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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): September 27, 2023
EVOFEM
BIOSCIENCES, INC.
(Exact
name of registrant as specified in its charter)
| Delaware |
|
001-36754 |
|
20-8527075 |
| (State
or other jurisdiction |
|
(Commission |
|
(I.R.S.
Employer |
| of
incorporation) |
|
File
Number) |
|
Identification
No.) |
7770
Regents Road, Suite 113-618
San
Diego, California 92122
(Address
of principal executive offices)
(858)
550-1900
(Registrant’s
telephone number, including area code)
N/A
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under
any of the following provisions:
| ☐ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
|
| ☐ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a -12) |
| |
|
| ☐ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d -2(b)) |
| |
|
| ☐ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e -4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
| Title
of each class |
|
Trading
Symbol(s) |
|
Name
of exchange on which registered |
| Common
Stock, par value $0.0001 per share |
|
EVFM |
|
OTCQB |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging Growth Company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
1.01 Entry into a Material Definitive Agreement Securities Purchase Agreement
On
September 27, 2023, Evofem Biosciences, Inc., a Delaware corporation (the “Company”), entered into a securities purchase
agreement (“SPA”), with certain investors (the “Investors”) providing for the sale and issuance
of senior subordinate convertible notes due in the aggregate original principal amount of $2,884,615 (the “Notes”),
warrants to purchase an aggregate of 22,189,349 shares (the “Series A Warrants”) of common stock the Company, par
value $0.0001 (the “Common Stock”), and prepaid warrants to purchase an aggregate of 4,807,692 shares of Common Stock (the
“Series B Warrants,” and, together with the Series A Warrants, the “Warrants”) (collectively, the
“Offering”).
The
Offering closed on September 27, 2023 (the “Closing Date”) and as a result, the Company issued Notes in an aggregate
principal amount of $2,884,615, Series A Warrants to purchase 22,189,349 shares of Common Stock, and Series B Warrants to purchase 4,807,692
shares of Common Stock. Each Investor paid approximately $650 for each $1,000 of the principal amount of Notes and Warrants. The net
amount of proceeds after the offering costs to the Company from the Offering was approximately $1.5 million.
The
Company may not effect the conversion or the exercise of the Notes and/or Warrants, and the applicable holder will not be entitled to
convert or exercise any portion of any such Notes and/or Warrants, which, upon giving effect to such conversion or exercise, would cause
the aggregate number of shares of Common Stock beneficially owned by the holder of such Notes and/or Warrants (together with its affiliates)
to exceed 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the conversion or exercise, as
such percentage ownership is determined in accordance with the terms of such Notes and/or Warrants.
Warrants
The
Series A Warrants are exercisable into shares of Common Stock at an exercise price of $0.13 per share (“Exercise Price”)
and allow for cashless exercise. Investors with Series B Warrants prepaid $0.129 per share, which have a nominal subsequent
exercise price of $0.001. The Company is to reserve for issuance under the Warrants the maximum number of shares of Common Stock to satisfy
the Required Reserve Amount (as defined in the SPA). In the event the Company does not maintain the Required Reserve Amount, the
Company shall pay cash in exchange for the cancellation of such Warrants exercisable at a price equal to the sum of (i) the product
of (x) such number of Authorization Failure Shares and (y) the greatest Closing Sale Price of the Common Stock on any Trading Day during
the period commencing on the date the Holder delivers the applicable Exercise Notice. If on any of the thirtieth (30th), sixtieth
(60th), ninetieth (90th), one hundred twentieth (120th), and/or one hundred and eightieth (180th),
as applicable, calendar day after the Closing Date (the “Adjustment Date”), the Exercise Price then in effect is greater
than the Market Price (as defined by the SPA) then in effect (the “Adjustment Price”), on the Adjustment Date the
Exercise Price shall automatically lower to the Adjustment Price. The Warrants expire on the fifth (5th) anniversary date
from the Issuance Date.
Notes
The
Notes will be the senior subordinate obligations of the Company and not the financial obligations of our subsidiaries. The principal
amount of the Notes accrue interest at a rate of 8% per annum (the “Interest Rate”), which will adjust to 12% upon
an Event of Default (the “Default Rate”). The Notes are convertible at a conversion price of $0.13 per share,
subject to adjustment as described therein. Unless earlier converted or redeemed, the Notes will mature on September 27, 2026, (the “Maturity
Date”), subject to the right of the investor to extend the date:
(i)
if an event of default under the Notes has occurred and is continuing (or any event shall have occurred and be continuing that with the
passage of time and the failure to cure would result in an event of default under the Notes) and
(ii)
for a period of 20 business days after the consummation of a fundamental transaction if certain events occur.
The
Company is required to pay a late charge of 12%
per annum (“Late Charges”) on any amount of principal or other amounts that are not paid when due. The Company
is required to pay, on the Maturity Date, all outstanding principal, accrued and unpaid interest, and accrued and unpaid Late
Charges on such principal and interest, if any.
Beneficial
Ownership Limitation on Conversion
The
Notes may not be converted and shares of Common Stock may not be issued under Notes if, after giving effect to the conversion or issuance,
the applicable holder of Notes (together with its affiliates, if any) would beneficially own in excess of 4.99% of our outstanding shares
of Common Stock, which we refer to herein as the “Note Blocker”. The Note Blocker may be raised or lowered to any other percentage
not in excess of 9.99% at the option of the applicable holder of Notes, except that any raise will only be effective upon 61-days’
prior notice to us.
Fundamental
Transactions
The
Notes prohibit the Company from entering specified fundamental transactions (including, without limitation, mergers, business
combinations and similar transactions) unless we are (or our successor is) a public company that assumes in writing all
of our obligations under the Notes.
Change
of Control Redemption Right
In
connection with a change of control of the Company, each holder may require us to redeem in cash all, or any portion, of the Notes at
the greater of the product of the 25% redemption premium multiplied by (i) the conversion amount to be redeemed, (ii) the product of
the conversion amount to be redeemed multiplied by the equity value of our Common Stock underlying the Notes and (iii) the product of
the conversion amount to be redeemed multiplied by the equity value of the change of control consideration payable to the holder of our
Common Stock underlying the Notes.
The
equity value of our Common Stock underlying the Notes is calculated using the greatest closing sale price of our Common Stock during
the period immediately preceding the consummation or the public announcement of the change of control and ending the date the holder
gives notice of such redemption.
The
equity value of the change of control consideration payable to the holder of our Common Stock underlying the Notes is calculated using
the aggregate cash consideration per share of our Common Stock to be paid to the holders of our Common Stock upon the change of control.
Covenants
The
Notes contain a variety of obligations on our part not to engage in specified activities, which are typical for transactions of this
type, as well as the following covenants:
| |
○ |
All
payments under the Notes shall be made pari passu with all other Notes and shall be senior to all other Indebtedness other
than Permitted Senior Indebtedness and Permitted Indebtedness secured by Permitted Liens. |
| |
|
|
| |
○ |
we
and our subsidiaries will not initially (directly or indirectly) incur any other indebtedness except for permitted indebtedness; |
| |
|
|
| |
○ |
we
and our subsidiaries will not initially (directly or indirectly) will not incur any liens, except for permitted liens; |
| |
○ |
we
and our subsidiaries will not, directly or indirectly, redeem or repay all or any portion of any indebtedness (except for certain
permitted indebtedness) if at the time the payment is due or is made or, after giving effect to the payment, an event constituting,
or that with the passage of time and without being cured would constitute, an event of default has occurred and is continuing; |
| |
|
|
| |
○ |
we
and our subsidiaries will not redeem, repurchase or pay any dividend or distribution on our respective capital stock; |
| |
|
|
| |
○ |
we
and our subsidiaries will not initially, directly or indirectly, permit any indebtedness to mature or accelerate prior to the Maturity
Date of the Notes; and |
| |
|
|
| |
○ |
we
will maintain engagement with an independent auditor to audit our financial statements that is registered with the Public
Company Accounting Oversight Board. |
Events
of Default
The
Notes contain standard and customary events of default including but not limited: (i) the failure of the Registration Statement (pursuant
to the Registration Rights Agreement) to be filed with the SEC on or prior to five days prior to the Filing Deadline (as defined therein);
(ii) the lapse of the effectiveness of that Registration Statement; (iii) the suspension of our Common Stock from trading
on the Eligible Market; (iv) the failure to cure a Conversion Failure (as defined therein); (v) the failure to maintain
the Authorized Share Allocation (as defined therein); (vi) failure to make payments when due under the Notes; (vii) bankruptcy
or insolvency of the Company; and/or (viii) the occurrence of default under redemption or acceleration prior to Maturity of an
aggregate $100,000 of Indebtedness (as defined therein).
If
an event of default occurs, each holder may require us to redeem all or any portion of the Notes (including all accrued and unpaid interest
and Late Charges thereon), in cash, at the greater of a 125% redemption premium multiplied by the conversion amount to be redeemed, and
solely with respect to certain events of the default, the equity value of our Common Stock underlying the Notes.
The
equity value of our Common Stock underlying the Notes is calculated using the greatest closing sale price of our Common Stock on any
trading day immediately preceding such event of default and the date we make the entire payment required.
Subsequent
Placement Optional Redemption Rights
At
any time from and after the earlier of (x) the date the Holder becomes aware of the occurrence of a Subsequent Placement (as defined
in the Securities Purchase Agreement) (the “Holder Notice Date”) and (y) the time of consummation of a Subsequent
Placement (in each case, other than with respect to Excluded Securities (as defined in the SPA)) (each, an “Eligible Subsequent
Placement”), so long as No Permitted Senior Indebtedness remains outstanding or undefeased (unless the Company has obtained
the prior written consent of such holders of Permitted Senior Indebtedness) (the “Senior Debt Condition”), the Holder
shall have the right, in its sole discretion, to require that the Company redeem (each an “Subsequent Placement Optional Redemption”)
all, or any portion, of the Conversion Amount under this Note not in excess of (together with any Subsequent Placement Optional Redemption
Amount (as defined in the applicable other Note of the Holder) of any other Notes of the Holder) the Holder’s Holder Pro Rata Amount
of 25% of the gross proceeds of such Eligible Subsequent Placement (the “Eligible Subsequent Placement Optional Redemption Amount”).
Asset
Sale Optional Redemption
At
any time from and after the earlier of (x) the date the Holder becomes aware of the occurrence of an Asset Sale (including any insurance
and condemnation proceeds thereof) and (y) the time of consummation of an Asset Sale (other than sales of inventory and product in the
ordinary course of business and amounts reinvested in assets to be used in the Company’s business within 12 months of the date
of consummation of such Asset Sale) (each, an “Eligible Asset Sale”), subject to the satisfaction of the Senior Debt
Condition, the Holder shall have the right, in its sole discretion, to require that the Company redeem (each an “Asset Sale
Optional Redemption”) all, or any portion, of the Conversion Amount under this Note not in excess of (together with any Asset
Sale Optional Redemption Amount (as defined in the applicable other Note of the Holder) of any other Notes of the Holder) the Holder’s
Holder Pro Rata Amount of 100% of the net proceeds (including any insurance and condemnation proceeds with respect thereto, but excluding
legal and investment banking reasonable fees and expenses) of such Eligible Asset Sale (the “Eligible Asset Sale Optional Redemption
Amount”) by delivering written notice thereof (an “Asset Sale Optional Redemption Notice”) to the Company.
The
Notes will be governed by, and construed in accordance with, the laws of the State of New York without regard to its conflicts of law
principles.
Registration
Rights Agreement
In
connection with the Offering, the Company has entered into a Registration Rights Agreement (the “RRA”) wherein the
Company is required to file a Registration Statement on Form S-1 by the 90th calendar day after the Closing Date and (ii) with respect
to any additional Registration Statements that may be required to be filed by the Company pursuant to this Agreement, the date on which
the Company was required to file such additional Registration Statement pursuant to the terms of this Agreement.
The
Company is required to obtain effectiveness of the Registration Statement on Form S-1 the earlier of (A) 90th calendar day after the Closing
Date and (B) 2nd Business Day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that such
Registration Statement will not be reviewed or will not be subject to further review and (ii) with respect to any additional Registration
Statements that may be required to be filed by the Company pursuant to this Agreement, the earlier of the (A) 90th calendar day following
the date on which the Company was required to file such additional Registration Statement and (B) 2nd Business Day after the date the
Company is notified (orally or in writing, whichever is earlier) by the SEC that such Registration Statement will not be reviewed or
will not be subject to further review.
The
Company shall pay to each holder of Registrable Securities relating to such Registration Statement an amount in cash equal to two percent
(2%) of such Investor’s original principal amount stated in such Investor’s Note on the Closing Date (1) on the date of such
Filing Failure, Effectiveness Failure, Maintenance Failure or Current Public Information Failure, as applicable, and (2) on every thirty
(30) day anniversary of (I) a Filing Failure until such Filing Failure is cured; (II) an Effectiveness Failure until such Effectiveness
Failure is cured; (III) a Maintenance Failure until such Maintenance Failure is cured; and (IV) a Current Public Information Failure
until the earlier of (i) the date such Current Public Information Failure is cured and (ii) such time that such public information is
no longer required pursuant to Rule 144 (in each case, pro-rated for periods totaling less than thirty (30) days).
The
foregoing is intended to provide a summary of the terms of the agreements and securities related to the Offering. This summary is qualified
in its entirety by reference to the full text of the agreements, each of which is attached as an exhibit to this Current Report on Form
8-K (this “Report”) as Exhibit 10.1, 10.2, 10.3 and 10.4, respectively. Readers should review those agreements for
a complete understanding of the terms and conditions associated with these transactions. The representations, warranties and covenants
contained in the agreements relating the Offering were made as of a specified date, may be subject to a contractual standard of materiality
different from what might be viewed as material to investors, or may have been used for the purpose of allocating risk between the parties.
Accordingly, the representations and warranties in the agreements relating the Offering are not necessarily characterizations of the
actual state of facts about the Company and its subsidiaries at the time they were made or otherwise and should be read only in conjunction
with the other information that the Company makes publicly available in reports, statements and other documents filed with the Securities
and Exchange Commission (the “Commission”).
Item
9.01 Financial Statements and Exhibits.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
| |
EVOFEM
BIOSCIENCES, INC. |
| |
|
|
| Dated:
October 3, 2023 |
By: |
/s/Saundra
Pelletier |
| |
|
Saundra
Pelletier |
| |
|
Chief
Executive Officer |
Exhibit
10.1
SECURITIES
PURCHASE AGREEMENT
This
SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of September 27, 2023, is by and among Evofem Biosciences,
Inc., a Delaware corporation with offices located at 7770 Regents Road, Suite 113-618, San Diego, California 92122 (the “Company”),
and each of the investors listed on the Schedule of Buyers attached hereto (individually, a “Buyer” and collectively,
the “Buyers”).
RECITALS
A.
The Company and each Buyer is executing and delivering this Agreement in reliance upon the exemption from securities registration afforded
by Section 4(a)(2) of the Securities Act of 1933, as amended (the “1933 Act”), and Rule 506(b) of Regulation D (“Regulation
D”) as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the 1933 Act.
B.
The Company has authorized a new series of senior subordinated convertible notes of the Company, in the aggregate original principal
amount of $2,884,615.38, substantially in the form attached hereto as Exhibit A (the “Notes”), which
Notes shall be convertible into shares of Common Stock (the shares of Common Stock issuable pursuant to the terms of the Notes, including,
without limitation, upon conversion or otherwise, collectively, the “Conversion Shares”), in accordance with the terms
of the Notes.
C.
Each Buyer wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, (i) a Note in
the aggregate original principal amount set forth opposite such Buyer’s name in column (3) on the Schedule of Buyers, and (ii)
a warrant to initially acquire up to that aggregate number of additional shares of Common Stock set forth opposite such Buyer’s
name in column (4) on the Schedule of Buyers, substantially in the form attached hereto as Exhibit B (the “Series
A Warrants”) (as exercised, collectively, the “Series A Warrant Shares”) and (iii) a warrant to initially
acquire up to that aggregate number of additional shares of Common Stock set forth opposite such Buyer’s name in column (5) on
the Schedule of Buyers, substantially in the form attached hereto as Exhibit B (the “Series B Warrants,”
and together with the Series A Warrants, the “Warrants”) (as exercised, collectively, the “Series A Warrant
Shares,” and together with the Series B Warrant Shares, the “Warrant Shares”).
D.
At the Closing, the parties hereto shall execute and deliver a Registration Rights Agreement, in the form attached hereto as Exhibit
C (the “Registration Rights Agreement”), pursuant to which the Company has agreed to provide certain registration
rights with respect to the Registrable Securities (as defined in the Registration Rights Agreement), under the 1933 Act and the rules
and regulations promulgated thereunder, and applicable state securities laws.
E.
The Notes, the Conversion Shares, the Warrants and the Warrant Shares are collectively referred to herein as the “Securities.”
AGREEMENT
NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and each Buyer hereby agree as follows:
1.
PURCHASE AND SALE OF NOTES AND WARRANTS.
(a)
Purchase of Notes and Warrants. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below,
the Company shall issue and sell to each Buyer, and each Buyer severally, but not jointly, agrees to purchase from the Company on the
Closing Date (as defined below) (i) a Note in the original principal amount as is set forth opposite such Buyer’s name in column
(3) on the Schedule of Buyers, (ii) Series A Warrants to initially acquire up to that aggregate number of Series A Warrant Shares as
is set forth opposite such Buyer’s name in column (4) on the Schedule of Buyers and (iii) Series B Warrants to initially acquire
up to such aggregate number of Series B Warrant Shares as is set forth opposite such Buyer’s name in column (5) on the Schedule
of Buyers.
(b)
Closing. The closing (the “Closing”) of the purchase of the Notes and the Warrants by the Buyers shall occur
at the offices of Kelley Drye & Warren LLP, 3 World Trade Center, 175 Greenwich Street, New York, NY 10007. The date and time of
the Closing (the “Closing Date”) shall be 10:00 a.m., New York time, on the first (1st) Business Day on which the
conditions to the Closing set forth in Sections 6 and 7 below are satisfied or waived (or such other date as is mutually agreed to by
the Company and each Buyer). As used herein “Business Day” means any day other than Saturday, Sunday or other day
on which commercial banks in The City of New York are authorized or required by law to remain closed; provided, however,
for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”,
“shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure of any
physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including
for wire transfers) of commercial banks in The City of New York generally are open for use by customers on such day.
(c)
Purchase Price. The aggregate purchase price for the Notes and the Warrants to be purchased by each Buyer (the “Purchase
Price”) shall be the amount set forth opposite such Buyer’s name in column (6) on the Schedule of Buyers. Each Buyer
shall pay approximately $650 for each $1,000 of principal amount of Notes and related Warrants to be purchased by such Buyer at the Closing.
Each Buyer and the Company agree that the Notes and the Warrants constitute an “investment unit” for purposes of Section
1273(c)(2) of the Internal Revenue Code of 1986, as amended (the “Code”). The Buyers and the Company mutually agree
that the allocation of the issue price of such investment unit between the Notes and the Warrants in accordance with Section 1273(c)(2)
of the Code and Treasury Regulation Section 1.1273-2(h) shall be an aggregate amount of $1,254,807.69 allocated to the purchase of the
Notes and Warrants and an aggregate amount of $620,192.31 allocated to the prepayment of the exercise price of the Series B Warrants,
and neither the Buyers nor the Company shall take any position inconsistent with such allocation in any tax return or in any judicial
or administrative proceeding in respect of taxes.
(d)
Form of Payment. On the Closing Date, (i) each Buyer shall pay its respective Purchase Price (less, in the case of any Buyer,
the amounts withheld pursuant to Section 4(g)) to the Company for the Notes and the Warrants to be issued and sold to such Buyer at the
Closing, by wire transfer of immediately available funds in accordance with the Flow of Funds Letter (as defined below) and (ii) the
Company shall deliver to each Buyer (A) a Note in the aggregate original principal amount as is set forth opposite such Buyer’s
name in column (3) of the Schedule of Buyers, (B) a Series A Warrant pursuant to which such Buyer shall have the right to initially acquire
up to that aggregate number of Series A Warrant Shares as is set forth opposite such Buyer’s name in column (4) of the Schedule
of Buyers and (C) a Series B Warrant pursuant to which such Buyer shall have the right to initially acquire up to such aggregate number
of Series B Warrant Shares as is set forth opposite such Buyer’s name in column (5) of the Schedule of Buyers, in each case, duly
executed on behalf of the Company and registered in the name of such Buyer or its designee.
2.
BUYER’S REPRESENTATIONS AND WARRANTIES.
Each
Buyer, severally and not jointly, represents and warrants to the Company with respect to only itself that, as of the date hereof and
as of the Closing Date:
(a)
Organization; Authority. Such Buyer is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction
of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated by the Transaction
Documents (as defined below) to which it is a party and otherwise to carry out its obligations hereunder and thereunder.
(b)
No Public Sale or Distribution. Such Buyer (i) is acquiring its Note and Warrants, (ii) upon conversion of its Note will acquire
the Conversion Shares issuable upon conversion thereof, and (iii) upon exercise of its Warrants (other than pursuant to a Cashless Exercise
(as defined in the Warrants)) will acquire the Warrant Shares issuable upon exercise thereof, in each case, for its own account and not
with a view towards, or for resale in connection with, the public sale or distribution thereof in violation of applicable securities
laws, except pursuant to sales registered or exempted under the 1933 Act; provided, however, by making the representations herein, such
Buyer does not agree, or make any representation or warranty, to hold any of the Securities for any minimum or other specific term and
reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption
from registration under the 1933 Act. Such Buyer does not presently have any agreement or understanding, directly or indirectly, with
any Person to distribute any of the Securities in violation of applicable securities laws. For purposes of this Agreement, “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and any Governmental Entity or any department or agency thereof.
(c)
Accredited Investor Status. Such Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation
D.
(d)
Reliance on Exemptions. Such Buyer understands that the Securities are being offered and sold to it in reliance on specific exemptions
from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the
truth and accuracy of, and such Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings
of such Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of such Buyer to acquire
the Securities.
(e)
Information. Such Buyer and its advisors, if any, have been furnished with all materials relating to the business, finances and
operations of the Company and materials relating to the offer and sale of the Securities that have been requested by such Buyer. Such
Buyer and its advisors, if any, have been afforded the opportunity to ask questions of the Company. Neither such inquiries nor any other
due diligence investigations conducted by such Buyer or its advisors, if any, or its representatives shall modify, amend or affect such
Buyer’s right to rely on the Company’s representations and warranties contained herein. Such Buyer understands that its investment
in the Securities involves a high degree of risk. Such Buyer has sought such accounting, legal and tax advice as it has considered necessary
to make an informed investment decision with respect to its acquisition of the Securities.
(f)
No Governmental Review. Such Buyer understands that no United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in
the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.
(g)
Transfer or Resale. Such Buyer understands that except as provided in the Registration Rights Agreement and Section 4(h) hereof:
(i) the Securities have not been and are not being registered under the 1933 Act or any state securities laws, and may not be offered
for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B) such Buyer shall have delivered to the Company
(if requested by the Company) an opinion of counsel, in a form reasonably acceptable to the Company, to the effect that such Securities
to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration, or (C) such
Buyer provides the Company with reasonable assurance that such Securities can be sold, assigned or transferred pursuant to Rule 144 or
Rule 144A promulgated under the 1933 Act (or a successor rule thereto) (collectively, “Rule 144”); (ii) any sale of
the Securities made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144, and further, if Rule 144 is not
applicable, any resale of the Securities under circumstances in which the seller (or the Person through whom the sale is made) may be
deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933
Act or the rules and regulations of the SEC promulgated thereunder; and (iii) neither the Company nor any other Person is under any obligation
to register the Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption
thereunder. Notwithstanding the foregoing, the Securities may be pledged in connection with a bona fide margin account or other loan
or financing arrangement secured by the Securities and such pledge of Securities shall not be deemed to be a transfer, sale or assignment
of the Securities hereunder, and no Buyer effecting a pledge of Securities shall be required to provide the Company with any notice thereof
or otherwise make any delivery to the Company pursuant to this Agreement or any other Transaction Document (as defined in Section 3(b)),
including, without limitation, this Section 2(g).
(h)
Validity; Enforcement. This Agreement and the Registration Rights Agreement have been duly and validly authorized, executed and
delivered on behalf of such Buyer and shall constitute the legal, valid and binding obligations of such Buyer enforceable against such
Buyer in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or to applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement
of applicable creditors’ rights and remedies.
(i)
No Conflicts. The execution, delivery and performance by such Buyer of this Agreement and the Registration Rights Agreement and
the consummation by such Buyer of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational
documents of such Buyer, or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would
become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture
or instrument to which such Buyer is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities laws) applicable to such Buyer, except in the case of clauses (ii) and (iii) above, for such
conflicts, defaults, rights or violations which could not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of such Buyer to perform its obligations hereunder.
3.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The
Company represents and warrants to each of the Buyers that, as of the date hereof and as of the Closing Date:
(a)
Organization and Qualification. Each of the Company and each of its Subsidiaries are entities duly organized and validly existing
and in good standing under the laws of the jurisdiction in which they are formed, and have the requisite power and authority to own their
properties and to carry on their business as now being conducted and as presently proposed to be conducted. Each of the Company and each
of its Subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction in which its ownership
of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to
be so qualified or be in good standing would not reasonably be expected to have a Material Adverse Effect (as defined below). As used
in this Agreement, “Material Adverse Effect” means any material adverse effect on (i) the business, properties, assets,
liabilities, operations (including results thereof), condition (financial or otherwise) or prospects of the Company or any Subsidiary,
individually or taken as a whole, (ii) the transactions contemplated hereby or in any of the other Transaction Documents or any other
agreements or instruments to be entered into in connection herewith or therewith or (iii) the authority or ability of the Company or
any of its Subsidiaries to perform any of their respective obligations under any of the Transaction Documents (as defined below). Other
than the Persons (as defined below) set forth on Schedule 3(a), the Company has no Subsidiaries. “Subsidiaries” means
any Person in which the Company, directly or indirectly, (I) owns any of the outstanding capital stock or holds any equity or similar
interest of such Person or (II) controls or operates all or any part of the business, operations or administration of such Person, and
each of the foregoing, is individually referred to herein as a “Subsidiary.”
(b)
Authorization; Enforcement; Validity. The Company has the requisite power and authority to enter into and perform its obligations
under this Agreement and the other Transaction Documents and to issue the Securities in accordance with the terms hereof and thereof.
Each Subsidiary has the requisite power and authority to enter into and perform its obligations under the Transaction Documents to which
it is a party. The execution and delivery of this Agreement and the other Transaction Documents by the Company, and the consummation
by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Notes and the
reservation for issuance and issuance of the Conversion Shares issuable upon conversion of the Notes and the issuance of the Warrants
and the reservation for issuance and issuance of the Warrant Shares issuable upon exercise of the Warrants) have been duly authorized
by the Company’s board of directors or other governing body, as applicable, and (other than the filing with the SEC of one or more
Registration Statements in accordance with the requirements of the Registration Rights Agreement, a Form D with the SEC and any other
filings as may be required by any state securities agencies) no further filing, consent or authorization is required by the Company,
its Subsidiaries, their respective boards of directors or their stockholders or other governing body. This Agreement has been, and the
other Transaction Documents to which it is a party will be prior to the Closing, duly executed and delivered by the Company, and each
constitutes the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with its respective
terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and
remedies and except as rights to indemnification and to contribution may be limited by federal or state securities law. “Transaction
Documents” means, collectively, this Agreement, the Notes, the Warrants, the Registration Rights Agreement, the Irrevocable
Transfer Agent Instructions (as defined below) and each of the other agreements and instruments entered into or delivered by any of the
parties hereto in connection with the transactions contemplated hereby and thereby, as may be amended from time to time.
(c)
Issuance of Securities. The issuance of the Notes and the Warrants are duly authorized and upon issuance in accordance with the
terms of the Transaction Documents shall be validly issued, fully paid and non-assessable and free from all preemptive or similar rights,
mortgages, defects, claims, liens, pledges, charges, taxes, rights of first refusal, encumbrances, security interests and other encumbrances
(collectively “Liens”) with respect to the issuance thereof. The Company shall have reserved from its duly authorized
capital stock for issuance pursuant to the Notes not less than 150% of the sum of (i) the maximum number of Conversion Shares issuable
upon conversion of the Notes (assuming for purposes hereof that (x) the Notes are convertible at the Alternate Conversion Price (as defined
in the Notes) assuming an Alternate Conversion Date (as defined in the Note) as of the date hereof, (y) interest on the Notes shall accrue
through the third anniversary of the Closing Date and will be converted in shares of Common Stock at a conversion price equal to the
Alternate Conversion Price assuming an Alternate Conversion Date as of the date hereof and (z) any such conversion shall not take into
account any limitations on the conversion of the Notes set forth in the Notes), and (ii) the maximum number of Warrant Shares initially
issuable upon exercise of the Warrants (without taking into account any limitations on the exercise of the Warrants set forth therein).
Upon issuance or conversion in accordance with the Notes or exercise in accordance with the Warrants (as the case may be), the Conversion
Shares and the Warrant Shares, respectively, when issued, will be validly issued, fully paid and nonassessable and free from all preemptive
or similar rights or Liens with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of Common
Stock. Subject to the accuracy of the representations and warranties of the Buyers in this Agreement, the offer and issuance by the Company
of the Securities is exempt from registration under the 1933 Act.
(d)
No Conflicts. Except as disclosed in the SEC Documents and/or Schedule 3(d), the execution, delivery and performance of the Transaction
Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without
limitation, the issuance of the Notes, the Warrants, the Conversion Shares and the Warrant Shares and the reservation for issuance of
the Conversion Shares and the Warrant Shares) will not (i) result in a violation of the Certificate of Incorporation (as defined below)
(including, without limitation, any certificate of designation contained therein), Bylaws (as defined below), certificate of formation,
memorandum of association, articles of association, bylaws or other organizational documents of the Company or any of its Subsidiaries,
or any capital stock or other securities of the Company or any of its Subsidiaries, (ii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) in any respect under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is
a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including, without limitation, foreign,
federal and state securities laws and regulations and the rules and regulations of OTCQB (the “Principal Market”)
and including all applicable foreign, federal and state laws, rules and regulations) applicable to the Company or any of its Subsidiaries
or by which any property or asset of the Company or any of its Subsidiaries is bound or affected.
(e)
Consents. Except for disclosed on the SEC Documents and/or Schedule 3(e), neither the Company nor any Subsidiary is required to
obtain any consent from, authorization or order of, or make any filing or registration with (other than the filing with the SEC of one
or more Registration Statements in accordance with the requirements of the Registration Rights Agreement, a Form D with the SEC and any
other filings as may be required by any state securities agencies), any Governmental Entity (as defined below) or any regulatory or self-regulatory
agency or any other Person in order for it to execute, deliver or perform any of its respective obligations under or contemplated by
the Transaction Documents, in each case, in accordance with the terms hereof or thereof. All consents, authorizations, orders, filings
and registrations which the Company or any Subsidiary is required to obtain pursuant to the preceding sentence have been or will be obtained
or effected on or prior to the Closing Date, and neither the Company nor any of its Subsidiaries are aware of any facts or circumstances
which might prevent the Company or any of its Subsidiaries from obtaining or effecting any of the registration, application or filings
contemplated by the Transaction Documents. The Company is not in violation of the requirements of the Principal Market and has no knowledge
of any facts or circumstances which could reasonably lead to delisting or suspension of the Common Stock in the foreseeable future. “Governmental
Entity” means any nation, state, county, city, town, village, district, or other political jurisdiction of any nature, federal,
state, local, municipal, foreign, or other government, governmental or quasi-governmental authority of any nature (including any governmental
agency, branch, department, official, or entity and any court or other tribunal), multi-national organization or body; or body exercising,
or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any
nature or instrumentality of any of the foregoing, including any entity or enterprise owned or controlled by a government or a public
international organization or any of the foregoing.
(f)
Acknowledgment Regarding Buyer’s Purchase of Securities. The Company acknowledges and agrees that each Buyer is acting solely
in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby
and thereby and that no Buyer is (i) an officer or director of the Company or any of its Subsidiaries, (ii) an “affiliate”
(as defined in Rule 144) of the Company or any of its Subsidiaries or (iii) to its knowledge, a “beneficial owner” of more
than 10% of the shares of Common Stock (as defined for purposes of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the
“1934 Act”)). The Company further acknowledges that no Buyer is acting as a financial advisor or fiduciary of the
Company or any of its Subsidiaries (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated
hereby and thereby, and any advice given by a Buyer or any of its representatives or agents in connection with the Transaction Documents
and the transactions contemplated hereby and thereby is merely incidental to such Buyer’s purchase of the Securities. The Company
further represents to each Buyer that the Company’s and each Subsidiary’s decision to enter into the Transaction Documents
to which it is a party has been based solely on the independent evaluation by the Company, each Subsidiary and their respective representatives.
(g)
No General Solicitation; No Placement Agent’s Fees. Neither the Company, nor any of its Subsidiaries or affiliates, nor
any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning
of Regulation D) in connection with the offer or sale of the Securities. The Company shall be responsible for the payment of any placement
agent’s fees, financial advisory fees, or brokers’ commissions (other than for Persons engaged by any Buyer or its investment
advisor) relating to or arising out of the transactions contemplated hereby. The Company shall pay, and hold each Buyer harmless against,
any liability, loss or expense (including, without limitation, attorney’s fees and out-of-pocket expenses) arising in connection
with any such claim. Neither the Company nor any of its Subsidiaries has engaged any placement agent or other agent in connection with
the offer or sale of the Securities.
(h)
No Integrated Offering. None of the Company, its Subsidiaries or any of their affiliates, nor any Person acting on their behalf
has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances
that would require registration of the issuance of any of the Securities under the 1933 Act, whether through integration with prior offerings
or otherwise, or cause this offering of the Securities to require approval of stockholders of the Company for purposes of the 1933 Act
or under any applicable stockholder approval provisions, including, without limitation, under the rules and regulations of any exchange
or automated quotation system on which any of the securities of the Company are listed or designated for quotation. None of the Company,
its Subsidiaries, their affiliates nor any Person acting on their behalf will take any action or steps that would require registration
of the issuance of any of the Securities under the 1933 Act or cause the offering of any of the Securities to be integrated with other
offerings of securities of the Company.
(i)
Dilutive Effect. The Company understands and acknowledges that the number of Conversion Shares and Warrant Shares will increase
in certain circumstances. The Company further acknowledges that its obligation to issue the Conversion Shares pursuant to the terms of
the Notes in accordance with this Agreement and the Notes and the Warrant Shares upon exercise of the Warrants in accordance with this
Agreement, the Notes and the Warrants is, in each case, absolute and unconditional regardless of the dilutive effect that such issuance
may have on the ownership interests of other stockholders of the Company.
(j)
Application of Takeover Protections; Rights Agreement. The Company and its board of directors have taken all necessary action,
if any, in order to render inapplicable any control share acquisition, interested stockholder, business combination, poison pill (including,
without limitation, any distribution under a rights agreement), stockholder rights plan or other similar anti-takeover provision under
the Certificate of Incorporation, Bylaws or other organizational documents or the laws of the jurisdiction of its incorporation or otherwise
which is or could become applicable to any Buyer as a result of the transactions contemplated by this Agreement, including, without limitation,
the Company’s issuance of the Securities and any Buyer’s ownership of the Securities. The Company and its board of directors
have taken all necessary action, if any, in order to render inapplicable any stockholder rights plan or similar arrangement relating
to accumulations of beneficial ownership of shares of Common Stock or a change in control of the Company or any of its Subsidiaries.
(k)
SEC Documents; Financial Statements. Except as disclosed on Schedule 3(k), during the two (2) years prior to the date hereof,
the Company has timely filed all reports, schedules, forms, proxy statements, statements and other documents required to be filed by
it with the SEC pursuant to the reporting requirements of the 1934 Act (all of the foregoing filed prior to the date hereof and all exhibits
and appendices included therein and financial statements, notes and schedules thereto and documents incorporated by reference therein
being hereinafter referred to as the “SEC Documents”); reports filed in compliance with the time periods specified
in Rule 12b-25 promulgated under the 1934 Act shall be considered timely for this purpose. When requested, the Company has delivered
or has made available to the Buyers or their respective representatives true, correct and complete copies of each of the SEC Documents
not available on the EDGAR system. As of their respective dates, the SEC Documents complied in all material respects with the requirements
of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading. As of their respective dates, the financial statements of the Company included in the SEC Documents complied
in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto
as in effect as of the time of filing. Such financial statements have been prepared in accordance with generally accepted accounting
principles (“GAAP”), consistently applied, during the periods involved (except (i) as may be otherwise indicated in
such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes
or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the
dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements,
to normal year-end audit adjustments which will not be material, either individually or in the aggregate). The reserves, if any, established
by the Company or the lack of reserves, if applicable, are reasonable based upon facts and circumstances known by the Company on the
date hereof and there are no loss contingencies that are required to be accrued by the Statement of Financial Accounting Standard No.
5 of the Financial Accounting Standards Board which are not provided for by the Company in its financial statements or otherwise. No
other information provided by or on behalf of the Company to any of the Buyers which is not included in the SEC Documents (including,
without limitation, information referred to in Section 2(e) of this Agreement or in the disclosure schedules to this Agreement) contains
any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein not misleading,
in the light of the circumstance under which they are or were made. The Company is not currently contemplating to amend or restate any
of the financial statements (including, without limitation, any notes or any letter of the independent accountants of the Company with
respect thereto) included in the SEC Documents (the “Financial Statements”), nor is the Company currently aware of
facts or circumstances which would require the Company to amend or restate any of the Financial Statements, in each case, in order for
any of the Financials Statements to be in compliance with GAAP and the rules and regulations of the SEC. The Company has not been informed
by its independent accountants that they recommend that the Company amend or restate any of the Financial Statements or that there is
any need for the Company to amend or restate any of the Financial Statements.
(l)
Absence of Certain Changes. Except as set forth in the SEC Documents and Schedules hereto, since the date of the Company’s
most recent audited financial statements contained in a Form 10-K, there has been no material adverse change and no material adverse
development in the business, assets, liabilities, properties, operations (including results thereof), condition (financial or otherwise)
or prospects of the Company or any of its Subsidiaries. Except as set forth in the SEC Documents, since the date of the Company’s
most recent audited financial statements contained in a Form 10-K, neither the Company nor any of its Subsidiaries has (i) declared or
paid any dividends, (ii) sold any assets, individually or in the aggregate, outside of the ordinary course of business or (iii) made
any capital expenditures, individually or in the aggregate, outside of the ordinary course of business.
(m)
No Undisclosed Events, Liabilities, Developments or Circumstances. Except as set forth in the Schedules hereto, the SEC Documents
or as otherwise disclosed in writing to Buyer, no event, liability, development or circumstance has occurred or exists, or is reasonably
expected to exist or occur with respect to the Company, any of its Subsidiaries or any of their respective businesses, properties, liabilities,
prospects, operations (including results thereof) or condition (financial or otherwise), that (i) would be required to be disclosed by
the Company under applicable securities laws on a registration statement on Form S-1 filed with the SEC relating to an issuance and sale
by the Company of its Common Stock and which has not been publicly announced, (ii) has had, or would be reasonably expected to have,
a material adverse effect on any Buyer’s investment hereunder or (iii) has had, or would be reasonably expected to have, a Material
Adverse Effect.
(n)
Conduct of Business; Regulatory Permits. Neither the Company nor any of its Subsidiaries is in violation of any term of or in
default under its Certificate of Incorporation, any certificate of designation, preferences or rights of any other outstanding series
of preferred stock of the Company or any of its Subsidiaries or Bylaws or their organizational charter, certificate of formation, memorandum
of association, articles of association, Certificate of Incorporation or certificate of incorporation or bylaws, respectively. Neither
the Company nor any of its Subsidiaries is in violation of any judgment, decree or order or any statute, ordinance, rule or regulation
applicable to the Company or any of its Subsidiaries, and neither the Company nor any of its Subsidiaries will conduct its business in
violation of any of the foregoing, except in all cases for violations which have not had, and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect. Without limiting the generality of the foregoing, and other than as disclosed
on the Schedules hereto, the Company is not in violation of any of the rules, regulations or requirements of the Principal Market and
has no knowledge of any facts or circumstances that could reasonably lead to delisting or suspension of the Common Stock by the Principal
Market in the foreseeable future. During the two years prior to the date hereof, (i) the Common Stock has been listed or designated for
quotation on the Principal Market, (ii) trading in the Common Stock has not been suspended by the SEC or the Principal Market and (iii)
except as disclosed in the SEC Documents, the Company has received no communication, written or oral, from the SEC or the Principal Market
regarding the suspension or delisting of the Common Stock from the Principal Market. The Company and each of its Subsidiaries possess
all certificates, authorizations and permits issued by the appropriate regulatory authorities necessary to conduct their respective businesses,
except where the failure to possess such certificates, authorizations or permits would not have, individually or in the aggregate, a
Material Adverse Effect, and neither the Company nor any such Subsidiary has received any notice of proceedings relating to the revocation
or modification of any such certificate, authorization or permit. Excepts as provided on Schedule 3(n) hereto, there is no agreement,
commitment, judgment, injunction, order or decree binding upon the Company or any of its Subsidiaries or to which the Company or any
of its Subsidiaries is a party which has or would reasonably be expected to have the effect of prohibiting or materially impairing any
business practice of the Company or any of its Subsidiaries, any acquisition of property by the Company or any of its Subsidiaries or
the conduct of business by the Company or any of its Subsidiaries as currently conducted other than such effects, individually or in
the aggregate, which have not had and would not reasonably be expected to have a Material Adverse Effect on the Company or any of its
Subsidiaries.
(o)
Foreign Corrupt Practices. Neither the Company, the Company’s subsidiary or any director,
officer, agent, employee, nor, to the knowledge of the Company, any other person acting for or on behalf of the foregoing (individually
and collectively, a “Company Affiliate”) have violated the U.S. Foreign Corrupt Practices Act (the “FCPA”)
or any other applicable anti-bribery or anti-corruption laws, nor has any Company Affiliate offered, paid, promised to pay, or authorized
the payment of any money, or offered, given, promised to give, or authorized the giving of anything of value, to any officer, employee
or any other person acting in an official capacity for any Governmental Entity to any political party or official thereof or to any candidate
for political office (individually and collectively, a “Government Official”) or to any person under circumstances
where such Company Affiliate knew or was aware of a high probability that all or a portion of such money or thing of value would be offered,
given or promised, directly or indirectly, to any Government Official, for the purpose of:
(i)
(A) influencing any act or decision of such Government Official in his/her official capacity, (B) inducing such Government Official to
do or omit to do any act in violation of his/her lawful duty, (C) securing any improper advantage, or (D) inducing such Government Official
to influence or affect any act or decision of any Governmental Entity, or
(ii)
assisting the Company or its Subsidiaries in obtaining or retaining business for or with, or directing business to, the Company or its
Subsidiaries.
(p)
Sarbanes-Oxley Act. The Company and each Subsidiary is in compliance with any and all applicable requirements of the Sarbanes-Oxley
Act of 2002, as amended, and any and all applicable rules and regulations promulgated by the SEC thereunder.
(q)
Transactions With Affiliates. Except as disclosed on Schedule 3(q), no current or former employee, partner, director, officer
or stockholder of the Company or its Subsidiaries, or, to the knowledge of the Company, any affiliate of any thereof, or, to the knowledge
of the Company, any member of the immediate family of any of the foregoing, is presently (or in the last twelve months has been) (i)
a party to any transaction with the Company or its Subsidiaries (including any contract, agreement or other arrangement providing for
the furnishing of services by, or rental of real or personal property from, or otherwise requiring payments to, any such director, officer
or stockholder or such associate or affiliate or relative Subsidiaries (other than for ordinary course services as employees, officers
or directors of the Company or any of its Subsidiaries)) or (ii) the direct or indirect owner of an interest in any corporation, firm,
association or business organization which is a competitor, supplier or customer of the Company or its Subsidiaries (except for a passive
investment (direct or indirect) in less than 5% of the common stock of a company whose securities are traded on or quoted through an
Eligible Market (as defined in the Notes)), nor does any such Person receive income from any source other than the Company or its Subsidiaries
which relates to the business of the Company or its Subsidiaries or should properly accrue to the Company or its Subsidiaries. No employee,
officer, stockholder or director of the Company or any of its Subsidiaries or member of his or her immediate family is indebted to the
Company or its Subsidiaries, as the case may be, nor is the Company or any of its Subsidiaries indebted (or committed to make loans or
extend or guarantee credit) to any of them, other than (i) for payment of salary or consulting or director fees for services rendered,
(ii) reimbursement for reasonable expenses incurred on behalf of the Company, and (iii) for other standard employee benefits made generally
available to all employees or executives (including in connection with the administration of the Company’s employee stock purchase
plan and stock option agreements outstanding under any stock option plan approved by the board of directors of the Company).
(r)
Equity Capitalization.
(i)
Definitions:
(A)
“Common Stock” means (x) the Company’s shares of common stock, $0.0001 par value per share, and (y) any capital
stock into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.
(B)
“Preferred Stock” means (x) the Company’s blank check preferred stock, $0.0001 par value per share, the terms
of which may be designated by the board of directors of the Company in a certificate of designations and (y) any capital stock into which
such preferred stock shall have been changed or any share capital resulting from a reclassification of such preferred stock (other than
a conversion of such preferred stock into Common Stock in accordance with the terms of such certificate of designations).
(C)
“Series A Preferred Stock” means (x) the Company’s shares of Series A Preferred Stock as designated by that
certain Certificate of Designation filed with the Secretary of State of the State of Delaware on March 24, 2020 and (y) any capital stock
into which such Series A Preferred Stock shall have been changed or any share capital resulting from a reclassification of such Series
A Preferred Stock.
(D)
“Series B-1 Preferred Stock” means (x) the Company’s shares of Series B-1 Convertible Preferred Stock as designated
by that certain Certificate of Designation of Preferences, Rights and Limitations filed with the Secretary of State of the State of Delaware
on October 11, 2021 and (y) any capital stock into which such Series B-1 Preferred Stock shall have been changed or any share capital
resulting from a reclassification of such Series B-1 Preferred Stock.
(E)
“Series B-2 Preferred Stock” means (x) the Company’s shares of Series B-2 Convertible Preferred Stock as designated
by that certain Certificate of Designation of Preferences, Rights and Limitations filed with the Secretary of State of the State of Delaware
on October 11, 2021 and (y) any capital stock into which such Series B-2 Preferred Stock shall have been changed or any share capital
resulting from a reclassification of such Series B-2 Preferred Stock.
(F)
“Series C Preferred Stock” means (x) the Company’s shares of Series C Non-Convertible Preferred Stock as designated
by that certain Certificate of Designations filed with the Secretary of State of the State of Delaware on March 24, 2022 and (y) any
capital stock into which such Series C Preferred Stock shall have been changed or any share capital resulting from a reclassification
of such Series C Preferred Stock.
(G)
“Series D Preferred Stock” means (x) the Company’s shares of Series D Non-Convertible Preferred Stock as designated
by that certain Certificate of Designations filed with the Secretary of State of the State of Delaware on December 16, 2022 and (y) any
capital stock into which such Series D Preferred Stock shall have been changed or any share capital resulting from a reclassification
of such Series D Preferred Stock.
(H)
“Series E-1 Preferred Stock” means (x) the Company’s shares of Series E-1 Non-Convertible Preferred Stock as
designated by that certain Certificate of Designations filed with the Secretary of State of the State of Delaware on August 7, 2023 and
(y) any capital stock into which such Series E-1 Preferred Stock shall have been changed or any share capital resulting from a reclassification
of such Series E-1 Preferred Stock.
(ii)
Authorized and Outstanding Capital Stock. As of the date hereof, the authorized capital stock of the Company consists of (A) 3,000,000,000
shares of Common Stock, of which 5,560,210 are issued and outstanding and 172,995,810 shares are reserved for issuance pursuant to Convertible
Securities (as defined below) (other than the Notes and the Warrants) exercisable or exchangeable for, or convertible into, shares of
Common Stock and (B) 5,000,000 shares of Preferred Stock of which 1,000,000 shares have been designated as Series A Preferred Stock,
none of which are issued and outstanding, 5,000 shares have been designated as Series B-1 Preferred Stock, none of which are issued and
outstanding, 5,000 shares have been designated as Series B-2 Preferred Stock, none of which are issued and outstanding, 1,700 shares
have been designated as Series C Preferred Stock, none of which are issued and outstanding, 70 shares have been designated as Series
D Non-Convertible Preferred Stock, none of which are issued and outstanding, and 2,300 shares have been designated as Series E-1 Preferred
Stock, 1,800 of which are outstanding. No shares of Common Stock are held in the treasury of the Company. “Convertible Securities”
means any capital stock or other security of the Company or any of its Subsidiaries that is at any time and under any circumstances directly
or indirectly convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any capital
stock or other security of the Company (including, without limitation, Common Stock) or any of its Subsidiaries.
(iii)
Valid Issuance; Available Shares; Affiliates. All of such outstanding shares are duly authorized and have been, or upon issuance
will be, validly issued and are fully paid and nonassessable. Schedule 3(r)(iii) sets forth the number of shares of Common Stock that
are (A) reserved for issuance pursuant to Convertible Securities (other than the Notes and the Warrants) and (B) that are, as of the
date hereof, owned by Persons who are “affiliates” (as defined in Rule 405 of the 1933 Act and calculated based on the assumption
that only officers, directors and holders of at least 10% of the Company’s issued and outstanding Common Stock are “affiliates”
without conceding that any such Persons are “affiliates” for purposes of federal securities laws) of the Company or any of
its Subsidiaries. To the Company’s knowledge, no Person owns 10% or more of the Company’s issued and outstanding shares of
Common Stock (calculated based on the assumption that all Convertible Securities, whether or not presently exercisable or convertible,
have been fully exercised or converted (as the case may be) taking account of any limitations on exercise or conversion (including “blockers”)
contained therein without conceding that such identified Person is a 10% stockholder for purposes of federal securities laws).
(iv)
Existing Securities; Obligations. Except as disclosed in the SEC Documents: (A) none of the Company’s or any Subsidiary’s
shares, interests or capital stock is subject to preemptive rights or any other similar rights or Liens suffered or permitted by the
Company or any Subsidiary; (B) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares, interests
or capital stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company
or any of its Subsidiaries is or may become bound to issue additional shares, interests or capital stock of the Company or any of its
Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities
or rights convertible into, or exercisable or exchangeable for, any shares, interests or capital stock of the Company or any of its Subsidiaries;
(C) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any
of their securities under the 1933 Act (except pursuant to the Registration Rights Agreement); (D) there are no outstanding securities
or instruments of the Company or any of its Subsidiaries which contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to redeem a security
of the Company or any of its Subsidiaries; (E) there are no securities or instruments containing anti-dilution or similar provisions
that will be triggered by the issuance of the Securities; and (F) neither the Company nor any Subsidiary has any stock appreciation rights
or “phantom stock” plans or agreements or any similar plan or agreement.
(v)
Organizational Documents. The Company has furnished to the Buyers true, correct and complete copies of the Company’s Certificate
of Incorporation, as amended and as in effect on the date hereof (the “Certificate of Incorporation”), and the Company’s
bylaws, as amended and as in effect on the date hereof (the “Bylaws”), and the terms of all Convertible Securities
and the material rights of the holders thereof in respect thereto.
