant to the exercise of
employee stock awards under the Company’s equity incentive plans, the issuance of shares of Common Stock to employees pursuant
to the Company’s employee stock purchase plans, the issuance of shares of Common Stock or Common Stock Equivalents pursuant to
agreements outstanding as of the date of the most recently filed periodic report under the Exchange Act and pursuant to the conversion
and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange
Act. Except for the holders of shares of Series C Convertible Preferred Stock, no Person has any right of first refusal, preemptive right,
right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as
set forth on Schedule 3.1(g), there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of
any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving
any Person any right to subscribe for or acquire, any shares of Common Stock or the capital stock of any Subsidiary, or contracts, commitments,
understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock
or Common Stock Equivalents or capital stock of any Subsidiary. The issuance and sale of the Securities will not obligate the Company
or any Subsidiary to issue shares of Common Stock or other securities to any Person (other than the Purchasers) and will not result in
a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities.
There are no outstanding securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions,
and there are no contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound
to redeem a security of the Company or such Subsidiary. The Company does not have any stock appreciation rights or “phantom stock”
plans or agreements or any similar plan or agreement. All of the outstanding shares of capital stock of the Company are duly authorized,
validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of
such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. Except
for required approvals, no further approval or authorization of any stockholder, the Board of Directors or others is required for the
issuance and sale of the Securities. There are no shareholders agreements, voting agreements or other similar agreements with respect
to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the
Company’s shareholders.
(h) SEC
Reports; Financial Statements. Except as set forth in Schedule 3.1(h), the Company has filed all reports, schedules, forms,
statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant
to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by
law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference
therein, being collectively referred to herein as the “SEC Reports”). As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC
Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The
financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements
and the rules and regulations of the SEC with respect thereto as in effect at the time of filing. Such financial statements have been
prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved
(“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited
financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position
of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements, to normal year-end audit adjustments.
(i) Material
Changes; Undisclosed Events, Liabilities or Developments. Other than as set forth on Schedule 3.1(i) since the date of the
latest audited financial statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed
prior to the date hereof, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to
result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade
payables and accrued expenses incurred in the ordinary course of business consistent with past practice, and (B) liabilities not required
to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the SEC, (iii) the Company
has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property
to its shareholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company
has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company equity incentive plans.
The Company does not have pending before the SEC any request for confidential treatment of information. Except for the issuance of the
Securities contemplated by this Agreement or as set forth on Schedule 3.1(i), no event, liability, fact, circumstance, occurrence
or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or
their respective businesses, prospects, properties, operations, assets or financial condition that would be required to be disclosed
by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed
at least one Trading Day prior to the date that this representation is made.
(j) Litigation.
Except as set forth in Schedule 3.1(j), there is no action, suit, notice of violation, proceeding or investigation, inquiry or
other similar proceeding of any federal or state governmental authority pending or, to the knowledge of the Company, threatened against
or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative
agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely
affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the issuance of the Securities
or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. The Company
has no reason to believe that an Action will be filed against it in the future. Except as set forth in Schedule 3.1(j), neither
the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation
of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge
of the Company, there is not pending or contemplated, any investigation by the SEC involving the Company or any current or former director
or officer of the Company. The SEC has not issued any stop order or other order suspending the effectiveness of any registration statement
filed by the Company or any Subsidiary under the Exchange Act or the Securities Act, and the Company has no reason to believe it will
do so in the future.
(k) Labor
Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company,
which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees
is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company
nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their
relationships with their employees are good. To the knowledge of the Company, no effort is underway to unionize or organize the employees
of the Company or any Subsidiary. To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now
expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information
agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and
the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with
respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all applicable U.S. federal, state,
local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages
and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. There is no workmen’s compensation liability matter, employment-related charge, complaint, grievance,
investigation, inquiry or obligation of any kind pending, or to the Company’s knowledge, threatened, relating to an alleged violation
or breach by the Company or its Subsidiaries of any law, regulation or contract that could, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect. The Company has no reason to believe that any individual may commence an Action or file
a claim with any governmental authority against the Company alleging sexual harassment or any type of discrimination or violation of
any Laws.
(l) Compliance.
Except as set forth on Schedule 3.1(l), neither the Company nor any Subsidiary: (i) is in default under or in violation of (and
no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or
any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any
of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or
order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or
regulation of any governmental authority, including without limitation all foreign, federal, state and local laws and regulations relating
to taxes, healthcare laws, anti-kickback laws, securities, environmental protection, occupational health and safety, product quality
and safety, transportation, and employment and labor matters, except in each case as could not have or reasonably be expected to result
in a Material Adverse Effect.
(m) Environmental
Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating to pollution
or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata),
including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as
all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders,
permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have
received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses;
and (iii) are in compliance with all terms and conditions of any such permit, license or approval except in each case of clause (i),
(ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.
(n) Regulatory
Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except
where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or
modification of any Material Permit.
(o) Title
to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them and good
and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in
each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries, and (ii) Liens for the payment
of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and, the payment of
which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries
are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance, except
where the failure to so comply would not be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.
(p) Intellectual
Property.
(i) Except
as set forth in Schedule 3.1(p), the Company owns or possesses or has the right to use pursuant to a valid and enforceable written
license, sublicense, agreement, or permission all Intellectual Property necessary for the operation of the business of the Company as
presently conducted, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.
(ii) The
Company has no knowledge that the Intellectual Property interferes with, infringe upon, misappropriate, or otherwise come into conflict
with, any Intellectual Property rights of third parties, and the Company has no knowledge that facts exist which indicate a likelihood
of the foregoing. The Company has not received any charge, complaint, claim, demand, or notice alleging any such interference, infringement,
misappropriation, or conflict (including any claim that the Company must license or refrain from using any Intellectual Property rights
of any third party). To the knowledge of the Company, no third party has interfered with, infringed upon, misappropriated, or otherwise
come into conflict with, any Intellectual Property rights of the Company, except in each case as could not have or reasonably be expected
to result in a Material Adverse Effect. None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise)
that any of, its Intellectual Property has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned,
within two (2) years from the date of this Agreement.
(q) Insurance.
The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged. The Company and the
Subsidiaries have directors and officers insurance coverage of $1,000,000. Neither the Company nor any Subsidiary has any reason to believe
that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business without a significant increase in cost.
(r) Transactions
With Affiliates and Employees. Except as disclosed in the SEC Reports, none of the officers, directors or Affiliates of the Company
or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to
any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to
or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from any officer, director,
Affiliate or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000 other than
for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company
and (iii) other employee benefits, including stock award agreements under any equity incentive plan of the Company.
