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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): July 6, 2023
MARIZYME,
INC.
(Exact
name of registrant as specified in its charter)
Nevada |
|
000-53223 |
|
82-5464863 |
(State or other jurisdiction
of incorporation) |
|
(Commission
File Number) |
|
(IRS
Employer
Identification
No.) |
555
Heritage Drive, Suite 205, Jupiter, Florida |
|
33458 |
(Address
of principal executive offices) |
|
(Zip
Code) |
(561)
935-9955
(Registrant’s
telephone number, including area code)
(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)) |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2
of the Securities Exchange Act of 1934.
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. ☐
Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered |
Not
applicable. |
|
|
|
|
Item
1.01 Entry into a Material Definitive Agreement.
Third
Closing of Private Placement
On
July 10, 2023, Marizyme, Inc. (the “Company”) conducted the third closing (the “Third OID Units Closing”) of
a private placement (the “OID Units Private Placement”) of up to $10,000,000 for an aggregate of up to 100,000,000 units
(“OID Units”), under a Unit Purchase Agreement between Hexin Global Ltd. (“Hexin”), an “accredited investor”
as such term is defined by Rule 501(a) of the Securities Act of 1933, as amended (the “Securities Act”), and the Company
(the “OID Units Purchase Agreement”), with each issuance of OID Units to an investor in the OID Units Private Placement consisting
of (i) a 15% original issue discount unsecured subordinated convertible promissory note (the “OID Convertible Note” and together
with other 15% original issue discount unsecured subordinated convertible promissory notes issued in the OID Units Private Placement,
the “OID Convertible Notes”), convertible into shares of common stock plus additional shares based on accrued interest at
$0.10 per share, subject to adjustment, (ii) a Class E Common Stock Purchase Warrant for the purchase of 125% of the shares of common
stock into which the OID Convertible Note may be converted at $0.10 per share, subject to adjustment (the “Class E Warrant”
and together with warrants of the same class, the “Class E Warrants”), and (iii) a Class F Common Stock Purchase Warrant
for the purchase of 125% of the shares of common stock into which the OID Convertible Note may be converted at $0.20 per share, subject
to adjustment (the “Class F Warrant” and together with warrants of the same class, the “Class E Warrants”). The
Class E Warrant and Class F Warrant owned by Hexin are collectively sometimes referred to as the “Class E and F Warrants”.
Under the OID Units Purchase Agreement, the minimum investment permitted is $1,000. The Company retained Univest Securities, LLC (“Univest”),
a registered broker-dealer and member of FINRA, as the Company’s exclusive placement agent in connection with the sale of the OID
Units pursuant to the OID Units Purchase Agreement under a Placement Agency Agreement, dated April 27, 2023 (the “April 2023 PAA”).
In addition to the rights set forth in the OID Units Purchase Agreement, the OID Convertible Note, and the Class E and F Warrants, the
investor party to the OID Units Purchase Agreement and the holder of the OID Convertible Note or the Class E and F Warrants will have
rights under the Registration Rights Agreement between the Company and Hexin, dated July 10, 2023 (the “July 10, 2023 Registration
Rights Agreement”), as described below.
In
connection with the Third OID Units Closing, on July 10, 2023, Hexin paid a subscription amount of $1,000,000, and the Company issued
11,764,710 OID Units consisting of (i) an OID Convertible Note in the principal amount of $1,176,471, convertible into 11,764,710 shares
of common stock plus additional shares based on accrued interest at $0.10 per share, subject to adjustment, (ii) a Class E Warrant for
the purchase of 14,705,880 shares of common stock at $0.10 per share, subject to adjustment, and (iii) a Class F Warrant for the purchase
of 14,705,880 shares of common stock at $0.20 per share, subject to adjustment. See below for additional related discussion of these
securities. In connection with the Third OID Units Closing, after deducting Univest’s 8% fee of $80,000 and $50,000 for reimbursement
of Univest’s legal fees pursuant to the April 2023 PAA, and, pursuant to the Placement Agency Agreement, dated as of December 10,
2021, between Univest and the Company, after deducting Univest’s outstanding fees of $140,000 or 8% from the issuances of an
unsecured promissory note to Walleye Opportunities Master Fund Ltd (“Walleye”)
for the principal amount of $1,000,000 on February 6, 2023 and an unsecured promissory note to Hexin on December 28, 2022 for the principal
amount of $750,000 for gross proceeds of $1,750,000, the Company received net proceeds of $730,000.
OID
Units Purchase Agreement
The
OID Units Purchase Agreement provides a right of first offer to each investor party to any proposed offer or sale of equity securities
by the Company until the first anniversary of the first closing of the OID Units Private Placement (i.e., May 12, 2024). The OID Units
Purchase Agreement also contains certain liquidated damages provisions, including for any failure of the Company to meet the requirements
for the OID Convertible Note or the Class E and Class F Warrants to be converted or exercised for non-restricted shares of common stock
under Rule 144 (“Rule 144”) under the Securities Act, and on every 30th day (pro-rated for periods totaling less than 30
days) thereafter, until cured or such Rule 144 requirements no longer apply, up to a maximum of 25% of each affected investor’s
subscription amount. The OID Units Purchase Agreement also contains a most-favored nations clause that provides that in connection with
any subsequent equity financing of the Company for consideration (a “Subsequent Financing”), each investor may accept the
securities and terms of the Subsequent Financing in substitution of the securities and terms of the OID Units Purchase Agreement, upon
notice from the investor, subject to the terms and conditions of the OID Units Purchase Agreement. The OID Units Purchase Agreement,
the OID Convertible Note and the Class E and F Warrants will be amended to incorporate the terms and forms of the securities sold in
the Subsequent Financing upon the closing of the Subsequent Financing. The OID Units Purchase Agreement will terminate upon certain events
including mutual written consent, by either party upon notice if a closing has not occurred within 15 business days of the date of the
agreement, an event of default under the OID Convertible Note, the full conversion or repayment of the OID Convertible Note and the non-ownership
of any shares of common stock issuable upon conversion of the OID Convertible Note or exercise of the Class E and F Warrants. The OID
Units Purchase Agreement also contains indemnification of each investor relating to claims relating to the transactions under the OID
Units Purchase Agreement which will survive termination. The investor’s rights under the OID Units Purchase Agreement may be assigned
to another “accredited investor” as defined by Rule 501(a) of the Securities Act.
OID
Convertible Note
The OID Convertible Note will mature nine months after the date of the Third OID Units Closing. The OID Convertible Note accrues 10%
of interest per annum on the outstanding principal amount. The OID Convertible Note will be unsecured and subordinated to any senior
indebtedness of the Company. The OID Convertible Note’s principal and accrued interest may generally be converted at any time at
a conversion price of $0.10 per share, subject to adjustment, at the option of the holder, into shares of common stock, subject to certain
limitations including: (i) only to the extent that the holder (together with any other person with which the holder is considered to
be part of a “group” under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)
or with which the holder otherwise files reports under Section 13 and/or Section 16 of the Exchange Act) would not become the “beneficial
owner” (as such term is defined in the Exchange Act and the rules and regulations thereunder) of in excess of 4.99% of the number
of shares of common stock outstanding, or 9.99% if the holder becomes the beneficial owner of more than 4.99% of the outstanding shares
of common stock (excluding from the calculation of that percentage any common stock or other equity interests in the Company beneficially
owned by virtue of the OID Convertible Note or the Class E and F Warrants), subject to a 61-day notice requirement; and (ii) only after
the effectiveness of the Capital Event Amendment. In connection with the second limitation, the OID Convertible Note contains covenants
requiring that the Company promptly call a meeting of stockholders for the purpose of seeking approval of the Capital Event Amendment,
use all commercially reasonable efforts to obtain approval, including the hiring of a proxy solicitation firm, and if stockholder approval
is not obtained at the meeting, to repeat the process every four months until it is obtained. In the event the Company offers, sells,
grants, issues, or otherwise disposes of common stock or securities with rights to common stock, or announces the intention to do one
of such things, before the listing of the common stock on NYSE American LLC (“NYSE American”), Nasdaq, or the New York Stock
Exchange (the “NYSE” and together with NYSE American and Nasdaq, a “National Stock Exchange”), at a lower price
per share than the OID Convertible Note’s conversion price while the OID Convertible Note is outstanding, then generally the conversion
price of the OID Convertible Note will be lowered to such price per share. This adjustment provision will apply one time only. The OID
Convertible Note also has customary antidilution provisions in the event of stock splits, certain changes of control or similar transactions,
and rights offerings. While the OID Convertible Note is outstanding and for 12 months after the Company lists its common stock on a National
Stock Exchange, the Company may not exchange or cooperate to exchange any indebtedness or securities, reduce or change the conversion,
exercise or exchange price of any securities convertible, exercisable or exchangeable for common stock, amend non-convertible debt to
convertible debt, issue securities at a price based on or varying with trading prices or quotations for the common stock or with a price
reset term, or agree to sell securities at a future determined price. Until 30 days after the OID Convertible Note is converted or repaid
in full, the Company may not sell any securities in a capital or debt raising transaction or series of related transactions which grant
to an investor the right to receive additional securities based upon future transactions of the Company on terms more favorable than
those granted to the investor in such transaction or series of related transactions. The OID Convertible Note may not be prepaid by the
Company. In the event of default under the OID Convertible Note, subject to certain cure rights, interest under the OID Convertible Note
will increase to the lower of 18% and the maximum legal interest rate, and the outstanding balance will become immediately due and payable.
The OID Convertible Note has the registration rights set forth in the July 10, 2023 Registration Rights Agreement. See “—July
10, 2023 Registration Rights Agreement” below.
Class
E Warrant and Class F Warrant
The
Class E and F Warrants are generally exercisable from the date of the Capital Event Amendment until five years from the date of issuance.
The exercise right is subject to a beneficial ownership limitation such that exercise is permitted only to the extent that the holder
(together with any other person with which the holder is considered to be part of a “group” under Section 13 of the Exchange
Act or with which the holder otherwise files reports under Section 13 and/or Section 16 of the Exchange Act) would not become the “beneficial
owner” (as such term is defined in the Exchange Act and the rules and regulations thereunder) of in excess of 4.99% of the number
of shares of common stock outstanding, or 9.99% if the holder becomes the beneficial owner of more than 4.99% of the outstanding shares
of common stock (excluding from the calculation of that percentage any common stock or other equity interests in the Company beneficially
owned by virtue of the Class E and F Warrants and the OID Convertible Note), subject to a 61-day notice requirement. The Class E and
F Warrants provide for exercise on a cashless net exercise basis if there is no effective registration statement registering or current
prospectus available for the resale of shares of common stock issuable under the Class E and F Warrants (a “Registration Default”)
after 180 days following the issue date (the “Registration Deadline”). In addition, for each 30 days following the Registration
Deadline, or portion of any 30-day period thereafter in which a Registration Default exists, the amount of shares issuable under the
Class E and F Warrants shall be automatically increased by 5%, prorated for a partial month, not to exceed in the aggregate an additional
25%. In the event the Company sells, grants, issues, or otherwise disposes of common stock or securities with rights to common stock,
or announces an intention to do so, at a lower effective price per share than the exercise prices of the Class E and F Warrants, while
any such Class E and F Warrants are outstanding, then generally the applicable Class E and F Warrants’ exercise price(s) will be
reduced to the greater of such lower price or a floor price as determined by any applicable National Stock Exchange. The Class E and
F Warrants have the registration rights set forth in the July 10, 2023 Registration Rights Agreement (see “—July 10, 2023
Registration Rights Agreement” below). The Class E and F Warrants also have customary antidilution provisions in the event
of stock splits, certain changes of control or similar transactions, and rights offerings. The Class E and F Warrants may be transferred
subject to their terms.
July
10, 2023 Registration Rights Agreement
Under
the July 10, 2023 Registration Rights Agreement, the Company is required to file a registration statement with the Securities and Exchange
Commission (the “SEC”) registering the resale of the shares of common stock issuable pursuant to conversion of the OID Convertible
Note and exercise of the Class E and F Warrants within 67 days of the date of the Third OID Units Closing and to cause the registration
statement to become effective within 120 days after such filing date. The Company must maintain the effectiveness of the registration
statement until the earlier of the first anniversary of its effectiveness date and the date that the shares registered for resale may
be resold without volume or manner-of-sale restrictions pursuant to Rule 144 and without the requirement for the Company to be in compliance
with the current public information requirement under Rule 144. If the Company fails to file the registration statement by the filing
deadline or cause it to become effective by the effectiveness deadline, or the registration statement ceases to be effective or the related
prospectus becomes unavailable for resales for more than 10 consecutive calendar days or more than an aggregate of 15 calendar days during
any 12-month period, then on the date of such failure and every 30 calendar days after such date until the failure is cured, the Company
must pay to each investor partial liquidated damages equal to 1% of the aggregate purchase price paid by such investor pursuant to the
OID Units Purchase Agreement, up to a maximum of 10% of the aggregate subscription amount paid by the investor. If the Company fails
to pay the partial liquidated damages within seven days of any such failure, the Company will pay interest thereon at a rate of the lesser
of 18% per annum or the maximum amount permitted under applicable law to each investor, accruing daily from the date such partial liquidated
damages are due until such amounts, plus all such interest thereon, are paid in full. Additional liquidated damages requirements will
end when the applicable failure is cured or Rule 144 becomes available for resale of all the shares of common stock otherwise required
to be registered for resale under the July 10, 2023 Registration Rights Agreement. Liquidated damages will not apply to a failure that
is due to limits imposed by the SEC’s interpretation of Rule 415 under the Securities Act. In addition, if there is not an effective
registration statement covering all shares of common stock subject to the registration rights under the July 10, 2023 Registration Rights
Agreement at any time when required and the Company proposes to file a registration statement to register certain other offerings, not
including an underwritten public offering of its securities for its own account or the account of others or certain other types of registration
statements, then the Company must provide notice and include the shares otherwise required to be registered under the July 10, 2023 Registration
Rights Agreement within 15 days of such notice, unless they are eligible for resale pursuant to Rule 144 (without volume restrictions
or current public information requirements). The July 10, 2023 Registration Rights Agreement contains related procedural and filing requirements
and investor notice and review rights as to certain events and filings relating to the registration statement. The Company will be responsible
for all fees and expenses relating to compliance with the July 10, 2023 Registration Rights Agreement, as well as up to $10,000 in reasonable
attorney fees for investor review of the registration statement. The July 10, 2023 Registration Rights Agreement contains mutual indemnification
provisions for claims relating to the registration statement. The investor’s rights under the OID Units Purchase Agreement may
be assigned to another “accredited investor” as defined by Rule 501(a) of the Securities Act.
Placement
Agency Agreement
Under
a Placement Agency Agreement, dated April 27, 2023 (the “April 2023 PAA”), Univest acted as the Company’s exclusive
placement agent in connection with the OID Units Private Placement. The Company agreed to pay Univest a cash placement fee equal to 8%
of the gross proceeds from the sale of the OID Units, 8% of the gross proceeds from the exercise of the Class E and F Warrants, and certain
Placement Agent Warrants on the terms described below under “—OID Units Placement Agent Warrants”. The Company
further agreed to reimburse Univest for the fees and expenses of its due diligence and legal counsel of up to $200,000. The April 2023
PAA provides indemnification rights to Univest and its affiliates in the event of certain claims relating to the April 2023 PAA or related
transactions. Under the April 2023 PAA, Univest has the right to act as the Company’s sole placement agent or an underwriter for
any future equity financing occurring during the 18-month period following the consummation of the OID Units Private Placement. The term
of the April 2023 PAA continues until the completion of the OID Units Private Placement, subject to termination after 15 days’
notice after July 31, 2023 or earlier in the case of termination for cause. Univest will also receive fees and Placement Agent Warrants
on the same basis as described above with respect to any private or public offering or other financing or capital raising transaction
of any kind of the Company within 12 months of the termination or expiration of the April 2023 PAA with an investor whom Univest has,
directly or indirectly, introduced to the Company during the term of the April 2023 PAA.
Placement
Agent Warrants
Under
the April 2023 PAA and the forms of Placement Agent Warrants agreed to in connection with the April 2023 PAA, the Company also agreed,
upon Univest’s payment of $100.00, to issue Placement Agent Warrants (the “OID Units Placement Agent Warrants”) to
Univest and/or its designee(s) at each closing of the OID Units Private Placement. The required OID Units Placement Agent Warrants will
consist of Placement Agent Warrants for the purchase of 8% of the aggregate number of shares of common stock initially issuable upon
conversion of the OID Convertible Notes issued in the respective closing, 8% of the aggregate number of shares of common stock initially
issuable upon exercise of the Class E Warrants issued in the respective closing at $0.10 per share, subject to adjustment, and 8% of
the aggregate number of shares of common stock initially issuable upon exercise of the Class F Warrants issued in the respective closing
at $0.20 per share, subject to adjustment. Univest notified the Company that the Company would be permitted to defer the issuance of
the OID Units Placement Agent Warrants until the final closing of the OID Units Private Placement.
The
OID Units Placement Agent Warrants will be generally exercisable for a period from the date of the Capital Event Amendment until five
years from that date. The exercise right will also be subject to the following beneficial ownership limitation: Exercise is permitted
only if it would not cause the holder (together with its Affiliates (as defined by Rule 405 under the Securities Act), and any other
persons acting as a group together with the holder or any of the holder’s Affiliates), to beneficially own in excess of the percentage
of the outstanding securities that are permitted to be beneficially owned (as described below), which, for purposes of the limitation,
includes shares issuable upon exercise of the OID Units Placement Agent Warrants, excludes shares issuable upon exercise of the unexercised
portion of the OID Units Placement Agent Warrants and exercise or conversion of the unexercised or nonconverted portion of any other
securities of the Company subject to an analogous limitation on conversion or exercise beneficially owned by the holder or any of its
Affiliates, and otherwise calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
For purposes of the OID Units Placement Agent Warrants, 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 the exercised portion of the OID Units Placement Agent Warrants,
by the holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The maximum
percentage of beneficial ownership of the Company’s outstanding securities that applies to an exercise of each OID Units Placement
Agent Warrant is 9.99% of the number of shares of the common stock outstanding immediately after giving effect to the issuance of shares
of common stock issuable upon exercise of the OID Units Placement Agent Warrant. The holder, upon notice to the Company, may increase
or decrease the percentage limit, provided that the limitation in no event exceeds 9.99% of the number of shares of common stock outstanding
immediately after giving effect to the issuance of shares of common stock upon exercise of the OID Units Placement Agent Warrant. Any
increase in the limitation will not be effective until the 61st day after such notice is delivered to the Company.
The
OID Units Placement Agent Warrants will provide for exercise by payment of cash or on a cashless net exercise basis. In the event the
Company sells, grants, issues, or otherwise disposes of common stock or securities with rights to common stock, or announces an intention
to do so, at a lower price per share than the applicable OID Units Placement Agent Warrants’ exercise price, before the listing
of the common stock on a National Stock Exchange, while such OID Units Placement Agent Warrants are outstanding, then the applicable
OID Units Placement Agent Warrants’ exercise price will be reduced to the greater of such lower price or a floor price as determined
by any applicable National Stock Exchange. The OID Units Placement Agent Warrants will provide for equivalent registration rights as
provided for under the July 10, 2023 Registration Rights Agreement. The OID Units Placement Agent Warrants will also have customary antidilution
provisions in the event of stock splits, certain changes of control or similar transactions, and rights offerings. The OID Units Placement
Agent Warrants will also provide mutual indemnification relating to claims relating to a registration statement under which shares issuable
upon exercise of the OID Units Placement Agent Warrants may be sold to the same or equivalent extent as the indemnification provision
contained in the OID Units Purchase Agreement.
The
foregoing description of each of the OID Convertible Note, the Class E Warrant, the Class F Warrant, the forms of the OID Units Placement
Agent Warrants, the OID Units Purchase Agreement, the July 10, 2023 Registration Rights Agreement, and the April 2023 PAA is qualified
in its entirety by reference to the full text of such documents which are filed or incorporated by reference as Exhibit 4.1, Exhibit
4.2, Exhibit 4.3, Exhibit 4.4, Exhibit 4.5, Exhibit 4.6, Exhibit 10.1, Exhibit 10.2, and Exhibit 10.3, respectively, to this Current
Report on Form 8-K, and which are incorporated by reference herein.
