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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date
of report (Date of earliest event reported): September 19, 2023
BIOTRICITY
INC.
(Exact
name of registrant as specified in its charter)
Nevada |
|
001-40761 |
|
30-0983531 |
(State
or Other Jurisdiction of
Incorporation
or Organization) |
|
(Commission
File
Number) |
|
(IRS
Employer
Identification
No.) |
203
Redwood Shores Parkway, Suite 600
Redwood
City, California 94065
(Address
of Principal Executive Offices)
(650)
832-1626
(Registrant’s
telephone number, including area code)
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 (see General Instruction A.2. below):
☐ |
Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
|
☐ |
Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
|
☐ |
Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
|
☐ |
Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
Title
of Class |
|
Trading
Symbol (s) |
|
Name
of each exchange on which registered |
Common Stock, Par Value
$0.001 |
|
BTCY |
|
Nasdaq Capital Market |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
1.01. Entry into a Material Definitive Agreement.
Securities
Purchase Agreement
On
September 19, 2023, Biotricity Inc. (the “Company”) entered into a security purchase agreement (the “Purchase Agreement”)
with an institutional investor (the “Investor”) for the issuance and sale of 220 shares of the Company’s newly designated
Series B Convertible Preferred Stock, $0.001 par value (the “Series B Preferred Stock”), at a purchase price of $9,090.91
per share of Preferred Stock, or gross proceeds of $2,000,000.
Shares
of Series B Preferred Stock and shares of Common Stock of the Company that are issuable upon conversion of, or as dividends on, the Series
B Preferred Stock were offered, and will be issued, pursuant to the Prospectus Supplement, filed September 19, 2023, to the Prospectus
included in the Company’s Registration Statement on Form S-3 (Registration No. 333-255544) filed with the Securities and Exchange
Commission on April 27, 2021, and declared effective May 4, 2021.
The
foregoing summary of the Purchase Agreement is qualified in its entirety by reference to the Purchase Agreement, which is filed as Exhibit
10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Series
B Preferred Stock
Pursuant
to the Purchase Agreement, on September 19, 2023, the Company filed a certificate of designations of Series B Convertible Preferred Stock
(the “Certificate of Designations”) with the Nevada Secretary of State designating 600 shares of the Company’s shares
of Preferred Stock as Series B Convertible Preferred Stock and setting forth the voting and other powers, preferences and relative, participating,
optional or other rights of the Preferred Shares. Each share of Series B Preferred Stock has a stated value of $10,000 per share.
The
Series B Preferred Stock, with respect to the payment of dividends, distributions and payments upon the liquidation, dissolution and
winding up of the Company, ranks senior to all capital stock of the Company unless the holders of the majority of the outstanding shares
of Series B Preferred Stock consent to the creation of other capital stock of the Company that is senior or equal in rank to the Series
B Preferred Stock.
Holders
of Series B Preferred Stock will be entitled to receive cumulative dividends (“Dividends”), in shares of common stock or
cash on the stated value at an annual rate of 8% (which will increase to 15% if a Triggering Event (as defined in the Certificate of
Designations) occurs. Dividends will be payable upon conversion of the Series B Preferred Stock, upon any redemption, or upon any required
payment upon any Bankruptcy Triggering Event (as defined in the Certificate of Designations).
Holders
of Series B Preferred Stock will be entitled to convert shares of Series B Preferred Stock into a number of shares of common stock determined
by dividing the stated value (plus any accrued but unpaid dividends and other amounts due) by the conversion price. The initial conversion
price is $3.50, subject to adjustment in the event the Company sells common stock at a price lower than the then-effective conversion
price. Holders may not convert the Series B Preferred Stock to common stock to the extent such conversion would cause such holder’s
beneficial ownership of common stock to exceed 4.99% of the outstanding common stock. In addition, the Company will not issue shares
of common stock upon conversion of the Series B Preferred Stock in an amount exceeding 19.9% of the outstanding common stock as of the
initial issuance date unless the Company receives shareholder approval for such issuances.
Holders
may elect to convert shares of Series B Preferred Stock to common stock at an alternate conversion price equal to 80% (or 70% if the
Company’s common stock is suspended from trading on or delisted from a principal trading market or if the Company has effected
a reverse split of the common stock) of the lowest daily volume weighed average price of the common stock during the Alternate Conversion
Measuring Period (as defined in the Certificate of Designations). In the event the Company receives a conversion notice that elects an
alternate conversion price, the Company may, at its option, elect to satisfy its obligation under such conversion with payment in cash
in an amount equal to 110% of the conversion amount.
The
series B Preferred Stock will automatically convert to common stock upon the 24-month anniversary of the initial issuance date of the
Series B Preferred Stock.
At
any time after the earlier of a holder’s receipt of a Triggering Event notice and such holder becoming aware of a Triggering Event
and ending on the 20th trading day after the later of (x) the date such Triggering Event is cured and (y) such holder’s receipt
of a Triggering Event notice, such holder may require the Company to redeem such holder’s shares of Series B Preferred Stock.
Upon
any Bankruptcy Triggering Event (as defined in the Certificate of Designations), the Company will be required to immediately redeem
all of the outstanding shares of Series B Preferred Stock.
The
Company will have the right at any time to redeem all or any portion of the Series B Preferred Stock then outstanding at a price equal
to 110% of the stated value plus any accrued but unpaid dividends and other amounts due.
Holders
of the Series B Preferred Stock will have the right to vote on an as-converted basis with the common stock, subject to the beneficial
ownership limitation set forth in the Certificate of Designations.
The
foregoing summary of the Series B Certificate of Designations is qualified in its entirety by reference to the Certificate of Designations
for the Series B Preferred Stock, which is filed as Exhibit 3.1 to this Current Report on Form 8-K.
Voting
Agreement
In
connection with the Purchase Agreement, the Company and certain of the Company’s stockholders entered into a voting agreement,
agreeing to vote their shares of the Company in favor of the transactions contemplated under the Purchase Agreement and against any proposal
or other corporate action that would result in a breach of the Purchase Agreement and any transaction document entered in connection
therewith.
The
foregoing summary of the Voting Agreement is qualified in its entirety by reference to the Voting Agreement, which is filed as Exhibit
10.2 to this Current Report on Form 8-K.
Item
5.03 Amendments to Articles of Incorporation or Bylaws; change in Fiscal Year.
The
information provided in Item 1.01 Entry into a Material Definitive Agreement of this Current Report on Form 8-K is incorporated
by reference into this Item 5.03.
Item 9.01 Financial Statements and Exhibits.
(d)
Exhibits.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Date:
September 20, 2023
|
BIOTRICITY INC. |
|
|
|
|
By: |
/s/
Waqaas Al-Siddiq |
|
|
Waqaas
Al-Siddiq |
|
|
Chief
Executive Officer |
Exhibit 3.1
CERTIFICATE OF DESIGNATIONS OF
SERIES B CONVERTIBLE PREFERRED STOCK OF
BIOTRICITY INC.
I, Waqaas Al-Siddiq, hereby certify
that I am the Chief Executive Officer of Biotricity Inc. (the “Company”), a corporation organized and existing under
the Nevada Revised Statutes (the “NRS”), and further do hereby certify:
That pursuant to the authority
expressly conferred upon the Board of Directors of the Company (the “Board”) by the Company’s Articles of Incorporation,
as amended (the “Articles of Incorporation”), the Board on September 19, 2023 adopted the following resolution creating
a series of preferred stock designated as “Series B Convertible Preferred Stock”, none of which shares have been issued:
RESOLVED, that pursuant to the
authority vested in the Board, in accordance with the provisions of the Articles of Incorporation, a series of preferred stock, par value
$0.001 per share, of the Company be and hereby is created, and that the designation and number of shares thereof and the voting and other
powers, preferences and relative, participating, optional or other rights of the shares of such series and the qualifications, limitations
and restrictions thereof are as follows:
TERMS OF SERIES B CONVERTIBLE PREFERRED STOCK
1. Designation and Number of
Shares. There shall hereby be created and established a series of preferred stock of the Company designated as “Series B Convertible
Preferred Stock” (the “Preferred Shares”). The authorized number of Preferred Shares shall be six hundred (600)
shares. Each Preferred Share shall have a par value of $0.001. Capitalized terms not defined herein shall have the meaning as set forth
in Section 31 below.
2. Ranking. Except to the
extent that the holders of at least a majority of the outstanding Preferred Shares (the “Required Holders”) expressly
consent to the creation of Parity Stock (as defined below) or Senior Preferred Stock (as defined below) in accordance with Section 16,
all shares of capital stock of the Company shall be junior in rank to all Preferred Shares with respect to the preferences as to dividends,
distributions and payments upon the liquidation, dissolution and winding up of the Company (such junior stock is referred to herein collectively
as “Junior Stock”). The rights of all such shares of capital stock of the Company shall be subject to the rights, powers,
preferences and privileges of the Preferred Shares. Without limiting any other provision of this Certificate of Designations, without
the prior express consent of the Required Holders, voting separate as a single class, the Company shall not hereafter authorize or issue
any additional or other shares of capital stock that is (i) of senior rank to the Preferred Shares in respect of the preferences as to
dividends, distributions and payments upon the liquidation, dissolution and winding up of the Company (collectively, the “Senior
Preferred Stock”), (ii) of pari passu rank to the Preferred Shares in respect of the preferences as to dividends, distributions
and payments upon the liquidation, dissolution and winding up of the Company (collectively, the “Parity Stock”) or
(iii) any Junior Stock having a maturity date or any other date requiring redemption or repayment of such shares of Junior Stock that
is prior to the first anniversary of the Initial Issuance Date. In the event of the merger or consolidation of the Company with or into
another corporation, the Preferred Shares shall maintain their relative rights, powers, designations, privileges and preferences provided
for herein and no such merger or consolidation shall result inconsistent therewith.
3. Dividends. From and
after the first date of issuance of any Preferred Shares (the “Initial Issuance Date”), each holder of a Preferred
Share (each, a “Holder” and collectively, the “Holders”) shall be entitled to receive dividends
(“Dividends”), which Dividends shall be paid by the Company out of funds legally available therefor, payable, subject
to the conditions and other terms hereof, in shares of Common Stock or cash on the Stated Value of such Preferred Share at the Dividend
Rate, which shall be cumulative and shall continue to accrue daily whether or not declared and whether or not in any fiscal year there
shall be net profits or surplus available for the payment of dividends in such fiscal year. Dividends on the Preferred Shares shall commence
accruing on the Initial Issuance Date and shall be computed on the basis of a 360-day year and twelve 30-day months. Accrued and unpaid
Dividends shall be payable by way of inclusion of the Dividends in the Conversion Amount on each Conversion Date in accordance with Section
4(c)(i) or upon any redemption in accordance with Section 11 or upon any required payment upon any Bankruptcy Triggering Event. From and
after the occurrence and during the continuance of any Triggering Event, the Dividend Rate shall automatically be increased to fifteen
percent (15.0%) per annum. In the event that such Triggering Event is subsequently cured, the adjustment referred to in the preceding
sentence shall cease to be effective as of the calendar day immediately following the date of such cure; provided, that the Dividends
as calculated and unpaid at such increased rate during the continuance of such Triggering Event shall continue to apply to the extent
relating to the days after the occurrence of such Triggering Event through and including the date of such cure of such Triggering Event.
4. Conversion. At any time
after the Initial Issuance Date, each Preferred Share shall be convertible into validly issued, fully paid and non-assessable shares of
Common Stock (as defined below), on the terms and conditions set forth in this Section 4.
(a) Holder’s
Conversion Right. Subject to the provisions of Section 4(d), at any time or times on or after the Initial Issuance Date, each Holder
shall be entitled to convert any portion of the outstanding Preferred Shares held by such Holder into validly issued, fully paid and non-assessable
shares of Common Stock in accordance with Section 4(c) at the Conversion Rate (as defined below); provided that, no Holder may deliver
another Conversion Notice while an existing Conversion Notice remains outstanding. The Company shall not issue any fraction of a share
of Common Stock upon any conversion. If the issuance would result in the issuance of a fraction of a share of Common Stock, the Company
shall round such fraction of a share of Common Stock up to the nearest whole share. The Company shall pay any and all transfer, stamp,
issuance and similar taxes, costs and expenses (including, without limitation, fees and expenses of the Transfer Agent (as defined below))
that may be payable with respect to the issuance and delivery of Common Stock upon conversion of any Preferred Shares.
(b) Conversion Rate.
The number of shares of Common Stock issuable upon conversion of any Preferred Share pursuant to Section 4(a) shall be determined by dividing
(x) the Conversion Amount of such Preferred Share by (y) the Conversion Price (the “Conversion Rate”):
(i) “Conversion
Amount” means, with respect to each Preferred Share, as of the applicable date of determination, the sum of (1) the Stated Value
thereof plus (2) the Additional Amount thereon and any accrued and unpaid Late Charges (as defined below in Section 24(c)) with respect
to such Stated Value and Additional Amount as of such date of determination.
(ii) “Conversion
Price” means, with respect to each Preferred Share, as of any Conversion Date or other date of determination, an initial price
of $3.50, subject to further adjustment as provided herein.
(c) Mechanics of
Conversion. The conversion of each Preferred Share shall be conducted in the following manner:
(i) Optional Conversion.
To convert a Preferred Share into shares of Common Stock on any date (a “Conversion Date”), a Holder shall deliver
(whether via facsimile, electronic mail or otherwise), for receipt on or prior to 11:59 p.m., New York time, on such date, a copy of an
executed notice of conversion of the share(s) of Preferred Shares subject to such conversion in the form attached hereto as Exhibit
I (the “Conversion Notice”) to the Company. If required by Section 4(c)(iii), within two (2) Trading Days following
a conversion of any such Preferred Shares as aforesaid, such Holder shall surrender to a nationally recognized overnight delivery service
for delivery to the Company the original certificates, if any, representing the Preferred Shares (the “Preferred Share Certificates”)
so converted as aforesaid (or an indemnification undertaking with respect to the Preferred Shares in the case of its loss, theft or destruction
as contemplated by Section 18(b)). On or before the first (1st) Trading Day following the date of receipt of a Conversion Notice,
the Company shall transmit by facsimile or electronic mail an acknowledgment of confirmation and representation as to whether such shares
of Common Stock may then be resold pursuant to Rule 144 or an effective and available registration statement, in the form attached hereto
as Exhibit II, of receipt of such Conversion Notice to such Holder and the Company’s transfer agent (the “Transfer
Agent”), which confirmation shall constitute an instruction to the Transfer Agent to process such Conversion Notice in accordance
with the terms herein. On or before the second (2nd) Trading Day following each date on which the Company has received a Conversion
Notice (or such earlier date as required pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement of a
trade initiated on the applicable Conversion Date of such shares of Common Stock issuable pursuant to such Conversion Notice) (the “Share
Delivery Deadline”), the Company shall (1) provided that the Transfer Agent is participating in The Depository Trust Company’s
(“DTC”) Fast Automated Securities Transfer Program, credit such aggregate number of shares of Common Stock to which
such Holder shall be entitled pursuant to such conversion to such Holder’s or its designee’s balance account with DTC through
its Deposit/Withdrawal at Custodian system, or (2) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer
Program, upon the request of such Holder, issue and deliver (via reputable overnight courier) to the address as specified in such Conversion
Notice, a certificate, registered in the name of such Holder or its designee, for the number of shares of Common Stock to which such Holder
shall be entitled. If the number of Preferred Shares represented by the Preferred Share Certificate(s) submitted for conversion pursuant
to Section 4(c)(iii) is greater than the number of Preferred Shares being converted, then the Company shall, as soon as practicable and
in no event later than two (2) Trading Days after receipt of the Preferred Share Certificate(s) and at its own expense, issue and deliver
to such Holder (or its designee) a new Preferred Share Certificate (in accordance with Section 18(d)) representing the number of Preferred
Shares not converted. The Person or Persons entitled to receive the shares of Common Stock issuable upon a conversion of Preferred Shares
shall be treated for all purposes as the record holder or holders of such shares of Common Stock on the Conversion Date. In the event
the Company is unable to deliver shares of Common Stock issuable upon a conversion of Preferred Shares to a Holder that would otherwise
be issuable upon delivery of a Conversion Notice because of the application of the Exchange Limitation (as defined below), the Company
shall deliver to such Holder within two (2) Trading Days following delivery of a Conversion Notice a bank check or wire transfer in the
amount of the product of (I) the number of such shares of Common Stock that would otherwise be delivered, multiplied by (II) the difference
of the VWAP of the Common Stock on the date of such Conversion Notice minus the Conversion Price; provided, the Holder shall be permitted
to deliver only two (2) Conversion Notices per calendar month during any such period.
(ii) Company’s
Failure to Timely Convert. If the Company shall fail, for any reason or for no reason, on or prior to the applicable Share Delivery
Deadline, either (I) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, to issue and deliver
to such Holder (or its designee) a certificate for the number of shares of Common Stock to which such Holder is entitled and register
such shares of Common Stock on the Company’s share register or, if the Transfer Agent is participating in the DTC Fast Automated
Securities Transfer Program, to credit such Holder’s or its designee’s balance account with DTC for such number of shares
of Common Stock to which such Holder is entitled upon such Holder’s conversion of any Conversion Amount (as the case may be) or
(II) if the registration statement covering the resale of the shares of Common Stock that are the subject of the Conversion Notice (the
“Unavailable Conversion Shares”) is not available for the resale of such Unavailable Conversion Shares and the Company
fails to promptly, but in no event later than as required pursuant to the Securities Purchase Agreement (x) notify such Holder and (y)
deliver the shares of Common Stock electronically without any restrictive legend by crediting such aggregate number of shares of Common
Stock to which such Holder is entitled pursuant to such exercise to such Holder’s or its designee’s balance account with DTC
through its Deposit/Withdrawal At Custodian system (the event described in the immediately foregoing clause (II) is hereinafter referred
as a “Notice Failure” and together with the event described in clause (I) above, a “Conversion Failure”),
then, in addition to all other remedies available to such Holder, (X) the Company shall pay in cash to such Holder on each day after the
Share Delivery Deadline that the issuance of such shares of Common Stock is not timely effected an amount equal to 2% of the product of
(A) the sum of the number of shares of Common Stock not issued to such Holder on or prior to the Share Delivery Deadline and to which
such Holder is entitled, multiplied by (B) any trading price of the Common Stock selected by such Holder in writing as in effect at any
time during the period beginning on the applicable Conversion Date and ending on the applicable Share Delivery Deadline, and (Y) such
Holder, upon written notice to the Company, may void its Conversion Notice with respect to, and retain or have returned, as the case may
be, all, or any portion, of such Preferred Shares that has not been converted pursuant to such Conversion Notice; provided that the voiding
of an Conversion Notice shall not affect the Company’s obligations to make any payments which have accrued prior to the date of
such notice pursuant to this Section 4(c)(ii) or otherwise. In addition to the foregoing, if on or prior to the Share Delivery Deadline,
either (A) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, the Company shall fail to
issue and deliver to such 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 such Holder or such Holder’s designee, as applicable, with DTC for the number of shares of Common
Stock to which such Holder is entitled upon such Holder’s conversion hereunder or pursuant to the Company’s obligation pursuant
to clause (II) below or (B) a Notice Failure occurs, and if on or after such Share Delivery Deadline such Holder purchases (in an open
market transaction or otherwise) shares of Common Stock corresponding to all or any portion of the number of shares of Common Stock issuable
upon such conversion that such Holder is entitled to receive from the Company and has not received from the Company in connection with
such Conversion Failure or Notice Failure, as applicable (a “Buy-In”), then, in addition to all other remedies available
to such Holder, the Company shall, within two (2) Business Days after receipt of such Holder’s request and in such Holder’s
discretion, either: (I) pay cash to such Holder in an amount equal to such Holder’s total purchase price (including brokerage commissions
and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including, without limitation, by any other Person
in respect, or on behalf, of such 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 to the balance account of such Holder or such
Holder’s designee, as applicable, with DTC for the number of shares of Common Stock to which such Holder is entitled upon such Holder’s
conversion hereunder (as the case may be) (and to issue such shares of Common Stock) shall terminate, or (II) promptly honor its obligation
to so issue and deliver to such Holder a certificate or certificates representing such shares of Common Stock or credit the balance account
of such Holder or such Holder’s designee, as applicable, with DTC for the number of shares of Common Stock to which such Holder
is entitled upon such Holder’s conversion hereunder (as the case may be) and pay cash to such Holder in an amount equal to the excess
(if any) of the Buy-In Price over the product of (x) such number of shares of Common Stock multiplied by (y) the lowest Closing Sale Price
of the Common Stock on any Trading Day during the period commencing on the date of the applicable Conversion Notice and ending on the
date of such issuance and payment under this clause (II). Nothing herein shall limit a Holder’s right to pursue any other remedies
available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive relief
with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock (or to electronically deliver
such shares of Common Stock) upon the conversion of any Preferred Shares as required pursuant to the terms hereof. Notwithstanding anything
herein to the contrary, with respect to any given Notice Failure and/or Conversion Failure, this Section 4(c)(ii) shall not apply to a
Holder to the extent the Company has already paid such amounts in full to such Holder with respect to such Notice Failure and/or Conversion
Failure, as applicable, pursuant to the analogous sections of the Securities Purchase Agreement.
(iii) Registration;
Book-Entry. At the time of issuance of any Preferred Shares hereunder, the applicable Holder may, by written request (including by
electronic-mail) to the Company, elect to receive such Preferred Shares in the form of one or more Preferred Share Certificates or in
Book-Entry form. The Company (or the Transfer Agent, as custodian for the Preferred Shares) shall maintain a register (the “Register”)
for the recordation of the names and addresses of the Holders of each Preferred Share and the Stated Value of the Preferred Shares and
whether the Preferred Shares are held by such Holder in Preferred Share Certificates or in Book-Entry form (the “Registered Preferred
Shares”). The entries in the Register shall be conclusive and binding for all purposes absent manifest error. The Company and
each Holder of the Preferred Shares shall treat each Person whose name is recorded in the Register as the owner of a Preferred Share for
all purposes (including, without limitation, the right to receive payments and Dividends hereunder) notwithstanding notice to the contrary.
A Registered Preferred Share may be assigned, transferred or sold only by registration of such assignment or sale on the Register. Upon
its receipt of a written request to assign, transfer or sell one or more Registered Preferred Shares by such Holder thereof, the Company
shall record the information contained therein in the Register and issue one or more new Registered Preferred Shares in the same aggregate
Stated Value as the Stated Value of the surrendered Registered Preferred Shares to the designated assignee or transferee pursuant to Section
18, provided that if the Company does not so record an assignment, transfer or sale (as the case may be) of such Registered Preferred
Shares within two (2) Business Days of such a request, then the Register shall be automatically deemed updated to reflect such assignment,
transfer or sale (as the case may be). Notwithstanding anything to the contrary set forth in this Section 4, following conversion of any
Preferred Shares in accordance with the terms hereof, the applicable Holder shall not be required to physically surrender such Preferred
Shares held in the form of a Preferred Share Certificate to the Company unless (A) the full or remaining number of Preferred Shares represented
by the applicable Preferred Share Certificate are being converted (in which event such certificate(s) shall be delivered to the Company
as contemplated by this Section 4(c)(iii)) or (B) such Holder has provided the Company with prior written notice (which notice may be
included in a Conversion Notice) requesting reissuance of Preferred Shares upon physical surrender of the applicable Preferred Share Certificate.
Each Holder and the Company shall maintain records showing the Stated Value, Dividends and Late Charges converted and/or paid (as the
case may be) and the dates of such conversions and/or payments (as the case may be) or shall use such other method, reasonably satisfactory
to such Holder and the Company, so as not to require physical surrender of a Preferred Share Certificate upon conversion. If the Company
does not update the Register to record such Stated Value, Dividends and Late Charges converted and/or paid (as the case may be) and the
dates of such conversions and/or payments (as the case may be) within two (2) Business Days of such occurrence, then the Register shall
be automatically deemed updated to reflect such occurrence. In the event of any dispute or discrepancy, such records of such Holder establishing
the number of Preferred Shares to which the record holder is entitled shall be controlling and determinative in the absence of manifest
error. A Holder and any transferee or assignee, by acceptance of a certificate, acknowledge and agree that, by reason of the provisions
of this paragraph, following conversion of any Preferred Shares, the number of Preferred Shares represented by such certificate may be
less than the number of Preferred Shares stated on the face thereof. Each Preferred Share Certificate shall bear the following legend:
ANY TRANSFEREE OR ASSIGNEE
OF THIS CERTIFICATE SHOULD CAREFULLY REVIEW THE TERMS OF THE CORPORATION’S CERTIFICATE OF DESIGNATIONS RELATING TO THE SHARES OF
SERIES B PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE, INCLUDING SECTION 4(c)(iii) THEREOF. THE NUMBER OF SHARES OF SERIES B PREFERRED
STOCK REPRESENTED BY THIS CERTIFICATE MAY BE LESS THAN THE NUMBER OF SHARES OF SERIES B PREFERRED STOCK STATED ON THE FACE HEREOF PURSUANT
TO SECTION 4(c)(iii) OF THE CERTIFICATE OF DESIGNATIONS RELATING TO THE SHARES OF SERIES B PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE.
