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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):
August 7, 2024
ADITXT, INC.
(Exact name of registrant as specified in its
charter)
Delaware |
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001-39336 |
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85-3204328 |
(State or other jurisdiction
of incorporation) |
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(Commission
File Number) |
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(I.R.S. Employer
Identification No.) |
2569 Wyandotte Street, Suite 101, Mountain View,
CA 94043
(Address of principal executive offices, including
ZIP code)
(650) 870-1200
(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) |
|
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☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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☐ |
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 |
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Trading Symbol(s) |
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Name of each exchange on which registered |
Common Stock, par value $0.001 |
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ADTX |
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The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant
is an emerging growth company as defined in 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.
As previously reported in a Current Report on
Form 8-K filed by Aditxt, Inc. (the “Company”), on December 29, 2023, the Company entered
into a securities purchase agreement with an institutional investor (“the “Holder”) for the issuance and sale
in a private placement of (i) pre-funded warrants (the “Pre-Funded Warrants”) to purchase up to 1,237,114 shares of
the Company’s common stock, par value $0.001 (the “Common Stock”) at an exercise price of $0.001 per share, and
(ii) warrants to purchase up to 2,474,228 shares of the Company’s Common Stock, at a purchase price of $4.85 per share.
On August 7, 2024, Aditxt, Inc. (the “Company”)
entered into a Securities Exchange Agreement with the Holder (the “Exchange Agreement”), pursuant to which the Company
agreed to exchange the Pre-Funded Warrants for: (i) an aggregate of 6,667 shares of the Company’s Series C-1 Convertible Preferred
Stock, par value $0.001 per share (the “Series C-1 Preferred Stock”), and (ii) warrants to purchase 2,569,171 shares
of the Company’s Common Stock at an exercise price of $1.49 per share for a term of five years (the “Warrants”). As
previously reported in a Current Report on Form 8-K filed by the Company, on May 2, 2024, the Company
filed a Certificate of Designation for its Series C-1 Preferred Stock with the Secretary of State of Delaware (the “Series
C-1 Certificate of Designations”).
The foregoing descriptions of the Series C-1 Certificate
of Designations, the Warrants, and the Exchange Agreement do not purport to be complete and are qualified in their entirety by the full
text of the Series C-1 Certificate of Designations, the Form of Warrant and the Exchange Agreement, which are attached hereto as Exhibit
3.1, 4.1 and 10.1, respectively, respectively and incorporated by reference herein.
Item
3.02 Unregistered Sales of Equity Securities.
The information
contained in Item 1.01 of this Current Report on Form 8-K in relation to the issuance of the shares of Series C-1 Preferred Stock is incorporated
by reference herein. The shares of Series C-1 Preferred Stock will be issued in reliance on the exemption from registration provided by
Section 3(a)(9) under the Securities Act of 1933, as amended.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
SIGNATURE
Pursuant to the requirements of the Securities
and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: August 8, 2024
Aditxt, Inc. |
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By: |
/s/ Amro Albanna |
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Name: |
Amro Albanna |
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Title: |
Chief Executive Officer |
|
-2-
Exhibit
4.1
FORM
OF 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.
Aditxt,
Inc.
Warrant
To Purchase Common Stock
Warrant
No.:
Date
of Issuance: August 7, 2024 (“Issuance Date”)
Aditxt,
Inc., a Delaware corporation (the “Company”), hereby certifies that, for
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
[BUYER], the registered holder hereof or its
permitted assigns (the “Holder”), is entitled, subject to the terms set
forth below, to purchase from the Company, at the Exercise Price (as defined below) then
in effect, upon exercise of this Warrant to Purchase Common Stock (including any Warrants
to Purchase Common Stock issued in exchange, transfer or replacement hereof, the “Warrant”),
at any time or times on or after the six month and one day anniversary of the Issuance Date
(the “Initial Exercisability 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.
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 Initial Exercisability 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 $[___], 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), 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
= the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise.
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 Exchange Agreement by and between the
Holder and the Company dated August 7, 2024 (the “Exchange 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(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 the Initial Reserve Amount (as defined in the Exchange Agreement) or (y) from
and after the Initial Reserve Expiration Date, 200% of the maximum number of shares of Common
Stock as shall be necessary to satisfy the Company’s obligation to issue shares of
Common Stock under the SPA Warrants then outstanding (without regard to any limitations on
exercise) (collectively, 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 (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. 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.
2. ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. Following the Stockholder approval Date, 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, 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) 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(b) 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 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 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 (or the time of execution of such 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)
with respect to any one share of Common Stock 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 minus (3) 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 Exercise 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 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) 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 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 the Exercise Price 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 4(b) above),
the Exercise Price in effect at the time of such increase or decrease shall be adjusted to the Exercise Price which would have been in
effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase price, additional consideration
or increased or decreased conversion rate (as the case may be) at the time initially granted, issued or sold. For purposes of this Section
2(b)(iii), if the terms of any Option or Convertible Security (including, without limitation, any Option or Convertible Security that
was outstanding as of the 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 Required Holders, the “Primary
Security”, and such Option and/or Convertible Security and/or Adjustment Right, the “Secondary Securities”
and together with the Primary Security, each a “Unit”), together comprising one integrated transaction, the aggregate
consideration per share of Common Stock with respect to such Primary Security shall be deemed to be the lower of (x) the purchase price
of such Unit, (y) if such Primary Security is an Option and/or Convertible Security, the lowest price per share for which one share of
Common Stock is at any time issuable upon the exercise or conversion of the Primary Security in accordance with Section 2(b)(i) or 2(b)(ii)
above and (z) the lowest VWAP of the shares of Common Stock on any Trading Day during the five (5) Trading Day period (the “Adjustment
Period”) immediately following the public announcement of such Dilutive Issuance (for the avoidance of doubt, if such public
announcement is released prior to the opening of the Principal Market on a Trading Day, such Trading Day shall be the first Trading Day
in such five Trading Day period and if this Warrant is exercised, on any given Exercise Date during any such Adjustment Period, solely
with respect to such portion of this Warrant converted on such applicable Exercise Date, such applicable Adjustment Period shall be deemed
to have ended on, and included, the Trading Day immediately prior to such Exercise Date). 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 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 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
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 Required 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 Required Holder. The determination of such appraiser shall
be final and binding upon all parties absent manifest error and the fees and expenses of such appraiser shall be borne by the Company.
(v) Record
Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive a dividend
or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for or purchase shares
of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issuance or sale of the
shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution
or the date of the granting of such right of subscription or purchase (as the case may be).
(c) Number
of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to this Section 2(b) and/or Section 2(h)
below, as applicable, 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) [Intentionally
Omotted].
(e)
Other Events. In the event that the Company (or any Subsidiary (as defined in the
Exchange 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 4(d) will
increase the Exercise Price or decrease the number of Warrant Shares as otherwise determined
pursuant to this Section 2, provided further that if the Holder does not accept such adjustments
as appropriately protecting its interests hereunder against such dilution, then the Company’s
board of directors and the Holder shall agree, in good faith, upon an independent investment
bank of nationally recognized standing to make such appropriate adjustments, whose determination
shall be final and binding absent manifest error and whose fees and expenses shall be borne
by the Company.
(f) Calculations.
All calculations under this Section 2 shall be made by rounding to the nearest cent or the nearest 1/100th of a share,
as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the
account of the Company, and the disposition of any such shares shall be considered an issuance or sale of Common Stock.
(g)
Voluntary Adjustment By Company. Subject to the rules and regulations of the Principal
Market, the Company may at any time during the term of this Warrant, with the prior written
consent of the Required Holders (as defined in the Exchange 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.
