Proxy Statement Pursuant
to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. 1)
☐ Fee paid previously with preliminary materials.
☐ Fee computed on table in exhibit required by Item 25(b) per
Exchange Act Rules 14a- 6(i)(1) and 0-11
Dear Fellow Stockholders of Smart for Life, Inc. -
You are cordially invited
to attend a Special Meeting of Stockholders (the “Special Meeting”) of Smart for Life, Inc., a Delaware corporation (the
“Company”), which is scheduled to be held on Wednesday, March 15, 2023 at 2:00 PM Eastern Time. The Special Meeting will
be a virtual stockholder meeting, conducted via live webcast, through which you can submit questions and vote online. The Special Meeting
can be accessed by visiting: . Stockholders of record of the Company at the close of business on February 3, 2023 are entitled to notice
of, and to vote at, the Special Meeting. Details of the business to be conducted at the Special Meeting are given in the accompanying
Notice of Special Meeting of Stockholders and the Proxy Statement. The Proxy Statement was first sent or given to our stockholders on
or about , 2023. You should also have received a Proxy Card or Voting Instruction Form and postage-paid return envelope, which are being
solicited on behalf of our Board of Directors (the “Board”).
After reading the Notice
of Special Meeting of Stockholders and the Proxy Statement, please mark your votes on the accompanying Proxy Card or Voting Instruction
Form, sign it and promptly return it in the accompanying postage-paid envelope. You may also vote by Internet or telephone as instructed
in the proxy statement or on the Proxy Card or Voting Instruction Form. Please vote by whichever method is most convenient for you to
ensure that your shares are represented at the Special Meeting.
It is very important
that your shares be represented and voted at the Special Meeting. Whether or not you plan to attend, we hope you will vote as soon as
possible. You may vote over the Internet, as well as by telephone, or by mailing the Proxy Card or Voting Instruction Form. Returning
the proxy or voting by Internet or telephone does not deprive you of your right to attend the Special Meeting and to vote your shares.
We look forward to seeing
you at the Special Meeting. Your vote and participation, no matter how many or how few shares you own, are very important to us. Your
cooperation is greatly appreciated.
The attached Notice of
Special Meeting of Stockholders and Proxy Statement are first being made available to stockholders of record beginning ,
2023. If you have any questions or require assistance in authorizing a proxy or voting your shares of common stock, please contact the
Company at the contact listed below:
Smart for Life, Inc.
Annual
Reports
We
have filed our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 with the SEC. It is available free of
charge at the SEC’s web site at www.sec.gov. Upon written request by a stockholder, we will mail without charge a copy of our Annual
Report on Form 10-K, including the financial statements and financial statement schedules, but excluding exhibits. Exhibits to the
Annual Report on Form 10-K are available upon payment of a reasonable fee, which is limited to our expenses in furnishing the requested
exhibit. All requests should be directed to Smart for Life, Inc., 990 S Rogers Circle, Suite 3, Boca Raton, Florida 33487,
Attention: Secretary. Our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 is also available on our IR
site under the link for “SEC Filings.”
|
By
Order of the Board of Directors, |
|
|
|
|
Boca
Raton, FL |
Alfonso
J. Cervantes, Jr. |
,
2023 |
Executive
Chairman and Secretary |
Smart for Life, Inc. | 35 | Proxy Statement |
ANNEX A
SECURITIES PURCHASE
AGREEMENT
This Securities Purchase Agreement
(this “Agreement”) is dated as of December 8, 2022 between Smart for Life, Inc., a Delaware corporation (the “Company”),
and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser”
and collectively, the “Purchasers”).
WHEREAS, subject to the terms
and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act (as defined below), and Rule 506 promulgated
thereunder, the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase
from the Company, securities of the Company as more fully described in this Agreement.
NOW, THEREFORE, IN CONSIDERATION
of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the Company and each Purchaser agree as follows:
ARTICLE I.
DEFINITIONS
1.1 Definitions.
In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings
set forth in this Section 1.1:
“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.5.
“Action”
shall have the meaning ascribed to such term in Section 3.1(j).
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Board of Directors”
means the board of directors of the Company.
“Business Day”
means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by
law to remain closed; provided, however, for clarification, commercial banks shall
not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”,
“non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations
at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial
banks in The City of New York are generally open for use by customers on such day.
“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1.
“Closing Date”
means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and
all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s obligations
to deliver the Securities, in each case, have been satisfied or waived.
“Commission”
means the United States Securities and Exchange Commission.
“Common Stock”
means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which such securities may hereafter
be reclassified or changed.
“Common Stock Equivalents”
means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including,
without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable
or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Company Counsel”
means Bevilacqua PLLC.
“Disclosure Schedules”
means the Disclosure Schedules of the Company delivered concurrently herewith.
“Disclosure Time”
means, (i) if this Agreement is signed on a day that is not a Trading Day or after 9:00 a.m. (New York City time) and before midnight
(New York City time) on any Trading Day, 9:01 a.m. (New York City time) on the Trading Day immediately following the date hereof, and
(ii) if this Agreement is signed between midnight (New York City time) and 9:00 a.m. (New York City time) on any Trading Day, no later
than 9:01 a.m. (New York City time) on the date hereof.
“Effective Date”
means the earliest of the date that (a) the initial Registration Statement has been declared effective by the Commission, (b) all of the
Shares and Warrant Shares have been sold pursuant to Rule 144 or may be sold pursuant to Rule 144 without the requirement for the Company
to be in compliance with the current public information required under Rule 144 and without volume or manner-of-sale restrictions, (c)
following the one year anniversary of the Closing Date provided that a holder of Shares or Warrant Shares is not an Affiliate of the Company,
or (d) all of the Shares and Warrant Shares may be sold pursuant to an exemption from registration under Section 4(a)(1) of the Securities
Act without volume or manner-of-sale restrictions and Company Counsel has delivered to such holders a standing written unqualified opinion
that resales may then be made by such holders of the Shares and Warrant Shares pursuant to such exemption which opinion shall be in form
and substance reasonably acceptable to such holders.
“EGS” means
Ellenoff Grossman & Schole LLP, with offices located at 1345 Avenue of the Americas, New York, New York 10105-0302.
“Evaluation Date”
shall have the meaning ascribed to such term in Section 3.1(s).
“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Exempt Issuance”
means the issuance of (a) shares of Common Stock or options to employees, officers, directors or consultants of the Company pursuant to
any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority
of the members of a committee of non-employee directors established for such purpose for services rendered to the Company (provided if
to consultants such issuance shall not exceed 100,000 in any calendar month, subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement and
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 during the prohibition period in Section 4.12(a)
herein), (b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder, (c) warrants to the Placement
Agent in connection with the transactions pursuant to this Agreement and any securities upon exercise of warrants to the Placement Agent,
(d) other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of
this Agreement or commitments to issue shares of common stock, which commitments are in existence on the date of this Agreement, provided
that such securities or such commitments have not been amended since the date of this Agreement to increase the number of such securities
or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection with stock splits or
combinations) or to extend the term of such securities, provided further 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 during the prohibition period in Section 4.12(a) herein, (e) securities issued pursuant to acquisitions or strategic transactions
approved by a majority of the disinterested directors of the Company and securities issued in financing transactions, the primary purpose
of which is to finance 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 during the prohibition period in Section 4.12(a) herein,
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, (f) shares of Common Stock,
options or convertible 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 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 during the prohibition period in Section
4.12(a) herein, (g) shares of Common Stock, options or convertible securities issued to in connection with the provision of goods pursuant
to 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 during the prohibition period in Section 4.12(a) herein, and (h) options or convertible securities issued in connection
with sponsored research, collaboration, technology license, development, marketing, investor relations or other similar agreements or
strategic partnerships approved 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 during the prohibition period in Section 4.12(a) herein.
“FCPA” means
the Foreign Corrupt Practices Act of 1977, as amended.
“FDA”
shall have the meaning ascribed to such term in Section 3.1(kk).
“FDCA”
shall have the meaning ascribed to such term in Section 3.1(kk).
“GAAP”
shall have the meaning ascribed to such term in Section 3.1(h).
“Indebtedness”
shall have the meaning ascribed to such term in Section 3.1(bb).
“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(p).
“Legend
Removal Date” shall have the meaning ascribed to such term in Section 4.1(c).
“Liens” means
a lien, charge pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).
“Material
Permits” shall have the meaning ascribed to such term in Section 3.1(n).
“Per Share Purchase
Price” equals $0.35, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other
similar transactions of the Common Stock that occur after the date of this Agreement; provided that the purchase price per Prefunded Warrant
shall be the Per Share Purchase Price minus $0.0001.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company,
joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Pharmaceutical
Product” shall have the meaning ascribed to such term in Section 3.1(jj).
“Placement
Agent” means Dawson James Securities, LLC.
“Prefunded Warrant”
means, collectively, the Prefunded Common Stock purchase warrants delivered to the Purchasers at the Closing in accordance with Section
2.2(a) hereof and the Debenture Prefunded Warrant issued pursuant to Section 4.18, which Pre-Funded Warrants shall be exercisable in accordance
with their terms and shall expire when exercised in full, in the form of Exhibit B attached hereto.
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.
“Public
Information Failure” shall have the meaning ascribed to such term in Section 4.2(b).
“Public
Information Failure Payments” shall have the meaning ascribed to such term in Section 4.2(b).
“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.8.
“Registration
Rights Agreement” means the Registration Rights Agreement, dated on or about the date hereof, among the Company and the Purchasers,
in the form of Exhibit A attached hereto.
“Registration Statement”
means a registration statement meeting the requirements set forth in the Registration Rights Agreement and covering the resale by the
Purchasers of the Shares and the Warrant Shares.
“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).
“Reverse Stock Split
Amendment” means the amendment to the Company’s certificate of incorporation that effects the Reverse Stock Split.
“Reverse Stock Split”
means a reverse stock split of the outstanding shares of Common Stock that is effected by the Company’s filing of an amendment to
its certificate of incorporation with the Secretary of State of the State of Delaware and the acceptance thereof.
“Reverse Stock Split
Date” means the date on which the Reverse Stock Split is consummated and deemed effective by the State of Delaware.
“Rule 144”
means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time,
or any similar rule or regulation hereafter adopted by the Commission having substantially the
“SEC Reports”
shall have the meaning ascribed to such term in Section 3.1(h).
“Securities”
means the Shares, the Warrants and the Warrant Shares.
“Securities Act”
means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Shareholder Approval”
means (i) the Company’s stockholders approval of the Reverse Stock Split, (ii) an increase in the number of authorized shares of
Common Stock, and (iii) such approval as may be required by the applicable rules and regulations of the Nasdaq Stock Market (or any successor
entity) from the shareholders of the Company with respect to the transactions contemplated by the Transaction Documents, including the
issuance of all of the Shares and Warrant Shares in excess of 19.99% of the issued and outstanding Common Stock on the Closing Date.
“Shares”
means the shares of Common Stock issued or issuable to each Purchaser pursuant to this Agreement.
“Short Sales”
means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include
locating and/or borrowing shares of Common Stock).
“Subscription Amount”
means, as to each Purchaser, the aggregate amount to be paid for Shares and Warrants purchased hereunder as specified below such Purchaser’s
name on the signature page of this Agreement and next to the heading “Subscription Amount,” in United States dollars and in
immediately available funds.
“Subsidiary”
means any subsidiary of the Company as set forth on Schedule 3.1(a) and shall, where applicable, also include any direct or indirect
subsidiary of the Company formed or acquired after the date hereof.
“Trading Day”
means a day on which the principal Trading Market is open for trading.
“Trading Market”
means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the
NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the
Pink Open Market, OTCQB or the OTCQX (or any successors to any of the foregoing).
“Transaction Documents”
means this Agreement, the Warrants, the Registration Rights Agreement, the Voting Agreement, all exhibits and schedules thereto and hereto
and any other documents or agreements executed in connection with the transactions contemplated hereunder.
“Transfer Agent”
means the transfer agent of the Company, and any successor transfer agent of the Company.
“Variable Rate Transaction”
shall have the meaning ascribed to such term in Section 4.12(b).
“Voting Agreement”
means the written agreement of all of the officers, directors and stockholders holding more than 10% of the issued and outstanding shares
of Common Stock on the date hereof to vote all Common Stock over which such Persons have voting control as of the record date for the
meeting of stockholders of the Company, amounting to, in the aggregate, at least 38% of the issued and outstanding Common Stock.
“VWAP” means,
for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted
on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the
Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m.
(New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB Venture Market (“OTCQB”) or OTCQX Best Market
(“OTCQX”) is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices
for the Common Stock are then reported on the Pink Open Market (“Pink Market”) operated by OTC Markets, Inc. (or a similar
organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported,
or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in
good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the
fees and expenses of which shall be paid by the Company.
“Warrants”
means the Prefunded Warrants.
“Warrant Shares”
means the shares of Common Stock issuable upon exercise of the Warrants.
ARTICLE II.
PURCHASE AND SALE
2.1 Closing.
On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery
of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly, agree to purchase,
up to an aggregate of $1,000,000 of Shares and Warrants; provided, however, that, to the extent that the aggregate number
of Shares issuable hereunder exceeds 1,710,528 in lieu of purchasing Shares such Purchaser shall purchase a Prefunded Warrant in lieu
of Shares in an amount equal to such Purchaser’s pro-rata share of the Subscription Amounts hereunder that causes such issuance
to exceed such limitation. Each Purchaser shall deliver to the Company, via wire transfer or a certified check, immediately available
funds equal to such Purchaser’s Subscription Amount as set forth on the signature page hereto executed by such Purchaser, and the
Company shall deliver to each Purchaser its respective Shares and a Warrant, as determined pursuant to Section 2.2(a), and the Company
and each Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Closing. Upon satisfaction of the covenants
and conditions set forth in Sections 2.2 and 2.3, the Closing shall take place remotely by electronic transfer of the Closing documentation.
2.2 Deliveries.
(a) On
or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:
(i) this
Agreement duly executed by the Company;
(ii) a
legal opinion of Company Counsel, substantially in the form of Exhibit C attached hereto;
(iii) a
copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver, on an expedited basis, a certificate
evidencing a number of Shares equal to such Purchaser’s Subscription Amount divided by the Per Share Purchase Price, registered
in the name of such Purchaser or evidence of the issuance of such Purchaser’s Shares hereunder as held in DRS book-entry form by
the Transfer Agent and registered in the name of such Purchaser, which evidence shall be reasonably satisfactory to such Purchaser;
(iv) Prefunded
Warrants pursuant to Section 2.1;
(v) Debenture
Prefunded Warrant issued pursuant to Section 4.18;
(vi) the
Company shall have provided each Purchaser with the Company’s wire instructions, on Company letterhead and executed by the Chief
Executive Officer or Chief Financial Officer;
(vii) the
Voting Agreements;
(viii) the
Registration Rights Agreement duly executed by the Company; and
(ix) the
Restated Warrant (as defined below).
(b) On
or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company, the following:
(i) this
Agreement duly executed by such Purchaser;
(ii) such
Purchaser’s Subscription Amount by wire transfer to the account specified in writing by the Company; and
(iii) the
Registration Rights Agreement duly executed by such Purchaser.
2.3 Closing
Conditions.
(a) The
obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:
(i) the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality, in all respects) on the
Closing Date of the representations and warranties of the Purchasers contained herein (unless as of a specific date therein in which case
they shall be accurate in all material respects (or, to the extent representations or warranties are qualified by materiality, in all
respects) as of such date);
(ii) all
obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been performed;
and
(iii) the
delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.
(b) The
respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being met:
(i) the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect,
in all respects) when made and on the Closing Date of the representations and warranties of the Company contained herein (unless as of
a specific date therein in which case they shall be accurate in all material respects or, to the extent representations or warranties
are qualified by materiality or Material Adverse Effect, in all respects) as of such date);
(ii) all
obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;
(iii) the
delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;
(iv) there
shall have been no Material Adverse Effect with respect to the Company;
(v) from
the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or the Company’s
principal Trading Market, and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall
not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such
service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities
nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude
in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of such Purchaser,
makes it impracticable or inadvisable to purchase the Securities at the Closing.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
3.1 Representations
and Warranties of the Company. Except as set forth in the SEC Reports (as defined below) or in the Disclosure Schedules, which Disclosure
Schedules shall be deemed a part hereof and shall qualify any representation or otherwise made herein to the extent of the disclosure
contained in the corresponding section of the Disclosure Schedules, the Company hereby makes the following representations and warranties
to each Purchaser:
(a) Subsidiaries.
All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1(a). The Company owns, directly or indirectly,
all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding
shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights
to subscribe for or purchase securities. If the Company has no subsidiaries, all other references to the Subsidiaries or any of them in
the Transaction Documents shall be disregarded.
(b) Organization
and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to
own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in
violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational
or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign
corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification
necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected
to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse
effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries,
taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis
its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding
has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority
or qualification.
(c) Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The
execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further
action is required by the Company, the Board of Directors or the Company’s stockholders in connection herewith or therewith other
than in connection with the Required Approvals. This Agreement and each other Transaction Document to which it is a party has been (or
upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute
the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by
general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
(d) No
Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it
is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby do
not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of
incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets
of the Company or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution or similar adjustments, acceleration
or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing
a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property
or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in
a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority
to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property
or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not
have or reasonably be expected to result in a Material Adverse Effect.
(e) Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to,
or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection
with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings required pursuant
to Section 4.4 of this Agreement, (ii) the filing with the Commission pursuant to the Registration Rights Agreement, (iii) the notice
and/or application(s) to each applicable Trading Market for the issuance and sale of the Securities and the listing of the Shares and
Warrant Shares for trading thereon in the time and manner required thereby, (iv) the filing of Form D with the Commission and such filings
as are required to be made under applicable state securities laws and (v) Shareholder Approval (collectively, the “Required Approvals”).
(f) Issuance
of the Securities. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than
restrictions on transfer provided for in the Transaction Documents. The Warrant Shares, when issued in accordance with the terms of the
Transaction Documents, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other
than restrictions on transfer provided for in the Transaction Documents. Subject to Shareholder Approval, the Company has reserved from
its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement and the Warrants.
(g) Capitalization.
The capitalization of the Company as of the date hereof is as set forth on Schedule 3.1(g), which Schedule 3.1(g) shall
also include the number of shares of Common Stock owned beneficially, and of record, by Affiliates of the Company as of the date hereof.
Except as set forth on Schedule 3.1(g), the Company has not issued any capital stock since its most recently filed periodic report under
the Exchange Act. Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate
in the transactions contemplated by the Transaction Documents. Except as set forth on Schedule 3.1(g), there are no outstanding
options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights
or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares
of Common Stock or the capital stock of any Subsidiary, or contracts, commitments, understandings or arrangements by which the Company
or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents or capital stock of any
Subsidiary. The issuance and sale of the Securities will not obligate the Company or any Subsidiary to issue shares of Common Stock or
other securities to any Person (other than the Purchasers). There are no outstanding securities or instruments of the Company or any
Subsidiary with any provision that adjusts the exercise, conversion, exchange or reset price of such security or instrument upon an issuance
of securities by the Company or any Subsidiary. There are no outstanding securities or instruments of the Company or any Subsidiary that
contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company
or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary. The Company does not have any stock
appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. All of the outstanding shares
of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with
all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar
rights to subscribe for or purchase securities. No further approval or authorization of any stockholder, the Board of Directors others
is required for the issuance and sale of the Securities. There are no stockholders agreements, voting agreements or other similar agreements
with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among
any of the Company’s stockholders.
(h) SEC
Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be
filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two
years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing
materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the
“SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC
Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects
with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any
untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading. The Company has never been an issuer
subject to Rule 144(i) under the Securities Act. The financial statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at
the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles
applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial
statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly
present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof
and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial,
year-end audit adjustments.
(i) Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within
the SEC Reports, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in
a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and
accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected
in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not
altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to
its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company
has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option plans. The
Company does not have pending before the Commission any request for confidential treatment of information. Except for the issuance of
the Securities contemplated by this Agreement, no event, liability, fact, circumstance, occurrence or development has occurred or exists
or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, prospects,
properties, operations, assets or financial condition that would be required to be disclosed by the Company under applicable securities
laws at the time this representation is made or deemed made that has not been publicly disclosed at least 1 Trading Day prior to the date
that this representation is made.
(j) Litigation.
Except as set forth on Schedule 3.1(j), there is no action, suit, inquiry, notice of violation, proceeding or investigation pending
or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties
before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign)
(collectively, an “Action”). None of the Actions set forth on Schedule 3.1(j), (i) adversely affects or challenges
the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) could, if there were an unfavorable
decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director
or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities
laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated,
any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission
has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary
under the Exchange Act or the Securities Act.
(k) Labor
Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company,
which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees
is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company
nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships
with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary is, or is now expected
to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement
or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued
employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any
of the foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and
regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the
failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(l) Compliance.
Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or
any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement
or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default
or violation has been waived), (ii) is in violation of any judgment, decree, or order of any court, arbitrator or other governmental authority
or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation
all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality
and safety and employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material Adverse
Effect.