(iv) Pro Rata Conversion;
Disputes. In the event that the Company receives a Conversion Notice from more than one Holder for the same Conversion Date and the
Company can convert some, but not all, of such Preferred Shares submitted for conversion, the Company shall convert from each Holder electing
to have Preferred Shares converted on such date a pro rata amount of such Holder’s Preferred Shares submitted for conversion on
such date based on the number of Preferred Shares submitted for conversion on such date by such Holder relative to the aggregate number
of Preferred Shares submitted for conversion on such date. In the event of a dispute as to the number of shares of Common Stock issuable
to a Holder in connection with a conversion of Preferred Shares, the Company shall issue to such Holder the number of shares of Common
Stock not in dispute and resolve such dispute in accordance with Section 23.
(d) Limitation on
Beneficial Ownership. The Company shall not effect the conversion of any of the Preferred Shares held by a Holder, and such Holder
shall not have the right to convert any of the Preferred Shares held by such Holder pursuant to the terms and conditions of this Certificate
of Designations and any such conversion shall be null and void and treated as if never made, to the extent that after giving effect to
such conversion, such Holder together with the other Attribution Parties collectively would beneficially own in excess of 4.99% (the “Maximum
Percentage”) of the shares of Common Stock outstanding immediately after giving effect to such conversion. For purposes of the
foregoing sentence, the aggregate number of shares of Common Stock beneficially owned by such Holder and the other Attribution Parties
shall include the number of shares of Common Stock held by such Holder and all other Attribution Parties plus the number of shares of
Common Stock issuable upon conversion of the Preferred Shares with respect to which the determination of such sentence is being made,
but shall exclude shares of Common Stock which would be issuable upon (A) conversion of the remaining, nonconverted Preferred Shares beneficially
owned by such Holder or any of the other Attribution Parties and (B) exercise or conversion of the unexercised or nonconverted portion
of any other securities of the Company (including, without limitation, any convertible notes, convertible preferred stock or warrants,
including the Preferred Shares) beneficially owned by such Holder or any other Attribution Party subject to a limitation on conversion
or exercise analogous to the limitation contained in this Section 4(d). For purposes of this Section 4(d), beneficial ownership shall
be calculated in accordance with Section 13(d) of the 1934 Act. For purposes of determining the number of outstanding shares of Common
Stock a Holder may acquire upon the conversion of such Preferred Shares without exceeding the Maximum Percentage, such Holder may rely
on the number of outstanding shares of Common Stock as reflected in (x) the Company’s most recent Annual Report on Form 10-K, Quarterly
Report on Form 10-Q, Current Report on Form 8-K or other public filing with the SEC, as the case may be, (y) a more recent public announcement
by the Company or (z) any other written notice by the Company or the Transfer Agent, if any, setting forth the number of shares of Common
Stock outstanding (the “Reported Outstanding Share Number”). If the Company receives a Conversion Notice from a Holder
at a time when the actual number of outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Company
shall notify such Holder in writing of the number of shares of Common Stock then outstanding and, to the extent that such Conversion Notice
would otherwise cause such Holder’s beneficial ownership, as determined pursuant to this Section 4(d), to exceed the Maximum Percentage,
such Holder must notify the Company of a reduced number of shares of Common Stock to be purchased pursuant to such Conversion Notice.
For any reason at any time, upon the written or oral request of any Holder, the Company shall within one (1) Business Day confirm orally
and in writing or by electronic mail to such Holder the number of shares of Common Stock then outstanding. In any case, the number of
outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company,
including such Preferred Shares, by such 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 a Holder upon conversion of such Preferred Shares results
in such 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 such 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 such Holder shall not have the
power to vote or to transfer the Excess Shares. Upon delivery of a written notice to the Company, any 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
of such Holder 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 such Holder and the other Attribution Parties and not to any other Holder that is
not an Attribution Party of such Holder. For purposes of clarity, the shares of Common Stock issuable to a Holder pursuant to the terms
of this Certificate of Designations in excess of the Maximum Percentage shall not be deemed to be beneficially owned by such Holder for
any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. In addition to the Maximum Percentage described
above and notwithstanding anything to the contrary in this Certificate of Designations, the Company shall not under any circumstances
issue shares of Common Stock issuable upon conversion of the Preferred Shares in amount exceeding 19.9% of total number of shares of Common
Stock outstanding on the Initial Issuance Date (the “Exchange Limitation”), unless the Company elects to seek and actually
receives shareholder approval. No prior inability to convert such Preferred Shares pursuant to this paragraph shall have any effect on
the applicability of the provisions of this paragraph with respect to any subsequent determination of convertibility. The provisions of
this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 4(d)
to the extent necessary to correct this paragraph (or any portion of this paragraph) which may be defective or inconsistent with the intended
beneficial ownership limitation contained in this Section 4(d) or to make changes or supplements necessary or desirable to properly give
effect to such limitation. The limitation contained in this paragraph may not be waived and shall apply to a successor holder of such
Preferred Shares.
(e) Right of Alternate
Conversion.
(i) Alternate Conversion.
Subject to Section 4(d), at the option of any Holder, such Holder may convert (each, an “Alternate Conversion”, and
the date of such Alternate Conversion, an “Alternate Conversion Date”) all, or any number, of Preferred Shares into
shares of Common Stock (such aggregate Conversion Amount of the Preferred Shares to be converted pursuant to this Section 4(e)(i), the
“Alternate Conversion Amount”) at the Alternate Conversion Price. Each Holder may convert up to a maximum Alternate
Conversion Amount of $250,000 per Conversion Notice.
(ii) Mechanics of Alternate
Conversion. On any Alternate Conversion Date, a Holder may voluntarily convert any Alternate Conversion Amount of Preferred Shares
pursuant to Section 4(c) (with “Alternate Conversion Price” replacing “Conversion Price” for all purposes hereunder
with respect to such Alternate Conversion) by designating in the Conversion Notice delivered pursuant to this Section 4(e) of this Certificate
of Designations that such Holder is electing to use the Alternate Conversion Price for such conversion, subject to the following:
a. Pre-Settlement.
No later than two (2) Trading Days after each Conversion Date using the Alternate Conversion Price (the “Pre-Settlement Conversion
Share Delivery Deadline”), the Company shall (A) transmit by electronic mail an acknowledgment of confirmation and representation,
in the form attached hereto as Exhibit II, and (B) cause the Transfer Agent to deliver electronically via Deposit/Withdrawal at Custodian
system to such Holder such number of Conversion Shares (the “Pre-Settlement Conversion Shares”) equal to the product
of (A) the quotient of (y) the Conversion Amount, divided by (z) the Pre-Settlement Conversion Price, and as to which such Holder shall
be the owner thereof as of such time of delivery of such Pre-Settlement Conversion Shares, multiplied by (B) 125%. The “Pre-Settlement
Conversion Price” means 80% of the Closing Sale Price on the date immediately preceding the Conversion Date. All such determinations
to be appropriately adjusted for any share split, share dividend, share combination or other similar transaction during any such measuring
period. A Holder shall have the right to request additional Pre-Settlement Conversion Shares during the Alternate Conversion Measuring
Period at any time there is an anticipated shortfall determined in such Holder’s sole discretion.
b. Settlement.
No later than two (2) Trading Days after the Alternate Conversion Measuring Period (the “Conversion Settlement Date”),
the Company shall (A) transmit by electronic mail an acknowledgment of confirmation and representation, in the form attached hereto as
Exhibit II, and (B) cause the Transfer Agent to deliver to such Holder such number of Conversion Shares (the “Settlement Conversion
Shares”) equal to the Conversion Amount divided by the Alternate Conversion Price; provided, however, that the number of Conversion
Shares to be delivered by the Conversion Settlement Date shall be reduced by the number of Pre-Settlement Conversion Shares delivered.
Notwithstanding anything herein to the contrary, if the number of Pre-Settlement Conversion Shares delivered to such Holder exceeds the
number of Settlement Conversion Shares, then such Holder shall within two (2) Trading Days return such excess Pre-Settlement Conversion
Shares to the Company (or the Company’s transfer agent on behalf of the Company); provided that any such Pre-Settlement Conversion
Shares may, at the option of such Holder, instead of being returned, be applied to any subsequent conversion prior to the date such return
would otherwise be due. For the sake of clarity, such Holder shall be required to return any excess Pre-Settlement Conversion Share to
the Company when all Preferred Shares are converted.
(iii) Cash Payment
Election. Upon receipt of a Conversion Notice for an Alternate Conversion by a Holder, the Company may, at its option, elect to satisfy
its obligation under such Alternate Conversion with payment in cash in an amount equal to 110% of the Alternate Conversion Amount set
forth on the Conversion Notice (the “Cash Payment”) in lieu of shares of Common Stock issuable upon conversion of the
Preferred Shares. To elect the Cash Payment, the Company shall, upon receipt of the Conversion Notice, immediately deliver to such Holder
(whether via facsimile, electronic mail or otherwise), a written instrument notifying such Holder of its intention to elect a Cash Payment
in satisfaction of its obligation under the Alternate Conversion. The Cash Payment shall be made to such Holder within two (2) Business
Days following such election. If the Company fails to make the payment in cash following an election on time, the Stated Value of the
then remaining outstanding Preferred Shares shall increase by 20%.
(f) Mandatory Conversion.
On the twenty-fourth (24th) month anniversary of the Initial Issuance Date (the “Mandatory Conversion Date”),
each outstanding Preferred Share shall automatically convert into that number of shares of Common Stock (subject to the limitations set
forth in Section 4(d)) determined by dividing the Stated Value of such Preferred Share by the Conversion Price on the Mandatory Conversion
Date (the “Mandatory Conversion”). To effect the Mandatory Conversion, a Holder shall not be required to surrender
the applicable Preferred Share Certificates. On or before the second (2nd) Trading Day following the Mandatory Conversion Date,
the Company shall (1) provided that the Transfer Agent is participating in DTC’s Fast Automated Securities Transfer Program, credit
such aggregate number of shares of Common Stock to which such Holder shall be entitled pursuant to such conversion to such Holder’s
or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system, or (2) if the Transfer Agent is not
participating in the DTC Fast Automated Securities Transfer Program, upon the request of such Holder, issue and deliver (via reputable
overnight courier) to the address as specified in the Register, a certificate, registered in the name of such Holder or its designee,
for the number of shares of Common Stock to which such Holder shall be entitled. For purposes of clarification, a Mandatory Conversion
shall be subject to the provisions of Sections 4(e)(i) and (ii).
5. Triggering Event Redemptions.
(a) Triggering Event.
Each of the following events shall constitute a “Triggering Event” and each of the events in clauses 5(a)(viii), 5(a)(ix),
and 5(a)(x), shall constitute a “Bankruptcy Triggering Event”:
(i) the suspension from
trading or the failure of the Common Stock to be trading or listed (as applicable) on an Eligible Market for a period of five (5) consecutive
Trading Days;
(ii) the Company’s
(A) failure to cure a Conversion Failure by delivery of the required number of shares of Common Stock within five (5) Trading Days after
the applicable Conversion Date or (B) notice, written or oral, to any holder of Preferred Shares, including, without limitation, by way
of public announcement or through any of its agents, at any time, of its intention not to comply, as required, with a request for conversion
of any Preferred Shares into shares of Common Stock that is requested in accordance with the provisions of this Certificate of Designations,
other than pursuant to Section 4(d) hereof;
(iii) except to the extent
the Company is in compliance with Section 10(b) below, at any time following the tenth (10th) consecutive Business Day after
notice has been given by a Holder to the Company that a Holder’s Authorized Share Allocation (as defined in Section 10(a) below)
is less than the sum of 125% of the number of shares of Common Stock that such Holder would be entitled to receive upon a conversion,
in full, of all of the Preferred Shares then held by such Holder (without regard to any limitations on conversion set forth in this Certificate
of Designations);
(iv) the Board fails to
declare any Dividend to be paid in accordance with Section 3;
(v) receipt of notice
given by a Holder to the Company of the Company’s failure to pay to any Holder any Dividend (whether or not declared by the Board)
or any other amount when and as due under this Certificate of Designations (including, without limitation, the Company’s failure
to pay any redemption payments or amounts hereunder), the Securities Purchase Agreement or any other Transaction Document or any other
agreement, document, certificate or other instrument delivered in connection with the transactions contemplated hereby and thereby (in
each case, whether or not permitted pursuant to the NRS), except, in the case of a failure to pay Dividends and Late Charges when and
as due, in each such case only if such failure remains uncured for a period of at least five (5) Trading Days;
(vi) receipt of notice
given by a Holder to the Company that the Company fails to remove any restrictive legend on any certificate or any shares of Common Stock
issued to the applicable Holder upon conversion or exercise (as the case may be) of any Securities (as defined in the Securities Purchase
Agreement) acquired by such Holder under the Securities Purchase Agreement as and when required by such Securities or the Securities Purchase
Agreement, unless otherwise then prohibited by applicable federal securities laws, and any such failure remains uncured for at least five
(5) Business Days;
(vii) the occurrence of
any default (that has not been cured within, if capable of curing, within twenty (20) Business Days of the occurrence) under, redemption
of or acceleration prior to maturity of at least an aggregate of $400,000 of Indebtedness (as defined in the Securities Purchase Agreement)
of the Company or any of its Subsidiaries, other than with respect to any Preferred Shares;
(viii) bankruptcy, insolvency,
reorganization or liquidation proceedings or other proceedings for the relief of debtors shall be instituted by or against the Company
or any Subsidiary and, if instituted against the Company or any Subsidiary by a third party, shall not be dismissed within sixty (60)
days of their initiation;
(ix) the commencement
by the Company or any Subsidiary of a voluntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it
to the entry of a decree, order, judgment or other similar document in respect of the Company or any Subsidiary in an involuntary case
or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or to the commencement
of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization
or relief under any applicable federal, state or foreign law, or the consent by it to the filing of such petition or to the appointment
of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company
or any Subsidiary or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the
execution of a composition of debts, or the occurrence of any other similar federal, state or foreign proceeding, or the admission by
it in writing of its inability to pay its debts generally as they become due, the taking of corporate action by the Company or any Subsidiary
in furtherance of any such action or the taking of any action by any Person to commence a Uniform Commercial Code foreclosure sale or
any other similar action under federal, state or foreign law;
(x) the entry by a court
of (i) a decree, order, judgment or other similar document in respect of the Company or any Subsidiary of a voluntary or involuntary case
or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar law or (ii) a decree,
order, judgment or other similar document adjudging the Company or any Subsidiary as bankrupt or insolvent, or approving as properly filed
a petition seeking liquidation, reorganization, arrangement, adjustment or composition of or in respect of the Company or any Subsidiary
under any applicable federal, state or foreign law or (iii) a decree, order, judgment or other similar document appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or any Subsidiary or of any substantial
part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree, order, judgment
or other similar document or any such other decree, order, judgment or other similar document unstayed and in effect for a period of sixty
(60) consecutive days;
(xi) a final judgment
or judgments for the payment of money aggregating in excess of $250,000 are rendered against the Company and/or any of its Subsidiaries
and which judgments are not, within sixty (60) days after the entry thereof, bonded, discharged, settled or stayed pending appeal, or
are not discharged within thirty (30) days after the expiration of such stay; provided, however, any judgment which is covered by insurance
or an indemnity from a credit worthy party shall not be included in calculating the $250,000 amount set forth above so long as the Company
provides each Holder a written statement from such insurer or indemnity provider (which written statement shall be reasonably satisfactory
to each Holder) to the effect that such judgment is covered by insurance or an indemnity;
(xii) the Company and/or
any Subsidiary, individually or in the aggregate, either (i) fails to pay, when due, or within any applicable grace or cure period not
exceeding a period of twenty (20) Business Days (or in the case where an arrangement to cure with the applicable third party is in place,
within a cure period not exceeding a period of twenty-five (25) Business Days), any payment with respect to any Indebtedness in excess
of $400,000 due to any third party (other than the case where failure to pay is considered to be cured as a result of the third party
providing a waiver or other forbearance, or, with respect to unsecured Indebtedness only, the payments are contested by the Company and/or
such Subsidiary (as the case may be) in good faith by proper proceedings and with respect to which adequate reserves have been set aside
for the payment thereof in accordance with GAAP) or is otherwise in breach or violation of any agreement for monies owed or owing in an
amount in excess of $400,000, which breach or violation has not been cured, if capable of curing, within twenty (20) Business Days, and
which breach or violation permits the other party thereto to declare a default or otherwise accelerate amounts due thereunder, or (ii)
suffer to exist any other circumstance or event that would, with or without the passage of time or the giving of notice, result in a default
or event of default under any agreement binding the Company or any Subsidiary, which default or event of default has not been cured, if
capable of curing, within twenty (20) Business Days, and which default or event of default would or is likely to have a material adverse
effect on the business, assets, operations (including results thereof), liabilities, properties, condition (including financial condition)
or prospects of the Company or any of its Subsidiaries, individually or in the aggregate;
(xiii) other than as specifically
set forth in another clause of this Section 5(a), the Company or any Subsidiary breaches any representation or warranty in any material
respect (other than representations or warranties subject to material adverse effect or materiality, which may not be breached in any
respect) or any covenant or other term or condition of any Transaction Document, except, in the case of a breach of a covenant or other
term or condition that is curable, only if such breach remains uncured for a period of five (5) consecutive Trading Days;
(xiv) a false or inaccurate
certification (including a false or inaccurate deemed certification) by the Company as to whether any Triggering Event has occurred;
(xv) any breach or failure
in any respect by the Company or any Subsidiary to comply with any provision of Section 13 of this Certificate of Designations;
(xvi) any Material Adverse
Effect (as defined in the Securities Purchase Agreement) occurs that has not been cured, if capable of curing, within five (5) Trading
Days of the occurrence;
(xvii) failure to have
an effective registration statement covering the resale of shares of Common Stock upon conversion of the Preferred Shares, which failure
continues for a period of forty (40) days; or
(xviii) any provision
of any Transaction Document shall at any time for any reason (other than pursuant to the express terms thereof) cease to be valid and
binding on or enforceable against the parties thereto, or the validity or enforceability thereof shall be contested, directly or indirectly,
by the Company or any Subsidiary, or a proceeding shall be commenced by the Company or any Subsidiary or any governmental authority having
jurisdiction over any of them, seeking to establish the invalidity or unenforceability thereof or the Company or any of its Subsidiaries
shall deny in writing that it has any liability or obligation purported to be created under one or more Transaction Documents.
(b) Notice of a Triggering
Event; Redemption Right. Upon the occurrence of a Triggering Event with respect to the Preferred Shares, the Company shall within
one (1) Business Day deliver written notice thereof via facsimile or electronic mail and overnight courier (with next day delivery specified)
(a “Triggering Event Notice”) to each Holder. At any time after the earlier of a Holder’s receipt of a Triggering
Event Notice and such Holder becoming aware of a Triggering Event (such earlier date, the “Triggering Event Right Commencement
Date”) and ending (such ending date, the “Triggering Event Right Expiration Date”, and each such period,
an “Triggering Event Redemption Right Period”) on the twentieth (20th) Trading Day after the later of (x)
the date such Triggering Event is cured and (y) such Holder’s receipt of a Triggering Event Notice that includes (I) a reasonable
description of the applicable Triggering Event, (II) a certification as to whether, in the opinion of the Company, such Triggering Event
is capable of being cured and, if applicable, a reasonable description of any existing plans of the Company to cure such Triggering Event
and (III) a certification as to the date the Triggering Event occurred and, if cured on or prior to the date of such Triggering Event
Notice, the applicable Triggering Event Right Expiration Date, such Holder may require the Company to redeem (regardless of whether such
Triggering Event has been cured on or prior to the Triggering Event Right Expiration Date) all or any of the Preferred Shares by delivering
written notice thereof (the “Triggering Event Redemption Notice”) to the Company, which Triggering Event Redemption
Notice shall indicate the number of the Preferred Shares such Holder is electing to redeem. Each of the Preferred Shares subject to redemption
by the Company pursuant to this Section 5(b) shall be redeemed by the Company at a price equal to the greater of (i) the product of (A)
the Conversion Amount to be redeemed multiplied by (B) the Redemption Premium and (ii) the product of (X) the Conversion Rate with respect
to the Conversion Amount in effect at such time as such Holder delivers a Triggering Event Redemption Notice multiplied by (Y) the product
of (1) the Redemption Premium multiplied by (2) the greatest Closing Sale Price of the Common Stock on any Trading Day during the period
commencing on the date immediately preceding such Triggering Event and ending on the date the Company makes the entire payment required
to be made under this Section 5(b) (the “Triggering Event Redemption Price”). Redemptions required by this Section
5(b) shall be made in accordance with the provisions of Section 11. To the extent redemptions required by this Section 5(b) are deemed
or determined by a court of competent jurisdiction to be prepayments of the Preferred Shares by the Company, such redemptions shall be
deemed to be voluntary prepayments. Notwithstanding anything to the contrary in this Section 5(b), but subject to Section 4(d), until
the Triggering Event Redemption Price (together with any Late Charges thereon) is paid in full, the Conversion Amount submitted for redemption
under this Section 5(b) (together with any Late Charges thereon) may be converted, in whole or in part, by such Holder into Common Stock
pursuant to the terms of this Certificate of Designations. In the event of the Company’s redemption of any of the Preferred Shares
under this Section 5(b), a Holder’s damages would be uncertain and difficult to estimate because of the parties’ inability
to predict future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for such Holder.
Accordingly, any redemption premium due under this Section 5(b) is intended by the parties to be, and shall be deemed, a reasonable estimate
of such Holder’s actual loss of its investment opportunity and not as a penalty. Any redemption upon a Triggering Event shall not
constitute an election of remedies by the applicable Holder or any other Holder, and all other rights and remedies of each Holder shall
be preserved.
(c) Mandatory Redemption
upon Bankruptcy Triggering Event. Notwithstanding anything to the contrary herein, and notwithstanding any conversion that is then
required or in process, upon any Bankruptcy Triggering Event, the Company shall immediately redeem, in cash, each of the Preferred Shares
then outstanding at a redemption price equal to the applicable Triggering Event Redemption Price (calculated as if such Holder shall have
delivered the Triggering Event Redemption Notice immediately prior to the occurrence of such Bankruptcy Triggering Event), without the
requirement for any notice or demand or other action by any Holder or any other person or entity, provided that a Holder may, in its sole
discretion, waive such right to receive payment upon a Bankruptcy Triggering Event, in whole or in part, and any such waiver shall not
affect any other rights of such Holder or any other Holder hereunder, including any other rights in respect of such Bankruptcy Triggering
Event, any right to conversion, and any right to payment of such Triggering Event Redemption Price or any other Redemption Price, as applicable.
6. Rights Upon Fundamental
Transactions.
(a) Assumption.
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 Certificate of Designations and the other Transaction Documents in accordance with the provisions
of this Section 6(a) pursuant to written agreements in form and substance satisfactory to the Required Holders and approved by the Required
Holders prior to such Fundamental Transaction, including agreements to deliver to each holder of Preferred Shares in exchange for such
Preferred Shares a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this
Certificate of Designations, including, without limitation, having a stated value and dividend rate equal to the stated value and dividend
rate of the Preferred Shares held by the Holders and having similar ranking to the Preferred Shares, and satisfactory to the Required
Holders and (ii) the Successor Entity (including its Parent Entity) is a publicly traded corporation whose shares of common stock are
quoted on or listed for trading on an Eligible Market. Upon the occurrence of any Fundamental Transaction, the Successor Entity shall
succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Certificate
of Designations 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 Certificate of
Designations and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein
and therein. In addition to the foregoing, upon consummation of a Fundamental Transaction, the Successor Entity shall deliver to each
Holder confirmation that there shall be issued upon conversion or redemption of the Preferred Shares at any time after the consummation
of such Fundamental Transaction, in lieu of the shares of Common Stock (or other securities, cash, assets or other property (except such
items still issuable under Sections 7 and 15, which shall continue to be receivable thereafter)) issuable upon the conversion or redemption
of the Preferred Shares prior to such Fundamental Transaction, such shares of the publicly traded common stock (or their equivalent) of
the Successor Entity (including its Parent Entity) which each Holder would have been entitled to receive upon the happening of such Fundamental
Transaction had all the Preferred Shares held by each Holder been converted immediately prior to such Fundamental Transaction (without
regard to any limitations on the conversion of the Preferred Shares contained in this Certificate of Designations), as adjusted in accordance
with the provisions of this Certificate of Designations. Notwithstanding the foregoing, such Holder may elect, at its sole option, by
delivery of written notice to the Company to waive this Section 6(a) to permit the Fundamental Transaction without the assumption of the
Preferred Shares. The provisions of this Section 6 shall apply similarly and equally to successive Fundamental Transactions and shall
be applied without regard to any limitations on the conversion or redemption of the Preferred Shares.
