|
|
|
|
|
1.
|
|
NAMES
OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Ibex
Investors LLC
|
|
|
2.
|
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(see
instructions)
(a) ☐
(b) ☒
|
|
|
3.
|
|
SEC
USE ONLY
|
|
|
4.
|
|
SOURCE
OF FUNDS (see instructions)
AF
|
|
|
5.
|
|
CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ☐
|
|
|
6.
|
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Colorado,
USA
|
|
|
|
|
|
|
|
NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
|
|
7.
|
|
SOLE
VOTING POWER
16,245,766
|
|
8.
|
|
SHARED
VOTING POWER
0
|
|
9.
|
|
SOLE
DISPOSITIVE POWER
16,245,766
|
|
10.
|
|
SHARED
DISPOSITIVE POWER
0
|
|
|
|
|
|
11.
|
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
16,245,766
|
|
|
12.
|
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(see
instructions) ☐
|
|
|
13.
|
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.3%
|
|
|
14.
|
|
TYPE
OF REPORTING PERSON (see instructions)
OO
|
|
|
|
|
|
|
|
1.
|
|
NAMES
OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Justin
B. Borus
|
|
|
2.
|
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(see
instructions)
(a) ☐
(b) ☒
|
|
|
3.
|
|
SEC
USE ONLY
|
|
|
4.
|
|
SOURCE
OF FUNDS (see instructions)
AF, PF
|
|
|
5.
|
|
CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ☐
|
|
|
6.
|
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
USA
|
|
|
|
|
|
|
|
NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
|
|
7.
|
|
SOLE
VOTING POWER
20,745,766
|
|
8.
|
|
SHARED
VOTING POWER
0
|
|
9.
|
|
SOLE
DISPOSITIVE POWER
20,745,766
|
|
10.
|
|
SHARED
DISPOSITIVE POWER
0
|
|
|
|
|
|
11.
|
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
20,745,766
|
|
|
12.
|
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(see
instructions) ☐
|
|
|
13.
|
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
15.5%
|
|
|
14.
|
|
TYPE
OF REPORTING PERSON (see instructions)
IN
|
|
|
|
|
|
|
|
1.
|
|
NAMES
OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Ibex
Microcap Fund LLLP
|
|
|
2.
|
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(see
instructions)
(a) ☐
(b) ☒
|
|
|
3.
|
|
SEC
USE ONLY
|
|
|
4.
|
|
SOURCE
OF FUNDS (see instructions)
WC
|
|
|
5.
|
|
CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ☐
|
|
|
6.
|
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Delaware, USA
|
|
|
|
|
|
|
|
NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
|
|
7.
|
|
SOLE
VOTING POWER
16,242,766
|
|
8.
|
|
SHARED
VOTING POWER
0
|
|
9.
|
|
SOLE
DISPOSITIVE POWER
16,242,766
|
|
10.
|
|
SHARED
DISPOSITIVE POWER
0
|
|
|
|
|
|
11.
|
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
16,242,766
|
|
|
12.
|
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(see
instructions) ☐
|
|
|
13.
|
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.3%
|
|
|
14.
|
|
TYPE
OF REPORTING PERSON (see instructions)
PN
|
|
|
|
|
|
|
|
1.
|
|
NAMES
OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Lazarus
Macro Micro Partners LLLP
|
|
|
2.
|
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(see
instructions)
(a) ☐
(b) ☒
|
|
|
3.
|
|
SEC
USE ONLY
|
|
|
4.
|
|
SOURCE
OF FUNDS (see instructions)
WC
|
|
|
5.
|
|
CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ☐
|
|
|
6.
|
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Delaware,
USA
|
|
|
|
|
|
|
|
NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
|
|
7.
|
|
SOLE
VOTING POWER
3,000
|
|
8.
|
|
SHARED
VOTING POWER
0
|
|
9.
|
|
SOLE
DISPOSITIVE POWER
3,000
|
|
10.
|
|
SHARED
DISPOSITIVE POWER
0
|
|
|
|
|
|
11.
|
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,000
|
|
|
12.
|
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(see
instructions) ☐
|
|
|
13.
|
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.002%
|
|
|
14.
|
|
TYPE
OF REPORTING PERSON (see instructions)
PN
|
|
|
|
|
|
|
|
1.
|
|
NAMES
OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Ibex
Investment Holdings LLC
|
|
|
2.
|
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(see
instructions)
(a) ☐
(b) ☒
|
|
|
3.
|
|
SEC
USE ONLY
|
|
|
4.
|
|
SOURCE
OF FUNDS (see instructions)
AF
|
|
|
5.
|
|
CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) ☐
|
|
|
6.
|
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Delaware,
USA
|
|
|
|
|
|
|
|
NUMBER
OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
|
|
7.
|
|
SOLE
VOTING POWER
16,245,766
|
|
8.
|
|
SHARED
VOTING POWER
0
|
|
9.
|
|
SOLE
DISPOSITIVE POWER
16,245,766
|
|
10.
|
|
SHARED
DISPOSITIVE POWER
0
|
|
|
|
|
|
11.
|
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
16,245,766
|
|
|
12.
|
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
(see
instructions) ☐
|
|
|
13.
|
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
12.3%
|
|
|
14.
|
|
TYPE
OF REPORTING PERSON (see instructions)
OO
|
|
|
|
ITEM 1.
|
Security and Issuer.
|
The
class of equity securities to which this Statement on Schedule 13D (this “Statement” or this “Schedule
13D”) relates is the Common Stock, par value $0.000001 per share (the “Common Stock”), of Barfresh
Food Group Inc. (the “Issuer”), with its principal executive offices located at 3600 Wilshire Blvd., Suite
1720, Los Angeles, California 90010.
|
ITEM 2.
|
Identity and Background.
|
(a)-(c)
and (f) The names of the persons filing this Statement (the “Reporting Persons”) are: (1) Justin B. Borus,
a United States citizen (“Mr. Borus”); (2) Ibex Investors LLC, a Colorado limited liability company (the “Investment
Manager”); (3) Ibex Microcap Fund LLLP, a Delaware limited liability limited partnership (the “Fund”);
(4) Lazarus Macro Micro Partners LLLP, a Delaware limited liability limited partnership (“Macro Micro Partners”);
and (5) Ibex Investment Holdings LLC, a Delaware limited liability company (“IM Holdings”). The Fund and Macro
Micro Partners are private investment vehicles. Mr. Borus, the Fund and Macro Micro Partners directly beneficially own the Common
Stock (as defined below) reported in this Statement. The Investment Manager is the investment manager and general partner of the
Fund and Macro Micro Partners. IM Holdings is the sole member of the Investment Manager. Mr. Borus is the manager of the Investment
Manager and IM Holdings. Mr. Borus, the Investment Manager and IM Holdings may be deemed to beneficially own the Common Stock
directly beneficially owned by the Fund and Macro Micro Partners. Each Reporting Person disclaims beneficial ownership with respect
to any shares other than the shares directly beneficially owned by such Reporting Person.
The
principal business of the Fund and Macro Micro Partners is that of a private investment vehicle engaged in investing and trading
in securities and financial instruments for its own account. The principal business of the Investment Manager is providing investment
management services to, and being the general partner of, the Fund and Macro Micro Partners. The principal business of IM Holdings
is acting as the sole member of the Investment Manager. Mr. Borus’ principal occupation is serving as the manager of the
Investment Manager and IM Holdings. The principal business address of the Reporting Persons is 260 N. Josephine Street, Suite
300, Denver, CO 80206.
(d)–(e) During
the last five years, none of the Reporting Persons has been (a) convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors) or (b) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and
as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
|
ITEM 3.
|
Source and Amount of Funds or Other
Consideration
|
The
source and amount of funds including commissions used (or to be used, in the case of Mr. Borus; see Item 4) by the Reporting Persons
in making their purchases of the shares of Common Stock and warrants to purchase shares of Common Stock beneficially owned by
them are set forth below:
REPORTING PERSON
|
|
SOURCE OF FUNDS
|
|
AMOUNT OF FUNDS
|
Fund
|
|
Working Capital
|
|
$
|
3,549,593.97
|
|
Macro Micro Partners
|
|
Working Capital
|
|
$
|
750.00
|
|
Mr. Borus
|
|
Personal Funds
|
|
$
|
1,500,000.00
|
|
One or more
of the Reporting Persons may effect purchases of securities through margin accounts which may extend margin credit to the Reporting
Persons as and when required to open or carry positions in the margin accounts, subject to applicable federal margin regulations,
stock exchange rules and brokers’ credit policies. In such instances, the positions held in the margin accounts are pledged
as collateral security for the repayment of debit balances in the accounts.
|
ITEM 4.
|
Purpose of Transaction.
|
On
March 19, 2020, Mr. Borus entered into a Securities Purchase Agreement (the “SPA”) with the Issuer whereby Mr. Borus
agreed to purchase, for an aggregate purchase price of $1,500,000, 3,000,000 shares of Common Stock and warrants to purchase an
additional 1,500,000 shares of Common Stock (the instrument evidencing the same, the “Warrant”) (subject to adjustment
as provided in the SPA based on the volume-weighted average trading price for the Common Stock for the last twenty (20) consecutive
trading days that conclude the six (6) month period after the initial closing under the SPA; in the event of any such adjustment,
this Schedule 13D will be amended accordingly). Mr. Borus expects such purchase to close on or about April 15, 2020, but such
securities are nevertheless included in Mr. Borus’ beneficial ownership of Common Stock for purposes of this Schedule 13D.
If such purchase does not close for whatever reason, this Schedule 13D will be amended accordingly. On March 19, 2020, Mr. Borus
also entered into an Escrow Agreement (the “Escrow Agreement”) which provides for funding (on or about April 15, 2020)
into an escrow account until the minimum aggregate offering size of $3 million is reached. Since such minimum has already been
reached, Mr. Borus’ purchase price of $1,500,000 will be released to the Issuer immediately after being funded into the
escrow account. The SPA, the form of Warrant and the Escrow Agreement are attached hereto as Exhibits 2, 3 and 4, respectively,
and are incorporated herein by reference. Mr. Borus has agreed to acquire the foregoing securities in the belief that such securities
are an attractive investment.
The
Fund and Macro Micro Partners acquired the shares of Common Stock and warrants owned by them in the belief that such securities
are an attractive investment.
Mr.
Borus and the Issuer are contemplating that Mr. Borus may become a director of the Issuer and discussions are ongoing in that
regard. Further the Reporting Persons have had and may continue to have discussions with the Issuer’s management and members
of the board of directors of the Issuer regarding the Issuer’s business, strategies and operations.
Except
as set forth in this Schedule 13D, none of the Reporting Persons has any plans or proposals that relate to or would result in
any of the transactions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D.