(m)
Environmental Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating
to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface
strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or
toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well
as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders,
permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have
received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses;
and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i), (ii) and (iii),
the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.
(n) Regulatory
Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except
where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification
of any Material Permit.
(o) Title
to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them and good
and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each
case free and clear of all Liens other than those Liens described in the SEC Reports and except for (i) Liens as do not materially affect
the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and
the Subsidiaries and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor
in accordance with GAAP and the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held
under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company
and the Subsidiaries are in compliance.
(p) Intellectual
Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications,
service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights
necessary or required for use in connection with their respective businesses as described in the SEC Reports and which the failure to
so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). None of, and neither
the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired,
terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement.
Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the SEC
Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the
rights of any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect. To the knowledge of the
Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual
Property Rights. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and
value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(q) Insurance. The Company
and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts
as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to,
directors and officers insurance coverage at least equal to the aggregate Subscription Amount. Neither the Company nor any Subsidiary
has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.
(r) Transactions
with Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of the Company or any Subsidiary
and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with
the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, providing
for the borrowing of money from or lending of money to or otherwise requiring payments to or from any officer, director or such employee
or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is
an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000 other than for (i) payment of salary
or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits,
including stock option agreements under any stock option plan of the Company.
(s) Sarbanes-Oxley;
Internal Accounting Controls. The Company and the Subsidiaries are in compliance with any and all applicable requirements of the Sarbanes-Oxley
Act of 2002, as amended, that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the
Commission thereunder that are effective as of the date hereof and as of the Closing Date. The Company and the Subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s
general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The Company and the Subsidiaries have established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such
disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits
under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules
and forms. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company
and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date,
the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange Act the
conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as
of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such
term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially
affect, the internal control over financial reporting of the Company and its Subsidiaries.
(t) Certain
Fees. Except for fees payable by the Company to the Placement Agent, no brokerage or finder’s fees or commissions are or will
be payable by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker,
bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Purchasers shall have no obligation
with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section
that may be due in connection with the transactions contemplated by the Transaction Documents.
(u) Private
Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, no registration
under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers as contemplated hereby.
The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market.
(v) Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will not be
or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company
shall conduct its business in a manner so that it will not become an “investment company” subject to registration under the
Investment Company Act of 1940, as amended.
(w) Registration
Rights. Other than each of the Purchasers, no Person has any right to cause the Company or any Subsidiary to effect the registration
under the Securities Act of any securities of the Company or any Subsidiary.
(x) Listing
and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company
has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common
Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration.
Except as set forth in the SEC Reports, the Company has not, in the 12 months preceding the date hereof, received notice from any Trading
Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing
or maintenance requirements of such Trading Market and the Company is, and has no reason to believe that it will not in the foreseeable
future continue to be, in compliance with all such listing and maintenance requirements. The Common Stock is currently eligible for electronic
transfer through the Depository Trust Company or another established clearing corporation and the Company is current in payment of the
fees to the Depository Trust Company (or such other established clearing corporation) in connection with such electronic transfer.
(y) Application
of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable
any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar
anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents) or the laws of its state
of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations
or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of
the Securities and the Purchasers’ ownership of the Securities.
(z) Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms
that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel with any information
that it believes constitutes or might constitute material, non-public information. The Company understands and confirms that the Purchasers
will rely on the foregoing representation in effecting transactions in securities of the Company. All of the disclosure furnished by or
on behalf of the Company to the Purchasers regarding the Company and its Subsidiaries, their respective businesses and the transactions
contemplated hereby, including the Disclosure Schedules to this Agreement, is true and correct and does not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading. The press releases disseminated by the Company during the twelve months preceding the date
of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made and
when made, not misleading. The Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with
respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.
(aa) No Integrated Offering.
Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, neither the Company, nor any of
its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or
solicited any offers to buy any security, under circumstances that would cause this offering of the Securities to be integrated with prior
offerings by the Company for purposes of (i) the Securities Act which would require the registration of any such securities under the
Securities Act, or (ii) any applicable shareholder approval provisions of any Trading Market on which any of the securities of the Company
are listed or designated.
(bb) Solvency. Based
on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the Company of the
proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s assets exceeds the amount that
will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities)
as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business as now conducted
and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted
by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii) the current cash flow of the
Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated
uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid.
The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts
of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances which lead it to believe
that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from
the Closing Date. Schedule 3.1(bb) sets forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company
or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness”
means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary
course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or
not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by
endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the
present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP. Neither
the Company nor any Subsidiary is in default with respect to any Indebtedness.
(cc) Tax Status. Except
for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the
Company and its Subsidiaries each (i) has made or filed all United States federal, state and local income and all foreign income and franchise
tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental
assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii)
has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to
which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority
of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such claim.
(dd) No General Solicitation.
Neither the Company nor any Person acting on behalf of the Company has offered or sold any of the Securities by any form of general solicitation
or general advertising. The Company has offered the Securities for sale only to the Purchasers and certain other “accredited investors”
within the meaning of Rule 501 under the Securities Act.
(ee) Foreign Corrupt Practices.
Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other person acting on behalf
of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other
unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government
officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully
any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the Company is aware) which
is in violation of law or (iv) violated in any material respect any provision of FCPA.
(ff) Accountants.
The Company’s accounting firm is set forth on Schedule 3.1(ff) of the Disclosure Schedules. To the knowledge and belief of
the Company, such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its
opinion with respect to the financial statements to be included in the Company’s Annual Report for the fiscal year.
(gg) No Disagreements
with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably anticipated by the Company
to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and the Company is current
with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability to perform any of its obligations
under any of the Transaction Documents.
(hh) Acknowledgment Regarding
Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the Purchasers is acting solely in the
capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby. The Company
further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with
respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or any of their respective
representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental
to the Purchasers’ purchase of the Securities. The Company further represents to each Purchaser that the Company’s decision
to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions
contemplated hereby by the Company and its representatives.
(ii) Acknowledgment
Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding
(except for Sections 3.2 (g) and 4.14 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers has been
asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the
Company, or “derivative” securities based on securities issued by the Company or to hold the Securities for any specified
term, (ii) past or future open market or other transactions by any Purchaser, specifically including, without limitation, Short Sales
or “derivative” transactions, before or after the closing of this or future private placement transactions, may negatively
impact the market price of the Company’s publicly-traded securities, (iii) any Purchaser, and counter-parties in “derivative”
transactions to which any such Purchaser is a party, directly or indirectly, presently may have a “short” position in the
Common Stock and (iv) each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party
in any “derivative” transaction. The Company further understands and acknowledges that (y) one or more Purchasers may engage
in hedging activities at various times during the period that the Securities are outstanding, including, without limitation, during the
periods that the value of the Warrant Shares deliverable with respect to Securities are being determined, and (z) such hedging activities
(if any) could reduce the value of the existing stockholders' equity interests in the Company at and after the time that the hedging activities
are being conducted. The Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of the
Transaction Documents.
(jj) Regulation M Compliance.
The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause
or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any
of the 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, other than,
in the case of clauses (ii) and (iii), compensation paid to the Placement Agent in connection with the placement of the Securities.
(kk) FDA. As to each
product subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”) under the Federal Food, Drug and
Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is manufactured, packaged, labeled, tested,
distributed, sold, and/or marketed by the Company or any of its Subsidiaries (each such product, a “Pharmaceutical Product”),
such Pharmaceutical Product is being manufactured, packaged, labeled, tested, distributed, sold and/or marketed by the Company in compliance
with all applicable requirements under FDCA and similar laws, rules and regulations relating to registration, investigational use, premarket
clearance, licensure, or application approval, good manufacturing practices, good laboratory practices, good clinical practices, product
listing, quotas, labeling, advertising, record keeping and filing of reports, except where the failure to be in compliance would not have
a Material Adverse Effect. There is no pending, completed or, to the Company's knowledge, threatened, action (including any lawsuit, arbitration,
or legal or administrative or regulatory proceeding, charge, complaint, or investigation) against the Company or any of its Subsidiaries,
and none of the Company or any of its Subsidiaries has received any notice, warning letter or other communication from the FDA or any
other governmental entity, which (i) contests the premarket clearance, licensure, registration, or approval of, the uses of, the distribution
of, the manufacturing or packaging of, the testing of, the sale of, or the labeling and promotion of any Pharmaceutical Product, (ii)
withdraws its approval of, requests the recall, suspension, or seizure of, or withdraws or orders the withdrawal of advertising or sales
promotional materials relating to, any Pharmaceutical Product, (iii) imposes a clinical hold on any clinical investigation by the Company
or any of its Subsidiaries, (iv) enjoins production at any facility of the Company or any of its Subsidiaries, (v) enters or proposes
to enter into a consent decree of permanent injunction with the Company or any of its Subsidiaries, or (vi) otherwise alleges any violation
of any laws, rules or regulations by the Company or any of its Subsidiaries, and which, either individually or in the aggregate, would
have a Material Adverse Effect. The properties, business and operations of the Company have been and are being conducted in all material
respects in accordance with all applicable laws, rules and regulations of the FDA. The Company has not been informed by the FDA
that the FDA will prohibit the marketing, sale, license or use in the United States of any product proposed to be developed, produced
or marketed by the Company nor has the FDA expressed any concern as to approving or clearing for marketing any product being developed
or proposed to be developed by the Company.
(ll) [RESERVED]
(mm) Stock Option Plans.
Each stock option granted by the Company under the Company’s stock option plan was granted (i) in accordance with the terms of the
Company’s stock option plan and (ii) with an exercise price at least equal to the fair market value of the Common Stock on the date
such stock option would be considered granted under GAAP and applicable law. No stock option granted under the Company’s stock option
plan has been backdated. The Company has not knowingly granted, and there is no and has been no Company policy or practice to knowingly
grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release or other public announcement
of material information regarding the Company or its Subsidiaries or their financial results or prospects.
(nn) Cybersecurity.
(i)(x) There has been no security breach or other compromise of or relating to any of the Company’s or any Subsidiary’s information
technology and computer systems, networks, hardware, software, data (including the data of its respective customers, employees, suppliers,
vendors and any third party data maintained by or on behalf of it), equipment or technology (collectively, “IT Systems and Data”)
and (y) the Company and the Subsidiaries have not been notified of, and has no knowledge of any event or condition that would reasonably
be expected to result in, any security breach or other compromise to its IT Systems and Data; (ii) the Company and the Subsidiaries are
presently in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator
or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems
and Data and to the protection of such IT Systems and Data from unauthorized use, access, misappropriation or modification, except as
would not, individually or in the aggregate, have a Material Adverse Effect; (iii) the Company and the Subsidiaries have implemented
and maintained commercially reasonable safeguards to maintain and protect its material confidential information and the integrity, continuous
operation, redundancy and security of all IT Systems and Data; and (iv) the Company and the Subsidiaries have implemented backup and disaster
recovery technology consistent with industry standards and practices.
(oo) Office
of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company's knowledge, any director, officer, agent, employee
or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”).
(pp) U.S. Real Property
Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the meaning of Section
897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s request.
(qq) Bank Holding Company
Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956, as amended
(the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”).
Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent (5%) or more of the
outstanding shares of any class of voting securities or twenty-five percent or more of the total equity of a bank or any entity that is
subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries or Affiliates exercises
a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal
Reserve.
(rr) Money Laundering.
The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping
and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes
and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no Action or Proceeding
by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect
to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.
(ss) No Disqualification
Events. With respect to the Securities to be offered and sold hereunder in reliance on Rule 506 under the Securities Act, none
of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company participating
in the offering hereunder, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated
on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company
in any capacity at the time of sale (each, an “Issuer Covered Person” and, together, “Issuer Covered Persons”)
is subject to any of the "Bad Actor" disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a
“Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has
exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company has complied,
to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the Purchasers a copy of any disclosures
provided thereunder.
(tt) Other Covered Persons.
Other than the Placement Agent, the Company is not aware of any person (other than any Issuer Covered Person) that has been or will be
paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of any Securities.
(uu) Notice of Disqualification
Events. The Company will notify the Purchasers and the Placement Agent in writing, prior to the Closing Date of (i) any Disqualification
Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a Disqualification Event relating
to any Issuer Covered Person.
3.2 Representations
and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as of the
date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case they shall be accurate
as of such date):
(a) Organization;
Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company
or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise
to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by such
Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate, partnership,
limited liability company or similar action, as applicable, on the part of such Purchaser. Each Transaction Document to which it is a
party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute
the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except (i) as limited
by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable
law.
(b) Own
Account. Such Purchaser understands that the Securities are “restricted securities” and have not been registered under
the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account and not with
a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable state
securities law, has no present intention of distributing any of such Securities in violation of the Securities Act or any applicable state
securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution
of such Securities in violation of the Securities Act or any applicable state securities law (this representation and warranty not limiting
such Purchaser’s right to sell the Securities pursuant to the Registration Statement or otherwise in compliance with applicable
federal and state securities laws). Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business.
(c) Purchaser
Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each date on which
it exercises any Warrants, it will be an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), (a)(8),
(a)(9), (a)(12), or (a)(13) under the Securities Act.
(d) Experience
of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience
in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities,
and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk of an investment in the
Securities and, at the present time, is able to afford a complete loss of such investment.
(e) General
Solicitation. Such Purchaser is not, to such Purchaser’s knowledge, purchasing the Securities as a result of any advertisement,
article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over
television or radio or presented at any seminar or, to the knowledge of such Purchaser, any other general solicitation or general advertisement.
(f) Access
to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including all exhibits
and schedules thereto) and the SEC Reports and has been afforded (i) the opportunity to ask such questions as it has deemed necessary
of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities
and the merits and risks of investing in the Securities; (ii) access to information about the Company and its financial condition, results
of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity
to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary
to make an informed investment decision with respect to the investment. Such Purchaser acknowledges and agrees that neither the
Placement Agent nor any Affiliate of the Placement Agent has provided such Purchaser with any information or advice with respect to the
Securities nor is such information or advice necessary or desired. Neither the Placement Agent nor any Affiliate has made or makes
any representation as to the Company or the quality of the Securities and the Placement Agent and any Affiliate may have acquired non-public
information with respect to the Company which such Purchaser agrees need not be provided to it. In connection with the issuance
of the Securities to such Purchaser, neither the Placement Agent nor any of its Affiliates has acted as a financial advisor or fiduciary
to such Purchaser.
(g) Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has not, nor has
any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any purchases or
sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Purchaser first
received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms
of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding the foregoing, in the
case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s
assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions
of such Purchaser’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by
the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement. Other than to other Persons
party to this Agreement or to such Purchaser’s representatives, including, without limitation, its officers, directors, partners,
legal and other advisors, employees, agents and Affiliates, such Purchaser has maintained the confidentiality of all disclosures made
to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing, for
the avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect
to locating or borrowing shares in order to effect Short Sales or similar transactions in the future.
The Company acknowledges and
agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such Purchaser’s right to rely on
the Company’s representations and warranties contained in this Agreement or any representations and warranties contained in any
other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation
of the transactions contemplated hereby. Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute
a representation or warranty, or preclude any actions, with respect to locating or borrowing shares in order to effect Short Sales or
similar transactions in the future.
ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
4.1 Transfer
Restrictions.
(a) The
Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities
other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Purchaser or in connection
with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion of
counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities
Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and the Registration
Rights Agreement and shall have the rights and obligations of a Purchaser under this Agreement and the Registration Rights Agreement.
(b) The
Purchasers agree to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Securities in the following
form:
THIS SECURITY HAS NOT BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT
IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.
The Company acknowledges and
agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or grant
a security interest in some or all of the Securities to a financial institution that is an “accredited investor” as defined
in Rule 501(a) under the Securities Act and, if required under the terms of such arrangement, such Purchaser may transfer pledged or secured
Securities to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company and no legal
opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice shall
be required of such pledge. At the appropriate Purchaser’s expense, the Company will execute and deliver such reasonable documentation
as a pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the Securities, including,
if the Securities are subject to registration pursuant to the Registration Rights Agreement, the preparation and filing of any required
prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable provision of the Securities Act to appropriately
amend the list of Selling Stockholders (as defined in the Registration Rights Agreement) thereunder.
(c) Certificates
evidencing the Shares and Warrant Shares shall not contain any legend (including the legend set forth in Section 4.1(b) hereof), (i) while
a registration statement (including the Registration Statement) covering the resale of such security is effective under the Securities
Act, (ii) following any sale of such Shares or Warrant Shares pursuant to Rule 144 (assuming cashless exercise of the Warrants), (iii)
if such Shares or Warrant Shares are eligible for sale under Rule 144 (assuming cashless exercise of the Warrants), without the requirement
for the Company to be in compliance with the current public information required under Rule 144 as to such Shares and Warrant Shares and
without volume or manner-of-sale restrictions, or (iv) if such legend is not required under applicable requirements of the Securities
Act (including judicial interpretations and pronouncements issued by the staff of the Commission). The Company shall cause its counsel
to issue a legal opinion to the Transfer Agent or the Purchaser promptly after the Effective Date if required by the Transfer Agent to
effect the removal of the legend hereunder, or if requested by a Purchaser, respectively. If all or any portion of a Warrant is exercised
at a time when there is an effective registration statement to cover the resale of the Warrant Shares, or if such Shares or Warrant Shares
may be sold under Rule 144 and the Company is then in compliance with the current public information required under Rule 144 (assuming
cashless exercise of the Warrants), or if the Shares or Warrant Shares may be sold under Rule 144 without the requirement for the Company
to be in compliance with the current public information required under Rule 144 as to such Shares or Warrant Shares or if such legend
is not otherwise required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued
by the staff of the Commission) then such Warrant Shares shall be issued free of all legends. The Company agrees that following the Effective
Date or at such time as such legend is no longer required under this Section 4.1(c), it will, no later than the earlier of (i) two (2)
Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined below) following the delivery by
a Purchaser to the Company or the Transfer Agent of a certificate representing Shares or Warrant Shares, as the case may be, issued with
a restrictive legend (such date, the “Legend Removal Date”), deliver or cause to be delivered to such Purchaser a certificate
representing such shares that is free from all restrictive and other legends. The Company may not make any notation on its records or
give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section 4. Certificates for Securities
subject to legend removal hereunder shall be transmitted by the Transfer Agent to the Purchaser by crediting the account of the Purchaser’s
prime broker with the Depository Trust Company System as directed by such Purchaser. As used herein, “Standard Settlement Period”
means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect
to the Common Stock as in effect on the date of delivery of a certificate representing Shares or Warrant Shares, as the case may be, issued
with a restrictive legend.
(d) In
addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, (i) as partial liquidated
damages and not as a penalty, for each $1,000 of Shares or Warrant Shares (based on the VWAP of the Common Stock on the date such Securities
are submitted to the Transfer Agent) delivered for removal of the restrictive legend and subject to Section 4.1(c), $10 per Trading Day
for each Trading Day after the Legend Removal Date until such certificate is delivered without a legend and (ii) if the Company fails
to (a) issue and deliver (or cause to be delivered) to a Purchaser by the Legend Removal Date a certificate representing the Securities
so delivered to the Company by such Purchaser that is free from all restrictive and other legends and (b) if after the Legend Removal
Date such Purchaser purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale
by such Purchaser of all or any portion of the number of shares of Common Stock, or a sale of a number of shares of Common Stock equal
to all or any portion of the number of shares of Common Stock that such Purchaser anticipated receiving from the Company without any restrictive
legend, then, an amount equal to the excess of such Purchaser’s total purchase price (including brokerage commissions and other
out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including brokerage commissions and other out-of-pocket expenses,
if any) (the “Buy-In Price”) over the product of (A) such number of Shares
or Warrant Shares that the Company was required to deliver to such Purchaser by the Legend Removal Date multiplied by (B) the lowest closing
sale price of the Common Stock on any Trading Day during the period commencing on the date of the delivery by such Purchaser to the Company
of the applicable Shares or Warrant Shares (as the case may be) and ending on the date of such delivery and payment under this clause
(ii).
(e) Each
Purchaser, severally and not jointly with the other Purchasers, agrees with the Company that such Purchaser will sell any Securities pursuant
to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption
therefrom, and that if Securities are sold pursuant to a Registration Statement, they will be sold in compliance with the plan of distribution
set forth therein, and acknowledges that the removal of the restrictive legend from certificates representing Securities as set forth
in this Section 4.1 is predicated upon the Company’s reliance upon this understanding.
4.2 Furnishing
of Information; Public Information.
(a) Until
the earlier of the time that no Purchaser owns Securities, the Company covenants to maintain the registration of the Common Stock under
Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof and file within the applicable
grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is
not then subject to the reporting requirements of the Exchange Act.