(b) Notice of a Change
of Control Redemption Right. No sooner than twenty (20) Trading Days nor later than ten (10) Trading Days prior to the consummation
of a Change of Control (the “Change of Control Date”), but not prior to the public announcement of such Change of Control,
the Company shall deliver written notice thereof via facsimile or electronic mail and overnight courier to each Holder (a “Change
of Control Notice”). At any time during the period beginning after a Holder’s receipt of a Change of Control Notice or
such Holder becoming aware of a Change of Control if a Change of Control Notice is not delivered to such Holder in accordance with the
immediately preceding sentence (as applicable) and ending on twenty (20) Trading Days after the later of (A) the date of consummation
of such Change of Control or (B) the date of receipt of such Change of Control Notice or (C) the date of the announcement of such Change
of Control, such Holder may require the Company to redeem all or any portion of such Holder’s Preferred Shares by delivering written
notice thereof (“Change of Control Redemption Notice”) to the Company, which Change of Control Redemption Notice shall
indicate the number of Preferred Shares such Holder is electing to have the Company redeem. Each Preferred Share subject to redemption
pursuant to this Section 6(b) shall be redeemed by the Company in cash at a price equal to the greatest of (i) the product of (w) the
Change of Control Redemption Premium multiplied by (y) the Conversion Amount of the Preferred Shares being redeemed, (ii) the product
of (x) the Change of Control Redemption Premium multiplied by (y) the product of (A) the Conversion Amount of the Preferred Shares being
redeemed multiplied by (B) the quotient determined by dividing (I) the greatest Closing Sale Price of the shares of Common Stock during
the period beginning on the date immediately preceding the earlier to occur of (1) the consummation of the applicable Change of Control
and (2) the public announcement of such Change of Control and ending on the date such Holder delivers the Change of Control Redemption
Notice by (II) the Conversion Price then in effect and (iii) the product of (y) the Change of Control Redemption Premium multiplied by
(z) the product of (A) the Conversion Amount of the Preferred Shares being redeemed multiplied by (B) the quotient of (I) the aggregate
cash consideration and the aggregate cash value of any non-cash consideration per share of Common Stock to be paid to such holders of
the shares of Common Stock upon consummation of such Change of Control (any such non-cash consideration constituting publicly-traded securities
shall be valued at the highest of the Closing Sale Price of such securities as of the Trading Day immediately prior to the consummation
of such Change of Control, the Closing Sale Price of such securities on the Trading Day immediately following the public announcement
of such proposed Change of Control and the Closing Sale Price of such securities on the Trading Day immediately prior to the public announcement
of such proposed Change of Control) divided by (II) the Conversion Price then in effect (the “Change of Control Redemption Price”).
Redemptions required by this Section 6(b) shall have priority to payments to all other stockholders of the Company in connection with
such Change of Control. To the extent redemptions required by this Section 6(b) are deemed or determined by a court of competent jurisdiction
to be prepayments of the Preferred Shares by the Company, such redemptions shall be deemed to be voluntary prepayments. Notwithstanding
anything to the contrary in this Section 6(b), but subject to Section 4(d), until the applicable Change of Control Redemption Price (together
with any Late Charges thereon) is paid in full to the applicable Holder, the Preferred Shares submitted by such Holder for redemption
under this Section 6(b) may be converted, in whole or in part, by such Holder into Common Stock pursuant to Section 4 or in the event
the Conversion Date is after the consummation of such Change of Control, stock or equity interests of the Successor Entity substantially
equivalent to the Company’s shares of Common Stock pursuant to Section 6(a). In the event of the Company’s redemption of any
of the Preferred Shares under this Section 6(b), such Holder’s damages would be uncertain and difficult to estimate because of the
parties’ inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment
opportunity for a Holder. Accordingly, any redemption premium due under this Section 6(b) is intended by the parties to be, and shall
be deemed, a reasonable estimate of such Holder’s actual loss of its investment opportunity and not as a penalty. The Company shall
make payment of the applicable Change of Control Redemption Price concurrently with the consummation of such Change of Control if a Change
of Control Redemption Notice is received prior to the consummation of such Change of Control and within two (2) Trading Days after the
Company’s receipt of such notice otherwise (the “Change of Control Redemption Date”). Redemptions required by
this Section 6 shall be made in accordance with the provisions of Section 11.
7. Rights Upon Issuance of
Purchase Rights and Other Corporate Events.
(a) Purchase Rights.
In addition to any adjustments pursuant to Section 8 and Section 15 below, if at any time the Company grants, issues or sells any Options,
Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to all or substantially all of the
record holders of any class of Common Stock (the “Purchase Rights”), then each Holder will be entitled to acquire,
upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such Holder could have acquired if such Holder
had held the number of shares of Common Stock acquirable upon complete conversion of all the Preferred Shares (without taking into account
any limitations or restrictions on the convertibility of the Preferred Shares and assuming for such purpose that all the Preferred Shares
were converted at the Alternate Conversion Price as of the applicable record date) held by such Holder immediately prior to the date on
which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which
the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights; provided, however,
to the extent that such Holder’s right to participate in any such Purchase Right would result in such Holder and the other Attribution
Parties exceeding the Maximum Percentage, then such Holder shall not be entitled to participate in such Purchase Right to such 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 such extent of any such excess) and such Purchase Right to such extent shall be held in abeyance (and,
if such Purchase Right has an expiration date, maturity date or other similar provision, such term shall be extended by such number of
days held in abeyance, if applicable) for the benefit of such Holder until such time or times, if ever, as its right thereto would not
result in such Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times such Holder shall be
granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent Purchase Right
held similarly in abeyance (and, if such Purchase Right has an expiration date, maturity date or other similar provision, such term shall
be extended by such number of days held in abeyance, if applicable)) to the same extent as if there had been no such limitation.
(b) Other Corporate
Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any Fundamental Transaction
pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange
for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision to ensure that each
Holder will thereafter have the right, at such Holder’s option, to receive upon a conversion of all the Preferred Shares held by
such Holder (i) in addition to the shares of Common Stock receivable upon such conversion, such securities or other assets to which such
Holder would have been entitled with respect to such shares of Common Stock had such shares of Common Stock been held by such Holder upon
the consummation of such Corporate Event (without taking into account any limitations or restrictions on the convertibility of the Preferred
Shares set forth in this Certificate of Designations) or (ii) in lieu of the shares of Common Stock otherwise receivable upon such conversion,
such securities or other assets received by the holders of shares of Common Stock in connection with the consummation of such Corporate
Event in such amounts as such Holder would have been entitled to receive had the Preferred Shares held by such Holder initially been issued
with conversion rights for the form of such consideration (as opposed to shares of Common Stock) at a conversion rate for such consideration
commensurate with the Conversion Rate. Provision made pursuant the preceding sentence shall be in a form and substance satisfactory to
the Required Holders. The provisions of this Section 7 shall apply similarly and equally to successive Corporate Events and shall be applied
without regard to any limitations on the conversion or redemption of the Preferred Shares set forth in this Certificate of Designations.
8. Rights Upon Issuance of
Other Securities.
(a) Adjustment of
Conversion Price upon Issuance of Common Stock. If and whenever on or after the Subscription Date the Company issues or sells, or
in accordance with this Section 8(a) is deemed to have issued or sold, any shares of Common Stock (including the issuance or sale of shares
of Common Stock owned or held by or for the account of the Company, but excluding any Excluded Securities issued or sold or deemed to
have been issued or sold) for a consideration per share (the “New Issuance Price”) less than a price equal to the Conversion
Price in effect immediately prior to such issue or sale or deemed issuance or sale (such Conversion Price then in effect is referred to
herein as the “Applicable Price”) (the foregoing a “Dilutive Issuance”), then, immediately after
such Dilutive Issuance, the Conversion Price then in effect shall be reduced to the New Issuance Price. For all purposes of the foregoing
(including, without limitation, determining the adjusted Conversion Price and the New Issuance Price under this Section 8(a)), the following
shall be applicable:
(i) Issuance of Options.
If the Company in any manner grants or sells any Options (excluding any Excluded Securities) 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 or sale of such Option for such price per share. For purposes of this Section 8(a)(i), the “lowest price per share
for which one share of Common Stock is at any time issuable upon the exercise of any such Option or upon conversion, exercise or exchange
of any Convertible Securities issuable upon exercise of any such Option or otherwise pursuant to the terms thereof” shall be equal
to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to
any one share of Common Stock upon the granting or sale of such Option, upon exercise of such Option and upon conversion, exercise or
exchange of any Convertible Security issuable upon exercise of such Option or otherwise pursuant to the terms thereof and (y) the lowest
exercise price set forth in such Option for which one share of Common Stock is issuable (or may become issuable assuming all possible
market conditions) upon the exercise of any such Options or upon conversion, exercise or exchange of any Convertible Securities issuable
upon exercise of any such Option or otherwise pursuant to the terms thereof minus (2) the sum of all amounts paid or payable to the holder
of such Option (or any other Person) upon the granting or sale of such Option, upon exercise of such Option and upon conversion, exercise
or exchange of any Convertible Security issuable upon exercise of such Option or otherwise pursuant to the terms thereof plus the value
of any other consideration received or receivable by, or benefit conferred on, the holder of such Option (or any other Person). Except
as contemplated below, no further adjustment of the Conversion Price shall be made upon the actual issuance of such shares 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 share of Common Stock upon conversion, exercise or exchange of such Convertible Securities. For further clarification, notwithstanding
anything herein to the contrary, any issuances of Options to employees or consultants of the Company or in the ordinary course of business
of the Company (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan) shall also be excluded
from this clause (i); provided, that, all such issuances (taking into account the shares of Common Stock issuable upon exercise of such
options) after the Subscription Date pursuant to this clause (i) do not, in the aggregate, exceed more than 10% of the Common Stock issued
and outstanding at any time during any six (6) month period.
(ii) Issuance of Convertible
Securities. If the Company in any manner issues or sells any Convertible Securities (excluding any Excluded 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 of such Convertible Securities for such price per share.
For purposes of this Section 8(a)(ii), the “lowest price per share for which one share of Common Stock is at any time issuable upon
the conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof” shall be equal to (1) the lower of (x)
the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to one share of Common Stock
upon the issuance or sale of the Convertible Security and upon conversion, exercise or exchange of such Convertible Security or otherwise
pursuant to the terms thereof and (y) the lowest conversion price set forth in such Convertible Security for which one share of Common
Stock is issuable (or may become issuable assuming all possible market conditions) upon conversion, exercise or exchange thereof or otherwise
pursuant to the terms thereof minus (2) the sum of all amounts paid or payable to the holder of such Convertible Security (or any other
Person) upon the issuance or sale of such Convertible Security plus the value of any other consideration received or receivable by, or
benefit conferred on, the holder of such Convertible Security (or any other Person). Except as contemplated below, no further adjustment
of the Conversion Price shall be made upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of
such Convertible Securities or otherwise pursuant to the terms thereof, and if any such issuance or sale of such Convertible Securities
is made upon exercise of any Options for which adjustment of the Conversion Price has been or is to be made pursuant to other provisions
of this Section 8(a), except as contemplated below, no further adjustment of the Conversion Price shall be made by reason of such issuance
or sale.
(iii) Change in Option
Price or Rate of Conversion. If the purchase or exercise price provided for in any Options (excluding any Excluded Securities), 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 8(b) below), the Conversion Price in effect at the time of such increase or decrease shall be adjusted to the Conversion Price
which would have been in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase
price, additional consideration or increased or decreased conversion rate (as the case may be) at the time initially granted, issued or
sold. For purposes of this Section 8(a)(iii), if the terms of 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 8(a) shall be made if such adjustment would result in an
increase of the Conversion Price then in effect.
(iv) Calculation of
Consideration Received. If any Option and/or Convertible Security and/or Adjustment Right is issued in connection with the issuance
or sale or deemed issuance or sale of any other securities of the Company (excluding any Excluded Securities) (as determined by the Required
Holders, the “Primary Security”, and such Option and/or Convertible Security and/or Adjustment Right, the “Secondary
Securities”), together comprising one integrated transaction (or one or more transactions if such issuances or sales or deemed
issuances or sales of securities of the Company either (A) have at least one investor or purchaser in common, (B) are consummated in reasonable
proximity to each other and/or (C) are consummated under the same plan of financing), the consideration per share of Common Stock with
respect to such Primary Security shall be deemed to be equal to the difference of (x) the lowest price per share for which one share of
Common Stock was issued (or was deemed to be issued pursuant to Section 8(a)(i) or 8(a)(ii) above, as applicable) in such integrated transaction
solely with respect to such Primary Security, minus (y) with respect to such Secondary Securities, the sum of (A) the Black Scholes Consideration
Value of each such Option, if any, (B) the fair market value (as determined by the Required Holders in good faith) or the Black Scholes
Consideration Value, as applicable, of such Adjustment Right, if any, and (C) the fair market value (as determined by the Required Holder)
of such Convertible Security, if any, in each case, as determined on a per share basis in accordance with this Section 8(a)(iv). If any
shares of Common Stock, Options or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration
received therefor (for the purpose of determining the consideration paid for such Common Stock, Option or Convertible Security, but not
for the purpose of the calculation of the Black Scholes Consideration Value) will be deemed to be the net amount of consideration received
by the Company therefor. If any shares of Common Stock, Options or Convertible Securities are issued or sold for a consideration other
than cash, the amount of such consideration received by the Company (for the purpose of determining the consideration paid for such Common
Stock, Option or Convertible Security, but not for the purpose of the calculation of the Black Scholes Consideration Value), will be the
fair value of such consideration, except where such consideration consists of publicly traded securities, in which case the amount of
consideration received by the Company for such securities will be the arithmetic average of the VWAPs of such security for each of the
five (5) Trading Days immediately preceding the date of receipt. If any shares of Common Stock, Options or Convertible Securities are
issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving entity, the amount
of consideration therefor (for the purpose of determining the consideration paid for such Common Stock, Option or Convertible Security,
but not for the purpose of the calculation of the Black Scholes Consideration Value), will be deemed to be the fair value of such portion
of the net assets and business of the non-surviving entity as is attributable to such shares of Common Stock, Options or Convertible Securities
(as the case may be). The fair value of any consideration other than cash or publicly traded securities will be determined jointly by
the Company and the Required Holders. 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 Holders. The determination of such appraiser shall be final and binding upon all parties absent manifest
error and the fees and expenses of such appraiser shall be borne by the Company.
(v) Record Date.
If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive a dividend or
other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for or purchase shares
of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issuance or sale of the
shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution
or the date of the granting of such right of subscription or purchase (as the case may be).
(b) Adjustment of
Conversion Price upon Subdivision or Combination of Common Stock. Without limiting any provision of Section 6 or Section 8(a), if
the Company at any time on or after the Subscription Date subdivides (by any stock split, stock dividend, stock combination, recapitalization
or other similar transaction) one or more classes of its outstanding shares of Common Stock into a greater number of shares, the Conversion
Price in effect immediately prior to such subdivision will be proportionately reduced. Without limiting any provision of Section 6 or
Section 8(a), if the Company at any time on or after the Subscription Date combines (by any stock split, stock dividend, stock combination,
recapitalization or other similar transaction) one or more classes of its outstanding shares of Common Stock into a smaller number of
shares, the Conversion Price in effect immediately prior to such combination will be proportionately increased. Any adjustment pursuant
to this Section 8(b) shall become effective immediately after the effective date of such subdivision or combination. If any event requiring
an adjustment under this Section 8(b) occurs during the period that a Conversion Price is calculated hereunder, then the calculation of
such Conversion Price shall be adjusted appropriately to reflect such event.
(c) Holder’s
Right of Adjusted Conversion Price. In addition to and not in limitation of the other provisions of this Section 8(b), if the Company
in any manner issues or sells or enters into any agreement to issue or sell, any Common Stock, Options or Convertible Securities (any
such securities, excluding any Excluded Securities, “Variable Price Securities”) after the Subscription Date that are
issuable pursuant to such agreement or convertible into or exchangeable or exercisable for shares of Common Stock at a price which varies
or may vary with the market price of the shares of Common Stock, including by way of one or more reset(s) to a fixed price, but exclusive
of such formulations reflecting customary anti-dilution provisions (such as share splits, share combinations, share dividends and similar
transactions) (each of the formulations for such variable price being herein referred to as, the “Variable Price”),
the Company shall provide written notice thereof via facsimile or electronic mail and overnight courier to each Holder on the date of
such agreement and/or the issuance of such shares of Common Stock, Convertible Securities or Options, as applicable. From and after the
date the Company enters into such agreement or issues any such Variable Price Securities, each Holder shall have the right, but not the
obligation, in its sole discretion to substitute the Variable Price for the Conversion Price upon conversion of the Preferred Shares by
designating in the Conversion Notice delivered upon any conversion of Preferred Shares that solely for purposes of such conversion such
Holder is relying on the Variable Price rather than the Conversion Price then in effect. A Holder’s election to rely on a Variable
Price for a particular conversion of Preferred Shares shall not obligate such Holder to rely on a Variable Price for any future conversions
of Preferred Shares.
(d) Stock Combination
Event Adjustments. If at any time and from time to time on or after the Subscription Date there occurs any stock split, stock dividend,
stock combination recapitalization or other similar transaction involving the Common Stock (each, a “Stock Combination Event”,
and such date thereof, the “Stock Combination Event Date”) and the Event Market Price is less than the Conversion Price
then in effect (after giving effect to the adjustment in Section 8(b) above), then on the sixteenth (16th) Trading Day immediately following
such Stock Combination Event Date, the Conversion Price then in effect on such sixteenth (16th) Trading Day (after giving effect to the
adjustment in Section 8(b) above) shall be reduced (but in no event increased) to the Event Market Price. For the avoidance of doubt,
if the adjustment in the immediately preceding sentence would otherwise result in an increase in the Conversion Price hereunder, no adjustment
shall be made.
(e) Other Events.
In the event that the Company (or any Subsidiary) shall take any action to which the provisions hereof are not strictly applicable, or,
if applicable, would not operate to protect any Holder from dilution or if any event occurs of the type contemplated by the provisions
of this Section 8 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 Board shall in good faith determine and implement an appropriate
adjustment in the Conversion Price so as to protect the rights of such Holder, provided that no such adjustment pursuant to this Section
8(b) will increase the Conversion Price as otherwise determined pursuant to this Section 8, provided further that if such Holder does
not accept such adjustments as appropriately protecting its interests hereunder against such dilution, then the Board and such 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 8 shall be made by rounding to the nearest cent or the nearest 1/100th of a share, as applicable.
The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the
Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.
(g) Voluntary Adjustment
by Company. Subject to the rules and regulations of the Principal Market, the Company may at any time any Preferred Shares remain
outstanding, with the prior written consent of the Required Holders, reduce the then current Conversion Price to any amount and for any
period of time deemed appropriate by the Board.
9. Noncircumvention. The
Company hereby covenants and agrees that the Company will not, by amendment of its Articles of Incorporation, Bylaws (as defined in the
Securities Purchase Agreement) or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution,
issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of
this Certificate of Designations, and will at all times in good faith carry out all the provisions of this Certificate of Designations
and take all action as may be required to protect the rights of the Holders hereunder. Without limiting the generality of the foregoing
or any other provision of this Certificate of Designations or the other Transaction Documents, the Company (a) shall not increase the
par value of any shares of Common Stock receivable upon the conversion of any Preferred Shares above the Conversion Price then in effect,
(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 conversion of Preferred Shares and (c) shall, so long as any Preferred Shares are outstanding,
take all action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose
of effecting the conversion of the Preferred Shares, the maximum number of shares of Common Stock as shall from time to time be necessary
to effect the conversion of the Preferred Shares then outstanding (without regard to any limitations on conversion contained herein).
Notwithstanding anything herein to the contrary, if after the sixty (60) calendar day anniversary of the Initial Issuance Date, each Holder
is not permitted to convert such Holder’s Preferred Shares in full for any reason (other than pursuant to restrictions set forth
in Section 4(d) hereof), the Company shall use its best efforts to promptly remedy such failure, including, without limitation, obtaining
such consents or approvals as necessary to effect such conversion into shares of Common Stock.
10. Authorized Shares.
(a) Reservation.
So long as any Preferred Shares remain outstanding, the Company shall at all times reserve at least 200% of the number of shares of Common
Stock as shall from time to time be necessary to effect the conversion, including without limitation, Alternate Conversions, of all of
the Preferred Shares then outstanding (without regard to any limitations on conversions) (the “Required Reserve Amount”).
The Required Reserve Amount (including, without limitation, each increase in the number of shares so reserved) shall be allocated pro
rata among the Holders based on the number of the Preferred Shares held by each Holder on the Initial Issuance Date or increase in the
number of reserved shares, as the case may be (the “Authorized Share Allocation”). In the event that a Holder shall
sell or otherwise transfer any of such Holder’s Preferred Shares, 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 Preferred
Shares shall be allocated to the remaining Holders of Preferred Shares, pro rata based on the number of the Preferred Shares then held
by the Holders.
(b) Insufficient
Authorized Shares. If, notwithstanding Section 10(a) and not in limitation thereof, at any time while any of the Preferred Shares
remain outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its obligation
to reserve for issuance upon conversion of the Preferred Shares at least a number of shares of Common Stock equal to 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 the Preferred Shares then outstanding (or deemed outstanding pursuant to Section 10(a) above). 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
(or, if a majority of the voting power then in effect of the capital stock of the Company consents to such increase, in lieu of such proxy
statement, deliver to the stockholders of the Company an information statement that has been filed with (and either approved by or not
subject to comments from) the SEC with respect thereto). In the event that the Company is prohibited from issuing shares of Common Stock
to a Holder upon any conversion due to the failure by the Company to have sufficient shares of Common Stock available out of the authorized
but unissued shares of Common Stock (such unavailable number of shares of Common Stock, the “Authorized Failure Shares”),
in lieu of delivering such Authorized Failure Shares to such Holder, the Company shall pay cash in exchange for the redemption of such
portion of the Conversion Amount of the Preferred Shares convertible into such Authorized Failure Shares at a price equal to the sum of
(i) the product of (x) such number of Authorized Failure Shares and (y) the greatest Closing Sale Price of the Common Stock on any Trading
Day during the period commencing on the date such Holder delivers the applicable Conversion Notice with respect to such Authorized Failure
Shares to the Company and ending on the date of such issuance and payment under this Section 10(a); and (ii) to the extent such Holder
purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Holder of Authorized
Failure Shares, any brokerage commissions and other out-of-pocket expenses, if any, of such Holder incurred in connection therewith. Nothing
contained in Section 10(a) or this Section 10(b) shall limit any obligations of the Company under any provision of the Securities Purchase
Agreement.
11. Redemptions.
(a) General.
If a Holder has submitted a Triggering Event Redemption Notice in accordance with Section 5(b), the Company shall deliver the applicable
Triggering Event Redemption Price to such Holder in cash within five (5) Business Days after the Company’s receipt of such Holder’s
Triggering Event Redemption Notice. If a Holder has submitted a Change of Control Redemption Notice in accordance with Section 6(b), the
Company shall deliver the applicable Change of Control Redemption Price to such Holder in cash concurrently with the consummation of such
Change of Control if such notice is received prior to the consummation of such Change of Control and within five (5) Business Days after
the Company’s receipt of such notice otherwise. Notwithstanding anything herein to the contrary, in connection with any redemption
hereunder at a time a Holder is entitled to receive a cash payment under any of the other Transaction Documents, at the option of such
Holder delivered in writing to the Company, the applicable Redemption Price hereunder shall be increased by the amount of such cash payment
owed to such Holder under such other Transaction Document and, upon payment in full or conversion in accordance herewith, shall satisfy
the Company’s payment obligation under such other Transaction Document. In the event of a redemption of less than all of the Preferred
Shares, the Company shall promptly cause to be issued and delivered to such Holder a new Preferred Share Certificate (in accordance with
Section 18) (or evidence of the creation of a new Book-Entry) representing the number of Preferred Shares which have not been redeemed.
In the event that the Company does not pay the applicable Redemption Price to a Holder within the time period required for any reason
(including, without limitation, to the extent such payment is prohibited pursuant to the NRS), at any time thereafter and until the Company
pays such unpaid Redemption Price in full, such Holder shall have the option, in lieu of redemption, to require the Company to promptly
return to such Holder all or any of the Preferred Shares that were submitted for redemption and for which the applicable Redemption Price
(together with any Late Charges thereon) has not been paid. Upon the Company’s receipt of such notice from a Holder, (x) the applicable
Redemption Notice shall be null and void with respect to such Preferred Shares, and (y) the Company shall immediately return the applicable
Preferred Share Certificate, or issue a new Preferred Share Certificate (in accordance with Section 18(d)), to such Holder (unless the
Preferred Shares are held in Book-Entry form, in which case the Company shall deliver evidence to such Holder that a Book-Entry for such
Preferred Shares then exists), and in each case the Additional Amount of such Preferred Shares shall be increased by an amount equal to
the difference between (1) the applicable Redemption Price (as the case may be, and as adjusted pursuant to this Section 11, if applicable)
minus (2) the Stated Value portion of the Conversion Amount submitted for redemption. A Holder’s delivery of a notice voiding a
Redemption Notice and exercise of its rights following such notice shall not affect the Company’s obligations to make any payments
of Late Charges which have accrued prior to the date of such notice with respect to the Preferred Shares subject to such notice.