(h)
Adjustments. If on any of the ninetieth (90th) and one hundred and eightieth
(180th), as applicable, calendar day after each of (x) each date of occurrence
of any Stock Combination Event and (y) the Applicable Date (as defined in the Exchange Agreement)
(each, an “Adjustment Date”), the Exercise Price then in effect is greater
than the greater of (A) the Floor Price (as defined in the Certificate of Designations),
and (B) the Market Price (as defined in the Certificate of Designations) then in effect (the
“Adjustment Price”), on the Adjustment Date the Exercise Price shall automatically
lower to the Adjustment Price.
(i)
Exercise Floor Price. Prior to the Stockholder Approval Date (as defined in the Exchange
Agreement), no adjustment pursuant to this Section 2 shall cause the Exercise Price to be
less than $[____] (as adjusted for any stock dividend, stock split, stock combination, reclassification
or similar transaction occurring after the date of the Exchange Agreement) (the “Exercise
Floor Price”). As of the Stockholder Approval Date, any Dilutive Issuances or other
events that would have resulted in an adjustment to the Exercise Price prior to the Stockholder
Approval Date, but for the application of this Section 2(i), shall adjust the Exercise Price
hereunder as if such Dilutive Issuances and/or other events, as applicable, occurred on the
Stockholder Approval Date.
3. RIGHTS
UPON DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 2 above or Section 4(a) below, if the Company
shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common
Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities,
property, options, evidence of indebtedness or any other assets by way of a dividend, spin off, reclassification, corporate rearrangement,
scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant,
then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have
participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without
regard to any limitations or restrictions on exercise of this Warrant, including without limitation, the 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 Exchange 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; 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
the provisions of this Section 4(c) shall not apply to any Fundamental Transactions that have been publicly announced as of the date
hereof, including but not limited to, the transactions contemplated by the Merger Agreement.
(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
Exchange Agreement), Bylaws (as defined in the Exchange 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 Exchange 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), 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 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. 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 Exchange 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.
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 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 Exchange Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.
The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York,
Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is
not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum
or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing
suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to the
Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor
of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.
14. CONSTRUCTION;
HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against any
Person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or affect the
interpretation of, this Warrant. Terms used in this Warrant but defined in the other Transaction Documents shall have the meanings ascribed
to such terms on the Closing Date (as defined in the Exchange Agreement) in such other Transaction Documents unless otherwise consented
to in writing by the Holder.
15. DISPUTE
RESOLUTION.
(a) Submission
to Dispute Resolution.
(i)
In the case of a dispute relating to the Exercise Price, the Closing Sale Price, the Bid Price, 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, 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.
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 § 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).
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 the Exchange 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)
“Adjustment Measurement Commencement Date” means January 1, 2023.
(d)
“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).
(e)
“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.
(f)
“Applicable Date” means the later of (x) the Stockholder Approval Date and (y) the earlier to occur of (A) the effective
date of a registration statement registering the resale by the Holders of all of the Registrable Securities and (B) the date the Registrable
Securities are eligible to be resold by the Holders (assuming such Holders are not then affiliates of the Company) without restriction
under Rule 144 of the 1933 Act (in each case, without regard to any limitations on exercise herein).
(g)
“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.
(h)
“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.
(i)
“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.
(j)
“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), 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) 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), (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) 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)
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).
(k)
“Bloomberg” means Bloomberg, L.P.
(l)
“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.
(m)
“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.
(n)
“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.
(o)
“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.
(p)
“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.
(q)
[Intentionally omitted]
(r)
[Intentionally omitted]
(s)
“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 either (x) with respect to any issuances during the period commencing on
the Issuance Date through [December 31], 2024 and/or (y) with respect to any issuances in
any given calendar year thereafter, as applicable, exceed 10% of the Common Stock issued
and outstanding as of the first calendar day in such period and/or calendar year, as applicable,
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 Adjustment
Measurement Commencement 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; and (iii) 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).
(t)
“Expiration Date” means the date that is the fifth (5th) anniversary of the Initial Exercisability 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.
(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 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.
(v)
“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.
(w)
“Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible
Securities.
(x)
“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.
(y)
“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.
(z)
“Principal Market” means the Nasdaq Capital Market.
(aa)
“Registration Rights Agreement” means that certain registration rights agreement, dated as of the Closing Date, by
and among the Company and the Buyers 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, as may be amended from time to time.
(bb)
“SEC” means the United States Securities and Exchange Commission or the successor thereto.
(cc)
“Stock Combination Event” means the occurrence at any time and from time to time on or after the Subscription Date
of any stock split, stock dividend, stock combination recapitalization or other similar transaction involving the Common Stock.
(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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ADITXT, INC. |
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By: |
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Amro Albanna |
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Title: |
Chief Executive Officer |
EXHIBIT
A
EXERCISE
NOTICE
TO
BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT TO PURCHASE COMMON STOCK
ADITXT,
INC.
The
undersigned holder hereby elects to exercise the Warrant to Purchase Common Stock No. _______ (the “Warrant”)
of Aditxt, 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 |
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“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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Account Number: |
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Date: _____________ __,________ |
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Name of Registered
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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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ADITXT, INC. |
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By: |
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Name: |
Amro Albanna |
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Title: |
Chief Executive Officer |
Exhibit 10.1
SECURITIES EXCHANGE
AGREEMENT
This SECURITIES EXCHANGE
AGREEMENT (the “Agreement”), dated as of August 7, 2024, is by and among Aditxt, Inc., a Delaware corporation with
offices located at 737 N. Fifth Street, Suite 200, Richmond, VA 23219 (the “Company”), and each of the investors listed
on the Schedule of Buyers attached hereto (individually, a “Buyer” and collectively, the “Buyers”).
RECITALS
A. Pursuant
to that certain securities purchase agreement, dated December 29, 2023, by and among the Company and the Buyers (the “Prior Purchase
Agreement”), the Company issued to the Buyers Pre-Funded Common Stock Purchase Warrants (“PFWs”) and Common
Stock Purchase Warrants (“Prior Warrants”) for an aggregate purchase price of, in the aggregate, $6,000,002.90 (“Prior
Purchase Price”).
B. The
Company has authorized (i) a new series of convertible preferred stock of the Company designated as Series C-1 Preferred Stock, $0.001
par value, the terms of which are set forth in the certificate of designation for such series of Preferred Stock (the “Certificate
of Designations”) in the form attached hereto as Exhibit A-1 (together with any convertible preferred shares issued
in replacement thereof in accordance with the terms thereof, the “Series C-1 Preferred Stock”), which Series C-1 Preferred
Stock shall be convertible into shares of Common Stock (such shares of Common Stock issuable pursuant to the terms of the Certificate
of Designations, including, without limitation, upon conversion or otherwise, collectively, the “Conversion Shares”),
in accordance with the terms of the Series C-1 Certificate of Designations.
C. On
the Closing Date, in reliance upon Section 3(a)(9) of the Securities Act of 1933, as amended (the “1933 Act”), the
exemption from securities registration afforded by 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, each Buyer wishes
to surrender for exchange, and the Company wishes to issue in exchange, upon the terms and conditions stated in this Agreement, all of
the PFWs and Prior Warrants held by the Buyer in exchange for (i) the aggregate number of shares of Series C-1 Preferred Stock (the “Preferred
Shares”) 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 (5) on the
Schedule of Buyers, substantially in the form attached hereto as Exhibit B (the “Warrants”) (as exercised,
collectively, the “Warrant Shares”).
D. Concurrently
herewith, the Company and certain other buyers (“Other Buyers”) are entering into a separate Securities Purchase Agreement
(“Other Purchase Agreement”), dated as of the date hereof, pursuant to which the Other Buyers shall purchase shares
of Preferred Stock and Common Stock Purchase Warrants and pursuant to which the parties hereto and thereto 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
Preferred Shares, 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. EXCHANGE
AND SALE OF PREFERRED SHARES AND WARRANTS.