(b) At
any time during the period commencing from the six (6) month anniversary of the date hereof and ending at such time that all of the Securities
may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without restriction or limitation
pursuant to Rule 144, if the Company (i) shall fail for any reason to satisfy the current public information requirement under Rule 144(c)
or (ii) has ever been an issuer described in Rule 144(i)(1)(i) or becomes an issuer in the future, and the Company shall fail to satisfy
any condition set forth in Rule 144(i)(2) (a “Public Information Failure”) then, in addition to such Purchaser’s
other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated damages and not as a penalty, by reason
of any such delay in or reduction of its ability to sell the Securities, an amount in cash equal to one percent (1.0%) of the aggregate
Subscription Amount of such Purchaser’s Securities on the day of a Public Information Failure and on every thirtieth (30th)
day (pro rated for periods totaling less than thirty days) thereafter until the earlier of (a) the date such Public Information Failure
is cured and (b) such time that such public information is no longer required for the Purchasers to transfer the Shares and Warrant
Shares pursuant to Rule 144. The payments to which a Purchaser shall be entitled pursuant to this Section 4.2(b) are referred to
herein as “Public Information Failure Payments.” Public Information Failure Payments shall be paid on the earlier
of (i) the last day of the calendar month during which such Public Information Failure Payments are incurred and (ii) the third (3rd)
Business Day after the event or failure giving rise to the Public Information Failure Payments is cured. In the event the Company
fails to make Public Information Failure Payments in a timely manner, such Public Information Failure Payments shall bear interest at
the rate of 1.0% per month (prorated for partial months) until paid in full. Nothing herein shall limit such Purchaser’s right to
pursue actual damages for the Public Information Failure, and such Purchaser shall have the right to pursue all remedies available to
it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.
4.3 Integration.
The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section
2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration
under the Securities Act of the sale of the Securities or that would be integrated with the offer or sale of the Securities for purposes
of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other
transaction unless shareholder approval is obtained before the closing of such subsequent transaction.
4.4 Securities
Laws Disclosure; Publicity. The Company shall (a) by the Disclosure Time, issue a press release disclosing the material terms of the
transactions contemplated hereby, and (b) file a Current Report on Form 8-K, including the Transaction Documents as exhibits thereto,
with the Commission within the time required by the Exchange Act. From and after the issuance of such press release, the Company represents
to the Purchasers that it shall have publicly disclosed all material, non-public information delivered to any of the Purchasers by the
Company or any of its Subsidiaries, or any of their respective officers, directors, employees, Affiliates or agents, including, without
limitation, the Placement Agent, in connection with the transactions contemplated by the Transaction Documents. In addition, effective
upon the issuance of such press release, the Company acknowledges and agrees that any and all confidentiality or similar obligations under
any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, agents,
employees, Affiliates or agents, including, without limitation, the Placement Agent, on the one hand, and any of the Purchasers or any
of their Affiliates on the other hand, shall terminate and be of no further force or effect. The Company understands and confirms that
each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company. The Company and each
Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and
neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public statement without the prior
consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect
to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required
by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication.
Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser
in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except
(a) as required by federal securities law in connection with (i) any registration statement contemplated by the Registration Rights Agreement
and (ii) the filing of final Transaction Documents with the Commission and (b) to the extent such disclosure is required by law or Trading
Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under this clause
(b) and reasonably cooperate with such Purchaser regarding such disclosure.
4.5 Shareholder
Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any Purchaser
is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution
under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that any Purchaser
could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents
or under any other agreement between the Company and the Purchasers.
4.6 Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents,
which shall be disclosed pursuant to Section 4.4, the Company covenants and agrees that neither it, nor any other Person acting on its
behalf will provide any Purchaser or its agents or counsel with any information that constitutes, or the Company reasonably believes constitutes,
material non-public information, unless prior thereto such Purchaser shall have consented in writing to the receipt of such information
and agreed in writing with the Company to keep such information confidential. The Company understands and confirms that each Purchaser
shall be relying on the foregoing covenant in effecting transactions in securities of the Company. To the extent that the Company, any
of its Subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates delivers any material, non-public
information to a Purchaser without such Purchaser’s consent, the Company hereby covenants and agrees that such Purchaser shall not
have any duty of confidentiality to the Company, any of its Subsidiaries, or any of their respective officers, directors, employees, Affiliates
or agents, including, without limitation, the Placement Agent, or a duty to the Company, any of its Subsidiaries or any of their respective
officers, directors, employees, Affiliates or agents, including, without limitation, the Placement Agent, not to trade on the basis of,
such material, non-public information, provided that the Purchaser shall remain subject to applicable law. To the extent that any notice
provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding the Company or any
Subsidiaries, the Company shall simultaneously with the delivery of such notice file such notice with the Commission pursuant to a Current
Report on Form 8-K. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions
in securities of the Company.
4.7 Use
of Proceeds. Except as set forth on Schedule 4.7 attached hereto, the Company shall use the net proceeds from the sale of the
Securities hereunder for working capital purposes and shall not use such proceeds: (a) for the satisfaction of any portion of the Company’s
debt (other than payment of trade payables in the ordinary course of the Company’s business and prior practices), (b) for the redemption
of any Common Stock or Common Stock Equivalents, (c) for the settlement of any outstanding litigation or (d) in violation of FCPA or OFAC
regulations.
4.8 Indemnification
of Purchasers. Subject to the provisions of this Section 4.8, the Company will indemnify and hold each Purchaser and its directors,
officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person
holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners
or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such
title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any and all losses, liabilities,
obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and
reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of or relating
to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other
Transaction Documents or (b) any action instituted against the Purchaser Parties in any capacity, or any of them or their respective Affiliates,
by any stockholder of the Company who is not an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated
by the Transaction Documents (unless such action is solely based upon a material breach of such Purchaser Party’s representations,
warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser Party may have with any such
stockholder or any violations by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which
is finally judicially determined to constitute fraud, gross negligence or willful misconduct. If any action shall be brought against any
Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the
Company in writing, and, the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable
to the Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i)
the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period
of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel a material
conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the Company
shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will not be liable to
any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the Company’s prior written
consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage
or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements
made by such Purchaser Party in this Agreement or in the other Transaction Documents. The indemnification required by this Section 4.8
shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received
or are incurred. The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any Purchaser
Party against the Company or others and any liabilities the Company may be subject to pursuant to law.
4.9 Reservation
of Common Stock. As of the Reverse Stock Split Date, the Company has reserved and the Company shall continue to reserve and keep available
at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue
Shares pursuant to this Agreement and Warrant Shares pursuant to any exercise of the Warrants.
4.10 Listing
of Common Stock. The Company hereby agrees to use best efforts to maintain the listing or quotation of the Common Stock on the Trading
Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list or quote all of the Shares
and Warrant Shares on such Trading Market and promptly secure the listing of all of the Shares and Warrant Shares on such Trading Market.
The Company further agrees, if the Company applies to have the Common Stock traded on any other Trading Market, it will then include in
such application all of the Shares and Warrant Shares, and will take such other action as is necessary to cause all of the Shares and
Warrant Shares to be listed or quoted on such other Trading Market as promptly as possible. The Company will then take all action reasonably
necessary to continue the listing and trading of its Common Stock on a Trading Market and will comply in all respects with the Company’s
reporting, filing and other obligations under the bylaws or rules of the Trading Market. The Company agrees to maintain the eligibility
of the Common Stock for electronic transfer through the Depository Trust Company or another established clearing corporation, including,
without limitation, by timely payment of fees to the Depository Trust Company or such other established clearing corporation in connection
with such electronic transfer. In addition, the Company shall hold a special meeting of shareholders (which may also be at the annual
meeting of shareholders) at the earliest practical date after the date hereof, and in any event within 75 days of the date hereof (unless
the Staff of the Commission reviews and comments on the Company’s proxy statement, in which case such 75 day period will be increased
to 120 days), 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. The Company shall use its reasonable best efforts to obtain such Shareholder Approval. If the Company does not obtain Shareholder
Approval at the first meeting, the Company shall call a meeting every four months thereafter to seek Shareholder Approval until the earlier
of the date Shareholder Approval is obtained or the Warrants are no longer outstanding.
4.11 Restrictions
on Conversion and Voting of Shares.
(a) From
the date hereof up to and including the earlier of (i) March 31, 2023 and (ii) the Reverse Stock Split Date, each Purchaser, severally
and not jointly with the other Purchasers, covenants that such Purchaser will not transfer, offer, sell, contract to sell, hypothecate,
pledge or otherwise dispose of (or enter into any transaction which is designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise)) any Shares.
(b) Each
Purchaser covenants to vote, and shall cause its Affiliates to vote, all shares of Common Stock owned by such Purchaser or its Affiliates,
as applicable, in respect of any resolution presented to the shareholders of the Company for the purpose of obtaining the Stockholder
Approval to the extent permitted by the rules and regulations of the Nasdaq Stock Market.
4.12 Subsequent
Equity Sales.
(a) From
the date hereof until 30 days after the Effective Date, neither the Company nor any Subsidiary shall (i) issue, enter into any agreement
to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents or (ii) file any registration
statement or any amendment or supplement thereto, in each case other than as contemplated pursuant to the Registration Rights Agreement
(b) From
the date hereof until the one-year anniversary of the date hereof, the Company shall be prohibited from effecting or entering into an
agreement to effect any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents (or a combination
of units thereof) involving a Variable Rate Transaction. “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, or effects a transaction under, any agreement,
including, but not limited to, an equity line of credit or an “at-the-market offering”, whereby the Company may issue securities
at a future determined price, regardless of whether shares pursuant to such agreement have actually been issued and regardless of whether
such agreement is subsequently canceled. Any Purchaser 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.
(c) Notwithstanding
the foregoing, this Section 4.12 shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction shall be an
Exempt Issuance.
4.13 Equal
Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered or paid to any
Person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless the same consideration is
also offered to all of the parties to the Transaction Documents. For clarification purposes, this provision constitutes a separate right
granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers
as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition
or voting of Securities or otherwise.
4.14 Certain
Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither it,
nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales,
of any of the Company’s securities during the period commencing with the execution of this Agreement and ending at such time that
the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section
4.4. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated
by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described in Section 4.4, such Purchaser
will maintain the confidentiality of the existence and terms of this transaction and the information included in the Disclosure Schedules
(other than as disclosed to its legal and other representatives). Notwithstanding the foregoing and notwithstanding anything contained
in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation, warranty
or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that the transactions
contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4, (ii) no
Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company in accordance with applicable
securities laws from and after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to
the initial press release as described in Section 4.4 and (iii) no Purchaser shall have any duty of confidentiality or duty not to trade
in the securities of the Company to the Company, any of its Subsidiaries, or any of their respective officers, directors, employees, Affiliates
or agent, including, without limitation, the Placement Agent after the issuance of the initial press release as described in Section 4.4.
Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers
manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions
made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only apply
with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered
by this Agreement.
4.15 Form
D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Securities as required under Regulation D and
to provide a copy thereof, promptly upon request of any Purchaser. The Company shall take such action as the Company shall reasonably
determine is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchasers at the Closing under
applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actions promptly
upon request of any Purchaser.
4.16 Acknowledgment
of Dilution. The Company acknowledges that the issuance of the Securities may result in dilution of the outstanding shares of Common
Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges that its obligations under
the Transaction Documents, including, without limitation, its obligation to issue the Shares and Warrant Shares pursuant to the Transaction
Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of the
effect of any such dilution or any claim the Company may have against any Purchaser and regardless of the dilutive effect that such issuance
may have on the ownership of the other stockholders of the Company.
4.17 Exercise
Procedures. The form of Notice of Exercise included in the Warrants set forth the totality of the procedures required of the Purchasers
in order to exercise the Warrants. No additional legal opinion, other information or instructions shall be required of the Purchasers
to exercise their Warrants. Without limiting the preceding sentences, no ink-original Notice of Exercise shall be required, nor shall
any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required in order to exercise the
Warrants. The Company shall honor exercises of the Warrants and shall deliver Warrant Shares in accordance with the terms, conditions
and time periods set forth in the Transaction Documents.
4.18 Conversion
of Debentures; Conversion Fee. Each of the Purchasers is also the holder of a 12% Unsecured Subordinated Convertible Debenture (each
a “Debenture” and, collectively, the “Debentures”) that is convertible into shares of Common Stock
(the “Conversion Shares”) at a conversion price of $1.00 (the “Debenture Conversion Price”). On
or about the date hereof, each Purchaser shall deliver to the Company a conversion notice in accordance with the Debenture in order to
convert all of the Debentures into Common Stock at the Debenture Conversion Price and in accordance with the terms of the Debentures such
that no Debentures will thereafter remain outstanding. The parties acknowledge and agree that in
accordance with Rule 144, the holding period of the Conversion Shares tack back to the holding period of the Debentures and the Company
agrees not to take any position contrary to this proviso and that the Conversion Shares may be sold pursuant to Rule 144 without restriction.
On the Closing Date (and in any event within 2 trading days of the date hereof), the Company shall deliver the Conversion Shares without
legend to the account specified by each Purchaser on the Purchaser’s signature page hereto via The Depository Trust Company Deposit
or Withdrawal at Custodian system. In consideration for, and as inducement for, the conversion of the Debentures as aforesaid, on the
Closing Date the Company shall issue to each Purchaser an additional Prefunded Warrant (the “Debenture Prefunded Warrant”)
to purchase up to a number of shares of Common Stock equal to (i) the principal amount plus accrued but unpaid interest of such Purchaser
listed on the signature page hereto under the caption “Debenture” divided by $0.35 less (ii) shares issued to such Purchaser
pursuant to the aforesaid conversion (such underlying shares, the “Conversion Fee Shares”). Within 3 business days
of the Closing Date, such Purchaser shall surrender the Debentures to the Company per the written instructions of the Company. For the
avoidance of doubt, the Purchaser agrees that the issuance of the Conversion Fee Shares, as adjusted, shall not be considered in calculating
the adjusted exercise price or number of shares issuable under any outstanding warrants of the Company held by the Purchaser resulting
from the offering contemplated by this Agreement.
4.19 Amendment and Restatement
of Outstanding Warrants. The Company and the Purchaser agree and acknowledge that as the result of the sale of Securities hereunder
at the Per Share Price, the exercise price and number of shares issuable pursuant to those certain warrants of the Company held by the
Purchaser (the “Warrants”) shall automatically be adjusted in accordance with Section 3(b) thereof. In order to reflect
such automatic adjustment and in order to amend the antidilution provision contained in Section 3(b) so that the exercise price of the
Warrants, but not the number of underlying shares, will be adjusted under Section 3(b) in connection with any future dilutive issuances,
the Company and the Purchaser agree to enter into an Amended and Restated Warrant in the form of Exhibit D to this Agreement (the
“Restated Warrant”). The parties acknowledge and agree that in accordance with Rule 144, the holding period of the
Restated Warrants is tacked on to the holding period of the Warrants and the Company agrees not to take any position contrary to this
proviso and that the Restated Warrant Shares, assuming cashless exercise, may be sold pursuant to Rule 144 without restriction as of
the date hereof.
4.20 No
Other Agreements. The Company hereby represents and warrants as of the date hereof and covenants and agrees from and after the date
hereof until ninety (90) days after the Effective Date, that none of the terms offered to any Purchaser with respect to Sections 4.18
and 4.19 (or any amendment, modification or waiver thereof) is or will be more favorable to any other Purchaser unless such terms are
concurrently offered to the Purchaser. If, and whenever on or after the date hereof until the date that is ninety (90) days after the
Effective Date, the Company enters into another agreement with any Purchaser relating to the Debentures or Warrants, then (i) the Company
shall provide notice thereof to each Purchaser promptly following the occurrence thereof and (ii) the terms and conditions of Sections
4.18 and 4.19 shall be, without any further action by the Purchaser or the Company, automatically amended and modified in an economically
and legally equivalent manner such that each Purchaser shall receive the benefit of the more favorable terms and/or conditions (as the
case may be) set forth in such other agreement, provided that upon written notice to the Company at any time a Purchaser may elect not
to accept the benefit of any such amended or modified term or condition, in which event the term or condition contained in this letter
agreement shall apply to such Purchaser as it was in effect immediately prior to such amendment or modification as if such amendment
or modification never occurred with respect to such Purchaser. The provisions of this paragraph shall apply similarly and equally to
any other agreements.
ARTICLE V.
MISCELLANEOUS
5.1 Termination.
This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect whatsoever
on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing has not been
consummated on or before the fifth (5th) Trading Day following the date hereof; provided, however, that no such
termination will affect the right of any party to sue for any breach by any other party (or parties).
5.2 Fees
and Expenses. At the Closing, the Company has agreed to reimburse the lead Purchaser the non-accountable sum of $25,000 for its legal
fees and expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses
of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees (including, without
limitation, any fees required for same-day processing of any instruction letter delivered by the Company and any exercise notice delivered
by a Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers.
5.3 Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.
5.4 Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication is delivered via facsimile
at the facsimile number or email attachment at the email address as set forth on the signature pages attached hereto at or prior to 5:30
p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the time of transmission, if such notice or communication
is delivered via email attachment at the email address as set forth on the signature pages attached hereto on a day that is not a Trading
Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading Day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice
is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto.
5.5 Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in
the case of an amendment, by the Company and Purchasers which purchased at least 50.1% in interest of the Shares based on the initial
Subscription Amounts hereunder (or, prior to the Closing, the Company and each Purchaser) or, in the case of a waiver, by the party against
whom enforcement of any such waived provision is sought, provided that if any amendment, modification or waiver disproportionately and
adversely impacts a Purchaser (or group of Purchasers), the consent of such disproportionately impacted Purchaser (or group of Purchasers)
shall also be required. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed
to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement
hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.
Any proposed amendment or waiver that disproportionately, materially and adversely affects the rights and obligations of any Purchaser
relative to the comparable rights and obligations of the other Purchasers shall require the prior written consent of such adversely affected
Purchaser. Any amendment effected in accordance with this Section 5.5 shall be binding upon each Purchaser and holder of Securities and
the Company.
5.6 Headings.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any
of the provisions hereof.
5.7 Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser
(other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns
or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities,
by the provisions of the Transaction Documents that apply to the “Purchasers.”
5.8 No
Third-Party Beneficiaries. The Placement Agent shall be the third-party beneficiary of the representations and warranties of the
Company in Section 3.1 and the representations and warranties of the Purchasers in Section 3.2. This Agreement is intended for the benefit
of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof
be enforced by, any other Person, except as otherwise set forth in Section 4.8 and this Section 5.8.
5.9 Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed
by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts
of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement and defense of the transactions
contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates,
directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts
sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts
sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents),
and hereby irrevocably waives, and agrees not to assert in any Action or Proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such Action or Proceeding is improper or is an inconvenient venue for such Proceeding. Each party
hereby irrevocably waives personal service of process and consents to process being served in any such Action or Proceeding by mailing
a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect
for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.
If any party shall commence an Action or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the
obligations of the Company under Section 4.8, the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing
party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution
of such Action or Proceeding.
5.10 Survival.
The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.
5.11 Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that
the parties need not sign the same counterpart. In the event that any signature is delivered by e-mail delivery of a “.pdf”
format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature
is executed) with the same force and effect as if such “.pdf” signature page were an original thereof.
5.12 Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force
and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts
to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.
5.13 Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any
of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document
and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind
or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in
whole or in part without prejudice to its future actions and rights; provided, however, that, in the case of a rescission
of an exercise of a Warrant, the applicable Purchaser shall be required to return any shares of Common Stock subject to any such rescinded
exercise notice concurrently with the return to such Purchaser of the aggregate exercise price paid to the Company for such shares and
the restoration of such Purchaser’s right to acquire such shares pursuant to such Purchaser’s Warrant (including, issuance
of a replacement warrant certificate evidencing such restored right).
5.14 Replacement
of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall
issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of
and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company
of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable
third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.
5.15 Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers
and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may
not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and
hereby agree to waive and not to assert in any Action for specific performance of any such obligation the defense that a remedy at law
would be adequate.
5.16 Payment
Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or a
Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or
any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or
are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including,
without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such
restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such enforcement or setoff had not occurred.
5.17 Independent
Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several
and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or non-performance
of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any other Transaction Document,
and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a partnership, an association,
a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Purchaser shall be entitled to independently
protect and enforce its rights including, without limitation, the rights arising out of this Agreement or out of the other Transaction
Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any Proceeding for such purpose.
Each Purchaser has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents. For
reasons of administrative convenience only, each Purchaser and its respective counsel have chosen to communicate with the Company through
EGS. EGS does not represent any of the Purchasers and only represents the lead Purchaser. The Company has elected to provide all Purchasers
with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so
by any of the Purchasers. It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction
Document is between the Company and a Purchaser, solely, and not between the Company and the Purchasers collectively and not between
and among the Purchasers.
5.18 Liquidated
Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction
Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts
have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts
are due and payable shall have been canceled.
5.19 Saturdays, Sundays,
Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein
shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
5.20 Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents
and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to
share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.
5.21 WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES
EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY
AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
(Signature Pages Follow)
IN WITNESS WHEREOF, the
parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the
date first indicated above.