(s)
Indebtedness and Other Contracts. Neither the Company nor any of its Subsidiaries, (i) except as disclosed on Schedule 3(r)
or in the SEC Documents, has any outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents
or instruments evidencing Indebtedness of the Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries is
bound, (ii) is a party to any contract, agreement or instrument, any reasonably expected violation of which, or reasonably expected default
under which, by the other party(ies) to such contract, agreement or instrument would reasonably be expected to result in a Material Adverse
Effect, (iii) has any financing statements securing obligations in any amounts filed in connection with the Company or any of its Subsidiaries;
(iv) is in violation of any term of, or in default under, any contract, agreement or instrument relating to any Indebtedness, except
where such violations and defaults would not be reasonably likely to result, individually or in the aggregate, in a Material Adverse
Effect, or (v) is a party to any contract, agreement or instrument relating to any Indebtedness, the performance of which, in the judgment
of the Company’s officers, has or is reasonably likely to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries
have any liabilities or obligations required to be disclosed in the SEC Documents which are not so disclosed in the SEC Documents, other
than those incurred in the ordinary course of the Company’s or its Subsidiaries’ respective businesses and which, individually
or in the aggregate, would not be reasonably likely to have a Material Adverse Effect. For purposes of this Agreement: (x) “Indebtedness”
of any Person means, without duplication (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed as
the deferred purchase price of property or services (including, without limitation, “capital leases” in accordance with GAAP)
(other than trade payables entered into in the ordinary course of business consistent with past practice), (C) all reimbursement or payment
obligations with respect to letters of credit, surety bonds and other similar instruments, (D) all obligations evidenced by notes, bonds,
debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets
or businesses, (E) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights
and remedies of the seller or bank under such agreement in the event of default are limited to repossession or sale of such property),
(F) all monetary obligations under any leasing or similar arrangement which, in connection with GAAP, consistently applied for the periods
covered thereby, is classified as a capital lease, (G) all indebtedness referred to in clauses (A) through (F) above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in any property
or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such assets or property has
not assumed or become liable for the payment of such indebtedness, and (H) all Contingent Obligations in respect of indebtedness or obligations
of others of the kinds referred to in clauses (A) through (G) above; and (y) “Contingent Obligation” means, as to
any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any Indebtedness, lease, dividend
or other obligation of another Person if the primary purpose or intent of the Person incurring such liability, or the primary effect
thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with
respect thereto.
(t)
Litigation. There is no action, suit, arbitration, proceeding, inquiry or investigation before or by the Principal Market, any
court, public board, other Governmental Entity, self-regulatory organization or body pending or, to the knowledge of the Company, threatened
against or affecting the Company or any of its Subsidiaries, the Common Stock or any of the Company’s or its Subsidiaries’
officers or directors, whether of a civil or criminal nature or otherwise, in their capacities as such that if adversely determined would
have a Material Adverse Effect, except as set forth in Schedule 3(t). To the knowledge of the Company, no director, officer or
employee of the Company or any of its subsidiaries has willfully violated 18 U.S.C. §1519 or engaged in spoliation in reasonable
anticipation of litigation. Without limitation of the foregoing, there has not been, and to the knowledge of the Company, there is not
pending or contemplated, any investigation by the SEC involving the Company, any of its Subsidiaries or any current or former director
or officer of the Company or any of its Subsidiaries. The SEC has not issued any stop order or other order suspending the effectiveness
of any registration statement filed by the Company under the 1933 Act or the 1934 Act. The Company is not aware of any fact which might
result in or form the basis for any such action, suit, arbitration, investigation, inquiry or other proceeding. Neither the Company nor
any of its Subsidiaries is subject to any order, writ, judgment, injunction, decree, determination or award of any Governmental Entity.
(u)
Insurance. The Company and each of its Subsidiaries are insured against such losses and risks and in such amounts as management
of the Company believes to be prudent and customary in the businesses in which the Company and its Subsidiaries are engaged. Neither
the Company nor any such Subsidiary has been refused any insurance coverage sought or applied for, and neither the Company nor any such
Subsidiary has any reason to believe that it will be unable to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material
Adverse Effect.
(v)
Employee Relations. Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or employs
any member of a union. Except as discussed in the Schedules hereto, the Company and its Subsidiaries believe that their relations with
their employees are good. Except as set forth in the SEC Documents, no executive officer (as defined in Rule 501(f) promulgated under
the 1933 Act) of the Company or any of its Subsidiaries has notified the Company or any such Subsidiary that such officer intends to
leave the Company or any such Subsidiary or otherwise terminate such officer’s employment with the Company or any such Subsidiary.
No executive officer of the Company or any of its Subsidiaries is, or is expected to be at this time, in violation of any material term
of any employment contract, confidentiality, disclosure or proprietary information agreement, non-competition agreement, or any other
contract or agreement or any restrictive covenant, and the continued employment of each such executive officer does not subject the Company
or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance
with all federal, state, local and foreign laws and regulations respecting labor, employment and employment practices and benefits, terms
and conditions of employment and wages and hours, except where failure to be in compliance would not, either individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.
(w)
Title.
(i)
Real Property. Each of the Company and its Subsidiaries holds good title to all real property, leases in real property, facilities
or other interests in real property owned or held by the Company or any of its Subsidiaries (the “Real Property”)
owned by the Company or any of its Subsidiaries (as applicable). The Real Property is free and clear of all Liens and is not subject
to any rights of way, building use restrictions, exceptions, variances, reservations, or limitations of any nature except for (a) Liens
for current taxes not yet due and (b) zoning laws and other land use restrictions that do not impair the present or anticipated use of
the property subject thereto. Any Real Property held under lease by the Company or any of its Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be
made of such property and buildings by the Company or any of its Subsidiaries.
(ii)
Fixtures and Equipment. Each of the Company and its Subsidiaries (as applicable) has good title to, or a valid leasehold interest
in, the tangible personal property, equipment, improvements, fixtures, and other personal property and appurtenances that are used by
the Company or its Subsidiary in connection with the conduct of its business (the “Fixtures and Equipment”). The Fixtures
and Equipment are structurally sound, are in good operating condition and repair, are adequate for the uses to which they are being put,
are not in need of maintenance or repairs except for ordinary, routine maintenance and repairs and are sufficient for the conduct of
the Company’s and/or its Subsidiaries’ businesses (as applicable) in the manner as conducted prior to the Closing. Each of
the Company and its Subsidiaries owns all of its Fixtures and Equipment free and clear of all Liens except for (a) liens for current
taxes not yet due and (b) zoning laws and other land use restrictions that do not impair the present or anticipated use of the property
subject thereto.
(x)
Intellectual Property Rights. The Company and its Subsidiaries own or possess adequate rights or licenses to use all trademarks,
trade names, service marks, service mark registrations, service names, original works of authorship, patents, patent rights, copyrights,
inventions, licenses, approvals, governmental authorizations, trade secrets and other intellectual property rights and all applications
and registrations therefor (“Intellectual Property Rights”) necessary to conduct their respective businesses as now
conducted and presently proposed to be conducted. Each of the patents both (x) owned by the Company or any of its Subsidiaries and (y)
currently used (or proposed to be used) in the business of the Company or any of its Subsidiaries is listed on Schedule 3(x)(i) (the
“Material Intellectual Property Rights”). Except as set forth in Schedule 3(x)(ii), none of the Company’s Material
Intellectual Property Rights have expired or terminated or have been abandoned or are expected to expire or terminate or are expected
to be abandoned, within three years from the date of this Agreement other than any such expirations or terminations that, individually
or in the aggregate, are not reasonably likely to have a Material Adverse Effect. The Company does not have any knowledge of any infringement
by the Company or its Subsidiaries of Material Intellectual Property Rights of others which infringement is reasonably likely to have
a Material Adverse Effect. There is no claim, action or proceeding being made or brought, or to the knowledge of the Company or any of
its Subsidiaries, being threatened, against the Company or any of its Subsidiaries regarding its Intellectual Property Rights, which
claim, action or proceeding would reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any of its Subsidiaries
is aware of any facts or circumstances which might give rise to any of the foregoing infringements or claims, actions or proceedings.
The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of
the Material Intellectual Property Rights.
(y)
Environmental Laws. (i) The Company and its Subsidiaries (A) are in compliance with any and all Environmental Laws (as defined
below), (B) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their
respective businesses and (C) are in compliance with all terms and conditions of any such permit, license or approval where, in each
of the foregoing clauses (A), (B) and (C), the failure to so comply or so receive such approvals would be reasonably expected to have,
individually or in the aggregate, a Material Adverse Effect. The term “Environmental Laws” means all federal, state,
local or foreign laws relating to pollution or protection of human health or the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges,
releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous
Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions,
judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.
(ii)
No Hazardous Materials:
(A)
have been disposed of or otherwise released from any Real Property of the Company or any of its Subsidiaries in violation of any Environmental
Laws; or
(B)
are present on, over, beneath, in or upon any Real Property or any portion thereof in quantities that would constitute a violation of
any Environmental Laws. No prior use by the Company or any of its Subsidiaries of any Real Property has occurred that violates any Environmental
Laws, which violation would be reasonably expected to have a Material Adverse Effect.
(iii)
Neither the Company nor any of its Subsidiaries knows of any other person who or entity which has stored, treated, recycled, disposed
of or otherwise located on any Real Property any Hazardous Materials, including, without limitation, such substances as asbestos and
polychlorinated biphenyls.
(iv)
None of the Real Properties are on any federal or state “Superfund” list or Liability Information System (“CERCLIS”)
list or any state environmental agency list of sites under consideration for CERCLIS, nor subject to any environmental related Liens.
(z)
Subsidiary Rights. The Company or one of its Subsidiaries has the unrestricted right to vote, and (subject to limitations imposed
by applicable law) to receive dividends and distributions on, all capital securities of its Subsidiaries as owned by the Company or such
Subsidiary.
(aa)
Tax Status. The Company and each of its Subsidiaries (i) has timely made or filed all foreign, federal and state income and all
other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has timely paid all taxes and other
governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations,
except those being contested in good faith and (iii) has set aside on its books provision reasonably adequate for the payment of all
taxes for periods subsequent to the periods to which such returns, reports or declarations apply in each case except as would not reasonably
be expected to have a Material Adverse Effect. There are no unpaid taxes in any material amount claimed to be due by the taxing authority
of any jurisdiction, and the officers of the Company and its Subsidiaries know of no basis for any such claim. The Company is not operated
in such a manner as to qualify as a passive foreign investment company, as defined in Section 1297 of the Code. So long as such Investor
together with the other Attribution Parties (as defined in the Notes) collectively do not own in excess of the Maximum Percentage (as
defined in the Notes) of the shares of Common Stock outstanding, the net operating loss carryforwards (“NOLs”) for
United States federal income tax purposes of the consolidated group of which the Company is the common parent, if any, shall not be adversely
effected by the transactions contemplated hereby, and the transactions contemplated hereby do not constitute an “ownership change”
within the meaning of Section 382 of the Code, thereby preserving the Company’s ability to utilize such NOLs.
(bb)
Internal Accounting and Disclosure Controls. As disclosed in the Disclosure Schedules and
in the SEC Documents, the Company and each of its Subsidiaries discovered material weakness in the internal control over financial reporting
(as such term is defined in Rule 13a-15(f) under the 1934 Act) that is effective to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting
principles, including that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset and
liability accountability, (iii) access to assets or incurrence of liabilities is permitted only in accordance with management’s
general or specific authorization and (iv) the recorded accountability for assets and liabilities is compared with the existing assets
and liabilities at reasonable intervals and appropriate action is taken with respect to any difference. As further identified in the
Disclosure Schedules and the SEC Documents, the Company identified a weakness in its ability to maintain disclosure controls and procedures
(as such term is defined in Rule 13a-15(e) under the 1934 Act) that are effective in ensuring that information required to be disclosed
by the Company in the reports that it files or submits under the 1934 Act is recorded, processed, summarized and reported, within the
time periods specified in the rules and forms of the SEC, including, without limitation, controls and procedures designed to ensure that
information required to be disclosed by the Company in the reports that it files or submits under the 1934 Act is accumulated and communicated
to the Company’s management, including its principal executive officer or officers and its principal financial officer or officers,
as appropriate, to allow timely decisions regarding required disclosure.
(cc)
Off Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company or any of its
Subsidiaries and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its 1934 Act
filings and is not so disclosed or that otherwise would be reasonably likely to have a Material Adverse Effect.
(dd)
Investment Company Status. The Company is not, and upon consummation of the sale of the Securities will not be, an “investment
company,” an affiliate of an “investment company,” a company controlled by an “investment company” or an
“affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company”
as such terms are defined in the Investment Company Act of 1940, as amended.
(ee)
Acknowledgement Regarding Buyers’ Trading Activity. It is understood and acknowledged by the Company that (i) following
the public disclosure of the transactions contemplated by the Transaction Documents, in accordance with the terms thereof, none of the
Buyers have been asked by the Company or any of its Subsidiaries to agree, nor has any Buyer agreed with the Company or any of its Subsidiaries,
to desist from effecting any transactions in or with respect to (including, without limitation, purchasing or selling, long and/or short)
any securities of the Company, or “derivative” securities based on securities issued by the Company or to hold any of the
Securities for any specified term; (ii) any Buyer, and counterparties in “derivative” transactions to which any such Buyer
is a party, directly or indirectly, presently may have a “short” position in the Common Stock which was established prior
to such Buyer’s knowledge of the transactions contemplated by the Transaction Documents; (iii) each Buyer shall not be deemed to
have any affiliation with or control over any arm’s length counterparty in any “derivative” transaction; and (iv) each
Buyer may rely on the Company’s obligation to timely deliver shares of Common Stock upon conversion, exercise or exchange, as applicable,
of the Securities as and when required pursuant to the Transaction Documents for purposes of effecting trading in the Common Stock of
the Company. The Company further understands and acknowledges that following the public disclosure of the transactions contemplated by
the Transaction Documents pursuant to the 8-K Filing (as defined below) one or more Buyers may engage in hedging and/or trading activities
(including, without limitation, the location and/or reservation of borrowable shares of Common Stock) at various times during the period
that the Securities are outstanding, including, without limitation, during the periods that the value and/or number of the Warrant Shares
or Conversion Shares, as applicable, deliverable with respect to the Securities are being determined and such hedging and/or trading
activities (including, without limitation, the location and/or reservation of borrowable shares of Common Stock), if any, can reduce
the value of the existing stockholders’ equity interest in the Company both at and after the time the hedging and/or trading activities
are being conducted. The Company acknowledges that such aforementioned hedging and/or trading activities do not constitute a breach of
this Agreement, the Notes, the Warrants or any other Transaction Document or any of the documents executed in connection herewith or
therewith.
(ff)
Manipulation of Price. Neither the Company nor any of its Subsidiaries has, and, to the knowledge of the Company, no Person acting
on their behalf has, directly or indirectly, (i) taken any action designed to cause or to result in the stabilization or manipulation
of the price of any security of the Company or any of its Subsidiaries to facilitate the sale or resale of any of the Securities, (ii)
sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities, (iii) paid or agreed to pay to
any Person any compensation for soliciting another to purchase any other securities of the Company or any of its Subsidiaries or (iv)
paid or agreed to pay any Person for research services with respect to any securities of the Company or any of its Subsidiaries.
(gg)
U.S. Real Property Holding Corporation. Neither the Company nor any of its Subsidiaries is, or has ever been, and so long as any
of the Securities are held by any of the Buyers, shall become, a U.S. real property holding corporation within the meaning of Section
897 of the Code, and the Company and each Subsidiary shall so certify upon any Buyer’s request.
(hh)
Omitted.
(ii)
Transfer Taxes. On the Closing Date, all stock transfer or other taxes (other than income or similar taxes) which are required
to be paid in connection with the issuance, sale and transfer of the Securities to be sold to each Buyer hereunder will be, or will have
been, fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with.
(jj)
Bank Holding Company Act; Regulation T, U or X.
(i)
Neither the Company nor any of its Subsidiaries is subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”)
and to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). Neither the Company
nor any of its Subsidiaries or affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares
of any class of voting securities or twenty-five percent (25%) or more of the total equity of a bank or any entity that is subject to
the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries or affiliates exercises a controlling
influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.
(ii)
The sale of the Notes, the use of proceeds thereof and the other transactions contemplated thereby or by the other Transaction Documents,
will not violate or be inconsistent with the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System
of the United States
(kk)
Shell Company Status. The Company is not, and has never been, an issuer identified in, or subject to, Rule 144(i).
(ll)
Illegal or Unauthorized Payments; Political Contributions. Neither the Company nor any of its Subsidiaries nor, to the best of
the Company’s knowledge (after reasonable inquiry of its officers and directors), any of the officers, directors, employees, agents
or other representatives of the Company or any of its Subsidiaries or any other business entity or enterprise with which the Company
or any Subsidiary is or has been affiliated or associated, has, directly or indirectly, made or authorized any payment, contribution
or gift of money, property, or services, whether or not in contravention of applicable law, (i) as a kickback or bribe to any Person
or (ii) to any political organization, or the holder of or any aspirant to any elective or appointive public office except for personal
political contributions not involving the direct or indirect use of funds of the Company or any of its Subsidiaries.
(mm)
Money Laundering. The Company and its Subsidiaries are in compliance with, and have not previously violated, the USA Patriot Act
of 2001 and all other applicable U.S. and non-U.S. anti-money laundering laws and regulations, including, without limitation, the laws,
regulations and Executive Orders and sanctions programs administered by the U.S. Office of Foreign Assets Control, including, but not
limited, to (i) Executive Order 13224 of September 23, 2001 entitled, “Blocking Property and Prohibiting Transactions With Persons
Who Commit, Threaten to Commit, or Support Terrorism” (66 Fed. Reg. 49079 (2001)); and (ii) any regulations contained in 31 CFR,
Subtitle B, Chapter V.
(nn)
Management. Except as set forth in Schedule 3(nn) hereto, during the past two year period, no current or, to the knowledge
of the Company, former officer or director or, to the knowledge of the Company, no current ten percent (10%) or greater stockholder of
the Company or any of its Subsidiaries has been the subject of:
(i)
a petition under bankruptcy laws or any other insolvency or moratorium law or the appointment by a court of a receiver, fiscal agent
or similar officer for such Person, or any partnership in which such person was a general partner at or within two years before the filing
of such petition or such appointment, or any corporation or business association of which such person was an executive officer at or
within two years before the time of the filing of such petition or such appointment;
(ii)
a conviction in a criminal proceeding or a named subject of a pending criminal proceeding (excluding traffic violations that do not relate
to driving while intoxicated or driving under the influence);
(iii)
any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or
temporarily enjoining any such person from, or otherwise limiting, the following activities:
(1)
Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage
transaction merchant, any other person regulated by the United States Commodity Futures Trading Commission or an associated person of
any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director
or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct
or practice in connection with such activity;
(2)
Engaging in any particular type of business practice; or
(3)
Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of
securities laws or commodities laws;
(iv)
any order, judgment or decree, not subsequently reversed, suspended or vacated, of any authority barring, suspending or otherwise limiting
for more than sixty (60) days the right of any such person to engage in any activity described in the preceding sub paragraph, or to
be associated with persons engaged in any such activity;
(v)
a finding by a court of competent jurisdiction in a civil action or by the SEC or other authority to have violated any securities law,
regulation or decree and the judgment in such civil action or finding by the SEC or any other authority has not been subsequently reversed,
suspended or vacated; or
(vi)
a finding by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any
federal commodities law, and the judgment in such civil action or finding has not been subsequently reversed, suspended or vacated.
(oo)
Stock Option Plans. Except as set forth in the SEC Document, each stock option granted by the Company was granted (i) in accordance
with the terms of the applicable stock option plan of the Company and (ii) with an exercise price at least equal to the fair market value
of the Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted
under the Company’s stock option plan has been backdated. The Company has not knowingly granted, and there is no and has been no
policy or practice of the Company to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options
with, the release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results
or prospects.
(pp)
No Disagreements with Accountants and Lawyers. Excepts as disclosed in the SEC Documents and/or Schedule 3(pp) there are no material
disagreements of any kind presently existing, or reasonably anticipated by the Company to arise, between the Company and the accountants
and lawyers formerly or presently employed by the Company and the Company is current with respect to any fees owed to its accountants
and lawyers which would be reasonably likely to affect the Company’s ability to perform any of its obligations under any of the
Transaction Documents. In addition, on or prior to the date hereof, the Company had discussions with its accountants about its financial
statements previously filed with the SEC. Based on those discussions, the Company has no reason to believe that it will need to restate
any such financial statements or any part thereof.
(qq)
No Disqualification Events. With respect to Securities to be offered and sold hereunder in reliance on Rule 506(b) under the 1933
Act (“Regulation D Securities”), none of the Company, any of its predecessors, any affiliated issuer, any director,
executive officer, other officer of the Company participating in the offering contemplated hereby, any beneficial owner of 20% or more
of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term
is defined in Rule 405 under the 1933 Act) connected with the Company in any capacity at the time of sale (each, an “Issuer
Covered Person” 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 1933 Act (a “Disqualification Event”), except
for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any
Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure
obligations under Rule 506(e), and has furnished to the Buyers a copy of any disclosures provided thereunder.
(rr)
Other Covered Persons. The Company is not aware of any Person that has been or will be paid (directly or indirectly) remuneration
for solicitation of Buyers or potential purchasers in connection with the sale of any Regulation D Securities.
(ss)
No Additional Agreements. The Company does not have any agreement or understanding with any Buyer with respect to the transactions
contemplated by the Transaction Documents other than as specified in the Transaction Documents.
(tt)
Public Utility Holding Act. None of the Company nor any of its Subsidiaries is a “holding company,” or an “affiliate”
of a “holding company,” as such terms are defined in the Public Utility Holding Act of 2005.
(uu)
Federal Power Act. None of the Company nor any of its Subsidiaries is subject to regulation as a “public utility”
under the Federal Power Act, as amended.
(vv)
Ranking of Notes. Except as disclosed in Schedule 3(vv), no Indebtedness of the Company, at the Closing, will be senior to, or
pari passu with, the Notes in right of payment, whether with respect to payment or redemptions, interest, damages, upon liquidation
or dissolution or otherwise (other than Indebtedness secured by Permitted Liens (as defined in the Notes)).
(ww)
Potential Products; FDA; EMEA.
(i)
The Company possesses all certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities
necessary to conduct its business as currently conducted, including without limitation all such certificates, authorizations and permits
required by the United States Food and Drug Administration (the “FDA”) or any other federal, state or foreign agencies
or bodies engaged in the regulation of pharmaceuticals or biohazardous materials, except where the failure to so possess such certificates,
authorizations and permits, individually or in the aggregate, would not result in a Material Adverse Effect. The Company has not received
any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, individually
or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect.
(ii)
The Company has not received any written notices or statements from the FDA, the European Medicines Agency (the “EMEA”)
or any other governmental agency, and otherwise has no knowledge or reason to believe, that (i) any drug or other product candidate of
the Company (each a “Potential Product”) may or will be rejected or determined to be non-approvable; (ii) a delay
in time for review and/or approval of a marketing authorization application or marketing approval application in any jurisdiction for
any Potential Product is or may be required, requested or being implemented; (iii) one or more clinical studies for any Potential Product
shall or may be requested or required in addition to the clinical studies submitted to the FDA prior to the date hereof as a precondition
to or condition of issuance or maintenance of a marketing approval for any Potential Product; (iv) any license, approval, permit or authorization
to conduct any clinical trial of or market any product or Potential Product of the Company has been, will be or may be suspended, revoked,
modified or limited, except in the cases of clauses (i), (ii), (iii) and (iv) where such rejections, determinations, delays, requests,
suspensions, revocations, modifications or limitations might not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
(iii)
To the Company’s knowledge, the preclinical and clinical testing, application for marketing approval of, manufacture, distribution,
promotion and sale of the products and Potential Products of the Company is in compliance, in all material respects, with all laws, rules
and regulations applicable to such activities, including without limitation applicable good laboratory practices, good clinical practices
and good manufacturing practices, except for such non-compliance as would not, individually or in the aggregate, have a Material Adverse
Effect. The Company is not aware of any studies, tests or trial the results of which reasonably call into question the results of the
tests and trials conducted by or on behalf of the Company. The Company has not received notice of adverse finding, warning letter or
clinical hold notice from the FDA or any non-U.S. counterpart of any of the foregoing, or any untitled letter or other correspondence
or notice from the FDA or any other governmental authority or agency or any institutional or ethical review board alleging or asserting
noncompliance with any law, rule or regulation applicable in any jurisdiction, except notices, letters, and correspondences and non-U.S.
counterparts thereof alleging or asserting such noncompliance as would not, individually or in the aggregate, have a Material Adverse
Effect. The Company has not, either voluntarily or involuntarily, initiated, conducted or issued, or caused to be initiated, conducted
or issued, any recall, field correction, market withdrawal or replacement, safety alert, warning, “dear doctor” letter, investigator
notice, or other notice or action relating to an alleged or potential lack of safety or efficacy of any product or Potential Product
of the Company, any alleged product defect of any product or Potential Product of the Company, or any violation of any material applicable
law, rule, regulation or any clinical trial or marketing license, approval, permit or authorization for any product or potential product
of the Company, and the Company is not aware of any facts or information that would cause it to initiate any such notice or action and
has no knowledge or reason to believe that the FDA, the EMEA or any other governmental agency or authority or any institutional or ethical
review board or other non-governmental authority intends to impose, require, request or suggest such notice or action.
(xx)
Cybersecurity. The Company and its Subsidiaries’ information technology assets and equipment, computers, systems, networks,
hardware, software, websites, applications, and databases (collectively, “IT Systems”) are adequate for, and operate
and perform in all material respects as required in connection with the operation of the business of the Company and its subsidiaries
as currently conducted, free and clear of all material bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants
that would reasonably be expected to have a Material Adverse Effect on the Company’s business. The Company and its Subsidiaries
have implemented and maintained commercially reasonable physical, technical and administrative controls, policies, procedures, and safeguards
to maintain and protect their material confidential information and the integrity, continuous operation, redundancy and security of all
IT Systems and data, including “Personal Data,” used in connection with their businesses. “Personal Data”
means (i) a natural person’s name, street address, telephone number, e-mail address, photograph, social security number or tax
identification number, driver’s license number, passport number, credit card number, bank information, or customer or account number;
(ii) any information which would qualify as “personally identifying information” under the Federal Trade Commission Act,
as amended; (iii) “personal data” as defined by the European Union General Data Protection Regulation (“GDPR”)
(EU 2016/679); (iv) any information which would qualify as “protected health information” under the Health Insurance Portability
and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act (collectively, “HIPAA”);
and (v) any other piece of information that allows the identification of such natural person, or his or her family, or permits the collection
or analysis of any data related to an identified person’s health or sexual orientation. There have been no breaches, violations,
outages or unauthorized uses of or accesses to same, except for those that have been remedied without material cost or liability or the
duty to notify any other person or such, nor any incidents under internal review or investigations relating to the same except in each
case, where such would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. The
Company and its 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 Personal Data and to the protection of such IT Systems and Personal Data from unauthorized use, access,
misappropriation or modification except in each case, where such would not, either individually or in the aggregate, reasonably be expected
to result in a Material Adverse Effect.
(yy)
Compliance with Data Privacy Laws. The Company and its Subsidiaries are, and at all prior times were, in compliance with all applicable
state and federal data privacy and security laws and regulations, including without limitation HIPAA, and the Company and its Subsidiaries
have taken commercially reasonable actions to prepare to comply with, and since May 25, 2018, have been and currently are in compliance
with, the GDPR (EU 2016/679) (collectively, the “Privacy Laws”) except in each case, where such would not, either
individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. To ensure compliance with the Privacy
Laws, the Company and its Subsidiaries have in place, comply with, and take appropriate steps reasonably designed to ensure compliance
in all material respects with their policies and procedures relating to data privacy and security and the collection, storage, use, disclosure,
handling, and analysis of Personal Data (the “Policies”). The Company and its Subsidiaries have at all times made
all disclosures to users or customers required by applicable laws and regulatory rules or requirements, and none of such disclosures
made or contained in any Policy have, to the knowledge of the Company, been inaccurate or in violation of any applicable laws and regulatory
rules or requirements in any material respect. The Company further certifies that neither it nor any Subsidiary: (i) has received notice
of any actual or potential liability under or relating to, or actual or potential violation of, any of the Privacy Laws, and has no knowledge
of any event or condition that would reasonably be expected to result in any such notice; (ii) is currently conducting or paying for,
in whole or in part, any investigation, remediation, or other corrective action pursuant to any Privacy Law; or (iii) is a party to any
order, decree, or agreement that imposes any obligation or liability under any Privacy Law.
(zz)
Registration Rights. Except as disclosed in the SEC Documents and/or the Schedules hereto, no holder of securities of the Company
has rights to the registration of any securities of the Company because of the filing of the Registration Statement or the issuance of
the Securities hereunder that could expose the Company to material liability or any Buyer to any liability or that could impair the Company’s
ability to consummate the issuance and sale of the Securities in the manner, and at the times, contemplated hereby, which rights have
not been waived by the holder thereof as of the date hereof.
(aaa)
Omitted.
(bbb)
Disclosure. The Company confirms that neither it nor any other Person acting on its behalf has provided any of the Buyers or their
agents or counsel with any information that constitutes or could reasonably be expected to constitute material, non-public information
concerning the Company or any of its Subsidiaries, other than the existence of the transactions contemplated by this Agreement and the
other Transaction Documents. The Company understands and confirms that each of the Buyers will rely on the foregoing representations
in effecting transactions in securities of the Company. All disclosure provided to the Buyers regarding the Company and its Subsidiaries,
their businesses and the transactions contemplated hereby, including the schedules to this Agreement, furnished by or on behalf of the
Company or any of its Subsidiaries is true and correct as of the date furnished and does not contain any untrue statement of a material
fact or omit to state any material fact as of the date furnished necessary in order to make the statements made therein, in the light
of the circumstances under which they were made, not misleading. All of the written information furnished after the date hereof by or
on behalf of the Company or any of its Subsidiaries to each Buyer pursuant to or in connection with this Agreement and the other Transaction
Documents, taken as a whole, will be true and correct in all material respects as of the date on which such information is so provided
and will not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements
made therein, in the light of the circumstances under which they were made, not misleading. Each press release issued by the Company
or any of its Subsidiaries during the twelve (12) months preceding the date of this Agreement did not at the time of release contain
any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make
the statements therein, in the light of the circumstances under which they are made, not misleading. No event or circumstance has occurred
or information exists with respect to the Company or any of its Subsidiaries or its or their business, properties, liabilities, prospects,
operations (including results thereof) or conditions (financial or otherwise), which, under applicable law, rule or regulation, requires
public disclosure at or before the date hereof or announcement by the Company but which has not been so publicly disclosed. The Company
acknowledges and agrees that no Buyer makes or has made any representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in Section 2.
4.
COVENANTS.
(a)
Best Efforts. Each Buyer shall use its best efforts to timely satisfy each of the covenants hereunder and conditions to be satisfied
by it as provided in Section 6 of this Agreement. The Company shall use its best efforts to timely satisfy each of the covenants hereunder
and conditions to be satisfied by it as provided in Section 7 of this Agreement.
(b)
Form D and Blue Sky. The Company shall file a Form D with respect to the Securities as required under Regulation D and to provide
a copy thereof to each Buyer promptly after such filing. The Company shall, on or before the Closing Date, take such action as the Company
shall reasonably determine is necessary in order to obtain an exemption for, or to, qualify the Securities for sale to the Buyers at
the Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of the states of the United States
(or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken to the Buyers on or prior
to the Closing Date. Without limiting any other obligation of the Company under this Agreement, the Company shall timely make all filings
and reports relating to the offer and sale of the Securities required under all applicable securities laws (including, without limitation,
all applicable federal securities laws and all applicable “Blue Sky” laws), and the Company shall comply with all applicable
foreign, federal, state and local laws, statutes, rules, regulations and the like relating to the offering and sale of the Securities
to the Buyers.
(c)
Reporting Status. Until the date on which the Buyers shall have sold all of the Registrable Securities (the “Reporting
Period”), the Company shall timely file all reports required to be filed with the SEC pursuant to the 1934 Act, and the Company
shall not terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations
thereunder would no longer require or otherwise permit such termination. From the time Form S-3 is available to the Company for the registration
of the Registrable Securities, the Company shall take all actions necessary to maintain its eligibility to register the Registrable Securities
for resale by the Buyers on Form S-3.
(d)
Use of Proceeds. The Company will use the proceeds from the sale of the Securities for general corporate purposes, but not, directly
or indirectly, for (i) except as set forth on Schedule 4(d), the satisfaction of any indebtedness of the Company or any of its Subsidiaries,
(ii) the redemption or repurchase of any securities of the Company or any of its Subsidiaries, or (iii) the settlement of any outstanding
litigation.
(e)
Financial Information. The Company agrees to send the following to each Investor (as defined in the Registration Rights Agreement)
during the Reporting Period (i) unless the following are filed with the SEC through EDGAR and are available to the public through the
EDGAR system, within one (1) Business Day after the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K and Quarterly
Reports on Form 10-Q, any interim reports or any consolidated balance sheets, income statements, stockholders’ equity statements
and/or cash flow statements for any period other than annual or quarterly, any Current Reports on Form 8-K and any registration statements
(other than on Form S-8) or amendments filed pursuant to the 1933 Act, (ii) unless the following are either filed with the SEC through
EDGAR or are otherwise widely disseminated via a recognized news release service (such as PR Newswire), on the same day as the release
thereof, e-mail copies of all press releases issued by the Company or any of its Subsidiaries and (iii) unless the following are filed
with the SEC through EDGAR, copies of any notices and other information made available or given to the stockholders of the Company generally,
contemporaneously with the making available or giving thereof to the stockholders.
(f)
Listing. The Company shall promptly secure the listing or designation for quotation (as the case may be) of all of the Registrable
Securities upon each national securities exchange and automated quotation system, if any, upon which the Common Stock is then listed
or designated for quotation (as the case may be) (subject to official notice of issuance) and shall maintain such listing or designation
for quotation (as the case may be) of all Registrable Securities from time to time issuable under the terms of the Transaction Documents
on such national securities exchange or automated quotation system. The Company shall maintain the Common Stock’s listing or authorization
for quotation (as the case may be) on the Principal Market, The New York Stock Exchange, the NYSE American, the Nasdaq Capital Market,
the Nasdaq Global Market or the Nasdaq Global Select Market (each, an “Eligible Market”). Neither the Company nor
any of its Subsidiaries shall take any action which could be reasonably expected to result in the delisting or suspension of the Common
Stock on an Eligible Market. The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section
4(f).
(g)
Fees. The Company shall remit to (i) Kelley Drye & Warren, LLP, counsel to the lead buyer, a non-accountable amount of $175,000.00,
and (ii) to Procopio Cory Hargreaves & Savtich, LLP, counsel to the Company, a non-accountable amount of $175,000.00, in each case
for all costs and expenses incurred by it or its affiliates in connection with the structuring, documentation, negotiation and closing
of the transactions contemplated by the Transaction Documents (the “Transaction Expenses”) and shall be withheld by
the lead Buyer from its Purchase Price at the Closing. The Company shall be responsible for the payment of any placement agent’s
fees, financial advisory fees, Controlled Account Bank fees, transfer agent fees, DTC (as defined below) fees or broker’s commissions
(other than for Persons engaged by any Buyer) relating to or arising out of the transactions contemplated hereby. The Company shall pay,
and hold each Buyer harmless against, any liability, loss or expense (including, without limitation, reasonable attorneys’ fees
and out-of-pocket expenses) arising in connection with any claim relating to any such payment. Except as otherwise set forth in the Transaction
Documents, each party to this Agreement shall bear its own expenses in connection with the sale of the Securities to the Buyers.
(h)
Pledge of Securities. Notwithstanding anything to the contrary contained in this Agreement, the Company acknowledges and agrees
that the Securities may be pledged by an Investor in connection with a bona fide margin agreement or other loan or financing arrangement
that is secured by the Securities. The pledge of Securities shall not be deemed to be a transfer, sale or assignment of the Securities
hereunder, and no Investor effecting a pledge of Securities shall be required to provide the Company with any notice thereof or otherwise
make any delivery to the Company pursuant to this Agreement or any other Transaction Document, including, without limitation, Section
2(g) hereof; provided that an Investor and its pledgee shall be required to comply with the provisions of Section 2(g) hereof
in order to effect a sale, transfer or assignment of Securities to such pledgee. The Company hereby agrees to execute and deliver such
documentation as a pledgee of the Securities may reasonably request in connection with a pledge of the Securities to such pledgee by
a Buyer.
(i)
Disclosure of Transactions and Other Material Information.
(i)
Disclosure of Transaction. On or before 9:00 a.m., New York time, on or before the fourth (4th) Business Day after the date of
this Agreement, the Company shall file a Current Report on Form 8-K describing all the material terms of the transactions contemplated
by the Transaction Documents in the form required by the 1934 Act and attaching all the material Transaction Documents (including, without
limitation, this Agreement (and all schedules to this Agreement), the form of Notes, the form of the Warrants, and the form of the Registration
Rights Agreement) (including all attachments, the “8-K Filing”). From and after the filing of the 8-K Filing, the
Company shall have disclosed all material, non-public information (if any) provided to any of the Buyers by the Company or any of its
Subsidiaries or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by
the Transaction Documents. In addition, effective upon the filing of the 8-K Filing, the Company acknowledges and agrees that any and
all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries
or any of their respective officers, directors, affiliates, employees or agents, on the one hand, and any of the Buyers or any of their
affiliates, on the other hand, shall terminate.
(ii)
Limitations on Disclosure. The Company shall not, and the Company shall cause each of its Subsidiaries and each of its and their
respective officers, directors, employees and agents not to, provide any Buyer with any material, non-public information regarding the
Company or any of its Subsidiaries from and after the date hereof without the express prior written consent of such Buyer (which may
be granted or withheld in such Buyer’s sole discretion) except to the extent (x) the Company is required to deliver such disclosures
pursuant to the terms and conditions of the Transaction Documents and (y) the Company complies with any subsequent disclosure requirements
set forth herein or therein, as applicable, with respect to such disclosures. In the event of a breach of any of the foregoing covenants,
including, without limitation, Section 4(s) of this Agreement, or any of the covenants or agreements contained in any other Transaction
Document, by the Company, any of its Subsidiaries, or any of its or their respective officers, directors, employees and agents (as determined
in the reasonable good faith judgment of such Buyer), in addition to any other remedy provided herein or in the Transaction Documents,
such Buyer shall have the right to make a public disclosure, in the form of a press release, public advertisement or otherwise, of such
breach or such material, non-public information, as applicable, without the prior approval by the Company, any of its Subsidiaries, or
any of its or their respective officers, directors, employees or agents. No Buyer shall have any liability to the Company, any of its
Subsidiaries, or any of its or their respective officers, directors, employees, affiliates, stockholders or agents, for any such disclosure.
To the extent that the Company delivers any material, non-public information to a Buyer without such Buyer’s consent, the Company
hereby covenants and agrees that such Buyer shall not have any duty of confidentiality with respect to, or a duty not to trade on the
basis of, such material, non-public information. Subject to the foregoing, neither the Company, its Subsidiaries nor any Buyer shall
issue any press releases or any other public statements with respect to the transactions contemplated hereby; provided, however, the
Company shall be entitled, without the prior approval of any Buyer, to make any press release or other public disclosure with respect
to such transactions (i) in substantial conformity with the 8-K Filing and contemporaneously therewith and (ii) as is required by applicable
law and regulations (provided that in the case of clause (i) each Buyer shall be consulted by the Company in connection with any such
press release or other public disclosure prior to its release). Without the prior written consent of the applicable Buyer (which may
be granted or withheld in such Buyer’s sole discretion), the Company shall not (and shall cause each of its Subsidiaries and affiliates
to not) disclose the name of such Buyer in any filing, announcement, release or otherwise. Notwithstanding anything contained in this
Agreement to the contrary and without implication that the contrary would otherwise be true, the Company expressly acknowledges and agrees
that no Buyer shall have (unless expressly agreed to by a particular Buyer after the date hereof in a written definitive and binding
agreement executed by the Company and such particular Buyer (it being understood and agreed that no Buyer may bind any other Buyer with
respect thereto)), any duty of confidentiality with respect to, or a duty not to trade on the basis of, any material, non-public information
regarding the Company or any of its Subsidiaries.
(j)
Additional Registration Statements. Until the Applicable Date (as defined below) and at any time thereafter while any Registration
Statement is not effective or the prospectus contained therein is not available for use or any Current Public Information Failure (as
defined in the Registration Rights Agreement) exists, the Company shall not file a registration statement or an offering statement under
the 1933 Act relating to securities that are not the Registrable Securities (other than a registration statement on Form S-8 or such
supplements or amendments to registration statements that are outstanding and have been declared effective by the SEC as of the date
hereof (solely to the extent necessary to keep such registration statements effective and available and not with respect to any Subsequent
Placement)) or a Registration Statement with respect to a Permitted Equity Line (as defined below). “Applicable Date”
means the earlier of (x) the first date on which the resale by the Buyers of all the Registrable Securities required to be filed on the
initial Registration Statement (as defined in the Registration Rights Agreement) pursuant to the Registration Rights Agreement is declared
effective by the SEC (and each prospectus contained therein is available for use on such date) or (y) the first date on which all of
the Registrable Securities are eligible to be resold by the Buyers pursuant to Rule 144 (or, if a Current Public Information Failure
has occurred and is continuing, such later date after which the Company has cured such Current Public Information Failure).
(k)
Additional Issuance of Securities. So long as any Buyer beneficially owns any Securities, the Company will not, without the prior
written consent of the Required Holders, issue any Notes (other than to the Buyers as contemplated hereby) and the Company shall not
issue any other securities that would cause a breach or default under the Notes or the Warrants. The Company agrees that for the period
commencing on the date hereof and ending on the date immediately following the 90th Trading Day after the Applicable Date
(provided that such period shall be extended by the number of calendar days during such period and any extension thereof contemplated
by this proviso on which any Registration Statement is not effective or any prospectus contained therein is not available for use or
any Current Public Information Failure exists) (the “Restricted Period”), neither the Company nor any of its Subsidiaries
shall directly or indirectly issue, offer, sell, grant any option or right to purchase, or otherwise dispose of (or announce any issuance,
offer, sale, grant of any option or right to purchase or other disposition of) any equity security or any equity-linked or related security
(including, without limitation, any “equity security” (as that term is defined under Rule 405 promulgated under the 1933
Act), any Convertible Securities (as defined below), any debt, any preferred stock or any purchase rights) (any such issuance, offer,
sale, grant, disposition or announcement (whether occurring during the Restricted Period or at any time thereafter) is referred to as
a “Subsequent Placement”). Notwithstanding the foregoing, this Section 4(k) shall not apply in respect of the issuance
of (i) shares of Common Stock or standard options to purchase Common Stock to directors, officers or employees of the Company in their
capacity as such pursuant to an Approved Stock Plan (as defined below), provided that (1) all such issuances (taking into account the
shares of Common Stock issuable upon exercise of such options) after the date hereof pursuant to this clause (i) do not, in the aggregate,
exceed more than 5% of the Common Stock issued and outstanding immediately prior to the date hereof and (2) the exercise price of any
such options is not lowered, none of such options are amended to increase the number of shares issuable thereunder and none of the terms
or conditions of any such options are otherwise materially changed in any manner that adversely affects any of the Buyers; (ii) shares
of Common Stock issued upon the conversion or exercise of Convertible Securities (other than standard options to purchase Common Stock
issued pursuant to an Approved Stock Plan that are covered by clause (i) above) issued prior to the date hereof, provided that the conversion,
exercise or other method of issuance (as the case may be) of any such Convertible Security is made solely pursuant to the conversion,
exercise or other method of issuance (as the case may be) provisions of such Convertible Security that were in effect on the date immediately
prior to the date of this Agreement, the conversion, exercise or issuance price of any such Convertible Securities (other than standard
options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) is not lowered, none
of such Convertible Securities (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are
covered by clause (i) above) are amended to increase the number of shares issuable thereunder and none of the terms or conditions of
any such Convertible Securities (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that
are covered by clause (i) above) are otherwise materially changed in any manner that adversely affects any of the Buyers; (iii) the Conversion
Shares, (iv) the Warrant Shares, and (v) the shares of Common Stock issued pursuant to a Permitted Equity Line (as defined below) (each
of the foregoing in clauses (i) through (v), collectively the “Excluded Securities”). “Approved Stock Plan”
means any employee benefit plan which has been approved by the board of directors of the Company prior to or subsequent to the date hereof
pursuant to which shares of Common Stock and standard options to purchase Common Stock may be issued to any employee, officer or director
for services provided to the Company in their capacity as such.
(l)
Reservation of Shares. So long as any of the Notes or Warrants remain outstanding, the Company shall take all action necessary
to at all times have authorized, and reserved for the purpose of issuance not less than 300% of the sum of (A) the maximum number of
shares of Common Stock issuable upon conversion of all the Notes then outstanding (assuming for purposes hereof that (x) the Notes are
convertible at the Alternate Conversion Price assuming an Alternate Conversion Date as of such time of determination, (y) interest on
the Notes shall accrue through the third anniversary of the Applicable Closing Date (as defined in the Notes) and will be converted in
shares of Common Stock at a conversion price equal to the Alternate Conversion Price assuming an Alternate Conversion Date as of such
time of determination and (z) any such conversion shall not take into account any limitations on the conversion of the Notes set forth
in the Notes), and (B) the maximum number of Warrant Shares issuable upon exercise of all the Warrants then outstanding (without regard
to any limitations on the exercise of the Warrants set forth therein) (such amount as determined pursuant to clause (i) or (ii), as applicable,
the “Required Reserve Amount”); provided that at no time shall the number of shares of Common Stock reserved pursuant
to this Section 4(l) be reduced other than proportionally in connection with any conversion, exercise and/or redemption, as applicable
of Notes and Warrants. If at any time the number of shares of Common Stock authorized and reserved for issuance is not sufficient to
meet the Required Reserve Amount, the Company will promptly take all corporate action necessary to authorize and reserve a sufficient
number of shares, including, without limitation, calling a special meeting of stockholders to authorize additional shares to meet the
Company’s obligations pursuant to the Transaction Documents, in the case of an insufficient number of authorized shares, obtain
stockholder approval of an increase in such authorized number of shares, and voting the management shares of the Company in favor of
an increase in the authorized shares of the Company to ensure that the number of authorized shares is sufficient to meet the Required
Reserve Amount.
(m)
Conduct of Business. The business of the Company and its Subsidiaries shall not be conducted in violation of any law, ordinance
or regulation of any Governmental Entity, except where such violations would not reasonably be expected to result, either individually
or in the aggregate, in a Material Adverse Effect.
(n)
Passive Foreign Investment Company. The Company shall conduct its business, and shall cause its Subsidiaries to conduct their
respective businesses, in such a manner as will ensure that the Company will not be deemed to constitute a passive foreign investment
company within the meaning of Section 1297 of the Code.
(o)
Corporate Existence. So long as any Buyer beneficially owns any Notes or Warrants, the Company shall not be party to any Fundamental
Transaction (as defined in the Notes) unless the Company is in compliance with the applicable provisions governing Fundamental Transactions
set forth in the Notes and the Warrants.
(p)
Conversion and Exercise Procedures. Each of the form of Exercise Notice (as defined in the Warrants) included in the Warrants
and the form of Conversion Notice (as defined in the Notes) included in the Notes set forth the totality of the procedures required of
the Buyers in order to exercise the Warrants or convert the Notes. Except as provided in Section 5(d), no additional legal opinion, other
information or instructions shall be required of the Buyers to exercise their Warrants or convert their Notes. The Company shall honor
exercises of the Warrants and conversions of the Notes and shall deliver the Conversion Shares and Warrant Shares in accordance with
the terms, conditions and time periods set forth in the Notes and Warrants. Without limiting the preceding sentences, no ink-original
Conversion Notice or Exercise Notice shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization)
of any Conversion Notice or Exercise Notice form be required in order to convert the Notes or exercise the Warrants.
(q)
Variable Securities. So long as any Notes remain outstanding, the Company and each Subsidiary
shall be prohibited from effecting or entering into an agreement to effect any Subsequent Placement involving a Variable Rate Transaction
(other than a Permitted Equity Line). “Variable Rate Transaction” means a transaction in which the Company or any
Subsidiary (i) issues or sells any Convertible Securities either (A) at a conversion, exercise 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 Convertible 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 Convertible Securities 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, other than pursuant to a customary “weighted average”
anti-dilution provision or (ii) enters into any agreement (including, without limitation, an equity line of credit or an “at-the-market”
offering) whereby the Company or any Subsidiary may sell securities at a future determined price (other than standard and customary “preemptive”
or “participation” rights). Each Buyer shall be entitled to obtain injunctive relief against the Company and its Subsidiaries
to preclude any such issuance, which remedy shall be in addition to any right to collect damages. “Permitted Equity Line”
means an equity line of credit by and between the Company and Keystone Capital Partners, LLC or any of its affiliates (as applicable,
the “Equity Line Purchaser”).
(s)
Participation Right. At any time any Notes remain outstanding, neither the Company nor any of its Subsidiaries shall directly
or indirectly issue, offer, sell, grant any option or right to purchase, or otherwise dispose of (or announce any issuance, offer, sale,
grant of any option or right to purchase or other disposition of) any equity security or any equity-linked or related security (including,
without limitation, any “equity security” (as that term is defined under Rule 405 promulgated under the 1933 Act)), any Convertible
Securities, any indebtedness, any preferred stock or any purchase rights (any such issuance, offer, sale, grant, disposition or announcement,
each, a “Subsequent Placement”), unless the Company shall have first complied with this Section 4(s). The Company
acknowledges and agrees that the right set forth in this Section 4(s) is a right granted by the Company, separately, to each Buyer.
(i)
At least one (1) Trading Day prior to any proposed or intended Subsequent Placement, the Company shall deliver to each Buyer a written
notice (each such notice, a “Pre-Notice”), which Pre-Notice shall not contain any information (including, without
limitation, material, non-public information) other than: (A) if the proposed Offer Notice (as defined below) constitutes or contains
material, non-public information, a statement asking whether the Investor is willing to accept material non-public information or (B)
if the proposed Offer Notice does not constitute or contain material, non-public information, (x) a statement that the Company proposes
or intends to effect a Subsequent Placement, (y) a statement that the statement in clause (x) above does not constitute material, non-public
information and (z) a statement informing such Buyer that it is entitled to receive an Offer Notice (as defined below) with respect to
such Subsequent Placement upon its written request. Upon the written request of a Buyer within three (3) Trading Days after the Company’s
delivery to such Buyer of such Pre-Notice, and only upon a written request by such Buyer, the Company shall promptly, but no later than
one (1) Trading Day after such request, deliver to such Buyer an irrevocable written notice (the “Offer Notice”) of
any proposed or intended issuance or sale or exchange (the “Offer”) of the securities being offered (the “Offered
Securities”) in a Subsequent Placement, which Offer Notice shall (A) identify and describe the Offered Securities, (B) describe
the price and other terms upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to
be issued, sold or exchanged, (C) identify the Persons (if known) to which or with which the Offered Securities are to be offered, issued,
sold or exchanged and (D) offer to issue and sell to or exchange with such Buyer in accordance with the terms of the Offer such Buyer’s
pro rata portion of 100% of the Offered Securities, provided that the number of Offered Securities which such Buyer shall have the right
to subscribe for under this Section 4(s) shall be (x) based on such Buyer’s pro rata portion of the aggregate original principal
amount of the Notes purchased hereunder by all Buyers (the “Basic Amount”), and (y) with respect to each Buyer that
elects to purchase its Basic Amount, any additional portion of the Offered Securities attributable to the Basic Amounts of other Buyers
as such Buyer shall indicate it will purchase or acquire should the other Buyers subscribe for less than their Basic Amounts (the “Undersubscription
Amount”), which process shall be repeated until each Buyer shall have an opportunity to subscribe for any remaining Undersubscription
Amount.