(a) Exchange
of Preferred Shares and Warrants. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below, the
Company shall exchange and issue to each Buyer, and each Buyer severally, but not jointly, agrees to exchange with the Company, on the
Closing Date (as defined below), all of the PFWs and Prior Warrants held by such Buyer for (i) the aggregate number of Preferred Shares
as is set forth opposite such Buyer’s name in column (3) on the Schedule of Buyers and (ii) Warrants to initially acquire up to
that aggregate number of 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 exchange of the PFWs and Prior Warrant for the Preferred Shares and the Warrants
shall occur at the offices of Sheppard, Mullin, Richter & Hampton LLP. 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) Exchange
Price. The aggregate exchange price for the Preferred Shares and the Warrants to be issued upon surrender of the PFWs and Prior Warrants
by each Buyer (the “Exchange Price”) shall be the Prior Purchase Price, plus $720,000 in accrued but unpaid liquidated
damages owed to the Buyer as a result of certain registration defaults, and shall be set forth opposite such Buyer’s name in column
(6) on the Schedule of Buyers.
(d) Exchange.
Concurrently with the closing of the transactions contemplated by the Other Purchase Agreement and in consideration for the agreement
to exchange to PFWs and Prior Warrants for the Securities issued and issuable hereunder, the Company shall deliver to each Buyer (A) the
aggregate number of Preferred Shares as is set forth opposite such Buyer’s name in column (3) of the Schedule of Buyers and (B)
a Warrant pursuant to which such Buyer shall have the right to initially acquire up to such aggregate number of Warrant Shares as is set
forth opposite such Buyer’s name in column (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. On the Closing Date, each Buyer shall surrender to the Company its respective PFWs
and Prior Warrants.
(e) Consent;
Waiver. Each Buyer, severally, and not jointly, consents to the transactions contemplated hereby and, to the extent a Buyer holds
any other securities of the Company or otherwise is a party to an agreement with the Company that would prohibit the issuance of the Securities
hereunder, waives, solely with respect to the issuance of the Securities hereunder, and not with respect to any other Subsequent Placement
(as defined below), any term or condition that would otherwise prohibit the issuances of the Securities in accordance herewith (which,
for the avoidance, of doubt, shall not include any waiver of any term or conditions that would adjust any conversion price or exercise
price of any security of such Buyer, as applicable)
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 Preferred Shares and Warrants, (ii) upon conversion of its Preferred
Shares 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(g) 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.
(j) Residency.
Such Buyer is a resident of that jurisdiction specified below its address on the Schedule of Buyers.
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. Except as set forth in Schedule 3(a), 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 Preferred Shares and the reservation for issuance
and issuance of the Conversion Shares issuable upon conversion of the Preferred Shares 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. The Certificate of Designations in the form attached hereto as
Exhibit A-1 has been filed with the Secretary of State of the State of Delaware and is in full force and effect, enforceable against the
Company in accordance with its terms and has not have been amended. “Transaction Documents” means, collectively, this
Agreement, the Certificate of Designations, the Preferred Shares, 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 Preferred Shares 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. As of the Closing, the Company shall have reserved from
its duly authorized capital stock not less than such aggregate number of shares of Common Stock for issuances pursuant to the Preferred
Shares and the Warrants as set forth in Schedule 3(c) attached hereto (if any)(the “Initial Reserve Amount”).
Upon issuance or conversion in accordance with the Preferred Shares 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. 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 Preferred Shares, 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, except as set forth in Schedule 3(d)(ii), or
(iii) result in a violation of any law, rule, regulation, order, judgment or decree (including, without limitation, foreign, federal and
state securities laws and regulations and the rules and regulations of the Nasdaq Capital Market (the “Principal Market”)
and including all applicable foreign, federal and state laws, rules and regulations) applicable to the Company or any of its Subsidiaries
or by which any property or asset of the Company or any of its Subsidiaries is bound or affected.
(e) Consents.
Except as set forth in 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.
Except as disclosed in Schedule 3(e), 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 Exchange 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 exchange of the Securities for the PFWs and Prior Warrants. 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; 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 Preferred
Shares in accordance with this Agreement and the Certificate of Designations and the Warrant Shares upon exercise of the Warrants in accordance
with this Agreement 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. 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”).
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. 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. Since the date of the Company’s
most recent audited financial statements contained in a Form 10-K, neither the Company nor any of its Subsidiaries has (i) declared or
paid any dividends, (ii) sold any assets, individually or in the aggregate, outside of the ordinary course of business or (iii) made any
capital expenditures, individually or in the aggregate, outside of the ordinary course of business. Neither the Company nor any of its
Subsidiaries has taken any steps to seek protection pursuant to any law or statute relating to bankruptcy, insolvency, reorganization,
receivership, liquidation or winding up, nor does the Company or any Subsidiary have any knowledge or reason to believe that any of their
respective creditors intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably
lead a creditor to do so.
(m) No
Undisclosed Events, Liabilities, Developments or Circumstances. Except as set forth in Schedule 3(m), 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) could have a material adverse effect on any Buyer’s investment hereunder or (iii) could have a Material Adverse
Effect.
(n) Conduct
of Business; Regulatory Permits. Neither the Company nor any of its Subsidiaries is in violation of any term of or in default under
its 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 possible violations which could not, individually or in the aggregate, have a Material Adverse
Effect. Without limiting the generality of the foregoing, except as set forth in Schedule 3(n), 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 set forth in Schedule 3(n), 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. There is no agreement, commitment, judgment, injunction, order or decree binding upon the Company or any of its Subsidiaries
or to which the Company or any of its Subsidiaries is a party which has or would reasonably be expected to have the effect of prohibiting
or materially impairing any business practice of the Company or any of its Subsidiaries, any acquisition of property by the Company or
any of its Subsidiaries or the conduct of business by the Company or any of its Subsidiaries as currently conducted other than such effects,
individually or in the aggregate, which have not had and would not reasonably be expected to have a Material Adverse Effect on the Company
or any of its Subsidiaries.
(o) Foreign Corrupt Practices.
Neither the Company, the Company’s subsidiary or any director, officer, agent, employee, nor any other person acting for or on
behalf of the foregoing (individually and collectively, a “Company Affiliate”) have violated the U.S. Foreign Corrupt
Practices Act (the “FCPA”) or any other applicable anti-bribery or anti-corruption laws, nor has any Company Affiliate
offered, paid, promised to pay, or authorized the payment of any money, or offered, given, promised to give, or authorized the giving
of anything of value, to any officer, employee or any other person acting in an official capacity for any Governmental Entity to any
political party or official thereof or to any candidate for political office (individually and collectively, a “Government Official”)
or to any person under circumstances where such Company Affiliate knew or was aware of a high probability that all or a portion of such
money or thing of value would be offered, given or promised, directly or indirectly, to any Government Official, for the purpose of:
(i) (A)
influencing any act or decision of such Government Official in his/her official capacity, (B) inducing such Government Official to do
or omit to do any act in violation of his/her lawful duty, (C) securing any improper advantage, or (D) inducing such Government Official
to influence or affect any act or decision of any Governmental Entity, or
(ii) assisting
the Company or its Subsidiaries in obtaining or retaining business for or with, or directing business to, the Company or its Subsidiaries.
(p) Sarbanes-Oxley
Act. The Company and each Subsidiary is in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002,
as amended, and any and all applicable rules and regulations promulgated by the SEC thereunder.