Smart for Life, Inc. |
|
Address for Notice: |
|
|
|
By: |
/s/ Darren C. Minton |
|
Alfonso J. Cervantes, Jr. |
|
Name: |
Darren C. Minton |
|
Executive Chairman |
|
Title: |
Chief Executive Officer |
|
990 Biscayne Blvd., Suite 503 |
|
|
|
|
Miami, Florida 33132 |
With a copy to (which shall not constitute notice): |
Louis A. Bevilacqua
Managing Member
Bevilacqua PLLC
1050 Connecticut Ave., NW
Suite 500
Washington, DC 20036 |
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
[PURCHASER SIGNATURE PAGES TO SMFL
SECURITIES PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the undersigned
have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated
above.
Name of Purchaser: ANSON EAST MATER FUND LP
Signature of Authorized Signatory of Purchaser:
/s/ Amin Nathoo
Name of Authorized Signatory: Amin Nathoo
Title of Authorized Signatory: Director, Anson
Advisors Inc.
Email Address of Authorized Signatory:____________________________________________________
Address for Notice to Purchaser:
Address for Delivery of Physical Securities to Purchaser, if applicable
(if not same as address for notice):
DWAC Instructions: ________________________________________________________
Subscription Amount: $62,500
Shares: 106,908
Prefunded Warrant Shares: 71,664
Principal and Interest of Debenture: $158,906
Conversion Fee Shares (share underlying Debenture Prefunded Warrant):
295,111
EIN Number:__________________________
[SIGNATURE PAGES CONTINUE]
[PURCHASER SIGNATURE PAGES TO SMFL
SECURITIES PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the undersigned
have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated
above.
Name of Purchaser: ANSON INVESTMENTS MASTER FUND
LP
Signature of Authorized Signatory of Purchaser:
/s/ Amin Nathoo
Name of Authorized Signatory: Amin Nathoo
Title of Authorized Signatory: Director, Anson
Advisors Inc.
Email Address of Authorized Signatory:_________________________________________
Address for Notice to Purchaser:
Address for Delivery of Physical Securities to Purchaser, if applicable
(if not same as address for notice):
DWAC Instructions:________________________________________________________
Subscription Amount: $187,500
Shares: 320,724
Prefunded Warrant Shares: 214,991
Principal and Interest of Debenture: $476,719
Conversion Fee Shares (share underlying Debenture Prefunded Warrant):
885,335
EIN Number:__________________________
[SIGNATURE PAGES CONTINUE]
[PURCHASER SIGNATURE PAGES TO SMFL
SECURITIES PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the undersigned
have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated
above.
Name of Purchaser: District 2 Capital Fund LP
Signature of Authorized Signatory of Purchaser:
/s/ Eric Schlanger
Name of Authorized Signatory: Eric Schlanger
Title of Authorized Signatory: Partner
Email Address of Authorized Signatory:_________________________________________
Address for Notice to Purchaser:
Address for Delivery of Physical Securities to Purchaser, if applicable
(if not same as address for notice):
DWAC Instructions:________________________________________________________
Subscription Amount: $250,000
Shares: 427,632
Prefunded Warrant Shares: 286,654
Principal and Interest of Debenture: $635,625
Conversion Fee Shares (share underlying Debenture Prefunded Warrant):
1,180,447
EIN Number:__________________________
[SIGNATURE PAGES CONTINUE]
[PURCHASER SIGNATURE PAGES TO SMFL
SECURITIES PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the undersigned
have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated
above.
Name of Purchaser: Ionic Ventures, LLC
Signature of Authorized Signatory of Purchaser:
/s/ Brendan O’Neil
Name of Authorized Signatory: Brendan O’Neil
Title of Authorized Signatory: Authorized Signatory
Email Address of Authorized Signatory:_________________________________________
Address for Notice to Purchaser:
Address for Delivery of Physical Securities to Purchaser, if applicable
(if not same as address for notice):
DWAC Instructions:________________________________________________________
Subscription Amount: $250,000
Shares: 427,632
Prefunded Warrant Shares: 286,654
Principal and Interest of Debenture: $635,625
Conversion Fee Shares (share underlying Debenture Prefunded Warrant):
1,180,447
EIN Number:__________________________
[SIGNATURE PAGES CONTINUE]
[PURCHASER SIGNATURE PAGES TO SMFL
SECURITIES PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the undersigned
have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated
above.
Name of Purchaser: Sabby Volatility Warrant Master
Fund, Ltd.
Signature of Authorized Signatory of Purchaser:
/s/ Robert Grundstein
Name of Authorized Signatory: Robert Grundstein
Title of Authorized Signatory: COO of Purchaser’s
Investment Manager
Email Address of Authorized Signatory:_________________________________________
Address for Notice to Purchaser:
Address for Delivery of Physical Securities to Purchaser, if applicable
(if not same as address for notice):
DWAC Instructions:________________________________________________________
Subscription Amount: $250,000
Shares: 0
Prefunded Warrant Shares: 714,286
Principal and Interest of Debenture: $635,625
Conversion Fee Shares (share underlying Debenture Prefunded Warrant):
1,180,447
EIN Number:__________________________
[SIGNATURE PAGES CONTINUE]
EXHIBIT B
[Form of Warrant]
NEITHER THIS SECURITY NOR THE SECURITIES FOR
WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY
STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT
TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
[DEBENTURE] PRE-FUNDED COMMON STOCK PURCHASE
WARRANT
smart
for life, inc.
Warrant Shares: Initial Issuance Date: December 8, 2022
THIS [DEBENTURE] PRE-FUNDED
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _______________ or its 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 hereof (the “Initial Exercise Date”) until this Warrant is exercised in full
but not thereafter, to subscribe for and purchase from Smart for Life, Inc., a Delaware corporation (the “Company”),
up to __________ shares (as subject to adjustment hereunder, the “Warrant Shares”) of Common Stock. [DEBENTURE PREFUNDED
WARRANT ONLY: On each of the following (i) the Reverse Stock Split Date, (ii) the date that Shareholder Approval (as defined in Section
5) is obtained and deemed effective and (iii) the Effective Date (each, a “Reset Date”), if the lowest VWAP during
the 5 consecutive Trading Days commencing on the Reset Date (the “Market Price”) (provided if the any of the above
events is effective after close of Trading on the primary Trading Market, then commencing on the next Trading Day which period shall
be the “Adjustment Period”) is less than $0.35 (as adjusted for the Reverse Split), then at the close of trading on
the primary Trading Market on the last day of the Adjustment Period, the number of Warrant Shares issuable hereunder shall increase,
and only increase, to equal (i) the principal amount plus accrued but unpaid interest of such Holder’s Debenture set forth on the
signature page to the Purchase Agreement divided by the applicable Market Price minus (ii) the original number of Conversion Shares issued
upon Conversion of the Debenture otherwise pursuant to the terms of Section 4.18 of the Purchase Agreement (such additional Warrant Shares
issuable as the result of the reset contained in this sentence, the “Additional Warrant Shares”); provided,
however, that regardless of the actual Market Price, the Market Price for purposes of this Warrant shall not be less than $0.25
(as adjusted for the Reverse Split) (and if less, shall equal $0.25 as adjusted for the Reverse Split).] The purchase price of one share
of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
Section 1. Definitions.
Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement
(the “Purchase Agreement”), dated December 8, 2022, among the Company and the purchasers signatory thereto.
Section 2. Exercise.
a) Exercise
of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on
or after the Initial Exercise Date by delivery to the Company of a duly executed facsimile copy or PDF copy submitted by e-mail (or e-mail
attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of
(i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i)
herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in
the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise
procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall
be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding
anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder
has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall
surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise
is delivered to the Company. 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. The Holder and the Company shall maintain records showing the number of Warrant
Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business
Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of
the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available
for purchase hereunder at any given time may be less than the amount stated on the face hereof.
b) Exercise
Price. The aggregate exercise price of this Warrant, except for a nominal exercise price of $0.0001 per Warrant Share, was pre-funded
to the Company on or prior to the Initial Exercise Date and, consequently, no additional consideration (other than the nominal exercise
price of $0.0001 per Warrant Share) shall be required to be paid by the Holder to any Person to effect any exercise of this Warrant.
The Holder shall not be entitled to the return or refund of all, or any portion, of such pre-paid aggregate exercise price under any
circumstance or for any reason whatsoever. The remaining unpaid exercise price per share of Common Stock under this Warrant shall be
$0.0001, subject to adjustment hereunder (the “Exercise Price”).
c) Cashless
Exercise. This Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in
which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A),
where:
| (A) |
= | as applicable: (i) the VWAP on the Trading Day immediately
preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section
2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior
to the opening of “regular trading hours” (as defined in Rule 600(b)(68) of Regulation NMS promulgated under the federal
securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding
the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Stock on the principal Trading Market as reported by
Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice of Exercise if
such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours
thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section
2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day
and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading
hours” on such Trading Day; |
| |
| |
| (B) |
= | the Exercise
Price of this Warrant, as adjusted hereunder; and |
| |
| |
| (X) |
= | the number
of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise
were by means of a cash exercise rather than a cashless exercise. |
If Warrant Shares are issued
in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant
Shares shall take on the characteristics of the Warrants being exercised, and the holding period of the Warrant Shares being issued may
be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c).
“Bid Price”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the Trading
Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City
time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the
Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not then listed
or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on The Pink Open Market (or a similar organization
or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in
all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by
the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses
of which shall be paid by the Company.
“VWAP” means,
for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted
on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the
Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New
York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in The Pink Open Market (or
a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common
Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser
selected in good faith by the Holders of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company,
the fees and expenses of which shall be paid by the Company.
d) Mechanics
of Exercise.
i. Delivery
of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer
Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust
Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such
system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the
Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations
pursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in
the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is
entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest
of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the
aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery
to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice
of Exercise, 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 Warrant Shares, provided that payment of the aggregate
Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the
number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for
any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company
shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise
(based on the VWAP of the Common Stock on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per
Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery
Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is
a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement
Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading
Market with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise.
ii. Delivery
of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and
upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing
the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other
respects be identical with this Warrant.
iii. Rescission
Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i)
by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv. 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 Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section
2(d)(i) above pursuant to an exercise on or before the 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 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 amount obtained by multiplying (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 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 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.
v. No
Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall,
at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the
Exercise Price or round up to the next whole share.
vi. Charges,
Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and
such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however,
that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for
exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition
thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer
Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established
clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
vii. Closing
of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
e) Holder’s
Exercise Limitations. 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 2 or otherwise, to the extent that after giving effect to such issuance after exercise
as set forth on the applicable Notice of Exercise, 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 its Affiliates 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 2(e), beneficial
ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder,
it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the
extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation
to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is
exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s
determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates
and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation,
and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to
any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder. For purposes of this Section 2(e), 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 Commission, 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 a Holder, the Company shall within one Trading Day 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 immediately after giving effect to the issuance of shares of Common
Stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership
Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number
of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of
this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership
Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this
paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct
this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein
contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained
in this paragraph shall apply to a successor holder of this Warrant.
Section 3. Certain
Adjustments.
a) Stock
Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes
a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of
Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this
Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse
stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues by reclassification of shares of the
Common Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which
the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event
and of which the denominator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately
after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate
Exercise Price of this Warrant shall remain unchanged.
b) [RESERVED]
c) Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells
any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any
class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number
of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including
without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance
or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are
to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the
Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation,
then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of
Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for
the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
d) Pro
Rata Distributions. During such time as this Warrant is outstanding, 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 or options by way of a dividend, spin off, reclassification,
corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after
the issuance of this 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 on exercise hereof, including without limitation, the Beneficial Ownership
Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as
of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided,
however, that, to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding
the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in
the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion of such Distribution
shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder
exceeding the Beneficial Ownership Limitation).
e) Fundamental
Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions
effects any merger or consolidation of the Company with or into another Person, (ii) the Company (or any Subsidiary), directly or indirectly,
effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in
one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the
Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares
for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the
Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization
of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for
other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock
or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off,
merger or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of
the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or
party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business
combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall
have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence
of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this
Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation,
and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction
by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such Fundamental Transaction
(without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination
of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price
among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.
If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such
Fundamental Transaction.
f) Calculations.
All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes
of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the
number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.
g) Notice
to Holder.
i. Adjustment
to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly
deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment
to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii. Notice
to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common
Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall
authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock
of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification
of the Common Stock, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer of
all or substantially all of its assets, or any compulsory share exchange whereby the Common Stock is converted into other securities,
cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs
of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile
number or email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable
record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common
Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on
which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the
date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock
for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange;
provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the
corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains,
material, non-public information regarding the Company or any of the Subsidiaries, then, if the Company is subject to the reporting requirements
of the Exchange Act pursuant to Section 12 or Section 15(d) of Exchange Act, the Company shall simultaneously file such notice with the
Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing
on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
h) Voluntary
Adjustment By Company. Subject to the rules and regulations of the Trading Market, the Company may at any time during the term of
this Warrant, subject to the prior written consent of the Holder, 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.
Section 4. Transfer
of Warrant.
a) Transferability.
Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof and to the provisions of
Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder (including, without limitation, any registration rights)
are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent,
together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent
or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required,
such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable,
and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing
the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary,
the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full,
in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers
an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised
by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
b) New
Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company,
together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or
its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination,
the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the Initial Issuance Date and shall be identical
with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c) Warrant
Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder
of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other
purposes, absent actual notice to the contrary.
d) Transfer
Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this
Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable
state securities or blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions or current public information
requirements pursuant to Rule 144, the Company may require, as a condition of allowing such transfer, that the Holder or transferee of
this Warrant, as the case may be, comply with the provisions of Section 6.7 of the Purchase Agreement.
e) Representation
by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise
hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or
reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant
to sales registered or exempted under the Securities Act.
Section 5. Limitations
on the Number of Shares Issuable. Notwithstanding anything herein to the contrary, the Company shall not issue to any Holder any
Warrant Shares [DEBENTURE PREFUNDED WARRANT: Additional Warrant Shares] to the extent such shares after giving effect to such issuance
after exercise and when added to the number of shares of Common Stock issued and issuable upon exercise of other Warrants being simultaneously
issued under the Purchase Agreement, such Holder (together with such’s Holder’s Affiliates and such other Holders and such
other Holders’ Affiliates), would (a) beneficially own in excess of 19.9% of the number of shares of Common Stock outstanding immediately
before giving effect to such issuances (the “Maximum Aggregate Ownership Amount”) or (b) control in excess of 19.9%
of the total voting power of the Company’s securities outstanding immediately before giving effect to such issuances that are entitled
to vote on a matter being voted on by holders of the Common Stock (the “Maximum Aggregate Voting Amount”), unless
and until the Company obtains stockholder approval permitting such issuances in accordance with applicable Nasdaq Stock Market rules
(”Stockholder Approval”). For purposes of this Section 5, beneficial ownership shall be determined in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. For purposes
of this Section 5, 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 (i) the Company’s most recent Quarterly Report on Form 10-Q or Annual Report on Form 10-K, as the
case may be, filed with the Securities and Exchange Commission, (ii) a more recent public announcement by the Company, or (iii) any other
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 business days confirm orally and in writing to such Holder the number
of shares of Common Stock then outstanding. If on any attempted exercise of this Warrant, the issuance of Warrant Shares [DEBENTURE PREFUNDED
WARRANT: Additional Warrant Shares] would exceed the Maximum Aggregate Ownership Amount or the Maximum Aggregate Voting Amount, and the
Company shall not have previously obtained Stockholder Approval at the time of exercise, then the Company shall issue to the Holder requesting
exercise such number of Warrant Shares [DEBENTURE PREFUNDED WARRANT: Additional Warrant Shares] as may be issued below the Maximum Aggregate
Ownership Amount or Maximum Aggregate Voting Amount, as the case may be, and, with respect to the remainder of the aggregate number of
Warrant Shares [DEBENTURE PREFUNDED WARRANT: Additional Warrant Shares], this Warrant shall not be exercisable until and unless Stockholder
Approval has been obtained.
Section 6. Miscellaneous.
a) No
Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends
or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set
forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to
Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be required
to net cash settle an exercise of this Warrant.
b) Loss,
Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory
to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case
of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include
the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make
and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.
c) Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted
herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
d) Authorized
Shares. The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued
Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights
under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who
are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without
violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed.
The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant
will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be
duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect
of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
Except and to the extent
as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate
of incorporation or through any reorganization, transfer of assets, consolidation, merger, 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, but will at all
times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate
to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the
Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior
to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts
to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary
to enable the Company to perform its obligations under this Warrant.
Before taking any action
which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the
Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.
e) Jurisdiction.
All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance
with the provisions of the Purchase Agreement.
f) Restrictions.
The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not
utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
g) Nonwaiver
and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as
a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of
this Warrant or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which
results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs
and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the
Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
h) Notices.
Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered
in accordance with the notice provisions of the Purchase Agreement.
i) Limitation
of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase
price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the
Company.
j) Remedies.
The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any
action for specific performance that a remedy at law would be adequate.
k) Successors
and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder.
The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable
by the Holder or holder of Warrant Shares.
l) Amendment.
This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.
m) Severability.
Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the
extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
n) Headings.
The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this
Warrant.
********************
IN WITNESS WHEREOF, the
Company has caused this [Debenture] Pre-Funded Warrant to be executed by its officer thereunto duly authorized as of the date first above
indicated.
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NOTICE OF EXERCISE
To: smart for life, inc.
(1) The
undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised
in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2) Payment
shall take the form of (check applicable box):
☐ in
lawful money of the United States; or
☐ [if
permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection
2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise
procedure set forth in subsection 2(c).
(3) Please
issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
_______________________________
The Warrant Shares shall be delivered to the following DWAC Account
Number:
_______________________________
_______________________________
_______________________________
(4) Accredited Investor.
The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.
[SIGNATURE OF HOLDER]
Name of Investing Entity:_______________________________________________________________
Signature of Authorized Signatory of Investing Entity:________________________________________
Name of Authorized Signatory:__________________________________________________________
Title of Authorized Signatory: ___________________________________________________________
Date: ______________________
ASSIGNMENT FORM
(To assign the foregoing
Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and
all rights evidenced thereby are hereby assigned to
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ANNEX B
CERTIFICATE OF AMEDMENT
OF
CERTIFICATE OF INCORPORATION
OF
SMART FOR LIFE, INC.
(Pursuant to Section 242 of the
General Corporation Law of the State of Delaware)
Smart for Life, Inc. (the
“Corporation”), a corporation organized and existing under and by virtue of the General Corporation Law of the State
of Delaware, does hereby certify:
FIRST: That at a meeting
of the Board of Directors of the Corporation resolutions were duly adopted setting forth a proposed amendment of the Certificate of Incorporation
of the Corporation, declaring said amendment to be advisable and calling a meeting of the stockholders of the Corporation for consideration
thereof. The resolutions setting forth the proposed amendment is as follows:
RESOLVED, that
Section 4.2 of the Certificate of Incorporation of the Corporation be amended by adding the following paragraph at the end of Section
4.2:
“Effective
as of _________, each ___ shares of the issued and outstanding Common Stock shall be reclassified and combined into one (1) validly issued,
fully paid and non-assessable share of Common Stock (the “Reverse Split”). No fractional shares shall be issued
in connection with the Reverse Split. Any fractional share that would otherwise be issued as a result of the Reverse Split shall be rounded
up to the next whole share.”
SECOND: That thereafter,
pursuant to resolution of its Board of Directors, a meeting of the stockholders of the Corporation was duly called and held upon notice
in accordance with Section 222 of the General Corporation Law of the State of Delaware at which meeting the necessary number of shares
as required by statute were voted in favor of the amendment.
THIRD: That said amendment
was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, Smart
for Life, Inc. has caused this Certificate of Amendment to be signed this ____ day of _____________.
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ANNEX C
PLAN
OF CONVERSION
OF
SMART FOR LIFE, INC.
This Plan of Conversion (this
“Plan of Conversion”) is adopted as of January 12, 2023 to convert Smart for Life, Inc., a Delaware corporation (the
“Converting Entity”), to a Nevada corporation to be known as “Smart for Life, Inc.” (the “Converted
Entity”).
1. Converting
Entity. The Converting Entity is a corporation organized under the General Corporation Law of the State of Delaware (the “DGCL”).
2. Converted
Entity. The Converted Entity shall be a corporation organized under Chapter 78 of the Nevada Revised Statutes (the “NRS”).
The name of the Converted Entity shall be Smart for Life, Inc.
3. The
Conversion. The Converting Entity shall be converted to the Converted Entity (the “Conversion”) pursuant to Section 92A.195
of the NRS and Section 266 of the DGCL.
4. Filing
of Conversion Documents; Effective Time. As soon as practicable following the satisfaction of the conditions set forth in Section
8, if this Plan of Conversion shall not have been terminated prior thereto as provided in Section 9, the Converting Entity shall
cause (i) articles of conversion meeting the requirements of Section 92A.205 of the NRS (the “Articles of Conversion”)
to be properly executed and filed in accordance with such section and (ii) a certificate of conversion meeting the requirements of Section
266 of the DGCL (the “Certificate of Conversion”) to be properly executed and filed in accordance with such section,
and otherwise make all other filings or recordings as required by the NRS or DGCL in connection with the Conversion. The Conversion shall
become effective at the time designated in the Articles of Conversion and Certificate of Conversion as the effective time of the Conversion
(the “Effective Time”).
