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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):
May 16, 2024
SIGNING DAY SPORTS, INC. |
(Exact name of registrant as specified in its charter) |
Delaware |
|
001-41863 |
|
87-2792157 |
(State or other jurisdiction
of incorporation) |
|
(Commission File Number) |
|
(IRS Employer
Identification No.) |
8355 East Hartford Rd., Suite 100, Scottsdale, AZ |
|
85255 |
(Address of principal executive offices) |
|
(Zip Code) |
(480) 220-6814 |
(Registrant’s telephone number, including area code) |
|
(Former name or former address, if changed since last report) |
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ | Written communications pursuant
to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
|
Trading Symbol(s) |
|
Name of each exchange on which registered |
Common Stock, $0.0001 par value per share |
|
SGN |
|
NYSE American LLC |
Indicate by check
mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities
Exchange Act of 1934.
Emerging Growth Company ☒
If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
Item 1.01 Entry into a Material Definitive Agreement.
On May 16, 2024, Signing Day Sports, Inc., a Delaware
corporation (the “Company”), entered into a securities purchase agreement, dated as of May 16, 2024 (the “FirstFire
Purchase Agreement”), with FirstFire Global Opportunities Fund, LLC (the “Investor”) pursuant to which the Company is
required to issue the Investor a senior secured convertible promissory note with principal of $412,500 (the “Note”), 187,500
shares of the Company’s common stock, par value $0.0001 per share (“common stock”), as a commitment fee (the “FF
Commitment Shares”), a warrant to purchase up to 1,375,000 shares of common stock (the “First FF Warrant”) and a second
warrant, to purchase up to 250,000 shares of common stock (the “Second FF Warrant,” and together with the First FF Warrant,
the “FF Warrants”).
The Company also entered
into a Security Agreement with the Investor (the “Security Agreement”) pursuant to which the Company will grant the Investor
a security interest in certain property of the Company to secure the Company’s obligations under the FF Note.
The closing of the transaction
under the FirstFire Purchase Agreement, including payment to the Company by the Investor of the purchase price of $375,000, remains subject
to certain conditions.
Under the Company’s
engagement letter agreement with Boustead Securities, LLC, a registered broker-dealer (“Boustead”), Boustead is acting as
the placement agent in connection with the transactions contemplated by the FirstFire Purchase Agreement, for which the Company will pay
to Boustead cash in the amount of 8.0% of the amount paid by the Investor to the Company pursuant to the FirstFire Purchase Agreement;
shares of common stock in an amount equal to 7.0% of the FF Commitment Shares; and placement agent warrants to purchase up to the number
of shares equal to 7.0% of the shares of common stock issuable to the Investor pursuant to conversion of the FF Note, exercise of the
First FF Warrant, and exercise of the Second FF Warrant, with an exercise price equal to the applicable conversion price or exercise price
per share, with the exercisability of the placement agent warrants issuable with respect to with the Second FF Warrant subject to the
same conditions for exercise as the Second FF Warrant. The placement agent warrants that are required to be issued to Boustead will be
exercisable for a period of five years from the date of issuance and contain cashless exercise provisions. Boustead also has certain registration
rights with respect to these warrants.
FirstFire Purchase
Agreement
Under the FirstFire Purchase Agreement, until
the FF Note has been fully converted or repaid, the Investor will have participation and rights of first refusal on any offers of the
Company’s securities other than offerings already disclosed in the Company’s reports filed with the SEC or pursuant to an
Excluded Issuance (as defined in the FirstFire Purchase Agreement), and most favored nation rights on any offers of the Company’s
securities other than for an Excluded Issuance. The Company will also be prohibited from effecting or entering into an agreement involving
a Variable Rate Transaction, as defined in the FirstFire Purchase Agreement, other than pursuant to an “at-the-market” agreement
with a registered broker-dealer, whereby such registered broker-dealer is acting as principal in the purchase of common stock from the
Company or an Equity Line of Credit (as defined in the FF Note), without the consent of the Investor, which may not be unreasonably withheld.
In addition, the Company may not issue, agree, propose, or offer to issue any shares of common stock or securities with underlying common
stock prior to the 30th calendar day after the date of the FirstFire Purchase Agreement.
The FirstFire Purchase Agreement (as well as the
FF Note and the FF Warrants) provides that the maximum amount of shares of common stock issuable under the FF Note and the FF Warrants
is limited to no more than 19.99% of the issued and outstanding common stock of the Company as of the date of the FirstFire Purchase Agreement
(as well as the FF Note and the FF Warrants) provides that the maximum amount of shares of common stock issuable, or 3,074,792 shares
of Common Stock, which number of shares shall be reduced, on a share-for-share basis, by the number of shares of Common Stock issued or
issuable pursuant to any transaction or series of transactions that may be aggregated with the transactions contemplated by the FirstFire
Purchase Agreement under applicable rules of the NYSE American LLC (the “NYSE American” and such limitation, the “FF
Exchange Limitation”), until the Company obtains stockholder approval to issue shares in excess of that amount for all shares issuable
pursuant to the terms of the FirstFire Purchase Agreement (the “FF Stockholder Approval”). The Company must hold a meeting
of stockholders on or before the date that is six months after the date of the FirstFire Purchase Agreement, for the purpose of obtaining
the FF Stockholder Approval, with the recommendation of the Company’s board of directors that such proposal be approved, the Company
must solicit proxies from its stockholders in connection with the proposal in the same manner as all other management proposals in such
proxy statement, and all management-appointed proxyholders shall vote their proxies in favor of such proposal. In addition, all members
of the Company’s board of directors and all of the Company’s executive officers must vote in favor of such proposal, for purposes
of obtaining the FF Stockholder Approval, with respect to all securities of the Company then held by such persons, and the Company must
generally use its commercially reasonable efforts to obtain the FF Stockholder Approval. If the Company does not obtain the FF Stockholder
Approval at the first meeting at which the proposal is voted upon, the Company shall call a stockholder meeting as often as possible thereafter
to seek the FF Stockholder Approval until the FF Stockholder Approval is obtained.
In addition, the FirstFire Purchase Agreement
provides that the Investor will pay an additional amount of at least an additional $175,000 to the Company subject to the same terms and
conditions of the Transaction Documents, including additional aggregate principal of at least $198,611, based on the 10% original issuance
discount under the FF Note, and the other terms and conditions of the FF Note (the “Second Tranche”), if, within six calendar
months of the date of the FirstFire Purchase Agreement, the Company obtains the FF Stockholder Approval and such FF Stockholder Approval
applies to the Second Tranche, the Registration Statement (as defined below) is effective, any additional registration statement required
to cover the shares of common stock issuable following the occurrence of the Second Tranche is effective, the Company is listed on the
NYSE American, and no Event of Default (as defined in the FF Note) has occurred.
The FirstFire Purchase Agreement also has a most
favored nations provision with respect to the issuance of any securities of the Company other than with respect to an Excluded Issuance.
FirstFire Registration Rights Agreement
In connection with the
transaction, the Company and the Investor entered into a registration rights agreement, dated as of May 16, 2024 (the “FirstFire
Registration Rights Agreement” and together with the FirstFire Purchase Agreement, the Security Agreement, the FF Notes and the
FF Warrants, the “FirstFire Transaction Documents”), pursuant to which the Company agreed to register the shares of common
stock underlying the FF Note and the FF Warrants and the FF Commitment Shares under the Securities Act of 1933, as amended (the “Securities
Act”), for resale pursuant to a registration statement (the “FF Registration Statement”). The Company agreed to file
the FF Registration Statement with the Securities and Exchange Commission (the “SEC”) within 90 calendar days from the date
of the FirstFire Purchase Agreement and to have the Registration Statement declared effective by the SEC within 120 days from the date
of the FirstFire Purchase Agreement. The Company also granted the Investor certain piggyback registration rights pursuant to the FirstFire
Purchase Agreement.
FF Note
The principal amount of the FF Note will bear
interest at the rate of 10% per annum on a 365-day basis. The interest will be guaranteed, which requires that all interest that would
accrue through the latest date of maturity be paid. The FF Note will mature on the earlier of the 12-month anniversary date of the issuance
date, or May 16, 2025, and the date of the consummation of a sale, conveyance or disposition of all or substantially all of the assets
of the Company, or the consolidation, merger or other business combination of the Company with or into any other entity when the Company
is not the survivor.
Any outstanding principal
amount or interest on the FF Note that is not paid when due will bear interest at the rate of the lesser of (i) 15% per annum and (ii)
the maximum amount permitted by law from the due date thereof until the same is paid. Under the FF Note, the Company is required to make
monthly amortization payments of $56,715 commencing September 16, 2024. The Company may prepay the FF Note any time prior to an Event
of Default on 15 trading days’ prior written notice for an amount equal to 110% of the principal amount then outstanding and 110%
of the accrued and unpaid interest outstanding.
Under the FF Note, the
holder of the FF Note may at any time and from time to time, subject to beneficial ownership limitations and the FF Exchange Limitation,
convert the outstanding principal amount and accrued interest under the FF Note into shares of common stock at an initial conversion price
of $0.30 per share, subject to adjustment, including adjustments under full-ratchet anti-dilution provisions for any issuances of securities
at a lower price per share or per underlying share of common stock to match the price of such lower-priced securities, other than for
an Excluded Issuance (the “Fixed Conversion Price”). If the Company fails to make an amortization payment when due under the
FF Note, the balance remaining under the FF Note will become convertible, and the conversion price will become the lower of the then-applicable
Fixed Conversion Price and 80% of the lowest closing price of the common stock during the ten trading days prior to the conversion date.
If an Event of Default occurs under the FF Note, then the balance remaining under the FF Note will become convertible at the lower of
the Fixed Conversion Price, the closing price of the common stock on the date of the Event of Default (or the next trading day if such
date is not on a trading day), and $0.195 per share, subject to adjustment. The number of shares issuable upon the conversion of the FF
Note and the conversion price of the FF Note are subject to any stock dividend, stock split, stock combination, rights offerings, reclassification,
or similar transaction.
If, at any time prior to the full repayment or
full conversion of all amounts owed under the FF Note, the Company receives cash proceeds from any source or series of related or unrelated
sources on or after the date of the FF Note, including but not limited to, from payments from customers, the issuance of equity or debt,
the incurrence of Indebtedness (as defined in the FF Note), a merchant cash advance, sale of receivables or similar transaction, the exercise
of outstanding warrants of the Company, the issuance of securities pursuant to an Equity Line of Credit (as defined in the FF Note) of
the Company or the Company’s offering of securities under Regulation A under the Securities Act, or the sale of assets (including
but not limited to real property) by the Company, the Company shall, within one (1) business day of Company’s receipt of such proceeds,
inform the holder of the FF Note of or publicly disclose such receipt, following which the holder of the FF Note shall have the right
in its sole discretion to require the Company to immediately apply up to 100% of such proceeds to repay all or any portion of the outstanding
principal amount and interest (including any default interest) then due under the FF Note.
The FF Note will be a senior secured obligation
of the Company, with priority over all existing and future indebtedness of the Company, except that the FF Note will be junior in priority
to the Company’s promissory note issued to Commerce Bank of Arizona (“CBAZ”) on or around December 23, 2023 pursuant
to the Business Loan Agreement, dated as of December 11, 2023, between the Company and the CBAZ in the amount of $2 million, and which
is secured by a certificate of deposit of the Company with CBAZ having a balance of approximately $2.1 million (the “Prior Secured
Note”). The Company may not incur any Indebtedness that is senior to or pari passu with the obligations under the FF Note. The Company
may not declare any dividends or other distributions except in the form of shares of common stock except for distributions pursuant to
a stockholders’ rights plan approved by a majority of the Company’s disinterested directors. The Company also may not repurchase
any capital stock or repay any indebtedness other than the FF Note and the Prior Secured Note.
The FF Note will have a most favored nations provision
with respect to the issuance of any debt securities of the Company.
FF Warrants
First FF Warrant
The First FF Warrant will be exercisable for up
to 1,375,000 shares of common stock from the date of issuance until the fifth anniversary of the date of issuance. The holder may exercise
the First FF Warrant by a “cashless” exercise if the Market Price (as defined below) is less than the exercise price then
in effect and there is no effective registration statement for the resale of the shares. The “Market Price” is defined as
the highest traded price of the common stock during the 30 trading days before the date of the cashless exercise. The number of shares
issuable upon cashless exercise will equal (i) the product of (a) the number of shares of common stock that the holder elects to purchase
under the First FF Warrant, times (b) the Market Price less the exercise price, divided by (ii) the Market Price.
Under the First FF Warrant,
the holder of the First FF Warrant may at any time and from time to time, subject to beneficial ownership limitations and the FF Exchange
Limitation, exercise the First FF Warrant to purchase shares of common stock at an initial conversion price of $0.30 per share, subject
to adjustment, including adjustments under full-ratchet anti-dilution provisions for any issuances of securities at a lower price per
share or per underlying share of common stock other than for an Excluded Issuance, or for any issuances of securities at a price which
varies or may vary with the market price of the common stock, to match the price of such lower-priced or variable price securities, or
for other dilution events. Simultaneous with any adjustment to the exercise price as a result of an anti-dilution adjustment, the number
of shares underlying the First FF Warrant will be adjusted proportionately so that after such adjustment the aggregate exercise price
payable under the First FF Warrant for the adjusted number of shares underlying the First FF Warrant will be the same as the aggregate
exercise price in effect immediately prior to such adjustment (without regard to any limitations on exercise). The First FF Warrant will
also contain rights to any rights to purchase securities of the Company distributed pro rata to the stockholders of the Company.
Second FF Warrant
The Second FF Warrant
will be exercisable for up to 250,000 shares of Common Stock for an initial exercise price of $0.01 per share from the date of an Event
of Default under the FF Note until the fifth anniversary of the date of an Event of Default under the FF Note. The Second FF Warrant will
be automatically canceled if the FF Note is fully extinguished (by repayment in cash and/or conversion into common stock) on or prior
to the maturity date of the FF Note. The Second FF Warrant otherwise has the same terms and conditions as the First FF Warrant.
General
The Transaction Documents
contain certain other agreements and obligations of the parties.
The
foregoing summary of the terms and conditions of the FF Note, the First FF Warrant, the Second FF Warrant, the FirstFire Purchase
Agreement, the Security Agreement, and the Registration Rights Agreement does not purport to be
complete and is qualified in its entirety by reference to the full text of the FF Note, the First FF Warrant, the Second FF
Warrant, the FirstFire Purchase Agreement, the Security Agreement, and the Registration Rights Agreement, copies or forms of which
are filed as Exhibit 4.1, Exhibit 4.2, Exhibit 4.3, Exhibit 10.1, Exhibit 10.2, and Exhibit 10.3, respectively, to this Current Report
on Form 8-K and incorporated herein by reference.
Item 1.02 Termination of a Material Definitive Agreement.
As previously disclosed in the Current Report
on Form 8-K filed by the Company on January 8, 2024, the Company entered into a Common Stock Purchase Agreement, dated as of January
5, 2024 (the “Tumim Purchase Agreement”), and a Registration Rights Agreement, dated
as of January 5, 2024 (the “Tumim Registration Rights Agreement”), with Tumim Stone Capital LLC (“Tumim”),
pursuant to which Tumim had committed to purchase, upon the terms and conditions specified in the Tumim Purchase Agreement and the Tumim
Registration Rights Agreement, up to $25 million of the Company’s common stock, $0.0001 par value per share.
On May 16, 2024, the Company and Tumim agreed
by mutual written consent and pursuant to its terms to terminate the Tumim Purchase Agreement, effective immediately.
In connection with this termination, Tumim also waived the prohibition under the Purchase Agreement on the Company
entering into a Variable Rate Transaction (as defined in the Tumim Purchase Agreement) which otherwise would have survived termination
of the Tumim Purchase Agreement for a six-month period.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information set forth
under Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
The information set forth
under Item 1.01 of this Current Report on Form 8-K is incorporated hereby reference.
The securities that may
be issued by the Company to the Investor under the FirstFire Purchase Agreement are being offered and sold by the Company to the Investor
in a transaction that is exempt from the registration requirements of the Securities Act in reliance on Section 4(a)(2) of the Securities
Act and Rule 506(b) of Regulation D thereunder. In the FirstFire Purchase Agreement, the Investor represented to the Company, among other
things, that it is an “accredited investor” (as such term is defined in Rule 501(a) of Regulation D under the Securities Act).
Accordingly, the offer and sale by the Company of the securities that may be issued and sold to the Investor under the FirstFire Purchase
Agreement have not been and will not be registered under the Securities Act or any applicable state securities or “Blue Sky”
laws and, therefore, such securities may not be offered or sold in the United States absent registration or an exemption from registration
under the Securities Act and any applicable state securities or “Blue Sky” laws.
The securities that may
be issued by the Company to Boustead under the Company’s engagement letter agreement with Boustead are being offered and sold by
the Company to Boustead in a transaction that is exempt from the registration requirements of the Securities Act, in reliance on Section
4(a)(2) of the Securities Act and/or Rule 506(b) of Regulation D thereunder. Accordingly, the offer and sale by the Company of the securities
that may be issued and sold to Boustead under its engagement letter agreement have not been and will not be registered under the Securities
Act or any applicable state securities or “Blue Sky” laws and, therefore, such securities may not be offered or sold in the
United States absent registration or an exemption from registration under the Securities Act and any applicable state securities or “Blue
Sky” laws.
This Current Report on Form 8-K shall not constitute
an offer to sell or a solicitation of an offer to buy any securities of the Company, nor shall there be any sale of any securities of
the Company in any state or other jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state or other jurisdiction.
Item 7.01
Regulation FD Disclosure.
The information set forth under Item 1.01, Item
1.02 and Item 3.02 of this Current Report on Form 8-K is incorporated herein by reference.
Item 9.01 Financial
Statements and Exhibits.
(d) Exhibits
Exhibit No. |
|
Description |
4.1 |
|
Form of Senior Secured Promissory Note |
4.2 |
|
Form of First Common Stock Purchase Warrant |
4.3 |
|
Form of Second Common Stock Purchase Warrant |
10.1 |
|
Securities Purchase Agreement, dated May 16, 2024, between Signing Day Sports, Inc. and FirstFire Global Opportunities Fund, LLC |
10.2 |
|
Security Agreement, dated May 16, 2024, between Signing Day Sports, Inc. and FirstFire Global Opportunities Fund, LLC |
10.3 |
|
Registration Rights Agreement, dated May 16, 2024, between Signing Day Sports, Inc. and FirstFire Global Opportunities Fund, LLC |
104 |
|
Cover Page Interactive Data File (embedded with the Inline XBRL document). |
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.
Date: May 17, 2024 |
SIGNING DAY SPORTS, INC. |
|
|
|
/s/ Daniel D. Nelson |
|
Name: |
Daniel D. Nelson |
|
Title: |
Chief Executive Officer |
6
Exhibit 4.1
NEITHER THE ISSUANCE AND SALE
OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR (B) AN OPINION OF COUNSEL (WHICH MAY BE THE LEGAL COUNSEL OPINION (AS DEFINED IN THE PURCHASE AGREEMENT)), IN A GENERALLY ACCEPTABLE
FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144, RULE 144A OR REGULATION S UNDER SAID
ACT OR OTHER APPLICABLE EXEMPTION. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
Principal Amount: $412,500.00 |
Issue Date: May 16, 2024 |
Actual Amount of Purchase Price: $375,000.00 |
|
SENIOR SECURED PROMISSORY
NOTE
FOR VALUE
RECEIVED, SIGNING DAY SPORTS, INC., a Delaware corporation (hereinafter called the “Borrower” or the “Company”)
(Trading Symbol: SGN), hereby promises to pay to the order of FIRSTFIRE GLOBAL OPPORTUNITIES FUND, LLC, a Delaware limited liability
company, or registered assigns (the “Holder”), in the form of lawful money of the United States of America, the principal
sum of $412,500.00 (the “Principal Amount”) (subject to adjustment herein), of which $375,000.00 (the “Purchase Price”)
is the actual amount of the purchase price hereof plus an original issue discount in the amount of $37,500.00 (the “OID”),
and to pay interest on the unpaid Principal Amount hereof at the rate of ten percent (10%) (the “Interest Rate”) per annum
from the date hereof (the “Issue Date”) until the same becomes due and payable, whether at maturity or upon acceleration or
by prepayment or otherwise, as further provided herein, with the understanding that the first twelve months of interest under this Note
(equal to $41,250.00) shall be guaranteed and earned in full as of the Issue Date. The maturity date shall be the sooner of twelve (12)
months from the Issue Date or the date of the consummation of a sale, conveyance or disposition of all or substantially all of the assets
of the Borrower, or the consolidation, merger or other business combination of the Borrower with or into any other Person (as defined
below) or Persons when the Borrower is not the survivor (the “Maturity Date”), and is the date upon which the Principal Amount
(which includes the OID) and any accrued and unpaid interest and other fees, shall be due and payable.
This Note may not be prepaid or repaid in whole or in part
except as otherwise explicitly set forth herein.
Any Principal
Amount or interest on this Note which is not paid when due shall bear interest at the rate of the lesser of (i) fifteen percent (15%)
per annum and (ii) the maximum amount permitted by law from the due date thereof until the same is paid (“Default Interest”).
Interest and Default Interest shall be computed on the basis of a 365-day year and the actual number of days elapsed.
All payments
due hereunder (to the extent not converted into shares of common stock, par value $0.0001 per share, of the Borrower (the “Common
Stock”) in accordance with the terms hereof) shall be made in lawful money of the United States of America. All payments shall be
made at such address as the Holder shall hereafter give to the Borrower by written notice made in accordance with the provisions of this
Note. Whenever any amount expressed to be due by the terms of this Note is due on any day which is not a business day, the same shall
instead be due on the next succeeding day which is a business day.
Each capitalized
term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities Purchase Agreement, dated
as of the Issue Date, pursuant to which this Note was originally issued (the “Purchase Agreement”). As used in this Note,
the term “business day” shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the city of
New York, New York are authorized or required by law or executive order to remain closed. As used herein, the term “Trading Day”
means any day that shares of Common Stock are listed for trading or quotation on the Principal Market (as defined in the Purchase Agreement),
provided, however, that if the Common Stock is not then listed or quoted on any Principal Market, then any calendar day.
This Note
is free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights
or other similar rights of shareholders of the Borrower and will not impose personal liability upon the holder thereof.
The following terms shall also apply to this Note:
ARTICLE I. CONVERSION RIGHTS
1.1 Conversion Right. The Holder shall have the right, on any calendar day, at
any time on or following the Issue Date, to convert all or any portion of the then outstanding and unpaid Principal Amount and interest
(including any Default Interest) into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue
Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified,
at the Conversion Price (as defined below) determined as provided herein (a “Conversion”), by submitting to the Borrower
or Borrower’s transfer agent a Notice of Conversion (as defined in this Note) by facsimile, e-mail or other reasonable means of
communication dispatched on the Conversion Date (as defined in this Note) prior to 11:59 p.m., New York, New York time; provided,
however, that notwithstanding anything to the contrary contained herein, the Holder shall not have the right to convert any portion
of this Note, pursuant to Section 1 or otherwise, to the extent that after giving effect to such issuance after conversion as set forth
on the applicable Notice of Conversion, the Holder (together with the Holder’s affiliates (the “Affiliates”), and any
other Persons (as defined below) acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution
Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing
sentence, the number of shares of Common Stock beneficially owned by the Holder and Attribution Parties shall include the number of shares
of Common Stock issuable upon conversion of this Note with respect to which such determination is being made, but shall exclude the number
of shares of Common Stock which would be issuable upon (i) conversion of the remaining, nonconverted portion of this Note beneficially
owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted
portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained
herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence,
for purposes of this Section 1.1, beneficial ownership shall be calculated in accordance with Section 13(d) of the Securities Exchange
Act of 1934, as amended (the “1934 Act”), and the rules and regulations promulgated thereunder, it being acknowledged by
the Holder that the Holder is solely responsible for any schedules required to be filed in accordance therewith. In addition, a determination
as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the 1934 Act and the rules and regulations
promulgated thereunder. For purposes of this Section 1.1, in determining the number of outstanding shares of Common Stock, the Holder
may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent periodic or annual report
filed with the SEC, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the
Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of the
Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then
outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion
or exercise of securities of the Company, including this Note, by the Holder or its Affiliates or Attribution Parties since the date
as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be
4.99% of the number of shares of the Common Stock outstanding at the time of the respective calculation hereunder. “Person”
and “Persons” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization, any other entity and any governmental entity or any department or agency thereof. The limitations contained
in this paragraph shall apply to a successor holder of this Note. The number of Conversion Shares (as defined in the Purchase Agreement)
to be issued upon each conversion of this Note shall be determined by dividing the Conversion Amount (as defined below) by the applicable
Conversion Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the
“Notice of Conversion”), delivered to the Borrower or Borrower’s transfer agent by the Holder in accordance with the
terms of this Note; provided that the Notice of Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably
expected to result in, notice) to the Borrower or Borrower’s transfer agent before 11:59 p.m., New York, New York time on such
conversion date (the “Conversion Date”). The term “Conversion Amount” means, with respect to any conversion of
this Note, the sum of (1) the Principal Amount of this Note to be converted in such conversion plus (2) at the Holder’s
option, accrued and unpaid interest, if any, on such Principal Amount at the Interest Rate to the Conversion Date, plus (3) at
the Holder’s option, Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2).
In addition to the beneficial ownership limitations provided in this Note, the sum of the number of shares of Common Stock that may be
issued under this Note shall be limited to the amount described in Section 4(r) of the Purchase Agreement (the “Exchange Cap”),
unless the Shareholder Approval (as defined in the Purchase Agreement) is obtained by the Company, except that shares of Common Stock
issuable upon conversion of this Note as to which the Conversion Price is at least equal to the greater of the Company’s stockholders’
equity per share disclosed in the Company’s most recent public filing with the SEC or the last closing bid price of the Common
Stock on the Principal Market as of the Conversion Date shall not be limited hereby.
1.2 Conversion Price.
(a)
Calculation of Conversion Price. The per share conversion price into which Principal Amount and interest (including any
Default Interest) under this Note shall be convertible into shares of Common Stock hereunder as further described in this Note (the “Conversion
Price”) shall equal $0.30, subject to adjustment as provided in this Note. If at any time the Conversion Price as determined hereunder
for any conversion would be less than the par value of the Common Stock, then at the sole discretion of the Holder, the Conversion Price
hereunder may equal such par value for such conversion and the Conversion Amount for such conversion may be increased to include Additional
Principal, where “Additional Principal” means such additional amount to be added to the Conversion Amount to the extent necessary
to cause the number of Conversion Shares issuable upon such conversion to equal the same number of Conversion Shares as would have been
issued had the Conversion Price not been adjusted by the Holder to the par value price. All such Conversion Price determinations are to
be appropriately adjusted for any stock dividend, stock split, stock combination, rights offerings, reclassification or similar transaction
that proportionately decreases or increases the Common Stock. If the Company, at any time while this Note is outstanding: (i) pays a stock
dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common
Stock Equivalents, (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way
of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues, in the event of a reclassification
of shares of the Common Stock, any shares of capital stock of the Company, then the Conversion Price shall be multiplied by a fraction
of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Company) outstanding immediately
before such event, and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event.
Any adjustment made pursuant to the immediately preceding sentence shall become effective immediately after the record date for the determination
of shareholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the
case of a subdivision, combination or re-classification. “Common Stock Equivalents” means any securities of the Company or
the Company’s Subsidiaries (as defined in the Purchase Agreement) which would entitle the holder thereof to acquire at any time
Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time
convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
(b) Adjustment
of Conversion Price relating to Amortization Payment. If the Company fails to pay any Amortization Payment (as defined in this
Note) pursuant to the terms of this Note, then, in addition to all other rights under this Note, the Holder shall have the right to
convert any portion of this Note at any time at a price per share equal to the Market Price (as defined in this Note). “Market
Price” shall mean the lesser of (i) the then applicable Conversion Price under the Note or (ii) 80% of the lowest closing
price of the Common Stock on any Trading Day during the ten (10) Trading Days prior to the respective Conversion Date.
(c) Adjustment
of Conversion Price due to Default. If an Event of Default occurs under this Note, then, in addition to all other rights under
this Note, the Holder shall have the right to convert any portion of this Note at any time at a price per share equal to the
Alternate Price (as defined in this Note). “Alternate Price” shall mean the lesser of (i) the then applicable Conversion
Price under the Note, (ii) the closing price of the Common Stock on the date of the Event of Default (provided, however, that if
such date is not a Trading Day, then the next Trading Day after the date of the Event of Default), or (iii) $0.195 (subject to
adjustment as provided in this Note). For the avoidance of doubt, a failure to make an Amortization Payment subject to Section
1.2(b) shall not result in an adjustment subject to this Section 1.2(c).
1.3 Authorized
and Reserved Shares. The Borrower covenants that at all times until the Note is satisfied in full, the Borrower will reserve
from its authorized and unissued Common Stock a sufficient number of shares, free from preemptive rights, to provide for the
issuance of a number of Conversion Shares equal to the greater of: (a) 7,562,500 shares of Common Stock or (b) the sum of (i) the
number of Conversion Shares issuable upon the full conversion of this Note (assuming no payment of Principal Amount or interest) at
a conversion price equal to the lesser of (i) the then applicable Conversion Price or (ii) the Market Price (even if the Note is not
yet convertible at the Market Price pursuant to the terms of this Note at the time of such calculation) multiplied by (ii)
two (2) (the “Reserved Amount”). The Borrower represents that upon issuance, the Conversion Shares will be duly and
validly issued, fully paid and non-assessable. The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent
to issue certificates for the Conversion Shares or instructions to have the Conversion Shares issued as contemplated by Section
1.4(f) hereof, and (ii) agrees that its issuance of this Note shall constitute full authority to its officers and agents who are
charged with the duty of executing stock certificates or cause the Company to electronically issue shares of Common Stock to execute
and issue the necessary certificates for the Conversion Shares or cause the Conversion Shares to be issued as contemplated by
Section 1.4(f) hereof in accordance with the terms and conditions of this Note.
If, at any time,
the Borrower does not maintain the Reserved Amount, it will be considered an Event of Default (as defined in this Note) under this Note.
1.4 Method of Conversion.
(a)
[Intentionally Omitted].
(b)
Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon conversion of this Note
in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Borrower unless the entire
unpaid Principal Amount is so converted. The Holder and the Borrower shall maintain records showing the Principal Amount so converted
and the dates of such conversions shall use such other method, reasonably satisfactory to the Holder and the Borrower, so as not to require
physical surrender of this Note upon each such conversion. In the event of any dispute or discrepancy, such records of the Holder shall,
prima facie, be controlling and determinative in the absence of manifest error. Notwithstanding the foregoing, if any portion of
this Note is converted as aforesaid, the Holder may not transfer this Note unless the Holder first physically surrenders this Note to
the Borrower, whereupon the Borrower will forthwith issue and deliver upon the order of the Holder a new Note of like tenor, registered
as the Holder (upon payment by the Holder of any applicable transfer taxes) may request, representing in the aggregate the remaining unpaid
Principal Amount of this Note. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions
of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted Principal Amount of this Note represented
by this Note may be less than the amount stated on the face hereof.
(c)
Payment of Taxes. The Borrower shall not be required to pay any tax which may be payable in respect of any transfer involved
in the issue and delivery of shares of Common Stock or other securities or property on conversion of this Note in a name other than that
of the Holder (or in street name), and the Borrower shall not be required to issue or deliver any such shares or other securities or property
unless and until the person or persons (other than the Holder or the custodian in whose street name such shares are to be held for the
Holder’s account) requesting the issuance thereof shall have paid to the Borrower the amount of any such tax or shall have established
to the satisfaction of the Borrower that such tax has been paid.
(d)
Delivery of Common Stock Upon Conversion. Upon receipt by the Borrower or Borrower’s transfer agent from the Holder
of a facsimile transmission or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements
for conversion as provided in this Section 1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the
order of the Holder certificates for the Conversion Shares (or cause the electronic delivery of the Conversion Shares as contemplated
by Section 1.4(f) hereof) within one (1) Trading Day after such receipt (the “Deadline”) (and, solely in the case of conversion
of the entire unpaid Principal Amount and interest (including any Default Interest) under this Note, surrender of this Note). If the Company
shall fail for any reason or for no reason to issue to the Holder on or prior to the Deadline a certificate for the number of Conversion
Shares or to which the Holder is entitled hereunder and register such Conversion Shares on the Company’s share register or to credit
the Holder’s balance account with DTC (as defined below) for such number of Conversion Shares to which the Holder is entitled upon
the Holder’s conversion of this Note (a “Conversion Failure”), then, in addition to all other remedies available to
the Holder, (i) the Company shall pay in cash to the Holder on each day after the Deadline and during such Conversion Failure an amount
equal to 1.0%, increasing to 2.0% on the fifth (5th) Trading Day following the date of such failure if it remains uncured,
of the product of (A) the sum of the number of Conversion Shares not issued to the Holder on or prior to the Deadline and to which the
Holder is entitled and (B) the closing sale price of the Common Stock on the Trading Day immediately preceding the last possible date
which the Company could have issued such Conversion Shares to the Holder without violating this Section 1.4(d); and (ii) the Holder, upon
written notice to the Company, may void all or any portion of such Notice of Conversion; provided that the voiding of all or any portion
of a Notice of Conversion shall not affect the Company’s obligations to make any payments which have accrued prior to the date of
such notice. In addition to the foregoing, if on or prior to the Deadline the Company shall fail to issue and deliver a certificate to
the Holder and register such Conversion Shares on the Company’s share register or credit the Holder’s balance account with
DTC for the number of Conversion Shares to which the Holder is entitled upon the Holder’s exercise hereunder or pursuant to the
Company’s obligation pursuant to clause (ii) below, and if on or after such Trading Day the Holder purchases (in an open market
transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of shares of Common Stock issuable
upon such exercise that the Holder anticipated receiving from the Company, then the Company shall, within two (2) Trading Days after the
Holder’s request and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s
total purchase price (including brokerage commissions and other reasonable and customary out-of-pocket expenses, if any) for the shares
of Common Stock so purchased (the “Buy-In Price”), at which point the Company’s obligation to deliver such certificate
(and to issue such Conversion Shares) or credit such Holder’s balance account with DTC for such Conversion Shares shall terminate,
or (ii) promptly honor its obligation to deliver to the Holder a certificate or certificates representing such Conversion Shares or credit
such Holder’s balance account with DTC and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price
over the product of (A) such number of shares of Common Stock, times (B) the closing sales price of the Common Stock on the date of exercise.
Nothing shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity, including, without
limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates
representing the Conversion Shares (or to electronically deliver such Conversion Shares) upon the conversion of this Note as required
pursuant to the terms hereof.
(e)
Obligation of Borrower to Deliver Common Stock. At the time that the Holder submits the Notice of Conversion to the Borrower
or Borrower’s transfer agent, the Holder shall be deemed to be the holder of record of the Conversion Shares issuable upon such
conversion, the outstanding Principal Amount and the amount of accrued and unpaid interest (including any Default Interest) under this
Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations under this Article I, all rights
with respect to the portion of this Note being so converted shall forthwith terminate except the right to receive the Common Stock or
other securities, cash or other assets, as herein provided, on such conversion. If the Holder shall have given a Notice of Conversion
as provided herein, the Borrower’s obligation to issue and deliver the certificates for the Conversion Shares (or cause the electronic
delivery of the Conversion Shares as contemplated by Section 1.4(f) hereof) shall be absolute and unconditional, irrespective of the absence
of any action by the Holder to enforce the same, any waiver or consent with respect to any provision thereof, the recovery of any judgment
against any person or any action to enforce the same, any failure or delay in the enforcement of any other obligation of the Borrower
to the holder of record, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder
of any obligation to the Borrower, and irrespective of any other circumstance which might otherwise limit such obligation of the Borrower
to the Holder in connection with such conversion. The Conversion Date specified in the Notice of Conversion shall be the Conversion Date
so long as the Notice of Conversion is sent to the Borrower or Borrower’s transfer agent before 11:59 p.m., New York, New York time,
on such date.
(f)
Delivery of Conversion Shares by Electronic Transfer. In lieu of delivering physical certificates representing the Conversion
Shares issuable upon conversion hereof, provided the Borrower is participating in the Depository Trust Company (“DTC”) Fast
Automated Securities Transfer or Deposit/Withdrawal at Custodian programs, upon request of the Holder and its compliance with the provisions
contained in Section 1.1 and in this Section 1.4, and the Conversion Shares may be sold or transferred pursuant to clause (i), clause
(ii), or clause (iii) of the first sentence of Section 1.5 of this Note, the Borrower shall use its best efforts to cause its transfer
agent to electronically transmit the Conversion Shares issuable upon conversion hereof to the Holder by crediting the account of Holder’s
Prime Broker with DTC through its Deposit Withdrawal Agent Commission system.
1.5
Concerning the Shares. The Conversion Shares issuable upon conversion of this Note may not be sold or transferred unless
(i) such shares are sold pursuant to an effective registration statement under the 1933 Act, (ii) the Borrower or its transfer agent shall
have been furnished with an opinion of counsel (which opinion shall be the Legal Counsel Opinion (as defined in the Purchase Agreement))
to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration, (iii)
such shares are sold or transferred pursuant to Rule 144, Rule 144A, Regulation S, or other applicable exemption, or (iv) such shares
are transferred to an “affiliate” (as defined in Rule 144) of the Borrower who agrees to sell or otherwise transfer the shares
only in accordance with this Section 1.5 and who is an Accredited Investor (as defined in the Purchase Agreement). Subject to the removal
provisions set forth below, until such time as the Conversion Shares have been registered under the 1933 Act or otherwise may be sold
pursuant to Rule 144, Rule 144A, Regulation S, or other applicable exemption without any restriction as to the number of securities as
of a particular date that can then be immediately sold, each certificate for the Conversion Shares that has not been so included in an
effective registration statement or that has not been sold pursuant to an effective registration statement or an exemption that permits
removal of the legend, shall bear a legend substantially in the following form, as appropriate:
“NEITHER THE ISSUANCE
AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR (B) AN OPINION OF COUNSEL (WHICH MAY BE THE LEGAL COUNSEL OPINION (AS DEFINED IN THE PURCHASE AGREEMENT)), IN A GENERALLY ACCEPTABLE
FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144, RULE 144A, REGULATION S UNDER SAID ACT,
OR OTHER APPLICABLE EXEMPTION. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”
The legend
set forth above shall be removed and the Company shall issue to the Holder a certificate for the applicable Conversion Shares without
such legend upon which it is stamped or (as requested by the Holder) issue the applicable Conversion Shares by electronic delivery by
crediting the account of such holder’s broker with DTC, if, unless otherwise required by applicable state securities laws: (a) such
Conversion Shares are registered for sale under an effective registration statement filed under the 1933 Act or otherwise may be sold
pursuant to Rule 144, Rule 144A, Regulation S, or other applicable exemption without any restriction as to the number of securities as
of a particular date that can then be immediately sold, or (b) the Company or the Holder provides the Legal Counsel Opinion (as contemplated
by and in accordance with Section 4(m) of the Purchase Agreement) to the effect that a public sale or transfer of such Conversion Shares
may be made without registration under the 1933 Act, which opinion shall be accepted by the Company so that the sale or transfer is effected.
The Company shall be responsible for the fees of its transfer agent and all DTC fees associated with any such issuance. The Holder agrees
to sell all Conversion Shares, including those represented by a certificate(s) from which the legend has been removed, in compliance with
applicable prospectus delivery requirements, if any. In the event that the Company does not accept the opinion of counsel provided by
the Holder with respect to the transfer of Conversion Shares pursuant to an exemption from registration, such as Rule 144, Rule 144A,
Regulation S, or other applicable exemption, at the Deadline, notwithstanding that the conditions of Rule 144, Rule 144A, Regulation S,
or other applicable exemption, as applicable, have been met, it will be considered an Event of Default under this Note.
1.6 Effect of Certain Events.
(a)
[Reserved]
(b)
Adjustment Due to Merger, Consolidation, Etc. If, at any time when this Note is issued and outstanding and prior to conversion
of all of this Note, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other similar
event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different number of shares of another
class or classes of stock or securities of the Borrower or another entity, or in case of any sale or conveyance of all or substantially
all of the assets of the Borrower other than in connection with a plan of complete liquidation of the Borrower, then the Holder of this
Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the terms and conditions specified
herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion, such stock, securities or assets which
the Holder would have been entitled to receive in such transaction had this Note been converted in full immediately prior to such transaction
(without regard to any limitations on conversion set forth herein), and in any such case appropriate provisions shall be made with respect
to the rights and interests of the Holder of this Note to the end that the provisions hereof (including, without limitation, provisions
for adjustment of the Conversion Price and of the number of shares issuable upon conversion of the Note) shall thereafter be applicable,
as nearly as may be practicable in relation to any securities or assets thereafter deliverable upon the conversion hereof. The Borrower
shall not effectuate any transaction described in this Section 1.6(b) unless (a) it first gives, to the extent practicable, at least thirty
(30) days prior written notice (but in any event at least fifteen (15) days prior written notice) of the record date of the special meeting
of shareholders to approve, or if there is no such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization,
reorganization or other similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b)
the resulting successor or acquiring entity (if not the Borrower) assumes by written instrument the obligations of this Section 1.6(b).
The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.
(c)
Adjustment Due to Distribution. If the Borrower shall declare or make any distribution of its assets (or rights to acquire
its assets) to holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend
or distribution to the Borrower’s shareholders in cash or shares (or rights to acquire shares) of capital stock of a subsidiary
(i.e., a spin-off)) (a “Distribution”), then the Holder of this Note shall be entitled, upon any conversion of this Note after
the date of record for determining shareholders entitled to such Distribution, to receive the amount of such assets which would have been
payable to the Holder with respect to the shares of Common Stock issuable upon such conversion had such Holder been the holder of such
shares of Common Stock on the record date for the determination of shareholders entitled to such Distribution.
(d)
Purchase Rights. If, at any time when all or any portion of this Note is issued and outstanding, the Borrower issues any
convertible securities or rights to purchase stock, warrants, securities or other property (the “Purchase Rights”) pro rata
to the record holders of any class of Common Stock, then the Holder of this Note 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 this Note (without regard to any limitations on conversion contained herein) immediately
before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights or, if no such record is taken, the
date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.
(e)
Dilutive Issuance. If the Borrower, at any time while this Note or any amounts due hereunder are outstanding, issues, sells
or grants (or has issued, sold or granted as of the Issue Date, as the case may be) (other than an Excluded Issuance (as defined in the
Purchase Agreement)) any option to purchase, or sells or grants any right to reprice, or otherwise disposes of, or issues (or has sold
or issued, as the case may be, or announces any sale, grant or any option to purchase or other disposition), any Common Stock or other
securities convertible into, exercisable for, or otherwise entitle any person or entity the right to acquire, shares of Common Stock (including,
without limitation, upon conversion of this Note, and any convertible notes or warrants outstanding as of or following the Issue Date),
in each or any case at an effective price per share that is lower than the then Conversion Price (such lower price, the “Base Conversion
Price” and such issuances, collectively, a “Dilutive Issuance”) (it being agreed that if the holder of the Common Stock
or other securities so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion,
exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance,
be entitled to receive shares of Common Stock at an effective price per share that is lower than the Conversion Price, such issuance shall
be deemed to have occurred for less than the Conversion Price on such date of the Dilutive Issuance), then the Conversion Price shall
be reduced, at the option of the Holder, to a price equal to the Base Conversion Price. Such adjustment shall be made whenever such Common
Stock or other securities are issued. By way of example, and for the avoidance of doubt, if the Company issues a convertible promissory
note (including but not limited to a Variable Rate Transaction (as defined in the Purchase Agreement)), and the holder of such convertible
promissory note has the right to convert it into Common Stock at an effective price per share that is lower than the then Conversion Price
(including but not limited to a conversion price with a discount that varies with the trading prices of or quotations for the Common Stock),
then the Holder has the right to reduce the Conversion Price to such Base Conversion Price (including but not limited to a conversion
price with a discount that varies with the trading prices of or quotations for the Common Stock) in perpetuity regardless of whether the
holder of such convertible promissory note ever effectuated a conversion at the Base Conversion Price. In the event of an issuance of
securities involving multiple tranches or closings, any adjustment pursuant to this Section 1.6(e) shall be calculated as if all such
securities were issued at the initial closing.
(f)
Notice of Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the
events described in Section 1.6 of this Note (other than an Excluded Issuance), the Borrower shall, at its expense and within two (2)
business days after the occurrence of each respective adjustment or readjustment of the Conversion Price, compute such adjustment or readjustment
and prepare and furnish to the Holder a certificate setting forth (i) the Conversion Price in effect at such time based upon the Dilutive
Issuance, (ii) the number of shares of Common Stock and the amount, if any, of other securities or property which at the time would be
received upon conversion of the Note, (iii) the detailed facts upon which such adjustment or readjustment is based, and (iv) copies of
the documentation (including but not limited to relevant transaction documents) that evidences the adjustment or readjustment. In addition,
the Borrower shall, within two (2) business days after each written request from the Holder, furnish to such Holder a like certificate
setting forth (i) the Conversion Price in effect at such time based upon the Dilutive Issuance, (ii) the number of shares of Common Stock
and the amount, if any, of other securities or property which at the time would be received upon conversion of the Note, (iii) the detailed
facts upon which such adjustment or readjustment is based, and (iv) copies of the documentation (including but not limited to relevant
transaction documents) that evidences the adjustment or readjustment. For the avoidance of doubt, each adjustment or readjustment of the
Conversion Price as a result of the events described in Section 1.6 of this Note shall occur without any action by the Holder and regardless
of whether the Borrower complied with the notification provisions in Section 1.6 of this Note.
1.7 [Intentionally
Omitted].
1.8 Status as Shareholder. Upon submission of a Notice of Conversion by the Holder, (i) the Conversion Shares covered thereby
(other than the Conversion Shares, if any, which cannot be issued because their issuance would exceed such Holder’s allocated portion
of the Reserved Amount, the Beneficial Ownership Limitation, or the Exchange Cap) shall be deemed converted into shares of Common Stock
and (ii) the Holder’s rights as the Holder of such converted portion of this Note shall cease and terminate, excepting only the
right to receive certificates for such shares of Common Stock and to any remedies provided herein or otherwise available at law or in
equity to such Holder because of a failure by the Borrower to comply with the terms of this Note. Notwithstanding the foregoing, if the
Holder has not received certificates for all shares of Common Stock prior to the tenth (10th) business day after the expiration of the
Deadline with respect to a conversion of any portion of this Note for any reason, then (unless the Holder otherwise elects to retain its
status as a holder of Common Stock by so notifying the Borrower) the Holder shall regain the rights of a Holder of this Note with respect
to such unconverted portions of this Note and the Borrower shall, as soon as practicable, return such unconverted Note to the Holder or,
if the Note has not been surrendered, adjust its records to reflect that such portion of this Note has not been converted. In all cases,
the Holder shall retain all of its rights and remedies for the Borrower’s failure to convert this Note.
1.9
Prepayment. At any time prior to the date that an Event of Default occurs under this Note, the Borrower shall have the right,
exercisable on fifteen (15) Trading Days prior written notice to the Holder of the Note, to prepay the outstanding Principal Amount
and interest then due under this Note in accordance with this Section 1.9. Any notice of prepayment hereunder (an “Optional
Prepayment Notice”) shall be delivered to the Holder of the Note at its registered addresses and shall state: (1) that the
Borrower is exercising its right to prepay the Note, and (2) the date of prepayment which shall be fifteen (15) Trading Days from
the date of the Optional Prepayment Notice (the “Optional Prepayment Date”). The Holder shall have the right, during the
period beginning on the date of Holder’s receipt of the Optional Prepayment Notice and until the Holder’s actual receipt
of the full prepayment amount on the Optional Prepayment Date, to instead convert all or any portion of the Note pursuant to the
terms of this Note, including the amount of this Note to be prepaid by the Borrower in accordance with this Section 1.9. On the
Optional Prepayment Date, the Borrower shall make payment of the amounts designated below to or upon the order of the Holder as
specified by the Holder in writing to the Borrower. If the Borrower exercises its right to prepay the Note in accordance with this
Section 1.9, the Borrower shall make payment to the Holder of an amount in cash equal to the sum of: (w) 110% multiplied by the
Principal Amount then outstanding plus (x) 110% multiplied by the accrued and unpaid interest on the Principal Amount to the
Optional Prepayment Date.
If the Borrower delivers an
Optional Prepayment Notice and fails to pay the applicable prepayment amount due to the Holder of the Note as provided in this Section
1.9, then the Borrower shall forever forfeit its right to prepay any part of the Note pursuant to this Section 1.9.