(q) Transactions
With Affiliates. No current or former employee, partner, director, officer or stockholder (direct or indirect) of the Company or its
Subsidiaries, or any associate, or, to the knowledge of the Company, any affiliate of any thereof, or any relative with a relationship
no more remote than first cousin of any of the foregoing, is presently, or has ever been, (i) a party to any transaction with the Company
or its Subsidiaries (including any contract, agreement or other arrangement providing for the furnishing of services by, or rental of
real or personal property from, or otherwise requiring payments to, any such director, officer or stockholder or such associate or affiliate
or relative Subsidiaries (other than for ordinary course services as employees, officers or directors of the Company or any of its Subsidiaries))
or (ii) the direct or indirect owner of an interest in any corporation, firm, association or business organization which is a competitor,
supplier or customer of the Company or its Subsidiaries (except for a passive investment (direct or indirect) in less than 5% of the common
stock of a company whose securities are traded on or quoted through an Eligible Market (as defined in the Certificate of Designations)),
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. Except as set forth in Schedule 3(q),
no employee, officer, stockholder or director of the Company or any of its Subsidiaries or member of his or her immediate family is indebted
to the Company or its Subsidiaries, as the case may be, nor is the Company or any of its Subsidiaries indebted (or committed to make loans
or extend or guarantee credit) to any of them, other than (i) for payment of salary for services rendered, (ii) reimbursement for reasonable
expenses incurred on behalf of the Company, and (iii) for other standard employee benefits made generally available to all employees or
executives (including stock option agreements outstanding under any stock option plan approved by the Board of Directors of the Company).
(r) Equity
Capitalization.
(i) Definitions:
(A) (A) “Common
Stock” means (x) the Company’s shares of common stock, $0.001 par value per share, and (y) any capital stock into
which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.
(B) “Preferred
Stock” means (x) the Company’s blank check preferred stock, $0.001 par value per share, the terms of which may be designated
by the board of directors of the Company in a certificate of designations and (y) any capital stock into which such preferred stock shall
have been changed or any share capital resulting from a reclassification of such preferred stock (other than a conversion of such preferred
stock into Common Stock in accordance with the terms of such certificate of designations).
(ii) Authorized
and Outstanding Capital Stock. As of the date hereof, the authorized capital stock of the Company consists of (A) 100,000,000 shares
of Common Stock, of which, 1,248,918 are issued and outstanding and [ ] shares are reserved for issuance pursuant to Convertible Securities
(as defined below) (other than the Preferred Shares and the Warrants) exercisable or exchangeable for, or convertible into, shares of
Common Stock and (B) 3,000,000 shares of Preferred Stock, [ ] of which are issued and outstanding. 51 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.
(ii) 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)(ii) sets forth the number of shares of Common Stock that are
(A) reserved for issuance pursuant to Convertible Securities (as defined below) (other than the Preferred Shares 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 (as defined below), whether
or not presently exercisable or convertible, have been fully exercised or converted (as the case may be) taking account of any
limitations on exercise or conversion (including “blockers”) contained therein without conceding that such identified Person
is a 10% stockholder for purposes of federal securities laws).
(iii) 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.
(iv) 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(s), has any
outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments evidencing Indebtedness
of the Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries is or may become bound, (ii) is a party to
any contract, agreement or instrument, the violation of which, or default under which, by the other party(ies) to such contract, agreement
or instrument could reasonably be expected to result in a Material Adverse Effect, (iii) has any financing statements securing obligations
in any amounts filed in connection with the Company or any of its Subsidiaries; (iv) is in violation of any term of, or in default under,
any contract, agreement or instrument relating to any Indebtedness, except where such violations and defaults would not result, individually
or in the aggregate, in a Material Adverse Effect, or (v) is a party to any contract, agreement or instrument relating to any Indebtedness,
the performance of which, in the judgment of the Company’s officers, has or is expected to have a Material Adverse Effect. Neither
the Company nor any of its Subsidiaries have any liabilities or obligations required to be disclosed in the SEC Documents which are not
so disclosed in the SEC Documents, other than those incurred in the ordinary course of the Company’s or its Subsidiaries’
respective businesses and which, individually or in the aggregate, do not or could not have a Material Adverse Effect. For purposes of
this Agreement: (x) “Indebtedness” of any Person means, without duplication (A) all indebtedness for borrowed money,
(B) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (including, without limitation,
“capital leases” in accordance with GAAP) (other than trade payables entered into in the ordinary course of business consistent
with past practice), (C) all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments,
(D) all obligations evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection
with the acquisition of property, assets or businesses, (E) all indebtedness created or arising under any conditional sale or other title
retention agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such
indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited to repossession
or sale of such property), (F) all monetary obligations under any leasing or similar arrangement which, in connection with GAAP, consistently
applied for the periods covered thereby, is classified as a capital lease, (G) all indebtedness referred to in clauses (A) through (F)
above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien
upon or in any property or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such
assets or property has not assumed or become liable for the payment of such indebtedness, and (H) all Contingent Obligations in respect
of indebtedness or obligations of others of the kinds referred to in clauses (A) through (G) above; 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, except as set forth in Schedule 3(t). 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. After reasonable inquiry of its employees, the
Company is not aware of any fact which might result in or form the basis for any such action, suit, arbitration, investigation, inquiry
or other proceeding. Neither the Company nor any of its Subsidiaries is subject to any order, writ, judgment, injunction, decree, determination
or award of any Governmental Entity.
(u) Insurance.
The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and its Subsidiaries
are engaged. Neither the Company nor any such Subsidiary has been refused any insurance coverage sought or applied for, and neither the
Company nor any such Subsidiary has any reason to believe that it will be unable to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that
would not have a Material Adverse Effect.
(v) Employee
Relations. Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or employs any member
of a union. The Company and its Subsidiaries believe that their relations with their employees are good. No executive officer (as defined
in Rule 501(f) promulgated under the 1933 Act) or other key employee of the Company or any of its Subsidiaries has notified the Company
or any such Subsidiary that such officer intends to leave the Company or any such Subsidiary or otherwise terminate such officer’s
employment with the Company or any such Subsidiary. No current (or former) executive officer or other key employee of the Company or any
of its Subsidiaries is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure
or proprietary information agreement, non-competition agreement, or any other contract or agreement or any restrictive covenant, and the
continued employment of each such executive officer or other key employee (as the case may be) does not subject the Company or any of
its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with
all federal, state, local and foreign laws and regulations respecting labor, employment and employment practices and benefits, terms and
conditions of employment and wages and hours, except where failure to be in compliance would not, either individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.
(w) Title.
(i) Real
Property. Except as set forth in the SEC Documents, 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). Except as set forth in the SEC Documents, 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. Except as set forth in the SEC Documents, 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 patents owned by the Company or any of its Subsidiaries is listed on Schedule 3(x)(i). Except as set forth
in Schedule 3(x)(ii), none of the Company’s Intellectual Property Rights have expired or terminated or have been abandoned
or are expected to expire or terminate or are expected to be abandoned, within three years from the date of this Agreement. The Company
does not have any knowledge of any infringement by the Company or its Subsidiaries of Intellectual Property Rights of others. There is
no claim, action or proceeding being made or brought, or to the knowledge of the Company or any of its Subsidiaries, being threatened,
against the Company or any of its Subsidiaries regarding its Intellectual Property Rights. Neither the Company nor any of its Subsidiaries
is aware of any facts or circumstances which might give rise to any of the foregoing infringements or claims, actions or proceedings.
The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their
Intellectual Property Rights.
(y) Environmental Laws.
(i) The Company and its Subsidiaries (A) are in compliance with any and all Environmental Laws (as defined below), (B) have received all
permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (C)
are in compliance with all terms and conditions of any such permit, license or approval where, in each of the foregoing clauses (A), (B)
and (C), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. The
term “Environmental Laws” means all federal, state, local or foreign laws relating to pollution or protection of human
health or the environment (including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata),
including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants,
or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters,
orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.
(ii) No
Hazardous Materials:
(A) have
been disposed of or otherwise released 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 have a material adverse effect on the business of the Company or any of its Subsidiaries.