The
Reporting Persons reserve the right to acquire, or cause to be acquired, additional securities of the Issuer, to dispose of, or
cause to be disposed, such securities at any time or to formulate other purposes, plans or proposals regarding the Issuer or any
of its securities, to the extent deemed advisable in light of general investment and trading policies of the Reporting Persons,
market conditions or other factors.
|
ITEM 5.
|
Interest in Securities of the Issuer.
|
(a) As
of the Event Date of March 19, 2020 and as of March 23, 2020 (the filing date of this Statement), the Reporting Persons beneficially
own:
|
(i)
|
The
Fund directly owns 14,442,766 shares of Common Stock and warrants to purchase 1,800,000
shares of Common Stock, representing 12.3% of all of the outstanding shares of Common
Stock.
|
|
(ii)
|
Macro
Micro Partners directly owns 3,000 shares of Common Stock, representing 0.002% of all
of the outstanding shares of Common Stock.
|
|
(iii)
|
Mr.
Borus directly beneficially owns 3,000,000 shares of Common Stock and warrants to purchase
1,500,000 shares of Common Stock, representing 3.4% of all of the outstanding shares
of Common Stock.
|
|
(iv)
|
The
Investment Manager, as the investment manager and general partner of the Fund and Macro
Micro Partners, may be deemed to beneficially own the 16,245,766 shares of Common Stock
held by the Fund and Macro Micro Partners and the warrants to purchase 1,800,000 shares
of Common Stock held by the Fund, representing 12.3% of all of the outstanding shares
of Common Stock.
|
|
(v)
|
IM
Holdings, as the sole member of the Investment Manager, may be deemed to beneficially
own the 16,245,766 shares of Common Stock held by the Fund and Macro Micro Partners and
the warrants to purchase 1,800,000 shares of Common Stock held by the Fund, representing
12.3% of all of the outstanding shares of Common Stock.
|
|
(vi)
|
Mr.
Borus, as the manager of the Investment Manager and IM Holdings, may be deemed to beneficially
own the 16,245,766 shares of Common Stock held by the Fund and Macro Micro Partners and
the warrants to purchase 1,800,000 shares of Common Stock held by the Fund, representing
12.3% of all of the outstanding shares of Common Stock. Together with the securities
beneficially owned directly by Mr. Borus as set forth in clause (iii) above, Mr. Borus
may be deemed to beneficially own 17,445,766 shares of Common Stock and warrants to purchase
3,300,000 shares of common stock, representing 15.5% of all of the outstanding shares
of Common Stock.
|
Each
Reporting Person disclaims beneficial ownership of any shares of Common Stock other than the shares beneficially owned directly
by such Reporting Person.
The
foregoing percentages set forth in this response are based on the 130,341,737 shares of Common Stock outstanding as of November
8, 2019, as reported by the Issuer in its Quarterly Report on Form 10-Q for the quarter ended September 30, 2019 and filed with
the SEC on November 14, 2019.
(b) The
Fund has, and each of the Investment Manager, IM Holdings and Mr. Borus may be deemed to have, the power to vote or direct the
vote of and to dispose or direct the disposition of 14,442,766 shares of Common Stock and warrants to purchase 1,800,000 shares
of Common Stock reported herein. Macro Micro Partners has, and each of the Investment Manager, IM Holdings and Mr. Borus may be
deemed to have, the power to vote or direct the vote of and to dispose or direct the disposition of 3,000 shares of Common Stock
reported herein. Mr. Borus will, upon acquisition (see Item 4), have the power to vote or direct the vote of and to dispose or
direct the disposition of 3,000,000 shares of Common Stock and warrants to purchase 1,500,000 shares of Common Stock reported
herein.
(c) Other
than as set forth in Item 4 above, no transactions in the Common Stock have been effected by any Reporting Person in the last
sixty (60) days.
(d) Not
applicable.
(e) Not
applicable.
|
ITEM 6.
|
Contracts, Arrangements, Understandings
or Relationships With Respect to Securities of the Issuer.
|
See Item 4 above.
|
ITEM 7.
|
Material to be Filed as Exhibits.
|
Exhibit No. Document
|
1.
|
Joint
Filing Agreement
|
|
2.
|
Securities
Purchase Agreement
|
SIGNATURE
After reasonable
inquiry and to the best of its knowledge and belief, the undersigned each certifies that the information with respect to it set
forth in this Statement is true, complete and correct.
Dated: March 23, 2020
Justin B. Borus
Ibex Investors LLC
Ibex Microcap Fund LLLP
Lazarus Macro Micro Partners LLLP
Ibex Investment Holdings LLC
By: /s/
Justin B. Borus
Justin B. Borus,
for himself and as the Manager of each of IM Holdings and the Investment Manager (for itself and on behalf of the Fund and Macro
Micro Partners)
EXHIBIT INDEX
Exhibit No. Document
|
1.
|
Joint
Filing Agreement
|
|
2.
|
Securities
Purchase Agreement
|
Exhibit 1
JOINT FILING
AGREEMENT
In accordance
with Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended, the persons named below agree to the joint filing on
behalf of each of them of a statement on Schedule 13D (including amendments thereto) with respect to the Common Stock, par value
$0.000001 per share, of Barfresh Food Group Inc. and further agree that this Joint Filing Agreement be included as an Exhibit
to such joint filing. In evidence thereof, the undersigned hereby execute this Agreement.
Dated: March 23, 2020
Justin B. Borus
Ibex Investors LLC
Ibex Microcap Fund LLLP
Lazarus Macro Micro Partners LLLP
Ibex Investment Holdings LLC
By: /s/
Justin B. Borus
Justin B. Borus,
for himself and as the Manager of each of IM Holdings and the Investment Manager (for itself and on behalf of the Fund and Macro
Micro Partners)
Exhibit 2
SECURITIES
PURCHASE AGREEMENT
This Securities Purchase
Agreement (this “Agreement”) is entered into between Barfresh Food Group, Inc., a Delaware corporation (the
“Company”) and each purchaser identified on the signature pages hereto (each, including its successors and assigns,
a “Purchaser” and collectively the “Purchasers”).
WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant to Section 4(2) of the Securities Act of 1933, as amended (the
“Securities Act”), and Rule 506 promulgated thereunder, the Company desires to issue and sell to each Purchaser, and
each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described
in this Agreement.
NOW, THEREFORE, IN
CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:
SECTION
I.
DEFINITIONS
1.1
Definitions. In addition to the terms defined elsewhere in this Agreement,
for all purposes of this Agreement, the following terms have the meanings set forth in this Section 1.1:“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common
control with a Person as such terms are used in and construed under Rule 405 under the Securities Act. With respect to a Purchaser,
any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such Purchaser
will be deemed to be an Affiliate of such Purchaser.
“Business
Day” means any day except Saturday, Sunday, any day that is a federal legal holiday in the United States or any day on
which banking institutions in the State of California are authorized or required by law or other governmental action to close.
“Closing(s)”
or “Closing Date(s)” means the Business Day(s) when Transaction Documents have been executed and delivered by
the applicable parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount
and (ii) the Company’s obligations to deliver the Securities have been satisfied or waived.
“Commission”
means the Securities and Exchange Commission.
“Common
Stock” means the common stock of the Company, par value $0.000001 per share, and any other class of securities into which
such securities may hereafter be reclassified or changed into.
“Common
Stock Equivalents” means any securities of the Company which would entitle the holder thereof to acquire at any time
Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at
any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Disclosure
Schedules” means the Disclosure Schedules of the attached hereto and incorporated herein by reference.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Liens”
means a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Per Share
Purchase Price” equals $0.50, subject to adjustment pursuant to Section 4.13, , but in no event less than $0.35 per Share,
and for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock
that occur after the date of this Agreement.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
“Rule 144”
means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or
any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.
“SEC Reports”
means all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act
and the Exchange Act.
“Securities”
means the Shares, the Warrants and the Warrant Shares.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Shares”
means the shares of Common Stock issued to each Purchaser pursuant to this Agreement.
“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall
not be deemed to include the location and/or reservation of borrowable shares of Common Stock).
“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for Shares and Warrants purchased hereunder as specified
below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount.”
“Subsidiary”
means any subsidiary of the Company as set forth in the SEC Reports, and shall, where applicable, include any subsidiary of the
Company formed or acquired after the date hereof.
“Trading
Day” means a day on which the New York Stock Exchange is open for trading.
“Trading
Market” means the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: FINRA Over-the-Counter Bulletin Board, the NASDAQ Stock Market or the New York Stock Exchange.
“Transaction
Documents” means this Agreement, the Warrants and any other documents or agreements executed in connection with the transactions
contemplated hereunder.
“Transfer
Agent” means Action Stock Transfer, with a mailing address of 2469 E. Fort Union Blvd., Suite 214, Salt Lake City, UT
84121, and a facsimile number of (801) 274-1099, or any successor transfer agent of the Company.
“Warrant(s)”
means, collectively, the Series-O Common Stock purchase warrants, substantially in the form attached hereto as Exhibit A,
delivered to the Purchasers at the Closing in accordance with Section 2.2(a) hereof, which warrant shall be to purchase up to that
number of shares of Common Stock equal to one-half (1/2) of every Share issued to such Purchaser in accordance with this Agreement,
exercisable for a period of three (3) years from its issuance at an exercise price equal to the sum of the Per Share Purchase Price
and $0.10 per Warrant Share, subject to adjustment as provided therein, but in no event less than $0.45 per Share.
“Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Warrants.
SECTION
II.
PURCHASE AND SALE
2.1
Closing.
(a)
On the Closing Date(s), upon the terms and subject to the conditions set forth herein, substantially
concurrent with the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers,
severally and not jointly, agree to purchase, in the aggregate, the Company’s Shares at the Per Share Purchase Price and
a Warrant to purchase up to that number of shares of Common Stock equal to one-half (1/2) of every Share issued to such Purchaser
in accordance with this Agreement.
(b)
The date and time of the initial Closing (the “Initial Closing”) shall be on or
after March 15, 2020 and no later than April 15, 2020 (the “Initial Closing Date”), with any additional Closings (the
“Additional Closing Dates”)(collectively, the “Closings”) to take place before June 15, 2020 (the “Termination
Date”), and the final Closing of which shall be deemed to be the “Final Closing”. The aggregate purchase price
for the Stock and Warrants to be purchased by each such Purchaser at each Closing (the “Purchase Price”) shall be the
aggregate amount set forth opposite each Purchaser’s name on the signature page hereto. Subscribed funds will be available
for use by the Company immediately after the Initial Closing.