(b) Redemption by
Multiple Holders. Upon the Company’s receipt of a Redemption Notice from any Holder for redemption or repayment as a result
of an event or occurrence substantially similar to the events or occurrences described in Section 5(b) or Section 6(b), the Company shall
immediately, but no later than one (1) Business Day of its receipt thereof, forward to each other Holder by facsimile or electronic mail
a copy of such notice. If the Company receives one or more Redemption Notices, during the seven (7) Business Day period beginning on and
including the date which is two (2) Business Days prior to the Company’s receipt of the initial Redemption Notice and ending on
and including the date which is two (2) Business Days after the Company’s receipt of the initial Redemption Notice and the Company
is unable to redeem all of the Conversion Amount of such Preferred Shares designated in such initial Redemption Notice and such other
Redemption Notices received during such seven (7) Business Day period, then the Company shall redeem a pro rata amount from each Holder
based on the Stated Value of the Preferred Shares submitted for redemption pursuant to such Redemption Notices received by the Company
during such seven (7) Business Day period.
(c) Company
Optional Redemption. At any time after the Initial Issuance Date, the Company shall have the right to redeem all or any
portion of the Preferred Shares then outstanding (the “Company
Optional Redemption Amount”) on the Company Optional Redemption Date (each as defined below) (a “Company
Optional Redemption”). The Preferred Shares subject to redemption pursuant to this Section 11
(c) shall be redeemed by the Company in cash at a price (the “Company Optional Redemption Price”) equal to 110% of the
Stated Value plus the Additional Amount as of the Company Optional Redemption Date. The Company may exercise its right to require
redemption under this Section 11 (c) by delivering a written notice thereof by facsimile or electronic mail and overnight courier to
all, but not less than all, of the Holders (the “Company Optional Redemption Notice” and the date all of the Holders
received such notice is referred to as the “Company Optional Redemption Notice Date”). Any Company Optional Redemption
Notice shall be irrevocable. The Company Optional Redemption Notice shall (x) state the date on which the Company Optional
Redemption shall occur (the “Company Optional Redemption Date”) which date shall not be less than ten (10) Business Days
following the Company Optional Redemption Notice Date, and (y) state the aggregate Conversion Amount of the Preferred Shares which
is being redeemed in such Company Optional Redemption from such Holder and all of the other Holders of the Preferred Shares (which
shall be allocated, pro rata, to each Holder) pursuant to Section 11 (c) on the Company Optional Redemption Date. All Conversion
Amounts converted by a Holder after the Company Optional Redemption Notice Date shall reduce the Company Optional Redemption Amount
of the Preferred Shares of such Holder required to be redeemed on the Company Optional Redemption Date. In the event of the
Company’s redemption of any of the Preferred Shares under this Section 11 (c), a Holder’s damages would be uncertain and
difficult to estimate because of the parties’ inability to predict future interest rates and the uncertainty of the
availability of a suitable substitute investment opportunity for such Holder. Accordingly, any redemption premium due under Section
11 (c) is intended by the parties to be, and shall be deemed, a reasonable estimate of such
Holder’s actual loss of its investment opportunity and not as a penalty. For purposes of clarification, a Company Optional
Redemption shall be subject to the applicable provisions of Section 11(a).
12. Voting Rights. Subject
to the limitations specified in Section 4(d) hereof, holders of Preferred Shares shall have the right to vote on all matters presented
to the stockholders for approval together with the shares of Common Stock, voting together as a single class, on an “as converted”
basis using the Conversion Price as set forth in Section 4(b)(ii) hereof (rounded down to the nearest whole number and using the record
date for determining the stockholders of the Company eligible to vote on such matters), except as required by law (including without limitation,
the NRS) or as otherwise expressly provided in the Articles of Incorporation or this Certificate of Designations. Holders of the Preferred
Shares shall be entitled to written notice of all stockholder meetings or written consents (and copies of proxy materials and other information
sent to stockholders) with respect to which they would be entitled to vote, which notice would be provided pursuant to the Company’s
bylaws the NRS. For the sake of clarity, the number of votes the Preferred Shares are entitled to shall be determined by using the Conversion
Price set forth in Section 4(b)(ii), and not the Alternate Conversion Price as defined herein, and always subject to the limitations set
forth in Section 4(d) hereof.
13. Covenants.
(a) Restriction on
Redemption and Cash Dividends. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
redeem, repurchase or declare or pay any cash dividend or distribution on any of its capital stock (other than as required by the Certificate
of Designations).
(b) Restriction on
Transfer of Assets. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, sell,
lease, license, assign, transfer, spin-off, split-off, close, convey or otherwise dispose of any assets or rights of the Company or any
Subsidiary owned or hereafter acquired whether in a single transaction or a series of related transactions, other than (i) sales, leases,
licenses, assignments, transfers, conveyances and other dispositions of such assets or rights by the Company and its Subsidiaries in the
ordinary course of business consistent with its past practice and (ii) sales of inventory and product in the ordinary course of business,
including, but not limited to, the sale or license of the Company’s drugs or drug candidates in the ordinary course of business
consistent with its past practice.
(c) Change in Nature
of Business. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, engage in
any material line of business substantially different from those lines of business conducted by or publicly contemplated to be conducted
by the Company and each of its Subsidiaries on the Subscription Date or any business substantially related or incidental thereto. The
Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly, modify its or their corporate
structure or purpose.
(d) Preservation
of Existence, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, its existence,
rights and privileges, and become or remain, and cause each of its Subsidiaries to become or remain, duly qualified and in good standing
in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its business makes
such qualification necessary.
(e) Maintenance of
Properties, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve, all of its
properties which are necessary or useful in the proper conduct of its business in good working order and condition, ordinary wear and
tear excepted, and comply, and cause each of its Subsidiaries to comply, at all times with the provisions of all leases to which it is
a party as lessee or under which it occupies property, so as to prevent any loss or forfeiture thereof or thereunder.
(f) Maintenance of
Intellectual Property. The Company will, and will cause each of its Subsidiaries to, take all action necessary or advisable to maintain
all of the Intellectual Property Rights of the Company and/or any of its Subsidiaries that are necessary or material to the conduct of
its business in full force and effect.
(g) Maintenance of
Insurance. The Company shall maintain, and cause each of its Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations (including, without limitation, comprehensive general liability, hazard, rent and business interruption insurance)
with respect to its properties (including all real properties leased or owned by it) and business, in such amounts and covering such risks
as is required by any governmental authority having jurisdiction with respect thereto or as is carried generally in accordance with sound
business practice by companies in similar businesses similarly situated.
(h) Transactions
with Affiliates. The Company shall not, nor shall it permit any of its Subsidiaries to, enter into, renew, extend or be a party to,
any transaction or series of related transactions (including, without limitation, the purchase, sale, lease, transfer or exchange of property
or assets of any kind or the rendering of services of any kind) with any affiliate, except transactions in the ordinary course of business
in a manner and to an extent consistent with past practice and necessary or desirable for the prudent operation of its business, for fair
consideration and on terms no less favorable to it or its Subsidiaries than would be obtainable in a comparable arm’s length transaction
with a Person that is not an affiliate thereof.
(i) Restricted Issuances.
The Company shall not, directly or indirectly, without the prior written consent of the Required Holders, (i) issue any Preferred Shares
(other than as contemplated by the Securities Purchase Agreement and this Certificate of Designations) or (ii) issue any other securities
that would cause a breach or default under this Certificate of Designations.
(j) Independent Investigation.
At the request of any Holder either (x) at any time when a Triggering Event has occurred and is continuing, (y) upon the occurrence of
an event that with the passage of time or giving of notice would constitute a Triggering Event or (z) at any time such Holder reasonably
believes a Triggering Event may have occurred or be continuing, the Company shall hire an independent, reputable investment bank selected
by the Company and approved by such Holder to investigate as to whether any breach of the Certificate of Designations has occurred (the
“Independent Investigator”). If the Independent Investigator determines that such breach of the Certificate of Designations
has occurred, the Independent Investigator shall notify the Company of such breach and the Company shall deliver written notice to each
Holder of such breach. In connection with such investigation, the Independent Investigator may, during normal business hours, inspect
all contracts, books, records, personnel, offices and other facilities and properties of the Company and its Subsidiaries and, to the
extent available to the Company after the Company uses reasonable efforts to obtain them, the records of its legal advisors and accountants
(including the accountants’ work papers) and any books of account, records, reports and other papers not contractually required
of the Company to be confidential or secret, or subject to attorney-client or other evidentiary privilege, and the Independent Investigator
may make such copies and inspections thereof as the Independent Investigator may reasonably request. The Company shall furnish the Independent
Investigator with such financial and operating data and other information with respect to the business and properties of the Company as
the Independent Investigator may reasonably request. The Company shall permit the Independent Investigator to discuss the affairs, finances
and accounts of the Company with, and to make proposals and furnish advice with respect thereto to, the Company’s officers, directors,
key employees and independent public accountants or any of them (and by this provision the Company authorizes said accountants to discuss
with such Independent Investigator the finances and affairs of the Company and any Subsidiaries), all at such reasonable times, upon reasonable
notice, and as often as may be reasonably requested.
14. Liquidation, Dissolution,
Winding-Up. In the event of a Liquidation Event, the Holders shall be entitled to receive in cash out of the assets of the Company,
whether from capital or from earnings available for distribution to its stockholders (the “Liquidation Funds”), before
any amount shall be paid to the holders of any of shares of Junior Stock, but pari passu with any Parity Stock then outstanding, an amount
per Preferred Share equal to the greater of (A) 125% of Stated Value of such Preferred Share and (B) the amount per share such Holder
would receive if such Holder converted such Preferred Share into Common Stock immediately prior to the date of such payment, provided
that if the Liquidation Funds are insufficient to pay the full amount due to the Holders and holders of shares of Parity Stock, then each
Holder and each holder of Parity Stock shall receive a percentage of the Liquidation Funds equal to the full amount of Liquidation Funds
payable to such Holder and such holder of Parity Stock as a liquidation preference, in accordance with their respective certificate of
designations (or equivalent), as a percentage of the full amount of Liquidation Funds payable to all holders of Preferred Shares and all
holders of shares of Parity Stock. To the extent necessary, the Company shall cause such actions to be taken by each of its Subsidiaries
so as to enable, to the maximum extent permitted by law, the proceeds of a Liquidation Event to be distributed to the Holders in accordance
with this Section 14. All the preferential amounts to be paid to the Holders under this Section 14 shall be paid or set apart for payment
before the payment or setting apart for payment of any amount for, or the distribution of any Liquidation Funds of the Company to the
holders of shares of Junior Stock in connection with a Liquidation Event as to which this Section 14 applies.
15. Distribution of Assets.
In addition to any adjustments pursuant to Section 7(a) and Section 8, if the Company shall declare or make any dividend or other distributions
of its assets (or rights to acquire its assets) to any or all holders of shares of Common Stock, by way of return of capital or otherwise
(including without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (the “Distributions”),
then each Holder, as holders of Preferred Shares, will be entitled to such Distributions as if such Holder had held the number of shares
of Common Stock acquirable upon complete conversion of the Preferred Shares (without taking into account any limitations or restrictions
on the convertibility of the Preferred Shares and assuming for such purpose that the Preferred Share was converted at the Alternate Conversion
Price as of the applicable record date) immediately prior to the date on which a record is taken for such Distribution or, if no such
record is taken, the date as of which the record holders of Common Stock are to be determined for such Distributions (provided,
however, that to the extent that such Holder’s right to participate in any such Distribution would result in such Holder
and the other Attribution Parties exceeding the Maximum Percentage, then such Holder shall not be entitled to participate in such Distribution
to such 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 such extent of any such excess) and the portion of such Distribution shall be held
in abeyance for the benefit of such Holder until such time or times as its right thereto would not result in such Holder and the other
Attribution Parties exceeding the Maximum Percentage, at which time or times, if any, such 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).
16. Vote to Change the Terms
of or Issue Preferred Shares. In addition to any other rights provided by law, except where the vote or written consent of the holders
of a greater number of shares is required by law or by another provision of the Articles of Incorporation, without first obtaining the
affirmative vote at a meeting duly called for such purpose or the written consent without a meeting of the Required Holders, voting together
as a single class, the Company shall not: (a) amend or repeal any provision of, or add any provision to, its Articles of Incorporation
or bylaws, or file any certificate of designations or articles of amendment of any series of shares of preferred stock, if such action
would adversely alter or change in any respect the preferences, rights, privileges or powers, or restrictions provided for the benefit
of the Preferred Shares hereunder, regardless of whether any such action shall be by means of amendment to the Articles of Incorporation
or by merger, consolidation or otherwise; (b) increase or decrease (other than by conversion) the authorized number of Preferred Shares;
(c) without limiting any provision of Section 2, create or authorize (by reclassification or otherwise) any new class or series of Senior
Preferred Stock or Parity Stock; (d) purchase, repurchase or redeem any shares of Junior Stock (other than pursuant to the terms of the
Company’s equity incentive plans and options and other equity awards granted under such plans (that have in good faith been approved
by the Board)); (e) without limiting any provision of Section 2, pay dividends or make any other distribution on any shares of any Junior
Stock; (f) issue any Preferred Shares other than as contemplated hereby or pursuant to the Securities Purchase Agreement; or (g) without
limiting any provision of Section 9, whether or not prohibited by the terms of the Preferred Shares, circumvent a right of the Preferred
Shares hereunder.
17. Transfer of Preferred Shares.
A Holder may transfer some or all of its Preferred Shares without the consent of the Company.
18. Reissuance of Preferred
Share Certificates and Book Entries.
(a) Transfer.
If any Preferred Shares are to be transferred, the applicable Holder shall surrender the applicable Preferred Share Certificate to the
Company (or, if the Preferred Shares are held in Book-Entry form, a written instruction letter to the Company), whereupon the Company
will forthwith issue and deliver upon the order of such Holder a new Preferred Share Certificate (in accordance with Section 18(d)) (or
evidence of the transfer of such Book-Entry), registered as such Holder may request, representing the outstanding number of Preferred
Shares being transferred by such Holder and, if less than the entire outstanding number of Preferred Shares is being transferred, a new
Preferred Share Certificate (in accordance with Section 18(d)) to such Holder representing the outstanding number of Preferred Shares
not being transferred (or evidence of such remaining Preferred Shares in a Book-Entry for such Holder). Such Holder and any assignee,
by acceptance of the Preferred Share Certificate or evidence of Book-Entry issuance, as applicable, acknowledge and agree that, by reason
of the provisions of Section 4(c)(ii) following conversion or redemption of any of the Preferred Shares, the outstanding number of Preferred
Shares represented by the Preferred Shares may be less than the number of Preferred Shares stated on the face of the Preferred Shares.
(b) Lost, Stolen
or Mutilated Preferred Share Certificate. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of a Preferred Share Certificate (as to which a written certification and the indemnification contemplated
below shall suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the applicable
Holder to the Company in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of such Preferred
Share Certificate, the Company shall execute and deliver to such Holder a new Preferred Share Certificate (in accordance with Section
18(d)) representing the applicable outstanding number of Preferred Shares.
(c) Preferred Share
Certificate and Book-Entries Exchangeable for Different Denominations and Forms. Each Preferred Share Certificate is exchangeable,
upon the surrender hereof by the applicable Holder at the principal office of the Company, for a new Preferred Share Certificate or Preferred
Share Certificate(s) or new Book-Entry (in accordance with Section 18(d)) representing, in the aggregate, the outstanding number of the
Preferred Shares in the original Preferred Share Certificate, and each such new Preferred Share Certificate and/or new Book-Entry, as
applicable, will represent such portion of such outstanding number of Preferred Shares from the original Preferred Share Certificate as
is designated in writing by such Holder at the time of such surrender. Each Book-Entry may be exchanged into one or more new Preferred
Share Certificates or split by the applicable Holder by delivery of a written notice to the Company into two or more new Book-Entries
(in accordance with Section 18(d)) representing, in the aggregate, the outstanding number of the Preferred Shares in the original Book-Entry,
and each such new Book-Entry and/or new Preferred Share Certificate, as applicable, will represent such portion of such outstanding number
of Preferred Shares from the original Book-Entry as is designated in writing by such Holder at the time of such surrender.
(d) Issuance of New
Preferred Share Certificate or Book-Entry. Whenever the Company is required to issue a new Preferred Share Certificate or a new Book-Entry
pursuant to the terms of this Certificate of Designations, such new Preferred Share Certificate or new Book-Entry (i) shall represent,
as indicated on the face of such Preferred Share Certificate or in such Book-Entry, as applicable, the number of Preferred Shares remaining
outstanding (or in the case of a new Preferred Share Certificate or new Book-Entry being issued pursuant to Section 18(a) or Section 18(c),
the number of Preferred Shares designated by such Holder) which, when added to the number of Preferred Shares represented by the other
new Preferred Share Certificates or other new Book-Entry, as applicable, issued in connection with such issuance, does not exceed the
number of Preferred Shares remaining outstanding under the original Preferred Share Certificate or original Book-Entry, as applicable,
immediately prior to such issuance of new Preferred Share Certificate or new Book-Entry, as applicable, and (ii) shall have an issuance
date, as indicated on the face of such new Preferred Share Certificate or in such new Book-Entry, as applicable, which is the same as
the issuance date of the original Preferred Share Certificate or in such original Book-Entry, as applicable.
19. Remedies, Characterizations,
Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Certificate of Designations shall be cumulative and
in addition to all other remedies available under this Certificate of Designations and any of the other Transaction Documents, at law
or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit any Holder’s
right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Certificate of Designations.
The Company covenants to each Holder that there shall be no characterization concerning this instrument other than as expressly provided
herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall
be the amounts to be received by a Holder and shall not, except as expressly provided herein, be subject to any other obligation of the
Company (or the performance thereof). No failure on the part of a Holder to exercise, and no delay in exercising, any right, power or
remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise by such Holder of any right, power or remedy
preclude any other or further exercise thereof or the exercise of any other right, power or remedy. In addition, the exercise of any right
or remedy of any Holder at law or equity or under Preferred Shares or any of the documents shall not be deemed to be an election of such
Holder’s rights or remedies under such documents or at law or equity. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to the Holders 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, each Holder shall be entitled, in addition to all other available remedies,
to specific performance and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of competent jurisdiction
in any such case without the necessity of proving actual damages and without posting a bond or other security. The Company shall provide
all information and documentation to a Holder that is requested by such Holder to enable such Holder to confirm the Company’s compliance
with the terms and conditions of this Certificate of Designations.
20. Payment of Collection,
Enforcement and Other Costs. If (a) any Preferred Shares are placed in the hands of an attorney for collection or enforcement or is
collected or enforced through any legal proceeding or a Holder otherwise takes action to collect amounts due under this Certificate of
Designations with respect to the Preferred Shares or to enforce the provisions of this Certificate of Designations or (b) there occurs
any bankruptcy, reorganization, receivership of the Company or other proceedings affecting Company creditors’ rights and involving
a claim under this Certificate of Designations, then the Company shall pay the costs incurred by such Holder for such collection, enforcement
or action or in connection with such bankruptcy, reorganization, receivership or other proceeding, including, without limitation, attorneys’
fees and disbursements. The Company expressly acknowledges and agrees that no amounts due under this Certificate of Designations with
respect to any Preferred Shares shall be affected, or limited, by the fact that the purchase price paid for each Preferred Share was less
than the original Stated Value thereof.
21. Construction; Headings.
This Certificate of Designations shall be deemed to be jointly drafted by the Company and the Holders and shall not be construed against
any such Person as the drafter hereof. The headings of this Certificate of Designations are for convenience of reference and shall not
form part of, or affect the interpretation of, this Certificate of Designations. Unless the context clearly indicates otherwise, each
pronoun herein shall be deemed to include the masculine, feminine, neuter, singular and plural forms thereof. The terms “including,”
“includes,” “include” and words of like import shall be construed broadly as if followed by the words “without
limitation.” The terms “herein,” “hereunder,” “hereof” and words of like import refer to this
entire Certificate of Designations instead of just the provision in which they are found. Unless expressly indicated otherwise, all section
references are to sections of this Certificate of Designations. Terms used in this Certificate of Designations and not otherwise defined
herein, but defined in the other Transaction Documents, shall have the meanings ascribed to such terms on the Initial Issuance Date in
such other Transaction Documents unless otherwise consented to in writing by the Required Holders.
22. Failure or Indulgence Not
Waiver. No failure or delay on the part of a Holder in the exercise of any power, right or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof
or of any other right, power or privilege. No waiver shall be effective unless it is in writing and signed by an authorized representative
of the waiving party. This Certificate of Designations shall be deemed to be jointly drafted by the Company and all Holders and shall
not be construed against any Person as the drafter hereof. Notwithstanding the foregoing, nothing contained in this Section 22 shall permit
any waiver of any provision of Section 4(d).
23. Dispute Resolution.
(a) Submission to
Dispute Resolution.
(i) In the case of a dispute
relating to a Closing Sale Price, a Conversion Price, Alternate Conversion Price, a VWAP or a fair market value or the arithmetic calculation
of a Conversion Rate, or the applicable Redemption Price (as the case may be) (including, without limitation, a dispute relating to the
determination of any of the foregoing), the Company or the applicable Holder (as the case may be) shall submit the dispute to the other
party via facsimile or electronic mail (A) if by the Company, within two (2) Business Days after the occurrence of the circumstances giving
rise to such dispute or (B) if by such Holder at any time after such Holder learned of the circumstances giving rise to such dispute.
If such Holder and the Company are unable to promptly resolve such dispute relating to such Closing Sale Price, such Conversion Price,
such Alternate Conversion Price, such VWAP or such fair market value, or the arithmetic calculation of such Conversion Rate or such applicable
Redemption Price (as the case may be), at any time after the second (2nd) Business Day following such initial notice by the
Company or such Holder (as the case may be) of such dispute to the Company or such Holder (as the case may be), then such Holder may,
at its sole option, select an independent, reputable investment bank to resolve such dispute.
(ii) Such 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 23 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 such Holder selected
such investment bank (the “Dispute Submission Deadline”) (the documents referred to in the immediately preceding clauses
(A) and (B) are collectively referred to herein as the “Required Dispute Documentation”) (it being understood and agreed
that if either such Holder or the 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 such Holder or otherwise requested by
such investment bank, neither the Company nor such Holder shall be entitled to deliver or submit any written documentation or other support
to such investment bank in connection with such dispute (other than the Required Dispute Documentation).
(iii) The Company and
such Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company and such 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 23 constitutes an agreement to arbitrate between the Company and each
Holder (and constitutes an arbitration agreement) under § 7501, et seq. of the New York Civil Practice Law and Rules (“CPLR”)
and that any Holder is authorized to apply for an order to compel arbitration pursuant to CPLR § 7503(a) in order to compel compliance
with this Section 23, (ii) a dispute relating to a Conversion Price includes, without limitation, disputes as to (A) whether an issuance
or sale or deemed issuance or sale of Common Stock occurred under Section 8(a), (B) the consideration per share at which an issuance or
deemed issuance of Common Stock occurred, (C) whether any issuance or sale or deemed issuance or sale of Common Stock was an issuance
or sale or deemed issuance or sale of Excluded Securities, (D) whether an agreement, instrument, security or the like constitutes and
Option or Convertible Security and (E) whether a Dilutive Issuance occurred, (iii) the terms of this Certificate of Designations and each
other applicable Transaction Document shall serve as the basis for the selected investment bank’s resolution of the applicable dispute,
such investment bank shall be entitled (and is hereby expressly authorized) to make all findings, determinations and the like that such
investment bank determines are required to be made by such investment bank in connection with its resolution of such dispute and in resolving
such dispute such investment bank shall apply such findings, determinations and the like to the terms of this Certificate of Designations
and any other applicable Transaction Documents, (iv) the applicable Holder (and only such Holder with respect to disputes solely relating
to such Holder), in its sole discretion, shall have the right to submit any dispute described in this Section 23 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 23 and (v) nothing
in this Section 23 shall limit such Holder from obtaining any injunctive relief or other equitable remedies (including, without limitation,
with respect to any matters described in this Section 23).
24. Notices; Currency; Payments.
(a) Notices.
The Company shall provide each Holder of Preferred Shares with prompt written notice of all actions taken pursuant to the terms of this
Certificate of Designations, including in reasonable detail a description of such action and the reason therefor. Whenever notice is required
to be given under this Certificate of Designations, unless otherwise provided herein, such notice must be in writing and shall be given
in accordance with Section 9(f) of the Securities Purchase Agreement. The Company shall provide each Holder with prompt written notice
of all actions taken pursuant to this Certificate of Designations, including in reasonable detail a description of such action and the
reason therefor. Without limiting the generality of the foregoing, the Company shall give written notice to each Holder (i) immediately
upon any adjustment of the Conversion Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and
(ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend
or distribution upon the Common Stock, (B) with respect to any grant, issuances, or sales of any Options, Convertible Securities or rights
to purchase stock, warrants, securities or other property to holders of shares of Common Stock or (C) for determining rights to vote with
respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be made known to
the public prior to or in conjunction with such notice being provided to such Holder.
(b) Currency.
All dollar amounts referred to in this Certificate of Designations are in United States Dollars (“U.S. Dollars”), and
all amounts owing under this Certificate of Designations 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 Certificate of Designations,
the U.S. Dollar exchange rate as published in the Wall Street Journal on the relevant date of calculation (it being understood and agreed
that where an amount is calculated with reference to, or over, a period of time, the date of calculation shall be the final date of such
period of time).
(c) Payments.