(ii)
To accept an Offer, in whole or in part, such Buyer must deliver a written notice to the Company prior to the later of (x) twenty-four
hours or (y) the end of the first (1st) Business Day, as applicable, after such Buyer’s actual receipt of the Offer
Notice (the “Offer Period”), setting forth the portion of such Buyer’s Basic Amount that such Buyer elects to
purchase and, if such Buyer shall elect to purchase all of its Basic Amount, the Undersubscription Amount, if any, that such Buyer elects
to purchase (in either case, the “Notice of Acceptance”). If the Basic Amounts subscribed for by all Buyers are less
than the total of all of the Basic Amounts, then each Buyer who has set forth an Undersubscription Amount in its Notice of Acceptance
shall be entitled to purchase, in addition to the Basic Amounts subscribed for, the Undersubscription Amount it has subscribed for; provided,
however, if the Undersubscription Amounts subscribed for exceed the difference between the total of all the Basic Amounts and the Basic
Amounts subscribed for (the “Available Undersubscription Amount”), each Buyer who has subscribed for any Undersubscription
Amount shall be entitled to purchase only that portion of the Available Undersubscription Amount as the Basic Amount of such Buyer bears
to the total Basic Amounts of all Buyers that have subscribed for Undersubscription Amounts, subject to rounding by the Company to the
extent it deems reasonably necessary. Notwithstanding the foregoing, if the Company desires to modify or amend the terms and conditions
of the Offer prior to the expiration of the Offer Period, the Company may deliver to each Buyer a new Offer Notice and the Offer Period
shall expire on the later of (x) twenty-four hours or (y) the end of the first (1st) Business Day, as applicable, after such
Buyer’s receipt of such new Offer Notice.
(iii)
The Company shall have five (5) Business Days from the expiration of the Offer Period above (A) to offer, issue, sell or exchange all
or any part of such Offered Securities as to which a Notice of Acceptance has not been given by a Buyer (the “Refused Securities”)
pursuant to a definitive agreement(s) (the “Subsequent Placement Agreement”), but only to the offerees described in
the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and interest
rates) that are not more favorable to the acquiring Person or Persons or less favorable to the Company than those set forth in the Offer
Notice and (B) to publicly announce (x) the execution of such Subsequent Placement Agreement, and (y) either (I) the consummation of
the transactions contemplated by such Subsequent Placement Agreement or (II) the termination of such Subsequent Placement Agreement,
which shall be filed with the SEC on a Current Report on Form 8-K with such Subsequent Placement Agreement and any documents contemplated
therein filed as exhibits thereto.
(iv)
In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms
specified in Section 4(s)(iii) above), then each Buyer may, at its sole option and in its sole discretion, withdraw its Notice of Acceptance
or reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than
the number or amount of the Offered Securities that such Buyer elected to purchase pursuant to Section 4(s)(iii) above multiplied by
a fraction, (i) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell
or exchange (including Offered Securities to be issued or sold to Buyers pursuant to this Section 4(s) prior to such reduction) and (ii)
the denominator of which shall be the original amount of the Offered Securities. In the event that any Buyer so elects to reduce the
number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange more than the
reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Buyers in accordance
with Section 4(s)(i) above.
(v)
Upon the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Buyer shall acquire from the
Company, and the Company shall issue to such Buyer, the number or amount of Offered Securities specified in its Notice of Acceptance,
as reduced pursuant to Section 4(s)(iv) above if such Buyer has so elected, upon the terms and conditions specified in the Offer. The
purchase by such Buyer of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and
such Buyer of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to such
Buyer and its counsel.
(vi)
Any Offered Securities not acquired by a Buyer or other Persons in accordance with this Section 4(s) may not be issued, sold or exchanged
until they are again offered to such Buyer under the procedures specified in this Agreement.
(vii)
The Company and each Buyer agree that if any Buyer elects to participate in the Offer, (x) neither the Subsequent Placement Agreement
with respect to such Offer nor any other transaction documents related thereto (collectively, the “Subsequent Placement Documents”)
shall include any term or provision whereby such Buyer shall be required to agree to any restrictions on trading as to any securities
of the Company or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in
connection with, any agreement previously entered into with the Company or any instrument received from the Company, and (y) any registration
rights set forth in such Subsequent Placement Documents shall be similar in all material respects to the registration rights contained
in the Registration Rights Agreement.
(viii)
Notwithstanding anything to the contrary in this Section 4(s) and unless otherwise agreed to by such Buyer, the Company shall either
confirm in writing to such Buyer that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose
its intention to issue the Offered Securities, in either case, in such a manner such that such Buyer will not be in possession of any
material, non-public information, by the fifth (5th) Business Day following delivery of the Offer Notice. If by such fifth
(5th) Business Day, no public disclosure regarding a transaction with respect to the Offered Securities has been made, and
no notice regarding the abandonment of such transaction has been received by such Buyer, such transaction shall be deemed to have been
abandoned and such Buyer shall not be in possession of any material, non-public information with respect to the Company or any of its
Subsidiaries. Should the Company decide to pursue such transaction with respect to the Offered Securities, the Company shall provide
such Buyer with another Offer Notice and such Buyer will again have the right of participation set forth in this Section 4(s). The Company
shall not be permitted to deliver more than one such Offer Notice to such Buyer in any sixty (60) day period, except as expressly contemplated
by the last sentence of Section 4(s)(ii).
(ix)
The restrictions contained in this Section 4(s) shall not apply in connection with the issuance of any Excluded Securities (as defined
in the Notes). The Company shall not circumvent the provisions of this Section 4(s) by providing terms or conditions to one Buyer that
are not provided to all.
(t)
Dilutive Issuances. For so long as any Notes or Warrants remain outstanding, the Company shall not, in any manner, enter into
or affect any Dilutive Issuance (as defined in the Notes) if the effect of such Dilutive Issuance is to cause the Company to be required
to issue upon conversion of any Notes or exercise of any Warrant any shares of Common Stock in excess of that number of shares of Common
Stock which the Company may issue upon conversion of the Notes and exercise of the Warrants without breaching the Company’s obligations
under the rules or regulations of the Principal Market.
(u)
Stock Splits. Until the Notes are no longer outstanding, the Company shall not effect any stock combination, reverse stock split
or other similar transaction (or make any public announcement or disclosure with respect to any of the foregoing) without the prior written
consent of the Required Holders (as defined below).
(v)
General Solicitation. None of the Company, any of its affiliates (as defined in Rule 501(b) under the 1933 Act) or any person
acting on behalf of the Company or such affiliate will solicit any offer to buy or offer or sell the Securities by means of any form
of general solicitation or general advertising within the meaning of Regulation D, including: (i) any advertisement, article, notice
or other communication published in any newspaper, magazine or similar medium or broadcast over television or radio; and (ii) any seminar
or meeting whose attendees have been invited by any general solicitation or general advertising.
(w)
Integration. None of the Company, any of its affiliates (as defined in Rule 501(b) under the 1933 Act), or any person acting
on behalf of the Company or such affiliate will sell, offer for sale, or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in the 1933 Act) which will be integrated with the sale of the Securities in a manner which would require the registration
of the Securities under the 1933 Act or require stockholder approval under the rules and regulations of the Principal Market and the
Company will take all action that is appropriate or necessary to assure that its offerings of other securities will not be integrated
for purposes of the 1933 Act or the rules and regulations of the Principal Market, with the issuance of Securities contemplated hereby.
(x)
Notice of Disqualification Events. The Company will notify the Buyers 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.
(y)
Permitted Equity Line. On or prior to thirty (30) calendar days after the Closing Date, the Company shall have entered into
a definitive agreement with the Equity Line Purchaser with respect to the Permitted Equity Line.
5.
REGISTER; TRANSFER AGENT INSTRUCTIONS; LEGEND.
(a)
Register. The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may
designate by notice to each holder of Securities), a register for the Notes and the Warrants in which the Company shall record the name
and address of the Person in whose name the Notes and the Warrants have been issued (including the name and address of each transferee),
the principal amount of the Notes held by such Person, the number of Conversion Shares issuable pursuant to the terms of the Notes and
the number of Warrant Shares issuable upon exercise of the Warrants held by such Person. The Company shall keep the register open and
available at all times during business hours for inspection of any Buyer or its legal representatives.
(b)
Transfer Agent Instructions. The Company shall issue irrevocable instructions to its transfer agent and any subsequent transfer
agent (as applicable, the “Transfer Agent”) in a form acceptable to each of the Buyers (the “Irrevocable
Transfer Agent Instructions”) to issue certificates or credit shares to the applicable balance accounts at The Depository Trust
Company (“DTC”), registered in the name of each Buyer or its respective nominee(s), for the Conversion Shares and
the Warrant Shares in such amounts as specified from time to time by each Buyer to the Company upon conversion of the Notes or the exercise
of the Warrants (as the case may be). The Company represents and warrants that no instruction other than the Irrevocable Transfer Agent
Instructions referred to in this Section 5(b), and stop transfer instructions to give effect to Section 2(g) hereof, will be given by
the Company to its transfer agent with respect to the Securities, and that the Securities shall otherwise be freely transferable on the
books and records of the Company, as applicable, to the extent provided in this Agreement and the other Transaction Documents. If a Buyer
effects a sale, assignment or transfer of the Securities in accordance with Section 2(g), the Company shall permit the transfer and shall
promptly instruct its transfer agent to issue one or more certificates or credit shares to the applicable balance accounts at DTC in
such name and in such denominations as specified by such Buyer to effect such sale, transfer or assignment. In the event that such sale,
assignment or transfer involves Conversion Shares or Warrant Shares sold, assigned or transferred pursuant to an effective registration
statement or in compliance with Rule 144, the transfer agent shall issue such shares to such Buyer, assignee or transferee (as the case
may be) without any restrictive legend in accordance with Section 5(d) below. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to a Buyer. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations
under this Section 5(b) will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions
of this Section 5(b), that a Buyer shall be entitled, in addition to all other available remedies, to an order and/or injunction restraining
any breach and requiring immediate issuance and transfer, without the necessity of showing economic loss and without any bond or other
security being required. The Company shall cause its counsel to issue the legal opinion referred to in the Irrevocable Transfer Agent
Instructions to the Company’s transfer agent on each Effective Date (as defined in the Registration Rights Agreement). Any fees
(with respect to the transfer agent, counsel to the Company or otherwise) associated with the issuance of such opinion or the removal
of any legends on any of the Securities shall be borne by the Company.
(c)
Legends. Each Buyer understands that the Securities have been issued (or will be issued in the case of the Conversion Shares and
the Warrant Shares) pursuant to an exemption from registration or qualification under the 1933 Act and applicable state securities laws,
and except as set forth below, the Securities shall bear any legend as required by the “blue sky” laws of any state and a
restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of such stock certificates):
[NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE]
[EXERCISABLE] HAVE BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE
OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL
TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER
SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING,
THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
(d)
Removal of Legends. Certificates evidencing Securities shall not be required to contain the legend set forth in Section 5(c) above
or any other legend (i) while a registration statement (including a Registration Statement) covering the resale of such Securities is
effective under the 1933 Act, (ii) following any sale of such Securities pursuant to Rule 144 (assuming the transferor is not an affiliate
of the Company), (iii) if such Securities are eligible to be sold, assigned or transferred under Rule 144 (provided that a Buyer provides
the Company with reasonable assurances that such Securities are eligible for sale, assignment or transfer under Rule 144 which shall
not include an opinion of Buyer’s counsel), (iv) in connection with a sale, assignment or other transfer (other than under Rule
144), provided that such Buyer provides the Company with an opinion of counsel to such Buyer, in a generally acceptable form, to the
effect that such sale, assignment or transfer of the Securities may be made without registration under the applicable requirements of
the 1933 Act or (v) if such legend is not required under applicable requirements of the 1933 Act (including, without limitation, controlling
judicial interpretations and pronouncements issued by the SEC). If a legend is not required pursuant to the foregoing, the Company shall
no later than two (2) Trading Days (or such earlier date as required pursuant to the 1934 Act or other applicable law, rule or regulation
for the settlement of a trade initiated on the date such Buyer delivers such legended certificate representing such Securities to the
Company) following the delivery by a Buyer to the Company or the transfer agent (with notice to the Company) of a legended certificate
representing such Securities (endorsed or with stock powers attached, signatures guaranteed, and otherwise in form necessary to affect
the reissuance and/or transfer, if applicable), together with any other deliveries from such Buyer as may be required above in this Section
5(d), as directed by such Buyer, either: (A) provided that the Company’s transfer agent is participating in the DTC Fast Automated
Securities Transfer Program (“FAST”) and such Securities are Conversion Shares or Warrant Shares, credit the aggregate
number of shares of Common Stock to which such Buyer shall be entitled to such Buyer’s or its designee’s balance account
with DTC through its Deposit/Withdrawal at Custodian system or (B) if the Company’s transfer agent is not participating in FAST,
issue and deliver (via reputable overnight courier) to such Buyer, a certificate representing such Securities that is free from all restrictive
and other legends, registered in the name of such Buyer or its designee (the date by which such credit is so required to be made to the
balance account of such Buyer’s or such Buyer’s designee with DTC or such certificate is required to be delivered to such
Buyer pursuant to the foregoing is referred to herein as the “Required Delivery Date”, and the date such shares of
Common Stock are actually delivered without restrictive legend to such Buyer or such Buyer’s designee with DTC, as applicable,
the “Share Delivery Date”). The Company shall be responsible for any transfer agent fees or DTC fees with respect
to any issuance of Securities or the removal of any legends with respect to any Securities in accordance herewith.
(e)
Failure to Timely Deliver; Buy-In. If the Company fails, for any reason or for no reason, to issue and deliver (or cause to be
delivered) to a Buyer (or its designee) by the Required Delivery Date, either (I) if the Transfer Agent is not participating in FAST,
a certificate for the number of Conversion Shares or Warrant Shares (as the case may be) to which such Buyer is entitled and register
such Conversion Shares or Warrant Shares (as the case may be) on the Company’s share register or, if the Transfer Agent is participating
in FAST, to credit the balance account of such Buyer or such Buyer’s designee with DTC for such number of Conversion Shares or
Warrant Shares (as the case may be) submitted for legend removal by such Buyer pursuant to Section 5(d) above or (II) if the Registration
Statement covering the resale of the Conversion Shares or Warrant Shares (as the case may be) submitted for legend removal by such Buyer
pursuant to Section 5(d) above (the “Unavailable Shares”) is not available for the resale of such Unavailable Shares
and the Company fails to promptly, but in no event later than as required pursuant to the Registration Rights Agreement (x) so notify
such Buyer and (y) deliver the Conversion Shares or Warrant Shares, as applicable, electronically without any restrictive legend by crediting
such aggregate number of Conversion Shares or Warrant Shares (as the case may be) submitted for legend removal by such Buyer pursuant
to Section 5(d) above to such Buyer’s or its designee’s balance account with DTC through its Deposit/Withdrawal At Custodian
system (the event described in the immediately foregoing clause (II) is hereinafter referred as a “Notice Failure”
and together with the event described in clause (I) above, a “Delivery Failure”), then, in addition to all other remedies
available to such Buyer, the Company shall pay in cash to such Buyer on each day after the Share Delivery Date and during such Delivery
Failure an amount equal to 2% of the product of (A) the sum of the number of shares of Common Stock not issued to such Buyer on or prior
to the Required Delivery Date and to which such Buyer is entitled, and (B) any trading price of the Common Stock selected by such Buyer
in writing as in effect at any time during the period beginning on the date of the delivery by such Buyer to the Company of the applicable
Conversion Shares or Warrant Shares (as the case may be) and ending on the applicable Share Delivery Date. In addition to the foregoing,
if on or prior to the Required Delivery Date either (I) if the Transfer Agent is not participating in FAST, the Company shall fail to
issue and deliver a certificate to a Buyer and register such shares of Common Stock on the Company’s share register or, if the
Transfer Agent is participating in FAST, credit the balance account of such Buyer or such Buyer’s designee with DTC for the number
of shares of Common Stock to which such Buyer submitted for legend removal by such Buyer pursuant to Section 5(d) above (ii) below or
(II) a Notice Failure occurs, and if on or after such Trading Day such Buyer acquires (in an open market transaction, stock loan or otherwise)
shares of Common Stock to deliver in satisfaction of a sale by such Buyer of shares of Common Stock submitted for legend removal by such
Buyer pursuant to Section 5(d) above that such Buyer is entitled to receive from the Company (a “Buy-In”), then the
Company shall, within two (2) Trading Days after such Buyer’s request and in such Buyer’s discretion, either (i) pay cash
to such Buyer in an amount equal to such Buyer’s total purchase price (including brokerage commissions, stock loan costs and other
out-of-pocket expenses, if any, for the shares of Common Stock so acquired (including, without limitation, by any other Person in respect,
or on behalf, of the Holder) (the “Buy-In Price”), at which point the Company’s obligation to so deliver such
certificate or credit such Buyer’s balance account shall terminate and such shares shall be cancelled, or (ii) promptly honor its
obligation to so deliver to such Buyer a certificate or certificates or credit the balance account of such Buyer or such Buyer’s
designee with DTC representing such number of shares of Common Stock that would have been so delivered if the Company timely complied
with its obligations hereunder and pay cash to such Buyer in an amount equal to the excess (if any) of the Buy-In Price over the product
of (A) such number of shares of Conversion Shares or Warrant Shares (as the case may be) that the Company was required to deliver to
such Buyer by the Required Delivery Date multiplied by (B) the lowest Closing Sale Price (as defined in the Warrants) of the Common Stock
on any Trading Day during the period commencing on the date of the delivery by such Buyer to the Company of the applicable Conversion
Shares or Warrant Shares (as the case may be) and ending on the date of such delivery and payment under this clause (ii). Nothing shall
limit such Buyer’s right to pursue any other remedies available to it hereunder, at law or in equity, including, without limitation,
a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates
representing shares of Common Stock (or to electronically deliver such shares of Common Stock) as required pursuant to the terms hereof.
Notwithstanding anything herein to the contrary, with respect to any given Notice Failure and/or Delivery Failure, this Section 5(e)
shall not apply to the applicable Buyer the extent the Company has already paid such amounts in full to such Buyer with respect to such
Notice Failure and/or Delivery Failure, as applicable, pursuant to the analogous sections of the Note or Warrant, as applicable, held
by such Buyer.
(f)
FAST Compliance. While any Warrants remain outstanding, the Company shall maintain a transfer agent that participates in FAST.
6.
CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.
(a)
The obligation of the Company hereunder to issue and sell the Notes and the related Warrants to each Buyer at the Closing is subject
to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Company’s
sole benefit and may be waived by the Company at any time in its sole discretion by providing each Buyer with prior written notice thereof:
(i)
Such Buyer shall have executed each of the other Transaction Documents to which it is a party and delivered the same to the Company.
(ii)
Such Buyer and each other Buyer shall have delivered to the Company the Purchase Price (less, in the case of any Buyer, the amounts withheld
pursuant to Section 4(g)) for the Note and the related Warrants being purchased by such Buyer at the Closing by wire transfer of immediately
available funds in accordance with the Flow of Funds Letter.
(iii)
The representations and warranties of such Buyer shall be true and correct in all material respects as of the date when made and as of
the Closing Date as though originally made at that time (except for representations and warranties that speak as of a specific date,
which shall be true and correct as of such specific date), and such Buyer shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by such
Buyer at or prior to the Closing Date.
7.
CONDITIONS TO EACH BUYER’S OBLIGATION TO PURCHASE.
(a)
The obligation of each Buyer hereunder to purchase its Note and its related Warrants at the Closing is subject to the satisfaction, at
or before the Closing Date, of each of the following conditions, provided that these conditions are for each Buyer’s sole benefit
and may be waived by such Buyer at any time in its sole discretion by providing the Company with prior written notice thereof:
(i)
The Company shall have duly executed and delivered to such Buyer each of the Transaction Documents to which it is a party and the Company
shall have duly executed and delivered to such Buyer (A) a Note in such original principal amount as is set forth across from such Buyer’s
name in column (3) of the Schedule of Buyers, (B) a Series A Warrant (initially exercisable for such aggregate number of Series A Warrant
Shares as is set forth across from such Buyer’s name in column (4) of the Schedule of Buyers) and (C) a Series B Warrant (initially
exercisable for such aggregate number of Series B Warrant Shares as is set forth across from such Buyer’s name in column (5) of
the Schedule of Buyers), in each case, as being purchased by such Buyer at the Closing pursuant to this Agreement.
(ii)
Such Buyer shall have received the opinion of Procopio Cory Hargreaves & Savitch, LLP the Company’s counsel, dated as of the
Closing Date, in the form acceptable to such Buyer.
(iii)
The Company shall have delivered to such Buyer a copy of the Irrevocable Transfer Agent Instructions, in the form acceptable to such
Buyer, which instructions shall have been delivered to and acknowledged in writing by the Company’s transfer agent.
(iv)
The Company shall have delivered to such Buyer a certificate evidencing the formation and good standing of the Company and each of its
Subsidiaries in each such entity’s jurisdiction of formation issued by the Secretary of State (or comparable office) of such jurisdiction
of formation as of a date within ten (10) days of the Closing Date.
(v)
The Company shall have delivered to such Buyer a certificate evidencing the Company’s qualification as a foreign corporation and
good standing issued by the Secretary of State (or comparable office) of each jurisdiction in which the Company conducts business and
is required to so qualify, as of a date within ten (10) days of the Closing Date.
(vi)
The Company shall have delivered to such Buyer a certified copy of the Certificate of Incorporation as certified by the Delaware Secretary
of State within ten (10) days of the Closing Date.
(vii)
The Company shall have delivered to such Buyer a certificate, in the form acceptable to such Buyer, executed by the Secretary of the
Company and dated as of the Closing Date, as to (i) the resolutions consistent with Section 3(b) as adopted by the Company’s board
of directors in a form reasonably acceptable to such Buyer, (ii) the Certificate of Incorporation of the Company and (iii) the Bylaws
of the Company, each as in effect at the Closing.
(viii)
Each and every representation and warranty of the Company shall be true and correct as of the date when made and as of the Closing Date
as though originally made at that time (except for representations and warranties that speak as of a specific date, which shall be true
and correct as of such specific date) and the Company shall have performed, satisfied and complied in all respects with the covenants,
agreements and conditions required to be performed, satisfied or complied with by the Company at or prior to the Closing Date. Such Buyer
shall have received a certificate, duly executed by the Chief Executive Officer of the Company, dated as of the Closing Date, to the
foregoing effect and as to such other matters as may be reasonably requested by such Buyer in the form acceptable to such Buyer.
(ix)
The Company shall have delivered to such Buyer a letter from the Company’s transfer agent certifying the number of shares of Common
Stock outstanding on the Closing Date immediately prior to the Closing.
(x)
The Common Stock (A) shall be designated for quotation or listed (as applicable) on the Principal Market and (B) shall not have been
suspended, as of the Closing Date, by the SEC or the Principal Market from trading on the Principal Market nor shall suspension by the
SEC or the Principal Market have been threatened, as of the Closing Date, either (I) in writing by the SEC or the Principal Market or
(II) by falling below the minimum maintenance requirements of the Principal Market.
(xi)
The Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the sale of
the Securities, including without limitation, those required by the Principal Market, if any.
(xii)
No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or Governmental Entity of competent jurisdiction that prohibits the consummation of any of the transactions contemplated
by the Transaction Documents.
(xiii)
Since the date of execution of this Agreement, no event or series of events shall have occurred that reasonably would have or result
in a Material Adverse Effect.
(xiv)
The Company shall have obtained approval of the Principal Market to list or designate for quotation (as the case may be) the Conversion
Shares and the Warrant Shares.
(xv)
Such Buyer shall have received a letter on the letterhead of the Company, duly executed by the Chief Executive Officer of the Company,
setting forth the wire amounts of each Buyer and the wire transfer instructions of the Company (the “Flow of Funds Letter”).
(xvi)
The Company and its Subsidiaries shall have delivered to such Buyer such other documents, instruments or certificates relating to the
transactions contemplated by this Agreement as such Buyer or its counsel may reasonably request.
8.
TERMINATION.
In
the event that the Closing shall not have occurred with respect to a Buyer within five (5) days of the date hereof, then such Buyer shall
have the right to terminate its obligations under this Agreement with respect to itself at any time on or after the close of business
on such date without liability of such Buyer to any other party; provided, however, (i) the right to terminate this Agreement under this
Section 8 shall not be available to such Buyer if the failure of the transactions contemplated by this Agreement to have been consummated
by such date is the result of such Buyer’s breach of this Agreement and (ii) the abandonment of the sale and purchase of the Notes
and the Warrants shall be applicable only to such Buyer providing such written notice, provided further that no such termination shall
affect any obligation of the Company under this Agreement to reimburse such Buyer for the expenses described in Section 4(g) above. Nothing
contained in this Section 8 shall be deemed to release any party from any liability for any breach by such party of the terms and provisions
of this Agreement or the other Transaction Documents or to impair the right of any party to compel specific performance by any other
party of its obligations under this Agreement or the other Transaction Documents.
9.
MISCELLANEOUS.
(a)
Governing Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of
this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict
of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of
any jurisdictions other than the State of New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state
and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection
herewith or under any of the other Transaction Documents or with any transaction contemplated hereby or thereby, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding
is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit,
action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to
limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude
any Buyer from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s
obligations to such Buyer or to enforce a judgment or other court ruling in favor of such Buyer. EACH PARTY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION
DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY
OR THEREBY.
(b)
Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the
same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event
that any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an
executed signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such signature page were an original thereof.
(c)
Headings; Gender. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation
of, this Agreement. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine,
neuter, singular and plural forms thereof. The terms “including,” “includes,” “include” and words
of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,”
“hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the provision in
which they are found.
(d)
Severability; Maximum Payment Amounts. If any provision of this Agreement is prohibited by law or otherwise determined to be invalid
or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall
be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues
to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature,
invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal
obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties
will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s),
the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s). Notwithstanding anything
to the contrary contained in this Agreement or any other Transaction Document (and without implication that the following is required
or applicable), it is the intention of the parties that in no event shall amounts and value paid by the Company and/or any of its Subsidiaries
(as the case may be), or payable to or received by any of the Buyers, under the Transaction Documents (including without limitation,
any amounts that would be characterized as “interest” under applicable law) exceed amounts permitted under any applicable
law. Accordingly, if any obligation to pay, payment made to any Buyer, or collection by any Buyer pursuant the Transaction Documents
is finally judicially determined to be contrary to any such applicable law, such obligation to pay, payment or collection shall be deemed
to have been made by mutual mistake of such Buyer, the Company and its Subsidiaries and such amount shall be deemed to have been adjusted
with retroactive effect to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by the applicable
law. Such adjustment shall be effected, to the extent necessary, by reducing or refunding, at the option of such Buyer, the amount of
interest or any other amounts which would constitute unlawful amounts required to be paid or actually paid to such Buyer under the Transaction
Documents. For greater certainty, to the extent that any interest, charges, fees, expenses or other amounts required to be paid to or
received by such Buyer under any of the Transaction Documents or related thereto are held to be within the meaning of “interest”
or another applicable term to otherwise be violative of applicable law, such amounts shall be pro-rated over the period of time to which
they relate.
(e)
Entire Agreement; Amendments. This Agreement, the other Transaction Documents and the schedules and exhibits attached hereto and
thereto and the instruments referenced herein and therein supersede all other prior oral or written agreements between the Buyers, the
Company, its Subsidiaries, their affiliates and Persons acting on their behalf, including, without limitation, any transactions by any
Buyer with respect to Common Stock or the Securities, and the other matters contained herein and therein, and this Agreement, the other
Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments referenced herein and therein contain
the entire understanding of the parties solely with respect to the matters covered herein and therein; provided, however, nothing contained
in this Agreement or any other Transaction Document shall (or shall be deemed to) (i) have any effect on any agreements any Buyer has
entered into with, or any instruments any Buyer has received from, the Company or any of its Subsidiaries prior to the date hereof with
respect to any prior investment made by such Buyer in the Company or (ii) waive, alter, modify or amend in any respect any obligations
of the Company or any of its Subsidiaries, or any rights of or benefits to any Buyer or any other Person, in any agreement entered into
prior to the date hereof between or among the Company and/or any of its Subsidiaries and any Buyer, or any instruments any Buyer received
from the Company and/or any of its Subsidiaries prior to the date hereof, and all such agreements and instruments shall continue in full
force and effect. Except as specifically set forth herein or therein, neither the Company nor any Buyer makes any representation, warranty,
covenant or undertaking with respect to such matters. For clarification purposes, the Recitals are part of this Agreement. No provision
of this Agreement may be amended other than by an instrument in writing signed by the Company and the Required Holders (as defined below),
and any amendment to any provision of this Agreement made in conformity with the provisions of this Section 9(e) shall be binding on
all Buyers and holders of Securities, as applicable; provided that no such amendment shall be effective to the extent that it (A) applies
to less than all of the holders of the Securities then outstanding or (B) imposes any obligation or liability on any Buyer without such
Buyer’s prior written consent (which may be granted or withheld in such Buyer’s sole discretion). No waiver shall be effective
unless it is in writing and signed by an authorized representative of the waiving party, provided that the Required Holders may waive
any provision of this Agreement, and any waiver of any provision of this Agreement made in conformity with the provisions of this Section
9(e) shall be binding on all Buyers and holders of Securities, as applicable, provided that no such waiver shall be effective to the
extent that it (1) applies to less than all of the holders of the Securities then outstanding (unless a party gives a waiver as to itself
only) or (2) imposes any obligation or liability on any Buyer without such Buyer’s prior written consent (which may be granted
or withheld in such Buyer’s sole discretion). No consideration (other than reimbursement of legal fees) shall be offered or paid
to any Person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same consideration
also is offered to all of the parties to the Transaction Documents, all holders of the Notes or all holders of the Warrants (as the case
may be). From the date hereof and while any Notes or Warrants are outstanding, the Company shall not be permitted to receive any consideration
from a Buyer or a holder of Notes or Warrants that is not otherwise contemplated by the Transaction Documents in order to, directly or
indirectly, induce the Company or any Subsidiary (i) to treat such Buyer or holder of Notes or Warrants in a manner that is more favorable
than to other similarly situated Buyers or holders of Notes or Warrants, as applicable, or (ii) to treat any Buyer(s) or holder(s) of
Notes or Warrants in a manner that is less favorable than the Buyer or holder of Notes or Warrants that is paying such consideration;
provided, however, that the determination of whether a Buyer has been treated more or less favorably than another Buyer shall disregard
any securities of the Company purchased or sold by any Buyer. The Company has not, directly or indirectly, made any agreements with any
Buyers relating to the terms or conditions of the transactions contemplated by the Transaction Documents except as set forth in the Transaction
Documents. Without limiting the foregoing, the Company confirms that, except as set forth in this Agreement, no Buyer has made any commitment
or promise or has any other obligation to provide any financing to the Company, any Subsidiary or otherwise. As a material inducement
for each Buyer to enter into this Agreement, the Company expressly acknowledges and agrees that (x) no due diligence or other investigation
or inquiry conducted by a Buyer, any of its advisors or any of its representatives shall affect such Buyer’s right to rely on,
or shall modify or qualify in any manner or be an exception to any of, the Company’s representations and warranties contained in
this Agreement or any other Transaction Document and (y) unless a provision of this Agreement or any other Transaction Document is expressly
preceded by the phrase “except as disclosed in the SEC Documents,” nothing contained in any of the SEC Documents shall affect
such Buyer’s right to rely on, or shall modify or qualify in any manner or be an exception to any of, the Company’s representations
and warranties contained in this Agreement or any other Transaction Document. “Required Holders” means (I) prior to
the Closing Date, each Buyer entitled to purchase Notes and Warrants at the Closing and (II) on or after the Closing Date, (x) Keystone
Capital Partners, LLC (“Keystone”), so long as Keystone holds any of the Notes or has the right to acquire any Notes
hereunder (or any Convertible Securities issued in exchange for any of the foregoing), or (y) otherwise, holders of a majority of the
Registrable Securities as of such time (excluding any Registrable Securities held by the Company or any of its Subsidiaries as of such
time) issued or issuable hereunder or pursuant to the Notes and/or the Warrants (or the Buyers, with respect to any waiver or amendment
of Section 4(s)) at such time as Keystone does not hold any of the Notes.
(f)
Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement
must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent
by electronic mail (provided that such sent email is kept on file (whether electronically or otherwise) by the sending party and the
sending party does not receive an automatically generated message from the recipient’s email server that such e-mail could not
be delivered to such recipient); or (iii) one (1) Business Day after deposit with an overnight courier service with next day delivery
specified, in each case, properly addressed to the party to receive the same. The mailing addresses and e-mail addresses for such communications
shall be:
If
to the Company:
Evofem
Biosciences, Inc.
7770 Regents Road, Suite 113-618
San Diego, California 92122
Telephone: (858) 550-1900
Attention: Chief Financial Officer
E-Mail: Izhang@evofem.com
With
a copy (for informational purposes only) to:
Procopio
Cory Hargreaves & Savitch, LLP
12544 High Bluff Drive
Suite 400
San Diego, CA 92130
Telephone: (858) 523-4305
E-Mail: dennis.doucette@procopio.com
If
to the Transfer Agent:
Pacific
Stock Transfer
6725 Via Austi Pkwy, Suite 300
Las Vegas, NV 89119
Telephone: (702) 323-0033
Attention: Joslyn Claiborne
E-Mail: jclairborne@pacificstocktransfer.com
If
to a Buyer, to its mailing address and e-mail address set forth on the Schedule of Buyers, with copies to such Buyer’s representatives
as set forth on the Schedule of Buyers,
with
a copy (for informational purposes only) to:
Kelley
Drye & Warren LLP
3
World Trade Center
175
Greenwich Street
New
York, NY 10007
Telephone:
(212) 808-7540
Attention:
Michael A. Adelstein, Esq.
E-mail:
madelstein@kelleydrye.com
or
to such other mailing address and/or e-mail address and/or to the attention of such other Person as the recipient party has specified
by written notice given to each other party five (5) days prior to the effectiveness of such change, provided that Kelley Drye &
Warren LLP shall only be provided copies of notices sent to the lead Buyer. Written confirmation of receipt (A) given by the recipient
of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s e-mail containing
the time, date and recipient’s e-mail or (C) provided by an overnight courier service shall be rebuttable evidence of personal
service, receipt by e-mail or receipt from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively.
(g)
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors
and assigns, including any purchasers of any of the Notes and Warrants. The Company shall not assign this Agreement or any rights or
obligations hereunder without the prior written consent of the Required Holders, including, without limitation, by way of a Fundamental
Transaction (as defined in the Warrants) (unless the Company is in compliance with the applicable provisions governing Fundamental Transactions
set forth in the Warrants) or a Fundamental Transaction (as defined in the Notes) (unless the Company is in compliance with the applicable
provisions governing Fundamental Transactions set forth in the Notes). A Buyer may assign some or all of its rights hereunder in connection
with any transfer of any of its Securities without the consent of the Company, in which event such assignee shall be deemed to be a Buyer
hereunder with respect to such assigned rights.
(h)
No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, other than the
Indemnitees referred to in Section 9(k).
(i)
Survival. The representations, warranties, agreements and covenants shall survive the Closing. Each Buyer shall be responsible
only for its own representations, warranties, agreements and covenants hereunder.
(j)
Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and
shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.
(k)
Indemnification. In consideration of each Buyer’s execution and delivery of the Transaction Documents and acquiring the
Securities thereunder and in addition to all of the Company’s other obligations under the Transaction Documents, the Company shall
defend, protect, indemnify and hold harmless each Buyer and each holder of any Securities and all of their stockholders, partners, members,
officers, directors, employees and direct or indirect investors and any of the foregoing Persons’ agents or other representatives
(including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the
“Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees,
liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for
which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified
Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to (i) any misrepresentation or breach
of any representation or warranty made by the Company or any Subsidiary in any of the Transaction Documents, (ii) any breach of any covenant,
agreement or obligation of the Company or any Subsidiary contained in any of the Transaction Documents or (iii) any cause of action,
suit, proceeding or claim brought or made against such Indemnitee by a third party (including for these purposes a derivative action
brought on behalf of the Company or any Subsidiary) or which otherwise involves such Indemnitee that arises out of or results from (A)
the execution, delivery, performance or enforcement of any of the Transaction Documents, (B) any transaction financed or to be financed
in whole or in part, directly or indirectly, with the proceeds of the issuance of the Securities, (C) any disclosure properly made by
such Buyer pursuant to Section 4(i), or (D) the status of such Buyer or holder of the Securities either as an investor in the Company
pursuant to the transactions contemplated by the Transaction Documents or as a party to this Agreement (including, without limitation,
as a party in interest or otherwise in any action or proceeding for injunctive or other equitable relief). To the extent that the foregoing
undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities which is permissible under applicable law. Except as otherwise set forth herein, the mechanics
and procedures with respect to the rights and obligations under this Section 9(k) shall be the same as those set forth in Section 6 of
the Registration Rights Agreement.
(l)
Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party. No specific representation or warranty shall limit the
generality or applicability of a more general representation or warranty. Each and every reference to share prices, shares of Common
Stock and any other numbers in this Agreement that relate to the Common Stock shall be automatically adjusted for any stock splits, stock
dividends, stock combinations, recapitalizations or other similar transactions that occur with respect to the Common Stock after the
date of this Agreement. Notwithstanding anything in this Agreement to the contrary, for the avoidance of doubt, nothing contained herein
shall constitute a representation or warranty against, or a prohibition of, any actions with respect to the borrowing of, arrangement
to borrow, identification of the availability of, and/or securing of, securities of the Company in order for such Buyer (or its broker
or other financial representative) to effect short sales or similar transactions in the future.
(m)
Remedies. Each Buyer and in the event of assignment by Buyer of its rights and obligations hereunder, each holder of Securities,
shall have all rights and remedies set forth in the Transaction Documents and all rights and remedies which such holders have been granted
at any time under any other agreement or contract and all of the rights which such holders have under any law. Any Person having any
rights under any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other security),
to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. Furthermore,
the Company recognizes that in the event that it or any Subsidiary fails to perform, observe, or discharge any or all of its or such
Subsidiary’s (as the case may be) obligations under the Transaction Documents, any remedy at law would inadequate relief to the
Buyers. The Company therefore agrees that the Buyers shall be entitled to specific performance and/or temporary, preliminary and permanent
injunctive or other equitable relief from any court of competent jurisdiction in any such case without the necessity of proving actual
damages and without posting a bond or other security. The remedies provided in this Agreement and the other Transaction Documents shall
be cumulative and in addition to all other remedies available under this Agreement and the other Transaction Documents, at law or in
equity (including a decree of specific performance and/or other injunctive relief). In addition to the other remedies set forth herein
and in the other Transaction Documents, if (a) this Agreement or any other Transaction Document is placed in the hands of an attorney
for collection of amounts due thereunder or enforcement or is enforced (or such collections are sought) through any legal proceeding
or the holder otherwise takes action to collect amounts due under this Agreement or any other Transaction Document or to enforce the
provisions of this Agreement or any other Transaction Document or (b) there occurs any bankruptcy, reorganization, receivership of the
company or other proceedings affecting company creditors’ rights and involving a claim under this Agreement or any other Transaction
Document, then the Company shall pay the costs incurred by the applicable Buyer or holder of Securities, as applicable, for such collection,
enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including, without limitation,
attorneys’ fees and disbursements.
(n)
Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction
Documents, whenever any Buyer exercises a right, election, demand or option under a Transaction Document and the Company or any Subsidiary
does not timely perform its related obligations within the periods therein provided, then such Buyer may rescind or withdraw, in its
sole discretion from time to time upon written notice to the Company or such Subsidiary (as the case may be), any relevant notice, demand
or election in whole or in part without prejudice to its future actions and rights.
(o)
Payment Set Aside; Currency. To the extent that the Company makes a payment or payments to any Buyer hereunder or pursuant to
any of the other Transaction Documents or any of the Buyers enforce or exercise their rights hereunder or thereunder, and such payment
or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent
or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, foreign, state or federal law,
common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended
to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff
had not occurred. Unless otherwise expressly indicated, all dollar amounts referred to in this Agreement and the other Transaction Documents
are in United States Dollars (“U.S. Dollars”), and all amounts owing under this Agreement and all other Transaction
Documents shall be paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall be converted into the U.S. Dollar
equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange Rate” means, in relation
to any amount of currency to be converted into U.S. Dollars pursuant to this Agreement, the U.S. Dollar exchange rate as published in
the Wall Street Journal on the relevant date of calculation.
(p)
Judgment Currency.
(i)
If for the purpose of obtaining or enforcing judgment against the Company in connection with this Agreement or any other Transaction
Document in any court in any jurisdiction it becomes necessary to convert into any other currency (such other currency being hereinafter
in this Section 9(p) referred to as the “Judgment Currency”) an amount due in US Dollars under this Agreement, the
conversion shall be made at the Exchange Rate prevailing on the Trading Day immediately preceding:
(1)
the date actual payment of the amount due, in the case of any proceeding in the courts of New York or in the courts of any other jurisdiction
that will give effect to such conversion being made on such date: or
(2)
the date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date as of
which such conversion is made pursuant to this Section 9(p)(i)(2) being hereinafter referred to as the “Judgment Conversion
Date”).
(ii)
If in the case of any proceeding in the court of any jurisdiction referred to in Section 9(p)(i)(2) above, there is a change in the Exchange
Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable party shall pay
such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the Exchange Rate
prevailing on the date of payment, will produce the amount of US Dollars which could have been purchased with the amount of Judgment
Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment Conversion Date.
(iii)
Any amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being obtained
for any other amounts due under or in respect of this Agreement or any other Transaction Document.
(q)
Independent Nature of Buyers’ Obligations and Rights. The obligations of each Buyer under the Transaction Documents are
several and not joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of the
obligations of any other Buyer under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no
action taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as, and the Company acknowledges that
the Buyers do not so constitute, a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption
that the Buyers are in any way acting in concert or as a group or entity, and the Company shall not assert any such claim with respect
to such obligations or the transactions contemplated by the Transaction Documents or any matters, and the Company acknowledges that the
Buyers are not acting in concert or as a group, and the Company shall not assert any such claim, with respect to such obligations or
the transactions contemplated by the Transaction Documents. The decision of each Buyer to purchase Securities pursuant to the Transaction
Documents has been made by such Buyer independently of any other Buyer. Each Buyer acknowledges that no other Buyer has acted as agent
for such Buyer in connection with such Buyer making its investment hereunder and that no other Buyer will be acting as agent of such
Buyer in connection with monitoring such Buyer’s investment in the Securities or enforcing its rights under the Transaction Documents.
The Company and each Buyer confirms that each Buyer has independently participated with the Company and its Subsidiaries in the negotiation
of the transaction contemplated hereby with the advice of its own counsel and advisors. Each Buyer shall be entitled to independently
protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction
Documents, and it shall not be necessary for any other Buyer to be joined as an additional party in any proceeding for such purpose.
The use of a single agreement to effectuate the purchase and sale of the Securities contemplated hereby was solely in the control of
the Company, not the action or decision of any Buyer, and was done solely for the convenience of the Company and its Subsidiaries and
not because it was required or requested to do so by any Buyer. It is expressly understood and agreed that each provision contained in
this Agreement and in each other Transaction Document is between the Company, each Subsidiary and a Buyer, solely, and not between the
Company, its Subsidiaries and the Buyers collectively and not between and among the Buyers.
[signature
pages follow]
IN
WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as
of the date first written above.
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COMPANY: |
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EVOFEM
BIOSCIENCES, INC. |
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By: |
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Name: |
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Title: |
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IN
WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as
of the date first written above.
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BUYER:
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[INVESTOR] |
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By: |
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Name: |
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Title: |
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SCHEDULE
OF BUYERS
| (1) |
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(2) |
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(3) |
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(4) |
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(5) |
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(6) |
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(7) |
Buyer |
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Mailing
and E-mail Addresses |
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Principal
Amount of Notes including OID |
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Aggregate
Number of Series A
Warrant Shares |
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Aggregate
Number of Series B
Warrant Shares |
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Purchase Price |
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Legal
Representative’s
Mailing and E-Mail Addresses |
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| [INVESTOR] |
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| Totals |
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$ |
2,884,615.38 |
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22,189,349 |
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4,807,692 |
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$ |
1,875,000.00 |
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Exhibit
10.2
FORM
OF SENIOR SUBORDINATED CONVERTIBLE NOTE
NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO
THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES. ANY TRANSFEREE OF THIS NOTE SHOULD CAREFULLY REVIEW THE TERMS OF THIS NOTE,
INCLUDING SECTIONS 3(c)(iii) AND 20(a) HEREOF. THE PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE AND, ACCORDINGLY, THE SECURITIES
ISSUABLE UPON CONVERSION HEREOF MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 3(c)(iii) OF THIS
NOTE.
THIS
NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”). PURSUANT TO TREASURY REGULATION §1.1275-3(b)(1), IVY ZHANG,
A REPRESENTATIVE OF THE COMPANY HEREOF WILL, BEGINNING TEN DAYS AFTER THE ISSUANCE DATE OF THIS NOTE, PROMPTLY MAKE AVAILABLE TO THE
HOLDER UPON REQUEST THE INFORMATION DESCRIBED IN TREASURY REGULATION §1.1275-3(b)(1)(i). IVY ZHANG MAY BE REACHED AT TELEPHONE NUMBER
858) 550-1900 X 289.
Evofem
Biosciences, Inc.
Senior
Subordinated Convertible Note
| Issuance
Date: September [__], 2023 |
Original
Principal Amount: U.S.
$[__] |
FOR
VALUE RECEIVED, Evofem Biosciences, Inc., a Delaware corporation (the “Company”), hereby promises to pay to the
order of [_______] or its registered assigns (“Holder”) the amount set forth above as the Original Principal Amount
(as reduced pursuant to the terms hereof pursuant to redemption, conversion or otherwise, the “Principal”) when due,
whether upon the Maturity Date, or upon acceleration, redemption or otherwise (in each case in accordance with the terms hereof) and
to pay interest (“Interest”) on any outstanding Principal at the applicable Interest Rate (as defined below) from
the date set forth above as the Issuance Date (the “Issuance Date”) until the same becomes due and payable, whether
upon the Maturity Date or upon acceleration, conversion, redemption or otherwise (in each case in accordance with the terms hereof).
This Senior Subordinated Convertible Note (including all Senior Subordinated Convertible Notes issued in exchange, transfer or replacement
hereof, this “Note”) is one of an issue of Senior Subordinated Convertible Notes issued pursuant to the Securities
Purchase Agreement, dated as of September [__], 2023 (the “Subscription Date”), by and among the Company and the investors
(the “Buyers”) referred to therein, as amended from time to time (collectively, the “Notes”, and
such other Senior Secured Convertible Notes, the “Other Notes”). Certain capitalized terms used herein are defined
in Section 33.
1.
PAYMENTS OF PRINCIPAL. On the Maturity Date, the Company shall pay to the Holder an amount in cash representing all outstanding
Principal, accrued and unpaid Interest and accrued and unpaid Late Charges (as defined in Section 26(c)) on such Principal and Interest.
Other than as specifically permitted by this Note, the Company may not prepay any portion of the outstanding Principal, accrued and unpaid
Interest or accrued and unpaid Late Charges on Principal and Interest, if any.
2.
INTEREST; INTEREST RATE.
(a)
Interest on this Note shall commence accruing on the Issuance Date and shall be computed on the basis of a 360-day year and twelve 30-day
months and shall be payable in arrears on each Interest Date and shall compound each calendar month and shall be payable in accordance
with the terms of this Note. Interest shall be paid on each Interest Date in cash.
(b)
Prior to the payment of Interest on an Interest Date, Interest on this Note shall accrue at the Interest Rate and be payable by way of
inclusion of the Interest in the Conversion Amount on each Conversion Date in accordance with Section 3(b)(i) or upon any redemption
in accordance with Section 12 or any required payment upon any Bankruptcy Event of Default. From and after the occurrence and during
the continuance of any Event of Default (regardless of whether the Company has delivered an Event of Default Notice to the Holder or
if the Holder has delivered an Event of Default Redemption Notice to the Company or otherwise notified the Company that an Event of Default
has occurred), the Interest Rate shall automatically be increased to twelve percent (12.0%) per annum (the “Default Rate”).
In the event that such Event of Default is subsequently cured (and no other Event of Default then exists, including, without limitation,
for the Company’s failure to pay such Interest at the Default Rate on the applicable Interest Date), the adjustment referred to
in the preceding sentence shall cease to be effective as of the calendar day immediately following the date of such cure; provided that
the Interest as calculated and unpaid at such increased rate during the continuance of such Event of Default shall continue to apply
to the extent relating to the days after the occurrence of such Event of Default through and including the date of such cure of such
Event of Default.
3.
CONVERSION OF NOTES. At any time after the Issuance Date, this Note shall be convertible into validly issued, fully paid and non-assessable
shares of Common Stock (as defined below), on the terms and conditions set forth in this Section 3.
(a)
Conversion Right. Subject to the provisions of Section 3(d), at any time or times on or after the Issuance Date, the
Holder shall be entitled to convert any portion of the outstanding and unpaid Conversion Amount (as defined below) into validly issued,
fully paid and non-assessable shares of Common Stock in accordance with Section 3(c), at the Conversion Rate (as defined below).
The Company shall not issue any fraction of a share of Common Stock upon any conversion. If the issuance would result in the issuance
of a fraction of a share of Common Stock, the Company shall round such fraction of a share of Common Stock up to the nearest whole share.
The Company shall pay any and all transfer, stamp, issuance and similar taxes, costs and expenses (including, without limitation, fees
and expenses of the Transfer Agent (as defined below)) that may be payable with respect to the issuance and delivery of Common Stock
upon conversion of any Conversion Amount.
(b)
Conversion Rate. The number of shares of Common Stock issuable upon conversion of any Conversion Amount pursuant to Section 3(a)
shall be determined by dividing (x) such Conversion Amount by (y) the Conversion Price (the “Conversion Rate”).
(i)
“Conversion Amount” means the sum of (x) portion of the Principal to be converted, redeemed or otherwise with respect
to which this determination is being made and (y) all accrued and unpaid Interest with respect to such portion of the Principal amount
and accrued and unpaid Late Charges with respect to such portion of such Principal and such Interest, and (z) any other unpaid amounts
pursuant to the Transaction Documents, if any.
(ii)
“Conversion Price” means, as of any Conversion Date or other date of determination, $0.13, subject to adjustment as
provided herein.
(c)
Mechanics of Conversion.