(iii) Neither
the Company nor any of its Subsidiaries knows of any other person who or entity which has stored, treated, recycled, disposed of or otherwise
located 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.
Except as set forth in Schedule 3(aa), the Company and each of its Subsidiaries (i) has timely made or filed all foreign, federal
and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has timely
paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns,
reports and declarations, except those being contested in good faith and (iii) has set aside on its books provision reasonably adequate
for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no
unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company and
its Subsidiaries know of no basis for any such claim. The Company is not operated in such a manner as to qualify as a passive foreign
investment company, as defined in Section 1297 of the Internal Revenue Code of 1986, as amended (the “Code”). The net
operating loss carryforwards (“NOLs”) for United States federal income tax purposes of the consolidated group of which
the Company is the common parent, if any, shall not be adversely effected by the transactions contemplated hereby. The transactions contemplated
hereby do not constitute an “ownership change” within the meaning of Section 382 of the Code, thereby preserving the Company’s
ability to utilize such NOLs.
(bb) Internal Accounting
and Disclosure Controls. The Company and each of its Subsidiaries maintains internal control over financial reporting (as such term
is defined in Rule 13a-15(f) under the 1934 Act) that is effective to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles,
including that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions
are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset and liability accountability,
(iii) access to assets or incurrence of liabilities is permitted only in accordance with management’s general or specific authorization
and (iv) the recorded accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals
and appropriate action is taken with respect to any difference. The Company maintains disclosure controls and procedures (as such term
is defined in Rule 13a-15(e) under the 1934 Act) that are effective in ensuring that information required to be disclosed by the Company
in the reports that it files or submits under the 1934 Act is recorded, processed, summarized and reported, within the time periods specified
in the rules and forms of the SEC, including, without limitation, controls and procedures designed to ensure that information required
to be disclosed by the Company in the reports that it files or submits under the 1934 Act is accumulated and communicated to the Company’s
management, including its principal executive officer or officers and its principal financial officer or officers, as appropriate, to
allow timely decisions regarding required disclosure. Neither the Company nor any of its Subsidiaries has received any notice or correspondence
from any accountant, Governmental Entity or other Person relating to any potential material weakness or significant deficiency in any
part of the internal controls over financial reporting of the Company or any of its Subsidiaries.
(cc) Off Balance Sheet
Arrangements. There is no transaction, arrangement, or other relationship between the Company or any of its Subsidiaries and an unconsolidated
or other off balance sheet entity that is required to be disclosed by the Company in its 1934 Act filings and is not so disclosed or that
otherwise could be reasonably likely to have a Material Adverse Effect.
(dd) Investment Company
Status. The Company is not, and upon consummation of the sale of the Securities will not be, an “investment company,”
an affiliate of an “investment company,” a company controlled by an “investment company” or an “affiliated
person” of, or “promoter” or “principal underwriter” for, an “investment company” as such terms
are defined in the Investment Company Act of 1940, as amended.
(ee) Acknowledgement
Regarding Buyers’ Trading Activity. It is understood and acknowledged by the Company that (i) following the public disclosure
of the transactions contemplated by the Transaction Documents, in accordance with the terms thereof, none of the Buyers have been asked
by the Company or any of its Subsidiaries to agree, nor has any Buyer agreed with the Company or any of its Subsidiaries, to desist from
effecting any transactions in or with respect to (including, without limitation, purchasing or selling, long and/or short) any securities
of the Company, or “derivative” securities based on securities issued by the Company or to hold any of the Securities for
any specified term; (ii) any Buyer, and counterparties in “derivative” transactions to which any such Buyer is a party, directly
or indirectly, presently may have a “short” position in the Common Stock which was established prior to such Buyer’s
knowledge of the transactions contemplated by the Transaction Documents; (iii) each Buyer shall not be deemed to have any affiliation
with or control over any arm’s length counterparty in any “derivative” transaction; and (iv) each Buyer may rely on
the Company’s obligation to timely deliver shares of Common Stock upon 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 Press Release (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
Certificate of Designations, the Warrants or any other Transaction Document or any of the documents executed in connection herewith or
therewith.
(ff) Manipulation of
Price. Neither the Company nor any of its Subsidiaries has, and, to the knowledge of the Company, no Person acting on their
behalf has, directly or indirectly, (i) taken any action designed to cause or to result in the stabilization or manipulation of the price
of any security of the Company or any of its Subsidiaries to facilitate the sale or resale of any of the Securities, (ii) sold, bid for,
purchased, or paid any compensation for soliciting purchases of, any of the Securities (iii) paid or agreed to pay to any Person any compensation
for soliciting another to purchase any other securities of the Company or any of its Subsidiaries or (iv) paid or agreed to pay any Person
for research services with respect to any securities of the Company or any of its Subsidiaries.
(gg) U.S. Real Property
Holding Corporation. Neither the Company nor any of its Subsidiaries is, or has ever been, and so long as any of the Securities are
held by any of the Buyers, shall become, a U.S. real property holding corporation within the meaning of Section 897 of the Code,
and the Company and each Subsidiary shall so certify upon any Buyer’s request.
(hh) Registration Eligibility.
Except as set forth on Schedule 3(hh), the Company is eligible to register the Registrable Securities (defined in the Registration
Rights Agreement) for resale by the Buyers using Form S-3 promulgated under the 1933 Act.
(ii) Transfer
Taxes. On the Closing Date, all stock transfer or other taxes (other than income or similar taxes) which are required to be paid in
connection with the issuance, sale and transfer of the Securities to be sold to each Buyer hereunder will be, or will have been, fully
paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with.
(jj) Bank Holding Company
Act. Neither the Company nor any of its Subsidiaries is subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”)
and to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). Neither the Company
nor any of its Subsidiaries or affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares
of any class of voting securities or twenty-five percent (25%) or more of the total equity of a bank or any entity that is subject to
the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries or affiliates exercises a controlling
influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.
(kk) Shell Company Status.
The Company is not, and has never been, an issuer identified in, or subject to, Rule 144(i).
(ll) Illegal or Unauthorized
Payments; Political Contributions. Neither the Company nor any of its Subsidiaries nor, to the best of the Company’s knowledge
(after reasonable inquiry of its officers and directors), any of the officers, directors, employees, agents or other representatives of
the Company or any of its Subsidiaries or any other business entity or enterprise with which the Company or any Subsidiary is or has been
affiliated or associated, has, directly or indirectly, made or authorized any payment, contribution or gift of money, property, or services,
whether or not in contravention of applicable law, (i) as a kickback or bribe to any Person or (ii) to any political organization, or
the holder of or any aspirant to any elective or appointive public office except for personal political contributions not involving the
direct or indirect use of funds of the Company or any of its Subsidiaries.
(mm) Money Laundering.
The Company and its Subsidiaries are in compliance with, and have not previously violated, the USA Patriot Act of 2001 and all other applicable
U.S. and non-U.S. anti-money laundering laws and regulations, including, 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 five year period, no current or former officer or director or,
to the knowledge of the Company, no current ten percent (10%) or greater stockholder of the Company or any of its Subsidiaries has been
the subject of:
(i) a
petition under bankruptcy laws or any other insolvency or moratorium law or the appointment by a court of a receiver, fiscal agent or
similar officer for such Person, or any partnership in which such person was a general partner at or within two years before the filing
of such petition or such appointment, or any corporation or business association of which such person was an executive officer at or within
two years before the time of the filing of such petition or such appointment;
(ii) a
conviction in a criminal proceeding or a named subject of a pending criminal proceeding (excluding traffic violations that do not relate
to driving while intoxicated or driving under the influence);
(iii) any
order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily
enjoining any such person from, or otherwise limiting, the following activities:
(1) Acting
as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction
merchant, any other person regulated by the United States Commodity Futures Trading Commission or an associated person of any of the foregoing,
or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment
company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with
such activity;
(2) Engaging
in any particular type of business practice; or
(3) Engaging
in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of securities
laws or commodities laws;
(iv) any
order, judgment or decree, not subsequently reversed, suspended or vacated, of any authority barring, suspending or otherwise limiting
for more than sixty (60) days the right of any such person to engage in any activity described in the preceding sub paragraph, or to be
associated with persons engaged in any such activity;
(v) a
finding by a court of competent jurisdiction in a civil action or by the SEC or other authority to have violated any securities law, regulation
or decree and the judgment in such civil action or finding by the SEC or any other authority has not been subsequently reversed, suspended
or vacated; or
(vi) a
finding by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any federal
commodities law, and the judgment in such civil action or finding has not been subsequently reversed, suspended or vacated.