(s) Sarbanes-Oxley;
Internal Accounting Controls. Except as disclosed in Schedule 3.1(s), the Company and the Subsidiaries are in compliance
with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all
applicable rules and regulations promulgated by the SEC thereunder that are effective as of the date hereof and as of the applicable
Closing. Except as disclosed in the SEC Reports, the Company and the Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity
with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s
general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any differences. The Company’s certifying officers have
evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the
period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation
Date”). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the
certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the
Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such
term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to
materially affect, the internal control over financial reporting of the Company and its Subsidiaries.
(t) Certain
Fees. Other than as set forth on Schedule 3.1(t), no brokerage or finder’s fees or commissions are or will be payable
by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or
other Person with respect to the transactions contemplated by the Transaction Documents. The Purchasers shall have no obligation with
respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section
3.1(t) that may be due in connection with the transactions contemplated by the Transaction Documents.
(u) Investment
Company; Private Placement. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities,
will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
The Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration
under the Investment Company Act of 1940, as amended.
(v) Registration
Rights. Other than as set forth on Schedule 3.1(v), no Person has any right to cause the Company or any Subsidiary to effect
the registration under the Securities Act of any securities of the Company or any Subsidiary. The Company shall not file any other resale
registration statement prior to filing the registration statement required hereunder.
(w) Listing
and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company
has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common
Stock under the Exchange Act nor has the Company received any notification that the SEC is contemplating terminating such registration.
The Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Common Stock is
or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such
Trading Market. The Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance
with all such listing and maintenance requirements. The Common Stock is currently eligible for electronic transfer through the Depository
Trust Company (“DTC”) or another established clearing corporation and the Company is current in payment of the fees
to the DTC (or such other established clearing corporation) in connection with such electronic transfer. The Company is not subject to
any “chill” issued by the DTC.
(x) Application
of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable
any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company’s Charter (or similar charter documents) or the Laws of its state of incorporation that
is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or exercising
their rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of the Securities
and the Purchasers’ ownership of the Securities, the Series C Shares, and the Conversion Shares.
(y) Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms
that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel with any information
that it believes constitutes or might constitute material, non-public information which is not otherwise disclosed in the SEC Reports.
The Company understands and confirms that the Purchasers will rely on the foregoing representation in effecting transactions in securities
of the Company. All of the disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company and its Subsidiaries,
their respective businesses and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, is true and
correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were made, not misleading. The press releases disseminated by
the Company during the 12 months preceding the date of this Agreement do not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances
under which they were made and when made, not misleading. The Company acknowledges and agrees that no Purchaser makes or has made any
representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section
3.2 hereof.
(z) No
Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2,
neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers
or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities
to be integrated with prior offerings by the Company for purposes of any applicable shareholder approval provisions of any Trading Market
on which any of the securities of the Company are listed or designated.
(aa) Solvency;
Indebtedness. Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the
receipt by the Company of the proceeds from the sale of the Subscription Amount of Securities hereunder, the Company will have
sufficient cash to operate its business as currently operated for a period of twelve (12) months from the Closing Date. Except as
set forth on Schedule 3.1(aa), the Company has no knowledge of any facts or circumstances which lead it to believe that it
will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the
Closing Date. Schedule 3.1(aa) set forth as of the time immediately following the Closing hereof all outstanding Indebtedness
of the Company or any Subsidiary. For the purposes of this Agreement, “Indebtedness” means (x) any liabilities
for borrowed money or amounts owed in excess of $100,000 (other than trade accounts payable incurred in the ordinary course of
business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not
the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by
endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z)
the present value of any lease payments in excess of $100,000 due under leases required to be capitalized in accordance with GAAP.
Except as set forth on Schedule 3.1(aa), neither the Company nor any Subsidiary is in default with respect to any
Indebtedness.
(bb) Tax
Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material
Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local income and all
foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid
all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns,
reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for
periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount
claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis
for any such claim.
(cc) Foreign
Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other
person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to
foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds,
(iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of
which the Company is aware) which is in violation of Law, or (iv) violated any provision of FCPA.
(dd) Accountants.
The Company’s accounting firm is set forth in the SEC Reports. To the knowledge and belief of the Company, such accounting firm
is a registered public accounting firm as required by the Exchange Act. There are no disagreements of any kind presently existing, or
reasonably anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by
the Company and the Company is or will be 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.
(ee) Acknowledgment
Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the Purchasers is acting solely
in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby.
The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity)
with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or any of their
respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely
incidental to the Purchasers’ purchase of the Securities. The Company further represents to each Purchaser that the Company’s
decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the
transactions contemplated hereby by the Company and its representatives.
(ff) Acknowledgement
Regarding Purchaser’s Trading Activity. Notwithstanding anything in this Agreement or elsewhere to the contrary (except for
Sections 3.2(f) and 4.12 hereof), it is understood and acknowledged by the Company that: (i) no Purchaser has been asked
by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the Company,
or “derivative” securities based on securities issued by the Company or to hold the Securities for any specified term; (ii)
past or future open market or other transactions by any Purchaser, specifically including, without limitation, Short Sales or “derivative”
transactions, before or after the closing of this or future private placement transactions, may negatively impact the market price of
the Company’s publicly-traded securities; (iii) any Purchaser, and counter-parties in “derivative” transactions to
which any such Purchaser is a party, directly or indirectly, presently may have a “short” position in the Common Stock, and
(iv) each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative”
transaction. The Company further understands and acknowledges that (y) one or more Purchasers may engage in hedging activities at various
times during the period that the Securities are outstanding, and (z) such hedging activities (if any) could reduce the value of the existing
shareholders’ equity interests in the Company at and after the time that the hedging activities are being conducted. The Company
acknowledges that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.
(gg) Regulation
M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action
designed to cause or to result in the stabilization or manipulation of the price of the Common Stock to facilitate the sale of the Securities,
or (ii) paid or agreed to pay to any Person any compensation for soliciting another to purchase the Securities or any other securities
of the Company.
(hh) Private
Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, no registration
under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers as contemplated hereby.
The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the principal Trading Market.
(ii) No
General Solicitation. Neither the Company nor any person acting on behalf of the Company has offered or sold any of the Securities
by any form of general solicitation or general advertising. The Company has offered the Securities for sale only to the Purchasers and
certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.
(jj) No
Disqualification Events. With respect to the Securities to be offered and sold hereunder in reliance on Rule 506(b) under the Securities
Act, none of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company
participating in the offering hereunder, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities,
calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with
the Company in any capacity at the time of sale, nor any Person, including a placement agent, who will receive a commission or fees for
soliciting purchasers (each, an “Issuer Covered Person” and, together, “Issuer Covered Persons”)
is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act
(a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company
has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company has
complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the Purchasers a copy of
any disclosures provided thereunder.