(i)
Optional Conversion. To convert any Conversion Amount into shares of Common Stock on any date (a “Conversion Date”),
the Holder shall deliver (whether via electronic mail or otherwise), for receipt on or prior to 11:59 p.m., New York time, on such date,
a copy of an executed notice of conversion in the form attached hereto as Exhibit I (each, a “Conversion Notice”)
to the Company. If required by Section 3(c)(iii), within two (2) Trading Days following a conversion of this Note as aforesaid,
the Holder shall surrender this Note to a nationally recognized overnight delivery service for delivery to the Company (or an indemnification
undertaking with respect to this Note in the case of its loss, theft or destruction as contemplated by Section 20(b)). On or before
the first (1st) Trading Day following the date of receipt of a Conversion Notice, the Company shall transmit by electronic mail an acknowledgment,
in the form attached hereto as Exhibit II, of confirmation of receipt of such Conversion Notice and representation as to whether
such shares of Common Stock may then be resold pursuant to Rule 144 or an effective and available registration statement (each, an “Acknowledgement”)
to the Holder and the Company’s transfer agent (the “Transfer Agent”) which confirmation shall constitute an
instruction to the Transfer Agent to process such Conversion Notice in accordance with the terms herein. On or before the second (2nd)
Trading Day following the date on which the Company has received a Conversion Notice (or such earlier date as required pursuant to the
1934 Act or other applicable law, rule or regulation for the settlement of a trade initiated on the applicable Conversion Date of such
shares of Common Stock issuable pursuant to such Conversion Notice) (the “Share Delivery Deadline”), the Company shall
(1) provided that the Transfer Agent is participating in The Depository Trust Company’s (“DTC”) Fast Automated
Securities Transfer Program (“FAST”), credit such aggregate number of shares of Common Stock to which the Holder shall
be entitled pursuant to such conversion to the Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal
at Custodian system or (2) if the Transfer Agent is not participating in FAST, upon the request of the Holder, issue and deliver (via
reputable overnight courier) to the address as specified in the Conversion Notice, a certificate, registered in the name of the Holder
or its designee, for the number of shares of Common Stock to which the Holder shall be entitled pursuant to such conversion. If this
Note is physically surrendered for conversion pursuant to Section 3(c)(iii) and the outstanding Principal of this Note is greater than
the Principal portion of the Conversion Amount being converted, then the Company shall as soon as practicable and in no event later than
two (2) Business Days after receipt of this Note and at its own expense, issue and deliver to the Holder (or its designee) a new Note
(in accordance with Section 20(d)) representing the outstanding Principal not converted. The Person or Persons entitled to receive
the shares of Common Stock issuable upon a conversion of this Note shall be treated for all purposes as the record holder or holders
of such shares of Common Stock on the Conversion Date. Notwithstanding anything to the contrary contained in this Note or the Registration
Rights Agreement, after the effective date of the Registration Statement (as defined in the Registration Rights Agreement) and prior
to the Holder’s receipt of the notice of a Grace Period (as defined in the Registration Rights Agreement), the Company shall cause
the Transfer Agent to deliver unlegended shares of Common Stock to the Holder (or its designee) in connection with any sale of Registrable
Securities (as defined in the Registration Rights Agreement) with respect to which the Holder has entered into a contract for sale, and
delivered a copy of the prospectus included as part of the particular Registration Statement to the extent applicable, and for which
the Holder has not yet settled.
(ii)
Company’s Failure to Timely Convert. If the Company shall fail, for any reason or for no reason, on or prior to the applicable
Share Delivery Deadline, either (I) if the Transfer Agent is not participating in FAST, to issue and deliver to the Holder (or its designee)
a certificate for the number of shares of Common Stock to which the Holder is entitled and register such shares of Common Stock on the
Company’s share register or, if the Transfer Agent is participating in FAST, to credit the balance account of the Holder or the
Holder’s designee with DTC for such number of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion
of this Note (as the case may be) or (II) if the Registration Statement covering the resale of the shares of Common Stock that are the
subject of the Conversion Notice (the “Unavailable Conversion Shares”) is not available for the resale of such Unavailable
Conversion Shares and the Company fails to promptly, but in no event later than as required pursuant to the Registration Rights Agreement
(x) so notify the Holder and (y) deliver the shares of Common Stock electronically without any restrictive legend by crediting such aggregate
number of shares of Common Stock to which the Holder is entitled pursuant to such conversion to the Holder’s or its designee’s
balance account with DTC through its Deposit/Withdrawal At Custodian system (the event described in the immediately foregoing clause
(II) is hereinafter referred as a “Notice Failure” and together with the event described in clause (I) above, a “Conversion
Failure”), then, in addition to all other remedies available to the Holder, (1) the Company shall pay in cash to the Holder
on each day after such Share Delivery Deadline that the issuance of such shares of Common Stock is not timely effected an amount equal
to 2% of the product of (A) the sum of the number of shares of Common Stock not issued to the Holder on or prior to the Share Delivery
Deadline and to which the Holder is entitled, multiplied by (B) any trading price of the Common Stock selected by the Holder in writing
as in effect at any time during the period beginning on the applicable Conversion Date and ending on the applicable Share Delivery Deadline
and (2) the Holder, upon written notice to the Company, may void its Conversion Notice with respect to, and retain or have returned (as
the case may be) any portion of this Note that has not been converted pursuant to such Conversion Notice, provided that the voiding of
a Conversion Notice shall not affect the Company’s obligations to make any payments which have accrued prior to the date of such
notice pursuant to this Section 3(c)(ii) or otherwise. In addition to the foregoing, if on or prior to the Share Delivery Deadline
either (A) if the Transfer Agent is not participating in FAST, the Company shall fail to issue and deliver to the Holder (or its designee)
a certificate and register such shares of Common Stock on the Company’s share register or, if the Transfer Agent is participating
in FAST, the Transfer Agent shall fail to credit the balance account of the Holder or the Holder’s designee with DTC for the number
of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion hereunder or pursuant to the Company’s
obligation pursuant to clause (II) below or (B) a Notice Failure occurs, and if on or after such Share Delivery Deadline the Holder acquires
(in an open market transaction, stock loan or otherwise) shares of Common Stock corresponding to all or any portion of the number of
shares of Common Stock issuable upon such conversion that the Holder is entitled to receive from the Company and has not received from
the Company in connection with such Conversion Failure or Notice Failure, as applicable (a “Buy-In”), then, in addition
to all other remedies available to the Holder, the Company shall, within two (2) Business Days after receipt of the Holder’s request
and in the Holder’s discretion, either: (I) pay cash to the Holder in an amount equal to the Holder’s total purchase price
(including brokerage commissions, stock loan costs and other out-of-pocket expenses, if any) for the shares of Common Stock so acquired
(including, without limitation, by any other Person in respect, or on behalf, of the Holder) (the “Buy-In Price”),
at which point the Company’s obligation to so issue and deliver such certificate (and to issue such shares of Common Stock) or
credit the balance account of such Holder or such Holder’s designee, as applicable, with DTC for the number of shares of Common
Stock to which the Holder is entitled upon the Holder’s conversion hereunder (as the case may be) (and to issue such shares of
Common Stock) shall terminate, or (II) promptly honor its obligation to so issue and deliver to the Holder a certificate or certificates
representing such shares of Common Stock or credit the balance account of such Holder or such Holder’s designee, as applicable,
with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion hereunder (as the
case may be) and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (x) such number
of shares of Common Stock multiplied by (y) the lowest Closing Sale Price of the Common Stock on any Trading Day during the period commencing
on the date of the applicable Conversion Notice and ending on the date of such issuance and payment under this clause (II) (the “Buy-In
Payment Amount”). Nothing shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law
or in equity, including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver certificates representing shares of Common Stock (or to electronically deliver such shares of Common Stock)
upon the conversion of this Note as required pursuant to the terms hereof.
(iii)
Registration; Book-Entry. The Company shall maintain a register (the “Register”) for the recordation of the
names and addresses of the holders of each Note and the principal amount of the Notes held by such holders (the “Registered
Notes”). The entries in the Register shall be conclusive and binding for all purposes absent manifest error. The Company and
the holders of the Notes shall treat each Person whose name is recorded in the Register as the owner of a Note for all purposes (including,
without limitation, the right to receive payments of Principal and Interest hereunder) notwithstanding notice to the contrary. A Registered
Note may be assigned, transferred or sold in whole or in part only by registration of such assignment or sale on the Register. Upon its
receipt of a written request to assign, transfer or sell all or part of any Registered Note by the holder thereof, the Company shall
record the information contained therein in the Register and issue one or more new Registered Notes in the same aggregate principal amount
as the principal amount of the surrendered Registered Note to the designated assignee or transferee pursuant to Section 18, provided
that if the Company does not so record an assignment, transfer or sale (as the case may be) of all or part of any Registered Note within
two (2) Business Days of such a request, then the Register shall be automatically deemed updated to reflect such assignment, transfer
or sale (as the case may be). Notwithstanding anything to the contrary set forth in this Section 3, following conversion of any
portion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Company
unless (A) the full Conversion Amount represented by this Note is being converted (in which event this Note shall be delivered to the
Company following conversion thereof as contemplated by Section 3(c)(i)) or (B) the Holder has provided the Company with prior written
notice (which notice may be included in a Conversion Notice) requesting reissuance of this Note upon physical surrender of this Note.
The Holder and the Company shall maintain records showing the Principal, Interest and Late Charges converted and/or paid (as the case
may be) and the dates of such conversions, and/or payments (as the case may be) or shall use such other method, reasonably satisfactory
to the Holder and the Company, so as not to require physical surrender of this Note upon conversion. If the Company does not update the
Register to record such Principal, Interest and Late Charges converted and/or paid (as the case may be) and the dates of such conversions,
and/or payments (as the case may be) within two (2) Business Days of such occurrence, then the Register shall be automatically deemed
updated to reflect such occurrence.
(iv)
Pro Rata Conversion; Disputes. In the event that the Company receives a Conversion Notice from more than one holder of Notes for
the same Conversion Date and the Company can convert some, but not all, of such portions of the Notes submitted for conversion, the Company,
subject to Section 3(d), shall convert from each holder of Notes electing to have Notes converted on such date a pro rata amount
of such holder’s portion of its Notes submitted for conversion based on the principal amount of Notes submitted for conversion
on such date by such holder relative to the aggregate principal amount of all Notes submitted for conversion on such date. In the event
of a dispute as to the number of shares of Common Stock issuable to the Holder in connection with a conversion of this Note, the Company
shall issue to the Holder the number of shares of Common Stock not in dispute and resolve such dispute in accordance with Section 25.
(d)
Limitations on Conversions. The Company shall not effect the conversion of any portion of this Note, and the Holder shall not
have the right to convert any portion of this Note pursuant to the terms and conditions of this Note and any such conversion shall be
null and void and treated as if never made, to the extent that after giving effect to such conversion, the Holder together with the other
Attribution Parties collectively would beneficially own in excess of 4.99% (the “Maximum Percentage”) of the shares
of Common Stock outstanding immediately after giving effect to such conversion. For purposes of the foregoing sentence, the aggregate
number of shares of Common Stock beneficially owned by the Holder and the other Attribution Parties shall include the number of shares
of Common Stock held by the Holder and all other Attribution Parties plus the number of shares of Common Stock issuable upon conversion
of this Note with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock which would
be issuable upon (A) conversion of the remaining, nonconverted portion of this Note beneficially owned by the Holder or any of the other
Attribution Parties and (B) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company
(including, without limitation, any convertible notes or convertible preferred stock or warrants, including, without limitation, the
Warrants) beneficially owned by the Holder or any other Attribution Party subject to a limitation on conversion or exercise analogous
to the limitation contained in this Section 3(d). For purposes of this Section 3(d), beneficial ownership shall be calculated
in accordance with Section 13(d) of the 1934 Act. For purposes of determining the number of outstanding shares of Common Stock the Holder
may acquire upon the conversion of this Note without exceeding the Maximum Percentage, the Holder may rely on the number of outstanding
shares of Common Stock as reflected in (x) the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q,
Current Report on Form 8-K or other public filing with the SEC, as the case may be, (y) a more recent public announcement by the Company
or (z) any other written notice by the Company or the Transfer Agent, if any, setting forth the number of shares of Common Stock outstanding
(the “Reported Outstanding Share Number”). If the Company receives a Conversion Notice from the Holder at a time when
the actual number of outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Company shall notify
the Holder in writing of the number of shares of Common Stock then outstanding and, to the extent that such Conversion Notice would otherwise
cause the Holder’s beneficial ownership, as determined pursuant to this Section 3(d), to exceed the Maximum Percentage, the
Holder must notify the Company of a reduced number of shares of Common Stock to be purchased pursuant to such Conversion Notice. For
any reason at any time, upon the written or oral request of the Holder, the Company shall within one (1) Business Day confirm orally
and in writing or by electronic mail to the Holder the number of shares of Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company,
including this Note, by the Holder and any other Attribution Party since the date as of which the Reported Outstanding Share Number was
reported. In the event that the issuance of shares of Common Stock to the Holder upon conversion of this Note results in the Holder and
the other Attribution Parties being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number of outstanding
shares of Common Stock (as determined under Section 13(d) of the 1934 Act), the number of shares so issued by which the Holder’s
and the other Attribution Parties’ aggregate beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”)
shall be deemed null and void and shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer the Excess
Shares. Upon delivery of a written notice to the Company, the Holder may from time to time increase (with such increase not effective
until the sixty-first (61st) day after delivery of such notice) or decrease the Maximum Percentage to any other percentage
not in excess of 9.99% as specified in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective
until the sixty-first (61st) day after such notice is delivered to the Company and (ii) any such increase or decrease will
apply only to the Holder and the other Attribution Parties and not to any other holder of Notes that is not an Attribution Party of the
Holder. For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of this Note in excess of the Maximum Percentage
shall not be deemed to be beneficially owned by the Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1)
of the 1934 Act. No prior inability to convert this Note pursuant to this paragraph shall have any effect on the applicability of the
provisions of this paragraph with respect to any subsequent determination of convertibility. The provisions of this paragraph shall be
construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 3(d) to the extent necessary
to correct this paragraph (or any portion of this paragraph) which may be defective or inconsistent with the intended beneficial ownership
limitation contained in this Section 3(d) or to make changes or supplements necessary or desirable to properly give effect to such
limitation. The limitation contained in this paragraph may not be waived and shall apply to a successor holder of this Note.
(e)
Right of Alternate Conversion Upon an Event of Default.
(i)
General. Subject to Section 3(d), at any time during an Event of Default Redemption Right Period (as defined below)
with respect to an Event of Default (regardless of whether such Event of Default has been cured, or if the Company has delivered an Event
of Default Notice to the Holder or if the Holder has delivered an Event of Default Redemption Notice to the Company or otherwise notified
the Company that an Event of Default has occurred), the Holder may, at the Holder’s option, convert (each, an “Alternate
Conversion”, and the date of such Alternate Conversion, each, an “Alternate Conversion Date”) all, or any
part of, the Conversion Amount (such portion of the Conversion Amount subject to such Alternate Conversion, each, an “Alternate
Conversion Amount”) into shares of Common Stock at the Alternate Conversion Price.
(ii)
Mechanics of Alternate Conversion. On any Alternate Conversion Date, the Holder may voluntarily convert any Alternate Conversion
Amount pursuant to Section 3(c) (with “Alternate Conversion Price” replacing “Conversion Price” for
all purposes hereunder with respect to such Alternate Conversion and with “Redemption Premium of the Conversion Amount” replacing
“Conversion Amount” in clause (x) of the definition of Conversion Rate above with respect to such Alternate Conversion) by
designating in the Conversion Notice delivered pursuant to this Section 3(e) of this Note that the Holder is electing to
use the Alternate Conversion Price for such conversion. Notwithstanding anything to the contrary in this Section 3(e), but
subject to Section 3(d), until the Company delivers shares of Common Stock representing the applicable Alternate Conversion
Amount to the Holder, such Alternate Conversion Amount may be converted by the Holder into shares of Common Stock pursuant to Section
3(c) without regard to this Section 3(e).
4.
RIGHTS UPON EVENT OF DEFAULT.
(a)
Event of Default. Each of the following events shall constitute an “Event of Default” and each of the events
in clauses (ix), (x) and (xi) shall constitute a “Bankruptcy Event of Default”:
(i)
the failure of the applicable Registration Statement (as defined in the Registration Rights Agreement) to be filed with the SEC on or
prior to the date that is five (5) days after the applicable Filing Deadline (as defined in the Registration Rights Agreement) or the
failure of the applicable Registration Statement to be declared effective by the SEC on or prior to the date that is five (5) days after
the applicable Effectiveness Deadline (as defined in the Registration Rights Agreement);
(ii)
while the applicable Registration Statement is required to be maintained effective pursuant to the terms of the Registration Rights Agreement,
the effectiveness of the applicable Registration Statement lapses for any reason (including, without limitation, the issuance of a stop
order) or such Registration Statement (or the prospectus contained therein) is unavailable to any holder of Registrable Securities (as
defined in the Registration Rights Agreement) for sale of all of such holder’s Registrable Securities in accordance with the terms
of the Registration Rights Agreement, and such lapse or unavailability continues for a period of five (5) consecutive days or for more
than an aggregate of ten (10) days in any 365-day period (excluding days during an Allowable Grace Period (as defined in the Registration
Rights Agreement));
(iii)
the suspension from trading or the failure of the Common Stock to be trading or listed (as applicable) on an Eligible Market for a period
of five (5) consecutive Trading Days;
(iv)
the Company’s (A) failure to cure a Conversion Failure or a Delivery Failure (as defined in the Warrants) by delivery of the required
number of shares of Common Stock within five (5) Trading Days after the applicable Conversion Date or exercise date (as the case may
be) or (B) notice, written or oral, to any holder of the Notes or Warrants, including, without limitation, by way of public announcement
or through any of its agents, at any time, of its intention not to comply, as required, with a request for conversion of any Notes into
shares of Common Stock that is requested in accordance with the provisions of the Notes, other than pursuant to Section 3(d), or
a request for exercise of any Warrants for shares of Common Stock in accordance with the provisions of the Warrants;
(v)
except to the extent the Company is in compliance with Section 11(b) below, at any time following the tenth (10th) consecutive
day that the Holder’s Authorized Share Allocation (as defined in Section 11(a) below) is less than the sum of (A) the number
of shares of Common Stock that the Holder would be entitled to receive upon a conversion of the full Conversion Amount of this Note (without
regard to any limitations on conversion set forth in Section 3(d) or otherwise), and (B) the number of shares of Common Stock that
the Holder would be entitled to receive upon exercise in full of the Holder’s Warrants (without regard to any limitations on exercise
set forth in the Warrants);
(vi)
the Company’s or any Subsidiary’s failure to pay to the Holder any amount of Principal, Interest, Late Charges or other amounts
when and as due under this Note (including, without limitation, the Company’s or any Subsidiary’s failure to pay any redemption
payments or amounts hereunder) or any other Transaction Document (as defined in the Securities Purchase Agreement) or any other agreement,
document, certificate or other instrument delivered in connection with the transactions contemplated hereby and thereby, except, in the
case of a failure to pay Interest and Late Charges when and as due, in which case only if such failure remains uncured for a period of
at least two (2) Trading Days;
(vii)
the Company fails to remove any restrictive legend on any certificate or any shares of Common Stock issued to the Holder upon conversion
or exercise (as the case may be) of any Securities (as defined in the Securities Purchase Agreement) acquired by the Holder under the
Securities Purchase Agreement (including this Note) as and when required by such Securities or the Securities Purchase Agreement, unless
otherwise then prohibited by applicable federal securities laws, and any such failure remains uncured for at least five (5) days;
(viii)
the occurrence of any default under, redemption of or acceleration prior to maturity of at least an aggregate of $100,000 of Indebtedness
(as defined in the Securities Purchase Agreement) of the Company or any of its Subsidiaries, other than with respect to any Other Notes;
(ix)
bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors shall be instituted
by or against the Company or any Subsidiary and, if instituted against the Company or any Subsidiary by a third party, shall not be dismissed
within thirty (30) days of their initiation;
(x)
the commencement by the Company or any Subsidiary of a voluntary case or proceeding under any applicable federal, state or foreign bankruptcy,
insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by it to the entry of a decree, order, judgment or other similar document in respect of the Company or any Subsidiary in an involuntary
case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking
reorganization or relief under any applicable federal, state or foreign law, or the consent by it to the filing of such petition or to
the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official
of the Company or any Subsidiary or of any substantial part of its property, or the making by it of an assignment for the benefit of
creditors, or the execution of a composition of debts, or the occurrence of any other similar federal, state or foreign proceeding, or
the admission by it in writing of its inability to pay its debts generally as they become due, the taking of corporate action by the
Company or any Subsidiary in furtherance of any such action or the taking of any action by any Person to commence a Uniform Commercial
Code foreclosure sale or any other similar action under federal, state or foreign law;
(xi)
the entry by a court of (i) a decree, order, judgment or other similar document in respect of the Company or any Subsidiary of a voluntary
or involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar
law or (ii) a decree, order, judgment or other similar document adjudging the Company or any Subsidiary as bankrupt or insolvent, or
approving as properly filed a petition seeking liquidation, reorganization, arrangement, adjustment or composition of or in respect of
the Company or any Subsidiary under any applicable federal, state or foreign law or (iii) a decree, order, judgment or other similar
document appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or any
Subsidiary or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance
of any such decree, order, judgment or other similar document or any such other decree, order, judgment or other similar document unstayed
and in effect for a period of thirty (30) consecutive days;
(xii)
a final judgment or judgments for the payment of money aggregating in excess of $100,000 are rendered against the Company and/or any
of its Subsidiaries and which judgments are not, within thirty (30) days after the entry thereof, bonded, discharged, settled or stayed
pending appeal, or are not discharged within thirty (30) days after the expiration of such stay; provided, however, any judgment which
is covered by insurance or an indemnity from a credit worthy party shall not be included in calculating the $100,000 amount set forth
above so long as the Company provides the Holder a written statement from such insurer or indemnity provider (which written statement
shall be reasonably satisfactory to the Holder) to the effect that such judgment is covered by insurance or an indemnity and the Company
or such Subsidiary (as the case may be) will receive the proceeds of such insurance or indemnity within thirty (30) days of the issuance
of such judgment;
(xiii)
the Company and/or any Subsidiary, individually or in the aggregate, either (i) fails to pay, when due, or within any applicable grace
period, any payment with respect to any Indebtedness in excess of $100,000 due to any third party (other than, with respect to unsecured
Indebtedness only, payments contested by the Company and/or such Subsidiary (as the case may be) in good faith by proper proceedings
and with respect to which adequate reserves have been set aside for the payment thereof in accordance with GAAP) or is otherwise in breach
or violation of any agreement for monies owed or owing in an amount in excess of $100,000, which failure to pay, breach or violation
permits the other party thereto to declare an event of default or otherwise accelerate amounts due thereunder, or (ii) suffer to exist
any other circumstance or event that would, with or without the passage of time or the giving of notice, result in a default or event
of default under any agreement binding the Company or any Subsidiary, which default or event of default would or is likely to have a
material adverse effect on the business, assets, operations (including results thereof), liabilities, properties, condition (including
financial condition) or prospects of the Company or any of its Subsidiaries, individually or in the aggregate;
(xiv)
other than as specifically set forth in another clause of this Section 4(a), the Company or any Subsidiary breaches any representation
or warranty, in any material respect (other than representations or warranties subject to material adverse effect or materiality, which
may not be breached in any respect) or any covenant or other term or condition of any Transaction Document, except, in the case of a
breach of a covenant or other term or condition that is curable, only if such breach remains uncured for a period of five (5) consecutive
Trading Days;
(xv)
a false or inaccurate certification (including a false or inaccurate deemed certification) by the Company as to whether any Event of
Default has occurred;
(xvi)
any breach or failure in any respect by the Company or any Subsidiary to comply with any provision of Section 15 of this Note;
(xvii)
any Material Adverse Effect (as defined in the Securities Purchase Agreement) occurs;
(xviii)
any Event of Default (as defined in the Other Notes) occurs with respect to any Other Notes.
(b)
Notice of an Event of Default; Redemption Right. Upon the occurrence of an Event of Default with respect to this Note or any Other
Note, the Company shall within one (1) Business Day deliver written notice thereof via electronic mail and overnight courier (with next
day delivery specified) (an “Event of Default Notice”) to the Holder. At any time after the earlier of the Holder’s
receipt of an Event of Default Notice and the Holder becoming aware of the occurrence of an Event of Default (such earlier date, the
“Event of Default Right Commencement Date”) and ending (such ending date, the “Event of Default Right Expiration
Date”, and each such period, an “Event of Default Redemption Right Period”) on the twentieth (20th)
Trading Day after the later of (x) the date such Event of Default is cured and (y) the Holder’s receipt of an Event of Default
Notice that includes (I) a reasonable description of the applicable Event of Default, (II) a certification as to whether, in the opinion
of the Company, such Event of Default is capable of being cured and, if applicable, a reasonable description of any existing plans of
the Company to cure such Event of Default and (III) a certification as to the date the Event of Default occurred and, if cured on or
prior to the date of such Event of Default Notice, the applicable Event of Default Right Expiration Date, the Holder may require the
Company to redeem (regardless of whether such Event of Default has been cured on or prior to the Event of Default Right Expiration Date)
all or any portion of this Note by delivering written notice thereof (the “Event of Default Redemption Notice”) to
the Company, which Event of Default Redemption Notice shall indicate the portion of this Note the Holder is electing to redeem. Each
portion of this Note subject to redemption by the Company pursuant to this Section 4(b) shall be redeemed by the Company at a price
equal to the greater of (i) the product of (A) the Conversion Amount to be redeemed multiplied by (B) the Redemption Premium and (ii)
solely with respect to an Event of Default pursuant to Sections 4(a)(iv), (v) and (vii) the product of (X) the Conversion Rate with respect
to the Conversion Amount in effect at such time as the Holder delivers an Event of Default Redemption Notice multiplied by (Y) the greatest
Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date immediately preceding such Event of
Default and ending on the date the Company makes the entire payment required to be made under this Section 4(b) (the “Event
of Default Redemption Price”). Redemptions required by this Section 4(b) shall be made in accordance with the provisions
of Section 12. To the extent redemptions required by this Section 4(b) are deemed or determined by a court of competent jurisdiction
to be prepayments of this Note by the Company, such redemptions shall be deemed to be voluntary prepayments. Notwithstanding anything
to the contrary in this Section 4(b), but subject to Section 3(d), until the Event of Default Redemption Price (together with
any Late Charges thereon) is paid in full, the Conversion Amount submitted for redemption under this Section 4(b) (together with
any Late Charges thereon) may be converted, in whole or in part, by the Holder into Common Stock pursuant to the terms of this Note.
In the event of the Company’s redemption of any portion of this Note under this Section 4(b), the Holder’s damages would
be uncertain and difficult to estimate because of the parties’ inability to predict future interest rates and the uncertainty of
the availability of a suitable substitute investment opportunity for the Holder. Accordingly, any redemption premium due under this Section
4(b) is intended by the parties to be, and shall be deemed, a reasonable estimate of the Holder’s actual loss of its investment
opportunity and not as a penalty. Any redemption upon an Event of Default shall not constitute an election of remedies by the Holder,
and all other rights and remedies of the Holder shall be preserved.
(c)
Mandatory Redemption upon Bankruptcy Event of Default. Notwithstanding anything to the contrary herein, and notwithstanding any
conversion that is then required or in process, upon any Bankruptcy Event of Default, whether occurring prior to or following the Maturity
Date, the Company shall immediately pay to the Holder an amount in cash representing (i) all outstanding Principal, accrued and unpaid
Interest and accrued and unpaid Late Charges on such Principal and Interest, multiplied by (ii) the Redemption Premium, in addition to
any and all other amounts due hereunder, without the requirement for any notice or demand or other action by the Holder or any other
person or entity, provided that the Holder may, in its sole discretion, waive such right to receive payment upon a Bankruptcy Event of
Default, in whole or in part, and any such waiver shall not affect any other rights of the Holder hereunder, including any other rights
in respect of such Bankruptcy Event of Default, any right to conversion, and any right to payment of the Event of Default Redemption
Price or any other Redemption Price, as applicable.
5.
RIGHTS UPON FUNDAMENTAL TRANSACTION.
(a)
Assumption. The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity assumes in writing
all of the obligations of the Company under this Note and the other Transaction Documents in accordance with the provisions of this Section
5(a) pursuant to written agreements in form and substance satisfactory to the Holder and approved by the Holder prior to such Fundamental
Transaction, including agreements to deliver to each holder of Notes in exchange for such Notes a security of the Successor Entity evidenced
by a written instrument substantially similar in form and substance to the Notes, including, without limitation, having a principal amount
and interest rate equal to the principal amounts then outstanding and the interest rates of the Notes held by such holder, having similar
conversion rights as the Notes and having similar ranking and security to the Notes, and satisfactory to the Holder. Upon the occurrence
of any 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 Note and the other Transaction Documents referring to the “Company” shall
refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations
of the Company under this Note and the other Transaction Documents with the same effect as if such Successor Entity had been named as
the Company herein. Upon consummation of a Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that
there shall be issued upon conversion or redemption of this Note at any time after the consummation of such Fundamental Transaction,
in lieu of the shares of Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections
6 and 16, which shall continue to be receivable thereafter)) issuable upon the conversion or redemption of the Notes prior
to such Fundamental Transaction, such shares of the publicly traded common stock (or their equivalent) of the Successor Entity (including
its Parent Entity) which the Holder would have been entitled to receive upon the happening of such Fundamental Transaction had this Note
been converted immediately prior to such Fundamental Transaction (without regard to any limitations on the conversion of this Note),
as adjusted in accordance with the provisions of this Note. Notwithstanding the foregoing, the Required Holders may elect, at their sole
option, by delivery of written notice to the Company to waive this Section 5(a) to permit the Fundamental Transaction without the
assumption of this Note. The provisions of this Section 5 shall apply similarly and equally to successive Fundamental Transactions
and shall be applied without regard to any limitations on the conversion of this Note.
(b)
Notice of a Change of Control; Redemption Right. No sooner than twenty (20) Trading Days nor later than ten (10) Trading Days
prior to the consummation of a Change of Control (the “Change of Control Date”), but not prior to the public announcement
of such Change of Control, the Company shall deliver written notice thereof via electronic mail and overnight courier to the Holder (a
“Change of Control Notice”). At any time during the period beginning after the Holder’s receipt of a Change
of Control Notice or the Holder becoming aware of a Change of Control if a Change of Control Notice is not delivered to the Holder in
accordance with the immediately preceding sentence (as applicable) and ending on twenty (20) Trading Days after the later of (A) the
date of consummation of such Change of Control or (B) the date of receipt of such Change of Control Notice or (C) the date of the announcement
of such Change of Control, the Holder may require the Company to redeem all or any portion of this Note by delivering written notice
thereof (“Change of Control Redemption Notice”) to the Company, which Change of Control Redemption Notice shall indicate
the Conversion Amount the Holder is electing to redeem. The portion of this Note subject to redemption pursuant to this Section 5
shall be redeemed by the Company in cash at a price equal to the greatest of (i) the product of (w) the Change of Control Redemption
Premium multiplied by (y) the Conversion Amount being redeemed, (ii) the product of (x) the Change of Control Redemption Premium multiplied
by (y) the product of (A) the Conversion Amount being redeemed multiplied by (B) the quotient determined by dividing (I) the greatest
Closing Sale Price of the shares of Common Stock during the period beginning on the date immediately preceding the earlier to occur of
(1) the consummation of the applicable Change of Control and (2) the public announcement of such Change of Control and ending on the
date the Holder delivers the Change of Control Redemption Notice by (II) the Conversion Price then in effect and (iii) the product of
(y) the Change of Control Redemption Premium multiplied by (z) the product of (A) the Conversion Amount being redeemed multiplied by
(B) the quotient of (I) the aggregate cash consideration and the aggregate cash value of any non-cash consideration per share of Common
Stock to be paid to the holders of the shares of Common Stock upon consummation of such Change of Control (any such non-cash consideration
constituting publicly-traded securities shall be valued at the highest of the Closing Sale Price of such securities as of the Trading
Day immediately prior to the consummation of such Change of Control, the Closing Sale Price of such securities on the Trading Day immediately
following the public announcement of such proposed Change of Control and the Closing Sale Price of such securities on the Trading Day
immediately prior to the public announcement of such proposed Change of Control) divided by (II) the Conversion Price then in effect
(the “Change of Control Redemption Price”). Redemptions required by this Section 5 shall be made in accordance
with the provisions of Section 12 and shall have priority to payments to stockholders in connection with such Change of Control.
To the extent redemptions required by this Section 5(b) are deemed or determined by a court of competent jurisdiction to be prepayments
of this Note by the Company, such redemptions shall be deemed to be voluntary prepayments. Notwithstanding anything to the contrary in
this Section 5, but subject to Section 3(d), until the Change of Control Redemption Price (together with any Late Charges thereon)
is paid in full, the Conversion Amount submitted for redemption under this Section 5(b) (together with any Late Charges thereon)
may be converted, in whole or in part, by the Holder into Common Stock pursuant to Section 3. In the event of the Company’s redemption
of any portion of this Note under this Section 5(b), the Holder’s damages would be uncertain and difficult to estimate because
of the parties’ inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment
opportunity for the Holder. Accordingly, any redemption premium due under this Section 5(b) is intended by the parties to be, and
shall be deemed, a reasonable estimate of the Holder’s actual loss of its investment opportunity and not as a penalty.
6.
RIGHTS UPON ISSUANCE OF PURCHASE RIGHTS AND OTHER CORPORATE EVENTS.
(a)
Purchase Rights. In addition to any adjustments pursuant to Sections 7 and 16 below, if at any time the Company grants,
issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to all
or substantially all of the record holders of any class of Common Stock (the “Purchase Rights”), then the Holder will
be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have
acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without taking
into account any limitations or restrictions on the convertibility of this Note and assuming for such purpose that the Note was converted
at the Alternate Conversion Price as of the applicable record date) immediately prior to the date on which a record is taken for the
grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of
Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that to the
extent that the Holder’s right to participate in any such Purchase Right would result in the Holder and the other Attribution Parties
exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase Right to the extent of the Maximum
Percentage (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Purchase Right (and
beneficial ownership) to the extent of any such excess) and such Purchase Right to such extent shall be held in abeyance (and, if such
Purchase Right has an expiration date, maturity date or other similar provision, such term shall be extended by such number of days held
in abeyance, if applicable) for the benefit of the Holder until such time or times, if ever, as its right thereto would not result in
the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such
right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent Purchase Right held similarly
in abeyance (and, if such Purchase Right has an expiration date, maturity date or other similar provision, such term shall be extended
by such number of days held in abeyance, if applicable)) to the same extent as if there had been no such limitation).
(b)
Other Corporate Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any
Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect
to or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision to
ensure that the Holder will thereafter have the right to receive upon a conversion of this Note, at the Holder’s option (i) in
addition to the shares of Common Stock receivable upon such conversion, such securities or other assets to which the Holder would have
been entitled with respect to such shares of Common Stock had such shares of Common Stock been held by the Holder upon the consummation
of such Corporate Event (without taking into account any limitations or restrictions on the convertibility of this Note) or (ii) in lieu
of the shares of Common Stock otherwise receivable upon such conversion, such securities or other assets received by the holders of shares
of Common Stock in connection with the consummation of such Corporate Event in such amounts as the Holder would have been entitled to
receive had this Note initially been issued with conversion rights for the form of such consideration (as opposed to shares of Common
Stock) at a conversion rate for such consideration commensurate with the Conversion Rate. Provision made pursuant to the preceding sentence
shall be in a form and substance satisfactory to the Holder. The provisions of this Section 6 shall apply similarly and equally
to successive Corporate Events and shall be applied without regard to any limitations on the conversion or redemption of this Note.
7.
RIGHTS UPON ISSUANCE OF OTHER SECURITIES.
(a)
Adjustment of Conversion Price upon Issuance of Common Stock. If and whenever on or after the Subscription Date the Company grants,
issues or sells (or enters into any agreement to grant, issue or sell), or in accordance with this Section 7(a) is deemed to
have granted, issued or sold, any shares of Common Stock (including the granting, issuance or sale of shares of Common Stock owned or
held by or for the account of the Company, but excluding any Excluded Securities granted, issued or sold or deemed to have been granted,
issued or sold) for a consideration per share (the “New Issuance Price”) less than a price equal to the Conversion
Price in effect immediately prior to such granting, issuance or sale or deemed granting, issuance or sale (such Conversion Price then
in effect is referred to herein as the “Applicable Price”) (the foregoing a “Dilutive Issuance”),
then, immediately after such Dilutive Issuance, the Conversion Price then in effect shall be reduced to an amount equal to the New Issuance
Price. For all purposes of the foregoing (including, without limitation, determining the adjusted Conversion Price and the New Issuance
Price under this Section 7(a)), the following shall be applicable:
(i)
Issuance of Options. If the Company in any manner grants, issues or sells (or enters into any agreement to grant, issue or sell)
any Options and the lowest price per share for which one share of Common Stock is at any time issuable upon the exercise of any such
Option or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise
pursuant to the terms thereof is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and
to have been issued and sold by the Company at the time of the granting, issuance or sale of such Option for such price per share. For
purposes of this Section 7(a)(i), the “lowest price per share for which one share of Common
Stock is at any time issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities
issuable upon exercise of any such Option or otherwise pursuant to the terms thereof” shall be equal to (1) the lower of (x) the
sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to any one share of Common Stock
upon the granting, issuance or sale of such Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible
Security issuable upon exercise of such Option or otherwise pursuant to the terms thereof and (y) the lowest exercise price set forth
in such Option for which one share of Common Stock is issuable (or may become issuable assuming all possible market conditions) upon
the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any
such Option or otherwise pursuant to the terms thereof, minus (2) the sum of all amounts paid or payable to the holder of such Option
(or any other Person) with respect to any one share of Common Stock upon the granting, issuance or sale of such Option, upon exercise
of such Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option or otherwise
pursuant to the terms thereof plus the value of any other consideration (including, without limitation, consideration consisting of cash,
debt forgiveness, assets or any other property) received or receivable by, or benefit conferred on, the holder of such Option (or any
other Person). Except as contemplated below, no further adjustment of the Conversion Price shall be made upon the actual issuance of
such share of Common Stock or of such Convertible Securities upon the exercise of such Options or otherwise pursuant to the terms thereof
or upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities.
(ii)
Issuance of Convertible Securities. If the Company in any manner issues or sells (or enters into any agreement to issue or sell)
any Convertible Securities and the lowest price per share for which one share of Common Stock is at any time issuable upon the conversion,
exercise or exchange thereof or otherwise pursuant to the terms thereof is less than the Applicable Price, then such share of Common
Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the issuance or sale (or the time
of execution of such agreement to issue or sell, as applicable) of such Convertible Securities for such price per share. For the purposes
of this Section 7(a)(ii), the “lowest price per share for which one share of Common Stock is at any time issuable
upon the conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof” shall be equal to (1) the lower of
(x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to one share of Common
Stock upon the issuance or sale (or pursuant to the agreement to issue or sell, as applicable) of the Convertible Security and upon conversion,
exercise or exchange of such Convertible Security or otherwise pursuant to the terms thereof and (y) the lowest conversion price set
forth in such Convertible Security for which one share of Common Stock is issuable (or may become issuable assuming all possible market
conditions) upon conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof minus (2) the sum of all amounts
paid or payable to the holder of such Convertible Security (or any other Person) with respect to any one share of Common Stock upon the
issuance or sale (or the agreement to issue or sell, as applicable) of such Convertible Security plus the value of any other consideration
received or receivable (including, without limitation, any consideration consisting of cash, debt forgiveness, assets or other property)
by, or benefit conferred on, the holder of such Convertible Security (or any other Person). Except as contemplated below, no further
adjustment of the Conversion Price shall be made upon the actual issuance of such shares of Common Stock upon conversion, exercise or
exchange of such Convertible Securities or otherwise pursuant to the terms thereof, and if any such issuance or sale of such Convertible
Securities is made upon exercise of any Options for which adjustment of the Conversion Price has been or is to be made pursuant to other
provisions of this Section 7(a), except as contemplated below, no further adjustment of the Conversion Price shall be made
by reason of such issuance or sale.
(iii)
Change in Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options, the additional consideration,
if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time (other than
proportional changes in conversion or exercise prices, as applicable, in connection with an event referred to in Section 7(b) below),
the Conversion Price in effect at the time of such increase or decrease shall be adjusted to the Conversion Price which would have been
in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase price, additional
consideration or increased or decreased conversion rate (as the case may be) at the time initially granted, issued or sold. For purposes
of this Section 7(a)(i), if the terms of any Option or Convertible Security (including, without limitation, any Option
or Convertible Security that was outstanding as of the Subscription Date) are increased or decreased in the manner described in the immediately
preceding sentence, then such Option or Convertible Security and the shares of Common Stock deemed issuable upon exercise, conversion
or exchange thereof shall be deemed to have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section
7(a) shall be made if such adjustment would result in an increase of the Conversion Price then in effect.
(iv)
Calculation of Consideration Received. If any Option and/or Convertible Security and/or Adjustment Right is issued in connection
with the issuance or sale or deemed issuance or sale of any other securities of the Company (as determined by the Holder, the “Primary
Security”, and such Option and/or Convertible Security and/or Adjustment Right, the “Secondary Securities”),
together comprising one integrated transaction (or one or more transactions if such issuances or sales or deemed issuances or sales of
securities of the Company either (A) have at least one investor or purchaser in common, (B) are consummated in reasonable proximity to
each other and/or (C) are consummated under the same plan of financing), the aggregate consideration per share of Common Stock with respect
to such Primary Security shall be deemed to be equal to the difference of (x) the lowest price per share for which one share of Common
Stock was issued (or was deemed to be issued pursuant to Section 7(a)(i) or 7(a)(ii) above, as applicable) in such integrated
transaction solely with respect to such Primary Security, minus (y) with respect to such Secondary Securities, the sum of (I) the Black
Scholes Consideration Value of each such Option, if any, (II) the fair market value (as determined by the Holder in good faith) or the
Black Scholes Consideration Value, as applicable, of such Adjustment Right, if any, and (III) the fair market value (as determined by
the Holder) of such Convertible Security, if any, in each case, as determined on a per share basis in accordance with this Section 7(a)(iv).
If any shares of Common Stock, Options or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the
consideration received therefor (for the purpose of determining the consideration paid for such Common Stock, Option or Convertible Security,
but not for the purpose of the calculation of the Black Scholes Consideration Value) will be deemed to be the net amount of consideration
received by the Company therefor. If any shares of Common Stock, Options or Convertible Securities are issued or sold for a consideration
other than cash, the amount of such consideration received by the Company (for the purpose of determining the consideration paid for
such Common Stock, Option or Convertible Security, but not for the purpose of the calculation of the Black Scholes Consideration Value)
will be the fair value of such consideration, except where such consideration consists of publicly traded securities, in which case the
amount of consideration received by the Company for such securities will be the arithmetic average of the VWAPs of such security for
each of the five (5) Trading Days immediately preceding the date of receipt. If any shares of Common Stock, Options or Convertible Securities
are issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving entity, the
amount of consideration therefor (for the purpose of determining the consideration paid for such Common Stock, Option or Convertible
Security, but not for the purpose of the calculation of the Black Scholes Consideration Value) will be deemed to be the fair value of
such portion of the net assets and business of the non-surviving entity as is attributable to such shares of Common Stock, Options or
Convertible Securities (as the case may be). The fair value of any consideration other than cash or publicly traded securities will be
determined jointly by the Company and the Holder. If such parties are unable to reach agreement within ten (10) days after the occurrence
of an event requiring valuation (the “Valuation Event”), the fair value of such consideration will be determined within
five (5) Trading Days after the tenth (10th) day following such Valuation Event by an independent, reputable appraiser jointly
selected by the Company and the Holder. The determination of such appraiser shall be final and binding upon all parties absent manifest
error and the fees and expenses of such appraiser shall be borne by the Company.
(v)
Record Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive
a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for or purchase
shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issuance or sale
of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution
or the date of the granting of such right of subscription or purchase (as the case may be).
(b)
Adjustment of Conversion Price upon Subdivision or Combination of Common Stock. Without limiting any provision of Section 6,
Section 16 or Section 7(a), if the Company at any time on or after the Subscription Date subdivides (by any stock split, stock
dividend, stock combination, recapitalization or other similar transaction) one or more classes of its outstanding shares of Common Stock
into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced.
Without limiting any provision of Section 6, Section 16 or Section 7(a), if the Company at any time on or after the Subscription
Date combines (by any stock split, stock dividend, stock combination, recapitalization or other similar transaction) one or more classes
of its outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such combination
will be proportionately increased. Any adjustment pursuant to this Section 7(b) shall become effective immediately after the
effective date of such subdivision or combination. If any event requiring an adjustment under this Section 7(b) occurs during
the period that a Conversion Price is calculated hereunder, then the calculation of such Conversion Price shall be adjusted appropriately
to reflect such event.
(c)
Holder’s Right of Adjusted Conversion Price. In addition to and not in limitation of the other provisions of this Section
7 or in the Securities Purchase Agreement, if the Company in any manner issues or sells or enters into any agreement to issue or
sell, any Common Stock, Options or Convertible Securities (other than shares of Common Stock issued pursuant to a Permitted Equity Line
(as defined in the Securities Purchase Agreement)) (any such securities, “Variable Price Securities”) regardless of
whether securities have been sold pursuant to such agreement and whether such agreement has subsequently been terminated, after the Subscription
Date that are issuable pursuant to such agreement or convertible into or exchangeable or exercisable for shares of Common Stock at a
price which varies or may vary with the market price of the shares of Common Stock, including by way of one or more reset(s) to a fixed
price, but exclusive of such formulations reflecting customary anti-dilution provisions (such as share splits, share combinations, share
dividends and similar transactions) (each of the formulations for such variable price being herein referred to as, the “Variable
Price”), the Company shall provide written notice thereof via electronic mail and overnight courier to the Holder on the date
of such agreement and the issuance of such Common Stock, Convertible Securities or Options. From and after the date the Company enters
into such agreement or issues any such Variable Price Securities (other than pursuant to a Permitted Equity Line), the Holder shall have
the right, but not the obligation, in its sole discretion to substitute the Variable Price, as calculated pursuant to the agreements
governing such Variable Price Securities, for the Conversion Price upon conversion of this Note by designating in the Conversion Notice
delivered upon any conversion of this Note that solely for purposes of such conversion the Holder is relying on the Variable Price rather
than the Conversion Price then in effect. The Holder’s election to rely on a Variable Price for a particular conversion of this
Note shall not obligate the Holder to rely on a Variable Price for any future conversion of this Note.
(d)
Stock Combination Event Adjustments. If at any time and from time to time on or after the Subscription Date there occurs any stock
split, stock dividend, stock combination recapitalization or other similar transaction involving the Common Stock (each, a “Stock
Combination Event”, and such date thereof, the “Stock Combination Event Date”) and the Event Market Price
is less than the Conversion Price then in effect (after giving effect to the adjustment in Section 7(b) above), then on the forty-first
(41st) Trading Day immediately following such Stock Combination Event Date, the Conversion Price then in effect on such forty-first (41st)
Trading Day (after giving effect to the adjustment in Section 7(b) above) shall be reduced (but in no event increased) to the Event
Market Price. For the avoidance of doubt, if the adjustment in the immediately preceding sentence would otherwise result in an increase
in the Conversion Price hereunder, no adjustment shall be made.
(e)
Other Events. In the event that the Company (or any Subsidiary) shall take any action to which the provisions hereof are not strictly
applicable, or, if applicable, would not operate to protect the Holder from dilution or if any event occurs of the type contemplated
by the provisions of this Section 7 but not expressly provided for by such provisions (including, without limitation, the granting
of stock appreciation rights, phantom stock rights or other rights with equity features), then the Company’s board of directors
shall in good faith determine and implement an appropriate adjustment in the Conversion Price so as to protect the rights of the Holder,
provided that no such adjustment pursuant to this Section 7(e) will increase the Conversion Price as otherwise determined pursuant
to this Section 7, provided further that if the Holder does not accept such adjustments as appropriately protecting its interests
hereunder against such dilution, then the Company’s board of directors and the Holder shall agree, in good faith, upon an independent
investment bank of nationally recognized standing to make such appropriate adjustments, whose determination shall be final and binding
absent manifest error and whose fees and expenses shall be borne by the Company.
(f)
Calculations. All calculations under this Section 7 shall be made by rounding to the nearest cent or the nearest 1/100th
of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or
held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.
(g)
Voluntary Adjustment by Company. Subject to the rules and regulations of the Principal Market, the Company may at any time during
the term of this Note, with the prior written consent of the Required Holders (as defined in the Securities Purchase Agreement), reduce
the then current Conversion Price of each of the Notes to any amount and for any period of time deemed appropriate by the board of directors
of the Company.
(h)
Adjustments. If on any of the thirtieth (30th), sixtieth (60th), ninetieth (90th),one hundred
and twentieth (120th), and one hundred and eightieth (180th), as applicable, calendar day after the Closing Date
(the “Adjustment Date”), the Conversion Price then in effect is greater than the Market Price then in effect (the
“Adjustment Price”), on the Adjustment Date the Conversion Price shall automatically lower to the Adjustment Price.
8.
SUBSEQUENT PLACEMENT OPTIONAL REDEMPTION
(a)
General. At any time from and after the earlier of (x) the date the Holder becomes aware of the occurrence of a Subsequent Placement
(as defined in the Securities Purchase Agreement) (the “Holder Notice Date”) and (y) the time of consummation of a
Subsequent Placement (in each case, other than with respect to Excluded Securities (as defined in the Securities Purchase Agreement))
(each, an “Eligible Subsequent Placement”), so long as no Permitted Senior Indebtedness remains outstanding or undefeased
(unless the Company has obtained the prior written consent of such holders of Permitted Senior Indebtedness) (the “Senior Debt
Condition”), the Holder shall have the right, in its sole discretion, to require that the Company redeem (each an “Subsequent
Placement Optional Redemption”) all, or any portion, of the Conversion Amount under this Note not in excess of (together with
any Subsequent Placement Optional Redemption Amount (as defined in the applicable other Note of the Holder) of any other Notes of the
Holder) the Holder’s Holder Pro Rata Amount of 25% of the gross proceeds of such Eligible Subsequent Placement (the “Eligible
Subsequent Placement Optional Redemption Amount”) by delivering written notice thereof (an “Subsequent Placement Optional
Redemption Notice”) to the Company. Notwithstanding the foregoing, upon the written request of the Holder, the Company shall
permit the Holder to participate in such Subsequent Placement and the Company shall apply all, or any part, as set forth in such written
request, of any amounts that would otherwise be payable to the Holder in such Subsequent Placement Optional Redemption, on a dollar-for-dollar
basis, against the purchase price of the securities to be purchased by the Holder in such Eligible Subsequent Placement (which, for the
avoidance of doubt, shall not be less than securities with a purchase price equal to the portion of the Subsequent Placement Optional
Redemption Amount the Holder elects to apply against thereto).
(b)
Mechanics. Each Subsequent Placement Optional Redemption Notice shall indicate that all, or such applicable portion, as set forth
in the applicable Subsequent Placement Optional Redemption Notice, of the Eligible Subsequent Placement Optional Redemption Amount the
Holder is electing to have redeemed (the “Subsequent Placement Optional Redemption Amount”) and the date of such Subsequent
Placement Optional Redemption (the “Subsequent Placement Optional Redemption Date”), which shall be the later of (x)
the fifth (5th) Business Day after the date of the applicable Subsequent Placement Optional Redemption Notice and (y) the
date of the consummation of such Eligible Subsequent Placement. The portion of the Conversion Amount of this Note subject to redemption
pursuant to this Section 8 shall be redeemed by the Company in cash at a price equal to 100% of the Subsequent Placement Optional
Redemption Amount (the “Subsequent Placement Optional Redemption Price”). Redemptions required by this Section 8
shall be made in accordance with the provisions of Section 13.
9.