Amendment
to Certain Registration Rights Agreements
As
previously reported in a Current Report on Form 8-K filed on May 18, 2023, in connection with the first closing of the OID Units Private
Placement, which occurred on May 12, 2023, a Registration Rights Agreement, dated as of May 12, 2023 (the “May 12, 2023 Registration
Rights Agreement”), between the Company and Walleye, provided that the Company file
a registration statement within 60 days of such closing, registering the resale of the shares of common stock issuable pursuant to conversion
of the 15% original issue discount unsecured subordinated convertible promissory note and exercise of the Class E Common Stock Purchase
Warrant and Class F Common Stock Purchase Warrant issued to that investor in connection
with such closing, and contained other terms and conditions. As previously reported in a Current Report on Form 8-K filed on May 24,
2023, pursuant to a Promissory Note issued to Hexin on December 28, 2022, on May 22, 2023,
the Company issued Hexin a Class E Common Stock Purchase Warrant and a Class F Common Stock
Purchase Warrant, which provide for registration rights under the May 12, 2023 Registration
Rights Agreement. As previously reported in a Current Report on Form 8-K filed on June 5, 2023, in connection with the second closing
of the OID Units Private Placement, which occurred on May 30, 2023, a Registration Rights Agreement, dated
as of May 30, 2023 (the “May 30, 2023 Registration Rights Agreement” and each of the May 30, 2023 Registration Rights
Agreement and the May 12, 2023 Registration Rights Agreement respectively, the “OID Units Registration Rights Agreement”),
between the Company and Walleye, Hexin and Frank Maresca, also provided that the Company file a registration statement within
60 days of such closing, registering the resale of the shares of common stock issuable pursuant to conversion of the OID Convertible
Notes and exercise of the Class E Warrants and Class F Warrant issued to these investors
in connection with such closing, and contained other terms and conditions.
Holders
of rights to 67% or more of the shares issuable upon conversion of the OID Convertible Notes and exercise of the Class E Warrants
and the Class F Warrants may agree to amend or waive the requirements of each OID Units Registration Rights Agreement.
Under an Amendment to Registration Rights Agreement, dated as of July 6, 2023 (“Amendment to Registration Rights Agreement”),
Walleye and Hexin, being holders of such rights, agreed to an amendment to each OID Units Registration Rights Agreement to provide that
the initial filing of the registration statement required by such OID Units Registration Rights Agreement shall be made on or before
the date that is 67 days after the date of the respective closing of the OID Units Private Placement.
The
foregoing description of the Amendment to Registration Rights Agreement is qualified in its entirety by reference to the full text of
such document which is filed as Exhibit 10.4 to this Current Report on Form 8-K, and which is incorporated by reference herein.
Item
2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The
information set forth under the section “—Third Closing of Private Placement” of Item 1.01 of this Current Report
on Form 8-K is incorporated by reference into this Item 2.03.
Item
3.02. Unregistered Sales of Equity Securities.
The
information set forth under the section “—Third Closing of Private Placement” of Item 1.01 of this Current Report
on Form 8-K is incorporated by reference into this Item 3.02. The offer of securities pursuant to the OID Units Purchase Agreement and
the April 2023 PAA, the sale of the OID Convertible Note and shares of common stock issuable upon conversion of the OID Convertible Note,
the sale of the Class E Warrant and shares of common stock issuable upon exercise of the Class E Warrant, the sale of the Class F Warrant
and shares of common stock issuable upon exercise of the Class F Warrants, and the offer of the OID Units Placement Agent Warrants and
shares of common stock issuable upon exercise of the OID Units Placement Agent Warrants described above was conducted as a private placement
pursuant to and in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act, and Rule 506(b) of
Regulation D promulgated thereunder (“Regulation D”) for transactions not involving a public offering. In connection with
the execution of the OID Units Purchase Agreement, Hexin represented that it was an “accredited investor” as such term is
defined in Rule 501(a) of Regulation D.
| Item
9.01 | Financial
Statements and Exhibits. |
(d)
Exhibits
Exhibit
No. |
|
Description
of Exhibit |
4.1 |
|
15% Original Issue Discount Unsecured Subordinated Convertible Promissory Note issued by Marizyme, Inc., dated July 10, 2023 |
4.2 |
|
Class E Common Stock Purchase Warrant issued by Marizyme, Inc., dated July 10, 2023 |
4.3 |
|
Class F Common Stock Purchase Warrant issued by Marizyme, Inc., dated July 10, 2023 |
4.4 |
|
Form of Placement Agent Warrant with respect to 15% Original Issue Discount Unsecured Subordinated Convertible Promissory Note (incorporated by reference to Exhibit 4.4 to Form 8-K filed on May 18, 2023) |
4.5 |
|
Form of Placement Agent Warrant with respect to Class E Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.5 to Form 8-K filed on May 18, 2023) |
4.6 |
|
Form of Placement Agent Warrant with respect to Class F Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.6 to Form 8-K filed on May 18, 2023) |
10.1 |
|
Unit Purchase Agreement between Marizyme, Inc. and the investor identified on Appendix A thereto, dated July 10, 2023 |
10.2 |
|
Registration Rights Agreement between Marizyme, Inc. and the purchaser signatory thereto, dated July 10, 2023 |
10.3 |
|
Placement Agency Agreement between Marizyme, Inc. and Univest Securities, LLC, dated April 27, 2023 (incorporated by reference to Exhibit 10.3 to Form 8-K filed on May 18, 2023) |
10.4 |
|
Amendment to Registration Rights Agreement, dated July 6, 2023, between Marizyme, Inc. and each of the several investors signatory thereto |
104 |
|
Cover
Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, Marizyme, Inc. has duly caused this current report to be signed on its behalf
by the undersigned hereunto duly authorized.
Date:
July 12, 2023 |
MARIZYME,
INC. |
|
|
|
|
By: |
/s/
David Barthel |
|
|
David
Barthel |
|
|
Chief
Executive Officer |
Exhibit
4.1
FORM
OF 15% ORIGINAL ISSUE DISCOUNT UNSECURED SUBORDINATED
CONVERTIBLE
PROMISSORY NOTE
NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED
BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
This
Note is issued pursuant to that certain Unit Purchase Agreement dated July 10, 2023 by and between the Company and the investors identified
therein, as amended, modified, or supplemented from time to time in accordance with its terms (the “Purchase Agreement”).
Receipt of this Note by the Holder shall constitute acceptance and agreement to all of the terms contained herein.
Original Issue Date:
July 10, 2023 | |
Subscription
Amount: | |
$ | 1,000,000 | |
Maturity Date: April 10, 2024 | |
Original Issue
Discount: | |
$ | 176,471 | |
Conversion Price
(subject to adjustment herein): $0.10 | |
Original Principal
Amount: | |
$ | 1,176,471 | |
MARIZYME,
INC.
15%
ORIGINAL ISSUE DISCOUNT UNSECURED SUBORDINATED
CONVERTIBLE
PROMISSORY NOTE
THIS
15% ORIGINAL ISSUE DISCOUNT UNSECURED SUBORDINATED CONVERTIBLE PROMISSORY NOTE is one of a series of duly authorized and validly issued
convertible promissory notes of Marizyme, Inc., a Nevada corporation (the “Company”) in the aggregate principal amount
of up to a maximum of Ten Million Dollars ($10,000,000), designated as its 15% Original Issue Discount Unsecured Subordinated Convertible
Promissory Notes (the “Note” and, collectively with the other notes of such series, the “Notes”).
FOR
VALUE RECEIVED, the Company promises to pay to Hexin Global Ltd., or its registered assigns (the “Holder”), the principal
sum of One Million One Hundred Seventy-Six Thousand Four Hundred Seventy-One Dollars ($1,176,471) (the “Original Principal Amount”)
on the “Maturity Date” designated hereinabove (the “Maturity Date”), or such earlier date as this Note
is required or permitted to be repaid as provided hereunder, and to pay interest to the Holder in accordance with the provision hereof.
This Note is subject to the following additional provisions:
Section
1. Definitions. For the purposes hereof, in addition to the terms defined elsewhere in this Note: (a) capitalized terms not
otherwise defined herein shall have the meanings set forth in the Purchase Agreement (as defined herein), and (b) the following terms
shall have the following meanings:
“Adjustment
Right” shall have the meaning set forth in Section 8(b)(iv) hereof.
“Alternate
Consideration” shall have the meaning set forth in Section 8(e) hereof.
“Applicable
Price” shall have the meaning set forth in Section 8(b) hereof.
“Bankruptcy
Event” means any of the following events: (a) the Company or any Significant Subsidiary thereof commences a case or other proceeding
under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar
law of any jurisdiction relating to the Company or any Significant Subsidiary thereof, (b) there is commenced against the Company or
any Significant Subsidiary thereof any such case or proceeding that is not dismissed within 60 days after commencement, (c) the Company
or any Significant Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case
or proceeding is entered, (d) the Company or any Significant Subsidiary thereof suffers any appointment of any custodian or the like
for it or any substantial part of its property that is not discharged or stayed within 60 calendar days after such appointment, (e) the
Company or any Significant Subsidiary thereof makes a general assignment for the benefit of creditors, (f) the Company or any Significant
Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts,
(g) the Company or any Significant Subsidiary thereof admits in writing that it is generally unable to pay its debts as they become due,
(h) the Company or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of
or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.
“Beneficial
Ownership Limitation” shall have the meaning set forth in Section 7(d) hereof.
“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 are generally
are open for use by customers on such day.
“Board
of Directors” means the board of directors of the Company.
“Buy-In”
shall have the meaning set forth in Section 7(c)(v) hereof.
“Capital
Event” shall have the meaning set forth in Section 7(e) hereof.
“Capital
Event Amendment” shall have the meaning set forth in Section 7(e) hereof.
“Commission” means
the United States Securities and Exchange Commission.
“Common
Stock” means the common stock of the Company, par value $0.001 per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.
“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is
at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Conversion”
shall have the meaning ascribed to such term in Section 7 hereof.
“Conversion
Date” shall have the meaning set forth in Section 7(a) hereof.
“Conversion
Price” shall have the meaning set forth in Section 7(b) hereof.
“Conversion
Shares” means the shares of Common Stock issuable upon the full or any partial conversion of the Note.
“Convertible
Securities” shall have the meaning set forth in Section 8(b)(i) hereof.
“Dilutive
Issuance” shall have the meaning set forth in Section 8(b) hereof.
“Distribution”
shall have the meaning set forth in Section 8(d) hereof.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended.
“Exempt
Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers, directors or consultants of the
Company pursuant to any stock or option plan duly adopted for such purpose, by the Board of Directors or a majority of the members of
a committee of directors established for such purpose for services rendered to the Company, (b) securities upon the exercise or exchange
of or conversion of any securities issued hereunder, securities upon the exercise or exchange of or conversion of any securities exercisable
or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of the Purchase Agreement, provided
that such securities have not been amended since the date of the Purchase Agreement to increase the number of such securities or to decrease
the conversion price, exchange price or conversion price of such securities (other than in connection with stock splits or combinations)
or to extend the term of such securities, (c) securities issued pursuant to acquisitions or strategic transactions approved by the Board
of Directors or securities issued in financing transactions, the primary purpose of which is to finance acquisitions or strategic transactions
approved by the Board of Directors, provided that such securities are issued as “restricted securities” (as defined in Rule
144), and provided that any such issuance shall only be to a Person (or to the equityholders of a Person) 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, but shall not include a transaction in which the Company is
issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, (d)
shares of Common Stock, options or convertible securities issued to banks, equipment lessors or other financial institutions, or to real
property lessors, pursuant to a debt financing, equipment leasing or real property leasing transaction approved by the Board of Directors,
(e) shares of Common Stock, options or convertible securities issued to or in connection with the provision of goods pursuant to transactions
approved by the Board of Directors and (f) shares of Common Stock, options or convertible securities issued in connection with sponsored
research, collaboration, technology license, development, marketing, investor relations or other similar agreements or strategic partnerships
approved by the Board of Directors.
“Event
of Default” shall have the meaning set forth in Section 6 hereof.
“Fundamental
Transaction” means any of the following transactions, whether effected directly or indirectly or through one or a series of
related transactions: (i) any merger or consolidation of the Company with or into another Person; (ii) any sale, lease, license, assignment,
transfer, conveyance or other disposition of all or more than 25% of the Company’s assets; (iii) the completion and acceptance
by holders of more than 50% of the Common Stock of any purchase offer, tender offer or exchange offer (whether by the Company or another
Person) pursuant to which holders of Common Stock sell, tender or exchange their shares for other Securities, cash or property, (iv)
any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common
Stock is effectively converted into or exchanged for other Securities, cash or property, or (v) a stock or share purchase or other business
combination (including a reorganization, recapitalization, spin-off or scheme of arrangement) whereby any other Person acquires more
than fifty percent (50%) of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person
or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase
or other business combination).
“Late
Fees” shall have the meaning set forth in Section 3(b) hereof.
“Maximum
Rate” shall have the meaning set forth in Section 13 hereof.
“New
Issuance Price” shall have the meaning set forth in Section 8(b) hereof.
“Note
Register” shall have the meaning set forth in Section 7(a) hereof.
“Notice
of Conversion” shall have the meaning set forth in Section 7(a) hereof.
“Option”
shall have the meaning set forth in Section 8(b)(i) hereof.
“Original
Issue Date” means the date of the first issuance of the Notes, regardless of any transfers of any Note and regardless of the
number of instruments which may be issued to evidence such Notes.
“Payment
Amount” means the sum of: (1) the outstanding Original Principal Amount of this Note, plus (ii) all other amounts, interest,
costs, expenses and damages due under or in respect of this Note, if any.
“Payment
Date” means the first (1st) day of each calendar month following the occurrence of an Event of Default until payment
in full of this Note.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Primary
Security” shall have the meaning set forth in Section 8(b)(iv) hereof.
“Proxy
Statement” shall have the meaning set forth in Section 7(e) hereof.
“Registration
Rights Agreement” means the Registration Rights Agreement, dated as of July 10, 2023 (as amended, supplemented, restated and/or
modified from time to time, by and between the Company and each of the several purchasers signatory thereto.
“Purchase
Agreement” shall have the meaning set forth in the second paragraph hereof.
“Purchase
Rights” shall have the meaning set forth in Section 8(c) hereof.
“Share
Delivery Date” shall have the meaning set forth in Section 7(c)(ii) hereof.
“Secondary
Securities” shall have the meaning set forth in Section 8(b)(iv) hereof.
“Securities
Act” means the Securities Act of 1933, as amended.
“Significant
Subsidiary” shall have the meaning set forth in Rule 1-02(w) of Regulation S-X.
“Stockholder
Approval” shall have the meaning set forth in Section 7(e) hereof.
“Stockholders
Meeting” shall have the meaning
set forth in Section 7(e) hereof.
“Successor
Entity” shall have the meaning set forth in Section 8(e) hereof.
“Trading
Day” means a day on which the principal Trading Market is open for trading.
“Trading
Market” means any of the following
markets or exchanges on which the Common Stock (or any other common stock of any other Person that references the Trading Market for
its common stock) is listed or quoted for trading on the date in question: The Nasdaq Stock Market LLC, the New York Stock Exchange,
NYSE American, or the OTCQX, the OTCQB, the Pink market or any other tier operated by OTC Markets Group Inc. (or any successor to any
of the foregoing).
“Uplisting
Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: NYSE American, The Nasdaq Stock Market LLC, or the New York Stock Exchange (or any successors to any of the foregoing).
“Valuation
Event” shall have the meaning set forth in Section 8(b)(iv) hereof.
“Variable
Rate Transaction” shall have the meaning set forth in Section 9(e) hereof.
Section
2. Prepayments. The Company may not prepay all or any part of the Outstanding Principal Balance.
Section
3. Interest.
(a)
Payment of Interest and Calculations. Interest shall accrue to the Holder on the aggregate unconverted and then outstanding principal
amount of this Note at the rate of ten percent (10%) per annum, calculated on the basis of a 360-day year and shall accrue daily commencing
on the Issuance Date until payment in full of the Outstanding Principal Amount (or conversion to the extent applicable), together with
all accrued and unpaid interest, liquidated damages, Late Fees and other amounts which may become due hereunder, has been made. Upon
conversion of this Note as set forth in Section 7 below, all accrued and unpaid interest shall be paid in shares of Common Stock rather
than in cash.
(b)
Late Fees. All overdue accrued and unpaid interest to be paid hereunder shall entail a late fee at an interest rate equal to the
lesser of 10% per annum or the maximum rate permitted by applicable law (the “Late Fees”) that shall accrue daily
from the date such interest is due hereunder through and including the date of actual payment in full.
Section
4. No Security; Subordination. This Note is not secured by any assets of the Company. All claims of the Holder to principal,
interest and any other amounts at any time owed under this Note (collectively, “Junior Indebtedness”) are hereby expressly
subordinated in right of payment, as herein set forth, to the prior payment in full of all Senior Indebtedness (as defined below). No
payment under Junior Indebtedness shall be made by the Company, nor shall the Holder exercise any remedies under the Junior Indebtedness
(including taking any legal action (whether judicial or otherwise) to collect the Junior Indebtedness), if, at the time of such payment,
exercise or immediately after giving effect thereto, (i) there shall exist any default under any agreements governing any of the Senior
Indebtedness or (ii) the maturity of any of the Senior Indebtedness has been accelerated to a date that is on or prior to the date a
payment is due under this Note, and such acceleration has not been waived or such Senior Indebtedness has not been paid in full; provided,
however, that (x) in the event that the holder of any Senior Indebtedness accelerates such Senior Indebtedness, then the Holder may accelerate
the indebtedness evidenced by this Note, and (y) if the Company is permitted under the terms of the Senior Indebtedness to pay an amount
due and owing under this Note and fails to make such payment, then so long as the terms of the Senior Indebtedness do not prohibit such
action, the Holder may exercise its rights to be paid such amount, but only such amount (and Holder shall not be permitted to accelerate
hereunder). Each holder of any Senior Indebtedness, whether such Senior Indebtedness was created or acquired before or after the issuance
of this Note, shall be entitled to rely on the subordination provisions set forth in this Note. Upon the request of the Company or any
holder of Senior Indebtedness, the Holder shall confirm (in writing) the above subordination provisions and shall execute and deliver
such additional subordination agreements as any holder of Senior Indebtedness may require. For purposes hereof, “Senior Indebtedness”
means, all secured indebtedness of the Company, whether outstanding on the date of the execution of this Note or thereafter created,
to banks, insurance companies, other financial institutions, private equity funds, hedge funds or other similar funds, unless in the
instrument creating or evidencing such indebtedness it is provided that such indebtedness is not senior in right of payment to this Note.
Senior Indebtedness shall also include indebtedness for taxes owed to federal or state agencies and other.
Section
5. Registration of Transfers and Exchanges.
(a)
Registration under Registration Statement. The Holder’s registration rights are set forth in the Registration Rights Agreement.
(b)
Different Denominations. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations,
as requested by the Holder surrendering the same. No service charge will be payable for such registration of transfer or exchange.
(c)
Investment Representations. This Note has been issued subject to certain investment representations of the original Holder set
forth in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable federal
and state securities laws and regulations.
(d)
Reliance on Note Register. Prior to due presentment for transfer to the Company of this Note, the Company and any agent of the
Company may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving
payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such agent
shall be affected by notice to the contrary.
