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UNITED STATES
SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported):
November 22, 2023 (November 21, 2023)
Aclarion,
Inc.
(Exact name of registrant as specified in its charter)
Delaware |
001-41358 |
47-3324725 |
(State or other jurisdiction |
(Commission |
(IRS Employer |
of incorporation) |
File Number) |
Identification No.) |
8181 Arista Place, Suite 100 |
|
Broomfield, Colorado |
80021 |
(Address of Principal Executive Offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (833) 275-2266
Not
Applicable
(Former name or former address, if changed since last report)
Check the appropriate box
below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following
provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
|
Trading |
|
Title of each class |
Symbol(s) |
Name of each exchange on which registered |
Common Stock |
ACON |
Nasdaq Stock Market |
Common
Stock Warrants |
ACONW |
Nasdaq Stock Market |
Indicate by check mark whether
the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule
12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company,
indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 1.01 Entry into a Material Definitive
Agreement.
$250,000 Unsecured
Note Financing
On November 21, 2023,
Aclarion, Inc. (the “Company”, “we” and “us”) entered into a securities purchase agreement with accredited
investors for an unsecured non-convertible note financing. The Company has received $250,000 of gross proceeds in connection with the
closing of this financing.
The securities purchase
agreement contains customary representations and warranties and agreements and obligations of the parties.
In connection with this
note financing, the Company will also issue to the investors (as more fully described below) certain (i) common stock warrants and (ii)
certain shares of common stock as a commitment fee.
The proceeds of this
note financing will be used for general corporate purposes.
Terms of the Notes
The notes will have a
15% original issue discount. The aggregate principal amount of the notes is $294,117.65. The notes have an 8% interest rate and will mature
April 19, 2024. The notes are unsecured. The notes are not convertible.
The notes may be prepaid
by the Company at any time without penalty. If the Company completes one or more qualified offerings of securities, then the notes become
redeemable at the option of the investor.
After an event of default,
the interest rate on the notes increases to 15%, and the notes become redeemable (at the option of the investor) at a redemption premium
of 25%.
Terms of the Warrants
In connection with the
closing, the Company issued to the investors 744,890 common stock warrants with a five-year term and an initial exercise price of $0.2865
per share.
The per share exercise
price of the warrants is subject to a “full ratchet” adjustment of the warrant exercise price if the Company issues securities
while the notes are outstanding at an effective per share price lower than the warrant exercise price then in effect.
Investor Commitment
Shares
In connection with the
closing, the Company will issue to the investors 148,978 shares of common stock as a commitment fee.
Placement Agent
Pre-Funded Fee Warrants
In connection with the
closing, the Company will issue to its placement agent pre-funded warrants for 25,210 shares of common stock as a placement agent fee.
These pre-funded warrants will not be exercisable
for six months after the date of issue.
Registration Rights
Agreement
Pursuant to a registration
rights agreement, the Company has agreed to file, not later than the 30th day following the closing, with the Securities and Exchange
Commission a registration statement (the “Registration Statement”) relating to the resale by the investors of (i) all of the
commitment shares, and (ii) all of the shares of Common Stock issuable upon the exercise of the warrants. The Company shall use its best
efforts to cause the Registration Statement to be declared effective as promptly as possible after the filing thereof, and shall use its
best efforts to keep such Registration Statement continuously effective thereafter.
* * * * * *
The foregoing description
of the securities purchase agreement, the notes, the warrants and the registration rights agreement is qualified in its entirety by reference
to the full text of those agreements, copies of which are filed as Exhibits 10.1, 10.2, 10.3 and 10.4 to this Current Report on Form 8-K
and incorporated herein by reference.
Item 3.02 Unregistered
Sales of Equity Securities.
The information set
forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
The securities described
above have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws
of any state, and were offered and sold in reliance on the exemption from registration under the Securities Act afforded by Section 4(a)(2)
thereof.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
ACLARION, INC. |
|
|
|
November 22, 2023 |
By: |
/s/ John Lorbiecki |
|
|
Name: John Lorbiecki |
|
|
Title: Chief Financial Officer |
Exhibit 10.1
Form Final
SECURITIES PURCHASE
AGREEMENT
This SECURITIES PURCHASE
AGREEMENT (the “Agreement”), dated as of November 21, 2023, is by and among Aclarion, Inc., a Delaware corporation
with offices located at 8181 Arista Place, Suite 100, Broomfield, CO 80021 (the “Company”),
and each of the investors listed on the Schedule of Buyers attached hereto (individually, a “Buyer” and collectively,
the “Buyers”).
RECITALS
A.On
May 16, 2023, the Company and certain of the Buyers (the “May Buyers”) executed and delivered that certain Securities
Purchase Agreement (the “May Securities Purchase Agreement”), pursuant to which, among other things, the Company issued
certain Initial Notes (as defined in the May Securities Purchase Agreement, the “Initial May Notes”) and subsequently
issued certain Additional Notes (as defined in the May Securities Purchase Agreement, the “Additional May Notes”, and
together with the Initial May Notes, the “May Notes”), shares of Common Stock (as defined below) and warrants to purchase
Common Stock to such May Buyers and granted certain registration rights with respect thereto pursuant to that certain registration rights
agreement by and among the Company and the May Buyers (the “May Registration Rights Agreement”).
B.The
Company and each Buyer is executing and delivering this Agreement in reliance upon the exemption from securities registration afforded
by Section 4(a)(2) of the Securities Act of 1933, as amended (the “1933 Act”), and Rule 506(b) of Regulation D (“Regulation D”)
as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the 1933 Act.
C.The
Company has authorized a new series of senior notes of the Company, in the aggregate original principal amount of $294,117.65, substantially
in the form attached hereto as Exhibit A (the “Notes”).
D.Each
Buyer wishes to purchase, and the Company wishes to sell, at the Closing (as defined below), upon the terms and conditions stated in this
Agreement, (i) a Note in the aggregate original principal amount set forth opposite such Buyer’s name in column (3) on the Schedule
of Buyers, (ii) such aggregate number of shares of Common Stock as set forth opposite such Buyer’s name in column (4) on the Schedule
of Buyers (which aggregate amount for all Buyers shall be 148,978 shares of Common Stock and shall collectively be referred to herein
as the “Commitment Shares”) (iii) a warrant to initially acquire up to that aggregate number of additional shares of
Common Stock set forth opposite such Buyer’s name in column (5) on the Schedule of Buyers, substantially in the form attached hereto
as Exhibit B (the “Warrants”) (as exercised, collectively, the “Warrant Shares”).
E.At
the Closing, the parties hereto shall execute and deliver a Registration Rights Agreement, in the form attached hereto as Exhibit
C (the “Registration Rights Agreement”), pursuant to which the Company has agreed to provide certain registration
rights with respect to the Registrable Securities (as defined in the Registration Rights Agreement), under the 1933 Act and the rules
and regulations promulgated thereunder, and applicable state securities laws.
F.The
Notes, Commitment Shares, the Warrants and the Warrant Shares are collectively referred to herein as the “Securities.”
AGREEMENT
NOW, THEREFORE, in consideration
of the premises and the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and each Buyer hereby agree as follows:
1.
PURCHASE AND SALE OF NOTES, COMMITMENT SHARES AND WARRANTS.
(a)
Purchase of Notes, Commitment Shares and Warrants. Subject to the satisfaction (or waiver) of the conditions set forth in
Sections 6(a) and 7(a) below, the Company shall issue and sell to each Buyer, and each Buyer severally, but not jointly, agrees to purchase
from the Company on the Closing Date (as defined below) (i) a Note in the original principal amount as is set forth opposite such Buyer’s
name in column (3) on the Schedule of Buyers, (ii) such aggregate number of Commitment Shares as is set forth opposite such Buyer’s
name in column (4) on the Schedule of Buyers, and (iii) Warrants to initially acquire up to that aggregate number of Warrant Shares as
is set forth opposite such Buyer’s name in column (5) on the Schedule of Buyers.
(b)
Closing. The closing (the “Closing”) of the purchase of the Notes, Commitment Shares and the Warrants by the
Buyers shall occur at the offices of Kelley Drye & Warren LLP, 3 World Trade Center, 175 Greenwich Street, New York, NY 10007. The
date and time of the Closing (the “Closing Date”) shall be 10:00 a.m., New York time, on the first (1st)
Business Day (as defined below) (and including the date hereof if a Business Day) on which the conditions to the Closing set forth in
Sections 6(a) and 7(a) below are satisfied or waived (or such other date as is mutually agreed to by the Company and each Buyer). As
used herein “Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks in The
City of New York are authorized or required by law to remain closed; provided, however,
for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”,
“shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure of any
physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including
for wire transfers) of commercial banks in The City of New York generally are open for use by customers on such day.
(c)
Purchase Price. The aggregate purchase price for the Notes, the Commitment Shares, and the Warrants to be purchased by each
Buyer (the “Purchase Price”) shall be the amount set forth opposite such Buyer’s name in column (6) on the Schedule
of Buyers. For the avoidance of doubt, the purchase price payable by each Buyer for the Notes, Commitment Shares, and the Warrants to
be purchased by such Buyer at the Closing shall be an amount in cash equal to $850 for each $1,000 of principal amount of Notes, Commitment
Shares, and Warrants to be purchased by such Buyer at the Closing. The Buyers and the Company agree that for purposes of applying Section
305 of the Internal Revenue Code of 1986, as amended (the “Code”), the Company will apply Section 1273(c)(2) of the
Code as if the Notes and the Warrants constitute an “investment unit” for purposes of Section 1273(c)(2) of the Code. The
parties agree that the allocation of the issue price of such investment unit between the Notes and the Warrants in accordance with Section
1273(c)(2) of the Code and Treasury Regulation Section 1.1273-2(h) as mutually agreed to by the parties, and none of the parties shall
take any position inconsistent with such allocation in any tax return or in any judicial or administrative proceeding in respect of taxes.
(d)
Form of Payment. On the Closing Date, (i) each Buyer shall pay its respective Purchase Price (less any amounts permitted
to be withheld by such Buyer pursuant to Section 4(g)) to the Company for the Notes and the Warrants to be issued and sold to such Buyer
at the Closing, by wire transfer of immediately available funds in accordance with the Flow of Funds Letter (as defined below), and (ii) the
Company shall deliver to each Buyer (A) a Note in the aggregate original principal amount as is set forth opposite such Buyer’s
name in column (3) of the Schedule of Buyers, (B) a stock certificate of the Company for such aggregate number of Commitment Shares as
set forth opposite such Buyer’s name in column (4) of the Schedule of Buyers, and (C) a Warrant pursuant to which such Buyer shall
have the right to initially acquire up to such aggregate number of Warrant Shares as is set forth opposite such Buyer’s name in
column (5) of the Schedule of Buyers, in each case, duly executed on behalf of the Company and registered in the name of such Buyer or
its designee.
(e)
Acknowledgement and Consent. Each May Buyer, severally, acknowledge, consent and agree that, from and after the Closing
Date: (i) the Notes shall be Permitted Indebtedness (as defined in the May Notes), (ii) Registrable Securities (as defined in the May
Registration Rights Agreement) shall include the Registrable Securities (as defined in the Registration Rights Agreement), and (iii) the
Notes shall rank pari passu with the May Notes.
2.
BUYER’S REPRESENTATIONS AND WARRANTIES.
Each Buyer, severally and
not jointly, represents and warrants to the Company with respect to only itself that, as of the date hereof and as of the Closing Date:
(a)
Organization; Authority. Such Buyer is an entity duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated
by the Transaction Documents to which it is a party and otherwise to carry out its obligations hereunder and thereunder.
(b)
No Public Sale or Distribution. Such Buyer (i) is acquiring its Note, Commitment Shares and Warrants and (ii) upon exercise
of its Warrants (other than pursuant to a Cashless Exercise (as defined in the Warrants)) will acquire the Warrant Shares issuable upon
exercise thereof, in each case, for its own account and not with a view towards, or for resale in connection with, the public sale or
distribution thereof in violation of applicable securities laws, except pursuant to sales registered or exempted under the 1933 Act; provided,
however, by making the representations herein, such Buyer does not agree, or make any representation or warranty, to hold any of the Securities
for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant
to a registration statement or an exemption from registration under the 1933 Act. Such Buyer does not presently have any agreement or
understanding, directly or indirectly, with any Person to distribute any of the Securities in violation of applicable securities laws.
For purposes of this Agreement, “Person” means an individual, a limited liability company, a partnership, a joint venture,
a corporation, a trust, an unincorporated organization, any other entity and any Governmental Entity or any department or agency thereof.
(c)
Accredited Investor Status. Such Buyer is an “accredited investor” as that term is defined in Rule 501(a) of
Regulation D.
(d)
Reliance on Exemptions. Such Buyer understands that the Securities are being offered and sold to it in reliance on specific
exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part
upon the truth and accuracy of, and such Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and
understandings of such Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of such Buyer
to acquire the Securities.
(e)
Information. Such Buyer and its advisors, if any, have been furnished with all materials relating to the business, finances
and operations of the Company and materials relating to the offer and sale of the Securities that have been requested by such Buyer. Such
Buyer and its advisors, if any, have been afforded the opportunity to ask questions of the Company. Neither such inquiries nor any other
due diligence investigations conducted by such Buyer or its advisors, if any, or its representatives shall modify, amend or affect such
Buyer’s right to rely on the Company’s representations and warranties contained herein. Such Buyer understands that its investment
in the Securities involves a high degree of risk. Such Buyer has sought such accounting, legal and tax advice as it has considered necessary
to make an informed investment decision with respect to its acquisition of the Securities.
(f)
No Governmental Review. Such Buyer understands that no United States federal or state agency or any other government or
governmental agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment
in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.
(g)
Transfer or Resale. Such Buyer understands that except as provided in the Registration Rights Agreement and Section 4(h)
hereof: (i) the Securities have not been and are not being registered under the 1933 Act or any state securities laws, and may not be
offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B) such Buyer shall have delivered to
the Company (if requested by the Company) an opinion of counsel, in a form reasonably acceptable to the Company, to the effect that such
Securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration, or
(C) such Buyer provides the Company with reasonable assurance that such Securities can be sold, assigned or transferred pursuant to Rule
144 or Rule 144A promulgated under the 1933 Act (or a successor rule thereto) (collectively, “Rule 144”); (ii) any
sale of the Securities made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144, and further, if Rule 144
is not applicable, any resale of the Securities under circumstances in which the seller (or the Person through whom the sale is made)
may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the
1933 Act or the rules and regulations of the SEC promulgated thereunder; and (iii) neither the Company nor any other Person is under any
obligation to register the Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any
exemption thereunder. Notwithstanding the foregoing, the Securities may be pledged in connection with a bona fide margin account or other
loan or financing arrangement secured by the Securities and such pledge of Securities shall not be deemed to be a transfer, sale or assignment
of the Securities hereunder, and no Buyer effecting a pledge of Securities shall be required to provide the Company with any notice thereof
or otherwise make any delivery to the Company pursuant to this Agreement or any other Transaction Document (as defined below), including,
without limitation, this Section 2(g).
(h)
Validity; Enforcement. This Agreement and the Registration Rights Agreement have been duly and validly authorized, executed
and delivered on behalf of such Buyer and shall constitute the legal, valid and binding obligations of such Buyer enforceable against
such Buyer in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or
to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally,
the enforcement of applicable creditors’ rights and remedies.
(i)
No Conflicts. The execution, delivery and performance by such Buyer of this Agreement and the Registration Rights Agreement
and the consummation by such Buyer of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational
documents of such Buyer, or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would
become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture
or instrument to which such Buyer is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including
federal and state securities laws) applicable to such Buyer, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults,
rights or violations which could not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the
ability of such Buyer to perform its obligations hereunder.
3.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and
warrants to each of the Buyers that, as of the date hereof and as of the Closing Date:
(a)
Organization and Qualification. Each of the Company and each of its Subsidiaries are entities duly organized and validly
existing and in good standing under the laws of the jurisdiction in which they are formed, and have the requisite power and authority
to own their properties and to carry on their business as now being conducted and as presently proposed to be conducted. Each of the Company
and each of its Subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction in which
its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that
the failure to be so qualified or be in good standing would not reasonably be expected to have a Material Adverse Effect (as defined below).
As used in this Agreement, “Material Adverse Effect” means any material adverse effect on (i) the business, properties,
assets, liabilities, operations (including results thereof), condition (financial or otherwise) or prospects of the Company or any Subsidiary,
individually or taken as a whole, (ii) the transactions contemplated hereby or in any of the other Transaction Documents or any other
agreements or instruments to be entered into in connection herewith or therewith or (iii) the authority or ability of the Company or any
of its Subsidiaries to perform any of their respective obligations under any of the Transaction Documents (as defined below). Other than
the Persons (as defined below) set forth on Schedule 3(a), the Company has no Subsidiaries. “Subsidiaries” means
any Person in which the Company, directly or indirectly, (I) owns any of the outstanding capital stock or holds any equity or similar
interest of such Person or (II) controls or operates all or any part of the business, operations or administration of such Person, and
each of the foregoing, is individually referred to herein as a “Subsidiary.”
(b)
Authorization; Enforcement; Validity. The Company has the requisite power and authority to enter into and perform its obligations
under this Agreement and the other Transaction Documents and to issue the Securities in accordance with the terms hereof and thereof.
The execution and delivery of this Agreement and the other Transaction Documents by the Company, and the consummation by the Company of
the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Notes, the issuance of the Commitment
Shares and the issuance of the Warrants and the reservation for issuance and issuance of the Warrant Shares issuable upon exercise of
the Warrants) have been duly authorized by the Company’s board of directors or other governing body, as applicable, and (other than
the filing with the SEC of one or more Registration Statements in accordance with the requirements of the Registration Rights Agreement,
a Form D with the SEC and any other filings as may be required by any state securities agencies) no further filing, consent or authorization
is required by the Company, its Subsidiaries, their respective boards of directors or their stockholders or other governing body. This
Agreement has been, and the other Transaction Documents to which it is a party will be prior to the Closing, duly executed and delivered
by the Company, and each constitutes the legal, valid and binding obligations of the Company, enforceable against the Company in accordance
with its respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’
rights and remedies and except as rights to indemnification and to contribution may be limited by federal or state securities law. “Transaction
Documents” means, collectively, this Agreement, the Notes, the Commitment Shares, the Warrants, the Registration Rights Agreement,
the Irrevocable Transfer Agent Instructions (as defined below) and each of the other agreements and instruments entered into or delivered
by any of the parties hereto in connection with the transactions contemplated hereby and thereby, as may be amended from time to time.
(c)
Issuance of Securities. The issuance of the Notes and the Warrants are duly authorized and upon issuance in accordance with
the terms of the Transaction Documents shall be validly issued, fully paid and non-assessable and free from all preemptive or similar
rights, mortgages, defects, claims, liens, pledges, charges, taxes, rights of first refusal, encumbrances, security interests and other
encumbrances (collectively “Liens”) with respect to the issuance thereof. The issuance of the Commitment Shares is
duly authorized and upon issuance in accordance with the terms of the Transaction Documents shall be validly issued, fully paid and nonassessable
and free from all preemptive or similar rights or Liens with respect to the issue thereof, with the holders being entitled to all rights
accorded to a holder of Common Stock. As of the Closing, the Company shall have reserved from its duly authorized capital stock not less
than 100% of the maximum number of Warrant Shares initially issuable upon exercise of the Warrants (without taking into account any limitations
on the exercise of the Warrants set forth therein). Upon issuance or exercise in accordance with the Warrants, the Warrant Shares when
issued, will be validly issued, fully paid and nonassessable and free from all preemptive or similar rights or Liens with respect to the
issue thereof, with the holders being entitled to all rights accorded to a holder of Common Stock. Subject to the accuracy of the representations
and warranties of the Buyers in this Agreement, the offer and issuance by the Company of the Securities is exempt from registration under
the 1933 Act.
(d)
No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by
the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Notes, the issuance
of the Commitment Shares, the Warrants and the Warrant Shares and the reservation for issuance of the Warrant Shares) will not (i) result
in a violation of the Certificate of Incorporation (as defined below) (including, without limitation, any certificate of designation contained
therein), Bylaws (as defined below), certificate of formation, memorandum of association, articles of association, bylaws or other organizational
documents of the Company or any of its Subsidiaries, or any capital stock or other securities of the Company or any of its Subsidiaries,
(ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) in any respect
under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument
to which the Company or any of its Subsidiaries is a party for which a consent or waiver has not been obtained, or (iii) result in a violation
of any law, rule, regulation, order, judgment or decree (including, without limitation, foreign, federal and state securities laws and
regulations and the rules and regulations of the Nasdaq Capital Market (the “Principal Market”) and including all applicable
foreign, federal and state laws, rules and regulations) applicable to the Company or any of its Subsidiaries or by which any property
or asset of the Company or any of its Subsidiaries is bound or affected.
(e)
Consents. Neither the Company nor any Subsidiary is required to obtain any consent from, authorization or order of, or make
any filing or registration with (other than the filing with the SEC of one or more Registration Statements in accordance with the requirements
of the Registration Rights Agreement, the filing of a Listing of Additional Shares application with the Principal Market, a Form D with
the SEC and any other filings as may be required by any state securities agencies), any Governmental Entity (as defined below) or any
regulatory or self-regulatory agency or any other Person in order for it to execute, deliver or perform any of its respective obligations
under or contemplated by the Transaction Documents, in each case, in accordance with the terms hereof or thereof. All consents, authorizations,
orders, filings and registrations which the Company or any Subsidiary is required to obtain pursuant to the preceding sentence have been
or will be obtained or effected on or prior to the Closing Date, and neither the Company nor any of its Subsidiaries are aware of any
facts or circumstances which might prevent the Company or any of its Subsidiaries from obtaining or effecting any of the registration,
application or filings contemplated by the Transaction Documents. Except as set forth in the SEC Documents, the Company is not in violation
of the requirements of the Principal Market and has no knowledge of any facts or circumstances which could reasonably lead to delisting
or suspension of the Common Stock in the foreseeable future. “Governmental Entity” means any nation, state, county,
city, town, village, district, or other political jurisdiction of any nature, federal, state, local, municipal, foreign, or other government,
governmental or quasi-governmental authority of any nature (including any governmental agency, branch, department, official, or entity
and any court or other tribunal), multi-national organization or body; or body exercising, or entitled to exercise, any administrative,
executive, judicial, legislative, police, regulatory, or taxing authority or power of any nature or instrumentality of any of the foregoing,
including any entity or enterprise owned or controlled by a government or a public international organization or any of the foregoing.
(f)
Acknowledgment Regarding Buyer’s Purchase of Securities. The Company acknowledges and agrees that each Buyer is acting
solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated
hereby and thereby and that no Buyer is (i) an officer or director of the Company or any of its Subsidiaries, (ii) an “affiliate”
(as defined in Rule 144) of the Company or any of its Subsidiaries or (iii) to its knowledge, a “beneficial owner” of more
than 10% of the shares of Common Stock (as defined for purposes of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the
“1934 Act”)). The Company further acknowledges that no Buyer is acting as a financial advisor or fiduciary of the Company
or any of its Subsidiaries (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby
and thereby, and any advice given by a Buyer or any of its representatives or agents in connection with the Transaction Documents and
the transactions contemplated hereby and thereby is merely incidental to such Buyer’s purchase of the Securities. The Company further
represents to each Buyer that the Company’s and each Subsidiary’s decision to enter into the Transaction Documents to which
it is a party has been based solely on the independent evaluation by the Company, each Subsidiary and their respective representatives.
(g)
No General Solicitation; Placement Agent’s Fees. Neither the Company, nor any of its Subsidiaries or affiliates, nor
any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of
Regulation D) in connection with the offer or sale of the Securities. The Company shall be responsible for the payment of any placement
agent’s fees, financial advisory fees, or brokers’ commissions (other than for Persons engaged by any Buyer or its investment
advisor) relating to or arising out of the transactions contemplated hereby, including, without limitation, placement agent fees payable
to Carter Terry, as placement agent (the “Placement Agent”) in connection with the sale of the Securities. The fees
and expenses of the Placement Agent to be paid by the Company or any of its Subsidiaries are as set forth on Schedule 3(g) attached hereto.
The Company shall pay, and hold each Buyer harmless against, any liability, loss or expense (including, without limitation, attorney’s
fees and out-of-pocket expenses) arising in connection with any such claim. The Company acknowledges that it has engaged the Placement
Agent in connection with the sale of the Securities. Other than the Placement Agent, neither the Company nor any of its Subsidiaries has
engaged any placement agent or other agent in connection with the offer or sale of the Securities.
(h)
No Integrated Offering. None of the Company, its Subsidiaries or any of their affiliates, nor any Person acting on their
behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances
that would require registration of the issuance of any of the Securities under the 1933 Act, whether through integration with prior offerings
or otherwise, or cause this offering of the Securities to require approval of stockholders of the Company for purposes of the 1933 Act
or under any applicable stockholder approval provisions, including, without limitation, under the rules and regulations of any exchange
or automated quotation system on which any of the securities of the Company are listed or designated for quotation. None of the Company,
its Subsidiaries, their affiliates nor any Person acting on their behalf will take any action or steps that would require registration
of the issuance of any of the Securities under the 1933 Act (other than pursuant to the Registration Rights Agreement) or cause the offering
of any of the Securities to be integrated with other offerings of securities of the Company.
(i)
Dilutive Effect. The Company understands and acknowledges that the number of Warrant Shares will increase in certain circumstances.
The Company further acknowledges that its obligation to issue the Warrant Shares upon exercise of the Warrants in accordance with this
Agreement and the Warrants is, in each case, absolute and unconditional regardless of the dilutive effect that such issuance may have
on the ownership interests of other stockholders of the Company.
(j)
Application of Takeover Protections; Rights Agreement. The Company and its board of directors have taken all necessary action,
if any, in order to render inapplicable any control share acquisition, interested stockholder, business combination, poison pill (including,
without limitation, any distribution under a rights agreement), stockholder rights plan or other similar anti-takeover provision under
the Certificate of Incorporation, Bylaws or other organizational documents or the laws of the jurisdiction of its incorporation or otherwise
which is or could become applicable to any Buyer as a result of the transactions contemplated by this Agreement, including, without limitation,
the Company’s issuance of the Securities and any Buyer’s ownership of the Securities. The Company and its board of directors
have taken all necessary action, if any, in order to render inapplicable any stockholder rights plan or similar arrangement relating to
accumulations of beneficial ownership of shares of Common Stock or a change in control of the Company or any of its Subsidiaries.
(k)
SEC Documents; Financial Statements. During the two (2) years prior to the date hereof, the Company has timely filed all
reports, schedules, forms, proxy statements, statements and other documents required to be filed by it with the SEC pursuant to the reporting
requirements of the 1934 Act (all of the foregoing filed prior to the date hereof and all exhibits and appendices included therein and
financial statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the
“SEC Documents”). The Company has delivered or has made available to the Buyers or their respective representatives
true, correct and complete copies of each of the SEC Documents not available on the EDGAR system. As of their respective dates, the SEC
Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated
thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements
of the Company included in the SEC Documents complied in all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto as in effect as of the time of filing. Such financial statements have been prepared
in accordance with generally accepted accounting principles (“GAAP”), consistently applied, during the periods involved
(except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects
the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit adjustments which will not be material, either individually or
in the aggregate). The reserves, if any, established by the Company or the lack of reserves, if applicable, are reasonable based upon
facts and circumstances known by the Company on the date hereof and there are no loss contingencies that are required to be accrued by
the Statement of Financial Accounting Standard No. 5 of the Financial Accounting Standards Board which are not provided for by the Company
in its financial statements or otherwise. No other information provided by or on behalf of the Company to any of the Buyers which is not
included in the SEC Documents (including, without limitation, information referred to in Section 2(e) of this Agreement or in the
disclosure schedules to this Agreement) contains any untrue statement of a material fact or omits to state any material fact necessary
in order to make the statements therein not misleading, in the light of the circumstance under which they are or were made. The Company
is not currently contemplating to amend or restate any of the financial statements (including, without limitation, any notes or any letter
of the independent accountants of the Company with respect thereto) included in the SEC Documents (the “Financial Statements”),
nor is the Company currently aware of facts or circumstances which would require the Company to amend or restate any of the Financial
Statements, in each case, in order for any of the Financials Statements to be in compliance with GAAP and the rules and regulations of
the SEC. The Company has not been informed by its independent accountants that they recommend that the Company amend or restate any of
the Financial Statements or that there is any need for the Company to amend or restate any of the Financial Statements.
(l)
Absence of Certain Changes. Since the date of the Company’s most recent audited financial statements contained in
a Form 10-K, there has been no material adverse change and no material adverse development in the business, assets, liabilities, properties,
operations (including results thereof), condition (financial or otherwise) or prospects of the Company or any of its Subsidiaries. Since
the date of the Company’s most recent audited financial statements contained in a Form 10-K, neither the Company nor any of its
Subsidiaries has (i) declared or paid any dividends, (ii) sold any assets, individually or in the aggregate, outside of the ordinary course
of business or (iii) made any capital expenditures, individually or in the aggregate, outside of the ordinary course of business. Neither
the Company nor any of its Subsidiaries has taken any steps to seek protection pursuant to any law or statute relating to bankruptcy,
insolvency, reorganization, receivership, liquidation or winding up. As described in the SEC Documents, our past working capital deficiency,
stockholders’ deficit and recurring losses from operations raised substantial doubt about our ability to continue as a going concern.
As a result, our independent registered public accounting firm has included an explanatory paragraph in its report on our financial statements
for the year ended December 31, 2022 with respect to this uncertainty.
(m)
No Undisclosed Events, Liabilities, Developments or Circumstances. Except as set forth in the SEC Documents, no event, liability,
development or circumstance has occurred or exists, or is reasonably expected to exist or occur with respect to the Company, any of its
Subsidiaries or any of their respective businesses, properties, liabilities, prospects, operations (including results thereof) or condition
(financial or otherwise), that (i) would be required to be disclosed by the Company under applicable securities laws on a registration
statement on Form S-1 filed with the SEC relating to an issuance and sale by the Company of its Common Stock and which has not been publicly
announced, (ii) could have a material adverse effect on any Buyer’s investment hereunder or (iii) could have a Material Adverse
Effect.
(n)
Conduct of Business; Regulatory Permits. Neither the Company nor any of its Subsidiaries is in violation of any term of
or in default under its Certificate of Incorporation, any certificate of designation, preferences or rights of any other outstanding series
of preferred stock of the Company or any of its Subsidiaries or Bylaws or their organizational charter, certificate of formation, memorandum
of association, articles of association, Certificate of Incorporation or certificate of incorporation or bylaws, respectively. Neither
the Company nor any of its Subsidiaries is in violation of any judgment, decree or order or any statute, ordinance, rule or regulation
applicable to the Company or any of its Subsidiaries, and neither the Company nor any of its Subsidiaries will conduct its business in
violation of any of the foregoing, except in all cases for possible violations which could not, individually or in the aggregate, have
a Material Adverse Effect. Without limiting the generality of the foregoing, except as set forth in the SEC Documents, the Company is
not in violation of any of the rules, regulations or requirements of the Principal Market and has no knowledge of any facts or circumstances
that could reasonably lead to delisting or suspension of the Common Stock by the Principal Market in the foreseeable future. During the
two years prior to the date hereof, (i) the Common Stock has been listed or designated for quotation on the Principal Market, (ii) trading
in the Common Stock has not been suspended by the SEC or the Principal Market and (iii) except as set forth in the SEC Documents, the
Company has received no communication, written or oral, from the SEC or the Principal Market regarding the suspension or delisting of
the Common Stock from the Principal Market. The Company and each of its Subsidiaries possess all certificates, authorizations and permits
issued by the appropriate regulatory authorities necessary to conduct their respective businesses, except where the failure to possess
such certificates, authorizations or permits would not have, individually or in the aggregate, a Material Adverse Effect, and neither
the Company nor any such Subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate,
authorization or permit. There is no agreement, commitment, judgment, injunction, order or decree binding upon the Company or any of its
Subsidiaries or to which the Company or any of its Subsidiaries is a party which has or would reasonably be expected to have the effect
of prohibiting or materially impairing any business practice of the Company or any of its Subsidiaries, any acquisition of property by
the Company or any of its Subsidiaries or the conduct of business by the Company or any of its Subsidiaries as currently conducted other
than such effects, individually or in the aggregate, which have not had and would not reasonably be expected to have a Material Adverse
Effect on the Company or any of its Subsidiaries.
(o)
Foreign Corrupt Practices. Neither the Company, any of its Subsidiaries or any director, officer, agent, employee, nor any
other person acting for or on behalf of the foregoing (individually and collectively, a “Company Affiliate”) have violated
the U.S. Foreign Corrupt Practices Act (the “FCPA”) or any other applicable anti-bribery or anti-corruption laws, nor
has any Company Affiliate offered, paid, promised to pay, or authorized the payment of any money, or offered, given, promised to give,
or authorized the giving of anything of value, to any officer, employee or any other person acting in an official capacity for any Governmental
Entity to any political party or official thereof or to any candidate for political office (individually and collectively, a “Government
Official”) or to any person under circumstances where such Company Affiliate knew or was aware of a high probability that all
or a portion of such money or thing of value would be offered, given or promised, directly or indirectly, to any Government Official,
for the purpose of:
(i)
(A) influencing any act or decision of such Government Official in his/her official capacity, (B) inducing such Government Official
to do or omit to do any act in violation of his/her lawful duty, (C) securing any improper advantage, or (D) inducing such Government
Official to influence or affect any act or decision of any Governmental Entity, or
(ii)
assisting the Company or its Subsidiaries in obtaining or retaining business for or with, or directing business to, the Company
or its Subsidiaries.
(p)
Sarbanes-Oxley Act. The Company and each Subsidiary is in compliance with any and all applicable requirements of the Sarbanes-Oxley
Act of 2002, as amended, and any and all applicable rules and regulations promulgated by the SEC thereunder.
(q)
Transactions With Affiliates. Except as set forth in the SEC Documents, no current or former employee, partner, director,
officer or stockholder (direct or indirect) of the Company or its Subsidiaries, or any associate, or, to the knowledge of the Company,
any affiliate of any thereof, or any relative with a relationship no more remote than first cousin of any of the foregoing, is presently,
or has ever been, (i) a party to any transaction with the Company or its Subsidiaries (including any contract, agreement or other arrangement
providing for the furnishing of services by, or rental of real or personal property from, or otherwise requiring payments to, any such
director, officer or stockholder or such associate or affiliate or relative Subsidiaries (other than for ordinary course services as employees,
officers or directors of the Company or any of its Subsidiaries)) or (ii) the direct or indirect owner of an interest in any corporation,
firm, association or business organization which is a competitor, supplier or customer of the Company or its Subsidiaries (except for
a passive investment (direct or indirect) in less than 5% of the common stock of a company whose securities are traded on or quoted through
an Eligible Market (as defined in the Warrants)), nor does any such Person receive income from any source other than the Company or its
Subsidiaries which relates to the business of the Company or its Subsidiaries or should properly accrue to the Company or its Subsidiaries.
No employee, officer, stockholder or director of the Company or any of its Subsidiaries or member of his or her immediate family is indebted
to the Company or its Subsidiaries, as the case may be, nor is the Company or any of its Subsidiaries indebted (or committed to make loans
or extend or guarantee credit) to any of them, other than (i) for payment of salary for services rendered, (ii) reimbursement for reasonable
expenses incurred on behalf of the Company, and (iii) for other standard employee benefits made generally available to all employees or
executives (including stock option agreements outstanding under any stock option plan approved by the Board of Directors of the Company).
(r)
Equity Capitalization.
(i)
Definitions:
(A)“Common
Stock” means (x) the Company’s shares of common stock, $0.00001 par value per share, and (y) any capital stock into
which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.
(B)“Preferred
Stock” means (x) the Company’s blank check preferred stock, $0.00001 par value per share, the terms of which may be designated
by the board of directors of the Company in a certificate of designations and (y) any capital stock into which such preferred stock shall
have been changed or any share capital resulting from a reclassification of such preferred stock (other than a conversion of such preferred
stock into Common Stock in accordance with the terms of such certificate of designations).
(ii)
Authorized and Outstanding Capital Stock. Schedule 3(r)(ii) sets forth as of the date hereof, the authorized, issued and
outstanding capital stock of the Company as well as all outstanding equity linked securities, including all options, warrants, restricted
stock units, Convertible Securities. No shares of Common Stock are held in the treasury of the Company. “Convertible Securities”
means any capital stock or other security of the Company or any of its Subsidiaries that is at any time and under any circumstances directly
or indirectly convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any capital
stock or other security of the Company (including, without limitation, Common Stock) or any of its Subsidiaries.
(iii)
Valid Issuance; Available Shares; Affiliates. All of such outstanding shares are duly authorized and have been, or upon
issuance will be, validly issued and are fully paid and nonassessable. The SEC Documents disclose all securities that are, as of the date
hereof, owned by Persons who are “affiliates” (as defined in Rule 405 of the 1933 Act and calculated based on the assumption
that only officers, directors and holders of at least 10% of the Company’s issued and outstanding Common Stock are “affiliates”
without conceding that any such Persons are “affiliates” for purposes of federal securities laws) of the Company or any of
its Subsidiaries. To the Company’s knowledge, except as set forth in the SEC Documents, no Person owns 10% or more of the Company’s
issued and outstanding shares of Common Stock (calculated based on the assumption that all Convertible Securities (as defined below),
whether or not presently exercisable or convertible, have been fully exercised or converted (as the case may be) taking account
of any limitations on exercise or conversion (including “blockers”) contained therein without conceding that such identified
Person is a 10% stockholder for purposes of federal securities laws).
(iv)
Existing Securities; Obligations. Except as disclosed in the SEC Documents or Schedule 3(r)(iv): (A) none of the Company’s
or any Subsidiary’s shares, interests or capital stock is subject to preemptive rights or any other similar rights or Liens suffered
or permitted by the Company or any Subsidiary; (B) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any
shares, interests or capital stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements
by which the Company or any of its Subsidiaries is or may become bound to issue additional shares, interests or capital stock of the Company
or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating
to, or securities or rights convertible into, or exercisable or exchangeable for, any shares, interests or capital stock of the Company
or any of its Subsidiaries; (C) except as set forth on Schedule 3(r)(iv)(C), there are no agreements or arrangements under which the Company
or any of its Subsidiaries is obligated to register the sale of any of their securities under the 1933 Act (except pursuant to the Registration
Rights Agreement); (D) there are no outstanding securities or instruments of the Company or any of its Subsidiaries which contain any
redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any
of its Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries; (E) there are no securities
or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities; and (F) neither
the Company nor any Subsidiary has any stock appreciation rights or “phantom stock” plans or agreements or any similar plan
or agreement.
(v)
Organizational Documents. The SEC Documents disclose true, correct and complete copies of the Company’s Certificate
of Incorporation, as amended and as in effect on the date hereof (the “Certificate of Incorporation”), and the Company’s
bylaws, as amended and as in effect on the date hereof (the “Bylaws”), and the terms of all Convertible Securities
and the material rights of the holders thereof in respect thereto.