ASSET SALE OPTIONAL REDEMPTION
(a)
At any time from and after the earlier of (x) the date the Holder becomes aware of the occurrence of an Asset Sale (including any insurance
and condemnation proceeds thereof) (the “Holder Notice Date”) and (y) the time of consummation of an Asset Sale (other
than sales of inventory and product in the ordinary course of business and amounts reinvested in assets to be used in the Company’s
business within 12 months of the date of consummation of such Asset Sale) (each, an “Eligible Asset Sale”), subject
to the satisfaction of the Senior Debt Condition, the Holder shall have the right, in its sole discretion, to require that the Company
redeem (each an “Asset Sale Optional Redemption”) all, or any portion, of the Conversion Amount under this Note not
in excess of (together with any Asset Sale Optional Redemption Amount (as defined in the applicable other Note of the Holder) of any
other Notes of the Holder) the Holder’s Holder Pro Rata Amount of 100% of the net proceeds (including any insurance and condemnation
proceeds with respect thereto, but excluding legal and investment banking reasonable fees and expenses) of such Eligible Asset Sale (the
“Eligible Asset Sale Optional Redemption Amount”) by delivering written notice thereof (an “Asset Sale Optional
Redemption Notice”) to the Company.
(b)
Mechanics. Each Asset Sale Optional Redemption Notice shall indicate that all, or such applicable portion, as set forth in the
applicable Asset Sale Optional Redemption Notice, of the Eligible Asset Sale Optional Redemption Amount the Holder is electing to have
redeemed (the “Asset Sale Optional Redemption Amount”) and the date of such Asset Sale Optional Redemption (the “Asset
Sale Optional Redemption Date”), which shall be the later of (x) the fifth (5th) Business Day after the date of
the applicable Asset Sale Optional Redemption Notice and (y) the date of the consummation of such Eligible Asset Sale. The portion of
the Conversion Amount of this Note subject to redemption pursuant to this Section 8 shall be redeemed by the Company in cash at
a price equal to 100% of the Asset Sale Optional Redemption Amount (the “Asset Sale Optional Redemption Price”). Redemptions
required by this Section 8 shall be made in accordance with the provisions of Section 13.
10.
NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation
(as defined in the Securities Purchase Agreement), Bylaws (as defined in the Securities Purchase Agreement) or through any reorganization,
transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this Note, and will at all times in good faith carry out
all of the provisions of this Note and take all action as may be required to protect the rights of the Holder of this Note. Without limiting
the generality of the foregoing or any other provision of this Note or the other Transaction Documents, the Company (a) shall not increase
the par value of any shares of Common Stock receivable upon conversion of this Note above the Conversion Price then in effect, and (b)
shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the conversion of this Note. Notwithstanding anything herein to the contrary, if after the
sixty (60) calendar day anniversary of the Issuance Date, the Holder is not permitted to convert this Note in full for any reason (other
than pursuant to restrictions set forth in Section 3(d) hereof), the Company shall use its best efforts to promptly remedy such
failure, including, without limitation, obtaining such consents or approvals as necessary to permit such conversion into shares of Common
Stock.
11.
RESERVATION OF AUTHORIZED SHARES.
(a)
Reservation. So long as any Notes remain outstanding, the Company shall at all times reserve the Required Reserve Amount (as defined
in the Securities Purchase Agreement). The Required Reserve Amount (including, without limitation, each increase in the number of shares
so reserved) shall be allocated pro rata among the holders of the Notes based on the original principal amount of the Notes held by each
holder on the Closing Date or increase in the number of reserved shares, as the case may be (the “Authorized Share Allocation”).
In the event that a holder shall sell or otherwise transfer any of such holder’s Notes, each transferee shall be allocated a pro
rata portion of such holder’s Authorized Share Allocation. Any shares of Common Stock reserved and allocated to any Person which
ceases to hold any Notes shall be allocated to the remaining holders of Notes, pro rata based on the principal amount of the Notes then
held by such holders.
(b)
Insufficient Authorized Shares. If, notwithstanding Section 11(a), and not in limitation thereof, at any time while any of
the Notes remain outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy
its obligation to reserve for issuance upon conversion of the Notes at least a number of shares of Common Stock equal to the Required
Reserve Amount (an “Authorized Share Failure”), then the Company shall immediately use its reasonable best efforts
to take all action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company
to reserve the Required Reserve Amount for the Notes then outstanding (and/or effect a reverse stock split to allow the Company to reserve
the Required Reserve Amount for the Notes then outstanding). Without limiting the generality of the foregoing sentence, as soon as practicable
after the date of the occurrence of an Authorized Share Failure, but in no event later than ninety (90) days after the occurrence of
such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number of
authorized shares of Common Stock and/or reverse stock split. In connection with such meeting, the Company shall provide each stockholder
with a proxy statement and shall use its best efforts to solicit its stockholders’ approval of such increase in authorized shares
of Common Stock and/or reverse stock split and to cause its board of directors to recommend to the stockholders that they approve such
proposal. Notwithstanding the foregoing, if any such time of an Authorized Share Failure, the Company is able to obtain the written consent
of a majority of the shares of its issued and outstanding shares of Common Stock to approve the increase in the number of authorized
shares of Common Stock and/or reverse stock split, the Company may satisfy this obligation by obtaining such consent and submitting for
filing with the SEC an Information Statement on Schedule 14C. In the event that the Company is prohibited from issuing shares of Common
Stock pursuant to the terms of this Note due to the failure by the Company to have sufficient shares of Common Stock available out of
the authorized but unissued shares of Common Stock (such unavailable number of shares of Common Stock, the “Authorized Failure
Shares”), in lieu of delivering such Authorized Failure Shares to the Holder, the Company shall pay cash in exchange for the
redemption of such portion of the Conversion Amount convertible into such Authorized Failure Shares at a price equal to the sum of (i)
the product of (x) such number of Authorized Failure Shares and (y) the greatest Closing Sale Price of the Common Stock on any Trading
Day during the period commencing on the date the Holder delivers the applicable Conversion Notice with respect to such Authorized Failure
Shares to the Company and ending on the date of such issuance and payment under this Section 11(a); and (ii) to the extent the Holder
purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of Authorized
Failure Shares, any brokerage commissions and other out-of-pocket expenses, if any, of the Holder incurred in connection therewith. Nothing
contained in Section 11(a) or this Section 11(b) shall limit any obligations of the Company under any provision of the Securities
Purchase Agreement.
12.
COMPANY OPTIONAL REDEMPTION.
(a)
At any time after date hereof the Company shall have the right to redeem all, or any part, of the Conversion Amount then remaining under
this Note (each, a “Company Optional Redemption Amount”) on the Company Optional Redemption Date (each as defined
below) (each, a “Company Optional Redemption”). The portion of this Note subject to redemption pursuant to this Section
12 shall be redeemed by the Company in cash at a price (each, a “Company Optional Redemption Price”) equal to
132.5% of the Conversion Amount being redeemed as of the Company Optional Redemption Date. The Company may exercise its right to require
redemption under this Section 12 by delivering a written notice thereof by facsimile or electronic mail and overnight courier to
all, but not less than all, of the holders of Notes (each, a “Company Optional Redemption Notice” and the date all
of the holders of Notes received such notice is referred to as the “Company Optional Redemption Notice Date”). The
Company may deliver only one Company Optional Redemption Notice hereunder in any twenty (20) Trading Day period and such Company Optional
Redemption Notice shall be irrevocable. The Company Optional Redemption Notice shall (x) state the date on which the Company Optional
Redemption shall occur (the “Company Optional Redemption Date”) which date shall not be less than ten (10) Trading
Days nor more than twenty (20) Trading Days following the Company Optional Redemption Notice Date, and (y) state the aggregate Conversion
Amount of the Notes which is being redeemed in such Company Optional Redemption from the Holder and all of the other holders of the Notes
pursuant to this Section 12 (and analogous provisions under the Other Notes) on the Company Optional Redemption Date. Notwithstanding
anything herein to the contrary, at any time prior to the date the Company Optional Redemption Price is paid, in full, the Company Optional
Redemption Amount may be converted, in whole or in part, by the Holder into shares of Common Stock pursuant to Section 3. All Conversion
Amounts converted by the Holder after the Company Optional Redemption Notice Date shall reduce the Company Optional Redemption Amount
of this Note required to be redeemed on the Company Optional Redemption Date. Redemptions made pursuant to this Section 12 shall
be made in accordance with Section 13. In the event of the Company’s redemption of any portion of this Note under this Section,
the Holder’s damages would be uncertain and difficult to estimate because of the parties’ inability to predict future interest
rates and the uncertainty of the availability of a suitable substitute investment opportunity for the Holder. Accordingly, any redemption
premium due under this Section 12 is intended by the parties to be, and shall be deemed, a reasonable estimate of the Holder’s
actual loss of its investment opportunity and not as a penalty. For the avoidance of doubt, the Company shall have no right to effect
a Company Optional Redemption if any Event of Default has occurred and continuing, but any Event of Default shall have no effect upon
the Holder’s right to convert this Note in its discretion.
(b)
Pro Rata Redemption Requirement. If the Company elects to cause a Company Optional Redemption of this Note pursuant to this Section
12, then it must simultaneously take the same action with respect to all of the Other Notes.
13.
REDEMPTIONS.
(a)
Mechanics. The Company shall deliver the applicable Event of Default Redemption Price to the Holder in cash within five (5) Business
Days after the Company’s receipt of the Holder’s Event of Default Redemption Notice. If the Holder has submitted a Change
of Control Redemption Notice in accordance with Section 5(b), the Company shall deliver the applicable Change of Control Redemption
Price to the Holder in cash concurrently with the consummation of such Change of Control if such notice is received prior to the consummation
of such Change of Control and within five (5) Business Days after the Company’s receipt of such notice otherwise. The Company shall
deliver the applicable Company Optional Redemption Price to the Holder in cash on the applicable Company Optional Redemption Date. The
Company shall deliver the applicable Asset Sale Optional Redemption Price to the Holder in cash on the applicable Asset Sale Optional
Redemption Date. The Company shall deliver the applicable Subsequent Placement Optional Redemption Price to the Holder in cash on the
applicable Subsequent Placement Optional Redemption Date. Notwithstanding anything herein to the contrary, in connection with any redemption
hereunder at a time the Holder is entitled to receive a cash payment under any of the other Transaction Documents, at the option of the
Holder delivered in writing to the Company, the applicable Redemption Price hereunder shall be increased by the amount of such cash payment
owed to the Holder under such other Transaction Document and, upon payment in full or conversion in accordance herewith, shall satisfy
the Company’s payment obligation under such other Transaction Document. In the event of a redemption of less than all of the Conversion
Amount of this Note, the Company shall promptly cause to be issued and delivered to the Holder a new Note (in accordance with Section
20(d)) representing the outstanding Principal which has not been redeemed. In the event that the Company does not pay the applicable
Redemption Price to the Holder within the time period required, at any time thereafter and until the Company pays such unpaid Redemption
Price in full, the Holder shall have the option, in lieu of redemption, to require the Company to promptly return to the Holder all or
any portion of this Note representing the Conversion Amount that was submitted for redemption and for which the applicable Redemption
Price (together with any Late Charges thereon) has not been paid. Upon the Company’s receipt of such notice, (x) the applicable
Redemption Notice shall be null and void with respect to such Conversion Amount, (y) the Company shall immediately return this Note,
or issue a new Note (in accordance with Section 20(d)), to the Holder, and in each case the principal amount of this Note or such
new Note (as the case may be) shall be increased by an amount equal to the difference between (1) the applicable Redemption Price (as
the case may be, and as adjusted pursuant to this Section 12, if applicable) minus (2) the Principal portion of the Conversion Amount
submitted for redemption and (z) the Conversion Price of this Note or such new Notes (as the case may be) shall be automatically adjusted
with respect to each conversion effected thereafter by the Holder to the lowest of (A) the Conversion Price as in effect on the date
on which the applicable Redemption Notice is voided, (B) 75% of the lowest Closing Bid Price of the Common Stock during the period beginning
on and including the date on which the applicable Redemption Notice is delivered to the Company and ending on and including the date
on which the applicable Redemption Notice is voided and (C) 75% of the quotient of (I) the sum of the five (5) lowest VWAPs of the Common
Stock during the twenty (20) consecutive Trading Day period ending and including the applicable Conversion Date divided by (II) five
(5) (it being understood and agreed that all such determinations shall be appropriately adjusted for any stock dividend, stock split,
stock combination or other similar transaction during such period). The Holder’s delivery of a notice voiding a Redemption Notice
and exercise of its rights following such notice shall not affect the Company’s obligations to make any payments of Late Charges
which have accrued prior to the date of such notice with respect to the Conversion Amount subject to such notice.
(b)
Redemption by Other Holders. Upon the Company’s receipt of notice from any of the holders of the Other Notes for redemption
or repayment as a result of an event or occurrence substantially similar to the events or occurrences described in Section 4(b)
or Section 5(b) (each, an “Other Redemption Notice”), the Company shall immediately, but no later than one (1)
Business Day of its receipt thereof, forward to the Holder by electronic mail a copy of such notice. If the Company receives a Redemption
Notice and one or more Other Redemption Notices, during the seven (7) Business Day period beginning on and including the date which is
two (2) Business Days prior to the Company’s receipt of the Holder’s applicable Redemption Notice and ending on and including
the date which is two (2) Business Days after the Company’s receipt of the Holder’s applicable Redemption Notice and the
Company is unable to redeem all principal, interest and other amounts designated in such Redemption Notice and such Other Redemption
Notices received during such seven (7) Business Day period, then the Company shall redeem a pro rata amount from each holder of the Notes
(including the Holder) based on the principal amount of the Notes submitted for redemption pursuant to such Redemption Notice and such
Other Redemption Notices received by the Company during such seven (7) Business Day period.
14.
VOTING RIGHTS. The Holder shall have no voting rights as the holder of this Note, except as required by law (including, without
limitation, the Delaware General Corporation Law) and as expressly provided in this Note.
15.
COVENANTS. Until all of the Notes have been converted, redeemed or otherwise satisfied in accordance with their terms:
(a)
Rank. All payments due under this Note (a) shall rank pari passu with all Other Notes and (b) shall be senior to all other
Indebtedness of the Company and its Subsidiaries (other than Permitted Indebtedness secured by Permitted Liens).
(b)
Incurrence of Indebtedness. Unless the Company has complied in full with Section 4(o) of the Securities Purchase Agreement with
respect to the issuance of any New Indebtedness (the “ROFR”), the Company shall not, and the Company shall cause each
of its Subsidiaries to not, directly or indirectly, incur or guarantee, assume or suffer to exist any Indebtedness (other than (i) the
Indebtedness evidenced by this Note and the Other Notes and (ii) other Permitted Indebtedness).
(c)
Existence of Liens. Unless the Company has complied with the ROFR, the Company shall not, and the Company shall cause each of
its Subsidiaries to not, directly or indirectly, allow or suffer to exist any mortgage, lien, pledge, charge, security interest or other
encumbrance upon or in any property or assets (including accounts and contract rights) owned by the Company or any of its Subsidiaries
(collectively, “Liens”) other than Permitted Liens.
(d)
Restricted Payments and Investments. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly
or indirectly, redeem, defease, repurchase, repay or make any payments in respect of, by the payment of cash or cash equivalents (in
whole or in part, whether by way of open market purchases, tender offers, private transactions or otherwise), all or any portion of any
Indebtedness (other than the Notes) whether by way of payment in respect of principal of (or premium, if any) or interest on, such Indebtedness
or make any Investment, as applicable, if at the time such payment with respect to such Indebtedness and/or Investment, as applicable,
is due or is otherwise made or, after giving effect to such payment, (i) an event constituting an Event of Default has occurred and is
continuing or (ii) an event that with the passage of time and without being cured would constitute an Event of Default has occurred and
is continuing.
(e)
Restriction on Redemption and Cash Dividends. The Company shall not, and the Company shall cause each of its Subsidiaries to not,
directly or indirectly, redeem, repurchase or declare or pay any cash dividend or distribution on any of its capital stock (other than
the Series D Preferred Stock (as defined in the Securities Purchase Agreement) in accordance with the Certificate of Designations (other
than the Series D Preferred Stock (as defined in the Securities Purchase Agreement)).
(f)
[Intentionally Omitted]
(g)
Maturity of Indebtedness. Other than with respect to Permitted Senior Indebtedness, the Company shall not, and the Company shall
cause each of its Subsidiaries to not, directly or indirectly, permit any Indebtedness of the Company or any of its Subsidiaries to mature
or accelerate prior to the Maturity Date.
(h)
Change in Nature of Business. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or
indirectly, engage in any material line of business substantially different from those lines of business conducted by or publicly contemplated
to be conducted by the Company and each of its Subsidiaries on the Subscription Date or any business substantially related or incidental
thereto. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, modify its or their
corporate structure or purpose.
(i)
Preservation of Existence, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve,
its existence, rights and privileges, and become or remain, and cause each of its Subsidiaries to become or remain, duly qualified and
in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its
business makes such qualification necessary.
(j)
Maintenance of Properties, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve,
all of its properties which are necessary or useful in the proper conduct of its business in good working order and condition, ordinary
wear and tear excepted, and comply, and cause each of its Subsidiaries to comply, at all times with the provisions of all leases to which
it is a party as lessee or under which it occupies property, so as to prevent any loss or forfeiture thereof or thereunder.
(k)
Maintenance of Intellectual Property. The Company will, and will cause each of its Subsidiaries to, take all action necessary
or advisable to maintain all of the Intellectual Property Rights (as defined in the Securities Purchase Agreement) of the Company and/or
any of its Subsidiaries that are necessary or material to the conduct of its business in full force and effect.
(l)
Maintenance of Insurance. The Company shall maintain, and cause each of its Subsidiaries to maintain, insurance with responsible
and reputable insurance companies or associations (including, without limitation, comprehensive general liability, hazard, rent and business
interruption insurance) with respect to its properties (including all real properties leased or owned by it) and business, in such amounts
and covering such risks as is required by any governmental authority having jurisdiction with respect thereto or as is carried generally
in accordance with sound business practice by companies in similar businesses similarly situated.
(m)
Transactions with Affiliates. The Company shall not, nor shall it permit any of its Subsidiaries to, enter into, renew, extend
or be a party to, any transaction or series of related transactions (including, without limitation, the purchase, sale, lease, transfer
or exchange of property or assets of any kind or the rendering of services of any kind) with any affiliate, except transactions in the
ordinary course of business in a manner and to an extent consistent with past practice and necessary or desirable for the prudent operation
of its business, for fair consideration and on terms no less favorable to it or its Subsidiaries than would be obtainable in a comparable
arm’s length transaction with a Person that is not an affiliate thereof.
(n)
Restricted Issuances. The Company shall not, directly or indirectly, without the prior written consent of the holders of a majority
in aggregate principal amount of the Notes then outstanding, (i) issue any Notes (other than as contemplated by the Securities Purchase
Agreement and the Notes) or (ii) issue any other securities that would cause a breach or default under the Notes or the Warrants.
(o)
Stay, Extension and Usury Laws. To the extent that it may lawfully do so, the Company (A) agrees that it will not at any time
insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law (wherever
or whenever enacted or in force) that may affect the covenants or the performance of this Note; and (B) expressly waives all benefits
or advantages of any such law and agrees that it will not, by resort to any such law, hinder, delay or impede the execution of any power
granted to the Holder by this Note, but will suffer and permit the execution of every such power as though no such law has been enacted.
(p)
Taxes. The Company and its Subsidiaries shall pay when due all taxes, fees or other charges of any nature whatsoever (together
with any related interest or penalties) now or hereafter imposed or assessed against the Company and its Subsidiaries or their respective
assets or upon their ownership, possession, use, operation or disposition thereof or upon their rents, receipts or earnings arising therefrom
(except where the failure to pay would not, individually or in the aggregate, have a material effect on the Company or any of its Subsidiaries).
The Company and its Subsidiaries shall file on or before the due date therefor all personal property tax returns (except where the failure
to file would not, individually or in the aggregate, have a material effect on the Company or any of its Subsidiaries). Notwithstanding
the foregoing, the Company and its Subsidiaries may contest, in good faith and by appropriate proceedings, taxes for which they maintain
adequate reserves therefor in accordance with GAAP.
(i)
PCAOB Registered Auditor. At all times any Notes remain outstanding, the Company shall have engaged an independent auditor to
audit its financial statements that is registered with (and in compliance with the rules and regulations of) the Public Company Accounting
Oversight Board.
(q)
Independent Investigation. At the reasonable request of the Holder either (x) at any time when an Event of Default has occurred
and is continuing, (y) upon the occurrence and during the continuance of an event that with the passage of time or giving of notice would
constitute an Event of Default or (z) at any time the Holder reasonably believes an Event of Default may have occurred and be continuing,
the Company shall hire an independent, reputable investment bank selected by the Company and approved by the Required Holders, to investigate
as to whether any breach of this Note has occurred (the “Independent Investigator”). If the Independent Investigator
determines that such breach of this Note has occurred, the Independent Investigator shall notify the Company of such breach and the Company
shall deliver written notice to each holder of a Note of such breach. In connection with such investigation, the Independent Investigator
may, during normal business hours, inspect all contracts, books, records, personnel, offices and other facilities and properties of the
Company and its Subsidiaries and, to the extent available to the Company after the Company uses reasonable efforts to obtain them, the
records of its legal advisors and accountants (including the accountants’ work papers) and any books of account, records, reports
and other papers not contractually required of the Company to be confidential or secret, or subject to attorney-client or other evidentiary
privilege, and the Independent Investigator may make such copies and inspections thereof as the Independent Investigator may reasonably
request. The Company shall furnish the Independent Investigator with such financial and operating data and other information with respect
to the business and properties of the Company as the Independent Investigator may reasonably request. The Company shall permit the Independent
Investigator to discuss the affairs, finances and accounts of the Company with, and to make proposals and furnish advice with respect
thereto to, the Company’s officers, directors, key employees and independent public accountants or any of them (and by this provision
the Company authorizes said accountants to discuss with such Independent Investigator the finances and affairs of the Company and any
Subsidiaries), all at such reasonable times, upon reasonable notice, and as often as may be reasonably requested.
16.
DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 6 and 7 above, if the Company shall declare
or make any dividend or other distributions of its assets (or rights to acquire its assets) to all 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)
(the “Distributions”), then the Holder will be entitled to such Distributions as if the Holder had held the number
of shares of Common Stock acquirable upon complete conversion of this Note (without taking into account any limitations or restrictions
on the convertibility of this Note and assuming for such purpose that the Note was converted at the Alternate Conversion Price as of
the applicable record date) immediately prior to the date on which a record is taken for such Distribution or, if no such record is taken,
the date as of which the record holders of Common Stock are to be determined for such Distributions (provided, however, that to the extent
that the Holder’s right to participate in any such Distribution would result in the Holder and the other Attribution Parties exceeding
the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution to the extent of the Maximum Percentage
(and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Distribution (and beneficial ownership)
to the extent of any such excess) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until
such time or times, if ever, as its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum
Percentage, at which time or times the Holder shall be granted such Distribution (and any Distributions declared or made on such initial
Distribution or on any subsequent Distribution held similarly in abeyance) to the same extent as if there had been no such limitation).
17.
AMENDING THE TERMS OF THIS NOTE. Except for Section 3(d) which may not be amended, modified or waived by the parties hereto,
the prior written consent of the Required Holders (as defined in the Securities Purchase Agreement) and the Company shall be required
for any change, waiver or amendment to this Note. Any change, waiver or amendment so approved shall be binding upon all existing and
future holders of this Note and any Other Notes; provided, however, that no such change, waiver or, as applied to any of the Notes held
by any particular holder of Notes, shall, without the written consent of that particular holder, (i) reduce the amount of Principal,
reduce the amount of accrued and unpaid Interest, or extend the Maturity Date, of the Notes, (ii) disproportionally and adversely affect
any rights under the Notes of any holder of Notes; or (iii) modify any of the provisions of, or impair the right of any holder of Notes
under, this Section 17.
18.
TRANSFER. This Note and any shares of Common Stock issued upon conversion of this Note may be offered, sold, assigned or transferred
by the Holder without the consent of the Company, subject only to the provisions of Section 2(g) of the Securities Purchase Agreement.
19.
REISSUANCE OF THIS NOTE.
(a)
Transfer. If this Note is to be transferred, the Holder shall surrender this Note to the Company, whereupon the Company will forthwith
issue and deliver upon the order of the Holder a new Note (in accordance with Section 18(d)), registered as the Holder may
request, representing the outstanding Principal being transferred by the Holder and, if less than the entire outstanding Principal is
being transferred, a new Note (in accordance with Section 18(d)) to the Holder representing the outstanding Principal not being
transferred. The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of Section
3(c)(iii) following conversion or redemption of any portion of this Note, the outstanding Principal represented by this Note may
be less than the Principal stated on the face of this Note.
(b)
Lost, Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Note (as to which a written certification and the indemnification contemplated below shall suffice
as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in
customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company shall execute
and deliver to the Holder a new Note (in accordance with Section 18(d)) representing the outstanding Principal.
(c)
Note Exchangeable for Different Denominations. This Note is exchangeable, upon the surrender hereof by the Holder at the principal
office of the Company, for a new Note or Notes (in accordance with Section 18(d) and in principal amounts of at least $1,000)
representing in the aggregate the outstanding Principal of this Note, and each such new Note will represent such portion of such outstanding
Principal as is designated by the Holder at the time of such surrender.
(d)
Issuance of New Notes. Whenever the Company is required to issue a new Note pursuant to the terms of this Note, such new Note
(i) shall be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding
(or in the case of a new Note being issued pursuant to Section 18(a) or Section 18(c), the Principal designated by
the Holder which, when added to the principal represented by the other new Notes issued in connection with such issuance, does not exceed
the Principal remaining outstanding under this Note immediately prior to such issuance of new Notes), (iii) shall have an issuance date,
as indicated on the face of such new Note, which is the same as the Issuance Date of this Note, (iv) shall have the same rights and conditions
as this Note, and (v) shall represent accrued and unpaid Interest and Late Charges on the Principal and Interest of this Note, from the
Issuance Date.
19.
SUBORDINATION. Notwithstanding anything to the contrary contained in the Transaction Documents, the rights of the Holder to receive
any cash payments hereunder, shall be expressly subordinate and junior in right of payment to the prior the satisfaction in full of any
amounts outstanding (other than unasserted contingent obligations) pursuant to the terms of the Permitted Senior Indebtedness as in effect
as of the Subscription Date (without regard to any amendment, modification or waiver thereto after the Subscription Date); provided,
that nothing herein shall be deemed to subordinate (a) the Holder’s right (to the extent established pursuant to one or more definitive
agreements with the Company after the date hereof) to receive any equity security(ies) of the Company in exchange for all, or any part,
of the Outstanding Amount hereunder (or any other amounts outstanding hereunder from time to time, as applicable) (each, an “Exchange
Security”) or (b) any cash or other proceeds received, directly or indirectly, by the Holder from the sale or other disposition
of any such Exchange Security. The subordination provisions set forth in this Section are for the benefit of the holders of the Permitted
Senior Indebtedness. No right of any agent for the holders of the Permitted Senior Indebtedness to enforce the subordination provisions
herein shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or the Holder or
by any noncompliance by the Company or the Holder with the terms herein. The holders of the Permitted Senior Indebtedness and their respective
agents shall be a third party beneficiaries of the subordination provisions set forth in this Section 18.
20.
REMEDIES, CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Note shall be cumulative
and in addition to all other remedies available under this Note and any of the other Transaction Documents at law or in equity (including
a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s right to pursue actual
and consequential damages for any failure by the Company to comply with the terms of this Note. No failure on the part of the Holder
to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise by the Holder of any right, power or remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. In addition, the exercise of any right or remedy of the Holder at law or equity or under this Note or any
of the documents shall not be deemed to be an election of Holder’s rights or remedies under such documents or at law or equity.
The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided
herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall
be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of
the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable
harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event
of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to specific performance
and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of competent jurisdiction in any such
case without the necessity of proving actual damages and without posting a bond or other security. The Company shall provide all information
and documentation to the Holder that is reasonably requested by the Holder to enable the Holder to confirm the Company’s compliance
with the terms and conditions of this Note (including, without limitation, compliance with Section 7).
21.
PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Note is placed in the hands of an attorney for collection or enforcement
or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this Note
and/or any other Transaction Document or to enforce the provisions of this Note and/or any other Transaction Document or (b) there occurs
any bankruptcy, reorganization, receivership of the Company or other proceedings affecting Company creditors’ rights and involving
a claim under this Note, then the Company shall pay the costs incurred by the Holder for such collection, enforcement or action or in
connection with such bankruptcy, reorganization, receivership or other proceeding, including, without limitation, attorneys’ fees
and disbursements. The Company expressly acknowledges and agrees that no amounts due under this Note and/or any other Transaction Document,
as applicable, shall be affected, or limited, by the fact that the purchase price paid for this Note was less than the original Principal
amount hereof.
22.
CONSTRUCTION; HEADINGS. This Note shall be deemed to be jointly drafted by the Company and the initial Holder and shall not be
construed against any such Person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form
part of, or affect the interpretation of, this Note. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed
to include the masculine, feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,”
“include” and words of like import shall be construed broadly as if followed by the words “without limitation.”
The terms “herein,” “hereunder,” “hereof” and words of like import refer to this entire Note instead
of just the provision in which they are found. Unless expressly indicated otherwise, all section references are to sections of this Note.
Terms used in this Note and not otherwise defined herein, but defined in the other Transaction Documents, shall have the meanings ascribed
to such terms on the Closing Date in such other Transaction Documents unless otherwise consented to in writing by the Holder.
23.
FAILURE OR INDULGENCE NOT WAIVER. No failure or delay on the part of the Holder in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or privilege. No waiver shall be effective unless it is in writing and
signed by an authorized representative of the waiving party. Notwithstanding the foregoing, nothing contained in this Section 24
shall permit any waiver of any provision of Section 3(d).
24.
DISPUTE RESOLUTION.
(a)
Submission to Dispute Resolution.
(i)
In the case of a dispute relating to a Closing Bid Price, a Closing Sale Price, a Conversion Price, an Alternate Conversion Price, a
Black Scholes Consideration Value, a VWAP or a fair market value or the arithmetic calculation of a Conversion Rate, or the applicable
Redemption Price (as the case may be) (including, without limitation, a dispute relating to the determination of any of the foregoing),
the Company or the Holder (as the case may be) shall submit the dispute to the other party via electronic mail (A) if by the Company,
within two (2) Business Days after the occurrence of the circumstances giving rise to such dispute or (B) if by the Holder at any time
after the Holder learned of the circumstances giving rise to such dispute. If the Holder and the Company are unable to promptly resolve
such dispute relating to such Closing Bid Price, such Closing Sale Price, such Conversion Price, such Alternate Conversion Price, such
Black Scholes Consideration Value, such VWAP or such fair market value, or the arithmetic calculation of such Conversion Rate or such
applicable Redemption Price (as the case may be), at any time after the second (2nd) Business Day following such initial notice
by the Company or the Holder (as the case may be) of such dispute to the Company or the Holder (as the case may be), then the Holder
may, at its sole option, select an independent, reputable investment bank reasonably acceptable to the Company to resolve such dispute.
(ii)
The Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered in accordance
with the first sentence of this Section 25 and (B) written documentation supporting its position with respect to such dispute,
in each case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following the date on which
the Holder selected such investment bank (the “Dispute Submission Deadline”) (the documents referred to in the immediately
preceding clauses (A) and (B) are collectively referred to herein as the “Required Dispute Documentation”) (it being
understood and agreed that if either the Holder or the Company fails to so deliver all of the Required Dispute Documentation by the Dispute
Submission Deadline, then the party who fails to so submit all of the Required Dispute Documentation shall no longer be entitled to (and
hereby waives its right to) deliver or submit any written documentation or other support to such investment bank with respect to such
dispute and such investment bank shall resolve such dispute based solely on the Required Dispute Documentation that was delivered to
such investment bank prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by both the Company and the Holder
or otherwise requested by such investment bank, neither the Company nor the Holder shall be entitled to deliver or submit any written
documentation or other support to such investment bank in connection with such dispute (other than the Required Dispute Documentation).
(iii)
The Company and the Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company and the
Holder of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline. The fees and expenses
of such investment bank shall be borne solely by the Company, and such investment bank’s resolution of such dispute shall be final
and binding upon all parties absent manifest error.
(b)
Miscellaneous. The Company expressly acknowledges and agrees that (i) this Section 25 constitutes an agreement to arbitrate
between the Company and the Holder (and constitutes an arbitration agreement) under § 7501, et seq. of the New York Civil Practice
Law and Rules (“CPLR”) and that the Holder is authorized to apply for an order to compel arbitration pursuant to CPLR
§ 7503(a) in order to compel compliance with this Section 25, (ii) a dispute relating to a Conversion Price includes, without
limitation, disputes as to (A) whether an issuance or sale or deemed issuance or sale of Common Stock occurred under Section 7(a),
(B) the consideration per share at which an issuance or deemed issuance of Common Stock occurred, (C) whether any issuance or sale or
deemed issuance or sale of Common Stock was an issuance or sale or deemed issuance or sale of Excluded Securities, (D) whether an agreement,
instrument, security or the like constitutes and Option or Convertible Security and (E) whether a Dilutive Issuance occurred, (iii) the
terms of this Note and each other applicable Transaction Document shall serve as the basis for the selected investment bank’s resolution
of the applicable dispute, such investment bank shall be entitled (and is hereby expressly authorized) to make all findings, determinations
and the like that such investment bank determines are required to be made by such investment bank in connection with its resolution of
such dispute and in resolving such dispute such investment bank shall apply such findings, determinations and the like to the terms of
this Note and any other applicable Transaction Documents, (iv) the Holder (and only the Holder), in its sole discretion, shall have the
right to submit any dispute described in this Section 25 to any state or federal court sitting in The City of New York, Borough
of Manhattan in lieu of utilizing the procedures set forth in this Section 25 and (v) nothing in this Section 25 shall limit
the Holder from obtaining any injunctive relief or other equitable remedies (including, without limitation, with respect to any matters
described in this Section 25).
25.
NOTICES; CURRENCY; PAYMENTS.
(a)
Notices. Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given
in accordance with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice
of all actions taken pursuant to this Note, including in reasonable detail a description of such action and the reason therefore. Without
limiting the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon any adjustment of the
Conversion Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (ii) at least fifteen (15)
days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon
the Common Stock, (B) with respect to any grant, issuances, or sales of any Options, Convertible Securities or rights to purchase stock,
warrants, securities or other property to holders of shares of Common Stock or (C) for determining rights to vote with respect to any
Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be made known to the public prior
to or in conjunction with such notice being provided to the Holder.
(b)
Currency. All dollar amounts referred to in this Note are in United States Dollars (“U.S. Dollars”), and all
amounts owing under this Note shall be paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall be converted
into the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange Rate”
means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Note, the U.S. Dollar exchange rate as
published in the Wall Street Journal on the relevant date of calculation (it being understood and agreed that where an amount is calculated
with reference to, or over, a period of time, the date of calculation shall be the final date of such period of time).
(c)
Payments. Whenever any payment of cash is to be made by the Company to any Person pursuant to this Note, unless otherwise expressly
set forth herein, such payment shall be made in lawful money of the United States of America by a certified check drawn on the account
of the Company and sent via overnight courier service to such Person at such address as previously provided to the Company in writing
(which address, in the case of each of the Buyers, shall initially be as set forth on the Schedule of Buyers attached to the Securities
Purchase Agreement), provided that the Holder may elect to receive a payment of cash via wire transfer of immediately available funds
by providing the Company with prior written notice setting out such request and the Holder’s wire transfer instructions. Whenever
any amount expressed to be due by the terms of this Note is due on any day which is not a Business Day, the same shall instead be due
on the next succeeding day which is a Business Day. Any amount of Principal or other amounts due under the Transaction Documents which
is not paid when due (except to the extent such amount is simultaneously accruing Interest at the Default Rate hereunder) shall result
in a late charge being incurred and payable by the Company in an amount equal to interest on such amount at the rate of twelve percent
(12%) per annum from the date such amount was due until the same is paid in full (“Late Charge”).
26.
CANCELLATION. After all Principal, accrued Interest, Late Charges and other amounts at any time owed on this Note or any other
Transaction Documents have been paid in full, this Note shall automatically be deemed canceled, shall be surrendered to the Company for
cancellation and shall not be reissued.
27.
WAIVER OF NOTICE. To the extent permitted by law, the Company hereby irrevocably waives demand, notice, presentment, protest and
all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note and the Securities
Purchase Agreement.
28.
GOVERNING LAW. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Note shall be governed by, the internal laws of the State of New York, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause
the application of the laws of any jurisdictions other than the State of New York. Except as otherwise required by Section 25 above,
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, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is
not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum
or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Nothing contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. Nothing contained herein (i) shall be deemed or operate to preclude the Holder from bringing suit or
taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to the Holder,
to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the
Holder or (ii) shall limit, or shall be deemed or construed to limit, any provision of Section 25. THE COMPANY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY.
29.
JUDGMENT CURRENCY.
(a)
If for the purpose of obtaining or enforcing judgment against the Company in any court in any jurisdiction it becomes necessary to convert
into any other currency (such other currency being hereinafter in this Section 30 referred to as the “Judgment Currency”)
an amount due in U.S. dollars under this Note, the conversion shall be made at the Exchange Rate prevailing on the Trading Day immediately
preceding:
(i)
the date actual payment of the amount due, in the case of any proceeding in the courts of New York or in the courts of any other jurisdiction
that will give effect to such conversion being made on such date: or
(ii)
the date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date as of
which such conversion is made pursuant to this Section 30(a)(ii) being hereinafter referred to as the “Judgment
Conversion Date”).
(b)
If in the case of any proceeding in the court of any jurisdiction referred to in Section 30(a)(ii) above, there is a change in the
Exchange Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable party
shall pay such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the Exchange
Rate prevailing on the date of payment, will produce the amount of US dollars which could have been purchased with the amount of Judgment
Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment Conversion Date.
(c)
Any amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being obtained
for any other amounts due under or in respect of this Note.
30.
SEVERABILITY. If any provision of this Note is prohibited by law or otherwise determined to be invalid or unenforceable by a court
of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply
to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Note so long as this Note as so modified continues to express, without material change,
the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the
provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical
realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations
to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible
to that of the prohibited, invalid or unenforceable provision(s).
31.
MAXIMUM PAYMENTS. Without limiting Section 9(d) of the Securities Purchase Agreement, nothing contained herein shall be deemed
to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the
event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments
in excess of such maximum shall be credited against amounts owed by the Company to the Holder and thus refunded to the Company.
32.
CERTAIN DEFINITIONS. For purposes of this Note, the following terms shall have the following meanings:
(a)
“1933 Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.
(b)
“1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
(c)
“Adjustment Right” means any right granted with respect to any securities issued in connection with, or with respect
to, any issuance or sale (or deemed issuance or sale in accordance with Section 7) of shares of Common Stock (other than rights
of the type described in Section 6(a) hereof) that could result in a decrease in the net consideration received by the Company in
connection with, or with respect to, such securities (including, without limitation, any cash settlement rights, cash adjustment or other
similar rights).
(d)
“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled
by, or is under common control with, such Person, it being understood for purposes of this definition that “control” of a
Person means the power directly or indirectly either to vote 25% or more of the stock having ordinary voting power for the election of
directors of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
(e)
“Alternate Conversion Price” means, with respect to any Alternate Conversion that price which shall be the lower of
(i) the applicable Conversion Price as in effect on the applicable Conversion Date of the applicable Alternate Conversion, and (ii) 80%
of the lowest VWAP of the Common Stock of any Trading Day during the fifteen (15) consecutive Trading Day period ending and including
the Trading Day immediately preceding the delivery or deemed delivery of the applicable Conversion Notice (such period, the “Alternate
Conversion Measuring Period”). All such determinations to be appropriately adjusted for any stock dividend, stock split, stock
combination, reclassification or similar transaction that proportionately decreases or increases the Common Stock during such Alternate
Conversion Measuring Period.
(f)
“Approved Stock Plan” means any employee benefit plan which has been approved by the board of directors of the Company
prior to or subsequent to the Subscription Date pursuant to which shares of Common Stock and standard options to purchase Common Stock
may be issued to any employee, officer or director for services provided to the Company in their capacity as such.
(g)
“Attribution Parties” means, collectively, the following Persons and entities: (i) any investment vehicle, including,
any funds, feeder funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed
or advised by the Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of
the Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or
any of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock would or could be aggregated
with the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the 1934 Act. For clarity, the purpose of
the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.
(h)
“Black Scholes Consideration Value” means the value of the applicable Option, Convertible Security or Adjustment Right
(as the case may be) as of the date of issuance thereof calculated using the Black Scholes Option Pricing Model obtained from the “OV”
function on Bloomberg utilizing (i) an underlying price per share equal to the Closing Sale Price of the Common Stock on the Trading
Day immediately preceding the public announcement of the execution of definitive documents with respect to the issuance of such Option,
Convertible Security or Adjustment Right (as the case may be), (ii) a risk-free interest rate corresponding to the U.S. Treasury rate
for a period equal to the remaining term of such Option, Convertible Security or Adjustment Right (as the case may be) as of the date
of issuance of such Option, Convertible Security or Adjustment Right (as the case may be), (iii) a zero cost of borrow and (iv) an expected
volatility equal to the greater of 100% and the 100 day volatility obtained from the “HVT” function on Bloomberg (determined
utilizing a 365 day annualization factor) as of the Trading Day immediately following the date of issuance of such Option, Convertible
Security or Adjustment Right (as the case may be).
(i)
“Bloomberg” means Bloomberg, L.P.
(j)
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New
York are authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall not
be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential
employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental
authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York
generally are open for use by customers on such day.
(k)
“Change of Control” means any Fundamental Transaction other than (i) any merger of the Company or any of its, direct
or indirect, wholly-owned Subsidiaries with or into any of the foregoing Persons, (ii) any reorganization, recapitalization or reclassification
of the shares of Common Stock in which holders of the Company’s voting power immediately prior to such reorganization, recapitalization
or reclassification continue after such reorganization, recapitalization or reclassification to hold publicly traded securities and,
directly or indirectly, are, in all material respects, the holders of the voting power of the surviving entity (or entities with the
authority or voting power to elect the members of the board of directors (or their equivalent if other than a corporation) of such entity
or entities) after such reorganization, recapitalization or reclassification, or (iii) pursuant to a migratory merger effected solely
for the purpose of changing the jurisdiction of incorporation of the Company or any of its Subsidiaries.
(l)
“Change of Control Redemption Premium” means 125%.
(m)
“Closing Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing
bid price and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the
Principal Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price
(as the case may be) then the last bid price or last trade price, respectively, of such security prior to 4:00:00 p.m., New York time,
as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the
last closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading market where
such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade
price, respectively, of such security in the over-the-counter market on the electronic bulletin board for such security as reported by
Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security by Bloomberg, the average of
the bid prices, or the ask prices, respectively, of any market makers for such security as reported in The Pink Open Market (or a similar
organization or agency succeeding to its functions of reporting prices). If the Closing Bid Price or the Closing Sale Price cannot be
calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price or the Closing Sale Price (as the
case may be) of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the
Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance
with the procedures in Section 25. All such determinations shall be appropriately adjusted for any stock splits, stock dividends,
stock combinations, recapitalizations or other similar transactions during such period.
(n)
“Closing Date” shall have the meaning set forth in the Securities Purchase Agreement, which date is the date the Company
initially issued Notes pursuant to the terms of the Securities Purchase Agreement.
(o)
“Common Stock” means (i) the Company’s shares of common stock, $0.0001 par value per share, and (ii) any capital
stock into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.
(p)
“Convertible Securities” means any stock or other security (other than Options) that is at any time and under any
circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof
to acquire, any shares of Common Stock.
(q)
“Current Subsidiary” means any Person in which the Company on the Subscription Date, directly or indirectly, (i) owns
any of the outstanding capital stock or holds any equity or similar interest of such Person or (ii) controls or operates all or any part
of the business, operations or administration of such Person, and all of the foregoing, collectively, “Current Subsidiaries”.
(r)
“Eligible Market” means The New York Stock Exchange, the NYSE American, the Nasdaq Capital Market, the Nasdaq Global
Select Market, the Nasdaq Global Market or the Principal Market.
(s)
“Event Market Price” means, with respect to any Stock Combination Event Date, the lowest VWAP of the Common Stock
during the twenty (20) consecutive Trading Day period ending and including the Trading Day immediately preceding the forty-first (41st)
Trading Day after such Stock Combination Event Date.
(t)
“Excluded Securities” means (i) shares of Common Stock or standard options to purchase Common Stock issued to directors,
officers or employees of the Company for services rendered to the Company in their capacity as such pursuant to an Approved Stock Plan
(as defined above), provided that (A) all such issuances (taking into account the shares of Common Stock issuable upon exercise of such
options) after the Subscription Date pursuant to this clause (i) do not, in the aggregate, exceed more than 5% of the Common Stock issued
and outstanding immediately prior to the Subscription Date and (B) the exercise price of any such options is not lowered, none of such
options are amended to increase the number of shares issuable thereunder and none of the terms or conditions of any such options are
otherwise materially changed in any manner that adversely affects any of the Buyers; (ii) shares of Common Stock issued upon the conversion
or exercise of Convertible Securities or Options (other than standard options to purchase Common Stock issued pursuant to an Approved
Stock Plan that are covered by clause (i) above) issued prior to the Subscription Date, provided that the conversion price of any such
Convertible Securities (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered
by clause (i) above) is not lowered, none of such Convertible Securities or Options (other than standard options to purchase Common Stock
issued pursuant to an Approved Stock Plan that are covered by clause (i) above) are amended to increase the number of shares issuable
thereunder and none of the terms or conditions of any such Convertible Securities or Options (other than standard options to purchase
Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) are otherwise materially changed in any
manner that adversely affects any of the Buyers; (iii) the shares of Common Stock issuable upon conversion of the Notes or otherwise
pursuant to the terms of the Notes; provided, that the terms of the Notes are not amended, modified or changed on or after the Subscription
Date (other than antidilution adjustments pursuant to the terms thereof in effect as of the Subscription Date), (iv) the shares of Common
Stock issuable upon exercise of the Warrants; provided, that the terms of the Warrants are not amended, modified or changed on or after
the Subscription Date (other than antidilution adjustments pursuant to the terms thereof in effect as of the Subscription Date), (v)
any shares of Common Stock issued or issuable in connection with any bona fide strategic or commercial alliances, acquisitions, mergers,
licensing arrangements, and strategic partnerships, provided, that (x) the primary purpose of such issuance is not to raise capital as
reasonably determined, and (y) the purchaser or acquirer or recipient of the securities in such issuance solely consists of either (I)
the actual participants in such strategic or commercial alliance, strategic or commercial licensing arrangement or strategic or commercial
partnership, (II) the actual owners of such assets or securities acquired in such acquisition or merger or (III) the stockholders, partners,
employees, consultants, officers, directors or members of the foregoing Persons, in each case, 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, and (IV) the number or amount of securities issued to such Persons by the
Company shall not be disproportionate to each such Person’s actual participation in (or fair market value of the contribution to)
such strategic or commercial alliance or strategic or commercial partnership or ownership of such assets or securities to be acquired
by the Company, as applicable, and (vi) any shares of Common Stock issued pursuant to a Permitted Equity Line.
(u)
“Fundamental Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries,
Affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the
surviving corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all
of the properties or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation
S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject
to or have its Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange offer that
is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of
Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated with any Subject
Entities making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares of Common Stock
such that all Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such purchase, tender or
exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding
shares of Common Stock, or (iv) consummate a stock or share purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Subject Entities whereby all such Subject Entities,
individually or in the aggregate, acquire, either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the
outstanding shares of Common Stock calculated as if any shares of Common Stock held by all the Subject Entities making or party to, or
Affiliated with any Subject Entity making or party to, such stock purchase agreement or other business combination were not outstanding;
or (z) such number of shares of Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in
Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify
its Common Stock, (B) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one
or more related transactions, allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the “beneficial
owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition, purchase, assignment,
conveyance, tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination,
reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise
in any manner whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common
Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock not held by all such
Subject Entities as of the date of this Note calculated as if any shares of Common Stock held by all such Subject Entities were not outstanding,
or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock or other equity
securities of the Company sufficient to allow such Subject Entities to effect a statutory short form merger or other transaction requiring
other stockholders of the Company to surrender their shares of Common Stock without approval of the stockholders of the Company or (C)
directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, the issuance of
or the entering into any other instrument or transaction structured in a manner to circumvent, or that circumvents, the intent of this
definition in which case this definition shall be construed and implemented in a manner otherwise than in strict conformity with the
terms of this definition to the extent necessary to correct this definition or any portion of this definition which may be defective
or inconsistent with the intended treatment of such instrument or transaction.
(v)
“GAAP” means United States generally accepted accounting principles, consistently applied.
(w)
“Group” means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5
thereunder.
(x)
“Holder Pro Rata Amount” means a fraction (i) the numerator of which is the original Principal amount of this Note
on the Closing Date and (ii) the denominator of which is the aggregate original principal amount of all Notes issued to the initial purchasers
pursuant to the Securities Purchase Agreement on the Closing Date.
(y)
“Indebtedness” shall have the meaning ascribed to such term in the Securities Purchase Agreement.
(z)
“Interest Date” means, with respect to any given calendar month, the first Trading Day of such calendar month.
(aa)
“Interest Rate” means 8% per annum, as may be adjusted from time to time in accordance with Section 2.
(bb)
“Investment” means any beneficial ownership (including stock, partnership or limited liability company interests)
of or in any Person, or any loan, advance or capital contribution to any Person or the acquisition of all, or substantially all, of the
assets of another Person or the purchase of any assets of another Person for greater than the fair market value of such assets.
(cc)
“Market Price” means, as of any date of determination, the quotient determined by dividing (x) the sum of the VWAP
of the Common Stock for each of the five (5) lowest Trading Days during the twenty (20) consecutive Trading Day period ending and including
the Trading Day immediately preceding such date of determination, divided by (y) five (5). All such determinations shall be appropriately
adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction during such period.
(dd)
“Maturity Date” shall mean September [__] , 2026, provided, however, the Maturity Date may be extended at the option
of the Holder (i) in the event that, and for so long as, an Event of Default shall have occurred and be continuing or any event shall
have occurred and be continuing that with the passage of time and the failure to cure would result in an Event of Default or (ii) through
the date that is twenty (20) Business Days after the consummation of a Fundamental Transaction in the event that a Fundamental Transaction
is publicly announced or a Change of Control Notice is delivered prior to the Maturity Date, provided further that if a Holder elects
to convert some or all of this Note pursuant to Section 3 hereof, and the Conversion Amount would be limited pursuant to Section
3(d) hereunder, the Maturity Date shall automatically be extended until such time as such provision shall not limit the conversion
of this Note.
(ee)
“New Subsidiary” means, as of any date of determination, any Person in which the Company after the Subscription Date,
directly or indirectly, (i) owns or acquires any of the outstanding capital stock or holds any equity or similar interest of such Person
or (ii) controls or operates all or any part of the business, operations or administration of such Person, and all of the foregoing,
collectively, “New Subsidiaries”.
(ff)
“Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible
Securities.
(gg)
“Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose
common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent
Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.