Section
6. Events of Default. In the event that any of the following (each, an “Event of Default”) shall occur:
(a)
Non-Payment. The Company shall default in the payment of the principal of, or accrued interest on, this Note as and when the same
shall become due and payable, whether by acceleration or otherwise; or
(b)
Default in Covenants. The Company shall default in any material manner in the observance or performance of the covenants or agreements
set forth in the Purchase Agreement, this Note, or any other Transaction Document (as defined in the Purchase Agreement); or
(c)
Breach of Representations and Warranties; Statements. Any representation, warranty, or written statement, report, financial statement,
or certificate made or delivered to the Holder or any other Holder shall be untrue or incorrect in any material respect as of the date
when made; or
(d)
Judgments. Any final, non-appealable judgment, decree or order for the payment of money is entered against any of the Company
or the Company’s subsidiaries, if any, in an amount equal to $500,000 or more and the same remains unsatisfied or unbonded for
more than thirty (30) days; or
(e)
Defaults in Indebtedness. The Company shall default on any of its obligations under any mortgage, credit agreement, or other facility,
indenture agreement, factoring agreement, or other instrument under which there may be issued, or by which there may be secured or evidenced,
any indebtedness for borrowed money or money due under any long term leasing or factoring arrangement that (a) involves an obligation
greater than $250,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness becoming
or being declared due and payable prior to the date on which it would otherwise become due and payable;
(f)
Bankruptcy. The Company shall: (i) admit in writing its inability to pay its debts as they become due; (ii) apply for, consent
to, or acquiesce in, the appointment of a trustee, receiver, sequestrator or other custodian for the Company or any of its property,
or make a general assignment for the benefit of creditors; (iii) in the absence of such application, consent or acquiesce in, permit
or suffer to exist the appointment of a trustee, receiver, sequestrator or other custodian for the Company or for any part of its property;
or (iv) permit or suffer to exist the commencement of any bankruptcy, reorganization, debt arrangement or other case or proceeding under
any bankruptcy or insolvency law, or any dissolution, winding up or liquidation proceeding, in respect of the Company, and, if such case
or proceeding is not commenced by the Company or converted to a voluntary case, such case or proceeding shall be consented to or acquiesced
in by the Company or shall result in the entry of an order for relief; or
(g)
Failure to Maintain D&O Insurance. The Company shall fail to maintain Directors and Officers liability insurance with coverage
limits of not less than $1,000,000 at any point while this Note is outstanding;
then,
and so long as such Event of Default is continuing for a period of two (2) business days in the case of non-payment under Section 6(a),
or for a period of thirty (30) calendar days in the case of events under Sections 6(b) through 6(d) and Section 6(g) (and the event which
would constitute such Event of Default, if curable, has not been cured), (i) the interest rate on this Note shall accrue at an interest
rate equal to the lesser of 18% per annum or the maximum rate permitted under applicable law until such Event of Default has been cured
(or until the termination of the Note in the event that the Event of Default cannot be cured), and (ii) at the Holder’s election,
all obligations of the Company under this Note shall be immediately due and payable without presentment, demand, protest or any other
action nor obligation of the Holder of any kind, all of which are hereby expressly waived, and Holder may exercise any other remedies
the Holder may have at law or in equity. If an Event of Default specified in Section 6(e) or Section 6(f) above occurs, the principal
of, and accrued interest on, all the Notes shall automatically, and without any declaration or other action on the part of any Holder,
become immediately due and payable.
Section
7. Conversion.
(a)
Voluntary Conversion. At any time after the time of the effectiveness of the Capital Event Amendment until this Note is no longer
outstanding, this Note shall be convertible, in whole or in part, into shares of Common Stock at the option of the Holder, at any time
and from time to time (subject to the conversion limitations set forth in Section 7(d) hereof). The Holder shall effect conversions by
delivering to the Company a Notice of Conversion, the form of which is attached hereto as Annex A (each, a “Notice of
Conversion”), specifying therein the principal amount of this Note to be converted and the date on which such conversion shall
be effected (such date, the “Conversion Date”, and such record, the “Note Register”). If no Conversion
Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is deemed delivered
hereunder. No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization)
of any Notice of Conversion form be required. To effect conversions hereunder, the Holder shall not be required to physically surrender
this Note to the Company unless the entire principal amount of this Note, plus all accrued and unpaid interest thereon, has been so converted.
Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Note in an amount equal to the applicable
conversion. The Holder and the Company shall maintain a Conversion Schedule showing the principal amount(s) converted and the date of
such conversion(s). The Company may deliver an objection to any Notice of Conversion within one (1) Business Day of delivery of such
Notice of Conversion. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in
the absence of manifest error. The Holder, and any assignee by acceptance of this Note, acknowledge and agree that, by reason of the
provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note
may be less than the amount stated on the face hereof.
(b)
Conversion Price. The conversion price in effect on any Conversion Date shall be equal to $0.10, as such amount may be adjusted,
from time to time, pursuant to the provisions of Section 8 hereafter (the “Conversion Price”). All such foregoing
determinations will be appropriately adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction
that proportionately decreases or increases the Common Stock during such measuring period. Nothing herein shall limit a Holder’s
right to pursue actual damages or declare an Event of Default pursuant to Section 6 hereof and the Holder shall have the right to pursue
all remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive
relief. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof
or under applicable law.
(c)
Mechanics of Conversion.
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i. |
Conversion
Shares Issuable Upon Conversion of Principal Amount. The number of Conversion Shares issuable upon a conversion hereunder shall
be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Note to be converted and any accrued
and unpaid interest to be converted by (y) the Conversion Price. |
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ii. |
Delivery
of Certificate or Transfer Agent Book-Entry Upon Conversion. Not later than two (2) Trading Days after each Conversion Date (the
“Share Delivery Date”), the Company shall deliver, or cause to be delivered, to the Holder a certificate or certificates
representing the Conversion Shares, or issue the Conversion Shares by book-entry of the Company’s transfer agent, free of any restricted
legends. |
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iii. |
Failure
to Deliver Certificates or Transfer Agent Book-Entry. If, in the case of any Notice of Conversion, such certificate or certificates
are not delivered to or as directed by the applicable Holder or issued by transfer agent book-entry by the Share Delivery Date, the Holder
shall be entitled to elect by written notice to the Company at any time on or before its receipt of such certificate or certificates
or transfer agent book-entry, to rescind such conversion, in which event the Company shall promptly return to the Holder any original
Note delivered to the Company and the Holder shall promptly return to the Company any Common Stock certificates issued to such Holder
pursuant to the rescinded Conversion Notice. |
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iv. |
Obligation
Absolute; Partial Liquidated Damages. The Company’s obligations to issue and
deliver the Conversion Shares upon conversion of this Note in accordance with the terms hereof are absolute and unconditional, irrespective
of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery
of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination,
or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation
of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation
of the Company to the Holder in connection with the issuance of such Conversion Shares; provided, however, that such
delivery shall not operate as a waiver by the Company of any such action the Company may have against the Holder. In the event the
Holder of this Note shall elect to convert any or all of the outstanding principal or interest amount hereof, the Company may not
refuse conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has been engaged in any violation
of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and or enjoining conversion
of all or part of this Note shall have been sought. If the injunction is not granted, the Company shall promptly comply with all
conversion obligations herein. If the injunction is obtained, the Company must post a surety bond for the benefit of the Holder in
the amount of one hundred fifty percent (150%) of the outstanding principal amount of this Note, which is subject to the injunction,
which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which
shall be payable to the Holder to the extent it obtains judgment. In the absence of seeking such injunction, the Company shall issue
Conversion Shares or, if applicable, cash, upon a properly noticed conversion. If the Company fails for any reason to deliver to
the Holder such certificate or certificates or transfer agent book-entry pursuant to Section 7(c)(ii) by the Share Delivery Date,
the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, $1,000 per Trading Day for each Trading
Day after such Share Delivery Date until such certificates are delivered or Holder rescinds such conversion. Nothing herein shall
limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section 6 hereof for the Company’s
failure to deliver Conversion Shares within the period specified herein and the Holder shall have the right to pursue all remedies
available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive
relief. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section
hereof or under applicable law. |
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v. |
Compensation
for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other rights available to the Holder,
if the Company fails for any reason to deliver to the Holder such certificate or certificates by the Share Delivery Date pursuant
to Section 7(c)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase (in an open market
transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction
of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive upon the conversion relating to such Share
Delivery Date (a “Buy-In”), then the Company shall (A) pay in cash to the Holder (in addition to any other remedies
available to or elected by the Holder) the amount, if any, by which (x) the Holder’s total purchase price (including any brokerage
commissions) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that
the Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving
rise to such purchase obligation was executed (including any brokerage commissions) and (B) at the option of the Holder, either reissue
(if surrendered) this Note in a principal amount equal to the principal amount of the attempted conversion (in which case such conversion
shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued if the Company
had timely complied with its delivery requirements under Section 7(c)(ii). For example, if the Holder purchases Common Stock having
a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of this Note with respect to which the
actual sale price of the Conversion Shares (including any brokerage commissions) giving rise to such purchase obligation was a total
of $10,000 under clause (A) of the immediately preceding sentence, the Company shall be required to pay the Holder $1,000. The Holder
shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request
of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies
available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive
relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon conversion
of this Note as required pursuant to the terms hereof. |
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vi. |
Reservation
of Shares Issuable Upon Conversion. Following the effectiveness of the Capital Event Amendment, the Maker shall at all times
while this Note shall be outstanding, reserve and keep available out of its authorized but unissued Common Stock, such number of
shares of Common Stock as shall from time to time be sufficient to effect the conversion of this Note (disregarding for this purpose
any and all limitations of any kind on such conversion). The Maker shall, from time to time, increase the authorized number of shares
of Common Stock or take other effective action if at any time the unissued number of authorized shares shall not be sufficient to
satisfy the Maker’s obligations under this Section 7(c)(vi). |
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vii. |
Fractional
Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of this Note. As to
any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Company shall at its election,
either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion Price
or round up to the next whole share. |
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viii. |
Transfer
Taxes and Expenses. The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without
charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such
certificates, provided that, the Company shall not be required to pay any tax that may be payable in respect of any transfer involved
in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of this Note so converted
and the Company shall not be required to issue or deliver such certificates unless or until the Person or Persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such
tax has been paid. The Company shall pay all transfer agent fees required for same-day processing of any Notice of Conversion. |
(d)
Holder’s Conversion Limitations. Notwithstanding anything to the contrary contained herein, the Holder shall not be entitled
to receive shares of Common Stock or other securities (together with Common Stock, “Equity Interests”) upon conversion
of this Note to the extent (but only to the extent) that such conversion or receipt would cause the Holder Group to become, directly
or indirectly, a “beneficial owner” (within the meaning of Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder) of a number of Equity Interests of a class that is registered under the Exchange Act which exceeds the Maximum
Percentage (as defined below) of the Equity Interests of such class that are outstanding at such time (the “Beneficial Ownership
Limitation”). Any purported delivery of Equity Interests in connection with the conversion of this Note prior to the termination
of this restriction in accordance herewith shall be void and have no effect to the extent (but only to the extent) that such delivery
would result in the Holder Group becoming the beneficial owner of more than the Maximum Percentage of the Equity Interests of a class
that is registered under the Exchange Act that is outstanding at such time. If any delivery of Equity Interests owed to the Holder following
conversion of this Note is not made, in whole or in part, as a result of this limitation, the Company’s obligation to make such
delivery shall not be extinguished and the Company shall deliver such Equity Interests as promptly as practicable after the Holder gives
notice to the Company that such delivery would not result in such limitation being triggered or upon termination of the restriction in
accordance with the terms hereof. To the extent limitations contained in this Section 7(d) apply, the determination of whether
this Note is convertible and of which portion of this Note is convertible shall be the sole responsibility and in the sole determination
of the Holder, and the submission of a Notice of Conversion shall be deemed to constitute the Holder’s determination that the issuance
of the full number of Conversion Shares requested in the Notice of Conversion is permitted hereunder, and the Company shall not have
any obligation to verify or confirm the accuracy of such determination. For purposes of this Section 7(d), (i) the term “Maximum
Percentage” shall mean 4.99%; provided, that if at any time after the date hereof the Holder Group beneficially owns in excess
of 4.99% of any class of Equity Interests in the Company that is registered under the Exchange Act (excluding any Equity Interests deemed
beneficially owned by virtue of this Note or the Warrants), then the Maximum Percentage shall automatically increase to 9.99% so long
as the Holder Group owns in excess of 4.99% of such class of Equity Interests (and shall, for the avoidance of doubt, automatically decrease
to 4.99% upon the Holder Group ceasing to own in excess of 4.99% of such class of Equity Interests); and (ii) the term “Holder
Group” shall mean the Holder plus any other Person with which the Holder is considered to be part of a group under Section
13 of the Exchange Act or with which the Holder otherwise files reports under Sections 13 and/or 16 of the Exchange Act. In determining
the number of Equity Interests of a particular class outstanding at any point in time, the Holder may rely on the number of outstanding
Equity Interests of such class as reflected in (x) the Company’s most recent Annual Report on Form 10-K or Quarterly Report on
Form 10-Q filed with the SEC, as the case may be, (y) a more recent public announcement by the Company or (z) a more recent notice by
the Company or its transfer agent to the Holder setting forth the number of Equity Interests of such class then outstanding. For any
reason at any time, upon written or oral request of the Holder, the Company shall, within one (1) Trading Day of such request, confirm
orally and in writing to the Holder the number of Equity Interests of any class then outstanding. Anything herein to the contrary, any
increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company.
The provisions of this Section 7(d) shall be construed, corrected and implemented in a manner so as to effectuate the intended
beneficial ownership limitation herein contained.
(e)
Authorized Shares; Capital Event. The Company covenants that, promptly following the Issue Date, the Company shall take all corporate
action necessary and use all commercially reasonable efforts to call a meeting of its stockholders (which may be its annual meeting)
(the “Stockholders Meeting”), for the purpose of seeking approval of the Company’s stockholders (the “Stockholder
Approval”) to amend the Articles of Incorporation (the “Capital Event Amendment”) to increase the number
of shares of Common Stock the Company is authorized to issue sufficient to permit the conversion in full of this Note in accordance with
its terms (the “Capital Event”). In connection therewith, the Company will as soon as reasonably practicable either
before and/or after the Issue Date file with the SEC proxy materials (including a proxy statement and form of proxy) for use at the Stockholders
Meeting and, after receiving and promptly responding to any comments of the SEC thereon, shall as soon as reasonably practicable mail
such proxy materials to the stockholders of the Company. The Company will comply with Section 14(a) of the Exchange Act and the rules
promulgated thereunder in relation to any proxy statement (as amended or supplemented, the “Proxy Statement”) and
any form of proxy to be sent to the stockholders of the Company in connection with the Stockholders Meeting, and the Proxy Statement
shall not, on the date that the Proxy Statement (or any amendment thereof or supplement thereto) is first mailed to stockholders or at
the time of the Stockholders Meeting, contain any untrue statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein not false or misleading, or omit to state any material fact necessary to correct any statement
in any earlier communication with respect to the solicitation of proxies or the Stockholders Meeting which has become false or misleading.
If the Company should discover at any time prior to the Stockholders Meeting, any event relating to the Company or the Subsidiaries or
any of their respective officers or directors that is required to be set forth in a supplement or amendment to the Proxy Statement, in
addition to the Company’s obligations under the Exchange Act, the Company will promptly inform the Placement Agent thereof. The
Board of Directors shall recommend to the Company’s stockholders that the stockholders vote in favor of the Capital Event at the
Stockholders Meeting and take all commercially reasonable action (including, without limitation, the hiring of a proxy solicitation firm
of nationally recognized standing) to solicit the approval of the stockholders for the Capital Event. If the Company does not obtain
stockholder approval for the Capital Event at the Stockholders Meeting, the Company shall call a meeting every four (4) months thereafter
to seek such Stockholder Approval until the date that such Stockholder Approval is obtained. No later than two (2) Business Days following
such Stockholder Approval of the Capital Event, the Company shall file with the Secretary of State of Nevada a certificate of amendment
to the Articles of Incorporation to provide for the effectiveness of the Capital Event, which shall provide that it shall become immediately
effective upon filing. The Company shall file a Current Report on Form 8-K announcing the results of the Stockholders Meeting and the
filing of the Capital Event Amendment no later than four (4) Business Days after each such event.
Following
the occurrence of the Capital Event and thereafter during the period the Note is outstanding, the Company shall reserve from its authorized
and unissued Common Stock a sufficient number of shares to provide for the issuance of the Conversion Shares upon the conversion of this
Note. The Company further covenants that its issuance of this Note shall constitute full authority to its officers who are charged with
the duty of issuing the necessary Conversion Shares upon the conversion of this Note. The Company will take all such reasonable action
as may be necessary to assure that such Conversion Shares may be issued as provided herein without violation of any applicable law or
regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Conversion
Shares which may be issued upon the conversion of this Note will, upon due conversion of this Note, be duly authorized, validly issued,
fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other
than taxes in respect of any transfer occurring contemporaneously with such issue).
Except
and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending
its Articles of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Note, but
will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary
or appropriate to protect the rights of Holder as set forth in this Note against impairment. Without limiting the generality of the foregoing,
the Company will (i) not increase the par value of any Conversion Shares above the amount payable therefor upon such conversion immediately
prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly
and legally issue fully paid and nonassessable Conversion Shares upon the conversion of this Note and (iii) use commercially reasonable
efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may
be, necessary to enable the Company to perform its obligations under this Note.
Before
taking any action which would result in an adjustment in the number of Conversion Shares for which this Note is convertible or in the
Conversion Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from
any public regulatory body or bodies having jurisdiction thereof.
Section
8. Certain Adjustments.
(a)
Stock Dividends and Stock Splits. If the Company, at any time while this Note is outstanding: (i) pays a stock dividend or otherwise
makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common Stock Equivalents (which,
for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon conversion of, or payment of interest
on, this Note), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of
a reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues, in the event of a reclassification
of shares of the Common Stock, any shares of capital stock of the Company, then the Conversion Price shall be multiplied by a fraction
of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Company) 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 this Section shall become effective immediately after the record date for the determination of stockholders
entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision,
combination or re-classification.
(b)
Subsequent Equity Sales; Uplisting. If, at any time while this Note is outstanding and until such time as the Company lists its
Common Stock for trading on any Uplisting Trading Market, the Company or any Subsidiary, as applicable, the Company issues or sells,
announces any offer, sale, or other disposition of, or in accordance with this Section 8 is deemed to have issued, sold or granted (or
makes an announcement regarding the same), any shares of Common Stock and/or Common Stock Equivalents (including the issuance or sale
of shares of Common Stock owned or held by or for the account of the Company, but excluding any securities issued or sold or deemed to
have been issued or sold solely in connection with an Exempt Issuance) for a consideration per share (the “New Issuance Price”)
less than a price equal to the Conversion Price in effect immediately prior to such issuance or sale or deemed issuance or sale (such
Conversion Price then in effect is referred to herein as the “Applicable Price”) (the foregoing a “Dilutive
Issuance”), then immediately after such Dilutive Issuance, the Conversion Price then in effect shall be reduced to an amount
equal to the New Issuance Price; provided, however, that the foregoing adjustment shall only be in effect one time only. For all purposes
of the foregoing (including, without limitation, determining the adjusted Conversion Price and the New Issuance Price under this Section
8(b)), the following shall be applicable:
i.
Issuance of Options. If the Company in any manner grants, issues or sells (or enters into any agreement to grant, issue or sell)
any Options (as defined below) and the lowest price per share for which one Common Stock is at any time issuable upon the exercise of
any such Option (as defined below) or upon conversion, exercise or exchange of any Common Stock Equivalents issuable upon exercise of
any such Option (as defined below) or otherwise pursuant to the terms thereof is less than the Applicable Price, then such Common Stock
shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option
(as defined below) for such price per share. For purposes of this Section 8(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 (as defined below) or upon conversion, exercise or exchange
of any Common Stock Equivalents issuable upon exercise of any such Option (as defined below) or otherwise pursuant to the terms thereof”
shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company
with respect to any one share of Common Stock upon the granting, issuance or sale of such Option (as defined below), upon exercise of
such Option (as defined below) and upon conversion, exercise or exchange of any Common Stock Equivalents issuable upon exercise of such
Option (as defined below) or otherwise pursuant to the terms thereof and (y) the lowest exercise price set forth in such Option (as defined
below) for which one Common Stock is issuable (or may become issuable assuming all possible market conditions) upon the exercise of any
such Options (as defined below) or upon conversion, exercise or exchange of any Common Stock Equivalents issuable upon exercise of any
such Option (as defined below) 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 of such Option (as defined below), upon exercise of such Option
(as defined below) and upon conversion, exercise or exchange of any Common Stock Equivalents issuable upon exercise of such Option (as
defined below) 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 (as defined below) (or any other Person). Except as contemplated below, no further adjustment
of the Conversion Price shall be made upon the actual issuance of such shares of Common Stock or of such Common Stock Equivalents upon
the exercise of such Options (as defined below) 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 Common Stock Equivalents. “Option” means any rights, warrants
or options to subscribe for or purchase shares of Common Stock or Convertible Securities. “Convertible Securities”
means any shares 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.
ii.