(s)
Indebtedness and Other Contracts. Neither the Company nor any of its Subsidiaries, (i) except as disclosed on Schedule 3(s)
or in the SEC Documents, has any outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents
or instruments evidencing Indebtedness of the Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries is
or may become bound, (ii) is a party to any contract, agreement or instrument, the violation of which, or default under which, by the
other party(ies) to such contract, agreement or instrument could reasonably be expected to result in a Material Adverse Effect, (iii)
has any financing statements securing obligations in any amounts filed in connection with the Company or any of its Subsidiaries; (iv)
is in violation of any term of, or in default under, any contract, agreement or instrument relating to any Indebtedness, except where
such violations and defaults would not result, individually or in the aggregate, in a Material Adverse Effect, or (v) is a party to any
contract, agreement or instrument relating to any Indebtedness, the performance of which, in the judgment of the Company’s officers,
has or is expected to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries have any liabilities or obligations
required to be disclosed in the SEC Documents which are not so disclosed in the SEC Documents, other than those incurred in the ordinary
course of the Company’s or its Subsidiaries’ respective businesses and which, individually or in the aggregate, do not or
could not have a Material Adverse Effect. For purposes of this Agreement: (x) “Indebtedness” of any Person means, without
duplication (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed as the deferred purchase price
of property or services (including, without limitation, “capital leases” in accordance with GAAP) (other than trade payables
entered into in the ordinary course of business consistent with past practice), (C) all reimbursement or payment obligations with respect
to letters of credit, surety bonds and other similar instruments, (D) all obligations evidenced by notes, bonds, debentures or similar
instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses, (E) all
indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case
with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller
or bank under such agreement in the event of default are limited to repossession or sale of such property), (F) all monetary obligations
under any leasing or similar arrangement which, in connection with GAAP, consistently applied for the periods covered thereby, is classified
as a capital lease, (G) all indebtedness referred to in clauses (A) through (F) above secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien upon or in any property or assets (including accounts and contract
rights) owned by any Person, even though the Person which owns such assets or property has not assumed or become liable for the payment
of such indebtedness, and (H) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to
in clauses (A) through (G) above; and (y) “Contingent Obligation” means, as to any Person, any direct or indirect liability,
contingent or otherwise, of that Person with respect to any Indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee
of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with, or that
the holders of such liability will be protected (in whole or in part) against loss with respect thereto.
(t)
Litigation. Except as set forth in the SEC Documents, there is no action, suit, arbitration, proceeding, inquiry or investigation
before or by the Principal Market, any court, public board, other Governmental Entity, self-regulatory organization or body pending or,
to the knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries, the Common Stock or any of the
Company’s or its Subsidiaries’ officers or directors, whether of a civil or criminal nature or otherwise, in their capacities
as such. No director, officer or employee of the Company or any of its subsidiaries has willfully violated 18 U.S.C. §1519 or engaged
in spoliation in reasonable anticipation of litigation. Without limitation of the foregoing, there has not been, and to the knowledge
of the Company, there is not pending or contemplated, any investigation by the SEC involving the Company, any of its Subsidiaries or any
current or former director or officer of the Company or any of its Subsidiaries. The SEC has not issued any stop order or other order
suspending the effectiveness of any registration statement filed by the Company under the 1933 Act or the 1934 Act. Except as set forth
in the SEC Documents, neither the Company nor any of its Subsidiaries is subject to any order, writ, judgment, injunction, decree, determination
or award of any Governmental Entity.
(u)
Insurance. The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against
such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which
the Company and its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has been refused any insurance coverage sought
or applied for, and neither the Company nor any such Subsidiary has any reason to believe that it will be unable to renew its existing
insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a Material Adverse Effect.
(v)
Employee Relations. Neither the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or
employs any member of a union. The Company and its Subsidiaries believe that their relations with their employees are good. No executive
officer (as defined in Rule 501(f) promulgated under the 1933 Act) or other key employee of the Company or any of its Subsidiaries has
notified the Company or any such Subsidiary that such officer intends to leave the Company or any such Subsidiary or otherwise terminate
such officer’s employment with the Company or any such Subsidiary. No current (or former) executive officer or other key employee
of the Company or any of its Subsidiaries is, or is now expected to be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement, non-competition agreement, or any other contract or agreement or any
restrictive covenant, and the continued employment of each such executive officer or other key employee (as the case may be) does not
subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries
are in compliance with all federal, state, local and foreign laws and regulations respecting labor, employment and employment practices
and benefits, terms and conditions of employment and wages and hours, except where failure to be in compliance would not, either individually
or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
(w)
Title.
(i)
Real Property. Each of the Company and its Subsidiaries holds good title to all real property, leases in real property,
facilities or other interests in real property owned or held by the Company or any of its Subsidiaries (the “Real Property”)
owned by the Company or any of its Subsidiaries (as applicable). The Real Property is free and clear of all Liens and is not subject to
any rights of way, building use restrictions, exceptions, variances, reservations, or limitations of any nature except for (a) Liens for
current taxes not yet due and (b) zoning laws and other land use restrictions that do not impair the present or anticipated use of the
property subject thereto. Any Real Property held under lease by the Company or any of its Subsidiaries are held by them under valid, subsisting
and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company or any of its Subsidiaries.
(ii)
Fixtures and Equipment. Each of the Company and its Subsidiaries (as applicable) has good title to, or a valid leasehold
interest in, the tangible personal property, equipment, improvements, fixtures, and other personal property and appurtenances that are
used by the Company or its Subsidiary in connection with the conduct of its business (the “Fixtures and Equipment”).
The Fixtures and Equipment are structurally sound, are in good operating condition and repair, are adequate for the uses to which they
are being put, are not in need of maintenance or repairs except for ordinary, routine maintenance and repairs and are sufficient for the
conduct of the Company’s and/or its Subsidiaries’ businesses (as applicable) in the manner as conducted prior to the Closing.
Each of the Company and its Subsidiaries owns all of its Fixtures and Equipment free and clear of all Liens except for (a) liens for current
taxes not yet due and (b) zoning laws and other land use restrictions that do not impair the present or anticipated use of the property
subject thereto.
(x)
Intellectual Property Rights. The Company and its Subsidiaries own or possess adequate rights or licenses to use all trademarks,
trade names, service marks, service mark registrations, service names, original works of authorship, patents, patent rights, copyrights,
inventions, licenses, approvals, governmental authorizations, trade secrets and other intellectual property rights and all applications
and registrations therefor (“Intellectual Property Rights”) necessary to conduct their respective businesses as now
conducted and presently proposed to be conducted. The Company does not have any knowledge of any infringement by the Company or its Subsidiaries
of Intellectual Property Rights of others. There is no claim, action or proceeding being made or brought, or to the knowledge of the Company
or any of its Subsidiaries, being threatened, against the Company or any of its Subsidiaries regarding its Intellectual Property Rights.
Neither the Company nor any of its Subsidiaries is aware of any facts or circumstances which might give rise to any of the foregoing infringements
or claims, actions or proceedings. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality
and value of all of their Intellectual Property Rights.
(y)
Environmental Laws(i). (i) The Company and its Subsidiaries (A) are in compliance with any and all Environmental Laws (as
defined below), (B) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (C) are in compliance with all terms and conditions of any such permit, license or approval where, in
each of the foregoing clauses (A), (B) and (C), the failure to so comply could be reasonably expected to have, individually or in the
aggregate, a Material Adverse Effect. The term “Environmental Laws” means all federal, state, local or foreign laws
relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater,
land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases
of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”)
into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments,
licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.
(ii)
No Hazardous Materials:
(A)
have been disposed of or otherwise released from any Real Property of the Company or any of its Subsidiaries in violation of any
Environmental Laws; or
(B)
are present on, over, beneath, in or upon any Real Property or any portion thereof in quantities that would constitute a violation
of any Environmental Laws. No prior use by the Company or any of its Subsidiaries of any Real Property has occurred that violates any
Environmental Laws, which violation would have a material adverse effect on the business of the Company or any of its Subsidiaries.
(iii)
Neither the Company nor any of its Subsidiaries knows of any other person who or entity which has stored, treated, recycled, disposed
of or otherwise located on any Real Property any Hazardous Materials, including, without limitation, such substances as asbestos and polychlorinated
biphenyls.
(iv)
None of the Real Properties are on any federal or state “Superfund” list or Liability Information System (“CERCLIS”)
list or any state environmental agency list of sites under consideration for CERCLIS, nor subject to any environmental related Liens.
(z)
[Intentionally Omitted]
(aa)
Tax Status. The Company and each of its Subsidiaries (i) has timely made or filed all foreign, federal and state income
and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has timely paid all taxes
and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and (iii) has set aside on its books provision reasonably adequate for the payment
of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in
any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company and its Subsidiaries
know of no basis for any such claim. The Company is not operated in such a manner as to qualify as a passive foreign investment company,
as defined in Section 1297 of the Code.
(bb)
Internal Accounting and Disclosure Controls. Except as set forth in the SEC Documents, the Company and each of its Subsidiaries
maintains internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the 1934 Act) that is effective to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles, including that (i) transactions are executed in accordance with
management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset and liability accountability, (iii) access to assets or incurrence of liabilities
is permitted only in accordance with management’s general or specific authorization and (iv) the recorded accountability for assets
and liabilities is compared with the existing assets and liabilities at reasonable intervals and appropriate action is taken with respect
to any difference. Except as set forth in the SEC Documents, the Company maintains disclosure controls and procedures (as such term is
defined in Rule 13a-15(e) under the 1934 Act) that are effective in ensuring that information required to be disclosed by the Company
in the reports that it files or submits under the 1934 Act is recorded, processed, summarized and reported, within the time periods specified
in the rules and forms of the SEC, including, without limitation, controls and procedures designed to ensure that information required
to be disclosed by the Company in the reports that it files or submits under the 1934 Act is accumulated and communicated to the Company’s
management, including its principal executive officer or officers and its principal financial officer or officers, as appropriate, to
allow timely decisions regarding required disclosure. Except as set forth in the SEC Documents, neither the Company nor any of its Subsidiaries
has received any notice or correspondence from any accountant, Governmental Entity or other Person relating to any potential material
weakness or significant deficiency in any part of the internal controls over financial reporting of the Company or any of its Subsidiaries.
(cc)
Off Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company or any of
its Subsidiaries and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its 1934 Act
filings and is not so disclosed or that otherwise could be reasonably likely to have a Material Adverse Effect.
(dd)
Investment Company Status. The Company is not, and upon consummation of the sale of the Securities will not be, an “investment
company,” an affiliate of an “investment company,” a company controlled by an “investment company” or an
“affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company”
as such terms are defined in the Investment Company Act of 1940, as amended.
(ee)
Acknowledgement Regarding Buyers’ Trading Activity. It is understood and acknowledged by the Company that (i) following
the public disclosure of the transactions contemplated by the Transaction Documents, in accordance with the terms thereof, none of the
Buyers have been asked by the Company or any of its Subsidiaries to agree, nor has any Buyer agreed with the Company or any of its Subsidiaries,
to desist from effecting any transactions in or with respect to (including, without limitation, purchasing or selling, long and/or short)
any securities of the Company, or “derivative” securities based on securities issued by the Company or to hold any of the
Securities for any specified term; (ii) any Buyer, and counterparties in “derivative” transactions to which any such Buyer
is a party, directly or indirectly, presently may have a “short” position in the Common Stock which was established prior
to such Buyer’s knowledge of the transactions contemplated by the Transaction Documents; (iii) each Buyer shall not be deemed to
have any affiliation with or control over any arm’s length counterparty in any “derivative” transaction; and (iv) each
Buyer may rely on the Company’s obligation to timely deliver shares of Common Stock upon exercise or exchange, as applicable, of
the Securities as and when required pursuant to the Transaction Documents for purposes of effecting trading in the Common Stock of the
Company. The Company further understands and acknowledges that following the public disclosure of the transactions contemplated by the
Transaction Documents pursuant to the Press Release (as defined below) one or more Buyers may engage in hedging and/or trading activities
(including, without limitation, the location and/or reservation of borrowable shares of Common Stock) at various times during the period
that the Securities are outstanding, including, without limitation, during the periods that the value and/or number of the Warrant Shares
deliverable with respect to the Securities are being determined and such hedging and/or trading activities (including, without limitation,
the location and/or reservation of borrowable shares of Common Stock), if any, can reduce the value of the existing stockholders’
equity interest in the Company both at and after the time the hedging and/or trading activities are being conducted. The Company acknowledges
that such aforementioned hedging and/or trading activities do not constitute a breach of this Agreement, the Notes, the Warrants or any
other Transaction Document or any of the documents executed in connection herewith or therewith.
(ff)
Manipulation of Price. Neither the Company nor any of its Subsidiaries has, and, to the knowledge of the Company, no Person
acting on their behalf has, directly or indirectly, (i) taken any action designed to cause or to result in the stabilization or manipulation
of the price of any security of the Company or any of its Subsidiaries to facilitate the sale or resale of any of the Securities, (ii)
sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities (other than the Placement Agent),
(iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company or any
of its Subsidiaries or (iv) paid or agreed to pay any Person for research services with respect to any securities of the Company or any
of its Subsidiaries.
(gg)
U.S. Real Property Holding Corporation. Neither the Company nor any of its Subsidiaries is, or has ever been, and so long
as any of the Securities are held by any of the Buyers, shall become, a U.S. real property holding corporation within the meaning of Section 897
of the Code, and the Company and each Subsidiary shall so certify upon any Buyer’s request.
(hh)
Registration Eligibility. The Company is eligible to register the Registrable Securities for resale by the Buyers using
Form S-3 promulgated under the 1933 Act.
(ii)
Transfer Taxes. On the Closing Date, all stock transfer or other taxes (other than income or similar taxes) which are required
to be paid in connection with the issuance, sale and transfer of the Securities to be sold to each Buyer hereunder will be, or will have
been, fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with.
(jj)
Bank Holding Company Act. Neither the Company nor any of its Subsidiaries is subject to the Bank Holding Company Act of
1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”). Neither the Company nor any of its Subsidiaries or affiliates owns or controls, directly or indirectly, five percent
(5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total equity of a
bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries
or affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and
to regulation by the Federal Reserve.
(kk)
Shell Company Status. The Company is not, and has never been, an issuer identified in, or subject to, Rule 144(i).
(ll)
Illegal or Unauthorized Payments; Political Contributions. Neither the Company nor any of its Subsidiaries nor, to the best
of the Company’s knowledge (after reasonable inquiry of its officers and directors), any of the officers, directors, employees,
agents or other representatives of the Company or any of its Subsidiaries or any other business entity or enterprise with which the Company
or any Subsidiary is or has been affiliated or associated, has, directly or indirectly, made or authorized any payment, contribution or
gift of money, property, or services, whether or not in contravention of applicable law, (i) as a kickback or bribe to any Person or (ii)
to any political organization, or the holder of or any aspirant to any elective or appointive public office except for personal political
contributions not involving the direct or indirect use of funds of the Company or any of its Subsidiaries.
(mm)
Money Laundering. The Company and its Subsidiaries are in compliance with, and have not previously violated, the USA Patriot
Act of 2001 and all other applicable U.S. and non-U.S. anti-money laundering laws and regulations, including, without limitation, the
laws, regulations and Executive Orders and sanctions programs administered by the U.S. Office of Foreign Assets Control, including, but
not limited, to (i) Executive Order 13224 of September 23, 2001 entitled, “Blocking Property and Prohibiting Transactions With Persons
Who Commit, Threaten to Commit, or Support Terrorism” (66 Fed. Reg. 49079 (2001)); and (ii) any regulations contained in 31 CFR,
Subtitle B, Chapter V.
(nn)
Management. During the past five-year period, no current officer or director of the Company or any of its Subsidiaries has
been the subject of:
(i)
a petition under bankruptcy laws or any other insolvency or moratorium law or the appointment by a court of a receiver, fiscal
agent or similar officer for such Person, or any partnership in which such person was a general partner at or within two years before
the filing of such petition or such appointment, or any corporation or business association of which such person was an executive officer
at or within two years before the time of the filing of such petition or such appointment;
(ii)
a conviction in a criminal proceeding or a named subject of a pending criminal proceeding (excluding traffic violations that do
not relate to driving while intoxicated or driving under the influence);
(iii)
any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently
or temporarily enjoining any such person from, or otherwise limiting, the following activities:
(1)
Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker,
leverage transaction merchant, any other person regulated by the United States Commodity Futures Trading Commission or an associated person
of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director
or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct
or practice in connection with such activity;
(2)
Engaging in any particular type of business practice; or
(3)
Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation
of securities laws or commodities laws;
(iv)
any order, judgment or decree, not subsequently reversed, suspended or vacated, of any authority barring, suspending or otherwise
limiting for more than sixty (60) days the right of any such person to engage in any activity described in the preceding sub paragraph,
or to be associated with persons engaged in any such activity;
(v)
a finding by a court of competent jurisdiction in a civil action or by the SEC or other authority to have violated any securities
law, regulation or decree and the judgment in such civil action or finding by the SEC or any other authority has not been subsequently
reversed, suspended or vacated; or
(vi)
a finding by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated
any federal commodities law, and the judgment in such civil action or finding has not been subsequently reversed, suspended or vacated.
(oo)
Stock Option Plans(b). Each stock option granted by the Company was granted (i) in accordance with the terms of the applicable
stock option plan of the Company and (ii) with an exercise price at least equal to the fair market value of the Common Stock on the date
such stock option would be considered granted under GAAP and applicable law. No stock option granted under the Company’s stock option
plan has been backdated. The Company has not knowingly granted, and there is no and has been no policy or practice of the Company to knowingly
grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release or other public announcement
of material information regarding the Company or its Subsidiaries or their financial results or prospects.
(pp)
No Disagreements with Accountants and Lawyers(c). There are no material disagreements of any kind presently existing, or
reasonably anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by
the Company and the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s
ability to perform any of its obligations under any of the Transaction Documents. In addition, on or prior to the date hereof, the Company
had discussions with its accountants about its financial statements previously filed with the SEC. Based on those discussions, the Company
has no reason to believe that it will need to restate any such financial statements or any part thereof.
(qq)
No Disqualification Events(d). With respect to Securities to be offered and sold hereunder in reliance on Rule 506(b) under
the 1933 Act (“Regulation D Securities”), none of the Company, any of its predecessors, any affiliated issuer, any
director, executive officer, other officer of the Company participating in the offering contemplated hereby, any beneficial owner of 20%
or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that
term is defined in Rule 405 under the 1933 Act) connected with the Company in any capacity at the time of sale (each, an “Issuer
Covered Person” and, together, “Issuer Covered Persons”) is subject to any of the “Bad Actor”
disqualifications described in Rule 506(d)(1)(i) to (viii) under the 1933 Act (a “Disqualification Event”), except
for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer
Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations
under Rule 506(e), and has furnished to the Buyers a copy of any disclosures provided thereunder.
(rr)
Other Covered Persons(e). The Company is not aware of any Person (other than the Placement Agent) that has been or will
be paid (directly or indirectly) remuneration for solicitation of Buyers or potential purchasers in connection with the sale of any Regulation
D Securities.
(ss)
No Additional Agreements. The Company does not have any agreement or understanding with any Buyer with respect to the transactions
contemplated by the Transaction Documents other than as specified in the Transaction Documents.
(tt)
Public Utility Holding Act. None of the Company nor any of its Subsidiaries is a “holding company,” or an “affiliate”
of a “holding company,” as such terms are defined in the Public Utility Holding Act of 2005.
(uu)
Federal Power Act. None of the Company nor any of its Subsidiaries is subject to regulation as a “public utility”
under the Federal Power Act, as amended.
(vv)
Ranking of Notes. No Indebtedness of the Company, at the Closing, will be senior to, or pari passu with, the Notes
in right of payment, whether with respect to payment or redemptions, interest, damages, upon liquidation or dissolution or otherwise.
(ww)
Cybersecurity. The Company and its Subsidiaries’ information technology assets and equipment, computers, systems,
networks, hardware, software, websites, applications, and databases (collectively, “IT Systems”) are adequate for,
and operate and perform in all material respects as required in connection with the operation of the business of the Company and its subsidiaries
as currently conducted, free and clear of all material bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants
that would reasonably be expected to have a Material Adverse Effect on the Company’s business. The Company and its Subsidiaries
have implemented and maintained commercially reasonable physical, technical and administrative controls, policies, procedures, and safeguards
to maintain and protect their material confidential information and the integrity, continuous operation, redundancy and security of all
IT Systems and data, including “Personal Data,” used in connection with their businesses. “Personal Data”
means (i) a natural person’s name, street address, telephone number, e-mail address, photograph, social security number or tax identification
number, driver’s license number, passport number, credit card number, bank information, or customer or account number; (ii) any
information which would qualify as “personally identifying information” under the Federal Trade Commission Act, as amended;
(iii) “personal data” as defined by the European Union General Data Protection Regulation (“GDPR”) (EU
2016/679); (iv) any information which would qualify as “protected health information” under the Health Insurance Portability
and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act (collectively, “HIPAA”);
and (v) any other piece of information that allows the identification of such natural person, or his or her family, or permits the collection
or analysis of any data related to an identified person’s health or sexual orientation. There have been no breaches, violations,
outages or unauthorized uses of or accesses to same, except for those that have been remedied without material cost or liability or the
duty to notify any other person or such, nor any incidents under internal review or investigations relating to the same except in each
case, where such would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. The
Company and its Subsidiaries are presently in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations
of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy
and security of IT Systems and Personal Data and to the protection of such IT Systems and Personal Data from unauthorized use, access,
misappropriation or modification except in each case, where such would not, either individually or in the aggregate, reasonably be expected
to result in a Material Adverse Effect.
(xx)
Compliance with Data Privacy Laws. The Company and its Subsidiaries are, and at all prior times were, in compliance with
all applicable state and federal data privacy and security laws and regulations, including without limitation HIPAA, and the Company and
its Subsidiaries have taken commercially reasonable actions to prepare to comply with, and since May 25, 2018, have been and currently
are in compliance with, the GDPR (EU 2016/679) (collectively, the “Privacy Laws”) except in each case, where such would
not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. To ensure compliance with
the Privacy Laws, the Company and its Subsidiaries have in place, comply with, and take appropriate steps reasonably designed to ensure
compliance in all material respects with their policies and procedures relating to data privacy and security and the collection, storage,
use, disclosure, handling, and analysis of Personal Data (the “Policies”). The Company and its Subsidiaries have at
all times made all disclosures to users or customers required by applicable laws and regulatory rules or requirements, and none of such
disclosures made or contained in any Policy have, to the knowledge of the Company, been inaccurate or in violation of any applicable laws
and regulatory rules or requirements in any material respect. The Company further certifies that neither it nor any Subsidiary: (i) has
received notice of any actual or potential liability under or relating to, or actual or potential violation of, any of the Privacy Laws,
and has no knowledge of any event or condition that would reasonably be expected to result in any such notice; (ii) is currently conducting
or paying for, in whole or in part, any investigation, remediation, or other corrective action pursuant to any Privacy Law; or (iii) is
a party to any order, decree, or agreement that imposes any obligation or liability under any Privacy Law.
(yy)
Disclosure. The Company confirms that neither it nor any other Person acting on its behalf has provided any of the Buyers
or their agents or counsel with any information that constitutes or could reasonably be expected to constitute material, non-public information
concerning the Company or any of its Subsidiaries, other than the existence of the transactions contemplated by this Agreement and the
other Transaction Documents. The Company understands and confirms that each of the Buyers will rely on the foregoing representations in
effecting transactions in securities of the Company. All disclosure provided to the Buyers regarding the Company and its Subsidiaries,
their businesses and the transactions contemplated hereby, including the schedules to this Agreement, furnished by or on behalf of the
Company or any of its Subsidiaries is true and correct and does not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not
misleading. No event or circumstance has occurred or information exists with respect to the Company or any of its Subsidiaries or its
or their business, properties, liabilities, prospects, operations (including results thereof) or conditions (financial or otherwise),
which, under applicable law, rule or regulation, requires public disclosure at or before the date hereof or announcement by the Company
but which has not been so publicly disclosed. The Company acknowledges and agrees that no Buyer makes or has made any representations
or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 2.
4.
COVENANTS.
(a)
Best Efforts. Each Buyer shall use its reasonable best efforts to timely satisfy each of the covenants hereunder and conditions
to be satisfied by it as provided in Section 6 of this Agreement. The Company shall use its reasonable best efforts to timely satisfy
each of the covenants hereunder and conditions to be satisfied by it as provided in Section 7 of this Agreement.
(b)
Form D and Blue Sky. The Company shall file a Form D with respect to the Securities as required under Regulation D and to
provide a copy thereof to each Buyer promptly after such filing. The Company shall, on or before the Closing Date, take such action as
the Company shall reasonably determine is necessary in order to obtain an exemption for, or to, qualify the Securities for sale to the
Buyers at the Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of the states of the United
States (or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken to the Buyers on or
prior to the Closing Date. Without limiting any other obligation of the Company under this Agreement, the Company shall timely make all
filings and reports relating to the offer and sale of the Securities required under all applicable securities laws (including, without
limitation, all applicable federal securities laws and all applicable “Blue Sky” laws), and the Company shall comply with
all applicable foreign, federal, state and local laws, statutes, rules, regulations and the like relating to the offering and sale of
the Securities to the Buyers.
(c)
Reporting Status. Until the date on which the Buyers shall have sold all of the Registrable Securities (the “Reporting
Period”), the Company shall timely file all reports required to be filed with the SEC pursuant to the 1934 Act, and the Company
shall not terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations
thereunder would no longer require or otherwise permit such termination.
(d)
Use of Proceeds. The Company will use the proceeds from the sale of the Securities for general corporate purposes, but not,
directly or indirectly, for (i) except as set forth on Schedule 4(d), the satisfaction of any indebtedness of the Company or any of its
Subsidiaries, (ii) the redemption or repurchase of any securities of the Company or any of its Subsidiaries, or (iii) the settlement of
any outstanding litigation.
(e)
Financial Information. The Company agrees to send the following to each Investor (as defined in the Registration Rights
Agreement) during the Reporting Period (i) unless the following are filed with the SEC through EDGAR and are available to the public through
the EDGAR system, within one (1) Business Day after the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K and Quarterly
Reports on Form 10-Q, any interim reports or any consolidated balance sheets, income statements, stockholders’ equity statements
and/or cash flow statements for any period other than annual, any Current Reports on Form 8-K and any registration statements (other than
on Form S-8) or amendments filed pursuant to the 1933 Act, (ii) unless the following are either filed with the SEC through EDGAR or are
otherwise widely disseminated via a recognized news release service (such as PR Newswire), on the same day as the release thereof, e-mail
copies of all press releases issued by the Company or any of its Subsidiaries and (iii) unless the following are filed with the SEC through
EDGAR, copies of any notices and other information made available or given to the stockholders of the Company generally, contemporaneously
with the making available or giving thereof to the stockholders.
(f)
Listing. The Company shall promptly secure the listing or designation for quotation (as the case may be) of all of the Registrable
Securities upon each national securities exchange and automated quotation system, if any, upon which the Common Stock is then listed or
designated for quotation (as the case may be) (subject to official notice of issuance) and shall maintain such listing or designation
for quotation (as the case may be) of all Registrable Securities from time to time issuable under the terms of the Transaction Documents
on such national securities exchange or automated quotation system. The Company shall maintain the Common Stock’s listing or authorization
for quotation (as the case may be) on the Principal Market, The New York Stock Exchange, the NYSE American, the Nasdaq Global Market the
Nasdaq Global Select Market (each, an “Eligible Market”). Neither the Company nor any of its Subsidiaries shall take
any action which could be reasonably expected to result in the delisting or suspension of the Common Stock on an Eligible Market. The
Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 4(f).
(g)
Fees. The Company shall reimburse Kelley Drye & Warren LLP (i) a non-accountable amount of $38,212.50 for all costs
and expenses incurred in connection with the structuring, documentation, negotiation and closing of the transactions contemplated by the
Transaction Documents (the “Transaction Expenses”) that shall be withheld by the lead Buyer from its applicable Purchase
Price at the Closing. The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees, transfer
agent fees, DTC (as defined below) fees or broker’s commissions (other than for Persons engaged by any Buyer) relating to or arising
out of the transactions contemplated hereby (including, without limitation, any fees or commissions payable to the Placement Agent, who
is the Company’s sole placement agent in connection with the transactions contemplated by this Agreement). The Company shall pay,
and hold each Buyer harmless against, any liability, loss or expense (including, without limitation, reasonable attorneys’ fees
and out-of-pocket expenses) arising in connection with any claim relating to any such payment. Except as otherwise set forth in the Transaction
Documents, each party to this Agreement shall bear its own expenses in connection with the sale of the Securities to the Buyers.
(h)
Pledge of Securities. Notwithstanding anything to the contrary contained in this Agreement, the Company acknowledges and
agrees that the Securities may be pledged by an Investor in connection with a bona fide margin agreement or other loan or financing arrangement
that is secured by the Securities. The pledge of Securities shall not be deemed to be a transfer, sale or assignment of the Securities
hereunder, and no Investor effecting a pledge of Securities shall be required to provide the Company with any notice thereof or otherwise
make any delivery to the Company pursuant to this Agreement or any other Transaction Document, including, without limitation, Section
2(g) hereof; provided that an Investor and its pledgee shall be required to comply with the provisions of Section 2(g) hereof in
order to effect a sale, transfer or assignment of Securities to such pledgee. The Company hereby agrees to execute and deliver such documentation
as a pledgee of the Securities may reasonably request in connection with a pledge of the Securities to such pledgee by a Buyer.
(i)
Disclosure of Transactions and Other Material Information.
(i)
Disclosure of Transaction. The Company shall, on or before 9:00 a.m., New York time, on the date of this Agreement,
issue a press release (the “Press Release”) reasonably acceptable to the Buyers disclosing all the material terms of
the transactions contemplated by the Transaction Documents. On or before 9:00 a.m., New York time, on the date of this Agreement, the
Company shall file a Current Report on Form 8-K describing all the material terms of the transactions contemplated by the Transaction
Documents in the form required by the 1934 Act and attaching all the material Transaction Documents (including, without limitation, this
Agreement (and all schedules to this Agreement), the form of Notes, the form of the Warrants, and the form of the Registration Rights
Agreement) (including all attachments, the “8-K Filing”). From and after the filing of the 8-K Filing, the Company
shall have disclosed all material, non-public information (if any) provided to any of the Buyers by the Company or any of its Subsidiaries
or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction
Documents. In addition, effective upon the filing of the 8-K Filing, the Company acknowledges and agrees that any and all confidentiality
or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective
officers, directors, affiliates, employees or agents, on the one hand, and any of the Buyers or any of their affiliates, on the other
hand, shall terminate.
(ii)
Limitations on Disclosure. The Company shall not, and the Company shall cause each of its Subsidiaries and each of its and
their respective officers, directors, employees and agents not to, provide any Buyer with any material, non-public information regarding
the Company or any of its Subsidiaries from and after the date hereof without the express prior written consent of such Buyer (which may
be granted or withheld in such Buyer’s sole discretion). In the event of a breach of any of the foregoing covenants, including,
without limitation, Section 4(n) of this Agreement, or any of the covenants or agreements contained in any other Transaction Document,
by the Company, any of its Subsidiaries, or any of its or their respective officers, directors, employees and agents (as determined in
the reasonable good faith judgment of such Buyer), in addition to any other remedy provided herein or in the Transaction Documents, such
Buyer shall have the right to make a public disclosure, in the form of a press release, public advertisement or otherwise, of such breach
or such material, non-public information, as applicable, without the prior approval by the Company, any of its Subsidiaries, or any of
its or their respective officers, directors, employees or agents. No Buyer shall have any liability to the Company, any of its Subsidiaries,
or any of its or their respective officers, directors, employees, affiliates, stockholders or agents, for any such disclosure. To the
extent that the Company delivers any material, non-public information to a Buyer without such Buyer’s consent, the Company hereby
covenants and agrees that such Buyer shall not have any duty of confidentiality with respect to, or a duty not to trade on the basis of,
such material, non-public information. Subject to the foregoing, neither the Company, its Subsidiaries nor any Buyer shall issue any press
releases or any other public statements with respect to the transactions contemplated hereby; provided, however, the Company shall be
entitled, without the prior approval of any Buyer, to make the Press Release and any press release or other public disclosure with respect
to such transactions (i) in substantial conformity with the 8-K Filing and contemporaneously therewith and (ii) as is required by applicable
law and regulations (provided that in the case of clause (i) each Buyer shall be consulted by the Company in connection with any such
press release or other public disclosure prior to its release). Without the prior written consent of the applicable Buyer (which may be
granted or withheld in such Buyer’s sole discretion), the Company shall not (and shall cause each of its Subsidiaries and affiliates
to not) disclose the name of such Buyer in any filing, announcement, release or otherwise. Notwithstanding anything contained in this
Agreement to the contrary and without implication that the contrary would otherwise be true, the Company expressly acknowledges and agrees
that no Buyer shall have (unless expressly agreed to by a particular Buyer after the date hereof in a written definitive and binding agreement
executed by the Company and such particular Buyer (it being understood and agreed that no Buyer may bind any other Buyer with respect
thereto)), any duty of confidentiality with respect to, or a duty not to trade on the basis of, any material, non-public information regarding
the Company or any of its Subsidiaries.
(j)
Additional Registration Statements. Until the Applicable Date (as defined below) and at any time thereafter while any Registration
Statement is not effective or the prospectus contained therein is not available for use or any Current Public Information Failure exists,
the Company shall not file a registration statement or an offering statement under the 1933 Act relating to securities that are not the
Registrable Securities or Registrable Securities (as defined in the May Securities Purchase Agreement) (other than a registration statement
on Form S-8 or such supplements or amendments to registration statements that are outstanding and have been declared effective by the
SEC as of the date hereof (solely to the extent necessary to keep such registration statements effective and available and not with respect
to any Subsequent Placement (as defined below))). “Applicable Date” means the earlier of (x) the first date on which
the resale by the Buyers of all the Registrable Securities required to be filed on the initial Registration Statement (as defined in the
Registration Rights Agreement) pursuant to the Registration Rights Agreement is declared effective by the SEC (and each prospectus contained
therein is available for use on such date) or (y) the first date on which all of the Registrable Securities are eligible to be resold
by the Buyers pursuant to Rule 144 (or, if a Current Public Information Failure has occurred and is continuing, such later date after
which the Company has cured such Current Public Information Failure).
(k)
Reservation of Shares. So long as any of the Notes or Warrants remain outstanding, the Company shall take all action necessary
to at all times have authorized, and reserved for the purpose of issuance, no less than 100% of the maximum number of Warrant Shares issuable
upon exercise of all the Warrants then outstanding (without taking into account any limitations on the exercise of the Warrants set forth
therein) (collectively, the “Required Reserve Amount”); provided that at no time shall the number of shares of Common
Stock reserved pursuant to this Section 4(k) be reduced other than proportionally in connection with any exercise and/or redemption, as
applicable, of Warrants. If at any time the number of shares of Common Stock authorized and reserved for issuance is not sufficient to
meet the Required Reserve Amount, the Company will promptly take all corporate action necessary to authorize and reserve a sufficient
number of shares, including, without limitation, calling a special meeting of stockholders to authorize additional shares to meet the
Company’s obligations pursuant to the Transaction Documents, in the case of an insufficient number of authorized shares, obtain
stockholder approval of an increase in such authorized number of shares, and voting the management shares of the Company in favor of an
increase in the authorized shares of the Company to ensure that the number of authorized shares is sufficient to meet the Required Reserve
Amount.
(l)
Conduct of Business. The business of the Company and its Subsidiaries shall not be conducted in violation of any law, ordinance
or regulation of any Governmental Entity, except where such violations would not reasonably be expected to result, either individually
or in the aggregate, in a Material Adverse Effect.
(m)
Dilutive Issuances. For so long as any Warrants remain outstanding, the Company shall not, in any manner, enter into or
affect any Dilutive Issuance (as defined in the Warrants) if the effect of such Dilutive Issuance is to cause the Company to be required
to issue upon exercise of any Warrant any shares of Common Stock in excess of that number of shares of Common Stock which the Company
may issue upon exercise of the Warrants without breaching the Company’s obligations under the rules or regulations of the Principal
Market.
(n)
Participation Right. At any time any Notes remain outstanding, neither the Company nor any of its Subsidiaries shall, directly
or indirectly, effect any Subsequent Placement unless the Company shall have first complied with this Section 4(n). The Company acknowledges
and agrees that the right set forth in this Section 4(n) is a right granted by the Company, separately, to each Buyer.
(i)
At least two (2) Trading Days prior to any proposed or intended Subsequent Placement, the Company shall deliver to each Buyer a
written notice (each such notice, a “Pre-Notice”), which Pre-Notice shall not contain any information (including, without
limitation, material, non-public information) other than: (A) if the proposed Offer Notice (as defined below) constitutes or contains
material, non-public information, a statement asking whether the Investor is willing to accept material non-public information or (B)
if the proposed Offer Notice does not constitute or contain material, non-public information, (x) a statement that the Company proposes
or intends to effect a Subsequent Placement, (y) a statement that the statement in clause (x) above does not constitute material, non-public
information and (z) a statement informing such Buyer that it is entitled to receive an Offer Notice (as defined below) with respect to
such Subsequent Placement upon its written request. Upon the written request of a Buyer within one (1) Trading Day after the Company’s
delivery to such Buyer of such Pre-Notice, and only upon a written request by such Buyer, the Company shall promptly, but no later than
one (1) Trading Day after such request, deliver to such Buyer an irrevocable written notice (the “Offer Notice”) of
any proposed or intended issuance or sale or exchange (the “Offer”) of the securities being offered (the “Offered
Securities”) in a Subsequent Placement, which Offer Notice shall (A) identify and describe the Offered Securities, (B) describe
the price and other terms upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be
issued, sold or exchanged, (C) identify the Persons (if known) to which or with which the Offered Securities are to be offered, issued,
sold or exchanged and (D) offer to issue and sell to or exchange with such Buyer in accordance with the terms of the Offer such Buyer’s
pro rata portion of 50% of the Offered Securities, provided that the number of Offered Securities which such Buyer shall have the right
to subscribe for under this Section 4(n) shall be (x) based on such Buyer’s pro rata portion of the aggregate original principal
amount of the Notes purchased hereunder by all Buyers (the “Basic Amount”), and (y) with respect to each Buyer that
elects to purchase its Basic Amount, any additional portion of the Offered Securities attributable to the Basic Amounts of other Buyers
as such Buyer shall indicate it will purchase or acquire should the other Buyers subscribe for less than their Basic Amounts (the “Undersubscription
Amount”), which process shall be repeated until each Buyer shall have an opportunity to subscribe for any remaining Undersubscription
Amount. “Subsequent Placement” means any direct or indirect issuance, offer, sale, grant of any option or right to
purchase, or otherwise disposal by the Company or any of its Subsidiaries of any equity security or any equity-linked or related security
(including, without limitation, any “equity security” (as that term is defined under Rule 405 promulgated under the 1933 Act),
any Convertible Securities, any Options, any debt, any preferred stock or any purchase rights).
(ii)
To accept an Offer, in whole or in part, such Buyer must deliver a written notice to the Company prior to the end of the second
(2nd) Business Day after such Buyer’s receipt of the Offer Notice (the “Offer Period”), setting forth the portion
of such Buyer’s Basic Amount that such Buyer elects to purchase and, if such Buyer shall elect to purchase all of its Basic Amount,
the Undersubscription Amount, if any, that such Buyer elects to purchase (in either case, the “Notice of Acceptance”).