Whenever any payment of cash is to be made by the Company to any Person pursuant to this Certificate of Designations, unless otherwise
expressly set forth herein, such payment shall be made in lawful money of the United States of America by wire transfer of immediately
available funds pursuant to wire transfer instructions that Holder shall provide to the Company in writing from time to time. Whenever
any amount expressed to be due by the terms of this Certificate of Designations is due on any day which is not a Business Day, the same
shall instead be due on the next succeeding day which is a Business Day. Any amount due under the Transaction Documents which is not paid
when due shall result in a late charge being incurred and payable by the Company in an amount equal to interest on such amount at the
rate of eighteen percent (18%) per annum from the date such amount was due until the same is paid in full (“Late Charge”).
25. Waiver of Notice. To
the extent permitted by law, the Company hereby irrevocably waives demand, notice, presentment, protest and all other demands and notices
in connection with the delivery, acceptance, performance, default or enforcement of this Certificate of Designations and the Securities
Purchase Agreement.
26. Governing Law. This
Certificate of Designations shall be construed and enforced in accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Certificate of Designations shall be governed by, the internal laws of the State of Nevada, without
giving effect to any choice of law or conflict of law provision or rule (whether of the State of Nevada or any other jurisdictions) that
would cause the application of the laws of any jurisdictions other than the State of Nevada. Except as otherwise required by Section 23
above, 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 to limit in any way any right to serve
process in any manner permitted by law. Nothing contained herein (i) shall be deemed or operate to preclude any Holder from bringing suit
or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to such 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 such
Holder or (ii) shall limit, or shall be deemed or construed to limit, any provision of Section 23 above. 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 CERTIFICATE OF DESIGNATIONS OR ANY TRANSACTION CONTEMPLATED HEREBY.
27. Judgment Currency.
(a) If for the purpose
of obtaining or enforcing judgment against the Company in any court in any jurisdiction it becomes necessary to convert into any other
currency (such other currency being hereinafter in this Section 27 referred to as the “Judgment Currency”) an amount
due in U.S. dollars under this Certificate of Designations, the conversion shall be made at the Exchange Rate prevailing on the Trading
Day immediately preceding:
(i) the date actual payment
of the amount due, in the case of any proceeding in the courts of New York or in the courts of any other jurisdiction that will give effect
to such conversion being made on such date: or
(ii) the date on which
the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date as of which such conversion
is made pursuant to this Section 27(a)(ii) being hereinafter referred to as the “Judgment Conversion Date”).
(b) If in the case of
any proceeding in the court of any jurisdiction referred to in Section 27(a)(ii) above, there is a change in the Exchange Rate prevailing
between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable party shall pay such adjusted amount
as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the Exchange Rate prevailing on the date
of payment, will produce the amount of US dollars which could have been purchased with the amount of Judgment Currency stipulated in the
judgment or judicial order at the Exchange Rate prevailing on the Judgment Conversion Date.
(c) Any amount due from
the Company under this provision shall be due as a separate debt and shall not be affected by judgment being obtained for any other amounts
due under or in respect of this Certificate of Designations.
28. Severability. If any
provision of this Certificate of Designations is prohibited by law or otherwise determined to be invalid or unenforceable by a court of
competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to
the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Certificate of Designations so long as this Certificate of Designations as so modified
continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited
nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal
obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties
will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the
effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).
29. Maximum Payments. Without
limiting Section 9(d) of the Securities Purchase Agreement, nothing contained herein shall be deemed to establish or require the payment
of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest required
to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited
against amounts owed by the Company to the applicable Holder and thus refunded to the Company.
30. Stockholder Matters; Amendment.
(a) Stockholder Matters.
Any stockholder action, approval or consent required, desired or otherwise sought by the Company pursuant to the NRS, the Articles of
Incorporation, this Certificate of Designations or otherwise with respect to the issuance of Preferred Shares may be effected by written
consent of the Company’s stockholders or at a duly called meeting of the Company’s stockholders, all in accordance with the
applicable rules and regulations of the NRS. This provision is intended to comply with the applicable sections of the NRS permitting stockholder
action, approval and consent affected by written consent in lieu of a meeting.
(b) Amendment.
Except for Section 4(d), which may not be amended or waived hereunder, this Certificate of Designations or any provision hereof may be
amended by obtaining the affirmative vote at a meeting duly called for such purpose, or written consent without a meeting in accordance
with the NRS, of the Required Holders, voting separate as a single class, and with such other stockholder approval, if any, as may then
be required pursuant to the NRS and the Articles of Incorporation.
31. Certain Defined Terms.
For purposes of this Certificate of Designations, the following terms shall have the following meanings:
(a) “1934 Act”
means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
(b) “Additional
Amount” means, as of the applicable date of determination, with respect to each Preferred Share, all declared and unpaid Dividends
on such Preferred Share.
(c) “Adjustment
Right” means any right granted with respect to any securities issued in connection with, or with respect to, any issuance or
sale (or deemed issuance or sale in accordance with Section 8(a)) of shares of Common Stock (other than rights of the type described in
Section 7(a) hereof) that could result in a decrease in the net consideration received by the Company in connection with, or with respect
to, such securities (including, without limitation, any cash settlement rights, cash adjustment or other similar rights).
(d) “Affiliate”
or “Affiliated” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled
by, or is under common control with, such Person, it being understood for purposes of this definition that “control” of a
Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of
directors of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
(e) “Alternate
Conversion Price” means, with respect to any Alternate Conversion that price which shall be 80% (or, if (x) the Common Stock
is suspended from trading on or delisted from the Principal Market at any time after the Initial Issuance Date (whether or not subsequently
cured), or (y) the Company has effected a reverse stock split of the Common Stock, 70%) of the lowest daily VWAPs of the Common Stock
during the period beginning on the Trading Day immediately after the day on which the applicable Holder receives the shares of Common
Stock issuable upon conversion of the Preferred Shares (“Conversion Shares”) and ending on the Trading Day on which
the aggregate dollar volume of the Common Stock traded on the Principal Market exceeds the product of the Conversion Amount set forth
on the applicable Alternate Conversion Notice multiplied by seven (7), subject to a five (5) Trading Day minimum (such period, the “Alternate
Conversion Measuring Period”); provided, however, that each day on which (i) the Common Stock has been suspended for trading
on all Eligible Markets, (ii) Conversion Shares cannot be sold by the Holder because of violation of Section 32 by the Company, or (iii)
Conversion Shares are not delivered after the Share Delivery Deadline, shall be excluded from the Alternate Conversion Measuring Period.
All such determinations to be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar
transaction that proportionately decreases or increases the Common Stock during such Alternate Conversion Measuring Period.
(f) “Approved
Stock Plan” means any employee benefit plan or agreement which has been approved by the Board prior to or subsequent to the
Closing Date (as defined in the Securities Purchase Agreement) pursuant to which shares of Common Stock and standard options to purchase
Common Stock may be issued to any employee, officer, consultant or director for services provided to the Company in their capacity as
such.
(g) “Attribution
Parties” means, collectively, the following Persons and entities: (i) any investment vehicle, including, any funds, feeder funds
or managed accounts, currently, or from time to time after the Initial Issuance Date, directly or indirectly managed or advised by a Holder’s
investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of such Holder or any of the foregoing,
(iii) any Person acting or who could be deemed to be acting as a Group together with such 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 such 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
such Holder and all other Attribution Parties to the Maximum Percentage.
(h) “Black
Scholes Consideration Value” means the value of the applicable Option, Convertible Security or Adjustment Right (as the case
may be) as of the date of issuance thereof calculated using the Black Scholes Option Pricing Model obtained from the “OV”
function on Bloomberg utilizing (i) an underlying price per share equal to the Closing Sale Price of the Common Stock on the Trading Day
immediately preceding the public announcement of the execution of definitive documents with respect to the issuance of such Option, Convertible
Security or Adjustment Right (as the case may be), (ii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period
equal to the remaining term of such Option, Convertible Security or Adjustment Right (as the case may be) as of the date of issuance of
such Option, Convertible Security or Adjustment Right (as the case may be), (iii) a zero cost of borrow and (iv) an expected volatility
equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization
factor) as of the Trading Day immediately following the date of issuance of such Option, Convertible Security or Adjustment Right (as
the case may be).
(i) “Bloomberg”
means Bloomberg, L.P.
(j) “Book-Entry”
means each entry on the Register evidencing one or more Preferred Shares held by a Holder in lieu of a Preferred Share Certificate issuable
hereunder.
(k) “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial
banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”,
“non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the
direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial
banks in The City of New York generally are open for use by customers on such day.
(l) “Change
of Control” means any Fundamental Transaction other than (i) any merger of the Company or any of its, direct or indirect, wholly-owned
Subsidiaries with or into any of the foregoing Persons, (ii) any reorganization, recapitalization or reclassification of the shares of
Common Stock in which holders of the Company’s voting power immediately prior to such
reorganization, recapitalization or reclassification continue after such reorganization, recapitalization or reclassification to hold
publicly traded securities and, directly or indirectly, are, in all material respects, the holders of the voting power of the surviving
entity (or entities with the authority or voting power to elect the members of the board of directors (or their equivalent if other than
a corporation) of such entity or entities) after such reorganization, recapitalization or reclassification or (iii) pursuant to a migratory
merger effected solely for the purpose of changing the jurisdiction of incorporation of the Company or any of its Subsidiaries.
(m) “Change
of Control Redemption Premium” means 110%.
(n) “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 do 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 sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). 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 Required Holder. If the Company and the Required Holders
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 23. All such determinations shall be appropriately adjusted for any stock splits, stock dividends, stock combinations, recapitalizations
or other similar transactions during such period.
(o) “Closing
Date” shall have the meaning set forth in the Securities Purchase Agreement, which date is the date the Company initially issued
the Preferred Shares pursuant to the terms of the Securities Purchase Agreement.
(p) “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.
(q) “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.
(r) “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.
(s) “Dividend
Rate” means eight percent (8.0%) per annum, as may be adjusted from time to time in accordance with Section 3.
(t) “Eligible
Market” means The New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, the Nasdaq Global Market, the
Nasdaq Capital Market.
(u) “Event
Market Price” means, with respect to any Stock Combination Event Date, 125% of the quotient determined by dividing (x) the sum
of the VWAP of the Common Stock for each of the five (5) lowest Trading Days during the twenty (20) consecutive Trading Day period ending
and including the Trading Day immediately preceding the sixteenth (16th) Trading Day after such Stock Combination Event Date, divided
by (y) five (5).
(v) “Excluded
Securities” means (i) shares of Common Stock or standard options to purchase Common Stock issued to directors, officers, employees
or consultants of the Company for services rendered to the Company in their capacity as such pursuant to an Approved Stock Plan (as defined
above), provided that (A) all such issuances (taking into account the shares of Common Stock issuable upon exercise of such options) after
the Subscription Date pursuant to this clause (i) do not, in the aggregate, exceed more than 15% of the Common Stock issued and outstanding
immediately prior to the Closing Date (as defined in the Securities Purchase Agreement) 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 (as defined in the Securities
Purchase Agreement); (ii) shares of Common Stock issued upon the conversion or exercise of Convertible Securities or Options (other than
standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) issued prior
to the Subscription Date, provided that the conversion or exercise price of any such Convertible Securities or Options (other than standard
options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) is not lowered (other
than in accordance with the terms thereof in effect as of the Subscription Date) from the conversion or exercise price in effect as of
the Subscription Date (whether pursuant to the terms of such Convertible Securities or Options or otherwise), none of such Convertible
Securities or Options (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered
by clause (i) above) are amended to increase the number of shares issuable thereunder and none of the terms or conditions of any such
Convertible Securities or Options (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that
are covered by clause (i) above) are otherwise materially changed in any manner that adversely affects any of the Buyers; (iii) the shares
of Common Stock issuable upon conversion of the Preferred Shares or otherwise pursuant to the terms of this Certificate of Designations;
provided, that the terms of this Certificate of Designations are not amended, modified or changed on or after the Subscription Date (other
than antidilution adjustments pursuant to the terms thereof in effect as of the Subscription Date); (iv) shares of Common Stock issued
upon the conversion or exercise of Options (other than standard options to purchase Common Stock issued pursuant to an Approved Stock
Plan that are covered by clause (i) above) in connection with the issuance of non-convertible debt securities by the Company; (v) securities
issued by the Company in connection with strategic license agreements, mergers, acquisitions, purchases or leases of assets, partnering
arrangements, joint ventures, strategic alliances or other commercial relationships (including to persons who are customers and suppliers
of the Company) relating to the operation of the Company’s business, so long as such issuances are not primarily for the purpose
of raising capital or to an entity whose primary business is investing in securities; and (vi) Shares of
Common Stock issued upon (A) conversion of the Company’s Series C Convertible Notes issued prior to the Subscription Date and (B)
exercise of warrants to purchase shares of Common Stock issued in connection therewith.
(w) “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 (excluding a merger consummated solely to effect a change of name or domicile of the Company), 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 Certificate of Designations calculated as if any shares of Common Stock held by all such
Subject Entities were not outstanding, or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding
shares of Common Stock or other equity securities of the Company sufficient to allow such Subject Entities to effect a statutory short
form merger or other transaction requiring other stockholders of the Company to surrender their shares of Common Stock without approval
of the stockholders of the Company or (C) directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more
related transactions, the issuance of or the entering into any other instrument or transaction structured in a manner to circumvent, or
that circumvents, the intent of this definition in which case this definition shall be construed and implemented in a manner otherwise
than in strict conformity with the terms of this definition to the extent necessary to correct this definition or any portion of this
definition which may be defective or inconsistent with the intended treatment of such instrument or transaction.
(x) “GAAP”
means United States generally accepted accounting principles, consistently applied.
(y) “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.
(z) “Indebtedness”
means 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
United States generally accepted accounting principles consistently applied for the periods covered thereby (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 United States generally accepted accounting principles, 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 mortgage,
deed of trust, lien, pledge, charge, security interest or other encumbrance of any nature whatsoever in or upon any property or assets
(including accounts and contract rights) with respect to any asset or property 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.
(aa) “Intellectual
Property Rights” means, with respect to the Company and its Subsidiaries, all of their 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.
(bb) “Liquidation
Event” means, whether in a single transaction or series of transactions, the voluntary or involuntary liquidation, dissolution
or winding up of the Company or such Subsidiaries the assets of which constitute all or substantially all of the assets of the business
of the Company and its Subsidiaries, taken as a whole.
(cc) “Material
Adverse Effect” means any material adverse effect on the business in excess of $250,000, properties, assets, liabilities, operations,
results of operations, condition (financial or otherwise) or prospects of the Company and its Subsidiaries, if any, individually or taken
as a whole, or on the transactions contemplated hereby or on the other Transaction Documents (as defined below), or by the agreements
and instruments to be entered into in connection therewith or on the authority or ability of the Company to perform its obligations under
the Transaction Documents.
(dd) “Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
(ee) “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.
(ff) “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.
(gg) “Principal
Market” means, as of any time of determination, the principal trading market, if any, in which the shares of Common Stock then
trade.
(hh) “Redemption
Notices” means, collectively, the Triggering Event Redemption Notices, the Change of Control Redemption Notices and the Company
Optional Redemption Notices, and each of the foregoing, individually, a “Redemption Notice.”
(ii) “Redemption
Premium” means 110%.
(jj) “Redemption
Prices” means, collectively, any Triggering Event Redemption Price, the Change of Control Redemption Price and the Company Optional
Redemption Price, and each of the foregoing, individually, a “Redemption Price.”
(kk) “SEC”
means the United States Securities and Exchange Commission or the successor thereto.
(ll) “Securities
Purchase Agreement” means that certain securities purchase agreement by and among the Company and the initial holders of Preferred
Shares, dated as of the Subscription Date, as may be amended from time in accordance with the terms thereof.
(mm) “Stated
Value” shall mean $10,000 per share, subject to adjustment for stock splits, stock dividends, recapitalizations, reorganizations,
reclassifications, combinations, subdivisions or other similar events occurring after the Initial Issuance Date with respect to the Preferred
Shares.
(nn) “Subscription
Date” means September 19, 2023.
(oo) “Subject
Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.
(pp) “Subsidiaries”
shall have the meaning as set forth in the Securities Purchase Agreement.
(qq) “Successor
Entity” means the Person (or, if so elected by the Required Holders, the Parent Entity) formed by, resulting from or surviving
any Fundamental Transaction or the Person (or, if so elected by the Required Holders, the Parent Entity) with which such Fundamental Transaction
shall have been entered into.
(rr) “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 applicable Holder or (y) with respect
to all determinations other than price determinations relating to the Common Stock, any day on which The New York Stock Exchange (or any
successor thereto) is open for trading of securities.
(ss) “Transaction
Documents” means the Securities Purchase Agreement, this Certificate of Designations and each of the other agreements and instruments
entered into or delivered by the Company or any of the Holders in connection with the transactions contemplated by the Securities Purchase
Agreement, all as may be amended from time to time in accordance with the terms thereof.
(tt) “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 sheets”
by OTC Markets Group Inc. (formerly Pink Sheets LLC). 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 Required Holders.
If the Company and the Required Holders 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 23. All such determinations shall be appropriately adjusted for any stock dividend, stock
split, stock combination, recapitalization or other similar transaction during such period.
32. Disclosure. Upon receipt
or delivery by the Company of any notice in accordance with the terms of this Certificate of Designations, 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 a Holder explicitly in writing in such notice (or immediately upon receipt of notice from such 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 such Holder), such Holder shall be entitled to presume that information contained in the notice does not constitute material, non-public
information relating to the Company or any of its Subsidiaries. Nothing contained in this Section 32 shall limit any obligations of the
Company, or any rights of any Holder, under Section 4(i) of the Securities Purchase Agreement.
33. Absence of Trading and
Disclosure Restrictions. The Company acknowledges and agrees that no Holder is a fiduciary or agent of the Company and that each 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 such 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 each 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.
* * * * *
IN WITNESS WHEREOF, the Company
has caused this Certificate of Designations of Series B Convertible Preferred Stock of Biotricity Inc. to be signed by its Chief Executive
Officer on this 19th day of September, 2023.
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/s/ Waqaas Al-Siddiq |
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Waqaas Al-Siddiq |
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EXHIBIT I
BIOTRICITY INC.
CONVERSION NOTICE
Reference is made to the Certificate
of Designations of the Series B Convertible Preferred Stock of Biotricity Inc. (the “Certificate of Designations”).
In accordance with and pursuant to the Certificate of Designations, the undersigned hereby elects to convert the number of shares of Series
B Convertible Preferred Stock, $0.001 par value per share (the “Preferred Shares”), of Biotricity Inc. a Nevada corporation
(the “Company”), indicated below into shares of common stock, $0.001 par value per share (the “Common Stock”),
of the Company, as of the date specified below.
Aggregate number of Preferred Shares to be converted |
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Aggregate Stated Value of such Preferred Shares to be converted: |
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Aggregate accrued and unpaid Dividends and accrued and unpaid Late Charges with respect to such Preferred Shares and such Aggregate Dividends to be converted: |
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AGGREGATE CONVERSION AMOUNT TO BE CONVERTED: |
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Please confirm the following information: |
Conversion Price: |
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Number of shares of Common Stock to be issued: |
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☐
Check here if Holder is electing to use the following Alternate Conversion Price: ____________
Please
issue the Common Stock into which the applicable Preferred Shares are being converted to Holder, or for its benefit, as follows:
☐
Check here if requesting delivery as a certificate to the following name and to the following address:
☐ Check here if requesting delivery by Deposit/Withdrawal at Custodian as follows:
DTC Participant: |
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Account Number: |
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Date: _____________ __, 20__ |
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EXHIBIT II
ACKNOWLEDGMENT
Date: _____________ __, 20__
The Company hereby (a) acknowledges
this Conversion Notice, (b) certifies that the above indicated number of shares of Common Stock [are][are not] eligible to be resold by
the Holder either (i) pursuant to Rule 144 (subject to the Holder’s execution and delivery to the Company of a customary 144 representation
letter) or (ii) an effective and available registration statement and (c) hereby directs _________________ to issue the above indicated
number of shares of Common Stock in accordance with the Transfer Agent Instructions dated _____________, 20__ from the Company and acknowledged
and agreed to by ________________________.
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BIOTRICITY INC. |
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Exhibit 5.1
September 19, 2023
Biotricity Inc.
275 Shoreline Drive, Suite 150
Redwood City, California 94065
Re: Biotricity Inc.
Ladies and Gentlemen:
We have acted as
counsel to Biotricity Inc., a Nevada corporation (the “Company”), in connection with the Securities Purchase Agreement dated
September 19, 2023 (the “Purchase Agreement”) by and between the Company and the investor signatory thereto (the “Buyer”),
relating to the sale by the Company to the Buyer of 220 shares (the “Preferred Shares”) of the Company’s Series B Convertible
Preferred Stock, par value $0.001 per share.
This opinion is being delivered
in accordance with the requirements of Item 601(b)(5) of Regulation S-K under the Securities Act of 1933, as amended (the “Securities
Act”).
In connection with this opinion,
we have examined originals or copies, certified or otherwise identified to our satisfaction, of the following:
1. Articles of Incorporation
of the Company, as amended;
2. Bylaws of the Company, as
amended;
3. The Purchase Agreement;
4. Registration Statement on
Form S-3 (Registration No. 333-255544) as filed by the Company with the Securities and Exchange Commission (the “Commission”)
on April 27, 2021 (as such registration statement became effective on May 4, 2021, the “Registration Statement”) pursuant
to the Securities Act;
5. The prospectus
supplement filed with the Commission on September 19, 2023 pursuant to Rule 424(b)(5) promulgated under the Securities Act (the
“Prospectus Supplement”), relating to the offering by the Company of the Preferred Shares and up to 1,704,593 shares of the
Company’s common stock, par value $0.001 (the “Common Shares”), issuable upon conversion of, or as dividends on the
Preferred Shares; and
6. Written consent of the Board
of Directors of the Company approving the Purchase Agreement.
We have also examined originals
or copies, certified or otherwise identified to our satisfaction, of such records of the Company and such agreements, certificates and
receipts of public officials, certificates of officers or other representatives of the Company and others, and such other documents as
we have deemed necessary or appropriate as a basis for the opinions stated below.
In our examination, we have assumed
the genuineness of all signatures, including endorsements, the legal capacity and competency of all natural persons, the authenticity
of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as facsimile, electronic,
certified or photostatic copies, and the authenticity of the originals of such copies. In making our examination of executed documents,
we have assumed (i) that the parties thereto, other than the Company, had the power, corporate or other, to enter into and perform all
obligations thereunder and (ii) the due authorization by all requisite action, corporate or other, and the execution and delivery by such
parties of such documents, and the validity and binding effect thereof on such parties.
1185 Avenue of the Americas | 31st Floor |
New York, NY | 10036
T (212) 930 9700 | F (212) 930 9725 |
WWW.SRF.LAW
The opinion expressed below is
limited to the federal securities laws of the United States of America and the corporate laws of the State of Nevada and we express no
opinion as to the effect on the matters covered by the laws of any other jurisdiction.
Based upon and subject to the
foregoing, we are of the opinion that (i) when the Preferred Shares have been delivered to and paid for by the Buyer as contemplated by
the Purchase Agreement, the Preferred Shares will be duly authorized, validly issued, fully paid and non-assessable, (ii) the Common Shares
have been duly authorized and when issued and delivered by the Company in accordance with the terms of the Purchase Agreement and the
Preferred Shares, will be validly issued, fully paid and non-assessable.
We
hereby consent to the filing of this opinion with the Commission as an exhibit to the Company’s Current Report on Form 8-K being
filed on the date hereof and incorporated by reference into the Registration Statement. We also hereby consent to the reference to our
firm under the caption “Legal Matters” in the Prospectus Supplement. In giving this consent, we do not thereby admit that
we are within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of
the Commission promulgated thereunder. This opinion is expressed as of the date hereof unless otherwise expressly stated, and we disclaim
any undertaking to advise you of any subsequent changes in the facts stated or assumed herein or of any subsequent changes in applicable
laws.
Very
truly yours,
/s/
Sichenzia Ross Ference LLP
1185
Avenue of the Americas | 31st Floor | New York, NY | 10036
T
(212) 930 9700 | F (212) 930 9725 | WWW.SRF.LAW
Exhibit
10.1
Execution
Version
SECURITIES
PURCHASE AGREEMENT
This
SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of September 19, 2023, is by and among Biotricity
Inc., a Nevada corporation with offices located at 203 Redwood Parkway, Suite 600, Redwood City, CA 94065 (the “Company”),
and each of the investors listed on the Schedule of Buyers attached hereto (individually, a “Buyer” and collectively,
the “Buyers”).
RECITALS
A.
Subject to the terms and conditions set forth in this Agreement and pursuant to an effective registration statement under the 1933 Act
of 1933, as amended (the “1933 Act”) for the Preferred Shares (as described below), the Company desires to issue and
sell to each Buyer, and each Buyer, severally and not jointly, desires to purchase from the Company, securities of the Company as more
fully described in this Agreement.
B.
The Company has authorized a new series of convertible preferred stock of the Company designated as Series B Convertible 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 (together with any convertible preferred shares issued in replacement
thereof in accordance with the terms thereof, the “Series B Preferred Stock”), which Series B 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 Certificate of Designations.
C.
Each Buyer wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, the aggregate
number of shares of Series B Preferred Stock (the “Preferred Shares”) set forth opposite such Buyer’s name in column
(3) on the Schedule of Buyers.
D.