(kk) Notice
of Disqualification Events. The Company will notify the Purchasers in writing, prior to the Closing Date of (i) any Disqualification
Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, reasonably be expected to become
a Disqualification Event relating to any Issuer Covered Person, in each case of which it is aware.
(ll) Office
of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director, officer, agent,
employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department (“OFAC”).
(mm) U.S.
Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the meaning
of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s request.
(nn) Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of
1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, 5% or more
of the outstanding shares of any class of voting securities or twenty-five percent 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.
(oo) Money
Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable
financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable
money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”),
and no Action by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary
with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.
(pp) Shell
Company Status. The Company is not, and has not been for a period of at least one year from the date hereof, an issuer identified
in Rule 144(i)(1) of the Securities Act. The Company has filed current “Form 10 information” (as defined in Rule 144(i)(3))
with the SEC reflecting its status as an entity that was no longer an issuer described in Rule 144(i)(1)(i) more than one year ago from
the date hereof. The Company shall provide a legal opinion of counsel to the Company in a form reasonably acceptable to the Purchaser
with respect to this representation.
3.2. Representations
and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants to the Company
as follows which representations and warranties shall be true and correct as of the date hereof and as of the Closing Date:
(a) Organization;
Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company
or similar power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry
out its obligations hereunder and thereunder. The execution and delivery of this Agreement and performance by such Purchaser of the transactions
contemplated by this Agreement have been duly authorized by all necessary corporate, partnership, limited liability company or similar
action, as applicable, on the part of such Purchaser. Each Transaction Document to which it is a party has been duly executed by such
Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation
of such Purchaser, enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies
and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
(b) Understandings
or Arrangements. Such Purchaser is acquiring the Securities as principal for its own account and has no direct or indirect arrangement
or understandings with any other persons to distribute or regarding the distribution of such Securities (this representation and warranty
not limiting such Purchaser’s right to sell the Securities in compliance with applicable federal and state securities laws). Such
Purchaser is acquiring the Securities hereunder in the ordinary course of its business. Such Purchaser understands that the Securities
are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law
and is acquiring such Securities as principal for its own account and not with a view to or for distributing or reselling such Securities
or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing
any of such Securities in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement
or understandings with any other persons to distribute or regarding the distribution of such Securities in violation of the Securities
Act or any applicable state securities law (this representation and warranty not limiting such Purchaser’s right to sell such Securities
in compliance with applicable federal and state securities laws).
(c) Purchaser
Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, an accredited investor within
the meaning of Rule 501 under the Securities Act. No Purchaser is subject to any Disqualification Event, except for a Disqualification
Event covered by Rule 506(d)(2) or (d)(3).
(d) Experience
of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience
in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities,
and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk of an investment in the
Securities and, at the present time, is able to afford a complete loss of such investment.
(e) Access
to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including all exhibits
and schedules thereto) and the SEC Reports and has been afforded, subject to Regulation FD, (i) the opportunity to ask such questions
as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the
offering of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company and
its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its
investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable
effort or expense that is necessary to make an informed investment decision with respect to the investment. Such Purchaser acknowledges
and agrees that neither the Company nor anyone else has provided such Purchaser with any information or advice with respect to the Securities
nor is such information or advice necessary or desired.
(f) Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has not, nor has
any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any purchases or
sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Purchaser first
received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms
of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding the foregoing, in the
case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s
assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other
portions of such Purchaser’s assets, the representation set forth above shall only apply with respect to the portion of assets
managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement. Other than to
other Persons party to this Agreement or to such Purchaser’s representatives, including, without limitation, its officers, directors,
partners, legal and other advisors, employees, agents and Affiliates, such Purchaser has maintained the confidentiality of all disclosures
made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing,
for avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect
to the identification of the availability of, or securing of, available shares to borrow in order to effect Short Sales or similar transactions
in the future.
The
Company acknowledges and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such
Purchaser’s right to rely on the Company’s representations and warranties contained in this Agreement or any representations
and warranties contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection
with this Agreement or the consummation of the transaction contemplated hereby.
ARTICLE
4.
OTHER
AGREEMENTS OF THE PARTIES
4.1. Removal
of Legends.
(a) The
Series C Shares and the Conversion Shares may only be disposed of in compliance with state and federal securities laws. In connection
with any transfer of the Series C Shares, and the Conversion Shares other than pursuant to an effective registration statement or Rule
144, to the Company or to an Affiliate of a Purchaser or in connection with a pledge as contemplated in Section 4.1(b), the Company
may require the transferor to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the
Company at the cost of the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect
that such transfer does not require registration of such transferred Series C Shares, and Conversion Shares under the Securities Act.
As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the
rights and obligations of a Purchaser under this Agreement.
(b) Each
Purchaser agrees to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Series C Shares, and
Conversion Shares in substantially the following form:
NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE
OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL
INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY
SUCH SECURITIES.
The
Company acknowledges and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered
broker-dealer or grant a security interest in some or all of the Series C Shares, and the Conversion Shares to a financial institution
that is an “accredited investor” as defined in Rule 501(a) under the Securities Act and who agrees to be bound by the provisions
of this Agreement and, if required under the terms of such arrangement, such Purchaser may transfer pledged or secured Series C Shares,
and Conversion Shares to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company and
no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice
shall be required of such pledge. At the appropriate Purchaser’s expense, the Company will execute and deliver such reasonable
documentation as a pledgee or secured party of Series C Shares, and Conversion Shares may reasonably request in connection with a pledge
or transfer of the Series C Shares and Conversion Shares.
(c) Certificates
evidencing the Series C Shares and the Conversion Shares (or the Transfer Agent’s records if held in book entry form) shall not
contain any legend (including the legend set forth in Section 4.1(b) hereof): (i) while a registration statement covering the
resale of such securities is effective under the Securities Act (the “Effective Date”), (ii) following any sale of
such Series C Shares, or Conversion Shares pursuant to Rule 144, (iii) if such Series C Shares or Conversion Shares are eligible for
sale under Rule 144, without the requirement for the Company to be in compliance with the current public information required under Rule
144 as to such Series C Shares or Conversion Shares and without volume or manner-of-sale restrictions or (iv) if such legend is not required
under applicable requirements of the Securities Act (including Sections 4(a)(1) and 4(a)(7) judicial interpretations and pronouncements
issued by the staff of the SEC). The Company shall, at its expense, cause its counsel to issue a legal opinion to the Transfer Agent
promptly after the Effective Date if required by the Transfer Agent to effect the removal of the legend hereunder. If any Series C Share
are converted at a time when there is an effective registration statement to cover the resale of the Conversion Shares, or if such Conversion
Shares may be sold under Rule 144 and the Company is then in compliance with the current public information required under Rule 144,
or if the Conversion Shares may be sold under Rule 144 without the requirement for the Company to be in compliance with the current public
information required under Rule 144 as to such Conversion Shares and without volume or manner-of-sale restrictions or if such legend
is not otherwise required under applicable requirements of the Securities Act (including Sections 4(a)(1) and 4(a)(7), judicial interpretations
and pronouncements issued by the staff of the SEC) then such Conversion Shares shall be issued or reissued free of all legends. The Company
agrees that following the effective date of any registration statement or at such time as such legend is no longer required under this
Section 4.1(c), it will, no later than two Trading Days following the delivery by a Purchaser to the Company or the Transfer Agent of
a certificate representing restricted Series C Shares, or Conversion Shares, as applicable, issued with a restrictive legend (such second
Trading Day, the “Legend Removal Date”), deliver or cause to be delivered to such Purchaser a certificate representing
such Series C Shares or Conversion Shares that is free from all restrictive and other legends. The Company may not make any notation
on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section 4.1.