If the Basic Amounts subscribed for by all Buyers are less than the total of all of the Basic Amounts, then each Buyer who has set forth
an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Basic Amounts subscribed for,
the Undersubscription Amount it has subscribed for; provided, however, if the Undersubscription Amounts subscribed for exceed the difference
between the total of all the Basic Amounts and the Basic Amounts subscribed for (the “Available Undersubscription Amount”),
each Buyer who has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription
Amount as the Basic Amount of such Buyer bears to the total Basic Amounts of all Buyers that have subscribed for Undersubscription Amounts,
subject to rounding by the Company to the extent it deems reasonably necessary. Notwithstanding the foregoing, if the Company desires
to modify or amend the terms and conditions of the Offer prior to the expiration of the Offer Period, the Company may deliver to each
Buyer a new Offer Notice and the Offer Period shall expire on the second (2nd) Business Day after such Buyer’s receipt of such new
Offer Notice.
(iii)
The Company shall have five (5) Business Days from the expiration of the Offer Period above (A) to offer, issue, sell or exchange
all or any part of such Offered Securities as to which a Notice of Acceptance has not been given by a Buyer (the “Refused Securities”)
pursuant to a definitive agreement(s) (the “Subsequent Placement Agreement”), but only to the offerees described in
the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and interest
rates) that are not more favorable to the acquiring Person or Persons or less favorable to the Company than those set forth in the Offer
Notice and (B) to publicly announce (x) the execution of such Subsequent Placement Agreement, and (y) either (I) the consummation of the
transactions contemplated by such Subsequent Placement Agreement or (II) the termination of such Subsequent Placement Agreement, which
shall be filed with the SEC on a Current Report on Form 8-K with such Subsequent Placement Agreement and any documents contemplated therein
filed as exhibits thereto.
(iv)
In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the
terms specified in Section 4(n)(iii) above), then each Buyer may, at its sole option and in its sole discretion, withdraw its Notice
of Acceptance or reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be
not less than the number or amount of the Offered Securities that such Buyer elected to purchase pursuant to Section 4(n)(ii) above
multiplied by a fraction, (i) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes
to issue, sell or exchange (including Offered Securities to be issued or sold to Buyers pursuant to this Section 4(n) prior to such
reduction) and (ii) the denominator of which shall be the original amount of the Offered Securities. In the event that any Buyer so elects
to reduce the number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange
more than the reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Buyers
in accordance with Section 4(n)(i) above.
(v)
Upon the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Buyer shall acquire
from the Company, and the Company shall issue to such Buyer, the number or amount of Offered Securities specified in its Notice of Acceptance,
as reduced pursuant to Section 4(n)(iv) above if such Buyer has so elected, upon the terms and conditions specified in the Offer.
The purchase by such Buyer of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company
and such Buyer of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to such
Buyer and its counsel.
(vi)
Any Offered Securities not acquired by a Buyer or other Persons in accordance with this Section 4(n) may not be issued, sold
or exchanged until they are again offered to such Buyer under the procedures specified in this Agreement.
(vii)
The Company and each Buyer agree that if any Buyer elects to participate in the Offer, (x) neither the Subsequent Placement Agreement
with respect to such Offer nor any other transaction documents related thereto (collectively, the “Subsequent Placement Documents”)
shall include any term or provision whereby such Buyer shall be required to agree to any restrictions on trading as to any securities
of the Company or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in connection
with, any agreement previously entered into with the Company or any instrument received from the Company, and (y) any registration rights
set forth in such Subsequent Placement Documents shall be similar in all material respects to the registration rights contained in the
Registration Rights Agreement.
(viii)
Notwithstanding anything to the contrary in this Section 4(n) and unless otherwise agreed to by such Buyer, the Company shall either
confirm in writing to such Buyer that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose
its intention to issue the Offered Securities, in either case, in such a manner such that such Buyer will not be in possession of any
material, non-public information, by the fifth (5th) Business Day following delivery of the Offer Notice. If by such fifth
(5th) Business Day, no public disclosure regarding a transaction with respect to the Offered Securities has been made, and
no notice regarding the abandonment of such transaction has been received by such Buyer, such transaction shall be deemed to have been
abandoned and such Buyer shall not be in possession of any material, non-public information with respect to the Company or any of its
Subsidiaries. Should the Company decide to pursue such transaction with respect to the Offered Securities, the Company shall provide such
Buyer with another Offer Notice and such Buyer will again have the right of participation set forth in this Section 4(n). The Company
shall not be permitted to deliver more than one such Offer Notice to such Buyer in any sixty (60) day period, except as expressly contemplated
by the last sentence of Section 4(n)(ii).
(ix)
The restrictions contained in this Section 4(n) shall not apply in connection with the issuance of (A) either (x) any bona fide
public offering of securities of the Company or (y) any shares of Common Stock or Convertible Securities (as applicable) issued or issuable
to the Persons set forth on Schedule 4(n) attached hereto other than in connection with a Variable Rate Transaction (as defined below)
or otherwise in connection with any bona fide strategic or commercial alliances, acquisitions, mergers, licensing arrangements, and strategic
partnerships, provided, that (1) the primary purpose of such issuance is not to raise capital as reasonably determined, and (2) the purchaser
or acquirer or recipient of the securities in such issuance solely consists of either (I) the actual participants in such strategic or
commercial alliance, strategic or commercial licensing arrangement or strategic or commercial partnership, (II) the actual owners of such
assets or securities acquired in such acquisition or merger or (III) the stockholders, partners, employees, consultants, officers, directors
or members of the foregoing Persons, in each case, which is, itself or through its subsidiaries, an operating company or an owner of an
asset, in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to
the investment of funds, and (IV) the number or amount of securities issued to such Persons by the Company shall not be disproportionate
to each such Person’s actual participation in (or fair market value of the contribution to) such strategic or commercial alliance
or strategic or commercial partnership or ownership of such assets or securities to be acquired by the Company, as applicable (the “Excluded
Offerings”) or (B) any Excluded Securities (as defined in the Notes). The Company shall not circumvent the provisions of this
Section 4(n) by providing terms or conditions to one Buyer that are not provided to all. “Variable Rate Transaction”
means a transaction in which the Company or any Subsidiary (i) issues or sells any Convertible Securities either (A) at a conversion,
exercise or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the shares of Common
Stock at any time after the initial issuance of such Convertible Securities, or (B) with a conversion, exercise or exchange price that
is subject to being reset at some future date after the initial issuance of such Convertible Securities or upon the occurrence of specified
or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock, other than pursuant
to a customary “weighted average” anti-dilution provision or (ii) enters into any agreement (including, without limitation,
an equity line of credit or an “at-the-market” offering) whereby the Company or any Subsidiary may sell securities at a future
determined price (other than standard and customary “preemptive” or “participation” rights).
(o)
Passive Foreign Investment Company. The Company shall conduct its business, and shall cause its Subsidiaries to conduct
their respective businesses, in such a manner as will ensure that the Company will not be deemed to constitute a passive foreign investment
company within the meaning of Section 1297 of the Code.
(p)
Restriction on Redemption and Cash Dividends. So long as any Notes are outstanding, the Company shall not, directly or indirectly,
redeem, or declare or pay any cash dividend or distribution on, any securities of the Company without the prior express written consent
of the Buyers.
(q)
Corporate Existence. So long as any Buyer beneficially owns any Notes or Warrants, the Company shall not be party to any
Fundamental Transaction (as defined in the Notes) or Fundamental Transaction (as defined in the Warrants) unless the Company is in compliance
with the applicable provisions governing Fundamental Transactions set forth in the Notes and the Warrants.
(r)
Stock Splits. Until the date Notes are no longer outstanding, the Company shall not effect any stock combination, reverse
stock split or other similar transaction (or make any public announcement or disclosure with respect to any of the foregoing) without
the prior written consent of the Required Holders (as defined below), provided, however, the Company may undertake one (1) reverse stock
split after the date hereof for the purpose of maintaining compliance with The Nasdaq Capital Market’s continued listing standards.
(s)
Exercise Procedures. Each of the form of Exercise Notice (as defined in the Warrants) included in the Warrants set forth
the totality of the procedures required of the Buyers in order to exercise the Warrants. Except as provided in Section 5(d), no additional
legal opinion, other information or instructions shall be required of the Buyers to exercise their Warrants. The Company shall honor exercises
of the Warrants and shall deliver the Warrant Shares in accordance with the terms, conditions and time periods set forth in the Warrants.
(t)
Regulation M. The Company will not take any action prohibited by Regulation M under the 1934 Act, in connection with the
distribution of the Securities contemplated hereby.
(u)
General Solicitation(f). None of the Company, any of its affiliates (as defined in Rule 501(b) under the 1933 Act) or any
person acting on behalf of the Company or such affiliate will solicit any offer to buy or offer or sell the Securities by means of any
form of general solicitation or general advertising within the meaning of Regulation D, including: (i) any advertisement, article,
notice or other communication published in any newspaper, magazine or similar medium or broadcast over television or radio; and (ii) any
seminar or meeting whose attendees have been invited by any general solicitation or general advertising.
(v)
Integration(g). None of the Company, any of its affiliates (as defined in Rule 501(b) under the 1933 Act), or any person
acting on behalf of the Company or such affiliate will sell, offer for sale, or solicit offers to buy or otherwise negotiate in respect
of any security (as defined in the 1933 Act) which will be integrated with the sale of the Securities in a manner which would require
the registration of the Securities under the 1933 Act or require stockholder approval under the rules and regulations of the Principal
Market and the Company will take all action that is appropriate or necessary to assure that its offerings of other securities will not
be integrated for purposes of the 1933 Act or the rules and regulations of the Principal Market, with the issuance of Securities contemplated
hereby.
(w)
Notice of Disqualification Events(a). The Company will notify the Buyers in writing, prior to the Closing Date of (i) any
Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a Disqualification
Event relating to any Issuer Covered Person.
(x)
Closing Documents. On or prior to fourteen (14) calendar days after the Closing Date, the Company agrees to deliver, or
cause to be delivered, to each Buyer and Kelley Drye & Warren LLP a complete closing set of the executed Transaction Documents, Securities
and any other document required to be delivered to any party pursuant to Section 7 hereof or otherwise.
5.
REGISTER; TRANSFER AGENT INSTRUCTIONS; LEGEND.
(a)
Register. The Company shall maintain at its principal executive offices (or such other office or agency of the Company as
it may designate by notice to each holder of Securities), a register for the Notes and the Warrants in which the Company shall record
the name and address of the Person in whose name the Notes and the Warrants have been issued (including the name and address of each transferee),
the principal amount of the Notes held by such Person and the number of Warrant Shares issuable upon exercise of the Warrants held by
such Person. The Company shall keep the register open and available at all times during business hours for inspection of any Buyer or
its legal representatives.
(b)
Transfer Agent Instructions. The Company shall issue irrevocable instructions to its transfer agent and any subsequent transfer
agent (as applicable, the “Transfer Agent”) in a form acceptable to each of the Buyers (the “Irrevocable Transfer
Agent Instructions”) to issue certificates or credit shares to the applicable balance accounts at The Depository Trust Company
(“DTC”), registered in the name of each Buyer or its respective nominee(s), for the Commitment Shares and the Warrant
Shares in such amounts as specified from time to time by each Buyer to the Company upon the exercise of the Warrants (as the case may
be). The Company represents and warrants that no instruction other than the Irrevocable Transfer Agent Instructions referred to in this
Section 5(b), and stop transfer instructions to give effect to Section 2(g) hereof, will be given by the Company to its transfer
agent with respect to the Securities, and that the Securities shall otherwise be freely transferable on the books and records of the Company,
as applicable, to the extent provided in this Agreement and the other Transaction Documents. If a Buyer effects a sale, assignment or
transfer of the Securities in accordance with Section 2(g), the Company shall permit the transfer and shall promptly instruct its transfer
agent to issue one or more certificates or credit shares to the applicable balance accounts at DTC in such name and in such denominations
as specified by such Buyer to effect such sale, transfer or assignment. In the event that such sale, assignment or transfer involves Commitment
Shares or Warrant Shares sold, assigned or transferred pursuant to an effective registration statement or in compliance with Rule 144,
the transfer agent shall issue such shares to such Buyer, assignee or transferee (as the case may be) without any restrictive legend in
accordance with Section 5(d) below. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable
harm to a Buyer. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under this Section 5(b)
will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section 5(b),
that a Buyer shall be entitled, in addition to all other available remedies, to an order and/or injunction restraining any breach and
requiring immediate issuance and transfer, without the necessity of showing economic loss and without any bond or other security being
required. The Company shall cause its counsel to issue the legal opinion referred to in the Irrevocable Transfer Agent Instructions to
the Company’s transfer agent on each Effective Date (as defined in the Registration Rights Agreement). Any fees (with respect to
the transfer agent, counsel to the Company or otherwise) associated with the issuance of such opinion or the removal of any legends on
any of the Securities shall be borne by the Company.
(c)
Legends(a). Each Buyer understands that the Securities have been issued (or will be issued in the case of the Warrant Shares)
pursuant to an exemption from registration or qualification under the 1933 Act and applicable state securities laws, and except as set
forth below, the Securities shall bear any legend as required by the “blue sky” laws of any state and a restrictive legend
in substantially the following form (and a stop-transfer order may be placed against transfer of such stock certificates):
[NEITHER THE ISSUANCE AND SALE
OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN][THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY),
IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH
A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
(d)
Removal of Legends. Certificates evidencing Securities shall not be required to contain the legend set forth in Section 5(c)
above or any other legend (i) while a registration statement (including a Registration Statement) covering the resale of such Securities
is effective under the 1933 Act, (ii) following any sale of such Securities pursuant to Rule 144 (assuming the transferor is not an affiliate
of the Company), (iii) if such Securities are eligible to be sold, assigned or transferred under Rule 144 (provided that a Buyer provides
the Company with reasonable assurances that such Securities are eligible for sale, assignment or transfer under Rule 144 which shall not
include an opinion of Buyer’s counsel), (iv) in connection with a sale, assignment or other transfer (other than under Rule 144),
provided that such Buyer provides the Company with an opinion of counsel to such Buyer, in a generally acceptable form, to the effect
that such sale, assignment or transfer of the Securities may be made without registration under the applicable requirements of the 1933
Act or (v) if such legend is not required under applicable requirements of the 1933 Act (including, without limitation, controlling judicial
interpretations and pronouncements issued by the SEC). If a legend is not required pursuant to the foregoing, the Company shall no later
than two (2) Trading Days (or such earlier date as required pursuant to the 1934 Act or other applicable law, rule or regulation for the
settlement of a trade initiated on the date such Buyer delivers such legended certificate representing such Securities to the Company)
following the delivery by a Buyer to the Company or the transfer agent (with notice to the Company) of a legended certificate representing
such Securities (endorsed or with stock powers attached, signatures guaranteed, and otherwise in form necessary to affect the reissuance
and/or transfer, if applicable), together with any other deliveries from such Buyer as may be required above in this Section 5(d),
as directed by such Buyer, either: (A) provided that the Company’s transfer agent is participating in the DTC Fast Automated Securities
Transfer Program (“FAST”) and such Securities are Commitment Shares or Warrant Shares, credit the aggregate number
of shares of Common Stock to which such Buyer shall be entitled to such Buyer’s or its designee’s balance account with DTC
through its Deposit/Withdrawal at Custodian system or (B) if the Company’s transfer agent is not participating in FAST, issue and
deliver (via reputable overnight courier) to such Buyer, a certificate representing such Securities that is free from all restrictive
and other legends, registered in the name of such Buyer or its designee (the date by which such credit is so required to be made to the
balance account of such Buyer’s or such Buyer’s designee with DTC or such certificate is required to be delivered to such
Buyer pursuant to the foregoing is referred to herein as the “Required Delivery Date”, and the date such shares of
Common Stock are actually delivered without restrictive legend to such Buyer or such Buyer’s designee with DTC, as applicable, the
“Share Delivery Date”). The Company shall be responsible for any transfer agent fees or DTC fees with respect to any
issuance of Securities or the removal of any legends with respect to any Securities in accordance herewith.
(e)
Failure to Timely Deliver; Buy-In. If the Company fails to fail, for any reason or for no reason, to issue and deliver (or
cause to be delivered) to a Buyer (or its designee) by the Required Delivery Date, either (I) if the Transfer Agent is not participating
in FAST, a certificate for the number of Commitment Shares or Warrant Shares (as the case may be) to which such Buyer is entitled and
register such Commitment Shares or Warrant Shares (as the case may be) on the Company’s share register or, if the Transfer Agent
is participating in FAST, to credit the balance account of such Buyer or such Buyer’s designee with DTC for such number of Commitment
Shares or Warrant Shares (as the case may be) submitted for legend removal by such Buyer pursuant to Section 5(d) above or (II) if the
Registration Statement covering the resale of the Commitment Shares or Warrant Shares (as the case may be) submitted for legend removal
by such Buyer pursuant to Section 5(d) above (the “Unavailable Shares”) is not available for the resale of such Unavailable
Shares and the Company fails to promptly, but in no event later than as required pursuant to the Registration Rights Agreement (x) so
notify such Buyer and (y) deliver the Commitment Shares or Warrant Shares, as applicable, electronically without any restrictive legend
by crediting such aggregate number of Commitment Shares or Warrant Shares (as the case may be) submitted for legend removal by such Buyer
pursuant to Section 5(d) above to such Buyer’s or its designee’s balance account with DTC through its Deposit/Withdrawal At
Custodian system (the event described in the immediately foregoing clause (II) is hereinafter referred as a “Notice Failure”
and together with the event described in clause (I) above, a “Delivery Failure”), then, in addition to all other remedies
available to such Buyer, the Company shall pay in cash to such Buyer on each day after the Share Delivery Date and during such Delivery
Failure an amount equal to 1% of the product of (A) the sum of the number of shares of Common Stock not issued to such Buyer on or prior
to the Required Delivery Date and to which such Buyer is entitled, and (B) any trading price of the Common Stock selected by such Buyer
in writing as in effect at any time during the period beginning on the date of the delivery by such Buyer to the Company of the applicable
Commitment Shares or Warrant Shares (as the case may be) and ending on the applicable Share Delivery Date. In addition to the foregoing,
if on or prior to the Required Delivery Date either (I) if the Transfer Agent is not participating in FAST, the Company shall fail to
issue and deliver a certificate to a Buyer and register such shares of Common Stock on the Company’s share register or, if the Transfer
Agent is participating in FAST, credit the balance account of such Buyer or such Buyer’s designee with DTC for the number of shares
of Common Stock to which such Buyer submitted for legend removal by such Buyer pursuant to Section 5(d) above (ii) below or (II) a Notice
Failure occurs, and if on or after such Trading Day such Buyer acquires (in an open market transaction, stock loan or otherwise) shares
of Common Stock corresponding to all or any portion of the number of shares of Common Stock issuable upon such exercise that such Buyer
is entitled to receive from the Company and has not received from the Company in connection with such Delivery Failure or Notice Failure,
as applicable (a “Buy-In”), then the Company shall, within two (2) Trading Days after such Buyer’s request and
in such Buyer’s discretion, either (i) pay cash to such Buyer in an amount equal to such Buyer’s total purchase price (including
brokerage commissions, stock loan costs and other out-of-pocket expenses, if any, for the shares of Common Stock so acquired) (the “Buy-In
Price”), at which point the Company’s obligation to so deliver such certificate or credit such Buyer’s balance account
shall terminate and such shares shall be cancelled, or (ii) promptly honor its obligation to so deliver to such Buyer a certificate or
certificates or credit the balance account of such Buyer or such Buyer’s designee with DTC representing such number of shares of
Common Stock that would have been so delivered if the Company timely complied with its obligations hereunder and pay cash to such Buyer
in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Commitment Shares or Warrant
Shares (as the case may be) that the Company was required to deliver to such Buyer by the Required Delivery Date multiplied by (B) the
lowest Closing Sale Price (as defined in the Warrants) of the Common Stock on any Trading Day during the period commencing on the date
of the delivery by such Buyer to the Company of the applicable Commitment Shares or Warrant Shares (as the case may be) and ending on
the date of such delivery and payment under this clause (ii). Nothing shall limit such Buyer’s right to pursue any other remedies
available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive relief
with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock (or to electronically deliver
such shares of Common Stock) as required pursuant to the terms hereof. Notwithstanding anything herein to the contrary, with respect to
any given Notice Failure and/or Delivery Failure, this Section 5(e) shall not apply to the applicable Buyer the extent the Company has
already paid such amounts in full to such Buyer with respect to such Notice Failure and/or Delivery Failure, as applicable, pursuant to
the analogous sections of the Note or Warrant, as applicable, held by such Buyer.
(f)
FAST Compliance. While any Warrants remain outstanding, the Company shall maintain a transfer agent that participates in
FAST.
6.
CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.
(a)
The obligation of the Company hereunder to issue and sell the Notes, the Commitment Shares and the Warrants to each Buyer at the
Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions
are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion by providing each Buyer with
prior written notice thereof:
(i)
Such Buyer shall have executed each of the other Transaction Documents to which it is a party and delivered the same to the Company.
(ii)
Such Buyer and each other Buyer shall have delivered to the Company the Purchase Price (less, in the case of any Buyer, the amounts
withheld pursuant to Section 4(g)) for the Note, the Commitment Shares and the Warrants being purchased by such Buyer at the Closing
by wire transfer of immediately available funds in accordance with the Flow of Funds Letter.
(iii)
The representations and warranties of such Buyer shall be true and correct in all material respects as of the date when made and
as of the Closing Date as though originally made at that time (except for representations and warranties that speak as of a specific date,
which shall be true and correct as of such specific date), and such Buyer shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by such
Buyer at or prior to the Closing Date.
7.
CONDITIONS TO EACH BUYER’S OBLIGATION TO PURCHASE.
(a)
The obligation of each Buyer hereunder to purchase its Note, Commitment Shares, and its related Warrants at the Closing is subject
to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for each Buyer’s
sole benefit and may be waived by such Buyer at any time in its sole discretion by providing the Company with prior written notice thereof:
(i)
The Company shall have duly executed and delivered to such Buyer each of the Transaction Documents to which it is a party and the
Company shall have duly executed and delivered to such Buyer (A) a Note in such original principal amount as is set forth across from
such Buyer’s name in column (3) of the Schedule of Buyers, (B) such aggregate number of Commitment Shares set forth across from
such Buyer’s name in column (4) of the Schedule of Buyers, and (C) a Warrant (initially exercisable for such aggregate number of
Warrant Shares as is set forth across from such Buyer’s name in column (5) of the Schedule of Buyers), in each case, as being purchased
by such Buyer at the Closing pursuant to this Agreement.
(ii)
Such Buyer shall have received the opinion of Carroll Legal LLC, the Company’s counsel, dated as of the Closing Date, in
the form acceptable to such Buyer.
(iii)
The Company shall have delivered to such Buyer a copy of the Irrevocable Transfer Agent Instructions, in the form acceptable to
such Buyer, which instructions shall have been delivered to and acknowledged in writing by the Company’s transfer agent.
(iv)
The Company shall have delivered to such Buyer a certificate evidencing the formation and good standing of the Company in such
entity’s jurisdiction of formation issued by the Secretary of State (or comparable office) of such jurisdiction of formation as
of a date within ten (10) days of the Closing Date.
(v)
The Company shall have delivered to such Buyer a certificate evidencing the Company’s qualification as a foreign corporation
and good standing issued by the Secretary of State (or comparable office) of each jurisdiction in which the Company conducts business
and is required to so qualify, as of a date within ten (10) days of the Closing Date.
(vi)
The Company shall have delivered to such Buyer a certified copy of the Certificate of Incorporation as certified by the Delaware
Secretary of State within ten (10) days of the Closing Date.
(vii)
The Company shall have delivered to such Buyer a certificate, in the form acceptable to such Buyer, executed by the Secretary of
the Company and dated as of the Closing Date, as to (i) the resolutions consistent with Section 3(b) as adopted by the Company’s
board of directors (or other governing body) in a form reasonably acceptable to such Buyer, (ii) the Certificate of Incorporation of the
Company and (iii) the Bylaws of the Company, each as in effect at the Closing.
(viii)
Each and every representation and warranty of the Company shall be true and correct in all material respects (except where such
representation or warranty is qualified by materiality or material adverse effect, in which case such representation or warrants shall
be true and correct in all respects) as of the date when made and as of the Closing Date as though originally made at that time (except
for representations and warranties that speak as of a specific date, which shall be true and correct as of such specific date) and the
Company shall have performed, satisfied and complied in all respects with the covenants, agreements and conditions required to be performed,
satisfied or complied with by the Company at or prior to the Closing Date. Such Buyer shall have received a certificate, duly executed
by the Chief Financial Officer of the Company, dated as of the Closing Date, to the foregoing effect and as to such other matters as may
be reasonably requested by such Buyer in the form acceptable to such Buyer.
(ix)
The Company shall have delivered to such Buyer a letter from the Company’s transfer agent certifying the number of shares
of Common Stock outstanding on the Closing Date immediately prior to the Closing.
(x)
The Common Stock (A) shall be designated for quotation or listed (as applicable) on the Principal Market and (B) shall not have
been suspended, as of the Closing Date, by the SEC or the Principal Market from trading on the Principal Market.
(xi)
The Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the sale
of the Securities, including without limitation, those required by the Principal Market, if any.
(xii)
No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or Governmental Entity of competent jurisdiction that prohibits the consummation of any of the transactions contemplated
by the Transaction Documents.
(xiii)
Since the date of execution of this Agreement, no event or series of events shall have occurred that reasonably would have or result
in a Material Adverse Effect.
(xiv)
The Company shall have obtained approval of the Principal Market to list or designate for quotation (as the case may be) the Commitment
Shares and the Warrant Shares.
(xv)
Within two (2) Business Days prior to the Closing, the Company shall have delivered or caused to be delivered to each Buyer certified
copies of requests for copies of information on Form UCC-11, listing all effective financing statements which name as debtor the Company
or any of its Subsidiaries, and the results of searches for any tax Lien and judgment Lien filed against such Person or its property,
which results, except as otherwise agreed to in writing by the Buyers, shall not show any such Liens.
(xvi)
Such Buyer shall have received a letter on the letterhead of the Company, duly executed by the Chief Financial Officer of the Company,
setting forth the wire amounts of each Buyer and the wire transfer instructions of the Company (the “Flow of Funds Letter”).
(xvii)
The Company and its Subsidiaries shall have delivered to such Buyer such other documents, instruments or certificates relating
to the transactions contemplated by this Agreement as such Buyer or its counsel may reasonably request.
8.
TERMINATION.
In the event that the Closing
shall not have occurred with respect to a Buyer within five (5) days of the date hereof, then such Buyer shall have the right to terminate
its obligations under this Agreement with respect to itself at any time on or after the close of business on such date without liability
of such Buyer to any other party; provided, however, (i) the right to terminate this Agreement under this Section 8 shall not be
available to such Buyer if the failure of the transactions contemplated by this Agreement to have been consummated by such date is the
result of such Buyer’s breach of this Agreement and (ii) the abandonment of the sale and purchase of the Notes, the Commitment Shares
and the Warrants shall be applicable only to such Buyer providing such written notice, provided further that no such termination shall
affect any obligation of the Company under this Agreement to reimburse such Buyer for the expenses described in Section 4(g) above.
Nothing contained in this Section 8 shall be deemed to release any party from any liability for any breach by such party of the terms
and provisions of this Agreement or the other Transaction Documents or to impair the right of any party to compel specific performance
by any other party of its obligations under this Agreement or the other Transaction Documents.
9.
MISCELLANEOUS.
(a)
Governing Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of Delaware, without giving effect to any provision of law or rule
(whether of the State of Delaware or any other jurisdictions) that would cause the application of the laws of any jurisdictions other
than the State of Delaware. The Company hereby irrevocably submits to the exclusive jurisdiction of the United States District Court for
the District of Delaware or in the Court of Chancery of the State of Delaware (or, if such courts lack subject-matter jurisdiction, in
the Superior Court of the State of Delaware), for the adjudication of any dispute hereunder or in connection herewith or under any of
the other Transaction Documents or with any transaction contemplated hereby or thereby, and hereby irrevocably waives, and agrees not
to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such
suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each
party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any
right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude any Buyer from
bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations
to such Buyer or to enforce a judgment or other court ruling in favor of such Buyer. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT
IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT
OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.
(b)
Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one
and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. In
the event that any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file
of an executed signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf
such signature is executed) with the same force and effect as if such signature page were an original thereof.
(c)
Headings; Gender. The headings of this Agreement are for convenience of reference and shall not form part of, or affect
the interpretation of, this Agreement. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include
the masculine, feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,” “include”
and words of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,”
“hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the provision in
which they are found.
(d)
Severability; Maximum Payment Amounts. If any provision of this Agreement is prohibited by law or otherwise determined to
be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable
shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability
of such provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified
continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited
nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal
obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties
will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the
effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s). Notwithstanding anything
to the contrary contained in this Agreement or any other Transaction Document (and without implication that the following is required
or applicable), it is the intention of the parties that in no event shall amounts and value paid by the Company and/or any of its Subsidiaries
(as the case may be), or payable to or received by any of the Buyers, under the Transaction Documents (including without limitation, any
amounts that would be characterized as “interest” under applicable law) exceed amounts permitted under any applicable law.
Accordingly, if any obligation to pay, payment made to any Buyer, or collection by any Buyer pursuant the Transaction Documents is finally
judicially determined to be contrary to any such applicable law, such obligation to pay, payment or collection shall be deemed to have
been made by mutual mistake of such Buyer, the Company and its Subsidiaries and such amount shall be deemed to have been adjusted with
retroactive effect to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by the applicable law.
Such adjustment shall be effected, to the extent necessary, by reducing or refunding, at the option of such Buyer, the amount of interest
or any other amounts which would constitute unlawful amounts required to be paid or actually paid to such Buyer under the Transaction
Documents. For greater certainty, to the extent that any interest, charges, fees, expenses or other amounts required to be paid to or
received by such Buyer under any of the Transaction Documents or related thereto are held to be within the meaning of “interest”
or another applicable term to otherwise be violative of applicable law, such amounts shall be pro-rated over the period of time to which
they relate.
(e)
Entire Agreement; Amendments. This Agreement, the other Transaction Documents and the schedules and exhibits attached hereto
and thereto and the instruments referenced herein and therein supersede all other prior oral or written agreements between the Buyers,
the Company, its Subsidiaries, their affiliates and Persons acting on their behalf, including, without limitation, any transactions by
any Buyer with respect to Common Stock or the Securities, and the other matters contained herein and therein, and this Agreement, the
other Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments referenced herein and therein
contain the entire understanding of the parties solely with respect to the matters covered herein and therein; provided, however, nothing
contained in this Agreement or any other Transaction Document shall (or shall be deemed to) (i) have any effect on any agreements any
Buyer has entered into with, or any instruments any Buyer has received from, the Company or any of its Subsidiaries prior to the date
hereof with respect to any prior investment made by such Buyer in the Company or (ii) waive, alter, modify or amend in any respect any
obligations of the Company or any of its Subsidiaries, or any rights of or benefits to any Buyer or any other Person, in any agreement
entered into prior to the date hereof between or among the Company and/or any of its Subsidiaries and any Buyer, or any instruments any
Buyer received from the Company and/or any of its Subsidiaries prior to the date hereof, and all such agreements and instruments shall
continue in full force and effect. Except as specifically set forth herein or therein, neither the Company nor any Buyer makes any representation,
warranty, covenant or undertaking with respect to such matters. For clarification purposes, the Recitals are part of this Agreement. No
provision of this Agreement may be amended other than by an instrument in writing signed by the Company and the Required Holders, and
any amendment to any provision of this Agreement made in conformity with the provisions of this Section 9(e) shall be binding on
all Buyers and holders of Securities, as applicable; provided that no such amendment shall be effective to the extent that it (A) applies
to less than all of the holders of the Securities then outstanding or (B) imposes any obligation or liability on any Buyer without such
Buyer’s prior written consent (which may be granted or withheld in such Buyer’s sole discretion). No waiver shall be effective
unless it is in writing and signed by an authorized representative of the waiving party, provided that the Required Holders may waive
any provision of this Agreement, and any waiver of any provision of this Agreement made in conformity with the provisions of this Section 9(e)
shall be binding on all Buyers and holders of Securities, as applicable, provided that no such waiver shall be effective to the extent
that it (1) applies to less than all of the holders of the Securities then outstanding (unless a party gives a waiver as to itself only)
or (2) imposes any obligation or liability on any Buyer without such Buyer’s prior written consent (which may be granted or withheld
in such Buyer’s sole discretion). No consideration (other than reimbursement of legal fees) shall be offered or paid to any Person
to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same consideration also
is offered to all of the parties to the Transaction Documents, all holders of the Notes or all holders of the Warrants (as the case may
be). From the date hereof and while any Notes or Warrants are outstanding, the Company shall not be permitted to receive any consideration
from a Buyer or a holder of Notes or Warrants that is not otherwise contemplated by the Transaction Documents in order to, directly or
indirectly, induce the Company or any Subsidiary (i) to treat such Buyer or holder of Notes or Warrants in a manner that is more favorable
than to other similarly situated Buyers or holders of Notes or Warrants, as applicable, or (ii) to treat any Buyer(s) or holder(s) of
Notes or Warrants in a manner that is less favorable than the Buyer or holder of Notes or Warrants that is paying such consideration;
provided, however, that the determination of whether a Buyer has been treated more or less favorably than another Buyer shall disregard
any securities of the Company purchased or sold by any Buyer. The Company has not, directly or indirectly, made any agreements with any
Buyers relating to the terms or conditions of the transactions contemplated by the Transaction Documents except as set forth in the Transaction
Documents. Without limiting the foregoing, the Company confirms that, except as set forth in this Agreement, no Buyer has made any commitment
or promise or has any other obligation to provide any financing to the Company, any Subsidiary or otherwise. As a material inducement
for each Buyer to enter into this Agreement, the Company expressly acknowledges and agrees that (x) no due diligence or other investigation
or inquiry conducted by a Buyer, any of its advisors or any of its representatives shall affect such Buyer’s right to rely on, or
shall modify or qualify in any manner or be an exception to any of, the Company’s representations and warranties contained in this
Agreement or any other Transaction Document and (y) unless a provision of this Agreement or any other Transaction Document is expressly
preceded by the phrase “except as disclosed in the SEC Documents,” nothing contained in any of the SEC Documents shall affect
such Buyer’s right to rely on, or shall modify or qualify in any manner or be an exception to any of, the Company’s representations
and warranties contained in this Agreement or any other Transaction Document. “Required Holders” means (I) prior to
the Closing Date, each Buyer entitled to purchase Notes at the Closing and (II) on or after the Closing Date, holders of a majority of
the Registrable Securities as of such time (excluding any Registrable Securities held by the Company or any of its Subsidiaries as of
such time) issued or issuable hereunder or pursuant to the Warrants (or the Buyers, with respect to any waiver or amendment of Section
4(n)).
(f)
Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt,
when sent by electronic mail (provided that such sent email is kept on file (whether electronically or otherwise) by the sending party
and the sending party does not receive an automatically generated message from the recipient’s email server that such e-mail could
not be delivered to such recipient); or (iii) one (1) Business Day after deposit with an overnight courier service with next day delivery
specified, in each case, properly addressed to the party to receive the same. The mailing addresses and e-mail addresses for such communications
shall be:
If to the Company:
Aclarion, Inc.
8181 Arista Place, Suite 100
Broomfield, CO 80021
Telephone: (303) 927-8857
Attention: John Lorbiecki, Chief Financial Officer
E-Mail: jlorbiecki@aclarion.com
With a copy (for informational purposes only) to:
Carroll Legal LLC
233 McKinley Park Ln
Louisville, CO, 80027
Telephone: (303) 888-4859
Attention: James H. Carroll
E-Mail: jcarroll@carroll.legal
If to the Transfer Agent:
VStock Transfer, LLC
18 Lafayette Place
Woodmere, NY 11598
Telephone: (212) 828-8436
Attention: Young Kim
E-Mail: young@vstocktransfer.com
If to a Buyer, to its mailing address and e-mail
address set forth on the Schedule of Buyers, with copies to such Buyer’s representatives as set forth on the Schedule of Buyers,
with a copy (for informational purposes only) to:
Kelley Drye & Warren LLP
3 World Trade Center
175 Greenwich Street
New York, NY 10007
Telephone: (212) 808-7540
Attention: Michael A. Adelstein, Esq.
E-mail: madelstein@kelleydrye.com
or to such other mailing address and/or e-mail
address and/or to the attention of such other Person as the recipient party has specified by written notice given to each other party
five (5) days prior to the effectiveness of such change, provided that Kelley Drye & Warren LLP shall only be provided copies of notices
sent to the lead Buyer. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication,
(B) mechanically or electronically generated by the sender’s e-mail containing the time, date and recipient’s e-mail or (C)
provided by an overnight courier service shall be rebuttable evidence of personal service, receipt by e-mail or receipt from an overnight
courier service in accordance with clause (i), (ii) or (iii) above, respectively.
(g)
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective
successors and assigns, including any purchasers of any of the Notes, Commitment Shares and Warrants (other than purchasers of Commitment
Shares in open market transactions). The Company shall not assign this Agreement or any rights or obligations hereunder without the prior
written consent of the Required Holders, including, without limitation, by way of a Fundamental Transaction (as defined in the Warrants)
(unless the Company is in compliance with the applicable provisions governing Fundamental Transactions set forth in the Warrants) or a
Fundamental Transaction (as defined in the Notes) (unless the Company is in compliance with the applicable provisions governing Fundamental
Transactions set forth in the Notes). A Buyer may assign some or all of its rights hereunder in connection with any transfer of any of
its Securities without the consent of the Company, in which event such assignee shall be deemed to be a Buyer hereunder with respect to
such assigned rights.
(h)
No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, other than the Indemnitees
referred to in Section 9(k).
(i)
Survival. The representations, warranties, agreements and covenants shall survive the Closing. Each Buyer shall be responsible
only for its own representations, warranties, agreements and covenants hereunder.
(j)
Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things,
and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
(k)
Indemnification. In consideration of each Buyer’s execution and delivery of the Transaction Documents and acquiring
the Securities thereunder and in addition to all of the Company’s other obligations under the Transaction Documents, the Company
shall defend, protect, indemnify and hold harmless each Buyer and each holder of any Securities and all of their stockholders, partners,
members, officers, directors, employees and direct or indirect investors and any of the foregoing Persons’ agents or other representatives
(including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the
“Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees,
liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for
which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified
Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to (i) any misrepresentation or breach
of any representation or warranty made by the Company or any Subsidiary in any of the Transaction Documents, (ii) any breach of any covenant,
agreement or obligation of the Company or any Subsidiary contained in any of the Transaction Documents or (iii) any cause of action, suit,
proceeding or claim brought or made against such Indemnitee by a third party (including for these purposes a derivative action brought
on behalf of the Company or any Subsidiary) or which otherwise involves such Indemnitee that arises out of or results from (A) the execution,
delivery, performance or enforcement of any of the Transaction Documents, (B) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of the issuance of the Securities, (C) any disclosure properly made by such Buyer pursuant
to Section 4(i), or (D) the status of such Buyer or holder of the Securities either as an investor in the Company pursuant to the
transactions contemplated by the Transaction Documents or as a party to this Agreement (including, without limitation, as a party in interest
or otherwise in any action or proceeding for injunctive or other equitable relief). To the extent that the foregoing undertaking by the
Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of
the Indemnified Liabilities which is permissible under applicable law. Except as otherwise set forth herein, the mechanics and procedures
with respect to the rights and obligations under this Section 9(k) shall be the same as those set forth in Section 6 of the
Registration Rights Agreement.