(c)
Each Purchaser shall deliver to Libertas Law Group, Inc., as escrow agent (the “Escrow
Agent”), immediately available funds via wire transfer in an amount equal to its Subscription Amount, the Company shall
deliver to each Purchaser its respective Shares and a Warrant as determined pursuant to Section 2.2(a), and the Escrow Agent, Company
and each Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Closing. Upon satisfaction of the
covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall be deemed to have occurred at the Company’s
executive office or such other location as the parties shall mutually agree. Notwithstanding anything contained herein to the contrary,
the Company may reject any subscription, in whole or in part, in its sole discretion.
2.2
Deliveries.
(a)
On or prior to the Closing Date, the Company shall deliver or cause to be delivered to the
Escrow Agent the following:
(i)
this Agreement duly executed by the Company;
(ii)
a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent
to deliver, on an expedited basis, a certificate evidencing a number of Shares equal to such Purchaser’s Subscription Amount
divided by the Per Share Purchase Price, registered in the name of such Purchaser; and
(iii)
a Warrant registered in the name of such Purchaser in accordance with this Agreement.
(b)
On or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to
the Escrow Agent the following:
(i)
this Agreement duly executed by such Purchaser; and
(ii)
such Purchaser’s Subscription Amount by wire transfer of immediately available funds
pursuant as follows.
Account Name
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Account Number:
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Bank Address:
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Routing Number:
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SWIFT Number:
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(c)
At the Closing, the Escrow Agent shall deliver to the Company the aggregate Subscription Amount
received by wire transfer of immediately available funds pursuant to wire transfer instructions given to the Escrow Agent by the
Company. As soon as reasonably practicable following Closing, the Company shall deliver to the Investor a certificate representing
the Shares and the duly executed Warrants, each registered in the name of the Investor.
2.3
Closing Conditions.
(a) The
obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:
(i)
the Escrow Agent’s receipt of Agreements for the aggregate subscription of at least
Three Million Dollars ($3,000,000) (the “Minimum Offering Amount”) on or prior to the Initial Closing Date;
(ii)
the accuracy in all material respects on the Closing Date of the representations and warranties
of the Purchasers contained herein;
(iii)
all obligations, covenants and agreements of each Purchaser required to be performed at or
prior to the Closing Date shall have been performed; and
(iv)
the delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.
(b)
The respective obligations of the Purchasers hereunder in connection with the Closing are
subject to the following conditions being met:
(i)
the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;
(ii)
the Escrow Agent’s receipt of the item set forth in Section 2.3(a)(i) of this Agreement;
(iii)
the accuracy in all material respects on the Closing Date of the representations and warranties
of the Company contained herein;
(iv)
all obligations, covenants and agreements of the Company required to be performed at or prior
to the Closing Date shall have been performed;
(v)
there shall have been no Material Adverse Effect (defined in Section 3.1(b) below) with respect
to the Company since the date hereof; and
(vi)
from the date hereof to the Closing Date, trading in the Common Stock shall not have been
suspended by the Commission or the Company’s principal Trading Market (except for any suspension of trading of limited duration
agreed to by the Company, which suspension shall be terminated prior to the Closing), and, at any time prior to the Closing Date,
trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall
not have been established on securities whose trades are reported by such service, or on any Trading Market, nor shall a banking
moratorium have been declared either by the United States or New York State authorities nor shall there have occurred any material
outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material
adverse change in, any financial market which, in each case, in the reasonable judgment of each Purchaser, makes it impracticable
or inadvisable to purchase the Securities at the Closing.
SECTION
III.
REPRESENTATIONS AND WARRANTIES
3.1
Representations and Warranties of the Company. Except as set forth in
the Disclosure Schedules, which Disclosure Schedules shall be deemed a part hereof and shall qualify any representation or otherwise
made herein to the extent of the disclosure contained in the corresponding section of the Disclosure Schedules, the Company hereby
makes the following representations and warranties to each Purchaser:
(a)
Subsidiaries. All of the direct and indirect subsidiaries of the Company are set forth
in the Company’s SEC Reports. The Company owns, directly or indirectly, the capital stock or other equity interests of each
Subsidiary free and clear of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly
issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.
(b)
Organization and Qualification. The Company and each of the Subsidiaries is an entity
duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation
or organization (as applicable), with the requisite power and authority to own and use its properties and assets and to carry on
its business as currently conducted. Neither the Company nor any Subsidiary is in violation or default of any of the provisions
of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company
and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in
each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result
in (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse
effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries,
taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely
basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”),
and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or
curtail such power and authority or qualification.
(c)
Authorization; Enforcement. The Company has the requisite corporate power and authority
to enter into and to consummate the transactions contemplated by each of the Transaction Documents and otherwise to carry out its
obligations hereunder and thereunder. The execution and delivery of each of the Transaction Documents by the Company and the consummation
by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the
Company and no further action is required by the Company, its board of directors or its stockholders in connection therewith other
than in connection with the Required Approvals. Each Transaction Document has been (or upon delivery will have been) duly executed
by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation
of the Company enforceable against the Company in accordance with its terms except (i) as limited by general equitable principles
and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of
creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief
or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
(d)
No Conflicts. The execution, delivery and performance of the Transaction Documents
by the Company, the issuance and sale of the Securities and the consummation by the Company of the other transactions contemplated
hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s
certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute
a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien
upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment,
acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other
instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary
is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required
Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction
of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities
laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case
of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.
(e)
Filings, Consents and Approvals. The Company is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state,
local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company
of the Transaction Documents, other than (i) filings required pursuant to Section 4.4 of this Agreement and (ii) the filing of
Form D with the Commission and such filings as are required to be made under applicable state securities laws (collectively, the
“Required Approvals”).
(f)
Issuance of the Securities. The Securities are duly authorized and, when issued and
paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable,
free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents.
The Warrant Shares, when issued in accordance with the terms of the Transaction Documents, will be validly issued, fully paid and
nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction
Documents. The Company has reserved from its duly authorized capital stock the maximum number of shares of Common Stock issuable
pursuant to this Agreement and the Warrants.
(g)
Capitalization. Except as set forth on Schedule 3.1(g), the Company has not issued
any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of
employee stock options under the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant
to the Company’s employee stock purchase plans and pursuant to the conversion or exercise of Common Stock Equivalents outstanding
as of the date of the most recently filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive
right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents.
Except as set forth in the Company’s SEC Reports and as a result of the purchase and sale of the Securities, there are no
outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities,
rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire,
any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is
or may become bound to issue additional shares of Common Stock or Common Stock Equivalents. The issuance and sale of the Securities
will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Purchasers) and
will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under
any of such securities. All of the outstanding shares of capital stock of the Company are validly issued, fully paid and nonassessable,
have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation
of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any
stockholder, the board of directors of the Company or others is required for the issuance and sale of the Securities. There are
no stockholder agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which
the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.
(h)
SEC Reports; Financial Statements. The Company has filed all SEC Reports for the two
years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material)
on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration
of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of
the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading. The financial statements of the Company
included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance
with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company
and its consolidated subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods
then ended, subject, in the case of unaudited statements, to normal year-end audit adjustments.
(i)
Material Changes; Undisclosed Events, Liabilities or Developments. Except as specifically
disclosed in the Company’s SEC Reports filed prior to the date hereof, (i) there has been no event, occurrence or development
that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any
liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business
consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant
to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the
Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed
or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities
to any officer, director or Affiliate, except pursuant to existing Company stock option plans or pursuant to conversion of outstanding
debt. The Company does not have pending before the Commission any request for confidential treatment of information. Except for
the issuance of the Securities contemplated by this Agreement or as set forth on Schedule 3.1(i), no event, liability or
development has occurred or exists with respect to the Company or its Subsidiaries or their respective business, properties, operations
or financial condition, that would be required to be disclosed by the Company under applicable securities laws at the time this
representation is made or deemed made that has not been publicly disclosed at least one (1) Trading Day prior to the date that
this representation is made.
(j)
Litigation. Except as set forth in the SEC Reports, there is no action, suit, inquiry,
notice of violation, Proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the
Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative
agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which
(i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities
or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither
the Company nor any Subsidiary, nor to the knowledge of the Company, any director or officer thereof, is or has been the subject
of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary
duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission
involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order
or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange
Act or the Securities Act.
(k)
Labor Relations. No material labor dispute exists or, to the knowledge of the Company,
is imminent with respect to any of the employees of the Company that could reasonably be expected to result in a Material Adverse
Effect. None of the Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s
relationship with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective
bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their employees are good. No executive
officer, to the knowledge of the Company, is, or is now expected to be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement
or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not subject
the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries
are in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices,
terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
(l)
Compliance. Neither the Company nor any Subsidiary (i) is in default under or in violation
of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by
the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under
or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party
or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation
of any order of any court, arbitrator or governmental body, or (iii) is or has been in violation of any statute, rule or regulation
of any governmental authority, including without limitation all foreign, federal, state and local laws applicable to its business
and all such laws that affect the environment, except in each case as could not have or reasonably be expected to result in a Material
Adverse Effect.
(m)
Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations
and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective
businesses as described in the SEC Reports, except where the failure to possess such permits could not reasonably be expected to
result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received
any notice of Proceedings relating to the revocation or modification of any Material Permit.
(n)
Title to Assets. The Company and the Subsidiaries have good and marketable title in
fee simple to all real property owned by them and good and marketable title in all personal property owned by them that is material
to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for Liens as do not materially
affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by
the Company and the Subsidiaries and Liens for the payment of federal, state or other taxes, the payment of which is neither delinquent
nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them
under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance.
(o)
Patents and Trademarks. The Company and the Subsidiaries have, or have rights to use,
all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights,
licenses and other intellectual property rights and similar rights necessary or material for use in connection with their respective
businesses as described in the SEC Reports and which the failure to so have could have a Material Adverse Effect (collectively,
the “Intellectual Property Rights”). Neither the Company nor any Subsidiary has received a notice (written or
otherwise) that any of the Intellectual Property Rights used by the Company or any Subsidiary violates or infringes upon the rights
of any Person. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing
infringement by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable
security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure
to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(p)
Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company
and the Subsidiaries are engaged. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as
may be necessary to continue its business without a significant increase in cost.
(q)
Transactions With Affiliates and Employees. Except as set forth in the SEC Reports,
none of the officers or directors of the Company and, to the knowledge of the Company, none of the employees of the Company is
presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental
of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or,
to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or
is an officer, director, trustee or partner, in each case in excess of the amount permitted under Item 404 of Regulation S-K other
than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of
the Company and (iii) other employee benefits, including stock option agreements under any stock option plan of the Company.
(r)
Private Placement. Assuming the accuracy of the Purchasers representations and warranties
set forth in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Securities by the
Company to the Purchasers as contemplated hereby. The issuance and sale of the Securities hereunder does not contravene the rules
and regulations of the Trading Market.