1.10
Repayment from Proceeds. If, at any time prior to the full repayment or full conversion of all amounts owed under this Note,
the Company or any of the Company’s Subsidiaries receives cash proceeds from any source or series of related or unrelated sources
on or after the Issue Date, including but not limited to, from payments from customers, the issuance of equity or debt, the incurrence
of Indebtedness (as defined in this Note), a merchant cash advance, sale of receivables or similar transaction, the exercise of outstanding
warrants of the Company or any of the Company’s Subsidiaries, the issuance of securities pursuant to an Equity Line of Credit (as
defined in this Note) of the Company or the Company’s offering of securities under Regulation A, or the sale of assets (including
but not limited to real property) by the Company or any of the Company’s Subsidiaries, the Company shall, within one (1) business
day of Company’s or the Subsidiaries’ receipt of such proceeds, inform the Holder of or publicly disclose such receipt, following
which the Holder shall have the right in its sole discretion to require the Company or the Subsidiaries to immediately apply up to 100%
of such proceeds to repay all or any portion of the outstanding Principal Amount and interest (including any Default Interest) then due
under this Note. Failure of the Company to comply with this provision shall constitute an Event of Default. “Equity Line of Credit”
shall mean any transaction involving a written agreement between the Company and an investor or underwriter whereby the Company has the
right to “put” its Common Stock to the investor or underwriter over an agreed period of time and at an agreed price or price
formula (such Common Stock must be registered pursuant to a registration statement of the Company for the investor’s or underwriter’s
resale). For the avoidance of doubt, the 110% repayment premium as further provided for in Section 1.9 of this Note shall apply to any
repayment of the Note under this Section 1.10 prior to the occurrence of an Event of Default.
ARTICLE II. RANKING AND
CERTAIN COVENANTS
2.1
Ranking and Security. This Note shall be a senior secured obligation of the Borrower, with priority over all existing and
future indebtedness of the Borrower, as provided in that certain security agreement entered into between the Borrower and the Holder on
the Issue Date (the “Security Agreement”), provided, however, that the security interests held by the Holder pursuant to the
Security Agreement shall be junior in priority to the Prior Secured Note (as defined in this Note). “Prior Secured Note” shall
mean that certain Promissory Note in the original principal amount of $2,000,000 issued by the Company to Commerce Bank of Arizona (the
“Senior Lender”) on or around December 23, 2023 pursuant to that certain Business Loan Agreement, dated as of December 11,
2023, between the Company and the Senior Lender.
2.2
Other Indebtedness. In addition to all obligations under the Security Agreement, and so long as the Borrower shall have
any obligation under this Note, neither the Borrower nor any of the Borrower’s subsidiaries shall (directly or indirectly) incur
or suffer to exist or guarantee any Indebtedness that is senior to or pari passu with (in priority of payment and performance) the Borrower’s
obligations hereunder (except as provided in Section 2.1 of this Note). “Indebtedness” shall mean all indebtedness, including
but not limited to (a) all indebtedness of the Borrower or Subsidiaries for the deferred purchase price of property or services, including
any type of letters of credit, (b) all liabilities, obligations and indebtedness for borrowed money including, but not limited to, all
obligations of the Borrower or Subsidiaries evidenced by notes, bonds, debentures or other similar instruments, (c) purchase money indebtedness
hereafter incurred by the Borrower or Subsidiaries to finance the purchase of fixed or capital assets, including all capital lease obligations
of the Borrower which do not exceed the purchase price of the assets funded, (d) all guaranties, endorsements and other contingent obligations
in respect of indebtedness of Borrower, Subsidiaries or others, whether or not the same are or should be reflected in the Borrower’s
or Subsidiaries’ consolidated balance sheet (or the notes thereto), (e) all guarantee obligations of the Borrower or Subsidiaries
in respect of obligations of the kind referred to in clauses (a) through (d) above that the Borrower or Subsidiaries would not be permitted
to incur or enter into, and (f) all obligations of the kind referred to in clauses (a) through (e) above that the Borrower or Subsidiaries
is not permitted to incur or enter into that are secured and/or unsecured by (or for which the holder of such obligation has an existing
right, contingent or otherwise, to be secured and/or unsecured by) any lien or encumbrance on property (including accounts and contract
rights) owned by the Borrower or Subsidiaries, whether or not the Borrower or Subsidiaries has assumed or become liable for the payment
of such obligation.
2.3
Distributions on Capital Stock. So long as the Borrower shall have any obligation under this Note, the Borrower shall not
without the Holder’s written consent (a) pay, declare or set apart for such payment, any dividend or other distribution (whether
in cash, property or other securities) on shares of capital stock other than dividends on shares of Common Stock or the Company’s
preferred stock, par value $0.0001 per share, solely in the form of shares of Common Stock or (b) directly or indirectly or through any
subsidiary make any other payment or distribution in respect of its capital stock except for distributions pursuant to any shareholders’
rights plan which is approved by a majority of the Borrower’s disinterested directors.
2.4
Restriction on Stock Repurchases and Debt Repayments. So long as the Borrower shall have any obligation under this Note,
the Borrower shall not without the Holder’s written consent redeem, repurchase or otherwise acquire (whether for cash or in exchange
for property or other securities or otherwise) in any one transaction or series of related transactions any shares of capital stock of
the Borrower or any warrants, rights or options to purchase or acquire any such shares, or repay any indebtedness of Borrower other than
this Note and the Prior Secured Note.
2.5
Sale of Assets. So long as the Borrower shall have any obligation under this Note, neither the Borrower nor any of the Borrower’s
Subsidiaries shall, without the Holder’s written consent, sell, lease or otherwise dispose of any significant portion of its assets
outside the ordinary course of business except with respect to that certain Certificate of Deposit, Account Number 9000070132 (the “Account”),
with the Senior Lender with an approximate balance of $2,100,000.00 together with (A) all interest, whether now accrued or
hereafter accruing; (B) all additional deposits hereafter made to the Account; (C) any and all proceeds from the Account; and (D) all
renewals, replacements and substitutions for any of the foregoing until the full repayment of the Prior Secured Note, which is subject
to that certain Assignment of Deposit Account, dated as of December 13, 2023, between the Company and the Senior Lender. Any consent by
the Holder to the disposition of any assets may be conditioned on a specified use of the proceeds of disposition.
2.6
Advances and Loans; Affiliate Transactions. So long as the Borrower shall have any obligation under this Note, the Borrower
shall not, without the Holder’s written consent, lend money, give credit, make advances to or enter into any transaction with any
person, firm, joint venture or corporation, including, without limitation, officers, directors, employees, subsidiaries and affiliates
of the Borrower, except loans, credits or advances (a) in existence or committed on the Issue Date and which the Borrower has informed
Holder in writing prior to the Issue Date, (b) in regard to transactions with unaffiliated third parties, made in the ordinary course
of business or (c) in regard to transactions with unaffiliated third parties, not in excess of $100,000. So long as the Borrower shall
have any obligation under this Note, the Borrower shall not, without the Holder’s written consent, repay any affiliate (as defined
in Rule 144) of the Borrower in connection with any indebtedness or accrued amounts owed to any such party.
2.7
[Intentionally Omitted].
2.8
Preservation of Business and Existence, etc. So long as the Borrower shall have any obligation under this Note, the Borrower
shall not, without the Holder’s written consent, which consent shall not be unreasonably withheld, (a) change the nature of its
business; (b) sell, divest, change the structure of any material assets other than in the ordinary course of business; (c) enter into
a Variable Rate Transaction; or (d) enter into any Prohibited Transaction (as defined in this Note). “Prohibited Transaction”
shall mean any merchant cash advance transaction, sale of receivables transaction, or any other similar transaction. In addition, so long
as the Borrower shall have any obligation under this Note, the Borrower shall maintain and preserve, and cause each of its Subsidiaries
to maintain and preserve, its existence, rights and privileges, and become or remain, and cause each of its Subsidiaries (other than dormant
Subsidiaries that have no or minimum assets) to become or remain, duly qualified and in good standing in each jurisdiction in which the
character of the properties owned or leased by it or in which the transaction of its business makes such qualification necessary.
2.9
Noncircumvention. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of
Incorporation 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 Note, and will at all times in good faith carry out all the provisions of this Note and take all action as may be required to protect
the rights of the Holder.
2.10
Lost, Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of any indemnification undertaking by the
Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company shall
execute and deliver to the Holder a new Note.
ARTICLE III. EVENTS OF
DEFAULT
It shall be
considered an event of default if any of the following events listed in this Article III (each, an “Event of Default”) shall
occur at any time on or after the Issue Date when any portion of this Note remains issued and outstanding:
3.1
Failure to Pay Principal or Interest. The Borrower fails to pay the Principal Amount hereof or interest thereon when due
on this Note, whether at maturity, upon acceleration or otherwise, or fails to fully comply with Section 1.10 of this Note, except in
the case of a failure to make an Amortization Payment.
3.2
Conversion and the Shares. The Borrower (i) fails to issue Conversion Shares to the Holder (or announces or threatens in
writing that it will not honor its obligation to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance
with the terms of this Note, (ii) fails to transfer or cause its transfer agent to transfer (issue) (electronically or in certificated
form) any certificate for the Conversion Shares issuable to the Holder upon conversion of or otherwise pursuant to this Note as and when
required by this Note, (iii) fails to reserve the Reserved Amount at all times, (iv) the Borrower directs its transfer agent not to transfer
or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically or in certificated form) any certificate
for the Conversion Shares issuable to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note,
or fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders its transfer agent from removing) any
restrictive legend (or to withdraw any stop transfer instructions in respect thereof) on any certificate for any Conversion Shares issued
to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note (or makes any written announcement,
statement or threat that it does not intend to honor the obligations described in this paragraph) and any such failure shall continue
uncured (or any written announcement, statement or threat not to honor its obligations shall not be rescinded in writing) for two (2)
Trading Days after the Holder shall have delivered a Notice of Conversion, and/or (v) fails to remain current in its obligations to its
transfer agent (including but not limited to payment obligations to its transfer agent). It shall be an Event of Default of this Note,
if a conversion of this Note is delayed, hindered or frustrated due to a balance owed by the Borrower to its transfer agent. If at the
option of the Holder, the Holder advances any funds to the Borrower’s transfer agent in order to process a conversion, such advanced
funds shall be added to the principal balance of the Note.
3.3
Breach of Agreements and Covenants. The Borrower breaches any covenant, agreement, or other term or condition contained
in the Purchase Agreement, Registration Rights Agreement (as defined in the Purchase Agreement), the Security Agreement, this Note, the
Irrevocable Transfer Agent Instructions, the Warrants (as defined in the Purchase Agreement), or in any agreement, statement or certificate
given in writing pursuant hereto or in connection herewith or therewith.
3.4
Breach of Representations and Warranties. Any representation or warranty of the Borrower made in the Purchase Agreement,
the Registration Rights Agreement, the Security Agreement, this Note, the Irrevocable Transfer Agent Instructions, the Warrants, or in
any agreement, statement or certificate given in writing pursuant hereto or in connection herewith or therewith shall be false or misleading
in any material respect when made.
3.5
Receiver or Trustee. The Borrower or any subsidiary of the Borrower shall make an assignment for the benefit of creditors,
or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such
a receiver or trustee shall otherwise be appointed.
3.6
Judgments. Any money judgment, writ or similar process shall be entered or filed against the Borrower or any subsidiary
of the Borrower or any of its property or other assets for more than $500,000, and shall remain unvacated, unbonded or unstayed for a
period of twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.
3.7
Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings, voluntary or involuntary,
for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary
of the Borrower.
3.8
Failure to Comply with the 1934 Act. At any time after the Issue Date, the Borrower shall fail to comply with the reporting
requirements of the 1934 Act and/or the Borrower shall cease to be subject to the reporting requirements of the 1934 Act.
3.9
Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial portion of its business.
3.10
Cessation of Operations. Any cessation of operations by Borrower or Borrower admits it is otherwise generally unable to
pay its debts as such debts become due, provided, however, that any disclosure of the Borrower’s ability to continue as a “going
concern” shall not be an admission that the Borrower cannot pay its debts as they become due.
3.11
Maintenance of Assets. The failure by Borrower to maintain any material intellectual property rights, personal, real property
or other assets which are necessary to conduct its business (whether now or in the future).
3.12
Financial Statement Restatement. The restatement of any financial statements filed by the Borrower with the SEC for any
date or period ending on or after the date that the Common Stock was registered under Section 12(b) of the 1934 Act.
3.13
Replacement of Transfer Agent. In the event that the Borrower proposes to replace its transfer agent, the Borrower fails
to provide, prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially
delivered pursuant to the Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock
in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.
3.14
Cross-Default. The declaration of an event of default by any lender or other extender of credit to the Company under any
notes, loans, agreements or other instruments of the Company evidencing any Indebtedness of the Company (including those filed as exhibits
to or described in the Company’s filings with the SEC), after the passage of all applicable notice and cure or grace periods.
3.15
[Intentionally omitted].
3.16
Inside Information. Any attempt by the Borrower or its officers, directors, and/or affiliates to transmit, convey, disclose,
or any actual transmittal, conveyance, or disclosure by the Borrower or its officers, directors, and/or affiliates of, material non-public
information concerning the Borrower, to the Holder or its successors and assigns, which is not immediately cured by Borrower’s filing
of a Form 8-K pursuant to Regulation FD on that same date.
3.17
Unavailability of Rule 144. If, at any time on or after the date that is six (6) calendar months after the Issue Date, the
Holder is unable to (i) obtain a standard “144 legal opinion letter” from an attorney reasonably acceptable to the Holder,
the Holder’s brokerage firm (and respective clearing firm), and the Borrower’s transfer agent in order to facilitate the Holder’s
conversion of any portion of the Note into free trading shares of the Borrower’s Common Stock pursuant to Rule 144, and/or (ii)
thereupon deposit such shares into the Holder’s brokerage account, provided that the Note and any securities issuable upon conversion
of which are at no time held by any affiliate of the Company.
3.18
Delisting, Suspension, or Quotation of Trading of Common Stock. If, at any time on or after the Issue Date, the Borrower’s
Common Stock (i) is suspended from trading, (ii) halted from trading, and/or (iii) fails to be listed on the NYSE American LLC.
3.19
Rights and Remedies Upon an Event of Default. Upon the occurrence of any Event of Default specified in this Article III,
this Note shall become immediately due and payable, and the Borrower shall pay to the Holder, in full satisfaction of its obligations
hereunder, an amount equal to the Principal Amount then outstanding plus accrued interest (including any Default Interest) through the
date of full repayment multiplied by 125% (collectively the “Default Amount”), as well as all costs, including, without limitation,
legal fees and expenses, of collection, all without demand, presentment or notice, all of which hereby are expressly waived by the Borrower.
In addition, the principal balance of the Note shall increase by $3,000.00 on the 1st of each calendar month after the date
of the occurrence of an Event of Default until the Note is repaid in the entirety. Holder may, in Holder’s sole discretion, convert
all or any portion of this Note (including the Default Amount) into Common Stock pursuant to the terms of this Note (for the avoidance
of doubt, this shall apply even if such conversion occurs after the Maturity Date). The Holder shall be entitled to exercise all other
rights and remedies available at law or in equity.
ARTICLE IV. MISCELLANEOUS
4.1 Failure
or Indulgence Not Waiver. No failure or delay on the part of the 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 privileges. All rights and remedies of the Holder existing hereunder are cumulative to,
and not exclusive of, any rights or remedies otherwise available.
4.2
Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall
be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified,
return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted
by hand delivery, telegram, e-mail or facsimile, addressed as set forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective
(a) upon hand delivery or delivery by e-mail or facsimile, with accurate confirmation generated by the transmitting facsimile machine,
at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received),
or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice
is to be received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid, addressed
to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such communications shall be:
If to the Borrower, to:
SIGNING DAY SPORTS, INC.
8355 East Hartford Dr., Suite 100
Scottsdale, AZ 85255
Attention: Daniel Nelson
e-mail: danny.nelson@signingdaysports.com
If to the Holder:
FIRSTFIRE GLOBAL OPPORTUNITIES FUND,
LLC
1040 First Avenue, Suite 190
New York, NY 10022
e-mail: eli@firstfirecapital.com
4.3
Amendments. This Note and any provision hereof may only be amended by an instrument in writing signed by the Borrower and
the Holder. The term “Note” and all reference thereto, as used throughout this instrument, shall mean this instrument as originally
executed, or if later amended or supplemented, then as so amended or supplemented.
4.4
Assignability. This Note shall be binding upon the Borrower and its successors and assigns, and shall inure to be the benefit
of the Holder and its successors and assigns. The Borrower shall not assign this Note or any rights or obligations hereunder without the
prior written consent of the Holder. The Holder may assign its rights hereunder to any “accredited investor” (as defined in
Rule 501(a) of the 1933 Act) in a private transaction from the Holder or to any of its “affiliates”, as that term is defined
under the 1934 Act, without the consent of the Borrower. Notwithstanding anything in this Note to the contrary, this Note may be pledged
as collateral in connection with a bona fide margin account or other lending arrangement. The Holder and any assignee, by acceptance of
this Note, acknowledge and agree that following conversion of a portion of this Note, the unpaid and unconverted principal amount of this
Note represented by this Note may be less than the amount stated on the face hereof.
4.5
Cost of Collection. If default is made in the payment of this Note, the Borrower shall pay the Holder hereof costs of collection,
including reasonable attorneys’ fees.
4.6
Arbitration of Claims; Governing Law; Venue; Attorney’s Fees. The Company and Holder shall submit all Claims (as defined
in Exhibit E of the Purchase Agreement) (the “Claims”) arising under this Note or any other agreement between the parties
and their affiliates or any Claim relating to the relationship of the parties to binding arbitration pursuant to the arbitration provisions
set forth in Exhibit E of the Purchase Agreement (the “Arbitration Provisions”). The Company and Holder hereby acknowledge
and agree that the Arbitration Provisions are unconditionally binding on the Company and Holder hereto and are severable from all other
provisions of this Note. By executing this Note, Company represents, warrants and covenants that Company has reviewed the Arbitration
Provisions carefully, consulted with legal counsel about such provisions (or waived its right to do so), understands that the Arbitration
Provisions are intended to allow for the expeditious and efficient resolution of any dispute hereunder, agrees to the terms and limitations
set forth in the Arbitration Provisions, and that Company will not take a position contrary to the foregoing representations. The Company
acknowledges and agrees that Holder may rely upon the foregoing representations and covenants of the Company regarding the Arbitration
Provisions. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation
and performance of this Note shall be governed by, the internal laws of the State of Delaware, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of Delaware. The Company and Holder consent to and expressly agree that the exclusive
venue for arbitration of any Claims arising under this Note or any other agreement between the Company and Holder or their respective
affiliates (including but not limited to the Transaction Documents) or any Claim relating to the relationship of the Company and Holder
or their respective affiliates shall be in the State of Delaware. Without modifying the Company’s and Holder’s obligations
to resolve disputes hereunder pursuant to the Arbitration Provisions, for any litigation arising in connection with any of the Transaction
Documents (and notwithstanding the terms (specifically including any governing law and venue terms) of any transfer agent services agreement
or other agreement between the Company’s transfer agent and the Company, such litigation specifically includes, without limitation
any action between or involving Company and the Company’s transfer agent under the Irrevocable Transfer Agent Instructions (as defined
in the Purchase Agreement) or otherwise related to Holder in any way (specifically including, without limitation, any action where Company
seeks to obtain an injunction, temporary restraining order, or otherwise prohibit the Company’s transfer agent from issuing shares
of Common Stock to Holder for any reason)), each party hereto hereby (i) consents to and expressly submits to the exclusive personal jurisdiction
of any state or federal court sitting in the State of Delaware, (ii) expressly submits to the exclusive venue of any such court for the
purposes hereof, (iii) agrees to not bring any such action (specifically including, without limitation, any action where Company seeks
to obtain an injunction, temporary restraining order, or otherwise prohibit the Company’s transfer agent from issuing shares of
Common Stock to Holder for any reason) outside of any state or federal court sitting in the State of Delaware, and (iv) waives any claim
of improper venue and any claim or objection that such courts are an inconvenient forum or any other claim, defense or objection to the
bringing of any such proceeding in such jurisdiction or to any claim that such venue of the suit, action or proceeding is improper. Notwithstanding
anything in the foregoing to the contrary, nothing herein (i) shall limit, or shall be deemed or construed to limit, the ability of the
Holder to realize on any collateral or any other security, or to enforce a judgment or other court ruling in favor of the Holder, including
through a legal action in any court of competent jurisdiction, or (ii) shall limit, or shall be deemed or construed to limit, any provision
of Section 4.15 of this Note. The Company hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any objection
to jurisdiction and venue of any action instituted hereunder, any claim that it is not personally subject to the jurisdiction of any such
court, and any claim that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper (including but not limited to based upon forum non conveniens). THE COMPANY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR
ARISING OUT OF THIS NOTE OR ANY TRANSACTIONS CONTEMPLATED HEREBY. The Company irrevocably waives personal service of process and consents
to process being served in any suit, action or proceeding in connection with this Note or any other agreement, certificate, instrument
or document contemplated hereby or thereby by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence
of delivery) to Company at the address in effect for notices to it under this Note 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. The prevailing party in any action or dispute brought in connection with this Note or any
other agreement, certificate, instrument or document contemplated hereby or thereby shall be entitled to recover from the other party
its reasonable attorney’s fees and costs. If any provision of this Note shall be invalid or unenforceable in any jurisdiction, such
invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Note in that jurisdiction or the
validity or enforceability of any provision of this Note in any other jurisdiction.
4.7 Certain
Amounts. Whenever pursuant to this Note the Borrower is required to pay an amount in excess of the outstanding Principal Amount (or
the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest on such interest, the Borrower
and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this Note may be difficult to determine
and the amount to be so paid by the Borrower represents stipulated damages and not a penalty and is intended to compensate the Holder
in part for loss of the opportunity to convert this Note and to earn a return from the sale of shares of Common Stock acquired upon conversion
of this Note at a price in excess of the price paid for such shares pursuant to this Note. The Borrower and the Holder hereby agree that
such amount of stipulated damages is not plainly disproportionate to the possible loss to the Holder from the receipt of a cash payment
without the opportunity to convert this Note into shares of Common Stock.
4.8 Purchase
Agreement. The Company and the Holder shall be bound by the applicable terms of the Purchase Agreement, the Security Agreement, and
the Transaction Documents entered into in connection herewith and therewith.
4.9
Notice of Corporate Events. Except as otherwise provided below, the Holder of this Note shall have no rights as a Holder
of Common Stock unless and only to the extent that it converts this Note into Common Stock. The Borrower shall provide the Holder with
prior notification of any meeting of the Borrower’s shareholders (and copies of proxy materials and other information sent to shareholders).
In the event of any taking by the Borrower of a record of its shareholders for the purpose of determining shareholders who are entitled
to receive payment of any dividend or other distribution, any right to subscribe for, purchase or otherwise acquire (including by way
of merger, consolidation, reclassification or recapitalization) any share of any class or any other securities or property, or to receive
any other right, or for the purpose of determining shareholders who are entitled to vote in connection with any change in control or any
proposed liquidation, dissolution or winding up of the Borrower, the Borrower shall give a notice to the Holder, at least twenty (20)
days prior to the record date specified therein (or thirty (30) days prior to the consummation of the transaction or event, whichever
is earlier), of the date on which any such record is to be taken for the purpose of such dividend, distribution, right or other event,
and a brief statement regarding the amount and character of such dividend, distribution, right or other event to the extent known at such
time. The Borrower shall make a public announcement of any event requiring notification to the Holder hereunder substantially simultaneously
with the notification to the Holder in accordance with the terms of this Section 4.9.
4.10
Remedies. The Borrower acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the
Holder, by vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy
at law for a breach of its obligations under this Note will be inadequate and agrees, in the event of a breach or threatened breach by
the Borrower of the provisions of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or
in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach
of this Note and to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without
any bond or other security being required.
4.11
Construction; Headings. This Note shall be deemed to be jointly drafted by the Company and all the Holder and shall not
be construed against any person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part
of, or affect the interpretation of, this Note.
4.12
Usury. To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever
claim, and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at
any time hereafter in force, in connection with any action or proceeding that may be brought by the Holder in order to enforce any right
or remedy under this Note. Notwithstanding any provision to the contrary contained in this Note, it is expressly agreed and provided that
the total liability of the Company under this Note for payments which under the applicable law are in the nature of interest shall not
exceed the maximum lawful rate authorized under applicable law (the “Maximum Rate”), and, without limiting the foregoing,
in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums which under the applicable
law in the nature of interest that the Company may be obligated to pay under this Note exceed such Maximum Rate. It is agreed that if
the maximum contract rate of interest allowed by applicable law and applicable to this Note is increased or decreased by statute or any
official governmental action subsequent to the Issue Date, the new maximum contract rate of interest allowed by law will be the Maximum
Rate applicable to this Note from the effective date thereof forward, unless such application is precluded by applicable law. If under
any circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to the Holder with respect to indebtedness
evidenced by this Note, such excess shall be applied by the Holder to the unpaid principal balance of any such indebtedness or be refunded
to the Company, the manner of handling such excess to be at the Holder’s election.
4.13
Severability. In the event that any provision of this Note is invalid or unenforceable under any applicable statute or rule
of law (including any judicial ruling), then such provision shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable under
any law shall not affect the validity or enforceability of any other provision of this Note.
4.14
Terms of Future Financings. So long as this Note is outstanding, upon any issuance by the Borrower or any of its Subsidiaries
of any debt security, or amendment to a debt security that was originally issued before the Issue Date, with any term that the Holder
reasonably believes is more favorable to the holder of such debt security or with a term in favor of the holder of such debt security
that the Holder reasonably believes was not similarly provided to the Holder in this Note (even if the holder of such other debt security
does not receive the benefit of such more favorable term until a default occurs under such other debt security), then (i) the Borrower
shall notify the Holder of such additional or more favorable term within one (1) business day of the issuance and/or amendment (as applicable)
of the respective debt security, and (ii) such term, at Holder’s option, shall become a part of the transaction documents with the
Holder (regardless of whether the Borrower complied with the notification provision of this Section 4.14). The types of terms contained
in another debt security that may be more favorable to the holder of such security include, but are not limited to, terms addressing prepayment
rate, interest rates, and original issue discounts.
4.15
Dispute Resolution.
(a)
In the case of a dispute relating to the Conversion Price, Conversion Amount, any prepayment amount or Default Amount, Issue Date,
Closing Date, Maturity Date, the closing bid price, or fair market value (as the case may be) (including, without limitation, a dispute
relating to the determination of any of the foregoing) (the “Note Calculations”), the Company or the Holder (as the case may
be) shall submit the dispute to the other party via electronic mail (A) if by the Company, within two (2) Trading Days after the occurrence
of the circumstances giving rise to such dispute or (B) if by the Holder, at any time after the Holder learned of the circumstances giving
rise to such dispute. If the Holder and the Company are unable to agree upon such determination or calculation within two (2) Trading
Days following such initial notice by the Company or the Holder (as the case may be) of such dispute to the Company or the Holder (as
the case may be), then the Holder may, at its sole option, submit the dispute to an independent, reputable investment bank or independent,
outside accountant selected by the Holder (the “Independent Third Party”), and the Company shall pay all expenses of such
Independent Third Party.
(b)
The Holder and the Company shall each deliver to such Independent Third Party (A) a copy of the initial dispute submission so delivered
in accordance with the first sentence of this Section 4.15(a) and (B) written documentation supporting its position with respect to such
dispute, in each case, no later than 5:00 p.m. (New York time) by second (2nd) Business Day immediately following the date on which the
Holder selected such Independent Third Party (the “Dispute Submission Deadline”) (the documents referred to in the immediately
preceding clauses (A) and (B) are collectively referred to herein as the “Required Dispute Documentation”) (it being understood
and agreed that if either the Holder or the Company fails to so deliver all of the Required Dispute Documentation by the Dispute Submission
Deadline, then the party who fails to so submit all of the Required Dispute Documentation shall no longer be entitled to (and hereby waives
its right to) deliver or submit any written documentation or other support to such Independent Third Party with respect to such dispute
and such Independent Third Party shall resolve such dispute based solely on the Required Dispute Documentation that was delivered to such
Independent Third Party prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by both the Company and the Holder
or otherwise requested by such Independent Third Party, neither the Company nor the Holder shall be entitled to deliver or submit any
written documentation or other support to such Independent Third Party in connection with such dispute, other than the Required Dispute
Documentation.
(c)
The Company and the Holder shall cause such Independent Third Party to determine the resolution of such dispute and notify the
Company and the Holder of such resolution no later than five (5) Business Days immediately following the Dispute Submission Deadline.
The fees and expenses of such Independent Third Party shall be borne solely by the Company, and such Independent Third Party’s resolution
of such dispute shall be final and binding upon all parties absent manifest error.
(d)
The Company expressly acknowledges and agrees that (i) this Section 4.15 constitutes an agreement to arbitrate between the Company
and the Holder (and constitutes an arbitration agreement) under the rules then in effect under the Delaware Rules of Civil Procedure (“DRCP”)
and that the Holder is authorized to apply for an order to compel arbitration pursuant to the DRCP in order to compel compliance with
this Section 4.15, (ii) a dispute relating to the Note Calculations includes, without limitation, disputes as to (A) whether an issuance
or sale or deemed issuance or sale of Common Stock occurred under Section 1.6 of this Note, (B) the consideration per share at which an
issuance or deemed issuance of Common Stock occurred, (C) whether any issuance or sale or deemed issuance or sale of Common Stock was
an issuance or sale or deemed issuance or sale, (D) whether an agreement, instrument, security or the like constitutes a Common Stock
Equivalent and (E) whether a Dilutive Issuance occurred, (iii) the terms of this Note and each other applicable Transaction Document shall
serve as the basis for the selected Independent Third Party’s resolution of the applicable dispute, such Independent Third Party
shall be entitled (and is hereby expressly authorized) to make all findings, determinations and the like that such Independent Third Party
determines are required to be made by such Independent Third Party in connection with its resolution of such dispute (including, without
limitation, determining (A) whether an issuance or sale or deemed issuance or sale of Common Stock occurred under Section 1.6 of this
Note, (B) the consideration per share at which an issuance or deemed issuance of Common Stock occurred, (C) whether any issuance or sale
or deemed issuance or sale of Common Stock was an issuance or sale or deemed issuance or sale, (D) whether an agreement, instrument, security
or the like constitutes a Common Stock Equivalent and (E) whether a Dilutive Issuance occurred) and in resolving such dispute such Independent
Third Party shall apply such findings, determinations and the like to the terms of this Note and any other applicable Transaction Documents,
and (iv) nothing in this Section 4.15 shall limit the Holder from obtaining any injunctive relief or other equitable remedies (including,
without limitation, with respect to any matters described in this Section 4.15).
4.16
Amortization Payments. In addition to all other payment obligations under this Note, Borrower shall also make the following
amortization payments (each an “Amortization Payment”) in cash to the Holder towards the repayment of this Note, as provided
in the following table:
Payment Date: |
|
Payment Amount: |
September 16, 2024 |
|
$56,715.00 |
October 16, 2024 |
|
$56,715.00 |
November 16, 2024 |
|
$56,715.00 |
December 16, 2024 |
|
$56,715.00 |
January 16, 2025 |
|
$56,715.00 |
February 16, 2025 |
|
$56,715.00 |
March 16, 2025 |
|
$56,715.00 |
April 16, 2025 |
|
$56,715.00 |
May 16, 2025 |
|
The entire remaining outstanding balance of the Note |
For the avoidance of doubt, the 110%
repayment premium as further provided for in Section 1.9 of this Note shall not apply to any repayment of the Note under this Section
4.16.
[signature
page follows]
IN WITNESS WHEREOF, Borrower
has caused this Note to be signed in its name by its duly authorized officer on May 16, 2024.
SIGNING DAY SPORTS, INC.
By:
| |
|
|
Name: |
Daniel Nelson |
|
|
Title: |
Chief Executive Officer |
|
EXHIBIT A -- NOTICE OF CONVERSION
The
undersigned hereby elects to convert $ ____________________principal amount of the Note (defined below) into that number of shares of Common Stock to be
issued pursuant to the conversion of the Note (“Common Stock”) as set forth below, of SIGNING DAY SPORTS, INC., a
Delaware corporation (the “Borrower”), according to the conditions of the promissory note of the Borrower dated as of May
16, 2024 (the “Note”), as of the date written below. No fee will be charged to the Holder for any conversion, except for
transfer taxes, if any.
Box Checked as to applicable instructions:
|
☐ |
The Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned or its nominee with DTC through its Deposit Withdrawal Agent Commission system (“DWAC Transfer”). |
|
|
|
|
|
Name of DTC Prime Broker: |
|
|
Account Number: |
|
☐ |
The undersigned hereby
requests that the Borrower issue a certificate or certificates for the number of shares of Common Stock set forth below (which
numbers are based on the Holder’s calculation attached hereto) in the name(s) specified immediately below or, if additional
space is necessary, on an attachment hereto: |
|
Date of Conversion: |
|
|
Applicable Conversion Price: |
$ |
|
Number of Shares of Common Stock to be
Issued Pursuant to Conversion of the Note: |
|
|
Amount of Principal Balance Due remaining
Under the Note after this conversion: |
|
Exhibit 4.2
NEITHER THIS SECURITY NOR THE SECURITIES
AS TO WHICH THIS SECURITY MAY BE EXERCISED 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 AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT. THIS SECURITY AND THE
SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED
BY SUCH SECURITIES.
COMMON STOCK
PURCHASE WARRANT
SIGNING DAY SPORTS, INC.
Warrant Shares: 1,375,000
Date of Issuance: May 16, 2024 (“Issuance
Date”)
This COMMON STOCK
PURCHASE WARRANT (the “Warrant”) certifies that, for value received (in connection with the issuance of the senior
secured promissory note in the principal amount of $412,500.00 to the Holder (as defined below) of even date) (the “Note”),
FirstFire Global Opportunities Fund, LLC, a Delaware limited liability company (including any permitted and registered assigns, the “Holder”),
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after
the date of issuance hereof, to purchase from SIGNING DAY SPORTS, INC., a Delaware corporation (the “Company”), 1,375,000
shares of Common Stock (the “Warrant Shares”) (whereby such number may be adjusted from time to time pursuant to the
terms and conditions of this Warrant) at the Exercise Price per share then in effect. This Warrant is issued by the Company as of the
date hereof in connection with that certain securities purchase agreement dated May 16, 2024, by and among the Company and the Holder
(the “Purchase Agreement”).
Capitalized terms
used in this Warrant shall have the meanings set forth in the Purchase Agreement unless otherwise defined in the body of this Warrant
or in Section 16 below. For purposes of this Warrant, the term “Exercise Price” shall mean $0.30, subject to adjustment as
provided herein (including but not limited to cashless exercise), and the term “Exercise Period” shall mean the period commencing
on the Issuance Date and ending on 5:00 p.m. eastern standard time on the five-year anniversary thereof.
1. EXERCISE OF WARRANT.
(a) Mechanics
of Exercise. Subject to the terms and conditions hereof, the rights represented by this Warrant may be exercised in whole or in part
at any time or times during the Exercise Period by delivery of a written notice, in the form attached hereto as Exhibit A (the
“Exercise Notice”), of the Holder’s election to exercise this Warrant. The Holder shall not be required to deliver
the original Warrant in order to effect an exercise hereunder. Partial exercises of this Warrant resulting in purchases of a portion of
the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant Shares purchased. On or before the second Trading Day (the “Warrant
Share Delivery Date”) following the date on which the Holder sent the Exercise Notice to the Company or the Company’s
transfer agent, and upon receipt by the Company of payment to the Company of an amount equal to the applicable Exercise Price multiplied
by the number of Warrant Shares as to which all or a portion of this Warrant is being exercised (the “Aggregate Exercise Price”
and together with the Exercise Notice, the “Exercise Delivery Documents”) in cash or by wire transfer of immediately
available funds (or by cashless exercise, in which case there shall be no Aggregate Exercise Price provided), the Company shall (or direct
its transfer agent to) issue and deliver by overnight courier to the address as specified in the Exercise Notice, a certificate, registered
in the Company’s share register in the name of the Holder or its designee, for the number of shares of Common Stock to which the
Holder is entitled pursuant to such exercise (or deliver such shares of Common Stock in electronic format if requested by the Holder).
Upon delivery of the Exercise Delivery Documents, the Holder shall be deemed for all corporate purposes to have become the holder of record
of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the certificates
evidencing such Warrant Shares. If this Warrant is submitted in connection with any exercise and the number of Warrant Shares represented
by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise, then the Company
shall as soon as practicable and in no event later than three Business Days after any exercise and at its own expense, issue a new Warrant
(in accordance with Section 7) representing the right to purchase the number of Warrant Shares purchasable immediately prior to such exercise
under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised.
If the Company fails
to cause its transfer agent to issue to the Holder the respective shares of Common Stock by the respective Warrant Share Delivery Date,
then the Holder will have the right to rescind such exercise in Holder’s sole discretion in addition to all other rights and remedies
at law, under this Warrant, or otherwise, and such failure shall also be deemed a material breach under this Warrant.
If the Market Price
of one share of Common Stock is greater than the Exercise Price, then, unless there is an effective non-stale registration statement of
the Company which contains a prospectus that complies with Section 5(b) and Section 10 of the Securities Act at the time of exercise and
covers the Holder’s immediate resale of all of the Warrant Shares at prevailing market prices (and not fixed prices) without any
limitation, the Holder may elect to receive Warrant Shares pursuant to a cashless exercise, in lieu of a cash exercise, equal to the value
of this Warrant determined in the manner described below (or of any portion thereof remaining unexercised) by surrender of this Warrant
and an Exercise Notice, in which event the Company shall issue to Holder a number of shares of Common Stock computed using the following
formula:
Where | X = | the number of Shares to be issued to Holder. |
| Y = | the number of Warrant Shares that the Holder elects to purchase under this Warrant (at the date of such calculation). |
| A= | the Market Price (at the date of such calculation). |
| B= | Exercise Price (as adjusted to the date of such calculation). |
(b) No
Fractional Shares. No fractional shares shall be issued upon the exercise of this Warrant as a consequence of any adjustment pursuant
hereto. All Warrant Shares (including fractions) issuable upon exercise of this Warrant may be aggregated for purposes of determining
whether the exercise would result in the issuance of any fractional share. If, after aggregation, the exercise would result in the issuance
of a fractional share, the Company shall, in lieu of issuance of any fractional share, pay the Holder otherwise entitled to such fraction
a sum in cash equal to the product resulting from multiplying the then-current fair market value of a Warrant Share by such fraction or
issue a whole share of Common Stock to the Holder.
(c) Holder’s
Exercise Limitations; Exchange Cap. Notwithstanding anything to the contrary contained herein, the Company shall not effect any exercise
of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 1 or otherwise, to
the extent that after giving effect to such issuance after exercise as set forth on the applicable Exercise Notice, the Holder (together
with the Holder’s Affiliates), and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates
(such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined
below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and Attribution
Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination
is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised
portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion
of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock
Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the
Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 1(c),
beneficial ownership shall be calculated in accordance with Section 13(d) of the 1934 Act and the rules and regulations promulgated thereunder,
it being acknowledged by the Holder that the Holder is solely responsible for any schedules required to be filed in accordance therewith.
In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the
1934 Act and the rules and regulations promulgated thereunder. For purposes of this Section 1(c), in determining the number of outstanding
shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s
most recent periodic or annual report filed with the SEC, as the case may be, (B) a more recent public announcement by the Company or
(C) a more recent written notice by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock
outstanding. Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to
the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall
be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or
its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial
Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding at the time of the respective calculation
hereunder. In addition to the beneficial ownership limitations provided in this Warrant, the sum of the number of shares of Common Stock
that may be issued under this Warrant shall be limited to the amount described in Section 4(r) of the Purchase
Agreement, unless and until the date of effectiveness (the “Ex-Exchange Cap Date”) of the Shareholder Approval (as
defined in the Purchase Agreement), except that shares of Common Stock issuable upon exercise of this Warrant as to which the Exercise
Price is at least equal to the greater of the Company’s stockholders’ equity per share disclosed in the Company’s most
recent public filing with the SEC or the last Closing Bid Price of the Common Stock as of the Warrant Share Delivery Date shall not be
limited hereby. In the event that the Company is prohibited from issuing any shares of Common Stock pursuant to this Warrant due to the
Company’s failure to obtain the Shareholder Approval (such number of shares that are prohibited from being issued are referred to
herein as the “Exchange Cap Shares”), in lieu of issuing and delivering such Exchange Cap Shares to the Holder, the Company
shall pay cash to the Holder in exchange for the cancellation of such portion of this Warrant exercisable into such Exchange Cap Shares
(the “Exchange Cap Payment Amount”) at a price equal to the sum of (x) the product of (A) such number of Exchange Cap Shares
and (B) the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date the Holder delivers
the applicable Exercise Notice with respect to such Exchange Cap Shares to the Company and ending on the date of the aforementioned payment
under this Section 1(c) and (y) to the extent the Holder purchases (in an open market transaction or otherwise) shares of Common Stock
to deliver in satisfaction of a sale by the Holder of Exchange Cap Shares, any brokerage commissions and other out-of-pocket expenses,
if any, of the Holder incurred in connection therewith. The limitations contained in this paragraph shall apply to a successor holder
of this Warrant.
(d) Compensation
for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if
the Company fails to cause the Company’s transfer agent to transmit to the Holder the Warrant Shares in accordance with the provisions
of this Warrant (including but not limited to Section 1(a) above pursuant to an exercise on or before the respective Warrant Share Delivery
Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s
brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which
the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder, within
one (1) Business Day of Holder’s request, the amount, if any, by which (x) the Holder’s total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased exceeds (y) the product of (1) the number of Warrant Shares that the
Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving
rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to
the Holder within one (1) Business Day of Holder’s request the number of shares of Common Stock that would have been issued had
the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases, or effectuates
a cashless exercise hereunder for, Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted
exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of
the immediately preceding sentence, the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written
notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount
of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to
timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.
2. ADJUSTMENTS.
The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as
set forth in this Section 2.
(a) Stock
Dividends and Splits. Without limiting any provision of Section 2(b), Section 3 or Section 4, if the Company, at any time
on or after the Issuance Date, (i) pays a stock dividend on one or more classes of its then outstanding shares of Common Stock or otherwise
makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides (by any stock split, stock
dividend, recapitalization or otherwise) one or more classes of its then outstanding shares of Common Stock into a larger number of shares
or (iii) combines (by combination, reverse stock split or otherwise) one or more classes of its then outstanding shares of Common Stock
into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall
be the number of shares of Common Stock outstanding immediately before such event and of which the denominator shall be the number of
shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become
effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution, and
any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such
subdivision or combination. If any event requiring an adjustment under this paragraph occurs during the period that an Exercise Price
is calculated hereunder, then the calculation of such Exercise Price shall be adjusted appropriately to reflect such event.
(b) Adjustment
Upon Issuance of Shares of Common Stock. If and whenever on or after the Issuance Date, the Company grants, issues or sells (or enters
into any agreement to grant, issue or sell), or in accordance with this Section 2 is deemed to have granted, issued or sold, any
shares of Common Stock (including the issuance or sale of shares of Common Stock owned or held by or for the account of the Company) (other
than in an Excluded Issuance (as defined in the Purchase Agreement)) for a consideration per share (the “New Issuance Price”)
less than a price equal to the Exercise Price in effect immediately prior to such granting, issuance or sale or deemed granting, issuance
or sale (such Exercise Price then in effect is referred to herein as the “Applicable Price”) (the foregoing a “Dilutive
Issuance”), then immediately after such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an amount equal
to the New Issuance Price. For all purposes of the foregoing (including, without limitation, determining the adjusted Exercise Price and
the New Issuance Price under this Section 2(b)), the following shall be applicable:
(i) Issuance
of Options. If the Company in any manner grants, issues or sells (or enters into any agreement to grant, issue or sell) any Options
(other than in an Excluded Issuance) and the lowest price per share for which one share of Common Stock is at any time issuable
upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of
any such Option or otherwise pursuant to the terms thereof is less than the Applicable Price, then such share of Common Stock shall be
deemed to be outstanding and to have been issued and sold by the Company at the time of the granting, issuance or sale (or the time of
execution of such agreement to grant, issue or sell, as applicable) of such Option for such price per share. For purposes of this Section 2(b)(i),
the “lowest price per share for which one share of Common Stock is at any time issuable upon the exercise of any such Options or
upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise pursuant to
the terms thereof” shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable
by the Company with respect to any one share of Common Stock upon the granting, issuance or sale (or pursuant to the agreement to grant,
issue or sell, as applicable) of such Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible
Security issuable upon exercise of such Option or otherwise pursuant to the terms thereof and (y) the lowest exercise price set forth
in such Option for which one share of Common Stock is issuable (or may become issuable assuming all possible market conditions) upon the
exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such
Option or otherwise pursuant to the terms thereof minus (2) the sum of all amounts paid or payable to the holder of such Option (or any
other Person) upon the granting, issuance or sale (or the agreement to grant, issue or sell, as applicable) of such Option, upon exercise
of such Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option or otherwise
pursuant to the terms thereof plus the value of any other consideration received or receivable by, or benefit conferred on, the holder
of such Option (or any other Person). Except as contemplated below, no further adjustment of the Exercise Price shall be made upon the
actual issuance of such shares of Common Stock or of such Convertible Securities upon the exercise of such Options or otherwise pursuant
to the terms of or upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities.
(ii) Issuance
of Convertible Securities. If the Company in any manner issues or sells (or enters into any agreement to issue or sell) any Convertible
Securities (other than in an Excluded Issuance) and the lowest price per share for which one share of Common Stock is at any time issuable
upon the conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof is less than the Applicable Price, then such
share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the issuance or
sale (or the time of execution of such agreement to issue or sell, as applicable) of such Convertible Securities for such price per share.
For the purposes of this Section 2(b)(ii), the “lowest price per share for which one share of Common Stock is at any time issuable
upon the conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof” shall be equal to (1) the lower of
(x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to one share of Common
Stock upon the issuance or sale (or pursuant to the agreement to issue or sell, as applicable) of the Convertible Security and upon conversion,
exercise or exchange of such Convertible Security or otherwise pursuant to the terms thereof and (y) the lowest conversion price set forth
in such Convertible Security for which one share of Common Stock is issuable (or may become issuable assuming all possible market conditions)
upon conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof minus (2) the sum of all amounts paid or payable
to the holder of such Convertible Security (or any other Person) upon the issuance or sale (or the agreement to issue or sell, as applicable)
of such Convertible Security plus the value of any other consideration received or receivable by, or benefit conferred on, the holder
of such Convertible Security (or any other Person). Except as contemplated below, no further adjustment of the Exercise Price shall be
made upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities or otherwise
pursuant to the terms thereof, and if any such issuance or sale of such Convertible Securities is made upon exercise of any Options for
which adjustment of this Warrant has been or is to be made pursuant to other provisions of this Section 2(b), except as contemplated
below, no further adjustment of the Exercise Price shall be made by reason of such issuance or sale.
(iii) Change
in Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options (excluding with respect to any
Excluded Issuance), the additional consideration, if any, payable upon the issue, conversion, exercise or exchange of any Convertible
Securities, or the rate at which any Convertible Securities are convertible into or exercisable or exchangeable for shares of Common Stock
increases or decreases at any time (other than proportional changes in conversion or exercise prices, as applicable, in connection with
an event referred to in Section 2(a)), the Exercise Price in effect at the time of such increase or decrease shall be adjusted to the
Exercise Price which would have been in effect at such time had such Options or Convertible Securities provided for such increased or
decreased purchase price, additional consideration or increased or decreased conversion rate, as the case may be, at the time initially
granted, issued or sold. For purposes of this Section 2(b)(iii), if the terms of any Option or Convertible Security (including, without
limitation, any Option or Convertible Security that was outstanding as of the Issuance Date) are increased or decreased in the manner
described in the immediately preceding sentence, then such Option or Convertible Security and the shares of Common Stock deemed issuable
upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such increase or decrease. No adjustment
pursuant to this Section 2(b) shall be made if such adjustment would result in an increase of the Exercise Price then in effect.
(iv) Calculation
of Consideration Received. If any Option and/or Convertible Security and/or Adjustment Right is issued in connection with the issuance
or sale or deemed issuance or sale of any other securities of the Company (excluding with respect to any Excluded Issuance) (as determined
jointly by the Holder and the Company), the “Primary Security”, and such Option and/or Convertible Security and/or Adjustment
Right, the “Secondary Securities”), together comprising one integrated transaction, (or one or more transactions if such issuances
or sales or deemed issuances or sales of securities of the Company either (A) have at least one investor or purchaser in common, (B) are
consummated in reasonable proximity to each other and/or (C) are consummated under the same plan of financing) the aggregate consideration
per share of Common Stock with respect to such Primary Security shall be deemed to be equal to the difference of (x) the lowest price
per share for which one share of Common Stock was issued (or was deemed to be issued pursuant to Section 2(b)(i) or 2(b)(ii) above, as
applicable) in such integrated transaction solely with respect to such Primary Security, minus (y) with respect to such Secondary Securities,
the sum of (I) the Black Scholes Consideration Value of each such Option, if any, (II) the fair market value (as reasonably determined
jointly by the Holder and the Company in good faith) or the Black Scholes Consideration Value, as applicable, of such Adjustment Right,
if any, and (III) the fair market value (as reasonably determined jointly by the Holder and the Company) of such Convertible Security,
if any, in each case, as determined on a per share basis in accordance with this Section 2(b)(iv). If any shares of Common Stock, Options
or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor (for
the purpose of determining the consideration paid for such Common Stock, Option or Convertible Security, but not for the purpose of the
calculation of the Black Scholes Consideration Value) will be deemed to be the net amount of consideration received by the Company therefor.