(oo) Stock Option Plans.
Each stock option granted by the Company was granted (i) in accordance with the terms of the applicable stock option plan of the Company
and (ii) with an exercise price at least equal to the fair market value of the Common Stock on the date such stock option would be considered
granted under GAAP and applicable law. No stock option granted under the Company’s stock option plan has been backdated. The Company
has not knowingly granted, and there is no and has been no policy or practice of the Company to knowingly grant, stock options prior to,
or otherwise knowingly coordinate the grant of stock options with, the release or other public announcement of material information regarding
the Company or its Subsidiaries or their financial results or prospects.
(pp) No Disagreements
with Accountants and Lawyers. There are no material disagreements of any kind presently existing, or reasonably anticipated
by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and the Company
is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability to perform any
of its obligations under any of the Transaction Documents. In addition, on or prior to the date hereof, the Company had discussions with
its accountants about its financial statements previously filed with the SEC. Based on those discussions, the Company has no reason to
believe that it will need to restate any such financial statements or any part thereof.
(qq) No 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 or Other Buyer with respect to the transactions contemplated by
the Transaction Documents other than as specified in the Transaction Documents or the transaction documents to the Other Purchase Agreement.
(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) 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 and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to
make the statements made therein, in the light of the circumstances under which they were made, not misleading. All of the written information
furnished after the date hereof by or on behalf of the Company or any of its Subsidiaries to each Buyer pursuant to or in connection with
this Agreement and the other Transaction Documents, taken as a whole, will be true and correct in all material respects as of the date
on which such information is so provided and will not contain any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.
Each press release issued by the Company or any of its Subsidiaries during the twelve (12) months preceding the date of this Agreement
did not at the time of release contain any untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of the circumstances under which they are made, not misleading.
No event or circumstance has occurred or information exists with respect to the Company or any of its Subsidiaries or its or their business,
properties, liabilities, prospects, operations (including results thereof) or conditions (financial or otherwise), which, under applicable
law, rule or regulation, requires public disclosure at or before the date hereof or announcement by the Company but which has not been
so publicly disclosed. All financial projections and forecasts that have been prepared by or on behalf of the Company or any of its Subsidiaries
and made available to you have been prepared in good faith based upon reasonable assumptions and represented, at the time each such financial
projection or forecast was delivered to each Buyer, the Company’s best estimate of future financial performance (it being recognized
that such financial projections or forecasts are not to be viewed as facts and that the actual results during the period or periods covered
by any such financial projections or forecasts may differ from the projected or forecasted results). The Company acknowledges and agrees
that no Buyer makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those
specifically set forth in Section 2.
(ww) Section
3(a)(9) Exchange. The Company acknowledges and agrees that, in accordance with Section 3(a)(9) of the Securities
Act, the holding period of the shares of Preferred Stock and Warrants (assuming cashless exercise of the Warrants) shall tack back to
the holding period of the PFWs and Prior Warrants. The Company agrees not to take any contrary positions to the aforementioned
representation.
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) 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, 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.
(e) 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(e).
(f) Fees.
The Company shall be responsible for the payment of any placement agent’s fees, financial advisory 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.
(g) 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.
(h) Disclosure
of Transactions and Other Material Information.
(i) Disclosure
of Transaction. The Company shall, on or before 9:30 a.m., New York time, on the first (1st) Business Day after the date of this
Agreement, issue a press release (the “Press Release”) reasonably acceptable to the Buyers disclosing all the material
terms of the transactions contemplated by the Transaction Documents. On or before 9:30 a.m., New York time, on the first (1st)
Business Day after the date of this Agreement, the Company shall file a Current Report on Form 8-K describing 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 the Warrants, the form of
Certificate of Designations 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). In the event of a breach of any of the foregoing covenants, including, without limitation, Section Error!
Reference source not found. 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 the Press Release and any press release or other public disclosure with respect
to such transactions (i) in substantial conformity with the 8-K Filing and contemporaneously therewith and (ii) as is required by applicable
law and regulations (provided that in the case of clause (i) each Buyer shall be consulted by the Company in connection with any such
press release or other public disclosure prior to its release). Without the prior written consent of the applicable Buyer (which may be
granted or withheld in such Buyer’s sole discretion), the Company shall not (and shall cause each of its Subsidiaries and affiliates
to not) disclose the name of such Buyer in any filing, announcement, release or otherwise. Notwithstanding anything contained in this
Agreement to the contrary and without implication that the contrary would otherwise be true, the Company expressly acknowledges and agrees
that no Buyer shall have (unless expressly agreed to by a particular Buyer after the date hereof in a written definitive and binding agreement
executed by the Company and such particular Buyer (it being understood and agreed that no Buyer may bind any other Buyer with respect
thereto)), any duty of confidentiality with respect to, or a duty not to trade on the basis of, any material, non-public information regarding
the Company or any of its Subsidiaries.
(iii) Other
Confidential Information. Disclosure Failures; Disclosure Delay Payments. In addition to other remedies set forth in this Section
4(h), and without limiting anything set forth in any other Transaction Document, at any time after the date hereof if the Company, any
of its Subsidiaries, or any of their respective officers, directors, employees or agents, provides any Buyer with material non-public
information relating to the Company or any of its Subsidiaries (each, the “Confidential Information”), the Company
shall, on or prior to the applicable Required Disclosure Date (as defined below), publicly disclose such Confidential Information on a
Current Report on Form 8-K or otherwise (each, a “Disclosure”). From and after such Disclosure, the Company shall have
disclosed all Confidential Information provided to such Buyer 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
such Disclosure, 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. In the event that the Company
fails to effect such Disclosure on or prior to the Required Disclosure Date and such Buyer shall have possessed Confidential Information
for at least ten (10) consecutive Trading Days (each, a “Disclosure Failure”), then, as partial relief for the damages
to such Buyer by reason of any such delay in, or reduction of, its ability to buy or sell shares of Common Stock after such Required Disclosure
Date (which remedy shall not be exclusive of any other remedies available at law or in equity), the Company shall pay to such Buyer an
amount in cash equal to the greater of (I) two percent (2%) of the aggregate Exchange Price and (II) the applicable Disclosure Restitution
Amount, on each of the following dates (each, a “Disclosure Delay Payment Date”): (i) on the date of such Disclosure
Failure and (ii) on every thirty (30) day anniversary such Disclosure Failure until the earlier of (x) the date such Disclosure Failure
is cured and (y) such time as all such non-public information provided to such Buyer shall cease to be Confidential Information (as evidenced
by a certificate, duly executed by an authorized officer of the Company to the foregoing effect) (such earlier date, as applicable, a
“Disclosure Cure Date”). Following the initial Disclosure Delay Payment for any particular Disclosure Failure, without
limiting the foregoing, if a Disclosure Cure Date occurs prior to any thirty (30) day anniversary of such Disclosure Failure, then such
Disclosure Delay Payment (prorated for such partial month) shall be made on the second (2nd) Business Day after such Disclosure Cure Date.