Issuance of Convertible Securities. If the Company in any manner issues or sells (or enters into any agreement to issue or sell)
any Common Stock Equivalents 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 shares of Common
Stock shall be deemed to be outstanding and to have been issued and sold by the Company at the time of the issuance or sale of such Common
Stock Equivalents for such price per share. For the purposes of this Section 8(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 Common Stock upon the issuance or sale of the Common Stock Equivalents and upon conversion, exercise or exchange
of such Common Stock Equivalents or otherwise pursuant to the terms thereof and (y) the lowest conversion price set forth in such Common
Stock Equivalents 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 Common Stock Equivalents (or any other Person) upon the issuance or sale of such Common Stock Equivalents plus
the value of any other consideration received or receivable by, or benefit conferred on, the holder of such Common Stock Equivalents
(or any other Person). Except as contemplated below, no further adjustment of the Conversion Price shall be made upon the actual issuance
of such shares of Common Stock upon conversion, exercise or exchange of such Common Stock Equivalents or otherwise pursuant to the terms
thereof, and if any such issuance or sale of such Common Stock Equivalents is made upon exercise of any Options for which adjustment
of this Note has been or is to be made pursuant to other provisions of this Section 8(b), except as contemplated below, no further adjustment
of the Conversion Price shall be made by reason of such issuance or sale.
iii.
Change in Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options, the additional consideration,
if any, payable upon the issue, conversion, exercise or exchange of any Common Stock Equivalents, or the rate at which any Common Stock
Equivalents are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time (other
than proportional changes in conversion or exercise prices, as applicable, in connection with an event referred to in Section 8(a)),
the Conversion Price in effect at the time of such increase or decrease shall be adjusted to the Conversion Price which would have been
in effect at such time had such Options or Common Stock Equivalents provided for such increased or decreased purchase price, additional
consideration or increased or decreased conversion rate, as the case may be, at the time initially granted, issued or sold. For purposes
of this Section 8(b)(iii), if the terms of any Option or Common Stock Equivalents that was outstanding as of the date this Note was issued
are increased or decreased in the manner described in the immediately preceding sentence, then such Option or Common Stock Equivalents
and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as of
the date of such increase or decrease. No adjustment pursuant to this Section 8(b)(iii) shall be made if such adjustment would result
in an increase of the Conversion Price then in effect.
iv.
Change in Option Price or Rate of Conversion. If any Option and/or Common Stock Equivalents and/or Adjustment Right (as defined
below) 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 Common Stock Equivalents and/or Adjustment Right (as
defined below), 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 8(b)(i)
or 8(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 the fair market value (as determined by the Holder in good faith) and the fair market value
(as determined by the Holder) of such Common Stock Equivalents, if any, in each case, as determined on a per share basis in accordance
with this Section 8(b)(iv). If any shares of Common Stock, Options or Common Stock Equivalents are issued or sold or deemed to have been
issued or sold for cash, the consideration received therefor will be deemed to be the net amount of consideration received by the Company
therefor. If any shares of Common Stock, Options or Common Stock Equivalents are issued or sold for a consideration other than cash,
the amount of such consideration received by the Company will be the fair value of such consideration, except where such consideration
consists of publicly traded securities, in which case the amount of consideration received by the Company for such securities will be
the arithmetic average of the volume-weighted average prices 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 Common Stock Equivalents are issued to the owners of the non-surviving
entity in connection with any merger in which the Company is the surviving entity, the amount of consideration therefor will be deemed
to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such shares of
Common Stock, Options or Common Stock Equivalents (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). “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 hereunder) of Common Stock 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).
v.
Change in Option Price or Rate of Conversion. 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 Common Stock Equivalents
or (B) to subscribe for or purchase shares of Common Stock, Options or Common Stock Equivalents, 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)
Subsequent Rights Offerings. If at any time that this Note is outstanding and convertible, the Company grants, issues or sells
any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any
class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number
of shares of Common Stock acquirable upon complete conversion of this Note (without regard to any limitations on exercise hereof, including
without limitation, the Beneficial Ownership Limitation) 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, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right
to participate in any such Purchase Rights would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder
shall not be entitled to participate in such Purchase Rights to such extent (or beneficial ownership of such shares of Common Stock as
a result of such Purchase Rights to such extent) and such Purchase Rights to such extent shall be held in abeyance for the Holder until
such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
(d)
Pro Rata Distributions. While this Note is outstanding, the Company shall not 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 or options by way of a dividend, spin off, reclassification,
corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”). In the event that
this Note is repaid at the time of such Distribution, the Holder shall not be entitled to participate in such Distribution. If the Holder
and the Company mutually agree, and this Note is not repaid at the time of such Distribution, then 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 conversion of this Note (without regard to any limitations on conversion hereof, including without
limitation, the Beneficial Ownership Limitation) immediately before the date of 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, to the extent that the Holder’s right to participate in any such Distribution
would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such
Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent)
and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto
would not result in the Holder exceeding the Beneficial Ownership Limitation).
(e)
Fundamental Transaction. Upon the occurrence of any Fundamental Transaction, the Holder, upon any subsequent conversion of this
Note, shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion immediately prior
to the occurrence of such Fundamental Transaction (without regard to the Beneficial Ownership Limitation), the number of shares of Common
Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration
(the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of
shares of Common Stock for which this Note is convertible immediately prior to such Fundamental Transaction (without regard to Beneficial
Ownership Limitation). For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted
to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one (1) share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the Conversion Price among the Alternate Consideration in a reasonable
manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given
any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same
choice as to the Alternate Consideration it receives upon any conversion of this Note following such Fundamental Transaction. The Company
shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”)
to assume in writing all of the obligations of the Company, in accordance with the provisions of this Section 8( e) pursuant to written
agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior
to such Fundamental Transaction and shall, at the option of the holder of this Note, deliver to the Holder in exchange for this Note
a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Note which is
convertible for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares
of Common Stock acquirable and receivable upon conversion of this Note (without regard to any limitations on the conversion of this Note)
prior to such Fundamental Transaction, and with a conversion price which applies to the conversion 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 number of shares of capital stock and such conversion price being for the purpose of
protecting the economic value of this Note immediately prior to the consummation of such Fundamental Transaction), and which is reasonably
satisfactory in form and substance to the Holder. Upon the occurrence of any such 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 Warrant 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 with the same effect as if such Successor Entity had been named
as the Company herein.
(f)
Calculations. All calculations under this Section 8 shall be made to the nearest cent or the nearest 1/100th of a share, as the
case may be. For purposes of this Section 8, the number of shares of Common Stock deemed to be issued and outstanding as of a given date
shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued and outstanding.
(g)
Notice to the Holder.
vi.
Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of Section 8, the Company
shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement
of the facts requiring such adjustment.
vii.
Notice to Allow Conversion by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form)
on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the
Company shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares
of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with
any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or
substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities,
cash or property or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs
of the Company, then, in each case, the Company shall cause to be filed at each office or agency maintained for the purpose of conversion
of this Note, and shall cause to be delivered to the Holder at its last address or email address as it shall appear upon the Note Register,
at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date
on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not
to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption,
rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share
exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record
shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in
the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that
the Company is required to file reports with the SEC under Section 12(g) or 15(d) of the Exchange Act and the Company’s Common
Stock is listed on a Trading Market and any notice provided hereunder constitutes, or contains, material, non-public information regarding
the Company or any of the Subsidiaries, the Company shall, as applicable, simultaneously issue a press release pursuant to a recognized
wire service or file such notice with the SEC pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to convert this
Note during the 20-day period commencing on the date of such notice through the effective date of the event triggering such notice except
as may otherwise be expressly set forth herein.
Section
9. Covenants. For so long as any Note is outstanding and any additional time required in any subsection of this Section, without
the prior written consent of the Holder:
(a)
Compliance with this Note and the Warrants. The Company shall, and shall cause its Subsidiaries to, comply with its obligations
under this Note and the Warrants.
(b)
Payment of Taxes, Etc. The Company shall, and shall cause each of its Subsidiaries to, promptly pay and discharge, or cause to
be paid and discharged, when due and payable, all lawful taxes, assessments and governmental charges or levies imposed upon the income,
profits, property or business of the Holder and the Subsidiaries, except for such failures to pay that, individually or in the aggregate,
have not had and would not reasonably be expected to have a Material Adverse Effect; provided, however, that any such tax, assessment,
charge or levy need not be paid if the validity thereof shall currently be contested in good faith by appropriate proceedings and if
the Holder or such Subsidiaries shall have set aside on its books adequate reserves with respect thereto, and provided, further, that
the Maker and such Subsidiaries will pay all such taxes, assessments, charges or levies forthwith upon the commencement of proceedings
to foreclose any lien which may have attached as security therefor.
(c)
Corporate Existence. The Company shall, and shall cause each of its Subsidiaries to, maintain in full force and effect its corporate
existence, rights and franchises and all licenses and other rights to use property owned or possessed by it and reasonably deemed to
be necessary to the conduct of its business.
(d)
Investment Company Act. The Company shall conduct its businesses in a manner so that it will not become subject to, or required
to be registered under, the Investment Company Act of 1940, as amended.
(e)
Variable Rate Transaction. If, at any time while this Note is outstanding and until twelve (12) months after the Company lists
its Common Stock for trading on any Uplisting Trading Market, the Company shall not directly or indirectly (i)(A) consummate any exchange
of any indebtedness and/or securities of the Company for any other securities and/or indebtedness of the Company, (B) cooperate with
any person to effect any exchange of securities and/or indebtedness of the Company in connection with a proposed sale of such securities
from an existing holder of such securities to a third party), and/or (C) reduce and/or otherwise change the exercise price, conversion
price and/or exchange price of any Common Stock Equivalent of the Company and/or amend any non-convertible indebtedness of the Company
to make it convertible into securities of the Company, (ii) issue or sell any of its securities either (A) at a conversion, exercise
or exchange rate or price that is based upon and/or varies with the trading prices of, or quotations for, Common Stock, and/or (B) with
a conversion, exercise or exchange rate and/or price that is subject to being reset on one or more occasions either (1) at some future
date after the initial issuance of such securities or (2) 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, and/or (iii) enter into any agreement (including, without
limitation, an equity line of credit or an “at-the-market offering”) whereby the Company may sell securities at a future
determined price. Any transaction contemplated in this Section 9(e), shall be referred to as a “Variable Rate Transaction”.
The Holder shall be entitled to obtain injunctive relief against the Company to preclude any Variable Rate Transaction (without the need
for the posting of any bond or similar item, which the Company hereby expressly and irrevocably waives the requirement for), which remedy
shall be in addition to any right of the Holder to collect damages.
Section
10. Miscellaneous.
(a)
Notices. Any and all notices or other communications or deliveries to be provided by the Holder hereunder shall be in writing
and delivered personally, by email attachment, or sent by a nationally recognized overnight courier service, addressed to the Company,
at the address or email address set forth in the Purchase Agreement, or such other, email address, or address as the Company may specify
for such purposes by notice to the Holder delivered in accordance with this Section 10(a). Any and all notices or other communications
or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile, by email attachment,
or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number, email address or address
of the Holder appearing on the books of the Company, or if no such facsimile number or email attachment or address appears on the books
of the Company, at the address of such Holder, as set forth in the Purchase Agreement. Any notice or other communication or deliveries
hereunder shall be deemed given and effective on the earliest of: (i) the date of transmission, if such notice or communication is delivered
via facsimile or email attachment prior to 5:30 p.m. (Pacific time) on any Business Day, (ii) the next Business Day after the date of
transmission, if such notice or communication is delivered via facsimile or email attachment on a day that is not a Business Day or later
than 5:30 p.m. (Pacific time) on any Business Day, (iii) the second Business Day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.
(b)
Lost or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in
exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed
Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of
such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to the Company.
(c)
Governing Law. This Note is being delivered in and shall be construed in accordance with the laws of the State of Nevada, without
conflicts of laws or choice of law provisions.
(d)
Waiver. Any waiver by the Company or the Holder of a breach of any provision of this Note shall not operate as or be construed
to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the Company
or the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive
that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note on any other occasion.
Any waiver by the Company or the Holder must be in writing.
(e)
Severability. If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect,
and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and
circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing
usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under
applicable law. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or
in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit
or forgive the Company from paying all or any portion of the principal of or interest on this Note as contemplated herein, wherever enacted,
now or at any time hereafter in force, or which may affect the covenants or the performance of this Note, and the Company (to the extent
it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to
any such law, hinder, delay or impede the execution of any power herein granted to the Holder, but will suffer and permit the execution
of every such as though no such law has been enacted.
(f)
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 the Warrants 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. 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 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 an injunction restraining any such breach or any such threatened breach, without the
necessity of showing economic loss and without any bond or other security being required. The Company shall provide all information and
documentation to the Holder that is reasonably requested by the Holder to enable the Holder to confirm the Company’s compliance
with the terms and conditions of this Note.
(g)
Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day.
(h)
Headings. The headings contained herein are for convenience only, do not constitute a part of this Note and shall not be deemed
to limit or affect any of the provisions hereof.
Section
11. Amendments; Waivers. No provision of this Note may be waived or amended except in a written instrument signed by the Company
and the Holder or the Majority in Interest of the Investors. No waiver of any default with respect to any provision, condition or requirement
of this Note shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair
the exercise of any such right.
Section
12. Equal Treatment of Holders. No consideration (including any modification of this Note) shall be offered or paid to any
Person (as such term is defined in the Purchase Agreement) to amend or consent to a waiver or modification of any provision hereof unless
the same consideration is also offered to each Holder. Further, the Company shall not make any payment of principal or interest on the
Notes in amounts which are disproportionate to the respective principal amounts outstanding on the Notes at any applicable time. For
clarification purposes, this provision constitutes a separate right granted to each Holder by the Company and negotiated separately by
each Holder and is intended for the Company to treat the Holders as a class and shall not in any way be construed as the Holders acting
in concert or as a group with respect to the purchase or disposition of the Notes or otherwise.
Section
13. Usury. To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever
claim and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at
any time hereafter in force, in connection with any action or proceeding that may be brought by any Holder in order to enforce any right
or remedy under this Note and the Warrants. Notwithstanding any provision to the contrary contained in this Note and the Warrants, it
is expressly agreed and provided that the total liability of the Company under this Note and the Warrants for payments in the nature
of interest shall not exceed the maximum lawful rate authorized under applicable law (the “Maximum Rate”), and, without
limiting the foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums
in the nature of interest that the Company may be obligated to pay under this Note and the Warrants exceed such Maximum Rate. It is agreed
that if the maximum contract rate of interest allowed by law and applicable to this Note and the Warrants is increased or decreased by
statute or any official governmental action subsequent to the date hereof, the new maximum contract rate of interest allowed by law will
be the Maximum Rate applicable to this Note and the Warrants from the effective date thereof forward, unless such application is precluded
by applicable law. If under any circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to any Holder
with respect to indebtedness evidenced by the this Note and the Warrants, such excess shall be applied by such Holder to the unpaid principal
amount of any such indebtedness or be refunded to the Company, the manner of handling such excess to be at such Holder’s election.
(Signature
Page Follows)
IN
WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly authorized officer as of the date first above indicated.
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MARIZYME,
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/s/
David Barthel |
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Name: |
David
Barthel |
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Title: |
Chief
Executive Officer |
ANNEX
A
NOTICE
OF CONVERSION
The
undersigned hereby elects to convert principal under the 15% Original Issue Discount Unsecured Subordinated Convertible Promissory Notes,
due __, 2024 , in the original principal amount of $_______ (the “Note”), issued by Marizyme, Inc., a Nevada corporation
(the “Company”), into shares of common stock, par value $0.001 per share, of the Company (the “Common Stock”)
according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a person
other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such
certificates and opinions as reasonably requested by the Company in accordance therewith. No fee will be charged to the holder for any
conversion, except for such transfer taxes, if any.
By
the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common Stock
does not exceed the amounts specified under Section 7(d) of this Note, as determined in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended.
The
undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with any transfer
of the aforesaid shares of Common Stock.
Conversion
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Principal
Amount of Note to be Converted: |
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Payment
of Interest in Common Stock __ yes __ no |
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If
yes, $_____ of Interest Accrued on Account of Conversion at Issue. |
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Number
of shares of Common Stock to be issued: |
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Signature: |
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Exhibit
4.2
THIS
WARRANT HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY.
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.
This
Warrant is issued pursuant to that certain Unit Purchase Agreement dated July 10, 2023 by and between the Company and the Holder (as
defined below) (the “Purchase Agreement”). Capitalized terms used and not otherwise defined herein shall have the
meanings set forth for such terms in the Purchase Agreement. Receipt of this Warrant by the Holder shall constitute acceptance and agreement
to all of the terms contained herein.
No.
6
MARIZYME,
INC.
Class
e COMMON STOCK PURCHASE WARRANT
Marizyme,
Inc., a Nevada corporation (together with any corporation which shall succeed to or assume the obligations of Marizyme, Inc. hereunder,
the “Company”), hereby certifies that, for value received, Hexin Global Ltd., an entity (the “Holder”),
is entitled, subject to the terms set forth below, to purchase from the Company at any time during the Exercise Period (as defined in
Section 9) up to Fourteen Million Seven Hundred Five Thousand Eight Hundred Eighty-Seven (14,705,887) fully paid and non-assessable shares
of Common Stock (as defined in Section 9), at a purchase price per share equal to the Exercise Price (as defined in Section 9). The number
of shares of Common Stock for which this Class E Common Stock Purchase Warrant (this “Warrant”) is exercisable and the Exercise
Price are subject to adjustment as provided herein.
1.
DEFINITIONS. Certain terms are used in this Warrant as specifically defined in Section 9.
2.
EXERCISE OF WARRANT.
2.1.
Exercise. This Warrant may be exercised prior to its expiration pursuant to Section 2.5 hereof by the Holder at any time or from
time to time during the Exercise Period, by submitting the form of subscription attached hereto (the “Exercise Notice”)
duly executed by the Holder, to the Company at its principal office, indicating whether the Holder is electing to purchase a specified
number of shares by paying the Aggregate Exercise Price as provided in Section 2.2 or is electing to exercise this Warrant as to a specified
number of shares pursuant to the cashless exercise provisions of Section 2.3. On or before the first Trading Day following the date on
which the Company has received the Exercise Notice, the Company shall transmit by electronic mail an acknowledgement of confirmation
of receipt of the Exercise Notice. Subject to Section 2.5, this Warrant shall be deemed exercised for all purposes as of the close of
business on the day on which the Holder has delivered the Exercise Notice to the Company. The Aggregate Exercise Price, if any, shall
be paid by wire transfer to the Company within five (5) Business Days of the date of exercise and prior to the time the Company issues
the certificates or transfer agent book-entries evidencing the shares issuable upon such exercise. In the event this Warrant is not exercised
in full, the Company may, at its expense, require the Holder, after such partial exercise, to promptly return this Warrant to the Company
and the Company will forthwith issue and deliver to or upon the order of the Holder a new warrant or warrants of like tenor, in the name
of the Holder or as the Holder (upon payment by the Holder of any applicable transfer taxes) may request, calling in the aggregate on
the face or faces thereof for the number of shares of Common Stock equal (without giving effect to any adjustment therein) to the number
of such shares called for on the face of this Warrant minus the number of such shares (without giving effect to any adjustment therein)
for which this Warrant shall have been exercised.
2.2.
Payment of Exercise Price by Wire Transfer. If the Holder elects to purchase a specified number of shares by paying the Aggregate
Exercise Price, the Holder shall pay such amount by wire transfer of immediately available funds to the account designated by the Company
in its acknowledgement of receipt of such Exercise Notice pursuant to Section 2.1.
2.3.