(s)
Investment Company. The Company is not, and is not an Affiliate of, and immediately
after receipt of payment for the Securities, will not be or be an Affiliate of, an “investment company” within the
meaning of the Investment Company Act of 1940, as amended. The Company shall conduct its business in a manner so that it will not
become subject to the Investment Company Act of 1940, as amended.
(t)
Listing and Maintenance Requirements. The Company’s Common Stock is registered
pursuant to Section 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely
to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any
notification that the Commission is contemplating terminating such registration. The Company has not, in the 12 months preceding
the date hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect
that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. The Company is, and
has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance
requirements.
(u)
Disclosure. Except with respect to the material terms and conditions of the transactions
contemplated by the Transaction Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided
any of the Purchasers or their agents or counsel with any information that it believes constitutes or might constitute material,
non-public information, unless prior thereto such Purchaser shall have executed a written agreement regarding the confidentiality
and use of such information. The Company understands and confirms that the Purchasers will rely on the foregoing representation
in effecting transactions in securities of the Company. All disclosure furnished by or on behalf of the Company to the Purchasers
regarding the Company, its business and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement,
is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The press
releases disseminated by the Company during the twelve months preceding the date of this Agreement taken as a whole do not contain
any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were made and when made, not misleading. The Company
acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in Section 3.2 hereof.
(v)
No Integrated Offering. Assuming the accuracy of the Purchasers’ representations
and warranties set forth in Section 3.2, neither the Company, nor any of its Affiliates, nor any Person acting on its or their
behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under
circumstances that would cause this offering of the Securities to be integrated with prior offerings by the Company for purposes
of (i) the Securities Act which would require the registration of any such securities under the Securities Act, or (ii) any applicable
shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.
(w)
Tax Status. Except for matters that would not, individually or in the aggregate, have
or reasonably be expected to result in a Material Adverse Effect, the Company and each Subsidiary has filed all necessary federal,
state and foreign income and franchise tax returns and has paid or accrued all taxes shown as due thereon, and the Company has
no knowledge of a tax deficiency which has been asserted or threatened against the Company or any Subsidiary.
(x)
No General Solicitation. Neither the Company nor any person acting on behalf of the
Company has offered or sold any of the Securities by any form of general solicitation or general advertising. The Company has offered
the Securities for sale only to the Purchasers and certain other “accredited investors” within the meaning of Rule
501 under the Securities Act.
(y)
Foreign Corrupt Practices. Neither the Company, nor to the knowledge of the Company,
any agent or other person acting on behalf of the Company, has (i) directly or indirectly, used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment
to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate
funds, (iii) failed to disclose fully any contribution made by the Company (or made by any person acting on its behalf of which
the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of the Foreign Corrupt
Practices Act of 1977, as amended.
(z)
Accountants. The Company’s accounting firm is Eide Bailly LLP. To the knowledge
and belief of the Company, such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and
(ii) shall express its opinion with respect to the financial statements to be included in the Company’s Annual Report on
Form 10-K for the year ending December 31, 2019.
(aa)
No Disagreements with Accountants and Lawyers. There are no disagreements of any kind
presently existing, or reasonably anticipated by the Company to arise, between the Company and the accountants and lawyers formerly
or presently employed by the Company which could affect the Company’s ability to perform any of its obligations under any
of the Transaction Documents, and the Company is current with respect to any fees owed to its accountants.
(bb)
Acknowledgment Regarding Purchasers’ Purchase of Securities. The Company acknowledges
and agrees that each of the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the
Transaction Documents and the transactions contemplated thereby. The Company further acknowledges that no Purchaser is acting as
a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the
transactions contemplated thereby and any advice given by any Purchaser or any of their respective representatives or agents in
connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Purchasers’
purchase of the Securities. The Company further represents to each Purchaser that the Company’s decision to enter into this
Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated
hereby by the Company and its representatives.
(cc)
Acknowledgement Regarding
Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding (except for
Sections 3.2(f) hereof), it is understood and acknowledged by the Company (i) that none of the Purchasers have been asked by the
Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the Company,
or “derivative” securities based on securities issued by the Company or to hold the Securities for any specified term;
(ii) that past or future open market or other transactions by any Purchaser, including Short Sales, and specifically including,
without limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private
placement transactions, may negatively impact the market price of the Company’s publicly-traded securities; (iii) that any
Purchaser, and counter-parties in “derivative” transactions to which any such Purchaser is a party, directly or indirectly,
presently may have a “short” position in the Common Stock, provided, however, any such short position shall not have
been established by an such Purchaser, or its Affiliates, during the Discussion Time ( as defined in Section 3.2(f)) and (iv) that
each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative”
transaction. The Company further understands and acknowledges that (a) one or more Purchasers
may engage in hedging activities at various times during the period that the Securities are outstanding and (b) such hedging activities
(if any) could reduce the value of the existing stockholders’ equity interests in the Company at and after the time that
the hedging activities are being conducted. The Company acknowledges that such aforementioned hedging activities do not constitute
a breach of any of the Transaction Documents.
(dd)
Regulation M Compliance. The Company has not, and to its knowledge no one acting on
its behalf has taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of any of the Securities.
(ee)
Certain Fees. Fees or commissions shall only be payable by the Company to licensed
brokers, finders, placement agents, investment bankers, banks or other Person with respect to the transactions contemplated by
the Transaction Documents.
(ff)
No Disqualification Events. With respect to Securities to be offered and sold hereunder
in reliance on Rule 506(b) under the Securities 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 nor any promoter (as that term
is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale (each, an “Issuer
Covered Person” and, together, “Issuer Covered Persons”) is subject to any of the “Bad Actor” disqualifications
described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification
Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person
is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under
Rule 506(e), and has furnished to the Purchasers a copy of any disclosures provided thereunder.
3.2
Representations and Warranties of the Purchasers. Each Purchaser, for
itself and for no other Purchaser, hereby represents and warrants as of the date hereof and as of the Closing Date to the Company
as follows:
(a)
Organization; Authority. Such Purchaser is an entity duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization with full right, corporate or partnership power and
authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out
its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by such Purchaser
of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate or similar action
on the part of such Purchaser. Each Transaction Document to which it is a party has been duly executed by such Purchaser, and when
delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such
Purchaser, enforceable against it in accordance with its terms, except (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’
rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
(b)
Own Account. Such Purchaser understands that the Securities are “restricted securities”
and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Securities as
principal for its own account and not with a view to or for distributing or reselling such Securities or any part thereof in violation
of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Securities in
violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings
with any other persons to distribute or regarding the distribution of such Securities in violation of the Securities Act or any
applicable state securities law. Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business.
(c)
Purchaser Status. At the time such Purchaser was offered the Securities, it was, and
at the date hereof it is, and on each date on which it exercises any Warrants, it will be either: (i) an “accredited investor”
as defined in Rule 501 under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a)
under the Securities Act. Such Purchaser is not required to be registered as a broker-dealer under Section 15 of the Exchange Act.
(d)
Investment Risks. Purchaser acknowledges and understands that an investment in the
Securities involves a high degree of risk, including the potential for the entire loss of Purchaser’s investment.
(e)
Experience of Such Purchaser. Such Purchaser, either alone or together with its representatives,
has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits
and risks of the prospective investment in the Securities and has so evaluated the merits and risks of such investment. Such Purchaser
is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss
of such investment.
(f)
General Solicitation. Such Purchaser is not purchasing the Securities as a result of
any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar
media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.
(g)
Short Sales and Confidentiality Prior To The Date Hereof. Other than consummating the
transactions contemplated hereunder, such Purchaser has not, nor has any Person acting on behalf of or pursuant to any understanding
with such Purchaser, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of the
Company during the period commencing from the time that such Purchaser first received a term sheet (written or oral) from the Company
or any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder until
the date hereof (“Discussion Time”).
Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Purchaser’s assets and the portfolio managers have no knowledge of the investment
decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth
above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision
to purchase the Securities covered by this Agreement. Other than to other Persons party to this Agreement, such Purchaser has maintained
the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this
transaction).
(h)
Non-Reliance on Statements of Agents. Purchaser represents and warrants that Purchaser
has not relied on statements of any officer, director, employee or agent of the Company not contained in this Agreement, the Company’s
website, or the Company’s SEC Filings in evaluating the merits of an investment in the Securities.
(i)
Certain Fees. Purchaser has not entered into any agreement or arrangement entitling
any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person to brokerage or finder’s
fees or commissions with respect to the transactions contemplated by the Transaction Documents. The Company shall have no obligation
with respect to any fees or with respect to any claims made by or on behalf of any Person other than as disclosed herein in Schedule
3.1(dd), if any, for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated
by the Transaction Documents.
SECTION
IV.
OTHER AGREEMENTS OF THE PARTIES
4.1
Transfer Restrictions. (a)The
Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities
other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Purchaser or in
connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company
an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion
shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred
Securities under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the
terms of this Agreement and shall have the rights of a Purchaser under this Agreement.
(b)
The Purchasers agree to the imprinting, so long as is required by this Section 4.1, of a legend
on any of the Securities in the following form:
THESE SECURITIES HAS NOT BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE
STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL
BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED
BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a)
UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.
(c)
The Company acknowledges and agrees that a Purchaser may from time to time pledge pursuant
to a bona fide margin agreement with a registered broker-dealer or grant a security interest in some or all of the Securities to
a financial institution that is an “accredited investor” as defined in Rule 501(a) under the Securities Act and who
agrees to be bound by the provisions of this Agreement and, if required under the terms of such arrangement, such Purchaser may
transfer pledged or secured Securities to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval
of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith.
Further, no notice shall be required of such pledge. At the appropriate Purchaser’s expense, the Company will execute and
deliver such reasonable documentation as a pledgee or secured party of Securities may reasonably request in connection with a pledge
or transfer of the Securities. Certificates evidencing the Shares and Warrant Shares shall not contain any legend (including the
legend set forth in Section 4.1(b)), (i) following any sale of such Shares or Warrant Shares pursuant to Rule 144 or (ii) if such
Shares or Warrant Shares are eligible for sale under Rule 144, (provided that a Purchaser provides the Company with an assurance
letter, which shall not include an opinion of Purchaser’s counsel, in the form reasonably satisfactory to Company’s
legal counsel, that such Shares or Warrant Shares are eligible for sale, assignment or transfer under Rule 144) or (iii) if such
legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements
issued by the staff of the Commission). The Company may not make any notation on its records or give instructions to the Transfer
Agent that enlarge the restrictions on transfer set forth in this Section, except in accordance with applicable law. Certificates
for Securities subject to legend removal hereunder shall be transmitted by the Transfer Agent to the Purchaser by crediting the
account of the Purchaser’s prime broker with the Depository Trust Company System as directed by such Purchaser.