(l)
Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their
mutual intent, and no rules of strict construction will be applied against any party. No specific representation or warranty shall limit
the generality or applicability of a more general representation or warranty. Each and every reference to share prices, shares of Common
Stock and any other numbers in this Agreement that relate to the Common Stock shall be automatically adjusted for any stock splits, stock
dividends, stock combinations, recapitalizations or other similar transactions that occur with respect to the Common Stock after the date
of this Agreement. Notwithstanding anything in this Agreement to the contrary, for the avoidance of doubt, nothing contained herein shall
constitute a representation or warranty against, or a prohibition of, any actions with respect to the borrowing of, arrangement to borrow,
identification of the availability of, and/or securing of, securities of the Company in order for such Buyer (or its broker or other financial
representative) to effect short sales or similar transactions in the future.
(m)
Remedies. Each Buyer and in the event of assignment by Buyer of its rights and obligations hereunder, each holder of Securities,
shall have all rights and remedies set forth in the Transaction Documents and all rights and remedies which such holders have been granted
at any time under any other agreement or contract and all of the rights which such holders have under any law. Any Person having any rights
under any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other security),
to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. Furthermore,
the Company recognizes that in the event that it or any Subsidiary fails to perform, observe, or discharge any or all of its or such Subsidiary’s
(as the case may be) obligations under the Transaction Documents, any remedy at law would inadequate relief to the Buyers. The Company
therefore agrees that the Buyers shall be entitled to specific performance and/or temporary, preliminary and permanent injunctive or other
equitable relief from any court of competent jurisdiction in any such case without the necessity of proving actual damages and without
posting a bond or other security. The remedies provided in this Agreement and the other Transaction Documents shall be cumulative and
in addition to all other remedies available under this Agreement and the other Transaction Documents, at law or in equity (including a
decree of specific performance and/or other injunctive relief).
(n)
Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of)
the Transaction Documents, whenever any Buyer exercises a right, election, demand or option under a Transaction Document and the Company
or any Subsidiary does not timely perform its related obligations within the periods therein provided, then such Buyer may rescind or
withdraw, in its sole discretion from time to time upon written notice to the Company or such Subsidiary (as the case may be), any relevant
notice, demand or election in whole or in part without prejudice to its future actions and rights.
(o)
Payment Set Aside; Currency. To the extent that the Company makes a payment or payments to any Buyer hereunder or pursuant
to any of the other Transaction Documents or any of the Buyers enforce or exercise their rights hereunder or thereunder, and such payment
or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent
or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company,
a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, foreign, state or federal law,
common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended
to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff
had not occurred. Unless otherwise expressly indicated, all dollar amounts referred to in this Agreement and the other Transaction Documents
are in United States Dollars (“U.S. Dollars”), and all amounts owing under this Agreement and all other Transaction
Documents shall be paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall be converted into the U.S. Dollar
equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange Rate” means, in relation
to any amount of currency to be converted into U.S. Dollars pursuant to this Agreement, the U.S. Dollar exchange rate as published in
the Wall Street Journal on the relevant date of calculation.
(p)
Judgment Currency.
(i)
If for the purpose of obtaining or enforcing judgment against the Company in connection with this Agreement or any other Transaction
Document in any court in any jurisdiction it becomes necessary to convert into any other currency (such other currency being hereinafter
in this Section 9(p) referred to as the “Judgment Currency”) an amount due in US Dollars under this Agreement,
the conversion shall be made at the Exchange Rate prevailing on the Trading Day immediately preceding:
(1)
the date actual payment of the amount due, in the case of any proceeding in the courts of Delaware or in the courts of any other
jurisdiction that will give effect to such conversion being made on such date: or
(2)
the date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date
as of which such conversion is made pursuant to this Section 9(p)(i)(2) being hereinafter referred to as the “Judgment Conversion
Date”).
(ii)
If in the case of any proceeding in the court of any jurisdiction referred to in Section 9(p)(i)(2) above, there is a change
in the Exchange Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable
party shall pay such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the
Exchange Rate prevailing on the date of payment, will produce the amount of US Dollars which could have been purchased with the amount
of Judgment Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment Conversion Date.
(iii)
Any amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being
obtained for any other amounts due under or in respect of this Agreement or any other Transaction Document.
(q)
Independent Nature of Buyers’ Obligations and Rights. The obligations of each Buyer under the Transaction Documents
are several and not joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of
the obligations of any other Buyer under any Transaction Document. Nothing contained herein or in any other Transaction Document, and
no action taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as, and the Company acknowledges that
the Buyers do not so constitute, a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption
that the Buyers are in any way acting in concert or as a group or entity, and the Company shall not assert any such claim with respect
to such obligations or the transactions contemplated by the Transaction Documents or any matters, and the Company acknowledges that the
Buyers are not acting in concert or as a group, and the Company shall not assert any such claim, with respect to such obligations or the
transactions contemplated by the Transaction Documents. The decision of each Buyer to purchase Securities pursuant to the Transaction
Documents has been made by such Buyer independently of any other Buyer. Each Buyer acknowledges that no other Buyer has acted as agent
for such Buyer in connection with such Buyer making its investment hereunder and that no other Buyer will be acting as agent of such Buyer
in connection with monitoring such Buyer’s investment in the Securities or enforcing its rights under the Transaction Documents.
The Company and each Buyer confirms that each Buyer has independently participated with the Company and its Subsidiaries in the negotiation
of the transaction contemplated hereby with the advice of its own counsel and advisors. Each Buyer shall be entitled to independently
protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction
Documents, and it shall not be necessary for any other Buyer to be joined as an additional party in any proceeding for such purpose. The
use of a single agreement to effectuate the purchase and sale of the Securities contemplated hereby was solely in the control of the Company,
not the action or decision of any Buyer, and was done solely for the convenience of the Company and its Subsidiaries and not because it
was required or requested to do so by any Buyer. It is expressly understood and agreed that each provision contained in this Agreement
and in each other Transaction Document is between the Company, each Subsidiary and a Buyer, solely, and not between the Company, its Subsidiaries
and the Buyers collectively and not between and among the Buyers.
[signature pages follow]
IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written
above.
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COMPANY:
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ACLARION, INC.
By:
Name: John Lorbiecki
Title: Chief Financial Officer |
IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written
above.
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[BUYERS]:
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By:
Name:
Title: |
SCHEDULE OF BUYERS
(1) |
(2) |
(3) |
(4) |
(5) |
(6) |
(7) |
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Buyer |
Mailing Address and E-mail Address |
Original Principal Amount of Notes |
Aggregate
Number of
Common
Shares |
Aggregate
Number of
Warrant Shares |
Purchase Price |
Legal Representative’s
Mailing Address and E-mail Address |
|
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|
|
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Totals |
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Exhibit 10.2
Form Final
[FORM OF SENIOR NOTE]
THE ISSUANCE AND SALE OF THIS NOTE HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THIS NOTE MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE
COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A
UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THIS NOTE MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY THE SECURITIES. ANY TRANSFEREE OF THIS NOTE SHOULD CAREFULLY REVIEW THE TERMS OF THIS NOTE, INCLUDING
SECTIONS 8 AND 12(a) HEREOF. THE PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT
TO SECTION 8 OF THIS NOTE.
THIS NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE
DISCOUNT (“OID”). PURSUANT TO TREASURY REGULATION §1.1275-3(b)(1), JOHN LORBIECKI, A REPRESENTATIVE OF THE COMPANY HEREOF
WILL, BEGINNING TEN DAYS AFTER THE ISSUANCE DATE OF THIS NOTE, PROMPTLY MAKE AVAILABLE TO THE HOLDER UPON REQUEST THE INFORMATION DESCRIBED
IN TREASURY REGULATION §1.1275-3(b)(1)(i). JOHN LORBIECKI MAY BE REACHED AT TELEPHONE NUMBER (303) 927-8857.
Aclarion,
Inc.
Senior
Note
Issuance Date: [●] 20__ |
Original Principal Amount: U.S. $[●] |
FOR VALUE RECEIVED,
Aclarion, Inc., a Delaware corporation (the “Company”), hereby promises to pay to the order of [BUYER] or its registered
assigns (“Holder”) the amount set forth above as the Original Principal Amount (as reduced pursuant to the terms hereof
pursuant to redemption or otherwise, the “Principal”) when due, whether upon the Maturity Date (as defined below),
or upon acceleration, redemption or otherwise (in each case in accordance with the terms hereof) and, to pay interest (“Interest”)
on any outstanding Principal at the applicable at a rate per annum equal to the Interest Rate (as defined below) from the date set forth
above as the Issuance Date (the “Issuance Date”) until the same becomes due and payable, whether upon an Interest Date
(as defined below), the Maturity Date, or upon acceleration, redemption or otherwise (in each case in accordance with the terms hereof).
This Senior Note (including all Senior Notes issued in exchange, transfer or replacement hereof, this “Note”) is one
of an issue of Senior Notes issued pursuant to the Securities Purchase Agreement, dated as of November 21, 2023 (the “Subscription
Date”), by and among the Company and the investors (the “Buyers”) referred to therein, as amended from time
to time (collectively, the “Notes”, and such other Senior Notes, the “Other Notes”). Certain capitalized
terms used herein are defined in Section 25.
1.
PAYMENTS OF PRINCIPAL. On the Maturity Date, the Company shall pay to the Holder an amount in cash representing all outstanding
Principal, accrued and unpaid Interest and accrued and unpaid Late Charges (as defined in Section 18(c)) on such Principal and Interest.
Other than as specifically permitted by this Note, the Company may not prepay any portion of the outstanding Principal, accrued and unpaid
Interest or accrued and unpaid Late Charges on Principal and Interest, if any.
2.
INTEREST; DEFAULT RATE.
(a)
Except as otherwise provided herein, Interest on this Note shall commence accruing on the Issuance Date and shall be computed on
the basis of a 360-day year and twelve 30-day months and shall be payable in arrears on the Maturity Date and shall compound each calendar
month and shall be payable in accordance with the terms of this Note. Interest shall be payable on the Maturity Date, to the record holder
of this Note as of the Maturity Date, in cash. Accrued and unpaid Interest, if any, shall also be payable by way of inclusion of such
Interest in the Outstanding Amount (as defined below) upon any redemption in accordance with Section 8 or any required payment upon any
Bankruptcy Event of Default (as defined in Section 3(a) below).
(b)
From and after the occurrence and during the continuance of any Event of Default, the Interest Rate shall automatically be increased
to fifteen percent (15.0%) per annum (the “Default Rate”). In the event that such Event of Default is subsequently
cured (and no other Event of Default then exists (including, without limitation, for the Company’s failure to pay such Interest
at the Default Rate on the applicable Interest Date)), the adjustment referred to in the preceding sentence shall cease to be effective
as of the calendar day immediately following the date of such cure; provided that the Interest as calculated and unpaid at such increased
rate during the continuance of such Event of Default shall continue to apply to the extent relating to the days after the occurrence of
such Event of Default through and including the date of such cure of such Event of Default. Notwithstanding the foregoing, any accrued
and unpaid Interest that accrues at the Default Rate shall be payable on each Interest Date to the record holder of this Note as of such
applicable Interest Date, in cash.
3.
RIGHTS UPON EVENT OF DEFAULT.
(a)
Event of Default. Each of the following events shall constitute an “Event of Default” and each of the
events in clauses (v), (vi) and (vii) shall constitute a “Bankruptcy Event of Default”:
(i)
the suspension from trading or the failure of the Common Stock to be trading or listed (as applicable) on an Eligible Market for
a period of five (5) consecutive Business Days;
(ii)
the Company’s or any Subsidiary’s failure to pay to the Holder any amount of Principal, Interest, Late Charges or other
amounts when and as due under this Note (including, without limitation, the Company’s or any Subsidiary’s failure to pay any
redemption payments or amounts hereunder) or any other Transaction Document (as defined in the Securities Purchase Agreement) or any other
agreement, document, certificate or other instrument delivered in connection with the transactions contemplated hereby and thereby, except,
in the case of a failure to pay Interest and Late Charges when and as due, in which case only if such failure remains uncured for a period
of at least two (2) Business Days;
(iii)
the Company fails to remove any restrictive legend on any certificate or any shares of Common Stock (as defined in the Securities
Purchase Agreement) issued to the Holder under the Securities Purchase Agreement and/or the Warrants (as defined in the Securities Purchase
Agreement), as and when required by the Securities Purchase Agreement and/or the Warrants (as defined in the Securities Purchase Agreement),
as applicable, unless otherwise then prohibited by applicable federal securities laws, and any such failure remains uncured for at least
five (5) Business Days;
(iv)
the occurrence of any default under, redemption of or acceleration prior to maturity of at least an aggregate of $250,000 of Indebtedness
(as defined in the Securities Purchase Agreement) of the Company or any of its Subsidiaries, other than with respect to any Other Notes;
(v)
bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors shall be instituted
by or against the Company or any Subsidiary and, if instituted against the Company or any Subsidiary by a third party, shall not be dismissed
within thirty (30) days of their initiation;
(vi)
the commencement by the Company or any Subsidiary of a voluntary case or proceeding under any applicable federal, state or foreign
bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent,
or the consent by it to the entry of a decree, order, judgment or other similar document in respect of the Company or any Subsidiary in
an involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or other similar
law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable federal, state or foreign law, or the consent by it to the filing of
such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or any Subsidiary or of any substantial part of its property, or the making by it of an assignment for
the benefit of creditors, or the execution of a composition of debts, or the occurrence of any other similar federal, state or foreign
proceeding, or the admission by it in writing of its inability to pay its debts generally as they become due, the taking of corporate
action by the Company or any Subsidiary in furtherance of any such action or the taking of any action by any Person to commence a Uniform
Commercial Code foreclosure sale or any other similar action under federal, state or foreign law;
(vii)
the entry by a court of (i) a decree, order, judgment or other similar document in respect of the Company or any Subsidiary of
a voluntary or involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization or
other similar law or (ii) a decree, order, judgment or other similar document adjudging the Company or any Subsidiary as bankrupt or insolvent,
or approving as properly filed a petition seeking liquidation, reorganization, arrangement, adjustment or composition of or in respect
of the Company or any Subsidiary under any applicable federal, state or foreign law or (iii) a decree, order, judgment or other similar
document appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or any
Subsidiary or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of
any such decree, order, judgment or other similar document or any such other decree, order, judgment or other similar document unstayed
and in effect for a period of thirty (30) consecutive days;
(viii)
a final judgment or judgments for the payment of money aggregating in excess of $250,000 are rendered against the Company and/or
any of its Subsidiaries and which judgments are not, within thirty (30) days after the entry thereof, bonded, discharged, settled or stayed
pending appeal, or are not discharged within thirty (30) days after the expiration of such stay; provided, however, any judgment which
is covered by insurance or an indemnity from a credit worthy party shall not be included in calculating the $250,000 amount set forth
above so long as the Company provides the Holder a written statement from such insurer or indemnity provider (which written statement
shall be reasonably satisfactory to the Holder) to the effect that such judgment is covered by insurance or an indemnity and the Company
or such Subsidiary (as the case may be) will receive the proceeds of such insurance or indemnity within thirty (30) days of the issuance
of such judgment;
(ix)
the Company and/or any Subsidiary, individually or in the aggregate, either (i) fails to pay, when due, or within any applicable
grace period, any payment with respect to any Indebtedness in excess of $250,000 due to any third party (other than, with respect to unsecured
Indebtedness only, payments contested by the Company and/or such Subsidiary (as the case may be) in good faith by proper proceedings and
with respect to which adequate reserves have been set aside for the payment thereof in accordance with GAAP) or is otherwise in breach
or violation of any agreement for monies owed or owing in an amount in excess of $250,000, which breach or violation permits the other
party thereto to declare a default or otherwise accelerate amounts due thereunder, or (ii) suffer to exist any other circumstance or event
that would, with or without the passage of time or the giving of notice, result in a default or event of default under any agreement binding
the Company or any Subsidiary, which default or event of default would or is likely to have a material adverse effect on the business,
assets, operations (including results thereof), liabilities, properties, condition (including financial condition) or prospects of the
Company or any of its Subsidiaries, individually or in the aggregate;
(x)
other than as specifically set forth in another clause of this Section 3(a), the Company or any Subsidiary breaches any representation
or warranty, in any material respect (other than representations or warranties subject to material adverse effect or materiality, which
may not be breached in any respect) or any covenant or other term or condition of any Transaction Document, except, in the case of a breach
of a covenant or other term or condition that is curable, only if such breach remains uncured for a period of five (5) consecutive Business
Days;
(xi)
a false or inaccurate certification (including a false or inaccurate deemed certification) by the Company as to whether any Event
of Default has occurred;
(xii)
any breach or failure in any respect by the Company or any Subsidiary to comply with any provision of Section 10 of this Note;
(xiii)
any Material Adverse Effect (as defined in the Securities Purchase Agreement) occurs;
(xiv)
any Change of Control occurs; and
(xv)
any Event of Default (as defined in the Other Notes) occurs with respect to any Other Notes.
(b)
Notice of an Event of Default; Redemption Right. Upon the occurrence of an Event of Default with respect to this Note or
any Other Note, the Company shall within one (1) Business Day deliver written notice thereof via facsimile or electronic mail and overnight
courier (with next day delivery specified) (an “Event of Default Notice”) to the Holder. At any time after the earlier
of the Holder’s receipt of an Event of Default Notice and the Holder becoming aware of an Event of Default, the Holder may require
the Company to redeem (regardless of whether such Event of Default has been cured) all or any portion of this Note by delivering written
notice thereof (the “Event of Default Redemption Notice”) to the Company, which Event of Default Redemption Notice
shall indicate the portion of this Note the Holder is electing to redeem. Each portion of this Note subject to redemption by the Company
pursuant to this Section 3(b) shall be redeemed by the Company at a price in cash equal to the product of (A) the Outstanding Amount to
be redeemed multiplied by (B) the Default Redemption Premium (the “Event of Default Redemption Price”). Redemptions
required by this Section 3(b) shall be made in accordance with the provisions of Section 8. To the extent redemptions required by this
Section 3(b) are deemed or determined by a court of competent jurisdiction to be prepayments of this Note by the Company, such redemptions
shall be deemed to be voluntary prepayments. In the event of the Company’s redemption of any portion of this Note under this Section
3(b), the Holder’s damages would be uncertain and difficult to estimate because of the parties’ inability to predict future
interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for the Holder. Accordingly, any
redemption premium due under this Section 3(b) is intended by the parties to be, and shall be deemed, a reasonable estimate of the Holder’s
actual loss of its investment opportunity and not as a penalty. Any redemption upon an Event of Default shall not constitute an election
of remedies by the Holder, and all other rights and remedies of the Holder shall be preserved.
(c)
Mandatory Redemption upon Bankruptcy Event of Default. Notwithstanding anything to the contrary herein, upon any Bankruptcy
Event of Default, whether occurring prior to or following the Maturity Date, the Company shall immediately pay to the Holder an amount
in cash representing (i) all outstanding Principal, accrued and unpaid Interest and accrued and unpaid Late Charges on such Principal
and Interest, multiplied by (ii) the Default Redemption Premium, in addition to any and all other amounts due hereunder, without the requirement
for any notice or demand or other action by the Holder or any other person or entity, provided that the Holder may, in its sole discretion,
waive such right to receive payment upon a Bankruptcy Event of Default, in whole or in part, and any such waiver shall not affect any
other rights of the Holder hereunder, including any other rights in respect of such Bankruptcy Event of Default, and any right to payment
of the Event of Default Redemption Price or any other Redemption Price, as applicable.
4.
RIGHTS UPON FUNDAMENTAL TRANSACTION.
(a)
Assumption. The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity assumes
in writing all of the obligations of the Company under this Note and the other Transaction Documents in accordance with the provisions
of this Section 4(a) pursuant to written agreements in form and substance satisfactory to the Required Holders (as defined in the Securities
Purchase Agreement) and approved by the Required Holders prior to such Fundamental Transaction, including agreements to deliver to each
holder of Notes in exchange for such Notes a security of the Successor Entity evidenced by a written instrument substantially similar
in form and substance to the Notes, including, without limitation, having a principal amount and interest rate equal to the principal
amounts then outstanding and the interest rates of the Notes held by such holder, having similar ranking and security to the Notes, and
satisfactory to the Required Holders. Upon the occurrence of any Fundamental Transaction, the Successor Entity shall succeed to, and be
substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Note and the other Transaction
Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power
of the Company and shall assume all of the obligations of the Company under this Note and the other Transaction Documents with the same
effect as if such Successor Entity had been named as the Company herein. The provisions of this Section 4 shall apply similarly and equally
to successive Fundamental Transactions.
5.
REDEMPTIONS AT THE COMPANY’S ELECTION.
(a)
Company Optional Redemption. At any time after the Issuance Date, the Company shall have the right to redeem all, or any
portion, of the Outstanding Amount then remaining under this Note (the “Company Optional Redemption Amount”) on the
Company Optional Redemption Date (each as defined below) (a “Company Optional Redemption”). The portion of this Note
subject to redemption pursuant to this Section 5 shall be redeemed by the Company in cash at a price (the “Company Optional Redemption
Price”) equal to 100% (or, if an Event of Default has occurred and is continuing, the Default Redemption Premium) of the Outstanding
Amount being redeemed as of the Company Optional Redemption Date. The Company may exercise its right to require redemption under this
Section 5 by delivering a written notice thereof by facsimile or electronic mail and overnight courier to all, but not less than all,
of the holders of Notes (the “Company Optional Redemption Notice” and the date all of the holders of Notes received
such notice is referred to as the “Company Optional Redemption Notice Date”). The Company may deliver only one Company
Optional Redemption Notice hereunder in any ten (10) Business Day period and such Company Optional Redemption Notice shall be irrevocable.
The Company Optional Redemption Notice shall (x) state the date on which the Company Optional Redemption shall occur (the “Company
Optional Redemption Date”) which date shall not be less than two (2) Business Days nor more than twenty (20) Business Days following
the Company Optional Redemption Notice Date, any (y) state the aggregate Outstanding Amount of the Notes which is being redeemed in such
Company Optional Redemption from the Holder and all of the other holders of the Notes pursuant to this Section 5 (and analogous provisions
under the Other Notes) on the Company Optional Redemption Date. Redemptions made pursuant to this Section 5 shall be made in accordance
with Section 8. In the event of the Company’s redemption of any portion of this Note under this Section 5, the Holder’s damages
would be uncertain and difficult to estimate because of the parties’ inability to predict future interest rates and the uncertainty
of the availability of a suitable substitute investment opportunity for the Holder. Accordingly, any redemption premium due under this
Section 5 is intended by the parties to be, and shall be deemed, a reasonable estimate of the Holder’s actual loss of its investment
opportunity and not as a penalty. For the avoidance of doubt, the Company shall have no right to effect a Company Optional Redemption
if any Event of Default has occurred and continuing.
(b)
Pro Rata Redemption Requirement. If the Company elects to cause a Company Optional Redemption of this Note pursuant to Section
5, then it must simultaneously take the same action with respect to all of the Other Notes.
6.
SUBSEQUENT TRANSACTION OPTIONAL REDEMPTION
(a)
General. If after the Issuance Date the Company shall consummate one or more Subsequent Transactions (the “Triggering
Event”, and such date that the Triggering Event occurs, the “Redemption Right Trigger Date”), upon the consummation
of such Subsequent Transaction resulting in the Redemption Right Trigger Date (the “Triggering Subsequent Transaction”)
and upon the consummation of each Subsequent Transaction thereafter (together with the Triggering Subsequent Transaction, each an “Eligible
Subsequent Transaction”), the Holder shall have the right, in its sole discretion, to require that the Company redeem (each
a “Subsequent Transaction Optional Redemption”) all, or any portion, of the Outstanding Amount under this Note not
in excess of the Holder’s Holder Pro Rata Amount of the gross proceeds (less any reasonable placement agent, underwriter and/or
legal fees and expenses) of each such applicable Eligible Subsequent Transaction (the “Eligible Subsequent Transaction Optional
Redemption Amount”) by delivering written notice thereof (a “Subsequent Transaction Optional Redemption Notice”)
to the Company. Notwithstanding the foregoing, if the Holder is participating in a Subsequent Transaction, upon the written request of
the Holder, the Company shall apply all, or any part, as set forth in such written request, of any Outstanding Amount hereunder, on a
dollar-for-dollar basis, against the purchase price of the securities to be purchased by the Holder in such Subsequent Transaction (each,
an “Exchange Amount”) and any Eligible Subsequent Transaction Optional Redemption Amount with respect thereto, if any,
shall be reduced, on a dollar-for-dollar basis (but not to an amount less than zero), by such corresponding Exchange Amount for such Subsequent
Transaction.
(b)
Mechanics. On or prior to second (2nd) Business Day prior to (x) the execution by the Company of any definitive
agreement with respect to any Subsequent Transaction or (y) the granting, issuance or sale of any shares of Common Stock under the Permitted
Equity Line, as applicable, the Company shall deliver written notice (each a “Subsequent Transaction Notice”) to the
Holder setting forth (i) a reasonable description of such Subsequent Transaction, (ii) the aggregate cash amount to be paid in such Subsequent
Transaction, (iii) the Company’s reasonable estimate of the fair market value of the aggregate non-cash amount, if any, to be paid
in such Subsequent Transaction, (iv) the reasonable placement agent, underwriter and/or legal fees and expenses, as applicable, to be
paid in cash in such Subsequent Transaction , (v) the Company’s calculations showing whether such Subsequent Transaction will be
a Triggering Subsequent Transaction (or a statement that a Triggering Subsequent Transaction has previously occurred, as applicable),
if applicable, and (vi) the Company’s calculations of the Eligible Subsequent Transaction Optional Redemption Amount, if any, with
respect thereto. If the Holder elects to deliver a Subsequent Transaction Optional Redemption Notice to the Company with respect to an
Eligible Subsequent Transaction, such Subsequent Transaction Optional Redemption Notice shall indicate that all, or such applicable portion
of the Eligible Subsequent Transaction Optional Redemption Amount the Holder is electing to have redeemed (the “Subsequent Transaction
Optional Redemption Amount”) and the date of such Subsequent Transaction Optional Redemption (the “Subsequent Transaction
Optional Redemption Date”), which shall be the later of (x) the fifth (5th) Business Day after the date of the applicable
Subsequent Transaction Optional Redemption Notice and (y) the date of the consummation of such Eligible Subsequent Transaction. The portion
of this Note subject to redemption pursuant to this Section 6 shall be redeemed by the Company in cash at a price equal to 100% of the
Subsequent Transaction Optional Redemption Amount (the “Subsequent Transaction Optional Redemption Price”). Redemptions
required by this Section 6 shall be made in accordance with the provisions of Section 8.
7.
NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of
Incorporation (as defined in the Securities Purchase Agreement), Bylaws (as defined in the Securities Purchase Agreement) or through any
reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other
voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Note, and will at all times in good
faith carry out all of the provisions of this Note and take all action as may be required to protect the rights of the Holder of this
Note.
8.
REDEMPTIONS.
(a)
Mechanics. The Company shall deliver the applicable Event of Default Redemption Price to the Holder in cash within five
(5) Business Days after the Company’s receipt of the Holder’s Event of Default Redemption Notice. The Company shall deliver
the applicable Company Optional Redemption Price to the Holder in cash on the applicable Company Optional Redemption Date. Notwithstanding
anything herein to the contrary, in connection with any redemption hereunder at a time the Holder is entitled to receive a cash payment
under any of the other Transaction Documents, at the option of the Holder delivered in writing to the Company, the applicable Redemption
Price hereunder shall be increased by the amount of such cash payment owed to the Holder under such other Transaction Document and, upon
payment in full in accordance herewith, shall satisfy the Company’s payment obligation under such other Transaction Document. In
the event of a redemption of less than all of the Outstanding Amount of this Note, the Company shall promptly cause to be issued and delivered
to the Holder a new Note (in accordance with Section 12(d)) representing the outstanding Principal which has not been redeemed. In the
event that the Company does not pay the applicable Redemption Price to the Holder within the time period required, at any time thereafter
and until the Company pays such unpaid Redemption Price in full, the Holder shall have the option, in lieu of redemption, to require the
Company to promptly return to the Holder all or any portion of this Note representing the Outstanding Amount that was submitted for redemption
and for which the applicable Redemption Price (together with any Late Charges thereon) has not been paid. Upon the Company’s receipt
of such notice, (x) the applicable Redemption Notice shall be null and void with respect to such Outstanding Amount, and (y) the Company
shall immediately return this Note, or issue a new Note (in accordance with Section 12(d)), to the Holder, and in each case the principal
amount of this Note or such new Note (as the case may be) shall be increased by an amount equal to the difference between (1) the applicable
Redemption Price (as the case may be, and as adjusted pursuant to this Section 8, if applicable) minus (2) the Principal portion of the
Outstanding Amount submitted for redemption. The Holder’s delivery of a notice voiding a Redemption Notice and exercise of its rights
following such notice shall not affect the Company’s obligations to make any payments of Late Charges which have accrued prior to
the date of such notice with respect to the Outstanding Amount subject to such notice.
(b)
Redemption by Other Holders. Upon the Company’s receipt of notice from any of the holders of the Other Notes for redemption
or repayment as a result of an event or occurrence substantially similar to the events or occurrences described in Section 3(b) or 6 (each,
an “Other Redemption Notice”), the Company shall immediately, but no later than one (1) Business Day of its receipt
thereof, forward to the Holder by facsimile or electronic mail a copy of such notice. If the Company receives a Redemption Notice and
one or more Other Redemption Notices, during the seven (7) Business Day period beginning on and including the date which is two (2) Business
Days prior to the Company’s receipt of the Holder’s applicable Redemption Notice and ending on and including the date which
is two (2) Business Days after the Company’s receipt of the Holder’s applicable Redemption Notice and the Company is unable
to redeem all principal, interest and other amounts designated in such Redemption Notice and such Other Redemption Notices received during
such seven (7) Business Day period, then the Company shall redeem a pro rata amount from each holder of the Notes (including the Holder)
based on the principal amount of the Notes submitted for redemption pursuant to such Redemption Notice and such Other Redemption Notices
received by the Company during such seven (7) Business Day period.
9.
VOTING RIGHTS. The Holder shall have no voting rights as the holder of this Note, except as required by law and as expressly
provided in this Note.
10.
COVENANTS. Until all of the Notes have been redeemed or otherwise satisfied in accordance with their terms:
(a)
Rank. All payments due under this Note shall rank pari passu with all Other Notes and all other Indebtedness of the
Company and its Subsidiaries (other than Permitted Indebtedness secured by Permitted Liens).
(b)
Incurrence of Indebtedness. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly
or indirectly, incur or guarantee, assume or suffer to exist any Indebtedness (other than (i) the Indebtedness evidenced by this Note
and the Other Notes and (ii) other Permitted Indebtedness).
(c)
Existence of Liens. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
allow or suffer to exist any mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets
(including accounts and contract rights) owned by the Company or any of its Subsidiaries (collectively, “Liens”) other
than Permitted Liens.
(d)
Restricted Payments. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
redeem, defease, repurchase, repay or make any payments in respect of, by the payment of cash or cash equivalents (in whole or in part,
whether by way of open market purchases, tender offers, private transactions or otherwise), all or any portion of any Indebtedness (other
than the Notes) whether by way of payment in respect of principal of (or premium, if any) or interest on, such Indebtedness if at the
time such payment is due or is otherwise made or, after giving effect to such payment, (i) an event constituting an Event of Default has
occurred and is continuing or (ii) an event that with the passage of time and without being cured would constitute an Event of Default
has occurred and is continuing.
(e)
Restriction on Redemption and Cash Dividends. The Company shall not, and the Company shall cause each of its Subsidiaries
to not, directly or indirectly, redeem, repurchase or declare or pay any cash dividend or distribution on any of its capital stock.
(f)
Restriction on Transfer of Assets. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly
or indirectly, sell, lease, license, assign, transfer, spin-off, split-off, close, convey or otherwise dispose of any material assets
or rights of the Company or any Subsidiary owned or hereafter acquired whether in a single transaction or a series of related transactions,
other than (i) sales, leases, licenses, assignments, transfers, conveyances and other dispositions of such assets or rights by the Company
and its Subsidiaries in the ordinary course of business consistent with its past practice and (ii) sales of inventory and product in the
ordinary course of business.
(g)
Maturity of Indebtedness. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or
indirectly, permit any Indebtedness of the Company or any of its Subsidiaries to mature or accelerate prior to the Maturity Date.
(h)
Change in Nature of Business. The Company shall not, and the Company shall cause each of its Subsidiaries to
not, directly or indirectly, engage in any material line of business substantially different from those lines of business conducted by
or publicly contemplated to be conducted by the Company and each of its Subsidiaries on the Subscription Date or any business substantially
related or incidental thereto. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
modify its or their corporate structure or purpose.
(i)
Preservation of Existence, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain
and preserve, its existence, rights and privileges, and become or remain, and cause each of its Subsidiaries to become or remain, duly
qualified and in good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction
of its business makes such qualification necessary.
(j)
Maintenance of Properties, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain
and preserve, all of its material properties which are necessary or useful in the proper conduct of its business in good working order
and condition, ordinary wear and tear excepted, and comply, and cause each of its Subsidiaries to comply, at all times with the provisions
of all leases to which it is a party as lessee or under which it occupies property, so as to prevent any material loss or forfeiture thereof
or thereunder.
(k)
Maintenance of Intellectual Property. The Company will, and will cause each of its Subsidiaries to, take all commercially
reasonable action necessary or advisable to maintain all of the Intellectual Property Rights (as defined in the Securities Purchase Agreement)
of the Company and/or any of its Subsidiaries that are necessary or material to the conduct of its business in full force and effect.
(l)
Maintenance of Insurance. The Company shall maintain, and cause each of its Subsidiaries to maintain, insurance with responsible
and reputable insurance companies or associations (including, without limitation, comprehensive general liability, hazard, rent and business
interruption insurance) with respect to its properties (including all real properties leased or owned by it) and business, in such amounts
and covering such risks as is required by any governmental authority having jurisdiction with respect thereto or as is carried generally
in accordance with sound business practice by companies in similar businesses similarly situated.
(m)
Transactions with Affiliates. The Company shall not, nor shall it permit any of its Subsidiaries to, enter into, renew,
extend or be a party to, any transaction or series of related transactions (including, without limitation, the purchase, sale, lease,
transfer or exchange of property or assets of any kind or the rendering of services of any kind) with any Affiliate, except transactions
in the ordinary course of business in a manner and to an extent consistent with past practice and necessary or desirable for the prudent
operation of its business, for fair consideration and on terms no less favorable to it or its Subsidiaries than would be obtainable in
a comparable arm’s length transaction with a Person that is not an Affiliate thereof.
(n)
Restricted Issuances. The Company shall not, directly or indirectly, without the prior written consent of the holders of
a majority in aggregate principal amount of the Notes then outstanding, (i) issue any Notes (other than as contemplated by the Securities
Purchase Agreement and the Notes) or (ii) issue any other securities that would cause a breach or default under the Notes.
(o)
Independent Investigation. At the request of the Holder either (x) at any time when an Event of Default has occurred and
is continuing, (y) upon the occurrence of an event that with the passage of time or giving of notice would constitute an Event of Default
or (z) at any time the Holder reasonably believes an Event of Default may have occurred or be continuing, the Company shall hire an independent,
reputable investment bank selected by the Company and approved by the Holder to investigate as to whether any breach of this Note has
occurred (the “Independent Investigator”). If the Independent Investigator determines that such breach of this Note
has occurred, the Independent Investigator shall notify the Company of such breach and the Company shall deliver written notice to each
holder of a Note of such breach. In connection with such investigation, the Independent Investigator may, during normal business hours,
inspect all contracts, books, records, personnel, offices and other facilities and properties of the Company and its Subsidiaries and,
to the extent available to the Company after the Company uses reasonable efforts to obtain them, the records of its legal advisors and
accountants (including the accountants’ work papers) and any books of account, records, reports and other papers not contractually
required of the Company to be confidential or secret, or subject to attorney-client or other evidentiary privilege, and the Independent
Investigator may make such copies and inspections thereof as the Independent Investigator may reasonably request. The Company shall furnish
the Independent Investigator with such financial and operating data and other information with respect to the business and properties
of the Company as the Independent Investigator may reasonably request. The Company shall permit the Independent Investigator to discuss
the affairs, finances and accounts of the Company with, and to make proposals and furnish advice with respect thereto to, the Company’s
officers, directors, key employees and independent public accountants or any of them (and by this provision the Company authorizes said
accountants to discuss with such Independent Investigator the finances and affairs of the Company and any Subsidiaries), all at such reasonable
times, upon reasonable notice, and as often as may be reasonably requested.
11.
TRANSFER. This Note may be offered, sold, assigned or transferred by the Holder without the consent of the Company, subject
only to the provisions of Section 2(g) of the Securities Purchase Agreement.
12.
REISSUANCE OF THIS NOTE.
(a)
Transfer. If this Note is to be transferred, the Holder shall surrender this Note to the Company, whereupon the Company
will forthwith issue and deliver upon the order of the Holder a new Note (in accordance with Section 12(d)), registered as the Holder
may request, representing the outstanding Principal being transferred by the Holder and, if less than the entire outstanding Principal
is being transferred, a new Note (in accordance with Section 12(d)) to the Holder representing the outstanding Principal not being transferred.
The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, following redemption of any portion of this Note,
the outstanding Principal represented by this Note may be less than the Principal stated on the face of this Note.
(b)
Lost, Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Note (as to which a written certification and the indemnification contemplated below shall suffice
as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in
customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company shall execute
and deliver to the Holder a new Note (in accordance with Section 12(d)) representing the outstanding Principal.
(c)
Note Exchangeable for Different Denominations. This Note is exchangeable, upon the surrender hereof by the Holder at the
principal office of the Company, for a new Note or Notes (in accordance with Section 12(d) and in principal amounts of at least $1,000)
representing in the aggregate the outstanding Principal of this Note, and each such new Note will represent such portion of such outstanding
Principal as is designated by the Holder at the time of such surrender.
(d)
Issuance of New Notes. Whenever the Company is required to issue a new Note pursuant to the terms of this Note, such new
Note (i) shall be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining
outstanding (or in the case of a new Note being issued pursuant to Section 12(a) or Section 12(c), the Principal designated by the Holder
which, when added to the principal represented by the other new Notes issued in connection with such issuance, does not exceed the Principal
remaining outstanding under this Note immediately prior to such issuance of new Notes), (iii) shall have an issuance date, as indicated
on the face of such new Note, which is the same as the Issuance Date of this Note, (iv) shall have the same rights and conditions as this
Note, and (v) shall represent accrued and unpaid Interest and Late Charges on the Principal and Interest of this Note, from the Issuance
Date.
13.
REMEDIES, CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Note shall
be cumulative and in addition to all other remedies available under this Note and any of the other Transaction Documents at law or in
equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s
right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Note. No failure on the
part of the Holder to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise by the Holder of any right, power or remedy preclude any other or further exercise thereof or the
exercise of any other right, power or remedy. In addition, the exercise of any right or remedy of the Holder at law or equity or under
this Note or any of the documents shall not be deemed to be an election of Holder’s rights or remedies under such documents or at
law or equity. The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly
provided herein. Amounts set forth or provided for herein with respect to payments, redemptions and the like (and the computation thereof)
shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation
of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable
harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of
any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to specific performance
and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of competent jurisdiction in any such
case without the necessity of proving actual damages and without posting a bond or other security. The Company shall provide all information
and documentation to the Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance with the
terms and conditions of this Note.
14.
PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Note is placed in the hands of an attorney for collection
or enforcement or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under
this Note or to enforce the provisions of this Note or (b) there occurs any bankruptcy, reorganization, receivership of the Company or
other proceedings affecting Company creditors’ rights and involving a claim under this Note, then the Company shall pay the costs
incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership
or other proceeding, including, without limitation, attorneys’ fees and disbursements. The Company expressly acknowledges and agrees
that no amounts due under this Note shall be affected, or limited, by the fact that the purchase price paid for this Note was less than
the original Principal amount hereof.
15.
CONSTRUCTION; HEADINGS. This Note shall be deemed to be jointly drafted by the Company and the initial Holder and shall
not be construed against any such Person as the drafter hereof. The headings of this Note are for convenience of reference and shall not
form part of, or affect the interpretation of, this Note. Unless the context clearly indicates otherwise, each pronoun herein shall be
deemed to include the masculine, feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,”
“include” and words of like import shall be construed broadly as if followed by the words “without limitation.”
The terms “herein,” “hereunder,” “hereof” and words of like import refer to this entire Note instead
of just the provision in which they are found. Unless expressly indicated otherwise, all section references are to sections of this Note.
Terms used in this Note and not otherwise defined herein, but defined in the other Transaction Documents, shall have the meanings ascribed
to such terms on the Closing Date in such other Transaction Documents unless otherwise consented to in writing by the Holder.
16.
FAILURE OR INDULGENCE NOT WAIVER. No failure or delay on the part of the Holder in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privilege. No waiver shall be effective unless it is in writing and signed
by an authorized representative of the waiving party.
17.
DISPUTE RESOLUTION.
(a)
Submission to Dispute Resolution.
(i)
In the case of a dispute relating to a fair market value or the arithmetic calculation of the applicable Redemption Price (as the
case may be) (including, without limitation, a dispute relating to the determination of any of the foregoing), the Company or the Holder
(as the case may be) shall submit the dispute to the other party via facsimile or electronic mail (A) if by the Company, within two (2)
Business Days after the occurrence of the circumstances giving rise to such dispute or (B) if by the Holder at any time after the Holder
learned of the circumstances giving rise to such dispute. If the Holder and the Company are unable to promptly resolve such dispute relating
to such fair market value, or the arithmetic calculation of such applicable Redemption Price (as the case may be), at any time after the
second (2nd) Business Day following such initial notice by the Company or the Holder (as the case may be) of such dispute to
the Company or the Holder (as the case may be), then the Holder may, at its sole option, select an independent, reputable investment bank
to resolve such dispute.
(ii)
The Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered
in accordance with the first sentence of this Section 17 and (B) written documentation supporting its position with respect to such dispute,
in each case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following the date on which
the Holder selected such investment bank (the “Dispute Submission Deadline”) (the documents referred to in the immediately
preceding clauses (A) and (B) are collectively referred to herein as the “Required Dispute Documentation”) (it being
understood and agreed that if either the Holder or the Company fails to so deliver all of the Required Dispute Documentation by the Dispute
Submission Deadline, then the party who fails to so submit all of the Required Dispute Documentation shall no longer be entitled to (and
hereby waives its right to) deliver or submit any written documentation or other support to such investment bank with respect to such
dispute and such investment bank shall resolve such dispute based solely on the Required Dispute Documentation that was delivered to such
investment bank prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by both the Company and the Holder or
otherwise requested by such investment bank, neither the Company nor the Holder shall be entitled to deliver or submit any written documentation
or other support to such investment bank in connection with such dispute (other than the Required Dispute Documentation).
(iii)
The Company and the Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company
and the Holder of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline. The fees
and expenses of such investment bank shall be borne solely by the Company, and such investment bank’s resolution of such dispute
shall be final and binding upon all parties absent manifest error.
(b)
Miscellaneous. The Company expressly acknowledges and agrees that (i) this Section 17 constitutes an agreement to arbitrate
between the Company and the Holder (and constitutes an arbitration agreement) under the Delaware Rapid Arbitration Act, as amended, (ii)
the terms of this Note and each other applicable Transaction Document shall serve as the basis for the selected investment bank’s
resolution of the applicable dispute, such investment bank shall be entitled (and is hereby expressly authorized) to make all findings,
determinations and the like that such investment bank determines are required to be made by such investment bank in connection with its
resolution of such dispute and in resolving such dispute such investment bank shall apply such findings, determinations and the like to
the terms of this Note and any other applicable Transaction Documents, (iii) the Holder (and only the Holder), in its sole discretion,
shall have the right to submit any dispute described in this Section 17 to the United States District Court for the District of Delaware
or in the Court of Chancery of the State of Delaware (or, if such courts lack subject-matter jurisdiction, in the Superior Court of the
State of Delaware) in lieu of utilizing the procedures set forth in this Section 17 and (iv) nothing in this Section 17 shall limit the
Holder from obtaining any injunctive relief or other equitable remedies (including, without limitation, with respect to any matters described
in this Section 17).
18.
NOTICES; CURRENCY; PAYMENTS.
(a)
Notices. Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be
given in accordance with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice
of all actions taken pursuant to this Note, including in reasonable detail a description of such action and the reason therefore.
(b)
Currency. All dollar amounts referred to in this Note are in United States Dollars (“U.S. Dollars”),
and all amounts owing under this Note shall be paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall be converted
into the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange Rate”
means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Note, the U.S. Dollar exchange rate as
published in the Wall Street Journal on the relevant date of calculation (it being understood and agreed that where an amount is calculated
with reference to, or over, a period of time, the date of calculation shall be the final date of such period of time).
(c)
Payments. Whenever any payment of cash is to be made by the Company to any Person pursuant to this Note, unless otherwise
expressly set forth herein, such payment shall be made in lawful money of the United States of America by a certified check drawn on the
account of the Company and sent via overnight courier service to such Person at such address as previously provided to the Company in
writing (which address, in the case of each of the Buyers, shall initially be as set forth on the Schedule of Buyers attached to the Securities
Purchase Agreement), provided that the Holder may elect to receive a payment of cash via wire transfer of immediately available funds
by providing the Company with prior written notice setting out such request and the Holder’s wire transfer instructions. Whenever
any amount expressed to be due by the terms of this Note is due on any day which is not a Business Day, the same shall instead be due
on the next succeeding day which is a Business Day. Any amount of Principal or other amounts due under the Transaction Documents which
is not paid when due shall result in a late charge being incurred and payable by the Company in an amount equal to interest on such amount
at the rate of fifteen percent (15%) per annum from the date such amount was due until the same is paid in full (“Late Charge”).
19.
CANCELLATION. After all Principal, accrued Interest, Late Charges and other amounts at any time owed on this Note have been
paid in full, this Note shall automatically be deemed canceled, shall be surrendered to the Company for cancellation and shall not be
reissued.
20.
WAIVER OF NOTICE. To the extent permitted by law, the Company hereby irrevocably waives demand, notice, presentment, protest
and all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note and the
Securities Purchase Agreement.
21.
GOVERNING LAW. This Note shall be construed and enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Note shall be governed by, the internal laws of the State of Delaware, without giving
effect to any provision of law or rule (whether of the State of Delaware or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of Delaware. Except as otherwise required by Section 17 above, the Company hereby
irrevocably submits to the exclusive jurisdiction of the United States District Court for the District of Delaware or in the Court of
Chancery of the State of Delaware (or, if such courts lack subject-matter jurisdiction, in the Superior Court of the State of Delaware),
for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein,
and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject
to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted
by law. Nothing contained herein (i) shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action
against the Company in any other jurisdiction to collect on the Company’s obligations to the Holder, to realize on any collateral
or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the Holder or (ii) shall limit,
or shall be deemed or construed to limit, any provision of Section 17. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE
TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS
NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY.
22.
JUDGMENT CURRENCY.
(a)
If for the purpose of obtaining or enforcing judgment against the Company in any court in any jurisdiction it becomes necessary
to convert into any other currency (such other currency being hereinafter in this Section 22 referred to as the “Judgment Currency”)
an amount due in U.S. dollars under this Note, the conversion shall be made at the Exchange Rate prevailing on the Business Day immediately
preceding:
(i)
the date actual payment of the amount due, in the case of any proceeding in the courts of Delaware or in the courts of any other
jurisdiction that will give effect to such conversion being made on such date: or
(ii)
the date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date
as of which such conversion is made pursuant to this Section 22(a)(ii) being hereinafter referred to as the “Judgment Conversion
Date”).
(b)
If in the case of any proceeding in the court of any jurisdiction referred to in Section 22(a)(ii) above, there is a change in
the Exchange Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable party
shall pay such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the Exchange
Rate prevailing on the date of payment, will produce the amount of US dollars which could have been purchased with the amount of Judgment
Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment Conversion Date.
(c)
Any amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being
obtained for any other amounts due under or in respect of this Note.
23.
SEVERABILITY. If any provision of this Note is prohibited by law or otherwise determined to be invalid or unenforceable
by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended
to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall
not affect the validity of the remaining provisions of this Note so long as this Note as so modified continues to express, without material
change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability
of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or
the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as
close as possible to that of the prohibited, invalid or unenforceable provision(s).
24.
MAXIMUM PAYMENTS. Without limiting Section 9(d) of the Securities Purchase Agreement, nothing contained herein shall be
deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law.
In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments
in excess of such maximum shall be credited against amounts owed by the Company to the Holder and thus refunded to the Company.
25.
AMENDING THE TERMS OF THIS NOTE. The prior written consent of the Holder shall be required for any change, waiver or amendment
to this Note.
26.
CERTAIN DEFINITIONS. For purposes of this Note, the following terms shall have the following meanings:
(a)
“1933 Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.
(b)
“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled
by, or is under common control with, such Person, it being understood for purposes of this definition that “control” of a
Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of
directors of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
(c)
“Bloomberg” means Bloomberg, L.P.
(d)
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City
of New York are authorized or required by law to remain closed; provided, however,
for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”,
“shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure
of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including
for wire transfers) of commercial banks in The City of New York generally are open for use by customers on such day.
(e)
“Change of Control” means any Fundamental Transaction other than (i) any merger of the Company or any of its,
direct or indirect, wholly-owned Subsidiaries with or into any of the foregoing Persons, (ii) any reorganization, recapitalization or
reclassification of the shares of Common Stock in which holders of the Company’s voting power immediately prior to such reorganization,
recapitalization or reclassification continue after such reorganization, recapitalization or reclassification to hold publicly traded
securities and, directly or indirectly, are, in all material respects, the holders of the voting power of the surviving entity (or entities
with the authority or voting power to elect the members of the board of directors (or their equivalent if other than a corporation)
of such entity or entities) after such reorganization, recapitalization or reclassification, or (iii) pursuant to a migratory merger effected
solely for the purpose of changing the jurisdiction of incorporation of the Company or any of its Subsidiaries.
(f)
“Closing Date” shall have the meaning set forth in the Securities Purchase Agreement, which date is the date
the Company initially issued Notes pursuant to the terms of the Securities Purchase Agreement.
(g)
“Fundamental Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries,
Affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the
surviving corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all
of the properties or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation
S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject
to or have its Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange offer that is
accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of Common
Stock calculated as if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated with any Subject Entities
making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares of Common Stock such that
all Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such purchase, tender or exchange offer,
become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common
Stock, or (iv) consummate a stock or share purchase agreement or other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with one or more Subject Entities whereby all such Subject Entities, individually
or in the aggregate, acquire, either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares
of Common Stock calculated as if any shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any
Subject Entity making or party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number
of shares of Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the
1934 Act) of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its Common Stock, (B)
that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions,
allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the “beneficial owner” (as
defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance, tender,
tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination, reorganization,
recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner whatsoever,
of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock, (y) at least 50%
of the aggregate ordinary voting power represented by issued and outstanding Common Stock not held by all such Subject Entities as of
the date of this Note calculated as if any shares of Common Stock held by all such Subject Entities were not outstanding, or (z) a percentage
of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock or other equity securities of the
Company sufficient to allow such Subject Entities to effect a statutory short form merger or other transaction requiring other stockholders
of the Company to surrender their shares of Common Stock without approval of the stockholders of the Company or (C) directly or indirectly,
including through subsidiaries, Affiliates or otherwise, in one or more related transactions, the issuance of or the entering into any
other instrument or transaction structured in a manner to circumvent, or that circumvents, the intent of this definition in which case
this definition shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this definition to
the extent necessary to correct this definition or any portion of this definition which may be defective or inconsistent with the intended
treatment of such instrument or transaction.
(h)
“GAAP” means United States generally accepted accounting principles, consistently applied.
(i)
“Group” means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in
Rule 13d-5 thereunder.
(j)
“Holder Pro Rata Amount” means, as of any time of determination, a fraction (i) the numerator of which is the
original Principal amount of this Note and (ii) the denominator of which is the aggregate original principal amount of all Notes issued
to the initial purchasers pursuant to the Securities Purchase Agreement on or prior to such time of determination.
(k)
“Indebtedness” shall have the meaning ascribed to such term in the Securities Purchase Agreement.
(l)
“Interest Date” means, with respect to any given calendar month, the first Business Day of such calendar month.
(m)
“Interest Rate” means eight percent (8%) per annum, as may be adjusted from time to time in accordance with
Section 2.
(n)
“Maturity Date” shall mean [April 19, 2024]1;
provided, however, the Maturity Date may be extended at the option of the Holder (i) in the event that, and for so long as, an Event of
Default shall have occurred and be continuing or any event shall have occurred and be continuing that with the passage of time and the
failure to cure would result in an Event of Default or (ii) through the date that is twenty (20) Business Days after the consummation
of a Fundamental Transaction in the event that a Fundamental Transaction is publicly announced or an Event of Default Redemption Notice
is delivered prior to the Maturity Date.
(o)
“Outstanding Amount” means the sum of (A) the portion of the Principal to be redeemed or otherwise with respect
to which this determination is being made, (B) accrued and unpaid Interest with respect to such Principal and (C) accrued and unpaid Late
Charges with respect to such Principal and Interest.
(p)
“Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and
whose common stock or equivalent equity security is quoted or listed on an Eligible Market (as defined in the Securities Purchase Agreement),
or, if there is more than one such Person or Parent Entity, the Person or Parent Entity with the largest public market capitalization
as of the date of consummation of the Fundamental Transaction.
(q)
“Permitted Equity Line” shall have the meaning set forth in those certain Amendment and Waivers dated as of
August 30, 2023 by and between the Company and the investors signatory thereto.
(r)
“Permitted Indebtedness” means (i) Indebtedness evidenced by this Note and the Other Notes, (ii) Indebtedness
set forth on Schedule 3(s) to the Securities Purchase Agreement, as in effect as of the Subscription Date and (iii) Indebtedness secured
by Permitted Liens or unsecured but as described in clauses (iv) and (v) of the definition of Permitted Liens.
(s)
“Permitted Liens” means (i) any Lien for taxes not yet due or delinquent or being contested in good faith by
appropriate proceedings for which adequate reserves have been established in accordance with GAAP, (ii) any statutory Lien arising in
the ordinary course of business by operation of law with respect to a liability that is not yet due or delinquent, (iii) any Lien created
by operation of law, such as materialmen’s liens, mechanics’ liens and other similar liens, arising in the ordinary course
of business with respect to a liability that is not yet due or delinquent or that are being contested in good faith by appropriate proceedings,
(iv) Liens (A) upon or in any equipment acquired or held by the Company or any of its Subsidiaries to secure the purchase price of such
equipment or Indebtedness incurred solely for the purpose of financing the acquisition or lease of such equipment, or (B) existing on
such equipment at the time of its acquisition, provided that the Lien is confined solely to the property so acquired and improvements
thereon, and the proceeds of such equipment, in either case, with respect to Indebtedness in an aggregate amount not to exceed $250,000,
(v) Liens incurred in connection with the extension, renewal or refinancing of the Indebtedness secured by Liens of the type described
in clause (iv) above, provided that any extension, renewal or replacement Lien shall be limited to the property encumbered by the existing
Lien and the principal amount of the Indebtedness being extended, renewed or refinanced does not increase, (vi) Liens in favor of customs
and revenue authorities arising as a matter of law to secure payments of custom duties in connection with the importation of goods, and
(vii) Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Section 3(a)(viii).
(t)
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization, any other entity or a government or any department or agency thereof.
(u)
“Principal Market” means the Nasdaq Capital Market.
_________________
1
Insert 150-day anniversary of the Issuance Date.
(v)
“Redemption Notices” means, collectively, the Event of Default Redemption Notices, the Company Optional Redemption
Notices and the Subsequent Transaction Optional Redemption Notices, and each of the foregoing, individually, a “Redemption Notice.”
(w)
“Default Redemption Premium” means 125%.
(x)
“Redemption Prices” means, collectively, Event of Default Redemption Prices, the Company Optional Redemption
Prices and the Subsequent Transaction Optional Redemption Prices, and each of the foregoing, individually, a “Redemption Price.”
(y)
“SEC” means the United States Securities and Exchange Commission or the successor thereto.
(z)
“Securities Purchase Agreement” means that certain securities purchase agreement, dated as of the Subscription
Date, by and among the Company and the initial holders of the Notes pursuant to which the Company issued the Notes, as may be amended
from time to time.
(aa)
“Subscription Date” means [November ____, 2023]2.
(bb)
“Subsequent Placement” means any issuance, offer, sale, grant of any option or right to purchase, or otherwise
dispose of (or announce any issuance, offer, sale, grant of any option or right to purchase or other disposition of) any equity security
or any equity-linked or related security (including, without limitation, any “equity security” (as that term is defined under
Rule 405 promulgated under the 1933 Act)), any Convertible Securities (as defined in the Securities Purchase Agreement), any debt, any
preferred stock or any purchase rights (but excluding any Excluded Offering (as defined in the Securities Purchase Agreement)).
(cc)
“Subsequent Transaction” means (i) the sale or other disposition of all or any part of the assets of the Company
or any of its Subsidiaries (including insurance and condemnation proceeds) after the Issuance Date other than sales of inventory in the
ordinary course of business and amounts reinvested in assets to be used in the Company’s business within twelve (12) months of such
disposition, (ii) any Subsequent Placement with any cash or non-cash proceeds (which non-cash proceeds shall be deemed to have been paid
in cash at the fair market value of such non-cash proceeds, as reasonably jointly determined by the Holder and the Company) paid by a
Person thereunder, directly or indirectly, to (or at the direction of) the Company or any of its Subsidiaries (including, without limitation,
any granting, issuance or sales of Common Stock pursuant to the Permitted Equity Line) and (iii) any cash or non-cash contributions (which
non-cash contribution shall be deemed to have been paid in cash at the fair market value of such non-cash contribution, as reasonably
jointly determined by the Holder and the Company), directly or indirectly, to (or at the direction of) the Company or any of its Subsidiaries.
(dd)
“Subsidiaries” shall have the meaning as set forth in the Securities Purchase Agreement.
(ee)
“Subject Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons
or Group.
(ff)
“Successor Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting
from or surviving any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental
Transaction shall have been entered into.
27.
DISCLOSURE. Upon delivery by the Company to the Holder (or receipt by the Company from the Holder) of any notice in accordance
with the terms of this Note, unless the Company has in good faith determined that the matters relating to such notice do not constitute
material, non-public information relating to the Company or any of its Subsidiaries, the Company shall on or prior to 9:00 am, New York
city time on the Business Day immediately following such notice delivery date, publicly disclose such material, non-public information
on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material, non-public information
relating to the Company or any of its Subsidiaries, the Company so shall indicate to the Holder explicitly in writing in such notice (or
immediately upon receipt of notice from the Holder, as applicable), and in the absence of any such written indication in such notice (or
notification from the Company immediately upon receipt of notice from the Holder), the Holder shall be entitled to presume that information
contained in the notice does not constitute material, non-public information relating to the Company or any of its Subsidiaries. Nothing
contained in this Section 27 shall limit any obligations of the Company, or any rights of the Holder, under Section 4(l) of the Securities
Purchase Agreement.
_________________
2
Insert date of execution of the Securities Purchase Agreement.
28.
ABSENCE OF TRADING AND DISCLOSURE RESTRICTIONS. The Company acknowledges and agrees that the Holder is not a fiduciary or
agent of the Company and that the Holder shall have no obligation to (a) maintain the confidentiality of any information provided by the
Company or (b) refrain from trading any securities while in possession of such information in the absence of a written non-disclosure
agreement signed by an officer of the Holder that explicitly provides for such confidentiality and trading restrictions. In the absence
of such an executed, written non-disclosure agreement, the Company acknowledges that the Holder may freely trade in any securities issued
by the Company, may possess and use any information provided by the Company in connection with such trading activity, and may disclose
any such information to any third party.
[signature page follows]
IN WITNESS WHEREOF, the Company
has caused this Note to be duly executed as of the Issuance Date set out above.
|
ACLARION, INC.
|
|
By:_________________________________ |
|
Name: |
|
Title: |
Exhibit 10.3
FORM FINAL
[FORM OF WARRANT]
NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO
THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES. THE NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY
BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 1(a) OF
THIS WARRANT.
Aclarion, Inc.
Warrant To Purchase Common Stock
Warrant No.:
Date of Issuance: November 21, 2023 (“Issuance
Date”)
Aclarion, Inc., a Delaware
corporation (the “Company”), hereby certifies that, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, [BUYER], the registered holder hereof or its permitted
assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise
Price (as defined below) then in effect, upon exercise of this Warrant to Purchase Common Stock (including any Warrants to Purchase Common
Stock issued in exchange, transfer or replacement hereof, the “Warrant”), at any time or times on or after the Issuance
Date, but not after 11:59 p.m., New York time, on the Expiration Date (as defined below), _________________1
(subject to adjustment as provided herein) fully paid and non-assessable shares of Common Stock (as defined below) (the “Warrant
Shares”, and such number of Warrant Shares, the “Warrant Number”). Except as otherwise defined herein, capitalized
terms in this Warrant shall have the meanings set forth in Section 19. This Warrant is one of the Warrants to Purchase Common Stock
(the “SPA Warrants”) issued pursuant to Section 1 of that certain Securities Purchase Agreement, dated as of November
21, 2023 (the “Subscription Date”), by and among the Company and the investors (the “Buyers”) referred
to therein, as amended from time to time (the “Securities Purchase Agreement”).
_________________
100% Warrant coverage.
1.
EXERCISE OF WARRANT.
(a)
Mechanics of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth
in Section 1(f)), this Warrant may be exercised by the Holder on any day on or after the Issuance Date (an “Exercise Date”),
in whole or in part, by delivery (whether via facsimile or otherwise) of a written notice, in the form attached hereto as Exhibit
A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant. Within one (1) Trading
Day following an exercise of this Warrant as aforesaid, the Holder shall deliver payment to the Company of an amount equal to the Exercise
Price in effect on the date of such exercise multiplied by the number of Warrant Shares as to which this Warrant was so exercised (the
“Aggregate Exercise Price”) in cash or via wire transfer of immediately available funds if the Holder did not notify
the Company in such Exercise Notice that such exercise was made pursuant to a Cashless Exercise (as defined in Section 1(d)). The
Holder shall not be required to deliver the original of this Warrant in order to effect an exercise hereunder. Execution and delivery
of an Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original of
this Warrant and issuance of a new Warrant evidencing the right to purchase the remaining number of Warrant Shares. Execution and delivery
of an Exercise Notice for all of the then-remaining Warrant Shares shall have the same effect as cancellation of the original of this
Warrant after delivery of the Warrant Shares in accordance with the terms hereof. On or before the first (1st) Trading Day
following the date on which the Company has received an Exercise Notice, the Company shall transmit by facsimile or electronic mail an
acknowledgment of confirmation of receipt of such Exercise Notice, in the form attached hereto as Exhibit B, to the
Holder and the Company’s transfer agent (the “Transfer Agent”), which confirmation shall constitute an instruction
to the Transfer Agent to process such Exercise Notice in accordance with the terms herein. On or before the second (2nd) Trading Day following
the date on which the Company has received such Exercise Notice (or such earlier date as required pursuant to the 1934 Act or other applicable
law, rule or regulation for the settlement of a trade of such Warrant Shares initiated on the applicable Exercise Date), the Company shall
(X) provided that the Transfer Agent is participating in The Depository Trust Company (“DTC”) Fast Automated Securities
Transfer Program, upon the request of the Holder, credit such aggregate number of shares of Common Stock to which the Holder is entitled
pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian
system, or (Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program (“FAST”),
upon the request of the Holder, issue and deliver (via reputable overnight courier) to the address as specified in the Exercise Notice,
a certificate, registered in the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder shall
be entitled pursuant to such exercise. Upon delivery of an Exercise Notice, the Holder shall be deemed for all corporate purposes to have
become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such
Warrant Shares are credited to the Holder’s DTC account or the date of delivery of the certificates evidencing such Warrant Shares
(as the case may be). If this Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and the number of
Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an
exercise and upon surrender of this Warrant to the Company by the Holder, then, at the request of the Holder, the Company shall as soon
as practicable and in no event later than two (2) Business Days after any exercise and at its own expense, issue and deliver to the Holder
(or its designee) a new Warrant (in accordance with Section 7(d)) representing the right to purchase the number of Warrant Shares
purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant
is exercised. No fractional shares of Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares
of Common Stock to be issued shall be rounded up to the nearest whole number. The Company shall pay any and all transfer, stamp, issuance
and similar taxes, costs and expenses (including, without limitation, fees and expenses of the Transfer Agent) that may be payable with
respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant. Notwithstanding the foregoing, except in the case
where an exercise of this Warrant is validly made pursuant to a Cashless Exercise, the Company’s failure to deliver Warrant Shares
to the Holder on or prior to the later of (i) two (2) Trading Days after receipt of the applicable Exercise Notice (or such earlier date
as required pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement of a trade of such Warrant Shares
initiated on the applicable Exercise Date) and (ii) one (1) Trading Day after the Company’s receipt of the Aggregate Exercise Price
(or valid notice of a Cashless Exercise) (such later date, the “Share Delivery Date”) shall not be deemed to be a breach
of this Warrant. Notwithstanding anything to the contrary contained in this Warrant or the Registration Rights Agreement, after the effective
date of the Registration Statement (as defined in the Registration Rights Agreement) and prior to the Holder’s receipt of the notice
of a Grace Period (as defined in the Registration Rights Agreement), the Company shall cause the Transfer Agent to deliver unlegended
shares of Common Stock to the Holder (or its designee) in connection with any sale of Registrable Securities (as defined in the Registration
Rights Agreement) with respect to which the Holder has entered into a contract for sale, and delivered a copy of the prospectus included
as part of the particular Registration Statement to the extent applicable, and for which the Holder has not yet settled. From the Issuance
Date through and including the Expiration Date, the Company shall maintain a transfer agent that participates in FAST.
(b)
Exercise Price. For purposes of this Warrant, “Exercise Price” means $0.2865, subject to adjustment as
provided herein.
(c)
Company’s Failure to Timely Deliver Securities. If the Company shall fail, for any reason or for no reason, on or
prior to the Share Delivery Date, either (I) if the Transfer Agent is not participating in FAST, to issue and deliver to the Holder (or
its designee) a certificate for the number of Warrant Shares to which the Holder is entitled and register such Warrant Shares on the Company’s
share register or, if the Transfer Agent is participating in FAST, to credit the balance account of the Holder or the Holder’s designee
with DTC for such number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise of this Warrant (as the case
may be) or (II) if a Registration Statement covering the resale of the Warrant Shares that are the subject of the Exercise Notice (the
“Unavailable Warrant Shares”) is not available for the resale of such Unavailable Warrant Shares and the Company fails
to promptly, but in no event later than as required pursuant to the Registration Rights Agreement (x) so notify the Holder and (y) deliver
the Warrant Shares electronically without any restrictive legend by crediting such aggregate number of Warrant Shares to which the Holder
is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal
At Custodian system (the event described in the immediately foregoing clause (II) is hereinafter referred as a “Notice Failure”
and together with the event described in clause (I) above, a “Delivery Failure”), then, in addition to all other remedies
available to the Holder, (X) the Company shall pay in cash to the Holder on each day after the Share Delivery Date and during such Delivery
Failure an amount equal to 1% of the product of (A) the sum of the number of shares of Common Stock not issued to the Holder on or prior
to the Share Delivery Date and to which the Holder is entitled, multiplied by (B) any trading price of the Common Stock selected by the
Holder in writing as in effect at any time during the period beginning on the applicable Exercise Date and ending on the applicable Share
Delivery Date, and (Y) the Holder, upon written notice to the Company, may void its Exercise Notice with respect to, and retain or have
returned, as the case may be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice; provided that
the voiding of an Exercise Notice shall not affect the Company’s obligations to make any payments which have accrued prior to the
date of such notice pursuant to this Section 1(c) or otherwise. In addition to the foregoing, if on or prior to the Share Delivery Date
either (I) the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, the Company shall fail to issue
and deliver to the Holder (or its designee) a certificate and register such shares of Common Stock on the Company’s share register
or, if the Transfer Agent is participating in the DTC Fast Automated Securities Transfer Program, the Transfer Agent shall fail to credit
the balance account of the Holder or the Holder’s designee with DTC for the number of shares of Common Stock to which the Holder
is entitled upon the Holder’s exercise hereunder or pursuant to the Company’s obligation pursuant to clause (ii) below or
(II) a Notice Failure occurs, and if on or after such Share Delivery Date the Holder acquires (in an open market transaction, stock loan
or otherwise) shares of Common Stock corresponding to all or any portion of the number of shares of Common Stock issuable upon such exercise
that the Holder is entitled to receive from the Company and has not received from the Company in connection with such Delivery Failure
or Notice Failure, as applicable (a “Buy-In”), then, in addition to all other remedies available to the Holder, the
Company shall, within two (2) Business Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash
to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions, stock loan costs and other
out-of-pocket expenses, if any) for the shares of Common Stock so acquired (including, without limitation, by any other Person in respect,
or on behalf, of the Holder) (the “Buy-In Price”), at which point the Company’s obligation to so issue and deliver
such certificate (and to issue such shares of Common Stock) or credit the balance account of such Holder or such Holder’s designee,
as applicable, with DTC for the number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise hereunder (as
the case may be) (and to issue such Warrant Shares) shall terminate, or (ii) promptly honor its obligation to so issue and deliver to
the Holder a certificate or certificates representing such Warrant Shares or credit the balance account of such Holder or such Holder’s
designee, as applicable, with DTC for the number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise hereunder
(as the case may be) and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A)
such number of Warrant Shares multiplied by (B) the lowest Closing Sale Price of the Common Stock on any Trading Day during the period
commencing on the date of the applicable Exercise Notice and ending on the date of such issuance and payment under this clause (ii) (the
“Buy-In Payment Amount”). Nothing shall limit the Holder’s right to pursue any other remedies available to it
hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive relief with respect
to the Company’s failure to timely deliver certificates representing shares of Common Stock (or to electronically deliver such shares
of Common Stock) upon the exercise of this Warrant as required pursuant to the terms hereof. While this Warrant is outstanding, the Company
shall cause its transfer agent to participate in FAST. In addition to the foregoing rights, (i) if the Company fails to deliver the applicable
number of Warrant Shares upon an exercise pursuant to Section 1 by the applicable Share Delivery Date, then the Holder shall have the
right to rescind such exercise in whole or in part and retain and/or have the Company return, as the case may be, any portion of this
Warrant that has not been exercised pursuant to such Exercise Notice; provided that the rescission of an exercise shall not affect the
Company’s obligation to make any payments that have accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise,
and (ii) if a registration statement covering the issuance or resale of the Warrant Shares that are subject to an Exercise Notice is not
available for the issuance or resale, as applicable, of such Warrant Shares and the Holder has submitted an Exercise Notice prior to receiving
notice of the non-availability of such registration statement and the Company has not already delivered the Warrant Shares underlying
such Exercise Notice electronically without any restrictive legend by crediting such aggregate number of Warrant Shares to which the Holder
is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with DTC through its Deposit / Withdrawal
At Custodian system, the Holder shall have the option, by delivery of notice to the Company, to (x) rescind such Exercise Notice in whole
or in part and retain or have returned, as the case may be, any portion of this Warrant that has not been exercised pursuant to such Exercise
Notice; provided that the rescission of an Exercise Notice shall not affect the Company’s obligation to make any payments that have
accrued prior to the date of such notice pursuant to this Section 1(c) or otherwise, and/or (y) switch some or all of such Exercise Notice
from a cash exercise to a Cashless Exercise.
(d)
Cashless Exercise. Notwithstanding anything contained herein to the contrary (other than Section 1(f) below), if at
the time of exercise hereof a Registration Statement (as defined in the Registration Rights Agreement) is not effective (or the prospectus
contained therein is not available for use) for the resale by the Holder of all of the Warrant Shares, then the Holder may, in its sole
discretion, exercise this Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made to the
Company upon such exercise in payment of the Aggregate Exercise Price, elect instead to receive upon such exercise the “Net Number”
of Warrant Shares determined according to the following formula (a “Cashless Exercise”):
Net Number = (A x B)
- (A x C)
B
For purposes of the foregoing formula:
A= the total number of shares with respect
to which this Warrant is then being exercised.
B = as elected by the Holder: (i) the
VWAP of the shares of Common Stock on the Trading Day immediately preceding the date of the applicable Exercise Notice if such Exercise
Notice is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not a Trading Day or (2) both executed and
delivered pursuant to Section 1(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in
Rule 600(b)(64) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder,
either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Exercise Notice or (z) the Bid Price of the shares
of Common Stock as of the time of the Holder’s execution of the applicable Exercise Notice if such Exercise Notice is executed during
“regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter pursuant to Section 1(a) hereof,
or (iii) the Closing Sale Price of the Common Stock on the date of the applicable Exercise Notice if the date of such Exercise Notice
is a Trading Day and such Exercise Notice is both executed and delivered pursuant to Section 1(a) hereof after the close of “regular
trading hours” on such Trading Day.
C = the Exercise
Price then in effect for the applicable Warrant Shares at the time of such exercise.
If the Warrant Shares are issued
in a Cashless Exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the 1933 Act, the Warrant Shares
take on the registered characteristics of the Warrants being exercised. For purposes of Rule 144(d) promulgated under the 1933 Act, as
in effect on the Subscription Date, it is intended that the Warrant Shares issued in a Cashless Exercise shall be deemed to have been
acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the date this Warrant was
originally issued pursuant to the Securities Purchase Agreement.
(e)
Disputes. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the number
of Warrant Shares to be issued pursuant to the terms hereof, the Company shall promptly issue to the Holder the number of Warrant Shares
that are not disputed and resolve such dispute in accordance with Section 15.
(f)
Limitations on Exercises.
(i)
Beneficial Ownership. The Company shall not effect the exercise of any portion of this Warrant, and the Holder shall not
have the right to exercise any portion of this Warrant, pursuant to the terms and conditions of this Warrant and any such exercise shall
be null and void and treated as if never made, to the extent that after giving effect to such exercise, the Holder together with the other
Attribution Parties collectively would beneficially own in excess of 4.99% (the “Maximum Percentage”) of the shares
of Common Stock outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number
of shares of Common Stock beneficially owned by the Holder and the other Attribution Parties shall include the number of shares of Common
Stock held by the Holder and all other Attribution Parties plus the number of shares of Common Stock issuable upon exercise of this Warrant
with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock which would be issuable
upon (A) exercise of the remaining, unexercised portion of this Warrant beneficially owned by the Holder or any of the other Attribution
Parties and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company (including, without
limitation, any convertible notes or convertible preferred stock or warrants, including other SPA Warrants) beneficially owned by the
Holder or any other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained in this
Section 1(f)(i). For purposes of this Section 1(f)(i), beneficial ownership shall be calculated in accordance with Section 13(d) of the
1934 Act. For purposes of determining the number of outstanding shares of Common Stock the Holder may acquire upon the exercise of this
Warrant without exceeding the Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected
in (x) the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other
public filing with the SEC, as the case may be, (y) a more recent public announcement by the Company or (z) any other written notice by
the Company or the Transfer Agent, if any, setting forth the number of shares of Common Stock outstanding (the “Reported Outstanding
Share Number”). If the Company receives an Exercise Notice from the Holder at a time when the actual number of outstanding shares
of Common Stock is less than the Reported Outstanding Share Number, the Company shall (i) notify the Holder in writing of the number of
shares of Common Stock then outstanding and, to the extent that such Exercise Notice would otherwise cause the Holder’s beneficial
ownership, as determined pursuant to this Section 1(f)(i), to exceed the Maximum Percentage, the Holder must notify the Company of a reduced
number of Warrant Shares to be acquired pursuant to such Exercise Notice (the number of shares by which such purchase is reduced, the
“Reduction Shares”) and (ii) as soon as reasonably practicable, the Company shall return to the Holder any exercise
price paid by the Holder for the Reduction Shares. For any reason at any time, upon the written or oral request of the Holder, the Company
shall within one (1) Business Day confirm orally and in writing or by electronic mail to the Holder the number of shares of Common Stock
then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion
or exercise of securities of the Company, including this Warrant, by the Holder and any other Attribution Party since the date as of which
the Reported Outstanding Share Number was reported. In the event that the issuance of shares of Common Stock to the Holder upon exercise
of this Warrant results in the Holder and the other Attribution Parties being deemed to beneficially own, in the aggregate, more than
the Maximum Percentage of the number of outstanding shares of Common Stock (as determined under Section 13(d) of the 1934 Act), the number
of shares so issued by which the Holder’s and the other Attribution Parties’ aggregate beneficial ownership exceeds the Maximum
Percentage (the “Excess Shares”) shall be deemed null and void and shall be cancelled ab initio, and the Holder shall
not have the power to vote or to transfer the Excess Shares. As soon as reasonably practicable after the issuance of the Excess Shares
has been deemed null and void, the Company shall return to the Holder the exercise price paid by the Holder for the Excess Shares. Upon
delivery of a written notice to the Company, the Holder may from time to time increase (with such increase not effective until the sixty-first
(61st) day after delivery of such notice) or decrease the Maximum Percentage to any other percentage not in excess of 9.99%
as specified in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the sixty-first
(61st) day after such notice is delivered to the Company and (ii) any such increase or decrease will apply only to the Holder
and the other Attribution Parties and not to any other holder of SPA Warrants that is not an Attribution Party of the Holder. For purposes
of clarity, the shares of Common Stock issuable pursuant to the terms of this Warrant in excess of the Maximum Percentage shall not be
deemed to be beneficially owned by the Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the 1934
Act. No prior inability to exercise this Warrant pursuant to this paragraph shall have any effect on the applicability of the provisions
of this paragraph with respect to any subsequent determination of exercisability. The provisions of this paragraph shall be construed
and implemented in a manner otherwise than in strict conformity with the terms of this Section 1(f)(i) to the extent necessary to correct
this paragraph or any portion of this paragraph which may be defective or inconsistent with the intended beneficial ownership limitation
contained in this Section 1(f)(i) or to make changes or supplements necessary or desirable to properly give effect to such limitation.
The limitation contained in this paragraph may not be waived and shall apply to a successor holder of this Warrant.