Cashless Exercise. If at any time after 180 days following the Issue Date (“Registration Deadline”), there
is no effective registration statement registering, or no current prospectus available for, the resale of the Warrant Shares by the Holder
(a “Registration Default”), then this Warrant may also be exercised, in whole or in part, at such time by means of
a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained
by dividing [(A-B) (X)] by (A), where:
(A)
= as applicable: (i) the VWAP 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 2.1 hereof on a day that is not a Trading Day or (2) both executed and delivered
pursuant to Section 2.1 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 Common Stock on the principal
Trading Market as reported by Bloomberg L.P. 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
(including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2.1 or (iii)
the VWAP 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 2.1 after the close of “regular trading hours” on such Trading Day;
(B)
= the Exercise Price of this Warrant, as adjusted hereunder; and
(X)
= the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such
exercise were by means of a cash exercise rather than a cashless exercise.
If
Warrant Shares are issued in such a cashless exercise, the Company and the Holder acknowledge and agree that in accordance with Section
3(a)(9) of the Securities Act, the Warrant Shares shall take on the characteristics of the Warrant being exercised, and the holding period
of the Warrant Shares being issued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position
contrary to this Section 2.3.
“Bid
Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock
is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the OTCQB Venture Market (“OTCQB”) service or
the OTCQX Best Market (“OTCQX”) service of OTC Markets Group Inc. (or a similar organization or agency succeeding
to its functions of reporting prices) (“OTC Markets”), respectively, is not a Trading Market, the volume weighted
average price of the Common Stock for such date (or the nearest preceding date) on the OTCQB or the OTCQX as applicable, (c) if the Common
Stock is not then listed or quoted for trading on the OTCQB or the OTCQX and if prices for the Common Stock are then quoted on the Pink
Open Market service of OTC Markets (the “Pink Sheets”), the most recent bid price per share of the Common Stock so
reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected
in good faith by the Holder and the Company, the fees and expenses of which shall be paid by the Company.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if is not a Trading Market, the volume weighted average price of the
Common Stock for such date (or the nearest preceding date) on the OTCQB or the OTCQX as applicable, (c) if the Common Stock is not then
listed or quoted for trading on the OTCQB or the OTCQX and if prices for the Common Stock are then quoted on the Pink Sheets, the most
recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock
as determined by an independent appraiser selected in good faith by the Holder and the Company , the fees and expenses of which shall
be paid by the Company.
Notwithstanding
anything herein to the contrary, on the date of termination of this Warrant pursuant to Section 2.5 hereof, this Warrant shall be automatically
exercised via cashless exercise pursuant to this Section 2.3.
If
at any time after the Registration Deadline, there is a Registration Default, then, for each thirty (30) days following the Registration
Deadline, or portion of any thirty (30) day period thereafter in which a Registration Default exists, the amount of Warrant Shares of
Holder shall be automatically increased by five percent (5%) over the Warrant Shares which are held by the Holder as on such dates (which
percentage shall be prorated in the case of a partial month) not to exceed in the aggregate an additional twenty-five percent (25%).
2.5.
Antitrust Notification. If the Holder determines, in its sole judgment upon the advice of counsel, that the issuance of any Warrant
Shares pursuant to the terms hereof would be subject to the provisions of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the “HSR Act”), the Company shall file as soon as practicable after the date on which the Company receives
notice from the Holder of the applicability of the HSR Act and a request to so file with the United States Federal Trade Commission and
the United States Department of Justice the notification and report form required to be filed by it pursuant to the HSR Act in connection
with such issuance.
2.6.
Termination. This Warrant shall terminate upon the earlier to occur of (i) exercise in full or (ii) the expiration of the Exercise
Period.
2.7.
Authorized Shares; Capital Event. The Company covenants that, promptly following the Issue Date, the Company shall take all corporate
action necessary and use all commercially reasonable efforts to call a meeting of its stockholders (which may be its annual meeting)
(the “Stockholders Meeting”), for the purpose of seeking approval of the Company’s stockholders (the “Stockholder
Approval”) to amend the Articles of Incorporation (the “Capital Event Amendment”) to increase the number
of shares of Common Stock the Company is authorized to issue sufficient to permit the exercise in full of this Warrant in accordance
with its terms (the “Capital Event”). In connection therewith, the Company will as soon as reasonably practicable
either before and/or after the Issue Date file with the U.S. Securities and Exchange Commission (the “SEC”) proxy
materials (including a proxy statement and form of proxy) for use at the Stockholders Meeting and, after receiving and promptly responding
to any comments of the SEC thereon, shall as soon as reasonably practicable mail such proxy materials to the stockholders of the Company.
The Company will comply with Section 14(a) of the Exchange Act and the rules promulgated thereunder in relation to any proxy statement
(as amended or supplemented, the “Proxy Statement”) and any form of proxy to be sent to the stockholders of the Company
in connection with the Stockholders Meeting, and the Proxy Statement shall not, on the date that the Proxy Statement (or any amendment
thereof or supplement thereto) is first mailed to stockholders or at the time of the Stockholders Meeting, contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make the statements made therein not false or misleading,
or omit to state any material fact necessary to correct any statement in any earlier communication with respect to the solicitation of
proxies or the Stockholders Meeting which has become false or misleading. If the Company should discover at any time prior to the Stockholders
Meeting, any event relating to the Company or the Subsidiaries or any of their respective officers or directors that is required to be
set forth in a supplement or amendment to the Proxy Statement, in addition to the Company’s obligations under the Exchange Act,
the Company will promptly inform the Placement Agent thereof. The Board of Directors shall recommend to the Company’s stockholders
that the stockholders vote in favor of the Capital Event at the Stockholders Meeting and take all commercially reasonable action (including,
without limitation, the hiring of a proxy solicitation firm of nationally recognized standing) to solicit the approval of the stockholders
for the Capital Event. If the Company does not obtain stockholder approval for the Capital Event at the Stockholders Meeting, the Company
shall call a meeting every four (4) months thereafter to seek such Stockholder Approval until the date that such Stockholder Approval
is obtained. No later than two (2) Business Days following such Stockholder Approval of the Capital Event, the Company shall file with
the Secretary of State of Nevada a certificate of amendment to the Articles of Incorporation to provide for the effectiveness of the
Capital Event, which shall provide that it shall become immediately effective upon filing. The Company shall file a Current Report on
Form 8-K announcing the results of the Stockholders Meeting and the filing of the Capital Event Amendment no later than four (4) Business
Days after each such event.
Following
the occurrence of the Capital Event and thereafter during the period this Warrant is outstanding, the Company shall reserve from its
authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise
of this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who
are charged with the duty of issuing the necessary Warrant Shares upon the exercise of this Warrant. The Company will take all such reasonable
action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law
or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all
Warrant Shares which may be issued upon the exercise of this Warrant will, upon exercise of this Warrant and payment for such Warrant
Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges
created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with
such issue).
Except
and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending
its Articles of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but
will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary
or appropriate to protect the rights of the Holder as set forth in this Warrant against impairment. Without limiting the generality of
the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise
immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company
may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof,
as may be necessary to enable the Company to perform its obligations under this Warrant.
Before
taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from
any public regulatory body or bodies having jurisdiction thereof.
3.
REGISTRATION RIGHTS. The Holder’s registration rights are set forth in the Registration Rights Agreement.
4.
DELIVERY OF STOCK CERTIFICATES ON EXERCISE.
4.1.
Delivery of Exercise Shares. As soon as practicable after any exercise of this Warrant and in any event within two (2) Trading
Days thereafter (such date, the “Exercise Share Delivery Date”), the Company shall, at its expense (including the
payment by it of any applicable issue or stamp taxes), cause to be issued in the name of and delivered to the Holder, or as the Holder
may direct, a certificate or certificates or transfer agent book-entry evidencing the number of fully paid and non-assessable shares
of Common Stock (which number shall be rounded down to the nearest whole share in the event any fractional share may otherwise be issuable
upon such exercise and the Company shall pay a cash adjustment to the Holder in respect of such final fraction in an amount equal to
such fraction multiplied by the Exercise Price) to which the Holder shall be entitled on such exercise, in such denominations as may
be requested by the Holder, which certificate or certificates or transfer agent book-entry shall be free of restrictive and trading legends
(except for any such legends as may be required under the Securities Act). In lieu of delivering physical certificates for or transfer
agent book-entry issuance of the shares of Common Stock issuable upon any exercise of this Warrant, provided the Warrant Shares are not
restricted securities and the Company’s transfer agent is participating in the Depository Trust Company (“DTC”)
Fast Automated Securities Transfer program or a similar program, upon request of the Holder, the Company shall cause its transfer agent
to electronically transmit such shares of Common Stock issuable upon exercise of this Warrant to the Holder (or its designee), by crediting
the account of the Holder’s (or such designee’s) broker with DTC through its Deposit Withdrawal Agent Commission system (provided
that the same time periods herein as for stock certificates shall apply) as instructed by the Holder (or its designee). If the Company
fails for any reason to deliver to the Holder the Warrant Shares subject to an Exercise Notice by the Warrant Share Delivery Date, the
Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such
exercise (based on the VWAP of the Common Stock on the date of the applicable Exercise Notice), $5 per Trading Day for each Trading Day
after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to
maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used
herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days,
on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Exercise Notice.
4.2.
Compensation for Buy-In on Failure to Timely Deliver Exercise Shares. In addition to any other rights available to the Holder,
if the Company fails to cause its transfer agent to transmit to the Holder Exercise Shares pursuant to an exercise on or before the Exercise
Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise)
or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of
the Exercise Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall
(a) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions,
if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Exercise Shares
that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell
order giving rise to such purchase obligation was executed, and (b) at the option of the Holder, either reinstate the portion of the
Warrant and equivalent number of Exercise Shares for which such exercise was not honored (in which case such exercise shall be deemed
rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied
with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price
of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise
to such purchase obligation of $10,000, under clause (a) of the immediately preceding sentence the Company shall be required to pay the
Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In
and evidence of the amount of such loss. Nothing herein shall limit the Holder’s right to pursue a decree of specific performance
and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant
as required pursuant to the terms hereof.
4.3.
Charges, Taxes and Expenses. Issuance of Exercise Shares shall be made without charge to the Holder for any issue or transfer
tax or other incidental expense in respect of the issuance of such Exercise Shares, all of which taxes and expenses shall be paid by
the Company, and such Exercise Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder;
provided, however, that in the event Exercise Shares are to be issued in a name other than the name of the Holder, this
Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto (the “Assignment Form”)
duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for
any transfer tax incidental thereto.
5.
CERTAIN ADJUSTMENT.
5.1.
Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (a) pays a stock dividend or otherwise
makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares
of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this
Warrant), (b) subdivides outstanding shares of Common Stock into a larger number of shares, (c) combines (including by way of reverse
stock split) outstanding shares of Common Stock into a smaller number of shares, or (d) issues by reclassification of shares of the Common
Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event
and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event and the number of
shares issuable upon exercise of this Warrant shall be proportionately adjusted. Any adjustment made pursuant to this Section 5.1
shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend
or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
5.2.
Subsequent Equity Sales; Uplisting. If, at any time while this Warrant is outstanding, the Company or any Subsidiary, as applicable,
sells or grants any option to purchase or sells or grants any right to reprice, or otherwise disposes of or issues (or announces any
sale, grant or any option to purchase or other disposition), any Common Stock or Common Stock Equivalents entitling any Person to acquire
shares of Common Stock at an effective price per share that is lower than the then Exercise Price (such lower price, the “Base
Exercise Price” and such issuances, collectively, a “Dilutive Issuance”) (if the holder of the Common Stock
or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating
conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection
with such issuance, be entitled to receive shares of Common Stock at an effective price per share that is lower than the Exercise Price,
such issuance shall be deemed to have occurred for less than the Exercise Price on such date of the Dilutive Issuance), then simultaneously
with the consummation (or, if earlier, the announcement) of each Dilutive Issuance the Exercise Price shall be reduced to equal the Base
Exercise Price (subject to adjustment for reverse and forward stock splits, recapitalizations and similar transactions following the
date of this Warrant), provided that the Base Exercise Price shall not be less than the floor price as determined by any applicable
Trading Market and for the avoidance of doubt subject to adjustment for reverse and forward stock splits, recapitalizations and similar
transactions following the date hereof. Notwithstanding the foregoing, no adjustment will be made under this Section 3(b) in respect
of any Exempt Issuance as that term is defined and construed in the Purchase Agreement. If the Company enters into a variable rate transaction,
the Company shall be deemed to have issued Common Stock or Common Stock Equivalents at the lowest possible conversion price at which
such securities may be converted or exercised. The Company shall notify the Holder in writing, no later than the Trading Day following
the issuance of any Common Stock or Common Stock Equivalents subject to this Section 5.2, indicating therein the applicable issuance
price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice, the “Dilutive Issuance
Notice”). For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section
5.2, upon the occurrence of any Dilutive Issuance, the Holder is entitled to receive the lower exercise price based upon the Base Exercise
Price on or after the date of such Dilutive Issuance, regardless of whether the Holder accurately refers to the Base Exercise
Price in the Exercise Notice.
5.3.
Subsequent Rights Offerings. If at any time that this Warrant is outstanding and exercisable, the Company grants, issues or sells
any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any
class of shares 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 on exercise hereof, including
without limitation, the Beneficial Ownership Limitation) 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, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right
to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall
not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result
of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time,
if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
5.4
Pro Rata Distributions. During such time as this Warrant is outstanding, 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 or options 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 on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date of 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 exceeding
the Beneficial Ownership Limitation (as defined herein), then the Holder shall not be entitled to participate in such Distribution to
such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion
of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not
result in the Holder exceeding the Beneficial Ownership Limitation).
5.5
Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company,
directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person,
(ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of
all or substantially all of its assets in one or a series of related transactions, (iii) any direct or indirect purchase offer, tender
offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of shares of Common Stock are
permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50%
or more of the outstanding shares of Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects
any reclassification, reorganization or recapitalization of the shares of Common Stock or any compulsory share exchange pursuant to which
the shares of Common Stock are effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly
or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including,
without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby
such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock
held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to,
such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”),
then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have
been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without
regard to the Beneficial Ownership Limitation (as defined herein)), the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such Fundamental Transaction (without regard to the Beneficial Ownership Limitation). For purposes of
any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based
on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company
shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different
components of the Alternate Consideration. If holders of shares of Common Stock are given any choice as to the securities, cash or property
to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives
upon any exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary, in the event
of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable
at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date of the
public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount
of cash equal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation
of such Fundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including
not approved by the Company’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor
Entity, as of the date of consummation of such Fundamental Transaction, the same type or form of consideration (and in the same proportion),
at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to the holders of Common Stock
of the Company in connection with the Fundamental Transaction, whether that consideration is in the form of cash, stock or any combination
thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connection
with the Fundamental Transaction; provided, further, that if holders of Common Stock of the Company are not offered or paid any consideration
in such Fundamental Transaction, such holders of Common Stock will be deemed to have received common stock of the Successor Entity (which
Entity may be the Company following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value”
means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg
determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free
interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the
applicable contemplated Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of 100% and
the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading
Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlying price per
share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value
of any non-cash consideration, if any, being offered in such Fundamental Transaction and (ii) the highest volume-weighted average price
during the period beginning on the Trading Day immediately preceding the public announcement of the applicable contemplated 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 this Section 5.5 and (D) a remaining option time equal to the time between the date of the public announcement of
the applicable contemplated Fundamental Transaction and the date of termination pursuant to Section 2.5 hereof and (E) a zero cost of
borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration)
within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction.
The Company shall cause any successor entity in a Fundamental Transaction in which the Company
is not the survivor (the “Successor Entity”) to assume in writing all
of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section
5.5 pursuant to written agreements in form and substance reasonably satisfactory to the Holder prior to such Fundamental Transaction
and shall, at the option of the Holder, 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 which is exercisable for a corresponding number of
shares of capital stock of such Successor Entity (or its parent entity) 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 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 which is reasonably satisfactory in form and substance to the Holder.
Upon the occurrence of any such 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 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.
5.6
Calculations. All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share, as the
case may be. For purposes of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as of a given date
shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding at the close of the
Trading Day on or, if not applicable, most recently preceding, such given date.
5.7
Notice to Holder.
(a)
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 5, the Company
shall promptly mail to the Holder a notice setting forth the Exercise Price after such adjustment and setting forth a brief statement
of the facts requiring such adjustment.
(b)
Notice to Allow Exercise by Holder. If (i) the Company shall declare a dividend (or any other distribution in whatever form) on
the Common Stock; (ii) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock; (iii) the
Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of
capital stock of any class or of any rights; (iv) the approval of any stockholders of the Company shall be required in connection with
any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or
substantially all of the assets of the Company, of any compulsory share exchange whereby the Common Stock is converted into other securities,
cash or property; or (v) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs
of the Company; then, in each case, the Company shall cause to be mailed or emailed to the Holder at its last address or email address
as it shall appear upon the Company’s records, at least twenty (20) calendar days prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to
be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected
that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to
mail or email such notice or any defect therein or in the mailing or emailing thereof shall not affect the validity of the corporate
action required to be specified in such notice. Subject to applicable law, the Holder is entitled to exercise this Warrant during the
period commencing on the date of such notice to the effective date of the event triggering such notice. Notwithstanding the foregoing,
the delivery of the notice described in this Section 5.7 is not intended to and shall not bestow upon the Holder any voting rights whatsoever
with respect to outstanding unexercised portion of this Warrant.
6.
NO IMPAIRMENT. The Company will not, by amendment of the Articles of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms
and in taking all such action as may be necessary or appropriate in order to protect the rights of the Holder against impairment. Without
limiting the generality of the foregoing, the Company (a) will not increase the par value of any shares of Common Stock receivable on
the exercise of this Warrant above the amount payable therefor on such exercise and (b) will take all such action as may be necessary
or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of stock on the exercise
of this Warrant from time to time outstanding.
7.
NOTICES OF RECORD DATE. In the event of:
(a)
any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who
are entitled to receive any dividend or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of
stock of any class or any other securities or property, or to receive any other right;
(b)
any capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company or any transfer
of all or substantially all the assets of the Company to or any consolidation or merger of the Company with or into any other Person
or any other Change of Control; or
(c)
any voluntary or involuntary dissolution, liquidation or winding-up of the Company;
then,
and in each such event, the Company will mail or email or cause to be mailed or emailed to the Holder a notice specifying (i) the date
on which any such record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character
of such dividend, distribution or right, or (ii) the date on which any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is anticipated to take place, and the time, if any is to be fixed, as of
which the holders of record of Common Stock shall be entitled to exchange their shares of Common Stock for securities or other property
deliverable on such reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up. Such notice shall be mailed or emailed at least fifteen (15) days prior to the date specified in such notice on which any
such action is to be taken.
8.
RESERVATION OF STOCK ISSUABLE ON EXERCISE OF WARRANT; REGULATORY COMPLIANCE.
8.1.
Reservation of Stock Issuable on Exercise of Warrant. Following the effectiveness of the Capital Event Amendment, the Company
shall at all times while this Warrant shall be outstanding, reserve and keep available out of its authorized but unissued Common Stock,
such number of shares of Common Stock as shall from time to time be sufficient to effect the exercise of all or any portion of the Warrant
Shares (disregarding for this purpose any and all limitations of any kind on such exercise). Following the effectiveness of the Capital
Event Amendment, the Company shall, from time to time in accordance with Chapter 78 of the Nevada Revised Statutes, increase the authorized
number of shares of Common Stock or take other effective action if at any time the unissued number of authorized shares shall not be
sufficient to satisfy the Company’s obligations under this Section 8.
8.2.
Regulatory Compliance. If any shares of Common Stock to be reserved for the purpose of exercise of the Warrant Shares require
registration or listing with or approval of any Governmental Authority, stock exchange or other regulatory body under any federal or
state law or regulation or otherwise before such shares may be validly issued or delivered upon exercise, the Company shall, at its sole
cost and expense, in good faith and as expeditiously as possible, secure such registration, listing or approval, as the case may be.
8.3.
Stockholder Approval. Notwithstanding anything herein to the contrary, the Company shall not be required to issue any Warrant
Shares if such issuance would cause the Company to be in violation of the rules and regulations of the Trading Market, the Articles of
Incorporation, or the Nevada Revised Statutes.
9.