If any shares of Common Stock, Options or Convertible Securities are issued or sold for a consideration other than cash, the amount of
such consideration received by the Company (for the purpose of determining the consideration paid for such Common Stock, Option or Convertible
Security, but not for the purpose of the calculation of the Black Scholes Consideration Value) will be the fair value of such consideration,
except where such consideration consists of publicly traded securities, in which case the amount of consideration received by the Company
for such securities will be the arithmetic average of the VWAPs of such security for each of the five (5) Trading Days immediately preceding
the date of receipt. If any shares of Common Stock, Options or Convertible Securities are issued to the owners of the non-surviving entity
in connection with any merger in which the Company is the surviving entity, the amount of consideration therefor (for the purpose of determining
the consideration paid for such Common Stock, Option or Convertible Security, but not for the purpose of the calculation of the Black
Scholes Consideration Value) will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity
as is attributable to such shares of Common Stock, Options or Convertible Securities (as the case may be). The fair value of any consideration
other than cash or publicly traded securities will be reasonably determined jointly by the Company and the Holder. If such parties are
unable to reach agreement within ten (10) days after the occurrence of an event requiring valuation (the “Valuation Event”),
the fair value of such consideration will be determined within five (5) Trading Days after the tenth (10th) day following such
Valuation Event by an independent, reputable appraiser jointly selected by the Company and the Holder. The determination of such appraiser
shall be final and binding upon all parties absent manifest error and the fees and expenses of such appraiser shall be borne by the Company.
(v) Record
Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive
a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for
or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issuance
or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or purchase (as the case may be).
(c) Holder’s
Right of Alternative Exercise Price Following Issuance of Certain Options or Convertible Securities. In addition to and not in limitation
of the other provisions of this Section 2, if the Company in any manner issues or sells or enters into any agreement to issue or
sell, any Common Stock, Options or Convertible Securities (any such securities, “Variable Price Securities”) after the Issuance
Date that are issuable pursuant to such agreement or convertible into or exchangeable or exercisable for shares of Common Stock at a price
which varies or may vary with the market price of the shares of Common Stock, including by way of one or more reset(s) to a fixed price,
but exclusive of such formulations reflecting customary anti-dilution provisions (such as share splits, share combinations, share dividends
and similar transactions) (each of the formulations for such variable price being herein referred to as, the “Variable Price”),
the Company shall provide written notice thereof via electronic mail and overnight courier to the Holder on the date of such agreement
and the issuance of such Common Stock, Convertible Securities or Options. From and after the date the Company enters into such agreement
or issues any such Variable Price Securities, the Holder shall have the right, but not the obligation, in its sole discretion to substitute
the Variable Price, as calculated pursuant to the agreements governing such Variable Price Securities, for the Exercise Price upon exercise
of this Warrant by designating in the Exercise Notice delivered upon any exercise of this Warrant that solely for purposes of such exercise
the Holder is relying on the Variable Price rather than the Exercise Price then in effect. The Holder’s election to rely on a Variable
Price for a particular exercise of this Warrant shall not obligate the Holder to rely on a Variable Price for any future exercises of
this Warrant.
(d) [Intentionally
omitted].
(e) Other
Events. In the event that the Company (or any Subsidiary (as defined in the Purchase Agreement)) shall take any action to which the
provisions hereof are not strictly applicable, or, if applicable, would not operate to protect the Holder from actual dilution or if any
event occurs of the type contemplated by the provisions of this Section 2 but not expressly provided for by such provisions (including,
without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Company’s
board of directors shall in good faith determine and implement an appropriate adjustment in the Exercise Price and the number of Warrant
Shares (if applicable) so as to protect the rights of the Holder, provided that no such adjustment pursuant to this Section 2(e) will
increase the Exercise Price or decrease the number of Warrant Shares as otherwise determined pursuant to this Section 2, provided further
that if the Holder does not accept such adjustments as appropriately protecting its interests hereunder against such dilution, then the
Company’s board of directors and the Holder shall agree, in good faith, upon an independent investment bank of nationally recognized
standing to make such appropriate adjustments, whose determination shall be final and binding absent manifest error and whose fees and
expenses shall be borne by the Company.
(f) Calculations.
All calculations under this Section 2 shall be made by rounding to the nearest cent or the nearest 1/100th of a share,
as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the
account of the Company, and the disposition of any such shares shall be considered an issuance or sale of Common Stock
(g) Voluntary
Adjustment By Company. Subject to the rules and regulations of the Principal Market, the Company may at any time during the term of
this Warrant, reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors
of the Company.
(h) Number
of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to this Section 2, the number of Warrant
Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such adjustment
the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate Exercise Price
in effect immediately prior to such adjustment (without regard to any limitations on exercise contained herein). For the avoidance of
doubt, the aggregate Exercise Price payable prior to such adjustment is calculated as follows: the total number of Warrant Shares issuable
upon exercise of this Warrant immediately prior to such adjustment (without regard to the Beneficial Ownership Limitation and the Exchange
Cap (as defined in the Purchase Agreement)) multiplied by the Exercise Price in effect immediately prior to such adjustment. By way of
example, if E is the total number of Warrant Shares issuable upon exercise of this Warrant immediately prior to such adjustment (without
regard to the Beneficial Ownership Limitation and the Exchange Cap), F is the Exercise Price in effect immediately prior to such adjustment,
and G is the Exercise Price in effect immediately after such adjustment, the adjustment to the number of Warrant Shares can be expressed
in the following formula: Total number of Warrant Shares after such adjustment = the number obtained from dividing [E x F] by G.
(i) Notice.
In addition to all other notice(s) required under this Section 2, the Company shall also notify the Holder in writing, no later than the
second Trading Day following any adjustment to the Warrant under this Section 2, indicating therein the occurrence of such applicable
exercise price and warrant share adjustment (such notice the “Adjustment Notice”). For purposes of clarification, regardless
of whether (i) the Company provides an Adjustment Notice pursuant to this Section 2 or (ii) the Holder accurately refers to the number
of Warrant Shares or Exercise Price in the Exercise Notice, the Holder is entitled to receive the adjustments to the number of Warrant
Shares and Exercise Price at all times on and after the date of such adjustment event.
3. RIGHTS
UPON DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 2 above or Section 4(a) below, if the Company shall
declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock,
by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property,
options, evidence of indebtedness or any other assets by way of a dividend, spin off, reclassification, corporate rearrangement, scheme
of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in
each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated
therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard
to any limitations or restrictions on exercise of this Warrant, including without limitation, the Beneficial Ownership Limitation or,
prior to the Ex-Exchange Cap Date, the Exchange Cap) immediately before the date on which a record is taken for such Distribution, or,
if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation
in such Distribution (provided, however, that to the extent that the Holder’s right to participate in any such Distribution would
result in the Holder and the other Attribution Parties exceeding the Beneficial Ownership Limitation or, prior to the Ex-Exchange Cap
Date, the Exchange Cap, then the Holder shall not be entitled to participate in such Distribution to the extent of the Beneficial Ownership
Limitation or, prior to the Ex-Exchange Cap Date, the Exchange Cap (and shall not be entitled to beneficial ownership of such shares of
Common Stock as a result of such Distribution (and beneficial ownership) to the extent of any such excess) and the portion of such Distribution
shall be held in abeyance for the benefit of the Holder until such time or times, if ever, as its right thereto would not result in the
Holder and the other Attribution Parties exceeding the Beneficial Ownership Limitation or, prior to the Ex-Exchange Cap Date, the Exchange
Cap, at which time or times the Holder shall be granted such Distribution (and any Distributions declared or made on such initial Distribution
or on any subsequent Distribution held similarly in abeyance) to the same extent as if there had been no such limitation).
4. PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS.
(a) Purchase
Rights. In addition to any adjustments pursuant to Sections 2 or 3 above, if at any time the Company grants, issues or sells any Options,
Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class
of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase
Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock
acquirable upon complete exercise of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including
without limitation, the Beneficial Ownership Limitation or, prior to the Ex-Exchange Cap Date, the Exchange Cap) immediately before the
date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of
which the record holders of shares of Common Stock are to be determined for the grant, issuance or sale of such Purchase Rights (provided,
however, that to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder
and the other Attribution Parties exceeding the Beneficial Ownership Limitation or, prior to the Ex-Exchange Cap Date, the Exchange Cap,
then the Holder shall not be entitled to participate in such Purchase Right to the extent of the Beneficial Ownership Limitation or, prior
to the Ex-Exchange Cap Date, the Exchange Cap (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result
of such Purchase Right (and beneficial ownership) to the extent of any such excess) and such Purchase Right to such extent shall be held
in abeyance for the benefit of the Holder until such time or times, if ever, as its right thereto would not result in the Holder and the
other Attribution Parties exceeding the Beneficial Ownership Limitation or, prior to the Ex-Exchange Cap Date, the Exchange Cap, at which
time or times the Holder shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or
on any subsequent Purchase Right held similarly in abeyance) to the same extent as if there had been no such limitation).
(b) Fundamental
Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity assumes in writing
all of the obligations of the Company under this Warrant and the other Transaction Documents (as defined in the Purchase Agreement) in
accordance with the provisions of this Section 4(b) pursuant to written agreements in form and substance satisfactory to the Holder
and approved by the Holder prior to such Fundamental Transaction, including agreements to deliver to the Holder in exchange for this Warrant
a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant, including,
without limitation, which is exercisable for a corresponding number of shares of capital stock equivalent to the shares of Common Stock
acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such
Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking
into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of
capital stock, such adjustments to the number of shares of capital stock and such exercise price being for the purpose of protecting the
economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction). Upon the consummation of each Fundamental
Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of the applicable Fundamental
Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead
to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company
under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company
herein. Upon consummation of each Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall
be issued upon exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction, in lieu of the shares
of Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections 3 and 4(a)
above, which shall continue to be receivable thereafter)) issuable upon the exercise of this Warrant prior to the applicable Fundamental
Transaction, such shares of publicly traded common stock (or its equivalent) of the Successor Entity (including its Parent Entity) which
the Holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised
immediately prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant), as adjusted
in accordance with the provisions of this Warrant. Notwithstanding the foregoing, and without limiting Section 1(c) hereof, the Holder
may elect, at its sole option, by delivery of written notice to the Company to waive this Section 4(b) to permit the Fundamental
Transaction without the assumption of this Warrant. In addition to and not in substitution for any other rights hereunder, prior to the
consummation of each Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or
other assets with respect to or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate
provision to insure that the Holder will thereafter have the right to receive upon an exercise of this Warrant at any time after the consummation
of the applicable Fundamental Transaction but prior to the Expiration Date, in lieu of the shares of the Common Stock (or other securities,
cash, assets or other property (except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable
thereafter)) issuable upon the exercise of the Warrant prior to such Fundamental Transaction, such shares of stock, securities, cash,
assets or any other property whatsoever (including warrants or other purchase or subscription rights) which the Holder would have been
entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to
the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant) (the “Corporate Event
Consideration”). Provision made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the
Holder.
(c) [Intentionally
omitted].
(d) Application.
The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions and Corporate Events and
shall be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without regard to any limitations on
the exercise of this Warrant (provided that the Holder shall continue to be subject to the Beneficial Ownership Limitation and prior to
the Ex-Exchange Cap Date, the Exchange Cap, applied however with respect to shares of capital stock registered under the 1934 Act and
thereafter receivable upon exercise of this Warrant (or any such other warrant)).
5. NON-CIRCUMVENTION.
The Company covenants and agrees that it 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 Warrant, and will at all times in good faith carry out
all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. Without limiting the generality
of the foregoing, the Company (i) shall not increase the par value of any shares of Common Stock receivable upon the exercise of this
Warrant above the Exercise Price then in effect, (ii) shall take all such actions as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon the exercise of this Warrant, and (iii)
shall, for so long as this Warrant is outstanding, have authorized and reserved, free from preemptive rights, two (2) times the number
of shares of Common Stock into which the Warrants are then exercisable into to provide for the exercise of the rights represented by this
Warrant (without regard to any limitations on exercise).
6. WARRANT
HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in its capacity as a holder
of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any purpose,
nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in its capacity as the Holder of this Warrant,
any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any
reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings,
receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which it is then entitled
to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities
on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such
liabilities are asserted by the Company or by creditors of the Company. Notwithstanding this Section 6, the Company shall provide
the Holder with copies of the same notices and other information given to the stockholders of the Company generally, contemporaneously
with the giving thereof to the stockholders.
7. REISSUANCE.
(a) Lost,
Stolen or Mutilated Warrant. If this Warrant is lost, stolen, mutilated or destroyed, the Company will, on such terms as to indemnity
or otherwise as it may reasonably impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new
Warrant of like denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed.
(b) Issuance
of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant shall
be of like tenor with this Warrant, and shall have an issuance date, as indicated on the face of such new Warrant which is the same as
the Issuance Date.
8. TRANSFER.
This Warrant shall be binding upon the Company and its successors and assigns, and shall inure to be the benefit of the Holder and its
successors and assigns. Notwithstanding anything to the contrary herein, the rights, interests or obligations of the Company hereunder
may not be assigned, by operation of law or otherwise, in whole or in part, by the Company without the prior signed written consent of
the Holder, which consent may be withheld at the sole discretion of the Holder (any such assignment or transfer shall be null and void
if the Company does not obtain the prior signed written consent of the Holder). This Warrant or any of the severable rights and obligations
inuring to the benefit of or to be performed by Holder hereunder may be assigned by Holder to a third party, in whole or in part, without
the need to obtain the Company’s consent thereto.
9. NOTICES.
Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance
with the notice provisions contained in the Purchase Agreement. The Company shall provide the Holder with prompt written notice (i) immediately
upon any adjustment of the Exercise Price, setting forth in reasonable detail, the calculation of such adjustment and (ii) at least 20
days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the
shares of Common Stock, (B) with respect to any grants, issuances or sales of any stock or other securities directly or indirectly convertible
into or exercisable or exchangeable for shares of Common Stock or other property, pro rata to the 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 the Holder.
10. DISCLOSURE.
Upon delivery by the Company to the Holder (or receipt by the Company from the Holder) of any notice in accordance with the terms of this
Warrant, unless the Company has in good faith determined that the matters relating to such notice do not constitute material, non-public
information relating to the Company or any of its Subsidiaries, the Company shall on or prior to 9:00 am, New York city time on the Business
Day immediately following such notice delivery date, publicly disclose such material, non-public information on a Current Report on Form
8-K or otherwise. In the event that the Company believes that a notice contains material, non-public information relating to the Company
or any of its Subsidiaries, the Company so shall indicate to the Holder explicitly in writing in such notice (or immediately upon receipt
of notice from the Holder, as applicable), and in the absence of any such written indication in such notice (or notification from the
Company immediately upon receipt of notice from the Holder), the Holder shall be entitled to presume that information contained in the
notice does not constitute material, non-public information relating to the Company or any of its Subsidiaries. Nothing contained in this
Section 10 shall limit any obligations of the Company, or any rights of the Holder, under the Purchase Agreement.
11. ABSENCE
OF TRADING AND DISCLOSURE RESTRICTIONS. The Company acknowledges and agrees that the Holder is not a fiduciary or agent of the Company
and that the Holder shall have no obligation to (a) maintain the confidentiality of any information provided by the Company or (b) refrain
from trading any securities while in possession of such information in the absence of a written non-disclosure agreement signed by an
officer of the Holder that explicitly provides for such confidentiality and trading restrictions. In the absence of such an executed,
written non-disclosure agreement and subject to compliance with any applicable securities laws, the Company acknowledges that the Holder
may freely trade in any securities issued by the Company, may possess and use any information provided by the Company in connection with
such trading activity, and may disclose any such information to any third party.
12. AMENDMENT
AND WAIVER. The terms of this Warrant may be amended or waived (either generally or in a particular instance and either retroactively
or prospectively) only with the signed written consent of the Company and the Holder.
13. ARBITRATION
OF CLAIMS; GOVERNING LAW; AND VENUE. The Company and Holder shall submit all Claims (as defined in Exhibit E of the Purchase Agreement)
(the “Claims”) arising under this Warrant or any other agreement between the parties and their affiliates or any Claim relating
to the relationship of the parties to binding arbitration pursuant to the arbitration provisions set forth in Exhibit E of the Purchase
Agreement (the “Arbitration Provisions”). The Company and Holder hereby acknowledge and agree that the Arbitration Provisions
are unconditionally binding on the Company and Holder hereto and are severable from all other provisions of this Warrant. By executing
this Warrant, Company represents, warrants and covenants that Company has reviewed the Arbitration Provisions carefully, consulted with
legal counsel about such provisions (or waived its right to do so), understands that the Arbitration Provisions are intended to allow
for the expeditious and efficient resolution of any dispute hereunder, agrees to the terms and limitations set forth in the Arbitration
Provisions, and that Company will not take a position contrary to the foregoing representations. The Company acknowledges and agrees that
Holder may rely upon the foregoing representations and covenants of the Company regarding the Arbitration Provisions. This Warrant shall
be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance
of this Warrant shall be governed by, the internal laws of the State of Delaware, without giving effect to any choice of law or conflict
of law provision or rule (whether of the State of Delaware or any other jurisdictions) that would cause the application of the laws of
any jurisdictions other than the State of Delaware. The Company and Holder consent to and expressly agree that the exclusive venue for
arbitration of any Claims arising under this Warrant or any other agreement between the Company and Holder or their respective affiliates
(including but not limited to the Transaction Documents) or any Claim relating to the relationship of the Company and Holder or their
respective affiliates shall be in the State of Delaware. Without modifying the Company’s and Holder’s obligations to resolve
disputes hereunder pursuant to the Arbitration Provisions, for any litigation arising in connection with any of the Transaction Documents
(and notwithstanding the terms (specifically including any governing law and venue terms) of any transfer agent services agreement or
other agreement between the Company’s transfer agent and the Company, such litigation specifically includes, without limitation
any action between or involving Company and the Company’s transfer agent under the Irrevocable Transfer Agent Instructions (as defined
in the Purchase Agreement) or otherwise related to Holder in any way (specifically including, without limitation, any action where Company
seeks to obtain an injunction, temporary restraining order, or otherwise prohibit the Company’s transfer agent from issuing shares
of Common Stock to Holder for any reason)), each party hereto hereby (i) consents to and expressly submits to the exclusive personal jurisdiction
of any state or federal court sitting in the State of Delaware, (ii) expressly submits to the exclusive venue of any such court for the
purposes hereof, (iii) agrees to not bring any such action (specifically including, without limitation, any action where Company seeks
to obtain an injunction, temporary restraining order, or otherwise prohibit the Company’s transfer agent from issuing shares of
Common Stock to Holder for any reason) outside of any state or federal court sitting in the State of Delaware, and (iv) waives any claim
of improper venue and any claim or objection that such courts are an inconvenient forum or any other claim, defense or objection to the
bringing of any such proceeding in such jurisdiction or to any claim that such venue of the suit, action or proceeding is improper. Notwithstanding
anything in the foregoing to the contrary, nothing herein (i) shall limit, or shall be deemed or construed to limit, the ability of the
Holder to realize on any collateral or any other security, or to enforce a judgment or other court ruling in favor of the Holder, including
through a legal action in any court of competent jurisdiction, or (ii) shall limit, or shall be deemed or construed to limit, any provision
of Section 15 of this Warrant. The Company hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any
objection to jurisdiction and venue of any action instituted hereunder, any claim that it is not personally subject to the jurisdiction
of any such court, and any claim that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit,
action or proceeding is improper (including but not limited to based upon forum non conveniens).
THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTIONS CONTEMPLATED HEREBY. The Company irrevocably waives
personal service of process and consents to process being served in any suit, action or proceeding in connection with this Warrant or
any other agreement, certificate, instrument or document contemplated hereby or thereby by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to Company at the address in effect for notices to it under this Warrant 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. The prevailing party in any action or dispute brought
in connection with this Warrant or any other agreement, certificate, instrument or document contemplated hereby or thereby shall be entitled
to recover from the other party its reasonable attorney’s fees and costs. If any provision of this Warrant shall be invalid or unenforceable
in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Warrant
in that jurisdiction or the validity or enforceability of any provision of this Warrant in any other jurisdiction.
14. ACCEPTANCE.
Receipt of this Warrant by the Holder shall constitute acceptance of and agreement to all of the terms and conditions contained
herein.
15. DISPUTE
RESOLUTION.
(a) Submission
to Dispute Resolution.
(i) Notwithstanding
anything to the contrary in this Warrant, in the case of a dispute relating to the Exercise Price, the Closing Sale Price, the Closing
Bid Price, Black Scholes Consideration Value, or fair market value or the arithmetic calculation of the number of Warrant Shares (as the
case may be) (including, without limitation, a dispute relating to the determination of any of the foregoing) (the “Warrant Calculations”),
the Company or the Holder (as the case may be) shall submit the dispute to the other party via electronic mail (A) if by the Company,
within two (2) Trading Days after the occurrence of the circumstances giving rise to such dispute or (B) if by the Holder, at any time
after the Holder learned of the circumstances giving rise to such dispute. If the Holder and the Company are unable to agree upon such
determination or calculation within two (2) Trading Days following such initial notice by the Company or the Holder (as the case may be)
of such dispute to the Company or the Holder (as the case may be), then the Holder may, at its sole option, submit the dispute to an independent,
reputable investment bank or independent, outside accountant selected by the Holder (the “Independent Third Party”), and the
Company shall pay all expenses of such Independent Third Party.
(ii) The
Holder and the Company shall each deliver to such Independent Third Party (A) a copy of the initial dispute submission so delivered in
accordance with the first sentence of this Section 15(a) and (B) written documentation supporting its position with respect to such dispute,
in each case, no later than 5:00 p.m. (New York time) by second (2nd) Business Day immediately following the date on which the Holder
selected such Independent Third Party (the “Dispute Submission Deadline”) (the documents referred to in the immediately preceding
clauses (A) and (B) are collectively referred to herein as the “Required Dispute Documentation”) (it being understood and
agreed that if either the Holder or the Company fails to so deliver all of the Required Dispute Documentation by the Dispute Submission
Deadline, then the party who fails to so submit all of the Required Dispute Documentation shall no longer be entitled to (and hereby waives
its right to) deliver or submit any written documentation or other support to such Independent Third Party with respect to such dispute
and such Independent Third Party shall resolve such dispute based solely on the Required Dispute Documentation that was delivered to such
Independent Third Party prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by both the Company and the Holder
or otherwise requested by such Independent Third Party, neither the Company nor the Holder shall be entitled to deliver or submit any
written documentation or other support to such Independent Third Party in connection with such dispute, other than the Required Dispute
Documentation.
(iii) The
Company and the Holder shall cause such Independent Third Party to determine the resolution of such dispute and notify the Company and
the Holder of such resolution no later than five (5) Business Days immediately following the Dispute Submission Deadline. The fees and
expenses of such Independent Third Party shall be borne solely by the Company, and such Independent Third Party’s resolution of
such dispute shall be final and binding upon all parties absent manifest error.
(b) Miscellaneous.
The Company expressly acknowledges and agrees that (i) this Section 15 constitutes an agreement to arbitrate between the Company
and the Holder (and constitutes an arbitration agreement) under the rules then in effect under the Delaware Rules of Civil Procedure
(“DRCP”) and that the Holder is authorized to apply for an order to compel arbitration pursuant to the DRCP in order to compel
compliance with this Section 15, (ii) a dispute relating to the Warrant Calculations includes, without limitation, disputes as to
(A) whether an issuance or sale or deemed issuance or sale of Common Stock occurred under Section 2 of this Warrant, (B) the consideration
per share at which an issuance or deemed issuance of Common Stock occurred, (C) whether any issuance or sale or deemed issuance or sale
of Common Stock was an issuance or sale or deemed issuance or sale, (D) whether an agreement, instrument, security or the like constitutes
an Option or Convertible Security and (E) whether a Dilutive Issuance occurred, (iii) the terms of this Warrant and each other applicable
Transaction Document shall serve as the basis for the selected Independent Third Party’s resolution of the applicable dispute,
such Independent Third Party shall be entitled (and is hereby expressly authorized) to make all findings, determinations and the like
that such Independent Third Party determines are required to be made by such Independent Third Party in connection with its resolution
of such dispute (including, without limitation, determining (A) whether an issuance or sale or deemed issuance or sale of Common Stock
occurred under Section 2 of this Warrant, (B) the consideration per share at which an issuance or deemed issuance of Common Stock occurred,
(C) whether any issuance or sale or deemed issuance or sale of Common Stock was an issuance or sale or deemed issuance or sale, (D) whether
an agreement, instrument, security or the like constitutes an Option or Convertible Security and (E) whether a Dilutive Issuance occurred)
and in resolving such dispute such Independent Third Party shall apply such findings, determinations and the like to the terms of this
Warrant and any other applicable Transaction Documents, and (iv) nothing in this Section 15 shall limit the Holder from obtaining
any injunctive relief or other equitable remedies (including, without limitation, with respect to any matters described in this Section 15).
16. CERTAIN
DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:
(a) “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.
(b) “Black
Scholes Consideration Value” means the value of the applicable Option, Convertible Security or Adjustment Right (as the case
may be) as of the date of issuance thereof calculated using the Black Scholes Option Pricing Model obtained from the “OV”
function on Bloomberg utilizing (i) an underlying price per share equal to the Closing Sale Price of the Common Stock on the Trading Day
immediately preceding the public announcement of the execution of definitive documents with respect to the issuance of such Option or
Convertible Security (as the case may be), (ii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to
the remaining term of such Option, Convertible Security or Adjustment Right (as the case may be) as of the date of issuance of such Option,
Convertible Security or Adjustment Right (as the case may be), (iii) a zero cost of borrow and (iv) an expected volatility equal to the
greater of 100% and the 30 day volatility obtained from the “HVT” function on Bloomberg (determined utilizing a 365 day annualization
factor) as of the Trading Day immediately following the date of issuance of such Option, Convertible Security or Adjustment Right (as
the case may be).
(c) “Black
Scholes Value” means the value of the unexercised portion of this Warrant remaining on the date of the Holder’s request
pursuant to Section 4(c)(i), which value is calculated using the Black Scholes Option Pricing Model obtained from the “OV”
function on Bloomberg utilizing (i) an underlying price per share equal to the greater of (1) the highest Closing Sale Price of the Common
Stock during the period beginning on the Trading Day immediately preceding the announcement of the applicable Change of Control (or the
consummation of the applicable Change of Control, if earlier) and ending on the Trading Day of the Holder’s request pursuant to
Section 4(c)(i) and (2) the sum of the price per share being offered in cash in the applicable Change of Control (if any) plus the value
of the non-cash consideration being offered in the applicable Change of Control (if any), (ii) a strike price equal to the Exercise Price
in effect on the date of the Holder’s request pursuant to Section 4(c)(i), (iii) a risk-free interest rate corresponding to
the U.S. Treasury rate for a period equal to the greater of (1) the remaining term of this Warrant as of the date of the Holder’s
request pursuant to Section 4(c)(i) and (2) the remaining term of this Warrant as of the date of consummation of the applicable Change
of Control or as of the date of the Holder’s request pursuant to Section 4(c)(i) if such request is prior to the date of the
consummation of the applicable Change of Control, (iv) a zero cost of borrow and (v) an expected volatility equal to the greater of 100%
and the 30 day volatility obtained from the “HVT” function on Bloomberg (determined utilizing a 365 day annualization factor)
as of the Trading Day immediately following the earliest to occur of (A) the public disclosure of the applicable Change of Control and
(B) the date of the Holder’s request pursuant to Section 4(c)(i).
(d) “Bloomberg”
means Bloomberg, L.P.
(e) “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in the State of Delaware 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 State of Delaware generally are open for use by customers on such day.
(f) “Change
of Control” means any Fundamental Transaction other than (i) any merger of the Company or any of its, direct or indirect, wholly-owned
Subsidiaries with or into any of the foregoing Persons, (ii) any reorganization, recapitalization or reclassification of the shares of
Common Stock in which holders of the Company’s voting power immediately prior to such reorganization, recapitalization or reclassification
continue after such reorganization, recapitalization or reclassification to hold publicly traded securities and, directly or indirectly,
are, in all material respects, the holders of the voting power of the surviving entity (or entities with the authority or voting power to
elect the members of the board of directors (or their equivalent if other than a corporation) of such entity or entities) after such reorganization,
recapitalization or reclassification, (iii) pursuant to a migratory merger effected solely for the purpose of changing the jurisdiction
of incorporation of the Company or any of its Subsidiaries or (iv) bone fide arm’s length acquisitions by the Company with one or
more third parties as long as holders of the Company’s voting power as of the Issuance Date continue after such acquisition to hold
publicly traded securities and, directly or indirectly, are, in all material respects, the holders of at least 51% of the voting power
of the surviving entity (or entities with the authority or voting power to elect the members of the board of directors (or their
equivalent if other than a corporation) of such entity or entities) after such acquisition.
(g) “Closing
Bid Price” and “Closing Sale Price” means, for any security as of any date, (i) the last closing bid price
and last closing trade price, respectively, for such security on the Principal Market, as reported by Quotestream or other similar quotation
service provider designated by the Holder, or, if the Principal Market begins to operate on an extended hours basis and does not designate
the closing trade price, then the last trade price of such security prior to 4:00 p.m., New York time, as reported by Quotestream or other
similar quotation service provider designated by the Holder, or (ii) if the foregoing does not apply, the last trade price of such security
in the over-the-counter market for such security as reported by Quotestream or other similar quotation service provider designated by
the Holder, or (iii) if no last trade price is reported for such security by Quotestream or other similar quotation service provider designated
by the Holder, the average of the bid and ask prices of any market makers for such security as reported by Quotestream or other similar
quotation service provider designated by the Holder. If the Closing Sale Price cannot be calculated for a security on a particular date
on any of the foregoing bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually determined
by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such
dispute shall be resolved in accordance with the procedures in Section 15. All such determinations to be appropriately adjusted for
any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation period.
(h) “Common
Stock” means the Company’s common stock, par value $0.0001 per share, and any other class of securities into which such
securities may hereafter be reclassified or changed.
(i) “Common
Stock Equivalents” means any securities of the Company that would entitle the holder thereof to acquire at any time Common Stock,
including without limitation any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible
into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
(j) “Convertible
Securities” means any stock or other security (other than Options) that is at any time and under any circumstances, directly
or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any shares
of Common Stock.
(k) “Eligible
Market” means The New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, the Nasdaq Global Market, Nasdaq
Capital Market, or equivalent national securities exchange.
(l) [Intentionally
omitted].
(m) [Intentionally
omitted].
(n) [Intentionally
omitted].
(o) “Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
(p) “Fundamental
Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise,
in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation) another
Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of
the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation S-X) to one or more Subject Entities,
or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject to or have its Common Stock be subject
to or party to one or more Subject Entities making, a purchase, tender or exchange offer that is accepted by the holders of at least either
(x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of Common Stock calculated as if any shares of Common
Stock held by all Subject Entities making or party to, or Affiliated with any Subject Entities making or party to, such purchase, tender
or exchange offer were not outstanding; or (z) such number of shares of Common Stock such that all Subject Entities making or party to,
or Affiliated with any Subject Entity making or party to, such purchase, tender or exchange offer, become collectively the beneficial
owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate a stock
or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off
or scheme of arrangement) with one or more Subject Entities whereby all such Subject Entities, individually or in the aggregate, acquire,
either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated
as if any shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject Entity making or
party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of Common Stock
such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50%
of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its Common Stock, (B) that the Company shall,
directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, allow any Subject
Entity individually or the Subject Entities in the aggregate to be or become the “beneficial owner” (as defined in Rule 13d-3
under the 1934 Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance, tender, tender offer, exchange,
reduction in outstanding shares of Common Stock, merger, consolidation, business combination, reorganization, recapitalization, spin-off,
scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner whatsoever, of either (x) at least
50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock, (y) at least 50% of the aggregate ordinary
voting power represented by issued and outstanding Common Stock not held by all such Subject Entities as of the date of this Warrant calculated
as if any shares of Common Stock held by all such Subject Entities were not outstanding, or (z) a percentage of the aggregate ordinary
voting power represented by issued and outstanding shares of Common Stock or other equity securities of the Company sufficient to allow
such Subject Entities to effect a statutory short form merger or other transaction requiring other shareholders of the Company to surrender
their shares of Common Stock without approval of the shareholders of the Company or (C) directly or indirectly, including through subsidiaries,
Affiliates or otherwise, in one or more related transactions, the issuance of or the entering into any other instrument or transaction
structured in a manner to circumvent, or that circumvents, the intent of this definition in which case this definition shall be construed
and implemented in a manner otherwise than in strict conformity with the terms of this definition to the extent necessary to correct this
definition or any portion of this definition which may be defective or inconsistent with the intended treatment of such instrument or
transaction.
(q) “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock or equivalent
equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity, the Person or Parent
Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.
(r) “Person”
and “Persons” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust,
an unincorporated organization, any other entity and any governmental entity or any department or agency thereof.
(s) “Principal
Market” means the principal securities exchange or trading market where such Common Stock is listed or quoted, including but
not limited to any tier of the OTC Markets Group, Inc., any tier of the The Nasdaq Stock Market LLC
(including Nasdaq Capital Market), or the NYSE American LLC, or any successor to such markets.
(t) “Market
Price” means the highest traded price of the Common Stock during the thirty Trading Days prior to the date of the respective
Exercise Notice.
(u) “Successor
Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from or surviving any Fundamental
Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental Transaction shall have been
entered into.
(v) “Trading
Day” means any day on which the Common Stock is listed or quoted on its Principal Market, provided, however, that if the Common
Stock is not then listed or quoted on any Principal Market, then any calendar day.
(w) “VWAP”
means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market (or, if the
Principal Market is not the principal trading market for such security, then on the principal securities exchange or securities market
on which such security is then traded), during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m., New York time,
as reported by Quotestream or other similar quotation service provider designated by the Holder through its “VAP” function
(set to 09:30 start time and 16:00 end time) or, if the foregoing does not apply, the dollar volume-weighted average price of such security
in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30 a.m., New York time,
and ending at 4:00 p.m., New York time, as reported by Quotestream or other similar quotation service provider designated by the Holder,
or, if no dollar volume-weighted average price is reported for such security by Quotestream or other similar quotation service provider
designated by the Holder for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market
makers for such security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC) (or a similar
organization or agency succeeding to its functions of reporting prices). If the VWAP cannot be calculated for such security on such date
on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as mutually determined by the Company
and the Holder. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization
or other similar transaction during such period.
* * * * * * *
IN WITNESS WHEREOF, the Company has caused
this Warrant to be duly executed as of the Issuance Date set forth above.
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SIGNING DAY SPORTS, INC. |
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Daniel Nelson |
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Chief Executive Officer |
EXHIBIT A
EXERCISE NOTICE
(To be executed by the registered holder
to exercise this Common Stock Purchase Warrant)
The
Undersigned holder hereby exercises the right to purchase of
the shares of Common Stock (“Warrant Shares”) of SIGNING DAY SPORTS, INC., a Delaware corporation (the “Company”),
evidenced by the attached copy of the Common Stock Purchase Warrant (the “Warrant”). Capitalized terms used herein and not
otherwise defined shall have the respective meanings set forth in the Warrant.
1. | Form of Exercise Price. The Holder intends that payment
of the Exercise Price shall be made as (check one): |
| ☐ | a
cash exercise with respect to _______________Warrant Shares; or |
| ☐ | by cashless exercise pursuant to the Warrant. |
2. | Payment of Exercise Price. If cash exercise is selected
above, the holder shall pay the applicable Aggregate Exercise Price in the sum of $ to the Company in accordance with the
terms of the Warrant. |
3. | Delivery of Warrant Shares. The Company shall deliver
to the holder Warrant Shares in accordance with the terms of the Warrant. |
Date: |
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(Print Name of Registered Holder) |
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By: |
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Name: |
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EXHIBIT B
ASSIGNMENT OF WARRANT
(To be signed only upon authorized transfer
of the Warrant)
For
Value Received, the undersigned hereby sells,
assigns, and transfers unto
the right to purchase shares of common stock
of SIGNING DAY SPORTS, INC., to which the within Common Stock Purchase Warrant relates and appoints , as attorney-in-fact,
to transfer said right on the books of SIGNING DAY SPORTS, INC. with full power of substitution and re-substitution in the premises. By
accepting such transfer, the transferee has agreed to be bound in all respects by the terms and conditions of the within Warrant.
Dated: |
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(Signature) * |
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(Name) |
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(Social Security or Tax Identification No.) |
* | The signature on this Assignment of Warrant must correspond
to the name as written upon the face of the Common Stock Purchase Warrant in every particular without alteration or enlargement or any
change whatsoever. When signing on behalf of a corporation, partnership, trust or other entity, please indicate your position(s) and
title(s) with such entity. |
Exhibit 4.3
NEITHER THIS SECURITY NOR THE SECURITIES AS TO
WHICH THIS SECURITY MAY BE EXERCISED 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 AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT. THIS SECURITY AND THE
SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED
BY SUCH SECURITIES.
COMMON STOCK PURCHASE
WARRANT
SIGNING DAY SPORTS, INC.
Warrant Shares: 250,000
Date of Issuance: May 16, 2024 (“Issuance
Date”)
This COMMON STOCK PURCHASE
WARRANT (the “Warrant”) certifies that, for value received (in connection with the issuance of the senior secured promissory
note in the principal amount of $412,500.00 to the Holder (as defined below) of even date) (the “Note”), FirstFire Global
Opportunities Fund, LLC, a Delaware limited liability company (including any permitted and registered assigns, the “Holder”),
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after
the date of issuance hereof, to purchase from SIGNING DAY SPORTS, INC., a Delaware corporation (the “Company”), 250,000
shares of Common Stock (the “Warrant Shares”) (whereby such number may be adjusted from time to time pursuant to the
terms and conditions of this Warrant) at the Exercise Price per share then in effect. This Warrant is issued by the Company as of the
date hereof in connection with that certain securities purchase agreement dated May 16, 2024, by and among the Company and the Holder
(the “Purchase Agreement”).
Capitalized terms used in
this Warrant shall have the meanings set forth in the Purchase Agreement unless otherwise defined in the body of this Warrant or in Section
16 below. For purposes of this Warrant, the term “Exercise Price” shall mean $0.01, subject to adjustment as provided herein
(including but not limited to cashless exercise), and the term “Exercise Period” shall mean the period commencing on the Trigger
Date (as defined in this Warrant) and ending on 5:00 p.m. eastern standard time on the date that is five (5) years after the Trigger Date.
1.
EXERCISE OF WARRANT.
(a) Mechanics
of Exercise. Subject to the terms and conditions hereof, the rights represented by this Warrant may be exercised in whole or in part
at any time or times during the Exercise Period by delivery of a written notice, in the form attached hereto as Exhibit A (the
“Exercise Notice”), of the Holder’s election to exercise this Warrant. The Holder shall not be required to deliver
the original Warrant in order to effect an exercise hereunder. Partial exercises of this Warrant resulting in purchases of a portion of
the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant Shares purchased. On or before the second Trading Day (the “Warrant
Share Delivery Date”) following the date on which the Holder sent the Exercise Notice to the Company or the Company’s
transfer agent, and upon receipt by the Company of payment to the Company of an amount equal to the applicable Exercise Price multiplied
by the number of Warrant Shares as to which all or a portion of this Warrant is being exercised (the “Aggregate Exercise Price”
and together with the Exercise Notice, the “Exercise Delivery Documents”) in cash or by wire transfer of immediately
available funds (or by cashless exercise, in which case there shall be no Aggregate Exercise Price provided), the Company shall (or direct
its transfer agent to) issue and deliver by overnight courier to the address as specified in the Exercise Notice, a certificate, registered
in the Company’s share register in the name of the Holder or its designee, for the number of shares of Common Stock to which the
Holder is entitled pursuant to such exercise (or deliver such shares of Common Stock in electronic format if requested by the Holder).
Upon delivery of the Exercise Delivery Documents, the Holder shall be deemed for all corporate purposes to have become the holder of record
of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the certificates
evidencing such Warrant Shares. If this Warrant is submitted in connection with any exercise and the number of Warrant Shares represented
by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise, then the Company
shall as soon as practicable and in no event later than three Business Days after any exercise and at its own expense, issue a new Warrant
(in accordance with Section 7) representing the right to purchase the number of Warrant Shares purchasable immediately prior to such exercise
under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised.
If the Company fails to
cause its transfer agent to issue to the Holder the respective shares of Common Stock by the respective Warrant Share Delivery Date, then
the Holder will have the right to rescind such exercise in Holder’s sole discretion in addition to all other rights and remedies
at law, under this Warrant, or otherwise, and such failure shall also be deemed a material breach under this Warrant.
If the Market Price of one
share of Common Stock is greater than the Exercise Price, then, unless there is an effective non-stale registration statement of the Company
which contains a prospectus that complies with Section 5(b) and Section 10 of the Securities Act at the time of exercise and covers the
Holder’s immediate resale of all of the Warrant Shares at prevailing market prices (and not fixed prices) without any limitation,
the Holder may elect to receive Warrant Shares pursuant to a cashless exercise, in lieu of a cash exercise, equal to the value of this
Warrant determined in the manner described below (or of any portion thereof remaining unexercised) by surrender of this Warrant and an
Exercise Notice, in which event the Company shall issue to Holder a number of shares of Common Stock computed using the following formula:
X = Y (A-B)
A
| Where |
X = | the number of Shares to be issued to Holder. |
| Y = | the number of Warrant Shares that the Holder elects to purchase under this Warrant (at the date of such calculation). |
| A = | the Market Price (at the date of such calculation). |
| B = | Exercise Price (as adjusted to the date of such calculation). |
(b) No
Fractional Shares. No fractional shares shall be issued upon the exercise of this Warrant as a consequence of any adjustment pursuant
hereto. All Warrant Shares (including fractions) issuable upon exercise of this Warrant may be aggregated for purposes of determining
whether the exercise would result in the issuance of any fractional share. If, after aggregation, the exercise would result in the issuance
of a fractional share, the Company shall, in lieu of issuance of any fractional share, pay the Holder otherwise entitled to such fraction
a sum in cash equal to the product resulting from multiplying the then-current fair market value of a Warrant Share by such fraction or
issue a whole share of Common Stock to the Holder.
(c) Holder’s
Exercise Limitations; Exchange Cap. Notwithstanding anything to the contrary contained herein, the Company shall not effect any exercise
of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 1 or otherwise, to
the extent that after giving effect to such issuance after exercise as set forth on the applicable Exercise Notice, the Holder (together
with the Holder’s Affiliates), and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates
(such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined
below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and Attribution
Parties shall include the number of shares of Common Stock issuable upon exercise of this Warrant with respect to which such determination
is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) exercise of the remaining, nonexercised
portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion
of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Stock
Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the
Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 1(c),
beneficial ownership shall be calculated in accordance with Section 13(d) of the 1934 Act and the rules and regulations promulgated thereunder,
it being acknowledged by the Holder that the Holder is solely responsible for any schedules required to be filed in accordance therewith.
In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the
1934 Act and the rules and regulations promulgated thereunder. For purposes of this Section 1(c), in determining the number of outstanding
shares of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s
most recent periodic or annual report filed with the SEC, as the case may be, (B) a more recent public announcement by the Company or
(C) a more recent written notice by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock
outstanding. Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to
the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall
be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or
its Affiliates or Attribution Parties since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial
Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding at the time of the respective calculation
hereunder. In addition to the beneficial ownership limitations provided in this Warrant, the sum of the number of shares of Common Stock
that may be issued under this Warrant shall be limited to the amount described in Section 4(r) of the Purchase
Agreement, unless and until the date of effectiveness (the “Ex-Exchange Cap Date”) of the Shareholder Approval (as
defined in the Purchase Agreement), except that shares of Common Stock issuable upon exercise of this Warrant as to which the Exercise
Price is at least equal to the greater of the Company’s stockholders’ equity per share disclosed in the Company’s most
recent public filing with the SEC or the last Closing Bid Price of the Common Stock as of the Warrant Share Delivery Date shall not be
limited hereby. In the event that the Company is prohibited from issuing any shares of Common Stock pursuant to this Warrant due to the
Company’s failure to obtain the Shareholder Approval (such number of shares that are prohibited from being issued are referred to
herein as the “Exchange Cap Shares”), in lieu of issuing and delivering such Exchange Cap Shares to the Holder, the Company
shall pay cash to the Holder in exchange for the cancellation of such portion of this Warrant exercisable into such Exchange Cap Shares
(the “Exchange Cap Payment Amount”) at a price equal to the sum of (x) the product of (A) such number of Exchange Cap Shares
and (B) the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date the Holder delivers
the applicable Exercise Notice with respect to such Exchange Cap Shares to the Company and ending on the date of the aforementioned payment
under this Section 1(c) and (y) to the extent the Holder purchases (in an open market transaction or otherwise) shares of Common Stock
to deliver in satisfaction of a sale by the Holder of Exchange Cap Shares, any brokerage commissions and other out-of-pocket expenses,
if any, of the Holder incurred in connection therewith. The limitations contained in this paragraph shall apply to a successor holder
of this Warrant.
(d) Compensation
for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if
the Company fails to cause the Company’s transfer agent to transmit to the Holder the Warrant Shares in accordance with the provisions
of this Warrant (including but not limited to Section 1(a) above pursuant to an exercise on or before the respective Warrant Share Delivery
Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s
brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which
the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder, within
one (1) Business Day of Holder’s request, the amount, if any, by which (x) the Holder’s total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased exceeds (y) the product of (1) the number of Warrant Shares that the
Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving
rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to
the Holder within one (1) Business Day of Holder’s request the number of shares of Common Stock that would have been issued had
the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases, or effectuates
a cashless exercise hereunder for, Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted
exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of
the immediately preceding sentence, the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written
notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount
of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to
timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.
2. ADJUSTMENTS.
The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as
set forth in this Section 2.
(a) Stock
Dividends and Splits. Without limiting any provision of Section 2(b), Section 3 or Section 4, if the Company, at any time
on or after the Issuance Date, (i) pays a stock dividend on one or more classes of its then outstanding shares of Common Stock or otherwise
makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides (by any stock split, stock
dividend, recapitalization or otherwise) one or more classes of its then outstanding shares of Common Stock into a larger number of shares
or (iii) combines (by combination, reverse stock split or otherwise) one or more classes of its then outstanding shares of Common Stock
into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall
be the number of shares of Common Stock outstanding immediately before such event and of which the denominator shall be the number of
shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become
effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution, and
any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such
subdivision or combination. If any event requiring an adjustment under this paragraph occurs during the period that an Exercise Price
is calculated hereunder, then the calculation of such Exercise Price shall be adjusted appropriately to reflect such event.
(b) Adjustment
Upon Issuance of Shares of Common Stock. If and whenever on or after the Issuance Date, the Company grants, issues or sells (or enters
into any agreement to grant, issue or sell), or in accordance with this Section 2 is deemed to have granted, issued or sold, any
shares of Common Stock (including the issuance or sale of shares of Common Stock owned or held by or for the account of the Company) (other
than in an Excluded Issuance (as defined in the Purchase Agreement)) for a consideration per share (the “New Issuance Price”)
less than a price equal to the Exercise Price in effect immediately prior to such granting, issuance or sale or deemed granting, issuance
or sale (such Exercise Price then in effect is referred to herein as the “Applicable Price”) (the foregoing a “Dilutive
Issuance”), then immediately after such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an amount equal
to the New Issuance Price. For all purposes of the foregoing (including, without limitation, determining the adjusted Exercise Price and
the New Issuance Price under this Section 2(b)), the following shall be applicable:
(i) Issuance
of Options. If the Company in any manner grants, issues or sells (or enters into any agreement to grant, issue or sell) any Options
(other than in an Excluded Issuance) and the lowest price per share for which one share of Common Stock is at any time issuable
upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of
any such Option or otherwise pursuant to the terms thereof is less than the Applicable Price, then such share of Common Stock shall be
deemed to be outstanding and to have been issued and sold by the Company at the time of the granting, issuance or sale (or the time of
execution of such agreement to grant, issue or sell, as applicable) of such Option for such price per share. For purposes of this Section 2(b)(i),
the “lowest price per share for which one share of Common Stock is at any time issuable upon the exercise of any such Options or
upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise pursuant to
the terms thereof” shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable
by the Company with respect to any one share of Common Stock upon the granting, issuance or sale (or pursuant to the agreement to grant,
issue or sell, as applicable) of such Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible
Security issuable upon exercise of such Option or otherwise pursuant to the terms thereof and (y) the lowest exercise price set forth
in such Option for which one share of Common Stock is issuable (or may become issuable assuming all possible market conditions) upon the
exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such
Option or otherwise pursuant to the terms thereof minus (2) the sum of all amounts paid or payable to the holder of such Option (or any
other Person) upon the granting, issuance or sale (or the agreement to grant, issue or sell, as applicable) of such Option, upon exercise
of such Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option or otherwise
pursuant to the terms thereof plus the value of any other consideration received or receivable by, or benefit conferred on, the holder
of such Option (or any other Person). Except as contemplated below, no further adjustment of the Exercise Price shall be made upon the
actual issuance of such shares of Common Stock or of such Convertible Securities upon the exercise of such Options or otherwise pursuant
to the terms of or upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities.