4.2
Furnishing of Information. Until the earliest of the time that (i) no
Purchaser owns Securities or (ii) the Securities may be sold without restriction, the Company covenants to file in a timely manner
(or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company
after the date hereof pursuant to the Exchange Act. As long as any Purchaser owns Securities, if the Company is not required to
file reports pursuant to the Exchange Act, it will prepare and furnish to the Purchasers and make publicly available in accordance
with Rule 144 such information as is required for the Purchasers to sell the Securities under Rule 144. The Company further covenants
that it will take such further action as any holder of Securities may reasonably request, to the extent required from time to time
to enable such Person to sell such Securities without registration under the Securities Act within the requirements of the exemption
provided by Rule 144.
4.3
Integration. The Company shall not sell, offer for sale or solicit offers
to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated
with the offer or sale of the Securities in a manner that would require the registration under the Securities Act of the sale of
the Securities to the Purchasers or that would be integrated with the offer or sale of the Securities to the Purchasers for purposes
of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such
other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.
4.4
Securities Laws Disclosure; Publicity. The Company shall issue a press
release and Current Report on Form 8-K disclosing the material terms of the transactions contemplated hereby. No Purchaser shall
issue any press release or otherwise make any public statement without the prior consent of the Company, which consent shall not
unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly
provide the other party with prior notice of such public statement or communication. Notwithstanding the foregoing, the Company
shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or
any regulatory agency or Trading Market, without the prior consent of such Purchaser, except (i) the filing of final Transaction
Documents (including signature pages thereto) with the Commission and (ii) to the extent such disclosure is required by law or
Trading Market regulations.
4.5
Non-Public Information. Except with respect to the material terms and
conditions of the transactions contemplated by the Transaction Documents, the Company covenants and agrees that neither it nor
any other Person acting on its behalf will provide any Purchaser or its agents or counsel with any information that the Company
believes constitutes material non-public information, unless prior thereto such Purchaser shall have executed a written agreement
regarding the confidentiality and use of such information. The Company understands and confirms that each Purchaser shall be relying
on the foregoing covenant in effecting transactions in securities of the Company.
4.6
Use of Proceeds. The Company shall use the net proceeds from the sale
of the Securities hereunder for general working capital.
4.7
Indemnification.
(a) Indemnification
of Purchasers. Subject to the provisions of this Section 4.7, the Company will indemnify and hold each Purchaser and its directors,
officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a
Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless
from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser
Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or
agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against a Purchaser
in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such
Purchaser, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is based upon
a breach of such Purchaser’s representations, warranties or covenants under the Transaction Documents or any agreements or
understandings such Purchaser may have with any such stockholder or any violations by the Purchaser of state or federal securities
laws or any conduct by such Purchaser which constitutes fraud, gross negligence, willful misconduct or malfeasance). If any action
shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser
Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel
of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel
in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of
such Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing,
(ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action
there is, in the reasonable opinion of such separate counsel, a material conflict on any material issue between the position of
the Company and the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and
expenses of no more than one such separate counsel. The Company will not be liable to any Purchaser Party under this Agreement
(i) for any settlement by a Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably
withheld or delayed; or (ii) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any
Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party
in this Agreement or in the other Transaction Documents.
(b) Indemnification
of Company. Subject to the provisions of this Section 4.7, each Purchaser severally and not jointly with the other Purchasers,
will indemnify and hold the Company and its directors, officers, shareholders, members, partners, employees and agents harmless
from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that the Company may suffer
or incur as a result of or relating to any breach of any of the representations, warranties, covenants or agreements made by the
Purchaser in this Agreement. If any action shall be brought against the Company in respect of which indemnity may be sought pursuant
to this Agreement, the Company shall promptly notify such Purchaser in writing, and the Purchaser shall have the right to assume
the defense thereof with counsel of its own choosing reasonably acceptable to the Company. The Company shall have the right to
employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall
be at the expense of such Company except to the extent that (i) the employment thereof has been specifically authorized by the
Purchaser in writing, (ii) the Purchaser has failed after a reasonable period of time to assume such defense and to employ counsel
or (iii) in such action there is, in the reasonable opinion of such separate counsel, a material conflict on any material issue
between the position of the Company and the position of such Purchaser, in which case the Purchaser shall be responsible for the
reasonable fees and expenses of no more than one such separate counsel. Such Purchaser will not be liable to the Company under
this Agreement (i) for any settlement by the Company effected without the Purchaser’s prior written consent, which shall
not be unreasonably withheld or delayed; (ii) to the extent, but only to the extent that a loss, claim, damage or liability is
attributable to any of the Company’s breach of any of the representations, warranties, covenants or agreements made by the
Company in this Agreement, or (iii) in an amount in excess of such Purchaser’s gain upon such Purchaser’s sale of the
Common Stock and/or Warrant Shares acquired pursuant to this Agreement.
4.8
Reservation of Common Stock. As of the date hereof, the Company has reserved
and the Company shall continue to reserve and keep available at all times, free of preemptive rights, a sufficient number of shares
of Common Stock for the purpose of enabling the Company to issue Shares pursuant to this Agreement and Warrant Shares pursuant
to any exercise of the Warrants.
4.9
Listing of Common Stock. The Company hereby agrees to use best efforts
to maintain the listing or quotation of the Common Stock on a Trading Market. The Company will take all action reasonably necessary
to continue the listing or quotation and trading of its Common Stock on a Trading Market and will comply in all respects with the
Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market.
4.10
Short Sales and Confidentiality After The Date Hereof. Each Purchaser
severally and not jointly with the other Purchasers, covenants that neither it nor any Affiliate acting on its behalf or pursuant
to any understanding with it will execute any Short Sales during the period commencing at the Discussion Time and ending at the
time that the transactions contemplated by this Agreement are first publicly announced as described in Section 4.4. Each Purchaser,
severally and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated by this Agreement
are publicly disclosed by the Company as described in Section 4.4, such Purchaser will maintain the confidentiality of the existence
and terms of this transaction and the information included in the Disclosure Schedules. Notwithstanding the foregoing, no Purchaser
makes any representation, warranty or covenant hereby that it will not engage in Short Sales in the securities of the Company after
the time that the transactions contemplated by this Agreement are first publicly announced as described in Section 4.4. Notwithstanding
the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser’s assets and the portfolio managers have no knowledge of the investment decisions made
by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only apply
with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities
covered by this Agreement.
4.11
Delivery of Securities After Closing. The Company shall deliver, or cause
to be delivered, the respective Securities purchased by each Purchaser to such Purchaser within five (5) Trading Days of the Closing
Date.
4.12
Form D; Blue Sky Filings. The Company agrees to file in a timely manner
a Form D with respect to the Securities as required under Regulation D and to provide a copy thereof, promptly upon request of
any Purchaser. The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an
exemption for, or to qualify the Securities for, sale to the Purchasers at the Closing under applicable securities or “Blue
Sky” laws of the states of the United States, and shall provide evidence of such actions promptly upon request of any Purchaser.
4.13
Adjustment Upon Issuance of Shares
of Common Stock. The Per Share Purchase Price shall be subject
to adjustment in accordance with this Section 4.13. Provided that if the volume-weighted average trading price for the last twenty
(20) consecutive trading days that conclude the six (6) month period after the Initial Closing (the “Six Month Price”)
exceeds or equals $0.50 per share (the “Target Price”), the Per Share Purchase Price will not be adjusted. If
the Six Month Price is less than the Target Price, the Per Share Purchase Price will be automatically reduced to the Six Month
Price, but in no event less than $0.35 per Share, in which case the Company shall issue to each Purchaser, based on such Purchaser’s
investment: (a) shares in a quantity that equals the difference between the number of Shares issued to such Purchaser at closing
and the number of Shares that would have been issued to such Purchaser at closing at the Six Month Price; and (b) a Warrant for
a number of Warrant Shares equal to fifty percent (50%) of the difference between the number of Shares issued to such Purchaser
at closing and the number of Shares that would have been issued to such Purchaser at closing at the Six Month Price, with an exercise
price equal to the sum of $0.10 per Share and the Six Month Price, but in no event less than $0.45 per Share. The exercise price
per share for the Warrant issued at Closing will automatically adjust to the sum of $0.10 per share and the Six Month Price, but
in no event less than $0.45 per Share.
By
way of example, if a Purchaser invests an aggregate of $1,000,000 and the Six Month Price exceeds or equals the Target Price, the
Purchaser will have received an aggregate of 2,000,000 Shares and a Warrant for 1,000,000 Warrant Shares at an exercise price of
$0.60 per Share. If the Six Month Price is $0.40, Purchaser will have received an aggregate of 2,500,000 Shares and a Warrant for
1,250,000 Warrant Shares at an exercise price of $0.50 per share.
SECTION
V.
MISCELLANEOUS
5.1
Fees and Expenses. Each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation,
preparation, execution, delivery and performance of this Agreement. The Company shall further be responsible for the payment of
any placement agent’s fees, financial advisory fees, transfer agent fees, the fees and expenses of DTC (as defined below)
fees or broker’s commissions relating to or arising out of the transactions contemplated hereby (including, without limitation,
any fees payable to any placement agent of the Company in connection with the transactions contemplated by this Agreement). The
Company shall pay all Transfer Agent fees, stamp taxes and other taxes and duties levied in connection with the delivery of any
Securities to the Purchasers.
5.2
Entire Agreement. The Transaction Documents, together with the exhibits
and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede
all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been
merged into such documents, exhibits and schedules.
5.3
Notices. Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date
of transmission, if such notice or communication is delivered via facsimile or email at the facsimile number set forth on the signature
pages attached hereto or the email address set forth on the signature pages attached hereto prior to 5:30 p.m. (PST) on a Business
Day, (b) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the
facsimile number set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (PST)
on any Business Day, (c) the 2nd Business Day following the date of mailing, if sent by U.S. nationally recognized overnight
courier service, or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices
and communications shall be as set forth on the signature pages attached hereto.
5.4
Amendments; Waivers. No provision of this Agreement may be waived or
amended except in a written instrument signed, in the case of an amendment, by the Company and the Purchasers of more than fifty
percent (50%) of the Shares still held by the Purchasers or, in the case of a waiver, by the party against whom enforcement of
any such waived provision is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement
shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair
the exercise of any such right.
5.5
Headings. The headings herein are for convenience only, do not constitute
a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.
5.6
Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties and each of their successors and permitted assigns.
5.7
Assignment. Each Purchaser acknowledges that it may not assign any of
its rights to or interest in or under this Agreement without the prior written consent of the Company, and any attempted assignment
without such consent shall be void and without force or effect.
5.8
No Third-Party Beneficiaries. This Agreement is intended for the benefit
of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision
hereof be enforced by, any other Person, except as otherwise set forth in Section 4.8.