5. Articles
of Incorporation and Bylaws. The Articles of Incorporation, Certificate of Designation of Series A Convertible Preferred Stock and
Bylaws of the Converted Entity shall be in the forms attached hereto as Exhibits A, B and C, respectively.
6. Effect
on Capital Stock of Converting Entity. At the Effective Time, each outstanding share of the Common Stock, par value $0.0001 per share,
and Series A Convertible Preferred Stock, par value $0.0001 per share, of the Converting Entity shall, by virtue of the Conversion and
without any action on the part of the holder thereof, be converted into one (1) share of the Common Stock, par value $0.0001 per share,
and one (1) share of the Series A Convertible Preferred Stock, par value $0.0001 per share, respectively, of the Converted Entity, such
that each such holder of Common Stock and Series A Convertible Preferred Stock of the Converting Entity will hold an equivalent number
of shares of Common Stock and Series A Convertible Preferred Stock, respectively, of the Converted Entity at the Effective Time. At and
after the Effective Time, all of the outstanding certificates that immediately prior thereto represented shares of Common Stock and Series
A Convertible Preferred Stock of the Converting Entity shall be deemed for all purposes to evidence ownership of and to represent the
respective shares of Common Stock and Series A Convertible Preferred Stock, respectively, of the Converted Entity into which the shares
represented by such certificates have been converted as herein provided and shall be so registered on the books and records of the Converted
Entity or its transfer agent.
7. Effect
on Other Securities of Converting Entity. At the Effective Time of the Conversion, all outstanding and unexercised portions of each
option, warrant and security exercisable or convertible by its terms into the Common Stock of the Converting Entity (including convertible
promissory notes), whether vested or unvested, which is outstanding immediately prior to the Effective Time (each, a “Convertible
Security”), shall be deemed to constitute an option, warrant or convertible security, as the case may be, to acquire the same
number of shares of the Common Stock of the Converted Entity as the holder of such Convertible Security would have been entitled to receive
had such holder exercised or converted such Convertible Security in full immediately prior to the Effective Time (not taking into account
whether such Convertible Security was in fact exercisable or convertible at such time), at the same exercise/conversion price per share,
and shall, to the extent permitted by law and otherwise reasonably practicable, have the same term, exercisability, vesting schedule,
status and all other material terms and conditions.
8. Conditions
Precedent. Completion of the Conversion is subject to the following conditions:
(a) This
Plan of Conversion shall have been adopted and approved by the affirmative vote of holders of at least a majority of the issued and outstanding
shares of the Common Stock of the Converting Entity at the record date for such action as set by the Board of Directors of the Converting
Entity.
(b) The
Converting entity shall not be subject to any decree, order or injunction of any court of competent jurisdiction that prohibits the consummation
of the Conversion.
(c) Other
than the filing of the Articles of Conversion and the Certificate of Conversion provided for under Section 4, all material consents and
authorizations of, filings or registrations with, and notices to, any governmental or regulatory authority required to consummate the
Conversion shall have been obtained or made.
9. Termination;
Abandonment. At any time before the Effective Time, this Plan of Conversion may be terminated and the Conversion may be abandoned,
or the consummation of the Conversion may be deferred for a reasonable period of time if, in the opinion of the Board of Directors of
the Converting Entity, such action would be in the best interests of the Converting Entity. In the event of termination of this Plan
of Conversion, this Plan of Conversion shall become void and of no effect.
This Plan of Conversion has
been adopted by the Board of Directors as of the date set forth above.
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Smart for Life, Inc. |
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By: |
/s/ Darren Minton |
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Name: |
Darren Minton |
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Its: |
Chief Executive Officer |
Exhibit A
Form of Articles of Incorporation
ATTACHMENT TO
ARTICLES OF INCORPORATION
OF
SMART FOR LIFE, INC.
The Articles of Incorporation
of Smart for Life, Inc. (the “Corporation”) are hereby supplemented
with the following additions to Article 8 and additional Articles 10-14.
ARTICLE 8 - AUTHORIZED SHARES
The total number of shares of capital stock which
the Corporation shall have authority to issue is five hundred million (500,000,000) shares of common stock, $0.0001 par value per share
(the “Common Stock”), and ten million (10,000,000) shares of preferred stock, $0.0001 par value per share (the “Preferred
Stock”). All Common Stock shall be of the same class and shall have the same rights and preferences. The Corporation shall have
authority to issue the shares of Preferred Stock in one or more series with such rights, preferences and designations as determined by
the Board of Directors of the Corporation. Authority is hereby expressly granted to the Board of Directors from time to time to issue
Preferred Stock in one or more series, and in connection with the creation of any such series, by resolution or resolutions providing
for the issue of the shares thereof, to determine and fix such voting powers, full or limited, or no voting powers, and such designations,
preferences and relative participating, optional or other special rights, and qualifications, limitations or restrictions thereof, including,
without limitation thereof, dividend rights, special voting rights, conversion rights, redemption privileges and liquidation preferences,
as shall be stated and expressed in such resolutions, all to the full extent now or hereafter permitted by the Nevada Revised Statutes.
Fully-paid stock of the Corporation shall not be liable to any further call or assessment.
ARTICLE 10 - AMENDMENT OF BYLAWS
In furtherance and not in limitation of the powers
conferred by the laws of the State of Nevada, the Board of Directors of the Corporation is expressly authorized to make, alter, amend
or repeal the Bylaws of the Corporation.
ARTICLE 11 - INDEMNIFICATION OF OFFICERS AND DIRECTORS
The Corporation may indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that such person is or was a director or officer of the Corporation, or who is
or was serving at the request of the Corporation as a director or officer of another corporation, partnership, joint venture, trust or
other enterprise, against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with the action, suit or proceeding, to the full extent permitted by the Nevada Revised Statutes
as such statutes may be amended from time to time.
ARTICLE 12 - LIABILITY OF DIRECTORS AND OFFICERS
No director or officer shall be personally liable
to the Corporation or any of its stockholders for damages for any breach of fiduciary duty as a director or officer; provided,
however, that the foregoing provision shall not eliminate or limit the liability of a director or officer (i) for acts or omissions
which involve intentional misconduct, fraud or a knowing violation of law, or (ii) for the payment of dividends in violation of Section
78.300 of the Nevada Revised Statutes. Any repeal or modification of this Article 12 by the stockholders of the Corporation shall be prospective
only, and shall not adversely affect any limitation of the personal liability of a director of officer of the Corporation for acts or
omissions prior to such repeal or modification.
ARTICLE 13 - ACQUISITION OF CONTROLLING INTEREST
The Corporation elects not to be governed by the
terms and provisions of Sections 78.378 through 78.3793, inclusive, of the Nevada Revised Statutes, as the same may be amended, superseded,
or replaced by any successor section, statute, or provision. No amendment to these Articles of Incorporation, directly or indirectly,
by merger or consolidation or otherwise, having the effect of amending or repealing any provision of this Article 13 shall apply to or
have any effect on any transaction involving acquisition of control by any person occurring prior to such amendment or repeal.
ARTICLE 14 - COMBINATIONS WITH INTERESTED STOCKHOLDERS
The Corporation elects not to be governed by the
terms and provisions of Sections 78.411 through 78.444, inclusive, of the Nevada Revised Statutes, as the same may be amended, superseded,
or replaced by any successor section, statute, or provision. No amendment to these Articles of Incorporation, directly or indirectly,
by merger or consolidation or otherwise, having the effect of amending or repealing any provision of this Article 14 shall apply to or
have any effect on any transaction with an interested stockholder occurring prior to such amendment or repeal.
Exhibit B
Form of Certificate of Designation
Exhibit A
SMART FOR
LIFE, INC.
CERTIFICATE OF DESIGNATION OF PREFERENCES,
RIGHTS AND LIMITATIONS
OF
SERIES A CONVERTIBLE PREFERRED STOCK
PURSUANT
TO SECTION 78.1955 OF THE
NEVADA REVISED STATUTES
Smart
for Life, Inc., a Nevada corporation (the “Company”), does hereby certify that,
pursuant to the authority contained in its Articles of Incorporation and in accordance with the provisions of Section 78.1955 of the
Nevada Revised Statutes (the “NRS”), the board of directors of the Company (the “Board”) has adopted
the following resolution creating the following series of the Company’s Series A Convertible Preferred Stock and determined the
voting powers, designations, powers, preferences and relative, participating, optional, or other special rights, and the qualifications,
limitations, and restrictions thereof, of such series:
RESOLVED,
that the Board does hereby provide for the issuance of the following series of preferred stock for cash or exchange of other securities,
rights or property and does hereby fix and determine the rights, preferences, restrictions and other matters relating to such series of
preferred stock as follows:
Section 1.
Definitions. For the purposes hereof,
the following terms shall have the following meanings:
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 of the Securities Act of 1933, as amended.
“Change of Control
Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof by an individual
or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether
through legal or beneficial ownership of capital stock of the Corporation, by contract or otherwise) of in excess of 33% of the voting
securities of the Corporation (other than by means of conversion or exercise of Preferred Stock and the securities issued together with
the Preferred Stock), (b) the Corporation merges into or consolidates with any other Person, or any Person merges into or consolidates
with the Corporation and, after giving effect to such transaction, the stockholders of the Corporation immediately prior to such transaction
own less than 66% of the aggregate voting power of the Corporation or the successor entity of such transaction, (c) the Corporation sells
or transfers all or substantially all of its (and all of its Subsidiaries, taken as a whole) assets to another Person and the stockholders
of the Corporation immediately prior to such transaction own less than 66% of the aggregate voting power of the acquiring entity immediately
after the transaction, (d) a replacement at one time or within a one year period of more than one-half of the members of the Board which
is not approved by a majority of those individuals who are members of the Board on the Original Issue Date (or by those individuals who
are serving as members of the Board on any date whose nomination to the Board was approved by a majority of the members of the Board who
are members on the Original Issue Date), or (e) the execution by the Corporation of an agreement to which the Corporation is a party or
by which it is bound, providing for any of the events set forth in clauses (a) through (d) above.
“Commission”
means the United States Securities and Exchange Commission.
“Common Stock”
means the Corporation’s common stock, par value $0.0001 per share, and stock of any other class of securities into which such securities
may hereafter be reclassified or changed.
“Common Stock Equivalents”
means any securities of the Corporation or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock,
including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible
into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Conversion Amount”
means the sum of the Stated Value at issue.
“Conversion Shares”
means, collectively, the shares of Common Stock issuable upon conversion of the shares of Series A Preferred Stock in accordance with
the terms hereof.
“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Original Issue Date”
means the date of the first issuance of any shares of the Preferred Stock regardless of the number of transfers of any particular shares
of Preferred Stock and regardless of the number of certificates which may be issued to evidence such Preferred Stock.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company,
joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Subsidiary”
means any subsidiary of the Corporation and shall, where applicable, also include any direct or indirect subsidiary of the Corporation
formed or acquired after the date of this Certificate of Designation.
“Trading Day”
means a day on which the principal Trading Market is open for business.
“Trading Market”
means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the
NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange (or any
successors to any of the foregoing).
Section
2. Designation, Amount and Par Value. The series
of preferred stock shall be designated as its Series A Convertible Preferred Stock (the “Series A Preferred Stock”)
and the number of shares so designated shall be up to 1,000 (which shall not be subject to increase without the written consent of all
of the holders of the Series A Preferred Stock (each, a “Holder” and collectively, the “Holders”)).
Each share of Series A Preferred Stock shall have a par value of $0.0001 per share and a stated value equal to $1,000(the “Stated
Value”).
Section
3. Dividends. The Series A Preferred
Stock will not be entitled to dividends or distributions.
Section 4.
Liquidation. Upon any liquidation,
dissolution or winding-up of the Corporation, whether voluntary or involuntary (a “Liquidation”), the Holders shall
be entitled to receive out of the assets, whether capital or surplus, of the Corporation the same amount that a holder of Common Stock
would receive if the Series A Preferred Stock were fully converted (disregarding for such purposes any conversion limitations hereunder)
to Common Stock which amounts shall be paid pari passu with all holders of Common Stock. A Change of Control Transaction shall
be deemed a Liquidation hereunder.
Section 5.
Voting Rights. The Series A Preferred Stock shall have no voting rights; provided
that, as long as any shares of Series A Preferred Stock are outstanding, the Corporation shall not, without the affirmative vote of the
Holders of a majority of the then outstanding shares of the Series A Preferred Stock, (a) alter or change adversely the powers, preferences
or rights given to the Series A Preferred Stock or alter or amend this Certificate of Designation, (b) authorize or create any class of
stock ranking as to dividends, redemption or distribution of assets upon a Liquidation senior to, or otherwise pari passu with,
the Series A Preferred Stock, (c) amend its articles of incorporation or other charter documents in any manner that adversely affects
any rights of the Holders, or (d) enter into any agreement with respect to any of the foregoing.
Section 6.
Conversion.
(a)
Conversions at Option of Holder. Each share of Series A Preferred Stock shall be convertible, at any time and from time
to time from and after the Original Issue Date at the option of the Holder thereof, into that number of shares of Common Stock (subject
to the limitations set forth in Section 6(d)) determined by dividing the Stated Value of such share of Series A Preferred Stock by the
Conversion Price. Holders shall effect conversions by providing the Corporation with the form of conversion notice attached hereto as
Annex A (a “Notice of Conversion”). Each Notice of Conversion shall specify the number of shares of Series A
Preferred Stock to be converted, the number of shares of Series A Preferred Stock owned prior to the conversion at issue, the number of
shares of Series A Preferred Stock owned subsequent to the conversion at issue and the date on which such conversion is to be effected,
which date may not be prior to the date the applicable Holder delivers by facsimile or email attachment such Notice of Conversion to the
Corporation (such date, the “Conversion Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion
Date shall be the date that such Notice of Conversion to the Corporation is deemed delivered hereunder. No ink-original Notice of Conversion
shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be
required. The calculations and entries set forth in the Notice of Conversion shall control in the absence of manifest or mathematical
error. To effect conversions of shares of Series A Preferred Stock, a Holder shall not be required to surrender the certificate(s) representing
the shares of Series A Preferred Stock to the Corporation unless all of the shares of Series A Preferred Stock represented thereby are
so converted, in which case such Holder shall deliver the certificate representing such shares of Series A Preferred Stock promptly following
the Conversion Date at issue. Shares of Series A Preferred Stock converted into Common Stock or redeemed in accordance with the terms
hereof shall be canceled and shall not be reissued.
(b)
Conversion Price. The conversion price for the Preferred Stock shall equal $0.6667, subject to adjustment herein (the “Conversion
Price”). [Conversion price to be adjusted if split occurs in DE first]
(c)
Mechanics of Conversion.
(i)
Delivery of Conversion Shares Upon Conversion. Not later than the earlier of (i) two (2) Trading Days and (ii) the number
of Trading Days comprising the Standard Settlement Period (as defined below) after each Conversion Date (the “Share Delivery
Date”), the Corporation shall deliver, or cause to be delivered, to the converting Holder Conversion Shares, which shall be
free of restrictive legends and trading restrictions, representing the number of Conversion Shares being acquired upon the conversion
of the Series A Preferred Stock. The Corporation shall use its best efforts to deliver the Conversion Shares required to be delivered
by the Corporation under this Section 6 electronically through the Depository Trust Company or another established clearing corporation
performing similar functions. As used herein, “Standard Settlement Period” means the standard settlement period, expressed
in a number of Trading Days, on the Corporation’s primary Trading Market with respect to the Common Stock as in effect on the date
of delivery of the Notice of Conversion.
(ii)
Failure to Deliver Conversion Shares. If, in the case of any Notice of Conversion, such Conversion Shares are not delivered
to or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to the
Corporation at any time on or before its receipt of such Conversion Shares.
(iii)
Obligation Absolute; Partial Liquidated Damages. The Corporation’s obligation to issue and deliver the Conversion
Shares upon conversion of Series A Preferred Stock in accordance with the terms hereof are absolute and unconditional, irrespective of
any action or inaction by a Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any
judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or
any breach or alleged breach by such Holder or any other Person of any obligation to the Corporation or any violation or alleged violation
of law by such Holder or any other person, and irrespective of any other circumstance which might otherwise limit such obligation of the
Corporation to such Holder in connection with the issuance of such Conversion Shares; provided, however, that such delivery
shall not operate as a waiver by the Corporation of any such action that the Corporation may have against such Holder. In the event a
Holder shall elect to convert any or all of the Stated Value of its Series A Preferred Stock, the Corporation may not refuse conversion
based on any claim that such Holder or any one associated or affiliated with such Holder has been engaged in any violation of law, agreement
or for any other reason, unless an injunction from a court, on notice to Holder, restraining and/or enjoining conversion of all or part
of the Series A Preferred Stock of such Holder shall have been sought and obtained, and the Corporation posts a surety bond for the benefit
of such Holder in the amount of 150% of the Stated Value of the Series A Preferred Stock which is subject to the injunction, which bond
shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable
to such Holder to the extent it obtains judgment. In the absence of such injunction, the Corporation shall issue Conversion Shares and,
if applicable, cash, upon a properly noticed conversion. If the Corporation fails to deliver to a Holder such Conversion Shares pursuant
to Section 6(c)(i) by the Share Delivery Date applicable to such conversion, the Corporation shall pay to such Holder, in cash, as liquidated
damages and not as a penalty, for each $10,000 of Stated Value of the Series A Preferred Stock being converted, $50 per Trading Day (increasing
to $100 per Trading Day on the third Trading Day and increasing to $200 per Trading Day on the sixth Trading Day after such damages begin
to accrue) for each Trading Day after the Share Delivery Date until such Conversion Shares are delivered or Holder rescinds such conversion.
Nothing herein shall limit a Holder’s right to pursue actual damages for the Corporation’s failure to deliver Conversion Shares
within the period specified herein and such Holder shall have the right to pursue all remedies available to it hereunder, at law or in
equity including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights shall
not prohibit a Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law.
(iv)
Compensation for Buy-In on Failure to Timely Deliver Conversion Shares Upon Conversion. In addition to any other rights
available to the Holder, if the Corporation fails for any reason to deliver to a Holder the applicable Conversion Shares by the Share
Delivery Date pursuant to Section 6(c)(i), and if after such Share Delivery Date such Holder is required by its brokerage firm 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 such Holder of the Conversion Shares which such Holder was entitled to receive upon the conversion relating
to such Share Delivery Date (a “Buy-In”), then the Corporation shall (A) pay in cash to such Holder (in addition to
any other remedies available to or elected by such Holder) the amount, if any, by which (x) such Holder’s total purchase price (including
any brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock
that such Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order
giving rise to such purchase obligation was executed (including any brokerage commissions) and (B) at the option of such Holder, either
reissue (if surrendered) the shares of Series A Preferred Stock equal to the number of shares of Series A Preferred Stock submitted for
conversion (in which case, such conversion shall be deemed rescinded) or deliver to such Holder the number of shares of Common Stock that
would have been issued if the Corporation had timely complied with its delivery requirements under Section 6(c)(i). For example, if a
Holder purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion
of shares of Series A Preferred Stock with respect to which the actual sale price of the Conversion Shares (including any brokerage commissions)
giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately preceding sentence, the Corporation
shall be required to pay such Holder $1,000. The Holder shall provide the Corporation written notice indicating the amounts payable to
such Holder in respect of the Buy-In and, upon request of the Corporation, 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 Corporation’s failure to timely deliver the Conversion Shares
upon conversion of the shares of Series A Preferred Stock as required pursuant to the terms hereof.
(v)
Reservation of Shares Issuable Upon Conversion. The Corporation covenants that it will at all times reserve and keep available
out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of the Series A Preferred Stock
as herein provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and the
other holders of the Series A Preferred Stock), not less than such aggregate number of shares of the Common Stock as shall be issuable
(taking into account the adjustments and restrictions of Section 7) upon the conversion of the then outstanding shares of Series A Preferred
Stock. The Corporation covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly
issued, fully paid and nonassessable.
(vi)
Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of the
Series A Preferred Stock. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion,
the Corporation shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Conversion Price or round up to the next whole share. Notwithstanding anything to the contrary contained herein, but
consistent with the provisions of this subsection with respect to fractional Conversion Shares, nothing shall prevent any Holder from
converting fractional shares of Series A Preferred Stock.
(vii)
Transfer Taxes and Expenses. The issuance of Conversion Shares shall be made without charge to any Holder for any documentary
stamp or similar taxes that may be payable in respect of the issue or delivery of such Conversion Shares, provided that the Corporation
shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such
Conversion Shares upon conversion in a name other than that of the Holders of such shares of Series A Preferred Stock and the Corporation
shall not be required to issue or deliver such Conversion Shares unless or until the Person or Persons requesting the issuance thereof
shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax
has been paid. The Corporation shall pay all transfer agent fees required for same-day processing of any Notice of Conversion and all
fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day
electronic delivery of the Conversion Shares.