(ii) Issuance
of Convertible Securities. If the Company in any manner issues or sells (or enters into any agreement to issue or sell) any Convertible
Securities (other than in an Excluded Issuance) and the lowest price per share for which one share of Common Stock is at any time issuable
upon the conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof is less than the Applicable Price, then such
share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the issuance or
sale (or the time of execution of such agreement to issue or sell, as applicable) of such Convertible Securities for such price per share.
For the purposes of this Section 2(b)(ii), the “lowest price per share for which one share of Common Stock is at any time issuable
upon the conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof” shall be equal to (1) the lower of
(x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to one share of Common
Stock upon the issuance or sale (or pursuant to the agreement to issue or sell, as applicable) of the Convertible Security and upon conversion,
exercise or exchange of such Convertible Security or otherwise pursuant to the terms thereof and (y) the lowest conversion price set forth
in such Convertible Security for which one share of Common Stock is issuable (or may become issuable assuming all possible market conditions)
upon conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof minus (2) the sum of all amounts paid or payable
to the holder of such Convertible Security (or any other Person) upon the issuance or sale (or the agreement to issue or sell, as applicable)
of such Convertible Security plus the value of any other consideration received or receivable by, or benefit conferred on, the holder
of such Convertible Security (or any other Person). Except as contemplated below, no further adjustment of the Exercise Price shall be
made upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities or otherwise
pursuant to the terms thereof, and if any such issuance or sale of such Convertible Securities is made upon exercise of any Options for
which adjustment of this Warrant has been or is to be made pursuant to other provisions of this Section 2(b), except as contemplated
below, no further adjustment of the Exercise Price shall be made by reason of such issuance or sale.
(iii) Change
in Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options (excluding with respect to any
Excluded Issuance), the additional consideration, if any, payable upon the issue, conversion, exercise or exchange of any Convertible
Securities, or the rate at which any Convertible Securities are convertible into or exercisable or exchangeable for shares of Common Stock
increases or decreases at any time (other than proportional changes in conversion or exercise prices, as applicable, in connection with
an event referred to in Section 2(a)), the Exercise Price in effect at the time of such increase or decrease shall be adjusted to the
Exercise Price which would have been in effect at such time had such Options or Convertible Securities provided for such increased or
decreased purchase price, additional consideration or increased or decreased conversion rate, as the case may be, at the time initially
granted, issued or sold. For purposes of this Section 2(b)(iii), if the terms of any Option or Convertible Security (including, without
limitation, any Option or Convertible Security that was outstanding as of the Issuance Date) are increased or decreased in the manner
described in the immediately preceding sentence, then such Option or Convertible Security and the shares of Common Stock deemed issuable
upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such increase or decrease. No adjustment
pursuant to this Section 2(b) shall be made if such adjustment would result in an increase of the Exercise Price then in effect.
(iv) Calculation
of Consideration Received. If any Option and/or Convertible Security and/or Adjustment Right is issued in connection with the issuance
or sale or deemed issuance or sale of any other securities of the Company (excluding with respect to any Excluded Issuance) (as determined
jointly by the Holder and the Company), the “Primary Security”, and such Option and/or Convertible Security and/or Adjustment
Right, the “Secondary Securities”), together comprising one integrated transaction, (or one or more transactions if such issuances
or sales or deemed issuances or sales of securities of the Company either (A) have at least one investor or purchaser in common, (B) are
consummated in reasonable proximity to each other and/or (C) are consummated under the same plan of financing) the aggregate consideration
per share of Common Stock with respect to such Primary Security shall be deemed to be equal to the difference of (x) the lowest price
per share for which one share of Common Stock was issued (or was deemed to be issued pursuant to Section 2(b)(i) or 2(b)(ii) above, as
applicable) in such integrated transaction solely with respect to such Primary Security, minus (y) with respect to such Secondary Securities,
the sum of (I) the Black Scholes Consideration Value of each such Option, if any, (II) the fair market value (as reasonably determined
jointly by the Holder and the Company in good faith) or the Black Scholes Consideration Value, as applicable, of such Adjustment Right,
if any, and (III) the fair market value (as reasonably determined jointly by the Holder and the Company) of such Convertible Security,
if any, in each case, as determined on a per share basis in accordance with this Section 2(b)(iv). If any shares of Common Stock, Options
or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor (for
the purpose of determining the consideration paid for such Common Stock, Option or Convertible Security, but not for the purpose of the
calculation of the Black Scholes Consideration Value) will be deemed to be the net amount of consideration received by the Company therefor.
If any shares of Common Stock, Options or Convertible Securities are issued or sold for a consideration other than cash, the amount of
such consideration received by the Company (for the purpose of determining the consideration paid for such Common Stock, Option or Convertible
Security, but not for the purpose of the calculation of the Black Scholes Consideration Value) will be the fair value of such consideration,
except where such consideration consists of publicly traded securities, in which case the amount of consideration received by the Company
for such securities will be the arithmetic average of the VWAPs of such security for each of the five (5) Trading Days immediately preceding
the date of receipt. If any shares of Common Stock, Options or Convertible Securities are issued to the owners of the non-surviving entity
in connection with any merger in which the Company is the surviving entity, the amount of consideration therefor (for the purpose of determining
the consideration paid for such Common Stock, Option or Convertible Security, but not for the purpose of the calculation of the Black
Scholes Consideration Value) will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity
as is attributable to such shares of Common Stock, Options or Convertible Securities (as the case may be). The fair value of any consideration
other than cash or publicly traded securities will be reasonably determined jointly by the Company and the Holder. If such parties are
unable to reach agreement within ten (10) days after the occurrence of an event requiring valuation (the “Valuation Event”),
the fair value of such consideration will be determined within five (5) Trading Days after the tenth (10th) day following such
Valuation Event by an independent, reputable appraiser jointly selected by the Company and the Holder. The determination of such appraiser
shall be final and binding upon all parties absent manifest error and the fees and expenses of such appraiser shall be borne by the Company.
(v) Record
Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive
a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for
or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issuance
or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or purchase (as the case may be).
(c) Holder’s
Right of Alternative Exercise Price Following Issuance of Certain Options or Convertible Securities. In addition to and not in limitation
of the other provisions of this Section 2, if the Company in any manner issues or sells or enters into any agreement to issue or
sell, any Common Stock, Options or Convertible Securities (any such securities, “Variable Price Securities”) after the Issuance
Date that are issuable pursuant to such agreement or convertible into or exchangeable or exercisable for shares of Common Stock at a price
which varies or may vary with the market price of the shares of Common Stock, including by way of one or more reset(s) to a fixed price,
but exclusive of such formulations reflecting customary anti-dilution provisions (such as share splits, share combinations, share dividends
and similar transactions) (each of the formulations for such variable price being herein referred to as, the “Variable Price”),
the Company shall provide written notice thereof via electronic mail and overnight courier to the Holder on the date of such agreement
and the issuance of such Common Stock, Convertible Securities or Options. From and after the date the Company enters into such agreement
or issues any such Variable Price Securities, the Holder shall have the right, but not the obligation, in its sole discretion to substitute
the Variable Price, as calculated pursuant to the agreements governing such Variable Price Securities, for the Exercise Price upon exercise
of this Warrant by designating in the Exercise Notice delivered upon any exercise of this Warrant that solely for purposes of such exercise
the Holder is relying on the Variable Price rather than the Exercise Price then in effect. The Holder’s election to rely on a Variable
Price for a particular exercise of this Warrant shall not obligate the Holder to rely on a Variable Price for any future exercises of
this Warrant.
(d) [Intentionally
omitted].
(e) Other
Events. In the event that the Company (or any Subsidiary (as defined in the Purchase Agreement)) shall take any action to which the
provisions hereof are not strictly applicable, or, if applicable, would not operate to protect the Holder from actual dilution or if any
event occurs of the type contemplated by the provisions of this Section 2 but not expressly provided for by such provisions (including,
without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Company’s
board of directors shall in good faith determine and implement an appropriate adjustment in the Exercise Price and the number of Warrant
Shares (if applicable) so as to protect the rights of the Holder, provided that no such adjustment pursuant to this Section 2(e) will
increase the Exercise Price or decrease the number of Warrant Shares as otherwise determined pursuant to this Section 2, provided further
that if the Holder does not accept such adjustments as appropriately protecting its interests hereunder against such dilution, then the
Company’s board of directors and the Holder shall agree, in good faith, upon an independent investment bank of nationally recognized
standing to make such appropriate adjustments, whose determination shall be final and binding absent manifest error and whose fees and
expenses shall be borne by the Company.
(f) Calculations.
All calculations under this Section 2 shall be made by rounding to the nearest cent or the nearest 1/100th of a share,
as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the
account of the Company, and the disposition of any such shares shall be considered an issuance or sale of Common Stock
(g) Voluntary
Adjustment By Company. Subject to the rules and regulations of the Principal Market, the Company may at any time during the term of
this Warrant, reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors
of the Company.
(h) Number
of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to this Section 2, the number of Warrant
Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such adjustment
the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate Exercise Price
in effect immediately prior to such adjustment (without regard to any limitations on exercise contained herein). For the avoidance of
doubt, the aggregate Exercise Price payable prior to such adjustment is calculated as follows: the total number of Warrant Shares issuable
upon exercise of this Warrant immediately prior to such adjustment (without regard to the Beneficial Ownership Limitation and the Exchange
Cap (as defined in the Purchase Agreement)) multiplied by the Exercise Price in effect immediately prior to such adjustment. By way of
example, if E is the total number of Warrant Shares issuable upon exercise of this Warrant immediately prior to such adjustment (without
regard to the Beneficial Ownership Limitation and the Exchange Cap), F is the Exercise Price in effect immediately prior to such adjustment,
and G is the Exercise Price in effect immediately after such adjustment, the adjustment to the number of Warrant Shares can be expressed
in the following formula: Total number of Warrant Shares after such adjustment = the number obtained from dividing [E x F] by G.
(i) Notice.
In addition to all other notice(s) required under this Section 2, the Company shall also notify the Holder in writing, no later than the
second Trading Day following any adjustment to the Warrant under this Section 2, indicating therein the occurrence of such applicable
exercise price and warrant share adjustment (such notice the “Adjustment Notice”). For purposes of clarification, regardless
of whether (i) the Company provides an Adjustment Notice pursuant to this Section 2 or (ii) the Holder accurately refers to the number
of Warrant Shares or Exercise Price in the Exercise Notice, the Holder is entitled to receive the adjustments to the number of Warrant
Shares and Exercise Price at all times on and after the date of such adjustment event.
(j) Returnable
Warrant. This Warrant shall, without any further action by either party hereto, be cancelled and extinguished in its entirety if the Note
is fully repaid in cash prior to the Trigger Date.
3. RIGHTS
UPON DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 2 above or Section 4(a) below, if the Company shall
declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock,
by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property,
options, evidence of indebtedness or any other assets by way of a dividend, spin off, reclassification, corporate rearrangement, scheme
of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in
each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated
therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard
to any limitations or restrictions on exercise of this Warrant, including without limitation, the Beneficial Ownership Limitation or,
prior to the Ex-Exchange Cap Date, the Exchange Cap) immediately before the date on which a record is taken for such Distribution, or,
if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation
in such Distribution (provided, however, that to the extent that the Holder’s right to participate in any such Distribution would
result in the Holder and the other Attribution Parties exceeding the Beneficial Ownership Limitation or, prior to the Ex-Exchange Cap
Date, the Exchange Cap, then the Holder shall not be entitled to participate in such Distribution to the extent of the Beneficial Ownership
Limitation or, prior to the Ex-Exchange Cap Date, the Exchange Cap (and shall not be entitled to beneficial ownership of such shares of
Common Stock as a result of such Distribution (and beneficial ownership) to the extent of any such excess) and the portion of such Distribution
shall be held in abeyance for the benefit of the Holder until such time or times, if ever, as its right thereto would not result in the
Holder and the other Attribution Parties exceeding the Beneficial Ownership Limitation or, prior to the Ex-Exchange Cap Date, the Exchange
Cap, at which time or times the Holder shall be granted such Distribution (and any Distributions declared or made on such initial Distribution
or on any subsequent Distribution held similarly in abeyance) to the same extent as if there had been no such limitation).
4. PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS.
(a) Purchase
Rights. In addition to any adjustments pursuant to Sections 2 or 3 above, if at any time the Company grants, issues or sells any Options,
Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class
of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase
Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock
acquirable upon complete exercise of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including
without limitation, the Beneficial Ownership Limitation or, prior to the Ex-Exchange Cap Date, the Exchange Cap) immediately before the
date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of
which the record holders of shares of Common Stock are to be determined for the grant, issuance or sale of such Purchase Rights (provided,
however, that to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder
and the other Attribution Parties exceeding the Beneficial Ownership Limitation or, prior to the Ex-Exchange Cap Date, the Exchange Cap,
then the Holder shall not be entitled to participate in such Purchase Right to the extent of the Beneficial Ownership Limitation or, prior
to the Ex-Exchange Cap Date, the Exchange Cap (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result
of such Purchase Right (and beneficial ownership) to the extent of any such excess) and such Purchase Right to such extent shall be held
in abeyance for the benefit of the Holder until such time or times, if ever, as its right thereto would not result in the Holder and the
other Attribution Parties exceeding the Beneficial Ownership Limitation or, prior to the Ex-Exchange Cap Date, the Exchange Cap, at which
time or times the Holder shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or
on any subsequent Purchase Right held similarly in abeyance) to the same extent as if there had been no such limitation).
(b) Fundamental
Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity assumes in writing
all of the obligations of the Company under this Warrant and the other Transaction Documents (as defined in the Purchase Agreement) in
accordance with the provisions of this Section 4(b) pursuant to written agreements in form and substance satisfactory to the Holder
and approved by the Holder prior to such Fundamental Transaction, including agreements to deliver to the Holder in exchange for this Warrant
a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant, including,
without limitation, which is exercisable for a corresponding number of shares of capital stock equivalent to the shares of Common Stock
acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such
Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking
into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of
capital stock, such adjustments to the number of shares of capital stock and such exercise price being for the purpose of protecting the
economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction). Upon the consummation of each Fundamental
Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of the applicable Fundamental
Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead
to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company
under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company
herein. Upon consummation of each Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall
be issued upon exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction, in lieu of the shares
of Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections 3 and 4(a)
above, which shall continue to be receivable thereafter)) issuable upon the exercise of this Warrant prior to the applicable Fundamental
Transaction, such shares of publicly traded common stock (or its equivalent) of the Successor Entity (including its Parent Entity) which
the Holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised
immediately prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant), as adjusted
in accordance with the provisions of this Warrant. Notwithstanding the foregoing, and without limiting Section 1(c) hereof, the Holder
may elect, at its sole option, by delivery of written notice to the Company to waive this Section 4(b) to permit the Fundamental
Transaction without the assumption of this Warrant. In addition to and not in substitution for any other rights hereunder, prior to the
consummation of each Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or
other assets with respect to or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate
provision to insure that the Holder will thereafter have the right to receive upon an exercise of this Warrant at any time after the consummation
of the applicable Fundamental Transaction but prior to the Expiration Date, in lieu of the shares of the Common Stock (or other securities,
cash, assets or other property (except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable
thereafter)) issuable upon the exercise of the Warrant prior to such Fundamental Transaction, such shares of stock, securities, cash,
assets or any other property whatsoever (including warrants or other purchase or subscription rights) which the Holder would have been
entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to
the applicable Fundamental Transaction (without regard to any limitations on the exercise of this Warrant) (the “Corporate Event
Consideration”). Provision made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the
Holder.
(c) [Intentionally
omitted].
(d) Application.
The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions and Corporate Events and
shall be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without regard to any limitations on
the exercise of this Warrant (provided that the Holder shall continue to be subject to the Beneficial Ownership Limitation and prior to
the Ex-Exchange Cap Date, the Exchange Cap, applied however with respect to shares of capital stock registered under the 1934 Act and
thereafter receivable upon exercise of this Warrant (or any such other warrant)).
5. NON-CIRCUMVENTION.
The Company covenants and agrees that it 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 Warrant, and will at all times in good faith carry out
all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. Without limiting the generality
of the foregoing, the Company (i) shall not increase the par value of any shares of Common Stock receivable upon the exercise of this
Warrant above the Exercise Price then in effect, (ii) shall take all such actions as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon the exercise of this Warrant, and (iii)
shall, for so long as this Warrant is outstanding, have authorized and reserved, free from preemptive rights, two (2) times the number
of shares of Common Stock into which the Warrants are then exercisable into to provide for the exercise of the rights represented by this
Warrant (without regard to any limitations on exercise).
6. WARRANT
HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in its capacity as a holder
of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any purpose,
nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in its capacity as the Holder of this Warrant,
any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any
reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings,
receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which it is then entitled
to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities
on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such
liabilities are asserted by the Company or by creditors of the Company. Notwithstanding this Section 6, the Company shall provide
the Holder with copies of the same notices and other information given to the stockholders of the Company generally, contemporaneously
with the giving thereof to the stockholders.
7.
REISSUANCE.
(a) Lost,
Stolen or Mutilated Warrant. If this Warrant is lost, stolen, mutilated or destroyed, the Company will, on such terms as to indemnity
or otherwise as it may reasonably impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new
Warrant of like denomination and tenor as this Warrant so lost, stolen, mutilated or destroyed.
(b) Issuance
of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant shall
be of like tenor with this Warrant, and shall have an issuance date, as indicated on the face of such new Warrant which is the same as
the Issuance Date.
8. TRANSFER.
This Warrant shall be binding upon the Company and its successors and assigns, and shall inure to be the benefit of the Holder and its
successors and assigns. Notwithstanding anything to the contrary herein, the rights, interests or obligations of the Company hereunder
may not be assigned, by operation of law or otherwise, in whole or in part, by the Company without the prior signed written consent of
the Holder, which consent may be withheld at the sole discretion of the Holder (any such assignment or transfer shall be null and void
if the Company does not obtain the prior signed written consent of the Holder). This Warrant or any of the severable rights and obligations
inuring to the benefit of or to be performed by Holder hereunder may be assigned by Holder to a third party, in whole or in part, without
the need to obtain the Company’s consent thereto.
9. NOTICES.
Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance
with the notice provisions contained in the Purchase Agreement. The Company shall provide the Holder with prompt written notice (i) immediately
upon any adjustment of the Exercise Price, setting forth in reasonable detail, the calculation of such adjustment and (ii) at least 20
days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the
shares of Common Stock, (B) with respect to any grants, issuances or sales of any stock or other securities directly or indirectly convertible
into or exercisable or exchangeable for shares of Common Stock or other property, pro rata to the 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 the Holder.
10. DISCLOSURE.
Upon delivery by the Company to the Holder (or receipt by the Company from the Holder) of any notice in accordance with the terms of this
Warrant, unless the Company has in good faith determined that the matters relating to such notice do not constitute material, non-public
information relating to the Company or any of its Subsidiaries, the Company shall on or prior to 9:00 am, New York city time on the Business
Day immediately following such notice delivery date, publicly disclose such material, non-public information on a Current Report on Form
8-K or otherwise. In the event that the Company believes that a notice contains material, non-public information relating to the Company
or any of its Subsidiaries, the Company so shall indicate to the Holder explicitly in writing in such notice (or immediately upon receipt
of notice from the Holder, as applicable), and in the absence of any such written indication in such notice (or notification from the
Company immediately upon receipt of notice from the Holder), the Holder shall be entitled to presume that information contained in the
notice does not constitute material, non-public information relating to the Company or any of its Subsidiaries. Nothing contained in this
Section 10 shall limit any obligations of the Company, or any rights of the Holder, under the Purchase Agreement.
11. ABSENCE
OF TRADING AND DISCLOSURE RESTRICTIONS. The Company acknowledges and agrees that the Holder is not a fiduciary or agent of the Company
and that the Holder shall have no obligation to (a) maintain the confidentiality of any information provided by the Company or (b) refrain
from trading any securities while in possession of such information in the absence of a written non-disclosure agreement signed by an
officer of the Holder that explicitly provides for such confidentiality and trading restrictions. In the absence of such an executed,
written non-disclosure agreement and subject to compliance with any applicable securities laws, the Company acknowledges that the Holder
may freely trade in any securities issued by the Company, may possess and use any information provided by the Company in connection with
such trading activity, and may disclose any such information to any third party.
12. AMENDMENT
AND WAIVER. The terms of this Warrant may be amended or waived (either generally or in a particular instance and either retroactively
or prospectively) only with the signed written consent of the Company and the Holder.
13. ARBITRATION
OF CLAIMS; GOVERNING LAW; AND VENUE. The Company and Holder shall submit all Claims (as defined in Exhibit E of the Purchase Agreement)
(the “Claims”) arising under this Warrant or any other agreement between the parties and their affiliates or any Claim relating
to the relationship of the parties to binding arbitration pursuant to the arbitration provisions set forth in Exhibit E of the Purchase
Agreement (the “Arbitration Provisions”). The Company and Holder hereby acknowledge and agree that the Arbitration Provisions
are unconditionally binding on the Company and Holder hereto and are severable from all other provisions of this Warrant. By executing
this Warrant, Company represents, warrants and covenants that Company has reviewed the Arbitration Provisions carefully, consulted with
legal counsel about such provisions (or waived its right to do so), understands that the Arbitration Provisions are intended to allow
for the expeditious and efficient resolution of any dispute hereunder, agrees to the terms and limitations set forth in the Arbitration
Provisions, and that Company will not take a position contrary to the foregoing representations. The Company acknowledges and agrees that
Holder may rely upon the foregoing representations and covenants of the Company regarding the Arbitration Provisions. This Warrant shall
be construed and enforced in accordance with, and all questions concerning the construction, validity, interpretation and performance
of this Warrant shall be governed by, the internal laws of the State of Delaware, without giving effect to any choice of law or conflict
of law provision or rule (whether of the State of Delaware or any other jurisdictions) that would cause the application of the laws of
any jurisdictions other than the State of Delaware. The Company and Holder consent to and expressly agree that the exclusive venue for
arbitration of any Claims arising under this Warrant or any other agreement between the Company and Holder or their respective affiliates
(including but not limited to the Transaction Documents) or any Claim relating to the relationship of the Company and Holder or their
respective affiliates shall be in the State of Delaware. Without modifying the Company’s and Holder’s obligations to resolve
disputes hereunder pursuant to the Arbitration Provisions, for any litigation arising in connection with any of the Transaction Documents
(and notwithstanding the terms (specifically including any governing law and venue terms) of any transfer agent services agreement or
other agreement between the Company’s transfer agent and the Company, such litigation specifically includes, without limitation
any action between or involving Company and the Company’s transfer agent under the Irrevocable Transfer Agent Instructions (as defined
in the Purchase Agreement) or otherwise related to Holder in any way (specifically including, without limitation, any action where Company
seeks to obtain an injunction, temporary restraining order, or otherwise prohibit the Company’s transfer agent from issuing shares
of Common Stock to Holder for any reason)), each party hereto hereby (i) consents to and expressly submits to the exclusive personal jurisdiction
of any state or federal court sitting in the State of Delaware, (ii) expressly submits to the exclusive venue of any such court for the
purposes hereof, (iii) agrees to not bring any such action (specifically including, without limitation, any action where Company seeks
to obtain an injunction, temporary restraining order, or otherwise prohibit the Company’s transfer agent from issuing shares of
Common Stock to Holder for any reason) outside of any state or federal court sitting in the State of Delaware, and (iv) waives any claim
of improper venue and any claim or objection that such courts are an inconvenient forum or any other claim, defense or objection to the
bringing of any such proceeding in such jurisdiction or to any claim that such venue of the suit, action or proceeding is improper. Notwithstanding
anything in the foregoing to the contrary, nothing herein (i) shall limit, or shall be deemed or construed to limit, the ability of the
Holder to realize on any collateral or any other security, or to enforce a judgment or other court ruling in favor of the Holder, including
through a legal action in any court of competent jurisdiction, or (ii) shall limit, or shall be deemed or construed to limit, any provision
of Section 15 of this Warrant. The Company hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any
objection to jurisdiction and venue of any action instituted hereunder, any claim that it is not personally subject to the jurisdiction
of any such court, and any claim that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit,
action or proceeding is improper (including but not limited to based upon forum non conveniens).
THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTIONS CONTEMPLATED HEREBY. The Company irrevocably waives
personal service of process and consents to process being served in any suit, action or proceeding in connection with this Warrant or
any other agreement, certificate, instrument or document contemplated hereby or thereby by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to Company at the address in effect for notices to it under this Warrant 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. The prevailing party in any action or dispute brought
in connection with this Warrant or any other agreement, certificate, instrument or document contemplated hereby or thereby shall be entitled
to recover from the other party its reasonable attorney’s fees and costs. If any provision of this Warrant shall be invalid or unenforceable
in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Warrant
in that jurisdiction or the validity or enforceability of any provision of this Warrant in any other jurisdiction.
14. ACCEPTANCE.
Receipt of this Warrant by the Holder shall constitute acceptance of and agreement to all of the terms and conditions contained
herein.
15. DISPUTE
RESOLUTION.
(a) Submission
to Dispute Resolution.
(i) Notwithstanding
anything to the contrary in this Warrant, in the case of a dispute relating to the Exercise Price, the Closing Sale Price, the Closing
Bid Price, Black Scholes Consideration Value, or fair market value or the arithmetic calculation of the number of Warrant Shares (as the
case may be) (including, without limitation, a dispute relating to the determination of any of the foregoing) (the “Warrant Calculations”),
the Company or the Holder (as the case may be) shall submit the dispute to the other party via electronic mail (A) if by the Company,
within two (2) Trading Days after the occurrence of the circumstances giving rise to such dispute or (B) if by the Holder, at any time
after the Holder learned of the circumstances giving rise to such dispute. If the Holder and the Company are unable to agree upon such
determination or calculation within two (2) Trading Days following such initial notice by the Company or the Holder (as the case may be)
of such dispute to the Company or the Holder (as the case may be), then the Holder may, at its sole option, submit the dispute to an independent,
reputable investment bank or independent, outside accountant selected by the Holder (the “Independent Third Party”), and the
Company shall pay all expenses of such Independent Third Party.
(ii) The
Holder and the Company shall each deliver to such Independent Third Party (A) a copy of the initial dispute submission so delivered in
accordance with the first sentence of this Section 15(a) and (B) written documentation supporting its position with respect to such dispute,
in each case, no later than 5:00 p.m. (New York time) by second (2nd) Business Day immediately following the date on which the Holder
selected such Independent Third Party (the “Dispute Submission Deadline”) (the documents referred to in the immediately preceding
clauses (A) and (B) are collectively referred to herein as the “Required Dispute Documentation”) (it being understood and
agreed that if either the Holder or the Company fails to so deliver all of the Required Dispute Documentation by the Dispute Submission
Deadline, then the party who fails to so submit all of the Required Dispute Documentation shall no longer be entitled to (and hereby waives
its right to) deliver or submit any written documentation or other support to such Independent Third Party with respect to such dispute
and such Independent Third Party shall resolve such dispute based solely on the Required Dispute Documentation that was delivered to such
Independent Third Party prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by both the Company and the Holder
or otherwise requested by such Independent Third Party, neither the Company nor the Holder shall be entitled to deliver or submit any
written documentation or other support to such Independent Third Party in connection with such dispute, other than the Required Dispute
Documentation.
(iii) The
Company and the Holder shall cause such Independent Third Party to determine the resolution of such dispute and notify the Company and
the Holder of such resolution no later than five (5) Business Days immediately following the Dispute Submission Deadline. The fees and
expenses of such Independent Third Party shall be borne solely by the Company, and such Independent Third Party’s resolution of
such dispute shall be final and binding upon all parties absent manifest error.
(b) Miscellaneous.
The Company expressly acknowledges and agrees that (i) this Section 15 constitutes an agreement to arbitrate between the Company
and the Holder (and constitutes an arbitration agreement) under the rules then in effect under the Delaware Rules of Civil Procedure (“DRCP”)
and that the Holder is authorized to apply for an order to compel arbitration pursuant to the DRCP in order to compel compliance with
this Section 15, (ii) a dispute relating to the Warrant Calculations includes, without limitation, disputes as to (A) whether an
issuance or sale or deemed issuance or sale of Common Stock occurred under Section 2 of this Warrant, (B) the consideration per share
at which an issuance or deemed issuance of Common Stock occurred, (C) whether any issuance or sale or deemed issuance or sale of Common
Stock was an issuance or sale or deemed issuance or sale, (D) whether an agreement, instrument, security or the like constitutes an Option
or Convertible Security and (E) whether a Dilutive Issuance occurred, (iii) the terms of this Warrant and each other applicable Transaction
Document shall serve as the basis for the selected Independent Third Party’s resolution of the applicable dispute, such Independent
Third Party shall be entitled (and is hereby expressly authorized) to make all findings, determinations and the like that such Independent
Third Party determines are required to be made by such Independent Third Party in connection with its resolution of such dispute (including,
without limitation, determining (A) whether an issuance or sale or deemed issuance or sale of Common Stock occurred under Section 2 of
this Warrant, (B) the consideration per share at which an issuance or deemed issuance of Common Stock occurred, (C) whether any issuance
or sale or deemed issuance or sale of Common Stock was an issuance or sale or deemed issuance or sale, (D) whether an agreement, instrument,
security or the like constitutes an Option or Convertible Security and (E) whether a Dilutive Issuance occurred) and in resolving such
dispute such Independent Third Party shall apply such findings, determinations and the like to the terms of this Warrant and any other
applicable Transaction Documents, and (iv) nothing in this Section 15 shall limit the Holder from obtaining any injunctive relief
or other equitable remedies (including, without limitation, with respect to any matters described in this Section 15).
16. CERTAIN
DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:
(a) “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.
(b) “Black
Scholes Consideration Value” means the value of the applicable Option, Convertible Security or Adjustment Right (as the case
may be) as of the date of issuance thereof calculated using the Black Scholes Option Pricing Model obtained from the “OV”
function on Bloomberg utilizing (i) an underlying price per share equal to the Closing Sale Price of the Common Stock on the Trading Day
immediately preceding the public announcement of the execution of definitive documents with respect to the issuance of such Option or
Convertible Security (as the case may be), (ii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to
the remaining term of such Option, Convertible Security or Adjustment Right (as the case may be) as of the date of issuance of such Option,
Convertible Security or Adjustment Right (as the case may be), (iii) a zero cost of borrow and (iv) an expected volatility equal to the
greater of 100% and the 30 day volatility obtained from the “HVT” function on Bloomberg (determined utilizing a 365 day annualization
factor) as of the Trading Day immediately following the date of issuance of such Option, Convertible Security or Adjustment Right (as
the case may be).
(c) “Black
Scholes Value” means the value of the unexercised portion of this Warrant remaining on the date of the Holder’s request
pursuant to Section 4(c)(i), which value is calculated using the Black Scholes Option Pricing Model obtained from the “OV”
function on Bloomberg utilizing (i) an underlying price per share equal to the greater of (1) the highest Closing Sale Price of the Common
Stock during the period beginning on the Trading Day immediately preceding the announcement of the applicable Change of Control (or the
consummation of the applicable Change of Control, if earlier) and ending on the Trading Day of the Holder’s request pursuant to
Section 4(c)(i) and (2) the sum of the price per share being offered in cash in the applicable Change of Control (if any) plus the value
of the non-cash consideration being offered in the applicable Change of Control (if any), (ii) a strike price equal to the Exercise Price
in effect on the date of the Holder’s request pursuant to Section 4(c)(i), (iii) a risk-free interest rate corresponding to
the U.S. Treasury rate for a period equal to the greater of (1) the remaining term of this Warrant as of the date of the Holder’s
request pursuant to Section 4(c)(i) and (2) the remaining term of this Warrant as of the date of consummation of the applicable Change
of Control or as of the date of the Holder’s request pursuant to Section 4(c)(i) if such request is prior to the date of the
consummation of the applicable Change of Control, (iv) a zero cost of borrow and (v) an expected volatility equal to the greater of 100%
and the 30 day volatility obtained from the “HVT” function on Bloomberg (determined utilizing a 365 day annualization factor)
as of the Trading Day immediately following the earliest to occur of (A) the public disclosure of the applicable Change of Control and
(B) the date of the Holder’s request pursuant to Section 4(c)(i).
(d) “Bloomberg”
means Bloomberg, L.P.
(e) “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in the State of Delaware 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 State of Delaware generally are open for use by customers on such day.
(f) “Change
of Control” means any Fundamental Transaction other than (i) any merger of the Company or any of its, direct or indirect, wholly-owned
Subsidiaries with or into any of the foregoing Persons, (ii) any reorganization, recapitalization or reclassification of the shares of
Common Stock in which holders of the Company’s voting power immediately prior to such reorganization, recapitalization or reclassification
continue after such reorganization, recapitalization or reclassification to hold publicly traded securities and, directly or indirectly,
are, in all material respects, the holders of the voting power of the surviving entity (or entities with the authority or voting power to
elect the members of the board of directors (or their equivalent if other than a corporation) of such entity or entities) after such reorganization,
recapitalization or reclassification, (iii) pursuant to a migratory merger effected solely for the purpose of changing the jurisdiction
of incorporation of the Company or any of its Subsidiaries or (iv) bone fide arm’s length acquisitions by the Company with one or
more third parties as long as holders of the Company’s voting power as of the Issuance Date continue after such acquisition to hold
publicly traded securities and, directly or indirectly, are, in all material respects, the holders of at least 51% of the voting power
of the surviving entity (or entities with the authority or voting power to elect the members of the board of directors (or their
equivalent if other than a corporation) of such entity or entities) after such acquisition.
(g) “Closing
Bid Price” and “Closing Sale Price” means, for any security as of any date, (i) the last closing bid price
and last closing trade price, respectively, for such security on the Principal Market, as reported by Quotestream or other similar quotation
service provider designated by the Holder, or, if the Principal Market begins to operate on an extended hours basis and does not designate
the closing trade price, then the last trade price of such security prior to 4:00 p.m., New York time, as reported by Quotestream or other
similar quotation service provider designated by the Holder, or (ii) if the foregoing does not apply, the last trade price of such security
in the over-the-counter market for such security as reported by Quotestream or other similar quotation service provider designated by
the Holder, or (iii) if no last trade price is reported for such security by Quotestream or other similar quotation service provider designated
by the Holder, the average of the bid and ask prices of any market makers for such security as reported by Quotestream or other similar
quotation service provider designated by the Holder. If the Closing Sale Price cannot be calculated for a security on a particular date
on any of the foregoing bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually determined
by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such
dispute shall be resolved in accordance with the procedures in Section 15. All such determinations to be appropriately adjusted for
any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation period.
(h) “Common
Stock” means the Company’s common stock, par value $0.0001 per share, and any other class of securities into which such
securities may hereafter be reclassified or changed.
(i) “Common
Stock Equivalents” means any securities of the Company that would entitle the holder thereof to acquire at any time Common Stock,
including without limitation any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible
into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
(j) “Convertible
Securities” means any stock or other security (other than Options) that is at any time and under any circumstances, directly
or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any shares
of Common Stock.
(k) “Eligible
Market” means The New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, the Nasdaq Global Market, Nasdaq
Capital Market, or equivalent national securities exchange.
(l) [Intentionally
omitted].
(m) [Intentionally
omitted].
(n) [Intentionally
omitted].
(o) “Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
(p) “Fundamental
Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise,
in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation) another
Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of
the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation S-X) to one or more Subject Entities,
or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject to or have its Common Stock be subject
to or party to one or more Subject Entities making, a purchase, tender or exchange offer that is accepted by the holders of at least either
(x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of Common Stock calculated as if any shares of Common
Stock held by all Subject Entities making or party to, or Affiliated with any Subject Entities making or party to, such purchase, tender
or exchange offer were not outstanding; or (z) such number of shares of Common Stock such that all Subject Entities making or party to,
or Affiliated with any Subject Entity making or party to, such purchase, tender or exchange offer, become collectively the beneficial
owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (iv) consummate a stock
or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off
or scheme of arrangement) with one or more Subject Entities whereby all such Subject Entities, individually or in the aggregate, acquire,
either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares of Common Stock calculated
as if any shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any Subject Entity making or
party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number of shares of Common Stock
such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50%
of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its Common Stock, (B) that the Company shall,
directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, allow any Subject
Entity individually or the Subject Entities in the aggregate to be or become the “beneficial owner” (as defined in Rule 13d-3
under the 1934 Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance, tender, tender offer, exchange,
reduction in outstanding shares of Common Stock, merger, consolidation, business combination, reorganization, recapitalization, spin-off,
scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner whatsoever, of either (x) at least
50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock, (y) at least 50% of the aggregate ordinary
voting power represented by issued and outstanding Common Stock not held by all such Subject Entities as of the date of this Warrant calculated
as if any shares of Common Stock held by all such Subject Entities were not outstanding, or (z) a percentage of the aggregate ordinary
voting power represented by issued and outstanding shares of Common Stock or other equity securities of the Company sufficient to allow
such Subject Entities to effect a statutory short form merger or other transaction requiring other shareholders of the Company to surrender
their shares of Common Stock without approval of the shareholders of the Company or (C) directly or indirectly, including through subsidiaries,
Affiliates or otherwise, in one or more related transactions, the issuance of or the entering into any other instrument or transaction
structured in a manner to circumvent, or that circumvents, the intent of this definition in which case this definition shall be construed
and implemented in a manner otherwise than in strict conformity with the terms of this definition to the extent necessary to correct this
definition or any portion of this definition which may be defective or inconsistent with the intended treatment of such instrument or
transaction.
(q) “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock or equivalent
equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity, the Person or Parent
Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.
(r) “Person”
and “Persons” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust,
an unincorporated organization, any other entity and any governmental entity or any department or agency thereof.
(s) “Principal
Market” means the principal securities exchange or trading market where such Common Stock is listed or quoted, including but
not limited to any tier of the OTC Markets Group, Inc., any tier of the The Nasdaq Stock Market LLC
(including Nasdaq Capital Market), or the NYSE American LLC, or any successor to such markets.
(t) “Market
Price” means the highest traded price of the Common Stock during the thirty Trading Days prior to the date of the respective
Exercise Notice.
(u) “Successor
Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from or surviving any Fundamental
Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental Transaction shall have been
entered into.
(v) “Trading
Day” means any day on which the Common Stock is listed or quoted on its Principal Market, provided, however, that if the Common
Stock is not then listed or quoted on any Principal Market, then any calendar day.
(w) “Trigger
Date” means the date that an Event of Default (as defined in the Note) occurs under the Note.
(x) “VWAP”
means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market (or, if the
Principal Market is not the principal trading market for such security, then on the principal securities exchange or securities market
on which such security is then traded), during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m., New York time,
as reported by Quotestream or other similar quotation service provider designated by the Holder through its “VAP” function
(set to 09:30 start time and 16:00 end time) or, if the foregoing does not apply, the dollar volume-weighted average price of such security
in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30 a.m., New York time,
and ending at 4:00 p.m., New York time, as reported by Quotestream or other similar quotation service provider designated by the Holder,
or, if no dollar volume-weighted average price is reported for such security by Quotestream or other similar quotation service provider
designated by the Holder for such hours, the average of the highest closing bid price and the lowest closing ask price of any of the market
makers for such security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC) (or a similar
organization or agency succeeding to its functions of reporting prices). If the VWAP cannot be calculated for such security on such date
on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as mutually determined by the Company
and the Holder. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization
or other similar transaction during such period.
* * * * * * *
IN WITNESS WHEREOF, the Company has caused this
Warrant to be duly executed as of the Issuance Date set forth above.
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SIGNING DAY SPORTS, INC. |
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Name: |
Daniel Nelson |
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Title: |
Chief Executive Officer |
EXHIBIT A
EXERCISE NOTICE
(To be executed by the registered holder to exercise
this Common Stock Purchase Warrant)
The
Undersigned holder hereby exercises the right to purchase
_______________ of the shares of Common Stock (“Warrant Shares”) of SIGNING DAY SPORTS, INC., a Delaware corporation (the
“Company”), evidenced by the attached copy of the Common Stock Purchase Warrant (the “Warrant”). Capitalized
terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.
| 1. | Form of Exercise Price. The Holder intends that payment of the Exercise Price shall be made as (check one): |
| ☐ | a
cash exercise with respect to ________________ Warrant Shares; or |
| ☐ | by cashless exercise pursuant to the Warrant. |
| 2. | Payment
of Exercise Price. If cash exercise is selected above, the holder shall pay the applicable Aggregate Exercise Price in the sum of
$ __________________ to the Company in accordance with the terms of the Warrant. |
| 3. | Delivery of Warrant Shares. The Company shall deliver to the holder _________________ Warrant
Shares in accordance with the terms of the Warrant. |
Date: ________________
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(Print Name of Registered Holder) |
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By: |
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Name: |
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Title: |
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EXHIBIT B
ASSIGNMENT OF WARRANT
(To be signed only upon authorized transfer of
the Warrant)
For
Value Received, the undersigned hereby sells,
assigns, and transfers unto _________________________ the right to purchase _____________________ shares of common stock of SIGNING DAY
SPORTS, INC., to which the within Common Stock Purchase Warrant relates and appoints _________, as attorney-in-fact, to transfer said
right on the books of SIGNING DAY SPORTS, INC. with full power of substitution and re-substitution in the premises. By accepting such
transfer, the transferee has agreed to be bound in all respects by the terms and conditions of the within Warrant.
Dated: _______________
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(Signature) * |
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(Name) |
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(Address) |
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(Social Security or Tax Identification No.) |
* | The signature on this Assignment of Warrant must correspond
to the name as written upon the face of the Common Stock Purchase Warrant in every particular without alteration or enlargement or any
change whatsoever. When signing on behalf of a corporation, partnership, trust or other entity, please indicate your position(s) and
title(s) with such entity. |
Exhibit
10.1
SECURITIES
PURCHASE AGREEMENT
This
SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of May 16, 2024, by and between SIGNING DAY SPORTS, INC.,
a Delaware corporation, with headquarters located at 8355 East Hartford Dr., Suite 100, Scottsdale, AZ 85255 (the “Company”),
and FIRSTFIRE GLOBAL OPPORTUNITIES FUND, LLC, a Delaware limited liability company, with its address at 1040 First Avenue, Suite
190, New York, NY 10022 (the “Buyer”).
WHEREAS:
A.
The Company and the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded
by Section 4(a)(2) of the Securities Act of 1933, as amended (the “1933 Act”), and Rule 506(b) promulgated by the United
States Securities and Exchange Commission (the “SEC”) under the 1933 Act;
B.
Buyer desires to purchase from the Company, and the Company desires to issue and sell to the Buyer, upon the terms and conditions set
forth in this Agreement, a senior secured promissory note of the Company, in the aggregate principal amount of $412,500.00 (as the principal
amount thereof may be increased pursuant to the terms thereof, and together with any note(s) issued in replacement thereof or as a dividend
thereon or otherwise with respect thereto in accordance with the terms thereof, in the form attached hereto as Exhibit A, the
“Note”), convertible into shares of common stock, par value $0.0001 per share, of the Company (the “Common Stock”),
upon the terms and subject to the limitations and conditions set forth in such Note; and
C.
The Company wishes to issue a common stock purchase warrant to purchase 1,375,000 shares of Common Stock (the “First Warrant”),
a common stock purchase warrant to purchase 250,000 shares of Common Stock (the “Second Warrant”, and collectively with the
First Warrant, the “Warrants”), and 187,500 shares of Common Stock (the “Commitment Shares”), to the Buyer as
additional consideration for the purchase of the Note, which all shall be earned in full as of the Closing Date, as further provided
herein; and
D.
In connection with this Agreement, the Company and the Buyer shall enter into a security agreement (the “Security Agreement”),
the form of which is attached hereto as Exhibit C, as well as a registration rights agreement (the “Registration Rights Agreement”),
the form of which is attached hereto as Exhibit D, in each case on the date of this Agreement.
NOW
THEREFORE, in consideration of the foregoing and of the agreements and covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the Buyer hereby agree as follows:
1. Purchase
and Sale of Note.
a.
Purchase of Note. On the Closing Date (as defined below), the Company shall issue and sell to the Buyer, and the Buyer agrees
to purchase from the Company, the Note, as further provided herein. As used in this Agreement, the term “business day” shall
mean any day other than a Saturday, Sunday, or a day on which commercial banks in the city of New York, New York are authorized or required
by law or executive order to remain closed.
b.
Form of Payment. On the Closing Date: (i) the Buyer shall pay the purchase price of$ 375,000.00 (the “Purchase Price”)
for the Note, to be issued and sold to it at the Closing (as defined below), by wire transfer of immediately available funds to the Company,
in accordance with the Company’s written wiring instructions, against delivery of the Note, and (ii) the Company shall deliver
such duly executed Note and the Warrants to the Buyer, against delivery of such Purchase Price. On the Closing Date, the Buyer shall
withhold a non-accountable sum of $8,500.00 from the Purchase Price to cover the Buyer’s legal fees in connection with the transactions
contemplated by this Agreement. On the Closing Date, the Buyer shall also withhold a sum of $30,000.00 from the Purchase Price to cover
the Company’s fees owed to Boustead Securities, LLC, a registered broker-dealer (CRD#: 141391) (“Boustead”), in connection
with the transactions contemplated by this Agreement.
c.
Closing Date. Subject to the satisfaction (or written waiver) of the conditions thereto set forth in Section 6 and Section 7 below,
the date and time of the issuance and sale of the Note pursuant to this Agreement(the “Closing Date”) shall be on the date
that the Purchase Price for the Note is paid by Buyer pursuant to the terms of this Agreement.
d.
Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) shall occur on the Closing
Date at such location as may be agreed to by the parties (including via exchange of electronic signatures).
1A.
Warrants; Commitment Shares. On or before the Closing Date, the Company shall issue the Warrants to the Buyer pursuant to the
terms contained therein as well as the Commitment Shares to the Buyer, each of which shall be earned in full as of the Closing Date.
2.
Buyer’s Representations and Warranties. The Buyer represents and warrants to the Company as of the Closing Date that:
a.
Investment Purpose. As of the Closing Date, the Buyer is purchasing the Note, Commitment Shares, and Warrants (the Note, Commitment
Shares, Warrants, shares of Common Stock issuable upon conversion of or otherwise pursuant to the Note (the “Conversion Shares”),
and shares of Common Stock issuable upon exercise of or otherwise pursuant to the Warrants (the “Exercise Shares”) shall
collectively be referred to herein as the “Securities”) for its own account and not with a present view towards the public
sale or distribution thereof, except pursuant to sales registered or exempted from registration under the 1933 Act; provided,
however, that by making the representations herein, the Buyer does not agree to hold any of the Securities for any minimum or
other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration
statement or an exemption under the 1933 Act.
b.
Accredited Investor Status. The Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation
D (an “Accredited Investor”).
c.
Reliance on Exemptions. The Buyer understands that the Securities are being offered and sold to it in reliance upon specific exemptions
from the registration requirements of United States federal and state securities laws and that the Company is relying upon the truth
and accuracy of, and the Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings
of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire the
Securities.
d.
Information. The Buyer and its advisors, if any, have been, and for so long as the Note remains outstanding will continue to be,
furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and
sale of the Securities which have been requested by the Buyer or its advisors. The Buyer and its advisors, if any, have been, and for
so long as the Note remains outstanding will continue to be, afforded the opportunity to ask questions of the Company regarding its business
and affairs. Notwithstanding the foregoing, the Company has not disclosed to the Buyer any material nonpublic information regarding the
Company or otherwise and will not disclose such information unless such information is disclosed to the public prior to or promptly following
such disclosure to the Buyer. Neither such inquiries nor any other due diligence investigation conducted by the Buyer or any of its advisors
or representatives shall modify, amend or affect Buyer’s right to rely on the Company’s representations and warranties contained
in Section 3 below.
e.
Governmental Review. The Buyer understands that no United States federal or state agency or any other government or governmental
agency has passed upon or made any recommendation or endorsement of the Securities.
f.
Transfer or Re-sale. The Buyer understands that (i) the sale or resale of the Securities has not been and is not being registered
under the 1933 Act or any applicable state securities laws, and the Securities may not be transferred unless (a) the Securities are sold
pursuant to an effective registration statement under the 1933 Act, (b) the Buyer shall have delivered to the Company, at the cost of
the Company, an opinion of counsel (which may be the Legal Counsel Opinion (as defined below)) that shall be in form, substance and scope
customary for opinions of counsel in comparable transactions to the effect that the Securities to be sold or transferred may be sold
or transferred pursuant to an exemption from such registration, (c) the Securities are sold or transferred to an “affiliate”
(as defined in Rule 144 promulgated under the 1933 Act (or a successor rule) (“Rule 144”)) of the Buyer who agrees to sell
or otherwise transfer the Securities only in accordance with this Section 2(f) and who is an Accredited Investor, (d) the Securities
are sold pursuant to Rule 144 or other applicable exemption, or (e) the Securities are sold pursuant to Regulation S under the 1933 Act
(or a successor rule) (“Regulation S”), and the Buyer shall have delivered to the Company, at the cost of the Company, an
opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactions; (ii) any sale
of such Securities made in reliance on Rule 144 may be made only in accordance with the terms of said Rule and further, if said Rule
is not applicable, any re-sale of such Securities under circumstances in which the seller (or the person through whom the sale is made)
may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the
1933 Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other person is under any obligation
to register such Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption
thereunder (in each case). Notwithstanding the foregoing or anything else contained herein to the contrary, the Securities may be pledged
in connection with a bona fide margin account or other lending arrangement secured by the Securities, and such pledge of Securities
shall not be deemed to be a transfer, sale or assignment of the Securities hereunder, and the Buyer in effecting such pledge of Securities
shall not be required to provide the Company with any notice thereof or otherwise make any delivery to the Company pursuant to this Agreement
or otherwise.
g.