5.9
Governing Law. All questions concerning the construction, validity, enforcement
and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal
laws of the State of Delaware, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings
concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction
Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or
agents) shall be commenced exclusively in the state and federal courts sitting in Los Angeles, California. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in the Los Angeles, California for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with
respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any
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 improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered
or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under
this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.
5.10
Survival. The representations and warranties contained herein shall survive
the Closing and the delivery of the Shares and Warrant Shares.
5.11
Execution. This Agreement may be executed in two or more counterparts,
all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have
been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart.
In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data
file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed)
with the same force and effect as if such facsimile or “.pdf” signature page was an original thereof.
5.12
Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction.
It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions,
covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
5.13
Replacement of Securities. If any certificate or instrument evidencing
any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution
for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument,
but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction. The applicant for
a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including customary indemnity)
associated with the issuance of such replacement Securities.
5.14
Independent Nature of Purchasers’ Obligations and Rights. The obligations
of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no
Purchaser shall be responsible in any way for the performance or non-performance of the obligations of any other Purchaser under
any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Purchaser pursuant
thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity,
or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or
the transactions contemplated by the Transaction Documents. Each Purchaser shall be entitled to independently protect and enforce
its rights, including without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and
it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose. Each
Purchaser has been represented by its own separate legal counsel in their review and negotiation of the Transaction Documents.
The Company’s counsel does not represent any of the Purchasers. The Company has elected to provide all Purchasers with the
same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by
the Purchasers.
5.15
Construction. The parties agree that each of them and/or their respective
counsel has reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction
to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of
the Transaction Documents or any amendments hereto.
IN WITNESS WHEREOF, the parties hereto have caused
this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date indicated on the
signature page.
BARFRESH FOOD GROUP inc.
By: /s/ Riccardo Delle Coste
Name: Riccardo Delle Coste
Title: Chief Executive Officer
Date: 3/19/2020
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Address for Notice:
Barfresh Food Group, Inc.
3600 Wilshire Boulevard Suite 1720
Los Angeles CA 90010
Attention: Riccardo Delle Coste,
Chief Executive Officer
Email: riccardo@barfresh.com
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[REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK]
[SIGNATURE PAGE FOR PURCHASER FOLLOWS]
[PURCHASER SIGNATURE PAGES TO BARFRESH
FOOD GROUP INC. SECURITIES PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the undersigned
have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first
indicated above.
ENTITY, TRUST, ETC. PURCHASERS
Entity Name:
Signature:
Name:
Title:
Date:
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INDIVIDUAL PURCHASERS
Signature: /s/ Justin Borus
Name: Justin Borus
Date: 3/18/2020
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Email:
Fax:
Address for Notice of Purchaser:
Address for Delivery of Securities for Purchaser (if not same as
address for notice):
Subscription Amount: $ 1,500,000
EIN Number:
Exhibit 3
FORM OF WARRANT
NEITHER THIS SECURITIES
REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES ISSUABLE UPON ITS EXERCISE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL
OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THE
SECURITIES REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES ISSUABLE UPON ITS EXERCISE MAY BE PLEDGED IN CONNECTION WITH A BONA
FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
[FORM OF] SERIES-O COMMON STOCK PURCHASE
WARRANT
BARFRESH FOOD GROUP, INC.
Warrant Shares: O-1____
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Initial Issuance Date:
March __, 2020
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THIS SERIES-O COMMON
STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, [___________] (the “Holder”)
is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on
or after the date hereof (the “Initial Exercise Date”) and on or prior to the close of business on the three
(3) year anniversary of the Initial Exercise Date (the “Termination Date”) but not thereafter, to subscribe
for and purchase from Barfresh Food Group, Inc., a Delaware corporation (the “Company”), up to [___________]
shares (the “Warrant Shares”) of Common Stock of the Company. The purchase price of one (1) Warrant Share under
this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
Section 1. Definitions.
Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement,
of even date herewith (the “Purchase Agreement”), among the Company and the purchasers signatory thereto.
Section 2. Exercise.
a)
Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may
be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date
by delivery to the Company of a duly executed facsimile copy or emailed electronic copy of the Notice of Exercise Form annexed
hereto (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder at the
address of such Holder appearing on the books of the Company); and, within three (3) Trading Days of the date said notice is delivered
to the Company, the Company shall have received payment of the aggregate Exercise Price of the Warrant Shares thereby purchased
by wire transfer. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this
Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised
in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of
the date the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of
a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of
Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the
Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall
deliver any objection to any Notice of Exercise Form within two (2) Business Days of receipt of such notice. The Holder and
any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following
the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any
given time may be less than the amount stated on the face hereof.
b)
Exercise Price. The exercise price per Warrant Share under this Warrant shall be SIXTY
CENTS ($0.60), subject to adjustment hereunder (the “Exercise Price”).
c)
Holder’s Restrictions. A Holder shall not have the right to exercise any portion
of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as
set forth on the applicable Notice of Exercise, such Holder (together with such Holder’s Affiliates, and any other person
or entity acting as a group together with such Holder or any of such Holder’s Affiliates), would beneficially own in excess
of the Beneficial Ownership Limitation (as defined below). For purposes of this Section 2(c) beneficial ownership shall be calculated
in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged
by the Holder that the Company is not representing to such Holder that such calculation is in compliance with Section 13(d) of
the Exchange Act and such Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent
that the limitation contained in this Section 2(d) applies, the determination of whether this Warrant is exercisable (in relation
to other securities owned by such Holder together with any Affiliates) and of which portion of this Warrant is exercisable shall
be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination
of whether this Warrant is exercisable (in relation to other securities owned by such Holder together with any Affiliates) and
of which portion of this Warrant is exercisable, in each case subject the Beneficial Ownership Limitation, and the Company shall
have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status
as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder. For purposes of this Section 2(d), in determining the number of outstanding shares of Common Stock, a Holder may rely
on the number of outstanding shares of Common Stock as reflected in (x) the Company’s most recent Form 10-Q or Form 10-K,
as the case may be, (y) a more recent public announcement by the Company or (z) any other notice by the Company or the Company’s
Transfer Agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the
Company shall within two Trading Days confirm orally and in writing to such Holder the number of shares of Common Stock then outstanding.
In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise
of securities of the Company, including this Warrant, by such Holder or its Affiliates since the date as of which such number of
outstanding shares of Common Stock was reported.
The “Beneficial
Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant. The provisions of this paragraph shall
be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(d) to correct this
paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein
contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations
contained in this paragraph shall apply to a successor holder of this Warrant. The limitations contained in this paragraph shall
not apply to any holder of greater than 5% of the Common Stock of the Company prior to the Initial Exercise Date. The Beneficial
Ownership Limitation provisions of this Section 2(c) may be waived by such Holder upon 65 days written notice to the Company.
d)
Mechanics of Exercise.
i.
Delivery of Certificates Upon Exercise. Certificates for shares purchased hereunder
shall be transmitted by the Transfer Agent of the Company to the Holder by physical delivery to the address specified by the Holder
in the Notice of Exercise within three (3) Trading Days from the delivery to the Company of the Notice of Exercise Form, surrender
of this Warrant (if required) and payment of the aggregate Exercise Price as set forth above (“Warrant Share Delivery
Date”). This Warrant shall be deemed to have been exercised on the date the Exercise Price is received by the Company.
The Warrant Shares shall be deemed to have been issued, and Holder or any other person so designated to be named therein shall
be deemed to have become a holder of record of such shares for all purposes, as of the date the Warrant has been exercised by payment
to the Company of the Exercise Price and all taxes required to be paid by the Holder, if any, pursuant to Section 2(d)(v) prior
to the issuance of such Warrant Shares, have been paid. The Warrant Shares shall bear a restrictive legend substantially similar
to the restrictive legend placed on the Common Shares issued pursuant to the Purchase Agreement.
ii.
Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in
part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of
the certificate or certificates representing Warrant Shares, deliver to Holder a new Warrant evidencing the rights of Holder to
purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical
with this Warrant.
iii.
Rescission Rights. If the Company fails to cause its Transfer Agent to transmit to
the Holder a certificate or certificates representing the Warrant Shares pursuant to this Section 2(e)(ii) by the Warrant Share
Delivery Date, then the Holder will have the right to rescind such exercise.
iv.
No Fractional Shares or Scrip. No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which Holder would otherwise be entitled
to purchase upon such exercise, the Company shall at its election, either pay a cash adjustment in respect of such final fraction
in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.
v.
Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares shall be made
without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate,
all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder or
in such name or names as may be directed by the Holder; provided, however, that in the event certificates for Warrant
Shares are to be issued in a name other than the name of the Holder, this Warrant, when surrendered for exercise, shall be accompanied
by the Assignment Form attached hereto duly executed by the Holder; and the Company may require, as a condition thereto, the payment
of a sum sufficient to reimburse it for any transfer tax incidental thereto.
vi.
Closing of Books. The Company will not close its stockholder books or records in any
manner that prevents the timely exercise of this Warrant, pursuant to the terms hereof.
Section 3. Certain
Adjustments.
a)
Price-Adjustment Pursuant to Purchase Agreement. If the Per Share Purchase Price is
adjusted under Section 4.13 of the Purchase Agreement, the Exercise Price shall automatically adjust to the sum of TEN CENTS
($0.10) per share and the Six Month Price, but in no event less than FORTY-FIVE CENTS ($0.45) per Share.
b)
Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding:
(i) pays a stock dividend or otherwise make a distribution or distributions on shares of its Common Stock or any other equity or
equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of
Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger
number of shares, (ii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number
of shares, or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then, in
each case, the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common
Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number
of shares of Common Stock outstanding immediately after such event and the number of shares issuable upon exercise of this Warrant
shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment
made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders
entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of
a subdivision, combination or re-classification.
c)
Calculations. All calculations under this Section 3 shall be made to the nearest cent
or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed
to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares,
if any) issued and outstanding.
d)
Voluntary Adjustment By Company. The Company may at any time during the term of this
Warrant reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors
of the Company provided that any such reduction is made in identical manner to all then unexercised Warrants held by Holders.
e)
Notice to Holder/Adjustment to Exercise Price. Whenever the Exercise Price is adjusted
pursuant to any provision of this Section 3, the Company shall promptly mail to the Holder a notice setting forth the Exercise
Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.