(d)
Beneficial Ownership Limitation. The Corporation shall not effect any conversion of the Series A Preferred Stock, and a
Holder shall not have the right to convert any portion of the Series A Preferred Stock, to the extent that, after giving effect to the
conversion set forth on the applicable Notice of Conversion, such Holder (together with such Holder’s Affiliates, and any Persons
acting as a group together with such Holder or any of such Holder’s Affiliates (such Persons, “Attribution Parties”))
would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence,
the number of shares of Common Stock beneficially owned by such Holder and its Affiliates and Attribution Parties shall include the number
of shares of Common Stock issuable upon conversion of the Series A Preferred Stock with respect to which such determination is being made,
but shall exclude the number of shares of Common Stock which are issuable upon (i) conversion of the remaining, unconverted Stated Value
of the Series A Preferred Stock beneficially owned by such Holder or any of its Affiliates or Attribution Parties and (ii) exercise or
conversion of the unexercised or unconverted portion of any other securities of the Corporation subject to a limitation on conversion
or exercise analogous to the limitation contained herein beneficially owned by such Holder or any of its Affiliates or Attribution Parties.
Except as set forth in the preceding sentence, for purposes of this Section 6(d), beneficial ownership shall be calculated in accordance
with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. To the extent that the limitation contained
in this Section 6(d) applies, the determination of whether the Series A Preferred Stock is convertible (in relation to other securities
owned by such Holder together with any Affiliates and Attribution Parties) and of how many shares of Series A Preferred Stock are convertible
shall be in the sole discretion of such Holder, and the submission of a Notice of Conversion shall be deemed to be such Holder’s
determination of whether the shares of Series A Preferred Stock may be converted (in relation to other securities owned by such Holder
together with any Affiliates and Attribution Parties) and how many shares of the Series A Preferred Stock are convertible, in each case
subject to the Beneficial Ownership Limitation. To ensure compliance with this restriction, each Holder will be deemed to represent to
the Corporation each time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth
in this paragraph and the Corporation shall have no obligation to verify or confirm the accuracy of such determination. In addition, a
determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder. For purposes of this Section 6(d)), in determining the number of outstanding shares
of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as stated in the most recent of the following:
(i) the Corporation’s most recent periodic or annual report filed with the Commission, as the case may be, (ii) a more recent public
announcement by the Corporation or (iii) a more recent written notice by the Corporation or its transfer agent setting forth the number
of shares of Common Stock outstanding. Upon the written or oral request (which may be via email) of a Holder, the Corporation shall
within one Trading Day confirm orally and in writing to such Holder the number of shares of Common Stock then outstanding. In any
case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities
of the Corporation, including the Series A Preferred Stock, by such Holder or its Affiliates or Attribution Parties since the date as
of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall
be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock
issuable upon conversion of Series A Preferred Stock held by the applicable Holder. A Holder, upon notice to the Corporation, may increase
or decrease the Beneficial Ownership Limitation provisions of this Section 6(d) applicable to its Series A Preferred Stock provided that
the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after
giving effect to the issuance of shares of Common Stock upon conversion of the Series A Preferred Stock held by the Holder and the provisions
of this Section 6(d) shall continue to apply. Any such increase in the Beneficial Ownership Limitation will not be effective until the
61st day after such notice is delivered to the Corporation and shall only apply to such Holder and no other Holder. The provisions of
this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 6(d)
to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation
contained herein or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations
contained in this paragraph shall apply to a successor holder of Preferred Stock.
Section
7. Certain Adjustments.
(a)
Stock Dividends and Stock Splits. If the Corporation, at any time while the Series A Preferred Stock is outstanding: (i)
pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or
any other Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Corporation
upon conversion of, or payment of a dividend on, the Series A Preferred Stock), (ii) subdivides outstanding shares of Common Stock into
a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller
number of shares, or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the
Corporation, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common
Stock (excluding any treasury shares of the Corporation) outstanding immediately before such event, and of which the denominator shall
be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section 7(a) shall
become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
(b)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 7(a) above, if at any time the Corporation
grants, issues or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the
record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder of will be entitled
to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the
Holder had held the number of shares of Common Stock acquirable upon complete conversion of such Holder’s Series A Preferred Stock
(without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately
before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the
date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights
(provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding
the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial
ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall
be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial
Ownership Limitation).
(c)
Pro Rata Distributions. During such time as the Series A Preferred Stock is outstanding, if the Corporation declares or
makes any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way
of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options
by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of the Series A Preferred Stock, then, in each such case, the Holder shall be entitled to participate in
such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common
Stock acquirable upon complete conversion of the Series A Preferred Stock (without regard to any limitations on conversion hereof, including
without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution,
or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation
in such Distribution (provided, however, to the extent that the Holder’s right to participate in any such Distribution
would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such
Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent)
and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto
would not result in the Holder exceeding the Beneficial Ownership Limitation).
(d)
Fundamental Transaction. If, at any time while the Series A Preferred Stock is outstanding, (i) the Corporation, directly
or indirectly, in one or more related transactions effects any merger or consolidation of the Corporation with or into another Person,
(ii) the Corporation, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition
of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender
offer or exchange offer (whether by the Corporation or another Person) is completed pursuant to which holders of Common Stock are permitted
to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of
the outstanding Common Stock, (iv) the Corporation, directly or indirectly, in one or more related transactions effects any reclassification,
reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively
converted into or exchanged for other securities, cash or property, or (v) the Corporation, directly or indirectly, in one or more related
transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding
shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated
or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a
“Fundamental Transaction”), then, upon any subsequent conversion of the Series A Preferred Stock, the Holder shall
have the right to receive, for each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence
of such Fundamental Transaction (without regard to any limitation in Section 6(d)) on the conversion of the Series A Preferred Stock),
the number of shares of Common Stock of the successor or acquiring corporation or of the Corporation, if it is the surviving corporation,
and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction
by a holder of the number of shares of Common Stock for which the Series A Preferred Stock is convertible immediately prior to such Fundamental
Transaction (without regard to any limitation in Section 6(d) on the conversion of the Series A Preferred Stock). For purposes of any
such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based
on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Corporation
shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different
components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be
received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon
any conversion of the Series A Preferred Stock following such Fundamental Transaction. To the extent necessary to effectuate the foregoing
provisions, any successor to the Corporation or surviving entity in such Fundamental Transaction shall file a new Certificate of Designation
with the same terms and conditions and issue to the Holders new preferred stock consistent with the foregoing provisions and evidencing
the Holders’ right to convert such preferred stock into Alternate Consideration. The Corporation shall cause any successor entity
in a Fundamental Transaction in which the Corporation is not the survivor (the “Successor Entity”) to assume in writing
all of the obligations of the Corporation under this Certificate of Designation in accordance with the provisions of this Section 7(d)
pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable
delay) prior to such Fundamental Transaction and shall, at the option of the holder of the Series A Preferred Stock, deliver to the Holder
in exchange for the Series A Preferred Stock a security of the Successor Entity evidenced by a written instrument substantially similar
in form and substance to the Series A Preferred Stock which is convertible for a corresponding number of shares of capital stock of such
Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon conversion of the Series
A Preferred Stock (without regard to any limitations on the conversion of the Series A Preferred Stock) prior to such Fundamental Transaction,
and with a conversion price which applies the conversion price hereunder to such shares of capital stock (but taking into account the
relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such
number of shares of capital stock and such conversion price being for the purpose of protecting the economic value of the Series A Preferred
Stock immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance
to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for
(so that from and after the date of such Fundamental Transaction, the provisions of this Certificate of Designation referring to the “Corporation”
shall refer instead to the Successor Entity), and may exercise every right and power of the Corporation and shall assume all of the obligations
of the Corporation under this Certificate of Designation with the same effect as if such Successor Entity had been named as the Corporation
herein.
(e)
Calculations. All calculations under this Section 7 shall be made to the nearest cent or the nearest 1/100th of a share,
as the case may be. For purposes of this Section 7, the number of shares of Common Stock deemed to be issued and outstanding as of a given
date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Corporation) issued and outstanding.
(f)
Notice to the Holders. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 7, the Corporation
shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement
of the facts requiring such adjustment. In addition, if (i) the Corporation shall declare a dividend (or any other distribution in whatever
form) on the Common Stock, (ii) the Corporation shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock,
(iii) the Corporation shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase
any shares of capital stock of any class or of any rights, (iv) the approval of any stockholders of the Corporation shall be required
in connection with any reclassification of the Common Stock, any consolidation or merger to which the Corporation is a party, any sale
or transfer of all or substantially all of the assets of the Corporation, or any compulsory share exchange whereby the Common Stock is
converted into other securities, cash or property, or (v) the Corporation shall authorize the voluntary or involuntary dissolution, liquidation
or winding up of the affairs of the Corporation, then, in each case, the Corporation shall cause to be filed at each office or agency
maintained for the purpose of conversion of the Series A Preferred Stock, and shall cause to be delivered to each Holder at its last address
as it shall appear upon the stock books of the Corporation, at least twenty (20) calendar days prior to the applicable record or effective
date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be
entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected
that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to
deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to
be specified in such notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information
regarding the Corporation or any of the Subsidiaries, then, if the Corporation is subject to the reporting requirements of the Exchange
Act pursuant to Section 12 or Section 15(d) of Exchange Act, the Corporation shall simultaneously file such notice with the Commission
pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to convert the Conversion Amount of the Series A Preferred
Stock (or any part hereof) during the 20-day period commencing on the date of such notice through the effective date of the event triggering
such notice except as may otherwise be expressly set forth herein.
Section
8. Miscellaneous.
(a)
Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall
be in writing and shall be deemed given and effective on the earliest of: (i) the time of transmission, if such notice or communication
is delivered via facsimile at the facsimile number or email attachment at the email address as set forth on the signature pages attached
hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (i) the next Trading Day after the time of transmission, if such
notice or communication is delivered via facsimile or email attachment at the facsimile number or email attachment as set forth on the
signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii)
the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service
or (iv) upon actual receipt by the party to whom such notice is required to be given.
(b)
Absolute Obligation. Except as expressly provided herein, no provision of this Certificate of Designation shall alter or
impair the obligation of the Corporation, which is absolute and unconditional, to pay liquidated damages and accrued dividends, as applicable,
on the shares of Series A Preferred Stock at the time, place, and rate, and in the coin or currency, herein prescribed.
(c)
Lost or Mutilated Stock Certificate. If a Holder’s stock certificate shall be mutilated, lost, stolen or destroyed,
the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated certificate, or in lieu
of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the shares of Series A Preferred Stock so mutilated,
lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership
hereof reasonably satisfactory to the Corporation.
(d)
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Certificate of
Designation shall be governed by and construed and enforced in accordance with the internal laws of the State of Nevada without regard
to the principles of conflict of laws thereof. All legal proceedings concerning the interpretation, enforcement and defense of the transactions
contemplated by this Certificate of Designation (whether brought against a party hereto or its respective Affiliates, directors, officers,
shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan
(the “New York Courts”). The Corporation and each Holder hereby irrevocably submits to the exclusive jurisdiction of
the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding.
The Corporation and each Holder hereby irrevocably waives personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Certificate of Designation and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve
process in any other manner permitted by applicable law. The Corporation and each Holder hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Certificate
of Designation or the transactions contemplated hereby. If the Corporation or any Holder shall commence an action or proceeding to enforce
any provisions of this Certificate of Designation, then the prevailing party in such action or proceeding shall be reimbursed by the other
party for its attorneys’ fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action
or proceeding.
(e)
Waiver. Any waiver by the Corporation or a Holder of a breach of any provision of this Certificate of Designation shall
not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Certificate
of Designation or a waiver by any other Holders. The failure of the Corporation or a Holder to insist upon strict adherence to any term
of this Certificate of Designation on one or more occasions shall not be considered a waiver or deprive that party (or any other Holder)
of the right thereafter to insist upon strict adherence to that term or any other term of this Certificate of Designation on any other
occasion. Any waiver by the Corporation or a Holder must be in writing.
(f)
Severability. If any provision of this Certificate of Designation is invalid, illegal or unenforceable, the balance of this
Certificate of Designation shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless
remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder
violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the
maximum rate of interest permitted under applicable law.
(g)
Next Trading Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Trading Day, such
payment shall be made on the next succeeding Trading Day.
(h)
Headings. The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designation
and shall not be deemed to limit or affect any of the provisions hereof.
(i)
Status of Converted or Redeemed Preferred Stock. If any shares of Series A Preferred Stock shall be converted, redeemed
or reacquired by the Corporation, such shares shall resume the status of authorized but unissued shares of preferred stock and shall no
longer be designated as Series A Preferred Stock.
Exhibit C
Form of Bylaws
BYLAWS
OF
SMART
FOR LIFE, Inc.
Adopted on ________, 2023
_______________________________________________________
article
I
OFFICES
1.1
Registered Office. The registered office and registered agent of Smart for Life, Inc. (the
“Corporation”) shall be as from time to time set forth in the Corporation’s Articles of Incorporation.
1.2
Other Offices. The Corporation may also have offices at such other places, both within and
without the State of Nevada, as the Board of Directors may from time to time determine or the business of the Corporation may require.
article
II
STOCKHOLDERS’ MEETINGS
2.1
Place of Meetings. Meetings of stockholders may be held at such time and place, within or
without the State of Nevada, as shall be stated in the notice of the meeting or in a duly executed waiver of notice thereof. Stockholders
and certain other persons permitted by the Corporation to attend a meeting of stockholders may participate in the meeting through remote
communication, including, without limitation, electronic communications, videoconferencing, teleconferencing or other available technology,
if the Corporation has implemented reasonable measures to (a) verify the identity of each person participating through such means as a
stockholder or permitted person and (b) provide the stockholders a reasonable opportunity to participate in the meeting and to vote on
matters submitted to the stockholders, including an opportunity to communicate, and to read or hear the proceedings of the meetings in
a substantially concurrent manner with such proceedings.
2.2
Annual Meeting.
(a)
The annual meeting of the stockholders of the Corporation, for the purpose of election of directors and for such other business
as may lawfully come before it, shall be held on such date and at such time as may be designated from time to time by the Board of Directors.
Nominations of persons for election to the Board of Directors of the Corporation and the proposal of business to be considered by the
stockholders may be made at an annual meeting of stockholders: (i) pursuant to the Corporation’s notice of meeting of stockholders;
(ii) by or at the direction of the Board of Directors; or (iii) by any stockholder of the Corporation who was a stockholder of record
at the time of giving of notice provided for in the following paragraph, who is entitled to vote at the meeting and who complied with
the notice procedures set forth in this Section.
(b)
At an annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the
meeting. For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (iii) of
paragraph (a) of this Section, (i) the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation,
(ii) such other business must be a proper matter for stockholder action under the Nevada Revised Statues, (iii) if the stockholder, or
the beneficial owner on whose behalf any such proposal or nomination is made, has provided the Corporation with a Solicitation Notice
(as defined in this Section), such stockholder or beneficial owner must, in the case of a proposal, have delivered a proxy statement and
form of proxy to holders of at least the percentage of the Corporation’s voting shares required under applicable law to carry any
such proposal, or, in the case of a nomination or nominations, have delivered a proxy statement and form of proxy to holders of a percentage
of the Corporation’s voting shares reasonably believed by such stockholder or beneficial owner to be sufficient to elect the nominee
or nominees proposed to be nominated by such stockholder, and must, in either case, have included in such materials the Solicitation Notice,
and (iv) if no Solicitation Notice relating thereto has been timely provided pursuant to this Section, the stockholder or beneficial owner
proposing such business or nomination must not have solicited a number of proxies sufficient to have required the delivery of such a Solicitation
Notice under this Section. To be timely, a stockholder’s notice shall be delivered to the Secretary by registered mail at the principal
executive offices of the Corporation not later than the close of business on the ninetieth (90th) day nor earlier than the close of business
on the one hundred twentieth (120th) day prior to the first anniversary of the preceding year’s annual meeting; provided, however,
that in the event that the date of the annual meeting is advanced more than thirty (30) days prior to or delayed by more than thirty (30)
days after the anniversary of the preceding year’s annual meeting, notice by the stockholder to be timely must be so received (i)
not earlier than the close of business on the one hundred twentieth (120th) day prior to the currently proposed annual meeting and not
later than the close of business on the later of the ninetieth (90th) day prior to such annual meeting or (ii) by the tenth (10th) business
day following the day on which public announcement of the date of such meeting is first made, whichever of (i) or (ii) occurs first. In
the event that an annual meeting has not been previously held, notice by the stockholder to be timely must be so received not later than
the close of business on the tenth (10th) business day following the day on which public announcement of the date of such meeting is first
made. In no event shall the public announcement of an adjournment of an annual meeting commence a new time period for the giving of a
stockholder’s notice as described above. Such stockholder’s notice shall set forth: (A) as to each person whom the stockholder
proposed to nominate for election or reelection as a director all information relating to such person that is required to be disclosed
in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation
14A under the Securities Exchange Act of 1934, as amended (the “1934 Act”) and Rule 14a-4(d) thereunder (including
such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (B) as
to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought
before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such stockholder
and the beneficial owner, if any, on whose behalf the proposal is made; and (C) as to the stockholder giving the notice and the beneficial
owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such stockholder, as they appear on the
Corporation’s books, and of such beneficial owner, (ii) the class and number of shares of the Corporation which are owned beneficially
and of record by such stockholder and such beneficial owner, and (iii) whether either such stockholder or beneficial owner intends to
deliver a proxy statement and form of proxy to holders of, in the case of the proposal, at least the percentage of the Corporation’s
voting shares required under applicable law to carry the proposal or, in the case of a nomination or nominations, a sufficient number
of holders of the Corporation’s voting shares to elect such nominee or nominees (an affirmative statement of such intent, a “Solicitation
Notice”).
(c)
Notwithstanding anything in the second sentence of paragraph (b) of this Section to the contrary, in the event that the number
of directors to be elected to the Board of Directors of the Corporation is increased and there is no public announcement naming all of
the nominees for director or specifying the size of the increased Board of Directors made by the Corporation at least one hundred (100)
days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by this Section
shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered
to the Secretary at the principal executive offices of the Corporation not later than the close of business on the tenth (10th)
day following the day on which such public announcement is first made by the Corporation.
(d)
Only such persons who are nominated in accordance with the procedures set forth in this Section shall be eligible to serve as directors
and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with
the procedures set forth in this Section. Except as otherwise provided by law, the chairman of the meeting shall have the power and duty
to determine whether a nomination or any business proposed to be brought before the meeting was made, or proposed, as the case may be,
in accordance with the procedures set forth in these Bylaws and, if any proposed nomination or business is not in compliance with these
Bylaws, to declare that such defective proposal or nomination shall not be presented for stockholder action at the meeting and shall be
disregarded.
(e)
Notwithstanding the foregoing provisions of this Section, in order to include information with respect to a stockholder proposal
in the proxy statement and form of proxy for a stockholders’ meeting, stockholders must provide notice as required by the regulations
promulgated under the 1934 Act. Nothing in these Bylaws shall be deemed to affect any rights of stockholders to request inclusion of proposals
in the Corporation proxy statement pursuant to Rule 14a-8 under the 1934 Act.
(f)
For purposes of this Section, “public announcement” shall mean disclosure in a press release reported by the Dow Jones
News Service, Associated Press, Accesswire, Market Wire or comparable national news service or in a document publicly filed by the Corporation
with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the 1934 Act.
2.3
Special Meetings.
(a)
Special meetings of the stockholders of the Corporation may be called, for any purpose or purposes, by (i) the Chairman of
the Board of Directors (the “Chairman”) or the Executive Chairman of the Board of Directors (the “Executive
Chairman”), whichever position is filled at the time, (ii), the Executive Vice-Chairman, (iii) the Chief Executive Officer,
(iv) the President, (v) the Board of Directors pursuant to a resolution adopted by a majority of the total number of authorized directors
(whether or not there exist any vacancies in previously authorized directorships at the time any such resolution is presented to the Board
of Directors for adoption) or (vi) by the holders of shares entitled to cast not less than 50% of the votes at the meeting, and shall
be held at such place, on such date, and at such time as the Board of Directors shall fix.
(b)
If a special meeting is properly called by any person or persons other than the Board of Directors, the request shall be in writing,
specifying the general nature of the business proposed to be transacted, and shall be delivered personally or sent by certified or registered
mail, return receipt requested, or by telegraphic or other facsimile transmission to the Chairman or Executive Chairman, the Executive
Vice-Chairman, the Chief Executive Officer, or the Secretary of the Corporation. No business may be transacted at such special meeting
otherwise than specified in such notice. The Board of Directors shall determine the time and place of such special meeting, which shall
be held not less than thirty-five (35) nor more than one hundred twenty (120) days after the date of the receipt of the request. Upon
determination of the time and place of the meeting, the officer receiving the request shall cause notice to be given to the stockholders
entitled to vote, in accordance with the provisions of Section 2.4 of these Bylaws. Nothing contained in this paragraph (b) shall
be construed as limiting, fixing, or affecting the time when a meeting of stockholders called by action of the Board of Directors may
be held.