Legends. The Buyer understands that until such time as the Note, Warrants, Commitment Shares, Conversion Shares, and/or Exercise
Shares, have been registered under the 1933 Act or may be sold pursuant to Rule 144, Rule 144A under the 1933 Act, Regulation S, or other
applicable exemption without any restriction as to the number of securities as of a particular date that can then be immediately sold,
the Securities may bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer
of such Securities):
“NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE/EXERCISABLE]
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM,
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144, RULE 144A, REGULATION S, OR OTHER APPLICABLE
EXEMPTION UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT
OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”
The
legend set forth above shall be removed and the Company shall issue a certificate or book entry statement for the applicable shares of
Common Stock without such legend to the holder of any Security upon which it is stamped or (as requested by such holder) issue the applicable
shares of Common Stock to such holder by electronic delivery by crediting the account of such holder’s broker with The Depository
Trust Company (“DTC”), if, unless otherwise required by applicable state securities laws, (a) such Security is registered
for sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144, Rule 144A,
Regulation S, or other applicable exemption without any restriction as to the number of securities as of a particular date that can then
be immediately sold, or (b) the Company or the Buyer provides the Legal Counsel Opinion (as contemplated by and in accordance with Section
4(l) hereof) to the effect that a public sale or transfer of such Security may be made without registration under the 1933 Act, which
opinion shall be accepted by the Company so that the sale or transfer is effected. The Company shall be responsible for the fees of its
transfer agent and all DTC fees associated with any such issuance. The Buyer agrees to sell all Securities, including those represented
by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery requirements, if any. In
the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to the transfer of Securities pursuant
to an exemption from registration, such as Rule 144, Rule 144A, Regulation S, or other applicable exemption at the Deadline (as defined
in the Note), it will be considered an Event of Default pursuant to Section 3.2 of the Note.
h.
Formation. The Buyer represents and warrants that it is a limited liability company duly formed and validly existing under the laws of
the State of Delaware and is in good standing with the relevant authorities.
i.
Authorization; Enforcement. This Agreement has been duly and validly authorized by the Buyer and has been duly executed and
delivered on behalf of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in
accordance with its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors’ rights generally and except as may be limited by the exercise of judicial discretion in
applying principles of equity.
3.
Representations and Warranties of the Company. The Company represents and warrants to the Buyer as of the Closing Date that, except
as otherwise disclosed in the SEC Documents:
a.
Organization and Qualification. The Company and each of its Subsidiaries (as defined below), if any, is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction in which it is incorporated or formed, with full power and authority
(corporate and other) to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used,
operated and conducted. The SEC Documents (as defined below) set forth a list of all of the Subsidiaries of the Company and the jurisdiction
in which each is incorporated. The Company and each of its Subsidiaries is duly qualified as a foreign corporation to do business and
is in good standing in every jurisdiction in which its ownership or use of property or the nature of the business conducted by it makes
such qualification necessary except where the failure to be so qualified or in good standing would not have a Material Adverse Effect.
“Material Adverse Effect” means any material adverse effect on the business, operations, assets, financial condition or prospects
of the Company or its Subsidiaries, if any, taken as a whole, or on the transactions contemplated hereby or by the agreements or instruments
to be entered into in connection herewith. “Subsidiaries” means any corporation or other organization, whether incorporated
or unincorporated, in which the Company owns, directly or indirectly, the majority of equity or other ownership interest or has a controlling
interest.
b.
Authorization; Enforcement. The Company has all requisite corporate power and authority to enter into and perform this Agreement,
the Note, and to consummate the transactions contemplated hereby and thereby and to issue the Securities, in accordance with the terms
hereof and thereof, (ii) the execution and delivery of this Agreement, the Warrants, the Note, the Commitment Shares, the Conversion
Shares, and the Exercise Shares by the Company and the consummation by it of the transactions contemplated hereby and thereby (including
without limitation, the issuance of the Note and the Warrants, as well as the issuance and reservation for issuance of the Conversion
Shares and the Exercise Shares issuable
upon conversion of the Note and/or exercise of the Warrants) have been duly authorized by the Company’s Board of Directors and
no further consent or authorization of the Company, its Board of Directors, its shareholders, or its debt holders is required, (iii)
this Agreement and the Note (together with any other instruments executed in connection herewith or therewith) will, upon delivery, have
been duly executed and delivered by the Company by its authorized representative, and such authorized representative is the true and
official representative with authority to sign this Agreement, the Note and the other instruments and documents that shall be executed
in connection herewith or therewith and bind the Company accordingly, and (iv) this Agreement constitutes, and upon execution and delivery
by the Company of the Note, each of such instruments will constitute, a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with their terms, enforceable against it in accordance with their terms, except as enforcement may
be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and
except as may be limited by the exercise of judicial discretion in applying principles of equity.
c.
Capitalization; Governing Documents. As of May 16, 2024, the authorized capital stock of the Company consists of: 150,000,000
authorized shares of Common Stock, of which 15,381,653 shares were issued and outstanding, and 15,000,000 authorized shares of preferred
stock, of which 0 shares of preferred stock were issued and outstanding. All of such outstanding shares of capital stock of the Company,
the Conversion Shares, the Exercise Shares, and the Commitment Shares are, or upon issuance will be, duly authorized, validly issued,
fully paid and non-assessable. No shares of capital stock of the Company are subject to preemptive rights or any other similar rights
of the shareholders of the Company or any liens or encumbrances imposed through the actions or failure to act of the Company. As of the
effective date of this Agreement, other than as publicly announced prior to such date and reflected in the SEC Documents of the Company
or as listed on Schedule 3(c): (i) there are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of
first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever relating to, or securities
or rights convertible into or exchangeable for any shares of capital stock of the Company or any of its Subsidiaries, or arrangements
by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the Company or
any of its Subsidiaries, (ii) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated
to register the sale of any of its or their securities under the 1933 Act and (iii) there are no anti-dilution or price adjustment provisions
contained in any security issued by the Company (or in any agreement providing rights to security holders) that will be triggered by
the issuance of any of the Securities. The Company has furnished to the Buyer true and correct copies of the Company’s Certificate
of Incorporation as in effect on the date hereof (“Certificate of Incorporation”), the Company’s Bylaws, as in effect
on the date hereof (the “Bylaws”), and the terms of all securities convertible into or exercisable for Common Stock of the
Company and the material rights of the holders thereof in respect thereto.
d.
Issuance of Conversion Shares and Exercise Shares. The Conversion Shares and Exercise Shares are duly authorized and reserved
for issuance and, upon conversion of the Note and/or exercise of the Warrants in accordance with its terms, will be validly issued, fully
paid and non-assessable, and free from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject
to preemptive rights or other similar rights of shareholders of the Company and will not impose personal liability upon the holder thereof.
e.
Issuance of Warrants and Commitment Shares. The issuance of the Warrants and the
Commitment Shares are duly authorized and will be validly issued, fully paid and non-assessable, and free
from all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other
similar rights of shareholders of the Company and will not impose personal liability upon the holder thereof.
f.
Acknowledgment of Dilution. The Company understands and acknowledges the potentially dilutive effect of the Conversion
Shares and the Exercise Shares to the Common Stock upon the conversion of the Note and/or exercise of the Warrants. The Company further
acknowledges that its obligation to issue, upon conversion of the Note and/or exercise of the Warrants, the Conversion Shares and/or
the Exercise Shares, are absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests
of other shareholders of the Company.
g.
Ranking; No Conflicts. The Note shall be a secured obligation of the Company pursuant to the terms of the Security Agreement.
Except as disclosed on Schedule 3(g), the Company represents and warrants that there are no security interests in, or liens on, the Company’s
assets as of the date of this Agreement except as created in favor of Buyer under the Security Agreement and as further disclosed in
the Security Agreement. The execution, delivery and performance of this Agreement and the Note by the Company and the consummation by
the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance and reservation for issuance
of the Conversion Shares and Exercise Shares) will not (i) conflict with or result in a violation of any provision of the Certificate
of Incorporation or Bylaws, or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default (or
an event which with notice or lapse of time or both could become a default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, note, evidence of indebtedness, indenture, patent, patent license or instrument to which
the Company or any of its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities laws and regulations and regulations of any self-regulatory organizations to which the Company
or its securities is subject) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or
any of its Subsidiaries is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations
and violations as would not, individually or in the aggregate, have a Material Adverse Effect), or (iv) trigger any anti-dilution and/or
ratchet provision contained in any other contract in which the Company is a party thereto or any security issued by the Company. Neither
the Company nor any of its Subsidiaries is in violation of its Certificate of Incorporation, Bylaws or other organizational documents
and neither the Company nor any of its Subsidiaries is in default (and no event has occurred which with notice or lapse of time or both
could put the Company or any of its Subsidiaries in default) under, and neither the Company nor any of its Subsidiaries has taken any
action or failed to take any action that would give to others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party or by which any property or assets
of the Company or any of its Subsidiaries is bound or affected, except for possible defaults as would not, individually or in the aggregate,
have a Material Adverse Effect. The businesses of the Company and its Subsidiaries, if any, are not being conducted in violation of any
law, ordinance or regulation of any governmental entity. Except as specifically contemplated by this Agreement and as required under
the 1933 Act and any applicable state securities laws, the Company is not required to obtain any consent, authorization or order of,
or make any filing or registration with, any court, governmental agency, regulatory agency, self-regulatory organization or stock market
or any third party in order for it to execute, deliver or perform any of its obligations under this Agreement and the Note in accordance
with the terms hereof or thereof or to issue and sell the Note in accordance with the terms hereof and, upon conversion of the Note and/or
exercise of the Warrants, issue Conversion Shares and/or Exercise Shares as applicable. All consents, authorizations, orders, filings
and registrations which the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior
to the date hereof. The Company is not in violation of the listing requirements of the Principal Market (as defined herein) and does
not reasonably anticipate that the Common Stock will be delisted by the Principal Market in the foreseeable future. The Company and its
Subsidiaries are unaware of any facts or circumstances which might give rise to any of the foregoing. The “Principal Market”
shall mean the principal securities exchange or trading market where such Common Stock is listed or traded, including but not limited
to any tier of the OTC Markets Group, Inc., any tier of The Nasdaq Stock Market LLC (including Nasdaq Capital Market), or the NYSE American
LLC, or any successor to such markets.
h.
SEC Documents; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required
to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “1934
Act”) (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements and schedules
thereto and documents (other than exhibits to such documents) incorporated by reference therein, being hereinafter referred to herein
as the “SEC Documents”). As of their respective dates, the SEC Documents complied in all material respects with the requirements
of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they
were made, not misleading. None of the statements made in any such SEC Documents is, or has been, required to be amended or updated under
applicable law (except for such statements as have been amended or updated in subsequent filings prior to the date hereof). As of their
respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all material respects
with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements
have been prepared in accordance with United States generally accepted accounting principles, consistently applied, during the periods
involved and fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries
as of the dates thereof and the consolidated results of their operations and cash flows for the periods then ended (subject, in the case
of unaudited statements, to normal year-end audit adjustments). Except as set forth in the financial statements of the Company included
in the SEC Documents, the Company has no liabilities, contingent or otherwise, other than (i) liabilities incurred in the ordinary course
of business subsequent to March 31, 2024, and (ii) obligations under contracts and commitments incurred in the ordinary course of business
and not required under generally accepted accounting principles to be reflected in such financial statements, which, individually or
in the aggregate, are not material to the financial condition or operating results of the Company. The Company is subject to the reporting
requirements of the 1934 Act. The Company has never been a “shell company” as described in Rule 144(i)(1)(i).
i.
Absence of Certain Changes. Since March 31, 2024, there has been no material adverse change and no material adverse development
in the assets, liabilities, business, properties, operations, financial condition, results of operations, prospects or 1934 Act reporting
status of the Company or any of its Subsidiaries.
j.
Absence of Litigation. There is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public
board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its Subsidiaries,
threatened against or affecting the Company or any of its Subsidiaries, or their officers or directors in their capacity as such, that
could have a Material Adverse Effect. The SEC Documents contain a complete list and summary description of any pending or, to the knowledge
of the Company, threatened proceeding against or affecting the Company or any of its Subsidiaries, without regard to whether it would
have a Material Adverse Effect. The Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to any
of the foregoing.
k.
Intellectual Property. The Company and each of its Subsidiaries owns or possesses the requisite licenses or rights to use all
patents, patent applications, patent rights, inventions, know-how, trade secrets, trademarks, trademark applications, service marks,
service names, trade names and copyrights (“Intellectual Property”) necessary to enable it to conduct its business as now
operated (and, as presently contemplated to be operated in the future); there is no claim or action by any person pertaining to, or proceeding
pending, or to the Company’s knowledge threatened, which challenges the right of the Company or of a Subsidiary with respect to
any Intellectual Property necessary to enable it to conduct its business as now operated (and, as presently contemplated to be operated
in the future); to the best of the Company’s knowledge, the Company’s or its Subsidiaries’ current and intended products,
services and processes do not infringe on any Intellectual Property or other rights held by any person; and the Company is unaware of
any facts or circumstances which might give rise to any of the foregoing, in each such case that could have a Material Adverse Effect.
The Company and each of its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of
their Intellectual Property.
l.
No Materially Adverse Contracts, Etc. Neither the Company nor any of its Subsidiaries is subject to any charter, corporate or
other legal restriction, or any judgment, decree, order, rule or regulation which in the judgment of the Company has or is expected in
the future to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is a party to any contract or agreement
which in the judgment of the Company has or is expected to have a Material Adverse Effect.
m.
Tax Status. The Company and each of its Subsidiaries has made or filed all federal, state and foreign income and all other tax
returns, reports and declarations required by any jurisdiction to which it is subject (unless and only to the extent that the Company
and each of its Subsidiaries has set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported taxes)
and 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, except those being contested in good faith and has set aside on its books provisions reasonably adequate
for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no
unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the Company knows of no basis
for any such claim. The Company has not executed a waiver with respect to the statute of limitations relating to the assessment or collection
of any foreign, federal, state or local tax. None of the Company’s tax returns is presently being audited by any taxingauthority.
n.
Transactions with Affiliates. Except for arm’s length transactions pursuant to which the Company or any of its Subsidiaries
makes payments in the ordinary course of business upon terms no less favorable than the Company or any of its Subsidiaries could obtain
from third parties and other than the grant of stock options and other transactions with the affiliates of the Company described in the
SEC Documents, none of the officers, directors, or employees of the Company is presently a party to any transaction with the Company
or any of its Subsidiaries (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, or otherwise
requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any corporation, partnership,
trust or other entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee
or partner.
o.
Disclosure. All information relating to or concerning the Company or any of its Subsidiaries set forth in this Agreement and provided
to the Buyer pursuant to Section 2(d) hereof and otherwise in connection with the transactions contemplated hereby is true and correct
in all material respects and the Company has not omitted to state any material fact necessary in order to make the statements made herein
or therein, in light of the circumstances under which they were made, not misleading. No event or circumstance has occurred or exists
with respect to the Company or any of its Subsidiaries or its or their business, properties, prospects, operations or financial conditions,
which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which has not been so
publicly announced or disclosed (assuming for this purpose that the Company’s reports filed under the 1934 Act are being incorporated
into an effective registration statement filed by the Company under the 1933 Act).
p.
Acknowledgment Regarding Buyer’s Purchase of Securities. The Company acknowledges and agrees that the Buyer is acting solely
in the capacity of arm’s length purchaser with respect to this Agreement and the transactions contemplated hereby. The Company
further acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with
respect to this Agreement and the transactions contemplated hereby and any statement made by the Buyer or any of its respective representatives
or agents in connection with this Agreement and the transactions contemplated hereby is not advice or a recommendation and is merely
incidental to the Buyer’s purchase of the Securities. The Company further represents to the Buyer that the Company’s decision
to enter into this Agreement has been based solely on the independent evaluation of the Company and its representatives.
q.
No Integrated Offering. 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 in any security or solicited any offers to buy any security under circumstances that would require
registration under the 1933 Act of the issuance of the Securities to the Buyer. Except with respect to issuances of securities to Boustead
as placement agent compensation in connection with the issuance of the Securities to the Buyer, the issuance of the Securities to the
Buyer will not be integrated with any other issuance of the Company’s securities (past, current or future) for purposes of any
shareholder approval provisions applicable to the Company or its securities.
r.
No Brokers; No Solicitation. Except with respect to Boustead the Company has taken no action which would give rise to any claim
by any person for brokerage commissions, transaction fees or similar payments relating to this Agreement or the transactions contemplated
hereby. The Company represents and warrants that neither the Buyer nor its employee(s), member(s), beneficial owner(s), or partner(s)
solicited the Company to enter into this Agreement and consummate the transactions described in this Agreement. The Company represents
and warrants that neither the Buyer nor its employee(s), member(s), beneficial owner(s), or partner(s) is required to be registered as
a broker-dealer under the 1934 Act in order to (i) enter into or consummate the transactions encompassed by this Agreement, the Security
Agreement, the Registration Rights Agreement, the Note, the Warrants, and the related transaction documents entered into in connection
herewith (the “Transaction Documents”), (ii) fulfill the Buyer’s obligations under the Transaction Documents, or (iii)
exercise any of the Buyer’s rights under the Transaction Documents (including but not limited to the sale of the Securities).
s.
Permits; Compliance. The Company and each of its Subsidiaries is in possession of all franchises, grants, authorizations, licenses,
permits, easements, variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and operate its properties
and to carry on its business as it is now being conducted (collectively, the “Company Permits”), and there is no action pending
or, to the knowledge of the Company, threatened regarding suspension or cancellation of any of the Company Permits, in each such case
that could have a Material Adverse Effect.. Neither the Company nor any of its Subsidiaries is in conflict with, or in default or violation
of, any of the Company Permits, except for any such conflicts, defaults or violations which, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect. Since March 31, 2024, neither the Company nor any of its Subsidiaries has
received any notification with respect to possible conflicts, defaults or violations of applicable laws, except for notices relating
to possible conflicts, defaults or violations, which conflicts, defaults or violations would not have a Material Adverse Effect.
t.
Environmental Matters.
(i)
There are, to the Company’s knowledge, with respect to the Company or any of its Subsidiaries or any predecessor of the Company,
no past or present violations of Environmental Laws (as defined below), releases of any material into the environment, actions, activities,
circumstances, conditions, events, incidents, or contractual obligations which may give rise to any common law environmental liability
or any liability under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 or similar federal, state, local
or foreign laws and neither the Company nor any of its Subsidiaries has received any notice with respect to any of the foregoing, nor
is any action pending or, to the Company’s knowledge, threatened in connection with any of the foregoing. The term “Environmental
Laws” means all federal, state, local or foreign laws relating to pollution or protection of human health or the environment (including,
without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws
relating to emissions, discharges, releases or threatened releases of chemicals, pollutants contaminants, or toxic or hazardous substances
or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes,
decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations
issued, entered, promulgated or approved thereunder.
(ii)
Other than those that are or were stored, used or disposed of in compliance with applicable law, no Hazardous Materials are contained
on or about any real property currently owned, leased or used by the Company or any of its Subsidiaries, and no Hazardous Materials were
released on or about any real property previously owned, leased or used by the Company or any of its Subsidiaries during the period the
property was owned, leased or used by the Company or any of its Subsidiaries, except in the normal course of the Company’s or any
of its Subsidiaries’ business.
(iii)
There are no underground storage tanks on or under any real property owned, leased or used by the Company or any of its Subsidiaries
that are not in compliance with applicablelaw.
u.
Title to Property. Except as disclosed in the SEC Documents and Schedule 3(u) hereto, the Company and its Subsidiaries have good
and marketable title in fee simple to all real property and good and marketable title to all personal property owned by them which is
material to the business of the Company and its Subsidiaries, in each case free and clear of all liens, encumbrances and defects except
such as would not have a Material Adverse Effect. Any real property and facilities held under lease by the Company and its Subsidiaries
are held by them under valid, subsisting and enforceable leases with such exceptions as would not have a Material Adverse Effect.
v.
Insurance. The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the
Company and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has 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 at a cost that would not have a Material Adverse Effect. Upon written request the Company will
provide to the Buyer true and correct copies of all policies relating to directors’ and officers’ liability coverage, errors
and omissions coverage, and commercial general liability coverage.
w.
[Reserved]
x.
Foreign Corrupt Practices. Neither the Company, nor any of its Subsidiaries, nor, to the Company’s knowledge, any director,
officer, agent, employee or other person acting on behalf of the Company or any Subsidiary has, in the course of his actions for, or
on behalf of, the Company, used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating
to political activity; made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate
funds; violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or made any bribe,
rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.
y.
Solvency. The Company (after giving effect to the transactions contemplated by this Agreement) is solvent (i.e., its assets
have a fair market value in excess of the amount required to pay its probable liabilities on its existing debts as they become absolute
and matured) and currently the Company has no information that would lead it to reasonably conclude that the Company would not, after
giving effect to the transaction contemplated by this Agreement, have the ability to, nor does it intend to take any action that would
impair its ability to, pay its debts from time to time incurred in connection therewith as such debts mature. The Company’s financial
statements for its most recent fiscal year end and interim financial statements have been prepared assuming the Company will continue
as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.
z.
No Investment Company. The Company is not, and upon the issuance and sale of the Securities as contemplated by this Agreement
will not be an “investment company” required to be registered under the Investment Company Act of 1940 (an “Investment
Company”). The Company is not controlled by an Investment Company.
aa.
No Off Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company or any of its
Subsidiaries and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its 1934 Act
filings and is not so disclosed or that otherwise could be reasonably likely to have a Material Adverse Effect.
bb.
No Disqualification Events. None of the Company nor, to the Company’s knowledge, 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 1933 Act) connected with the Company in any capacity at the time of sale (each, an “Issuer
Covered Person”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under
the 1933 Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company
has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event.
cc. Manipulation
of Price. 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, or that could reasonably be expected to cause or result, in the stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for,
purchased, or paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any person
any compensation for soliciting another to purchase any other securities of the Company.
dd.
Bank Holding Company Act. Neither the Company nor any of its Subsidiaries is subject to the Bank Holding Company Act of 1956,
as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”).
Neither the Company nor any of its Subsidiaries or affiliates owns or controls, directly or indirectly, five percent (5%) or more of
the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total equity of a bank or any entity
that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries or affiliates exercises
a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the
Federal Reserve.
ee.
Illegal or Unauthorized Payments; Political Contributions. Neither the Company nor any of its Subsidiaries nor, to the Company’s
knowledge, any of the officers, directors, employees, agents or other representatives of the Company or any of its Subsidiaries or any
other business entity or enterprise with which the Company or any Subsidiary is or has been affiliated or associated, has, directly or
indirectly, made or authorized any payment, contribution or gift of money, property, or services, whether or not in contravention of
applicable law, (i) as a kickback or bribe to any person or (ii) to any political organization, or the holder of or any aspirant to any
elective or appointive public office except for personal political contributions not involving the direct or indirect use of funds of
the Company or any of its Subsidiaries.
ff.
Breach of Representations and Warranties by the Company. The Company agrees that if the Company breaches any of the representations
or warranties set forth in this Section 3 and in addition to any other remedies available to the Buyer pursuant to this Agreement, it
will be considered an Event of Default under Section
3.4
of the Note.
4.
ADDITIONAL COVENANTS, AGREEMENTS AND ACKNOWLEDGEMENTS.
a.
Best Efforts. The parties shall use their best efforts to satisfy timely each of the conditions described in Section 6 and 7 of
this Agreement.
b.
Form D; Blue Sky Laws. The Company agrees to file a Form D with respect to the Securities if required under Regulation D and to
provide a copy thereof to the Buyer promptly after such filing. The Company shall, on or before the Closing Date, take such action as
the Company shall reasonably determine is necessary to qualify the Securities for sale to the Buyer at the applicable closing pursuant
to this Agreement under applicable securities or “blue sky” laws of the states of the United States (or to obtain an exemption
from such qualification), and shall provide evidence of any such action so taken to the Buyer on or prior to the ClosingDate.
c.
Use of Proceeds. The Company shall use the Purchase Price for business development and general working capital, and not for any
other purpose, including but not limited to (i) the repayment of any indebtedness owed to officers, directors or employees of the Company
or their affiliates, (ii) the repayment of any debt issued in corporate finance transactions (including but not limited to promissory
notes that have the ability to be converted into Common Stock), (iii) any loan to or investment in any other corporation, partnership,
enterprise or other person (except in connection with the Company’s currently existing operations), (iv) any loan, credit, or advance
to any officers, directors, employees, or affiliates of the Company, or (v) in violation or contravention of any applicable law, rule
or regulation.
d.
Right of Participation and First Refusal.
(i)
Other than arrangements that are in place or disclosed in SEC Documents prior to the date of this Agreement, and other than any Excluded
Issuance (as defined below), from the date of this Agreement until the date that the Note is extinguished in its entirety, the Company
will not, (i) directly or indirectly, offer, sell, grant any option to purchase, or otherwise dispose of (or announce any offer, sale,
grant or any option to purchase or other disposition of) any of its or its Subsidiaries’ debt, equity, or equity equivalent securities,
including without limitation any debt, preferred shares or other instrument or security that is, at any time during its life and/or under
any circumstances, convertible into, exchangeable, or exercisable for Common Stock (any such offer, sale, grant, disposition or announcement
being referred to as a “Subsequent Placement”) or (ii) enter into any definitive agreement with regard to the foregoing,
in each case unless the Company shall have first complied with this Section 4(d). “Excluded Issuance” shall mean an issuance
or sale of any Common Stock or any securities of the Company or its Subsidiaries which entitle the holder thereof to acquire at any time
shares of Common Stock, including, without limitation, shares of Common Stock, any debt, preferred shares, rights, options, warrants
or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof
to receive, shares of Common Stock (“Common Stock Equivalents”) issued or sold by the Company in connection with: (a) a grant
to any existing or prospective directors, officers or other employees, sales agents, consultants, or service providers of the Company
or any Subsidiary pursuant to a stock incentive plan or similar equity-based plans or other compensation agreement; (b) the conversion
or exchange of any securities of the Company into capital stock, or the exercise of any warrants or other rights to acquire capital stock
issued and outstanding on the date hereof, provided such securities have not been amended since the date hereof to increase the number
of such securities or to decrease the exercise price or exchange price of such securities; (c) any acquisition by the Company or any
Subsidiary of any equity interests, assets, properties, or business of any Person; (d) any strategic license agreements, mergers, consolidations,
business combinations, acquisitions, purchases or leases of assets, partnering arrangements, joint ventures, strategic alliances, investor
relations or public relations agreements, or other commercial relationships (including to persons who are customers and suppliers of
the Company) relating to the operation of the Company’s business, so long as such issuances are not primarily for the purpose of
raising capital or to an entity whose primary business is investing in securities; (e) any subdivision of Common Stock (by a split of
Common Stock or otherwise), payment of stock dividend, reclassification, reorganization, or any similar recapitalization; (f) securities
issued to banks, equipment lessors or other financial institutions, or to real property lessors, pursuant to a debt financing, equipment
leasing or real property leasing transaction, approved by a majority of the independent directors of the Company; (g) securities issued
in connection with the provision of goods or services pursuant to transactions approved by a majority of the independent directors of
the Company; or (i) 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 equityholders 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.
(ii)
The Company shall deliver to the Buyer an irrevocable written notice (the “Offer Notice”) of any proposed or intended Subsequent
Placement, which shall (w) identify and describe the Subsequent Placement, (x) describe the price and other terms upon which they are
to be issued, sold or exchanged, and the number or amount of the securities in the Subsequent Placement to be issued, sold, or exchanged
and (y) offer to issue and sell to or exchange with the Buyer at least $412,500.00 of the securities in the Subsequent Placement (in
each case, an “Offer”).
(iii)
To accept an Offer, in whole or in part, the Buyer must deliver a written notice (the “Notice of Acceptance”) to the Company
prior to the end of the fifth (5th) Trading Day (as defined in the Note) after the Buyer’s receipt of the Offer Notice
(the “Offer Period”), setting forth the amount that the Buyer elects to purchase (the “Subscription Amount”).
The Company shall complete the Subsequent Placement and issue and sell the Subscription Amount to the Buyer upon terms and conditions
(including, without limitation, unit prices and interest rates) set forth in the Offer Notice, unless a change to such terms and conditions
is agreed to in writing between the Company and Buyer. The Buyer may elect to exchange any amounts owed under the Note (plus the prepayment
premiums provided for in Section 1.9 of the Note if prior to the occurrence of an Event of Default (as defined in the Note) under the
Note) in lieu of cash consideration with respect to all or any portion of the Subscription Amount.
(iv)
Notwithstanding anything to the contrary contained herein, if the Company desires to modify or amend the terms or conditions of a Subsequent
Placement at any time after the Offer Notice is given to Buyer (provided, however, that such modification or amendment to the terms or
conditions cannot occur during any Offer Period), the Company shall deliver to the Buyer a new Offer Notice and the Offer Period of such
new Offer shall expire at the end of the fifth (5th) Trading Day after the Buyer’s receipt of such new Offer Notice.
e.
Usury. To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever
claim, and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at
any time hereafter in force, in connection with any action or proceeding that may be brought by the Buyer in order to enforce any right
or remedy under this Agreement, the Note and any document, agreement or instrument contemplated thereby. Notwithstanding any provision
to the contrary contained in this Agreement, the Note and any document, agreement or instrument contemplated thereby, it is expressly
agreed and provided that the total liability of the Company under this Agreement, the Note or any document, agreement or instrument contemplated
thereby for payments which under applicable law are in the nature of interest shall not exceed the maximum lawful rate authorized under
applicable law (the “Maximum Rate”), and, without limiting the foregoing, in no event shall any rate of interest or default
interest, or both of them, when aggregated with any other sums which under applicable law in the nature of interest that the Company
may be obligated to pay under this Agreement, the Note and any document, agreement or instrument contemplated thereby exceed such Maximum
Rate. It is agreed that if the maximum contract rate of interest allowed by law applicable to this Agreement, the Note and any document,
agreement or instrument contemplated thereby is increased or decreased by statute or any official governmental action subsequent to the
date hereof, the new maximum contract rate of interest allowed by law will be the Maximum Rate applicable to this Agreement, the Note
and any document, agreement or instrument contemplated thereby from the effective date thereof forward, unless such application is precluded
by applicable law. If under any circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to the Buyer
with respect to indebtedness evidenced by this Agreement, the Note and any document, agreement or instrument contemplated thereby, such
excess shall be applied by the Buyer to the unpaid principal balance of any such indebtedness or be refunded to the Company, the manner
of handling such excess to be at the Buyer’s election.
f.
Restriction on Activities. Commencing as of the date first above written, and until the earlier of payment of the Note in full
or full conversion of the Note, the Company shall not, directly or indirectly, without the Buyer’s prior written consent, which
consent shall not be unreasonably withheld: (a) change the nature of its business; or (b) sell, divest, acquire, or change the structure
of any material assets other than in the ordinary course of business.
g.
Listing. The Company will, so long as the Buyer owns any of the Securities, maintain the listing and trading of its Common Stock
on the Principal Market or any equivalent replacement exchange or electronic quotation system (including but not limited to the Pink
Sheets electronic quotation system) and will comply in all respects with the Company’s reporting, filing and other obligations
under the bylaws or rules of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and such exchanges, as applicable.
The Company shall promptly provide to the Buyer copies of any notices it receives from the Principal Market and any other exchanges or
electronic quotation systems on which the Common Stock is then traded regarding the continued eligibility of the Common Stock for listing
on such exchanges and quotation systems.
h.
Corporate Existence. The Company will, so long as the Buyer beneficially owns any of the Securities, maintain its corporate existence
and shall not sell all or substantially all of the Company’s assets, except in the event of a merger or consolidation with the
written consent of the Buyer or sale of all or substantially all of the Company’s assets with the written consent of the Buyer,
where the surviving or successor entity in such transaction (i) assumes the Company’s obligations hereunder and under the agreements
and instruments entered into in connection herewith and (ii) is a publicly traded corporation whose common stock is listed for trading
or quotation on the Principal Market, any tier of The Nasdaq Stock LLC Market, the New York Stock Exchange or the NYSE American LLC.
i.
No Integration. The Company shall not make any offers or sales of any security (other than the Securities) under circumstances
that would require registration of the Securities being offered or sold hereunder under the 1933 Act or cause the offering of the Securities
to be integrated with any other offering of securities by the Company for the purpose of any stockholder approval provision applicable
to the Company or its securities.
j.
Compliance with 1934 Act; Public Information Failures. For so long as the Buyer beneficially owns the Note, the Commitment Shares,
the Warrants, the Conversion Shares, or any Exercise Shares, the Company shall comply with the reporting requirements of the 1934 Act;
and the Company shall continue to be subject to the reporting requirements of the 1934 Act.
k.
Acknowledgement Regarding Buyer’s Trading Activity. Until the Note is fully repaid or fully converted, the Buyer shall not
effect any “short sale” (as such term is defined in Rule 200 of Regulation SHO of the 1934 Act) of the Common Stock which
establishes a net short position with respect to the Common Stock.
l.
Legal Counsel Opinions. Upon the request of the Buyer from to time to time, the Company shall be responsible (at its cost) for
promptly supplying to the Company’s transfer agent and the Buyer a customary legal opinion letter of its counsel (the “Legal
Counsel Opinion”) to the effect that the resale of the Conversion Shares and/or Exercise Shares by the Buyer or its affiliates,
successors and assigns is exempt from the registration requirements of the 1933 Act pursuant to Rule 144 (provided the requirements of
Rule 144 are satisfied and provided the Conversion Shares and/or Exercise Shares are not then registered under the 1933 Act for resale
pursuant to an effective registration statement) or other applicable exemption (provided the requirements of such other applicable exemption
are satisfied). In addition, the Buyer may (at the Company’s cost) at any time secure its own legal counsel to issue the Legal
Counsel Opinion, and the Company will instruct its transfer agent to accept such opinion. The Company hereby agrees that it may never
take the position that it is a “shell company” in connection with its obligations under this Agreement or otherwise.
m.
Piggy-Back Registration Rights. The Company hereby grants to the Buyer the piggy- back registration rights set forth in Exhibit
B hereto.
n.
Most Favored Nation. Except as to an Excluded Issuance, while the Note or any principal amount, interest or fees or expenses due
thereunder remain outstanding and unpaid, the Company shall not enter into any public or private offering of its securities (including
securities convertible into shares of Common Stock) with any individual or entity (an “Other Investor”) that has the effect
of establishing rights or otherwise benefiting such Other Investor in a manner more favorable in any material respect to such Other Investor
(even if the Other Investor does not receive the benefit of such more favorable term until a default occurs under such other security)
than the rights and benefits established in favor of the Buyer by this Agreement or the Note unless, in any such case, the Buyer has
been provided with such rights and benefits pursuant to a definitive written agreement or agreements between the Company and theBuyer.
o.
Subsequent Variable Rate Transactions. From the date hereof until such time as the Note is fully converted or fully repaid, the
Company shall not effect or enter into an agreement involving a Variable Rate Transaction without the prior written consent of the Buyer,
which consent shall not be unreasonably withheld, other than an “at-the-market” offering of securities under an effective
shelf registration statement pursuant to a sales agreement with a broker-dealer. “Variable Rate Transaction” means a transaction
in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or
include the right to receive, additional shares of Common Stock either (A) at a conversion price, exercise price or exchange rate or
other price that is based upon, and/or varies with, the trading prices of or quotations for the shares of Common Stock at any time after
the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price that is subject to being
reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent
events directly or indirectly related to the business of the Company or the market for the Common Stock or (ii) enters into any agreement,
including, but not limited to, an Equity Line of Credit (as defined in the Note), whereby the Company may issue securities at a future
determined price. The Buyer shall be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy
shall be in addition to any right to collect damages.
p.
Non-Public Information. The Company covenants and agrees that neither it, nor any other person acting on its behalf will provide
the Buyer or its agents or counsel with any information that constitutes, or the Company reasonably believes constitutes, material non-public
information, unless prior thereto the Buyer shall have consented to the receipt of such information and agreed with the Company to keep
such information confidential. The Company understands and confirms that the Buyer 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 the Buyer
without such Buyer’s consent, the Company hereby covenants and agrees that such Buyer 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 Buyer shall remain subject to applicable law. To the extent
that any notice provided, information provided, or any other communications made by the Company, to the Buyer, constitutes or contains
material non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice or other
material information with the SEC pursuant to a Current Report on Form 8-K. In addition to any other remedies provided by this Agreement
or the related transaction documents, if the Company provides any material non-public information to the Buyer without their prior written
consent, and it fails to immediately (no later than that business day) file a Form 8-K disclosing this material non-public information,
it shall pay the Buyer as partial liquidated damages and not as a penalty a sum equal to $3,000 per day beginning with the day the information
is disclosed to the Buyer and ending and including the day the Form 8-K disclosing this information is filed.
q. D&O
Insurance. The Company shall maintain director
and officer insurance on behalf of the Company’s (including its subsidiary) officers and directors for a period of 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 provide for two years of tail coverage.
r.
Shareholder Approval; Prohibition on Issuance. “Shareholder Approval” means the approval of a sufficient amount of
holders of the Company’s Common Stock to satisfy the shareholder approval requirements to effectuate the transactions contemplated
by the Agreement, including the issuance of all of the Common Stock underlying the Note, Common Stock underlying the Warrants, and Commitment
Shares, in excess of 19.99% of the issued and outstanding Common Stock on the Closing Date (the “Exchange Cap”). The Exchange
Cap is equal to 3,074,792 shares of Common Stock, which number of shares shall be reduced, on a share-for-share basis, by the number
of shares of Common Stock issued or issuable pursuant to any transaction or series of transactions that may be aggregated with the transactions
contemplated by this Agreement under applicable rules of the NYSE American LLC (subject to appropriate adjustment for any stock dividend,
stock split, stock combination, rights offerings, reclassification or similar transaction that proportionately decreases or increases
the Common Stock). The Company shall hold a meeting of shareholders on or before the date that is six (6) months after the date of this
Agreement, for the purpose of obtaining Shareholder Approval, with the recommendation of the Company’s Board of Directors that
such proposal be approved, and the Company shall solicit proxies from its shareholders in connection therewith in the same manner as
all other management proposals in such proxy statement and all management- appointed proxyholders shall vote their proxies in favor of
such proposal. In addition, all members of the Company’s Board of Directors and all of the Company’s executive officers shall
vote in favor of such proposal, for purposes of obtaining the Shareholder Approval, with respect to all securities of the Company then
held by such persons. The Company shall use its commercially reasonable efforts to obtain such Shareholder Approval. If the Company does
not obtain Shareholder Approval at the first meeting, the Company shall call a meeting as often as possible thereafter to seek Shareholder
Approval until the Shareholder Approval is obtained. Until the Shareholder Approval becomes effective pursuant to the rules promulgated
under the 1934 Act, the Company shall not hold any meeting of its shareholders unless the Company also includes a proposal for obtaining
the Shareholder Approval in such meeting. Until such approval is obtained, the Buyer shall not be issued in the aggregate, pursuant to
the Agreement or upon conversion of the Note or exercise of the Warrants, shares of Common Stock in an amount greater than the Exchange
Cap except as otherwise provided in the Note or the Warrants. In the event that the Buyer shall sell or otherwise transfer any of such
Buyer’s Note or Warrants, the transferee shall be allocated a pro rata portion of such Exchange Cap, and the restrictions of the
prior sentence shall apply to such transferee with respect to the portion of the Exchange Cap allocated to such transferee.
s.
No Broker-Dealer Acknowledgement. Absent a final adjudication from a court of competent jurisdiction stating otherwise, the Company
shall not to any person, institution, governmental or other entity, state, claim, allege, or in any way assert, that Buyer is currently,
or ever has been, a broker-dealer under the Securities Exchange Act of 1934.
t.
Subsequent Securities Sales. In addition to all other restrictions on the issuance of securities by the Company as provided in
this Agreement, from the date of this Agreement through the date that is thirty (30) calendar days after the date of this Agreement,
neither the Company nor any Subsidiary shall issue, enter into any agreement to issue, or announce the issuance or proposed issuance
of any shares of Common Stock or Common Stock Equivalents except with respect to the Securities.
u.
Amendment of Prior Transactions. The Company shall not amend or alter the provisions or terms of any debt or Common Stock Equivalents
(including but not limited to any warrants exercisable into Common Stock and promissory notes convertible into Common Stock) of the Company
issued on or prior to the date of this Agreement without the express written consent of the Buyer.
v.
Breach of Covenants. The Company acknowledges and agrees that if the Company breaches any of the covenants set forth in this Section
4, in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an Event of Default under
Section 3.3 of the Note.
5.
Transfer Agent Instructions. The Company shall issue irrevocable instructions to the Company’s transfer agent to
issue certificates and/or issue shares electronically at the Buyer’s option, registered in the name of the Buyer or its nominee,
upon conversion of the Note and/or exercise of the Warrants, the Conversion Shares and Exercise Shares, in such amounts as specified
from time to time by the Buyer to the Company in accordance with the terms thereof (the “Irrevocable Transfer Agent Instructions”).
In the event that the Company proposes to replace its transfer agent, the Company shall provide, prior to the effective date of such
replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to this Agreement (including
but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount (as defined in the Note)) signed
by the successor transfer agent to the Company and the Company. Prior to registration of the Conversion Shares and/or Exercise Shares
under the 1933 Act or the date on which the Conversion Shares and/or Exercise Shares may be sold pursuant to Rule 144, Rule 144A, Regulation
S, or other applicable exemption without any restriction as to the number of Securities as of a particular date that can then be immediately
sold, all such certificates or book entry shares shall bear the restrictive legend specified in Section 2(g) of this Agreement. The Company
warrants that: (i) no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5 will be given
by the Company to its transfer agent and that the Securities shall otherwise be freely transferable on the books and records of the Company
as and to the extent provided in this Agreement and the Note; (ii) it will not direct its transfer agent not to transfer or delay, impair,
and/or hinder its transfer agent in transferring (or issuing)(electronically or in certificated form) any certificate for Securities
to be issued to the Buyer upon conversion of or otherwise pursuant to the Note and/or upon exercise of or otherwise pursuant to the Warrants
as and when required by the Note and this Agreement; (iii) it will not fail to remove (or directs its transfer agent not to remove or
impairs, delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions
in respect thereof) on any certificate for any Securities issued to the Buyer upon conversion of or otherwise pursuant to the Note and/or
upon exercise of or otherwise pursuant to the Warrants as and when required by the Note, Warrants, and/or this Agreement and (iv) it
will provide any required corporate resolutions and issuance approvals to its transfer agent within 6 hours of notice prior to 9:30 a.m.
Eastern Time, or one (1) business day of notice after such time, of each conversion of the Note and/or exercise of the Warrants. Nothing
in this Section shall affect in any way the Buyer’s obligations and agreement set forth in Section 2(g) hereof to comply with all
applicable prospectus delivery requirements, if any, upon re-sale of the Securities. If the Buyer provides the Company, at the cost of
the Company, with (i) an opinion of counsel in form, substance and scope customary for opinions in comparable transactions, to the effect
that a public sale or transfer of such Securities may be made without registration under the 1933 Act and such sale or transfer is effected
or (ii) the Buyer provides reasonable assurances that the Securities can be sold pursuant to 144, Rule 144A, Regulation S, or other applicable
exemption, the Company shall permit the transfer, and, in the case of the Securities, promptly instruct its transfer agent to issue one
or more certificates, free from restrictive legend, in such name and in such denominations as specified by the Buyer. The Company acknowledges
that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer, by vitiating the intent and purpose of the
transactions contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under
this Section 5 may be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section,
that the Buyer shall be entitled, in addition to all other available remedies, to an injunction restraining any breach and requiring
immediate transfer, without the necessity of showing economic loss and without any bond or other security being required.
6.
Conditions to the Company’s Obligation to Sell. The obligation of the Company hereunder to issue and sell the Note to the
Buyer at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions thereto, provided
that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion:
a.
The Buyer shall have executed this Agreement and the Security Agreement, Registration Rights Agreement, and delivered the same to the
Company.
b.
The Buyer shall have delivered the Purchase Price in accordance with Section 1(b) above.
c.
The representations and warranties of the Buyer shall be true and correct in all material respects as of the date when made and as of
the Closing Date, as though made at that time (except for representations and warranties that speak as of a specific date), and the Buyer
shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Buyer at or prior to the Closing Date.
d.
No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority
over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.
7.
Conditions to The Buyer’s Obligation to Purchase. The obligation of the Buyer hereunder to purchase the Note, on the Closing
Date, is subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions
are for the Buyer’s sole benefit and may be waived by the Buyer at any time in its sole discretion:
a.
The Company shall have executed this Agreement and the Security Agreement, the Registration Rights Agreement, and delivered the same
to the Buyer.
b.
The Company shall have delivered to the Buyer the duly executed Note in such denominations as the Buyer shall request and in accordance
with Section 1(b) above.
c.
The Company shall have delivered to the Buyer the Warrants and the Commitment Shares.
d.
The Irrevocable Transfer Agent Instructions, in form and substance satisfactory to the Buyer, shall have been delivered to and acknowledged
in writing by the Company’s Transfer Agent.
e.
The representations and warranties of the Company shall be true and correct in all material respects as of the date when made and as
of Closing Date, as though made at such time (except for representations and warranties that speak as of a specific date) and the Company
shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date.
f.
No litigation, statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority
over the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.
g.
No event shall have occurred which could reasonably be expected to have a Material Adverse Effect on the Company including but not limited
to a change in the 1934 Act reporting status of the Company or the failure of the Company to be timely in its 1934 Act reporting obligations.
h.
Trading in the Common Stock on the Principal Market shall not have been suspended by the SEC, FINRA or the Principal Market.
i.
The Company shall have delivered to the Buyer (i) a certificate evidencing the formation and good standing of the Company and each of
its Subsidiaries in such entity’s jurisdiction of formation issued by the Secretary of State (or comparable office) of such jurisdiction,
as of a date within ten (10) days of the Closing Date and (ii) resolutions adopted by the Company’s Board of Directors at a duly
called meeting or by unanimous written consent authorizing this Agreement and all other documents, instruments and transactions contemplated
hereby.
j.
The Company shall have delivered to the Buyer a legal opinion from the Company’s counsel covering the transactions contemplated
by the Transaction Documents in a form acceptable to the Buyer.
8.
Governing Law; Miscellaneous.
a.
Arbitration of Claims; Governing Law; Venue. The Company and Buyer shall submit all Claims (as defined in Exhibit E of this Purchase
Agreement) (the “Claims”) arising under this Agreement or any other agreement between the Company and Buyer or their respective
affiliates (including but not limited to the Transaction Documents) or any Claim relating to the relationship of the Company and Buyer
or their respective affiliates to binding arbitration pursuant to the arbitration provisions set forth in Exhibit E of the Purchase Agreement
(the “Arbitration Provisions”). The Company and Buyer hereby acknowledge and agree that the Arbitration Provisions are unconditionally
binding on the Company and Buyer hereto and are severable from all other provisions of this Agreement. By executing this Agreement, Company
represents, warrants and covenants that Company has reviewed the Arbitration Provisions carefully, consulted with legal counsel about
such provisions (or waived its right to do so), understands that the Arbitration Provisions are intended to allow for the expeditious
and efficient resolution of any dispute hereunder, agrees to the terms and limitations set forth in the Arbitration Provisions, and that
Company will not take a position contrary to the foregoing representations. Company acknowledges and agrees that Buyer may rely upon
the foregoing representations and covenants of Company regarding the Arbitration Provisions. This Agreement shall be construed and enforced
in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Agreement shall be
governed by, the internal laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of Delaware or any other jurisdictions) that would cause the application of the laws of any jurisdictions other
than the State of Delaware. The Company and Buyer consent to and expressly agree that the exclusive venue for arbitration of any Claims
arising under this Agreement or any other agreement between the Company and Buyer or their respective affiliates (including but not limited
to the Transaction Documents) or any Claim relating to the relationship of the Company and Buyer or their respective affiliates shall
be in the State of Delaware. Without modifying the Company’s and Buyer’s mandatory obligations to resolve disputes hereunder
pursuant to the Arbitration Provisions, for any litigation arising in connection with any of the Transaction Documents (and notwithstanding
the terms (specifically including any governing law and venue terms) of any transfer agent services agreement or other agreement between
the Company’s transfer agent and the Company, such litigation specifically includes, without limitation any action between or involving
Company and the Company’s transfer agent under the Irrevocable Transfer Agent Instructions or otherwise related to Buyer in any
way (specifically including, without limitation, any action where Company seeks to obtain an injunction, temporary restraining order,
or otherwise prohibit the Company’s transfer agent from issuing shares of Common Stock to Buyer for any reason)), each party hereto
hereby (i) consents to and expressly submits to the exclusive personal jurisdiction of any state or federal court sitting in the State
of Delaware, (ii) expressly submits to the exclusive venue of any such court for the purposes hereof, (iii) agrees to not bring any such
action (specifically including, without limitation, any action where Company seeks to obtain an injunction, temporary restraining order,
or otherwise prohibit the Company’s transfer agent from issuing shares of Common Stock to Buyer for any reason) outside of any
state or federal court sitting in the State of Delaware, and (iv) waives any claim of improper venue and any claim or objection that
such courts are an inconvenient forum or any other claim, defense or objection to the bringing of any such proceeding in such jurisdiction
or to any claim that such venue of the suit, action or proceeding is improper. Notwithstanding anything in the foregoing to the contrary,
nothing herein shall limit, or shall be deemed or construed to limit, the ability of the Buyer to realize on any collateral or any other
security, or to enforce a judgment or other court ruling in favor of the Buyer, including through a legal action in any court of competent
jurisdiction. The Company hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any objection to jurisdiction
and venue of any action instituted hereunder, any claim that it is not personally subject to the jurisdiction of any such court, and
any claim that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding
is improper (including but not limited to based upon forum non conveniens). THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT
IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT
OF THIS AGREEMENT OR ANY TRANSACTIONS CONTEMPLATED HEREBY. The Company irrevocably waives personal service of process and consents
to process being served in any suit, action or proceeding in connection with this Agreement or any other agreement, certificate, instrument
or document contemplated hereby or thereby by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence
of delivery) to Company 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. The prevailing party in any action or dispute brought in connection with this Agreement
or any other agreement, certificate, instrument or document contemplated hereby or thereby shall be entitled to recover from the other
party its reasonable attorney’s fees and costs. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction,
such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction
or the validity or enforceability of any provision of this Agreement in any other jurisdiction.
b.
Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of
which shall constitute one and the same agreement and shall become effective when counterparts have been signed by each party and delivered
to the other party. A facsimile or .pdf signature shall be considered due execution and shall be binding upon the signatory thereto with
the same force and effect as if the signature were an original, not a facsimile or .pdf signature. Delivery of a counterpart signature
hereto by facsimile or email/.pdf transmission shall be deemed validly delivery thereof.
c.
Construction; Headings. This Agreement shall be deemed to be jointly drafted by the Company and the Buyer and shall not be construed
against any person as the drafter hereof. The headings of this Agreement are for convenience of reference only and shall not form part
of, or affect the interpretation of, this Agreement.
d.
Severability. In the event that any provision of this Agreement, the Note, or any other agreement or instrument delivered in connection
herewith is invalid or unenforceable under any applicable statute or rule of law, then such provision shall be deemed inoperative to
the extent that it may conflict therewith and shall be deemed modified to conform with such statute or rule of law. Any such provision
which may prove invalid or unenforceable under any law shall not affect the validity or enforceability of any other provision of this
Agreement, the Note, or any other agreement, certificate, instrument or document contemplated hereby or thereby.
e.
Entire Agreement; Amendments. This Agreement, the Note, and the instruments referenced herein contain the entire understanding
of the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither
the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this
Agreement or any agreement or instrument contemplated hereby may be waived or amended other than by an instrument in writing signed by
the Buyer.
f. Notices.
All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by
hand delivery, telegram, e-mail or facsimile, addressed as set forth below or to such other address as such party shall have
specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be
deemed effective (a) upon hand delivery or delivery by e-mail or facsimile, with accurate confirmation generated by the transmitting
facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where such
notice is to be received), or the first business day following such delivery (if delivered other than on a business day during
normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by
express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first
occur. The addresses for such communications shall be:
If
to the Company, to:
SIGNING
DAY SPORTS, INC.
8355
East Hartford Dr., Suite 100
Scottsdale,
AZ 85255 Attention: Daniel Nelson
e-mail:
danny.nelson@signingdaysports.com
If
to the Buyer:
FIRSTFIRE
GLOBAL OPPORTUNITIES FUND, LLC
1040
First Avenue, Suite 190 New York, NY 10022
e-mail:
eli@firstfirecapital.com
g.
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and
assigns. The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the
Buyer. The Buyer may assign its rights hereunder to any “accredited investor” (as defined in Rule 501(a) of the 1933 Act)
in a private transaction from the Buyer or to any of its “affiliates,” as that term is defined under the 1934 Act, without
the consent of the Company.
h.
Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors
and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.
i.
Survival. The representations and warranties of the Company and the agreements and covenants set forth in this Agreement shall
survive the closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of the Buyer. The Company agrees
to indemnify and hold harmless the Buyer and all their officers, directors, employees and agents for loss or damage arising as a result
of or related to any breach or alleged breach by the Company of any of its representations, warranties and covenants set forth in this
Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as they are incurred.
j.
Publicity. The Company and the Buyer shall have the right to review a reasonable period of time before issuance of any press releases
or SEC filings, or any other public statements with respect to the transactions contemplated hereby; provided, however,
that the Company shall be entitled, without the prior approval of the Buyer, to make any press release or SEC filings with respect to
such transactions as is required by applicable law and regulations (although the Buyer shall be consulted by the Company in connection
with any press release prior to its release and shall be provided with a copy thereof and be given an opportunity to comment thereon).
k.
Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and
shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.
l.
No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against any party.
m.
Indemnification. In consideration of the Buyer’s execution and delivery of this Agreement and acquiring the Securities hereunder,
and in addition to all of the Company’s other obligations under this Agreement or the Note, the Company shall defend, protect,
indemnify and hold harmless the Buyer and its stockholders, partners, members, officers, directors, employees and direct or indirect
investors and any of the foregoing persons’ agents or other representatives (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”) from and against any and all actions,
causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective
of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys’
fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or
relating to (a) any misrepresentation or breach of any representation or warranty made by the Company in this Agreement, the Note or
any other agreement, certificate, instrument or document contemplated hereby or thereby, (b) any breach of any covenant, agreement or
obligation of the Company contained in this Agreement, the Note or any other agreement, certificate, instrument or document contemplated
hereby or thereby or (c) any cause of action, suit or claim brought or made against such Indemnitee by a third party (including for these
purposes a derivative action brought on behalf of the Company) and arising out of or resulting from (i) the execution, delivery, performance
or enforcement of this Agreement, the Note or any other agreement, certificate, instrument or document contemplated hereby or thereby,
(ii) any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of the issuance of the
Securities, or (iii) the status of the Buyer or holder of the Securities as an investor in the Company pursuant to the transactions contemplated
by this Agreement. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall
make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities that is permissible under applicable
law.
n.
Remedies. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer by
vitiating the intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law
for a breach of its obligations under this Agreement, the Note, the Warrants, or any other agreement, certificate, instrument or document
contemplated hereby or thereby will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions
of this Agreement, the Note, the Warrants, or any other agreement, certificate, instrument or document contemplated hereby or thereby,
that the Buyer shall be entitled, in addition to all other available remedies at law or in equity, and in addition to the penalties assessable
herein, to an injunction or injunctions restraining, preventing or curing any breach of this Agreement, the Note, the Warrants, or any
other agreement, certificate, instrument or document contemplated hereby or thereby, and to enforce specifically the terms and provisions
hereof and thereof, without the necessity of showing economic loss and without any bond or other security being required.
o.
Payment Set Aside. To the extent that the (i) Company makes a payment or payments to the Buyer hereunder, pursuant to the Note,
pursuant to the Warrants, or pursuant to any other agreement, certificate, instrument or document contemplated hereby or thereby, or
(ii) the Buyer enforces or exercises its rights hereunder, pursuant to the Note, pursuant to the Warrants, or pursuant to any other agreement,
certificate, instrument or document contemplated hereby or thereby, and such payment or payments or the proceeds of such enforcement
or exercise or any part thereof (including but not limited to the sale of the Securities) are for any reason (i) subsequently invalidated,
declared to be fraudulent or preferential, set aside, recovered from, or disgorged by the Buyer, or (ii) are required to be refunded,
repaid or otherwise restored to the Company, a trustee, receiver, government entity, or any other person or entity under any law (including,
without limitation, any bankruptcy law, foreign, state or federal law, common law or equitable cause of action), then (i) 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 and (ii) the Company shall immediately
pay to the Buyer a dollar amount equal to the amount that was for any reason (i) subsequently invalidated, declared to be fraudulent
or preferential, set aside, recovered from, or disgorged by the Buyer, or (ii) required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver, government entity, or any other person or entity under any law (including, without limitation, any
bankruptcy law, foreign, state or federal law, common law or equitable cause of action).
p.
Failure or Indulgence Not Waiver. No failure or delay on the part of the Buyer 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 privileges. All rights and remedies of the Buyer existing hereunder
are cumulative to, and not exclusive of, any rights or remedies otherwise available.
q.
Electronic Signature. This Agreement may be executed and delivered in one or more counterparts (including by facsimile or electronic
mail or in .pdf or any other form of electronic delivery (including any electronic signature complying with U.S. federal ESIGN Act of
2000)) and by different parties in separate counterparts, with the same effect as if all parties hereto had signed the same document.
All counterparts so executed and delivered shall be construed together and shall constitute one and the same agreement.
r. Additional
Funding. If, within six (6) calendar months after the date of this Agreement (the “Funding Condition Period”), (i)
an Event of Default (as defined in the Note) has not occurred under the Note, (ii) the Common Stock is listed for trading on the
NYSE American, (iii) the Shareholder Approval, as well as shareholder approval for the issuance of all securities (including but not
limited to Common Stock) under the Second Tranche (as defined below), shall have been obtained and be effective, (iv) the initial
Registration Statement (as defined in the Registration Rights Agreement) shall still be effective, and (v) there is an effective
registration statement of the Company covering the Buyer’s resale of all securities (including but not limited to Common
Stock) under the Second Tranche (all of the aforementioned conditions in (i) through (v) of this sentence are referred to herein as
the “Additional Funding Conditions”), then, at the Company’s option, which may be exercised by giving written
notice to the Buyer within the Funding Condition Period so long the Additional Funding Conditions are satisfied (the “Funding
Notice”), the Buyer shall fund the purchase price of at least an additional $175,000.00 (the “Second Tranche) under the
same terms and conditions as the Transaction Documents (the “Second Tranche Transaction Documents”) within ten (10)
calendar days after the Buyer’s receipt of the Funding Notice (the “Second Tranche Funding Period”). For the
avoidance of doubt, the Additional Funding Conditions must continue to be satisfied during the Second Tranche Funding Period. The
closing of the Second Tranche shall remain subject to the satisfaction of all of the other closing conditions and deliverables
contained in each of the Second Tranche Transaction Documents to be delivered to the Buyer with respect to the Second Tranche.
Accordingly, and for the avoidance of doubt, the Company must provide signed copies of all of the applicable Second Tranche
Transaction Documents with respect to the Second Tranche within the Second Tranche Funding Period as a condition of closing of the
Second Tranche.
[Signature
Page Follows]
IN
WITNESS WHEREOF, the undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above written.
SIGNING
DAY SPORTS, INC.
By: |
/s/ Daniel Nelson |
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Name: |
DANIEL NELSON |
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|
Title: |
CHIEF EXECUTIVE OFFICER |
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FIRSTFIRE
GLOBAL OPPORTUNITIES FUND, LLC |
|
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By: |
FirstFire Capital Management LLC, its manager |
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By: |
/s/
Eli Fireman |
|
Name: |
ELI FIREMAN |
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EXHIBIT
A
FORM
OF NOTE
[attached
hereto]
EXHIBIT
B
PIGGY-BACK
REGISTRATION RIGHTS
All
of the Conversion Shares, Exercise Shares, and Commitment Shares shall be deemed “Registrable Securities” subject to the
provisions of this Exhibit B. All capitalized terms used but not defined in this Exhibit B shall have the meanings ascribed to such terms
in the Securities Purchase Agreement to which this Exhibit is attached.
1. Piggy-Back Registration.
1.1
Piggy-Back Rights. If at any time on or after the date of the Closing the Company proposes to file any Registration Statement
under the 1933 Act (a “Registration Statement”) with respect to any offering of equity securities, or securities or other
obligations exercisable or exchangeable for, or convertible into, equity securities, by the Company for its own account or for shareholders
of the Company for their account (or by the Company and by shareholders of the Company), other than a Registration Statement (i) filed
in connection with any employee stock option or other benefit plan on Form S-8, (ii) for a dividend reinvestment plan or (iii) in connection
with a merger or acquisition, then the Company shall (x) give written notice of such proposed filing to the holders of Registrable Securities
appearing on the books and records of the Company as such a holder as soon as practicable but in no event less than ten (10) days before
the anticipated filing date of the Registration Statement, which notice shall describe the amount and type of securities to be included
in such Registration Statement, the intended method(s) of distribution, and the name of the proposed managing underwriter or underwriters,
if any, of the offering, and (y) offer to the holders of Registrable Securities in such notice the opportunity to register the sale of
such number of Registrable Securities as such holders may request in writing within three (3) days following receipt of such notice (a
“Piggy- Back Registration”). The Company shall cause such Registrable Securities to be included in such registration and
shall cause the managing underwriter or underwriters of a proposed underwritten offering to permit the Registrable Securities requested
to be included in a Piggy-Back Registration on the same terms and conditions as any similar securities of the Company and to permit the
sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof (with the
understanding that the Company shall file the initial prospectus covering the Buyer’s sale of the Registrable Securities at prevailing
market prices on the same date that the Registration Statement is declared effective by the SEC).
1.2
Withdrawal. Any holder of Registrable Securities may elect to withdraw such holder’s request for inclusion of Registrable
Securities in any Piggy-Back Registration by giving written notice to the Company of such request to withdraw prior to the effectiveness
of the Registration Statement. The Company (whether on its own determination or as the result of a withdrawal by persons making a demand
pursuant to written contractual obligations) may withdraw a Registration Statement at any time prior to the effectiveness of such Registration
Statement. Notwithstanding any such withdrawal, the Company shall pay all expenses incurred by the holders of Registrable Securities
in connection with such Piggy-Back Registration as provided in Section 1.5 below.
1.3
The Company shall notify the holders of Registrable Securities at any time when a prospectus relating to such holder’s Registrable
Securities is required to be delivered under the 1933 Act, upon discovery that, or upon the happening of any event as a result of which,
the prospectus included in such Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances
then existing. At the request of such holder, the Company shall also prepare, file and furnish to such holder a reasonable number of
copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of
the Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing.
The holders of Registrable Securities shall not to offer or sell any Registrable Securities covered by the Registration Statement after
receipt of such notification until the receipt of such supplement or amendment.
1.4
The Company may request a holder of Registrable Securities to furnish the Company such information with respect to such holder and
such holder’s proposed distribution of the Registrable Securities pursuant to the Registration Statement as the Company may
from time to time reasonably request in writing or as shall be required by law or by the SEC in connection therewith, and such
holders shall furnish the Company with such information.
1.5
All fees and expenses incident to the performance of or compliance with this Exhibit B by the Company shall be borne by the Company whether
or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing sentence
shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses of the Company’s
counsel and independent registered public accountants) (A) with respect to filings made with the SEC, (B) with respect to filings required
to be made with any trading market on which the Common Stock is then listed for trading, (C) in compliance with applicable state securities
or Blue Sky laws reasonably agreed to by the Company in writing (including, without limitation, fees and disbursements of counsel for
the Company in connection with Blue Sky qualifications or exemptions of the Registrable Securities) and (D) with respect to any filing
that may be required to be made by any broker through which a holder of Registrable Securities intends to make sales of Registrable Securities
with the FINRA, (ii) printing expenses, (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for
the Company, (v) 1933 Act liability insurance, if the Company so desires such insurance, (vi) fees and expenses of all other persons
or entities retained by the Company in connection with the consummation of the transactions contemplated by this Exhibit B and (vii)
reasonable fees and disbursements of a single special counsel for the holders of Registrable Securities (selected by holders of the majority
of the Registrable Securities requesting such registration). In addition, the Company shall be responsible for all of its internal expenses
incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries
and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder. In no event shall
the Company be responsible for any broker or similar commissions of any holder of Registrable Securities.
1.6
The Company and its successors and assigns shall indemnify and hold harmless the Buyer, each holder of Registrable Securities, the officers,
directors, members, partners, agents and employees (and any other individuals or entities with a functionally equivalent role of a person
holding such titles, notwithstanding a lack of such title or any other title) of each of them, each individual or entity who controls
the Buyer or any such holder of Registrable Securities (within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act)
and the officers, directors, members, stockholders, partners, agents and employees (and any other individuals or entities with a functionally
equivalent role of a person holding such titles, notwithstanding a lack of such title or any other title) of each such controlling individual
or entity (each, an “Indemnified Party”), to the fullest extent permitted by applicable law, from and against any and all
losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses (collectively,
“Losses”), as incurred, arising out of or relating to (1) any untrue or alleged untrue statement of a material fact
contained in a Registration Statement, any related prospectus or any form of prospectus or in any amendment or supplement thereto or
in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein (in the case of any such prospectus or supplement thereto, in light of the circumstances
under which they were made) not misleading or (2) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act or
any state securities law, or any rule or regulation thereunder, in connection with the performance of its obligations under this Exhibit
B, except to the extent, but only to the extent, that (i) such untrue statements or omissions are based upon information regarding the
Buyer or such holder of Registrable Securities furnished to the Company by such party for use therein. The Company shall notify the Buyer
and each holder of Registrable Securities promptly of the institution, threat or assertion of any proceeding arising from or in connection
with the transactions contemplated by this Exhibit B of which the Company is aware.
1.7
If the indemnification under Section 1.6 is unavailable to an Indemnified Party or insufficient to hold an Indemnified Party harmless
for any Losses, then the Company shall contribute to the amount paid or payable by such Indemnified Party, in such proportion as is appropriate
to reflect the relative fault of the Company and Indemnified Party in connection with the actions, statements or omissions that resulted
in such Losses as well as any other relevant equitable considerations. The relative fault of the Company and Indemnified Party shall
be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of
a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by,
the Company or the Indemnified Party, and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party
as a result of any Losses shall be deemed to include any reasonable attorneys’ or other fees or expenses incurred by such party
in connection with any proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification
provided for in Section 1.6 was available to such party in accordance with its terms. It is agreed that it would not be just and equitable
if contribution pursuant to this Section 1.7 were determined by pro rata allocation or by any other method of allocation that does not
take into account the equitable considerations referred to in the immediately preceding sentence. Notwithstanding the provisions of this
Section 1.7, neither the Buyer nor any holder of Registrable Securities shall be required to contribute, in the aggregate, any amount
in excess of the amount by which the net proceeds actually received by such party from the sale of all of their Registrable Securities
pursuant to such Registration Statement or related prospectus exceeds the amount of any damages that such party has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.
[End
of Exhibit B]
EXHIBIT
C
FORM
OF SECURITY AGREEMENT
[attached
hereto]
EXHIBIT
D
FORM
OF REGISTRATION RIGHTS AGREEMENT
[attached
hereto]
EXHIBIT
E
ARBITRATION
PROVISIONS
1.
Dispute Resolution. Each party consents to and expressly agrees that the exclusive venue for arbitration of any dispute arising
out of or relating to any of the Transaction Documents or the relationship of the parties or their affiliates shall be in the State of
Delaware. For purposes of this Exhibit E, the term “Claims” means any disputes, claims, demands, causes of
action, requests for injunctive relief, requests for specific performance, questions regarding severability of any provisions of the
Transaction Documents, liabilities, damages, losses, or controversies whatsoever arising from, related to, or connected with the transactions
contemplated in the Transaction Documents and any communications between the parties related thereto, including without limitation any
claims of mutual mistake, mistake, fraud, misrepresentation, failure of formation, failure of consideration, promissory estoppel, unconscionability,
failure of condition precedent, rescission, and any statutory claims, tort claims, contract claims, or claims to void, invalidate or
terminate the Agreement (or these Arbitration Provisions (defined below)) or any of the other Transaction Documents. The term “Claims”
specifically excludes a dispute over the Warrant Calculations (as defined in the Warrants) and Note Calculations (as defined in the Note),
and the parties hereby acknowledge and agree that a dispute over any Warrant Calculations (as defined in the Warrants) or Note Calculations
(as defined in the Note) shall be resolved by the parties as expressly provided for in the Warrants and Note respectively. The parties
to this Agreement (the “parties”) hereby agree that the Claims may be arbitrated in one or more Arbitrations pursuant
to these Arbitration Provisions (one for an injunction or injunctions and a separate one for all other Claims). The parties hereby agree
that the arbitration provisions set forth in this Exhibit E (“Arbitration Provisions”) are binding on each
of them. As a result, any attempt to rescind the Agreement (or these Arbitration Provisions) or any other Transaction Document) or declare
the Agreement (or these Arbitration Provisions) or any other Transaction Document invalid or unenforceable pursuant to Section 29 of
the 1934 Act or for any other reason is subject to these Arbitration Provisions. These Arbitration Provisions shall also survive any
termination or expiration of the Agreement. Any capitalized term not defined in these Arbitration Provisions shall have the meaning set
forth in the Agreement.
2.
Arbitration. Except as otherwise provided herein, all Claims must be submitted to arbitration (“Arbitration”)
to be conducted exclusively in the State of Delaware and pursuant to the terms set forth in these Arbitration Provisions. Subject to
the arbitration appeal right provided for in Paragraph 5 below (the “Appeal Right”), the parties agree that the award
of the arbitrator rendered pursuant to Paragraph 4 below (the “Arbitration Award”) shall be (a) final and binding
upon the parties, (b) the sole and exclusive remedy between them regarding any Claims, counterclaims, issues, or accountings presented
or pleaded to the arbitrator, and (c) promptly payable in United States dollars free of any tax, deduction or offset (with respect to
monetary awards). Subject to the Appeal Right, any costs or fees, including without limitation attorneys’ fees, incurred in connection
with or incident to enforcing the Arbitration Award shall, to the maximum extent permitted by law, be charged against the party resisting
such enforcement. The Arbitration Award shall include Default Interest (as defined or otherwise provided for in the Note, “Default
Interest”) (with respect to monetary awards) at the rate specified in the Note for Default Interest both before and after the
Arbitration Award. Judgment upon the Arbitration Award will be entered and enforced by any state or federal court sitting in the State
of Delaware.
3.
The Arbitration Act. The parties hereby incorporate herein the provisions and procedures set forth in the Delaware Uniform Arbitration
Act, Title 10 Chapter 57 (as amended or superseded from time to time, the “Arbitration Act”). Notwithstanding the
foregoing, pursuant to, and to the maximum extent permitted by, the Arbitration Act, in the event of conflict or variation between the
terms of these Arbitration Provisions and the provisions of the Arbitration Act, the terms of these Arbitration Provisions shall control
and the parties hereby waive or otherwise agree to vary the effect of all requirements of the Arbitration Act that may conflict with
or vary from these Arbitration Provisions.
4.
Arbitration Proceedings. Arbitration between the parties will be subject to the following:
4.1
Initiation of Arbitration. Pursuant to the Arbitration Act, the parties agree that a party may initiate Arbitration by giving
written notice to the other party (“Arbitration Notice”) in the same manner that notice is permitted under Section
8(f) of the Agreement; provided, however, that the Arbitration Notice may not be given by email or fax. Arbitration will be deemed
initiated as of the date that the Arbitration Notice is deemed physically delivered to such other party under Section 8(f) of the Agreement
(the “Service Date”). After the Service Date, information may be delivered, and notices may be given, by email or
fax pursuant to Section 8(f) of the Agreement or any other method permitted thereunder. The Arbitration Notice must describe the nature
of the controversy, the remedies sought, and the election to commence Arbitration proceedings. All Claims in the Arbitration Notice must
be pleaded consistent with the Delaware Rules of Civil Procedure.
4.2
Selection and Payment of Arbitrator.
(a)
Within ten (10) calendar days after the Service Date, Buyer shall select and submit to Company the names of three (3) arbitrators that
are designated as “neutrals” or qualified arbitrators by American Arbitration Association (“AAA”) (https://www.adr.org/)
or other arbitration service provider agreed upon by the parties (such three (3) designated persons hereunder are referred to herein
as the “Proposed Arbitrators”). For the avoidance of doubt, each Proposed Arbitrator must be qualified as a “neutral”
with AAA or other arbitration service provider agreed upon by the parties. Within five (5) calendar days after Buyer has submitted to
Company the names of the Proposed Arbitrators, Company must select, by written notice to Buyer, one (1) of the Proposed Arbitrators to
act as the arbitrator for the parties under these Arbitration Provisions. If Company fails to select one of the Proposed Arbitrators
in writing within such 5-day period, then Buyer may select the arbitrator from the Proposed Arbitrators by providing written notice of
such selection to Company.
(b)
If Buyer fails to submit to Company the Proposed Arbitrators within ten (10) calendar days after the Service Date pursuant to subparagraph
(a) above, then Company may at any time prior to Buyer so designating the Proposed Arbitrators, identify the names of three (3) arbitrators
that are designated as “neutrals” or qualified arbitrators by AAA or other arbitration service provider agreed upon by the
parties by written notice to Buyer. Buyer may then, within five (5) calendar days after Company has submitted notice of its Proposed
Arbitrators to Buyer, select, by written notice to Company, one (1) of the Proposed Arbitrators to act as the arbitrator for the parties
under these Arbitration Provisions. If Buyer fails to select in writing and within such 5-day period one (1) of the three (3) Proposed
Arbitrators selected by Company, then Company may select the arbitrator from its three (3) previously selected Proposed Arbitrators by
providing written notice of such selection to Buyer.
(c)
If a Proposed Arbitrator chosen to serve as arbitrator declines or is otherwise unable to serve as arbitrator, then the party that selected
such Proposed Arbitrator may select one (1) of the other three (3) Proposed Arbitrators within three (3) calendar days of the date the
chosen Proposed Arbitrator declines or notifies the parties he or she is unable to serve as arbitrator. If all three (3) Proposed Arbitrators
decline or are otherwise unable to serve as arbitrator, then the arbitrator selection process shall begin again in accordance with this
Paragraph 4.2.
(d)
The date that the Proposed Arbitrator selected pursuant to this Paragraph 4.2 agrees in writing (including via email) delivered to both
parties to serve as the arbitrator hereunder is referred to herein as the “Arbitration Commencement Date”. If an arbitrator
resigns or is unable to act during the Arbitration, a replacement arbitrator shall be chosen in accordance with this Paragraph 4.2 to
continue the Arbitration. If AAA or other arbitration service provider agreed upon by the parties ceases to exist or to provide a list
of neutrals and there is no successor thereto, then the arbitrator shall be selected under the then prevailing rules of the American
Arbitration Association.
(e)
Subject to Paragraph 4.10 below, the cost of the arbitrator must be paid equally by both parties. Subject to Paragraph 4.10 below, if
one party refuses or fails to pay its portion of the arbitrator fee, then the other party can advance such unpaid amount (subject to
the accrual of Default Interest thereupon), with such amount being added to or subtracted from, as applicable, the Arbitration Award.
4.3
Applicability of Certain Delaware Rules. The parties agree that the Arbitration shall be conducted generally in accordance with
the Delaware Rules of Civil Procedure and the Delaware Rules of Evidence. More specifically, the Delaware Rules of Civil Procedure shall
apply, without limitation, to the filing of any pleadings, motions or memoranda, the conducting of discovery, and the taking of any depositions.
The Delaware Rules of Evidence shall apply to any hearings, whether telephonic or in person, held by the arbitrator. Notwithstanding
the foregoing, it is the parties’ intent that the incorporation of such rules will in no event supersede these Arbitration Provisions.
In the event of any conflict between the Delaware Rules of Civil Procedure or the Delaware Rules of Evidence and these Arbitration Provisions,
these Arbitration Provisions shall control.
4.4
Answer and Default. An answer and any counterclaims to the Arbitration Notice shall be required to be delivered to the party initiating
the Arbitration within twenty (20) calendar days after the Arbitration Commencement Date. If an answer is not delivered by the required
deadline, the arbitrator must provide written notice to the defaulting party stating that the arbitrator will enter a default award against
such party if such party does not file an answer within five (5) calendar days of receipt of such notice. If an answer is not filed within
the five (5) day extension period, the arbitrator must render a default award, consistent with the relief requested in the Arbitration
Notice, against a party that fails to submit an answer within such time period.
4.5 [Intentionally Omitted].
4.6 Discovery. The parties
agree that discovery shall be conducted as follows:
(a)
Written discovery will only be allowed if the likely benefits of the proposed written discovery outweigh the burden or expense thereof,
and the written discovery sought is likely to reveal information that will satisfy a specific element of a claim or defense already pleaded
in the Arbitration. The party seeking written discovery shall always have the burden of showing that all of the standards and limitations
set forth in these Arbitration Provisions are satisfied. The scope of discovery in the Arbitration proceedings shall also be limited
as follows:
(i)
To facts directly connected with the transactions contemplated by the Agreement.
(ii)
To facts and information that cannot be obtained from another source or in another manner that is more convenient, less burdensome or
less expensive than in the manner requested.
(b)
No party shall be allowed (i) more than fifteen (15) interrogatories (including discrete subparts), (ii) more than fifteen (15) requests
for admission (including discrete subparts), (iii) more than ten (10) document requests (including discrete subparts), or (iv) more than
three (3) depositions (excluding expert depositions) for a maximum of seven (7) hours per deposition. The costs associated with depositions
will be borne by the party taking the deposition. The party defending the deposition will submit a notice to the party taking the deposition
of the estimated attorneys’ fees that such party expects to incur in connection with defending the deposition. If the party defending
the deposition fails to submit an estimate of attorneys’ fees within five (5) calendar days of its receipt of a deposition notice,
then such party shall be deemed to have waived its right to the estimated attorneys’ fees. The party taking the deposition must
pay the party defending the deposition the estimated attorneys’ fees prior to taking the deposition, unless such obligation is
deemed to be waived as set forth in the immediately preceding sentence. If the party taking the deposition believes that the estimated
attorneys’ fees are unreasonable, such party may submit the issue to the arbitrator for a decision.
(c)
All discovery requests (including document production requests included in deposition notices) must be submitted in writing to the arbitrator
and the other party. The party submitting the written discovery requests must include with such discovery requests a detailed explanation
of how the proposed discovery requests satisfy the requirements of these Arbitration Provisions and the Delaware Rules of Civil Procedure.
The receiving party will then be allowed, within five (5) calendar days of receiving the proposed discovery requests, to submit to the
arbitrator an estimate of the attorneys’ fees and costs associated with responding to such written discovery requests and a written
challenge to each applicable discovery request. After receipt of an estimate of attorneys’ fees and costs and/or challenge(s) to
one or more discovery requests, consistent with subparagraph (c) above, the arbitrator will within three (3) calendar days make a finding
as to the likely attorneys’ fees and costs associated with responding to the discovery requests and issue an order that (i) requires
the requesting party to prepay the attorneys’ fees and costs associated with responding to the discovery requests, and (ii) requires
the responding party to respond to the discovery requests as limited by the arbitrator within twenty-five (25) calendar days of the arbitrator’s
finding with respect to such discovery requests. If a party entitled to submit an estimate of attorneys’ fees and costs and/or
a challenge to discovery requests fails to do so within such 5-day period, the arbitrator will make a finding that (A) there are no attorneys’
fees or costs associated with responding to such discovery requests, and (B) the responding party must respond to such discovery requests
(as may be limited by the arbitrator) within twenty-five (25) calendar days of the arbitrator’s finding with respect to such discovery
requests. Any party submitting any written discovery requests, including without limitation interrogatories, requests for production
subpoenas to a party or a third party, or requests for admissions, must prepay the estimated attorneys’ fees and costs, before
the responding party has any obligation to produce or respond to the same, unless such obligation is deemed waived as set forth above.
(d)
In order to allow a written discovery request, the arbitrator must find that the discovery request satisfies the standards set forth
in these Arbitration Provisions and the Delaware Rules of Civil Procedure. The arbitrator must strictly enforce these standards. If a
discovery request does not satisfy any of the standards set forth in these Arbitration Provisions or the Delaware Rules of Civil Procedure,
the arbitrator may modify such discovery request to satisfy the applicable standards, or strike such discovery request in whole or in
part.
(e)
Each party may submit expert reports (and rebuttals thereto), provided that such reports must be submitted within sixty (60) days of
the Arbitration Commencement Date. Each party will be allowed a maximum of two (2) experts. Expert reports must contain the following:
(i) a complete statement of all opinions the expert will offer at trial and the basis and reasons for them; (ii) the expert’s name
and qualifications, including a list of all the expert’s publications within the preceding ten (10) years, and a list of any other
cases in which the expert has testified at trial or in a deposition or prepared a report within the preceding ten (10) years; and (iii)
the compensation to be paid for the expert’s report and testimony. The parties are entitled to depose any other party’s expert
witness one (1) time for no more than four (4) hours. An expert may not testify in a party’s case-in-chief concerning any matter
not fairly disclosed in the expert report.
4.6
Dispositive Motions. Each party shall have the right to submit dispositive motions pursuant to the Delaware Rules of Civil Procedure
(a “Dispositive Motion”). The party submitting the Dispositive Motion may, but is not required to, deliver to the
arbitrator and to the other party a memorandum in support (the “Memorandum in Support”) of the Dispositive Motion.
Within seven (7) calendar days of delivery of the Memorandum in Support, the other party shall deliver to the arbitrator and to the other
party a memorandum in opposition to the Memorandum in Support (the “Memorandum in Opposition”). Within seven (7) calendar
days of delivery of the Memorandum in Opposition, as applicable, the party that submitted the Memorandum in Support shall deliver to
the arbitrator and to the other party a reply memorandum to the Memorandum in Opposition (“Reply Memorandum”). If
the applicable party shall fail to deliver the Memorandum in Opposition as required above, or if the other party fails to deliver the
Reply Memorandum as required above, then the applicable party shall lose its right to so deliver the same, and the Dispositive Motion
shall proceed regardless.
4.7
Confidentiality. All information disclosed by either party (or such party’s agents) during the Arbitration process (including
without limitation information disclosed during the discovery process or any Appeal (defined below)) shall be considered confidential
in nature. Each party agrees not to disclose any confidential information received from the other party (or its agents) during the Arbitration
process (including without limitation during the discovery process or any Appeal) unless (a) prior to or after the time of disclosure
such information becomes public knowledge or part of the public domain, not as a result of any inaction or action of the receiving party
or its agents, (b) such information is required by a court order, subpoena or similar legal duress to be disclosed if such receiving
party has notified the other party thereof in writing and given it a reasonable opportunity to obtain a protective order from a court
of competent jurisdiction prior to disclosure, or (c) such information is disclosed to the receiving party’s agents, representatives
and legal counsel on a need to know basis who each agree in writing not to disclose such information to any third party. The arbitrator
is hereby authorized and directed to issue a protective order to prevent the disclosure of privileged information and confidential information
upon the written request of either party.
4.8
Authorization; Timing; Scheduling Order. Subject to all other portions of these Arbitration Provisions, the parties hereby authorize
and direct the arbitrator to take such actions and make such rulings as may be necessary to carry out the parties’ intent for the
Arbitration proceedings to be efficient and expeditious. The parties hereby agree that an Arbitration Award must be made within one hundred
twenty (120) calendar days after the Arbitration Commencement Date. The arbitrator is hereby authorized and directed to hold a scheduling
conference within ten (10) calendar days after the Arbitration Commencement Date in order to establish a scheduling order with various
binding deadlines for discovery, expert testimony, and the submission of documents by the parties to enable the arbitrator to render
a decision prior to the end of such 120-day period.
4.9
Relief. The arbitrator shall have the right to award or include in the Arbitration Award (or in a preliminary ruling) any relief
which the arbitrator deems proper under the circumstances, including, without limitation, specific performance and injunctive relief,
provided that the arbitrator may not award exemplary or punitive damages.
4.10
Fees and Costs. As part of the Arbitration Award, the arbitrator is hereby directed to require the losing party (the party being
awarded the least amount of money by the arbitrator, which, for the avoidance of doubt, shall be determined without regard to any statutory
fines, penalties, fees, or other charges awarded to any party) to (a) pay the full amount of any unpaid costs and fees of the Arbitration,
and (b) reimburse the prevailing party for all reasonable attorneys’ fees, arbitrator costs and fees, deposition costs, other discovery
costs, and other expenses, costs or fees paid or otherwise incurred by the prevailing party in connection with the Arbitration.
5.
Arbitration Appeal.
5.1
Initiation of Appeal. Following the entry of the Arbitration Award, either party (the “Appellant”) shall have
a period of thirty (30) calendar days in which to notify the other party (the “Appellee”), in writing, that the Appellant
elects to appeal (the “Appeal”) the Arbitration Award (such notice, an “Appeal Notice”) to a panel
of arbitrators as provided in Paragraph 5.2 below. The date the Appellant delivers an Appeal Notice to the Appellee is referred to herein
as the “Appeal Date”. The Appeal Notice must be delivered to the Appellee in accordance with the provisions of Paragraph
4.1 above with respect to delivery of an Arbitration Notice. In addition, together with delivery of the Appeal Notice to the Appellee,
the Appellant must also pay for (and provide proof of such payment to the Appellee together with delivery of the Appeal Notice) a bond
in the amount of 110% of the sum the Appellant owes to the Appellee as a result of the Arbitration Award the Appellant is appealing.
In the event an Appellant delivers an Appeal Notice to the Appellee (together with proof of payment of the applicable bond) in compliance
with the provisions of this Paragraph 5.1, the Appeal will occur as a matter of right and, except as specifically set forth herein, will
not be further conditioned. In the event a party does not deliver an Appeal Notice (along with proof of payment of the applicable bond)
to the other party within the deadline prescribed in this Paragraph 5.1, such party shall lose its right to appeal the Arbitration Award.
If no party delivers an Appeal Notice (along with proof of payment of the applicable bond) to the other party within the deadline described
in this Paragraph 5.1, the Arbitration Award shall be final. The parties acknowledge and agree that any Appeal shall be deemed part of
the parties’ agreement to arbitrate for purposes of these Arbitration Provisions and the Arbitration Act.
5.2
Selection and Payment of Appeal Panel. In the event an Appellant delivers an Appeal Notice to the Appellee (together with proof
of payment of the applicable bond) in compliance with the provisions of Paragraph 5.1 above, the Appeal will be heard by a three (3)
person arbitration panel (the “Appeal Panel”).
(a)
Within ten (10) calendar days after the Appeal Date, the Appellee shall select and submit to the Appellant the names of five (5)
arbitrators that are designated as “neutrals” or qualified arbitrators by AAA (https://www.adr.org/) or other arbitration
service provider agreed upon by the parties (such five (5) designated persons hereunder are referred to herein as the “Proposed
Appeal Arbitrators”). For the avoidance of doubt, each Proposed Appeal Arbitrator must be qualified as a “neutral”
with AAA or other arbitration service provider agreed upon by the parties, and shall not be the arbitrator who rendered the Arbitration
Award being appealed (the “Original Arbitrator”). Within five (5) calendar days after the Appellee has submitted to
the Appellant the names of the Proposed Appeal Arbitrators, the Appellant must select, by written notice to the Appellee, three (3) of
the Proposed Appeal Arbitrators to act as the members of the Appeal Panel. If the Appellant fails to select three (3) of the Proposed
Appeal Arbitrators in writing within such 5-day period, then the Appellee may select such three (3) arbitrators from the Proposed Appeal
Arbitrators by providing written notice of such selection to the Appellant.
(b)
If the Appellee fails to submit to the Appellant the names of the Proposed Appeal Arbitrators within ten (10) calendar days after the
Appeal Date pursuant to subparagraph (a) above, then the Appellant may at any time prior to the Appellee so designating the Proposed
Appeal Arbitrators, identify the names of five (5) arbitrators that are designated as “neutrals” or qualified arbitrators
by AAA or other arbitration service provider agreed upon by the parties (none of whom may be the Original Arbitrator) by written notice
to the Appellee. The Appellee may then, within five (5) calendar days after the Appellant has submitted notice of its selected arbitrators
to the Appellee, select, by written notice to the Appellant, three (3) of such selected arbitrators to serve on the Appeal Panel. If
the Appellee fails to select in writing within such 5- day period three (3) of the arbitrators selected by the Appellant to serve as
the members of the Appeal Panel, then the Appellant may select the three (3) members of the Appeal Panel from the Appellant’s list
of five (5) arbitrators by providing written notice of such selection to the Appellee.
(c)
If a selected Proposed Appeal Arbitrator declines or is otherwise unable to serve, then the party that selected such Proposed
Appeal Arbitrator may select one (1) of the other five (5) designated Proposed Appeal Arbitrators within three (3) calendar days of the
date a chosen Proposed Appeal Arbitrator declines or notifies the parties he or she is unable to serve as an arbitrator. If at least
three (3) of the five (5) designated Proposed Appeal Arbitrators decline or are otherwise unable to serve, then the Proposed Appeal Arbitrator
selection process shall begin again in accordance with this Paragraph 5.2; provided, however, that any Proposed Appeal Arbitrators
who have already agreed to serve shall remain on the Appeal Panel.
(d)
The date that all three (3) Proposed Appeal Arbitrators selected pursuant to this Paragraph 5.2 agree in writing (including via
email) delivered to both the Appellant and the Appellee to serve as members of the Appeal Panel hereunder is referred to herein as the
“Appeal Commencement Date”. No later than five (5) calendar days after the Appeal Commencement Date, the Appellee
shall designate in writing (including via email) to the Appellant and the Appeal Panel the name of one (1) of the three (3) members of
the Appeal Panel to serve as the lead arbitrator in the Appeal proceedings. Each member of the Appeal Panel shall be deemed an arbitrator
for purposes of these Arbitration Provisions and the Arbitration Act, provided that, in conducting the Appeal, the Appeal Panel may only
act or make determinations upon the approval or vote of no less than the majority vote of its members, as announced or communicated by
the lead arbitrator on the Appeal Panel. If an arbitrator on the Appeal Panel ceases or is unable to act during the Appeal proceedings,
a replacement arbitrator shall be chosen in accordance with Paragraph 5.2 above to continue the Appeal as a member of the Appeal Panel.
If AAA or other arbitration service provider agreed upon by the parties ceases to exist or to provide a list of neutrals, then the arbitrators
for the Appeal Panel shall be selected under the then prevailing rules of the American Arbitration Association.
(d)
Subject to Paragraph 5.7 below, the cost of the Appeal Panel must be paid entirely by the Appellant.
5.3
Appeal Procedure. The Appeal will be deemed an appeal of the entire Arbitration Award. In conducting the Appeal, the Appeal Panel
shall conduct a de novo review of all Claims described or otherwise set forth in the Arbitration Notice. Subject to the foregoing and
all other provisions of this Paragraph 5, the Appeal Panel shall conduct the Appeal in a manner the Appeal Panel considers appropriate
for a fair and expeditious disposition of the Appeal, may hold one or more hearings and permit oral argument, and may review all previous
evidence and discovery, together with all briefs, pleadings and other documents filed with the Original Arbitrator (as well as any documents
filed with the Appeal Panel pursuant to Paragraph 5.4(a) below). Notwithstanding the foregoing, in connection with the Appeal, the Appeal
Panel shall not permit the parties to conduct any additional discovery or raise any new Claims to be arbitrated, shall not permit new
witnesses or affidavits, and shall not base any of its findings or determinations on the Original Arbitrator’s findings or the
Arbitration Award.
5.4
Timing.
(a)
Within seven (7) calendar days of the Appeal Commencement Date, the Appellant (i) shall deliver or cause to be delivered to the Appeal
Panel copies of the Appeal Notice, all discovery conducted in connection with the Arbitration, and all briefs, pleadings and other documents
filed with the Original Arbitrator (which material Appellee shall have the right to review and supplement if necessary), and (ii) may,
but is not required to, deliver to the Appeal Panel and to the Appellee a Memorandum in Support of the Appellant’s arguments concerning
or position with respect to all Claims, counterclaims, issues, or accountings presented or pleaded in the Arbitration. Within seven (7)
calendar days of the Appellant’s delivery of the Memorandum in Support, as applicable, the Appellee shall deliver to the Appeal
Panel and to the Appellant a Memorandum in Opposition to the Memorandum in Support. Within seven (7) calendar days of the Appellee’s
delivery of the Memorandum in Opposition, as applicable, the Appellant shall deliver to the Appeal Panel and to the Appellee a Reply
Memorandum to the Memorandum in Opposition. If the Appellant shall fail to substantially comply with the requirements of clause (i) of
this subparagraph (a), the Appellant shall lose its right to appeal the Arbitration Award, and the Arbitration Award shall be final.
If the Appellee shall fail to deliver the Memorandum in Opposition as required above, or if the Appellant shall fail to deliver the Reply
Memorandum as required above, then the Appellee or the Appellant, as the case may be, shall lose its right to so deliver the same, and
the Appeal shall proceed regardless.
(b)
Subject to subparagraph (a) above, the parties hereby agree that the Appeal must be heard by the Appeal Panel within thirty (30)
calendar days of the Appeal Commencement Date, and that the Appeal Panel must render its decision within thirty (30) calendar days after
the Appeal is heard (and in no event later than sixty (60) calendar days after the Appeal Commencement Date).
5.5
Appeal Panel Award. The Appeal Panel shall issue its decision (the “Appeal Panel Award”) through the lead arbitrator
on the Appeal Panel. Notwithstanding any other provision contained herein, the Appeal Panel Award shall (a) supersede in its entirety
and make of no further force or effect the Arbitration Award (provided that any protective orders issued by the Original Arbitrator shall
remain in full force and effect), (b) be final and binding upon the parties, with no further rights of appeal, (c) be the sole and exclusive
remedy between the parties regarding any Claims, counterclaims, issues, or accountings presented or pleaded in the Arbitration, and (d)
be promptly payable in United States dollars free of any tax, deduction or offset (with respect to monetary awards). Any costs or fees,
including without limitation attorneys’ fees, incurred in connection with or incident to enforcing the Appeal Panel Award shall,
to the maximum extent permitted by law, be charged against the party resisting such enforcement. The Appeal Panel Award shall include
Default Interest (with respect to monetary awards) at the rate specified in the Note for Default Interest both before and after the Arbitration
Award. Judgment upon the Appeal Panel Award will be entered and enforced by a state or federal court sitting in the State of Delaware.
5.6
Relief. The Appeal Panel shall have the right to award or include in the Appeal Panel Award any relief which the Appeal Panel
deems proper under the circumstances, including, without limitation, specific performance and injunctive relief, provided that the Appeal
Panel may not award exemplary or punitive damages.
5.7
Fees and Costs. As part of the Appeal Panel Award, the Appeal Panel is hereby directed to require the losing party (the party
being awarded the least amount of money by the arbitrator, which, for the avoidance of doubt, shall be determined without regard to any
statutory fines, penalties, fees, or other charges awarded to any party) to (a) pay the full amount of any unpaid costs and fees of the
Arbitration and the Appeal Panel, and (b) reimburse the prevailing party (the party being awarded the most amount of money by the Appeal
Panel, which, for the avoidance of doubt, shall be determined without regard to any statutory fines, penalties, fees, or other charges
awarded to any part) the reasonable attorneys’ fees, arbitrator and Appeal Panel costs and fees, deposition costs, other discovery
costs, and other expenses, costs or fees paid or otherwise incurred by the prevailing party in connection with the Arbitration (including
without limitation in connection with the Appeal).
6. Miscellaneous.
6.1
Severability. If any part of these Arbitration Provisions is found to violate or be illegal under applicable law, then such provision
shall be modified to the minimum extent necessary to make such provision enforceable under applicable law, and the remainder of the Arbitration
Provisions shall remain unaffected and in full force and effect.
6.2
Governing Law. These Arbitration Provisions shall be governed by the laws of the State of Delaware without regard to the conflict
of laws principles therein.
6.3
Interpretation. The headings of these Arbitration Provisions are for convenience of reference only and shall not form part of,
or affect the interpretation of, these Arbitration Provisions.
6.4
Waiver. No waiver of any provision of these Arbitration Provisions shall be effective unless it is in the form of a writing signed
by the party granting the waiver.
6.5
Time is of the Essence. Time is expressly made of the essence with respect to each and every provision of these Arbitration Provisions.
[Remainder
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DISCLOSURE
SCHEDULE
RELATING
TO THE SECURITIES PURCHASE
AGREEMENT,
DATED AS OF MAY 16, 2024
BETWEEN
SIGNING
DAY SPORTS, INC.
AND
FIRSTFIRE
GLOBAL OPPORTUNITIES FUND, LLC
This
disclosure schedule is made and given pursuant to Section 3 of the Securities Purchase Agreement, dated as of May 16, 2024 (the “Agreement”),
by and between SIGNING DAY SPORTS, INC., a Delaware corporation (the “Company”), and FIRSTFIRE GLOBAL OPPORTUNITIES
FUND, LLC, a Delaware limited liability company (the “Buyer”). Unless the context otherwise requires, all capitalized
terms are used herein as defined in the Agreement. The numbers below correspond to the section numbers of representations and warranties
in the Agreement most directly modified by the below exceptions.