(ii)
Principal Market Regulation. The Company shall not issue any shares of Common Stock upon the exercise of this Warrant if
the issuance of such shares of Common Stock (taken together with the shares of Common Stock issued pursuant to the Securities Purchase
Agreement and such shares of Common Stock issued or issuable upon the exercise of the SPA Warrants or otherwise pursuant to the terms
of the SPA Warrants) would exceed the aggregate number of shares of Common Stock which the Company may issue without breaching the Company’s
obligations under the rules or regulations of the Principal Market (the number of shares which may be issued without violating such rules
and regulations, the “Exchange Cap”), except that such limitation shall not apply in the event that the Company (A)
obtains the approval of its stockholders as required by the applicable rules of the Principal Market for issuances of shares of Common
Stock in excess of such amount or (B) obtains a written opinion from outside counsel to the Company that such approval is not required,
which opinion shall be reasonably satisfactory to the Holder. Until such approval or such written opinion is obtained, no Buyer shall
be issued in the aggregate, upon exercise (as the case may be) of any of the SPA Warrants or otherwise pursuant to the terms of the SPA
Warrants, shares of Common Stock in an amount greater than the product of (i) the Exchange Cap as of the Issuance Date multiplied by (ii)
the quotient of (1) the original principal amount of Notes issued to such Buyer pursuant to the Securities Purchase Agreement on the Closing
Date (as defined in the Securities Purchase Agreement) divided by (2) the aggregate original principal amount of all Notes issued to the
Buyers pursuant to the Securities Purchase Agreement on the Closing Date (with respect to each Buyer, the “Exchange Cap Allocation”).
In the event that any Buyer shall sell or otherwise transfer any of such Buyer’s SPA Warrants, the transferee shall be allocated
a pro rata portion of such Buyer’s Exchange Cap Allocation with respect to such portion of such SPA Warrants so transferred, and
the restrictions of the prior sentence shall apply to such transferee with respect to the portion of the Exchange Cap Allocation so allocated
to such transferee. Upon exercise in full of a holder’s SPA Warrants, the difference (if any) between such holder’s Exchange
Cap Allocation and the number of shares of Common Stock actually issued to such holder pursuant to the Securities Purchase Agreement and
upon such holder’s exercise in full of such SPA Warrants shall be allocated, to the respective Exchange Cap Allocations of the remaining
holders of SPA Warrants on a pro rata basis in proportion to the shares of Common Stock underlying the SPA Warrants then held by each
such holder of SPA Warrants. In the event that the Company is then prohibited from issuing any shares of Common Stock pursuant to this
Section 1(f)(ii) (the “Exchange Cap Shares”), in lieu of issuing and delivering such Exchange Cap Shares to the Holder,
the Company shall pay cash to the Holder in exchange for the cancellation of such portion of this Warrant exercisable into such Exchange
Cap Shares (the “Exchange Cap Payment Amount”) at a price equal to the sum of (x) the product of (A) such number of
Exchange Cap Shares and (B) the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the
date the Holder delivers the applicable Exercise Notice with respect to such Exchange Cap Shares to the Company and ending on the date
of such payment under this Section 1(f)(ii) and (y) to the extent the Holder purchases (in an open market transaction or otherwise) shares
of Common Stock to deliver in satisfaction of a sale by the Holder of Exchange Cap Shares, any brokerage commissions and other out-of-pocket
expenses, if any, of the Holder incurred in connection therewith.
(g)
Reservation of Shares.
(i)
Required Reserve Amount. So long as this Warrant remains outstanding, the Company shall at all times keep reserved for issuance
under this Warrant a number of shares of Common Stock at least equal to 100% of the maximum number of shares of Common Stock as shall
be necessary to satisfy the Company’s obligation to issue shares of Common Stock under the SPA Warrants then outstanding (without
regard to any limitations on exercise) (the “Required Reserve Amount”); provided that at no time shall the number of
shares of Common Stock reserved pursuant to this Section 1(g)(i) be reduced other than proportionally in connection with any exercise
or redemption of SPA Warrants or such other event covered by Section 2(a) below. The Required Reserve Amount (including, without limitation,
each increase in the number of shares so reserved) shall be allocated pro rata among the holders of the SPA Warrants based on number of
shares of Common Stock issuable upon exercise of SPA Warrants held by each holder on the Closing Date (without regard to any limitations
on exercise) or increase in the number of reserved shares, as the case may be (the “Authorized Share Allocation”).
In the event that a holder shall sell or otherwise transfer any of such holder’s SPA Warrants, each transferee shall be allocated
a pro rata portion of such holder’s Authorized Share Allocation. Any shares of Common Stock reserved and allocated to any Person
which ceases to hold any SPA Warrants shall be allocated to the remaining holders of SPA Warrants, pro rata based on the number of shares
of Common Stock issuable upon exercise of the SPA Warrants then held by such holders (without regard to any limitations on exercise).
(ii)
Insufficient Authorized Shares. If, notwithstanding Section 1(g)(i) above, and not in limitation thereof, at any time while
any of the SPA Warrants remain outstanding, the Company does not have a sufficient number of authorized and unreserved shares of Common
Stock to satisfy its obligation to reserve the Required Reserve Amount (an “Authorized Share Failure”), then the Company
shall immediately take all action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient
to allow the Company to reserve the Required Reserve Amount for all the SPA Warrants then outstanding. Without limiting the generality
of the foregoing sentence, as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later
than sixty (60) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the
approval of an increase in the number of authorized shares of Common Stock. In connection with such meeting, the Company shall provide
each stockholder with a proxy statement and shall use its best efforts to solicit its stockholders’ approval of such increase in
authorized shares of Common Stock and to cause its board of directors to recommend to the stockholders that they approve such proposal.
Notwithstanding the foregoing, if any such time of an Authorized Share Failure, the Company is able to obtain the written consent of a
majority of the shares of its issued and outstanding shares of Common Stock to approve the increase in the number of authorized shares
of Common Stock, the Company may satisfy this obligation by obtaining such consent and submitting for filing with the SEC an Information
Statement on Schedule 14C. In the event that the Company is prohibited from issuing shares of Common Stock upon an exercise of this Warrant
due to the failure by the Company to have sufficient shares of Common Stock available out of the authorized but unissued shares of Common
Stock (such unavailable number of shares of Common Stock, the “Authorization Failure Shares”), in lieu of delivering
such Authorization Failure Shares to the Holder, the Company shall pay cash in exchange for the cancellation of such portion of this Warrant
exercisable into such Authorization Failure Shares at a price equal to the sum of (i) the product of (x) such number of Authorization
Failure Shares and (y) the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date
the Holder delivers the applicable Exercise Notice with respect to such Authorization Failure Shares to the Company and ending on the
date of such issuance and payment under this Section 1(g); and (ii) to the extent the Holder purchases (in an open market transaction
or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of Authorization Failure Shares, any Buy-In Payment
Amount, brokerage commissions and other out-of-pocket expenses, if any, of the Holder incurred in connection therewith. Nothing contained
in this Section 1(g) shall limit any obligations of the Company under any provision of the Securities Purchase Agreement.
2.
ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price
and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 2.
(a)
Stock Dividends and Splits. Without limiting any provision of Section 2(a), Section 3 or Section 4, if the Company,
at any time on or after the Subscription Date, (i) pays a stock dividend on one or more classes of its then outstanding shares of Common
Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides (by any
stock split, stock dividend, recapitalization or otherwise) one or more classes of its then outstanding shares of Common Stock into a
larger number of shares or (iii) combines (by combination, reverse stock split or otherwise) one or more classes of its then outstanding
shares of Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction of
which the numerator shall be the number of shares of Common Stock outstanding immediately before such event and of which the denominator
shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of
this paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive such
dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after
the effective date of such subdivision or combination. If any event requiring an adjustment under this paragraph occurs during the period
that an Exercise Price is calculated hereunder, then the calculation of such Exercise Price shall be adjusted appropriately to reflect
such event.
(b)
Adjustment Upon Issuance of Shares of Common Stock. If and whenever on or after the Subscription Date and prior to the date
no Notes remain outstanding, the Company grants, issues or sells (or enters into any agreement to grant, issue or sell), or in accordance
with this Section 2 is deemed to have granted, issued or sold, any shares of Common Stock (including the issuance or sale of shares
of Common Stock owned or held by or for the account of the Company, but excluding any Excluded Securities granted issued or sold or deemed
to have been granted issued or sold) for a consideration per share (the “New Issuance Price”) less than a price equal
to the Exercise Price in effect immediately prior to such granting, issuance or sale or deemed granting, issuance or sale (such Exercise
Price then in effect is referred to herein as the “Applicable Price”) (the foregoing a “Dilutive Issuance”),
then immediately after such Dilutive Issuance, the Exercise Price then in effect shall be reduced to an amount equal to the New Issuance
Price. For all purposes of the foregoing (including, without limitation, determining the adjusted Exercise Price and the New Issuance
Price under this Section 2(a)), the following shall be applicable:
(i)
Issuance of Options. If the Company in any manner grants, issues or sells (or enters into any agreement to grant, issue
or sell) any Options and the lowest price per share for which one share of Common Stock is at any time issuable upon the exercise of any
such Option or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise
pursuant to the terms thereof is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and
to have been issued and sold by the Company at the time of the granting, issuance or sale (or the time of execution of such agreement
to grant, issue or sell, as applicable) of such Option for such price per share. For purposes of this Section 2(b)(i), the “lowest
price per share for which one share of Common Stock is at any time issuable upon the exercise of any such Options or upon conversion,
exercise or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise pursuant to the terms thereof”
shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company with
respect to any one share of Common Stock upon the granting, issuance or sale (or pursuant to the agreement to grant, issue or sell, as
applicable) of such Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible Security issuable
upon exercise of such Option or otherwise pursuant to the terms thereof and (y) the lowest exercise price set forth in such Option for
which one share of Common Stock is issuable (or may become issuable assuming all possible market conditions) upon the exercise of any
such Options or upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise
pursuant to the terms thereof minus (2) the sum of all amounts paid or payable to the holder of such Option (or any other Person) upon
the granting, issuance or sale (or the agreement to grant, issue or sell, as applicable) of such Option, upon exercise of such Option
and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option or otherwise pursuant to the
terms thereof plus the value of any other consideration received or receivable by, or benefit conferred on, the holder of such Option
(or any other Person). Except as contemplated below, no further adjustment of the Exercise Price shall be made upon the actual issuance
of such shares of Common Stock or of such Convertible Securities upon the exercise of such Options or otherwise pursuant to the terms
of or upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities.
(ii)
Issuance of Convertible Securities. If the Company in any manner issues or sells (or enters into any agreement to issue
or sell) any Convertible Securities and the lowest price per share for which one share of Common Stock is at any time issuable upon the
conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof is less than the Applicable Price, then such share
of Common Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the issuance or sale
(or the time of execution of such agreement to issue or sell, as applicable) of such Convertible Securities for such price per share.
For the purposes of this Section 2(b)(ii), the “lowest price per share for which one share of Common Stock is at any time issuable
upon the conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof” shall be equal to (1) the lower of
(x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to one share of Common
Stock upon the issuance or sale (or pursuant to the agreement to issue or sell, as applicable) of the Convertible Security and upon conversion,
exercise or exchange of such Convertible Security or otherwise pursuant to the terms thereof and (y) the lowest conversion price set forth
in such Convertible Security for which one share of Common Stock is issuable (or may become issuable assuming all possible market conditions)
upon conversion, exercise or exchange thereof or otherwise pursuant to the terms thereof minus (2) the sum of all amounts paid or payable
to the holder of such Convertible Security (or any other Person) upon the issuance or sale (or the agreement to issue or sell, as applicable)
of such Convertible Security plus the value of any other consideration received or receivable by, or benefit conferred on, the holder
of such Convertible Security (or any other Person). Except as contemplated below, no further adjustment of the Exercise Price shall be
made upon the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities or otherwise
pursuant to the terms thereof, and if any such issuance or sale of such Convertible Securities is made upon exercise of any Options for
which adjustment of this Warrant has been or is to be made pursuant to other provisions of this Section 2(a), except as contemplated
below, no further adjustment of the Exercise Price shall be made by reason of such issuance or sale.
(iii)
Change in Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options, the additional
consideration, if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any
Convertible Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time
(other than proportional changes in conversion or exercise prices, as applicable, in connection with an event referred to in Section 2(a)),
the Exercise Price in effect at the time of such increase or decrease shall be adjusted to the Exercise Price which would have been in
effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase price, additional consideration
or increased or decreased conversion rate, as the case may be, at the time initially granted, issued or sold. For purposes of this Section 2(b)(i),
if the terms of any Option or Convertible Security (including, without limitation, any Option or Convertible Security that was outstanding
as of the Subscription Date) are increased or decreased in the manner described in the immediately preceding sentence, then such Option
or Convertible Security and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to
have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section 2(a) shall be made if such adjustment
would result in an increase of the Exercise Price then in effect.
(iv)
Calculation of Consideration Received. If any Option and/or Convertible Security and/or Adjustment Right is issued in connection
with the issuance or sale or deemed issuance or sale of any other securities of the Company (as determined by the Holder, the “Primary
Security”, and such Option and/or Convertible Security and/or Adjustment Right, the “Secondary Securities”),
together comprising one integrated transaction, (or one or more transactions if such issuances or sales or deemed issuances or sales of
securities of the Company either (A) have at least one investor or purchaser in common, (B) are consummated in reasonable proximity to
each other and/or (C) are consummated under the same plan of financing) the aggregate consideration per share of Common Stock with respect
to such Primary Security shall be deemed to be equal to the difference of (x) the lowest price per share for which one share of Common
Stock was issued (or was deemed to be issued pursuant to Section 2(b)(i) or 2(b)(ii) above, as applicable) in such integrated transaction
solely with respect to such Primary Security, minus (y) with respect to such Secondary Securities, the sum of (I) the Black Scholes Consideration
Value of each such Option, if any, (II) the fair market value (as determined by the Holder in good faith) or the Black Scholes Consideration
Value, as applicable, of such Adjustment Right, if any, and (III) the fair market value (as determined by the Holder) of such Convertible
Security, if any, in each case, as determined on a per share basis in accordance with this Section 2(b)(iv). If any shares of Common Stock,
Options or Convertible Securities are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor
(for the purpose of determining the consideration paid for such Common Stock, Option or Convertible Security, but not for the purpose
of the calculation of the Black Scholes Consideration Value) will be deemed to be the net amount of consideration received by the Company
therefor. If any shares of Common Stock, Options or Convertible Securities are issued or sold for a consideration other than cash, the
amount of such consideration received by the Company (for the purpose of determining the consideration paid for such Common Stock, Option
or Convertible Security, but not for the purpose of the calculation of the Black Scholes Consideration Value) will be the fair value of
such consideration, except where such consideration consists of publicly traded securities, in which case the amount of consideration
received by the Company for such securities will be the arithmetic average of the VWAPs of such security for each of the five (5) Trading
Days immediately preceding the date of receipt. If any shares of Common Stock, Options or Convertible Securities are issued to the owners
of the non-surviving entity in connection with any merger in which the Company is the surviving entity, the amount of consideration therefor
(for the purpose of determining the consideration paid for such Common Stock, Option or Convertible Security, but not for the purpose
of the calculation of the Black Scholes Consideration Value) will be deemed to be the fair value of such portion of the net assets and
business of the non-surviving entity as is attributable to such shares of Common Stock, Options or Convertible Securities (as the case
may be). The fair value of any consideration other than cash or publicly traded securities will be determined jointly by the Company and
the Holder. If such parties are unable to reach agreement within ten (10) days after the occurrence of an event requiring valuation (the
“Valuation Event”), the fair value of such consideration will be determined within five (5) Trading Days after the
tenth (10th) day following such Valuation Event by an independent, reputable appraiser jointly selected by the Company and
the Holder. The determination of such appraiser shall be final and binding upon all parties absent manifest error and the fees and expenses
of such appraiser shall be borne by the Company.
(v)
Record Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to
receive a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe
for or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the
issuance or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making
of such other distribution or the date of the granting of such right of subscription or purchase (as the case may be).
(c)
Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to Section 2(a) above only,
the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that
after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the
aggregate Exercise Price in effect immediately prior to such adjustment (without regard to any limitations on exercise contained herein).
(d)
Other Events. In the event that the Company (or any Subsidiary (as defined in the Securities Purchase Agreement)) shall
take any action to which the provisions hereof are not strictly applicable, or, if applicable, would not operate to protect the Holder
from dilution or if any event occurs of the type contemplated by the provisions of this Section 2 but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity
features), then the Company’s board of directors shall in good faith determine and implement an appropriate adjustment in the Exercise
Price and the number of Warrant Shares (if applicable) so as to protect the rights of the Holder, provided that no such adjustment pursuant
to this Section 2(d) will increase the Exercise Price or decrease the number of Warrant Shares as otherwise determined pursuant to this
Section 2, provided further that if the Holder does not accept such adjustments as appropriately protecting its interests hereunder against
such dilution, then the Company’s board of directors and the Holder shall agree, in good faith, upon an independent investment bank
of nationally recognized standing to make such appropriate adjustments, whose determination shall be final and binding absent manifest
error and whose fees and expenses shall be borne by the Company. This Section 2(d) shall not apply to any issuances or deemed issuances
of any Excluded Securities.
(e)
Calculations. All calculations under this Section 2 shall be made by rounding to the nearest cent or the nearest 1/100th
of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by
or for the account of the Company, and the disposition of any such shares shall be considered an issuance or sale of Common Stock.
(f)
Voluntary Adjustment By Company. Subject to the rules and regulations of the Principal Market, the Company may at any time
during the term of this Warrant, with the prior written consent of the Required Holders (as defined in the Securities Purchase Agreement),
reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors of the Company.
3.
RIGHTS UPON DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 2 above or Section 4(a)
below, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders
of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or
other securities, property, options, evidence of indebtedness or any other assets by way of a dividend, spin off, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance
of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the
Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of
this Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including without limitation, the Maximum
Percentage) immediately before the date on which a record is taken for such Distribution, or, if no such record is taken, the date as
of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however,
that to the extent that the Holder’s right to participate in any such Distribution would result in the Holder and the other Attribution
Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution to the extent of the
Maximum Percentage (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Distribution
(and beneficial ownership) to the extent of any such excess) and the portion of such Distribution shall be held in abeyance for the benefit
of the Holder until such time or times, if ever, as its right thereto would not result in the Holder and the other Attribution Parties
exceeding the Maximum Percentage, at which time or times the Holder shall be granted such Distribution (and any Distributions declared
or made on such initial Distribution or on any subsequent Distribution held similarly in abeyance) to the same extent as if there had
been no such limitation).
4.
PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.
(a)
Purchase Rights. In addition to any adjustments pursuant to Sections 2 or 3 above, if at any time the Company grants,
issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the
record holders of any class of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon
the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held
the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations or restrictions
on exercise of this Warrant, including without limitation, the Maximum Percentage) immediately before the date on which a record is taken
for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares
of Common Stock are to be determined for the grant, issuance or sale of such Purchase Rights (provided, however, that to
the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder and the other Attribution
Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase Right to the extent of
the Maximum Percentage (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Purchase
Right (and beneficial ownership) to the extent of any such excess) and such Purchase Right to such extent shall be held in abeyance for
the benefit of the Holder until such time or times, if ever, as its right thereto would not result in the Holder and the other Attribution
Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such right (and any Purchase Right granted,
issued or sold on such initial Purchase Right or on any subsequent Purchase Right held similarly in abeyance) to the same extent as if
there had been no such limitation).
(b)
Fundamental Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless (i) the
Successor Entity assumes in writing all of the obligations of the Company under this Warrant and the other Transaction Documents (as defined
in the Securities Purchase Agreement) in accordance with the provisions of this Section 4(b) pursuant to written agreements in form
and substance satisfactory to the Holder and approved by the Holder prior to such Fundamental Transaction, including agreements to deliver
to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar
in form and substance to this Warrant, including, without limitation, which is exercisable for a corresponding number of shares of capital
stock equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations
on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder
to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental
Transaction and the value of such shares of capital stock, such adjustments to the number of shares of capital stock and such exercise
price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental
Transaction) and (ii) the Successor Entity (including its Parent Entity) is a publicly traded corporation whose common stock is quoted
on or listed for trading on an Eligible Market. Upon the consummation of each Fundamental Transaction, the Successor Entity shall succeed
to, and be substituted for (so that from and after the date of the applicable Fundamental Transaction, the provisions of this Warrant
and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise
every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction
Documents with the same effect as if such Successor Entity had been named as the Company herein. Upon consummation of each Fundamental
Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall be issued upon exercise of this Warrant at
any time after the consummation of the applicable Fundamental Transaction, in lieu of the shares of Common Stock (or other securities,
cash, assets or other property (except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable
thereafter)) issuable upon the exercise of this Warrant prior to the applicable Fundamental Transaction, such shares of publicly traded
common stock (or its equivalent) of the Successor Entity (including its Parent Entity) which the Holder would have been entitled to receive
upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental
Transaction (without regard to any limitations on the exercise of this Warrant), as adjusted in accordance with the provisions of this
Warrant. Notwithstanding the foregoing, and without limiting Section 1(f) hereof, the Holder may elect, at its sole option, by delivery
of written notice to the Company to waive this Section 4(b) to permit the Fundamental Transaction without the assumption of this
Warrant. In addition to and not in substitution for any other rights hereunder, prior to the consummation of each Fundamental Transaction
pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect to or in exchange
for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision to insure that the Holder
will thereafter have the right to receive upon an exercise of this Warrant at any time after the consummation of the applicable Fundamental
Transaction but prior to the Expiration Date, in lieu of the shares of the Common Stock (or other securities, cash, assets or other property
(except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon
the exercise of the Warrant prior to such Fundamental Transaction, such shares of stock, securities, cash, assets or any other property
whatsoever (including warrants or other purchase or subscription rights) which the Holder would have been entitled to receive upon the
happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction
(without regard to any limitations on the exercise of this Warrant). Provision made pursuant to the preceding sentence shall be in a form
and substance reasonably satisfactory to the Holder.
(c)
Black Scholes Value. Notwithstanding the foregoing and the provisions of Section 4(b) above, at the request of the
Holder delivered at any time commencing on the earliest to occur of (x) the public disclosure of any Fundamental Transaction, (y) the
consummation of any Fundamental Transaction and (z) the Holder first becoming aware of any Fundamental Transaction through the date that
is ninety (90) days after the public disclosure of the consummation of such Fundamental Transaction by the Company pursuant to a Current
Report on Form 8-K filed with the SEC, the Company or the Successor Entity (as the case may be) shall purchase this Warrant from the Holder
on the date of such request by paying to the Holder cash in an amount equal to the Black Scholes Value. Payment of such amounts shall
be made by the Company (or at the Company’s direction) to the Holder on or prior to the later of (x) the second (2nd)
Trading Day after the date of such request and (y) the date of consummation of such Fundamental Transaction. In no event shall the Company
be required to make any payments pursuant to this Section 4(c) earlier than the date of consummation of such Fundamental Transaction.
(d)
Application. The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions
and Corporate Events and shall be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without regard
to any limitations on the exercise of this Warrant (provided that the Holder shall continue to be entitled to the benefit of the Maximum
Percentage, applied however with respect to shares of capital stock registered under the 1934 Act and thereafter receivable upon exercise
of this Warrant (or any such other warrant)).
5.
NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate
of Incorporation (as defined in the Securities Purchase Agreement), Bylaws (as defined in the Securities Purchase Agreement) or through
any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issuance or sale of securities, or
any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all
times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder.
Without limiting the generality of the foregoing, the Company (a) shall not increase the par value of any shares of Common Stock receivable
upon the exercise of this Warrant above the Exercise Price then in effect, and (b) shall take all such actions as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon the exercise
of this Warrant. Notwithstanding anything herein to the contrary, if after the sixty (60) calendar day anniversary of the Issuance Date,
the Holder is not permitted to exercise this Warrant in full for any reason (other than pursuant to restrictions set forth in Section
1(f) hereof), the Company shall use its best efforts to promptly remedy such failure, including, without limitation, obtaining such consents
or approvals as necessary to permit such exercise into shares of Common Stock.
6.
WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in
its capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital
of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in its capacity
as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any
corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise),
receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant
Shares which it is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall
be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a
stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding this
Section 6, the Company shall provide the Holder with copies of the same notices and other information given to the stockholders of
the Company generally, contemporaneously with the giving thereof to the stockholders.
7.
REISSUANCE OF WARRANTS.
(a)
Transfer of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon
the Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered
as the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less
than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 7(d))
to the Holder representing the right to purchase the number of Warrant Shares not being transferred.
(b)
Lost, Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the
loss, theft, destruction or mutilation of this Warrant (as to which a written certification and the indemnification contemplated below
shall suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the
Company in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company
shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d)) representing the right to purchase the Warrant
Shares then underlying this Warrant.
(c)
Exchangeable for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal
office of the Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to
purchase the number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such
portion of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however, no warrants for fractional
shares of Common Stock shall be given.
(d)
Issuance of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant,
such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the
right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a)
or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying the
other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant),
(iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date, and (iv) shall
have the same rights and conditions as this Warrant.
8.
NOTICES. Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice
shall be given in accordance with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt
written notice of all actions taken pursuant to this Warrant (other than the issuance of shares of Common Stock upon exercise in accordance
with the terms hereof), including in reasonable detail a description of such action and the reason therefor. Without limiting the generality
of the foregoing, the Company will give written notice to the Holder (i) immediately upon each adjustment of the Exercise Price and the
number of Warrant Shares, setting forth in reasonable detail, and certifying, the calculation of such adjustment(s), (ii) at least fifteen
(15) days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon
the shares of Common Stock, (B) with respect to any grants, issuances or sales of any Options, Convertible Securities or rights to purchase
stock, warrants, securities or other property to holders of shares of Common Stock or (C) for determining rights to vote with respect
to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information shall be made known to the public
prior to or in conjunction with such notice being provided to the Holder, (iii) at least ten (10) Trading Days prior to the consummation
of any Fundamental Transaction and (iv) within one (1) Business Day of the occurrence of an Event of Default (as defined in the Notes),
setting forth in reasonable detail any material events with respect to such Event of Default and any efforts by the Company to cure such
Event of Default. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding
the Company or any of its Subsidiaries, the Company shall simultaneously file such notice with the SEC (as defined in the Securities Purchase
Agreement) pursuant to a Current Report on Form 8-K. If the Company or any of its Subsidiaries provides material non-public information
to the Holder that is not simultaneously filed in a Current Report on Form 8-K and the Holder has not agreed to receive such material
non-public information, the Company hereby covenants and agrees that the Holder shall not have any duty of confidentiality to the Company,
any of its Subsidiaries or any of their respective officers, directors, employees, affiliates or agents with respect to, or a duty to
any of the foregoing not to trade on the basis of, such material non-public information. It is expressly understood and agreed that the
time of execution specified by the Holder in each Exercise Notice shall be definitive and may not be disputed or challenged by the Company.
9.
DISCLOSURE. Upon delivery by the Company to the Holder (or receipt by the Company from the Holder) of any notice
in accordance with the terms of this Warrant, unless the Company has in good faith determined that the matters relating to such notice
do not constitute material, non-public information relating to the Company or any of its Subsidiaries, the Company shall on or prior to
9:00 am, New York city time on the Business Day immediately following such notice delivery date, publicly disclose such material, non-public
information on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material, non-public
information relating to the Company or any of its Subsidiaries, the Company so shall indicate to the Holder explicitly in writing in such
notice (or immediately upon receipt of notice from the Holder, as applicable), and in the absence of any such written indication in such
notice (or notification from the Company immediately upon receipt of notice from the Holder), the Holder shall be entitled to presume
that information contained in the notice does not constitute material, non-public information relating to the Company or any of its Subsidiaries.
Nothing contained in this Section 9 shall limit any obligations of the Company, or any rights of the Holder, under Section 4(i) of the
Securities Purchase Agreement.
10.
ABSENCE OF TRADING AND DISCLOSURE RESTRICTIONS. The Company acknowledges and agrees that the Holder is not a fiduciary or
agent of the Company and that the Holder shall have no obligation to (a) maintain the confidentiality of any information provided by the
Company or (b) refrain from trading any securities while in possession of such information in the absence of a written non-disclosure
agreement signed by an officer of the Holder that explicitly provides for such confidentiality and trading restrictions. In the absence
of such an executed, written non-disclosure agreement, the Company acknowledges that the Holder may freely trade in any securities issued
by the Company, may possess and use any information provided by the Company in connection with such trading activity, and may disclose
any such information to any third party.
11.
AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant (other than Section 1(f))
may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it,
only if the Company has obtained the written consent of the Holder. No waiver shall be effective unless it is in writing and signed by
an authorized representative of the waiving party.
12.
SEVERABILITY. If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable
by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended
to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall
not affect the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability
of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or
the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as
close as possible to that of the prohibited, invalid or unenforceable provision(s).
13.
GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accordance with, and all questions
concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State
of Delaware, without giving effect to any provision of law or rule (whether of the State of Delaware or any other jurisdictions) that
would cause the application of the laws of any jurisdictions other than the State of Delaware. The Company hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to the Company
at the address set forth in Section 9(f) of the Securities Purchase Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. The Company hereby irrevocably submits to the exclusive jurisdiction of the United States District
Court for the District of Delaware or in the Court of Chancery of the State of Delaware (or, if such courts lack subject-matter jurisdiction,
in the Superior Court of the State of Delaware), for the adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any
claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient
forum or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any
right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from
bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations
to the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling
in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR
THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.
14.
CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall
not be construed against any Person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not
form part of, or affect the interpretation of, this Warrant. Terms used in this Warrant but defined in the other Transaction Documents
shall have the meanings ascribed to such terms on the Closing Date in such other Transaction Documents unless otherwise consented to in
writing by the Holder.
15.
DISPUTE RESOLUTION.
(a)
Submission to Dispute Resolution.
(i)
In the case of a dispute relating to the Exercise Price, the Closing Sale Price, the Bid Price, Black Scholes Consideration Value,
Event of Default Black Scholes Value, Black Scholes Value or fair market value or the arithmetic calculation of the number of Warrant
Shares (as the case may be) (including, without limitation, a dispute relating to the determination of any of the foregoing), the Company
or the Holder (as the case may be) shall submit the dispute to the other party via facsimile (A) if by the Company, within two (2) Business
Days after the occurrence of the circumstances giving rise to such dispute or (B) if by the Holder, at any time after the Holder learned
of the circumstances giving rise to such dispute. If the Holder and the Company are unable to promptly resolve such dispute relating to
such Exercise Price, such Closing Sale Price, such Bid Price, such Black Scholes Consideration Value, Event of Default Black Scholes Value,
Black Scholes Value or such fair market value or such arithmetic calculation of the number of Warrant Shares (as the case may be), at
any time after the second (2nd) Business Day following such initial notice by the Company or the Holder (as the case may be)
of such dispute to the Company or the Holder (as the case may be), then the Holder may, at its sole option, select an independent, reputable
investment bank to resolve such dispute.
(ii)
The Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered
in accordance with the first sentence of this Section 15 and (B) written documentation supporting its position with respect to such
dispute, in each case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following the date
on which the Holder selected such investment bank (the “Dispute Submission Deadline”) (the documents referred to in
the immediately preceding clauses (A) and (B) are collectively referred to herein as the “Required Dispute Documentation”)
(it being understood and agreed that if either the Holder or the Company fails to so deliver all of the Required Dispute Documentation
by the Dispute Submission Deadline, then the party who fails to so submit all of the Required Dispute Documentation shall no longer be
entitled to (and hereby waives its right to) deliver or submit any written documentation or other support to such investment bank with
respect to such dispute and such investment bank shall resolve such dispute based solely on the Required Dispute Documentation that was
delivered to such investment bank prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by both the Company
and the Holder or otherwise requested by such investment bank, neither the Company nor the Holder shall be entitled to deliver or submit
any written documentation or other support to such investment bank in connection with such dispute (other than the Required Dispute Documentation).
(iii)
The Company and the Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company
and the Holder of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline. The fees
and expenses of such investment bank shall be borne solely by the Company, and such investment bank’s resolution of such dispute
shall be final and binding upon all parties absent manifest error.
(b)
Miscellaneous. The Company expressly acknowledges and agrees that (i) this Section 15 constitutes an agreement to arbitrate
between the Company and the Holder (and constitutes an arbitration agreement) under the Delaware Rapid Arbitration Act, as amended, (ii)
a dispute relating to the Exercise Price includes, without limitation, disputes as to (A) whether an issuance or sale or deemed issuance
or sale of Common Stock occurred under Section 2(a), (B) the consideration per share at which an issuance or deemed issuance of Common
Stock occurred, (C) whether any issuance or sale or deemed issuance or sale of Common Stock was an issuance or sale or deemed issuance
or sale of Excluded Securities, (D) whether an agreement, instrument, security or the like constitutes and Option or Convertible Security
and (E) whether a Dilutive Issuance occurred, (iii) the terms of this Warrant and each other applicable Transaction Document shall serve
as the basis for the selected investment bank’s resolution of the applicable dispute, such investment bank shall be entitled (and
is hereby expressly authorized) to make all findings, determinations and the like that such investment bank determines are required to
be made by such investment bank in connection with its resolution of such dispute (including, without limitation, determining (A) whether
an issuance or sale or deemed issuance or sale of Common Stock occurred under Section 2(a), (B) the consideration per share at which an
issuance or deemed issuance of Common Stock occurred, (C) whether any issuance or sale or deemed issuance or sale of Common Stock was
an issuance or sale or deemed issuance or sale of Excluded Securities, (D) whether an agreement, instrument, security or the like constitutes
and Option or Convertible Security and (E) whether a Dilutive Issuance occurred) and in resolving such dispute such investment bank shall
apply such findings, determinations and the like to the terms of this Warrant and any other applicable Transaction Documents, (iv) the
Holder (and only the Holder), in its sole discretion, shall have the right to submit any dispute described in this Section 15 to
the United States District Court for the District of Delaware or in the Court of Chancery of the State of Delaware (or, if such courts
lack subject-matter jurisdiction, in the Superior Court of the State of Delaware) in lieu of utilizing the procedures set forth in this
Section 15 and (v) nothing in this Section 15 shall limit the Holder from obtaining any injunctive relief or other equitable
remedies (including, without limitation, with respect to any matters described in this Section 15).
16.
REMEDIES, CHARACTERIZATION, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant
shall be cumulative and in addition to all other remedies available under this Warrant and the other Transaction Documents, at law or
in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the
Holder to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Warrant. The Company
covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts
set forth or provided for herein with respect to payments, exercises and the like (and the computation thereof) shall be the amounts to
be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the
performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder
and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or
threatened breach, the holder of this Warrant shall be entitled, in addition to all other available remedies, to specific performance
and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of competent jurisdiction in any such
case without the necessity of proving actual damages and without posting a bond or other security. The Company shall provide all information
and documentation to the Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance with the
terms and conditions of this Warrant (including, without limitation, compliance with Section 2 hereof). The issuance of shares and
certificates for shares as contemplated hereby upon the exercise of this Warrant shall be made without charge to the Holder or such shares
for any issuance tax or other costs in respect thereof, provided that the Company shall not be required to pay any tax which may be payable
in respect of any transfer involved in the issuance and delivery of any certificate in a name other than the Holder or its agent on its
behalf.
17.
PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Warrant is placed
in the hands of an attorney for collection or enforcement or is collected or enforced through any legal proceeding or the holder otherwise
takes action to collect amounts due under this Warrant or to enforce the provisions of this Warrant or (b) there occurs any bankruptcy,
reorganization, receivership of the company or other proceedings affecting company creditors’ rights and involving a claim under
this Warrant, then the Company shall pay the costs incurred by the Holder for such collection, enforcement or action or in connection
with such bankruptcy, reorganization, receivership or other proceeding, including, without limitation, attorneys’ fees and disbursements.
18.
TRANSFER. This Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company,
except as may otherwise be required by Section 2(g) of the Securities Purchase Agreement.
19.
CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:
(a)
“1933 Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.
(b)
“1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
(c)
“Adjustment Right” means any right granted with respect to any securities issued in connection with, or with
respect to, any issuance or sale (or deemed issuance or sale in accordance with Section 2) of shares of Common Stock (other than
rights of the type described in Section 3 and 4 hereof) that could result in a decrease in the net consideration received by the
Company in connection with, or with respect to, such securities (including, without limitation, any cash settlement rights, cash adjustment
or other similar rights).
(d)
“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled
by, or is under common control with, such Person, it being understood for purposes of this definition that “control” of a
Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of
directors of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
(e)
“Approved Stock Plan” means any employee benefit plan which has been approved by the board of directors of
the Company prior to or subsequent to the date hereof pursuant to which shares of Common Stock, restricted stock units and options to
purchase Common Stock may be issued to any employee, consultant, officer or director for services provided to the Company in their capacity
as such. Approved Stock Plan shall also include equity grants of shares of Common Stock, restricted stock units and options to purchase
Common Stock approved the Company’s board of directors (or the compensation committee thereof) to any employee, consultant, officer
or director for services provided to the Company in their capacity as such and made outside of a plan as permitted by the inducement grant
exception under the Nasdaq listing rules.
(f)
“Attribution Parties” means, collectively, the following Persons and entities: (i) any investment vehicle, including,
any funds, feeder funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed or
advised by the Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the
Holder or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or any
of the foregoing and (iv) any other Persons whose beneficial ownership of the Company’s Common Stock would or could be aggregated
with the Holder’s and the other Attribution Parties for purposes of Section 13(d) of the 1934 Act. For clarity, the purpose of the
foregoing is to subject collectively the Holder and all other Attribution Parties to the Maximum Percentage.
(g)
“Bid Price” means, for any security as of the particular time of determination, the bid price for such security
on the Principal Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not the principal securities
exchange or trading market for such security, the bid price of such security on the principal securities exchange or trading market where
such security is listed or traded as reported by Bloomberg as of such time of determination, or if the foregoing does not apply, the bid
price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg as of
such time of determination, or, if no bid price is reported for such security by Bloomberg as of such time of determination, the average
of the bid prices of any market makers for such security as reported in The Pink Open Market (or a similar organization or agency succeeding
to its functions of reporting prices) as of such time of determination. If the Bid Price cannot be calculated for a security as of the
particular time of determination on any of the foregoing bases, the Bid Price of such security as of such time of determination shall
be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon
the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 15. All
such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction
during such period.
(h)
“Black Scholes Consideration Value” means the value of the applicable Option, Convertible Security or Adjustment
Right (as the case may be) as of the date of issuance thereof calculated using the Black Scholes Option Pricing Model obtained from the
“OV” function on Bloomberg utilizing (i) an underlying price per share equal to the Closing Sale Price of the Common Stock
on the Trading Day immediately preceding the public announcement of the execution of definitive documents with respect to the issuance
of such Option or Convertible Security (as the case may be), (ii) a risk-free interest rate corresponding to the U.S. Treasury rate for
a period equal to the remaining term of such Option, Convertible Security or Adjustment Right (as the case may be) as of the date of issuance
of such Option, Convertible Security or Adjustment Right (as the case may be), (iii) a zero cost of borrow and (iv) an expected volatility
equal to the greater of 100% and the 30 day volatility obtained from the “HVT” function on Bloomberg (determined utilizing
a 365 day annualization factor) as of the Trading Day immediately following the date of issuance of such Option, Convertible Security
or Adjustment Right (as the case may be).
(i)
“Black Scholes Value” means the value of the unexercised portion of this Warrant remaining on the date of the
Holder’s request pursuant to Section 4(c), which value is calculated using the Black Scholes Option Pricing Model obtained
from the “OV” function on Bloomberg utilizing (i) an underlying price per share equal to the greater of (1) the highest Closing
Sale Price of the Common Stock during the period beginning on the Trading Day immediately preceding the announcement of the applicable
Fundamental Transaction (or the consummation of the applicable Fundamental Transaction, if earlier) and ending on the Trading Day of the
Holder’s request pursuant to Section 4(c) and (2) the sum of the price per share being offered in cash in the applicable Fundamental
Transaction (if any) plus the value of the non-cash consideration being offered in the applicable Fundamental Transaction (if any), (ii)
a strike price equal to the Exercise Price in effect on the date of the Holder’s request pursuant to Section 4(c), (iii) a
risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the greater of (1) the remaining term of this Warrant
as of the date of the Holder’s request pursuant to Section 4(c) and (2) the remaining term of this Warrant as of the date of
consummation of the applicable Fundamental Transaction or as of the date of the Holder’s request pursuant to Section 4(c) if
such request is prior to the date of the consummation of the applicable Fundamental Transaction, (iv) a zero cost of borrow and (v) an
expected volatility equal to the greater of 100% and the 30 day volatility obtained from the “HVT” function on Bloomberg (determined
utilizing a 365 day annualization factor) as of the Trading Day immediately following the earliest to occur of (A) the public disclosure
of the applicable Fundamental Transaction and (B) the date of the Holder’s request pursuant to Section 4(c).