2.4
Notice of Meetings. Written notice stating (a) the date
and time of the meeting, (b) the means of remote communication, if any, by which stockholders and proxies shall be deemed to be present
in person and vote at the meeting, (c) unless the meeting is to be held solely by remote communication, the physical location of the meeting,
and (d) except in the case of the annual meeting, the purpose or purposes for which the meeting is called, must be delivered personally,
mailed postage prepaid or delivered as provided in Section 7.1 to each stockholder of record entitled to vote at the meeting
not less than ten (10) nor more than sixty (60) days before the meeting. If mailed, it must be directed to the stockholder at his or her
address as it appears upon the records of the Corporation.
2.5
Quorum; Adjournment. At all meetings of the stockholders,
the presence in person or by proxy of the holders of one-third of the shares issued and outstanding and entitled to vote shall be necessary
and sufficient to constitute a quorum for the transaction of business, except as otherwise provided by law, by the Articles of Incorporation
or by these Bylaws. If a meeting of stockholders is adjourned, notice of the following information need not be delivered if the information
is announced at the meeting at which the adjournment is taken: (a) the date and time of the adjourned meeting; (b) the means
of remote communication, if any, by which stockholders and proxies shall be deemed to be present in person and vote at the adjourned meeting;
and (c) unless the adjourned meeting is to be held solely by remote communication, the physical location of the adjourned meeting. If
a new record date is fixed for an adjourned or postponed meeting, notice of the adjourned or postponed meeting must be delivered to each
stockholder of record as of the new record date. At such adjourned meeting at which a quorum shall be present or represented, any business
may be transacted which might have been transacted at the meeting as originally notified.
2.6
Voting. Each outstanding share of the Corporation’s capital stock shall be entitled
to one vote on each matter submitted to a vote at a meeting of stockholders, except to the extent that the voting rights of the shares
of any class or classes are otherwise provided by applicable law or the Articles of Incorporation. When a quorum is present at any meeting
of the Corporation’s stockholders, action by the stockholders on a matter other than the election of directors is approved if the
number of votes cast in favor of the action exceeds the number of votes cast in opposition to the action, unless the question is one upon
which, by express provision of law, the Articles of Incorporation or these Bylaws, a different vote is required, in which case such express
provision shall govern and control the decision of such question. Voting for directors shall be in accordance with Section 3.2 of these
Bylaws.
2.7
Proxies. Each stockholder entitled to vote at a meeting of stockholders or to express
consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder
by proxy. Without limiting the manner in which a stockholder may authorize another person or persons to act for him or her as proxy, a
stockholder may sign a writing authorizing another person or persons to act for him or her as proxy. Any copy, communication by electronic
transmission or other reliable reproduction of the writing may be substituted for the original writing for any purpose for which the original
writing could be used, if the copy, communication by electronic transmission or other reproduction is a complete reproduction of the entire
original writing. Except as otherwise provided below, no such proxy is valid after the expiration of six (6) months from the date of its
creation unless the stockholder specifies in it the length of time for which it is to continue in force, which may not exceed seven (7)
years from the date of its creation. A proxy shall be deemed irrevocable if the written authorization states that the proxy is irrevocable,
but is irrevocable only for as long as it is coupled with an interest sufficient in law to support an irrevocable power. Unless otherwise
provided in the proxy, a proxy made irrevocable is revoked when the interest with which it is coupled is extinguished, but the Corporation
may honor the proxy until notice of the extinguishment of the proxy is received by the Corporation.
2.8
Record Date; Closing Transfer Books. The Board of Directors may fix in advance a record date
for the purpose of determining stockholders entitled to notice of or to vote at a meeting of stockholders, such record date to be not
less than ten (10) nor more than sixty (60) days prior to such meeting, or the Board of Directors may close the stock transfer books for
such purpose for a period of not less than ten (10) nor more than sixty (60) days prior to such meeting. If a record date for a meeting
of stockholders is not fixed by the Board of Directors, the record date is at the close of business on the day before the day on which
the first notice is given or, if notice is waived, at the close of business on the day before the meeting is held. A determination of
stockholders of record entitled to notice of or to vote at a meeting of stockholders applies to any adjournment or postponement of the
meeting unless the Board of Directors fixes a new record date for the adjourned or postponed meeting. The Board of Directors must fix
a new record date if the meeting is adjourned or postponed to a date more than 60 days later than the meeting date set for the original
meeting.
2.9
Action by Consent. Any action required or permitted by law, the Articles of Incorporation,
or these Bylaws to be taken at a meeting of the stockholders of the Corporation may be taken without a meeting if a consent or consents
in writing, setting forth the action so taken, shall be signed by stockholders holding at least a majority of the voting power; provided
that if a different proportion of voting power is required for such an action at a meeting, then that proportion of written consents is
required.
article
III
BOARD OF DIRECTORS
3.1
Management. The business and affairs of the Corporation shall be managed by or under the direction
of the Board of Directors, who may exercise all such powers of the Corporation and do all such lawful acts and things as are not by law,
the Articles of Incorporation, a stockholders’ agreement or these Bylaws directed or required to be exercised or done by the stockholders.
3.2
Qualification; Election; Term. None of the directors need be a stockholder of the Corporation
or a resident of the State of Nevada. The directors shall be elected by plurality vote at the annual meeting of the stockholders, except
as hereinafter provided, and each director elected shall hold office until his successor shall be elected and qualified.
3.3
Number. The authorized number of directors of the Corporation shall be fixed by the Board
of Directors from time to time. No decrease in the number of directors shall have the effect of shortening the term of any incumbent director.
3.4
Resignation. Any director may resign at any time by delivering his or her notice in writing or by electronic transmission
to the Secretary, such resignation to specify whether it will be effective at a particular time, upon receipt by the Secretary or at the
pleasure of the Board of Directors. If no such specification is made, it shall be deemed effective at the pleasure of the Board of Directors.
When one or more directors shall resign from the Board of Directors, effective at a future date, a majority of the directors then in office,
including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation
or resignations shall become effective, and each director so chosen shall hold office for the unexpired portion of the term of the Director
whose place shall be vacated and until his successor shall have been duly elected and qualified.
3.5
Removal. Any director may be removed either for or without cause only by the affirmative vote
of stockholders representing not less than two-thirds of the voting power of the issued and outstanding stock entitled to vote.
3.6
Vacancies. Unless otherwise provided in the Articles of Incorporation, and subject to the
rights of the holders of any series of Preferred Stock, any vacancies on the Board of Directors resulting from death, resignation, disqualification,
removal or other causes and any newly created directorships resulting from any increase in the number of directors shall, unless the Board
of Directors determines by resolution that any such vacancies or newly created directorships shall be filled by stockholders, be filled
only by the affirmative vote of a majority of the directors then in office, even though less than a quorum of the Board of Directors,
or by a sole remaining director, provided, however, that whenever the holders of any class or classes of stock or series thereof
are entitled to elect one or more directors by the provisions of the Articles of Incorporation, vacancies and newly created directorships
of such class or classes or series shall, unless the Board of Directors determines by resolution that any such vacancies or newly created
directorships shall be filled by stockholders, be filled by a majority of the directors elected by such class or classes or series thereof
then in office, or by a sole remaining director so elected. Any director elected in accordance with the preceding sentence shall hold
office for the remainder of the full term of the director for which the vacancy was created or occurred and until such director’s
successor shall have been elected and qualified. A vacancy in the Board of Directors shall be deemed to exist under this Bylaw in the
case of the death, removal or resignation of any director.
3.7
Place of Meetings. Meetings of the Board of Directors, regular or special, may be held at
such place within or without the State of Nevada as may be fixed from time to time by the Board of Directors. The members of the Board
of Directors or of any committee thereof may participate in a meeting of the Board or committee through electronic communications, videoconferencing,
teleconferencing or other available technology if the Corporation has implemented reasonable measures to (a) verify the identity of each
person participating through such means as a director or committee member, as the case may be, and (b) provide the directors or committee
members a reasonable opportunity to participate in the meeting and to vote on matters submitted to the directors or committee members,
as the case may be, including an opportunity to communicate and to read or hear the proceedings of the meeting in a substantially concurrent
manner with such proceedings.
3.8
Regular Meetings. Regular meetings of the Board of Directors may be held without notice at
such time and place as shall from time to time be determined by resolution of the Board of Directors.
3.9
Special Meetings. Special meetings of the Board of Directors may be called by the Chairman
or Executive Chairman, the Executive Vice-Chairman, the Chief Executive Officer or the President on oral or written notice to each director,
given either personally, by telephone, by telegram, by mail, by facsimile or by e-mail at least twenty-four (24) hours prior to the time
of the meeting. Special meetings shall be called by the Chairman or Executive Chairman, the Executive Vice-Chairman, the Chief Executive
Officer or the President in like manner and on like notice on the written request of any director. Except as may be otherwise expressly
provided by law, the Articles of Incorporation or these Bylaws, neither the business to be transacted at, nor the purpose of, any special
meeting need to be specified in a notice or waiver of notice.
3.10
Quorum and Voting. At all meetings of the Board of Directors the presence of a majority of
the number of directors then in office shall be necessary and sufficient to constitute a quorum for the transaction of business, and the
affirmative vote of at least a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board
of Directors, except as may be otherwise specifically provided by law, the Articles of Incorporation or these Bylaws. If a quorum shall
not be present at any meeting of directors, the directors present thereat may adjourn the meeting from time to time without notice other
than announcement at the meeting, until a quorum shall be present.
3.11
Action by Consent. Any action required or permitted to be taken at any meeting of the Board
of Directors may be taken without such a meeting if a consent or consents in writing, setting forth the action so taken, is signed by
all the members of the Board of Directors.
3.12
Compensation of Directors. Directors shall receive such compensation for their services, and
reimbursement for their expenses as the Board of Directors, by resolution, shall establish; provided that nothing herein contained shall
be construed to preclude any director from serving the Corporation in any other capacity and receiving compensation therefor.
3.13
Committees. The Board of Directors may, by resolution passed by a majority of the whole Board,
designate committees, each committee to consist of one or more directors of the Corporation, which committees shall have such power and
authority and shall perform such functions as may be provided in such resolution. Each committee,
to the extent provided in such resolution, shall have and may exercise all of the authority of the Board of Directors in the management
of the business and affairs of the Corporation, except where action of the full Board of Directors is required by statute or by the Articles
of Incorporation. Unless the Board of Directors shall otherwise provide, regular meetings of the committee appointed pursuant to this
Section shall be held at such times and places as are determined by the Board of Directors, or by any such committee, and when notice
thereof has been given to each member of such committee, no further notice of such regular meetings need be given thereafter. Special
meetings of any such committee may be held at any place which has been determined from time to time by such committee, and may be called
by any director who is a member of such committee, upon notice to the members of such committee of the time and place of such special
meeting given in the manner provided for the giving of notice to members of the Board of Directors of the time and place of special meetings
of the Board of Directors. Notice of any special meeting of any committee may be waived in writing at any time before or after the meeting
and will be waived by any director by attendance thereat, except when the director attends such special meeting for the express purpose
of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.
Unless otherwise provided by the Board of Directors in the resolutions authorizing the creation of the committee, a majority of the authorized
number of members of any such committee shall constitute a quorum for the transaction of business, and the act of a majority of those
present at any meeting at which a quorum is present shall be the act of such committee.
article
IV
OFFICERS
4.1
In General. The officers of the Corporation shall be elected by the Board of Directors and
shall be a President, a Chief Financial Officer, and a Secretary. The Board of Directors may also elect a Chief Executive Officer, one
or more Vice Presidents, Assistant Vice Presidents and Assistant Secretaries. Any two or more offices may be held by the same person.
The Board may also elect or appoint an Executive Chairman and Executive Vice-Chairman from among its directors to serve as an officer
of the Corporation. If no Executive Chairman is elected or appointed, the Board shall elect or appoint from among the directors
a person to act as Chairman who shall not be deemed to be an officer of the Corporation unless he or she has otherwise been elected or
appointed as such.
4.2
Subordinate Officers. The Board of Directors may appoint, or may empower the Executive Chairman, the Chief Executive Officer
or the President to appoint, such other officers as the business of the Corporation may require, each of whom shall hold office for such
period, have such authority and perform such duties as are provided in these Bylaws or as the Board of Directors or such delegate may
from time to time determine.
4.3
Election and Term. The Board of Directors, at its first
meeting after each annual meeting of stockholders, shall elect the officers, none of whom need be a member of the Board of Directors.
Each officer of the Corporation shall hold office until his or her death, resignation or removal from office, or the election and qualification
of his or her successor, whichever shall first occur.
4.4
Resignation. Any officer may resign at any time by giving notice in writing or by electronic
transmission notice to the Board of Directors or to the Chief Executive Officer or to the Secretary. Any such resignation shall be effective
when received by the person or persons to whom such notice is given, unless a later time is specified therein, in which event the resignation
shall become effective at such later time. Unless otherwise specified in such notice, the acceptance of any such resignation shall not
be necessary to make it effective. Any resignation shall be without prejudice to the rights, if any, of the Corporation under any contract
with the resigning officer.
4.5
Removal. Any officer may be removed from office at any time, either with or without cause, by the affirmative vote of a
majority of the directors in office at the time, or by the unanimous written or electronic consent of the directors in office at the time,
or by any committee or superior officers.
4.6
Duties of Officers.
(a)
Chairman of the Board of Directors. The Chairman of the Board of Directors, when present, shall preside at all meetings
of the stockholders and the Board of Directors. The Chairman of the Board of Directors shall perform other duties commonly incident to
the office and shall also perform such other duties and have such other powers as the Board of Directors shall designate from time to
time.
(b)
Executive Chairman. The Executive Chairman, if one shall have been elected or appointed, shall exercise such powers
and perform such duties as shall be determined from time to time by resolution of the Board, including, but not limited to, sharing with
the Chief Executive Officer responsibility for strategic planning, collaborating with the Chief Executive Officer on major initiatives,
assisting the Chief Executive Officer and other senior officers in matters relating to communications and relationships with the Corporation’s
constituents, and generally serving as a resource for the Chief Executive Officer. The Executive Chairman shall also have the power to
sign certificates for shares of stock of the Corporation and affix the signature of the Corporation to all deeds, conveyances, mortgages,
leases, obligations, bonds, certificates and other papers and instruments in writing which have been authorized by the Board of Directors
or which, in the judgment of the Executive Chairman, should be executed on behalf of the Corporation.
(c)
Executive Vice-Chairman. The Executive Vice-Chairman, if one shall have been elected or appointed, shall assist the
Chairman or Executive Chairman in performing his or her duties and responsibilities. In particular, the Executive Vice-Chairman shall
have an important role in monitoring the implementation of the Company’s strategies. During the period when the Chairman or Executive
Chairman is absent and the normal functions of the Chairman or Executive Chairman cannot be carried out, the Executive Vice-Chairman will
take the role as the acting Chairman or Executive Chairman until the Chairman or Executive Chairman resumes carrying out his or her normal
duties or a new Chairman or Executive Chairman has been elected and appointed by the Board. The Executive Vice-Chairman shall also have
the power to sign certificates for shares of stock of the Corporation and affix the signature of the Corporation to all deeds, conveyances,
mortgages, leases, obligations, bonds, certificates and other papers and instruments in writing which have been authorized by the Board
of Directors or which, in the judgment of the Executive Vice-Chairman, should be executed on behalf of the Corporation.
(d)
Chief Executive Officer. The powers and duties of the Chief Executive Officer are: (a) to act as the general manager
and chief executive officer of the Corporation and, subject to the direction of the Board of Directors, to have general supervision, direction
and control of the business and affairs of the Corporation; (b) to preside at all meetings of the stockholders and the Board of Directors
in the absence of the Chairman or Executive Chairman and the Executive Vice-Chairman, or if there is no Chairman, Executive Chairman,
or Executive Vice-Chairman; (c) to call meetings of the stockholders and meetings of the Board of Directors to be held at such times
and, subject to the limitations prescribed by law or by these Bylaws, at such places as he or she shall deem proper; and (d) to affix
the signature of the Corporation to all deeds, conveyances, mortgages, leases, obligations, bonds, certificates and other papers and instruments
in writing which have been authorized by the Board of Directors or which, in the judgment of the Chief Executive Officer, should be executed
on behalf of the Corporation, to sign certificates for shares of stock of the Corporation, and, subject to the direction of the Board
of Directors, to have general charge of the property of the Corporation and to supervise and control all officers, agents and employees
of the Corporation.
(e)
President. The powers and duties of the President are: (a) subject to the authority granted to the Chief Executive
Officer, if any, to act as the general manager of the Corporation and, subject to the control of the Board of Directors, to have general
supervision, direction and control of the business and affairs of the Corporation; (b) to preside at all meetings of the stockholders
and Board of Directors in the absence of the Chairman or Executive Chairman, the Executive Vice-Chairman and the Chief Executive Officer
or if there be no Chairman, Executive Chairman, Executive Vice-Chairman, or Chief Executive Officer; and (c) to affix the signature
of the Corporation to all deeds, conveyances, mortgages, leases, obligations, bonds, certificates and other papers and instruments in
writing which have been authorized by the Board of Directors or which, in the judgment of the President, should be executed on behalf
of the Corporation, to sign certificates for shares of stock of the Corporation, and, subject to the direction of the Board of Directors,
to have general charge of the property of the Corporation and to supervise and control all officers, agents and employees of the Corporation.
The President shall perform other duties commonly incident to the office and shall also perform such other duties and have such other
powers as the Board of Directors shall designate from time to time.
(f)
Vice Presidents. The Vice Presidents may assume and perform the duties of the President in the absence or disability of
the President or whenever the office of President is vacant. The Vice Presidents shall perform other duties commonly incident to their
office and shall also perform such other duties and have such other powers as the Board of Directors or the President shall designate
from time to time.
(g)
Chief Financial Officer. The powers and duties of the Chief Financial Officer are: (a) to supervise and control the
keeping and maintaining of adequate and correct accounts of the Corporation’s properties and business transactions, including accounts
of its assets, liabilities, receipts, disbursements, gains, losses, capital, surplus and shares; (b) to have the custody of all funds,
securities, evidences of indebtedness and other valuable documents of the Corporation and, at his or her discretion, to cause any or all
thereof to be deposited for the account of the Corporation with such depository as may be designated from time to time by the Board of
Directors; (c) to receive or cause to be received, and to give or cause to be given, receipts and acquittances for moneys paid in
for the account of the Corporation; (d) to disburse, or cause to be disbursed, all funds of the Corporation as may be directed by
the Chief Executive Officer, the President or the Board of Directors, taking proper vouchers for such disbursements; (e) to
render to the Chief Executive Officer, the President or to the Board of Directors, whenever either may require, accounts of all transactions
as Chief Financial Officer and of the financial condition of the Corporation; and (f) generally to do and perform all such
duties as pertain to such office and as may be required by the Board of Directors or these Bylaws. The Chief Executive Officer may direct
a Controller or any Assistant Controller to assume and perform the duties of the Chief Financial Officer in the absence or disability
of the Chief Financial Officer, and each Controller and Assistant Controller shall perform other duties commonly incident to the office
and shall also perform such other duties and have such other powers as the Board of Directors or the Chief Executive Officer shall designate
from time to time.
(h)
Secretary. The powers and duties of the Secretary are: (a) to keep a book of minutes at the principal executive office
of the Corporation, or such other place as the Board of Directors may order, of all meetings of its directors and stockholders, whether
regular or special, the notice thereof given, the names of those present at directors’ meetings, the number of shares present or
represented at stockholders’ meetings and the proceedings thereof; (b) to keep the seal of the Corporation and to affix the
same to all instruments which may require it; (c) to keep or cause to be kept at the principal executive office of the Corporation,
or at the office of the transfer agent or agents, a record of the stockholders of the Corporation; (d) to keep a supply of certificates
for shares of the Corporation, to fill in and sign all certificates issued or prepare the initial transaction statement or written statements
for uncertificated shares, and to make a proper record of each such issuance, provided that so long as the Corporation shall have one
or more duly appointed and acting transfer agents of the shares, or any class or series of shares, of the Corporation, such duties with
respect to such shares shall be performed by such transfer agent or transfer agents; (e) to transfer upon the share books of the
Corporation any and all shares of the Corporation, provided that so long as the Corporation shall have one or more duly appointed and
acting transfer agents of the shares, or any class or series of shares, of the Corporation, such duties with respect to such shares shall
be performed by such transfer agent or transfer agents; and (f) to make service and publication of all notices that may be necessary
or proper and without command or direction from anyone. The Secretary shall perform all other duties provided for in these Bylaws and
other duties commonly incident to the office and shall also perform such other duties and have such other powers as the Board of Directors
shall designate from time to time. The Chief Executive Officer may direct any Assistant Secretary to assume and perform the duties of
the Secretary in the absence or disability of the Secretary, and each Assistant Secretary shall perform other duties commonly incident
to the office and shall also perform such other duties and have such other powers as the Board of Directors or the Chief Executive Officer
shall designate from time to time.