(hh)
“Permitted Indebtedness” means (i) Indebtedness evidenced by this Note and the Other Notes, (ii) Indebtedness set
forth on Schedule 3(s) to the Securities Purchase Agreement, as in effect as of the Subscription Date (iii) Indebtedness secured by Permitted
Liens or unsecured but as described in clauses (iv) and (v) of the definition of Permitted Liens, and (iv) Permitted Senior Indebtedness.
(ii)
“Permitted Liens” means (i) any Lien for taxes not yet due or delinquent or being contested in good faith by appropriate
proceedings for which adequate reserves have been established in accordance with GAAP, (ii) any statutory Lien arising in the ordinary
course of business by operation of law with respect to a liability that is not yet due or delinquent, (iii) any Lien created by operation
of law, such as materialmen’s liens, mechanics’ liens and other similar liens, arising in the ordinary course of business
with respect to a liability that is not yet due or delinquent or that are being contested in good faith by appropriate proceedings, (iv)
Liens (A) upon or in any equipment acquired or held by the Company or any of its Subsidiaries to secure the purchase price of such equipment
or Indebtedness incurred solely for the purpose of financing the acquisition or lease of such equipment, or (B) existing on such equipment
at the time of its acquisition, provided that the Lien is confined solely to the property so acquired and improvements thereon, and the
proceeds of such equipment, in either case, with respect to Indebtedness in an aggregate amount not to exceed $100,000, (v) Liens incurred
in connection with the extension, renewal or refinancing of the Indebtedness secured by Liens of the type described in clause (iv) above,
provided that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal
amount of the Indebtedness being extended, renewed or refinanced does not increase, (vi) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payments of custom duties in connection with the importation of goods, (vii) Liens arising from
judgments, decrees or attachments in circumstances not constituting an Event of Default under Section 4(a)(xii); Liens with respect
to Permitted Senior Indebtedness.
(jj)
“Permitted Senior Indebtedness” means Indebtedness issued pursuant to that certain Securities Purchase and Security
Agreement, dated April 23, 2020, by and between the Company and the persons set forth therein and Indebtedness issued pursuant to that
certain Securities Purchase Agreement, dated October 14, 2020, by and between the Company and the persons set forth therein.
(kk)
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust,
an unincorporated organization, any other entity or a government or any department or agency thereof.
(ll)
“Principal Market” means the OTCQB.
(mm)
“Redemption Notices” means, collectively, the Event of Default Redemption Notices, the Company Optional Redemption
Notices, the Asset Sale Optional Redemption Notices, the Subsequent Placement Optional Redemption Notices and the Change of Control Redemption
Notices, and each of the foregoing, individually, a “Redemption Notice.”
(nn)
“Redemption Premium” means 125%.
(oo)
“Redemption Prices” means, collectively, Event of Default Redemption Prices, the Change of Control Redemption Prices,
the Asset Sale Optional Redemption Prices, the Subsequent Placement Optional Redemption Prices and the Company Optional Redemption Prices,
and each of the foregoing, individually, a “Redemption Price.”
(pp)
“Registration Rights Agreement” means that certain registration rights agreement, dated as of the Closing Date, by
and among the Company and the initial holders of the Notes relating to, among other things, the registration of the resale of the Common
Stock issuable upon conversion of the Notes or otherwise pursuant to the terms of the Notes and exercise of the Warrants, as may be amended
from time to time.
(qq)
“SEC” means the United States Securities and Exchange Commission or the successor thereto.
(rr)
“Securities Purchase Agreement” means that certain securities purchase agreement, dated as of the Subscription Date,
by and among the Company and the initial holders of the Notes pursuant to which the Company issued the Notes, as may be amended from
time to time.
(ss)
“Security Agreement” shall have the meaning as set forth in the Securities Purchase Agreement.
(tt)
“Subscription Date” means September [__], 2023.
(uu)
“Subject Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.
(vv)
“Subsidiaries” means, as of any date of determination, collectively, all Current Subsidiaries and all New Subsidiaries,
and each of the foregoing, individually, a “Subsidiary.”
(ww)
“Successor Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from
or surviving any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental
Transaction shall have been entered into.
(xx)
“Trading Day” means, as applicable, (x) with respect to all price or trading volume determinations relating to the
Common Stock, any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading
market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded,
provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or
market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange
or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during
the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise designated as a Trading Day in writing by the Holder or
(y) with respect to all determinations other than price determinations relating to the Common Stock, any day on which The New York Stock
Exchange (or any successor thereto) is open for trading of securities.
(yy)
“VWAP” means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal
Market (or, if the Principal Market is not the principal trading market for such security, then on the principal securities exchange
or securities market on which such security is then traded), during the period beginning at 9:30 a.m., New York time, and ending at 4:00
p.m., New York time, as reported by Bloomberg through its “VAP” function (set to 09:30 start time and 16:00 end time) or,
if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic
bulletin board for such security during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m., New York time, as
reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the
average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in
The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices). If the VWAP cannot be calculated
for such security on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as
mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such
security, then such dispute shall be resolved in accordance with the procedures in Section 25. All such determinations shall be
appropriately adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction during such
period.
(zz)
“Warrants” has the meaning ascribed to such term in the Securities Purchase Agreement, and shall include all warrants
issued in exchange therefor or replacement thereof.
33.
DISCLOSURE. Upon delivery by the Company to the Holder (or receipt by the Company from the Holder) of any notice in accordance
with the terms of this Note, unless the Company has in good faith determined that the matters relating to such notice do not constitute
material, non-public information relating to the Company or any of its Subsidiaries, the Company shall on or prior to 9:00 am, New York
city time on the Business Day immediately following such notice delivery date, publicly disclose such material, non-public information
on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material, non-public information
relating to the Company or any of its Subsidiaries, the Company so shall indicate to the Holder explicitly in writing in such notice
(or immediately upon receipt of notice from the Holder, as applicable), and in the absence of any such written indication in such notice
(or notification from the Company immediately upon receipt of notice from the Holder), the Holder shall be entitled to presume that information
contained in the notice does not constitute material, non-public information relating to the Company or any of its Subsidiaries. Nothing
contained in this Section 34 shall limit any obligations of the Company, or any rights of the Holder, under Section 4(i) of the
Securities Purchase Agreement.
34.
ABSENCE OF TRADING AND DISCLOSURE RESTRICTIONS. The Company acknowledges and agrees that the Holder is not a fiduciary or agent
of the Company and that the Holder shall have no obligation to (a) maintain the confidentiality of any information provided by the Company
or (b) refrain from trading any securities while in possession of such information in the absence of a written non-disclosure agreement
signed by an officer of the Holder that explicitly provides for such confidentiality and trading restrictions. In the absence of such
an executed, written non-disclosure agreement, the Company acknowledges that the Holder may freely trade in any securities issued by
the Company, may possess and use any information provided by the Company in connection with such trading activity, and may disclose any
such information to any third party.
[signature
page follows]
IN
WITNESS WHEREOF, the Company has caused this Note to be duly executed as of the Issuance Date set out above.
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EVOFEM
BIOSCIENCES, INC. |
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By: |
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Name: |
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Title: |
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Senior
Convertible Note - Signature Page
EXHIBIT
I
EVOFEM
BIOSCIENCES, INC.
CONVERSION
NOTICE
Reference
is made to the Senior Subordinated Convertible Note (the “Note”) issued to the undersigned by Evofem Biosciences,
Inc., a Delaware corporation (the “Company”). In accordance with and pursuant to the Note, the undersigned hereby
elects to convert the Conversion Amount (as defined in the Note) of the Note indicated below into shares of Common Stock, $0.0001 par
value per share (the “Common Stock”), of the Company, as of the date specified below. Capitalized terms not defined
herein shall have the meaning as set forth in the Note.
| Date
of Conversion: |
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| Aggregate
Principal to be converted: |
|
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| Aggregate
accrued and unpaid Interest and accrued and unpaid Late Charges with respect to such portion of the Aggregate Principal and such
Aggregate Interest to be converted: |
|
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AGGREGATE
CONVERSION AMOUNT
TO
BE CONVERTED: |
|
Please
confirm the following information:
| Conversion
Price: |
|
| |
|
| Number
of shares of Common Stock to be issued: |
|
☐
If this Conversion Notice is being delivered with respect to an Alternate Conversion, check here if Holder is electing to use the following
Alternate Conversion Price:____________
Please
issue the Common Stock into which the Note is being converted to Holder, or for its benefit, as follows:
| ☐ |
Check here if requesting delivery as a certificate to the following name and to the following address: |
| ☐ |
Check here if requesting delivery
by Deposit/Withdrawal at Custodian as follows: |
| DTC
Participant: |
|
| DTC
Number: |
|
| Account
Number: |
|
| Date:
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_____________
____, _______ |
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| Name
of Registered Holder |
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| By: |
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| Name:
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| Title: |
|
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E-mail
Address:
Exhibit
II
ACKNOWLEDGMENT
The
Company hereby (a) acknowledges this Conversion Notice, (b) certifies that the above indicated number of shares of Common Stock [are][are
not] eligible to be resold by the Holder either (i) pursuant to Rule 144 (subject to the Holder’s execution and delivery to the
Company of a customary 144 representation letter) or (ii) an effective and available registration statement and (c) hereby directs _________________
to issue the above indicated number of shares of Common Stock in accordance with the Transfer Agent Instructions dated _____________,
20__ from the Company and acknowledged and agreed to by ________________________.
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EVOFEM
BIOSCIENCES, INC. |
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By:
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Name: |
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Title: |
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Exhibit
10.3
[FORM
OF SERIES [A][B PREPAID] WARRANT]
NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO
THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES. THE NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 1(a)
OF THIS WARRANT.
Evofem
Biosciences, Inc.
Series
[A][B Prepaid] Warrant To Purchase Common Stock
Date
of Issuance: September [__], 2023 (“Issuance Date”)
Evofem
Biosciences, Inc., a Delaware corporation (the “Company”), hereby certifies that, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, [______], the registered holder hereof or its permitted assigns (the “Holder”),
is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then in effect,
upon exercise of this Series [A][B Prepaid] Warrant to Purchase Common Stock (including any Series [A][B Prepaid] Warrants to Purchase
Common Stock issued in exchange, transfer or replacement hereof, the “Warrant”), at any time or times on or after
the Issuance Date, but not after 11:59 p.m., New York time, on the Expiration Date (as defined below), [__] (subject to adjustment as
provided herein) fully paid and non-assessable shares of Common Stock (as defined below) (the “Warrant Shares”, and
such number of Warrant Shares, the “Warrant Number”). Except as otherwise defined herein, capitalized terms in this
Warrant shall have the meanings set forth in Section 19. This Warrant is one of the Warrants to Purchase Common Stock (the “SPA
Warrants”) issued pursuant to Section 1 of that certain Securities Purchase Agreement, dated as of September [__], 2023 (the
“Subscription Date”), by and among the Company and the investors (the “Buyers”) referred to therein,
as amended from time to time (the “Securities Purchase Agreement”).
[INSERT
IN SERIES B WARRANT ONLY: Notwithstanding anything herein to the contrary, the Aggregate Exercise Price (as defined below) of this
Warrant, except for a nominal exercise price of $0.001 per Warrant Share, was pre-funded to the Company on or prior to the initial Issuance
Date and, consequently, no additional consideration (other than the nominal exercise price of $0.001 per Warrant Share) shall be required
to be paid by the Holder to any Person to effect any exercise of this Warrant.]
1.
EXERCISE OF WARRANT.
(a)
Mechanics of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in
Section 1(f)), this Warrant may be exercised by the Holder on any day on or after the Issuance Date (an “Exercise Date”),
in whole or in part, by delivery (whether via facsimile or otherwise) of a written notice, in the form attached hereto as Exhibit
A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant. Within one (1) Trading
Day following an exercise of this Warrant as aforesaid, the Holder shall deliver payment to the Company of an amount equal to the Exercise
Price in effect on the date of such exercise multiplied by the number of Warrant Shares as to which this Warrant was so exercised (the
“Aggregate Exercise Price”) in cash or via wire transfer of immediately available funds if the Holder did not notify
the Company in such Exercise Notice that such exercise was made pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder
shall not be required to deliver the original of this Warrant in order to effect an exercise hereunder. Execution and delivery of an
Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original of this
Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. Execution and delivery
of an Exercise Notice for all of the then-remaining Warrant Shares shall have the same effect as cancellation of the original of this
Warrant after delivery of the Warrant Shares in accordance with the terms hereof. On or before the first (1st) Trading Day
following the date on which the Company has received an Exercise Notice, the Company shall transmit by facsimile or electronic mail an
acknowledgment of confirmation of receipt of such Exercise Notice, in the form attached hereto as Exhibit B, to the Holder
and the Company’s transfer agent (the “Transfer Agent”), which confirmation shall constitute an instruction
to the Transfer Agent to process such Exercise Notice in accordance with the terms herein. On or before the second (2nd) Trading Day
following the date on which the Company has received such Exercise Notice (or such earlier date as required pursuant to the 1934 Act
or other applicable law, rule or regulation for the settlement of a trade of such Warrant Shares initiated on the applicable Exercise
Date), the Company shall (X) provided that the Transfer Agent is participating in The Depository Trust Company (“DTC”)
Fast Automated Securities Transfer Program, upon the request of the Holder, credit such aggregate number of shares of Common Stock to
which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through
its Deposit/Withdrawal at Custodian system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer
Program (“FAST”), upon the request of the Holder, issue and deliver (via reputable overnight courier) to the address
as specified in the Exercise Notice, a certificate, registered in the name of the Holder or its designee, for the number of shares of
Common Stock to which the Holder shall be entitled pursuant to such exercise. Upon delivery of an Exercise Notice, the Holder shall be
deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been
exercised, irrespective of the date such Warrant Shares are credited to the Holder’s DTC account or the date of delivery of the
certificates evidencing such Warrant Shares (as the case may be). If this Warrant is submitted in connection with any exercise pursuant
to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of
Warrant Shares being acquired upon an exercise and upon surrender of this Warrant to the Company by the Holder, then, at the request
of the Holder, the Company shall as soon as practicable and in no event later than two (2) Business Days after any exercise and at its
own expense, issue and deliver to the Holder (or its designee) a new Warrant (in accordance with Section 7(d)) representing the right
to purchase the number of Warrant Shares purchasable immediately prior to such exercise under this Warrant, less the number of Warrant
Shares with respect to which this Warrant is exercised. No fractional shares of Common Stock are to be issued upon the exercise of this
Warrant, but rather the number of shares of Common Stock to be issued shall be rounded up to the nearest whole number. The Company shall
pay any and all transfer, stamp, issuance and similar taxes, costs and expenses (including, without limitation, fees and expenses of
the Transfer Agent) that may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant. Notwithstanding
the foregoing, except in the case where an exercise of this Warrant is validly made pursuant to a Cashless Exercise, the Company’s
failure to deliver Warrant Shares to the Holder on or prior to the later of (i) two (2) Trading Days after receipt of the applicable
Exercise Notice (or such earlier date as required pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement
of a trade of such Warrant Shares initiated on the applicable Exercise Date) and (ii) one (1) Trading Day after the Company’s receipt
of the Aggregate Exercise Price (or valid notice of a Cashless Exercise) (such later date, the “Share Delivery Date”)
shall not be deemed to be a breach of this Warrant. Notwithstanding anything to the contrary contained in this Warrant or the Registration
Rights Agreement, after the effective date of the Registration Statement (as defined in the Registration Rights Agreement) and prior
to the Holder’s receipt of the notice of a Grace Period (as defined in the Registration Rights Agreement), the Company shall cause
the Transfer Agent to deliver unlegended shares of Common Stock to the Holder (or its designee) in connection with any sale of Registrable
Securities (as defined in the Registration Rights Agreement) with respect to which the Holder has entered into a contract for sale, and
delivered a copy of the prospectus included as part of the particular Registration Statement to the extent applicable, and for which
the Holder has not yet settled. From the Issuance Date through and including the Expiration Date, the Company shall maintain a transfer
agent that participates in FAST.
(b)
Exercise Price. For purposes of this Warrant, “Exercise Price” means $0.13, subject to adjustment as provided
herein.
(c)
Company’s Failure to Timely Deliver Securities. If the Company shall fail, for any reason or for no reason, on or prior
to the Share Delivery Date, either (I) if the Transfer Agent is not participating in FAST, to issue and deliver to the Holder (or its
designee) a certificate for the number of Warrant Shares to which the Holder is entitled and register such Warrant Shares on the Company’s
share register or, if the Transfer Agent is participating in FAST, to credit the balance account of the Holder or the Holder’s
designee with DTC for such number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise of this Warrant
(as the case may be) or (II) if a Registration Statement covering the resale of the Warrant Shares that are the subject of the Exercise
Notice (the “Unavailable Warrant Shares”) is not available for the resale of such Unavailable Warrant Shares and the
Company fails to promptly, but in no event later than as required pursuant to the Registration Rights Agreement (x) so notify the Holder
and (y) deliver the Warrant Shares electronically without any restrictive legend by crediting such aggregate number of Warrant Shares
to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through
its Deposit/Withdrawal At Custodian system (the event described in the immediately foregoing clause (II) is hereinafter referred as a
“Notice Failure” and together with the event described in clause (I) above, a “Delivery Failure”),
then, in addition to all other remedies available to the Holder, (X) the Company shall pay in cash to the Holder on each day after the
Share Delivery Date and during such Delivery Failure an amount equal to 2% of the product of (A) the sum of the number of shares of Common
Stock not issued to the Holder on or prior to the Share Delivery Date and to which the Holder is entitled, multiplied by (B) any trading
price of the Common Stock selected by the Holder in writing as in effect at any time during the period beginning on the applicable Exercise
Date and ending on the applicable Share Delivery Date, and (Y) the Holder, upon written notice to the Company, may void its Exercise
Notice with respect to, and retain or have returned, as the case may be, any portion of this Warrant that has not been exercised pursuant
to such Exercise Notice; provided that the voiding of an Exercise Notice shall not affect the Company’s obligations to make any
payments which have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise. In addition to the foregoing,
if on or prior to the Share Delivery Date either (I) the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer
Program, the Company shall fail to issue and deliver to the Holder (or its designee) a certificate and register such shares of Common
Stock on the Company’s share register or, if the Transfer Agent is participating in the DTC Fast Automated Securities Transfer
Program, the Transfer Agent shall fail to credit the balance account of the Holder or the Holder’s designee with DTC for the number
of shares of Common Stock to which the Holder is entitled upon the Holder’s exercise hereunder or pursuant to the Company’s
obligation pursuant to clause (ii) below or (II) a Notice Failure occurs, and if on or after such Share Delivery Date the Holder acquires
(in an open market transaction, stock loan or otherwise) shares of Common Stock corresponding to all or any portion of the number of
shares of Common Stock issuable upon such exercise that the Holder is entitled to receive from the Company and has not received from
the Company in connection with such Delivery Failure or Notice Failure, as applicable (a “Buy-In”), then, in addition
to all other remedies available to the Holder, the Company shall, within two (2) Business Days after the Holder’s request and in
the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase price (including
brokerage commissions, stock loan costs and other out-of-pocket expenses, if any) for the shares of Common Stock so acquired (including,
without limitation, by any other Person in respect, or on behalf, of the Holder) (the “Buy-In Price”), at which point
the Company’s obligation to so issue and deliver such certificate (and to issue such shares of Common Stock) or credit the balance
account of such Holder or such Holder’s designee, as applicable, with DTC for the number of Warrant Shares to which the Holder
is entitled upon the Holder’s exercise hereunder (as the case may be) (and to issue such Warrant Shares) shall terminate, or (ii)
promptly honor its obligation to so issue and deliver to the Holder a certificate or certificates representing such Warrant Shares or
credit the balance account of such Holder or such Holder’s designee, as applicable, with DTC for the number of Warrant Shares to
which the Holder is entitled upon the Holder’s exercise hereunder (as the case may be) and pay cash to the Holder in an amount
equal to the excess (if any) of the Buy-In Price over the product of (A) such number of Warrant Shares multiplied by (B) the lowest Closing
Sale Price of the Common Stock on any Trading Day during the period commencing on the date of the applicable Exercise Notice and ending
on the date of such issuance and payment under this clause (ii) (the “Buy-In Payment Amount”). Nothing shall limit
the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity, including, without limitation,
a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates
representing shares of Common Stock (or to electronically deliver such shares of Common Stock) upon the exercise of this Warrant as required
pursuant to the terms hereof. While this Warrant is outstanding, the Company shall cause its transfer agent to participate in FAST. In
addition to the foregoing rights, (i) if the Company fails to deliver the applicable number of Warrant Shares upon an exercise pursuant
to Section 1 by the applicable Share Delivery Date, then the Holder shall have the right to rescind such exercise in whole or in part
and retain and/or have the Company return, as the case may be, any portion of this Warrant that has not been exercised pursuant to such
Exercise Notice; provided that the rescission of an exercise shall not affect the Company’s obligation to make any payments that
have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise, and (ii) if a registration statement covering
the issuance or resale of the Warrant Shares that are subject to an Exercise Notice is not available for the issuance or resale, as applicable,
of such Warrant Shares and the Holder has submitted an Exercise Notice prior to receiving notice of the non-availability of such registration
statement and the Company has not already delivered the Warrant Shares underlying such Exercise Notice electronically without any restrictive
legend by crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s
or its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system, the Holder shall have the option,
by delivery of notice to the Company, to (x) rescind such Exercise Notice in whole or in part and retain or have returned, as the case
may be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice; provided that the rescission of an
Exercise Notice shall not affect the Company’s obligation to make any payments that have accrued prior to the date of such notice
pursuant to this Section 1(c) or otherwise, and/or (y) switch some or all of such Exercise Notice from a cash exercise to a Cashless
Exercise.
(d)
Cashless Exercise. Notwithstanding anything contained herein to the contrary (other than Section 1(f) below), [INSERT IN SERIES
A WARRANT ONLY: if at the time of exercise hereof a Registration Statement (as defined in the Registration Rights Agreement) is not effective
(or the prospectus contained therein is not available for use) for the resale by the Holder of all of the Warrant Shares, then] the Holder
may, in its sole discretion, exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated
to be made to the Company upon such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such exercise
the “Net Number” of Warrant Shares determined according to the following formula (a “Cashless Exercise”):
| Net
Number = (A x B) - (A x C) |
| B |
For
purposes of the foregoing formula:
A=
the total number of shares with respect to which this Warrant is then being exercised.
B
= as elected by the Holder: (i) the VWAP of the shares of Common Stock on the Trading Day immediately preceding the date of the applicable
Exercise Notice if such Exercise Notice is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not a Trading
Day or (2) both executed and delivered pursuant to Section 1(a) hereof on a Trading Day prior to the opening of “regular trading
hours” (as defined in Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii)
at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Exercise Notice
or (z) the Bid Price of the shares of Common Stock as of the time of the Holder’s execution of the applicable Exercise Notice if
such Exercise Notice is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter
pursuant to Section 1(a) hereof, or (iii) the Closing Sale Price of the Common Stock on the date of the applicable Exercise Notice if
the date of such Exercise Notice is a Trading Day and such Exercise Notice is both executed and delivered pursuant to Section 1(a) hereof
after the close of “regular trading hours” on such Trading Day.
C
= [INSERT IN SERIES A WARRANT: the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.][INSERT
IN SERIES B WARRANT: $0.001 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations and similar events).]
If
the Warrant Shares are issued in a Cashless Exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the
1933 Act, the Warrant Shares take on the registered characteristics of the Warrants being exercised. For purposes of Rule 144(d) promulgated
under the 1933 Act, as in effect on the Subscription Date, it is intended that the Warrant Shares issued in a Cashless Exercise shall
be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the
date this Warrant was originally issued pursuant to the Securities Purchase Agreement.
(e)
Disputes. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the number of
Warrant Shares to be issued pursuant to the terms hereof, the Company shall promptly issue to the Holder the number of Warrant Shares
that are not disputed and resolve such dispute in accordance with Section 15.
(f)
Limitations on Exercises. The Company shall not effect the exercise of any portion of this Warrant, and the Holder shall not have
the right to exercise any portion of this Warrant, pursuant to the terms and conditions of this Warrant and any such exercise shall be
null and void and treated as if never made, to the extent that after giving effect to such exercise, the Holder together with the other
Attribution Parties collectively would beneficially own in excess of 4.99% (the “Maximum Percentage”) of the shares
of Common Stock outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number
of shares of Common Stock beneficially owned by the Holder and the other Attribution Parties shall include the number of shares of Common
Stock held by the Holder and all other Attribution Parties plus the number of shares of Common Stock issuable upon exercise of this Warrant
with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock which would be issuable
upon (A) exercise of the remaining, unexercised portion of this Warrant beneficially owned by the Holder or any of the other Attribution
Parties and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company (including, without
limitation, any convertible notes or convertible preferred stock or warrants, including other SPA Warrants) beneficially owned by the
Holder or any other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained in this
Section 1(f)(i). For purposes of this Section 1(f)(i), beneficial ownership shall be calculated in accordance with Section 13(d) of the
1934 Act. For purposes of determining the number of outstanding shares of Common Stock the Holder may acquire upon the exercise of this
Warrant without exceeding the Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected
in (x) the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other
public filing with the SEC, as the case may be, (y) a more recent public announcement by the Company or (z) any other written notice
by the Company or the Transfer Agent, if any, setting forth the number of shares of Common Stock outstanding (the “Reported
Outstanding Share Number”). If the Company receives an Exercise Notice from the Holder at a time when the actual number of
outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Company shall (i) notify the Holder in writing
of the number of shares of Common Stock then outstanding and, to the extent that such Exercise Notice would otherwise cause the Holder’s
beneficial ownership, as determined pursuant to this Section 1(f)(i), to exceed the Maximum Percentage, the Holder must notify the Company
of a reduced number of Warrant Shares to be acquired pursuant to such Exercise Notice (the number of shares by which such purchase is
reduced, the “Reduction Shares”) and (ii) as soon as reasonably practicable, the Company shall return to the Holder
any exercise price paid by the Holder for the Reduction Shares. For any reason at any time, upon the written or oral request of the Holder,
the Company shall within one (1) Business Day confirm orally and in writing or by electronic mail to the Holder the number of shares
of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect
to the conversion or exercise of securities of the Company, including this Warrant, by the Holder and any other Attribution Party since
the date as of which the Reported Outstanding Share Number was reported. In the event that the issuance of shares of Common Stock to
the Holder upon exercise of this Warrant results in the Holder and the other Attribution Parties being deemed to beneficially own, in
the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock (as determined under Section 13(d)
of the 1934 Act), the number of shares so issued by which the Holder’s and the other Attribution Parties’ aggregate beneficial
ownership exceeds the Maximum Percentage (the “Excess Shares”) shall be deemed null and void and shall be cancelled
ab initio, and the Holder shall not have the power to vote or to transfer the Excess Shares. As soon as reasonably practicable after
the issuance of the Excess Shares has been deemed null and void, the Company shall return to the Holder the exercise price paid by the
Holder for the Excess Shares. Upon delivery of a written notice to the Company, the Holder may from time to time increase (with such
increase not effective until the sixty-first (61st) day after delivery of such notice) or decrease the Maximum Percentage
to any other percentage not in excess of 9.99% as specified in such notice; provided that (i) any such increase in the Maximum Percentage
will not be effective until the sixty-first (61st) day after such notice is delivered to the Company and (ii) any such increase
or decrease will apply only to the Holder and the other Attribution Parties and not to any other holder of SPA Warrants that is not an
Attribution Party of the Holder. For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of this Warrant in
excess of the Maximum Percentage shall not be deemed to be beneficially owned by the Holder for any purpose including for purposes of
Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No prior inability to exercise this Warrant pursuant to this paragraph shall have
any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of exercisability. The
provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this
Section 1(f)(i) to the extent necessary to correct this paragraph or any portion of this paragraph which may be defective or inconsistent
with the intended beneficial ownership limitation contained in this Section 1(f)(i) or to make changes or supplements necessary or desirable
to properly give effect to such limitation. The limitation contained in this paragraph may not be waived and shall apply to a successor
holder of this Warrant.
(g)
Reservation of Shares.
(i)
Required Reserve Amount. So long as this Warrant remains outstanding, the Company shall at all times keep reserved for issuance
under this Warrant a number of shares of Common Stock at least equal to the maximum number of shares of Common Stock as shall be necessary
to satisfy the Company’s obligation to issue shares of Common Stock under the SPA Warrants then outstanding (without regard to
any limitations on exercise) (the “Required Reserve Amount”); provided that at no time shall the number of shares
of Common Stock reserved pursuant to this Section 1(g)(i) be reduced other than proportionally in connection with any exercise or redemption
of SPA Warrants or such other event covered by Section 2(a) below. The Required Reserve Amount (including, without limitation, each increase
in the number of shares so reserved) shall be allocated pro rata among the holders of the SPA Warrants based on number of shares of Common
Stock issuable upon exercise of SPA Warrants held by each holder on the Closing Date (as defined in the Securities Purchase Agreement)
(without regard to any limitations on exercise) or increase in the number of reserved shares, as the case may be (the “Authorized
Share Allocation”). In the event that a holder shall sell or otherwise transfer any of such holder’s SPA Warrants, each
transferee shall be allocated a pro rata portion of such holder’s Authorized Share Allocation. Any shares of Common Stock reserved
and allocated to any Person which ceases to hold any SPA Warrants shall be allocated to the remaining holders of SPA Warrants, pro rata
based on the number of shares of Common Stock issuable upon exercise of the SPA Warrants then held by such holders (without regard to
any limitations on exercise).
(ii)
Insufficient Authorized Shares. If, notwithstanding Section 1(g)(i) above, and not in limitation thereof, at any time while any
of the SPA Warrants remain outstanding, the Company does not have a sufficient number of authorized and unreserved shares of Common Stock
to satisfy its obligation to reserve the Required Reserve Amount (an “Authorized Share Failure”), then the Company
shall immediately take all action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient
to allow the Company to reserve the Required Reserve Amount for all the SPA Warrants then outstanding. Without limiting the generality
of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later
than sixty (60) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for
the approval of an increase in the number of authorized shares of Common Stock, a reverse split or other corporate action. In connection
with such meeting, the Company shall provide each stockholder with a proxy statement and shall use its best efforts to solicit its stockholders’
approval of such increase in authorized shares of Common Stock and to cause its board of directors to recommend to the stockholders that
they approve such proposal. Notwithstanding the foregoing, if any such time of an Authorized Share Failure, the Company is able to obtain
the written consent of a majority of the shares of its issued and outstanding shares of Common Stock to approve the increase in the number
of authorized shares of Common Stock, the Company may satisfy this obligation by obtaining such consent and submitting for filing with
the SEC an Information Statement on Schedule 14C. In the event that the Company is prohibited from issuing shares of Common Stock upon
an exercise of this Warrant due to the failure by the Company to have sufficient shares of Common Stock available out of the authorized
but unissued shares of Common Stock (such unavailable number of shares of Common Stock, the “Authorization Failure Shares”),
in lieu of delivering such Authorization Failure Shares to the Holder, the Company shall pay cash in exchange for the cancellation of
such portion of this Warrant exercisable into such Authorization Failure Shares at a price equal to the sum of (i) the product of (x)
such number of Authorization Failure Shares and (y) the greatest Closing Sale Price of the Common Stock on any Trading Day during the
period commencing on the date the Holder delivers the applicable Exercise Notice with respect to such Authorization Failure Shares to
the Company and ending on the date of such issuance and payment under this Section 1(g); and (ii) to the extent the Holder purchases
(in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of Authorization
Failure Shares, any Buy-In Payment Amount, brokerage commissions and other out-of-pocket expenses, if any, of the Holder incurred in
connection therewith. Nothing contained in this Section 1(g) shall limit any obligations of the Company under any provision of the Securities
Purchase Agreement.
2. ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant
are subject to adjustment from time to time as set forth in this Section 2.
(a)
Stock Dividends and Splits. Without limiting any provision of Section 2(b), Section 3 or Section 4, if the Company, at any time
on or after the Subscription Date, (i) pays a stock dividend on one or more classes of its then outstanding shares of Common Stock or
otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides (by any stock
split, stock dividend, recapitalization or otherwise) one or more classes of its then outstanding shares of Common Stock into a larger
number of shares or (iii) combines (by combination, reverse stock split or otherwise) one or more classes of its then outstanding shares
of Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction of which
the numerator shall be the number of shares of Common Stock outstanding immediately before such event and of which the denominator shall
be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this
paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend
or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective
date of such subdivision or combination. If any event requiring an adjustment under this paragraph occurs during the period that an Exercise
Price is calculated hereunder, then the calculation of such Exercise Price shall be adjusted appropriately to reflect such event.
(b)
[INSERT IN SERIES A WARRANT ONLY: Adjustment Upon Issuance of Shares of Common Stock. If and whenever on or after the Subscription
Date, the Company grants, issues or sells (or enters into any agreement to grant, issue or sell), or in accordance with this Section
2 is deemed to have granted, issued or sold, any shares of Common Stock (including the issuance or sale of shares of Common Stock owned
or held by or for the account of the Company, but excluding any Excluded Securities granted issued or sold or deemed to have been granted
issued or sold) for a consideration per share (the “New Issuance Price”) less than a price equal to the Exercise Price
in effect immediately prior to such granting, issuance or sale or deemed granting, issuance or sale (such Exercise Price then in effect
is referred to herein as the “Applicable Price”) (the foregoing a “Dilutive Issuance”), then immediately
after such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an amount equal to the New Issuance Price. For all
purposes of the foregoing (including, without limitation, determining the adjusted Exercise Price and the New Issuance Price under this
Section 2(b)), the following shall be applicable:
(i)
Issuance of Options. If the Company in any manner grants, issues or sells (or enters into any agreement to grant, issue or sell)
any Options and the lowest price per share for which one share of Common Stock is at any time issuable upon the exercise of any such
Option or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise
pursuant to the terms thereof is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and
to have been issued and sold by the Company at the time of the granting, issuance or sale (or the time of execution of such agreement
to grant, issue or sell, as applicable) of such Option for such price per share. For purposes of this Section 2(b)(i), the “lowest
price per share for which one share of Common Stock is at any time issuable upon the exercise of any such Options or upon conversion,
exercise or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise pursuant to the terms thereof”
shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company
with respect to any one share of Common Stock upon the granting, issuance or sale (or pursuant to the agreement to grant, issue or sell,
as applicable) of such Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible Security issuable
upon exercise of such Option or otherwise pursuant to the terms thereof and (y) the lowest exercise price set forth in such Option for
which one share of Common Stock is issuable (or may become issuable assuming all possible market conditions) upon the exercise of any
such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise
pursuant to the terms thereof minus (2) the sum of all amounts paid or payable to the holder of such Option (or any other Person) upon
the granting, issuance or sale (or the agreement to grant, issue or sell, as applicable) of such Option, upon exercise of such Option
and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option or otherwise pursuant to
the terms thereof plus the value of any other consideration received or receivable by, or benefit conferred on, the holder of such Option
(or any other Person). Except as contemplated below, no further adjustment of the Exercise Price shall be made upon the actual issuance
of such shares of Common Stock or of such Convertible Securities upon the exercise of such Options or otherwise pursuant to the terms
of or upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities.
(ii)
Issuance of Convertible Securities. If the Company in any manner issues or sells (or enters into any agreement to issue or sell)
any Convertible Securities and the lowest price per share for which one share of Common Stock is at any time issuable upon the conversion,
exercise or exchange thereof or otherwise pursuant to the terms thereof is less than the Applicable Price, then such share of Common
Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the issuance or sale (or the time
of execution of such agreement to issue or sell, as applicable) of such Convertible Securities for such price per share. For the purposes
of this Section 2(b)(ii), the “lowest price per share for which one share of Common Stock is at any time issuable upon the conversion,
exercise or exchange thereof or otherwise pursuant to the terms thereof” shall be equal to (1) the lower of (x) the sum of the
lowest amounts of consideration (if any) received or receivable by the Company with respect to one share of Common Stock upon the issuance
or sale (or pursuant to the agreement to issue or sell, as applicable) of the Convertible Security and upon conversion, exercise or exchange
of such Convertible Security or otherwise pursuant to the terms thereof and (y) the lowest conversion price set forth in such Convertible
Security for which one share of Common Stock is issuable (or may become issuable assuming all possible market conditions) upon conversion,
exercise or exchange thereof or otherwise pursuant to the terms thereof minus (2) the sum of all amounts paid or payable to the holder
of such Convertible Security (or any other Person) upon the issuance or sale (or the agreement to issue or sell, as applicable) of such
Convertible Security plus the value of any other consideration received or receivable by, or benefit conferred on, the holder of such
Convertible Security (or any other Person). Except as contemplated below, no further adjustment of the Exercise Price shall be made upon
the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities or otherwise
pursuant to the terms thereof, and if any such issuance or sale of such Convertible Securities is made upon exercise of any Options for
which adjustment of this Warrant has been or is to be made pursuant to other provisions of this Section 2(b), except as contemplated
below, no further adjustment of the Exercise Price shall be made by reason of such issuance or sale.
(iii)
Change in Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options, the additional consideration,
if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time (other than
proportional changes in conversion or exercise prices, as applicable, in connection with an event referred to in Section 2(a)), the Exercise
Price in effect at the time of such increase or decrease shall be adjusted to the Exercise Price which would have been in effect at such
time had such Options or Convertible Securities provided for such increased or decreased purchase price, additional consideration or
increased or decreased conversion rate, as the case may be, at the time initially granted, issued or sold . For purposes of this Section
2(b)(ii), if the terms of any Option or Convertible Security (including, without limitation, any Option or Convertible Security that
was outstanding as of the Subscription Date) are increased or decreased in the manner described in the immediately preceding sentence,
then such Option or Convertible Security and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof
shall be deemed to have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section 2(b) shall be
made if such adjustment would result in an increase of the Exercise Price then in effect.
(iv)
Calculation of Consideration Received. If any Option and/or Convertible Security and/or Adjustment Right is issued in connection
with the issuance or sale or deemed issuance or sale of any other securities of the Company (as determined by the Holder, the “Primary
Security”, and such Option and/or Convertible Security and/or Adjustment Right, the “Secondary Securities”),
together comprising one integrated transaction, (or one or more transactions if such issuances or sales or deemed issuances or sales
of securities of the Company either (A) have at least one investor or purchaser in common, (B) are consummated in reasonable proximity
to each other and/or (C) are consummated under the same plan of financing) the aggregate consideration per share of Common Stock with
respect to such Primary Security shall be deemed to be equal to the difference of (x) the lowest price per share for which one share
of Common Stock was issued (or was deemed to be issued pursuant to Section 2(b)(i) or 2(b)(ii) above, as applicable) in such integrated
transaction solely with respect to such Primary Security, minus (y) with respect to such Secondary Securities, the sum of (I) the Black
Scholes Consideration Value of each such Option, if any, (II) the fair market value (as determined by the Holder in good faith) or the
Black Scholes Consideration Value, as applicable, of such Adjustment Right, if any, and (III) the fair market value (as determined by
the Holder) of such Convertible Security, if any, in each case, as determined on a per share basis in accordance with this Section 2(b)(iv).
If any shares of Common Stock, Options or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the
consideration received therefor (for the purpose of determining the consideration paid for such Common Stock, Option or Convertible Security,
but not for the purpose of the calculation of the Black Scholes Consideration Value) will be deemed to be the net amount of consideration
received by the Company therefor. If any shares of Common Stock, Options or Convertible Securities are issued or sold for a consideration
other than cash, the amount of such consideration received by the Company (for the purpose of determining the consideration paid for
such Common Stock, Option or Convertible Security, but not for the purpose of the calculation of the Black Scholes Consideration Value)
will be the fair value of such consideration, except where such consideration consists of publicly traded securities, in which case the
amount of consideration received by the Company for such securities will be the arithmetic average of the VWAPs of such security for
each of the five (5) Trading Days immediately preceding the date of receipt. If any shares of Common Stock, Options or Convertible Securities
are issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving entity, the
amount of consideration therefor (for the purpose of determining the consideration paid for such Common Stock, Option or Convertible
Security, but not for the purpose of the calculation of the Black Scholes Consideration Value) will be deemed to be the fair value of
such portion of the net assets and business of the non-surviving entity as is attributable to such shares of Common Stock, Options or
Convertible Securities (as the case may be). The fair value of any consideration other than cash or publicly traded securities will be
determined jointly by the Company and the Holder. If such parties are unable to reach agreement within ten (10) days after the occurrence
of an event requiring valuation (the “Valuation Event”), the fair value of such consideration will be determined within
five (5) Trading Days after the tenth (10th) day following such Valuation Event by an independent, reputable appraiser jointly
selected by the Company and the Holder. The determination of such appraiser shall be final and binding upon all parties absent manifest
error and the fees and expenses of such appraiser shall be borne by the Company.
(v)
Record Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive
a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for or purchase
shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issuance or sale
of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution
or the date of the granting of such right of subscription or purchase (as the case may be).][INSERT IN SERIES B WARRANT ONLY: [Intentionally
Omitted]]
(c)
Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to this Section 2(a), the number of
Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such
adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate
Exercise Price in effect immediately prior to such adjustment (without regard to any limitations on exercise contained herein).
(d)
[INSERT IN SERIES A WARRANT ONLY: Holder’s Right of Alternative Exercise Price Following Issuance of Certain Options or Convertible
Securities. In addition to and not in limitation of the other provisions of this Section 2, if the Company in any manner issues or
sells or enters into any agreement to issue or sell, any Common Stock, Options or Convertible Securities (other than shares of Common
Stock issued pursuant to a Permitted Equity Line (as defined in the Securities Purchase Agreement)) (any such securities, “Variable
Price Securities”) after the Subscription Date that are issuable pursuant to such agreement or convertible into or exchangeable
or exercisable for shares of Common Stock at a price which varies or may vary with the market price of the shares of Common Stock, including
by way of one or more reset(s) to a fixed price, but exclusive of such formulations reflecting customary anti-dilution provisions (such
as share splits, share combinations, share dividends and similar transactions) (each of the formulations for such variable price being
herein referred to as, the “Variable Price”), the Company shall provide written notice thereof via facsimile and overnight
courier to the Holder on the date of such agreement and the issuance of such Convertible Securities or Options. From and after the date
the Company enters into such agreement or issues any such Variable Price Securities (other than pursuant to a Permitted Equity Line),
the Holder shall have the right, but not the obligation, in its sole discretion to substitute the Variable Price for the Exercise Price
upon exercise of this Warrant by designating in the Exercise Notice delivered upon any exercise of this Warrant that solely for purposes
of such exercise the Holder is relying on the Variable Price rather than the Exercise Price then in effect. The Holder’s election
to rely on a Variable Price for a particular exercise of this Warrant shall not obligate the Holder to rely on a Variable Price for any
future exercises of this Warrant.][INSERT IN SERIES B WARRANT ONLY: [Intentionally Omitted]]
(e)
[INSERT IN SERIES A WARRANT ONLY: Stock Combination Event Adjustment. If at any time and from time to time on or after the Issuance
Date there occurs any stock split, stock dividend, stock combination recapitalization or other similar transaction involving the Common
Stock (each, a “Stock Combination Event”, and such date thereof, the “Stock Combination Event Date”)
and the Event Market Price is less than the Exercise Price then in effect (after giving effect to the adjustment in clause 2(a) above),
then on the sixteenth (16th) Trading Day immediately following such Stock Combination Event, the Exercise Price then in effect on such
sixteenth (16th) Trading Day (after giving effect to the adjustment in clause 2(a) above) shall be reduced (but in no event increased)
to the Event Market Price. For the avoidance of doubt, if the adjustment in the immediately preceding sentence would otherwise result
in an increase in the Exercise Price hereunder, no adjustment shall be made.][INSERT IN SERIES B WARRANT ONLY: [Intentionally Omitted]]
(f)
[INSERT IN SERIES A WARRANT ONLY: Other Events. In the event that the Company (or any Subsidiary (as defined in the Securities
Purchase Agreement)) shall take any action to which the provisions hereof are not strictly applicable, or, if applicable, would not operate
to protect the Holder from dilution or if any event occurs of the type contemplated by the provisions of this Section 2 but not expressly
provided for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other
rights with equity features), then the Company’s board of directors shall in good faith determine and implement an appropriate
adjustment in the Exercise Price and the number of Warrant Shares (if applicable) so as to protect the rights of the Holder, provided
that no such adjustment pursuant to this Section 2(f) will increase the Exercise Price or decrease the number of Warrant Shares as otherwise
determined pursuant to this Section 2, provided further that if the Holder does not accept such adjustments as appropriately protecting
its interests hereunder against such dilution, then the Company’s board of directors and the Holder shall agree, in good faith,
upon an independent investment bank of nationally recognized standing to make such appropriate adjustments, whose determination shall
be final and binding absent manifest error and whose fees and expenses shall be borne by the Company.][INSERT IN SERIES B WARRANT ONLY:
[Intentionally Omitted]]
(g)
Calculations. All calculations under this Section 2 shall be made by rounding to the nearest cent or the nearest 1/100th
of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or
held by or for the account of the Company, and the disposition of any such shares shall be considered an issuance or sale of Common Stock.
(h)
Voluntary Adjustment By Company. Subject to the rules and regulations of the Principal Market, the Company may at any time during
the term of this Warrant, with the prior written consent of the Required Holders (as defined in the Securities Purchase Agreement), reduce
the then current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors of the Company.
(i)
Adjustments. If on any of the thirtieth (30th), sixtieth (60th), ninetieth (90th), one hundred
and/or twentieth (120th), and one hundred and eightieth (180th), as applicable, calendar day after the Closing
Date (the “Adjustment Date”), the Exercise Price then in effect is greater than the Market Price then in effect (the
“Adjustment Price”), on the Adjustment Date the Exercise Price shall automatically lower to the Adjustment Price.
3.
RIGHTS UPON DISTRIBUTION OF ASSETS . In addition to any adjustments pursuant to Section 2
above or Section 4(a) below, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire
its assets) to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution
of cash, stock or other securities, property, options, evidence of indebtedness or any other assets by way of a dividend, spin off, reclassification,
corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after
the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent
that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete
exercise of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including without limitation,
the Maximum Percentage) immediately before the date on which a record is taken for such Distribution, or, if no such record is taken,
the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided,
however, that to the extent that the Holder’s right to participate in any such Distribution would result in the Holder and the
other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution
to the extent of the Maximum Percentage (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result
of such Distribution (and beneficial ownership) to the extent of any such excess) and the portion of such Distribution shall be held
in abeyance for the benefit of the Holder until such time or times, if ever, as its right thereto would not result in the Holder and
the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such Distribution
(and any Distributions declared or made on such initial Distribution or on any subsequent Distribution held similarly in abeyance) to
the same extent as if there had been no such limitation).
4.
PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.
(a)
Purchase Rights. In addition to any adjustments pursuant to Sections 2 or 3 above, if at any time the Company grants, issues or
sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record
holders of any class of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the
terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the
number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations or restrictions
on exercise of this Warrant, including without limitation, the Maximum Percentage) immediately before the date on which a record is taken
for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the grant, issuance or sale of such Purchase Rights (provided, however, that to
the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder and the other Attribution
Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase Right to the extent of
the Maximum Percentage (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Purchase
Right (and beneficial ownership) to the extent of any such excess) and such Purchase Right to such extent shall be held in abeyance for
the benefit of the Holder until such time or times, if ever, as its right thereto would not result in the Holder and the other Attribution
Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such right (and any Purchase Right granted,
issued or sold on such initial Purchase Right or on any subsequent Purchase Right held similarly in abeyance) to the same extent as if
there had been no such limitation).
(b)
Fundamental Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity
assumes in writing all of the obligations of the Company under this Warrant and the other Transaction Documents (as defined in the Securities
Purchase Agreement) in accordance with the provisions of this Section 4(b) pursuant to written agreements in form and substance satisfactory
to the Holder and approved by the Holder prior to such Fundamental Transaction, including agreements to deliver to the Holder in exchange
for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to
this Warrant, including, without limitation, which is exercisable for a corresponding number of shares of capital stock equivalent to
the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise
of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such
shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction
and the value of such shares of capital stock, such adjustments to the number of shares of capital stock and such exercise price being
for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction)
and (ii) the Successor Entity (including its Parent Entity) is a publicly traded corporation whose common stock is quoted on or listed
for trading on an Eligible Market. Upon the consummation of each Fundamental Transaction, the Successor Entity shall succeed to, and
be substituted for (so that from and after the date of the applicable Fundamental Transaction, the provisions of this Warrant and the
other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every
right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents
with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation of each Fundamental Transaction,
the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at any time after
the consummation of the applicable Fundamental Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets
or other property (except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter))
issuable upon the exercise of this Warrant prior to the applicable Fundamental Transaction, such shares of publicly traded common stock
(or its equivalent) of the Successor Entity (including its Parent Entity) which the Holder would have been entitled to receive upon the
happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction
(without regard to any limitations on the exercise of this Warrant), as adjusted in accordance with the provisions of this Warrant. Notwithstanding
the foregoing, and without limiting Section 1(f) hereof, the Holder may elect, at its sole option, by delivery of written notice to the
Company to waive this Section 4(b) to permit the Fundamental Transaction without the assumption of this Warrant. In addition to and not
in substitution for any other rights hereunder, prior to the consummation of each Fundamental Transaction pursuant to which holders of
shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange for shares of Common Stock (a
“Corporate Event”), the Company shall make appropriate provision to insure that the Holder will thereafter have the
right to receive upon an exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction but prior
to the Expiration Date, in lieu of the shares of the Common Stock (or other securities, cash, assets or other property (except such items
still issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of the
Warrant prior to such Fundamental Transaction, such shares of stock, securities, cash, assets or any other property whatsoever (including
warrants or other purchase or subscription rights) which the Holder would have been entitled to receive upon the happening of the applicable
Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction (without regard to
any limitations on the exercise of this Warrant). Provision made pursuant to the preceding sentence shall be in a form and substance
reasonably satisfactory to the Holder.
(c)
Black Scholes Value.
(i)
Fundamental Transaction Redemption. Notwithstanding the foregoing and the provisions of Section 4(b) above, at the request of
the Holder delivered at any time commencing on the earliest to occur of (x) the public disclosure of any Fundamental Transaction, (y)
the consummation of any Fundamental Transaction and (z) the Holder first becoming aware of any Fundamental Transaction through the date
that is ninety (90) days after the public disclosure of the consummation of such Fundamental Transaction by the Company pursuant to a
Current Report on Form 8-K filed with the SEC, the Company or the Successor Entity (as the case may be) shall purchase this Warrant from
the Holder on the date of such request by paying to the Holder cash in an amount equal to the Black Scholes Value. Payment of such amounts
shall be made by the Company (or at the Company’s direction) to the Holder on or prior to the later of (x) the second (2nd)
Trading Day after the date of such request and (y) the date of consummation of such Fundamental Transaction; provided, however,
that, if such Fundamental Transaction is not within the Company’s control, including not approved by the Company’s Board
of Directors, the Holder shall only be entitled to receive from the Company or any Successor Entity, the same type or form of consideration
(and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to
the holders of Common Stock of the Company in connection with such Fundamental Transaction, whether that consideration be in the form
of cash, stock or any combination thereof, or whether the holders of Common Stock are given the choice to receive from among alternative
forms of consideration in connection with such Fundamental Transaction; provided, further, that if holders of Common Stock
of the Company are not offered or paid any consideration in such Fundamental Transaction, such holders of Common Stock will be deemed
to have received common stock of the Successor Entity (which Successor Entity may be the Company following such Fundamental Transaction)
in such Fundamental Transaction. Payment of such amounts shall be made by the Company (or at the Company’s direction) to the Holder
on or prior to the later of (x) the second (2nd) Trading Day after the date of such request and (y) the date of consummation
of such Fundamental Transaction.