Section
3(c)
Capitalization;
Governing Documents
N/A
Section
3.1(g)
Ranking;
No Conflicts
Revolving
Lins of Credit with Commerce Bank of Arizona
Under
a Business Loan Agreement, dated December 11, 2023 (the “Second CBAZ Loan Agreement”), between the Company
and Commerce Bank of Arizona (“CBAZ”), the Company and CBAZ entered into a $2,000,000 secured revolving line
of credit (the “Second CBAZ LOC”). In connection with the Second CBAZ LOC, CBAZ issued a promissory note to
the Company, dated December 11, 2023 (the “Second CBAZ Promissory Note”), with principal of $2,000,000. The
Company paid loan origination and other fees totaling $5,500 and CBAZ immediately disbursed $334,624.85 of the funds in connection with
the Second CBAZ LOC for crediting the full prepayment of the balance in that amount outstanding in connection with the First CBAZ LOC.
The principal balance under the Second CBAZ Promissory Note bears interest at a fixed rate per annum of 7.21% per annum, and will mature
on December 11, 2024. There is no penalty for prepayment of the Second CBAZ Promissory Note. The Second CBAZ LOC was required to be secured
by a 12-month CD Account Number 9000070132 (the “Account”) with CBAZ with an
approximate balance of $2,100,000.00 together with (A) all interest, whether now accrued or hereafter accruing; (B) all additional deposits
made to the Account; (C) any and all proceeds from the Account; and (D) all renewals, replacements and substitutions for any of the foregoing
(the “CD Collateral”) under an Assignment of Deposit Account, dated December 11, 2023, between the Company
and CBAZ (the “Assignment of Deposit Account”).
In
connection with the Second CBAZ LOC, the Company agreed to the following negative covenants: (i) incurring any other indebtedness; (ii)
permitting other liens on its property, (iii) selling any of its accounts receivable with recourse to any third party; (iv) engaging
in substantially different business activities; (v) ceasing operations, engaging in certain corporate transactions, or selling the CD
Collateral; or (vi) paying cash dividends on its stock except to pay certain income taxes of stockholders or repurchasing or retiring
any of the Company’s outstanding common stock. The following events will constitute a default under the Second CBAZ LOC: (i) the
Company fails to comply with the negative covenants described above; (ii) any change in ownership of 25% or more of the common stock
of the Company; (iii) a material adverse change in the Company’s financial condition or CBAZ believes the prospect of payment or
performance under any loans under the Second CBAZ LOC is impaired; and (iv) other customary events of default including insolvency, foreclosure
or forfeiture proceedings, and failure to make payment when due. Any late payments due will be charged 5% of the regularly scheduled
payments. Upon an event of default, the interest rate on the Second CBAZ Promissory Note will increase to 13.21%; all indebtedness under
the Second CBAZ Promissory Note will become due at the option of CBAZ, except that if an event of default occurs due to an insolvency
and certain similar events, the indebtedness will become due immediately automatically; all of CBAZ’s obligations under the Second
CBAZ Loan Agreement will terminate; and CBAZ may take any actions permitted under the Assignment of Deposit Account, including application
of account proceeds under the CD Collateral to outstanding indebtedness, and use of all rights and remedies of a secured creditor under
the Arizona Uniform Commercial Code. The Second CBAZ LOC is also subject to certain other terms and conditions. The outstanding balance
under the Second CBAZ LOC was $2,000,000 as of March 31, 2024.
See
Disclosure Schedule Section 3.1(u).
Section
3.1(u)
Titles
to Property
Under
the Assignment of Deposit Account, CBAZ holds a security interest in the Account with an approximate balance of $2,100,000.00 together
with (A) all interest, whether now accrued or hereafter accruing; (B) all additional deposits made to the Account; (C) any and all proceeds
from the Account; and (D) all renewals, replacements and substitutions for any of the foregoing.
36
Exhibit
10.2
SECURITY
AGREEMENT
This
SECURITY AGREEMENT, dated as of May 16, 2024 (this “Agreement”), is among Signing Day Sports, Inc., a Delaware corporation
(the “Company” or “Debtor”, and collectively with each Additional Debtor (as defined in this Agreement),
the “Debtors”) and FirstFire Global Opportunities Fund, LLC, a Delaware limited liability company (collectively with
its endorsees, transferees and assigns, the “Secured Parties”).
W
I T N E S S E T H:
WHEREAS,
pursuant to the securities purchase agreement entered into by the Company and the Secured Parties on May 16, 2024 (the “Purchase
Agreement”), the Company has agreed to issue that certain 10% senior secured promissory note dated May 16, 2024, in the original
principal amount of $412,500.00 (the “Note”);
WHEREAS,
in order to induce the Secured Parties to enter into the investment evidenced by the Note, each Debtor has agreed to execute and deliver
to the Secured Parties this Agreement and to grant the Secured Parties, a security interest in certain property of such Debtors to secure
the prompt payment, performance and discharge in full of all of the Company’s obligations under the Note.
NOW,
THEREFORE, in consideration of the agreements herein contained and for other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto hereby agree as follows:
1.
Certain Definitions. As used in this Agreement, the following terms shall have the meanings set forth in this Section 1. Terms
used but not otherwise defined in this Agreement that are defined in Article 9 of the UCC (such as “account”, “chattel
paper”, “commercial tort claim”, “deposit account”, “document”, “equipment”, “fixtures”,
“general intangibles”, “goods”, “instruments”, “inventory”, “investment property”,
“letter-of-credit rights”, “proceeds” and “supporting obligations”) shall have the respective meanings
given such terms in Article 9 of the UCC.
(a)
“Collateral” means the collateral in which the Secured Parties are granted a security interest by this Agreement and
which shall include the following personal property of the Debtors, whether presently owned or existing or hereafter acquired or coming
into existence, wherever situated, and all additions and accessions thereto and all substitutions and replacements thereof, and all proceeds,
products and accounts thereof, including, without limitation, all proceeds from the sale or transfer of the Collateral and of insurance
covering the same and of any tort claims in connection therewith, and all dividends, interest, cash, notes, securities, equity interest
or other property at any time and from time to time acquired, receivable or otherwise distributed in respect of, or in exchange for,
any or all of the Pledged Securities (as defined below):
(i)
All goods, including, without limitation, (A) all machinery, equipment, computers, motor vehicles, trucks, tanks, boats, ships, appliances,
furniture, special and general tools, fixtures, test and quality control devices and other equipment of every kind and nature and wherever
situated, together with all documents of title and documents representing the same, all additions and accessions thereto, replacements
therefor, all parts therefor, and all substitutes for any of the foregoing and all other items used and useful in connection with any
Debtor’s businesses and all improvements thereto; and (B) all inventory;
(ii)
All contract rights and other general intangibles, including, without limitation, all partnership interests, membership interests, stock
or other securities, rights under any of the Organizational Documents, agreements related to the Pledged Securities, licenses, distribution
and other agreements, computer software (whether “off-the-shelf”, licensed from any third party or developed by any Debtor),
computer software development rights, leases, franchises, customer lists, quality control procedures, grants and rights, goodwill, Intellectual
Property, income tax refunds, and employee retention tax credits;
(iii)
All accounts, together with all instruments, all documents of title representing any of the foregoing, all rights in any merchandising,
goods, equipment, motor vehicles and trucks which any of the same may represent, and all right, title, security and guaranties with respect
to each account, including any right of stoppage in transit;
(iv)
All documents, letter-of-credit rights, instruments and chattel paper;
(v)
All commercial tort claims;
(vi)
All deposit accounts and all cash (whether or not deposited in such deposit accounts), not including that certain Certificate of Deposit,
Account Number 9000070132 (the “Account”), with Commerce Bank of Arizona (the “Senior Lender”) with an approximate
balance of $2,100,000.00 together with (A) all interest, whether now accrued or hereafter accruing; (B) all additional deposits hereafter
made to the Account; (C) any and all proceeds from the Account; and (D) all renewals, replacements and substitutions for any of the foregoing,
which is subject to that certain Assignment of Deposit Account, dated as of December 13, 2023, between the Company and the Senior Lender,
until the full repayment of that certain Promissory Note in the original principal amount of $2,000,000 issued by the Company to the
Senior Lender on or around December 23, 2023 pursuant to that certain Business Loan Agreement, dated as of December 11, 2023, between
the Company and the Senior Lender (the “Excluded Collateral”);
(vii)
All investment property;
(viii)
All supporting obligations; and
(ix)
All files, records, books of account, business papers, and computer programs; and
(x)
the products and proceeds of all of the foregoing Collateral set forth in clauses (i)-
(ix)
above.
Without
limiting the generality of the foregoing, the “Collateral” shall include all investment property and general intangibles
respecting ownership and/or other equity interests in each Additional Debtor, including, without limitation, the shares of capital stock
and the other equity interests disclosed in the SEC Documents (as defined in the Purchase Agreement), as the same may be modified from
time to time pursuant to the terms hereof, and any other shares of capital stock and/or other equity interests of any other direct or
indirect subsidiary of any Debtor obtained in the future, and, in each case, all certificates representing such shares and/or equity
interests and, in each case, all rights, options, warrants, stock, other securities and/or equity interests that may hereafter be received,
receivable or distributed in respect of, or exchanged for, any of the foregoing and all rights arising under or in connection with the
Pledged Securities, including, but not limited to, all dividends, interest and cash.
Notwithstanding
the foregoing, nothing herein shall be deemed to constitute an assignment of any asset which, in the event of an assignment, becomes
void by operation of applicable law or the assignment of which is otherwise prohibited by applicable law (in each case to the extent
that such applicable law is not overridden by Sections 9-406, 9-407 and/or 9-408 of the UCC or other similar applicable law); provided,
however, that, to the extent permitted by applicable law, this Agreement shall create a valid security interest in such asset
and, to the extent permitted by applicable law, this Agreement shall create a valid security interest in the proceeds of such asset.
(b)
“Intellectual Property” means the collective reference to all rights, priorities and privileges relating to intellectual
property, whether arising under United States, multinational or foreign laws or otherwise, including, without limitation, (i) all copyrights
arising under the laws of the United States, any other country or any political subdivision thereof, whether registered or unregistered
and whether published or unpublished, all registrations and recordings thereof, and all applications in connection therewith, including,
without limitation, all registrations, recordings and applications in the United States Copyright Office, (ii) all letters patent of
the United States, any other country or any political subdivision thereof, all reissues and extensions thereof, and all applications
for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part thereof, (iii)
all trademarks, trade names, corporate names, company names, business names, fictitious business names, trade dress, service marks, logos,
domain names and other source or business identifiers, and all goodwill associated therewith, now existing or hereafter adopted or acquired,
all registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof,
or otherwise, and all common law rights related thereto, (iv) all trade secrets arising under the laws of the United States, any other
country or any political subdivision thereof, (v) all rights to obtain any reissues, renewals or extensions of the foregoing, (vi) all
licenses for any of the foregoing, and (vii) all causes of action for infringement of the foregoing.
(c)
[Intentionally Omitted].
(d)
“Necessary Endorsement” means undated stock powers endorsed in blank or other proper instruments of assignment duly
executed and such other instruments or documents as the Secured Parties may reasonably request.
(e)
“Obligations” means all of the liabilities and obligations (primary, secondary, direct, contingent, sole, joint or
several) due or to become due, or that are now or may be hereafter contracted or acquired, or owing to, of any Debtor to the Secured
Parties, including, without limitation, all obligations under this Agreement, the Note, and any other instruments, agreements or other
documents executed and/or delivered in connection herewith or therewith, in each case, whether now or hereafter existing, voluntary or
involuntary, direct or indirect, absolute or contingent, liquidated or unliquidated, whether or not jointly owed with others, and whether
or not from time to time decreased or extinguished and later increased, created or incurred, and all or any portion of such obligations
or liabilities that are paid, to the extent all or any part of such payment is avoided or recovered directly or indirectly from any of
the Secured Parties as a preference, fraudulent transfer or otherwise as such obligations may be amended, supplemented, converted, extended
or modified from time to time. Without limiting the generality of the foregoing, the term “Obligations” shall include, without
limitation: (i) principal, interest, and penalties under the Note and all other amounts owed thereunder; (ii) any and all other fees,
indemnities, costs, obligations and liabilities of the Debtors from time to time under or in connection with this Agreement, the Note,
and any other instruments, agreements or other documents executed and/or delivered in connection herewith or therewith; and (iii) all
amounts (including but not limited to post-petition interest) in respect of the foregoing that would be payable but for the fact that
the obligations to pay such amounts are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving any Debtor.
(f)
“Organizational Documents” means, with respect to any Debtor, the documents by which such Debtor was organized (such
as a certificate of incorporation, certificate of limited partnership or articles of organization, and including, without limitation,
any certificates of designation for preferred stock or other forms of preferred equity) and which relate to the internal governance of
such Debtor (such as bylaws, a partnership agreement or an operating, limited liability or members agreement).
(g)
“Pledged Interests” shall have the meaning ascribed to such term in Section 4(j).
(h)
“Pledged Securities” shall have the meaning ascribed to such term in Section 4(i).
(i)
“UCC” means the Uniform Commercial Code of the State of Delaware and or any other applicable law of any state or states
which has jurisdiction with respect to all, or any portion of, the Collateral or this Agreement, from time to time. It is the intent
of the parties that defined terms in the UCC should be construed in their broadest sense so that the term “Collateral” will
be construed in its broadest sense. Accordingly if there are, from time to time, changes to defined terms in the UCC that broaden the
definitions, they are incorporated herein and if existing definitions in the UCC are broader than the amended definitions, the existing
ones shall be controlling.
2.
Grant of Security Interest in Collateral. As an inducement for the Secured Parties to enter into the investment as evidenced by
the Note and to secure the complete and timely payment, performance and discharge in full, as the case may be, of all of the Obligations,
each Debtor hereby unconditionally and irrevocably pledges, grants and hypothecates to the Secured Parties a security interest in and
to, a lien upon and a right of set-off against all of their respective right, title and interest of whatsoever kind and nature in and
to, the Collateral (a “Security Interest” and, collectively, the “Security Interests”).
3.
Delivery of Certain Collateral. Contemporaneously or prior to the execution of this Agreement, each Debtor shall deliver or cause to
be delivered to the Secured Parties (a) any and all certificates and other instruments representing or evidencing the Pledged Securities,
and (b) any and all certificates and other instruments or documents representing any of the other Collateral, in each case, together
with all Necessary Endorsements. The Debtors are, contemporaneously with the execution hereof, delivering to Secured Parties, or have
previously delivered to Secured Parties, a true and correct copy of each Organizational Document governing any of the Pledged Securities.
4.
Representations, Warranties, Covenants and Agreements of the Debtors. Except as set forth under the corresponding section of the
disclosure schedules delivered to the Secured Parties concurrently herewith (the “Disclosure Schedules”), which Disclosure
Schedules shall be deemed a part hereof, each Debtor represents and warrants to, and covenants and agrees with, the Secured Parties as
follows:
(a)
Each Debtor has the requisite corporate, partnership, limited liability company or other power and authority to enter into this Agreement
and otherwise to carry out its obligations hereunder. The execution, delivery and performance by each Debtor of this Agreement and the
filings contemplated therein have been duly authorized by all necessary action on the part of such Debtor and no further action is required
by such Debtor. This Agreement has been duly executed by each Debtor. This Agreement constitutes the legal, valid and binding obligation
of each Debtor, enforceable against each Debtor in accordance with its terms except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization and similar laws of general application relating to or affecting the rights and remedies of creditors
and by general principles of equity.
(b)
The Debtors have no place of business or offices where their respective books of account and records are kept (other than temporarily
at the offices of its attorneys or accountants) or places where Collateral is stored or located, except as set forth on Schedule A
attached hereto. Except as specifically set forth on Schedule A, each Debtor is the record owner of the real property where
such Collateral is located, and there exist no mortgages or other liens on any such real property. Except as disclosed on Schedule
A, none of such Collateral is in the possession of any consignee, bailee, warehouseman, agent or processor.
(c)
Except as set forth in the SEC Documents, the Debtors are the sole owner of the Collateral (except for non-exclusive licenses granted
by any Debtor in the ordinary course of business), free and clear of any liens, security interests, encumbrances, rights or claims. The
Debtors are fully authorized to grant the Security Interests. Except as set forth in the SEC Documents, there is not on file in any governmental
or regulatory authority, agency or recording office an effective financing statement, security agreement, license or transfer or any
notice of any of the foregoing (other than those that will be filed in favor of the Secured Parties pursuant to this Agreement) covering
or affecting any of the Collateral. Except as set forth in the SEC Documents prior to the date of this Agreement and except pursuant
to this Agreement, as long as this Agreement shall be in effect, the Debtors shall not execute and shall not knowingly permit to be on
file in any such office or agency any other financing statement or other document or instrument (except to the extent filed or recorded
in favor of the Secured Parties pursuant to the terms of this Agreement).
(d)
No written claim has been received that any Collateral or any Debtor’s use of any Collateral violates the rights of any third party.
There has been no adverse decision to any Debtor’s claim of ownership rights in or exclusive rights to use the Collateral in any jurisdiction
or to any Debtor’s right to keep and maintain such Collateral in full force and effect, and there is no proceeding involving said rights
pending or, to the best knowledge of any Debtor, threatened before any court, judicial body, administrative or regulatory agency, arbitrator
or other governmental authority.
(e)
Each Debtor shall at all times maintain its books of account and records relating to the Collateral at its principal place of business
and its Collateral at the locations set forth on Schedule A attached hereto and may not relocate such books of account and records
or tangible Collateral unless it delivers to the Secured Parties at least 30 days prior to such relocation (i) written notice of such
relocation and the new location thereof (which must be within the United States) and (ii) evidence that appropriate financing statements
and other necessary documents have been filed and recorded and other steps have been taken to perfect the Security Interests to create
in favor of the Secured Parties a valid, perfected and continuing perfected lien in the Collateral.
(f)
This Agreement creates in favor of the Secured Parties a valid security interest in the Collateral securing the payment and performance
of the Obligations. Upon making the filings described in the immediately following paragraph, all security interests created hereunder
in any Collateral which may be perfected by filing financing statements shall have been duly perfected. Except for the filing of the
financing statements referred to in the immediately following paragraph, the recordation of this Agreement with respect to copyrights
and copyright applications in the United States Copyright Office referred to in paragraph (m), the execution and delivery of deposit
account control agreements satisfying the jurisdictional requirements with respect to each deposit account of the Debtors, and the delivery
of the certificates and other instruments provided in Section 3, no action is necessary to create, perfect or protect the security interests
created hereunder. Without limiting the generality of the foregoing, except for the filing of said financing statements, the recordation
of this Agreement, and the execution and delivery of said deposit account control agreements, no consent of any third parties and no
authorization, approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required
for (i) the execution, delivery and performance of this Agreement, (ii) the creation or perfection of the Security Interests created
hereunder in the Collateral or (iii) the enforcement of the rights of the Secured Parties hereunder.
(g)
Each Debtor hereby authorizes the Secured Parties to file one or more financing statements with respect to the Security Interests, with
the proper filing and recording agencies in any jurisdiction deemed proper by it. The Secured Parties shall have the right (and is hereby
authorized to) to file with the applicable filing office(s) such financing statements, amendments, addenda, continuations, terminations,
assignments and other records (whether or not executed by Debtors) to perfect and to maintain perfected security interests in the Collateral
by the Secured Parties, including but not limited to a financing statement in all other applicable jurisdictions with respect to the
Collateral promptly upon the execution of this Agreement.
(h)
The execution, delivery and performance of this Agreement by the Debtors does not violate any of the provisions of any Organizational
Documents of any Debtor or any judgment, decree, order or award of any court, governmental body or arbitrator or any applicable law,
rule or regulation applicable to any Debtor, conflict with, or constitute a default (or an event that with notice or lapse of time or
both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing any Debtor’s debt or otherwise)
or other understanding to which any Debtor is a party or by which any property or asset of any Debtor is bound or affected. If any, all
required consents (including, without limitation, from stockholders or creditors of any Debtor) necessary for any Debtor to enter into
and perform its obligations hereunder have been obtained.
(i)
The capital stock and other equity interests listed in the SEC Documents (the “Pledged Securities”) represent all
of the capital stock and other equity interests of each Additional Debtor, and represent all capital stock and other equity interests
owned, directly or indirectly, by the Company. All of the Pledged Securities are validly issued, fully paid and nonassessable, and the
Company is the legal and beneficial owner of the Pledged Securities, free and clear of any lien, security interest or other encumbrance
except for the security interests created by this Agreement.
(j)
The ownership and other equity interests in partnerships and limited liability companies (if any) included in the Collateral (the “Pledged
Interests”) by their express terms do not provide that they are securities governed by Article 8 of the UCC and are not held
in a securities account or by any financial intermediary.
(k)
Each Debtor shall at all times maintain the liens and Security Interests provided for hereunder as valid and perfected first priority
(subject to Section 19(n) hereof) liens and security interests in the Collateral in favor of the Secured Parties until this Agreement
and the Security Interest hereunder shall be terminated pursuant to Section 14 hereof. Each Debtor hereby agrees to defend the same against
the claims of any and all persons and entities. Each Debtor shall safeguard and protect all Collateral for the account of the Secured
Parties. Each Debtor shall pay the cost of filing the same in all public offices wherever filing is, or is deemed by the Secured Parties
to be, necessary or desirable to effect the rights and obligations provided for herein. Each Debtor shall, upon reasonable request by
the Secured Parties, file with the applicable filing office(s) such financing statements, amendments, addenda, continuations, terminations,
assignments and other records (whether or not executed by Debtor) to perfect and to maintain perfected security interests in the Collateral
by the Secured Parties, including but not limited to (a) promptly upon the execution of this Agreement, a financing statement in all
applicable jurisdictions on behalf of the Secured Parties with respect to the Collateral. The Financing Statement shall designate the
Secured Parties as the secured party and Debtor as the debtor, shall identify the security interest in the Collateral, and contain any
other items required by law. Without limiting the generality of the foregoing, each Debtor shall pay all fees, taxes and other amounts
necessary to maintain the Collateral and the Security Interests hereunder, and each Debtor shall obtain and furnish to the Secured Parties
from time to time, upon demand, such releases and/or subordinations of claims and liens which may be required to maintain the priority
of the Security Interests hereunder.
(l)
No Debtor will transfer, pledge, hypothecate, encumber, license, sell or otherwise dispose of any of the Collateral (except for non-exclusive
licenses granted by a Debtor in its ordinary course of business and sales of inventory by a Debtor in its ordinary course of business)
without the prior written consent of the Secured Parties.
(m)
Each Debtor shall keep and preserve its equipment, inventory and other tangible Collateral in good condition, repair and order and shall
not operate or locate any such Collateral (or cause to be operated or located) in any area excluded from insurance coverage.
(n)
Each Debtor shall maintain with financially sound and reputable insurers, insurance with respect to the Collateral, including Collateral
hereafter acquired, against loss or damage of the kinds and in the amounts customarily insured against by entities of established reputation
having similar properties similarly situated and in such amounts as are customarily carried under similar circumstances by other such
entities and otherwise as is prudent for entities engaged in similar businesses but in any event sufficient to cover the full replacement
cost thereof. Each Debtor shall cause each insurance policy issued in connection herewith to provide, and the insurer issuing such policy
to certify to the Secured Parties, that (a) if such insurance be proposed to be cancelled or materially changed for any reason whatsoever,
such insurer will promptly notify the Secured Parties and such cancellation or change shall not be effective as to the Secured Parties
for at least thirty (30) days after receipt by the Secured Parties of such notice, unless the effect of such change is to extend or increase
coverage under the policy; and (b) the Secured Parties will have the right (but no obligation) at its election to remedy any default
in the payment of premiums within thirty (30) days of notice from the insurer of such default. If no Event of Default (as defined in
the Note) exists and if the proceeds arising out of any claim or series of related claims do not exceed $100,000, loss payments in each
instance will be applied by the applicable Debtor to the repair and/or replacement of property with respect to which the loss was incurred
to the extent reasonably feasible, and any loss payments or the balance thereof remaining, to the extent not so applied, shall be payable
to the applicable Debtor; provided, however, that payments received by any Debtor after an Event of Default occurs and
is continuing or in excess of $100,000 for any occurrence or series of related occurrences shall be paid to the Secured Parties and accordingly,
if received by such Debtor, shall be held in trust for the Secured Parties and immediately paid over to the Secured Parties. Copies of
such policies or the related certificates, in each case, shall be delivered to the Secured Parties at least annually and at the time
any new policy of insurance is issued.
(o)
Each Debtor shall, within ten (10) days of obtaining knowledge thereof, advise the Secured Parties promptly, in sufficient detail, of
any material adverse change in the Collateral, and of the occurrence of any event which would have a material adverse effect on the value
of the Collateral or on the Secured Parties’ security interest therein.
(p)
Each Debtor shall promptly execute and deliver to the Secured Parties such further deeds, mortgages, assignments, security agreements,
financing statements or other instruments, documents, certificates and assurances and take such further action as the Secured Parties
may from time to time request and may in its sole discretion deem necessary to perfect, protect or enforce the Secured Parties’
security interest in the Collateral.
(q)
Each Debtor shall permit the Secured Parties and its representatives and agents to inspect the Collateral during normal business hours
and upon reasonable prior notice, and to make copies of records pertaining to the Collateral as may be reasonably requested by the Secured
Parties from time to time.
(r)
Each Debtor shall take all steps reasonably necessary to diligently pursue and seek to preserve, enforce and collect any rights, claims,
causes of action and accounts receivable in respect of the Collateral.
(s)
Each Debtor shall promptly notify the Secured Parties in sufficient detail upon becoming aware of any attachment, garnishment, execution
or other legal process levied against any Collateral and of any other information received by such Debtor that may materially affect
the value of the Collateral, the Security Interest or the rights and remedies of the Secured Parties hereunder.
(t)
All information heretofore, herein or hereafter supplied to the Secured Parties by or on behalf of any Debtor with respect to the Collateral
is accurate and complete in all material respects as of the date furnished.
(u)
The Debtors shall at all times preserve and keep in full force and effect their respective valid existence and good standing and any
rights and franchises material to its business.
(v)
No Debtor will change its name, type of organization, jurisdiction of organization, organizational identification number (if it has one),
legal or corporate structure, or identity, or add any new fictitious name unless it provides at least 30 days prior written notice to
the Secured Parties of such change and, at the time of such written notification, such Debtor provides any financing statements or fixture
filings necessary to perfect and continue the perfection of the Security Interests granted and evidenced by this Agreement.
(w)
Except in the ordinary course of business, no Debtor may consign any of its inventory or sell any of its inventory on bill and hold,
sale or return, sale on approval, or other conditional terms of sale without the consent of the Secured Parties which shall not be unreasonably
withheld.
(x)
No Debtor may relocate its chief executive office to a new location without providing 30 days prior written notification thereof to the
Secured Parties and so long as, at the time of such written notification, such Debtor provides any financing statements or fixture filings
necessary to perfect and continue the perfection of the Security Interests granted and evidenced by this Agreement.
(y)
Each Debtor was organized and remains organized solely under the laws of the state set forth next to such Debtor’s name in Schedule
B attached hereto, which Schedule B sets forth each Debtor’s organizational identification number or, if any Debtor
does not have one, states that one does not exist.
(z)
(i) The actual name of each Debtor is the name set forth in Schedule B attached hereto;( ii) no Debtor has any trade names except
as set forth in the SEC Documents; (iii) no Debtor has used any name other than that stated in the preamble hereto or as set forth in
the SEC Documents for the preceding five years; and (iv) no entity has merged into any Debtor or been acquired by any Debtor within the
past five years except as set forth in the SEC Documents.
(aa)
At any time and from time to time that any Collateral consists of instruments, certificated securities or other items that require or
permit possession by the Secured Parties to perfect the security interest created hereby, the applicable Debtor shall deliver such Collateral
to the Secured Parties.
(bb)
Each Debtor, in its capacity as issuer, hereby agrees to comply with any and all orders and instructions of Secured Parties regarding
the Pledged Interests consistent with the terms of this Agreement without the further consent of any Debtor as contemplated by Section
8-106 (or any successor section) of the UCC. Further, each Debtor agrees that it shall not enter into a similar agreement (or one that
would confer “control” within the meaning of Article 8 of the UCC) with any other person or entity.
(cc)
Each Debtor shall cause all tangible chattel paper constituting Collateral to be delivered to the Secured Parties, or, if such delivery
is not possible, then to cause such tangible chattel paper to contain a legend noting that it is subject to the security interest created
by this Agreement. To the extent that any Collateral consists of electronic chattel paper, the applicable Debtor shall cause the underlying
chattel paper to be “marked” within the meaning of Section 9-105 of the UCC (or successor section thereto).
(dd)
If there is any investment property or deposit account included as Collateral that can be perfected by “control” through
an account control agreement, the applicable Debtor shall cause such an account control agreement, in form and substance in each case
satisfactory to the Secured Parties, to be entered into and delivered to the Secured Parties.
(ee)
To the extent that any Collateral consists of letter-of-credit rights, the applicable Debtor shall cause the issuer of each underlying
letter of credit to consent to an assignment of the proceeds thereof to the Secured Parties.
(ff)
To the extent that any Collateral is in the possession of any third party, the applicable Debtor shall join with the Secured Parties
in notifying such third party of the Secured Parties’ security interest in such Collateral and shall use its best efforts to obtain
an acknowledgement and agreement from such third party with respect to the Collateral, in form and substance reasonably satisfactory
to the Secured Parties.
(gg)
If any Debtor shall at any time hold or acquire a commercial tort claim, such Debtor shall promptly notify the Secured Parties in a writing
signed by such Debtor of the particulars thereof and grant to the Secured Parties in such writing a security interest therein and in
the proceeds thereof, all upon the terms of this Agreement, with such writing to be in form and substance satisfactory to the Secured
Parties.
(hh)
Each Debtor shall immediately provide written notice to the Secured Parties of any and all accounts which arise out of contracts with
any governmental authority and, to the extent necessary to perfect or continue the perfected status of the Security Interests in such
accounts and proceeds thereof, shall execute and deliver to the Secured Parties an assignment of claims for such accounts and cooperate
with the Secured Parties in taking any other steps required, in its judgment, under the Federal Assignment of Claims Act or any similar
federal, state or local statute or rule to perfect or continue the perfected status of the Security Interests in such accounts and proceeds
thereof.
(ii)
Each Debtor shall cause each future subsidiary of such Debtor to immediately become a party hereto (an “Additional Debtor”),
by executing and delivering an Additional Debtor Joinder in substantially the form of Annex A attached hereto and comply with
the provisions hereof applicable to the Debtors. Concurrent therewith, the Additional Debtor shall deliver replacement schedules for,
or supplements to all other Schedules to (or referred to in) this Agreement, as applicable, which replacement schedules shall supersede,
or supplements shall modify, the Schedules then in effect. The Additional Debtor shall also deliver such opinions of counsel, authorizing
resolutions, good standing certificates, incumbency certificates, organizational documents, financing statements and other information
and documentation as the Secured Parties may reasonably request. Upon delivery of the foregoing to the Secured Parties, the Additional
Debtor shall be and become a party to this Agreement with the same rights and obligations as the Debtors, for all purposes hereof as
fully and to the same extent as if it were an original signatory hereto and shall be deemed to have made the representations, warranties
and covenants set forth herein as of the date of execution and delivery of such Additional Debtor Joinder, and all references herein
to the “Debtors” shall be deemed to include each Additional Debtor.
(jj)
Each Debtor shall vote the Pledged Securities to comply with the covenants and agreements set forth herein and in the Note.
(kk)
Each Debtor shall register the pledge of the applicable Pledged Securities on the books of such Debtor. Each Debtor shall notify each
issuer of Pledged Securities to register the pledge of the applicable Pledged Securities in the name of the Secured Parties on the books
of such issuer. Further, except with respect to certificated securities delivered to the Secured Parties, the applicable Debtor shall
deliver to Secured Parties an acknowledgement of pledge (which, where appropriate, shall comply with the requirements of the relevant
jurisdiction with respect to perfection by registration) signed by the issuer of the applicable Pledged Securities, which acknowledgement
shall confirm that: (a) it has registered the pledge on its books and records; and (b) at any time directed by the Secured Parties during
the continuation of an Event of Default, such issuer will transfer the record ownership of such Pledged Securities into the name of the
Secured Parties or any designee of Secured Parties, will take such steps as may be necessary to effect the transfer, and will comply
with all other instructions of Secured Parties regarding such Pledged Securities without the further consent of the applicable Debtor.
(ll)
In the event that, upon an occurrence of an Event of Default, Secured Parties shall sell all or any of the Pledged Securities to another
party or parties (herein called the “Transferee”) or shall purchase or retain all or any of the Pledged Securities,
each Debtor shall, to the extent applicable: (i) deliver to Secured Parties or the Transferee, as the case may be, the articles of incorporation,
bylaws, minute books, stock certificate books, corporate seals, deeds, leases, indentures, agreements, evidences of indebtedness, books
of account, financial records and all other Organizational Documents and records of the Debtors and their direct and indirect subsidiaries;
(ii) use its best efforts to obtain resignations of the persons then serving as officers and directors of the Debtors and their direct
and indirect subsidiaries, if so requested; and (iii) use its best efforts to obtain any approvals that are required by any governmental
or regulatory body in order to permit the sale of the Pledged Securities to the Transferee or the purchase or retention of the Pledged
Securities by Secured Parties and allow the Transferee or Secured Parties to continue the business of the Debtors and their direct and
indirect subsidiaries.
(mm)
Without limiting the generality of the other obligations of the Debtors hereunder, each Debtor shall promptly (i) cause to be registered
at the United States Copyright Office all of its material copyrights, (ii) cause the security interest contemplated hereby with respect
to all Intellectual Property registered at the United States Copyright Office or United States Patent and Trademark Office to be duly
recorded at the applicable office, and (iii) give the Secured Parties notice whenever it acquires (whether absolutely or by license)
or creates any additional material Intellectual Property.
(nn)
Each Debtor will from time to time, at the joint and several expense of the Debtors, promptly execute and deliver all such further instruments
and documents, and take all such further action as may be necessary or desirable, or as the Secured Parties may reasonably request, in
order to perfect and protect any security interest granted or purported to be granted hereby or to enable the Secured Parties to exercise
and enforce their rights and remedies hereunder and with respect to any Collateral or to otherwise carry out the purposes of this Agreement.
(oo)
The SEC Documents disclose all of the patents, patent applications, trademarks, trademark applications, registered copyrights, and domain
names owned by any of the Debtors as of the date hereof. The SEC Documents disclose all material licenses in favor of any Debtor for
the use of any patents, trademarks, copyrights and domain names as of the date hereof. All material patents and trademarks of the Debtors
have been duly recorded at the United States Patent and Trademark Office and all material copyrights of the Debtors have been duly recorded
at the United States Copyright Office.
(pp)
Except as set forth in the SEC Documents, none of the account debtors or other persons or entities obligated on any of the Collateral
is a governmental authority covered by the Federal Assignment of Claims Act or any similar federal, state or local statute or rule in
respect of such Collateral.
5.
Effect of Pledge on Certain Rights. If any of the Collateral subject to this Agreement consists of nonvoting equity or ownership interests
(regardless of class, designation, preference or rights) that may be converted into voting equity or ownership interests upon the occurrence
of certain events (including, without limitation, upon the transfer of all or any of the other stock or assets of the issuer), it is
agreed that the pledge of such equity or ownership interests pursuant to this Agreement or the enforcement of any of Secured Parties’
rights hereunder shall not be deemed to be the type of event which would trigger such conversion rights notwithstanding any provisions
in the Organizational Documents or agreements to which any Debtor is subject or to which any Debtor is party.
6.
Defaults. The following events shall be “Events of Default”:
(a)
The occurrence of an Event of Default (as defined in the Note) under the Note;
(b)
Any representation or warranty of any Debtor in this Agreement shall prove to have been incorrect in any material respect when made;
(c)
The failure by any Debtor to observe or perform any of its obligations hereunder for five (5) days after delivery to such Debtor of notice
of such failure by or on behalf of the Secured Parties unless such default is capable of cure but cannot be cured within such time frame
and such Debtor is using best efforts to cure same in a timely fashion; or
(d)
If any provision of this Agreement shall at any time for any reason be declared to be null and void, or the validity or enforceability
thereof shall be contested by any Debtor, or a proceeding shall be commenced by any Debtor, or by any governmental authority having jurisdiction
over any Debtor, seeking to establish the invalidity or unenforceability thereof, or any Debtor shall deny that any Debtor has any liability
or obligation purported to be created under this Agreement.
7.
Duty To Hold In Trust.
(a)
Upon the occurrence of any Event of Default and at any time thereafter, each Debtor shall, upon receipt of any revenue, income, dividend,
interest or other sums subject to the Security Interests, whether payable pursuant to the Note or otherwise, or of any check, draft,
note, trade acceptance or other instrument evidencing an obligation to pay any such sum, hold the same in trust for the Secured Parties
and shall forthwith endorse and transfer any such sums or instruments, or both, to the Secured Parties, pro-rata in proportion to their
respective then-currently outstanding principal amount of Note for application to the satisfaction of the Obligations.
(b)
If any Debtor shall become entitled to receive or shall receive any securities or other property (including, without limitation, shares
of Pledged Securities or instruments representing Pledged Securities acquired after the date hereof, or any options, warrants, rights
or other similar property or certificates representing a dividend, or any distribution in connection with any recapitalization, reclassification
or increase or reduction of capital, or issued in connection with any reorganization of such Debtor or any of its direct or indirect
subsidiaries) in respect of the Pledged Securities (whether as an addition to, in substitution of, or in exchange for, such Pledged Securities
or otherwise), such Debtor agrees to (i) accept the same as the agent of the Secured Parties; (ii) hold the same in trust on behalf of
and for the benefit of the Secured Parties; and (iii) to deliver any and all certificates or instruments evidencing the same to Secured
Parties on or before the close of business on the fifth business day following the receipt thereof by such Debtor, in the exact form
received together with the Necessary Endorsements, to be held by Secured Parties subject to the terms of this Agreement as Collateral.
8.
Rights and Remedies Upon Default.
(a)
Upon the occurrence of any Event of Default and at any time thereafter, the Secured Parties, shall have the right to exercise all of
the remedies conferred hereunder and under the Note, and the Secured Parties shall have all the rights and remedies of a secured party
under the UCC. Without limitation, the Secured Parties shall have the following rights and powers:
(i)
The Secured Parties shall have the right to take possession of the Collateral and, for that purpose, enter, with the aid and assistance
of any person, any premises where the Collateral, or any part thereof, is or may be placed and remove the same, and each Debtor shall
assemble the Collateral and make it available to the Secured Parties at places which the Secured Parties shall reasonably select, whether
at such Debtor’s premises or elsewhere, and make available to the Secured Parties, without rent, all of such Debtor’s respective
premises and facilities for the purpose of the Secured Parties taking possession of, removing or putting the Collateral in saleable or
disposable form.
(ii)
Upon notice to the Debtors by Secured Parties, all rights of each Debtor to exercise the voting and other consensual rights which it
would otherwise be entitled to exercise and all rights of each Debtor to receive the dividends and interest which it would otherwise
be authorized to receive and retain, shall cease. Upon such notice, the Secured Parties shall have the right to receive any interest,
cash dividends or other payments on the Collateral and, at the option of Secured Parties, to exercise in such Secured Parties’
discretion all voting rights pertaining thereto. Without limiting the generality of the foregoing, Secured Parties shall have the right
(but not the obligation) to exercise all rights with respect to the Collateral as it were the sole and absolute owner thereof, including,
without limitation, to vote and/or to exchange, at its sole discretion, any or all of the Collateral in connection with a merger, reorganization,
consolidation, recapitalization or other readjustment concerning or involving the Collateral or any Debtor or any of its direct or indirect
subsidiaries.
(iii)
The Secured Parties shall have the right to operate the business of each Debtor using the Collateral and shall have the right to assign,
sell, lease or otherwise dispose of and deliver all or any part of the Collateral, at public or private sale or otherwise, either with
or without special conditions or stipulations, for cash or on credit or for future delivery, in such parcel or parcels and at such time
or times and at such place or places, and upon such terms and conditions as the Secured Parties may deem commercially reasonable, all
without (except as shall be required by applicable statute and cannot be waived) advertisement or demand upon or notice to any Debtor
or right of redemption of a Debtor, which are hereby expressly waived. Upon each such sale, lease, assignment or other transfer of Collateral,
the Secured Parties, may, unless prohibited by applicable law which cannot be waived, purchase all or any part of the Collateral being
sold, free from and discharged of all trusts, claims, right of redemption and equities of any Debtor, which are hereby waived and released.
(iv)
The Secured Parties shall have the right (but not the obligation) to notify any account debtors and any obligors under instruments or
accounts to make payments directly to the Secured Parties, on behalf of the Secured Parties, and to enforce the Debtors’ rights
against such account debtors and obligors.
(v)
The Secured Parties may (but are not obligated to) direct any financial intermediary or any other person or entity holding any investment
property to transfer the same to the Secured Parties or its designee.
(vi)
The Secured Parties may (but is not obligated to) transfer any or all Intellectual Property registered in the name of any Debtor at the
United States Patent and Trademark Office and/or Copyright Office into the name of the Secured Parties or any designee or any purchaser
of any Collateral.
(b)
The Secured Parties shall comply with any applicable law in connection with a disposition of Collateral and such compliance will not
be considered adversely to affect the commercial reasonableness of any sale of the Collateral. The Secured Parties may sell the Collateral
without giving any warranties and may specifically disclaim such warranties. If the Secured Parties sell any of the Collateral on credit,
the Debtors will only be credited with payments actually made by the purchaser. In addition, each Debtor waives any and all rights that
it may have to a judicial hearing in advance of the enforcement of any of the Secured Parties’ rights and remedies hereunder, including,
without limitation, its right following an Event of Default to take immediate possession of the Collateral and to exercise its rights
and remedies with respect thereto.
(c)
For the purpose of enabling the Secured Parties to further exercise rights and remedies under this Section 8 or elsewhere provided by
agreement or applicable law, each Debtor hereby grants to the Secured Parties, for the benefit of the Secured Parties, an irrevocable,
nonexclusive license (exercisable without payment of royalty or other compensation to such Debtor) to use, license or sublicense following
an Event of Default, any Intellectual Property now owned or hereafter acquired by such Debtor, and wherever the same may be located,
and including in such license access to all media in which any of the licensed items may be recorded or stored and to all computer software
and programs used for the compilation or printout thereof.
9.
Applications of Proceeds. The proceeds of any such sale, lease or other disposition of the Collateral hereunder or from payments
made on account of any insurance policy insuring any portion of the Collateral shall be applied first, to the expenses of retaking, holding,
storing, processing and preparing for sale, selling, and the like (including, without limitation, any taxes, fees and other costs incurred
in connection therewith) of the Collateral, to the reasonable attorneys’ fees and expenses incurred by the Secured Parties in enforcing
the Secured Parties’ rights hereunder and in connection with collecting, storing and disposing of the Collateral, and then to satisfaction
of the Obligations pro rata among the Secured Parties (based on then-outstanding principal amounts of Note at the time of any such determination),
and to the payment of any other amounts required by applicable law, after which the Secured Parties shall pay to the applicable Debtor
any surplus proceeds. If, upon the sale, license or other disposition of the Collateral, the proceeds thereof are insufficient to pay
all amounts to which the Secured Parties are legally entitled, the Debtors will be liable for the deficiency, together with interest
thereon, at the rate of the Default Interest (as defined in the Note), and the reasonable fees of any attorneys employed by the Secured
Parties to collect such deficiency. To the extent permitted by applicable law, each Debtor waives all claims, damages and demands against
the Secured Parties arising out of the repossession, removal, retention or sale of the Collateral, unless due solely to the gross negligence
or willful misconduct of the Secured Parties as determined by a final judgment (not subject to further appeal) of a court of competent
jurisdiction.
10.
Securities Law Provision. Each Debtor recognizes that Secured Parties may be limited in its ability to effect a sale to the public of
all or part of the Pledged Securities by reason of certain prohibitions in the Securities Act of 1933, as amended, or other federal or
state securities laws (collectively, the “Securities Laws”), and may be compelled to resort to one or more sales to
a restricted group of purchasers who may be required to agree to acquire the Pledged Securities for their own account, for investment
and not with a view to the distribution or resale thereof. Each Debtor agrees that sales so made may be at prices and on terms less favorable
than if the Pledged Securities were sold to the public, and that Secured Parties have no obligation to delay the sale of any Pledged
Securities for the period of time necessary to register the Pledged Securities for sale to the public under the Securities Laws. Each
Debtor shall cooperate with Secured Parties in its attempt to satisfy any requirements under the Securities Laws (including, without
limitation, registration thereunder if requested by Secured Parties) applicable to the sale of the Pledged Securities by Secured Parties.
11.
Costs and Expenses. Each Debtor agrees to pay all reasonable out-of-pocket fees, costs and expenses incurred in connection with
any filing required hereunder, including without limitation, any financing statements, continuation statements, partial releases and/or
termination statements related thereto or any expenses of any searches reasonably required by the Secured Parties. The Debtors shall
also pay all other claims and charges which in the reasonable opinion of the Secured Parties is reasonably likely to prejudice, imperil
or otherwise affect the Collateral or the Security Interests therein. The Debtors will also, upon demand, pay to the Secured Parties
the amount of any and all reasonable expenses, including the reasonable fees and expenses of its counsel and of any experts and agents,
which the Secured Parties may incur in connection with the creation, perfection, protection, satisfaction, foreclosure, collection or
enforcement of the Security Interest and the preparation, administration, continuance, amendment or enforcement of this Agreement and
pay to the Secured Parties the amount of any and all reasonable expenses, including the reasonable fees and expenses of its counsel and
of any experts and agents, which the Secured Parties may incur in connection with (i) the enforcement of this Agreement, (ii) the custody
or preservation of, or the sale of, collection from, or other realization upon, any of the Collateral, or (iii) the exercise or enforcement
of any of the rights of the Secured Parties under the Note. Until so paid, any fees payable hereunder shall be added to the principal
amount of the Note and shall bear interest at the rate of the Default Interest (as defined in the Note).
12.
Responsibility for Collateral. The Debtors assume all liabilities and responsibility in connection with all Collateral, and the
Obligations shall in no way be affected or diminished by reason of the loss, destruction, damage or theft of any of the Collateral or
its unavailability for any reason. Without limiting the generality of the foregoing, (a) the Secured Parties do not (i) have any duty
(either before or after an Event of Default) to collect any amounts in respect of the Collateral or to preserve any rights relating to
the Collateral, or (ii) have any obligation to clean-up or otherwise prepare the Collateral for sale, and (b) each Debtor shall remain
obligated and liable under each contract or agreement included in the Collateral to be observed or performed by such Debtor thereunder.
The Secured Parties shall not have any obligation or liability under any such contract or agreement by reason of or arising out of this
Agreement or the receipt by the Secured Parties of any payment relating to any of the Collateral, nor shall the Secured Parties be obligated
in any manner to perform any of the obligations of any Debtor under or pursuant to any such contract or agreement, to make inquiry as
to the nature or sufficiency of any payment received by the Secured Parties in respect of the Collateral or as to the sufficiency of
any performance by any party under any such contract or agreement, to present or file any claim, to take any action to enforce any performance
or to collect the payment of any amounts which the Secured Parties may be entitled at any time or times.
13.
Security Interests Absolute. All rights of the Secured Parties and all obligations of the Debtors hereunder, shall be absolute
and unconditional, irrespective of: (a) any lack of validity or enforceability of this Agreement, the Note or any agreement entered into
in connection with the foregoing, or any portion hereof or thereof; (b) any change in the time, manner or place of payment or performance
of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from
the Note or any other agreement entered into in connection with the foregoing; (c) any exchange, release or nonperfection of any of the
Collateral, or any release or amendment or waiver of or consent to departure from any other collateral for, or any guarantee, or any
other security, for all or any of the Obligations; (d) any action by the Secured Parties to obtain, adjust, settle and cancel in its
sole discretion any insurance claims or matters made or arising in connection with the Collateral; or (e) any other circumstance which
might otherwise constitute any legal or equitable defense available to a Debtor, or a discharge of all or any part of the Security Interests
granted hereby. Until the Obligations shall have been paid and performed in full, the rights of the Secured Parties shall continue even
if the Obligations are barred for any reason, including, without limitation, the running of the statute of limitations or bankruptcy.
Each Debtor expressly waives presentment, protest, notice of protest, demand, notice of nonpayment and demand for performance. In the
event that at any time any transfer of any Collateral or any payment received by the Secured Parties hereunder shall be deemed by final
order of a court of competent jurisdiction to have been a voidable preference or fraudulent conveyance under the bankruptcy or insolvency
laws of the United States, or shall be deemed to be otherwise due to any party other than the Secured Parties, then, in any such event,
each Debtor’s obligations hereunder shall survive cancellation of this Agreement, and shall not be discharged or satisfied by any
prior payment thereof and/or cancellation of this Agreement, but shall remain a valid and binding obligation enforceable in accordance
with the terms and provisions hereof. Each Debtor waives all right to require the Secured Parties to proceed against any other person
or entity or to apply any Collateral which the Secured Parties may hold at any time, or to marshal assets, or to pursue any other remedy.
Each Debtor waives any defense arising by reason of the application of the statute of limitations to any obligation secured hereby.
14.
Term of Agreement. This Agreement and the Security Interests shall terminate on the date on which all payments under the Note
have been indefeasibly paid in full and all other Obligations have been paid or discharged; provided, however, that all
indemnities of the Debtors contained in this Agreement shall survive and remain operative and in full force and effect regardless of
the termination of this Agreement.
15.
Power of Attorney; Further Assurances.