The Preferred Shares and the Conversion Shares are collectively referred to herein as the “Securities.”
AGREEMENT
NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and each Buyer hereby agree as follows:
1.
PURCHASE AND SALE OF PREFERRED SHARES.
(a) Purchase
of Preferred Shares. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below, the Company shall
issue and sell to each Buyer, and each Buyer severally, but not jointly, agrees to purchase from the Company on the Closing Date (as
defined below) the aggregate number of Preferred Shares as is set forth opposite such Buyer’s name in column (3) on the Schedule
of Buyers.
(b) Closing.
The closing (the “Closing”) of the purchase of the Preferred Shares by the Buyers shall occur at the offices of Sullivan
& Worcester LLP, 1633 Broadway, Suite 3200, New York, NY 10019. The date and time of the Closing (the “Closing Date”)
shall be 10:00 a.m., New York time, on the first (1st) Business Day on which the conditions to the Closing set forth in Sections 6 and
7 below are satisfied or waived (or such other date as is mutually agreed to by the Company and each Buyer). As used herein “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial
banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”,
“non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the
direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial
banks in The City of New York generally are open for use by customers on such day.
(c) Purchase
Price. The aggregate purchase price for the Preferred Shares to be purchased by each Buyer (the “Purchase Price”)
shall be the amount set forth opposite such Buyer’s name in column (4) on the Schedule of Buyers.
(d) Form
of Payment. On the Closing Date, (i) each Buyer shall pay its respective Purchase Price (less, in the case of any Buyer, the amounts
withheld pursuant to Section 4(g)) to the Company for the Preferred Shares to be issued and sold to such Buyer at the Closing, by wire
transfer of immediately available funds in accordance with the Flow of Funds Letter (as defined below) and (ii) the Company shall deliver
to each Buyer the aggregate number of Preferred Shares as is set forth opposite such Buyer’s name in column (3) of the Schedule
of Buyers, in each case, duly executed on behalf of the Company and registered in the name of such Buyer or its designee.
2.
BUYER’S REPRESENTATIONS AND WARRANTIES.
Each
Buyer, severally and not jointly, represents and warrants to the Company with respect to only itself that, as of the date hereof and
as of the Closing Date:
(a) Organization;
Authority. Such Buyer is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its
organization with the requisite power and authority to enter into and to consummate the transactions contemplated by the Transaction
Documents (as defined below) to which it is a party and otherwise to carry out its obligations hereunder and thereunder.
(b) No
Public Sale or Distribution. Such Buyer (i) is acquiring its Preferred Shares, and (ii) upon conversion of its Preferred Shares will
acquire the Conversion Shares issuable upon conversion 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 promulgated
under the 1933 Act “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 this Agreement: (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 United States Securities
and Exchange Commission (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 has 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 consummation by such Buyer of the transactions
contemplated hereby will not (i) result in a violation of the organizational documents of such Buyer, or (ii) conflict with, or constitute
a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Buyer is a party, or (iii) result in
a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to such
Buyer, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which could not, individually
or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Buyer to perform its obligations
hereunder.
3.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The
Company represents and warrants to each of the Buyers that, as of the date hereof and as of the Closing Date:
(a) Organization
and Qualification. Each of the Company and each of its Subsidiaries are entities duly organized and validly existing and in good
standing under the laws of the jurisdiction in which they are formed, and have the requisite power and authority to own their properties
and to carry on their business as now being conducted and as presently proposed to be conducted. Each of the Company and each of its
Subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction in which its ownership
of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to
be so qualified or be in good standing would not reasonably be expected to have a Material Adverse Effect (as defined below). As used
in this Agreement, “Material Adverse Effect” means any material adverse effect on (i) the business, properties, assets,
liabilities, operations (including results thereof), condition (financial or otherwise) or prospects of the Company or any Subsidiary,
individually or taken as a whole, (ii) the transactions contemplated hereby or in any of the other Transaction Documents or any other
agreements or instruments to be entered into in connection herewith or therewith or (iii) the authority or ability of the Company or
any of its Subsidiaries to perform any of their respective obligations under any of the Transaction Documents (as defined below). Other
than the Persons (as defined below) set forth on Schedule 3(a), the Company has no Subsidiaries. “Subsidiaries” means
any Person in which the Company, directly or indirectly, (I) owns any of the outstanding capital stock or holds any equity or similar
interest of such Person or (II) controls or operates all or any part of the business, operations or administration of such Person, and
each of the foregoing, is individually referred to herein as a “Subsidiary.”
(b) Authorization;
Enforcement; Validity. The Company has the requisite power and authority to enter into and perform its obligations under this Agreement
and the other Transaction Documents and to issue the Securities in accordance with the terms hereof and thereof. 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 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 Prospectus Supplements
(as defined below), 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 has been filed with
the Secretary of State of the State of Nevada 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 Preferred Shares,
the Certificate of Designations, 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 is 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 the sum of 200% of the maximum number of Conversion Shares issuable upon conversion of the Preferred Shares
(assuming for purposes hereof that (x) the Preferred Shares are convertible at the initial Alternate Conversion Price (as defined in
the Certificate of Designations), and (y) any such conversion shall not take into account any limitations on the conversion of the Preferred
Shares set forth in the Certificate of Designations). Upon issuance or conversion in accordance with the Preferred Shares, the Conversion
Shares, 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. The Company has prepared
and filed the Registration Statement in conformity with the requirements of the 1933 Act, which became effective on May 4, 2021, including
the Prospectus, and such amendments and supplements thereto as may have been required to the date of this Agreement. The Registration
Statement is effective under the 1933 Act and no stop order preventing or suspending the effectiveness of the Registration Statement
or suspending or preventing the use of the Prospectus has been issued by the SEC and no proceedings for that purpose have been instituted
or, to the knowledge of the Company, are threatened by the SEC. The Company, if required by the rules and regulations of the SEC, shall
file the Prospectus Supplement with the SEC pursuant to Rule 424(b). At the time the Registration Statement and any amendments thereto
became effective, at the date of this Agreement, and at the Closing Date, the Registration Statement and any amendments thereto conformed
and will conform in all material respects to the requirements of the 1933 Act and did not and will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading;
and the Prospectus and any amendments or supplements thereto, at the time the Prospectus or any amendment or supplement thereto was issued
and at the Closing Date, conformed and will conform in all material respects to the requirements of the 1933 Act and did not and will
not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading. The Company was at the time of the filing of the Registration
Statement eligible to use Form S-3. The Company is eligible to use Form S-3 under the 1933 Act and it meets the transaction requirements
with respect to the aggregate market value of securities being sold pursuant to this offering and during the twelve (12) months prior
to this offering, as set forth in General Instruction I.B.6 of Form S-3. All corporate action required to be taken for the authorization,
issuance and sale of the Preferred Shares and the Conversion Shares has been duly and validly taken. The Securities conform in all material
respects to all statements with respect thereto contained in the Registration Statement and the Prospectus. “Registration Statement”
means the effective registration statement on Form S-3 (File No. 333-255544) filed with the SEC and which registers the sale of the Preferred
Shares and the Conversion Shares. “Prospectus” means the final prospectus filed with the Registration Statement. “Prospectus
Supplement” means the supplement to the Prospectus complying with Rule 424(b) of the 1933 Act that is filed with the SEC and
delivered by the Company to each Buyer at the Closing.
(d) No
Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and its Subsidiaries and the consummation
by the Company and its Subsidiaries of the transactions contemplated hereby and thereby (including, without limitation, the issuance
of the Preferred Shares, the Conversion Shares and the reservation for issuance of the Conversion Shares) will not (i) result in a violation
of the Articles of Incorporation (as defined below) (including, without limitation, any certificate of designation contained therein),
Bylaws (as defined below), certificate of formation, memorandum of association, articles of association, bylaws or other organizational
documents of the Company or any of its Subsidiaries, or any capital stock or other securities of the Company or any of its Subsidiaries,
(ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) in any respect
under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument
to which the Company or any of its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment
or decree (including, without limitation, foreign, federal and state securities laws and regulations and the rules and regulations of
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.
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, a Form D with the SEC, and any other filings as may
be required by any state securities agencies), any Governmental Entity (as defined below) or any regulatory or self-regulatory agency
or any other Person in order for it to execute, deliver or perform any of its respective obligations under or contemplated by the Transaction
Documents, in each case, in accordance with the terms hereof or thereof. All consents, authorizations, orders, filings and registrations
which the Company or any Subsidiary is required to obtain pursuant to the preceding sentence have been or will be obtained or effected
on or prior to the Closing Date, and neither the Company nor any of its Subsidiaries are aware of any facts or circumstances which might
prevent the Company or any of its Subsidiaries from obtaining or effecting any of the registration, application or filings contemplated
by the Transaction Documents. The Company is not in violation of the requirements of the Principal Market and has no knowledge of any
facts or circumstances which could reasonably lead to delisting or suspension of the Common Stock in the foreseeable future. “Governmental
Entity” means any nation, state, county, city, town, village, district, or other political jurisdiction of any nature, federal,
state, local, municipal, foreign, or other government, governmental or quasi-governmental authority of any nature (including any governmental
agency, branch, department, official, or entity and any court or other tribunal), multi-national organization or body; or body exercising,
or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any
nature or instrumentality of any of the foregoing, including any entity or enterprise owned or controlled by a government or a public
international organization or any of the foregoing.
(f) Acknowledgment
Regarding Buyer’s Purchase of Securities. The Company acknowledges and agrees that each Buyer is acting solely in the capacity
of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby and
that no Buyer is (i) an officer or director of the Company or any of its Subsidiaries, (ii) an “affiliate” (as defined in
Rule 144) of the Company or any of its Subsidiaries or (iii) to its knowledge, a “beneficial owner” of more than 10% of the
shares of Common Stock (as defined for purposes of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “1934
Act”)). The Company further acknowledges that no Buyer is acting as a financial advisor or fiduciary of the Company or any
of its Subsidiaries (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and
thereby, and any advice given by a Buyer or any of its representatives or agents in connection with the Transaction Documents and the
transactions contemplated hereby and thereby is merely incidental to such Buyer’s purchase of the Securities. The Company further
represents to each Buyer that the Company’s and each Subsidiary’s decision to enter into the Transaction Documents to which
it is a party has been based solely on the independent evaluation by the Company, each Subsidiary and their respective representatives.
The Company acknowledges that the Buyer is not a broker dealer and is not required to be registered as a broker dealer.
(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, in connection with the sale of the Securities. 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 issuance of the Securities may result in dilution of the outstanding
shares of Common Stock, which dilution may be substantial under certain market conditions, and that the number of Conversion Shares may
increase in certain circumstances. The Company further acknowledges that its obligations under the Transaction Documents, including,
without limitation, its obligation to issue the Conversion Shares pursuant to the Transaction Documents, are unconditional and absolute
and not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim
the Company may have against any Buyer and regardless of the dilutive effect that such issuance may have on the ownership of the 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 Articles 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. 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 and the Registration Statement 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, when filed with the SEC, will 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 March 31, 2023, 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 March 31, 2023, 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. The Company and its Subsidiaries, individually and on a consolidated basis, are not as of the date hereof, and after giving effect
to the transactions contemplated hereby to occur at the Closing, will not be Insolvent (as defined below). For purposes of this Section
3(l), “Insolvent” means, (i) with respect to the Company and its Subsidiaries, on a consolidated basis, (A) the present
fair saleable value of the Company’s and its Subsidiaries’ assets is less than the amount required to pay the Company’s
and its Subsidiaries’ total Indebtedness (as defined below), (B) the Company and its Subsidiaries are unable to pay their debts
and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured or (C) the Company
and its Subsidiaries intend to incur or believe that they will incur debts that would be beyond their ability to pay as such debts mature;
and (ii) with respect to the Company and each Subsidiary, individually, (A) the present fair saleable value of the Company’s or
such Subsidiary’s (as the case may be) assets is less than the amount required to pay its respective total Indebtedness, (B) the
Company or such Subsidiary (as the case may be) is unable to pay its respective debts and liabilities, subordinated, contingent or otherwise,
as such debts and liabilities become absolute and matured or (C) the Company or such Subsidiary (as the case may be) intends to incur
or believes that it will incur debts that would be beyond its respective ability to pay as such debts mature. Neither the Company nor
any of its Subsidiaries has engaged in any business or in any transaction, and is not about to engage in any business or in any transaction,
for which the Company’s or such Subsidiary’s remaining assets constitute unreasonably small capital with which to conduct
the business in which it is engaged as such business is now conducted and is proposed to be conducted.
(m) No
Undisclosed Events, Liabilities, Developments or Circumstances. Since March 31, 2023, 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 Articles 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, Articles 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, as of the Closing Date, 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. As of the Closing Date, (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) 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. As of the Closing Date, 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 below)), nor does any such
Person receive income from any source other than the Company or its Subsidiaries which relates to the business of the Company or its
Subsidiaries or should properly accrue to the Company or its Subsidiaries. No employee, officer, stockholder or director of the Company
or any of its Subsidiaries or member of his or her immediate family is indebted to the Company or its Subsidiaries, as the case may be,
nor is the Company or any of its Subsidiaries indebted (or committed to make loans or extend or guarantee credit) to any of them, other
than (i) for payment of salary 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. “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) 125,000,000 shares
of Common Stock, of which, 8,565,795 shares are issued and outstanding and 9,338,644 shares are reserved for issuance pursuant to Convertible
Securities (as defined below) (other than the Preferred Shares) exercisable or exchangeable for, or convertible into, shares of Common
Stock and (B) 10,000,000 shares of Preferred Stock, 20,000 of which have been designated Series A Preferred Stock, 6,304 of which are
issued and outstanding. No shares of Common Stock are held in the treasury of the Company.
(iii) Valid
Issuance; Available Shares; Affiliates. All of such outstanding shares are duly authorized and have been, or upon issuance will be,
validly issued and are fully paid and nonassessable. Schedule 3(r)(iii) sets forth the number of shares of Common Stock that are
(A) reserved for issuance pursuant to Convertible Securities (as defined below) (other than the Preferred Shares) 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).
(iv) Existing
Securities; Obligations. Except as disclosed on Schedule 3(r)(iv): (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; (D) there are no outstanding securities or instruments of the Company or any of its Subsidiaries
which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which
the Company or any of its Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries; (E) there
are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities;
and (F) neither the Company nor any Subsidiary has any stock appreciation rights or “phantom stock” plans or agreements or
any similar plan or agreement.
(v) Organizational
Documents. The Company has furnished to the Buyers true, correct and complete copies of the Company’s Articles of Incorporation,
as amended and as in effect on the date hereof (the “Articles 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 material 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.
As of the Closing Date, the Company and each of its Subsidiaries will be 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 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. Each of the Company and its Subsidiaries holds good title to all real property, leases in real property, facilities or
other interests in real property owned or held by the Company or any of its Subsidiaries (the “Real Property”) owned
by the Company or any of its Subsidiaries (as applicable). The Real Property is free and clear of all Liens and is not subject to any
rights of way, building use restrictions, exceptions, variances, reservations, or limitations of any nature except for (a) Liens for
current taxes not yet due and (b) zoning laws and other land use restrictions that do not impair the present or anticipated use of the
property subject thereto. Any Real Property held under lease by the Company or any of its Subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be
made of such property and buildings by the Company or any of its Subsidiaries.
(ii) Fixtures
and Equipment. Each of the Company and its Subsidiaries (as applicable) has good title to, or a valid leasehold interest in, the
tangible personal property, equipment, improvements, fixtures, and other personal property and appurtenances that are used by the Company
or its Subsidiary in connection with the conduct of its business (the “Fixtures and Equipment”). The Fixtures and
Equipment are structurally sound, are in good operating condition and repair, are adequate for the uses to which they are being put,
are not in need of maintenance or repairs except for ordinary, routine maintenance and repairs and are sufficient for the conduct of
the Company’s and/or its Subsidiaries’ businesses (as applicable) in the manner as conducted prior to the Closing. Each of
the Company and its Subsidiaries owns all of its Fixtures and Equipment free and clear of all Liens except for (a) liens for current
taxes not yet due and (b) zoning laws and other land use restrictions that do not impair the present or anticipated use of the property
subject thereto.
(x) Intellectual
Property Rights. As of the Closing Date, 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 and trademarks 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.
(i) 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 a 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.
(ii) 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.
(iii) None
of the Real Properties are on any federal or state “Superfund” list or Liability Information System (“CERCLIS”)
list or any state environmental agency list of sites under consideration for CERCLIS, nor subject to any environmental related Liens.
(z) Subsidiary
Rights. The Company or one of its Subsidiaries has the unrestricted right to vote, and (subject to limitations imposed by applicable
law) to receive dividends and distributions on, all capital securities of its Subsidiaries as owned by the Company or such Subsidiary.
(aa) Tax
Status. The Company and each of its Subsidiaries (i) has timely made or filed all foreign, federal and state income and all other
tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has timely paid all taxes and other governmental
assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except
those being contested in good faith and (iii) has set aside on its books provision reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount
claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company and its Subsidiaries know of no basis
for any such claim. The Company is not operated in such a manner as to qualify as a passive foreign investment company, as defined in
Section 1297 of the Code. 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. As of the Closing Date, 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. As of the Closing Date, 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 8-K Filing (as defined below) one or more Buyers may engage in hedging and/or trading activities (including,
without limitation, the location and/or reservation of borrowable shares of Common Stock) at various times during the period that the
Securities are outstanding, including, without limitation, during the periods that the value and/or number of the Conversion Shares 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, 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) Reserved.
(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) 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.
(ll) 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.
(mm) Management.
Except as set forth in Schedule 3(mm) 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.
(nn) 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.
(oo) 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.
(pp) 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.
(qq) 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.
(rr) No
Additional Agreements. The Company does not have any agreement or understanding with any Buyer with respect to the transactions contemplated
by the Transaction Documents other than as specified in the Transaction Documents.
(ss) 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.
(tt) 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.
(uu) Potential
Products; FDA; EMEA.
(i) The
Company possesses all certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities
necessary to conduct its business as currently conducted, including without limitation all such certificates, authorizations and permits
required by the United States Food and Drug Administration (the “FDA”) or any other federal, state or foreign agencies
or bodies engaged in the regulation of pharmaceuticals or biohazardous materials, except where the failure to so possess such certificates,
authorizations and permits, individually or in the aggregate, would not result in a Material Adverse Effect. The Company has not received
any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, individually
or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect.
(ii) The
Company has not received any written notices or statements from the FDA, the European Medicines Agency (the “EMEA”)
or any other governmental agency, and otherwise has no knowledge or reason to believe, that (i) any drug candidate of the Company (each
a “Potential Product”) may or will be rejected or determined to be non-approvable; (ii) a delay in time for review
and/or approval of a marketing authorization application or marketing approval application in any jurisdiction for any Potential Product
is or may be required, requested or being implemented; (iii) one or more clinical studies for any Potential Product shall or may be requested
or required in addition to the clinical studies submitted to the FDA prior to the date hereof as a precondition to or condition of issuance
or maintenance of a marketing approval for any Potential Product; (iv) any license, approval, permit or authorization to conduct any
clinical trial of or market any product or Potential Product of the Company has been, will be or may be suspended, revoked, modified
or limited, except in the cases of clauses (i), (ii), (iii) and (iv) where such rejections, determinations, delays, requests, suspensions,
revocations, modifications or limitations might not reasonably be expected to have, individually or in the aggregate, a Material Adverse
Effect.
(iii) To
the Company’s knowledge, the preclinical and clinical testing, application for marketing approval of, manufacture, distribution,
promotion and sale of the products and Potential Products of the Company is in compliance, in all material respects, with all laws, rules
and regulations applicable to such activities, including without limitation applicable good laboratory practices, good clinical practices
and good manufacturing practices, except for such non-compliance as would not, individually or in the aggregate, have a Material Adverse
Effect. The Company is not aware of any studies, tests or trial the results of which reasonably call into question the results of the
tests and trials conducted by or on behalf of the Company. The Company has not received notice of adverse finding, warning letter or
clinical hold notice from the FDA or any non-U.S. counterpart of any of the foregoing, or any untitled letter or other correspondence
or notice from the FDA or any other governmental authority or agency or any institutional or ethical review board alleging or asserting
noncompliance with any law, rule or regulation applicable in any jurisdiction, except notices, letters, and correspondences and non-U.S.
counterparts thereof alleging or asserting such noncompliance as would not, individually or in the aggregate, have a Material Adverse
Effect. The Company has not, either voluntarily or involuntarily, initiated, conducted or issued, or caused to be initiated, conducted
or issued, any recall, field correction, market withdrawal or replacement, safety alert, warning, “dear doctor” letter, investigator
notice, or other notice or action relating to an alleged or potential lack of safety or efficacy of any product or Potential Product
of the Company, any alleged product defect of any product or Potential Product of the Company, or any violation of any material applicable
law, rule, regulation or any clinical trial or marketing license, approval, permit or authorization for any product or potential product
of the Company, and the Company is not aware of any facts or information that would cause it to initiate any such notice or action and
has no knowledge or reason to believe that the FDA, the EMEA or any other governmental agency or authority or any institutional or ethical
review board or other non-governmental authority intends to impose, require, request or suggest such notice or action.
(vv) Cybersecurity.
The Company and its Subsidiaries’ information technology assets and equipment, computers, systems, networks, hardware, software,
websites, applications, and databases (collectively, “IT Systems”) are adequate for, and operate and perform in all
material respects as required in connection with the operation of the business of the Company and its subsidiaries as currently conducted,
free and clear of all material bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants that would reasonably
be expected to have a Material Adverse Effect on the Company’s business. The Company and its Subsidiaries have implemented and
maintained commercially reasonable physical, technical and administrative controls, policies, procedures, and safeguards to maintain
and protect their material confidential information and the integrity, continuous operation, redundancy and security of all IT Systems
and data, including “Personal Data,” used in connection with their businesses. “Personal Data” means (i)
a natural person’s name, street address, telephone number, e-mail address, photograph, social security number or tax identification
number, driver’s license number, passport number, credit card number, bank information, or customer or account number; (ii) any
information which would qualify as “personally identifying information” under the Federal Trade Commission Act, as amended;
(iii) “personal data” as defined by the European Union General Data Protection Regulation (“GDPR”) (EU
2016/679); (iv) any information which would qualify as “protected health information” under the Health Insurance Portability
and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act (collectively, “HIPAA”);
and (v) any other piece of information that allows the identification of such natural person, or his or her family, or permits the collection
or analysis of any data related to an identified person’s health or sexual orientation. There have been no breaches, violations,
outages or unauthorized uses of or accesses to same, except for those that have been remedied without material cost or liability or the
duty to notify any other person, nor any incidents under internal review or investigations relating to the same except in each case,
where such would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. The Company
and its Subsidiaries are presently in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations
of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy
and security of IT Systems and Personal Data and to the protection of such IT Systems and Personal Data from unauthorized use, access,
misappropriation or modification except in each case, where such would not, either individually or in the aggregate, reasonably be expected
to result in a Material Adverse Effect.
(ww) Compliance
with Data Privacy Laws. The Company and its Subsidiaries are, and at all prior times were, in compliance with all applicable state
and federal data privacy and security laws and regulations, including without limitation HIPAA, and the Company and its Subsidiaries
have taken commercially reasonable actions to prepare to comply with, and since May 25, 2018, have been and currently are in compliance
with, the GDPR (EU 2016/679) (collectively, the “Privacy Laws”) except in each case, where such would not, either
individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. To ensure compliance with the Privacy
Laws, the Company and its Subsidiaries have in place, comply with, and take appropriate steps reasonably designed to ensure compliance
in all material respects with their policies and procedures relating to data privacy and security and the collection, storage, use, disclosure,
handling, and analysis of Personal Data (the “Policies”). The Company and its Subsidiaries have at all times made
all disclosures to users or customers required by applicable laws and regulatory rules or requirements, and none of such disclosures
made or contained in any Policy have, to the knowledge of the Company, been inaccurate or in violation of any applicable laws and regulatory
rules or requirements in any material respect. The Company further certifies that neither it nor any Subsidiary: (i) has received notice
of any actual or potential liability under or relating to, or actual or potential violation of, any of the Privacy Laws, and has no knowledge
of any event or condition that would reasonably be expected to result in any such notice; (ii) is currently conducting or paying for,
in whole or in part, any investigation, remediation, or other corrective action pursuant to any Privacy Law; or (iii) is a party to any
order, decree, or agreement that imposes any obligation or liability under any Privacy Law.
(xx) 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. 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 the Buyers 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.
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) Blue
Sky. 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 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
Securities, the Company shall take all actions necessary to maintain its eligibility to register the Securities for resale by the Buyers
on Form S-3.
(d) Use
of Proceeds. The Company will use the proceeds from the sale of the Securities for general corporate purposes, but not, directly
or indirectly, for (i) except as set forth on Schedule 4(d), the satisfaction of any indebtedness of the Company or any of its Subsidiaries,
(ii) the redemption or repurchase of any securities of the Company or any of its Subsidiaries, or (iii) the settlement of any outstanding
litigation.
(e) Financial
Information. From and after the Closing Date, the Company agrees to send the following to each Buyer 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, facsimile copies of all press releases
issued by the Company or any of its Subsidiaries and (iii) unless the following are filed with the SEC through EDGAR, copies of any notices
and other information made available or given to the stockholders of the Company generally, contemporaneously with the making available
or giving thereof to the stockholders.