(j)
“Bloomberg” means Bloomberg, L.P.
(k)
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City
of New York are authorized or required by law to remain closed; provided, however,
for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”,
“shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure
of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including
for wire transfers) of commercial banks in The City of New York generally are open for use by customers on such day.
(l)
“Closing Sale Price” means, for any security as of any date, the last closing trade price for such security
on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not
designate the closing trade price, then the last trade price of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg,
or, if the Principal Market is not the principal securities exchange or trading market for such security, the last trade price of such
security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if
the foregoing does not apply, the last trade price of such security in the over-the-counter market on the electronic bulletin board for
such security as reported by Bloomberg, or, if no last trade price is reported for such security by Bloomberg, the average of the ask
prices of any market makers for such security as reported in The Pink Open Market (or a similar organization or agency succeeding to its
functions of reporting prices). If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing
bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually determined by the Company and the
Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved
in accordance with the procedures in Section 15. All such determinations shall be appropriately adjusted for any stock dividend,
stock split, stock combination or other similar transaction during such period.
(m)
“Common Stock” means (i) the Company’s shares of common stock, $0.0001 par value per share, and (ii)
any capital stock into which such common stock shall have been changed or any share capital resulting from a reclassification of such
common stock.
(n)
“Convertible Securities” means any stock or other security (other than Options) that is at any time and under
any circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof
to acquire, any shares of Common Stock.
(o)
“Eligible Market” means The New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, the
Nasdaq Global Market, the Nasdaq Capital Market or the Principal Market.
(p)
“Event of Default Black Scholes Value” means the value of the unexercised portion of this Warrant remaining
on the date of the Holder’s request pursuant to Section 4(c), which value is calculated using the Black Scholes Option Pricing
Model obtained from the “OV” function on Bloomberg utilizing (i) an underlying price per share equal to the highest Closing
Sale Price of the Common Stock during the period beginning on the date of the occurrence of the Event of Default through the date all
Events of Default have been cured (assuming for such purpose that the Notes remain outstanding) or, if earlier, the Trading Day of the
Holder’s request pursuant to Section 4(c), (ii) a strike price equal to the Exercise Price in effect on the date of the Holder’s
request pursuant to Section 4(c), (iii) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the
greater of (1) the remaining term of this Warrant as of the date of the Holder’s request pursuant to Section 4(c) and (2) the
remaining term of this Warrant as of the date of the occurrence of such Event of Default, (iv) a zero cost of borrow and (v) an expected
volatility equal to the greater of 100% and the 30 day volatility obtained from the “HVT” function on Bloomberg (determined
utilizing a 365 day annualization factor) as of the Trading Day immediately following later of (x) the date of the occurrence of such
Event of Default and (y) the date of the public announcement of such Event of Default.
(q)
“Excluded Securities” means (i) any and all restricted stock units, shares of Common Stock or options to purchase
Common Stock issued to directors, officers, employees and consultants of the Company for services rendered to the Company in their capacity
as such pursuant to an Approved Stock Plan (as defined above); (ii) shares of Common Stock issued upon the conversion or exercise of Convertible
Securities (other than restricted stock units and standard options to purchase Common Stock issued pursuant to an Approved Stock Plan
that are covered by clause (i) above) issued prior to the Subscription Date, provided that the conversion price of any such Convertible
Securities (other than restricted stock units and standard options to purchase Common Stock issued pursuant to an Approved Stock Plan
that are covered by clause (i) above) is not lowered, none of such Convertible Securities (other than restricted stock units and standard
options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) are amended to increase
the number of shares issuable thereunder and none of the terms or conditions of any such Convertible Securities (other than restricted
stock units and standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above)
are otherwise materially changed in any manner that adversely affects any of the Buyers; and (iii) the shares of Common Stock issuable
upon exercise of the SPA Warrants; provided, that the terms of the SPA Warrant are not amended, modified or changed on or after the Subscription
Date (other than antidilution adjustments pursuant to the terms thereof in effect as of the Subscription Date).
(r)
“Expiration Date” means the date that is the fifth (5th) anniversary of the Issuance Date or, if
such date falls on a day other than a Trading Day or on which trading does not take place on the Principal Market (a “Holiday”),
the next date that is not a Holiday.
(s)
“Fundamental Transaction” means (A) that the Company shall, directly or indirectly, including through subsidiaries,
Affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the
surviving corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all
of the properties or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation
S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject
to or have its Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange offer that is
accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of Common
Stock calculated as if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated with any Subject Entities
making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares of Common Stock such that
all Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such purchase, tender or exchange offer,
become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common
Stock, or (iv) consummate a stock or share purchase agreement or other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with one or more Subject Entities whereby all such Subject Entities, individually
or in the aggregate, acquire, either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding shares
of Common Stock calculated as if any shares of Common Stock held by all the Subject Entities making or party to, or Affiliated with any
Subject Entity making or party to, such stock purchase agreement or other business combination were not outstanding; or (z) such number
of shares of Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3 under the
1934 Act) of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its Common Stock, (B)
that the Company shall, directly or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions,
allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the “beneficial owner” (as
defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance, tender,
tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination, reorganization,
recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner whatsoever,
of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock, (y) at least 50%
of the aggregate ordinary voting power represented by issued and outstanding Common Stock not held by all such Subject Entities as of
the date of this Warrant calculated as if any shares of Common Stock held by all such Subject Entities were not outstanding, or (z) a
percentage of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock or other equity securities
of the Company sufficient to allow such Subject Entities to effect a statutory short form merger or other transaction requiring other
shareholders of the Company to surrender their shares of Common Stock without approval of the shareholders of the Company or (C) directly
or indirectly, including through subsidiaries, Affiliates or otherwise, in one or more related transactions, the issuance of or the entering
into any other instrument or transaction structured in a manner to circumvent, or that circumvents, the intent of this definition in which
case this definition shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this definition
to the extent necessary to correct this definition or any portion of this definition which may be defective or inconsistent with the intended
treatment of such instrument or transaction.
(t)
“Group” means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in
Rule 13d-5 thereunder.
(u)
“Notes” has the meaning ascribed to such term in the Securities Purchase Agreement, and shall include all notes
issued in exchange therefor or replacement thereof.
(v)
“Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible
Securities.
(w)
“Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and
whose common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person
or Parent Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental
Transaction.
(x)
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a
trust, an unincorporated organization, any other entity or a government or any department or agency thereof.
(y)
“Principal Market” means the Nasdaq Capital Market.
(z)
“Registration Rights Agreement” means that certain registration rights agreement, dated as of the Closing Date,
by and among the Company and the initial holders of the Notes relating to, among other things, the registration of the resale of the Common
Stock issuable pursuant to the Securities Purchase Agreement and upon exercise of the SPA Warrants, as may be amended from time to time.
(aa)
“SEC” means the United States Securities and Exchange Commission or the successor thereto.
(bb)
“Subject Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons
or Group.
(cc)
“Successor Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting
from or surviving any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental
Transaction shall have been entered into.
(dd)
“Trading Day” means, as applicable, (x) with respect to all price or trading volume determinations relating
to the Common Stock, any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal
trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then
traded, provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange
or market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such
exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market,
then during the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise designated as a Trading Day in writing by the
Holder or (y) with respect to all determinations other than price or trading volume determinations relating to the Common Stock, any day
on which The New York Stock Exchange (or any successor thereto) is open for trading of securities.
(ee)
“VWAP” means, for any security as of any date, the dollar volume-weighted average price for such security on
the Principal Market (or, if the Principal Market is not the principal trading market for such security, then on the principal securities
exchange or securities market on which such security is then traded), during the period beginning at 9:30 a.m., New York time, and ending
at 4:00 p.m., New York time, as reported by Bloomberg through its “VAP” function (set to 09:30 start time and 16:00 end time)
or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic
bulletin board for such security during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m., New York time, as reported
by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of
the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in The Pink Open
Market (or a similar organization or agency succeeding to its functions of reporting prices). If the VWAP cannot be calculated for such
security on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as mutually
determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security,
then such dispute shall be resolved in accordance with the procedures in Section 15. All such determinations shall be appropriately
adjusted for any stock dividend, stock split, stock combination, recapitalization or other similar transaction during such period.
[signature page follows]
IN WITNESS WHEREOF,
the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out above.
| ACLARION, Inc. |
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| By:
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| | Name: |
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| | Title: |
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EXHIBIT A
EXERCISE NOTICE
TO BE EXECUTED
BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT TO PURCHASE COMMON STOCK
ACLARION,
INC.
The undersigned holder hereby
elects to exercise the Warrant to Purchase Common Stock No. _______ (the “Warrant”) of Aclarion, Inc., a Delaware
corporation (the “Company”) as specified below. Capitalized terms used herein and not otherwise defined shall have
the respective meanings set forth in the Warrant.
1.Form
of Exercise Price. The Holder intends that payment of the Aggregate Exercise Price shall be made as:
| [_] | a “Cash Exercise” with respect to _________________ Warrant
Shares; and/or |
| [_] | a “Cashless Exercise” with respect to _______________
Warrant Shares. |
In the event that the Holder
has elected a Cashless Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto, the Holder hereby represents
and warrants that (i) this Exercise Notice was executed by the Holder at __________ [a.m.][p.m.] on the date set forth below and (ii)
if applicable, the Bid Price as of such time of execution of this Exercise Notice was $________.
2.Payment
of Exercise Price. In the event that the Holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to be
issued pursuant hereto, the Holder shall pay the Aggregate Exercise Price in the sum of $___________________
to the Company in accordance with the terms of the Warrant.
3.Delivery
of Warrant Shares. The Company shall deliver to Holder, or its designee or agent as specified below, __________ shares of Common
Stock in accordance with the terms of the Warrant. Delivery shall be made to Holder, or for its benefit,
as follows:
[_]Check
here if requesting delivery as a certificate to the following name and to the following address:
| [_] | Check here if requesting delivery by Deposit/Withdrawal at Custodian as follows: |
DTC Participant: |
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DTC Number: |
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Account Number: |
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Date: _____________ __,
____________________
Name of Registered Holder
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By: _________________________
Name:
Title:
Tax ID:____________________________
Facsimile:__________________________
E-mail Address:_____________________
|
EXHIBIT B
ACKNOWLEDGMENT
The
Company hereby acknowledges this Exercise Notice and hereby directs ______________ to issue the above indicated number
of shares of Common Stock in accordance with the Transfer Agent Instructions dated _________, 202_, from the Company and acknowledged
and agreed to by _______________.
| ACLARION, Inc. |
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| By:
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| | Name: |
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| | Title: |
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Exhibit 10.4
FORM FINAL
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS
AGREEMENT (this “Agreement”), dated as of November 21, 2023, is by and among Aclarion, Inc., a Delaware corporation
with offices located at 8181 Arista Place, Suite 100, Broomfield, CO 80021 (the “Company”), and the undersigned buyers
(each, a “Buyer,” and collectively, the “Buyers”).
RECITALS
A.In
connection with the Securities Purchase Agreement by and among the parties hereto, dated as of November 21, 2023 (the “Securities
Purchase Agreement”), the Company has agreed, upon the terms and subject to the conditions of the Securities Purchase Agreement,
to issue and sell to each Buyer (i) the Notes (as defined in the Securities Purchase Agreement), (ii) the Commitment Shares (as defined
in the Securities Purchase Agreement) and (iii) the Warrants (as defined in the Securities Purchase Agreement) which will be exercisable
to purchase Warrant Shares (as defined in the Securities Purchase Agreement) in accordance with the terms of the Warrants.
B.To
induce the Buyers to consummate the transactions contemplated by the Securities Purchase Agreement, the Company has agreed to provide
certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor
statute (collectively, the “1933 Act”), and applicable state securities laws.
AGREEMENT
NOW, THEREFORE, in
consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and each of the Buyers hereby agree as follows:
1.
Definitions.
Capitalized terms used herein
and not otherwise defined herein shall have the respective meanings set forth in the Securities Purchase Agreement. As used in this Agreement,
the following terms shall have the following meanings:
(a)“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial
banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”,
“non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations
at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial
banks in The City of New York generally are open for use by customers on such day.
(b)“Closing
Date” shall have the meaning set forth in the Securities Purchase Agreement.
(c)“Effective
Date” means the date that the applicable Registration Statement has been declared effective by the SEC.
(d)“Effectiveness
Deadline” means (i) with respect to the initial Registration Statement required to be filed pursuant to Section 2(a), the
earlier of the (A) 60th calendar day after the Closing Date and (B) 4th Business Day after the date the Company is notified
(orally or in writing, whichever is earlier) by the SEC that such Registration Statement will not be reviewed or will not be subject to
further review and (ii) with respect to any additional Registration Statements that may be required to be filed by the Company pursuant
to this Agreement, the earlier of the (A) 60th calendar day following the date on which the Company was required to file such
additional Registration Statement and (B) 4th Business Day after the date the Company is notified (orally or in writing, whichever is
earlier) by the SEC that such Registration Statement will not be reviewed or will not be subject to further review.
(e)“Filing
Deadline” means (i) with respect to the initial Registration Statement required to be filed pursuant to Section 2(a), the
30th calendar day after the Closing Date and (ii) with respect to any additional Registration Statements that may be required
to be filed by the Company pursuant to this Agreement, the date on which the Company was required to file such additional Registration
Statement pursuant to the terms of this Agreement.
(f)“Investor”
means a Buyer or any transferee or assignee of any Registrable Securities or Warrants, as applicable, to whom a Buyer assigns its rights
under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9 and any transferee
or assignee thereof to whom a transferee or assignee of any Registrable Securities or Warrants, as applicable, assigns its rights under
this Agreement and who agrees to become bound by the provisions of this Agreement in accordance with Section 9.
(g)“Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization
or a government or any department or agency thereof.
(h)“register,”
“registered,” and “registration” refer to a registration effected by preparing and filing one or
more Registration Statements in compliance with the 1933 Act and pursuant to Rule 415 and the declaration of effectiveness of such Registration
Statement(s) by the SEC.
(i)“Registrable
Securities” means (i) the Commitment Shares, (ii) the Warrant Shares and (iii) any capital stock of the Company issued or issuable
with respect to the Commitment Shares, the Warrant Shares or the Warrants, including, without limitation, (1) as a result of any stock
split, stock dividend, recapitalization, exchange or similar event or otherwise and (2) shares of capital stock of the Company into which
the shares of Common Stock (as defined in the Warrants) are converted or exchanged and shares of capital stock of a Successor Entity (as
defined in the Warrants) into which the shares of Common Stock are converted or exchanged, in each case, without regard to any limitations
on exercise of the Warrants.
(j)“Registration
Statement” means a registration statement or registration statements of the Company filed under the 1933 Act covering Registrable
Securities.
(k)“Required
Holders” means, as of any given time, the holders of a majority of the Registrable Securities as of such time (excluding any
Registrable Securities held by the Company or any of its Subsidiaries as of such time).
(l)“Required
Registration Amount” the sum of (i) the number of Commitment Shares issued pursuant to the Securities Purchase Agreement, and
(ii) 100% of the maximum number of Warrant Shares issuable upon exercise of the Warrants pursuant to the terms of the Warrants (without
taking into account any limitations on the exercise of the Warrants set forth therein), all subject to adjustment as provided in Section 2(d)
and/or Section 2(f).
(m)“Rule
144” means Rule 144 promulgated by the SEC under the 1933 Act, as such rule may be amended from time to time, or any other similar
or successor rule or regulation of the SEC that may at any time permit the Investors to sell securities of the Company to the public without
registration.
(n)“Rule
415” means Rule 415 promulgated by the SEC under the 1933 Act, as such rule may be amended from time to time, or any other similar
or successor rule or regulation of the SEC providing for offering securities on a continuous or delayed basis.
(o)“SEC”
means the United States Securities and Exchange Commission or any successor thereto.
2.
Registration.
(a)
Mandatory Registration. The Company shall prepare and, as soon as practicable, but in no event later than the Filing Deadline,
file with the SEC an initial Registration Statement on Form S-3 covering the resale of all of the Registrable Securities, provided that
such initial Registration Statement shall register for resale at least the number of shares of Common Stock equal to the Required Registration
Amount as of the date such Registration Statement is initially filed with the SEC; provided further that if Form S-3 is unavailable for
such a registration, the Company shall use such other form as is required by Section 2(c). Such initial Registration Statement, and each
other Registration Statement required to be filed pursuant to the terms of this Agreement, shall contain (except if otherwise directed
by the Required Holders) the “Selling Stockholders” and “Plan of Distribution” sections in substantially
the form attached hereto as Exhibit B. The Company shall use its reasonable best efforts to have such initial Registration Statement,
and each other Registration Statement required to be filed pursuant to the terms of this Agreement, declared effective by the SEC as soon
as practicable, but in no event later than the applicable Effectiveness Deadline for such Registration Statement.
(b)
Legal Counsel. Subject to Section 5 hereof, Kelley Drye & Warren LLP, counsel solely to the lead investor (“Legal
Counsel”) shall review and oversee any registration, solely on behalf of the lead investor, pursuant to this Section 2.
(c)
Ineligibility to Use Form S-3. In the event that Form S-3 is not available for the registration of the resale of Registrable
Securities hereunder, the Company shall (i) register the resale of the Registrable Securities on Form S-1 or another appropriate form
reasonably acceptable to the Required Holders and (ii) undertake to register the resale of the Registrable Securities on Form S-3
as soon as such form is available, provided that the Company shall maintain the effectiveness of all Registration Statements then in effect
until such time as a Registration Statement on Form S-3 covering the resale of all the Registrable Securities has been declared effective
by the SEC and the prospectus contained therein is available for use.
(d)
Sufficient Number of Shares Registered. In the event the number of shares available under any Registration Statement is
insufficient to cover all of the Registrable Securities required to be covered by such Registration Statement or an Investor’s allocated
portion of the Registrable Securities pursuant to Section 2(h), the Company shall amend such Registration Statement (if permissible),
or file with the SEC a new Registration Statement (on the short form available therefor, if applicable), or both, so as to cover at least
the Required Registration Amount as of the Trading Day immediately preceding the date of the filing of such amendment or new Registration
Statement, in each case, as soon as practicable, but in any event not later than fifteen (15) days after the necessity therefor arises
(but taking account of any Staff position with respect to the date on which the Staff will permit such amendment to the Registration Statement
and/or such new Registration Statement (as the case may be) to be filed with the SEC). The Company shall use its reasonable best efforts
to cause such amendment to such Registration Statement and/or such new Registration Statement (as the case may be) to become effective
as soon as practicable following the filing thereof with the SEC, but in no event later than the applicable Effectiveness Deadline for
such Registration Statement. For purposes of the foregoing provision, the number of shares available under a Registration Statement shall
be deemed “insufficient to cover all of the Registrable Securities” if at any time during the Registration Period (as defined
below) the number of shares of Common Stock available for resale under the applicable Registration Statement is less than the product
determined by multiplying (i) the Required Registration Amount as of such time by (ii) 0.75. The calculation set forth in the foregoing
sentence shall be made without regard to any limitations on exercise of the Warrants (and such calculation shall assume that the Warrants
are then fully exercisable for shares of Common Stock at the then-prevailing applicable Exercise Price (as defined in the Warrants)).
(e)
Effect of Failure to File and Obtain and Maintain Effectiveness of any Registration Statement. If (i) a Registration Statement
covering the resale of all of the Registrable Securities required to be covered thereby (disregarding any reduction pursuant to Section 2(f))
and required to be filed by the Company pursuant to this Agreement is (A) not filed with the SEC on or before the Filing Deadline for
such Registration Statement (a “Filing Failure”) (it being understood that if the Company files a Registration Statement
without affording each Investor and Legal Counsel the opportunity to review and comment on the same as required by Section 3(c) hereof,
the Company shall be deemed to not have satisfied this clause (i)(A) and such event shall be deemed to be a Filing Failure) or (B)
not declared effective by the SEC on or before the Effectiveness Deadline for such Registration Statement (an “Effectiveness
Failure”) (it being understood that if on the Business Day immediately following the Effective Date for such Registration Statement
the Company shall not have filed a “final” prospectus for such Registration Statement with the SEC under Rule 424(b) in accordance
with Section 3(b) (whether or not such a prospectus is technically required by such rule), the Company shall be deemed to not have
satisfied this clause (i)(B) and such event shall be deemed to be an Effectiveness Failure), (ii) other than during an Allowable Grace
Period (as defined below), on any day after the Effective Date of a Registration Statement sales of all of the Registrable Securities
required to be included on such Registration Statement (disregarding any reduction pursuant to Section 2(f)) cannot be made pursuant
to such Registration Statement (including, without limitation, because of a failure to keep such Registration Statement effective, a failure
to disclose such information as is necessary for sales to be made pursuant to such Registration Statement, a suspension or delisting of
(or a failure to timely list) the shares of Common Stock on the Principal Market (as defined in the Securities Purchase Agreement) or
any other limitations imposed by the Principal Market, or a failure to register a sufficient number of shares of Common Stock or by reason
of a stop order) or the prospectus contained therein is not available for use for any reason (a “Maintenance Failure”),
or (iii) if a Registration Statement is not effective for any reason or the prospectus contained therein is not available for use for
any reason, and either (x) the Company fails for any reason to satisfy the requirements of Rule 144(c)(1), including, without limitation,
the failure to satisfy the current public information requirement under Rule 144(c) or (y) the Company has ever been an issuer described
in Rule 144(i)(1)(i) or becomes such an issuer in the future, and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2)
(a “Current Public Information Failure”) as a result of which any of the Investors are unable to sell Registrable Securities
without restriction under Rule 144 (including, without limitation, volume restrictions), then, as partial relief for the damages
to any holder by reason of any such delay in, or reduction of, its ability to sell the underlying shares of Common Stock (which remedy
shall not be exclusive of any other remedies available at law or in equity, including, without limitation, specific performance), the
Company shall pay to each holder of Registrable Securities relating to such Registration Statement an amount in cash equal to one percent
(1%) of the aggregate Purchase Price (as such term is defined in the Securities Purchase Agreement): (1) on the date of such Filing Failure,
Effectiveness Failure, Maintenance Failure or Current Public Information Failure, as applicable, and (2) on every thirty (30) day anniversary
of (I) a Filing Failure until such Filing Failure is cured; (II) an Effectiveness Failure until such Effectiveness Failure is cured; (III) a
Maintenance Failure until such Maintenance Failure is cured; and (IV) a Current Public Information Failure until the earlier of (i) the
date such Current Public Information Failure is cured and (ii) such time that such public information is no longer required pursuant to
Rule 144 (in each case, pro rated for periods totaling less than thirty (30) days). The payments to which a holder of Registrable
Securities shall be entitled pursuant to this Section 2(e) are referred to herein as “Registration Delay Payments.”
Following the initial Registration Delay Payment for any particular event or failure (which shall be paid on the date of such event or
failure, as set forth above), without limiting the foregoing, if an event or failure giving rise to the Registration Delay Payments is
cured prior to any thirty (30) day anniversary of such event or failure, then such Registration Delay Payment shall be made on the third
(3rd) Business Day after such cure. In the event the Company fails to make Registration Delay Payments in a timely manner in
accordance with the foregoing, such Registration Delay Payments shall bear interest at the rate of one percent (1%) per month (prorated
for partial months) until paid in full. Notwithstanding the foregoing, no Registration Delay Payments shall be owed to an Investor (other
than with respect to a Maintenance Failure resulting from a suspension or delisting of (or a failure to timely list) the shares of Common
Stock on the Principal Market) with respect to any period during which all of such Investor’s Registrable Securities may be sold
by such Investor without restriction under Rule 144 (including, without limitation, volume restrictions) and without the need for current
public information required by Rule 144(c)(1) (or Rule 144(i)(2), if applicable).
(f)
Offering. Notwithstanding anything to the contrary contained in this Agreement, in the event the staff of the SEC (the “Staff”)
or the SEC seeks to characterize any offering pursuant to a Registration Statement filed pursuant to this Agreement as constituting
an offering of securities by, or on behalf of, the Company, or in any other manner, such that the Staff or the SEC do not permit
such Registration Statement to become effective and used for resales in a manner that does not constitute such an offering and that permits
the continuous resale at the market by the Investors participating therein (or as otherwise may be acceptable to each Investor)
without being named therein as an “underwriter,” then the Company shall reduce the number of shares to be included in such
Registration Statement by all Investors until such time as the Staff and the SEC shall so permit such Registration Statement to become
effective as aforesaid. In making such reduction, the Company shall reduce the number of shares to be included by all Investors on a pro
rata basis (based upon the number of Registrable Securities otherwise required to be included for each Investor) unless the inclusion
of shares by a particular Investor or a particular set of Investors are resulting in the Staff or the SEC’s “by or on behalf
of the Company” offering position, in which event the shares held by such Investor or set of Investors shall be the only shares
subject to reduction (and if by a set of Investors on a pro rata basis by such Investors or on such other basis as would result in the
exclusion of the least number of shares by all such Investors); provided, that, with respect to such pro rata portion allocated to any
Investor, such Investor may elect the allocation of such pro rata portion among the Registrable Securities of such Investor. In addition,
in the event that the Staff or the SEC requires any Investor seeking to sell securities under a Registration Statement filed pursuant
to this Agreement to be specifically identified as an “underwriter” in order to permit such Registration Statement to
become effective, and such Investor does not consent to being so named as an underwriter in such Registration Statement, then, in
each such case, the Company shall reduce the total number of Registrable Securities to be registered on behalf of such Investor, until
such time as the Staff or the SEC does not require such identification or until such Investor accepts such identification and the manner
thereof. Any reduction pursuant to this paragraph will first reduce all Registrable Securities other than those issued pursuant to
the Securities Purchase Agreement. In the event of any reduction in Registrable Securities pursuant to this paragraph, an
affected Investor shall have the right to require, upon delivery of a written request to the Company signed by such Investor, the Company
to file a registration statement within twenty (20) days of such request (subject to any restrictions imposed by Rule 415 or required by
the Staff or the SEC) for resale by such Investor in a manner acceptable to such Investor, and the Company shall following such request cause
to be and keep effective such registration statement in the same manner as otherwise contemplated in this Agreement for registration
statements hereunder, in each case until such time as: (i) all Registrable Securities held by such Investor have been registered
and sold pursuant to an effective Registration Statement in a manner acceptable to such Investor or (ii) all Registrable Securities
may be resold by such Investor without restriction (including, without limitation, volume limitations) pursuant to Rule 144 (taking
account of any Staff position with respect to “affiliate” status) and without the need for current public information required
by Rule 144(c)(1) (or Rule 144(i)(2), if applicable) or (iii) such Investor agrees to be named as an underwriter in any such Registration
Statement in a manner acceptable to such Investor as to all Registrable Securities held by such Investor and that have not theretofore
been included in a Registration Statement under this Agreement (it being understood that the special demand right under this sentence
may be exercised by an Investor multiple times and with respect to limited amounts of Registrable Securities in order to permit the resale
thereof by such Investor as contemplated above).
(g)
Piggyback Registrations. Without limiting any obligation of the Company hereunder or under the Securities Purchase Agreement,
if after there is not an effective Registration Statement covering all of the Registrable Securities or the prospectus contained therein
is not available for use and the Company shall determine to prepare and file with the SEC a registration statement or an offering statement
relating to an offering for its own account or the account of others under the 1933 Act of any of its equity securities (other than on
Form S-4 or Form S-8 (each as promulgated under the 1933 Act) or their then equivalents relating to equity securities to be issued solely
in connection with any acquisition of any entity or business or equity securities issuable in connection with the Company’s stock
option or other employee benefit plans), then the Company shall deliver to each Investor a written notice of such determination and, if
within fifteen (15) days after the date of the delivery of such notice, any such Investor shall so request in writing, the Company
shall include in such registration statement or offering statement all or any part of such Registrable Securities such Investor requests
to be registered; provided, however, the Company shall not be required to register any Registrable Securities pursuant to this Section 2(g)
that are eligible for resale pursuant to Rule 144 without restriction (including, without limitation, volume restrictions) and without
the need for current public information required by Rule 144(c)(1) (or Rule 144(i)(2), if applicable) or that are the subject of
a then-effective Registration Statement.
(h)
Allocation of Registrable Securities. The initial number of Registrable Securities included in any Registration Statement
and any increase in the number of Registrable Securities included therein shall be allocated pro rata among the Investors based on the
number of Registrable Securities held by each Investor at the time such Registration Statement covering such initial number of Registrable
Securities or increase thereof is declared effective by the SEC. In the event that an Investor sells or otherwise transfers any of such
Investor’s Registrable Securities, each transferee or assignee (as the case may be) that becomes an Investor shall be allocated
a pro rata portion of the then-remaining number of Registrable Securities included in such Registration Statement for such transferor
or assignee (as the case may be). Any shares of Common Stock included in a Registration Statement and which remain allocated to any Person
which ceases to hold any Registrable Securities covered by such Registration Statement shall be allocated to the remaining Investors,
pro rata based on the number of Registrable Securities then held by such Investors which are covered by such Registration Statement.
(i)
No Inclusion of Other Securities. Except for the securities set forth on Schedule 2(i) (which, for the avoidance of doubt,
in the event of the SEC requires a reduction of the aggregate number of shares of Common Stock to be registered on a Registration Statement,
shall be reduced in full prior to any reduction of the aggregate number of Registrable Securities to be included on such Registration
Statement), the Company shall in no event include any securities other than Registrable Securities on any Registration Statement filed
in accordance herewith without the prior written consent of the Required Holders. Until the Applicable Date (as defined in the Securities
Purchase Agreement), the Company shall not enter into any agreement providing any registration rights to any of its security holders,
except as otherwise permitted under the Securities Purchase Agreement.
3.
Related Obligations.
The Company shall use its
reasonable best efforts to effect the registration of the Registrable Securities in accordance with the intended method of disposition
thereof, and, pursuant thereto, the Company shall have the following obligations:
(a)
The Company shall promptly prepare and file with the SEC a Registration Statement with respect to all the Registrable Securities
(but in no event later than the applicable Filing Deadline) and use its reasonable best efforts to cause such Registration Statement to
become effective as soon as practicable after such filing (but in no event later than the Effectiveness Deadline). Subject to Allowable
Grace Periods, the Company shall keep each Registration Statement effective (and the prospectus contained therein available for use) pursuant
to Rule 415 for resales by the Investors on a delayed or continuous basis at then-prevailing market prices (and not fixed prices) at all
times until the earlier of (i) the date as of which all of the Investors may sell all of the Registrable Securities required to be covered
by such Registration Statement (disregarding any reduction pursuant to Section 2(f)) without restriction pursuant to Rule 144 (including,
without limitation, volume restrictions) and without the need for current public information required by Rule 144(c)(1) (or Rule 144(i)(2),
if applicable) or (ii) the date on which the Investors shall have sold all of the Registrable Securities covered by such Registration
Statement (the “Registration Period”). Notwithstanding anything to the contrary contained in this Agreement, the Company
shall ensure that, when filed and at all times while effective, each Registration Statement (including, without limitation, all amendments
and supplements thereto) and the prospectus (including, without limitation, all amendments and supplements thereto) used in connection
with such Registration Statement (1) shall not contain any untrue statement of a material fact or omit to state a material fact required
to be stated therein, or necessary to make the statements therein (in the case of prospectuses, in the light of the circumstances in which
they were made) not misleading and (2) will disclose (whether directly or through incorporation by reference to other SEC filings to the
extent permitted) all material information regarding the Company and its securities. The Company shall submit to the SEC, within four
(4) Business Days after the later of the date that (i) the Company learns that no review of a particular Registration Statement will be
made by the Staff or that the Staff has no further comments on a particular Registration Statement (as the case may be) and (ii) the consent
of Legal Counsel is obtained pursuant to Section 3(c) (which consent shall be immediately sought), a request for acceleration of
effectiveness of such Registration Statement to a time and date not later than forty eight (48) hours after the submission of such
request. The Company shall respond in writing to comments made by the SEC in respect of a Registration Statement as soon as practicable,
but in no event later than twenty one (21) days after the receipt of comments by or notice from the SEC that an amendment is required
in order for a Registration Statement to be declared effective.
(b)
Subject to Section 3(r) of this Agreement, the Company shall prepare and file with the SEC such amendments (including, without
limitation, post-effective amendments) and supplements to each Registration Statement and the prospectus used in connection with each
such Registration Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may be necessary
to keep each such Registration Statement effective at all times during the Registration Period for such Registration Statement, and, during
such period, comply with the provisions of the 1933 Act with respect to the disposition of all Registrable Securities of the Company required
to be covered by such Registration Statement until such time as all of such Registrable Securities shall have been disposed of in accordance
with the intended methods of disposition by the seller or sellers thereof as set forth in such Registration Statement; provided, however,
by 8:30 a.m. (New York time) on the Business Day immediately following each Effective Date, the Company shall file with the SEC in accordance
with Rule 424(b) under the 1933 Act the final prospectus to be used in connection with sales pursuant to the applicable Registration Statement
(whether or not such a prospectus is technically required by such rule). In the case of amendments and supplements to any Registration
Statement which are required to be filed pursuant to this Agreement (including, without limitation, pursuant to this Section 3(b))
by reason of the Company filing a report on Form 8-K, Form 10-Q or Form 10-K or any analogous report under the Securities Exchange Act
of 1934, as amended (the “1934 Act”), the Company shall, if permitted under the applicable rules and regulations of
the SEC, have incorporated such report by reference into such Registration Statement, if applicable, or shall file such amendments or
supplements with the SEC on the same day on which the 1934 Act report is filed which created the requirement for the Company to amend
or supplement such Registration Statement.
(c)
The Company shall (A) permit Legal Counsel and legal counsel for each other Investor to review and comment upon (i) each Registration
Statement at least five (5) Business Days prior to its filing with the SEC and (ii) all amendments and supplements to each Registration
Statement (including, without limitation, the prospectus contained therein) (except for Annual Reports on Form 10-K, Quarterly Reports
on Form 10-Q, Current Reports on Form 8-K, and any similar or successor reports) within a reasonable number of days prior to their filing
with the SEC, and (B) not file any Registration Statement or amendment or supplement thereto in a form to which Legal Counsel or any legal
counsel for any other Investor reasonably objects. The Company shall not submit a request for acceleration of the effectiveness of a Registration
Statement or any amendment or supplement thereto or to any prospectus contained therein without the prior consent of Legal Counsel, which
consent shall not be unreasonably withheld. The Company shall promptly furnish to Legal Counsel and legal counsel for each other Investor,
without charge, (i) copies of any correspondence from the SEC or the Staff to the Company or its representatives relating to each Registration
Statement, provided that such correspondence shall not contain any material, non-public information regarding the Company or any of its
Subsidiaries (as defined in the Securities Purchase Agreement), (ii) after the same is prepared and filed with the SEC, one (1) copy
of each Registration Statement and any amendment(s) and supplement(s) thereto, including, without limitation, financial statements and
schedules, all documents incorporated therein by reference, if requested by an Investor, and all exhibits and (iii) upon the effectiveness
of each Registration Statement, one (1) copy of the prospectus included in such Registration Statement and all amendments and supplements
thereto. The Company shall reasonably cooperate with Legal Counsel and legal counsel for each other Investor in performing the Company’s
obligations pursuant to this Section 3.
(d)
The Company shall promptly furnish to each Investor whose Registrable Securities are included in any Registration Statement, without
charge, (i) after the same is prepared and filed with the SEC, at least one (1) copy of each Registration Statement and any amendment(s)
and supplement(s) thereto, including, without limitation, financial statements and schedules, all documents incorporated therein by reference,
if requested by an Investor, all exhibits and each preliminary prospectus, (ii) upon the effectiveness of each Registration Statement,
ten (10) copies of the prospectus included in such Registration Statement and all amendments and supplements thereto (or such other
number of copies as such Investor may reasonably request from time to time) and (iii) such other documents, including, without limitation,
copies of any preliminary or final prospectus, as such Investor may reasonably request from time to time in order to facilitate the disposition
of the Registrable Securities owned by such Investor.
(e)
The Company shall use its reasonable best efforts to (i) register and qualify, unless an exemption from registration and qualification
applies, the resale by Investors of the Registrable Securities covered by a Registration Statement under such other securities or “blue
sky” laws of all applicable jurisdictions in the United States, (ii) prepare and file in those jurisdictions, such amendments (including,
without limitation, post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain
the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations
and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable
to qualify the Registrable Securities for sale in such jurisdictions; provided, however, the Company shall not be required in connection
therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify
but for this Section 3(e), (y) subject itself to general taxation in any such jurisdiction, or (z) file a general consent to service
of process in any such jurisdiction. The Company shall promptly notify Legal Counsel, legal counsel for each other Investor and each Investor
who holds Registrable Securities of the receipt by the Company of any notification with respect to the suspension of the registration
or qualification of any of the Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction
in the United States or its receipt of actual notice of the initiation or threatening of any proceeding for such purpose.
(f)
The Company shall notify Legal Counsel, legal counsel for each other Investor and each Investor in writing of the happening of
any event, as promptly as practicable after becoming aware of such event, as a result of which the prospectus included in a Registration
Statement, as then in effect, may include an untrue statement of a material fact or omission to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (provided
that in no event shall such notice contain any material, non-public information regarding the Company or any of its Subsidiaries), and,
subject to Section 3(r), promptly prepare a supplement or amendment to such Registration Statement and such prospectus contained
therein to correct such untrue statement or omission and deliver ten (10) copies of such supplement or amendment to Legal Counsel, legal
counsel for each other Investor and each Investor (or such other number of copies as Legal Counsel, legal counsel for each other Investor
or such Investor may reasonably request). The Company shall also promptly notify Legal Counsel, legal counsel for each other Investor
and each Investor in writing (i) when a prospectus or any prospectus supplement or post-effective amendment has been filed, when a Registration
Statement or any post-effective amendment has become effective (notification of such effectiveness shall be delivered to Legal Counsel,
legal counsel for each other Investor and each Investor by facsimile or e-mail on the same day of such effectiveness and by overnight
mail), and when the Company receives written notice from the SEC that a Registration Statement or any post-effective amendment will be
reviewed by the SEC, (ii) of any request by the SEC for amendments or supplements to a Registration Statement or related prospectus or
related information, (iii) of the Company’s reasonable determination that a post-effective amendment to a Registration Statement
would be appropriate; and (iv) of the receipt of any request by the SEC or any other federal or state governmental authority for any additional
information relating to the Registration Statement or any amendment or supplement thereto or any related prospectus. The Company shall
respond as promptly as practicable to any comments received from the SEC with respect to each Registration Statement or any amendment
thereto (it being understood and agreed that the Company’s response to any such comments shall be delivered to the SEC no later
than fifteen (15) Business Days after the receipt thereof).