Certificates for Series C Shares or Conversion Shares subject to legend removal hereunder shall be transmitted by the Transfer Agent
to the Purchaser by crediting the account of the Purchaser’s prime broker with the Depository Trust Company system as directed
by such Purchaser. The Company shall be responsible for any delays caused by its Transfer Agent. In addition to each Purchaser’s
other available remedies, the Company shall pay to each Purchaser, in cash, as partial liquidated damages and not as a penalty, 2% of
the total of the value of the Securities for which the removal of the legend is sought (based on the VWAP of the Common Stock on the
date such Securities are submitted to the Transfer Agent) for each full month that said opinion is not delivered after the Legend Removal
Date until such certificate is delivered without a legend.
(d) In
the event a Purchaser shall request delivery of unlegended shares as described in this Section 4.1 and the Company is required
to deliver such unlegended shares, (i) it shall pay all fees and expenses associated with or required by the legend removal and/or transfer
including but not limited to legal fees, Transfer Agent fees and overnight delivery charges and taxes, if any, imposed by any applicable
government upon the issuance of Common Stock; and (ii) the Company may not refuse to deliver unlegended shares based on any claim that
such Purchaser or anyone associated or affiliated with such Purchaser has not complied with Purchaser’s obligations under the Transaction
Documents, or for any other reason, unless, an injunction or temporary restraining order from a court, on notice, restraining and or
enjoining delivery of such unlegended shares shall have been sought and obtained by the Company and the Company has posted a surety bond
for the benefit of such Purchaser in the amount of the greater of (x) 150% of the amount of the aggregate purchase price of the Conversion
Shares (based on the amount of the Stated Value of the Series C Shares (as defined in the Series C COD) which was converted) which is
subject to the injunction or temporary restraining order, or (y) the VWAP of the Common Stock on the Trading Day before the issue date
of the injunction multiplied by the number of unlegended shares to be subject to the injunction, which bond shall remain in effect until
the completion of the litigation of the dispute and the proceeds of which shall be payable to such Purchaser to the extent Purchaser
obtains judgment in Purchaser’s favor.
(e) In
addition to each Purchaser’s other available remedies, the Company shall pay to each applicable Purchaser, in cash, (i) as partial
liquidated damages and not as a penalty, for each $1,000 of Securities (based on the VWAP of the Common Stock on the date such Securities
are submitted to the Transfer Agent) delivered for removal of the restrictive legend and subject to Section 4.1(c), $10 per Trading
Day (increasing to $20 per Trading Day five (5) Trading Days after such damages have begun to accrue) for each Trading Day after the
Legend Removal Date until such certificate is delivered without a legend and (ii) if the Company fails to (a) issue and deliver (or cause
to be delivered) to an applicable Purchaser by the Legend Removal Date a certificate representing the Securities so delivered to the
Company by such Purchaser that is free from all restrictive and other legends and (b) if after the Legend Removal Date such Purchaser
purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by Purchaser of all
or any portion of the number of shares of Common Stock, or a sale of a number of shares of Common Stock equal to all or any portion of
the number of shares of Common Stock that Purchaser anticipated receiving from the Company without any restrictive legend, then, an amount
equal to the excess of such Purchaser’s total purchase price (including brokerage commissions and other out-of-pocket expenses,
if any) for the shares of Common Stock so purchased (including brokerage commissions and other out-of-pocket expenses, if any) (the “Buy-In
Price”) over the product of (A) such number of Securities that the Company was required to deliver to Purchaser by the Legend
Removal Date multiplied by (B) the average of the closing sale prices of the Common Stock on any Trading Day during the period commencing
on the date of the delivery by Purchaser to the Company of the applicable Securities (as the case may be) and ending on the date of such
delivery and payment under this clause (ii).
(f) The
Company shall (A) pay the reasonable legal fees of the Purchaser’s choice (provided such counsel is reasonably acceptable to the
Company) (in an amount not to exceed $500 per legal opinion, and not more often than once per week per Purchaser) in connection with
the conversion of the Series C Shares, and (B) cause its attorneys to promptly provide any opinion or reliance opinion to the Transfer
Agent.
(g) For
the avoidance of doubt, the Transaction Documents set forth any and all deliverables that will be required by the Company and the Transfer
Agent to effect a conversion of the Series C Shares and shares underlying the Existing Warrants (as defined in the Existing Warrant Amendment
Letter), and no Purchaser shall be required to deliver any additional documentation or pay any additional fees or costs to the Company
or the Transfer Agent to effect such conversion.
4.2. Furnishing
of Information.
(a) Until
such time that no Purchaser owns Series C Shares, the Company covenants to maintain the registration of the Common Stock under Section
12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof and file within the applicable grace period)
all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject
to the reporting requirements of the Exchange Act.
(b) At
any time during the period commencing from the six (6) month anniversary of the date hereof and ending at such time that all of the Securities
may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without restriction or limitation
pursuant to Rule 144, if the Company (i) shall fail for any reason to satisfy the current public information requirement under Rule 144(c)
or (ii) has ever been an issuer described in Rule 144 (i)(1)(i) or becomes an issuer in the future, and the Company shall fail to satisfy
any condition set forth in Rule 144(i)(2) (a “Public Information Failure”) then, in addition to each Purchaser’s
other available remedies, the Company shall pay to each Purchaser, in cash, as partial liquidated damages and not as a penalty, by reason
of any such delay in or reduction of its ability to sell the Securities, an amount in cash equal to two percent (2.0%) of the Subscription
Amount of each Purchaser’s Securities on the day of a Public Information Failure and on every thirtieth (30th) day (pro rated for
periods totaling less than thirty days) thereafter until the earlier of (a) the date such Public Information Failure is cured and (b)
such time that such public information is no longer required for a Purchaser to transfer the Securities pursuant to Rule 144, provided
that such liquidated damages shall not exceed in the aggregate to twenty-five percent (25.0%) of the aggregate Subscription Amount of
the Purchasers. The payments to which the Purchasers shall be entitled pursuant to this Section 4.3(b) are referred to herein
as “Public Information Failure Payments.” Public Information Failure Payments shall be paid on the earlier of (i)
the last day of the calendar month during which such Public Information Failure Payments are incurred and (ii) the third (3rd) Business
Day after the event or failure giving rise to the Public Information Failure Payments is cured. In the event the Company fails to make
Public Information Failure Payments in a timely manner, such Public Information Failure Payments shall bear interest at the rate of 1.5%
per month (prorated for partial months) until paid in full. Nothing herein shall limit a Purchaser’s right to pursue actual damages
for the Public Information Failure, and each Purchaser shall have the right to pursue all remedies available to it at law or in equity
including, without limitation, a decree of specific performance and/or injunctive relief.