The payments to which an Investor shall be entitled pursuant to this Section 4(l)(iii) are referred to herein as “Disclosure
Delay Payments.” In the event the Company fails to make Disclosure Delay Payments in a timely manner in accordance with the
foregoing, such Disclosure Delay Payments shall bear interest at the rate of two percent (2%) per month (prorated for partial months)
until paid in full.
(iv) For
the purpose of this Agreement the following definitions shall apply:
(1)
“Disclosure Failure Market Price” means, as of any Disclosure Delay Payment Date, the price computed as the quotient
of (I) the sum of the five (5) highest VWAPs (as defined in the Warrants) of the Common Stock during the applicable Disclosure Restitution
Period (as defined below), divided by (II) five (5) (such period, the “Disclosure Failure Measuring Period”). All such
determinations to be appropriately adjusted for any share dividend, share split, share combination, reclassification or similar transaction
that proportionately decreases or increases the Common Stock during such Disclosure Failure Measuring Period.
(2) “Disclosure
Restitution Amount” means, as of any Disclosure Delay Payment Date, the product of (x) difference of (I) the Disclosure Failure
Market Price less (II) the lowest purchase price, per share of Common Stock, of any Common Stock issued or issuable to such Buyer pursuant
to this Agreement or any other Transaction Documents, multiplied by (y) 10% of the aggregate daily dollar trading volume (as reported
on Bloomberg (as defined in the Warrants)) of the Common Stock on the Principal Market for each Trading Day (as defined in the Warrants)
either (1) with respect to the initial Disclosure Delay Payment Date, during the period commencing on the applicable Required Disclosure
Date through and including the Trading Day immediately prior to the initial Disclosure Delay Payment Date or (2) with respect to each
other Disclosure Delay Payment Date, during the period commencing the immediately preceding Disclosure Delay Payment Date through and
including the Trading Day immediately prior to such applicable Disclosure Delay Payment Date (such applicable period, the “Disclosure
Restitution Period”).
(3) “Required
Disclosure Date” means (x) if such Buyer authorized the delivery of such Confidential Information, either (I) if the Company
and such Buyer have mutually agreed upon a date (as evidenced by an e-mail or other writing) of Disclosure of such Confidential Information,
such agreed upon date or (II) otherwise, the seventh (7th) calendar day after the date such Buyer first received any Confidential
Information or (y) if such Buyer did not authorize the delivery of such Confidential Information, the first (1st) Business
Day after such Buyer’s receipt of such Confidential Information.
(i) Exercise
of PFWs and Prior Warrants prior to Closing. The Company acknowledges and agrees that the Buyers may continue to exercise the PFWs
and Prior Warrants until the day prior to the Closing Date and, to the extent such PFWs and Prior Warrants are exercised, the number of
Preferred Shares and Warrants issuable hereunder shall be reduced ratably by the amount exercised on a one for one basis.
(j) Filing
of PFW and Prior Warrant Registration Statement. Within 10 days of the date hereof, the Company shall file an amendment to the Company
registration statement on Form S-1, File No. 333-276588 registering all of the shares of Common Stock underlying the PFWs and Prior Warrants
and cause such registration statement to be declared effective as promptly as possible thereunder, otherwise pursuant to the terms of
the “Registration Rights Agreement” entered into in connection with the Prior Purchase Agreement.
(k) Reservation of Shares. So long as any of the Preferred Shares or Warrants remain outstanding, the Company shall take all action necessary to at all times
have authorized, and reserved for the purpose of issuance, no less than the amount set forth on Schedule 3(c) if prior to May
31, 2024 (or, if earlier, the Stockholder Approval Date (as defined below)), the Initial Reserve Amount (the “Initial Reserve
Expiration Date”), and (y) from and after the Initial Reserve Expiration Date 200% of the sum of (i) the maximum number of
shares of Common Stock issuable upon conversion of all the Preferred Shares then outstanding (assuming for purposes hereof that (x) the
Preferred Shares are convertible at the Conversion Price then in effect, (y) dividends on the Preferred Shares 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 applicable date of determination and (z) any such conversion shall not take into
account any limitations on the conversion of the Preferred Shares set forth in the Certificate of Designations), and (ii) the maximum
number of Warrant Shares issuable upon exercise of all the Warrants then outstanding (without regard to any limitations on the exercise
of the Warrants set forth therein) (collectively, the “Required Reserve Amount”); provided that at no time shall the
number of shares of Common Stock reserved pursuant to this Section 4(k) be reduced other than proportionally in connection with any conversion,
exercise and/or redemption, as applicable of Preferred Shares 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.
(l) 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.
(m) Corporate
Existence. So long as any Buyer beneficially owns any Preferred Shares or Warrants, the Company shall not be party to any Fundamental
Transaction (as defined in the Certificate of Designations) unless the Company is in compliance with the applicable provisions governing
Fundamental Transactions set forth in the Certificate of Designations and the Warrants.
(n) Stock
Splits. Until the Preferred Shares and all preferred shares issued pursuant to the Certificate of Designations and the Warrants 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 a the Required Holder, other
than a stock split that is required, in the good faith determination of the Board of Directors of the Company, (i) to maintain the listing
of the Common Stock on the Principal Market, or (ii) having the effect of increasing the amount of authorized but unissued shares of Common
Stock to satisfy its obligations hereunder.
(o) 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 Certificate of Designations) included in the Certificate of Designations set forth the totality of
the procedures required of the Buyers in order to exercise the Warrants or convert the Preferred Shares. 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 Preferred Shares. The Company shall honor exercises of the Warrants and conversions of the Preferred Shares and shall deliver the
Conversion Shares and Warrant Shares in accordance with the terms, conditions and time periods set forth in the Certificate of Designations
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 Preferred Shares or exercise the Warrants.
(p) Regulation
M. The Company will not take any action prohibited by Regulation M under the 1934 Act, in connection with the distribution of the
Securities contemplated hereby.
(q) 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.
(r) 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.
(b) Stockholder
Approval. The Company shall provide each stockholder entitled to vote at a special meeting of stockholders of the Company (the “Stockholder
Meeting”), which shall be promptly called and held not later than October 15, 2024 (the “Stockholder Meeting Deadline”),
a proxy statement, in each case, in a form reasonably acceptable to the Required Holder, at the expense of the Company. The proxy statement,
if any, shall solicit each of the Company’s stockholder’s affirmative vote at the Stockholder Meeting for approval of resolutions
(“Stockholder Resolutions”) providing for (x) the increase of the authorized shares of Common Stock of the Company
from 100,000,000 to 1,000,000,000 (the “Increase in Authorized”) and/or a reverse stock split of the issued and outstanding
shares of Common Stock of the Company resulting in a similar impact on the Company’s authorized but unissued shares of Common Stock
and (y) the approval of any matters requiring stockholder approval pursuant to the listing requirements of the Principal Market including,
without limitation the issuance of more than 20% of the outstanding shares of Common Stock, in connection with the transactions contemplated
hereby (such affirmative approval being referred to herein as the “Stockholder Approval”, and the date such Stockholder
Approval is obtained, the “Stockholder Approval Date”), and the Company shall use its reasonable best efforts to solicit
its stockholders’ approval of such resolutions and to cause the Board of Directors of the Company to recommend to the stockholders
that they approve such resolutions. The Company shall be obligated to seek to obtain the Stockholder Approval by the Stockholder Meeting
Deadline. If, despite the Company’s reasonable best efforts the Stockholder Approval is not obtained on or prior to the Stockholder
Meeting Deadline, the Company shall cause an additional Stockholder Meeting to be held on or prior to July 31, 2024. If, despite the Company’s
reasonable best efforts the Stockholder Approval is not obtained after such subsequent stockholder meetings, the Company shall cause an
additional Stockholder Meeting to be held semi-annually thereafter until such Stockholder Approval is obtained.