(ii)
[INSERT IN SERIES A WARRANT ONLY: Event of Default Redemption. Notwithstanding the foregoing and the provisions of Section 4(b)
above, at the request of the Holder delivered at any time after the occurrence of an Event of Default (as defined in the Notes)(assuming
for such purpose that the Notes remain outstanding), the Company or the Successor Entity (as the case may be) shall purchase this Warrant
from the Holder on the date of such request by paying to the Holder cash in an amount equal to the Event of Default Black Scholes Value.][INSERT
IN SERIES B WARRANT ONLY: [Intentionally Omitted]]
(d)
Application. The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions and Corporate
Events and shall be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without regard to any limitations
on the exercise of this Warrant (provided that the Holder shall continue to be entitled to the benefit of the Maximum Percentage, applied
however with respect to shares of capital stock registered under the 1934 Act and thereafter receivable upon exercise of this Warrant
(or any such other warrant)).
5.
NONCIRCUMVENTION . The Company hereby covenants and agrees that the Company will not, by amendment
of its Certificate of Incorporation (as defined in the Securities Purchase Agreement), Bylaws (as defined in the Securities Purchase
Agreement) or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance or
sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant,
and will at all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the
rights of the Holder. Without limiting the generality of the foregoing, the Company (a) shall not increase the par value of any shares
of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, and (b) shall take all such actions
as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Common
Stock upon the exercise of this Warrant. Notwithstanding anything herein to the contrary, if after the sixty (60) calendar day anniversary
of the Issuance Date, the Holder is not permitted to exercise this Warrant in full for any reason (other than pursuant to restrictions
set forth in Section 1(f) hereof), the Company shall use its best efforts to promptly remedy such failure, including, without limitation,
obtaining such consents or approvals as necessary to permit such exercise into shares of Common Stock.
6.
WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder,
solely in its capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share
capital of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in
its capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold
consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance
or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder
of the Warrant Shares which it is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this
Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise)
or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding
this Section 6, the Company shall provide the Holder with copies of the same notices and other information given to the stockholders
of the Company generally, contemporaneously with the giving thereof to the stockholders.
7.
REISSUANCE OF WARRANTS.
(a)
Transfer of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the
Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as
the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less
than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section
7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred.
(b)
Lost, Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant (as to which a written certification and the indemnification contemplated below shall
suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company
in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company shall execute
and deliver to the Holder a new Warrant (in accordance with Section 7(d)) representing the right to purchase the Warrant Shares then
underlying this Warrant.
(c)
Exchangeable for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office
of the Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the
number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of
such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however, no warrants for fractional shares
of Common Stock shall be given.
(d)
Issuance of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such
new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right
to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a) or
Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying the other
new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant), (iii)
shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date, and (iv) shall have
the same rights and conditions as this Warrant.
8.
NOTICES. Whenever notice is required to be given under this Warrant, unless otherwise provided herein,
such notice shall be given in accordance with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder
with prompt written notice of all actions taken pursuant to this Warrant (other than the issuance of shares of Common Stock upon exercise
in accordance with the terms hereof), including in reasonable detail a description of such action and the reason therefor. Without limiting
the generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon each adjustment of the Exercise
Price and the number of Warrant Shares, setting forth in reasonable detail, and certifying, the calculation of such adjustment(s), (ii)
at least fifteen (15) days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend
or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of any Options, Convertible Securities
or rights to purchase stock, warrants, securities or other property to holders of shares of Common Stock or (C) for determining rights
to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be
made known to the public prior to or in conjunction with such notice being provided to the Holder, (iii) at least ten (10) Trading Days
prior to the consummation of any Fundamental Transaction and (iv) within one (1) Business Day of the occurrence of an Event of Default
(as defined in the Notes), setting forth in reasonable detail any material events with respect to such Event of Default and any efforts
by the Company to cure such Event of Default. To the extent that any notice provided hereunder constitutes, or contains, material, non-public
information regarding the Company or any of its Subsidiaries, the Company shall simultaneously file such notice with the SEC (as defined
in the Securities Purchase Agreement) pursuant to a Current Report on Form 8-K. If the Company or any of its Subsidiaries provides material
non-public information to the Holder that is not simultaneously filed in a Current Report on Form 8-K and the Holder has not agreed to
receive such material non-public information, the Company hereby covenants and agrees that the Holder shall not have any duty of confidentiality
to the Company, any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or agents with respect
to, or a duty to any of the foregoing not to trade on the basis of, such material non-public information. It is expressly understood
and agreed that the time of execution specified by the Holder in each Exercise Notice shall be definitive and may not be disputed or
challenged by the Company.
9.
DISCLOSURE. Upon delivery by the Company to the Holder (or receipt by the Company from the Holder)
of any notice in accordance with the terms of this Warrant, unless the Company has in good faith determined that the matters relating
to such notice do not constitute material, non-public information relating to the Company or any of its Subsidiaries, the Company shall
on or prior to 9:00 am, New York city time on the Business Day immediately following such notice delivery date, publicly disclose such
material, non-public information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains
material, non-public information relating to the Company or any of its Subsidiaries, the Company so shall indicate to the Holder explicitly
in writing in such notice (or immediately upon receipt of notice from the Holder, as applicable), and in the absence of any such written
indication in such notice (or notification from the Company immediately upon receipt of notice from the Holder), the Holder shall be
entitled to presume that information contained in the notice does not constitute material, non-public information relating to the Company
or any of its Subsidiaries. Nothing contained in this Section 9 shall limit any obligations of the Company, or any rights of the Holder,
under Section 4(i) of the Securities Purchase Agreement.
10.
ABSENCE OF TRADING AND DISCLOSURE RESTRICTIONS. The Company acknowledges and agrees that the Holder is not a fiduciary or agent
of the Company and that the Holder shall have no obligation to (a) maintain the confidentiality of any information provided by the Company
or (b) refrain from trading any securities while in possession of such information in the absence of a written non-disclosure agreement
signed by an officer of the Holder that explicitly provides for such confidentiality and trading restrictions. In the absence of such
an executed, written non-disclosure agreement, the Company acknowledges that the Holder may freely trade in any securities issued by
the Company, may possess and use any information provided by the Company in connection with such trading activity, and may disclose any
such information to any third party.
11.
AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant (other
than Section 1(f)) may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to
be performed by it, only if the Company has obtained the written consent of the Holder. No waiver shall be effective unless it is in
writing and signed by an authorized representative of the waiving party.
12.
SEVERABILITY. If any provision of this Warrant is prohibited by law or otherwise determined to be
invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable
shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability
of such provision shall not affect the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues
to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature,
invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal
obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties
will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s),
the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).
13.
GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with,
and all questions concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal
laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New
York. The Company hereby irrevocably waives personal service of process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof to the Company at the address set forth in Section 9(f) of the Securities Purchase Agreement
and agrees that such service shall constitute good and sufficient service of process and notice thereof. The Company hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other
legal action against the Company in any other jurisdiction to collect on the Company’s obligations to the Holder, to realize on
any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the Holder. THE
COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.
14.
CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and the
Holder and shall not be construed against any Person as the drafter hereof. The headings of this Warrant are for convenience of reference
and shall not form part of, or affect the interpretation of, this Warrant. Terms used in this Warrant but defined in the other Transaction
Documents shall have the meanings ascribed to such terms on the Closing Date in such other Transaction Documents unless otherwise consented
to in writing by the Holder.
15.
DISPUTE RESOLUTION.
(a)
Submission to Dispute Resolution.
(i)
In the case of a dispute relating to the Exercise Price, the Closing Sale Price, the Bid Price, [INSERT IN SERIES A WARRANT ONLY: Black
Scholes Consideration Value, Event of Default Black Scholes Value,] Black Scholes Value or fair market value or the arithmetic calculation
of the number of Warrant Shares (as the case may be) (including, without limitation, a dispute relating to the determination of any of
the foregoing), the Company or the Holder (as the case may be) shall submit the dispute to the other party via facsimile (A) if by the
Company, within two (2) Business Days after the occurrence of the circumstances giving rise to such dispute or (B) if by the Holder,
at any time after the Holder learned of the circumstances giving rise to such dispute. If the Holder and the Company are unable to promptly
resolve such dispute relating to such Exercise Price, such Closing Sale Price, such Bid Price, [INSERT IN SERIES A WARRANT ONLY: such
Black Scholes Consideration Value, Event of Default Black Scholes Value,] Black Scholes Value or such fair market value or such arithmetic
calculation of the number of Warrant Shares (as the case may be), at any time after the second (2nd) Business Day following
such initial notice by the Company or the Holder (as the case may be) of such dispute to the Company or the Holder (as the case may be),
then the Holder may, at its sole option, select an independent, reputable investment bank to resolve such dispute.
(ii)
The Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered in accordance
with the first sentence of this Section 15 and (B) written documentation supporting its position with respect to such dispute, in each
case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following the date on which the
Holder selected such investment bank (the “Dispute Submission Deadline”) (the documents referred to in the immediately
preceding clauses (A) and (B) are collectively referred to herein as the “Required Dispute Documentation”) (it being
understood and agreed that if either the Holder or the Company fails to so deliver all of the Required Dispute Documentation by the Dispute
Submission Deadline, then the party who fails to so submit all of the Required Dispute Documentation shall no longer be entitled to (and
hereby waives its right to) deliver or submit any written documentation or other support to such investment bank with respect to such
dispute and such investment bank shall resolve such dispute based solely on the Required Dispute Documentation that was delivered to
such investment bank prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by both the Company and the Holder
or otherwise requested by such investment bank, neither the Company nor the Holder shall be entitled to deliver or submit any written
documentation or other support to such investment bank in connection with such dispute (other than the Required Dispute Documentation).
(iii)
The Company and the Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company and the
Holder of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline. The fees and expenses
of such investment bank shall be borne solely by the Company, and such investment bank’s resolution of such dispute shall be final
and binding upon all parties absent manifest error.
(b)
Miscellaneous. [INSERT IN SERIES A WARRANT ONLY: The Company expressly acknowledges and agrees that (i) this Section 15 constitutes
an agreement to arbitrate between the Company and the Holder (and constitutes an arbitration agreement) under the rules then in effect
under § 7501, et seq. of the New York Civil Practice Law and Rules (“CPLR”) and that the Holder is authorized
to apply for an order to compel arbitration pursuant to CPLR § 7503(a) in order to compel compliance with this Section 15, (ii)
a dispute relating to the Exercise Price includes, without limitation, disputes as to (A) whether an issuance or sale or deemed issuance
or sale of Common Stock occurred under Section 2(b), (B) the consideration per share at which an issuance or deemed issuance of Common
Stock occurred, (C) whether any issuance or sale or deemed issuance or sale of Common Stock was an issuance or sale or deemed issuance
or sale of Excluded Securities, (D) whether an agreement, instrument, security or the like constitutes and Option or Convertible Security
and (E) whether a Dilutive Issuance occurred, (iii) the terms of this Warrant and each other applicable Transaction Document shall serve
as the basis for the selected investment bank’s resolution of the applicable dispute, such investment bank shall be entitled (and
is hereby expressly authorized) to make all findings, determinations and the like that such investment bank determines are required to
be made by such investment bank in connection with its resolution of such dispute (including, without limitation, determining (A) whether
an issuance or sale or deemed issuance or sale of Common Stock occurred under Section 2(b), (B) the consideration per share at which
an issuance or deemed issuance of Common Stock occurred, (C) whether any issuance or sale or deemed issuance or sale of Common Stock
was an issuance or sale or deemed issuance or sale of Excluded Securities, (D) whether an agreement, instrument, security or the like
constitutes and Option or Convertible Security and (E) whether a Dilutive Issuance occurred) and in resolving such dispute such investment
bank shall apply such findings, determinations and the like to the terms of this Warrant and any other applicable Transaction Documents,
(iv) the Holder (and only the Holder), in its sole discretion, shall have the right to submit any dispute described in this Section 15
to any state or federal court sitting in The City of New York, Borough of Manhattan in lieu of utilizing the procedures set forth in
this Section 15 and (v) nothing in this Section 15 shall limit the Holder from obtaining any injunctive relief or other equitable remedies
(including, without limitation, with respect to any matters described in this Section 15).][INSERT IN SERIES B WARRANT ONLY: The Company
expressly acknowledges and agrees that (i) this Section 15 constitutes an agreement to arbitrate between the Company and the Holder (and
constitutes an arbitration agreement) under the rules then in effect under § 7501, et seq. of the New York Civil Practice Law and
Rules (“CPLR”) and that the Holder is authorized to apply for an order to compel arbitration pursuant to CPLR §
7503(a) in order to compel compliance with this Section 15, (ii) the terms of this Warrant and each other applicable Transaction Document
shall serve as the basis for the selected investment bank’s resolution of the applicable dispute, such investment bank shall be
entitled (and is hereby expressly authorized) to make all findings, determinations and the like that such investment bank determines
are required to be made by such investment bank in connection with its resolution of such dispute and in resolving such dispute such
investment bank shall apply such findings, determinations and the like to the terms of this Warrant and any other applicable Transaction
Documents, (iii) the Holder (and only the Holder), in its sole discretion, shall have the right to submit any dispute described in this
Section 15 to any state or federal court sitting in The City of New York, Borough of Manhattan in lieu of utilizing the procedures set
forth in this Section 15 and (iv) nothing in this Section 15 shall limit the Holder from obtaining any injunctive relief or other equitable
remedies (including, without limitation, with respect to any matters described in this Section 15).]
16.
REMEDIES, CHARACTERIZATION, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided
in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant and the other Transaction Documents,
at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right
of the Holder to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Warrant. The
Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein.
Amounts set forth or provided for herein with respect to payments, exercises and the like (and the computation thereof) shall be the
amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company
(or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to
the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such
breach or threatened breach, the holder of this Warrant shall be entitled, in addition to all other available remedies, to specific performance
and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of competent jurisdiction in any such
case without the necessity of proving actual damages and without posting a bond or other security. The Company shall provide all information
and documentation to the Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance with the
terms and conditions of this Warrant (including, without limitation, compliance with Section 2 hereof). The issuance of shares and certificates
for shares as contemplated hereby upon the exercise of this Warrant shall be made without charge to the Holder or such shares for any
issuance tax or other costs in respect thereof, provided that the Company shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issuance and delivery of any certificate in a name other than the Holder or its agent on its
behalf.
17.
PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER COSTS.
If (a) this Warrant is placed in the hands of an attorney for collection or enforcement or is collected or enforced through any legal
proceeding or the holder otherwise takes action to collect amounts due under this Warrant or to enforce the provisions of this Warrant
or (b) there occurs any bankruptcy, reorganization, receivership of the company or other proceedings affecting company creditors’
rights and involving a claim under this Warrant, then the Company shall pay the costs incurred by the Holder for such collection, enforcement
or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including, without limitation, attorneys’
fees and disbursements.
18.
TRANSFER. This Warrant may be offered for sale, sold, transferred or assigned without the consent
of the Company, except as may otherwise be required by Section 2(g) of the Securities Purchase Agreement.
19.
CERTAIN DEFINITIONS . For purposes of this Warrant, the following terms shall have the following
meanings:
(a)
“1933 Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.
(b)
“1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
(c)
[INSERT IN SERIES A WARRANT ONLY: “Adjustment Right” means any right granted with respect to any securities issued
in connection with, or with respect to, any issuance or sale (or deemed issuance or sale in accordance with Section 2) of shares of Common
Stock (other than rights of the type described in Section 3 and 4 hereof) that could result in a decrease in the net consideration received
by the Company in connection with, or with respect to, such securities (including, without limitation, any cash settlement rights, cash
adjustment or other similar rights).][INSERT IN SERIES B WARRANT ONLY: [Intentionally Omitted]]
(d)
“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled
by, or is under common control with, such Person, it being understood for purposes of this definition that “control” of a
Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of
directors of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
(e)
[INSERT IN SERIES A WARRANT ONLY: “Approved Stock Plan” means any employee benefit plan which has been approved by
the board of directors of the Company prior to or subsequent to the date hereof pursuant to which shares of Common Stock and standard
options to purchase Common Stock may be issued to any employee, officer or director for services provided to the Company in their capacity
as such.][INSERT IN SERIES B WARRANT ONLY: [Intentionally Omitted]]
(f)
“Attribution Parties” means, collectively, the following Persons and entities: (i) any investment vehicle, including,
any funds, feeder funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed
or advised by the Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of
the Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or
any of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock would or could be aggregated
with the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the 1934 Act. For clarity, the purpose of
the foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.
(g)
“Bid Price” means, for any security as of the particular time of determination, the bid price for such security on
the Principal Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not the principal securities
exchange or trading market for such security, the bid price of such security on the principal securities exchange or trading market where
such security is listed or traded as reported by Bloomberg as of such time of determination, or if the foregoing does not apply, the
bid price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg
as of such time of determination, or, if no bid price is reported for such security by Bloomberg as of such time of determination, the
average of the bid prices of any market makers for such security as reported in The Pink Open Market (or a similar organization or agency
succeeding to its functions of reporting prices) as of such time of determination. If the Bid Price cannot be calculated for a security
as of the particular time of determination on any of the foregoing bases, the Bid Price of such security as of such time of determination
shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree
upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 15. All
such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction
during such period.
(h)
[INSERT IN SERIES A WARRANT ONLY “Black Scholes Consideration Value” means the value of the applicable Option, Convertible
Security or Adjustment Right (as the case may be) as of the date of issuance thereof calculated using the Black Scholes Option Pricing
Model obtained from the “OV” function on Bloomberg utilizing (i) an underlying price per share equal to the Closing Sale
Price of the Common Stock on the Trading Day immediately preceding the public announcement of the execution of definitive documents with
respect to the issuance of such Option or Convertible Security (as the case may be), (ii) a risk-free interest rate corresponding to
the U.S. Treasury rate for a period equal to the remaining term of such Option, Convertible Security or Adjustment Right (as the case
may be) as of the date of issuance of such Option, Convertible Security or Adjustment Right (as the case may be), (iii) a zero cost of
borrow and (iv) an expected volatility equal to the greater of 100% and the 30 day volatility obtained from the “HVT” function
on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following the date of issuance of
such Option, Convertible Security or Adjustment Right (as the case may be).][INSERT IN SERIES B WARRANT ONLY: [Intentionally Omitted]]
(i)
“Black Scholes Value” means the value of the unexercised portion of this Warrant remaining on the date of the Holder’s
request pursuant to Section 4(c)(i), which value is calculated using the Black Scholes Option Pricing Model obtained from the “OV”
function on Bloomberg utilizing (i) an underlying price per share equal to the greater of (1) the highest Closing Sale Price of the Common
Stock during the period beginning on the Trading Day immediately preceding the announcement of the applicable Fundamental Transaction
(or the consummation of the applicable Fundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request
pursuant to Section 4(c)(i) and (2) the sum of the price per share being offered in cash in the applicable Fundamental Transaction (if
any) plus the value of the non-cash consideration being offered in the applicable Fundamental Transaction (if any), (ii) a strike price
equal to the Exercise Price in effect on the date of the Holder’s request pursuant to Section 4(c)(i), (iii) a risk-free interest
rate corresponding to the U.S. Treasury rate for a period equal to the greater of (1) the remaining term of this Warrant as of the date
of the Holder’s request pursuant to Section 4(c)(i) and (2) the remaining term of this Warrant as of the date of consummation of
the applicable Fundamental Transaction or as of the date of the Holder’s request pursuant to Section 4(c)(i) if such request is
prior to the date of the consummation of the applicable Fundamental Transaction, (iv) a zero cost of borrow and (v) an expected volatility
equal to the greater of 100% and the 30 day volatility obtained from the “HVT” function on Bloomberg (determined utilizing
a 365 day annualization factor) as of the Trading Day immediately following the earliest to occur of (A) the public disclosure of the
applicable Fundamental Transaction and (B) the date of the Holder’s request pursuant to Section 4(c)(i).
(j)
“Bloomberg” means Bloomberg, L.P.
(k)
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New
York are authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall not
be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential
employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental
authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York
generally are open for use by customers on such day.
(l)
“Closing Sale Price” means, for any security as of any date, the last closing trade price for such security on the
Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate
the closing trade price, then the last trade price of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or,
if the Principal Market is not the principal securities exchange or trading market for such security, the last trade price of such security
on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing
does not apply, the last trade price of such security in the over-the-counter market on the electronic bulletin board for such security
as reported by Bloomberg, or, if no last trade price is reported for such security by Bloomberg, the average of the ask prices of any
market makers for such security as reported in The Pink Open Market (or a similar organization or agency succeeding to its functions
of reporting prices). If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases,
the Closing Sale Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder.
If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in
accordance with the procedures in Section 15. All such determinations shall be appropriately adjusted for any stock dividend, stock split,
stock combination or other similar transaction during such period.
(m)
“Common Stock” means (i) the Company’s shares of common stock, $0.0001 par value per share, and (ii) any capital
stock into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.
(n)
“Convertible Securities” means any stock or other security (other than Options) that is at any time and under any
circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof
to acquire, any shares of Common Stock.
(o)
“Eligible Market” means The New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, the Nasdaq
Global Market, the Nasdaq Capital Market or the Principal Market.
(p)
[INSERT IN SERIES A WARRANT ONLY: “Event Market Price” means, with respect to any Stock Combination Event Date, the
quotient determined by dividing (x) the sum of the VWAP of the Common Stock for each of the five (5) lowest Trading Days during the twenty
(20) consecutive Trading Day period ending and including the Trading Day immediately preceding the sixteenth (16th) Trading Day after
such Stock Combination Event Date, divided by (y) five (5). All such determinations shall be appropriately adjusted for any stock dividend,
stock split, stock combination, recapitalization or other similar transaction during such period.][INSERT IN SERIES B WARRANT ONLY: [Intentionally
Omitted]]
(q)
[INSERT IN SERIES A WARRANT ONLY: “Event of Default Black Scholes Value” means the value of the unexercised portion
of this Warrant remaining on the date of the Holder’s request pursuant to Section 4(c)(ii), which value is calculated using the
Black Scholes Option Pricing Model obtained from the “OV” function on Bloomberg utilizing (i) an underlying price per share
equal to the highest Closing Sale Price of the Common Stock during the period beginning on the date of the occurrence of the Event of
Default through the date all Events of Default have been cured (assuming for such purpose that the Notes remain outstanding) or, if earlier,
the Trading Day of the Holder’s request pursuant to Section 4(c)(ii), (ii) a strike price equal to the Exercise Price in effect
on the date of the Holder’s request pursuant to Section 4(c)(ii), (iii) a risk-free interest rate corresponding to the U.S. Treasury
rate for a period equal to the greater of (1) the remaining term of this Warrant as of the date of the Holder’s request pursuant
to Section 4(c)(ii) and (2) the remaining term of this Warrant as of the date of the occurrence of such Event of Default, (iv) a zero
cost of borrow and (v) an expected volatility equal to the greater of 100% and the 30 day volatility obtained from the “HVT”
function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following later of (x)
the date of the occurrence of such Event of Default and (y) the date of the public announcement of such Event of Default.][INSERT IN
SERIES B WARRANT ONLY: [Intentionally Omitted]]
(r)
[INSERT IN SERIES A WARRANT ONLY: “Excluded Securities” means (i) shares of Common Stock or standard options to purchase
Common Stock issued to directors, officers or employees of the Company for services rendered to the Company in their capacity as such
pursuant to an Approved Stock Plan (as defined above), provided that (A) all such issuances (taking into account the shares of Common
Stock issuable upon exercise of such options) after the Subscription Date pursuant to this clause (i) do not, in the aggregate, exceed
more than 5% of the Common Stock issued and outstanding immediately prior to the Subscription Date and (B) the exercise price of any
such options is not lowered, none of such options are amended to increase the number of shares issuable thereunder and none of the terms
or conditions of any such options are otherwise materially changed in any manner that adversely affects any of the Buyers; (ii) shares
of Common Stock issued upon the conversion or exercise of Convertible Securities (other than standard options to purchase Common Stock
issued pursuant to an Approved Stock Plan that are covered by clause (i) above) issued prior to the Subscription Date, provided that
the conversion price of any such Convertible Securities (other than standard options to purchase Common Stock issued pursuant to an Approved
Stock Plan that are covered by clause (i) above) is not lowered, none of such Convertible Securities (other than standard options to
purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) are amended to increase the number
of shares issuable thereunder and none of the terms or conditions of any such Convertible Securities (other than standard options to
purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) are otherwise materially changed
in any manner that adversely affects any of the Buyers; (iii) the shares of Common Stock issuable upon conversion of the Notes or otherwise
pursuant to the terms of the Notes; provided, that the terms of the Notes are not amended, modified or changed on or after the Subscription
Date (other than antidilution adjustments pursuant to the terms thereof in effect as of the Subscription Date), (iv) the shares of Common
Stock issuable upon exercise of the SPA Warrants; provided, that the terms of the SPA Warrant are not amended, modified or changed on
or after the Subscription Date (other than antidilution adjustments pursuant to the terms thereof in effect as of the Subscription Date),
(v) any shares of Common Stock issued or issuable in connection with any bona fide strategic or commercial alliances, acquisitions, mergers,
licensing arrangements, and strategic partnerships, provided, that (x) the primary purpose of such issuance is not to raise capital as
reasonably determined, and (y) the purchaser or acquirer or recipient of the securities in such issuance solely consists of either (I)
the actual participants in such strategic or commercial alliance, strategic or commercial licensing arrangement or strategic or commercial
partnership, (II) the actual owners of such assets or securities acquired in such acquisition or merger or (III) the stockholders, partners,
employees, consultants, officers, directors or members of the foregoing Persons, in each case, 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, and (IV) the number or amount of securities issued to such Persons by the
Company shall not be disproportionate to each such Person’s actual participation in (or fair market value of the contribution to)
such strategic or commercial alliance or strategic or commercial partnership or ownership of such assets or securities to be acquired
by the Company, as applicable, and (vi) any shares of Common Stock issued pursuant to a Permitted Equity Line.][INSERT IN SERIES B WARRANT
ONLY: [Intentionally Omitted]]
(s)
“Expiration Date” means the date that is the fifth (5th) anniversary of the Issuance Date or, if such date
falls on a day other than a Trading Day or on which trading does not take place on the Principal Market (a “Holiday”),
the next date that is not a Holiday.
(t)
“Fundamental Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries,
Affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the
surviving corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all
of the properties or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation
S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject
to or have its Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange offer that
is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of
Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated with any Subject
Entities making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares of Common Stock
such that all Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such purchase, tender or
exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding
shares of Common Stock, or (iv) consummate a stock or share purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Subject Entities whereby all such Subject Entities,
individually or in the aggregate, acquire, either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the
outstanding shares of Common Stock calculated as if any shares of Common Stock held by all the Subject Entities making or party to, or
Affiliated with any Subject Entity making or party to, such stock purchase agreement or other business combination were not outstanding;
or (z) such number of shares of Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in
Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify
its Common Stock, (B) that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one
or more related transactions, allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the “beneficial
owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition, purchase, assignment,
conveyance, tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination,
reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise
in any manner whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common
Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock not held by all such
Subject Entities as of the date of this Warrant calculated as if any shares of Common Stock held by all such Subject Entities were not
outstanding, or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock
or other equity securities of the Company sufficient to allow such Subject Entities to effect a statutory short form merger or other
transaction requiring other shareholders of the Company to surrender their shares of Common Stock without approval of the shareholders
of the Company or (C) directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions,
the issuance of or the entering into any other instrument or transaction structured in a manner to circumvent, or that circumvents, the
intent of this definition in which case this definition shall be construed and implemented in a manner otherwise than in strict conformity
with the terms of this definition to the extent necessary to correct this definition or any portion of this definition which may be defective
or inconsistent with the intended treatment of such instrument or transaction.
(u)
“Group” means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5
thereunder.
(v)
“Market Price” means, as of any date of determination, the quotient determined by dividing (x) the sum of the VWAP
of the Common Stock for each of the five (5) lowest Trading Days during the twenty (20) consecutive Trading Day period ending and including
the Trading Day immediately preceding such date of determination, divided by (y) five (5). All such determinations shall be appropriately
adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction during such period.
(w)
“Notes” has the meaning ascribed to such term in the Securities Purchase Agreement, and shall include all notes issued
in exchange therefor or replacement thereof.
(x)
“Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible
Securities.
(y)
“Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose
common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent
Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.
(z)
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust,
an unincorporated organization, any other entity or a government or any department or agency thereof.
(aa)
“Principal Market” means the OTCQB.
(bb)
“Registration Rights Agreement” means that certain registration rights agreement, dated as of the Closing Date, by
and among the Company and the initial holders of the Notes relating to, among other things, the registration of the resale of the Common
Stock issuable upon conversion of the Notes or otherwise pursuant to the terms of the Notes and exercise of the SPA Warrants, as may
be amended from time to time.
(cc)
“SEC” means the United States Securities and Exchange Commission or the successor thereto.
(dd)
“Subject Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.
(ee)
“Successor Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from
or surviving any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental
Transaction shall have been entered into.
(ff)
“Trading Day” means, as applicable, (x) with respect to all price or trading volume determinations relating to the
Common Stock, any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading
market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded,
provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or
market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange
or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during
the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise designated as a Trading Day in writing by the Holder or
(y) with respect to all determinations other than price or trading volume determinations relating to the Common Stock, any day on which
The New York Stock Exchange (or any successor thereto) is open for trading of securities.
(gg)
“VWAP” means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal
Market (or, if the Principal Market is not the principal trading market for such security, then on the principal securities exchange
or securities market on which such security is then traded), during the period beginning at 9:30 a.m., New York time, and ending at 4:00
p.m., New York time, as reported by Bloomberg through its “VAP” function (set to 09:30 start time and 16:00 end time) or,
if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic
bulletin board for such security during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m., New York time, as
reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the
average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in
The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices). If the VWAP cannot be calculated
for such security on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as
mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such
security, then such dispute shall be resolved in accordance with the procedures in Section 15. All such determinations shall be appropriately
adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction during such period.
[signature
page follows]
IN
WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out
above.
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Evofem
Biosciences, Inc. |
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By: |
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Name:
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Title: |
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EXHIBIT
A
EXERCISE
NOTICE
TO
BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT TO PURCHASE COMMON STOCK
EVOFEM
BIOSCIENCES, INC.
The
undersigned holder hereby elects to exercise the Warrant to Purchase Common Stock No. _______ (the “Warrant”) of Evofem
Biosciences, Inc., a Delaware corporation (the “Company”) as specified below. Capitalized terms used herein and not
otherwise defined shall have the respective meanings set forth in the Warrant.
1.
Form of Exercise Price. The Holder intends that payment of the Aggregate Exercise Price shall be made as:
| ☐ | a
“Cash Exercise” with respect to _________________ Warrant Shares; and/or |
| ☐ | a
“Cashless Exercise” with respect to _______________ Warrant Shares. |
In
the event that the Holder has elected a Cashless Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto,
the Holder hereby represents and warrants that (i) this Exercise Notice was executed by the Holder at __________ [a.m.][p.m.] on the
date set forth below and (ii) if applicable, the Bid Price as of such time of execution of this Exercise Notice was $________.
2.
Payment of Exercise Price. In the event that the Holder has elected a Cash Exercise with respect to some or all of the Warrant
Shares to be issued pursuant hereto, the Holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company
in accordance with the terms of the Warrant.
3.
Delivery of Warrant Shares. The Company shall deliver to Holder, or its designee or agent as specified below, __________ shares
of Common Stock in accordance with the terms of the Warrant. Delivery shall be made to Holder, or for its benefit, as follows:
☐
Check here if requesting delivery as a certificate to the following name and to the following address:
| ☐ | Check
here if requesting delivery by Deposit/Withdrawal at Custodian as follows: |
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DTC
Participant: |
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DTC
Number: |
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Account
Number: |
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Date:
_____________ __, _____
_________________________
| Name
of Registered Holder |
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| Tax
ID:________________________________ |
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| Facsimile:
_____________________________ |
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| E-mail
Address:________________________ |
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EXHIBIT
B
ACKNOWLEDGMENT
The
Company hereby acknowledges this Exercise Notice and hereby directs ______________ to issue the above indicated number of shares of Common
Stock in accordance with the Transfer Agent Instructions dated _________, 202_, from the Company and acknowledged and agreed to by _______________.
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Evofem
Biosciences, Inc. |
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Name:
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By: |
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Title: |
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Exhibit 10.4
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT
(this “Agreement”), dated as of September 27, 2023, is by and among Evofem Biosciences, Inc., a Delaware corporation
with offices located at 7770 Regents Road, Suite 113-618, San Diego, California 92122 (the “Company”), and the undersigned
buyers (each, a “Buyer,” and collectively, the “Buyers”).
RECITALS
A. In connection with the Securities
Purchase Agreement by and among the parties hereto, dated as of September 27 , 2023 (the “Securities Purchase Agreement”),
the Company has agreed, upon the terms and subject to the conditions of the Securities Purchase Agreement, to issue and sell to each Buyer
(i) the Notes (as defined in the Securities Purchase Agreement) which will be convertible into Conversion Shares (as defined in the Securities
Purchase Agreement) in accordance with the terms of the Notes and (ii) the Warrants (as defined in the Securities Purchase Agreement)
which will be exercisable to purchase Warrant Shares (as defined in the Securities Purchase Agreement) in accordance with the terms of
the Warrants.
B. To induce the Buyers to consummate
the transactions contemplated by the Securities Purchase Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the
“1933 Act”), and applicable state securities laws.
AGREEMENT
NOW, THEREFORE, in consideration
of the premises and the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and each of the Buyers hereby agree as follows:
1. Definitions.
Capitalized terms used herein
and not otherwise defined herein shall have the respective meanings set forth in the Securities Purchase Agreement. As used in this Agreement,
the following terms shall have the following meanings:
(a) “Business Day”
means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by
law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required
by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any
other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so
long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally are
open for use by customers on such day.
(b) “Closing Date”
shall have the meaning set forth in the Securities Purchase Agreement.
(c) “Effective Date”
means the date that the applicable Registration Statement has been declared effective by the SEC.
(d) “Effectiveness Deadline”
means (i) with respect to the initial Registration Statement required to be filed pursuant to Section 2(a), the earlier of the (A) 90th
calendar day after the Closing Date and (B) 2nd Business Day after the date the Company is notified (orally or in writing, whichever is
earlier) by the SEC that such Registration Statement will not be reviewed or will not be subject to further review and (ii) with respect
to any additional Registration Statements that may be required to be filed by the Company pursuant to this Agreement, the earlier of the
(A) 90th calendar day following the date on which the Company was required to file such additional Registration Statement and
(B) 2nd Business Day after the date the Company is notified (orally or in writing, whichever is earlier) by the SEC that such
Registration Statement will not be reviewed or will not be subject to further review.
(e) “Filing Deadline”
means (i) with respect to the initial Registration Statement required to be filed pursuant to Section 2(a), the 90th calendar
day after the Closing Date and (ii) with respect to any additional Registration Statements that may be required to be filed by the Company
pursuant to this Agreement, the date on which the Company was required to file such additional Registration Statement pursuant to the
terms of this Agreement.
(f) “Investor”
means a Buyer or any transferee or assignee of any Registrable Securities, Notes or Warrants, as applicable, to whom a Buyer assigns its
rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9 and any transferee
or assignee thereof to whom a transferee or assignee of any Registrable Securities, Notes or Warrants, as applicable, assigns its rights
under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9.
(g) “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization
or a government or any department or agency thereof.
(h) “register,”
“registered,” and “registration” refer to a registration effected by preparing and filing one or
more Registration Statements in compliance with the 1933 Act and pursuant to Rule 415 and the declaration of effectiveness of such Registration
Statement(s) by the SEC.
(i) “Registrable Securities”
means (i) the Conversion Shares, (ii) the Warrant Shares and (iii) any capital stock of the Company issued or issuable with respect to
the Conversion Shares, the Warrant Shares, the Notes or the Warrants, including, without limitation, (1) as a result of any stock split,
stock dividend, recapitalization, exchange or similar event or otherwise and (2) shares of capital stock of the Company into which the
shares of Common Stock (as defined in the Notes) are converted or exchanged and shares of capital stock of a Successor Entity (as defined
in the Warrants) into which the shares of Common Stock are converted or exchanged, in each case, without regard to any limitations on
conversion of the Notes or exercise of the Warrants.
(j) “Registration Statement”
means a registration statement or registration statements of the Company filed under the 1933 Act covering Registrable Securities.
(k) “Required Holders”
shall have the meaning as set forth in the Securities Purchase Agreement.
(l) “Required Registration
Amount” means, as of any time of determination, 300% of the sum of (i) the maximum number of Conversion Shares issuable upon
conversion of the Notes (assuming for purposes hereof that (x) the Notes are convertible at the Alternate Conversion Price (as defined
in the Notes) assuming an Alternate Conversion Date (as defined in the Notes) as of such time of determination, (y) interest on the Notes
shall accrue through the second anniversary of the Closing Date and will be converted in shares of Common Stock at the Alternate Conversion
Price assuming an Alternate Conversion Date as of such time of determination and (z) any such conversion shall not take into account any
limitations on the conversion of the Notes set forth in the Notes) and (ii) the maximum number of Warrant Shares issuable upon exercise
of the Warrants (without taking into account any limitations on the exercise of the Warrants set forth therein), all subject to adjustment
as provided in Section 2(d) and/or Section 2(f).
(m) “Rule 144”
means Rule 144 promulgated by the SEC under the 1933 Act, as such rule may be amended from time to time, or any other similar or successor
rule or regulation of the SEC that may at any time permit the Investors to sell securities of the Company to the public without registration.
(n) “Rule 415”
means Rule 415 promulgated by the SEC under the 1933 Act, as such rule may be amended from time to time, or any other similar or successor
rule or regulation of the SEC providing for offering securities on a continuous or delayed basis.
(o) “SEC” means
the United States Securities and Exchange Commission or any successor thereto.
2. Registration.
(a) Mandatory Registration.
The Company shall prepare and, as soon as practicable, but in no event later than the Filing Deadline, file with the SEC an initial Registration
Statement on Form S-1 covering the resale of all of the Registrable Securities, provided that such initial Registration Statement shall
register for resale at least the number of shares of Common Stock equal to the Required Registration Amount as of the date such Registration
Statement is initially filed with the SEC.Such initial Registration Statement, and each other Registration Statement required to be filed
pursuant to the terms of this Agreement, shall contain (except if otherwise directed by the Required Holders) the “Selling Stockholders”
and “Plan of Distribution” sections in substantially the form attached hereto as Exhibit B. The Company shall
use its best efforts to have such initial Registration Statement, and each other Registration Statement required to be filed pursuant
to the terms of this Agreement, declared effective by the SEC as soon as practicable, but in no event later than the applicable Effectiveness
Deadline for such Registration Statement.
(b) Legal Counsel. Subject
to Section 5 hereof, Kelley Drye & Warren LLP, counsel solely to the investors (“Legal Counsel”) shall review and
oversee any registration, solely on behalf of the investors, pursuant to this Section 2.
(c) [Intentionally Omitted]
(d) Sufficient Number of Shares
Registered. In the event the number of shares available under any Registration Statement is insufficient to cover all of the Registrable
Securities required to be covered by such Registration Statement or an Investor’s allocated portion of the Registrable Securities
pursuant to Section 2(h), the Company shall amend such Registration Statement (if permissible), or file with the SEC a new Registration
Statement (on the short form available therefor, if applicable), or both, so as to cover at least the Required Registration Amount as
of the Trading Day immediately preceding the date of the filing of such amendment or new Registration Statement, in each case, as soon
as practicable, but in any event not later than fifteen (15) days after the necessity therefor arises (but taking account of any Staff
position with respect to the date on which the Staff will permit such amendment to the Registration Statement and/or such new Registration
Statement (as the case may be) to be filed with the SEC). The Company shall use its best efforts to cause such amendment to such Registration
Statement and/or such new Registration Statement (as the case may be) to become effective as soon as practicable following the filing
thereof with the SEC, but in no event later than the applicable Effectiveness Deadline for such Registration Statement. For purposes of
the foregoing provision, the number of shares available under a Registration Statement shall be deemed “insufficient to cover all
of the Registrable Securities” if at any time the number of shares of Common Stock available for resale under the applicable Registration
Statement is less than the product determined by multiplying (i) the Required Registration Amount as of such time by (ii) 0.90. The calculation
set forth in the foregoing sentence shall be made without regard to any limitations on conversion, amortization and/or redemption of the
Notes or exercise of the Warrants (and such calculation shall assume (A) that the Notes are then convertible in full into shares of Common
Stock at the then prevailing Conversion Rate (as defined in the Notes), (B) the initial outstanding principal amount of the Notes remains
outstanding through the scheduled Maturity Date (as defined in the Notes) and no redemptions of the Notes occur prior to the scheduled
Maturity Date and (C) the Warrants are then exercisable in full into shares of Common Stock at the then prevailing Exercise Price (as
defined in the Warrants)).
(e) Effect of Failure to File
and Obtain and Maintain Effectiveness of any Registration Statement. If (i) a Registration Statement covering the resale of all of
the Registrable Securities required to be covered thereby (disregarding any reduction pursuant to Section 2(f)) and required to be filed
by the Company pursuant to this Agreement is (A) not filed with the SEC on or before the Filing Deadline for such Registration Statement
(a “Filing Failure”) (it being understood that if the Company files a Registration Statement without affording each
Investor and Legal Counsel the opportunity to review and comment on the same as required by Section 3(c) hereof, the Company shall be
deemed to not have satisfied this clause (i)(A) and such event shall be deemed to be a Filing Failure) or (B) not declared effective by
the SEC on or before the Effectiveness Deadline for such Registration Statement (an “Effectiveness Failure”) (it being
understood that if on the Business Day immediately following the Effective Date for such Registration Statement the Company shall not
have filed a “final” prospectus for such Registration Statement with the SEC under Rule 424(b) in accordance with Section
3(b) (whether or not such a prospectus is technically required by such rule), the Company shall be deemed to not have satisfied this clause
(i)(B) and such event shall be deemed to be an Effectiveness Failure), (ii) other than during an Allowable Grace Period (as defined below),
on any day after the Effective Date of a Registration Statement sales of all of the Registrable Securities required to be included on
such Registration Statement (disregarding any reduction pursuant to Section 2(f)) cannot be made pursuant to such Registration Statement
(including, without limitation, because of a failure to keep such Registration Statement effective, a failure to disclose such information
as is necessary for sales to be made pursuant to such Registration Statement, a suspension or delisting of (or a failure to timely list)
the shares of Common Stock on the Principal Market (as defined in the Securities Purchase Agreement) or any other limitations imposed
by the Principal Market, or a failure to register a sufficient number of shares of Common Stock or by reason of a stop order) or the prospectus
contained therein is not available for use for any reason (a “Maintenance Failure”), or (iii) if a Registration Statement
is not effective for any reason or the prospectus contained therein is not available for use for any reason, and either (x) the Company
fails for any reason to satisfy the requirements of Rule 144(c)(1), including, without limitation, the failure to satisfy the current
public information requirement under Rule 144(c) or (y) the Company has ever been an issuer described in Rule 144(i)(1)(i) or becomes
such an issuer in the future, and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (a “Current Public
Information Failure”) as a result of which any of the Investors are unable to sell Registrable Securities without restriction
under Rule 144 (including, without limitation, volume restrictions), then, as partial relief for the damages to any holder by reason of
any such delay in, or reduction of, its ability to sell the underlying shares of Common Stock (which remedy shall not be exclusive of
any other remedies available at law or in equity, including, without limitation, specific performance), the Company shall pay to each
holder of Registrable Securities relating to such Registration Statement an amount in cash equal to two percent (2%) of such Investor’s
original principal amount stated in such Investor’s Note on the Closing Date (1) on the date of such Filing Failure, Effectiveness
Failure, Maintenance Failure or Current Public Information Failure, as applicable, and (2) on every thirty (30) day anniversary of (I)
a Filing Failure until such Filing Failure is cured; (II) an Effectiveness Failure until such Effectiveness Failure is cured; (III) a
Maintenance Failure until such Maintenance Failure is cured; and (IV) a Current Public Information Failure until the earlier of (i) the
date such Current Public Information Failure is cured and (ii) such time that such public information is no longer required pursuant to
Rule 144 (in each case, pro rated for periods totaling less than thirty (30) days). The payments to which a holder of Registrable Securities
shall be entitled pursuant to this Section 2(e) are referred to herein as “Registration Delay Payments.” Following
the initial Registration Delay Payment for any particular event or failure (which shall be paid on the date of such event or failure,
as set forth above), without limiting the foregoing, if an event or failure giving rise to the Registration Delay Payments is cured prior
to any thirty (30) day anniversary of such event or failure, then such Registration Delay Payment shall be made on the third (3rd)
Business Day after such cure. In the event the Company fails to make Registration Delay Payments in a timely manner in accordance with
the foregoing, such Registration Delay Payments shall bear interest at the rate of two percent (2%) per month (prorated for partial months)
until paid in full. Notwithstanding the foregoing, no Registration Delay Payments shall be owed to an Investor (other than with respect
to a Maintenance Failure resulting from a suspension or delisting of (or a failure to timely list) the shares of Common Stock on the Principal
Market) with respect to any period during which all of such Investor’s Registrable Securities may be sold by such Investor without
restriction under Rule 144 (including, without limitation, volume restrictions) and without the need for current public information required
by Rule 144(c)(1) (or Rule 144(i)(2), if applicable).
(f) Offering. Notwithstanding
anything to the contrary contained in this Agreement, but subject to the payment of the Registration Delay Payments pursuant to Section
2(e), in the event the staff of the SEC (the “Staff”) or the SEC seeks to characterize any offering pursuant to a Registration
Statement filed pursuant to this Agreement as constituting an offering of securities by, or on behalf of, the Company, or in any other
manner, such that the Staff or the SEC do not permit such Registration Statement to become effective and used for resales in a manner
that does not constitute such an offering and that permits the continuous resale at the market by the Investors participating therein
(or as otherwise may be acceptable to each Investor) without being named therein as an “underwriter,” then the Company shall
reduce the number of shares to be included in such Registration Statement by all Investors until such time as the Staff and the SEC shall
so permit such Registration Statement to become effective as aforesaid. In making such reduction, the Company shall reduce the number
of shares to be included by all Investors on a pro rata basis (based upon the number of Registrable Securities otherwise required to be
included for each Investor) unless the inclusion of shares by a particular Investor or a particular set of Investors are resulting in
the Staff or the SEC’s “by or on behalf of the Company” offering position, in which event the shares held by such Investor
or set of Investors shall be the only shares subject to reduction (and if by a set of Investors on a pro rata basis by such Investors
or on such other basis as would result in the exclusion of the least number of shares by all such Investors); provided, that, with respect
to such pro rata portion allocated to any Investor, such Investor may elect the allocation of such pro rata portion among the Registrable
Securities of such Investor. In addition, in the event that the Staff or the SEC requires any Investor seeking to sell securities under
a Registration Statement filed pursuant to this Agreement to be specifically identified as an “underwriter” in order to permit
such Registration Statement to become effective, and such Investor does not consent to being so named as an underwriter in such Registration
Statement, then, in each such case, the Company shall reduce the total number of Registrable Securities to be registered on behalf of
such Investor, until such time as the Staff or the SEC does not require such identification or until such Investor accepts such identification
and the manner thereof. Any reduction pursuant to this paragraph will first reduce all Registrable Securities other than those issued
pursuant to the Securities Purchase Agreement. In the event of any reduction in Registrable Securities pursuant to this paragraph, an
affected Investor shall have the right to require, upon delivery of a written request to the Company signed by such Investor, the Company
to file a registration statement within twenty (20) days of such request (subject to any restrictions imposed by Rule 415 or required
by the Staff or the SEC) for resale by such Investor in a manner acceptable to such Investor, and the Company shall following such request
cause to be and keep effective such registration statement in the same manner as otherwise contemplated in this Agreement for registration
statements hereunder, in each case until such time as: (i) all Registrable Securities held by such Investor have been registered and sold
pursuant to an effective Registration Statement in a manner acceptable to such Investor or (ii) all Registrable Securities may be resold
by such Investor without restriction (including, without limitation, volume limitations) pursuant to Rule 144 (taking account of any Staff
position with respect to “affiliate” status) and without the need for current public information required by Rule 144(c)(1)
(or Rule 144(i)(2), if applicable) or (iii) such Investor agrees to be named as an underwriter in any such Registration Statement in a
manner acceptable to such Investor as to all Registrable Securities held by such Investor and that have not theretofore been included
in a Registration Statement under this Agreement (it being understood that the special demand right under this sentence may be exercised
by an Investor multiple times and with respect to limited amounts of Registrable Securities in order to permit the resale thereof by such
Investor as contemplated above).
(g) Piggyback Registrations.
Without limiting any obligation of the Company hereunder or under the Securities Purchase Agreement, if there is not an effective Registration
Statement covering all of the Registrable Securities or the prospectus contained therein is not available for use and the Company shall
determine to prepare and file with the SEC a registration statement or offering statement relating to an offering for its own account
or the account of others under the 1933 Act of any of its equity securities (other than on Form S-4 or Form S-8 (each as promulgated under
the 1933 Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity
or business or equity securities issuable in connection with the Company’s stock option or other employee benefit plans), then the
Company shall deliver to each Investor a written notice of such determination and, if within fifteen (15) days after the date of the delivery
of such notice, any such Investor shall so request in writing, the Company shall include in such registration statement or offering statement
all or any part of such Registrable Securities such Investor requests to be registered; provided, however, the Company shall not be required
to register any Registrable Securities pursuant to this Section 2(g) that are eligible for resale pursuant to Rule 144 without restriction
(including, without limitation, volume restrictions) and without the need for current public information required by Rule 144(c)(1) (or
Rule 144(i)(2), if applicable) or that are the subject of a then-effective Registration Statement.
(h) Allocation of Registrable
Securities. The initial number of Registrable Securities included in any Registration Statement and any increase in the number of
Registrable Securities included therein shall be allocated pro rata among the Investors based on the number of Registrable Securities
held by each Investor at the time such Registration Statement covering such initial number of Registrable Securities or increase thereof
is declared effective by the SEC. In the event that an Investor sells or otherwise transfers any of such Investor’s Registrable
Securities, each transferee or assignee (as the case may be) that becomes an Investor shall be allocated a pro rata portion of the then-remaining
number of Registrable Securities included in such Registration Statement for such transferor or assignee (as the case may be). Any shares
of Common Stock included in a Registration Statement and which remain allocated to any Person which ceases to hold any Registrable Securities
covered by such Registration Statement shall be allocated to the remaining Investors, pro rata based on the number of Registrable Securities
then held by such Investors which are covered by such Registration Statement.
(i) No Inclusion of Other Securities.
The Company shall in no event include any securities other than Registrable Securities on any Registration Statement filed in accordance
herewith without the prior written consent of the Required Holders. Until the Applicable Date (as defined in the Securities Purchase Agreement),
the Company shall not enter into any agreement providing any registration rights to any of its security holders, except as otherwise permitted
under the Securities Purchase Agreement.