DEFINITIONS. As used herein the following terms, unless the context otherwise requires, have the following respective meanings:
“Aggregate
Exercise Price” means, in connection with the exercise of this Warrant at any time, an amount equal to the product obtained
by multiplying (i) the Exercise Price times (ii) the number of shares of Common Stock for which this Warrant is being exercised at such
time.
“Alternate
Consideration” has the meaning set forth in Section 5.5 hereof.
“Articles
of Incorporation” means the Company’s Articles of Incorporation.
“Bid
Price” has the meaning set forth in Section 2.3 hereof.
“Black
Scholes Value” has the meaning set forth in Section 5.5 hereof.
“Business
Day” means any day other than a Saturday, Sunday or any other day on which the Federal Reserve Bank of New York is closed in
New York City.
“Capital
Event” has the meaning set forth in Section 2.7 hereof.
“Capital
Event Amendment” has the meaning set forth in Section 2.7 hereof.
“Change
of Control” has the meaning set forth in the Purchase Agreement.
“Common
Stock” means (i) the Company’s Common Stock, par value $0.001 per share, and (ii) any other securities into which or
for which any of the securities described in clause (i) above have been converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, sale of assets or otherwise.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended.
“Exercise
Notice” has the meaning set forth in Section 2.1 hereof.
“Exercise
Period” means the period commencing on the time of the effectiveness of the Capital Event Amendment and ending 11:59 P.M. (Eastern
Time) on the five-year anniversary of the Issue Date or earlier closing of a Fundamental Transaction (other than a Fundamental Transaction
of the type described in clause (d) of the definition thereof resulting in the conversion into or exchange for another security of the
Company).
“Exercise
Price” means $0.10 per share.
“Exercise
Shares” means the shares of Common Stock for which this Warrant is then being exercised.
“Fair
Market Value” means, with respect to any security or other property, the fair market value of such security or other property
as determined by the Board of Directors, acting in good faith.
“Fundamental
Transaction” has the meaning set forth in Section 5.5 hereof.
“Governmental
Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether
state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national
bodies such as the European Union or the European Central Bank).
“HSR
Act” has the meaning set forth in Section 2.5 hereof.
“Issue
Date” means July 10, 2023.
“Note”
means the 15% original issue discount unsecured subordination convertible promissory note issued by the Company to the Holder pursuant
to the Purchase Agreement.
“OTCQB”
has the meaning set forth in Section 2.3 hereof.
“OTCQX”
has the meaning set forth in Section 2.3 hereof.
“OTC
Markets” has the meaning set forth in Section 2.3 hereof.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Pink
Sheets” has the meaning set forth in Section 2.3 hereof.
“Proxy
Statement” has the meaning set forth in Section 2.7 hereof.
“Registration
Rights Agreement” means the Registration Rights Agreement, dated as of July 10, 2023 (as the same may be amended from time
to time), by and between the Company and each of the several purchasers signatory thereto.
“Registration
Deadline” has the meaning set forth in Section 2.3 hereof.
“Registration
Default” has the meaning set forth in Section 2.3 hereof.
“SEC”
shall have the meaning set forth in Section 2.7 hereof.
“Securities
Act” means the Securities Act of 1933, as amended.
“Stockholders
Meeting” has the meaning set forth in Section 2.7 hereof.
“Subsidiary”
means, as of any time of determination and with respect to any Person, any United States corporation, partnership, limited liability
company or limited liability partnership, all of the stock (or other equity interest) of every class of which, except directors’
qualifying shares (or any equivalent), shall, at such time, be owned by such Person either directly or through Subsidiaries and of which
such Person or a Subsidiary shall have 100% control thereof, except directors’ qualifying shares. Unless the context otherwise
clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of the Company.
“Successor
Entity” has the meaning set forth in Section 5.5 hereof.
“Trading
Day” means a day on which the Common Stock is traded on a Trading Market.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock (or any other common stock of any other Person
that references the Trading Market for its common stock) is listed or quoted for trading on the date in question: The Nasdaq Stock Market
LLC, the New York Stock Exchange, NYSE American, or the OTCQX, the OTCQB, the Pink market or any other tier operated by OTC Markets Group
Inc. (or any successor to any of the foregoing).
“Unavailable
Warrant Shares” has the meaning set forth in Section 2.4 hereof.
“Uplisting
Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: The NYSE American, The Nasdaq Stock Market LLC, or the New York Stock Exchange (or any successors to any of the
foregoing).
“VWAP”
has the meaning set forth in Section 2.3 hereof.
“Warrant
Shares” means collectively the shares of Common Stock of the Company issuable upon exercise of this Warrant in accordance with
its terms, as such number may be adjusted pursuant to the provisions thereof.
10.
LIMITATION ON BENEFICIAL OWNERSHIP. Notwithstanding anything to the contrary contained herein, the Holder shall not be entitled
to receive shares of Common Stock or other securities (together with Common Stock, “Equity Interests”) upon exercise
of this Warrant to the extent (but only to the extent) that such exercise or receipt would cause the Holder Group to become, directly
or indirectly, a “beneficial owner” (within the meaning of Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder) of a number of Equity Interests of a class that is registered under the Exchange Act which exceeds the Maximum
Percentage (as defined below) of the Equity Interests of such class that are outstanding at such time (the “Beneficial Ownership
Limitation”). Any purported delivery of Equity Interests in connection with the exercise of this Warrant prior to the termination
of this restriction in accordance herewith shall be void and have no effect to the extent (but only to the extent) that such delivery
would result in the Holder Group becoming the beneficial owner of more than the Maximum Percentage of the Equity Interests of a class
that is registered under the Exchange Act that is outstanding at such time. If any delivery of Equity Interests owed to the Holder following
exercise of this Warrant is not made, in whole or in part, as a result of this limitation, the Company’s obligation to make such
delivery shall not be extinguished and the Company shall deliver such Equity Interests as promptly as practicable after the Holder gives
notice to the Company that such delivery would not result in such limitation being triggered or upon termination of the restriction in
accordance with the terms hereof. To the extent limitations contained in this Section 10 apply, the determination of whether this Warrant
is exercisable and of which portion of this Warrant is exercisable shall be the sole responsibility and in the sole determination of
the Holder, and the submission of an Exercise Notice shall be deemed to constitute the Holder’s determination that the issuance
of the full number of Warrant Shares requested in the Exercise Notice is permitted hereunder, and neither the Company nor any Warrant
agent shall have any obligation to verify or confirm the accuracy of such determination. For purposes of this Section 10, (i) the term
“Maximum Percentage” shall mean 4.99%; provided, that if at any time after the date hereof the Holder Group beneficially
owns in excess of 4.99% of any class of Equity Interests in the Company that is registered under the Exchange Act (excluding any Equity
Interests deemed beneficially owned by virtue of the Warrant or the Note), then the Maximum Percentage shall automatically increase to
9.99% so long as the Holder Group owns in excess of 4.99% of such class of Equity Interests (and shall, for the avoidance of doubt, automatically
decrease to 4.99% upon the Holder Group ceasing to own in excess of 4.99% of such class of Equity Interests); and (ii) the term “Holder
Group” shall mean the Holder plus any other Person with which the Holder is considered to be part of a group under Section
13 of the Exchange Act or with which the Holder otherwise files reports under Sections 13 and/or 16 of the Exchange Act. In determining
the number of Equity Interests of a particular class outstanding at any point in time, the Holder may rely on the number of outstanding
Equity Interests of such class as reflected in (x) the Company’s most recent Annual Report on Form 10-K or Quarterly Report on
Form 10-Q filed with the SEC, as the case may be, (y) a more recent public announcement by the Company or (z) a more recent notice by
the Company or its transfer agent to the Holder setting forth the number of Equity Interests of such class then outstanding. For any
reason at any time, upon written or oral request of the Holder, the Company shall, within one (1) Trading Day of such request, confirm
orally and in writing to the Holder the number of Equity Interests of any class then outstanding. Anything herein to the contrary, any
increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company.
The provisions of this Section 10 shall be construed, corrected and implemented in a manner so as to effectuate the intended beneficial
ownership limitation herein contained.
11.
REGISTRATION AND TRANSFER OF WARRANT.
11.1.
Registration of Warrant. The Company shall register and record transfers, exchanges, reissuances and cancellations of this Warrant,
upon the records to be maintained by the Company for that purpose, in the name of the record holder hereof from time to time. The Company
may deem and treat the registered holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution
to the Holder, and for all other purposes, absent actual notice to the contrary. The Company shall be entitled to rely and held harmless
in acting or refraining from acting in reliance upon, any notices, instructions or documents it believes in good faith to be from an
authorized representative of the Holder.
11.2
Transferability. This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable,
in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written
assignment of this Warrant substantially in the form of assignment (the “Assignment Notice”) attached hereto duly
executed by the Holder or its agent or attorney. The Company may require the transferor thereof to provide to the Company an opinion
of counsel selected by the transferor, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the
effect that such transfer does not require registration of the transferred Warrant under the Securities Act. Upon such surrender, the
Company shall execute and deliver a new warrant or warrants in the name of the assignee or assignees, as applicable, and in the denomination
or denominations specified in such Assignment Notice, and shall issue to the assignor a new warrant evidencing the portion of this Warrant
not so assigned, and this Warrant shall promptly be cancelled. This Warrant, if properly assigned in accordance herewith, may be exercised
by a new holder for the purchase of Exercise Shares without having a new warrant issued.
11.3.
New Warrants. This Warrant may be divided or combined with other warrants issued to the holder under the Purchase Agreement or
upon previous division of this Warrant upon presentation hereof at the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new warrants are to be issued, signed by the Holder or its agent or attorney. Subject
to compliance with Section 11.2, as to any transfer which may be involved in such division or combination, the Company shall execute
and deliver a new warrant or warrants in exchange for this Warrant or warrants to be divided or combined in accordance with such notice.
All warrants issued on transfers or exchanges shall be dated the original Issue Date and shall be identical with this Warrant except
as to the number of Exercise Shares issuable pursuant thereto.
12.
LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Exercise Shares,
and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of this Warrant,
shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the
Company will make and deliver a new warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such warrant
or stock certificate.
13.
REMEDIES. The Company stipulates that the remedies at law of the Holder in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate, and that such terms
may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a
violation of any of the terms hereof or otherwise.
14.
NO RIGHTS AS A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in such Person’s 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 such Person’s 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 Exercise
Shares.
15.
NOTICES. All notices, requests, demands and other communications that are required or may be given pursuant to the terms of this
Warrant shall be in writing and shall be deemed delivered (i) on the date of delivery when delivered by hand on a Business Day during
normal business hours or, if delivered on a day that is not a Business Day or after normal business hours, then on the next Business
Day, (ii) on the date of transmission when sent by facsimile transmission or email during normal business hours on a Business Day with
telephone confirmation of receipt or, if transmitted on a day that is not a Business Day or after normal business hours, then on the
next Business Day, or (iii) on the second Business Day after the date of dispatch when sent by a reputable courier service that maintains
records of receipt. The addresses for notice shall be as set forth in the Purchase Agreement.
16.
CONSENT TO AMENDMENTS. Any term of this Warrant may be amended, and the Company may take any action herein prohibited, or compliance
therewith may be waived, only if the Company shall have obtained the written consent (and not without such written consent) to such amendment,
action or waiver from the Holder. No course of dealing between the Company and the Holder nor any delay in exercising any rights hereunder
shall operate as a waiver of any rights of the Holder.
17.
MISCELLANEOUS. In case any provision of this Warrant shall be invalid, illegal or unenforceable, or partially invalid, illegal
or unenforceable, the provision shall be enforced to the extent, if any, that it may legally be enforced and the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or impaired thereby. If any provision of this Warrant is
found to conflict with the Purchase Agreement, the provisions of this Warrant shall prevail. If any provision of this Warrant is found
to conflict with the Note, the provisions of the Note shall prevail. THIS WARRANT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE INTERNAL LAW OF THE STATE OF NEVADA EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE
LAW OF SUCH STATE THAT WOULD PERMIT THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE. The headings in this Warrant
are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof.
[Remainder
of Page Intentionally Left Blank]
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its duly authorized officer.
Dated
as of July 10, 2023
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marizyme,
INC. |
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By: |
/s/
David Barthel |
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Name: |
David
Barthel |
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Title: |
Chief
Executive Officer |
FORM
OF SUBSCRIPTION
(To
be signed only on exercise
of
attached Warrant)
TO:
Marizyme, Inc.
1.
The undersigned Holder of the attached Warrant hereby elects to exercise its purchase right under such Warrant to purchase shares of
Common Stock of Marizyme, Inc., a Nevada corporation (the “Company”), as follows (check one or more, as applicable):
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☐ |
to
exercise the Warrant to purchase __________ shares of Common Stock and to pay the Aggregate Exercise Price therefor by wire transfer
of United States funds to the account of the Company, which transfer has been made prior to or as of the date of delivery of this
Form of Subscription pursuant to the instructions of the Company; |
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and/or |
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☐ |
to
exercise the Warrant with respect to ____________ shares of Common Stock pursuant to the net exercise provisions specified in Section
2.3 of the Warrant. |
2.
In exercising this Warrant, the undersigned Holder hereby confirms and acknowledges that the shares of Common Stock are being acquired
solely for the account of the undersigned and not as a nominee for any other party, and for investment, and that the undersigned shall
not offer, sell or otherwise dispose of any such shares of Common Stock except under circumstances that will not result in a violation
of the Securities Act or any state securities laws. The undersigned hereby further confirms and acknowledges that it is an “accredited
investor”, as that term is defined under the Securities Act.
3.
Please issue (1) a stock certificate or certificates or (2) transfer agent book-entry (circle one) representing the appropriate number
of shares of Common Stock in the name of the undersigned or in such other name(s) as is specified below:
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Name:
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Address:
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Email
Address: |
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TIN:
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Dated: |
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(Signature must conform exactly to name of |
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Holder as specified on the face of the Warrant) |
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FORM
OF ASSIGNMENT
(To
be signed only on transfer of Warrant)
For
value received, the undersigned hereby sells, assigns, and transfers unto ________________ the right represented by the within Warrant
to purchase shares of Common Stock of Marizyme, Inc., a Nevada corporation, to which the within Warrant relates, and appoints _________________
attorney to transfer such right on the books of Marizyme, Inc., with full power of substitution in the premises.
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[insert name of Holder] |
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Dated: _______________________ |
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By: |
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Title: |
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[insert address of Holder] |
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Signed
in the presence of: |
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Exhibit
4.3
THIS
WARRANT HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON
AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY.
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.
This
Warrant is issued pursuant to that certain Unit Purchase Agreement dated July 10, 2023 by and between the Company and the Holder (as
defined below) (the “Purchase Agreement”). Capitalized terms used and not otherwise defined herein shall have the
meanings set forth for such terms in the Purchase Agreement. Receipt of this Warrant by the Holder shall constitute acceptance and agreement
to all of the terms contained herein.
No.
6
MARIZYME,
INC.
Class
f COMMON STOCK PURCHASE WARRANT
Marizyme,
Inc., a Nevada corporation (together with any corporation which shall succeed to or assume the obligations of Marizyme, Inc. hereunder,
the “Company”), hereby certifies that, for value received, Hexin Global Ltd., an entity (the “Holder”),
is entitled, subject to the terms set forth below, to purchase from the Company at any time during the Exercise Period (as defined in
Section 9) up to Fourteen Million Seven Hundred Five Thousand Eight Hundred Eighty-Seven (14,705,887) fully paid and non-assessable shares
of Common Stock (as defined in Section 9), at a purchase price per share equal to the Exercise Price (as defined in Section 9). The number
of shares of Common Stock for which this Class F Common Stock Purchase Warrant (this “Warrant”) is exercisable and the Exercise
Price are subject to adjustment as provided herein.
1.
DEFINITIONS. Certain terms are used in this Warrant as specifically defined in Section 9.
2.
EXERCISE OF WARRANT.
2.1.
Exercise. This Warrant may be exercised prior to its expiration pursuant to Section 2.5 hereof by the Holder at any time or from
time to time during the Exercise Period, by submitting the form of subscription attached hereto (the “Exercise Notice”)
duly executed by the Holder, to the Company at its principal office, indicating whether the Holder is electing to purchase a specified
number of shares by paying the Aggregate Exercise Price as provided in Section 2.2 or is electing to exercise this Warrant as to a specified
number of shares pursuant to the cashless exercise provisions of Section 2.3. On or before the first Trading Day following the date on
which the Company has received the Exercise Notice, the Company shall transmit by electronic mail an acknowledgement of confirmation
of receipt of the Exercise Notice. Subject to Section 2.5, this Warrant shall be deemed exercised for all purposes as of the close of
business on the day on which the Holder has delivered the Exercise Notice to the Company. The Aggregate Exercise Price, if any, shall
be paid by wire transfer to the Company within five (5) Business Days of the date of exercise and prior to the time the Company issues
the certificates or transfer agent book-entries evidencing the shares issuable upon such exercise. In the event this Warrant is not exercised
in full, the Company may, at its expense, require the Holder, after such partial exercise, to promptly return this Warrant to the Company
and the Company will forthwith issue and deliver to or upon the order of the Holder a new warrant or warrants of like tenor, in the name
of the Holder or as the Holder (upon payment by the Holder of any applicable transfer taxes) may request, calling in the aggregate on
the face or faces thereof for the number of shares of Common Stock equal (without giving effect to any adjustment therein) to the number
of such shares called for on the face of this Warrant minus the number of such shares (without giving effect to any adjustment therein)
for which this Warrant shall have been exercised.
2.2.Payment
of Exercise Price by Wire Transfer. If the Holder elects to purchase a specified number of shares by paying the Aggregate Exercise
Price, the Holder shall pay such amount by wire transfer of immediately available funds to the account designated by the Company in its
acknowledgement of receipt of such Exercise Notice pursuant to Section 2.1.
2.3.Cashless
Exercise. If at any time after 180 days following the Issue Date (“Registration Deadline”), there is no effective
registration statement registering, or no current prospectus available for, the resale of the Warrant Shares by the Holder (a “Registration
Default”), then this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise”
in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by
(A), where:
(A)
= as applicable: (i) the VWAP 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 2.1 hereof on a day that is not a Trading Day or (2) both executed and delivered
pursuant to Section 2.1 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 Common Stock on the principal
Trading Market as reported by Bloomberg L.P. 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
(including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2.1 or (iii)
the VWAP 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 2.1 after the close of “regular trading hours” on such Trading Day;
(B)
= the Exercise Price of this Warrant, as adjusted hereunder; and
(X)
= the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such
exercise were by means of a cash exercise rather than a cashless exercise.
If
Warrant Shares are issued in such a cashless exercise, the Company and the Holder acknowledge and agree that in accordance with Section
3(a)(9) of the Securities Act, the Warrant Shares shall take on the characteristics of the Warrant being exercised, and the holding period
of the Warrant Shares being issued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position
contrary to this Section 2.3.
“Bid
Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock
is then listed or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the OTCQB Venture Market (“OTCQB”) service or
the OTCQX Best Market (“OTCQX”) service of OTC Markets Group Inc. (or a similar organization or agency succeeding
to its functions of reporting prices) (“OTC Markets”), respectively, is not a Trading Market, the volume weighted
average price of the Common Stock for such date (or the nearest preceding date) on the OTCQB or the OTCQX as applicable, (c) if the Common
Stock is not then listed or quoted for trading on the OTCQB or the OTCQX and if prices for the Common Stock are then quoted on the Pink
Open Market service of OTC Markets (the “Pink Sheets”), the most recent bid price per share of the Common Stock so
reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected
in good faith by the Holder and the Company, the fees and expenses of which shall be paid by the Company.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if is not a Trading Market, the volume weighted average price of the
Common Stock for such date (or the nearest preceding date) on the OTCQB or the OTCQX as applicable, (c) if the Common Stock is not then
listed or quoted for trading on the OTCQB or the OTCQX and if prices for the Common Stock are then quoted on the Pink Sheets, the most
recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock
as determined by an independent appraiser selected in good faith by the Holder and the Company , the fees and expenses of which shall
be paid by the Company.
Notwithstanding
anything herein to the contrary, on the date of termination of this Warrant pursuant to Section 2.5 hereof, this Warrant shall be automatically
exercised via cashless exercise pursuant to this Section 2.3.