(f) Listing.
The Company shall use its best efforts to maintain the listing or designation for quotation (as the case may be) of all of the 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 Securities from time to time issuable under the terms of the Transaction Documents on such national securities
exchange or automated quotation system. From and after the date hereof, the Company shall secure and 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”).
From and after the date hereof, neither the Company nor any of its Subsidiaries shall take any action which could be reasonably expected
to result in the delisting or suspension of the Common Stock on an Eligible Market. The Company shall pay all fees and expenses in connection
with satisfying its obligations under this Section 4(f).
(g) Fees.
The Company shall reimburse the lead Buyer for all costs and expenses incurred by it or its affiliates in connection with the structuring,
documentation, negotiation and closing of the transactions contemplated by the Transaction Documents (including, without limitation,
as applicable, all reasonable legal fees of outside counsel and disbursements of Sullivan & Worcester LLP, counsel to the lead Buyer,
any other reasonable fees and expenses in connection with the structuring, documentation, negotiation and closing of the transactions
contemplated by the Transaction Documents and due diligence and regulatory filings in connection therewith) up to a maximum of $50,000
(the “Transaction Expenses”) which shall be withheld by the lead Buyer from its Purchase Price at the Closing, less
$10,000 previously paid by the Company to Sullivan & Worcester LLP; provided, that the Company shall promptly reimburse Sullivan
& Worcester LLP on demand for all Transaction Expenses not so reimbursed through such withholding at the Closing. 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.
(h) Pledge
of Securities. Notwithstanding anything to the contrary contained in this Agreement, the Company acknowledges and agrees that the
Securities may be pledged by aBuyer 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 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, including, without limitation, Section 2(g) hereof; provided
that an Buyer and its pledgee shall be required to comply with the provisions of Section 2(g) hereof in order to effect a sale, transfer
or assignment of Securities to such pledgee. The Company hereby agrees to execute and deliver such documentation as a pledgee of the
Securities may reasonably request in connection with a pledge of the Securities to such pledgee by a Buyer.
(i) Disclosure
of Transactions and Other Material Information.
(i) Disclosure
of Transaction. Between 9:00 a.m. New York City time and 9:30 a.m., New York time, in each case, unless sooner filed as exhibits
to a registration statement under the 1933 Act, on the first Business Day following the Closing Date, 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), and the form of Certificate of Designations) (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
4(o) of this Agreement, or any of the covenants or agreements contained in any other Transaction Document, by the Company, any of its
Subsidiaries, or any of its or their respective officers, directors, employees and agents (as determined in the reasonable good faith
judgment of such Buyer), in addition to any other remedy provided herein or in the Transaction Documents, such Buyer shall have the right
to make a public disclosure, in the form of a press release, public advertisement or otherwise, of such breach or such material, non-public
information, as applicable, without the prior approval by the Company, any of its Subsidiaries, or any of its or their respective officers,
directors, employees or agents. No Buyer shall have any liability to the Company, any of its Subsidiaries, or any of its or their respective
officers, directors, employees, affiliates, stockholders or agents, for any such disclosure. To the extent that the Company delivers
any material, non-public information to a Buyer without such Buyer’s consent, the Company hereby covenants and agrees that such
Buyer shall not have any duty of confidentiality with respect to, or a duty not to trade on the basis of, such material, non-public information.
Subject to the foregoing, neither the Company, its Subsidiaries nor any Buyer shall issue any press releases or any other public statements
with respect to the transactions contemplated hereby; provided, however, the Company shall be entitled, without the prior approval of
any Buyer, to make any press release or other public disclosure with respect to such transactions (i) in substantial conformity with
the 8-K Filing and contemporaneously therewith and (ii) as is required by applicable law and regulations (provided that in the case of
clause (i) each Buyer shall be consulted by the Company in connection with any such press release or other public disclosure prior to
its release). Without the prior written consent of the applicable Buyer (which may be granted or withheld in such Buyer’s sole
discretion), the Company shall not (and shall cause each of its Subsidiaries and affiliates to not) disclose the name of such Buyer in
any filing, announcement, release or otherwise. Notwithstanding anything contained in this Agreement to the contrary and without implication
that the contrary would otherwise be true, the Company expressly acknowledges and agrees that no Buyer shall have (unless expressly agreed
to by a particular Buyer after the date hereof in a written definitive and binding agreement executed by the Company and such particular
Buyer (it being understood and agreed that no Buyer may bind any other Buyer with respect thereto)), any duty of confidentiality with
respect to, or a duty not to trade on the basis of, any material, non-public information regarding the Company or any of its Subsidiaries.
(j) Additional
Registration Statements. Until the Applicable Date (as defined below) and at any time thereafter while any Registration Statement
is not effective or the prospectus contained therein is not available for use, the Company shall not file a registration statement or
an offering statement under the 1933 Act relating to securities that are not the Securities (other than a registration statement on Form
S-8 or such supplements or amendments to registration statements that are outstanding and have been declared effective by the SEC as
of the date hereof (solely to the extent necessary to keep such registration statements effective and available and not with respect
to any Subsequent Placement)). “Applicable Date” means the earlier of (x) the first date on which the resale by the
Buyers of all the Securities required to be filed on the initial Registration Statement is declared effective by the SEC (and each prospectus
contained therein is available for use on such date) or (y) the first date on which all of the Securities are eligible to be resold by
the Buyers pursuant to Rule 144 (or, if either (x) the Company fails for any reason to satisfy the requirements of Rule 144(c)(1), including,
without limitation, the failure to satisfy the current public information requirement under Rule 144(c) or (y) the Company has ever been
an issuer described in Rule 144(i)(1)(i) or becomes such an issuer in the future, and the Company shall fail to satisfy any condition
set forth in Rule 144(i)(2) (a “Current Public Information Failure”) has occurred and is continuing, such later date
after which the Company has cured such Current Public Information Failure).
(k) Additional
Issuance of Securities. So long as any Buyer beneficially owns any Securities, the Company will not, without the prior written consent
of the Required Holders, issue any Preferred Shares (other than to the Buyers as contemplated hereby) and the Company shall not issue
any other securities that would cause a breach or default under the Certificate of Designations. The Company agrees that for the period
commencing on the date hereof and ending on the date immediately following the Applicable Date (provided that such period shall be extended
by the number of calendar days during such period and any extension thereof contemplated by this proviso on which any Registration Statement
is not effective or any prospectus contained therein is not available for use or any Current Public Information Failure exists) (the
“Restricted Period”), neither the Company nor any of its Subsidiaries shall directly or indirectly issue, offer, sell,
grant any option or right to purchase, or otherwise dispose of (or announce any issuance, offer, sale, grant of any option or right to
purchase or other disposition of) any equity security or any equity-linked or related security (including, without limitation, any “equity
security” (as that term is defined under Rule 405 promulgated under the 1933 Act), any Convertible Securities (as defined below),
any debt, any preferred stock or any purchase rights) (any such issuance, offer, sale, grant, disposition or announcement (whether occurring
during the Restricted Period or at any time thereafter) is referred to as a “Subsequent Placement”). Notwithstanding
the foregoing, this Section 4(k) shall not apply in respect of the issuance of Excluded Securities (as defined in the Certificate of
Designations. “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. “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.
(l) Reservation
of Shares. So long as any of the Preferred Shares 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 200% of 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 Alternate Conversion Price then in effect, and (y) any such conversion shall not take into account any limitations on the conversion
of the Preferred Shares set forth in the Certificate of Designations) (collectively, the “Required Reserve Amount”);
provided that at no time shall the number of shares of Common Stock reserved pursuant to this Section 4(l) be reduced other than proportionally
in connection with any conversion, exercise and/or redemption, as applicable of Preferred Shares. If at any time the number of shares
of Common Stock authorized and reserved for issuance is not sufficient to meet the Required Reserve Amount, the Company will promptly
take all corporate action necessary to authorize and reserve a sufficient number of shares, including, without limitation, calling a
special meeting of stockholders to authorize additional shares to meet the Company’s obligations pursuant to the Transaction Documents,
in the case of an insufficient number of authorized shares, obtain stockholder approval of an increase in such authorized number of shares,
and voting the management shares of the Company in favor of an increase in the authorized shares of the Company to ensure that the number
of authorized shares is sufficient to meet the Required Reserve Amount.
(m) Conduct
of Business. The business of the Company and its Subsidiaries shall not be conducted in violation of any law, ordinance or regulation
of any Governmental Entity, except where such violations would not reasonably be expected to result, either individually or in the aggregate,
in a Material Adverse Effect.
(n) Other
Preferred Shares; Variable Securities. Except as set forth on Schedule 4(n), until no Preferred Shares remain outstanding, the Company
and each Subsidiary shall be prohibited from effecting or entering into an agreement to effect any Subsequent Placement involving a Variable
Rate Transaction. “Variable Rate Transaction” means a transaction in which the Company or any Subsidiary (i) issues
or sells any Convertible Securities either (A) at a conversion, exercise or exchange rate or other price that is based upon and/or varies
with the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such Convertible Securities,
or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of
such Convertible Securities or upon the occurrence of specified or contingent events directly or indirectly related to the business of
the Company or the market for the Common Stock, other than pursuant to a customary “weighted average” anti-dilution provision
or (ii) enters into any agreement (including, without limitation, an equity line of credit or an “at-the-market” offering)
whereby the Company or any Subsidiary may sell securities at a future determined price (other than standard and customary “preemptive”
or “participation” rights). Each Buyer shall be entitled to obtain injunctive relief against the Company and its Subsidiaries
to preclude any such issuance, which remedy shall be in addition to any right to collect damages.
(o) Participation
Right. At any time on or prior to the ninetieth (90th) day after the Closing Date, neither the Company nor any of its
Subsidiaries shall, directly or indirectly, effect any Subsequent Placement unless the Company shall have first complied with this Section
4(o). The Company acknowledges and agrees that the right set forth in this Section 4(o) is a right granted by the Company, separately,
to each Buyer.
(i) At
least three (3) Trading Days prior to any proposed or intended Subsequent Placement, the Company shall deliver to each Buyer a written
notice (each such notice, a “Pre-Notice”), which Pre-Notice shall not contain any information (including, without
limitation, material, non-public information) other than: (A) if the proposed Offer Notice (as defined below) constitutes or contains
material, non-public information, a statement asking whether the Buyer is willing to accept material non-public information or (B) if
the proposed Offer Notice does not constitute or contain material, non-public information, (x) a statement that the Company proposes
or intends to effect a Subsequent Placement, (y) a statement that the statement in clause (x) above does not constitute material, non-public
information and (z) a statement informing such Buyer that it is entitled to receive an Offer Notice (as defined below) with respect to
such Subsequent Placement upon its written request. Upon the written request of a Buyer within three (3) Trading Days after the Company’s
delivery to such Buyer of such Pre-Notice, and only upon a written request by such Buyer, the Company shall promptly, but no later than
one (1) Trading Day after such request, deliver to such Buyer an irrevocable written notice (the “Offer Notice”) of
any proposed or intended issuance or sale or exchange (the “Offer”) of the securities being offered (the “Offered
Securities”) in a Subsequent Placement, which Offer Notice shall (A) identify and describe the Offered Securities, (B) describe
the price and other terms upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to
be issued, sold or exchanged, (C) identify the Persons (if known) to which or with which the Offered Securities are to be offered, issued,
sold or exchanged and (D) offer to issue and sell to or exchange with such Buyer in accordance with the terms of the Offer such Buyer’s
pro rata portion of 25% of the Offered Securities, provided that the number of Offered Securities which such Buyer shall have the right
to subscribe for under this Section 4(o) shall be (x) based on such Buyer’s pro rata portion of the aggregate number of the Preferred
Shares purchased hereunder by all Buyers (the “Basic Amount”), and (y) with respect to each Buyer that elects to purchase
its Basic Amount, any additional portion of the Offered Securities attributable to the Basic Amounts of other Buyers as such Buyer shall
indicate it will purchase or acquire should the other Buyers subscribe for less than their Basic Amounts (the “Undersubscription
Amount”), which process shall be repeated until each Buyer shall have an opportunity to subscribe for any remaining Undersubscription
Amount. “Trading Day” means a day on which the Principal Market is open for trading.
(ii) To
accept an Offer, in whole or in part, such Buyer must deliver a written notice to the Company prior to the end of the third (3rd)
Business Day after such Buyer’s receipt of the Offer Notice (the “Offer Period”), setting forth the portion
of such Buyer’s Basic Amount that such Buyer elects to purchase and, if such Buyer shall elect to purchase all of its Basic Amount,
the Undersubscription Amount, if any, that such Buyer elects to purchase (in either case, the “Notice of Acceptance”).
If the Basic Amounts subscribed for by all Buyers are less than the total of all of the Basic Amounts, then each Buyer who has set forth
an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Basic Amounts subscribed for,
the Undersubscription Amount it has subscribed for; provided, however, if the Undersubscription Amounts subscribed for exceed the difference
between the total of all the Basic Amounts and the Basic Amounts subscribed for (the “Available Undersubscription Amount”),
each Buyer who has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription
Amount as the Basic Amount of such Buyer bears to the total Basic Amounts of all Buyers that have subscribed for Undersubscription Amounts,
subject to rounding by the Company to the extent it deems reasonably necessary. Notwithstanding the foregoing, if the Company desires
to modify or amend the terms and conditions of the Offer prior to the expiration of the Offer Period, the Company may deliver to each
Buyer a new Offer Notice and the Offer Period shall expire on the third (3rd) Business Day after such Buyer’s receipt
of such new Offer Notice.
(iii) The
Company shall have three (3) Business Days from the expiration of the Offer Period above (A) to offer, issue, sell or exchange all or
any part of such Offered Securities as to which a Notice of Acceptance has not been given by a Buyer (the “Refused Securities”)
pursuant to a definitive agreement(s) (the “Subsequent Placement Agreement”), but only to the offerees described in
the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and interest
rates) that are not more favorable to the acquiring Person or Persons or less favorable to the Company than those set forth in the Offer
Notice and (B) to publicly announce (x) the execution of such Subsequent Placement Agreement, and (y) either (I) the consummation of
the transactions contemplated by such Subsequent Placement Agreement or (II) the termination of such Subsequent Placement Agreement,
which shall be filed with the SEC on a Current Report on Form 8-K with such Subsequent Placement Agreement and any documents contemplated
therein filed as exhibits thereto.
(iv) In
the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms
specified in Section 4(o)(iii) above), then each Buyer may, at its sole option and in its sole discretion, withdraw its Notice of Acceptance
or reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than
the number or amount of the Offered Securities that such Buyer elected to purchase pursuant to Section 4(o)(ii) above multiplied by a
fraction, (i) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell
or exchange (including Offered Securities to be issued or sold to Buyers pursuant to this Section 4(o) prior to such reduction) and (ii)
the denominator of which shall be the original amount of the Offered Securities. In the event that any Buyer so elects to reduce the
number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange more than the
reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Buyers in accordance
with Section 4(o)(i) above.
(v) Upon
the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Buyer shall acquire from the Company,
and the Company shall issue to such Buyer, the number or amount of Offered Securities specified in its Notice of Acceptance, as reduced
pursuant to Section 4(o)(iv) above if such Buyer has so elected, upon the terms and conditions specified in the Offer. The purchase by
such Buyer of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and such Buyer
of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to such Buyer and
its counsel.
(vi) Any
Offered Securities not acquired by a Buyer or other Persons in accordance with this Section 4(o) may not be issued, sold or exchanged
until they are again offered to such Buyer under the procedures specified in this Agreement.
(vii) The
Company and each Buyer agree that if any Buyer elects to participate in the Offer, neither the Subsequent Placement Agreement with respect
to such Offer nor any other transaction documents related thereto (collectively, the “Subsequent Placement Documents”)
shall include any term or provision whereby such Buyer shall be required to agree to any restrictions on trading as to any securities
of the Company or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in
connection with, any agreement previously entered into with the Company or any instrument received from the Company.
(viii) Notwithstanding
anything to the contrary in this Section 4(o) and unless otherwise agreed to by such Buyer, the Company shall either confirm in writing
to such Buyer that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose its intention
to issue the Offered Securities, in either case, in such a manner such that such Buyer will not be in possession of any material, non-public
information, by the third (3rd) Business Day following delivery of the Offer Notice. If by such third (3rd) Business
Day, no public disclosure regarding a transaction with respect to the Offered Securities has been made, and no notice regarding the abandonment
of such transaction has been received by such Buyer, such transaction shall be deemed to have been abandoned and such Buyer shall not
be in possession of any material, non-public information with respect to the Company or any of its Subsidiaries. Should the Company decide
to pursue such transaction with respect to the Offered Securities, the Company shall provide such Buyer with another Offer Notice and
such Buyer will again have the right of participation set forth in this Section 4(o). The Company shall not be permitted to deliver more
than one such Offer Notice to such Buyer in any sixty (60) day period, except as expressly contemplated by the last sentence of Section
4(o)(ii).
(ix) The
restrictions contained in this Section 4(o) shall not apply in connection with the issuance of any Excluded Securities. The Company shall
not circumvent the provisions of this Section 4(o) by providing terms or conditions to one Buyer that are not provided to all.
(p) Dilutive
Issuances. For so long as any Preferred Shares remain outstanding, the Company shall not, in any manner, enter into or affect any
Dilutive Issuance (as defined in the Certificate of Designations) if the effect of such Dilutive Issuance is to cause the Company to
be required to issue upon conversion of any Preferred Shares any shares of Common Stock in excess of that number of shares of Common
Stock which the Company may issue upon conversion of the Preferred Shares without breaching the Company’s obligations under the
rules or regulations of the Principal Market.
(q) 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.
(r) Restriction
on Redemption and Cash Dividends. So long as any Preferred Shares are outstanding, the Company shall not, directly or indirectly,
redeem, or declare or pay any cash dividend or distribution on, any securities of the Company without the prior express written consent
of the Buyers (other than as required by the Certificate of Designations).
(s) Corporate
Existence. So long as any Buyer beneficially owns any Preferred Shares, 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.
(t) Stock
Splits. Until the Preferred Shares are no longer outstanding, the Company shall not effect any stock combination, reverse stock split
or other similar transaction (or make any public announcement or disclosure with respect to any of the foregoing) without the prior written
consent of the Required Holders (as defined below).
(u) Conversion
Procedures. 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 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 convert their Preferred Shares.
The Company shall honor conversions of the Preferred Shares and shall deliver the Conversion Shares in accordance with the terms, conditions
and time periods set forth in the Certificate of Designations. Without limiting the preceding sentences, no ink-original Conversion Notice
shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Conversion Notice form be required
in order to convert the Preferred Shares.
(v) 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.
(w) 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.
(x) Integration.
None of the Company, any of its affiliates (as defined in Rule 501(b) under the 1933 Act), or any person acting on behalf of the Company
or such affiliate will sell, offer for sale, or solicit offers to buy or otherwise negotiate in respect of any security (as defined in
the 1933 Act) which will be integrated with the sale of the Securities in a manner which would require the registration of the Securities
under the 1933 Act or require stockholder approval under the rules and regulations of the Principal Market and the Company will take
all action that is appropriate or necessary to assure that its offerings of other securities will not be integrated for purposes of the
1933 Act or the rules and regulations of the Principal Market, with the issuance of Securities contemplated hereby.
(y) 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.
(z) Stockholder
Approval. If required by the applicable rules and regulations of the Eligible Market (or any successor entity), the Company shall
hold a special meeting of stockholders (which may also be at the annual meeting of stockholders) as soon as practicable, but in no event
later than seventy-five (75) days following the date on which two (2) conversions of Preferred Shares by the Buyers would require approval
of the Company’s stockholders pursuant to the rules and regulations of the Eligible Market, for the purpose of obtaining the Stockholder
Approval (as defined below); provided, however, such date shall be increased by an additional thirty (30) calendar days in the event
that the Company receives comments to its proxy statement from the SEC, with the recommendation of the Company’s board of directors
that such proposal be approved, and the Company shall solicit proxies from its stockholders in connection therewith in the same manner
as all other management proposals in such proxy statement and all management-appointed proxyholders shall vote their proxies in favor
of such proposal. If the Company does not obtain Stockholder Approval at the first meeting, the Company shall call a meeting every three
(3) months thereafter to seek Stockholder Approval until the date the Stockholder Approval is obtained. Prior to any such stockholder
meeting, the Company shall timely file a proxy statement pursuant to Section 14(a) of the 1934 Act in compliance in all material respects
with the provisions of its Bylaws and all applicable law. The Company shall not be required to issue any Conversion Shares if such issuance
would cause the Company to be required to obtain the Stockholder Approval either pursuant to the rules and regulations of the Trading
Market or otherwise until such Stockholder Approval has been obtained. As used herein, “Stockholder Approval” means
the approval of such number of the holders of the outstanding shares of the Company’s voting securities as required by its Bylaws
and the Nevada Revised Statutes, to ratify and approve all of the transactions contemplated by the Transaction Documents, including the
issuance of all of the Securities, all as may be required by the applicable rules and regulations of the Eligible Market (or any successor
entity).
(aa) Books
and Records. Prior to the Closing, the Company will keep proper books of record and account, in which full and correct entries shall
be made of all financial transactions and the asset and business of the Company and its Subsidiaries in accordance with GAAP.
(bb) [Reserved.]
(cc) Prohibited
Short Sales. Each Buyer, severally and not jointly, covenants and agrees that neither it, nor any of its Affiliates acting on its
behalf or pursuant to any understanding with it, will execute (i) any Short Sales of the Common Stock or (ii) any hedging transaction
that establishes a net short position with respect to the Common Stock, in each case during the period commencing with the execution
of this Agreement and ending on the date no Preferred Shares remain outstanding; provided, that this provision shall not operate to restrict
any Buyer’s trading under any prior securities purchase agreement containing contractual rights that explicitly protects such trading
in respect of the previously issued securities. “Short Sales” means all “short
sales” as defined in Rule 200 of Regulation SHO under the Exchange Act.
(dd) Leak-Out.
On any Trading Day during which the closing price of the Common Stock on the prior Trading Day was less than $4.00 per share, each Buyer
will be limited to total sales of Common Stock equal to the greater of the average of: (a) $10,000 per Trading Day each month, and (b)
an amount equal to 10% of greater of the (x) average daily trading volume of the Common Stock as reported by Bloomberg, LP per calendar
month or (y) trading volume of the Common Stock as reported by Bloomberg, LP on such Trading Day.
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 in which the Company shall record the name and address of the Person
in whose name the Preferred Shares have been issued (including the name and address of each transferee), the aggregate number of Preferred
Shares held by such Person, and the number of Conversion Shares issuable pursuant to the terms of the Preferred Shares. 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 in such amounts as specified from time to
time by each Buyer to the Company upon conversion of the Preferred Shares. 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 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. 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 the date hereof. 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.
The Securities shall be issued free of legends. 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.
(d) [Reserved.]
(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 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 Section 5(b) (the “Required
Delivery Date”), either (I) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program,
a certificate for the number of Conversion Shares to which such Buyer is entitled and register such Conversion Shares on the Company’s
share register or, if the Transfer Agent is participating in the DTC Fast Automated Securities Transfer Program, to credit the balance
account of such Buyer or such Buyer’s designee with DTC for such number of Conversion Shares or (II) if the Registration Statement
covering the resale of the Conversion Shares (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 two (2) Business Days (x) so notify such Buyer and (y) deliver the
Conversion Shares electronically without any restrictive legend by crediting such aggregate number of Conversion Shares 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 date such Conversion Shares are actually delivered without restrictive legend to such
Buyer or such Buyer’s designee with DTC, as applicable, 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 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 the DTC Fast Automated Securities Transfer Program, 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 the DTC Fast Automated Securities Transfer Program, 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 is entitled or (II) a Notice Failure occurs, and if on
or after such Trading Day such Buyer purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction
of a sale by such Buyer of shares of Common Stock 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 and other out-of-pocket
expenses, if any, for the shares of Common Stock so purchased) (the “Buy-In Price”), at which point the Company’s
obligation to 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 that the Company was required to deliver to such Buyer
by the Required Delivery Date multiplied by (B) the lowest closing sale price of the Common Stock on any Trading Day during the period
commencing on the date of the delivery by such Buyer to the Company of the applicable Conversion Shares 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, as applicable, with respect to the Preferred Shares, as applicable, then held by such Buyer.
(f) FAST
Compliance. While any Preferred Shares remain outstanding, the Company shall maintain a transfer agent that participates in the DTC
Fast Automated Securities Transfer Program.
6.
CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.
(a) The
obligation of the Company hereunder to issue and sell the Preferred Shares to each Buyer at the Closing is subject to the satisfaction,
at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Company’s sole benefit
and may be waived by the Company at any time in its sole discretion by providing each Buyer with prior written notice thereof:
(i) Such
Buyer shall have executed each of the other Transaction Documents to which it is a party and delivered the same to the Company.
(ii) Such
Buyer and each other Buyer shall have delivered to the Company the Purchase Price (less, in the case of any Buyer, the amounts withheld
pursuant to Section 4(g)) for the Preferred Shares being purchased by such Buyer at the Closing by wire transfer of immediately available
funds in accordance with the Flow of Funds Letter.