4.7
Divisional and Other Officers. The Executive Chairman and the Chief Executive Officer shall have the power, in the exercise
of his or her discretion, to appoint additional persons to hold positions and titles such as vice president of a division of the Corporation
or president of a division of the Corporation, or similar such titles, as the business of the Corporation may require, subject to such
limits in appointment power as the Board of Directors may determine. The Board of Directors shall be advised of any such appointment at
a meeting of the Board of Directors, and the appointment shall be noted in the minutes of the meeting. The minutes shall clearly state
that such persons are non-corporate officers appointed pursuant to this Section. Each such appointee shall have such title, shall serve
in such capacity and shall have such authority and perform such duties as the Executive Chairman or Chief Executive Officer shall determine.
Appointees may hold titles such as “president” of a division or other group within the Corporation, or “vice president”
of a division or other group within the Corporation. However, any such appointee, absent specific election by the Board of Directors as
an elected corporate officer, (a) shall not be considered an officer elected by the Board of Directors pursuant to this Article IV
and shall not have the executive powers or authority of corporate officers elected pursuant to this Article IV and (b) shall
be empowered to represent himself or herself to third parties as a divisional or group vice president or other title permitted, as applicable,
only, and shall be empowered to execute documents, bind the Corporation or otherwise act on behalf of the Corporation only as authorized
by the Executive Chairman or Chief Executive Officer or by resolution of the Board of Directors.
4.8
Salaries. The salaries of all officers and agents of the Corporation shall be fixed by the
Board of Directors or any committee of the Board, if so authorized by the Board.
4.9
Employment and Other Contracts. The Board of Directors may authorize any officer or officers
or agent or agents to enter into any contract or execute and deliver any instrument in the name or on behalf of the Corporation, and such
authority may be general or confined to specific instances. The Board of Directors may, when it believes the interest of the Corporation
will best be served thereby, authorize executive employment contracts which will contain such terms and conditions as the Board of Directors
deems appropriate.
article
V
SHARES OF STOCK
5.1
Form of Certificates. The Corporation may, but is not required to, deliver to each stockholder
a certificate or certificates, in such form as may be determined by the Board of Directors, representing shares to which the stockholder
is entitled. Such certificates shall be consecutively numbered and shall be registered on the books and records the Corporation or its
transfer agent as they are issued. Each certificate shall state on the face thereof the holder’s name, the number, class of shares,
and the par value of such shares or a statement that such shares are without par value.
5.2
Shares without Certificates. The Board of Directors may authorize the issuance of uncertificated
shares of some or all of the shares of any or all of its classes or series. The issuance of uncertificated shares has no effect on existing
certificates for shares until surrendered to the Corporation, or on the respective rights and obligations of the stockholders. Unless
otherwise provided by the Nevada Revised Statutes, the rights and obligations of stockholders are identical whether or not their shares
of stock are represented by certificates. Within a reasonable time after the issuance or transfer of uncertificated shares, the Corporation
shall send the stockholder a written statement containing the information required on the certificates pursuant to Section 5.1. At least
annually thereafter, the Corporation shall provide to its stockholders of record, a written statement confirming the information contained
in the informational statement previously sent pursuant to this Section.
5.3
Lost, Stolen or Destroyed Certificates. The Board of Directors may direct that a new certificate
be issued, or that uncertificated shares be issued, in place of any certificate theretofore issued by the Corporation alleged to have
been lost or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate to be lost or destroyed. When
authorizing such issue of a new certificate or uncertificated shares, the Board of Directors, in its discretion and as a condition precedent
to the issuance thereof, may require the owner of such lost or destroyed certificate, or his legal representative, to advertise the same
in such manner as it shall require and/or to give the Corporation a bond, in such form, in such sum, and with such surety or sureties
as it may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have
been lost or destroyed. When a certificate has been lost, apparently destroyed or wrongfully taken, and the holder of record fails to
notify the Corporation within a reasonable time after he has notice of it, and the Corporation registers a transfer of the shares represented
by the certificate before receiving such notification, the holder of record is precluded from making any claim against the Corporation
for the transfer or a new certificate or uncertificated shares.
5.4
Restrictions on Transfer. The Corporation shall have power to enter into and perform any agreement with any number of stockholders
of any one or more classes of stock of the Corporation to restrict the sale, transfer, assignment, pledge, or other disposal of or encumbering
of any of the shares of stock of the Corporation or any right or interest therein, whether voluntarily or by operation of law, or by gift
or otherwise of shares of stock of the Corporation of any one or more classes owned by such stockholders in any manner not prohibited
by the Nevada Revised Statutes. Transfers of record of shares of stock of the Corporation shall be made only upon its books by the holders
thereof, in person or by attorney duly authorized, and, in the case of stock represented by certificate, upon the surrender of a properly
endorsed certificate or certificates for a like number of shares.
5.5
Registered Stockholders. The Corporation shall be entitled to treat the holder of record of
any share or shares of stock as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim
to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof,
except as otherwise provided by law.
article
VI
indemnification
6.1
Directors and Executive Officers. The Corporation shall indemnify its directors and executive officers (for the purposes
of this Article, “executive officers” shall have the meaning defined in Rule 3b-7 promulgated under the 1934 Act) to the fullest
extent not prohibited by the Nevada Revised Statutes or any other applicable law; provided, however, that the Corporation may modify the
extent of such indemnification by individual contracts with its directors and executive officers; and, provided, further, that the Corporation
shall not be required to indemnify any director or executive officer in connection with any proceeding (or part thereof) initiated by
such person unless (a) such indemnification is expressly required to be made by law, (b) the proceeding was authorized by the Board
of Directors of the Corporation, (c) such indemnification is provided by the Corporation, in its sole discretion, pursuant to the
powers vested in the Corporation under the Nevada Revised Statutes or any other applicable law or (d) such indemnification is required
to be made under Section 6.4.
6.2
Other Officers, Employees and Other Agents. The Corporation shall have power to indemnify its other officers, employees
and other agents as set forth in the Nevada Revised Statutes or any other applicable law. The Board of Directors shall have the power
to delegate the determination of whether indemnification shall be given to any such person except such executive officers to officers
or other persons as the Board of Directors shall determine.
6.3
Expenses. The Corporation shall advance to any person who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that
he is or was a director or executive officer of the Corporation, or is or was serving at the request of the Corporation as a director
or executive officer of another corporation, partnership, joint venture, trust or other enterprise, prior to the final disposition of
the proceeding, promptly following request therefor, all expenses incurred by any director or executive officer in connection with such
proceeding, provided, however, that, if the Nevada Revised Statutes requires, an advancement of expenses incurred by a director or officer
in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee,
including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an undertaking,
by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from
which there is no further right to appeal that such indemnitee is not entitled to be indemnified for such expenses under this Section
or otherwise. Notwithstanding the foregoing, unless otherwise determined pursuant to Section 6.5, no advance shall be made by the Corporation
to an executive officer of the Corporation (except by reason of the fact that such executive officer is or was a director of the Corporation,
in which event this paragraph shall not apply) in any action, suit or proceeding, whether civil, criminal, administrative or investigative,
if a determination is reasonably and promptly made (a) by a majority vote of a quorum consisting of directors who were not parties
to the proceeding, even if not a quorum, or (b) by a committee of such directors designated by a majority of such directors, even
though less than a quorum, or (c) if there are no such directors, or such directors so direct, by independent legal counsel in a written
opinion, that the facts known to the decision-making party at the time such determination is made demonstrate clearly and convincingly
that such person acted in bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the
Corporation.
6.4
Enforcement. Without the necessity of entering into an express contract, all rights to indemnification and advances to directors
and executive officers under this Article VI shall be deemed to be contractual rights and be effective to the same extent and as if provided
for in a contract between the Corporation and the director or executive officer. Any right to indemnification or advances granted by this
Article VI to a director or executive officer shall be enforceable by or on behalf of the person holding such right in any court of competent
jurisdiction if (a) the claim for indemnification or advances is denied, in whole or in part, or (b) no disposition of such
claim is made within ninety (90) days of request therefor. The claimant in such enforcement action, if successful in whole or in part,
shall be entitled to be paid also the expense of prosecuting the claim. In connection with any claim for indemnification, the Corporation
shall be entitled to raise as a defense to any such action that the claimant has not met the standards of conduct that make it permissible
under the Nevada Revised Statutes or any other applicable law for the Corporation to indemnify the claimant for the amount claimed. In
connection with any claim by an executive officer of the Corporation (except in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that such executive officer is or was a director of the Corporation) for advances,
the Corporation shall be entitled to raise as a defense as to any such action clear and convincing evidence that such person acted in
bad faith or in a manner that such person did not believe to be in or not opposed to the best interests of the Corporation, or with respect
to any criminal action or proceeding that such person acted without reasonable cause to believe that his conduct was lawful. Neither the
failure of the Corporation (including its Board of Directors, independent legal counsel or its stockholders) to have made a determination
prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he has met the applicable
standard of conduct set forth in the Nevada Revised Statutes or any other applicable law, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel or its stockholders) that the claimant has not met such applicable standard
of conduct, shall be a defense to the action or create a presumption that claimant has not met the applicable standard of conduct.
6.5
Non-Exclusivity of Rights. The rights conferred on any person by this Article VI shall not be exclusive of any other right
which such person may have or hereafter acquire under any applicable statute, provision of the Articles of Incorporation, these Bylaws,
agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in
another capacity while holding office. The Corporation is specifically authorized to enter into individual contracts with any or all of
its directors, officers, employees or agents respecting indemnification and advances, to the fullest extent not prohibited by the Nevada
Revised Statutes or any other applicable law.
6.6
Survival of Rights. The rights conferred on any person by this Article VI shall continue as to a person who has ceased to
be a director or executive officer and shall inure to the benefit of the heirs, executors and administrators of such a person.
6.7
Insurance. To the fullest extent permitted by the Nevada Revised Statutes, or any other applicable law, the Corporation,
upon approval by the Board of Directors, may purchase insurance on behalf of any person required or permitted to be indemnified pursuant
to this Article VI.
6.8
Amendments. Any repeal or modification of this Article VI shall only be prospective and shall not affect the rights under
this Bylaw in effect at the time of the alleged occurrence of any action or omission to act that is the cause of any proceeding against
any agent of the Corporation.
6.9
Saving Clause. If this Article VI or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction,
then the Corporation shall nevertheless indemnify each director and executive officer to the full extent not prohibited by any applicable
portion of this Article that shall not have been invalidated, or by any other applicable law. If this Article VI shall be invalid
due to the application of the indemnification provisions of another jurisdiction, then the Corporation shall indemnify each director and
executive officer to the full extent under applicable law.
6.10
Certain Definitions. For the purposes of this Article VI, the following definitions shall apply:
(a)
The term “proceeding” shall be broadly construed and shall include, without limitation, the investigation, preparation,
prosecution, defense, settlement, arbitration and appeal of, and the giving of testimony in, any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative.
(b)
The term “expenses” shall be broadly construed and shall include, without limitation, court costs, attorneys’
fees, witness fees, fines, amounts paid in settlement or judgment and any other costs and expenses of any nature or kind incurred in connection
with any proceeding.
(c)
The term the “Corporation” shall include, in addition to the resulting Corporation, any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had
power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer,
employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position
under the provisions of this Article with respect to the resulting or surviving Corporation as he would have with respect to such constituent
corporation if its separate existence had continued.
(d)
References to a “director,” “executive officer,” “officer,” “employee,” or “agent”
of the Corporation shall include, without limitation, situations where such person is serving at the request of the Corporation as, respectively,
a director, executive officer, officer, employee, trustee or agent of another corporation, partnership, joint venture, trust or other
enterprise.
(e)
References to “other enterprises” shall include employee benefit plans; references to “fines” shall include
any excise taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the
Corporation” shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or
involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries;
and a person who acted in good faith and in a manner he reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation”
as referred to in this Article.
article
VII
NOTICES
7.1
Form of Notice. Whenever required by law, the Articles of Incorporation or these Bylaws, notice
is to be given to any director or stockholder, and no provision is made as to how such notice shall be given, such notice may be given
in writing, by mail, postage prepaid, addressed to such director or stockholder at such address as appears on the books and records of
the Corporation or its transfer agent. A notice or other communication may also be delivered by electronic transmission if the electronic
transmission contains or is accompanied by information from which the recipient can determine the date of the transmission. Unless otherwise
agreed between sender and recipient, an electronic transmission is received when it enters an information processing system that the recipient
has designated or uses for the purpose of receiving electronic transmissions or information of the type sent and it is in a form ordinarily
capable of being processed by that system. Except as otherwise provided by these Bylaws or specific statute, any notice or other communication,
if in a comprehensible form or manner, is effective at the earliest of the following: (a) if in a physical form, when it is left at the
address of a director or stockholder as it appears upon the records of the Corporation, the residence or usual place of business of a
director or stockholder or the stockholder’s principal place of business; (b) if mailed by United States mail postage prepaid and
correctly addressed to a director or stockholder, upon deposit in the United States mail; or (c) if oral, when communicated.
7.2
Waiver. Whenever any notice is required to be given to any stockholder or director of the
Corporation as required by law, the Articles of Incorporation or these Bylaws, a waiver thereof in writing signed by the person or persons
entitled to such notice, whether before or after the time stated in such notice, shall be equivalent to the giving of such notice. Attendance
of a stockholder or director at a meeting shall constitute a waiver of notice of such meeting, except where such stockholder or director
attends for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called
or convened.
7.3
Affidavit of Mailing. An affidavit of mailing, executed by a duly authorized and competent employee of the Corporation or
its transfer agent appointed with respect to the class of stock affected or other agent, specifying the name and address or the names
and addresses of the stockholder or stockholders, or director or directors, to whom any such notice or notices was or were given, and
the time and method of giving the same, shall in the absence of fraud, be prima facie evidence of the facts therein contained.
7.4
Methods of Notice. It shall not be necessary that the same method of giving notice be employed in respect of all recipients
of notice, but one permissible method may be employed in respect of any one or more, and any other permissible method or methods may be
employed in respect of any other or others.
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VIII
GENERAL PROVISIONS
8.1
Execution of Corporate Instruments. The Board of Directors may, in its discretion, determine the method and designate the
signatory officer or officers, or other person or persons, to execute on behalf of the Corporation any corporate instrument or document,
or to sign on behalf of the Corporation the corporate name without limitation, or to enter into contracts on behalf of the Corporation,
except where otherwise provided by law or these Bylaws, and such execution or signature shall be binding upon the Corporation. All checks
and drafts drawn on banks or other depositaries on funds to the credit of the Corporation or in special accounts of the Corporation shall
be signed by such person or persons as the Board of Directors shall authorize so to do. Unless authorized or ratified by the Board of
Directors or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the Corporation
by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount.
8.2
Execution of Other Securities. All bonds, debentures and other corporate securities of the Corporation, other than stock
certificates (covered in Section 5.1 of these Bylaws), may be signed by the Chairman or Executive Chairman, the Executive Vice-Chairman,
the Chief Executive Officer, the President or any Vice President, or such other person as may be authorized by the Board of Directors,
and the corporate seal impressed thereon or a facsimile of such seal imprinted thereon and attested by the signature of the Secretary
or an Assistant Secretary, or the Chief Financial Officer or Treasurer or an Assistant Treasurer; provided, however, that where any such
bond, debenture or other corporate security shall be authenticated by the manual signature, or where permissible facsimile signature,
of a trustee under an indenture pursuant to which such bond, debenture or other corporate security shall be issued, the signatures of
the persons signing and attesting the corporate seal on such bond, debenture or other corporate security may be the imprinted facsimile
of the signatures of such persons. Interest coupons appertaining to any such bond, debenture or other corporate security, authenticated
by a trustee as aforesaid, shall be signed by the Treasurer or an Assistant Treasurer of the Corporation or such other person as may be
authorized by the Board of Directors, or bear imprinted thereon the facsimile signature of such person. In case any officer who shall
have signed or attested any bond, debenture or other corporate security, or whose facsimile signature shall appear thereon or on any such
interest coupon, shall have ceased to be such officer before the bond, debenture or other corporate security so signed or attested shall
have been delivered, such bond, debenture or other corporate security nevertheless may be adopted by the Corporation and issued and delivered
as though the person who signed the same or whose facsimile signature shall have been used thereon had not ceased to be such officer of
the Corporation.
8.3
Voting of Securities Owned by the Corporation. All stock and other securities of other corporations owned or held by the
Corporation for itself, or for other parties in any capacity, shall be voted, and all proxies with respect thereto shall be executed,
by the person authorized so to do by resolution of the Board of Directors, or, in the absence of such authorization, by the Chairman or
Executive Chairman, the Executive Vice-Chairman, the Chief Executive Officer, the President, or any Vice President.
8.4
Dividends. Dividends upon the outstanding shares of the Corporation, subject to the provisions
of the Articles of Incorporation, if any, may be declared by the Board of Directors at any regular or special meeting. Dividends may be
declared and paid in cash, in property, or in shares of the Corporation, subject to the provisions of the Nevada Revised Statutes and
the Articles of Incorporation. The Board of Directors may fix in advance a record date for the purpose of determining stockholders entitled
to receive payment of any dividend, such record date to be not more than sixty (60) days prior to the payment date of such dividend, or
the Board of Directors may close the stock transfer books for such purpose for a period of not more than sixty (60) days prior to the
payment date of such dividend. In the absence of any action by the Board of Directors, the date upon which the Board of Directors adopts
the resolution declaring such dividend shall be the record date.
8.5
Reserves. There may be created by resolution of the Board of Directors out of the surplus
of the Corporation such reserve or reserves as the directors from time to time, in their discretion, think proper to provide for contingencies,
or to equalize dividends, or to repair or maintain any property of the Corporation, or for such other purpose as the directors shall think
beneficial to the Corporation, and the directors may modify or abolish any such reserve in the manner in which it was created. Surplus
of the Corporation to the extent so reserved shall not be available for the payment of dividends or other distributions by the Corporation.
8.6
Books and Records. The Corporation shall keep correct and complete books and records of account
and minutes of the proceedings of its stockholders and Board of Directors, and shall keep at its registered office or principal place
of business, or at the office of its transfer agent or registrar, a record of its stockholders, giving the names and addresses of all
stockholders and the number and class of the shares held by each.
8.7
Corporate Seal. The Board of Directors may adopt a corporate seal. The corporate seal shall consist of a die bearing the
name of the Corporation and the inscription, “Corporate Seal-Nevada.” Said seal may be used by causing it or a facsimile thereof
to be impressed or affixed or reproduced or otherwise.
8.8
Fiscal Year. The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.
8.9
Interpretation and Construction. Reference in these Bylaws to any provision of the Nevada Revised Statutes shall be deemed
to include all amendments thereof. Unless the context requires otherwise, the general provisions, rules of construction and definitions
in the Nevada Revised Statutes shall govern the construction of these Bylaws. Without limiting the generality of the provision, the singular
number includes the plural, the plural number includes the singular, and the term “person” includes both a corporation and
a natural person. All restrictions, limitations, requirements and other provisions of these Bylaws shall be construed, insofar as possible,
as supplemental and additional to all provisions of law applicable to the subject matter thereof and shall be fully complied with in addition
to the said provisions of law unless such compliance shall be illegal. Any article, section, subsection, subdivision, sentence, clause
or phrase of these Bylaws which, upon being construed in the manner provided in this Section 8.9, shall be contrary to or inconsistent
with any applicable provision of law, shall not apply so long as said provisions of law shall remain in effect, but such result shall
not affect the validity or applicability of any other portions of these Bylaws, it being hereby declared that these Bylaws, and each article,
section, subsection, subdivision, sentence, clause, or phrase thereof, would have been adopted irrespective of the fact that any one or
more articles, sections, subsections, subdivisions, sentences, clauses or phrases is or are illegal.
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IX
ADOPTION, AMENDMENT OR REPEAL OF BYLAWS
9.1
By the Board of Directors. The Board of Directors is expressly empowered to adopt, amend or repeal bylaws of the Corporation.
9.2
By the Stockholders. The stockholders shall also have power to adopt, amend or repeal bylaws of the Corporation; provided,
however, that, in addition to any vote of the holders of any class or series of stock of the Corporation required by law or by the Articles
of Incorporation, such action by stockholders shall require the affirmative vote of the holders of at least a majority of the voting power
of all of the then-outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors,
voting together as a single class.
* * *
ANNEX D
AMENDMENT NO. 1
TO
SMART FOR LIFE, INC.
2022 EQUITY INCENTIVE PLAN
The Smart for Life, Inc. Equity Incentive Plan (the “Plan”)
is hereby amended as follows:
Section 4.1 of the Plan is hereby amended in its entirety to read as
follows:
“4.1 Subject
to adjustment in accordance with Section 11, a total of 70,000,000 shares of Common Stock shall be available for the grant of Awards
under the Plan. Shares of Common Stock granted in connection with all Awards under the Plan shall be counted against this limit as one
(1) share of Common Stock for every one (1) share of Common Stock granted in connection with such Award. During the terms of the Awards,
the Company shall keep available at all times the number of shares of Common Stock required to satisfy such Awards.”
Except as herein amended, the provisions of the Plan shall remain in
full force and effect.
Effective as of _________, 2023.
D-1