If
at any time after the Registration Deadline, there is a Registration Default, then, for each thirty (30) days following the Registration
Deadline, or portion of any thirty (30) day period thereafter in which a Registration Default exists, the amount of Warrant Shares of
Holder shall be automatically increased by five percent (5%) over the Warrant Shares which are held by the Holder as on such dates (which
percentage shall be prorated in the case of a partial month) not to exceed in the aggregate an additional twenty-five percent (25%).
2.5.
Antitrust Notification. If the Holder determines, in its sole judgment upon the advice of counsel, that the issuance of any Warrant
Shares pursuant to the terms hereof would be subject to the provisions of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the “HSR Act”), the Company shall file as soon as practicable after the date on which the Company receives
notice from the Holder of the applicability of the HSR Act and a request to so file with the United States Federal Trade Commission and
the United States Department of Justice the notification and report form required to be filed by it pursuant to the HSR Act in connection
with such issuance.
2.6.
Termination. This Warrant shall terminate upon the earlier to occur of (i) exercise in full or (ii) the expiration of the Exercise
Period.
2.7.
Authorized Shares; Capital Event. The Company covenants that, promptly following the Issue Date, the Company shall take all corporate
action necessary and use all commercially reasonable efforts to call a meeting of its stockholders (which may be its annual meeting)
(the “Stockholders Meeting”), for the purpose of seeking approval of the Company’s stockholders (the “Stockholder
Approval”) to amend the Articles of Incorporation (the “Capital Event Amendment”) to increase the number
of shares of Common Stock the Company is authorized to issue sufficient to permit the exercise in full of this Warrant in accordance
with its terms (the “Capital Event”). In connection therewith, the Company will as soon as reasonably practicable
either before and/or after the Issue Date file with the U.S. Securities and Exchange Commission (the “SEC”) proxy
materials (including a proxy statement and form of proxy) for use at the Stockholders Meeting and, after receiving and promptly responding
to any comments of the SEC thereon, shall as soon as reasonably practicable mail such proxy materials to the stockholders of the Company.
The Company will comply with Section 14(a) of the Exchange Act and the rules promulgated thereunder in relation to any proxy statement
(as amended or supplemented, the “Proxy Statement”) and any form of proxy to be sent to the stockholders of the Company
in connection with the Stockholders Meeting, and the Proxy Statement shall not, on the date that the Proxy Statement (or any amendment
thereof or supplement thereto) is first mailed to stockholders or at the time of the Stockholders Meeting, contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make the statements made therein not false or misleading,
or omit to state any material fact necessary to correct any statement in any earlier communication with respect to the solicitation of
proxies or the Stockholders Meeting which has become false or misleading. If the Company should discover at any time prior to the Stockholders
Meeting, any event relating to the Company or the Subsidiaries or any of their respective officers or directors that is required to be
set forth in a supplement or amendment to the Proxy Statement, in addition to the Company’s obligations under the Exchange Act,
the Company will promptly inform the Placement Agent thereof. The Board of Directors shall recommend to the Company’s stockholders
that the stockholders vote in favor of the Capital Event at the Stockholders Meeting and take all commercially reasonable action (including,
without limitation, the hiring of a proxy solicitation firm of nationally recognized standing) to solicit the approval of the stockholders
for the Capital Event. If the Company does not obtain stockholder approval for the Capital Event at the Stockholders Meeting, the Company
shall call a meeting every four (4) months thereafter to seek such Stockholder Approval until the date that such Stockholder Approval
is obtained. No later than two (2) Business Days following such Stockholder Approval of the Capital Event, the Company shall file with
the Secretary of State of Nevada a certificate of amendment to the Articles of Incorporation to provide for the effectiveness of the
Capital Event, which shall provide that it shall become immediately effective upon filing. The Company shall file a Current Report on
Form 8-K announcing the results of the Stockholders Meeting and the filing of the Capital Event Amendment no later than four (4) Business
Days after each such event.
Following
the occurrence of the Capital Event and thereafter during the period this Warrant is outstanding, the Company shall reserve from its
authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise
of this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who
are charged with the duty of issuing the necessary Warrant Shares upon the exercise of this Warrant. The Company will take all such reasonable
action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law
or regulation, or of any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all
Warrant Shares which may be issued upon the exercise of this Warrant will, upon exercise of this Warrant and payment for such Warrant
Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges
created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with
such issue).
Except
and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending
its Articles of Incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but
will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary
or appropriate to protect the rights of the Holder as set forth in this Warrant against impairment. Without limiting the generality of
the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise
immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company
may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof,
as may be necessary to enable the Company to perform its obligations under this Warrant.
Before
taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from
any public regulatory body or bodies having jurisdiction thereof.
3.
REGISTRATION RIGHTS. The Holder’s registration rights are set forth in the Registration Rights Agreement.
4.
DELIVERY OF STOCK CERTIFICATES ON EXERCISE.
4.1.
Delivery of Exercise Shares. As soon as practicable after any exercise of this Warrant and in any event within two (2) Trading
Days thereafter (such date, the “Exercise Share Delivery Date”), the Company shall, at its expense (including the
payment by it of any applicable issue or stamp taxes), cause to be issued in the name of and delivered to the Holder, or as the Holder
may direct, a certificate or certificates or transfer agent book-entry evidencing the number of fully paid and non-assessable shares
of Common Stock (which number shall be rounded down to the nearest whole share in the event any fractional share may otherwise be issuable
upon such exercise and the Company shall pay a cash adjustment to the Holder in respect of such final fraction in an amount equal to
such fraction multiplied by the Exercise Price) to which the Holder shall be entitled on such exercise, in such denominations as may
be requested by the Holder, which certificate or certificates or transfer agent book-entry shall be free of restrictive and trading legends
(except for any such legends as may be required under the Securities Act). In lieu of delivering physical certificates for or transfer
agent book-entry issuance of the shares of Common Stock issuable upon any exercise of this Warrant, provided the Warrant Shares are not
restricted securities and the Company’s transfer agent is participating in the Depository Trust Company (“DTC”)
Fast Automated Securities Transfer program or a similar program, upon request of the Holder, the Company shall cause its transfer agent
to electronically transmit such shares of Common Stock issuable upon exercise of this Warrant to the Holder (or its designee), by crediting
the account of the Holder’s (or such designee’s) broker with DTC through its Deposit Withdrawal Agent Commission system (provided
that the same time periods herein as for stock certificates shall apply) as instructed by the Holder (or its designee). If the Company
fails for any reason to deliver to the Holder the Warrant Shares subject to an Exercise Notice by the Warrant Share Delivery Date, the
Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such
exercise (based on the VWAP of the Common Stock on the date of the applicable Exercise Notice), $5 per Trading Day for each Trading Day
after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to
maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used
herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days,
on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of the Exercise Notice.
4.2.
Compensation for Buy-In on Failure to Timely Deliver Exercise Shares. In addition to any other rights available to the Holder,
if the Company fails to cause its transfer agent to transmit to the Holder Exercise Shares pursuant to an exercise on or before the Exercise
Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise)
or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of
the Exercise Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall
(a) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions,
if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Exercise Shares
that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell
order giving rise to such purchase obligation was executed, and (b) at the option of the Holder, either reinstate the portion of the
Warrant and equivalent number of Exercise Shares for which such exercise was not honored (in which case such exercise shall be deemed
rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied
with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price
of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise
to such purchase obligation of $10,000, under clause (a) of the immediately preceding sentence the Company shall be required to pay the
Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In
and evidence of the amount of such loss. Nothing herein shall limit the Holder’s right to pursue a decree of specific performance
and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant
as required pursuant to the terms hereof.
4.3.
Charges, Taxes and Expenses. Issuance of Exercise Shares shall be made without charge to the Holder for any issue or transfer
tax or other incidental expense in respect of the issuance of such Exercise Shares, all of which taxes and expenses shall be paid by
the Company, and such Exercise Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder;
provided, however, that in the event Exercise Shares are to be issued in a name other than the name of the Holder, this
Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto (the “Assignment Form”)
duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for
any transfer tax incidental thereto.
5.
CERTAIN ADJUSTMENT.
5.1.
Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (a) pays a stock dividend or otherwise
makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares
of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this
Warrant), (b) subdivides outstanding shares of Common Stock into a larger number of shares, (c) combines (including by way of reverse
stock split) outstanding shares of Common Stock into a smaller number of shares, or (d) issues by reclassification of shares of the Common
Stock any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the
numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event
and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event and the number of
shares issuable upon exercise of this Warrant shall be proportionately adjusted. Any adjustment made pursuant to this Section 5.1
shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend
or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
5.2.
Subsequent Equity Sales; Uplisting. If, at any time while this Warrant is outstanding, the Company or any Subsidiary, as applicable,
sells or grants any option to purchase or sells or grants any right to reprice, or otherwise disposes of or issues (or announces any
sale, grant or any option to purchase or other disposition), any Common Stock or Common Stock Equivalents entitling any Person to acquire
shares of Common Stock at an effective price per share that is lower than the then Exercise Price (such lower price, the “Base
Exercise Price” and such issuances, collectively, a “Dilutive Issuance”) (if the holder of the Common Stock
or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating
conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection
with such issuance, be entitled to receive shares of Common Stock at an effective price per share that is lower than the Exercise Price,
such issuance shall be deemed to have occurred for less than the Exercise Price on such date of the Dilutive Issuance), then simultaneously
with the consummation (or, if earlier, the announcement) of each Dilutive Issuance the Exercise Price shall be reduced to equal the Base
Exercise Price (subject to adjustment for reverse and forward stock splits, recapitalizations and similar transactions following the
date of this Warrant), provided that the Base Exercise Price shall not be less than the floor price as determined by any applicable
Trading Market and for the avoidance of doubt subject to adjustment for reverse and forward stock splits, recapitalizations and similar
transactions following the date hereof. Notwithstanding the foregoing, no adjustment will be made under this Section 3(b) in respect
of any Exempt Issuance as that term is defined and construed in the Purchase Agreement. If the Company enters into a variable rate transaction,
the Company shall be deemed to have issued Common Stock or Common Stock Equivalents at the lowest possible conversion price at which
such securities may be converted or exercised. The Company shall notify the Holder in writing, no later than the Trading Day following
the issuance of any Common Stock or Common Stock Equivalents subject to this Section 5.2, indicating therein the applicable issuance
price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice, the “Dilutive Issuance
Notice”). For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section
5.2, upon the occurrence of any Dilutive Issuance, the Holder is entitled to receive the lower exercise price based upon the Base Exercise
Price on or after the date of such Dilutive Issuance, regardless of whether the Holder accurately refers to the Base Exercise
Price in the Exercise Notice.
5.3.
Subsequent Rights Offerings. If at any time that this Warrant is outstanding and exercisable, the Company grants, issues or sells
any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any
class of shares 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 on exercise hereof, including
without limitation, the Beneficial Ownership Limitation) 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, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right
to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall
not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a result
of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time,
if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
5.4
Pro Rata Distributions. During such time as this Warrant is outstanding, 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 or options 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 on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date of 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 exceeding
the Beneficial Ownership Limitation (as defined herein), then the Holder shall not be entitled to participate in such Distribution to
such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent) and the portion
of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not
result in the Holder exceeding the Beneficial Ownership Limitation).
5.5
Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company,
directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person,
(ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of
all or substantially all of its assets in one or a series of related transactions, (iii) any direct or indirect purchase offer, tender
offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of shares of Common Stock are
permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50%
or more of the outstanding shares of Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects
any reclassification, reorganization or recapitalization of the shares of Common Stock or any compulsory share exchange pursuant to which
the shares of Common Stock are effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly
or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including,
without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person or group of Persons whereby
such other Person or group acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock
held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to,
such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”),
then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have
been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without
regard to the Beneficial Ownership Limitation (as defined herein)), the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such Fundamental Transaction (without regard to the Beneficial Ownership Limitation). For purposes of
any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based
on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company
shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different
components of the Alternate Consideration. If holders of shares of Common Stock are given any choice as to the securities, cash or property
to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives
upon any exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary, in the event
of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable
at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date of the
public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount
of cash equal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation
of such Fundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including
not approved by the Company’s Board of Directors, the Holder shall only be entitled to receive from the Company or any Successor
Entity, as of the date of consummation of such Fundamental Transaction, the same type or form of consideration (and in the same proportion),
at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to the holders of Common Stock
of the Company in connection with the Fundamental Transaction, whether that consideration is in the form of cash, stock or any combination
thereof, or whether the holders of Common Stock are given the choice to receive from among alternative forms of consideration in connection
with the Fundamental Transaction; provided, further, that if holders of Common Stock of the Company are not offered or paid any consideration
in such Fundamental Transaction, such holders of Common Stock will be deemed to have received common stock of the Successor Entity (which
Entity may be the Company following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value”
means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg
determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free
interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the
applicable contemplated Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of 100% and
the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading
Day immediately following the public announcement of the applicable contemplated Fundamental Transaction, (C) the underlying price per
share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value
of any non-cash consideration, if any, being offered in such Fundamental Transaction and (ii) the highest volume-weighted average price
during the period beginning on the Trading Day immediately preceding the public announcement of the applicable contemplated 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 this Section 5.5 and (D) a remaining option time equal to the time between the date of the public announcement of
the applicable contemplated Fundamental Transaction and the date of termination pursuant to Section 2.5 hereof and (E) a zero cost of
borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration)
within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction.
The Company shall cause any successor entity in a Fundamental Transaction in which the Company
is not the survivor (the “Successor Entity”) to assume in writing all
of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section
5.5 pursuant to written agreements in form and substance reasonably satisfactory to the Holder prior to such Fundamental Transaction
and shall, at the option of the Holder, 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 which is exercisable for a corresponding number of
shares of capital stock of such Successor Entity (or its parent entity) 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 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 which is reasonably satisfactory in form and substance to the Holder.
Upon the occurrence of any such 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 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.
5.6
Calculations. All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share, as the
case may be. For purposes of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as of a given date
shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding at the close of the
Trading Day on or, if not applicable, most recently preceding, such given date.
5.7
Notice to Holder.
(a)
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 5, the Company
shall promptly mail to the Holder a notice setting forth the Exercise Price after such adjustment and setting forth a brief statement
of the facts requiring such adjustment.
(b)
Notice to Allow Exercise by Holder. If (i) the Company shall declare a dividend (or any other distribution in whatever form) on
the Common Stock; (ii) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock; (iii) the
Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of
capital stock of any class or of any rights; (iv) the approval of any stockholders of the Company shall be required in connection with
any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or
substantially all of the assets of the Company, of any compulsory share exchange whereby the Common Stock is converted into other securities,
cash or property; or (v) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs
of the Company; then, in each case, the Company shall cause to be mailed or emailed to the Holder at its last address or email address
as it shall appear upon the Company’s records, at least twenty (20) calendar days prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to
be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification,
consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected
that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to
mail or email such notice or any defect therein or in the mailing or emailing thereof shall not affect the validity of the corporate
action required to be specified in such notice. Subject to applicable law, the Holder is entitled to exercise this Warrant during the
period commencing on the date of such notice to the effective date of the event triggering such notice. Notwithstanding the foregoing,
the delivery of the notice described in this Section 5.7 is not intended to and shall not bestow upon the Holder any voting rights whatsoever
with respect to outstanding unexercised portion of this Warrant.
6.
NO IMPAIRMENT. The Company will not, by amendment of the Articles of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms
and in taking all such action as may be necessary or appropriate in order to protect the rights of the Holder against impairment. Without
limiting the generality of the foregoing, the Company (a) will not increase the par value of any shares of Common Stock receivable on
the exercise of this Warrant above the amount payable therefor on such exercise and (b) will take all such action as may be necessary
or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of stock on the exercise
of this Warrant from time to time outstanding.
7.
NOTICES OF RECORD DATE. In the event of:
(a)
any taking by the Company of a record of the holders of any class of securities for the purpose of determining the holders thereof who
are entitled to receive any dividend or other distribution, or any right to subscribe for, purchase or otherwise acquire any shares of
stock of any class or any other securities or property, or to receive any other right;
(b)
any capital reorganization of the Company, any reclassification or recapitalization of the capital stock of the Company or any transfer
of all or substantially all the assets of the Company to or any consolidation or merger of the Company with or into any other Person
or any other Change of Control; or
(c)
any voluntary or involuntary dissolution, liquidation or winding-up of the Company;
then,
and in each such event, the Company will mail or email or cause to be mailed or emailed to the Holder a notice specifying (i) the date
on which any such record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character
of such dividend, distribution or right, or (ii) the date on which any such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up is anticipated to take place, and the time, if any is to be fixed, as of
which the holders of record of Common Stock shall be entitled to exchange their shares of Common Stock for securities or other property
deliverable on such reorganization, reclassification, recapitalization, transfer, consolidation, merger, dissolution, liquidation or
winding-up. Such notice shall be mailed or emailed at least fifteen (15) days prior to the date specified in such notice on which any
such action is to be taken.
8.
RESERVATION OF STOCK ISSUABLE ON EXERCISE OF WARRANT; REGULATORY COMPLIANCE.
8.1.
Reservation of Stock Issuable on Exercise of Warrant. Following the effectiveness of the Capital Event Amendment, the Company
shall at all times while this Warrant shall be outstanding, reserve and keep available out of its authorized but unissued Common Stock,
such number of shares of Common Stock as shall from time to time be sufficient to effect the exercise of all or any portion of the Warrant
Shares (disregarding for this purpose any and all limitations of any kind on such exercise). Following the effectiveness of the Capital
Event Amendment, the Company shall, from time to time in accordance with Chapter 78 of the Nevada Revised Statutes, increase the authorized
number of shares of Common Stock or take other effective action if at any time the unissued number of authorized shares shall not be
sufficient to satisfy the Company’s obligations under this Section 8.
8.2.
Regulatory Compliance. If any shares of Common Stock to be reserved for the purpose of exercise of the Warrant Shares require
registration or listing with or approval of any Governmental Authority, stock exchange or other regulatory body under any federal or
state law or regulation or otherwise before such shares may be validly issued or delivered upon exercise, the Company shall, at its sole
cost and expense, in good faith and as expeditiously as possible, secure such registration, listing or approval, as the case may be.
8.3.
Stockholder Approval. Notwithstanding anything herein to the contrary, the Company shall not be required to issue any Warrant
Shares if such issuance would cause the Company to be in violation of the rules and regulations of the Trading Market, the Articles of
Incorporation, or the Nevada Revised Statutes.
9.
DEFINITIONS. As used herein the following terms, unless the context otherwise requires, have the following respective meanings:
“Aggregate
Exercise Price” means, in connection with the exercise of this Warrant at any time, an amount equal to the product obtained
by multiplying (i) the Exercise Price times (ii) the number of shares of Common Stock for which this Warrant is being exercised at such
time.
“Alternate
Consideration” has the meaning set forth in Section 5.5 hereof.
“Articles
of Incorporation” means the Company’s Articles of Incorporation.
“Bid
Price” has the meaning set forth in Section 2.3 hereof.
“Black
Scholes Value” has the meaning set forth in Section 5.5 hereof.
“Business
Day” means any day other than a Saturday, Sunday or any other day on which the Federal Reserve Bank of New York is closed in
New York City.
“Capital
Event” has the meaning set forth in Section 2.7 hereof.
“Capital
Event Amendment” has the meaning set forth in Section 2.7 hereof.
“Change
of Control” has the meaning set forth in the Purchase Agreement.
“Common
Stock” means (i) the Company’s Common Stock, par value $0.001 per share, and (ii) any other securities into which or
for which any of the securities described in clause (i) above have been converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, sale of assets or otherwise.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended.
“Exercise
Notice” has the meaning set forth in Section 2.1 hereof.
“Exercise
Period” means the period commencing on the time of the effectiveness of the Capital Event Amendment and ending 11:59 P.M. (Eastern
Time) on the five-year anniversary of the Issue Date or earlier closing of a Fundamental Transaction (other than a Fundamental Transaction
of the type described in clause (d) of the definition thereof resulting in the conversion into or exchange for another security of the
Company).
“Exercise
Price” means $0.20 per share.