(s) Closing
Documents. On or prior to fourteen (14) calendar days after the Closing Date, the Company agrees to deliver, or cause to be delivered,
to each Buyer a complete closing set of the executed Transaction Documents, Securities and any other document required to be delivered
to any party pursuant to Section 7 hereof or otherwise.
(t) Consent
to Other Purchase Agreement. The Buyers hereby consent to the Company entering into the Other Purchase Agreement with the other Buyers.
provided that any amendments or modifications to the Other Agreements (or other consideration paid or granted in connection with the Preferred
Stock and Common Stock Purchase Warrants issued in connection therewith and not disclosed to the Buyers) shall require a separate written
consent pursuant to Section 4.11 of the Prior Purchase Agreement.
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 Preferred Shares and the Warrants in which the Company shall record the name and address
of the Person in whose name the Preferred Shares and the Warrants have been issued (including the name and address of each transferee),
the aggregate number of Preferred Shares held by such Person, the number of Conversion Shares issuable pursuant to the terms of the Preferred
Shares 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 Preferred Shares 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 Certificate of Designations or Warrant, as applicable, with respect to the Preferred Shares
or Warrants, as applicable, then 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 EXCHANGE.
(a) The
obligation of the Company hereunder to exchange the PFWs and Prior Warrants for the Preferred Shares and the 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 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 surrendered to the Company all of its PFWs and Prior Warrants for the Preferred Shares and the related
Warrants being issued hereunder to such Buyer at the Closing.
(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 EXCHANGE.
(a) The
obligation of each Buyer hereunder to exchange its PFWs and Prior Warrants for Preferred Shares and its 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) such aggregate number of Preferred Shares as set forth across from such Buyer’s
name in column (3) of the Schedule of Buyers and (B) Warrants initially exercisable for such aggregate number of 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 issued to such Buyer at
the Closing pursuant to this Agreement.
(ii) Such
Buyer shall have received the opinion of Sheppard, Mullin, Richter & Hampton 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 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.
(v) The
Company shall have delivered to such Buyer a certified copy of the Certificate of Incorporation, the Certificate of Designations as certified
by the Delaware Secretary of State within ten (10) days of the Closing Date.
(vi) 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.
(vii) 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.
(viii) 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.
(ix) The
Common Stock (A) shall be designated for quotation or listed (as applicable) on the Principal Market and (B) except as set forth in Schedule
3(e), 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.
(x) 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, except as set forth in Schedule 3(e).
(xi) 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.
(xii) 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.
(xiii) 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.
(xiv) 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 90 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 exchange of the Preferred Shares and the
Warrants for PFWs and Prior 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(f)
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. Upon termination of this Agreement, the
Buyer shall surrender to the Company the Preferred Shares and Warrants.
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 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. Notwithstanding
anything herein to the contrary, until the Closing, the Prior Purchase Agreement shall continue to survive in all respects as to the rights
and obligations of the Company and the Buyers, as the case may be, relating to the PFWs and Prior Warrants. At the Closing, the Prior
Purchase Agreement shall terminate except as set forth therein. 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 Holder (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 Holder 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). 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 Holder” is
Sabby Volatility Warrant Master Fund, Ltd.
(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:
Aditxt, Inc..
737 N. Fifth Street, Suite 200
Richmond, VA 23219
Telephone: (650) 870-1200
Attention: Chief Executive Officer
Email: aalbanna@aditxt.com
With a copy (for informational purposes only) to:
Sheppard, Mullin, Richter & Hampton LLP
30 Rockefeller Plaza
New York, NY 10112
Telephone: (212) 653-8700
Attention: Richard A. Friedman, Esq.
Email: rafriedman@sheppardmullin.com
If to the Transfer Agent:
VStock Transfer LLC
18 Lafayette Place
Woodmere, NY 11598
Telephone: (212) 828-8436
Attention: Young Kim
Email: young@vstocktransfer.com
If to a Buyer, to its mailing address and e-mail
address set forth on the Schedule of Buyers.
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. 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 Preferred Shares and Warrants, (other than purchasers of Conversion Shares or Warrant Shares in open market transactions).
The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Required Holder,
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
Certificate of Designations) (unless the Company is in compliance with the applicable provisions governing Fundamental Transactions set
forth in the Certificate of Designations). 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(h), 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).
(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 (or the Other Buyers) as, and the Company acknowledges
that the Buyers (or Other 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 (or Other 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
(including but not limitation the obligations under the other Purchase Agreement), and the Company acknowledges that the Buyers (or Other
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 exchange PFWs and Prior Warrants for Securities
pursuant to the Transaction Documents has been made by such Buyer independently of any other Buyer (or Other Buyer). Each Buyer acknowledges
that no other Buyer (or Other Buyer) has acted as agent for such Buyer in connection with such Buyer making its investment hereunder and
that no other Buyer (or 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 (or
Other Buyer) to be joined as an additional party in any proceeding for such purpose. The use of a single agreement to effectuate the exchange
of the Securities for PFWs and Prior Warrants contemplated hereby was solely in the control of the Company, not the action or decision
of any Buyer (or Other 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 (or Other 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 (or Other Buyers).
[signature pages follow]
IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written
above.
|
COMPANY: |
|
|
|
|
ADITXT, INC. |
|
|
|
|
|
By: |
/s/ Amro Albanna |
|
|
Name: |
Amro Albanna |
|
|
Title: |
Chief Executive Officer |
IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written
above.
|
BUYER: |
|
|
|
|
Sabby Volatility Warrant Master
Fund, Ltd. |
|
|
|
|
|
By: |
/s/ Robert Grundstein |
|
|
Name: |
Robert Grundstein |
|
|
Title: |
COO of Investment Manager |
SCHEDULE OF BUYERS
(1) |
(2) |
(3) |
(4) |
(5) |
(6) |
|
|
|
|
|
|
Buyer |
Mailing Address
and E-mail Address |
Aggregate
Number of
Preferred Shares |
N/A |
Aggregate
Number of
Warrant Shares |
Exchange Price |
Sabby Volatility Warrant Master Fund, Ltd. |
Robert Grundstein
COO and General Counsel
p / (646) 307-4527
c / (201) 993-9426
rgrundstein@sabbymanagement.com
|
6,667 |
|
|
$6,667,000
(inclusive of $667,000 in liquidated damages) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL |
|
|
|
|
v3.24.2.u1
Cover
|
Aug. 07, 2024 |
Cover [Abstract] |
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Document Type |
8-K
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Amendment Flag |
false
|
Document Period End Date |
Aug. 07, 2024
|
Entity File Number |
001-39336
|
Entity Registrant Name |
ADITXT, INC.
|
Entity Central Index Key |
0001726711
|
Entity Tax Identification Number |
85-3204328
|
Entity Incorporation, State or Country Code |
DE
|
Entity Address, Address Line One |
2569 Wyandotte Street
|
Entity Address, Address Line Two |
Suite 101
|
Entity Address, City or Town |
Mountain View
|
Entity Address, State or Province |
CA
|
Entity Address, Postal Zip Code |
94043
|
City Area Code |
650
|
Local Phone Number |
870-1200
|
Written Communications |
false
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Soliciting Material |
false
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Pre-commencement Tender Offer |
false
|
Pre-commencement Issuer Tender Offer |
false
|
Title of 12(b) Security |
Common Stock, par value $0.001
|
Trading Symbol |
ADTX
|
Security Exchange Name |
NASDAQ
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Entity Emerging Growth Company |
true
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Elected Not To Use the Extended Transition Period |
false
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Aditxt (NASDAQ:ADTX)
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