4.3. Integration;
Acknolwedgment of Dilution. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect
of any security (as defined in Section 2(a)(1) of the Securities Act) that would be integrated with the offer or sale of the Securities
for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing
of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction. The Company acknowledges
that the issuance of the Securities may result in dilution of the outstanding shares of Common Stock, which dilution may be substantial
under certain market conditions. The Company further acknowledges that its obligations under the Transaction Documents, including, without
limitation, its obligation to issue the Securities pursuant to the Transaction Documents, are unconditional and absolute and not subject
to any right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim the Company may
have against a Purchaser and regardless of the dilutive effect that such issuance may have on the ownership of the other stockholders
of the Company.
4.4. Securities
Laws Disclosure; Publicity. The Company shall file a Current Report on Form 8-K disclosing the material terms of this Agreement,
including the Transaction Documents as exhibits thereto, prior to 9:00 AM (New York Time) on the first Trading Day after the Closing
Date. From and after the filing of the Form 8-K as provided in the preceding sentence, the Company represents to each Purchaser that
it shall have publicly disclosed all material, non-public information delivered to each Purchaser by the Company or any of its Subsidiaries,
or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction
Documents. In addition, effective upon the issuance of such Form 8-K, the Company acknowledges and agrees that any and all confidentiality
or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective
officers, directors, agents, employees or Affiliates on the one hand, and any of the Purchasers or any of their Affiliates on the other
hand, shall terminate. The Company and each Purchaser shall consult with each other in issuing any press releases with respect to the
transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release nor otherwise make any
such public statement (other than the Form 8-K approved by Purchaser) and the registration statement on Form S-1 registering the resale
of the Securities) without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior
consent of each Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed,
except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice
of such public statement or communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser,
or include the name of any Purchaser in any filing with the SEC or any regulatory agency or Trading Market, without the prior written
consent of such Purchaser, except (a) as required by the staff of the SEC in connection with the filing of final Transaction Documents
with the SEC and (b) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall
provide the Purchasers with prior notice of such disclosure permitted under this clause (b).
4.5. Shareholder
Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any Purchaser
is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution
under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that any Purchaser
could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents
or under any other agreement between the Company and any Purchaser.
4.6. Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents,
which shall be disclosed pursuant to Section 4.4, the Company covenants and agrees that neither it, nor any other Person acting
on its behalf will provide any Purchaser or its agents or counsel with any information that constitutes, or the Company reasonably believes
constitutes, material non-public information (including providing any Pre-Notice or Subsequent Financing Notice under the Series C COD
(as those terms are defined in the Series C COD)), unless prior thereto such Purchaser shall have consented to the receipt of such information
and agreed with the Company to keep such information confidential. Prior to providing a Purchaser with any material non-public information
(including any Pre-Notice or Subsequent Financing provided for under the Series C COD (as those terms are defined in the Series C COD)),
the Company shall provide the Purchaser with a consent substantially in the form attached as Exhibit D (“Consent”)
which shall not include any material non-public information. The Company shall not provide the Purchaser with the material non-public
information if the Purchaser does not execute and return the Consent to the Company. To the extent that any notice provided pursuant
to any Transaction Document or any other communications made by the Company, or information provided, to any Purchaser constitutes, or
contains, material, non-public information regarding the Company or any Subsidiaries, and such information was provided without such
Purchaser’s prior written consent, the Company shall simultaneously file material non-public information with the SEC pursuant
to a Current Report on Form 8-K. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant
in effecting transactions in securities of the Company. To the extent that the Company delivers any material, non-public information
to a Purchaser without such Purchaser’s consent, the Company hereby covenants and agrees that such Purchaser shall not have any
duty of confidentiality to the Company, any of its Subsidiaries, or any of their respective officers, directors, agents, employees or
Affiliates, not to trade on the basis of, such material, non-public information, provided that the Purchaser shall remain subject to
applicable law. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions
in securities of the Company. In addition to any other remedies provided by this Agreement or other Transaction Documents, if the Company
provides any material, non-public information to the Purchasers without their prior written consent, and it fails to immediately (no
later than the next Trading Day) file a Form 8-K disclosing this material, non-public information, it shall, subject to Section 5.18,
pay each Purchasers as partial liquidated damages and not as a penalty a sum equal to $500 per day for each $100,000 of each Purchaser’s
Subscription Amount beginning with the day the information is disclosed to the Purchaser and ending and including the day the Form 8-K
disclosing this information is filed; provided that no such liquidated damages shall be owed to any Purchaser not then holding Securities.
4.7. Use
of Proceeds. The Company shall use the net proceeds from the sale of Securities hereunder at the Initial Closing for working capital
purposes, and as otherwise provided on Schedule 4.7 and shall not use such proceeds: (a) for the satisfaction of any other portion
of the Company’s debt other than as specified on Schedule 4.7, (b) for the redemption of any Common Stock or Common Stock
Equivalents, or (c) for the settlement of any outstanding litigation, (d) in violation of FCPA or OFAC regulations, or (e) to lend money,
give credit, or make advances to any officers, directors, employees or affiliates of the Company.