(g)
The Company shall (i) use its reasonable best efforts to prevent the issuance of any stop order or other suspension of effectiveness
of each Registration Statement or the use of any prospectus contained therein, or the suspension of the qualification, or the loss of
an exemption from qualification, of any of the Registrable Securities for sale in any jurisdiction and, if such an order or suspension
is issued, to obtain the withdrawal of such order or suspension at the earliest possible moment and (ii) notify Legal Counsel, legal counsel
for each other Investor and each Investor who holds Registrable Securities of the issuance of such order and the resolution thereof or
its receipt of actual notice of the initiation or threat of any proceeding for such purpose.
(h)
If any Investor may be required under applicable securities law to be described in any Registration Statement as an underwriter
and such Investor consents to so being named an underwriter, at the request of any Investor, the Company shall furnish to such Investor,
on the date of the effectiveness of such Registration Statement and thereafter from time to time on such dates as an Investor may reasonably
request (i) a letter, dated such date, from the Company’s independent certified public accountants in form and substance as is customarily
given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the Investors, and
(ii) an opinion, dated as of such date, of counsel representing the Company for purposes of such Registration Statement, in form, scope
and substance as is customarily given in an underwritten public offering, addressed to the Investors.
(i)
If any Investor may be required under applicable securities law to be described in any Registration Statement as an underwriter
and such Investor consents to so being named an underwriter, upon the written request of such Investor, the Company shall make available
for inspection by (i) such Investor, (ii) legal counsel for such Investor and (iii) one (1) firm of accountants or other agents retained
by such Investor (collectively, the “Inspectors”), all pertinent financial and other records, and pertinent corporate
documents and properties of the Company (collectively, the “Records”), as shall be reasonably deemed necessary by each
Inspector, and cause the Company’s officers, directors and employees to supply all information which any Inspector may reasonably
request; provided, however, each Inspector shall agree in writing to hold in strict confidence and not to make any disclosure (except
to such Investor) or use of any Record or other information which the Company’s board of directors determines in good faith to be
confidential, and of which determination the Inspectors are so notified, unless (1) the disclosure of such Records is necessary to avoid
or correct a misstatement or omission in any Registration Statement or is otherwise required under the 1933 Act, (2) the release of such
Records is ordered pursuant to a final, non-appealable subpoena or order from a court or government body of competent jurisdiction, or
(3) the information in such Records has been made generally available to the public other than by disclosure in violation of this Agreement
or any other Transaction Document (as defined in the Securities Purchase Agreement). Such Investor agrees that it shall, upon learning
that disclosure of such Records is sought in or by a court or governmental body of competent jurisdiction or through other means, give
prompt notice to the Company and allow the Company, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain
a protective order for, the Records deemed confidential. Nothing herein (or in any other confidentiality agreement between the Company
and such Investor, if any) shall be deemed to limit any Investor’s ability to sell Registrable Securities in a manner which is otherwise
consistent with applicable laws and regulations.
(j)
The Company shall hold in confidence and not make any disclosure of information concerning an Investor provided to the Company
unless (i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information
is necessary to avoid or correct a misstatement or omission in any Registration Statement or is otherwise required to be disclosed in
such Registration Statement pursuant to the 1933 Act, (iii) the release of such information is ordered pursuant to a subpoena or other
final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such information has been made generally
available to the public other than by disclosure in violation of this Agreement or any other Transaction Document. The Company agrees
that it shall, upon learning that disclosure of such information concerning an Investor is sought in or by a court or governmental body
of competent jurisdiction or through other means, give prompt written notice to such Investor and allow such Investor, at such Investor’s
expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information.
(k)
Without limiting any obligation of the Company under the Securities Purchase Agreement, the Company shall use its reasonable best
efforts either to (i) cause all of the Registrable Securities covered by each Registration Statement to be listed on each securities exchange
on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable Securities
is then permitted under the rules of such exchange, (ii) secure designation and quotation of all of the Registrable Securities covered
by each Registration Statement on an Eligible Market (as defined in the Securities Purchase Agreement), or (iii) if, despite the Company’s
reasonable best efforts to satisfy the preceding clauses (i) or (ii) the Company is unsuccessful in satisfying the preceding clauses
(i) or (ii), without limiting the generality of the foregoing, to use its reasonable best efforts to arrange for at least two market makers
to register with the Financial Industry Regulatory Authority (“FINRA”) as such with respect to such Registrable Securities.
In addition, the Company shall cooperate with each Investor and any broker or dealer through which any such Investor proposes to sell
its Registrable Securities in effecting a filing with FINRA pursuant to FINRA Rule 5110 as requested by such Investor. The Company shall
pay all fees and expenses in connection with satisfying its obligations under this Section 3(k).
(l)
The Company shall cooperate with the Investors who hold Registrable Securities being offered and, to the extent applicable, facilitate
the timely preparation and delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities to be
offered pursuant to a Registration Statement and enable such certificates to be in such denominations or amounts (as the case may be)
as the Investors may reasonably request from time to time and registered in such names as the Investors may request.
(m)
If requested by an Investor, the Company shall as soon as practicable after receipt of notice from such Investor and subject to
Section 3(r) hereof, (i) incorporate in a prospectus supplement or post-effective amendment such information as an Investor reasonably
requests to be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information
with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms
of the offering of the Registrable Securities to be sold in such offering; (ii) make all required filings of such prospectus supplement
or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment;
and (iii) supplement or make amendments to any Registration Statement or prospectus contained therein if reasonably requested by an Investor
holding any Registrable Securities.
(n)
The Company shall use its reasonable best efforts to cause the Registrable Securities covered by a Registration Statement to be
registered with or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such
Registrable Securities.
(o)
The Company shall make generally available to its security holders as soon as practical, but not later than ninety (90) days after
the close of the period covered thereby, an earnings statement (in form complying with, and in the manner provided by, the provisions
of Rule 158 under the 1933 Act) covering a twelve-month period beginning not later than the first day of the Company’s fiscal
quarter next following the applicable Effective Date of each Registration Statement.
(p)
The Company shall otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the SEC in connection
with any registration hereunder.
(q)
Within one (1) Business Day after a Registration Statement which covers Registrable Securities is declared effective by the SEC,
the Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities
(with copies to the Investors whose Registrable Securities are included in such Registration Statement) confirmation that such Registration
Statement has been declared effective by the SEC in the form attached hereto as Exhibit A.
(r)
Notwithstanding anything to the contrary herein (but subject to the last sentence of this Section 3(r)), at any time after
the Effective Date of a particular Registration Statement, the Company may delay the disclosure of material, non-public information concerning
the Company or any of its Subsidiaries the disclosure of which at the time is not, in the good faith opinion of the board of directors
of the Company, in the best interest of the Company and, in the opinion of counsel to the Company, otherwise required (a “Grace
Period”), provided that the Company shall promptly notify the Investors in writing of the (i) existence of material, non-public
information giving rise to a Grace Period (provided that in each such notice the Company shall not disclose the content of such material,
non-public information to any of the Investors) and the date on which such Grace Period will begin and (ii) date on which such Grace
Period ends, provided further that (I) no Grace Period shall exceed ten (10) consecutive Business Days and during any three hundred sixty
five (365) day period all such Grace Periods shall not exceed an aggregate of thirty (30) days, (II) the first day of any Grace Period
must be at least five (5) Trading Days after the last day of any prior Grace Period and (III) no Grace Period may exist during the
twenty (20) Trading Day period immediately following the Effective Date of such Registration Statement (provided that such sixty (60)
Trading Day period shall be extended by the number of Trading Days during such period and any extension thereof contemplated by this proviso
during which such Registration Statement is not effective or the prospectus contained therein is not available for use) (each, an “Allowable
Grace Period”). For purposes of determining the length of a Grace Period above, such Grace Period shall begin on and include
the date the Investors receive the notice referred to in clause (i) above and shall end on and include the later of the date the Investors
receive the notice referred to in clause (ii) above and the date referred to in such notice. The provisions of Section 3(g) hereof
shall not be applicable during the period of any Allowable Grace Period. Upon expiration of each Grace Period, the Company shall again
be bound by the first sentence of Section 3(f) with respect to the information giving rise thereto unless such material, non-public
information is no longer applicable. Notwithstanding anything to the contrary contained in this Section 3(r), the Company shall cause
its transfer agent to deliver unlegended shares of Common Stock to a transferee of an Investor in accordance with the terms of the Securities
Purchase Agreement in connection with any sale of Registrable Securities with respect to which such Investor has entered into a contract
for sale, and delivered a copy of the prospectus included as part of the particular Registration Statement to the extent applicable, prior
to such Investor’s receipt of the notice of a Grace Period and for which the Investor has not yet settled.
(s)
The Company shall take all other reasonable actions necessary to expedite and facilitate disposition by each Investors of its Registrable
Securities pursuant to each Registration Statement.
(t)
Neither the Company nor any Subsidiary or affiliate thereof shall identify any Investor as an underwriter in any public disclosure
or filing with the SEC, the Principal Market or any Eligible Market and any Buyer being deemed an underwriter by the SEC shall not relieve
the Company of any obligations it has under this Agreement or any other Transaction Document (as defined in the Securities Purchase Agreement);
provided, however, that the foregoing shall not prohibit the Company from including the disclosure found in the “Plan of Distribution”
section attached hereto as Exhibit B in the Registration Statement.
(u)
Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the Company or any of its Subsidiaries,
on or after the date of this Agreement, enter into any agreement with respect to its securities, that would have the effect of impairing
the rights granted to the Buyers in this Agreement or otherwise conflicts with the provisions hereof.
4.
Obligations of the Investors.
(a)
At least five (5) Business Days prior to the first anticipated filing date of each Registration Statement, the Company shall notify
each Investor in writing of the information the Company requires from each such Investor with respect to such Registration Statement.
It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect
to the Registrable Securities of a particular Investor that such Investor shall furnish to the Company such information regarding itself,
the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it, as shall be reasonably
required to effect and maintain the effectiveness of the registration of such Registrable Securities and shall execute such documents
in connection with such registration as the Company may reasonably request.
(b)
Each Investor, by such Investor’s acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of each Registration Statement hereunder, unless such Investor
has notified the Company in writing of such Investor’s election to exclude all of such Investor’s Registrable Securities from
such Registration Statement.
(c)
Each Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(g)
or the first sentence of 3(f), such Investor will immediately discontinue disposition of Registrable Securities pursuant to any Registration
Statement(s) covering such Registrable Securities until such Investor’s receipt of the copies of the supplemented or amended prospectus
contemplated by Section 3(g) or the first sentence of Section 3(f) or receipt of notice that no supplement or amendment is required.
Notwithstanding anything to the contrary in this Section 4(c), the Company shall cause its transfer agent to deliver unlegended shares
of Common Stock to a transferee of an Investor in accordance with the terms of the Securities Purchase Agreement in connection with any
sale of Registrable Securities with respect to which such Investor has entered into a contract for sale prior to the Investor’s
receipt of a notice from the Company of the happening of any event of the kind described in Section 3(g) or the first sentence of
Section 3(f) and for which such Investor has not yet settled.
5.
Expenses of Registration.
All reasonable expenses, other
than underwriting discounts and commissions, incurred in connection with registrations, filings or qualifications pursuant to Sections 2
and 3, including, without limitation, all registration, listing and qualifications fees, printers and accounting fees, FINRA filing fees
(if any) and fees and disbursements of counsel for the Company shall be paid by the Company. The Company shall reimburse Legal Counsel
for its fees and disbursements in connection with registration, filing or qualification pursuant to Sections 2 and 3 of this Agreement
which amount shall be limited to $5,000 for each such registration, filing or qualification.
6.
Indemnification.
(a)
To the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend each Investor and
each of its directors, officers, shareholders, members, partners, employees, agents, advisors, representatives (and any other Persons
with a functionally equivalent role of a Person holding such titles notwithstanding the lack of such title or any other title) and each
Person, if any, who controls such Investor within the meaning of the 1933 Act or the 1934 Act and each of the directors, officers, shareholders,
members, partners, employees, agents, advisors, representatives (and any other Persons with a functionally equivalent role of a Person
holding such titles notwithstanding the lack of such title or any other title) of such controlling Persons (each, an “Indemnified
Person”), against any losses, obligations, claims, damages, liabilities, contingencies, judgments, fines, penalties, charges,
costs (including, without limitation, court costs, reasonable attorneys’ fees and costs of defense and investigation), amounts paid
in settlement or expenses, joint or several, (collectively, “Claims”) incurred in investigating, preparing or defending
any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental,
administrative or other regulatory agency, body or the SEC, whether pending or threatened, whether or not an Indemnified Person is or
may be a party thereto (“Indemnified Damages”), to which any of them may become subject insofar as such Claims (or
actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement
or alleged untrue statement of a material fact in a Registration Statement or any post-effective amendment thereto or in any filing made
in connection with the qualification of the offering under the securities or other “blue sky” laws of any jurisdiction in
which Registrable Securities are offered (“Blue Sky Filing”), or the omission or alleged omission to state a material
fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus if used prior to the effective date of such Registration Statement,
or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with
the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in light
of the circumstances under which the statements therein were made, not misleading or (iii) any violation or alleged violation by the Company
of the 1933 Act, the 1934 Act, any other law, including, without limitation, any state securities law, or any rule or regulation thereunder
relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement or (iv) any violation of this Agreement
(the matters in the foregoing clauses (i) through (iv) being, collectively, “Violations”). Subject to Section 6(c),
the Company shall reimburse the Indemnified Persons, promptly as such expenses are incurred and are due and payable, for any legal fees
or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to
the contrary contained herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim by an
Indemnified Person arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished
in writing to the Company by such Indemnified Person for such Indemnified Person expressly for use in connection with the preparation
of such Registration Statement or any such amendment thereof or supplement thereto, if such prospectus was timely made available by the
Company pursuant to Section 3(d); and (ii) shall not apply to amounts paid in settlement of any Claim if such settlement is effected without
the prior written consent of the Company, which consent shall not be unreasonably withheld or delayed. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the transfer of
any of the Registrable Securities by any of the Investors pursuant to Section 9.
(b)
In connection with any Registration Statement in which an Investor is participating, such Investor agrees to severally and not
jointly indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 6(a), the Company,
each of its directors, each of its officers who signs the Registration Statement and each Person, if any, who controls the Company within
the meaning of the 1933 Act or the 1934 Act (each, an “Indemnified Party”), against any Claim or Indemnified Damages
to which any of them may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or Indemnified Damages arise
out of or are based upon any Violation, in each case, to the extent, and only to the extent, that such Violation occurs in reliance upon
and in conformity with written information furnished to the Company by such Investor expressly for use in connection with such Registration
Statement; and, subject to Section 6(c) and the below provisos in this Section 6(b), such Investor will reimburse an Indemnified
Party any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such
Claim; provided, however, the indemnity agreement contained in this Section 6(b) and the agreement with respect to contribution contained
in Section 7 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written
consent of such Investor, which consent shall not be unreasonably withheld or delayed, provided further that such Investor shall be liable
under this Section 6(b) for only that amount of a Claim or Indemnified Damages as does not exceed the net proceeds to such Investor
as a result of the applicable sale of Registrable Securities pursuant to such Registration Statement. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of such Indemnified Party and shall survive the transfer of any
of the Registrable Securities by any of the Investors pursuant to Section 9.
(c)
Promptly after receipt by an Indemnified Person or Indemnified Party (as the case may be) under this Section 6 of notice of
the commencement of any action or proceeding (including, without limitation, any governmental action or proceeding) involving a Claim,
such Indemnified Person or Indemnified Party (as the case may be) shall, if a Claim in respect thereof is to be made against any indemnifying
party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying
party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying
party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the
Indemnified Person or the Indemnified Party (as the case may be); provided, however, an Indemnified Person or Indemnified Party (as the
case may be) shall have the right to retain its own counsel with the fees and expenses of such counsel to be paid by the indemnifying
party if: (i) the indemnifying party has agreed in writing to pay such fees and expenses; (ii) the indemnifying party shall have failed
promptly to assume the defense of such Claim and to employ counsel reasonably satisfactory to such Indemnified Person or Indemnified Party
(as the case may be) in any such Claim; or (iii) the named parties to any such Claim (including, without limitation, any impleaded parties)
include both such Indemnified Person or Indemnified Party (as the case may be) and the indemnifying party, and such Indemnified Person
or such Indemnified Party (as the case may be) shall have been advised by counsel that a conflict of interest is likely to exist if the
same counsel were to represent such Indemnified Person or such Indemnified Party (as the case may be) and the indemnifying party in which
case, if such Indemnified Person or such Indemnified Party (as the case may be) notifies the indemnifying party in writing that it elects
to employ separate counsel at the expense of the indemnifying party, then the indemnifying party shall not have the right to assume the
defense thereof and such counsel shall be at the expense of the indemnifying party, provided further that in the case of clause (iii)
above the indemnifying party shall not be responsible for the reasonable fees and expenses of more than one (1) separate legal counsel
for such Indemnified Person or Indemnified Party (as the case may be). The Indemnified Party or Indemnified Person (as the case may be)
shall reasonably cooperate with the indemnifying party in connection with any negotiation or defense of any such action or Claim by the
indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnified Party or Indemnified
Person (as the case may be) which relates to such action or Claim. The indemnifying party shall keep the Indemnified Party or Indemnified
Person (as the case may be) reasonably apprised at all times as to the status of the defense or any settlement negotiations with respect
thereto. No indemnifying party shall be liable for any settlement of any action, claim or proceeding effected without its prior written
consent; provided, however, the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party
shall, without the prior written consent of the Indemnified Party or Indemnified Person (as the case may be), consent to entry of any
judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant
or plaintiff to such Indemnified Party or Indemnified Person (as the case may be) of a release from all liability in respect to such Claim
or litigation, and such settlement shall not include any admission as to fault on the part of the Indemnified Party. Following indemnification
as provided for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified Party or Indemnified Person (as
the case may be) with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made.
The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall
not relieve such indemnifying party of any liability to the Indemnified Person or Indemnified Party (as the case may be) under this Section 6,
except to the extent that the indemnifying party is materially and adversely prejudiced in its ability to defend such action.
(d)
The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course
of the investigation or defense, as and when bills are received or Indemnified Damages are incurred.
(e)
The indemnity and contribution agreements contained herein shall be in addition to (i) any cause of action or similar right of
the Indemnified Party or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party
may be subject to pursuant to the law.
7.
Contribution.
To the extent any indemnification
by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect
to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however:
(i) no contribution shall be made under circumstances where the maker would not have been liable for indemnification under the fault standards
set forth in Section 6 of this Agreement, (ii) no Person involved in the sale of Registrable Securities which Person is guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) in connection with such sale shall be entitled to contribution
from any Person involved in such sale of Registrable Securities who was not guilty of fraudulent misrepresentation; and (iii) contribution
by any seller of Registrable Securities shall be limited in amount to the amount of net proceeds received by such seller from the applicable
sale of such Registrable Securities pursuant to such Registration Statement. Notwithstanding the provisions of this Section 7, no
Investor shall be required to contribute, in the aggregate, any amount in excess of the amount by which the net proceeds actually received
by such Investor from the applicable sale of the Registrable Securities subject to the Claim exceeds the amount of any damages that such
Investor has otherwise been required to pay, or would otherwise be required to pay under Section 6(b), by reason of such untrue or
alleged untrue statement or omission or alleged omission.
8.
Reports Under the 1934 Act.
With a view to making available
to the Investors the benefits of Rule 144, the Company agrees to:
(a)
make and keep public information available, as those terms are understood and defined in Rule 144;
(b)
file with the SEC in a timely manner all reports and other documents required of the Company under the 1933 Act and the 1934 Act
so long as the Company remains subject to such requirements (it being understood and agreed that nothing herein shall limit any obligations
of the Company under the Securities Purchase Agreement) and the filing of such reports and other documents is required for the applicable
provisions of Rule 144; and
(c)
furnish to each Investor so long as such Investor owns Registrable Securities, promptly upon request, (i) a written statement by
the Company, if true, that it has complied with the reporting, submission and posting requirements of Rule 144, the 1933 Act and the 1934
Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company
with the SEC if such reports are not publicly available via EDGAR, and (iii) such other information as may be reasonably requested
to permit the Investors to sell such securities pursuant to Rule 144 without registration.
9.
Assignment of Registration Rights.
All or any portion of the
rights under this Agreement shall be automatically assignable by each Investor to any transferee or assignee (as the case may be) of all
or any portion of such Investor’s Registrable Securities or Warrants if: (i) such Investor agrees in writing with such transferee
or assignee (as the case may be) to assign all or any portion of such rights, and a copy of such agreement is furnished to the Company
within a reasonable time after such transfer or assignment (as the case may be); (ii) the Company is, within a reasonable time after such
transfer or assignment (as the case may be), furnished with written notice of (a) the name and address of such transferee or assignee
(as the case may be), and (b) the securities with respect to which such registration rights are being transferred or assigned (as the
case may be); (iii) immediately following such transfer or assignment (as the case may be) the further disposition of such securities
by such transferee or assignee (as the case may be) is restricted under the 1933 Act or applicable state securities laws if so required;
(iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this sentence such transferee or assignee
(as the case may be) agrees in writing with the Company to be bound by all of the provisions contained herein; (v) such transfer or assignment
(as the case may be) shall have been made in accordance with the applicable requirements of the Securities Purchase Agreement and the
Warrants (as the case may be); and (vi) such transfer or assignment (as the case may be) shall have been conducted in accordance with
all applicable federal and state securities laws.
10.
Amendment of Registration Rights.
Provisions of this Agreement
may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively),
only with the written consent of the Company and the Required Holders; provided that any such amendment or waiver that complies with the
foregoing, but that disproportionately, materially and adversely affects the rights and obligations of any Investor relative to the comparable
rights and obligations of the other Investors shall require the prior written consent of such adversely affected Investor. Any amendment
or waiver effected in accordance with this Section 10 shall be binding upon each Investor and the Company, provided that no such amendment
shall be effective to the extent that it (1) applies to less than all of the holders of Registrable Securities or (2) imposes any obligation
or liability on any Investor without such Investor’s prior written consent (which may be granted or withheld in such Investor’s
sole discretion). No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party.
No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement
unless the same consideration (other than the reimbursement of legal fees) also is offered to all of the parties to this Agreement.
11.
Miscellaneous.
(a)
Solely for purposes of this Agreement, a Person is deemed to be a holder of Registrable Securities whenever such Person owns, or
is deemed to own, of record such Registrable Securities. If the Company receives conflicting instructions, notices or elections from two
or more Persons with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election
received from such record owner of such Registrable Securities.
(b)
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must
be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by
electronic mail (provided that such sent email is kept on file (whether electronically or otherwise) by the sending party and the sending
party does not receive an automatically generated message from the recipient’s email server that such e-mail could not be delivered
to such recipient); or (iii) one (1) Business Day after deposit with an overnight courier service with next day delivery specified, in
each case, properly addressed to the party to receive the same. The mailing addresses and e-mail addresses for such communications shall
be:
If to the Company:
Aclarion, Inc.
8181 Arista Place, Suite 100
Broomfield, CO 80021
Telephone: (303) 927-8857
Attention: John Lorbiecki, Chief Financial Officer
E-Mail: jlorbiecki@aclarion.com
With a copy (for informational purposes only) to:
Carroll Legal LLC
233 McKinley Park Ln
Louisville, CO, 80027
Telephone: (303) 888-4859
Attention: James H. Carroll
E-Mail: jcarroll@carroll.legal
If to the Transfer Agent:
VStock Transfer, LLC
18 Lafayette Place
Woodmere, NY 11598
Telephone: (212) 828-8436
Attention: Young Kim
E-Mail: young@vstocktransfer.com
If to Legal Counsel:
Kelley Drye & Warren LLP
3 World Trade Center
175 Greenwich Street
New York, NY 10007
Telephone: (212) 808-7540
Facsimile: (212) 808-7897
Attention: Michael A. Adelstein, Esq.
E-mail: madelstein@kelleydrye.com
If to a Buyer, to its mailing address and/or email
address set forth on the Schedule of Buyers attached to the Securities Purchase Agreement, with copies to such Buyer’s representatives
as set forth on the Schedule of Buyers, or to such other mailing address and/or email address and/or to the attention of such other Person
as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness of such change,
provided that Kelley Drye & Warren LLP shall only be provided notices sent to the lead investor. Written confirmation of receipt (A) given
by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s
e-mail containing the time, date and recipient’s e-mail or (C) provided by a courier or overnight courier service shall be rebuttable
evidence of personal service, receipt by e-mail or receipt from a nationally recognized overnight delivery service in accordance with
clause (i), (ii) or (iii) above, respectively.
(c)
Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such
right or remedy, shall not operate as a waiver thereof. The Company and each Investor acknowledge and agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that each party hereto shall be entitled to an injunction or injunctions to prevent or cure breaches
of the provisions of this Agreement by any other party hereto and to enforce specifically the terms and provisions hereof (without the
necessity of showing economic loss and without any bond or other security being required), this being in addition to any other remedy
to which any party may be entitled by law or equity.
(d)
All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of Delaware, without giving effect to any provision of law or rule (whether of the State of Delaware or any
other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Delaware. Each party hereby
irrevocably submits to the exclusive jurisdiction of the United States District Court for the District of Delaware or in the Court of
Chancery of the State of Delaware (or, if such courts lack subject-matter jurisdiction, in the Superior Court of the State of Delaware),
for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein,
and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject
to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this
Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH
OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
(e)
If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest
extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity
of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without material change,
the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the
provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical
realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to
replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible
to that of the prohibited, invalid or unenforceable provision(s).
(f)
This Agreement, the other Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments referenced
herein and therein constitute the entire agreement among the parties hereto and thereto solely with respect to the subject matter hereof
and thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein.
This Agreement, the other Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments referenced
herein and therein supersede all prior agreements and understandings among the parties hereto solely with respect to the subject matter
hereof and thereof; provided, however, nothing contained in this Agreement or any other Transaction Document shall (or shall be deemed
to) (i) have any effect on any agreements any Investor has entered into with the Company or any of its Subsidiaries prior to the date
hereof with respect to any prior investment made by such Investor in the Company, (ii) waive, alter, modify or amend in any respect any
obligations of the Company or any of its Subsidiaries or any rights of or benefits to any Investor or any other Person in any agreement
entered into prior to the date hereof between or among the Company and/or any of its Subsidiaries and any Investor and all such agreements
shall continue in full force and effect or (iii) limit any obligations of the Company under any of the other Transaction Documents.
(g)
Subject to compliance with Section 9 (if applicable), this Agreement shall inure to the benefit of and be binding upon the
permitted successors and assigns of each of the parties hereto. This Agreement is not for the benefit of, nor may any provision hereof
be enforced by, any Person, other than the parties hereto, their respective permitted successors and assigns and the Persons referred
to in Sections 6 and 7 hereof.
(h)
The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter, singular
and plural forms thereof. The terms “including,” “includes,” “include” and words of like import shall
be construed broadly as if followed by the words “without limitation.” The terms “herein,” “hereunder,”
“hereof” and words of like import refer to this entire Agreement instead of just the provision in which they are found.
(i)
This Agreement may be executed in two or more identical counterparts, each of which shall be deemed an original, but all of which
shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered
to the other party. In the event that any signature is delivered by facsimile transmission or by an email which contains a portable document
format (.pdf) file of an executed signature page, such signature page shall create a valid and binding obligation of the party executing
(or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.
(j)
Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents as any other party may reasonably request in order to carry out the
intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
(k)
The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and
no rules of strict construction will be applied against any party. Notwithstanding anything to the contrary set forth in Section 10, terms
used in this Agreement but defined in the other Transaction Documents shall have the meanings ascribed to such terms on the Closing Date
in such other Transaction Documents unless otherwise consented to in writing by each Investor.
(l)
All consents and other determinations required to be made by the Investors pursuant to this Agreement shall be made, unless otherwise
specified in this Agreement, by the Required Holders, determined as if all of the outstanding Warrants then held by the Investors have
been exercised for Registrable Securities without regard to any limitations on exercise of the Warrants.
(m)
This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other Person.
(n)
The obligations of each Investor under this Agreement and the other Transaction Documents are several and not joint with the obligations
of any other Investor, and no Investor shall be responsible in any way for the performance of the obligations of any other Investor under
this Agreement or any other Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by
any Investor pursuant hereto or thereto, shall be deemed to constitute the Investors as, and the Company acknowledges that the Investors
do not so constitute, a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption that
the Investors are in any way acting in concert or as a group or entity with respect to such obligations or the transactions contemplated
by the Transaction Documents or any matters, and the Company acknowledges that the Investors are not acting in concert or as a group,
and the Company shall not assert any such claim, with respect to such obligations or the transactions contemplated by this Agreement or
any of the other the Transaction Documents. Each Investor shall be entitled to independently protect and enforce its rights, including,
without limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and it shall not be necessary
for any other Investor to be joined as an additional party in any proceeding for such purpose. The use of a single agreement with respect
to the obligations of the Company contained herein was solely in the control of the Company, not the action or decision of any Investor,
and was done solely for the convenience of the Company and not because it was required or requested to do so by any Investor. It is expressly
understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between the Company and
an Investor, solely, and not between the Company and the Investors collectively and not between and among Investors.
[Signature Page Follows]
IN WITNESS WHEREOF, each Buyer and the Company
have caused their respective signature page to this Registration Rights Agreement to be duly executed as of the date first written above.
|
COMPANY:
|
|
ACLARION, INC.
By:
Name: John Lorbiecki
Title: Chief Financial Officer |
IN WITNESS WHEREOF, each Buyer and the Company
have caused their respective signature page to this Registration Rights Agreement to be duly executed as of the date first written above.
|
[BUYERS]:
|
|
By:
Name:
Title: |
EXHIBIT A
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
______________________
______________________
______________________
Attention: _____________
Re:Aclarion, Inc.
Ladies and Gentlemen:
[We are][I am] counsel to Aclarion,
Inc., a Delaware corporation (the “Company”), and have represented the Company in connection with that certain Securities
Purchase Agreement (the “Securities Purchase Agreement”) entered into by and among the Company and the buyers named
therein (collectively, the “Holders”) pursuant to which the Company issued to the Holders certain senior notes (the
“Notes”), shares (the “Commitment Shares”) of common stock, $0.00001 par value, of the Company
(the “Common Stock”), and warrants exercisable for shares of Common Stock (the “Warrants”). Pursuant
to the Securities Purchase Agreement, the Company also has entered into a Registration Rights Agreement with the Holders (the “Registration
Rights Agreement”) pursuant to which the Company agreed, among other things, to register the Registrable Securities (as defined
in the Registration Rights Agreement), including the Commitment Shares and the shares of Common Stock issuable upon exercise of the Warrants,
under the Securities Act of 1933, as amended (the “1933 Act”). In connection with the Company’s obligations under
the Registration Rights Agreement, on ____________ ___, 20__, the Company filed a Registration Statement on Form [S-1][S-3] (File
No. 333-_____________) (the “Registration Statement”) with the Securities and Exchange Commission (the “SEC”)
relating to the Registrable Securities which names each of the Holders as a selling stockholder thereunder.
In connection with the foregoing,
[we][I] advise you that [a member of the SEC’s staff has advised [us][me] by telephone that [the SEC has entered an order declaring
the Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS]] [an order declaring
the Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS]] has been posted
on the web site of the SEC at www.sec.gov] and [we][I] have no knowledge, after a review of information posted on the website of the SEC
at http://www.sec.gov/litigation/stoporders.shtml, that any stop order suspending its effectiveness has been issued or that any proceedings
for that purpose are pending before, or threatened by, the SEC and the Registrable Securities are available for resale under the 1933
Act pursuant to the Registration Statement.
This letter shall serve as our
standing opinion to you that the Commitment Shares and the shares of Common Stock underlying the Warrants are freely transferable by the
Holders pursuant to the Registration Statement. You need not require further letters from us to effect any future legend-free issuance
or reissuance of such shares of Common Stock to the Holders as contemplated by the Company’s Irrevocable Transfer Agent Instructions
dated _________ __, 20__.
|
Very truly yours,
[ISSUER’S COUNSEL]
By:_____________________ |
EXHIBIT B
SELLING STOCKHOLDERS
The shares of common stock
being offered by the selling stockholders are those previously issued to the selling stockholders and those issuable to the selling stockholders
upon exercise of the warrants. For additional information regarding the issuance of common stock and the warrants, see “Private
Placement of Notes, Commitment Shares and Warrants” above. We are registering the shares of common stock in order to permit the
selling stockholders to offer the shares for resale from time to time. Except for the ownership of the common stock and the warrants issued
pursuant to the Securities Purchase Agreement, the selling stockholders have not had any material relationship with us within the past
three years.
The table below lists the
selling stockholders and other information regarding the beneficial ownership (as determined under Section 13(d) of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder) of the shares of common stock held by each of the selling stockholders.
The second column lists the number of shares of common stock beneficially owned by the selling stockholders, based on their respective
ownership of shares of common stock and warrants, as of ________, 202_, assuming exercise of the warrants held by each such selling stockholder
on that date but taking account of any limitations on exercise set forth therein.
The third column lists the
shares of common stock being offered by this prospectus by the selling stockholders and does not take in account any limitations on exercise
of the warrants set forth therein.
In accordance with the terms
of a registration rights agreement with the holders of the common stock and the warrants, this prospectus generally covers the resale
of the sum of (i) the number of shares of common stock issued in connection with the Securities Purchase Agreement and (ii) 100% of the
maximum number of shares of common stock issuable upon exercise of the warrants, in each case, determined as if the outstanding warrants
were exercised in full (without regard to any limitations on exercise contained therein) as of the trading day immediately preceding the
date this registration statement was initially filed with the SEC. Because the exercise price of the warrants may be adjusted, the number
of shares that will actually be issued may be more or less than the number of shares being offered by this prospectus. The fourth column
assumes the sale of all of the shares offered by the selling stockholders pursuant to this prospectus.
Under the terms of the warrants,
a selling stockholder may not exercise the warrants to the extent (but only to the extent) such selling stockholder or any of its affiliates
would beneficially own a number of shares of our common stock which would exceed 4.99%. The number of shares in the second column reflects
these limitations. The selling stockholders may sell all, some or none of their shares in this offering. See “Plan of Distribution”.
Name of Selling Stockholder
|
Number of Shares of Common Stock Owned Prior to Offering |
Maximum Number of Shares of Common Stock to be Sold Pursuant to this Prospectus |
Number of Shares of Common Stock of Owned After Offering |
|
|
|
|
PLAN OF DISTRIBUTION
We are registering the shares
of common stock previously issued and the shares of common stock issuable upon exercise of the warrants to permit the resale of these
shares of common stock by the holders of the common stock and warrants from time to time after the date of this prospectus. We will not
receive any of the proceeds from the sale by the selling stockholders of the shares of common stock, although we will receive the exercise
price of any Warrants not exercised by the selling stockholders on a cashless exercise basis. We will bear all fees and expenses incident
to our obligation to register the shares of common stock.
The selling stockholders may
sell all or a portion of the shares of common stock held by them and offered hereby from time to time directly or through one or more
underwriters, broker-dealers or agents. If the shares of common stock are sold through underwriters or broker-dealers, the selling stockholders
will be responsible for underwriting discounts or commissions or agent’s commissions. The shares of common stock may be sold in
one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices determined at the time
of sale or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block transactions, pursuant
to one or more of the following methods:
| · | on any national securities exchange or quotation service on which the securities may be listed or quoted
at the time of sale; |
| · | in the over-the-counter market; |
| · | in transactions otherwise than on these exchanges or systems or in the over-the-counter market; |
| · | through the writing or settlement of options, whether such options are listed on an options exchange or
otherwise; |
| · | ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
| · | block trades in which the broker-dealer will attempt to sell the shares as agent but may position and
resell a portion of the block as principal to facilitate the transaction; |
| · | purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
| · | an exchange distribution in accordance with the rules of the applicable exchange; |
| · | privately negotiated transactions; |
| · | short sales made after the date the Registration Statement is declared effective by the SEC; |
| · | broker-dealers may agree with a selling security holder to sell a specified number of such shares at a
stipulated price per share; |
| · | a combination of any such methods of sale; and |
| · | any other method permitted pursuant to applicable law. |
The selling stockholders may
also sell shares of common stock under Rule 144 promulgated under the Securities Act of 1933, as amended, if available, rather than
under this prospectus. In addition, the selling stockholders may transfer the shares of common stock by other means not described in this
prospectus. If the selling stockholders effect such transactions by selling shares of common stock to or through underwriters, broker-dealers
or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts, concessions or commissions from
the selling stockholders or commissions from purchasers of the shares of common stock for whom they may act as agent or to whom they may
sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers or agents may be in excess
of those customary in the types of transactions involved). In connection with sales of the shares of common stock or otherwise, the selling
stockholders may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the shares of common
stock in the course of hedging in positions they assume. The selling stockholders may also sell shares of common stock short and deliver
shares of common stock covered by this prospectus to close out short positions and to return borrowed shares in connection with such short
sales. The selling stockholders may also loan or pledge shares of common stock to broker-dealers that in turn may sell such shares.
The selling stockholders may
pledge or grant a security interest in some or all of the notes, warrants or shares of common stock owned by them and, if they default
in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of common stock from time
to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable provision of the Securities
Act amending, if necessary, the list of selling stockholders to include the pledgee, transferee or other successors in interest as selling
stockholders under this prospectus. The selling stockholders also may transfer and donate the shares of common stock in other circumstances
in which case the transferees, donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of
this prospectus.
To the extent required by
the Securities Act and the rules and regulations thereunder, the selling stockholders and any broker-dealer participating in the distribution
of the shares of common stock may be deemed to be “underwriters” within the meaning of the Securities Act, and any commission
paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting commissions or discounts under
the Securities Act. At the time a particular offering of the shares of common stock is made, a prospectus supplement, if required, will
be distributed, which will set forth the aggregate amount of shares of common stock being offered and the terms of the offering, including
the name or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation from the selling
stockholders and any discounts, commissions or concessions allowed or re-allowed or paid to broker-dealers.
Under the securities laws
of some states, the shares of common stock may be sold in such states only through registered or licensed brokers or dealers. In addition,
in some states the shares of common stock may not be sold unless such shares have been registered or qualified for sale in such state
or an exemption from registration or qualification is available and is complied with.
There can be no assurance
that any selling stockholder will sell any or all of the shares of common stock registered pursuant to the registration statement, of
which this prospectus forms a part.
The selling stockholders and
any other person participating in such distribution will be subject to applicable provisions of the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder, including, without limitation, to the extent applicable, Regulation M of the Exchange
Act, which may limit the timing of purchases and sales of any of the shares of common stock by the selling stockholders and any other
participating person. To the extent applicable, Regulation M may also restrict the ability of any person engaged in the distribution of
the shares of common stock to engage in market-making activities with respect to the shares of common stock. All of the foregoing may
affect the marketability of the shares of common stock and the ability of any person or entity to engage in market-making activities with
respect to the shares of common stock.
We will pay all expenses of
the registration of the shares of common stock pursuant to the registration rights agreement, estimated to be $[ ]
in total, including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance with state securities
or “blue sky” laws; provided, however, a selling stockholder will pay all underwriting discounts and selling commissions,
if any. We will indemnify the selling stockholders against liabilities, including some liabilities under the Securities Act in accordance
with the registration rights agreements or the selling stockholders will be entitled to contribution. We may be indemnified by the selling
stockholders against civil liabilities, including liabilities under the Securities Act that may arise from any written information furnished
to us by the selling stockholder specifically for use in this prospectus, in accordance with the related registration rights agreements
or we may be entitled to contribution.
Once sold under the registration
statement, of which this prospectus forms a part, the shares of common stock will be freely tradable in the hands of persons other than
our affiliates.
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