3. Related Obligations.
The Company shall use its best
efforts to effect the registration of the Registrable Securities in accordance with the intended method of disposition thereof, and, pursuant
thereto, the Company shall have the following obligations:
(a) The Company shall promptly
prepare and file with the SEC a Registration Statement with respect to all the Registrable Securities (but in no event later than the
applicable Filing Deadline) and use its best efforts to cause such Registration Statement to become effective as soon as practicable after
such filing (but in no event later than the Effectiveness Deadline). Subject to Allowable Grace Periods, the Company shall keep each Registration
Statement effective (and the prospectus contained therein available for use) pursuant to Rule 415 for resales by the Investors on a delayed
or continuous basis at then-prevailing market prices (and not fixed prices) at all times until the earlier of (i) the date as of which
all of the Investors may sell all of the Registrable Securities required to be covered by such Registration Statement (disregarding any
reduction pursuant to Section 2(f)) without restriction pursuant to Rule 144 (including, without limitation, volume restrictions) and
without the need for current public information required by Rule 144(c)(1) (or Rule 144(i)(2), if applicable) or (ii) the date on which
the Investors shall have sold all of the Registrable Securities covered by such Registration Statement (the “Registration Period”).
Notwithstanding anything to the contrary contained in this Agreement, the Company shall ensure that, when filed and at all times while
effective, each Registration Statement (including, without limitation, all amendments and supplements thereto) and the prospectus (including,
without limitation, all amendments and supplements thereto) used in connection with such Registration Statement (1) shall not contain
any untrue statement of a material fact or omit to state a material fact required to be stated therein, or necessary to make the statements
therein (in the case of prospectuses, in the light of the circumstances in which they were made) not misleading and (2) will disclose
(whether directly or through incorporation by reference to other SEC filings to the extent permitted) all material information regarding
the Company and its securities. The Company shall submit to the SEC, within one (1) Business Day after the later of the date that (i)
the Company learns that no review of a particular Registration Statement will be made by the Staff or that the Staff has no further comments
on a particular Registration Statement (as the case may be) and (ii) the consent of Legal Counsel is obtained pursuant to Section 3(c)
(which consent shall be immediately sought), a request for acceleration of effectiveness of such Registration Statement to a time and
date not later than twenty-four (24) hours after the submission of such request. The Company shall respond in writing to comments made
by the SEC in respect of a Registration Statement as soon as practicable, but in no event later than fifteen (15) days after the receipt
of comments by or notice from the SEC that an amendment is required in order for a Registration Statement to be declared effective.
(b) Subject to Section 3(r) of
this Agreement, the Company shall prepare and file with the SEC such amendments (including, without limitation, post-effective amendments)
and supplements to each Registration Statement and the prospectus used in connection with each such Registration Statement, which prospectus
is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may be necessary to keep each such Registration Statement effective
at all times during the Registration Period for such Registration Statement, and, during such period, comply with the provisions of the
1933 Act with respect to the disposition of all Registrable Securities of the Company required to be covered by such Registration Statement
until such time as all of such Registrable Securities shall have been disposed of in accordance with the intended methods of disposition
by the seller or sellers thereof as set forth in such Registration Statement; provided, however, by 8:30 a.m. (New York time) on the Business
Day immediately following each Effective Date, the Company shall file with the SEC in accordance with Rule 424(b) under the 1933 Act the
final prospectus to be used in connection with sales pursuant to the applicable Registration Statement (whether or not such a prospectus
is technically required by such rule). In the case of amendments and supplements to any Registration Statement which are required to be
filed pursuant to this Agreement (including, without limitation, pursuant to this Section 3(b)) by reason of the Company filing a report
on Form 8-K, Form 10-Q or Form 10-K or any analogous report under the Securities Exchange Act of 1934, as amended (the “1934
Act”), the Company shall, if permitted under the applicable rules and regulations of the SEC, have incorporated such report
by reference into such Registration Statement, if applicable, or shall file such amendments or supplements with the SEC on the same day
on which the 1934 Act report is filed which created the requirement for the Company to amend or supplement such Registration Statement.
(c) The Company shall (A) permit
Legal Counsel and legal counsel for each other Investor to review and comment upon (i) each Registration Statement at least five (5) Business
Days prior to its filing with the SEC and (ii) all amendments and supplements to each Registration Statement (including, without limitation,
the prospectus contained therein) (except for Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K,
and any similar or successor reports) within a reasonable number of days prior to their filing with the SEC, and (B) not file any Registration
Statement or amendment or supplement thereto in a form to which Legal Counsel or any legal counsel for any other Investor reasonably objects.
The Company shall not submit a request for acceleration of the effectiveness of a Registration Statement or any amendment or supplement
thereto or to any prospectus contained therein without the prior consent of Legal Counsel, which consent shall not be unreasonably withheld.
The Company shall promptly furnish to Legal Counsel and legal counsel for each other Investor, without charge, (i) copies of any correspondence
from the SEC or the Staff to the Company or its representatives relating to each Registration Statement, provided that such correspondence
shall not contain any material, non-public information regarding the Company or any of its Subsidiaries (as defined in the Securities
Purchase Agreement), (ii) after the same is prepared and filed with the SEC, one (1) copy of each Registration Statement and any amendment(s)
and supplement(s) thereto, including, without limitation, financial statements and schedules, all documents incorporated therein by reference,
if requested by an Investor, and all exhibits and (iii) upon the effectiveness of each Registration Statement, one (1) copy of the prospectus
included in such Registration Statement and all amendments and supplements thereto. The Company shall reasonably cooperate with Legal
Counsel and legal counsel for each other Investor in performing the Company’s obligations pursuant to this Section 3.
(d) The Company shall promptly
furnish to each Investor whose Registrable Securities are included in any Registration Statement, without charge, (i) after the same is
prepared and filed with the SEC, at least one (1) copy of each Registration Statement and any amendment(s) and supplement(s) thereto,
including, without limitation, financial statements and schedules, all documents incorporated therein by reference, if requested by an
Investor, all exhibits and each preliminary prospectus, (ii) upon the effectiveness of each Registration Statement, ten (10) copies of
the prospectus included in such Registration Statement and all amendments and supplements thereto (or such other number of copies as such
Investor may reasonably request from time to time) and (iii) such other documents, including, without limitation, copies of any preliminary
or final prospectus, as such Investor may reasonably request from time to time in order to facilitate the disposition of the Registrable
Securities owned by such Investor.
(e) The Company shall use its
best efforts to (i) register and qualify, unless an exemption from registration and qualification applies, the resale by Investors of
the Registrable Securities covered by a Registration Statement under such other securities or “blue sky” laws of all applicable
jurisdictions in the United States, (ii) prepare and file in those jurisdictions, such amendments (including, without limitation, post-effective
amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof during
the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualifications in effect
at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registrable
Securities for sale in such jurisdictions; provided, however, the Company shall not be required in connection therewith or as a condition
thereto to (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(e),
(y) subject itself to general taxation in any such jurisdiction, or (z) file a general consent to service of process in any such jurisdiction.
The Company shall promptly notify Legal Counsel, legal counsel for each other Investor and each Investor who holds Registrable Securities
of the receipt by the Company of any notification with respect to the suspension of the registration or qualification of any of the Registrable
Securities for sale under the securities or “blue sky” laws of any jurisdiction in the United States or its receipt of actual
notice of the initiation or threatening of any proceeding for such purpose.
(f) The Company shall notify Legal
Counsel, legal counsel for each other Investor and each Investor in writing of the happening of any event, as promptly as practicable
after becoming aware of such event, as a result of which the prospectus included in a Registration Statement, as then in effect, may include
an untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading (provided that in no event shall such notice contain
any material, non-public information regarding the Company or any of its Subsidiaries), and, subject to Section 3(r), promptly prepare
a supplement or amendment to such Registration Statement and such prospectus contained therein to correct such untrue statement or omission
and deliver ten (10) copies of such supplement or amendment to Legal Counsel, legal counsel for each other Investor and each Investor
(or such other number of copies as Legal Counsel, legal counsel for each other Investor or such Investor may reasonably request). The
Company shall also promptly notify Legal Counsel, legal counsel for each other Investor and each Investor in writing (i) when a prospectus
or any prospectus supplement or post-effective amendment has been filed, when a Registration Statement or any post-effective amendment
has become effective (notification of such effectiveness shall be delivered to Legal Counsel, legal counsel for each other Investor and
each Investor by e-mail on the same day of such effectiveness and by overnight mail), and when the Company receives written notice from
the SEC that a Registration Statement or any post-effective amendment will be reviewed by the SEC, (ii) of any request by the SEC for
amendments or supplements to a Registration Statement or related prospectus or related information, (iii) of the Company’s reasonable
determination that a post-effective amendment to a Registration Statement would be appropriate; and (iv) of the receipt of any request
by the SEC or any other federal or state governmental authority for any additional information relating to the Registration Statement
or any amendment or supplement thereto or any related prospectus. The Company shall respond as promptly as practicable to any comments
received from the SEC with respect to each Registration Statement or any amendment thereto (it being understood and agreed that the Company’s
response to any such comments shall be delivered to the SEC no later than fifteen (15) Business Days after the receipt thereof).
(g) The Company shall (i) use
its best efforts to prevent the issuance of any stop order or other suspension of effectiveness of each Registration Statement or the
use of any prospectus contained therein, or the suspension of the qualification, or the loss of an exemption from qualification, of any
of the Registrable Securities for sale in any jurisdiction and, if such an order or suspension is issued, to obtain the withdrawal of
such order or suspension at the earliest possible moment and (ii) notify Legal Counsel, legal counsel for each other Investor and each
Investor who holds Registrable Securities of the issuance of such order and the resolution thereof or its receipt of actual notice of
the initiation or threat of any proceeding for such purpose.
(h) If any Investor may be required
under applicable securities law to be described in any Registration Statement as an underwriter and such Investor consents to so being
named an underwriter, at the request of any Investor, the Company shall furnish to such Investor, on the date of the effectiveness of
such Registration Statement and thereafter from time to time on such dates as an Investor may reasonably request (i) a letter, dated such
date, from the Company’s independent certified public accountants in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering, addressed to the Investors, and (ii) an opinion, dated as of such
date, of counsel representing the Company for purposes of such Registration Statement, in form, scope and substance as is customarily
given in an underwritten public offering, addressed to the Investors.
(i) If any Investor may be required
under applicable securities law to be described in any Registration Statement as an underwriter and such Investor consents to so being
named an underwriter, upon the written request of such Investor, the Company shall make available for inspection by (i) such Investor,
(ii) legal counsel for such Investor and (iii) one (1) firm of accountants or other agents retained by such Investor (collectively, the
“Inspectors”), all pertinent financial and other records, and pertinent corporate documents and properties of the Company
(collectively, the “Records”), as shall be reasonably deemed necessary by each Inspector, and cause the Company’s
officers, directors and employees to supply all information which any Inspector may reasonably request; provided, however, each Inspector
shall agree in writing to hold in strict confidence and not to make any disclosure (except to such Investor) or use of any Record or other
information which the Company’s board of directors determines in good faith to be confidential, and of which determination the Inspectors
are so notified, unless (1) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in any Registration
Statement or is otherwise required under the 1933 Act, (2) the release of such Records is ordered pursuant to a final, non-appealable
subpoena or order from a court or government body of competent jurisdiction, or (3) the information in such Records has been made generally
available to the public other than by disclosure in violation of this Agreement or any other Transaction Document (as defined in the Securities
Purchase Agreement). Such Investor agrees that it shall, upon learning that disclosure of such Records is sought in or by a court or governmental
body of competent jurisdiction or through other means, give prompt notice to the Company and allow the Company, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order for, the Records deemed confidential. Nothing herein (or
in any other confidentiality agreement between the Company and such Investor, if any) shall be deemed to limit any Investor’s ability
to sell Registrable Securities in a manner which is otherwise consistent with applicable laws and regulations.
(j) The Company shall hold in
confidence and not make any disclosure of information concerning an Investor provided to the Company unless (i) disclosure of such information
is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or correct
a misstatement or omission in any Registration Statement or is otherwise required to be disclosed in such Registration Statement pursuant
to the 1933 Act, (iii) the release of such information is ordered pursuant to a subpoena or other final, non-appealable order from a court
or governmental body of competent jurisdiction, or (iv) such information has been made generally available to the public other than by
disclosure in violation of this Agreement or any other Transaction Document. The Company agrees that it shall, upon learning that disclosure
of such information concerning an Investor is sought in or by a court or governmental body of competent jurisdiction or through other
means, give prompt written notice to such Investor and allow such Investor, at such Investor’s expense, to undertake appropriate
action to prevent disclosure of, or to obtain a protective order for, such information.
(k) Without limiting any obligation
of the Company under the Securities Purchase Agreement, the Company shall use its best efforts either to (i) cause all of the Registrable
Securities covered by each Registration Statement to be listed on each securities exchange on which securities of the same class or series
issued by the Company are then listed, if any, if the listing of such Registrable Securities is then permitted under the rules of such
exchange, (ii) secure designation and quotation of all of the Registrable Securities covered by each Registration Statement on an Eligible
Market (as defined in the Securities Purchase Agreement), or (iii) if, despite the Company’s best efforts to satisfy the preceding
clauses (i) or (ii) the Company is unsuccessful in satisfying the preceding clauses (i) or (ii), without limiting the generality of the
foregoing, to use its best efforts to arrange for at least two market makers to register with the Financial Industry Regulatory Authority
(“FINRA”) as such with respect to such Registrable Securities. In addition, the Company shall cooperate with each Investor
and any broker or dealer through which any such Investor proposes to sell its Registrable Securities in effecting a filing with FINRA
pursuant to FINRA Rule 5110 as requested by such Investor. The Company shall pay all fees and expenses in connection with satisfying its
obligations under this Section 3(k).
(l) The Company shall cooperate
with the Investors who hold Registrable Securities being offered and, to the extent applicable, facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities to be offered pursuant to a Registration
Statement and enable such certificates to be in such denominations or amounts (as the case may be) as the Investors may reasonably request
from time to time and registered in such names as the Investors may request.
(m) If requested by an Investor,
the Company shall as soon as practicable after receipt of notice from such Investor and subject to Section 3(r) hereof, (i) incorporate
in a prospectus supplement or post-effective amendment such information as an Investor reasonably requests to be included therein relating
to the sale and distribution of Registrable Securities, including, without limitation, information with respect to the number of Registrable
Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities
to be sold in such offering; (ii) make all required filings of such prospectus supplement or post-effective amendment after being notified
of the matters to be incorporated in such prospectus supplement or post-effective amendment; and (iii) supplement or make amendments to
any Registration Statement or prospectus contained therein if reasonably requested by an Investor holding any Registrable Securities.
(n) The Company shall use its
best efforts to cause the Registrable Securities covered by a Registration Statement to be registered with or approved by such other governmental
agencies or authorities as may be necessary to consummate the disposition of such Registrable Securities.
(o) The Company shall make generally
available to its security holders as soon as practical, but not later than ninety (90) days after the close of the period covered thereby,
an earnings statement (in form complying with, and in the manner provided by, the provisions of Rule 158 under the 1933 Act) covering
a twelve-month period beginning not later than the first day of the Company’s fiscal quarter next following the applicable Effective
Date of each Registration Statement.
(p) The Company shall otherwise
use its best efforts to comply with all applicable rules and regulations of the SEC in connection with any registration hereunder.
(q) Within one (1) Business Day
after a Registration Statement which covers Registrable Securities is declared effective by the SEC, the Company shall deliver, and shall
cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities (with copies to the Investors whose
Registrable Securities are included in such Registration Statement) confirmation that such Registration Statement has been declared effective
by the SEC in the form attached hereto as Exhibit A.
(r) Notwithstanding anything to
the contrary herein (but subject to the last sentence of this Section 3(r)), at any time after the Effective Date of a particular Registration
Statement, the Company may delay the disclosure of material, non-public information concerning the Company or any of its Subsidiaries
the disclosure of which at the time is not, in the good faith opinion of the board of directors of the Company, in the best interest of
the Company and, in the opinion of counsel to the Company, otherwise required (a “Grace Period”), provided that the
Company shall promptly notify the Investors in writing of the (i) existence of material, non-public information giving rise to a Grace
Period (provided that in each such notice the Company shall not disclose the content of such material, non-public information to any of
the Investors) and the date on which such Grace Period will begin and (ii) date on which such Grace Period ends, provided further that
(I) no Grace Period shall exceed ten (10) consecutive days and during any three hundred sixty five (365) day period all such Grace Periods
shall not exceed an aggregate of thirty (30) days, (II) the first day of any Grace Period must be at least five (5) Trading Days after
the last day of any prior Grace Period and (III) except as as described below, no Grace Period may exist during the sixty (60) Trading
Day period immediately following the Effective Date of such Registration Statement (provided that such sixty (60) Trading Day period shall
be extended by the number of Trading Days during such period and any extension thereof contemplated by this proviso during which such
Registration Statement is not effective or the prospectus contained therein is not available for use) (each, an “Allowable Grace
Period”). Notwithstanding the foregoing, any Registration Delay Payments due and payable as a result of an Effectiveness Failure
will accrue but remain unpaid for sixty (60) calendar days after such Effectiveness Failure (the “Effectiveness Cure Period”).
In the event the Company cures Effectiveness Failure the Effectiveness Cure Period, the accrued but unpaid Registration Delay Payments
shall be forgiven. A failure to cure the Effectiveness Failure in the Effectiveness Cure Period shall result in all Registration Delay
Payments accrued and unpaid since the Effectiveness Failure to be due and payable. For purposes of determining the length of a Grace Period
above, such Grace Period shall begin on and include the date the Investors receive the notice referred to in clause (i) above and shall
end on and include the later of the date the Investors receive the notice referred to in clause (ii) above and the date referred to in
such notice. The provisions of Section 3(g) hereof shall not be applicable during the period of any Allowable Grace Period. Upon expiration
of each Grace Period, the Company shall again be bound by the first sentence of Section 3(f) with respect to the information giving rise
thereto unless such material, non-public information is no longer applicable. Notwithstanding anything to the contrary contained in this
Section 3(r), the Company shall cause its transfer agent to deliver unlegended shares of Common Stock to a transferee of an Investor in
accordance with the terms of the Securities Purchase Agreement in connection with any sale of Registrable Securities with respect to which
such Investor has entered into a contract for sale, and delivered a copy of the prospectus included as part of the particular Registration
Statement to the extent applicable, prior to such Investor’s receipt of the notice of a Grace Period and for which the Investor
has not yet settled.
(s) The Company shall take all
other reasonable actions necessary to expedite and facilitate disposition by each Investors of its Registrable Securities pursuant to
each Registration Statement.
(t) Neither the Company nor any
Subsidiary or affiliate thereof shall identify any Investor as an underwriter in any public disclosure or filing with the SEC, the Principal
Market or any Eligible Market and any Buyer being deemed an underwriter by the SEC shall not relieve the Company of any obligations it
has under this Agreement or any other Transaction Document (as defined in the Securities Purchase Agreement); provided, however, that
the foregoing shall not prohibit the Company from including the disclosure found in the “Plan of Distribution” section attached
hereto as Exhibit B in the Registration Statement.
(u) Neither the Company nor any
of its Subsidiaries has entered, as of the date hereof, nor shall the Company or any of its Subsidiaries, on or after the date of this
Agreement, enter into any agreement with respect to its securities, that would have the effect of impairing the rights granted to the
Buyers in this Agreement or otherwise conflicts with the provisions hereof.
4. Obligations of the Investors.
(a) At least five (5) Business
Days prior to the first anticipated filing date of each Registration Statement, the Company shall notify each Investor in writing of the
information the Company requires from each such Investor with respect to such Registration Statement. It shall be a condition precedent
to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the Registrable Securities of
a particular Investor that such Investor shall furnish to the Company such information regarding itself, the Registrable Securities held
by it and the intended method of disposition of the Registrable Securities held by it, as shall be reasonably required to effect and maintain
the effectiveness of the registration of such Registrable Securities and shall execute such documents in connection with such registration
as the Company may reasonably request.
(b) Each Investor, by such Investor’s
acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with
the preparation and filing of each Registration Statement hereunder, unless such Investor has notified the Company in writing of such
Investor’s election to exclude all of such Investor’s Registrable Securities from such Registration Statement.
(c) Each Investor agrees that,
upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(g) or the first sentence
of 3(f), such Investor will immediately discontinue disposition of Registrable Securities pursuant to any Registration Statement(s) covering
such Registrable Securities until such Investor’s receipt of the copies of the supplemented or amended prospectus contemplated by
Section 3(g) or the first sentence of Section 3(f) or receipt of notice that no supplement or amendment is required. Notwithstanding anything
to the contrary in this Section 4(c), the Company shall cause its transfer agent to deliver unlegended shares of Common Stock to a transferee
of an Investor in accordance with the terms of the Securities Purchase Agreement in connection with any sale of Registrable Securities
with respect to which such Investor has entered into a contract for sale prior to the Investor’s receipt of a notice from the Company
of the happening of any event of the kind described in Section 3(g) or the first sentence of Section 3(f) and for which such Investor
has not yet settled.
5. Expenses of Registration.
All reasonable expenses, other
than underwriting discounts and commissions, incurred in connection with registrations, filings or qualifications pursuant to Sections
2 and 3, including, without limitation, all registration, listing and qualifications fees, printers and accounting fees, FINRA filing
fees (if any) and fees and disbursements of counsel for the Company shall be paid by the Company. The Company shall reimburse Legal Counsel
for its fees and disbursements in connection with registration, filing or qualification pursuant to Sections 2 and 3 of this Agreement
which amount shall be limited to $10,000 for each such registration, filing or qualification.
6. Indemnification.
(a) To the fullest extent permitted
by law, the Company will, and hereby does, indemnify, hold harmless and defend each Investor and each of its directors, officers, shareholders,
members, partners, employees, agents, advisors, representatives (and any other Persons with a functionally equivalent role of a Person
holding such titles notwithstanding the lack of such title or any other title) and each Person, if any, who controls such Investor within
the meaning of the 1933 Act or the 1934 Act and each of the directors, officers, shareholders, members, partners, employees, agents, advisors,
representatives (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding the lack of
such title or any other title) of such controlling Persons (each, an “Indemnified Person”), against any losses, obligations,
claims, damages, liabilities, contingencies, judgments, fines, penalties, charges, costs (including, without limitation, court costs,
reasonable attorneys’ fees and costs of defense and investigation), amounts paid in settlement or expenses, joint or several, (collectively,
“Claims”) incurred in investigating, preparing or defending any action, claim, suit, inquiry, proceeding, investigation
or appeal taken from the foregoing by or before any court or governmental, administrative or other regulatory agency, body or the SEC,
whether pending or threatened, whether or not an Indemnified Person is or may be a party thereto (“Indemnified Damages”),
to which any of them may become subject insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect
thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact in a Registration Statement
or any post-effective amendment thereto or in any filing made in connection with the qualification of the offering under the securities
or other “blue sky” laws of any jurisdiction in which Registrable Securities are offered (“Blue Sky Filing”),
or the omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein
not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus if used
prior to the effective date of such Registration Statement, or contained in the final prospectus (as amended or supplemented, if the Company
files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact
necessary to make the statements made therein, in light of the circumstances under which the statements therein were made, not misleading
or (iii) any violation or alleged violation by the Company of the 1933 Act, the 1934 Act, any other law, including, without limitation,
any state securities law, or any rule or regulation thereunder relating to the offer or sale of the Registrable Securities pursuant to
a Registration Statement or (iv) any violation of this Agreement (the matters in the foregoing clauses (i) through (iv) being, collectively,
“Violations”). Subject to Section 6(c), the Company shall reimburse the Indemnified Persons, promptly as such expenses
are incurred and are due and payable, for any legal fees or other reasonable expenses incurred by them in connection with investigating
or defending any such Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this
Section 6(a): (i) shall not apply to a Claim by an Indemnified Person arising out of or based upon a Violation which occurs in reliance
upon and in conformity with information furnished in writing to the Company by such Indemnified Person for such Indemnified Person expressly
for use in connection with the preparation of such Registration Statement or any such amendment thereof or supplement thereto, if such
prospectus was timely made available by the Company pursuant to Section 3(d); and (ii) shall not apply to amounts paid in settlement of
any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld
or delayed. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified
Person and shall survive the transfer of any of the Registrable Securities by any of the Investors pursuant to Section 9.
(b) In connection with any Registration
Statement in which an Investor is participating, such Investor agrees to severally and not jointly indemnify, hold harmless and defend,
to the same extent and in the same manner as is set forth in Section 6(a), the Company, each of its directors, each of its officers who
signs the Registration Statement and each Person, if any, who controls the Company within the meaning of the 1933 Act or the 1934 Act
(each, an “Indemnified Party”), against any Claim or Indemnified Damages to which any of them may become subject, under
the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or Indemnified Damages arise out of or are based upon any Violation, in
each case, to the extent, and only to the extent, that such Violation occurs in reliance upon and in conformity with written information
furnished to the Company by such Investor expressly for use in connection with such Registration Statement; and, subject to Section 6(c)
and the below provisos in this Section 6(b), such Investor will reimburse an Indemnified Party any legal or other expenses reasonably
incurred by such Indemnified Party in connection with investigating or defending any such Claim; provided, however, the indemnity agreement
contained in this Section 6(b) and the agreement with respect to contribution contained in Section 7 shall not apply to amounts paid in
settlement of any Claim if such settlement is effected without the prior written consent of such Investor, which consent shall not be
unreasonably withheld or delayed, provided further that such Investor shall be liable under this Section 6(b) for only that amount of
a Claim or Indemnified Damages as does not exceed the net proceeds to such Investor as a result of the applicable sale of Registrable
Securities pursuant to such Registration Statement. Such indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such Indemnified Party and shall survive the transfer of any of the Registrable Securities by any of the Investors
pursuant to Section 9.
(c) Promptly after receipt by
an Indemnified Person or Indemnified Party (as the case may be) under this Section 6 of notice of the commencement of any action or proceeding
(including, without limitation, any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified Party
(as the case may be) shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to
the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in,
and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of
the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party (as
the case may be); provided, however, an Indemnified Person or Indemnified Party (as the case may be) shall have the right to retain its
own counsel with the fees and expenses of such counsel to be paid by the indemnifying party if: (i) the indemnifying party has agreed
in writing to pay such fees and expenses; (ii) the indemnifying party shall have failed promptly to assume the defense of such Claim and
to employ counsel reasonably satisfactory to such Indemnified Person or Indemnified Party (as the case may be) in any such Claim; or (iii)
the named parties to any such Claim (including, without limitation, any impleaded parties) include both such Indemnified Person or Indemnified
Party (as the case may be) and the indemnifying party, and such Indemnified Person or such Indemnified Party (as the case may be) shall
have been advised by counsel that a conflict of interest is likely to exist if the same counsel were to represent such Indemnified Person
or such Indemnified Party and the indemnifying party (in which case, if such Indemnified Person or such Indemnified Party (as the case
may be) notifies the indemnifying party in writing that it elects to employ separate counsel at the expense of the indemnifying party,
then the indemnifying party shall not have the right to assume the defense thereof and such counsel shall be at the expense of the indemnifying
party, provided further that in the case of clause (iii) above the indemnifying party shall not be responsible for the reasonable fees
and expenses of more than one (1) separate legal counsel for such Indemnified Person or Indemnified Party (as the case may be). The Indemnified
Party or Indemnified Person (as the case may be) shall reasonably cooperate with the indemnifying party in connection with any negotiation
or defense of any such action or Claim by the indemnifying party and shall furnish to the indemnifying party all information reasonably
available to the Indemnified Party or Indemnified Person (as the case may be) which relates to such action or Claim. The indemnifying
party shall keep the Indemnified Party or Indemnified Person (as the case may be) reasonably apprised at all times as to the status of
the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for any settlement of any action,
claim or proceeding effected without its prior written consent; provided, however, the indemnifying party shall not unreasonably withhold,
delay or condition its consent. No indemnifying party shall, without the prior written consent of the Indemnified Party or Indemnified
Person (as the case may be), consent to entry of any judgment or enter into any settlement or other compromise which does not include
as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party or Indemnified Person (as the case
may be) of a release from all liability in respect to such Claim or litigation, and such settlement shall not include any admission as
to fault on the part of the Indemnified Party. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated
to all rights of the Indemnified Party or Indemnified Person (as the case may be) with respect to all third parties, firms or corporations
relating to the matter for which indemnification has been made. The failure to deliver written notice to the indemnifying party within
a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified
Person or Indemnified Party (as the case may be) under this Section 6, except to the extent that the indemnifying party is materially
and adversely prejudiced in its ability to defend such action.
(d) The indemnification required
by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when
bills are received or Indemnified Damages are incurred.
(e) The indemnity and contribution
agreements contained herein shall be in addition to (i) any cause of action or similar right of the Indemnified Party or Indemnified Person
against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject to pursuant to the law.
7. Contribution.
To the extent any indemnification
by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect
to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however: (i) no
contribution shall be made under circumstances where the maker would not have been liable for indemnification under the fault standards
set forth in Section 6 of this Agreement, (ii) no Person involved in the sale of Registrable Securities which Person is guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) in connection with such sale shall be entitled to contribution
from any Person involved in such sale of Registrable Securities who was not guilty of fraudulent misrepresentation; and (iii) contribution
by any seller of Registrable Securities shall be limited in amount to the amount of net proceeds received by such seller from the applicable
sale of such Registrable Securities pursuant to such Registration Statement. Notwithstanding the provisions of this Section 7, no Investor
shall be required to contribute, in the aggregate, any amount in excess of the amount by which the net proceeds actually received by such
Investor from the applicable sale of the Registrable Securities subject to the Claim exceeds the amount of any damages that such Investor
has otherwise been required to pay, or would otherwise be required to pay under Section 6(b), by reason of such untrue or alleged untrue
statement or omission or alleged omission.
8. Reports Under the 1934 Act.
With a view to making available
to the Investors the benefits of Rule 144, the Company agrees to:
(a) make and keep public information
available, as those terms are understood and defined in Rule 144;
(b) file with the SEC in a timely
manner all reports and other documents required of the Company under the 1933 Act and the 1934 Act so long as the Company remains subject
to such requirements (it being understood and agreed that nothing herein shall limit any obligations of the Company under the Securities
Purchase Agreement) and the filing of such reports and other documents is required for the applicable provisions of Rule 144; and
(c) furnish to each Investor so
long as such Investor owns Registrable Securities, promptly upon request, (i) a written statement by the Company, if true, that it has
complied with the reporting, submission and posting requirements of Rule 144, the 1933 Act and the 1934 Act, (ii) a copy of the most recent
annual or quarterly report of the Company and such other reports and documents so filed by the Company with the SEC if such reports are
not publicly available via EDGAR, and (iii) such other information as may be reasonably requested to permit the Investors to sell such
securities pursuant to Rule 144 without registration.
9. Assignment of Registration
Rights.
All or any portion of the rights
under this Agreement shall be automatically assignable by each Investor to any transferee or assignee (as the case may be) of all or any
portion of such Investor’s Registrable Securities, Notes or Warrants if: (i) such Investor agrees in writing with such transferee
or assignee (as the case may be) to assign all or any portion of such rights, and a copy of such agreement is furnished to the Company
within a reasonable time after such transfer or assignment (as the case may be); (ii) the Company is, within a reasonable time after such
transfer or assignment (as the case may be), furnished with written notice of (a) the name and address of such transferee or assignee
(as the case may be), and (b) the securities with respect to which such registration rights are being transferred or assigned (as the
case may be); (iii) immediately following such transfer or assignment (as the case may be) the further disposition of such securities
by such transferee or assignee (as the case may be) is restricted under the 1933 Act or applicable state securities laws if so required;
(iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this sentence such transferee or assignee
(as the case may be) agrees in writing with the Company to be bound by all of the provisions contained herein; (v) such transfer or assignment
(as the case may be) shall have been made in accordance with the applicable requirements of the Securities Purchase Agreement, the Notes
and the Warrants (as the case may be); and (vi) such transfer or assignment (as the case may be) shall have been conducted in accordance
with all applicable federal and state securities laws.
10. Amendment of Registration
Rights.
Provisions
of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively
or prospectively), only with the written consent of the Company and the Required Holders; provided that any such amendment or waiver that
complies with the foregoing, but that disproportionately, materially and adversely affects the rights and obligations of any Investor
relative to the comparable rights and obligations of the other Investors shall require the prior written consent of such adversely affected
Investor. Any amendment or waiver effected in accordance with this Section 10 shall be binding upon each Investor and the Company, provided
that no such amendment shall be effective to the extent that it (1) applies to less than all of the holders of Registrable Securities
or (2) imposes any obligation or liability on any Investor without such Investor’s prior written consent (which may be granted or
withheld in such Investor’s sole discretion). No waiver shall be effective unless it is in writing and signed by an authorized representative
of the waiving party. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision
of this Agreement unless the same consideration (other than the reimbursement of legal fees) also is offered to all of the parties to
this Agreement.
11. Miscellaneous.
(a) Solely for purposes of this
Agreement, a Person is deemed to be a holder of Registrable Securities whenever such Person owns, or is deemed to own, of record such
Registrable Securities. If the Company receives conflicting instructions, notices or elections from two or more Persons with respect to
the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received from such record owner
of such Registrable Securities.
(b) Any notices, consents, waivers
or other communications required or permitted to be given under the terms of this Agreement must be in writing and will be deemed to have
been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by electronic mail (provided that such sent
email is kept on file (whether electronically or otherwise) by the sending party and the sending party does not receive an automatically
generated message from the recipient’s email server that such e-mail could not be delivered to such recipient); or (iii) one (1)
Business Day after deposit with an overnight courier service with next day delivery specified, in each case, properly addressed to the
party to receive the same. The mailing addresses and e-mail addresses for such communications shall be:
If to the Company:
Evofem Biosciences, Inc.
921307770 Regents Road, Suite 113-618,
San Diego, California 92122
Telephone: (858) 550-1900
Attention: Chief Financial Officer
E-Mail: Izhang@traversellc.com
With a copy (for informational purposes
only) to:
Procopio Cory Hargreaves & Savitch, LLP
12544 High Bluff Drive
Suite 400
San Diego, CA 92130
Telephone: (858) 523-4305
E-Mail: dennis.doucette@procopio.com
If to the Transfer Agent:
Pacific Stock Transfer
6725 Via Austi Pkwy, Suite 300
Las Vegas, NV
Telephone: (702) 323-0033
Attention: Joslyn Claiborne
E-Mail: jclaiborne@pacificstocktransfer.com
If to Legal Counsel:
Kelley Drye & Warren LLP
3 World Trade Center
175 Greenwich Street
New York, NY 10007
Telephone: (212) 808-7540
Facsimile (212) 808-7897
Attention: Michael A. Adelstein, Esq.
E-mail: madelstein@kelleydrye.com
If to a Buyer, to its mailing address and/or email
address set forth on the Schedule of Buyers attached to the Securities Purchase Agreement, with copies to such Buyer’s representatives
as set forth on the Schedule of Buyers, or to such other mailing address and/or email address and/or to the attention of such other Person
as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness of such change.
Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender’s e-mail containing the time, date and recipient’s e-mail or (C) provided by a courier
or overnight courier service shall be rebuttable evidence of personal service, receipt by e-mail or receipt from a nationally recognized
overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.
(c) Failure of any party to exercise
any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right or remedy, shall not operate as a
waiver thereof. The Company and each Investor acknowledge and agree that irreparable damage would occur in the event that any of the provisions
of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that
each party hereto shall be entitled to an injunction or injunctions to prevent or cure breaches of the provisions of this Agreement by
any other party hereto and to enforce specifically the terms and provisions hereof (without the necessity of showing economic loss and
without any bond or other security being required), this being in addition to any other remedy to which any party may be entitled by law
or equity.
(d) All questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York,
without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the State of New York. 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, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding
is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit
in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND
AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT
OR ANY TRANSACTION CONTEMPLATED HEREBY.
(e) If any provision of this Agreement
is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would
otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable,
and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Agreement so
long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the
subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially
impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise
be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable
provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable
provision(s).
(f) This Agreement, the other
Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments referenced herein and therein constitute
the entire agreement among the parties hereto and thereto solely with respect to the subject matter hereof and thereof. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to herein and therein. This Agreement, the other Transaction
Documents, the schedules and exhibits attached hereto and thereto and the instruments referenced herein and therein supersede all prior
agreements and understandings among the parties hereto solely with respect to the subject matter hereof and thereof; provided, however,
nothing contained in this Agreement or any other Transaction Document shall (or shall be deemed to) (i) have any effect on any agreements
any Investor has entered into with the Company or any of its Subsidiaries prior to the date hereof with respect to any prior investment
made by such Investor in the Company, (ii) waive, alter, modify or amend in any respect any obligations of the Company or any of its Subsidiaries
or any rights of or benefits to any Investor or any other Person in any agreement entered into prior to the date hereof between or among
the Company and/or any of its Subsidiaries and any Investor and all such agreements shall continue in full force and effect or (iii) limit
any obligations of the Company under any of the other Transaction Documents.
(g) Subject to compliance with
Section 9 (if applicable), this Agreement shall inure to the benefit of and be binding upon the permitted successors and assigns of each
of the parties hereto. This Agreement is not for the benefit of, nor may any provision hereof be enforced by, any Person, other than the
parties hereto, their respective permitted successors and assigns and the Persons referred to in Sections 6 and 7 hereof.
(h) The headings in this Agreement
are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. Unless the context clearly indicates
otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter, singular and plural forms thereof. The terms
“including,” “includes,” “include” and words of like import shall be construed broadly as if followed
by the words “without limitation.” The terms “herein,” “hereunder,” “hereof” and words
of like import refer to this entire Agreement instead of just the provision in which they are found.
(i) This Agreement may be executed
in two or more identical counterparts, each of which shall be deemed an original, but all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event that
any signature is delivered by facsimile transmission or by an email which contains a portable document format (.pdf) file of an executed
signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such signature
is executed) with the same force and effect as if such signature page were an original thereof.
(j) Each party shall do and perform,
or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates,
instruments and documents as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated hereby.
(k) The language used in this
Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no rules of strict construction will
be applied against any party. Notwithstanding anything to the contrary set forth in Section 10, terms used in this Agreement but defined
in the other Transaction Documents shall have the meanings ascribed to such terms on the Closing Date in such other Transaction Documents
unless otherwise consented to in writing by each Investor.
(l) All consents and other determinations
required to be made by the Investors pursuant to this Agreement shall be made, unless otherwise specified in this Agreement, by the Required
Holders, determined as if all of the outstanding Notes then held by the Investors have been converted for Registrable Securities without
regard to any limitations on redemption, amortization and/or conversion of the Notes and the outstanding Warrants then held by Investors
have been exercised for Registrable Securities without regard to any limitations on exercise of the Warrants.
(m) This Agreement is intended
for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any
provision hereof be enforced by, any other Person.
(n) The obligations of each Investor
under this Agreement and the other Transaction Documents are several and not joint with the obligations of any other Investor, and no
Investor shall be responsible in any way for the performance of the obligations of any other Investor under this Agreement or any other
Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Investor pursuant hereto
or thereto, shall be deemed to constitute the Investors as, and the Company acknowledges that the Investors do not so constitute, a partnership,
an association, a joint venture or any other kind of group or entity, or create a presumption that the Investors are in any way acting
in concert or as a group or entity with respect to such obligations or the transactions contemplated by the Transaction Documents or any
matters, and the Company acknowledges that the Investors are not acting in concert or as a group, and the Company shall not assert any
such claim, with respect to such obligations or the transactions contemplated by this Agreement or any of the other the Transaction Documents.
Each Investor shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out
of this Agreement or out of any other Transaction Documents, and it shall not be necessary for any other Investor to be joined as an additional
party in any proceeding for such purpose. The use of a single agreement with respect to the obligations of the Company contained herein
was solely in the control of the Company, not the action or decision of any Investor, and was done solely for the convenience of the Company
and not because it was required or requested to do so by any Investor. It is expressly understood and agreed that each provision contained
in this Agreement and in each other Transaction Document is between the Company and an Investor, solely, and not between the Company and
the Investors collectively and not between and among Investors.
[Signature Page Follows]
IN WITNESS WHEREOF, each
Buyer and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed as of the
date first written above.
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COMPANY: |
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EVOFEM BIOSCIENCES, INC. |
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IN WITNESS WHEREOF, each
Buyer and the Company have caused their respective signature page to this Registration Rights Agreement to be duly executed as of the
date first written above.
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BUYER: |
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EXHIBIT A
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
______________________
______________________
______________________
Attention: _____________
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Re: |
Evofem Biosciences, Inc. |
Ladies and Gentlemen:
[We are][I am] counsel to Evofem
Biosciences, Inc., a Delaware corporation (the “Company”), and have represented the Company in connection with that
certain Securities Purchase Agreement (the “Securities Purchase Agreement”) entered into by and among the Company and
the buyers named therein (collectively, the “Holders”) pursuant to which the Company issued to the Holders senior subordinated
convertible notes (the “Notes”) convertible into the Company’s shares of common stock, $0.0001 par value per
share (the “Common Stock”), and warrants exercisable for shares of Common Stock (the “Warrants”).
Pursuant to the Securities Purchase Agreement, the Company also has entered into a Registration Rights Agreement with the Holders (the
“Registration Rights Agreement”) pursuant to which the Company agreed, among other things, to register the Registrable
Securities (as defined in the Registration Rights Agreement), including the shares of Common Stock issuable upon conversion of the Notes
and exercise of the Warrants, under the Securities Act of 1933, as amended (the “1933 Act”). In connection with the
Company’s obligations under the Registration Rights Agreement, on ____________ ___, 20__, the Company filed a Registration Statement
on Form S-1 (File No. 333-_____________) (the “Registration Statement”) with the Securities and Exchange Commission
(the “SEC”) relating to the Registrable Securities which names each of the Holders as a selling stockholder thereunder.
In connection with the foregoing,
[we][I] advise you that [a member of the SEC’s staff has advised [us][me] by telephone that [the SEC has entered an order declaring
the Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS]] [an order declaring
the Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS]] has been posted
on the web site of the SEC at www.sec.gov] and [we][I] have no knowledge, after a review of information posted on the website of the SEC
at http://www.sec.gov/litigation/stoporders.shtml, that any stop order suspending its effectiveness has been issued or that any proceedings
for that purpose are pending before, or threatened by, the SEC and the Registrable Securities are available for resale under the 1933
Act pursuant to the Registration Statement.
This letter shall serve as our standing
opinion to you that the shares of Common Stock underlying the Notes and Warrants are freely transferable by the Holders pursuant to the
Registration Statement. You need not require further letters from us to effect any future legend-free issuance or reissuance of such shares
of Common Stock to the Holders as contemplated by the Company’s Irrevocable Transfer Agent Instructions dated _________ __, 20__.
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Very truly yours, |
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[ISSUER’S COUNSEL] |
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EXHIBIT B
SELLING STOCKHOLDERS
The shares of common stock being
offered by the selling stockholders are those issuable to the selling stockholders upon conversion of the notes and exercise of the warrants.
For additional information regarding the issuance of the notes and the warrants, see “Private Placement of Notes and Warrants”
above. We are registering the shares of common stock in order to permit the selling stockholders to offer the shares for resale from time
to time. Except for the ownership of the notes and the warrants issued pursuant to the Securities Purchase Agreement, the selling stockholders
have not had any material relationship with us within the past three years.
The table below lists the selling
stockholders and other information regarding the beneficial ownership (as determined under Section 13(d) of the Securities Exchange Act
of 1934, as amended, and the rules and regulations thereunder) of the shares of common stock held by each of the selling stockholders.
The second column lists the number of shares of common stock beneficially owned by the selling stockholders, based on their respective
ownership of shares of common stock, notes and warrants, as of ________, 20__, assuming conversion of the notes and exercise of the warrants
held by each such selling stockholder on that date but taking account of any limitations on conversion and exercise set forth therein.
The third column lists the shares
of common stock being offered by this prospectus by the selling stockholders and does not take in account any limitations on (i) conversion
of the notes set forth therein or (ii) exercise of the warrants set forth therein.
In accordance with the terms of
a registration rights agreement with the holders of the notes and the warrants, this prospectus generally covers the resale of 200% of
the sum of (i) the maximum number of shares of common stock issued or issuable pursuant to the Notes, including payment of interest on
the notes through [DATE], and (ii) the maximum number of shares of common stock issued or issuable upon exercise of the warrants, in each
case, determined as if the outstanding notes (including interest on the notes through [DATE]) and warrants were converted or exercised
(as the case may be) in full (without regard to any limitations on conversion or exercise contained therein solely for the purpose of
such calculation) at an alternate conversion price or exercise price (as the case may be) calculated as of the trading day immediately
preceding the date this registration statement was initially filed with the SEC. Because the conversion price and alternate conversion
price of the notes and the exercise price of the warrants may be adjusted, the number of shares that will actually be issued may be more
or less than the number of shares being offered by this prospectus. The fourth column assumes the sale of all of the shares offered by
the selling stockholders pursuant to this prospectus.
Under the terms of the notes and
the warrants, a selling stockholder may not convert the notes or exercise the warrants to the extent (but only to the extent) such selling
stockholder or any of its affiliates would beneficially own a number of shares of our common stock which would exceed 4.99% of the outstanding
shares of the Company. The number of shares in the second column reflects these limitations. The selling stockholders may sell all, some
or none of their shares in this offering. See “Plan of Distribution.”
Name of Selling Stockholder |
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of Shares of Common Stock Owned Prior to Offering |
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Maximum
Number of Shares of Common Stock to be Sold Pursuant to this Prospectus |
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Number
of Shares of Common Stock of Owned After Offering |
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PLAN OF DISTRIBUTION
We are registering the shares
of common stock issuable upon conversion of the notes and exercise of the warrants to permit the resale of these shares of common stock
by the holders of the notes and warrants from time to time after the date of this prospectus. We will not receive any of the proceeds
from the sale by the selling stockholders of the shares of common stock, although we will receive the exercise price of any Warrants not
exercised by the selling stockholders on a cashless exercise basis. We will bear all fees and expenses incident to our obligation to register
the shares of common stock.
The selling stockholders may sell
all or a portion of the shares of common stock held by them and offered hereby from time to time directly or through one or more underwriters,
broker-dealers or agents. If the shares of common stock are sold through underwriters or broker-dealers, the selling stockholders will
be responsible for underwriting discounts or commissions or agent’s commissions. The shares of common stock may be sold in one or
more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time of sale
or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions, pursuant to one
or more of the following methods:
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● |
on any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale; |
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|
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● |
in the over-the-counter market; |
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|
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● |
in transactions otherwise than on these exchanges or systems or in the over-the-counter market; |
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|
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● |
through the writing or settlement of options, whether such options are listed on an options exchange or otherwise; |
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|
|
| |
● |
ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
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|
|
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● |
block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; |
| |
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|
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● |
purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
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|
|
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● |
an exchange distribution in accordance with the rules of the applicable exchange; |
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|
|
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● |
privately negotiated transactions; |
| |
|
|
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● |
short sales made after the date the Registration Statement is declared effective by the SEC; |
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● |
broker-dealers may agree with a selling security holder to sell a specified number of such shares at a stipulated price per share; |
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|
|
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● |
a combination of any such methods of sale; and |
| |
|
|
| |
● |
any other method permitted pursuant to applicable law. |
The selling stockholders may also
sell shares of common stock under Rule 144 promulgated under the Securities Act of 1933, as amended, if available, rather than under this
prospectus. In addition, the selling stockholders may transfer the shares of common stock by other means not described in this prospectus.
If the selling stockholders effect such transactions by selling shares of common stock to or through underwriters, broker-dealers or agents,
such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from the selling
stockholders or commissions from purchasers of the shares of common stock for whom they may act as agent or to whom they may sell as principal
(which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in excess of those customary
in the types of transactions involved). In connection with sales of the shares of common stock or otherwise, the selling stockholders
may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the shares of common stock in the
course of hedging in positions they assume. The selling stockholders may also sell shares of common stock short and deliver shares of
common stock covered by this prospectus to close out short positions and to return borrowed shares in connection with such short sales.
The selling stockholders may also loan or pledge shares of common stock to broker-dealers that in turn may sell such shares.
The selling stockholders may pledge
or grant a security interest in some or all of the notes, warrants or shares of common stock owned by them and, if they default in the
performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock from time to time
pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities Act
amending, if necessary, the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling
stockholders under this prospectus. The selling stockholders also may transfer and donate the shares of common stock in other circumstances
in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of
this prospectus.
To the extent required by the
Securities Act and the rules and regulations thereunder, the selling stockholders and any broker-dealer participating in the distribution
of the shares of common stock may be deemed to be “underwriters” within the meaning of the Securities Act, and any commission
paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting commissions or discounts under
the Securities Act. At the time a particular offering of the shares of common stock is made, a prospectus supplement, if required, will
be distributed, which will set forth the aggregate amount of shares of common stock being offered and the terms of the offering, including
the name or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the selling
stockholders and any discounts, commissions or concessions allowed or re-allowed or paid to broker-dealers.
Under the securities laws of some
states, the shares of common stock may be sold in such states only through registered or licensed brokers or dealers. In addition, in
some states the shares of common stock may not be sold unless such shares have been registered or qualified for sale in such state or
an exemption from registration or qualification is available and is complied with.
There can be no assurance that
any selling stockholder will sell any or all of the shares of common stock registered pursuant to the registration statement, of which
this prospectus forms a part.
The selling stockholders and any
other person participating in such distribution will be subject to applicable provisions of the Securities Exchange Act of 1934, as amended,
and the rules and regulations thereunder, including, without limitation, to the extent applicable, Regulation M of the Exchange Act, which
may limit the timing of purchases and sales of any of the shares of common stock by the selling stockholders and any other participating
person. To the extent applicable, Regulation M may also restrict the ability of any person engaged in the distribution of the shares of
common stock to engage in market-making activities with respect to the shares of common stock. All of the foregoing may affect the marketability
of the shares of common stock and the ability of any person or entity to engage in market-making activities with respect to the shares
of common stock.
We will pay all expenses of the
registration of the shares of common stock pursuant to the registration rights agreement, estimated to be $[ ] in total, including, without
limitation, Securities and Exchange Commission filing fees and expenses of compliance with state securities or “blue sky”
laws; provided, however, a selling stockholder will pay all underwriting discounts and selling commissions, if any. We will indemnify
the selling stockholders against liabilities, including some liabilities under the Securities Act in accordance with the registration
rights agreements or the selling stockholders will be entitled to contribution. We may be indemnified by the selling stockholders against
civil liabilities, including liabilities under the Securities Act that may arise from any written information furnished to us by the selling
stockholder specifically for use in this prospectus, in accordance with the related registration rights agreements or we may be entitled
to contribution.
Once sold under the registration
statement, of which this prospectus forms a part, the shares of common stock will be freely tradable in the hands of persons other than
our affiliates.
v3.23.3
Cover
|
Sep. 27, 2023 |
| Cover [Abstract] |
|
| Document Type |
8-K
|
| Amendment Flag |
false
|
| Document Period End Date |
Sep. 27, 2023
|
| Entity File Number |
001-36754
|
| Entity Registrant Name |
EVOFEM
BIOSCIENCES, INC.
|
| Entity Central Index Key |
0001618835
|
| Entity Tax Identification Number |
20-8527075
|
| Entity Incorporation, State or Country Code |
DE
|
| Entity Address, Address Line One |
7770
Regents Road
|
| Entity Address, Address Line Two |
Suite 113-618
|
| Entity Address, City or Town |
San
Diego
|
| Entity Address, State or Province |
CA
|
| Entity Address, Postal Zip Code |
92122
|
| City Area Code |
(858)
|
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550-1900
|
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false
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false
|
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false
|
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|
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Common
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|
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EVFM
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