4.8. Indemnification
of the Purchasers. Subject to the provisions of this Section 4.8, the Company will indemnify and hold the Purchaser and its
directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role
of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents,
members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding
a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any
and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in
settlements, court costs and reasonable attorneys’ fees and costs of investigation (including local counsel, if retained) that
any such Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties,
covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against
the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any shareholder of the Company who is not an
Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless such action
is based upon a breach of such Purchaser Party’s representations, warranties or covenants under the Transaction Documents or any
agreements or understandings such Purchaser Party may have with any such shareholder or any conduct by such Purchaser Party which constitutes
willful misconduct or gross negligence). If any action shall be brought against any Purchaser Party in respect of which indemnity may
be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the
right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party
shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been specifically
authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ
counsel or (iii) in such action there is, in the reasonable opinion of counsel to the Purchaser Party, a material conflict on any material
issue between the position of the Company and the position of such Purchaser Party, in which case the Company shall be responsible for
the reasonable fees and expenses of no more than one such separate counsel (in addition to local counsel, if retained). The Company will
not be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the Company’s
prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss,
claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants
or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents. The Purchaser Parties shall have
the right to settle any action against any of them by the payment of money provided that they cannot agree to any equitable relief and
the Company, its officers, directors and Affiliates receive unconditional releases in customary form. The indemnification required by
this Section 4.8 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as
and when bills are received or are incurred. The indemnity agreements contained herein shall be in addition to any cause of action or
similar right of any Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant to law.
4.9. Reservation
of Common Stock.
(a) Immediately
upon Closing, the Company shall reserve the number of shares of Common Stock issuable upon conversion of the Series C Shares (the “Required
Minimum”). The Company shall execute and cause the Transfer Agent to execute a reservation letter in the form attached as Exhibit
C.
(b) The
Company shall at all times maintain a reserve of the Required Minimum from its duly authorized shares of Common Stock for issuance pursuant
to the Transaction Documents in such amounts as may then be required to fulfill its obligations in full under the Transaction Documents.
If, on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than the Required Minimum
on such date (a “Required Minimum Failure”), then, in addition to each Purchaser’s other available remedies,
the Company shall pay to each Purchaser, in cash, as partial liquidated damages and not as a penalty, an amount in cash equal to two
percent (2.0%) of each Purchaser’s Subscription Amount on the day of a Required Minimum Failure and on every thirtieth (30th) day
(pro rated for periods totaling less than thirty days) thereafter until the date such Required Minimum Failure is cured; provided that
such liquidated damages shall not exceed twenty-five percent (25.0%) of each Purchaser’s aggregate Subscription Amount. The payments
to which each Purchaser shall be entitled pursuant to this Section 4.11(a) are referred to herein as “Required Minimum
Failure Payments.” Required Minimum Failure Payments shall be paid on the earlier of (i) the last day of the calendar month
during which such Required Minimum Failure Payments are incurred and (ii) the third (3rd) Business Day after the event or failure giving
rise to the Required Minimum Failure is cured. In the event the Company fails to make Required Minimum Failure Payments in a timely manner,
such Required Minimum Failure Payments shall bear interest at the rate of 1.5% per month (prorated for partial months) until paid in
full. Nothing herein shall limit a Purchaser’s right to pursue actual damages for the Required Minimum Failure, and each Purchaser
shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance
and/or injunctive relief.
(c) Upon
the occurrence of a Required Minimum Failure, the Company’s Board of Directors shall use commercially reasonable efforts to amend
the Company’s certificate or articles of incorporation to increase the number of authorized but unissued shares of Common Stock
to at least the Required Minimum at such time, as soon as possible and in any event not later than the 75th day after the first date
on which such Required Minimum Reservation Failure occurred.
(d) The
Company shall, if applicable: (i) in the time and manner required by the principal Trading Market, prepare and file with such Trading
Market an additional shares listing application covering a number of shares of Common Stock at least equal to the Required Minimum on
the date of such application, (ii) take all steps necessary to cause such shares of Common Stock to be approved for listing or quotation
on such Trading Market as soon as possible thereafter, (iii) provide to the Purchaser evidence of such listing or quotation and (iv)
maintain the listing or quotation of such Common Stock on any date at least equal to the Required Minimum on such date on such Trading
Market or another Trading Market. The Company agrees to maintain the eligibility of the Common Stock for electronic transfer through
the Depository Trust Company or another established clearing corporation, including, without limitation, by timely payment of fees to
the Depository Trust Company or such other established clearing corporation in connection with such electronic transfer.
4.10. Listing
of Common Stock. The Company hereby agrees to use its reasonable best efforts to maintain the listing or quotation of the Common
Stock on the Trading Market on which it is currently listed or quoted; provided, however, the Company shall if it qualifies,
list its Common Stock on a Trading Market which is a national securities exchange. The Company will then take all action necessary to
continue the listing and trading of its Common Stock on a Trading Market and will comply in all respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of the Trading Market. The Company agrees to maintain the eligibility of the Common
Stock for electronic transfer through the DTC or another established clearing corporation, including, without limitation, by timely payment
of fees to the DTC or such other established clearing corporation in connection with such electronic transfer.
4.11. Equal
Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered or paid to any
Person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless the same consideration is
also offered to all of the parties to the Transaction Documents. For clarification purposes, this provision constitutes a separate right
granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers
as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition
or voting of Securities or otherwise.
4.12. Certain
Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither it
nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short
Sales of any of the Company’s securities during the period commencing with the execution of this Agreement and ending at such time
that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described
in Section 4.4. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions
contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described in Section
4.4, such Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information included
in the Disclosure Schedules. Notwithstanding the foregoing and notwithstanding anything contained in this Agreement to the contrary,
the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will
not engage in effecting transactions in any securities of the Company after the time that the transactions contemplated by this Agreement
are first publicly announced pursuant to the initial press release as described in Section 4.4, (ii) no Purchaser shall be restricted
or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities laws from and
after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release
as described in Section 4.4 and (iii) no Purchaser shall have any duty of confidentiality or duty not to trade in the securities
of the Company to the Company or its Subsidiaries after the issuance of the initial press release as described in Section 4.4.
Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers
manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions
made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only apply
with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered
by this Agreement.
4.13. Conversion
Procedures. The form of Notice of Conversion for Series C Shares attached hereto as Exhibit E set forth the totality of the
procedures required of the Purchasers in order to convert the Series C Shares. No additional legal opinion, other information or instructions
shall be required of the Purchasers to convert their Series C Shares. Without limiting the preceding sentences, no ink-original Conversion
Notice or Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any
Conversion Notice or Notice of Exercise form be required in order to convert the Series C Shares. The Company shall honor conversions
of the Series C Shares and shall deliver Conversion Shares in accordance with the terms, conditions and time periods set forth in the
Transaction Documents.
4.14. DTC
Program. For so long as any Series C Shares are outstanding, the Company will employ as the Transfer Agent for the Common Stock a
participant in the DTC Automated Securities Transfer Program and cause the Common Stock to be transferable pursuant to such program.
4.15. Maintenance
of Property. The Company shall keep all of its property, which is necessary or useful to the conduct of its business, in good working
order and condition, ordinary wear and tear excepted.