Section 4. Transfer
of Warrant.
a)
Transferability. Subject to compliance with any applicable securities laws and the
conditions set forth in Section 4(d) hereof and to the provisions of Section 4.1 of the Purchase Agreement, this Warrant and all
rights hereunder are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or
its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed
by the Holder or its agent or attorney and funds sufficient to pay the Company’s costs and any transfer taxes incurred in
connection with making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver
a new Warrant or Warrants in the name of the assignee or assignees and in the denomination or denominations specified in such instrument
of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant
shall promptly be cancelled. A Warrant, if properly assigned, may be exercised by a new holder for the purchase of Warrant Shares
without having a new Warrant issued.
b)
New Warrants. This Warrant may be divided or combined with other Warrants upon presentation
hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new
Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer
which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange
for the Warrant or Warrants to be divided or combined in accordance with such notice.
c)
Warrant Register. The Company shall register this Warrant, upon records to be maintained
by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time
to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any
exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.
d)
Transfer Restrictions. If, at the time of the surrender of this Warrant in connection
with any transfer of this Warrant, the transfer of this Warrant shall not be registered pursuant to an effective registration statement
under the Securities Act and under applicable state securities or blue sky laws, the Company may require, as a condition of allowing
such transfer, that the Holder or transferee of this Warrant, as the case may be, comply with the provisions of Section 4.1 of
the Purchase Agreement.
Section 5. Miscellaneous.
a)
Registration Rights. The holders of Warrants will be entitled to “piggyback”
registration rights on any registered offering by the Company on its own behalf or on behalf of selling stockholders, subject to
customary exceptions and limitations. The Company may require each holder of registrable securities as to which any registration
is being effected to furnish to the Company, within five (5) calendar days after written request therefor has been made by the
Company, such information regarding the distribution of such holder’s registrable securities as is required by law to be
disclosed.
b)
No Rights as Shareholder Until Exercise. This Warrant does not entitle the Holder to
any voting rights or other rights as a shareholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i).
c)
Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon
receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation
of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like
tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.
d)
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any
action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or
such right may be exercised on the next succeeding Business Day.
e)
Authorized Shares. The Company covenants that during the period the Warrant is outstanding,
it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the
Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of
this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute
and issue the necessary certificates for the Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without
violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Stock may be
listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented
by this Warrant will, upon exercise of the purchase rights represented by this Warrant, be duly authorized, validly issued, fully
paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other
than taxes in respect of any transfer occurring contemporaneously with such issue).
Except and to the
extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its
certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale
of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be
necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the
generality of the foregoing, the Company will (a) not increase the par value of any Warrant Shares above the amount payable therefor
upon such exercise immediately prior to such increase in par value, (b) take all such action as may be necessary or appropriate
in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant,
and (c) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory
body having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant.
Before taking any
action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise
Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any
public regulatory body or bodies having jurisdiction thereof.
f)
Jurisdiction. All questions concerning the construction, validity, enforcement and
interpretation of this Warrant shall be determined in accordance with the provisions of the Purchase Agreement.
g)
Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise
of this Warrant, if not registered, will have restrictions upon resale imposed by state and federal securities laws.
h)
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any
right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice Holder’s rights, powers
or remedies, notwithstanding the fact that all rights hereunder terminate on the Termination Date.
i)
Notices. Any notice, request or other document required or permitted to be given or
delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement.
j)
Limitation of Liability. No provision hereof, in the absence of any affirmative action
by Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of Holder,
shall give rise to any liability of Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether
such liability is asserted by the Company or by creditors of the Company.
k)
Successors and Assigns. Subject to applicable securities laws, this Warrant and the
rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors of the Company and the
successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of all Holders from
time to time of this Warrant and shall be enforceable by any such Holder or holder of Warrant Shares.
l)
Amendment. This Warrant may be modified or amended or the provisions hereof waived
with the written consent of the Company and the Holder.
m)
Severability. Wherever possible, each provision of this Warrant shall be interpreted
in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating
the remainder of such provisions or the remaining provisions of this Warrant.
n)
Headings. The headings used in this Warrant are for the convenience of reference only
and shall not, for any purpose, be deemed a part of this Warrant.
IN WITNESS WHEREOF,
the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
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BARFRESH FOOD GROUP, INC.
By:__________________________________________
Name: Riccardo Delle Coste
Title: Chief Executive Officer
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NOTICE
OF EXERCISE
To: BARFRESH
FOOD GROUP INC.
(1)
The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant
to the terms of the attached Warrant and tenders herewith payment of the exercise price in full, together with all applicable transfer
taxes, if any.
(2)
Payment shall take the form of (check applicable box):
[ ] in lawful
money of the United States by Wire Transfer; or
[ ] in lawful
money of the United States by Cashier’s Check of immediately available funds drawn on a US banking institution.
(3)
Please issue a certificate or certificates representing said Warrant Shares in the name of
the undersigned or in such other name as is specified below:
_______________________________
The Warrant Shares shall be delivered by physical
delivery of a certificate to:
_______________________________
_______________________________
_______________________________
(4) Accredited Investor.
The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933,
as amended.
[SIGNATURE
OF HOLDER]
Name of Investing Entity:
Signature:
Name:
Title:
Date:
ASSIGNMENT
FORM
(To assign the foregoing warrant, execute
this form and supply required information.
Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED,
[____] all of or [_______] shares of the foregoing Warrant and all rights evidenced thereby are hereby assigned to
_______________________________________________
whose address is
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Holder’s Signature:
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Holder’s Address:
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Dated:
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Signature Guaranteed: ___________________________________________
NOTE: The signature to this Assignment Form
must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever,
and must be guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing Warrant.
Exhibit 4
ESCROW AGREEMENT
This Escrow Agreement (“Escrow
Agreement”) is made between Barfresh Food Group, Inc., a corporation organized under the laws of Delaware (the “Issuer”),
Libertas Law Group, Inc., a corporation organized under the laws of California (the “Escrow Agent”) and the purchasers
under that certain Securities Purchase Agreement of even date herewith (the “Purchase Agreement”), between the Issuer
and the purchasers’ and signatory thereto and hereto (“Purchasers”).
RECITALS
A. Issuer
is conducting a private offering of its securities (the “Offering”) of securities pursuant to the terms of the Purchase
Agreement. Purchaser wishes that Escrow Agent hold its investment ("Investment Funds") in a segregated account (the “Escrow
Account”) for the deposit and disbursement of Investment Funds in accordance with the instructions in this Escrow Agreement
and the Purchase Agreement.
B. The
Escrow Agent is willing to act as an escrow agent upon the terms and conditions hereinafter set forth.
In consideration of the matters described
above, and of the mutual benefits and obligations set forth in this Escrow Agreement, the parties agree as follows:
SECTION I. APPOINTMENT OF ESCROW AGENT
Purchaser appoints the Escrow Agent as
depository with respect to the Offering pursuant to the terms and conditions of this Escrow Agreement.
SECTION II. DEPOSIT WITH ESCROW AGENT
The Escrow Agent agrees to accept and
hold, from time to time, funds that shall be delivered to the Escrow Agent. The Escrow Agent shall place the escrow deposits in
a non-interest bearing account captioned “Libertas Law Group, Inc. FBO Barfresh Food Group, Inc.” and will hold the
funds for safekeeping. Escrow Agent shall not be liable for any loss of funds due to the failure of banking institutions failure
or loss of funds.
SECTION III. THE OFFERING
The Offering is contingent upon, among
other conditions contained in the Purchase Agreement, the Issuer receiving and accepting executed Purchase Agreements for aggregate
subscriptions of at least Three Million Dollars ($3,000,000) (the “Minimum Offering Condition”) on or prior to the
Initial Closing Date. The Issuer may withdraw the Offering in its sole discretion for any reason whatsoever. The Issuer may reject
any subscription, in whole in part, at any time, in its sole discretion. The Escrow Agent is not a party to, and is not bound by,
or charged with notice of, any agreement out of which this escrow may arise.
SECTION IV. DURATION OF ESCROW ACCOUNT
AND DISBURSEMENT OF FUNDS
The Escrow Agent shall hold the funds
in the Escrow Account until the occurrence of any one of the following events, and upon such occurrence, the Escrow Agent shall
deliver funds as follows:
A. In
the event that the Minimum Offering Condition is not met by the date required under the SPA, within three (3) business days thereof,
the Escrow Agent will refund to the individual investors on record any amounts on deposit.
B. Upon
the satisfaction of the Minimum Offering Condition, all subscription monies in the Escrow Account will be released to, and in the
name of, the Issuer. Thereafter, all funds deposited in the Escrow Account will be released to the Issuer as Purchase Agreements
are accepted by the Issuer.
SECTION V. COLLECTION PROCEDURE
The Escrow Agent shall be only accept
proceeds by wire transfer of immediately available funds, according to the instructions attached hereto. In the event that the
Escrow Agent accept a check, then the Escrow Agent shall be under no duty or responsibility to enforce collection of any checks
delivered to the Escrow Agent. The Escrow Agent is authorized to forward each check for collection and upon collection of the proceeds
of each check, deposit the collected proceeds in the Escrow Account. As an alternative, the Escrow Agent may at its discretion
telephone the bank on which the check is drawn to confirm that the check has been paid. The Escrow Agent will not be accountable
for the proceeds of any such item until the proceeds are received from the Escrow Agent in final collected funds. The Escrow Agent
shall promptly return any check or instrument received from the Issuer or agent of the Issuer upon which payment is refused, together
with the related documents that were delivered to the Escrow Agent. In such cases, the Escrow Agent will promptly notify the Issuer
of such return. If the Issuer rejects any subscription for which the Escrow Agent has already collected funds, the Escrow Agent
shall promptly issue a refund check to the rejected subscriber. If the Issuer rejects any subscription for which the Escrow Agent
has not yet collected fund but has submitted the subscriber’s check for collection, the Escrow Agent shall promptly issue
a check in the amount of the subscriber’s check to the rejected subscriber after the Escrow Agent has cleared such funds.
If the Escrow Agent has not yet submitted a rejected subscriber’s check for collection, the Escrow Agent shall promptly remit
the subscriber’s check directly to the subscriber. If Escrow Agent has disbursed funds to the Issuer and subsequently subscriber’s
check is returned for any reason, the Issuer shall become responsible for reimbursing the Escrow Agent. Upon receipt of reimbursement
funds, the Escrow Agent will return subscriber’s check to the Issuer.