(iii) The
representations and warranties of such Buyer shall be true and correct in all material respects as of the date when made and as of the
Closing Date as though originally made at that time (except for representations and warranties that speak as of a specific date, which
shall be true and correct as of such specific date), and such Buyer shall have performed, satisfied and complied in all material respects
with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by such Buyer at
or prior to the Closing Date.
7.
CONDITIONS TO EACH BUYER’S OBLIGATION TO PURCHASE.
(a) The
obligation of each Buyer hereunder to purchase its Preferred Shares 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 such aggregate number of Preferred Shares as set forth across from such Buyer’s
name in column (3) of the Schedule of Buyers, in each case, as being purchased by such Buyer at the Closing pursuant to this Agreement.
(ii) 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 attached hereto as Exhibit
B.
(iii) Such
Buyer shall have received the opinion of Sichenzia Ross Ference LLP, the Company’s counsel, dated as of the Closing Date, in the
form attached hereto as Exhibit C.
(iv) The
Company shall have delivered to such Buyer a copy of the Irrevocable Transfer Agent Instructions, in the form attached hereto as Exhibit
D which instructions shall have been delivered to and acknowledged in writing by the Company’s transfer agent.
(v) The
Company shall have delivered to such Buyer a certificate evidencing the formation and good standing of the Company in such entity’s
jurisdiction of formation issued by the Secretary of State (or comparable office) of such jurisdiction of formation as of a date within
ten (10) days of the Closing Date.
(vi) The
Company shall have delivered to such Buyer a certified copy of the Articles of Incorporation and the Certificate of Designations as certified
by the Nevada Secretary of State within ten (10) days of the Closing Date.
(vii) The
Company shall have delivered to such Buyer a certificate, in the form attached hereto as Exhibit E, 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, which includes an acknowledgement of Section 3(i), in the form attached hereto as Exhibit F, (ii) the
Articles of Incorporation of the Company and (iii) the Bylaws of the Company, each as in effect at the Closing.
(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) 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.
(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.
(xiv) The
Company shall have delivered to such Buyer the Prospectus and Prospectus Supplement (which may be delivered in accordance with Rule 172
under the 1933 Act).
(xv) The
Company shall have delivered to such Buyer one or more voting agreements in the form of Exhibit
G hereof (collectively, the “Voting Agreements”), by and between the Company and the stockholders listed on
Schedule 7(a)(xv) attached hereto (the “Stockholders”) and the Stockholders shall have duly executed and delivered to the
Buyer each of the Voting Agreements.
(xvi) Such
Buyer shall have received a letter on the letterhead of the Company, duly executed by the Chief Executive Officer of the Company, setting
forth the wire amounts of each Buyer and the wire transfer instructions of the Company (the “Flow of Funds Letter”).
(xvii) The
Company and its Subsidiaries shall have delivered to such Buyer such other documents, instruments or certificates relating to the transactions
contemplated by this Agreement as such Buyer or its counsel may reasonably request.
8.
TERMINATION.
In
the event that the Closing shall not have occurred with respect to a Buyer within five (5) Business Days of the date all of the conditions
specified in Section 7 have been satisfied or waived, then such Buyer shall have the right to terminate its obligations under this Agreement
with respect to itself at any time on or after the close of business on such date without liability of such Buyer to any other party;
provided, however, (i) the right to terminate this Agreement under this Section 8 shall not be available to such Buyer if the failure
of the transactions contemplated by this Agreement to have been consummated by such date is the result of such Buyer’s breach of
this Agreement and (ii) the abandonment of the sale and purchase of the Preferred Shares shall be applicable only to such Buyer providing
such written notice, provided further that no such termination shall affect any obligation of the Company under this Agreement to reimburse
such Buyer for the expenses described in Section 4(g) above. Nothing contained in this Section 8 shall be deemed to release any party
from any liability for any breach by such party of the terms and provisions of this Agreement or the other Transaction Documents or to
impair the right of any party to compel specific performance by any other party of its obligations under this Agreement or the other
Transaction Documents.
9.
MISCELLANEOUS.
(a) Governing
Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this Agreement
shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision
or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts
sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or under
any of the other Transaction Documents or with any transaction contemplated hereby or thereby, and hereby irrevocably waives, and agrees
not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper.
Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any
right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude any Buyer from
bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations,
as applicable, to such Buyer or to enforce a judgment or other court ruling in favor of such Buyer. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER
TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY OR THEREBY.
(b) Counterparts.
This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and delivered to the other party. In the event that any signature
is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an executed signature
page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed)
with the same force and effect as if such signature page were an original thereof.
(c) Headings;
Gender. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation
of, this Agreement. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine,
neuter, singular and plural forms thereof. The terms “including,” “includes,” “include” and words
of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,”
“hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the provision in
which they are found.
(d) Severability;
Maximum Payment Amounts. If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable
by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended
to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall
not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express,
without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity
or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations
of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor
in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of
which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s). Notwithstanding anything to the contrary
contained in this Agreement or any other Transaction Document (and without implication that the following is required or applicable),
it is the intention of the parties that in no event shall amounts and value paid by the Company and/or any of its Subsidiaries (as the
case may be), or payable to or received by any of the Buyers, under the Transaction Documents (including without limitation, any amounts
that would be characterized as “interest” under applicable law) exceed amounts permitted under any applicable law. Accordingly,
if any obligation to pay, payment made to any Buyer, or collection by any Buyer pursuant the Transaction Documents is finally judicially
determined to be contrary to any such applicable law, such obligation to pay, payment or collection shall be deemed to have been made
by mutual mistake of such Buyer, the Company and its Subsidiaries and such amount shall be deemed to have been adjusted with retroactive
effect to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by the applicable law. Such adjustment
shall be effected, to the extent necessary, by reducing or refunding, at the option of such Buyer, the amount of interest or any other
amounts which would constitute unlawful amounts required to be paid or actually paid to such Buyer under the Transaction Documents. For
greater certainty, to the extent that any interest, charges, fees, expenses or other amounts required to be paid to or received by such
Buyer under any of the Transaction Documents or related thereto are held to be within the meaning of “interest” or another
applicable term to otherwise be violative of applicable law, such amounts shall be pro-rated over the period of time to which they relate.
(e) Entire
Agreement; Amendments. This Agreement, the other Transaction Documents and the schedules and exhibits attached hereto and thereto
and the instruments referenced herein and therein supersede all other prior oral or written agreements between the Buyers, the Company,
its Subsidiaries, their affiliates and Persons acting on their behalf, including, without limitation, any transactions by any Buyer with
respect to Common Stock or the Securities, and the other matters contained herein and therein, and this Agreement, the other Transaction
Documents, the schedules and exhibits attached hereto and thereto and the instruments referenced herein and therein contain the entire
understanding of the parties solely with respect to the matters covered herein and therein; provided, however, nothing contained in this
Agreement or any other Transaction Document shall (or shall be deemed to) (i) have any effect on any agreements any Buyer has entered
into with, or any instruments any Buyer has received from, the Company or any of its Subsidiaries prior to the date hereof with respect
to any prior investment made by such Buyer in the Company or (ii) waive, alter, modify or amend in any respect any obligations of the
Company or any of its Subsidiaries, or any rights of or benefits to any Buyer or any other Person, in any agreement entered into prior
to the date hereof between or among the Company and/or any of its Subsidiaries and any Buyer, or any instruments any Buyer received from
the Company and/or any of its Subsidiaries prior to the date hereof, and all such agreements and instruments shall continue in full force
and effect. Except as specifically set forth herein or therein, neither the Company nor any Buyer makes any representation, warranty,
covenant or undertaking with respect to such matters. For clarification purposes, the Recitals are part of this Agreement. No provision
of this Agreement may be amended other than by an instrument in writing signed by the Company and the Required Holders (as defined below),
and any amendment to any provision of this Agreement made in conformity with the provisions of this Section 9(e) shall be binding on
all Buyers and holders of Securities, as applicable; provided that no such amendment shall be effective to the extent that it (A) applies
to less than all of the holders of the Securities then outstanding or (B) imposes any obligation or liability on any Buyer without such
Buyer’s prior written consent (which may be granted or withheld in such Buyer’s sole discretion). No waiver shall be effective
unless it is in writing and signed by an authorized representative of the waiving party, provided that the Required Holders may waive
any provision of this Agreement, and any waiver of any provision of this Agreement made in conformity with the provisions of this Section
9(e) shall be binding on all Buyers and holders of Securities, as applicable, provided that no such waiver shall be effective to the
extent that it (1) applies to less than all of the holders of the Securities then outstanding (unless a party gives a waiver as to itself
only) or (2) imposes any obligation or liability on any Buyer without such Buyer’s prior written consent (which may be granted
or withheld in such Buyer’s sole discretion). No consideration (other than reimbursement of legal fees) shall be offered or paid
to any Person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same consideration
also is offered to all of the parties to the Transaction Documents, all holders of the Preferred Shares. From the date hereof and while
any Preferred Shares are outstanding, the Company shall not be permitted to receive any consideration from a Buyer or a holder of Preferred
Shares that is not otherwise contemplated by the Transaction Documents in order to, directly or indirectly, induce the Company or any
Subsidiary (i) to treat such Buyer or holder of Preferred Shares in a manner that is more favorable than to other similarly situated
Buyers or holders of Preferred Shares, as applicable, or (ii) to treat any Buyer(s) or holder(s) of Preferred Shares in a manner that
is less favorable than the Buyer or holder of Preferred Shares that is paying such consideration; provided, however, that the determination
of whether a Buyer has been treated more or less favorably than another Buyer shall disregard any securities of the Company purchased
or sold by any Buyer. The Company has not, directly or indirectly, made any agreements with any Buyers relating to the terms or conditions
of the transactions contemplated by the Transaction Documents except as set forth in the Transaction Documents. Without limiting the
foregoing, the Company confirms that, except as set forth in this Agreement, no Buyer has made any commitment or promise or has any other
obligation to provide any financing to the Company, any Subsidiary or otherwise. As a material inducement for each Buyer to enter into
this Agreement, the Company expressly acknowledges and agrees that (x) no due diligence or other investigation or inquiry conducted by
a Buyer, any of its advisors or any of its representatives shall affect such Buyer’s right to rely on, or shall modify or qualify
in any manner or be an exception to any of, the Company’s representations and warranties contained in this Agreement or any other
Transaction Document and (y) unless a provision of this Agreement or any other Transaction Document is expressly preceded by the phrase
“except as disclosed in the SEC Documents,” nothing contained in any of the SEC Documents shall affect such Buyer’s
right to rely on, or shall modify or qualify in any manner or be an exception to any of, the Company’s representations and warranties
contained in this Agreement or any other Transaction Document. “Required Holders” means (I) prior to the Closing Date,
each Buyer entitled to purchase Preferred Shares at the Closing and (II) on or after the Closing Date, holders of a majority of the Securities
as of such time (excluding any Securities held by the Company or any of its Subsidiaries as of such time) issued or issuable hereunder
or pursuant to the Certificate of Designations (or the Buyers, with respect to any waiver or amendment of Section 4(o)).
(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 facsimile
(provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party) or 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 addresses, facsimile numbers and e-mail addresses for such communications
shall be:
If
to the Company:
Biotricity
Inc.
203
Redwood Parkway, Suite 600
Redwood
City, CA 94065
Telephone:
(408) 515-8472
Attention:
Waqaas Al-Siddiq
E-Mail:
walsiddiq@biotricity.com
With
a copy (for informational purposes only) to:
Sichenzia
Ross Ference LLP
1185
Avenue of the Americas, 31st Floor
New
York, NY 10036
Telephone:
(212) 930-9700
Facsimile:
(212) 930-9725
Attention:
Gregory Sichenzia, Esq.
E-Mail:
gsichenzia@srf.law
If
to a Buyer, to its address, e-mail address and facsimile number set forth on the Schedule of Buyers, with copies to such Buyer’s
representatives as set forth on the Schedule of Buyers,
with
a copy (for informational purposes only) to:
Sullivan
& Worcester LLP
1633
Broadway, Suite 3200
New
York, NY 10019
Telephone:
(212) 660-3060
Facsimile:
(212) 660-3001
Attention:
David Danovitch, Esq.
E-mail:
ddanovitch@sullivanlaw.com
or
to such other address, e-mail address and/or facsimile number and/or to the attention of such other Person as the recipient party has
specified by written notice given to each other party five (5) days prior to the effectiveness of such change, provided that Sullivan
& Worcester LLP shall only be provided copies of notices sent to the lead Buyer. Written confirmation of receipt (A) given by the
recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s
facsimile machine or e-mail containing the time, date, recipient facsimile number and, with respect to each facsimile transmission, an
image of the first page of such transmission or (C) provided by an overnight courier service shall be rebuttable evidence of personal
service, receipt by facsimile 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. The Company shall not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Required Holders, including, without limitation, by way of a Fundamental Transaction (as defined
in the 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(i), or (D)
the status of such Buyer or holder of the Securities either as an investor in the Company pursuant to the transactions contemplated by
the Transaction Documents or as a party to this Agreement (including, without limitation, as a party in interest or otherwise in any
action or proceeding for injunctive or other equitable relief). To the extent that the foregoing undertaking by the Company may be unenforceable
for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities
which is permissible under applicable law.
(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 as, and the Company acknowledges that the Buyers do not
so constitute, a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption that the
Buyers are in any way acting in concert or as a group or entity, and the Company shall not assert any such claim with respect to such
obligations or the transactions contemplated by the Transaction Documents or any matters, and the Company acknowledges that the Buyers
are not acting in concert or as a group, and the Company shall not assert any such claim, with respect to such obligations or the transactions
contemplated by the Transaction Documents. The decision of each Buyer to purchase Securities pursuant to the Transaction Documents has
been made by such Buyer independently of any other Buyer. Each Buyer acknowledges that no other Buyer has acted as agent for such Buyer
in connection with such Buyer making its investment hereunder and that no other Buyer will be acting as agent of such Buyer in connection
with monitoring such Buyer’s investment in the Securities or enforcing its rights under the Transaction Documents. The Company
and each Buyer confirms that each Buyer has independently participated with the Company and its Subsidiaries in the negotiation of the
transaction contemplated hereby with the advice of its own counsel and advisors. Each Buyer shall be entitled to independently protect
and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents,
and it shall not be necessary for any other Buyer to be joined as an additional party in any proceeding for such purpose. The use of
a single agreement to effectuate the purchase and sale of the Securities contemplated hereby was solely in the control of the Company,
not the action or decision of any Buyer, and was done solely for the convenience of the Company and its Subsidiaries and not because
it was required or requested to do so by any Buyer. It is expressly understood and agreed that each provision contained in this Agreement
and in each other Transaction Document is between the Company, each Subsidiary and a Buyer, solely, and not between the Company, its
Subsidiaries and the Buyers collectively and not between and among the Buyers.
[signature
pages follow]
IN
WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as
of the date first written above.
|
COMPANY: |
|
BIOTRICITY
INC. |
|
|
|
|
By: |
|
|
Name: |
|
|
Title: |
|
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.
SCHEDULE
OF BUYERS
(1) |
|
(2) |
|
(3) |
|
(4) |
Buyer |
|
Address
|
|
Aggregate
Number
of
Preferred
Shares |
|
Purchase
Price |
|
|
|
|
|
|
|
|
|
Telephone:
Facsimile:
Attention: |
|
220 |
|
$2,000,000 |
TOTAL |
|
|
|
220 |
|
$2,000,000 |
DISCLOSURE
SCHEDULES
EXHIBIT
A
CERTIFICATE
OF DESIGNATIONS
EXHIBIT
B
FORM
OF COMPANY CERTIFICATE
EXHIBIT
C
FORM
OF LEGAL OPINION
EXHIBIT
d
IRREVOCABLE
TRANSFER AGENT INSTRUCTIONS
EXHIBIT
E
FORM
OF BUYER CERTIFICATE
EXHIBIT
F
FORM
OF BOARD RESOLUTION
EXHIBIT
G
FORM
OF VOTING AGREEMENT
Exhibit 10.2
VOTING AGREEMENT
VOTING AGREEMENT, dated
as of September 19, 2023 (this “Agreement”),
by and among Biotricity Inc., a Nevada corporation, (the “Company”),
(the “Investor”),
and the stockholders whose names appear on the signature pages hereto (each, a “Stockholder”
and collectively, the “Stockholders”).
WHEREAS, the Company and the Investor
have entered into a Securities Purchase Agreement, dated as of September 18, 2023 (the “Securities Purchase Agreement”),
pursuant to which, among other things, the Company has agreed to issue and sell to the Investor and the Investor has agreed to purchase
certain preferred stock of the Company (the “Preferred Stock”), which will be convertible into shares of the Company’s
common stock, $0.001 par value per share (the “Common Stock”, as converted, the “Conversion Shares”),
in accordance with the terms of the Preferred Stock;
WHEREAS, as of the date hereof,
the Stockholders beneficially own shares of Common Stock (the “Stockholder Shares”), which represent approximately
9.5% of the total issued and outstanding Common Stock of the Company; and
WHEREAS, as a condition to the willingness
of the Investor to enter into the Securities Purchase Agreement and to consummate the transactions contemplated thereby (collectively,
the “Transaction”), the Investor has required that the Stockholders agree, and in order to induce the Investor to enter
into the Securities Purchase Agreement, the Stockholders have agreed, to enter into this Agreement with respect to all the Stockholder
Shares now owned and which may hereafter be acquired by the Stockholders and any other securities of the Company (the “Other
Securities”, and together with the Stockholder Shares, the “Stockholder Securities”), if any, which Stockholders
are currently entitled to vote, or after the date hereof becomes entitled to vote, at any meeting of the stockholders of the Company.
NOW, THEREFORE, in consideration
of the foregoing and the mutual covenants and agreements contained herein, and intending to be legally bound hereby, the parties hereto
hereby agree as follows:
ARTICLE I
VOTING AGREEMENT OF THE STOCKHOLDERS
SECTION 1.01. Voting Agreement.
Subject to the last sentence of this Section 1.01, each of the Stockholders hereby agrees that at any meeting of the stockholders of the
Company, however called, and in any action by written consent of the Company’s stockholders, the Stockholders shall vote the Stockholder
Securities, which Stockholders are currently entitled to vote, or after the date hereof becomes entitled to vote, at any meeting of the
stockholders of the Company: (a) in favor of the Stockholder Approval (as defined in the Securities Purchase Agreement) as described in
Section 4(z) of the Securities Purchase Agreement; and (b) against any proposal or any other corporate action or agreement that would
result in a breach of any covenant, representation or warranty or any other obligation or agreement of the Company under the Transaction
Documents (as defined in the Securities Purchase Agreement) or which could result in any of the conditions to the Company’s obligations
under the Transaction Documents not being fulfilled. The Stockholders acknowledge receipt and review of a copy of the Securities Purchase
Agreement and the other Transaction Documents. The obligations of the Stockholders under this Section 1.01 shall terminate immediately
following the occurrence of the Stockholder Approval.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
Each Stockholder hereby represents
and warrants, severally but not jointly, to the Company and the Investor as follows:
SECTION 2.01. Authority Relative
to this Agreement. The Stockholder has all requisite power and authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by the Stockholder
and constitutes a legal, valid and binding obligation of the Stockholder, enforceable against the Stockholder in accordance with its terms,
except (a) as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium
or similar laws now or hereafter in effect relating to, or affecting generally, the enforcement of creditors’ and other obligees’
rights and (b) where the remedy of specific performance or other forms of equitable relief may be subject to certain equitable defenses
and principles and to the discretion of the court before which the proceeding may be brought.
SECTION 2.02. No Conflict.
(a) The execution and delivery of this Agreement by the Stockholder does not, and the performance of this Agreement by the Stockholder
shall not, (i) conflict with or violate any federal, state or local law, statute, ordinance, rule, regulation, order, judgment or decree
applicable to the Stockholder or by which the Stockholder Securities owned by the Stockholder are bound or affected or (ii) result in
any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a lien or encumbrance on any
of the Stockholder Securities owned by the Stockholder pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which the Stockholder is a party or by which the Stockholder or the Stockholder
Securities owned by the Stockholder is bound.
(b) The
execution and delivery of this Agreement by the Stockholder does not, and the performance of this Agreement by the Stockholder shall not,
require any consent, approval, authorization or permit of, or filing with or notification to, any governmental entity by the Stockholder.
SECTION 2.03. Title to the Stock.
As of the date hereof, the Stockholder is the owner of that number of shares of Common Stock set forth next to its signature hereto, entitled
to vote, without restriction, on all matters brought before holders of capital stock of the Company. Such shares of Common Stock are all
the securities of the Company owned, either of record or beneficially, by the Stockholder. Such Common Stock is owned free and clear of
all Encumbrances (as defined below). The Stockholder has not appointed or granted any proxy, which appointment or grant is still effective,
with respect to the Common Stock or Other Securities owned by the Stockholder.
ARTICLE III
COVENANTS
SECTION 3.01. No Disposition
or Encumbrance of Stock. Each Stockholder hereby severally but not jointly covenants and agrees that the Stockholder shall not offer
or agree to sell, transfer, tender, assign, hypothecate or otherwise dispose of, grant a proxy or power of attorney with respect to, or
create or permit to exist any security interest, lien, claim, pledge, option, right of first refusal, agreement, limitation on the Stockholder’s
voting rights, charge or other encumbrance of any nature whatsoever (“Encumbrance”) with respect to the Stockholder
Securities, directly or indirectly, or initiate, solicit or encourage any person to take actions which could reasonably be expected to
lead to the occurrence of any of the foregoing.
SECTION 3.02. Company Cooperation.
The Company hereby covenants and agrees that it will not, and each Stockholder irrevocably and unconditionally acknowledges and agrees
that the Company will not (and waives any rights against the Company in relation thereto), recognize any Encumbrance or agreement (other
than this Agreement) on any of the Stockholder Securities subject to this Agreement.
ARTICLE IV
MISCELLANEOUS
SECTION 4.01. Further Assurances.
The Stockholders shall execute and deliver such further documents and instruments and take all further action as may be reasonably necessary
in order to consummate the transactions contemplated hereby.
SECTION 4.02. Specific Performance.
The parties hereto agree that irreparable damage would occur in the event any provision of this Agreement was not performed in accordance
with the terms hereof and that the Investor shall be entitled to specific performance of the terms hereof, in addition to any other remedy
at law or in equity. The Investor shall be entitled to its reasonable attorneys’ fees in any action brought to enforce this Agreement
in which it is the prevailing party.
SECTION 4.03. Entire Agreement.
This Agreement constitutes the entire agreement between the Company and the Stockholders (other than the Securities Purchase Agreement
and the other Transaction Documents) with respect to the subject matter hereof and supersedes all prior agreements and understandings,
both written and oral, among the Company and the Stockholder with respect to the subject matter hereof.
SECTION 4.04. Amendment.
This Agreement may not be amended except by an instrument in writing signed by the parties hereto.
SECTION 4.05. Severability.
If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law, or public policy,
all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal
substance of this Agreement is not affected in any manner materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to modify this Agreement
so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the terms of this
Agreement remain as originally contemplated to the fullest extent possible.
SECTION 4.06. 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.
SECTION 4.07. Governing Law.
All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal
laws of the State of Nevada, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of
Nevada or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Nevada. The
Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the Borough of Manhattan in
the City of New York, New York, 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. The parties consent to the jurisdiction
and venue of the foregoing courts and consent that any process or notice of motion or other application to any of said courts or a judge
thereof may be served inside or outside the State of New York or the Southern District of New York by registered mail, return receipt
requested, directed to the party being served at its address set forth on the signature ages to this Agreement (and service so made shall
be deemed complete three (3) days after the same has been posted as aforesaid) or by personal service or in such other manner as may be
permissible under the rules of said courts. Each of the Company and the Stockholder irrevocably waives, to the fullest extent permitted
by law, any objection which it may now or hereafter have to the laying of the venue of any such suit, action, or proceeding brought in
such a court and any claim that suit, action, or proceeding has been brought in an inconvenient forum. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH
OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
SECTION 4.08. Termination.
This Agreement shall automatically terminate immediately following the occurrence of the Shareholder Approval.
[The remainder of the page is intentionally left blank]
IN WITNESS WHEREOF, the Stockholder
and the Company have duly executed this Voting Agreement as of the date first written above.
|
THE COMPANY: |
|
|
|
BIOTRICITY, INC. |
|
|
|
By: |
|
|
Name: |
Waqaas Al-Siddiq |
|
Title: |
CEO |
|
|
|
|
Address: |
|
|
|
|
THE INVESTOR |
|
|
|
|
By: |
|
|
Name: |
|
|
Title: |
|
|
|
|
|
Address: |
STOCKHOLDERS: |
|
|
|
|
By: |
|
|
Name: |
Waqaas Al-Siddiq |
|
Title: |
an Individual |
|
|
|
|
Shares: |
785,390 |
|
|
|
|
Address: |
|
By: |
|
|
Name: |
John Ayanoglou |
|
Title: |
an Individual |
|
|
|
|
Shares: |
6,945 |
|
|
|
|
Address: |
|
|
|
|
By: |
|
|
Name: |
David A. Rosa |
|
Title: |
an Individual |
|
|
|
|
Shares: |
25,363 |
|
|
|
|
Address: |
|
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