4.16. Preservation
of Corporate Existence. The Company shall preserve and maintain its corporate existence, rights, privileges and franchises in the
jurisdiction of its incorporation, and qualify and remain qualified, as a foreign corporation in each jurisdiction in which such qualification
is necessary in view of its business or operations and where the failure to qualify or remain qualified might reasonably have a Material
Adverse Effect upon the financial condition, business or operations of the Company taken as a whole.
4.17. D&O
Insurance. The Company shall maintain director and officer insurance on behalf of the Company and its officers and directors for
18 months after the Closing with respect to any losses, claims, damages, liabilities, costs and expense in connection with any actual
or threatened claim or proceeding that is based on, or arises out of their status as a director or officer of the Company. The insurance
policy shall cover SEC investigations for the Company and its officers and directors and provide for two years of tail coverage.
4.18. Subsequent
Equity Sales.
(a) Until
there are no Series C Shares outstanding, the Company will not, without the consent of the holders of a majority of the outstanding Series
C Shares, issue nor agree to issue Variable Priced Equity Linked Instruments or any equity with price reset rights (subject to adjustment
for stock splits, distributions, dividends, recapitalizations and the like) (collectively, the “Variable Rate Transaction”).
For purposes hereof, “Variable Priced Equity Linked Instruments” shall include: (A) any debt or equity securities
which are convertible into, exercisable or exchangeable for, or carry the right to receive additional shares of Common Stock either (1)
at any conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations
for Common Stock at any time after the initial issuance of such debt or equity security, or (2) with a fixed conversion, exercise or
exchange price that is subject to being reset at some future date at any time after the initial issuance of such debt or equity security
due to a change in the market price of the Company’s Common Stock since date of initial issuance, and (B) any amortizing convertible
security which amortizes prior to its maturity date, where the Company is required or has the option to (or any investor in such transaction
has the option to require the Company to) make such amortization payments in shares of Common Stock which are valued at a price that
is based upon and/or varies with the trading prices of or quotations for Common Stock at any time after the initial issuance of such
debt or equity security (whether or not such payments in stock are subject to certain equity conditions). For purposes of determining
the total consideration for a convertible instrument (including a right to purchase equity of the Company) issued, subject to an original
issue or similar discount or which principal amount is directly or indirectly increased after issuance, the consideration will be deemed
to be the actual cash amount received by the Company in consideration of the original issuance of such convertible instrument. Notwithstanding
anything to the contrary contained herein, a Variable Rate Transaction shall not include an at-the-market facility which shall not be
prohibited by this Section 4.18.
(b) Notwithstanding
the foregoing, this Section 4.18 shall not apply in respect of an Exempt Issuance. The Company shall provide each Purchaser with
notice of any such issuance or sale in the manner for disclosure of subsequent financings set forth in the Series C COD.
4.19. No
Registration of Securities. Except as disclosed on Schedule 4.19, while the Series C Shares are outstanding, the Company will
not file any registration statements to register sales of Common Stock, including shares underlying any derivative securities, unless
a registration statement is then in effect for the resale by the Purchasers of the Conversion Shares.
4.20. Most
Favored Nation. Each Purchaser shall have the right, exercisable at any time in connection with any issuance by the Company of Common
Stock or Common Stock Equivalents for consideration (a “Subsequent Financing”) to accept the securities and terms
of such Subsequent Financing in lieu of the Securities and the terms of this Agreement (“MFN Right”), subject to the
terms and conditions set forth herein. If the Company receives such notice from a Purchaser of the exercise of its MFN Right for such
Subsequent Financing, then: (i) effective upon the closing of such Subsequent Financing, the terms of the Securities (and, if and to
the extent relevant, the underlying securities) then held by Purchaser and this Agreement (collectively, “Present Terms”)
shall automatically be amended by (x) substituting the form, mix and Present Terms of such securities (and, if and to the extent relevant,
the underlying securities) with those of the securities issued in the Subsequent Financing (and, if and to the extent relevant, the underlying
securities) (the “Subsequent Financing Terms”) and (y) incorporating by reference, mutatis mutandis, the Subsequent
Financing Terms in lieu of the Present Terms; and (ii) thereafter, upon the reasonable request of the Company or a Purchaser, the parties
shall reasonably cooperate with each other in order to further or better evidence or effect such substitution(s) and amendment(s), and
to otherwise carry out the intent and purposes of this Section, including the physical exchange of securities. Notwithstanding anything
contained herein to the contrary, the MFN Right shall also apply to an Exempt Issuance.
4.21. Form
D; Blue Sky and Other Filings. The Company agrees to timely file a Form D with respect to the Securities as required under Regulation
D and to provide a copy thereof, promptly upon request of a Purchaser. The Company shall take such action as the Company shall reasonably
determine is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchasers at the Closing under
applicable securities or “Blue Sky” laws of the states of the United States and shall provide evidence of such actions promptly
upon request of a Purchaser.
4.22. Prohibited
Actions. Until there are no Series C Shares outstanding, the Company shall not (a) change the nature of its business, (b) sell, divest
or change the structure of any material assets of the Company except in the ordinary course of business, or (c) enter into any transaction
involving merchant-cash-advances or any similar transaction whereby the Company shall be obligated to the counterparty of for an amount
in excess of $1,000,000.
ARTICLE
5.
MISCELLANEOUS
5.1. Termination.
This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect whatsoever
on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing has not been
consummated on or before June 30, 2023; provided, however, that no such termination will affect the right of any party
to sue for any breach by any other party (or parties).
5.2. Fees
and Expenses. Except as expressly set forth below and in the Transaction Documents to the contrary, each party shall pay the fees
and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident
to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees
(including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company and any
exercise notice delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities
to the Purchasers. Upon the Closing, out of the proceeds of this transaction, the Company shall pay counsel for the Lead Investor a total
of up to $25,000 in fees (which will be withheld from the Subscription Amount), including but not limited to fees with respect to legal
and due diligence costs.
5.3. Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.
5.4. Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered via facsimile
or email attachment at the facsimile number or email address as set forth on the signature pages attached hereto at or prior to 5:30
p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication
is delivered via facsimile or email attachment at the facsimile number or email address as set forth on the signature pages attached
hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second Trading Day
following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party
to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages
attached hereto.
5.5.
Amendments; Waivers. Except as provided in the last sentence of this Section 5.5, no provision of this Agreement may be
waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and the
Purchaser’s which hold at least 50.1% in interest in the Series C Shares at the time of such amendment or waiver or, in the case
of a waiver, by the party against whom enforcement of any such waived provision is sought; provided, that if any amendment, modification
or waiver disproportionately and adversely impacts a Purchaser (or group of Purchasers), the consent of such disproportionately impacted
Purchaser (or group of Purchasers) shall also be required. No waiver of any default with respect to any provision, condition or requirement
of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner
impair the exercise of any such right. Any proposed amendment or waiver that disproportionately, materially and adversely affects the
rights and obligations of any Purchaser relative to the comparable rights and obligations of the other Purchasers shall require the prior
written consent of such adversely affected Purchaser, Any amendment effected in accordance with accordance with this Section 5.5
shall be binding upon each Purchaser and holder of Securities and the Company. In order to amend the definition of Exempt Issuance, the
written consent of the Company and each Purchaser must be obtained.