SECTION VI. LIABILITY OF ESCROW AGENT
The duties and obligations of the Escrow
Agent pursuant to this Escrow Agreement will be determined solely by the express provisions of this Escrow Agreement and the laws
of the state of California. The Escrow Agent acts under this Escrow Agreement as a depository only, and is not responsible or liable
in any manner whatever for the sufficiency, correctness, genuineness or validity of the subject matter of the escrow, or any part
thereof, or for the form or execution thereof, or for the identity or authority of any person executing or depositing it. The Escrow
Agent shall have no implied duties or obligations to determine or inquire into the happening or occurrence of any event or contingency,
or the performance or failure of performance of any of the parties to this Escrow Agreement. The Escrow Agent’s sole duty
pursuant to this Escrow Agreement shall be to safeguard the deposited funds in the Escrow Account and to dispose and deliver the
same in accordance with the instruction given to the Escrow Agent in accordance with this Escrow Agreement. In the event that the
Escrow Agent is called upon by the terms of this Escrow Agreement to determine the occurrence of any event or contingency, the
Escrow Agent shall be obligated in making such determination only to exercise reasonable care and diligence. The Escrow Agent shall
be liable for anything which it may do or refrain from doing only if its conduct represents willful misconduct or gross negligence
in light of all of the circumstances surrounding such actions, taking into consideration the time and facilities available to the
Escrow Agent in the ordinary conduct of its business. In determining the occurrence of any such event or contingency, the Escrow
Agent may request from any of the parties to this Escrow Agreement, or any other person, such reasonable additional evidence as
the Escrow Agent in its sole discretion may deem necessary to determine any fact relating to the occurrence of such event or contingency,
and in this connection, may inquire and consult with any of the parties to this Escrow Agreement. The Escrow Agent shall not be
liable for any damages resulting from its delay in acting under this Escrow Agreement pending its examination of the additional
evidence that has been requested by the Escrow Agent. In the event that the Escrow Agent is required to take certain action upon
the occurrence of any event or contingency, the time prescribed for action by the Escrow Agent shall, in all cases, be reasonable
time after written notice to the Escrow Agent of the occurrence of such event or contingency. In the event that the Escrow Agent
becomes involved in litigation in connection with this escrow, or in the event that the Escrow Agent files its own interpleader
in any court of competent jurisdiction to determine the rights of the parties to this Escrow Agreement, the Issuer agrees to indemnify
and save the Escrow Agent harmless from all loss, costs, damages, expenses, and reasonable attorney’s fees suffered or incurred
by the Escrow Agent as a result thereof.
SECTION VII. RELIANCE OF ESCROW AGENT
The Escrow Agent will be entitled to
rely upon and will be protected in acting in reliance upon any instructions, directions or information furnished to it in writing
by any agent of the Issuer pursuant to the provisions of this Escrow Agreement or upon any written notice, request, waiver, consent,
certificate, receipt, authorization, power of attorney or other paper or document which the Escrow Agent in good faith believes
to be genuine and what it purports to be. The Escrow Agent is authorized to rely upon the representations of the Issuer as to its
authority to execute and deliver this Escrow Agreement, notifications, receipts or instructions under this Escrow Agreement and
as to relationships among persons, including persons authorized to receive delivery under this Escrow Agreement. Written notice
of any succession or assignment of any interest of any party specified in this Escrow Agreement shall be given to the Escrow Agent,
and shall not be effective until received by the Escrow Agent. The Escrow Agent may consult with legal counsel (payable only out
of escrowed funds which the Issuer has become entitled to receive) in the event of any dispute or question as to the construction
of any of the provisions of this Escrow Agreement or its duties under this Escrow Agreement, and it shall incur no liability and
shall be fully protected in acting accordance with the opinion and instructions of such counsel. Under no circumstances shall the
Escrow Agent be liable for any general or consequential damages or damages caused, in whole or in part, by the action or inaction
of the Issuer or any of its agents or employees. The Escrow Agent shall not be liable for any damage, loss, liability or delay
caused by accidents, strikes, fire, flood, war, riot, equipment breakdown, electrical or mechanical failure, acts of nature or
any cause which is reasonably unavailable or beyond its reasonable control.
SECTION VIII. FUNDS DEDICATED
The funds deposited into the Escrow Account
shall be held in escrow until such time as the Investment Funds are disbursed in accordance with this Escrow Agreement. The Issuer
is aware and understands that it is not entitled to Investment Funds received into escrow and no amounts deposited in the Escrow
Account shall become the property of the Issuer or any other entity, or be subject to the debts of the Issuer or any other entity,
until disbursed in accordance with this Escrow Agreement. The Escrow Agent is aware and understands that no amounts deposited into
the Escrow Account, other than as provided in this Escrow Agreement, shall become the property of the Escrow Agent, or any other
entity, or be subject to the debts of the Escrow Agent or any other entity.
SECTION IX. INTERPLEADER
In the event of any disagreement between
any of the parties to this agreement, or between them or either or any of them and any other person, resulting in adverse claims
or demands being made in connection with the subject matter of the escrow, or in the event that the Escrow Agent may, at its option,
refuse to comply with any claims or demands on it, or refuse to take any other action under this Escrow Agreement, as long as such
disagreement continues or such doubt exists, and in any such event, the Escrow Agent shall be entitled to continue so to refrain
from acting until (i) the rights of all parties shall have been fully and finally adjudicated by a court of competent jurisdiction,
or (ii) all differences shall have been adjusted and all doubt resolved by agreement among all interested persons, and the Escrow
Agent shall have been notified thereof in writing signed by all such persons, and the Escrow Agent shall have been notified thereof
in writing signed by all such persons. The rights of the Escrow Agent under this Section are cumulative of all other rights which
it may have by law or otherwise.
SECTION X. INDEMNIFICATION
The Escrow Agent, its affiliates, and
each of its officers, directors, employees, agents and attorneys (collectively, the “Indemnified Parties”) shall be
indemnified against and be held harmless by the Issuer from any losses, costs, damages, expenses, claims and attorney’s fees
suffered or incurred by the Indemnified Parties as a result of, in connection with or arising from, or out of, but not limited
to, the acts or omissions of any Indemnified Party, the bank holding the Investment Funds, or Purchasers, in performance of or
pursuant to this Escrow Agreement, except such acts or omissions as may result from such Indemnified Party’s willful misconduct,
gross negligence, or fraud.
SECTION X. NOTICES
All notices, requests, demands or other
communications with deliveries required or permitted to be given pursuant to this Escrow Agreement shall be in writing and shall
be deemed to have been duly given if delivered personally, given by prepaid telegram, or deposited for mail by first-class mail,
postage prepaid, sent either registered or certified mail as follows:
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A.
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If to the investors in the Offering, to the address of each respective
investor listed in the Purchase Agreement delivered to the Escrow Agent.
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B.
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If to the Issuer, then to the address of listed in the Purchase Agreement.
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C.
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If to the Escrow Agent: Libertas Law Group, Inc., 225 Santa Monica
Boulevard, 5th Floor, Santa Monica, CA 90401.
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In the event that the Escrow Agent is
authorized or directed under the terms of this Escrow Agreement to deliver the subject matter of the escrow, or any part thereof,
to any of the undersigned, such delivery may be made by depositing the same in the United States mail in an envelope addressed
to the person to whom such delivery is to be made at the person’s address as shown in this Section.
SECTION XI. FEES AND EXPENSES
Purchaser understands that Escrow Agent
is the legal counsel of the Issuer, and does not represent Purchaser in any manner. The Escrow Agent is not charging fees for its
services hereunder; provided however the Escrow Agent shall be entitled to reimbursement of any out-of-pocket expenses incurred
in connection with the performance of its services as escrow agent, including reasonable fees and disbursements of legal counsel.
SECTION XII. APPOINTMENT OF SUCCESSOR
ESCROW AGENT
The Escrow Agent may resign by giving
five (5) days advance written notice to the Issuer. The Issuer may within its sole discretion terminate the appointment of the
Escrow Agent and appoint a successor escrow agent (“Successor Escrow Agent”). Upon receipt of notice from the Successor
Escrow Agent of its acceptance of the appointment by the Issuer as Successor Escrow Agent, the Escrow Agent shall deliver to the
Successor Escrow Agent all funds held in the Escrow Account to be administered by the Successor Escrow Agent in accordance with
its written agreement with the Issuer. Upon such delivery, the Escrow Agent shall be released from any and all liability under
this Escrow Agreement.
SECTION XIII. PATRIOT ACT COMPLIANCE
The Issuer agrees to provide any necessary
documentation to Escrow Agent as required for the Escrow Agent to comply with verification procedures specified in the U.S.A. Patriot
Act. Documents include but are not limited to: (1) certified articles of incorporation, (2) a corporate resolution with the signature
of the person signing this Escrow Agreement, (3) a completed IRS Form W-9, and (4) a government-issued photo I.D. In addition,
the Issuer will have its investors provide identifying documentation as required for the Escrow Agent to comply with verification
procedures specified in the U.S.A. Patriot Act.
SECTION XIV. GENERAL
Whenever under the terms of this Escrow
Agreement the performance date of any provision of this Escrow Agreement shall fall on a holiday of the Escrow Agent, the performance
thereof on the next successive business day of the Escrow Agent shall be deemed to be in full compliance with this Escrow Agreement.
This Agreement shall be construed in accordance with the laws of California, and all obligations of the parties under this Escrow
Agreement are performable in Santa Monica, California. This Agreement shall be binding upon and inure to the benefit of the parties
to this Escrow Agreement and their respective heirs, executors, administrations, legal representatives, successors and assigns.
In case any one or more of the provisions contained in this Escrow Agreement shall for any reason be held to be invalid, illegal,
or unenforceable, the remaining provisions shall not be affected thereby, and this Escrow Agreement shall be construed as if such
invalid, illegal, or unenforceable provision had never been contained in this Escrow Agreement. This Agreement constitutes the
sole and only agreement of the parties to this Escrow Agreement and supersedes any prior understandings or written or oral agreements
between the parties respecting the within subject matter, save and except those agreements entered into contemporaneously in this
Escrow Agreement and as are referred to in this Escrow Agreement. The headings used in this Escrow Agreement have been included
only in order to make it easier to locate the subject covered by each provision and are not to be used in construing this Escrow
Agreement. This Agreement may be executed in any number of counterparts, and each such counterpart shall for all purposes be deemed
an original. This Agreement may not be modified or amended except by a written instrument signed by the parties to this Escrow
Agreement and referring specifically to this Escrow Agreement. Each party shall, upon the request of the other party, execute,
acknowledge, and deliver any and all instruments reasonably necessary or appropriate to carry into effect the intention of the
parties as expressed in this Escrow Agreement.
The parties have executed this Escrow
Agreement the day and year first set forth above.
ISSUER”
Barfresh food
group, inc.
By: /s/ Riccardo Delle Coste
Name: Riccardo Delle Coste
Title: Chief Executive Officer
Date: 3/19/20
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“ESCROW AGENT”
Libertas law group,
inc.
By: /s/ Mark Abdou
Name: Mark Abdou
Title: Partner
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PURCHASER
Name: Justin Borus
By: /s/ Justin Borus
Name: Justin Borus
Title:
Date: 3/18/2020
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WIRE INSTRUCTIONS
Account Name
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Account Number:
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Bank Address:
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Routing Number:
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SWIFT Number:
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