(a)
Each Debtor authorizes the Secured Parties, and does hereby make, constitute and appoint the Secured Parties and its officers, agents,
successors or assigns with full power of substitution, as such Debtor’s true and lawful attorney-in-fact, with power, in the name
of the Secured Parties or such Debtor, to, after the occurrence and during the continuance of an Event of Default, (i) endorse any note,
checks, drafts, money orders or other instruments of payment (including payments payable under or in respect of any policy of insurance)
in respect of the Collateral that may come into possession of the Secured Parties; (ii) to sign and endorse any financing statement or
any invoice, freight or express bill, bill of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications
and notices in connection with accounts, and other documents relating to the Collateral; (iii) to pay or discharge taxes, liens, security
interests or other encumbrances at any time levied or placed on or threatened against the Collateral; (iv) to demand, collect, receipt
for, compromise, settle and sue for monies due in respect of the Collateral; (v) to transfer any Intellectual Property or provide licenses
respecting any Intellectual Property; and (vi) generally, at the option of the Secured Parties, and at the expense of the Debtors, at
any time, or from time to time, to execute and deliver any and all documents and instruments and to do all acts and things which the
Secured Parties deem necessary to protect, preserve and realize upon the Collateral and the Security Interests granted therein in order
to effect the intent of this Agreement and the Note all as fully and effectually as the Debtors might or could do; and each Debtor hereby
ratifies all that said attorney shall lawfully do or cause to be done by virtue hereof. This power of attorney is coupled with an interest
and shall be irrevocable for the term of this Agreement and thereafter as long as any of the Obligations shall be outstanding. The designation
set forth herein shall be deemed to amend and supersede any inconsistent provision in the Organizational Documents or other documents
or agreements to which any Debtor is subject or to which any Debtor is a party. Without limiting the generality of the foregoing, after
the occurrence and during the continuance of an Event of Default, the Secured Parties are specifically authorized to execute and file
any applications for or instruments of transfer and assignment of any patents, trademarks, copyrights or other Intellectual Property
with the United States Patent and Trademark Office and the United States Copyright Office.
(b)
On a continuing basis, each Debtor will make, execute, acknowledge, deliver, file and record, as the case may be, with the proper filing
and recording agencies in any jurisdiction, all such instruments, and take all such action as may reasonably be deemed necessary or advisable,
or as reasonably requested by the Secured Parties, to perfect the Security Interests granted hereunder and otherwise to carry out the
intent and purposes of this Agreement, or for assuring and confirming to the Secured Parties the grant or perfection of a perfected security
interest in all the Collateral under the UCC.
(c)
Each Debtor hereby irrevocably appoints the Secured Parties as such Debtor’s attorney-in- fact, with full authority in the place
and instead of such Debtor and in the name of such Debtor, from time to time in the Secured Parties’ discretion, to take any action
and to execute any instrument which the Secured Parties may deem necessary or advisable to accomplish the purposes of this Agreement,
pertaining to the filing, in its sole discretion, of one or more financing or continuation statements and amendments thereto, relative
to any of the Collateral without the signature of such Debtor where permitted by law, which financing statements may (but need not) describe
the Collateral as “all assets” or “all personal property” or words of like import (except as such description
is inconsistent with the Collateral as provided herein), and ratifies all such actions taken by the Secured Parties. This power of attorney
is coupled with an interest and shall be irrevocable for the term of this Agreement and thereafter as long as any of the Obligations
shall be outstanding.
16.
Notices. All notices, requests, demands and other communications hereunder shall be subject to the notice provision of the Purchase
Agreement (as such term is defined in the Note).
17.
Other Security. To the extent that the Obligations are now or hereafter secured by property other than the Collateral or by the
guarantee, endorsement or property of any other person, firm, corporation or other entity, then the Secured Parties shall have the right,
in its sole discretion, to pursue, relinquish, subordinate, modify or take any other action with respect thereto, without in any way
modifying or affecting any of the Secured Parties’ rights and remedies hereunder.
18.
[Intentionally Omitted].
19.
Miscellaneous.
(a)
No course of dealing between the Debtors and the Secured Parties, nor any failure to exercise, nor any delay in exercising, on the part
of the Secured Parties, any right, power or privilege hereunder or under the Note shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, power or privilege hereunder or thereunder preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.
(b)
All of the rights and remedies of the Secured Parties with respect to the Collateral, whether established hereby or by the Note or by
any other agreements, instruments or documents or by law shall be cumulative and may be exercised singly or concurrently.
(c)
This Agreement, together with the exhibits and schedules hereto, contain the entire understanding of the parties with respect to the
subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the
parties acknowledge have been merged into this Agreement and the exhibits and schedules hereto. 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 Debtors and the
Secured Parties holding 67% or more of the principal amount of Note then outstanding, or, in the case of a waiver, by the party against
whom enforcement of any such waived provision is sought.
(d)
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.
(e)
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.
(f)
This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Debtors
may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Secured Parties (other
than by merger as provided in this Agreement and the Note). The Secured Parties may assign any or all of its rights under this Agreement
to any party to whom such Secured Parties assigns or transfers any Obligations, provided such transferee agrees in writing to be bound,
with respect to the transferred Obligations, by the provisions of this Agreement that apply to the “Secured Parties.”
(g)
Each party shall take such further action and execute and deliver such further documents as may be necessary or appropriate in order
to carry out the provisions and purposes of this Agreement.
(h)
The Debtors and Secured Parties shall submit all Claims (as defined in Exhibit E of the Purchase Agreement) (the
“Claims”) arising under this Agreement or any other agreement between the parties and their affiliates or any Claim
relating to the relationship of the parties to binding arbitration pursuant to the arbitration provisions set forth in Exhibit E of
the Purchase Agreement (the “Arbitration Provisions”). The Debtors and Secured Parties hereby acknowledge and agree that
the Arbitration Provisions are unconditionally binding on the Debtors and Secured Parties hereto and are severable from all other
provisions of this Agreement. By executing this Agreement, Debtors represents, warrants and covenants that Debtors have reviewed the
Arbitration Provisions carefully, consulted with legal counsel about such provisions (or waived its right to do so), understands
that the Arbitration Provisions are intended to allow for the expeditious and efficient resolution of any dispute hereunder, agrees
to the terms and limitations set forth in the Arbitration Provisions, and that Debtors will not take a position contrary to the
foregoing representations. Debtors acknowledge and agree that Secured Parties may rely upon the foregoing representations and
covenants of Debtors regarding the Arbitration Provisions. This Agreement shall be construed and enforced in accordance with, and
all questions concerning the construction, validity, interpretation and performance of this Agreement shall be governed by, the
internal laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of
the State of Delaware or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the
State of Delaware. The Debtors and Secured Parties consent to and expressly agree that the exclusive venue for arbitration of any
Claims arising under this Agreement or any other agreement between the Debtors and Secured Parties or their respective affiliates
(including but not limited to the Transaction Documents (as defined in the Purchase Agreement)) or any Claim relating to the
relationship of the Debtors and Secured Parties or their respective affiliates shall be in the State of Delaware. Without modifying
the Debtors’ and Secured Parties’ obligations to resolve disputes hereunder pursuant to the Arbitration Provisions, for
any litigation arising in connection with any of the Transaction Documents, each party hereto hereby (i) consents to and expressly
submits to the exclusive personal jurisdiction of any state or federal court sitting in the State of Delaware, (ii) expressly
submits to the exclusive venue of any such court for the purposes hereof, (iii) agrees to not bring any such action outside of any
state or federal court sitting in the State of Delaware, and (iv) waives any claim of improper venue and any claim or objection that
such courts are an inconvenient forum or any other claim, defense or objection to the bringing of any such proceeding in such
jurisdiction or to any claim that such venue of the suit, action or proceeding is improper. Notwithstanding anything in the
foregoing to the contrary, nothing herein shall limit, or shall be deemed or construed to limit, the ability of the Secured Parties
to realize on any collateral or any other security, or to enforce a judgment or other court ruling in favor of the Secured Parties,
including through a legal action in any court of competent jurisdiction. The Debtors hereby irrevocably waive, and agree not to
assert in any suit, action or proceeding, any objection to jurisdiction and venue of any action instituted hereunder, any claim that
it is not personally subject to the jurisdiction of any such court, and any claim that such suit, action or proceeding is brought in
an inconvenient forum or that the venue of such suit, action or proceeding is improper (including but not limited to based upon forum
non conveniens). THE DEBTORS HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTIONS CONTEMPLATED
HEREBY. The Debtors irrevocably waive personal service of process and consents to process being served in any suit,
action or proceeding in connection with this Agreement or any other agreement, certificate, instrument or document contemplated
hereby or thereby by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to
Debtors 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. The prevailing party in any action or dispute brought in connection with this
Agreement or any other agreement, certificate, instrument or document contemplated hereby or thereby shall be entitled to recover
from the other party its reasonable attorney’s fees and costs. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other
jurisdiction.
(i)
This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and, all
of which taken together shall constitute one and the same Agreement. In the event that any signature is delivered by electronic or facsimile
transmission, such signature shall create a valid binding obligation of the party executing (or on whose behalf such signature is executed)
the same with the same force and effect as if such electronic or facsimile signature were the original thereof.
(j)
All Debtors shall jointly and severally be liable for the obligations of each Debtor to the Secured Parties hereunder.
(k)
Each Debtor shall indemnify, reimburse and hold harmless the Secured Parties and their respective partners, members, shareholders, officers,
directors, employees and agents (and any other persons with other titles that have similar functions) (including, without limitation,
those retained in connection with the transactions contemplated by this Agreement) (collectively, “Indemnitees”) from
and against any and all losses, claims, liabilities, damages, penalties, suits, costs and expenses, of any kind or nature (including
fees relating to the cost of investigating and defending any of the foregoing) imposed on, incurred by or asserted against such Indemnitee
in any way related to or arising from or alleged to arise from this Agreement or the Collateral, except any such losses, claims, liabilities,
damages, penalties, suits, costs and expenses which result from the gross negligence or willful misconduct of the Indemnitee as determined
by a final, nonappealable decision of a court of competent jurisdiction. This indemnification provision is in addition to, and not in
limitation of, any other indemnification provision in the Note, the Purchase Agreement (as such term is defined in the Note) or any other
agreement, instrument or other document executed or delivered in connection herewith or therewith.
(l)
Nothing in this Agreement shall be construed to subject the Secured Parties to liability as a partner in any Debtor or any if its direct
or indirect subsidiaries that is a partnership or as a member in any Debtor or any of its direct or indirect subsidiaries that is a limited
liability company, nor shall the Secured Parties be deemed to have assumed any obligations under any partnership agreement or limited
liability company agreement, as applicable, of any such Debtor or any of its direct or indirect subsidiaries or otherwise, unless and
until any such Secured Parties exercise its right to be substituted for such Debtor as a partner or member, as applicable, pursuant hereto.
(m)
To the extent that the grant of the security interest in the Collateral and the enforcement of the terms hereof require the consent,
approval or action of any partner or member, as applicable, of any Debtor or any direct or indirect subsidiary of any Debtor or compliance
with any provisions of any of the Organizational Documents, the Debtors hereby grant such consent and approval and waive any such noncompliance
with the terms of said documents.
(n)
Notwithstanding anything to the contrary contained in this Agreement, the security interest(s) with respect to the Collateral created
by this Agreement shall be junior in priority to the security interest(s) with respect to the Collateral established for the Prior Secured
Note (as defined in the Note).
[SIGNATURE
PAGE FOLLOW]
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on the day and year first above written.
SIGNING DAY SPORTS, INC. |
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By: |
/s/
Daniel Nelson |
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Name: |
Daniel Nelson |
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Title: |
Chief Executive Officer |
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FIRSTFIRE GLOBAL OPPORTUNITIES FUND, LLC |
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By: |
FirstFire Capital Management LLC, its manager |
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By: |
/s/
Eli Fireman |
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Name: |
Eli Fireman |
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SCHEDULE
A
Principal
Place of Business of Debtors: 8355 East Hartford Dr., Suite 100, Scottsdale, AZ 85255 Locations Where Collateral is Located or Stored:
8355
East Hartford Dr., Suite 100, Scottsdale, AZ 85255
SCHEDULE
B
Jurisdiction
of Organization
Debtor |
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Jurisdiction of Organization |
Signing Day Sports, Inc. |
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Delaware |
ANNEX
A
to
SECURITY
AGREEMENT
FORM
OF ADDITIONAL DEBTOR JOINDER
Security
Agreement dated as of May 16, 2024 made by Signing Day Sports, Inc.
and
its subsidiaries party thereto from time to time, as Debtors to and in favor of
the
Secured Parties identified therein (the “Security Agreement”)
Reference
is made to the Security Agreement as defined above; capitalized terms used herein and not otherwise defined herein shall have the meanings
given to such terms in, or by reference in, the Security Agreement.
The
undersigned hereby agrees that upon delivery of this Additional Debtor Joinder to the Secured Parties referred to above, the undersigned
shall (a) be an Additional Debtor under the Security Agreement, (b) have all the rights and obligations of the Debtors under the Security
Agreement as fully and to the same extent as if the undersigned was an original signatory thereto and (c) be deemed to have made the
representations and warranties set forth therein as of the date of execution and delivery of this Additional Debtor Joinder. WITHOUT
LIMITING THE GENERALITY OF THE FOREGOING, THE UNDERSIGNED SPECIFICALLY GRANTS TO THE SECURED PARTIES A SECURITY INTEREST IN THE COLLATERAL
AS MORE FULLY SET FORTH IN THE SECURITY AGREEMENT AND ACKNOWLEDGES AND AGREES TO THE WAIVER OF JURY TRIAL PROVISIONS SET FORTH THEREIN.
Attached
hereto are supplemental and/or replacement Schedules to the Security Agreement, as applicable.
An
executed copy of this Joinder shall be delivered to the Secured Parties, and the Secured Parties may rely on the matters set forth herein
on or after the date hereof. This Joinder shall not be modified, amended or terminated without the prior written consent of the Secured
Parties.
IN
WITNESS WHEREOF, the undersigned has caused this Joinder to be executed in the name and on behalf of the undersigned.
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[Name of Additional Debtor] |
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By: |
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Name: |
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Title: |
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Address: |
Dated:
Exhibit 10.3
REGISTRATION RIGHTS AGREEMENT
REGISTRATION
RIGHTS AGREEMENT (this “Agreement”), dated as of May 16, 2024, by and between SIGNING DAY SPORTS, INC.,
a Delaware corporation (the “Company”), and FIRSTFIRE GLOBAL OPPORTUNITIES FUND, LLC, a Delaware limited liability
company (together with it permitted assigns, the “Investor”). Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings set forth in the securities purchase agreement by and between the parties hereto, dated as of
the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “Purchase Agreement”).
WHEREAS:
The Company has
agreed, upon the terms and subject to the conditions of the Purchase Agreement, to sell to the Investor the Securities (as defined in
the Purchase Agreement) and to induce the Investor to enter into the Purchase Agreement, the Company has agreed to provide certain registration
rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively,
the “Securities Act”), and applicable state securities laws.
NOW, THEREFORE,
in consideration of the promises and the mutual covenants contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Investor hereby agree as follows:
As used in this Agreement, the following terms shall have
the following meanings:
a. “Investor” shall have the meaning set forth above.
b. “Person”
means any individual or entity including but not limited to any corporation, a limited liability company, an association, a partnership,
an organization, a business, an individual, a governmental or political subdivision thereof or a governmental agency.
c. “Register,”
“registered,” and “registration” refer to a registration effected by preparing and filing one or
more registration statements of the Company in compliance with the Securities Act and/or pursuant to Rule 415 under the Securities Act
or any successor rule providing for offering securities on a continuous basis (“Rule 415”), and the declaration or
ordering of effectiveness of such registration statement(s) by the United States Securities and Exchange Commission (the “SEC”).
d. “Registrable
Securities” means all of the Commitment Shares (as defined in the Purchase Agreement) (the “Commitment Shares”),
Conversion Shares (as defined in the Purchase Agreement) (the “Conversion Shares”) which may, from time to time, be
issued to the Investor under the Note (as defined in the Purchase Agreement) (the “Note”), without regard to any limitation
on beneficial ownership, Exercise Shares (as defined in the Purchase Agreement) (the “Exercise Shares”) which may,
from time to time, be issued to the Investor under the Warrants (as defined in the Purchase Agreement) (the “Warrants”),
without regard to any limitation on beneficial ownership, and shares of Common Stock (as defined in the
Purchase Agreement) (the “Common Stock”) issued to the Investor as a result of any stock split, stock dividend, recapitalization,
exchange or similar event or otherwise, without regard to any limitation on beneficial ownership in the Purchase Agreement, Note, or Warrants..
As to any particular Registrable Securities, such securities shall cease to be Registrable Securities when (i) the SEC has declared a
Registration Statement covering such securities effective and such securities have been disposed of pursuant to such effective Registration
Statement, (ii) such securities are sold under circumstances in which all of the applicable conditions of Rule 144 under the Securities
Act are met, (iii) such securities
become eligible for sale pursuant to Rule 144 without volume or manner-of-sale restrictions and without the requirement for the Company
to be in compliance with the current public information requirement under Rule 144(c)(1), as set forth in a written opinion letter to
such effect, addressed, delivered and reasonably acceptable to the applicable transfer agent and the holders of such securities, or (iv)
such securities have ceased to be outstanding
e. “Registration
Statement” means one or more registration statements of the Company covering only the sale of the Registrable Securities.
a. Mandatory
Registration. The Company shall, within ninety (90) calendar days from the date of this Agreement, file with the SEC an initial Registration
Statement covering the maximum number of Registrable Securities as shall be permitted to be included thereon in accordance with applicable
SEC rules, regulations and interpretations so as to permit the resale of such Registrable Securities by the Investor (in any event, no
less than the number of shares of Common Stock equal to the Exchange Cap (as defined in the Purchase Agreement) for Investor’s resale
of the Registrable Securities), including but not limited to under Rule 415 under the Securities Act at then prevailing market prices
(and not fixed prices), subject to the aggregate number of authorized shares of the Company’s Common Stock then available for issuance
in its Certificate of Incorporation. The initial Registration Statement shall register only the Registrable Securities. The Investor and
its counsel shall have a reasonable opportunity to review and comment upon such Registration Statement and any amendment or supplement
to such Registration Statement and any related prospectus prior to its filing with the SEC, and the Company shall give due consideration
to all reasonable comments. The Investor shall furnish all information reasonably requested by the Company for inclusion therein. The
Company shall have the Registration Statement declared effective by the SEC within one hundred twenty (120) calendar days from the date
hereof (or at the earliest possible date if prior to one hundred twenty (120) calendar days from the date hereof), and any amendment to
the Registration Statement thereafter declared effective by the SEC at the earliest possible date. The Company shall keep the Registration
Statement effective, including but not limited to pursuant to Rule 415 promulgated under the Securities Act and available for the resale
by the Investor of all of the Registrable Securities covered thereby at all times until the date on which the Investor shall have sold
all the Registrable Securities covered thereby (the “Registration Period”). The Registration Statement (including any
amendments or supplements thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein, or necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading. In the event that (i) the Registration Statement or New Registration Statement (as defined below)
becomes stale after the initial effectiveness of such Registration Statement or New Registration Statement and (ii) the Investor still
has ownership of any of the Registrable Securities, the Company shall immediately file one or more post-effective amendments to facilitate
the SEC’s declaration of effectiveness with respect to such Registration Statement or New Registration Statement.
b. Rule
424 Prospectus. The Company shall, as required by applicable securities regulations, from time to time file (in each case, at the
earliest possible date) with the SEC, pursuant to Rule 424 promulgated under the Securities Act, the prospectus and prospectus supplements,
if any, to be used in connection with sales of the Registrable Securities under the Registration Statement. The Company shall file such
initial prospectus covering the Investor’s sale of the Registrable Securities at or before 8:30 a.m. (New York time) on the Business
Day following the date that the Registration Statement is declared effective by the SEC. The Investor and its counsel shall have a reasonable
opportunity to review and comment upon such prospectus prior to its filing with the SEC, and the Company shall give due consideration
to all such comments. The Investor shall use its reasonable best efforts to comment upon such prospectus within one (1) Business Day from the date
the Investor receives the final pre-filing version of such prospectus.
c. Sufficient
Number of Shares Registered. In the event the number of shares available under the Registration Statement is insufficient to cover
all of the Registrable Securities, the Company shall amend the Registration Statement or file a new Registration Statement (a “New
Registration Statement”), so as to cover all of such Registrable Securities (subject to the limitations set forth in Section
2(a)) as soon as practicable, but in any event not later than ten (10) Business Days after the necessity therefor arises, subject to any
limits that may be imposed by the SEC pursuant to Rule 415 under the Securities Act. The Company shall use it reasonable best efforts
to cause such amendment and/or New Registration Statement to become effective as soon as practicable following the filing thereof. In
the event that any of the Registrable Securities are not included in the Registration Statement, or have not been included in any New
Registration Statement and the Company files any other registration statement under the Securities Act (other than on Form S-4, Form S-8,
or with respect to other employee related plans or rights offerings) (“Other Registration Statement”) then the Company
shall include such remaining Registrable Securities in such Other Registration Statement. The Company agrees that it shall not file any
such Other Registration Statement unless all of the Registrable Securities have been included in such Other Registration Statement or
otherwise have been registered for resale as described above.
d. Offering.
If the staff of the SEC (the “Staff”) or the SEC seeks to characterize any offering pursuant to a Registration Statement
filed pursuant to this Agreement as constituting an offering of securities that does not permit such Registration Statement to become
effective and be used for resales by the Investor under Rule 415 at then prevailing market prices (and not fixed prices), or if after
the filing of the initial Registration Statement with the SEC pursuant to Section 2(a), the Company is otherwise required by the Staff
or the SEC to reduce the number of Registrable Securities included in such initial Registration Statement, then the Company shall reduce
the number of Registrable Securities to be included in such initial Registration Statement (with the prior consent, which shall not be
unreasonably withheld, of the Investor and its legal counsel as to the specific Registrable Securities to be removed therefrom) until
such time as the Staff and the SEC shall so permit such Registration Statement to become effective and be used as aforesaid. In the event
of any reduction in Registrable Securities pursuant to this paragraph, the Company shall file one or more New Registration Statements
in accordance with Section 2(c) until such time as all Registrable Securities have been included in Registration Statements that have
been declared effective and the prospectus contained therein is available for use by the Investor. Notwithstanding any provision herein
or in the Purchase Agreement to the contrary, the Company’s obligations to register Registrable Securities (and any related conditions
to the Investor’s obligations) shall be qualified as necessary to comport with any requirement of the SEC or the Staff as addressed
in this Section 2(d).
With respect
to the Registration Statement and whenever any Registrable Securities are to be registered pursuant to Section 2 including on any New
Registration Statement, the Company shall use its reasonable best efforts to effect the registration of the Registrable Securities in
accordance with the intended method of disposition thereof and, pursuant thereto, the Company shall have the following obligations:
a. The
Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to any registration
statement and the prospectus used in connection with such registration statement, which prospectus is to be filed pursuant to Rule 424
promulgated under the Securities Act, as may be necessary to keep the Registration Statement or any New Registration Statement effective
at all times during the Registration Period, and, during such period, comply with the provisions of the Securities Act with respect to
the disposition of all Registrable Securities of the Company covered by the Registration Statement or any New Registration Statement until
such time as all of such Registrable Securities shall have been disposed of
in accordance with the intended methods of disposition by the seller or sellers thereof as set forth in such registration statement.
b. The
Company shall permit the Investor to review and comment upon the Registration Statement or any New Registration Statement and all amendments
and supplements thereto at least two (2) Business Days prior to their filing with the SEC, and not file any document in a form to which
Investor reasonably objects. The Investor shall use its reasonable best efforts to comment upon the Registration Statement or any New
Registration Statement and any amendments or supplements thereto within two (2) Business Days from the date the Investor receives the
final version thereof. The Company shall furnish to the Investor, without charge any correspondence from the SEC or the staff of the SEC
to the Company or its representatives relating to the Registration Statement or any New Registration Statement.
c. Upon
request of the Investor, the Company shall furnish to the Investor, (i) promptly after the same is prepared and filed with the SEC, at
least one copy of such registration statement and any amendment(s) thereto, including financial statements and schedules, all documents
incorporated therein by reference and all exhibits, (ii) upon the effectiveness of any registration statement, a copy of the prospectus
included in such registration statement and all amendments and supplements thereto (or such other number of copies as the Investor may
reasonably request) and (iii) such other documents, including copies of any preliminary or final prospectus, as the Investor may reasonably
request from time to time in order to facilitate the disposition of the Registrable Securities owned by the Investor. For the avoidance
of doubt, any filing available to the Investor via the SEC’s live EDGAR system shall be deemed “furnished to the Investor”
hereunder.
d.
The Company shall use reasonable best efforts to (i) register and qualify the Registrable Securities covered by a registration
statement under such other securities or “blue sky” laws of such jurisdictions in the United States as the Investor
reasonably requests, (ii) prepare and file in those jurisdictions, such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during the
Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect
at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions; provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where it would not otherwise be required to
qualify but for this Section 3(d), (y) subject itself to general taxation in any such jurisdiction, or (z) file a general consent to
service of process in any such jurisdiction. The Company shall promptly notify the Investor who holds Registrable Securities of the
receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the
Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction in the United States or its
receipt of actual notice of the initiation or threatening of any proceeding for such purpose.
e. As
promptly as practicable after becoming aware of such event or facts, the Company shall notify the Investor in writing of the happening
of any event or existence of such facts as a result of which the prospectus included in any registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made, not misleading, and promptly prepare a supplement or amendment
to such registration statement and/or take any other necessary steps (which, if in accordance with applicable SEC rules and regulations,
may consist of a document to be filed by the Company with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act and
to be incorporated by reference in the prospectus) to correct such untrue statement or omission, and deliver a copy of such supplement
or amendment to the Investor (or such other number of copies as the Investor may reasonably request). The Company
shall also promptly notify the Investor in writing (i) when a prospectus or any prospectus supplement or post-effective amendment has
been filed, and when a registration statement or any post-effective amendment has become effective (notification of such effectiveness
shall be delivered to the Investor by email on the same day of such effectiveness or by overnight mail), (ii) of any request by the SEC
for amendments or supplements to any registration statement or related prospectus or related information, and (iii) of the Company’s
reasonable determination that a post-effective amendment to a registration statement would be appropriate.
f. The
Company shall use its reasonable best efforts to prevent the issuance of any stop order or other suspension of effectiveness of any registration
statement, or the suspension of the qualification of any Registrable Securities for sale in any jurisdiction and, if such an order or
suspension is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment and to notify the Investor
of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation or threat of any proceeding
for such purpose.
g. The
Company shall (i) cause all the Registrable Securities to be listed on each securities exchange on which securities of the same class
or series issued by the Company are then listed, if any, if the listing of such Registrable Securities is then permitted under the rules
of such exchange, or (ii) secure designation and quotation of all the Registrable Securities on the Principal Market (as defined in the
Purchase Agreement). The Company shall pay all fees and expenses in connection with satisfying its obligation under this Section.
h. The
Company shall cooperate with the Investor to facilitate the timely preparation and delivery of the Registrable Securities (not bearing
any restrictive legend) either by DWAC, DRS, or in certificated form if DWAC or DRS is unavailable, to be offered pursuant to any registration
statement and enable such Registrable Securities to be in such denominations or amounts as the Investor may reasonably request and registered
in such names as the Investor may request.
i. The
Company shall at all times provide a transfer agent and registrar with respect to its Common Stock.
j. If
reasonably requested by the Investor, the Company shall (i) immediately incorporate in a prospectus supplement or post-effective amendment
such information as the Investor believes should be included therein relating to the sale and distribution of Registrable Securities,
including, without limitation, information with respect to the number of Registrable Securities being sold, the purchase price being paid
therefor and any other terms of the offering of the Registrable Securities; (ii) make all required filings of such prospectus supplement
or post-effective amendment as soon as practicable upon notification of the matters to be incorporated in such prospectus supplement or
post-effective amendment; and (iii) supplement or make amendments to any registration statement.
k. The
Company shall use its reasonable best efforts to cause the Registrable Securities covered by any registration statement to be registered
with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable
Securities.
l. Within
two (2) Business Days after any registration statement which includes the Registrable Securities is ordered effective by the SEC, the
Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities
(with copies to the Investor) confirmation that such registration statement has been declared effective by the SEC in the form attached
hereto as Exhibit A. Thereafter, if requested by the Investor at any time, the Company shall require its counsel to deliver to
the Investor a written confirmation whether or not the effectiveness of such registration statement has lapsed
at any time for any reason (including, without limitation, the issuance of a stop order) and whether or not the registration statement
is current and available to the Investor for sale of all of the Registrable Securities.
m. The
Company shall take all other reasonable actions necessary to expedite and facilitate disposition by the Investor of Registrable Securities
pursuant to any registration statement.
| 4. | OBLIGATIONS OF THE INVESTOR. |
a. The
Company shall notify the Investor in writing of the information the Company reasonably requires from the Investor in connection with any
registration statement hereunder. The Investor shall furnish to the Company such information regarding itself, the Registrable Securities
held by it and the intended method of disposition of the Registrable Securities held by it as shall be reasonably required to effect the
registration of such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably
request.
b. The
Investor agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of
any registration statement hereunder.
c.
The Investor agrees that, upon receipt of any notice from the Company of the happening of any event or existence of facts of the
kind described in Section 3(f) or the first sentence of Section 3(e), the Investor will immediately discontinue disposition of
Registrable Securities pursuant to any registration statement(s) covering such Registrable Securities until the Investor’s
receipt of the copies of the supplemented or amended prospectus contemplated by Section 3(f) or the first sentence of Section 3(e).
Notwithstanding anything to the contrary, the Company shall cause its transfer agent to promptly deliver shares of Common Stock
without any restrictive legend in accordance with the terms of the Purchase Agreement, Note, and Warrants as applicable in
connection with any sale of Registrable Securities with respect to which an Investor has entered into a contract for sale prior to
the Investor’s receipt of a notice from the Company of the happening of any event of the kind described in Section 3(f) or the
first sentence of Section 3(e) and for which the Investor has not yet settled.
| 5. | EXPENSES OF REGISTRATION. |
All reasonable
expenses of the Company, other than sales or brokerage commissions, incurred in connection with registrations, filings or qualifications
pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualifications fees, printers and accounting
fees, and fees and disbursements of counsel for the Company, shall be paid by the Company.
a. To
the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend the Investor, each Person,
if any, who controls the Investor, the members, the directors, officers, partners, employees, agents, representatives of the Investor
and each Person, if any, who controls the Investor within the meaning of the Securities Act or the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) (each, an “Indemnified Person”), against any third-party losses, claims,
damages, liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’ fees, amounts paid in settlement (with
the prior written consent of the Company, such consent not to be unreasonably withheld) or expenses, joint or several, (collectively,
“Claims”) reasonably incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding,
investigation or appeal taken from the foregoing by or before any court or governmental, administrative or other regulatory agency, body
or the SEC, whether pending or threatened, whether or not an indemnified party is or may be a party thereto (“Indemnified
Damages”), to which any of them may become subject insofar as such Claims (or actions or proceedings, whether commenced or threatened,
in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in the Registration
Statement, any New Registration Statement or any post-effective amendment thereto or in any filing made in connection with the qualification
of the offering under the securities or other “blue sky” laws of any jurisdiction in which Registrable Securities are offered
(“Blue Sky Filing”), or the omission or alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained
in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or
the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in light of the circumstances
under which the statements therein were made, not misleading, (iii) any violation or alleged violation by the Company of the Securities
Act, the Exchange Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder relating
to the offer or sale of the Registrable Securities pursuant to the Registration Statement or any New Registration Statement or (iv) any
material violation by the Company of this Agreement (the matters in the foregoing clauses (i) through (iv) being, collectively, “Violations”).
The Company shall reimburse each Indemnified Person promptly as such expenses are incurred and are due and payable, for any reasonable
legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding
anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim
by an Indemnified Person arising out of or based upon a Violation which occurs in reliance upon and in conformity with information about
the Investor furnished in writing to the Company by such Indemnified Person expressly for use in connection with the preparation of the
Registration Statement, any New Registration Statement or any such amendment thereof or supplement thereto, if such prospectus was timely
made available by the Company pursuant to Section 3(c) or Section 3(e); (ii) with respect to any superseded prospectus, shall not inure
to the benefit of any such person from whom the person asserting any such Claim purchased the Registrable Securities that are the subject
thereof (or to the benefit of any person controlling such person) if the untrue statement or omission of material fact contained in the
superseded prospectus was corrected in the revised prospectus, as then amended or supplemented, if such revised prospectus was timely
made available by the Company pursuant to Section 3(c) or Section 3(e), and the Indemnified Person was promptly advised in writing not
to use the incorrect prospectus prior to the use giving rise to a violation and such Indemnified Person, notwithstanding such advice,
used it; (iii) shall not be available to the extent such Claim is based on a failure of the Investor to deliver or to cause to be delivered
the prospectus made available by the Company, if such prospectus was timely made available by the Company pursuant to Section 3(c) or
Section 3(e); and (iv) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written
consent of the Company, which consent shall not be unreasonably withheld. Such indemnity shall remain in full force and effect regardless
of any investigation made by or on behalf of the Indemnified Person and shall survive the transfer of the Registrable Securities by the
Investor pursuant to Section 9.
b.
In connection with the Registration Statement or any New Registration Statement, the Investor agrees to indemnify, hold harmless and
defend, to the same extent and in the same manner as is set forth in Section 6(a), the Company, each of its directors, each
of its officers who signs the Registration Statement or any New Registration Statement, each Person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act (collectively and together with an Indemnified Person, an
“Indemnified Party”), against any Claim or Indemnified Damages to which any of them may become subject, under the
Securities Act, the Exchange Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or are based upon any
Violation, in each case to the extent, and only to the extent, that such Violation occurs in reliance upon and in conformity with
written information about the Investor set forth on Exhibit B attached hereto and furnished to the Company by the Investor
expressly for use in connection with such registration statement or from the failure of the Investor to deliver or so cause to be
delivered the prospectus made available by the Company, if such prospectus was timely made available by the Company pursuant to Section
3(c) or Section 3(e); provided, however, that the indemnity agreement contained in this Section 6(b) and the
agreement with respect to contribution contained in Section 7 shall not apply to amounts paid in settlement of any Claim if
such settlement is effected without the prior written consent of the Investor, which consent shall not be unreasonably withheld;
provided, further, however, that the Investor shall be liable under this Section 6(b) for only that amount of a Claim or
Indemnified Damages as does not exceed the net proceeds to the Investor as a result of the sale of Registrable Securities pursuant
to such registration statement. Such indemnity shall remain in full force and effect regardless of any investigation made by or on
behalf of such Indemnified Party and shall survive the transfer of the Registrable Securities by the Investor pursuant to Section
9.
c. Promptly
after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any action or proceeding
(including any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in
respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice
of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party
so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually
satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party, as the case may be; provided, however, that
an Indemnified Person or Indemnified Party shall have the right to retain its own counsel with the fees and expenses to be paid by the
indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of
the Indemnified Person or Indemnified Party and the indemnifying party would be inappropriate due to actual or potential differing interests
between such Indemnified Person or Indemnified Party and any other party represented by such counsel in such proceeding. The Indemnified
Party or Indemnified Person shall cooperate fully with the indemnifying party in connection with any negotiation or defense of any such
action or claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified
Party or Indemnified Person which relates to such action or claim. The indemnifying party shall keep the Indemnified Party or Indemnified
Person fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying
party shall be liable for any settlement of any action, claim or proceeding effected without its written consent, provided, however, that
the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the consent
of the Indemnified Party or Indemnified Person, consent to entry of any judgment or enter into any settlement or other compromise which
does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person
of a release from all liability in respect to such claim or litigation. Following indemnification as provided for hereunder, the indemnifying
party shall be subrogated to all rights of the Indemnified Party or Indemnified Person with respect to all third parties, firms or corporations
relating to the matter for which indemnification has been made. The failure to deliver written notice to the indemnifying party within
a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified
Person or Indemnified Party under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend
such action.
d. The
indemnification required by this Section 6 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 Indemnified Damages are incurred.
e. The
indemnity agreements contained herein shall be in addition to (i) any cause of action or similar right of the Indemnified Party or Indemnified
Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant to applicable
law.
To the extent any
indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution
with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however,
that:
(i) no seller of Registrable Securities
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from
any seller of Registrable Securities who was not guilty of fraudulent misrepresentation; and (ii) contribution by any seller of Registrable
Securities shall be limited in amount to the net amount of proceeds received by such seller from the sale of such Registrable Securities.
| 8. | REPORTS AND DISCLOSURE UNDER THE SECURITIES ACTS. |
With a view to
making available to the Investor the benefits of Rule 144 promulgated under the Securities Act or any other similar rule or regulation
of the SEC that may at any time permit the Investor to sell securities of the Company to the public without registration (“Rule
144”), the Company agrees, at the Company’s sole expense, so long as the Investor owns Registrable Securities, to use
reasonable best efforts to:
a. make
and keep public information available, as those terms are understood and defined in Rule 144;
b. file
with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act
so long as the Company remains subject to such requirements and the filing of such reports and other documents is required for the applicable
provisions of Rule 144;
c. furnish
to the Investor so long as the Investor owns Registrable Securities, promptly upon request, (i) a written statement by the Company that
it has complied with the reporting and or disclosure provisions of Rule 144, the Securities Act and the Exchange Act, (ii) a copy of the
most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other
information as may be reasonably requested to permit the Investor to sell such securities pursuant to Rule 144 without registration; and
d. take
such additional action as is requested by the Investor to enable the Investor to sell the Registrable Securities pursuant to Rule 144,
including, without limitation, delivering all such legal opinions, consents, certificates, resolutions and instructions to the Company’s
transfer agent as may be requested from time to time by the Investor and otherwise fully cooperate with Investor and Investor’s
broker to effect such sale of securities pursuant to Rule 144.
The Company agrees
that damages may be an inadequate remedy for any breach of the terms and provisions of this Section 8 and that Investor shall, whether
or not it is pursuing any remedies at law, be entitled to equitable relief in the form of a preliminary or permanent injunctions, without
having to post any bond or other security, upon any breach or threatened breach of any such terms or provisions.
| 9. | ASSIGNMENT OF REGISTRATION RIGHTS. |
The Company shall not assign this Agreement
or any rights or obligations hereunder without the prior written consent of the Investor.
| 10. | AMENDMENT OF REGISTRATION RIGHTS. |
No provision of
this Agreement may be amended or waived by the parties from and after the date that is one Business Day immediately preceding the initial
filing of the Registration Statement with the SEC. Subject to the immediately preceding sentence, no provision of this Agreement may be
(i) amended other than by a written instrument signed by both parties hereto or (ii) waived other than in a written instrument signed
by the party against whom enforcement of such waiver is sought. Failure of any party to exercise any right or remedy under this Agreement
or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a waiver thereof.
a. A
Person is deemed to be a holder of Registrable Securities whenever such Person owns or is deemed to own of record such Registrable Securities.
If the Company receives conflicting instructions, notices or elections from two or more Persons with respect to the same Registrable Securities,
the Company shall act upon the basis of instructions, notice or election received from the registered owner of such Registrable Securities.
b.
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be
in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by
email (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or
(iii) one (1) Business Day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to
the party to receive the same. The addresses for such communications shall be:
If to the Company, to:
SIGNING DAY SPORTS, INC.
8355 East Hartford Dr., Suite 100
Scottsdale, AZ 85255
Email: danny.nelson@signingdaysports.com
Attention:
Daniel Nelson
If to the Investor:
FIRSTFIRE GLOBAL OPPORTUNITIES FUND, LLC
1040 First Avenue, Suite 190 New York, NY 10022
e-mail: eli@firstfirecapital.com
or at such other address, email address,
and/or to the attention of such other person as the recipient party has specified by written notice given to each other party three (3)
Business Days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent,
waiver or other communication, (B) mechanically or electronically generated by the sender’s email account containing the time, date,
recipient email address, as applicable, and an image of the first page of such transmission or (C) provided by a nationally recognized
overnight delivery service, shall be rebuttable evidence of personal service, receipt by email or receipt from a nationally recognized
overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.
c.
The Company and Investor shall submit all Claims (as defined in Exhibit E of the Purchase Agreement) (the “Claims”) arising
under this Agreement or any other agreement between the parties and their affiliates or any Claim relating to the relationship of the
parties to binding arbitration pursuant to the arbitration provisions set forth in Exhibit E of the Purchase Agreement (the “Arbitration
Provisions”). The Company and Investor hereby acknowledge and agree that the Arbitration Provisions are unconditionally binding
on the Company and Investor hereto and are severable from all other provisions of this Agreement. By executing this Agreement, Company
represents, warrants and covenants that Company has reviewed the Arbitration Provisions carefully, consulted with legal counsel about
such provisions (or waived its right to do so), understands that the Arbitration Provisions are intended to allow for the expeditious
and efficient resolution of any dispute hereunder, agrees to the terms and limitations set forth in the Arbitration Provisions, and that
Company will not take a position contrary to the foregoing representations. Company acknowledges and agrees that Investor may rely upon
the foregoing representations and covenants of Company regarding the Arbitration Provisions. This Agreement shall be construed and enforced
in accordance with, and all questions concerning the construction, validity, interpretation and performance of this Agreement shall be
governed by, the internal laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of Delaware or any other jurisdictions) that would cause the application of the laws of any jurisdictions other
than the State of Delaware. The Company and Investor consent to and expressly agree that the exclusive venue for arbitration of any Claims
arising under this Agreement or any other agreement between the Company and Investor or their respective affiliates (including but not
limited to the Transaction Documents (as defined in the Purchase Agreement)) or any Claim relating to the relationship of the Company
and Investor or their respective affiliates shall be in the State of Delaware. Without modifying the Company’s and Investor’s
obligations to resolve disputes hereunder pursuant to the Arbitration Provisions, for any litigation arising in connection with any of
the Transaction Documents (and notwithstanding the terms (specifically including any governing law and venue terms) of any transfer agent
services agreement or other agreement between the Company’s transfer agent and the Company, such litigation specifically includes,
without limitation any action between or involving Company and the Company’s transfer agent under the Irrevocable Transfer Agent
Instructions (as defined in the Purchase Agreement) or otherwise related to Investor in any way (specifically including, without limitation,
any action where Company seeks to obtain an injunction, temporary restraining order, or otherwise prohibit the Company’s transfer
agent from issuing shares of Common Stock to Investor for any reason)), each party hereto hereby (i) consents to and expressly submits
to the exclusive personal jurisdiction of any state or federal court sitting in the State of Delaware, (ii) expressly submits to the
exclusive venue of any such court for the purposes hereof, (iii) agrees to not bring any such action (specifically including, without
limitation, any action where Company seeks to obtain an injunction, temporary restraining order, or otherwise prohibit the Company’s
transfer agent from issuing shares of Common Stock to Investor for any reason) outside of any state or federal court sitting in the State
of Delaware, and (iv) waives any claim of improper venue and any claim or objection that such courts are an inconvenient forum or any
other claim, defense or objection to the bringing of any such proceeding in such jurisdiction or to any claim that such venue of the
suit, action or proceeding is improper. Notwithstanding anything in the foregoing to the contrary, nothing herein shall limit, or shall
be deemed or construed to limit, the ability of the Investor to realize on any collateral or any other security, or to enforce a judgment
or other court ruling in favor of the Investor, including through a legal action in any court of competent jurisdiction. The Company
hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any objection to jurisdiction and venue of any
action instituted hereunder, any claim that it is not personally subject to the jurisdiction of any such court, and any claim that such
suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper (including
but not limited to based upon forum non conveniens). THE COMPANY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR
ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTIONS CONTEMPLATED HEREBY. The Company irrevocably waives personal service of process
and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other agreement, certificate,
instrument or document contemplated hereby or thereby by mailing a copy thereof via registered
or certified mail or overnight delivery (with evidence of delivery) to Company 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. The prevailing party in any action or dispute
brought in connection with this Agreement or any other agreement, certificate, instrument or document contemplated hereby or thereby shall
be entitled to recover from the other party its reasonable attorney’s fees and costs. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.
d. The
Agreement, Purchase Agreement, Note, Warrants, and ancillary documentation entered into between the Company and Investor therewith constitute
the entire agreement among the parties hereto with respect to the subject matter hereof and thereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and therein. The Agreement, Purchase Agreement, Note, Warrants,
and ancillary documentation entered into between the Company and Investor therewith supersede all prior agreements and understandings
among the parties hereto with respect to the subject matter hereof and thereof.
e. Subject
to the requirements of Section 9, this Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns
of each of the parties hereto.
f. The
headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
g. This
Agreement may be executed in identical counterparts, each of which shall be deemed an original but all of which shall constitute one and
the same agreement. This Agreement, once executed by a party, may be delivered to the other party hereto by e-mail in a “.pdf”
format data file of a copy of this Agreement bearing the signature of the party so delivering this Agreement.
h. Each
party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such
other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent
and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
i. The
language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no rules of
strict construction will be applied against any party.
j. 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.
* * * * * *
IN WITNESS WHEREOF, the parties
have caused this Agreement to be duly executed as of day and year first above written.
THE COMPANY:
SIGNING DAY SPORTS, INC.
By: |
/s/ Daniel Nelson |
|
|
Name: |
DANIEL NELSON |
|
|
Title: |
CHIEF EXECUTIVE OFFICER |
|
INVESTOR:
FIRSTFIRE GLOBAL OPPORTUNITIES FUND, LLC
By: FirstFire Capital Management LLC, its manager
By: |
/s/ Eli Fireman |
|
|
Name: |
ELI FIREMAN |
|
[Signature Page to registration rights
agreement]
EXHIBIT A
TO REGISTRATION RIGHTS AGREEMENT
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
________, 2024
____________
____________
____________
Re: Effectiveness of Registration
Statement
Ladies and Gentlemen:
We are counsel
to SIGNING DAY SPORTS, INC., a Delaware corporation (the “Company”), and have represented the Company in connection
with that certain Purchase Agreement, dated as of May 16, 2024 (the “Purchase Agreement”), entered into by and between
the Company and FIRSTFIRE GLOBAL OPPORTUNITIES FUND, LLC, a Delaware limited liability company (the “Investor”) pursuant
to which the Company has agreed to issue to the Investor shares of Common Stock of the Company, par value $0.0001 per share (the “Common
Stock”), consisting of the Conversion Shares (as defined in the Purchase Agreement), Exercise Shares (as defined in the Purchase
Agreement), and Commitment Shares (as defined in the Purchase Agreement) in accordance with the terms of the Purchase Agreement, the Note
(as defined below), and the Warrants (as defined below). In connection with the transactions contemplated by the Purchase Agreement, the
Company also has entered into a Registration Rights Agreement, of even date with the Purchase Agreement with the Investor (the “Registration
Rights Agreement”) pursuant to which the Company agreed, among other things, to file a Registration Statement (File No. 333-[________])
(the “Registration Statement”) with the Securities and Exchange Commission (the “SEC”) relating to the registration
for resale under the Securities Act of 1933, as amended (the “Securities Act”), on [____], 2024, of the following shares of Common
Stock:
_______Conversion Shares issued
and/or to be issued to the Investor upon conversion of the Note (as defined in the Purchase Agreement) (the “Note”)
in accordance with the Note; and
_______Exercise
Shares issued and/or to be issued to the Investor upon exercise of the Warrants (as defined in the Purchase Agreement) (the “Warrants”)
in accordance with the Warrants; and
_______Commitment Shares issued to the Investor pursuant to the Agreement.
In connection
with the foregoing, we advise you that a member of the SEC’s staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the Securities Act at [ ] [A.M./P.M.] on [ ], 2024 and we have no knowledge,
after telephonic inquiry of a member of the SEC’s staff, that any stop order suspending its effectiveness has been issued or that
any proceedings for that purpose are pending before, or threatened by, the SEC and the Conversion Shares, Exercise Shares, and Commitment
Shares are available for resale under the Securities Act pursuant to the Registration Statement and may be issued without any restrictive
legend.
|
Very truly yours, |
|
[Company Counsel] |
|
|
|
|
By: |
|
cc: FIRSTFIRE GLOBAL OPPORTUNITIES FUND,
LLC
EXHIBIT B
TO REGISTRATION RIGHTS AGREEMENT
Information About the
Investor Furnished to The Company by The Investor
Expressly for Use in Connection with The Registration Statement
Information with Respect to Investor
As of the date of the
Purchase Agreement, __________ beneficially owned [_________] shares of our Common Stock. _______________, are deemed to be
beneficial owners of all of the shares of Common Stock owned by _________. _____________ [has sole] [have shared] voting and
investment power over the shares being offered under the prospectus filed with the SEC in connection with the transactions
contemplated under the Purchase Agreement. ___________ is not a licensed broker dealer or an affiliate of a licensed broker
dealer.
v3.24.1.1.u2
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May 16, 2024 |
Cover [Abstract] |
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8-K
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May 16, 2024
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Entity File Number |
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|
Entity Registrant Name |
SIGNING DAY SPORTS, INC.
|
Entity Central Index Key |
0001898474
|
Entity Tax Identification Number |
87-2792157
|
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DE
|
Entity Address, Address Line One |
8355 East Hartford Rd.
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Suite 100
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Scottsdale
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AZ
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