5.6. Headings.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any
of the provisions hereof.
5.7. Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser
(other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns
or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities,
by the provisions of the Transaction Documents that apply to the Purchasers.
5.8. No
Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in
Section 4.8 and this Section 5.8.
5.9. Governing
Law; Exclusive Jurisdiction; Attorneys’ Fees. All questions concerning the construction, validity, enforcement and interpretation
of the Transaction Documents except the Series C COD shall be governed by and construed and enforced in accordance with the internal
laws of the State of Delaware, without regard to the principles of conflicts of law thereof. All questions concerning the construction,
validity, enforcement and interpretation of the Series C COD shall be governed by and construed and enforced in accordance with the internal
laws of the State of Wyoming, without regard to the principles of conflicts of law thereof. Each party agrees that all Actions concerning
the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether
brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents)
shall be commenced exclusively in the state and federal courts in New York County, New York. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in New York County, New York for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement
of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Action, any claim that it is not
personally subject to the jurisdiction of any such court, that such Action is improper or is an inconvenient venue for such Action. Each
party hereby irrevocably waives personal service of process and consents to process being served in any such Action by mailing a copy
thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for
notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If any
party shall commence an Action to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company
elsewhere in this Agreement, the prevailing party in such Action shall be reimbursed by the non-prevailing party for its reasonable attorneys’
fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action.
5.10. Survival.
The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.
5.11. Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that
the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery
of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original
thereof.
5.12. Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force
and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts
to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.
5.13. Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any
of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document
and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind
or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in
whole or in part without prejudice to its future actions and rights.
5.14. Replacement
of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall
issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of
and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company
of such loss, theft or destruction without requiring the posting of any bond.
5.15. Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers
and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may
not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and
hereby agree to waive and not to assert in any Action for specific performance of any such obligation the defense that a remedy at law
would be adequate.
5.16. Payment
Set Aside. To the extent the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required
to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including, without
limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.
5.17. Independent
Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several
and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or non-performance
of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any other Transaction Document,
and no action taken by any Purchaser pursuant hereto or thereto shall be deemed to constitute the Purchasers as a partnership, an association,
a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Purchaser shall be entitled to independently
protect and enforce its rights including, without limitation, the rights arising out of this Agreement or out of the other Transaction
Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any Proceeding for such purpose.
Each Purchaser has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents. The
Company has elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not
because it was required or requested to do so by any of the Purchasers. It is expressly understood and agreed that each provision contained
in this Agreement and in each other Transaction Document is between the Company and a Purchaser, solely, and not between the Company
and the Purchasers collectively and not between and among the Purchasers.
5.18. Liquidated
Damages.
(a) The
Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction Documents is a continuing
obligation of the Company, provided, however, that, as to each Purchaser (or transferee thereof), such obligations shall terminate when
such Purchaser (or transferee thereof) ceases to hold the instrument or security pursuant to which such partial liquidated damages or
other amounts are due and payable for any reason including, but not limited to, conversion, exercise, redemption or exchange and such
Purchaser (or any transferee) has been paid such liquidated damages or other amounts that are owed to it.
(b) Except
as otherwise provided herein, the Company’s obligations to pay any partial liquidated damages or other amounts owing under the
Transaction Documents to any particular Purchaser shall be limited to the product of (i) the partial liquidated damages or other amounts
that would be owing under the Transaction Documents (excluding the effect of this Section 5.18(b)) multiplied by (ii) a fraction
(A) the numerator of which is the equal to the total of the Stated Value of the Series C Shares (as defined in the Series C COD) then-held
by such Purchaser and (B) the denominator of which is equal to such Purchaser’s Subscription Amount.
5.19. Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted
herein shall not be a Trading Day, then such action may be taken or such right may be exercised on the next succeeding Trading Day.
5.20. Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents
and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to
share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.
5.21. WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH
KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND
EXPRESSLY WAIVE FOREVER TRIAL BY JURY.
In
addition, the parties hereto agree that any action, proceeding or claim arising out of or relating in any way to this Agreement or the
other Transaction Documents shall be resolved through final and binding arbitration in accordance with the Commercial Arbitration Rules
of the American Arbitration Association (“AAA”).
5.22. Non-Circumvention.
The Company hereby covenants and agrees that the Company will not, by amendment of its Charter, including any Certificates of Designation,
or Bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue 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 Agreement,
and will at all times in good faith carry out all of the provision of this Agreement and take all action as may be required to protect
the rights of all holders of the Securities. Without limiting the generality of the foregoing or any other provision of this Agreement
or the other Transaction Documents, the Company (a) shall not increase the par value of any shares of Common Stock receivable upon conversion
of the Series C Shares above the conversion price of the Series C Shares, then in effect and (b) shall take all such action as may be
necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Conversion Shares upon
the conversion of the Series C Shares. Notwithstanding anything herein to the contrary, if after six months from the Initial Closing,
a holder is not permitted to convert the Series C Shares, in full, for any reason, the Company shall use its best efforts to promptly
remedy such failure, including, without limitation, obtaining such consent or approvals as necessary to permit such conversion or exercise.
(Signature
Pages Follow)
IN
WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
INTERNATIONAL
LAND ALLICANCE, INC. |
Address
for Notice: |
|
|
|
By: |
|
Email: |
Name: |
Frank
Ingrande |
|
Title: |
President |
|
With
a copy to (which shall not constitute notice):
Lucosky
Brookman LLP
101
Wood Avenue South
Woodbridge,
New Jersey 08830
Fifth
Floor
Attn:
Seth Brookman, Partner
Email:
sbrookman@lucbro.com
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGE FOR PURCHASER FOLLOWS]
Signature
Page to Securities Purchase Agreement
PURCHASER
SIGNATURE PAGES TO INTERNATIONAL LAND ALLIANCE, INC. SECURITIES PURCHASE AGREEMENT
IN
WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories
as of the date first indicated above.
Name
of Purchaser: ___________________
Signature
of Authorized Signatory of Purchaser: _________________________________
Name
of Authorized Signatory: _______________________________________________
Title
of Authorized Signatory: ________________________________________________
Email
Address of Authorized Signatory: _________________________________________
Facsimile
Number of Authorized Signatory: ______________________________________
Address
for Notice to Purchaser:
Address
for Delivery of Securities to Purchaser (if not same as address for notice):
Subscription
Amount: $_________________
EIN
Number: _______________________
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