“Exercise
Shares” means the shares of Common Stock for which this Warrant is then being exercised.
“Fair
Market Value” means, with respect to any security or other property, the fair market value of such security or other property
as determined by the Board of Directors, acting in good faith.
“Fundamental
Transaction” has the meaning set forth in Section 5.5 hereof.
“Governmental
Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether
state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national
bodies such as the European Union or the European Central Bank).
“HSR
Act” has the meaning set forth in Section 2.5 hereof.
“Issue
Date” means July 10, 2023.
“Note”
means the 15% original issue discount unsecured subordination convertible promissory note issued by the Company to the Holder pursuant
to the Purchase Agreement.
“OTCQB”
has the meaning set forth in Section 2.3 hereof.
“OTCQX”
has the meaning set forth in Section 2.3 hereof.
“OTC
Markets” has the meaning set forth in Section 2.3 hereof.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Pink
Sheets” has the meaning set forth in Section 2.3 hereof.
“Proxy
Statement” has the meaning set forth in Section 2.7 hereof.
“Registration
Rights Agreement” means the Registration Rights Agreement, dated as of July 10, 2023 (as the same may be amended from time
to time), by and between the Company and each of the several purchasers signatory thereto.
“Registration
Deadline” has the meaning set forth in Section 2.3 hereof.
“Registration
Default” has the meaning set forth in Section 2.3 hereof.
“SEC”
shall have the meaning set forth in Section 2.7 hereof.
“Securities
Act” means the Securities Act of 1933, as amended.
“Stockholders
Meeting” has the meaning set forth in Section 2.7 hereof.
“Subsidiary”
means, as of any time of determination and with respect to any Person, any United States corporation, partnership, limited liability
company or limited liability partnership, all of the stock (or other equity interest) of every class of which, except directors’
qualifying shares (or any equivalent), shall, at such time, be owned by such Person either directly or through Subsidiaries and of which
such Person or a Subsidiary shall have 100% control thereof, except directors’ qualifying shares. Unless the context otherwise
clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of the Company.
“Successor
Entity” has the meaning set forth in Section 5.5 hereof.
“Trading
Day” means a day on which the Common Stock is traded on a Trading Market.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock (or any other common stock of any other Person
that references the Trading Market for its common stock) is listed or quoted for trading on the date in question: The Nasdaq Stock Market
LLC, the New York Stock Exchange, NYSE American, or the OTCQX, the OTCQB, the Pink market or any other tier operated by OTC Markets Group
Inc. (or any successor to any of the foregoing).
“Unavailable
Warrant Shares” has the meaning set forth in Section 2.4 hereof.
“Uplisting
Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: The NYSE American, The Nasdaq Stock Market LLC, or the New York Stock Exchange (or any successors to any of the
foregoing).
“VWAP”
has the meaning set forth in Section 2.3 hereof.
“Warrant
Shares” means collectively the shares of Common Stock of the Company issuable upon exercise of this Warrant in accordance with
its terms, as such number may be adjusted pursuant to the provisions thereof.
10.
LIMITATION ON BENEFICIAL OWNERSHIP. Notwithstanding anything to the contrary contained herein, the Holder shall not be entitled
to receive shares of Common Stock or other securities (together with Common Stock, “Equity Interests”) upon exercise
of this Warrant to the extent (but only to the extent) that such exercise or receipt would cause the Holder Group to become, directly
or indirectly, a “beneficial owner” (within the meaning of Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder) of a number of Equity Interests of a class that is registered under the Exchange Act which exceeds the Maximum
Percentage (as defined below) of the Equity Interests of such class that are outstanding at such time (the “Beneficial Ownership
Limitation”). Any purported delivery of Equity Interests in connection with the exercise of this Warrant prior to the termination
of this restriction in accordance herewith shall be void and have no effect to the extent (but only to the extent) that such delivery
would result in the Holder Group becoming the beneficial owner of more than the Maximum Percentage of the Equity Interests of a class
that is registered under the Exchange Act that is outstanding at such time. If any delivery of Equity Interests owed to the Holder following
exercise of this Warrant is not made, in whole or in part, as a result of this limitation, the Company’s obligation to make such
delivery shall not be extinguished and the Company shall deliver such Equity Interests as promptly as practicable after the Holder gives
notice to the Company that such delivery would not result in such limitation being triggered or upon termination of the restriction in
accordance with the terms hereof. To the extent limitations contained in this Section 10 apply, the determination of whether this Warrant
is exercisable and of which portion of this Warrant is exercisable shall be the sole responsibility and in the sole determination of
the Holder, and the submission of an Exercise Notice shall be deemed to constitute the Holder’s determination that the issuance
of the full number of Warrant Shares requested in the Exercise Notice is permitted hereunder, and neither the Company nor any Warrant
agent shall have any obligation to verify or confirm the accuracy of such determination. For purposes of this Section 10, (i) the term
“Maximum Percentage” shall mean 4.99%; provided, that if at any time after the date hereof the Holder Group beneficially
owns in excess of 4.99% of any class of Equity Interests in the Company that is registered under the Exchange Act (excluding any Equity
Interests deemed beneficially owned by virtue of the Warrant or the Note), then the Maximum Percentage shall automatically increase to
9.99% so long as the Holder Group owns in excess of 4.99% of such class of Equity Interests (and shall, for the avoidance of doubt, automatically
decrease to 4.99% upon the Holder Group ceasing to own in excess of 4.99% of such class of Equity Interests); and (ii) the term “Holder
Group” shall mean the Holder plus any other Person with which the Holder is considered to be part of a group under Section
13 of the Exchange Act or with which the Holder otherwise files reports under Sections 13 and/or 16 of the Exchange Act. In determining
the number of Equity Interests of a particular class outstanding at any point in time, the Holder may rely on the number of outstanding
Equity Interests of such class as reflected in (x) the Company’s most recent Annual Report on Form 10-K or Quarterly Report on
Form 10-Q filed with the SEC, as the case may be, (y) a more recent public announcement by the Company or (z) a more recent notice by
the Company or its transfer agent to the Holder setting forth the number of Equity Interests of such class then outstanding. For any
reason at any time, upon written or oral request of the Holder, the Company shall, within one (1) Trading Day of such request, confirm
orally and in writing to the Holder the number of Equity Interests of any class then outstanding. Anything herein to the contrary, any
increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company.
The provisions of this Section 10 shall be construed, corrected and implemented in a manner so as to effectuate the intended beneficial
ownership limitation herein contained.
11.
REGISTRATION AND TRANSFER OF WARRANT.
11.1.
Registration of Warrant. The Company shall register and record transfers, exchanges, reissuances and cancellations of this Warrant,
upon the records to be maintained by the Company for that purpose, in the name of the record holder hereof from time to time. The Company
may deem and treat the registered holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution
to the Holder, and for all other purposes, absent actual notice to the contrary. The Company shall be entitled to rely and held harmless
in acting or refraining from acting in reliance upon, any notices, instructions or documents it believes in good faith to be from an
authorized representative of the Holder.
11.2
Transferability. This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable,
in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written
assignment of this Warrant substantially in the form of assignment (the “Assignment Notice”) attached hereto duly
executed by the Holder or its agent or attorney. The Company may require the transferor thereof to provide to the Company an opinion
of counsel selected by the transferor, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the
effect that such transfer does not require registration of the transferred Warrant under the Securities Act. Upon such surrender, the
Company shall execute and deliver a new warrant or warrants in the name of the assignee or assignees, as applicable, and in the denomination
or denominations specified in such Assignment Notice, and shall issue to the assignor a new warrant evidencing the portion of this Warrant
not so assigned, and this Warrant shall promptly be cancelled. This Warrant, if properly assigned in accordance herewith, may be exercised
by a new holder for the purchase of Exercise Shares without having a new warrant issued.
11.3.
New Warrants. This Warrant may be divided or combined with other warrants issued to the holder under the Purchase Agreement or
upon previous division of this Warrant upon presentation hereof at the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new warrants are to be issued, signed by the Holder or its agent or attorney. Subject
to compliance with Section 11.2, as to any transfer which may be involved in such division or combination, the Company shall execute
and deliver a new warrant or warrants in exchange for this Warrant or warrants to be divided or combined in accordance with such notice.
All warrants issued on transfers or exchanges shall be dated the original Issue Date and shall be identical with this Warrant except
as to the number of Exercise Shares issuable pursuant thereto.
12.
LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Exercise Shares,
and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of this Warrant,
shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the
Company will make and deliver a new warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such warrant
or stock certificate.
13.
REMEDIES. The Company stipulates that the remedies at law of the Holder in the event of any default or threatened default by the
Company in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate, and that such terms
may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a
violation of any of the terms hereof or otherwise.
14.
NO RIGHTS AS A STOCKHOLDER. Except as otherwise specifically provided herein, the Holder, solely in such Person’s 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 such Person’s 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 Exercise
Shares.
15.
NOTICES. All notices, requests, demands and other communications that are required or may be given pursuant to the terms of this
Warrant shall be in writing and shall be deemed delivered (i) on the date of delivery when delivered by hand on a Business Day during
normal business hours or, if delivered on a day that is not a Business Day or after normal business hours, then on the next Business
Day, (ii) on the date of transmission when sent by facsimile transmission or email during normal business hours on a Business Day with
telephone confirmation of receipt or, if transmitted on a day that is not a Business Day or after normal business hours, then on the
next Business Day, or (iii) on the second Business Day after the date of dispatch when sent by a reputable courier service that maintains
records of receipt. The addresses for notice shall be as set forth in the Purchase Agreement.
16.
CONSENT TO AMENDMENTS. Any term of this Warrant may be amended, and the Company may take any action herein prohibited, or compliance
therewith may be waived, only if the Company shall have obtained the written consent (and not without such written consent) to such amendment,
action or waiver from the Holder. No course of dealing between the Company and the Holder nor any delay in exercising any rights hereunder
shall operate as a waiver of any rights of the Holder.
17.
MISCELLANEOUS. In case any provision of this Warrant shall be invalid, illegal or unenforceable, or partially invalid, illegal
or unenforceable, the provision shall be enforced to the extent, if any, that it may legally be enforced and the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or impaired thereby. If any provision of this Warrant is
found to conflict with the Purchase Agreement, the provisions of this Warrant shall prevail. If any provision of this Warrant is found
to conflict with the Note, the provisions of the Note shall prevail. THIS WARRANT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE INTERNAL LAW OF THE STATE OF NEVADA EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE
LAW OF SUCH STATE THAT WOULD PERMIT THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE. The headings in this Warrant
are for purposes of reference only, and shall not limit or otherwise affect any of the terms hereof.
[Remainder
of Page Intentionally Left Blank]
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its duly authorized officer.
Dated
as of July 10, 2023 |
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marizyme,
INC. |
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By: |
/s/
David Barthel |
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Name: |
David
Barthel |
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Title:
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Chief
Executive Officer |
FORM
OF SUBSCRIPTION
(To
be signed only on exercise
of
attached Warrant)
TO:
Marizyme, Inc.
1.
The undersigned Holder of the attached Warrant hereby elects to exercise its purchase right under such Warrant to purchase shares of
Common Stock of Marizyme, Inc., a Nevada corporation (the “Company”), as follows (check one or more, as applicable):
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☐ |
to
exercise the Warrant to purchase __________ shares of Common Stock and to pay the Aggregate Exercise Price therefor by wire transfer
of United States funds to the account of the Company, which transfer has been made prior to or as of the date of delivery of this
Form of Subscription pursuant to the instructions of the Company; |
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and/or |
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☐ |
to
exercise the Warrant with respect to ____________ shares of Common Stock pursuant to the net exercise provisions specified in Section
2.3 of the Warrant. |
2.
In exercising this Warrant, the undersigned Holder hereby confirms and acknowledges that the shares of Common Stock are being acquired
solely for the account of the undersigned and not as a nominee for any other party, and for investment, and that the undersigned shall
not offer, sell or otherwise dispose of any such shares of Common Stock except under circumstances that will not result in a violation
of the Securities Act or any state securities laws. The undersigned hereby further confirms and acknowledges that it is an “accredited
investor”, as that term is defined under the Securities Act.
3.
Please issue (1) a stock certificate or certificates or (2) transfer agent book-entry (circle one) representing the appropriate number
of shares of Common Stock in the name of the undersigned or in such other name(s) as is specified below:
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Name: |
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Address: |
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Email
Address: |
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TIN: |
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Dated: |
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(Signature
must conform exactly to name of |
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Holder
as specified on the face of the Warrant) |
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FORM
OF ASSIGNMENT
(To
be signed only on transfer of Warrant)
For
value received, the undersigned hereby sells, assigns, and transfers unto ________________ the right represented by the within Warrant
to purchase _______ shares of Common Stock of Marizyme, Inc., a Nevada corporation, to which the within Warrant relates, and appoints
_________________ attorney to transfer such right on the books of Marizyme, Inc., with full power of substitution in the premises.
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[insert
name of Holder] |
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Dated: ____________________ |
By: |
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Title: |
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[insert
address of Holder] |
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Signed
in the presence of: |
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Exhibit 10.1
UNIT
PURCHASE AGREEMENT
This
Unit Purchase Agreement (as amended, supplemented, restated and/or modified from time to time, this “Agreement”) is
entered into as of July 10, 2023, by and among Marizyme, Inc., a Nevada corporation (the “Company”), and each investor
identified on Appendix A hereto (each, including its successors and assigns, an “Investor” and collectively,
the “Investors”).
BACKGROUND
WHEREAS,
pursuant to the authorization of the Company’s board of directors (the “Board of Directors”), the Company is
offering (the “Offering”) up to 100,000,000 units (the “Units”) comprised of, as to each Investor
and regardless of the number of Units issued, (i) a 15% original issue discount unsecured subordinated convertible promissory note with
10% interest (the “Note”) convertible into the Common Stock (as defined herein) of the Company at an initial price
per share of $0.10, (ii) a warrant to purchase one and twenty-five hundredths (1.25) shares of Common Stock per Unit at an initial price
per share of $0.20 (the “Class E Warrant”), and (iii) a second warrant to purchase one and twenty-five hundredths
(1.25) shares of Common Stock per Unit at an initial price per share of $3.00 (the “Class F Warrant” and, together
with the Class E Warrant, the “Warrants,” and, together with the Note, the Class E Warrant and the Investor Shares
(as defined herein), the “Securities”), at a price per Unit of $0.10 (the “Price Per Unit”);
WHEREAS,
the Units are being offered on a “reasonable best efforts” basis with respect to a maximum of $10,000,000 and without
any minimum, to a limited number of “accredited investors” (as that term is defined by Rule 501(a) of Regulation D (“Regulation
D”) promulgated by the SEC (as defined herein) under the Securities Act of 1933, as amended (the “Securities Act”);
WHEREAS,
the Company and each Investor is executing and delivering this Agreement in reliance upon the exemption from securities registration
afforded by Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated by the SEC under the Securities Act;
WHEREAS,
the Company has retained Univest Securities, LLC to act as its exclusive placement agent in connection with the sale of the Units pursuant
to this Agreement (the “Placement Agent”);
WHEREAS,
the minimum investment amount that may be purchased by an Investor is 10,000 Units for an aggregate minimum purchase price of $1,000,
unless the Company and the Placement Agent waive such requirement in their sole discretion; and
WHEREAS,
the Company desires to issue and sell the Units to the Investors at one or more Closing (as defined below) as set forth herein.
NOW
THEREFORE, in consideration of the foregoing recitals and the covenants and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and each Investor hereby agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following terms shall have the following meanings specified or indicated below, and such meanings shall
be equally applicable to the singular and plural forms of such defined terms:
“Acquisition”
means the acquisition by the Company or any direct or indirect Subsidiary (as defined herein) of the Company of a majority of the Equity
Interests (as defined herein) or substantially all of the assets and business of any Person, whether by direct purchase of Equity Interests,
asset purchase, merger, consolidation or like combination.
“Affiliate”
means a Person (as defined herein) that directly, or indirectly through one or more intermediaries, controls or is controlled by, or
is under common control with, the Person specified, as such terms are used in and construed under Rule 405 under the Securities Act.
“Agreement”
has the meaning set forth in the preamble.
“Blank
Check Preferred Stock” has the meaning set forth in Section 3.4(a).
“Board
of Directors” has the meaning set forth in the Background section.
“Business
Day” means any day other than a Saturday, Sunday or any other day on which the Federal Reserve Bank of New York is closed in
New York City.
“Capital
Stock” means the Common Stock and any other classes of capital stock of the Company.
“Change
of Control” means, with respect to the Company:
| (a) | a
change in the composition of the Board of Directors of the Company at a single stockholder
meeting where a majority of the individuals that were directors of the Company immediately
prior to the start of such stockholder meeting are no longer directors at the conclusion
of such meeting; |
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| (b) | a
change in composition of the Board of Directors of the Company prior to the termination of
this Agreement where a majority of the individuals that were directors as of the date of
this Agreement cease to be directors of the Company prior to the termination of this Agreement; |
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| (c) | unless
their replacements shall be approved by an Investor in an Investor’s sole discretion,
any two of the individuals who are the Chief Executive Officer, President or Chairman of
the Board of Directors as of the date of this Agreement cease to hold such position at any
time prior to the termination of this Agreement; |
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| (d) | other
than a stockholder that holds such a position at the date of this Agreement, if a Person
comes to have beneficial ownership, control or direction over more than forty percent (40%)
of the voting rights attached to any class of voting securities of the Company; or |
| (e) | the
sale or other disposition by the Company or any of its Subsidiaries in a single transaction,
or in a series of transactions, of all or substantially all of their respective assets. |
“Class
E Warrant” has the meaning set forth in the Background section.
“Class
F Warrant” has the meaning set forth in the Background section.
“Closing”
has the meaning set forth in Section 2.1.
“Closing
Date” has the meaning set forth in Section 2.2.
“Code”
has the meaning set forth in Section 2.1.
“Common
Stock” means the common stock of the Company, par value $0.001 per share.
“Company”
has the meaning set forth in the preamble.
“Conversion
Shares” means the shares of Common Stock issuable upon the full or any partial conversion of the Note.
“Equity
Interests” means and includes capital stock, membership interests and other similar equity securities, and shall also include
warrants or options to purchase capital stock, membership interests or other equity interests.
“Event”
means any event, change, development, effect, condition, circumstance, matter, occurrence or state of facts.
“Event
of Default” has the meaning set forth in Section 7.1.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended.
“HSR
Act” has the meaning set forth in Section 5.16.
“Investor”
and “Investors” have their respective meanings set forth in the preamble.
“Investor
Group” shall mean an Investor plus any other Person with which an Investor is considered to be part of a group under Section
13 of the Exchange Act or with which an Investor otherwise files reports under Sections 13 and/or 16 of the Exchange Act.
“Indebtedness”
has the meaning set forth in Section 3.29.
“Investor
Party” has the meaning set forth in Section 5.12(a).
“Investor
Shares” means the Conversion Shares, the Warrant Shares and any other shares issued or issuable to an Investor pursuant to
this Agreement or any of the Securities.
“IP
Rights” has the meaning set forth in Section 3.10.
“Law”
means any law, rule, regulation, order, judgment or decree, including, without limitation, any federal or state securities law.
“Losses”
has the meaning set forth in Section 5.12(a).
“Majority
in Interest of the Investors” means those Investors holding fifty-one percent (51%) of the total Subscription Amount specified
on Appendix A hereto at the time the approval or consent of the Investors is being sought.
“Material
Adverse Effect” means any material adverse effect on (i) the businesses, properties, assets, prospects, operations, results
of operations or financial condition of the Company, or the Company and the Subsidiaries, taken as a whole, or (ii) the ability of the
Company to consummate the transactions contemplated by this Agreement or to perform its obligations hereunder or under the Securities;
in this regard, any the following shall be deemed either alone or in combination to constitute, and any of the following shall be taken
into account in determining whether there has been or would be, a Material Adverse Effect: (a) any adverse effect resulting from or arising
out of general economic conditions; (b) any adverse effect resulting from or arising out of general conditions in the industries in which
the Company and the Subsidiaries operate; (c) any adverse effect resulting from any changes to an applicable Law; or (d) any adverse
effect resulting from or arising out of any pandemic or similar emergency, transportation disruption, strike or labor disruption, natural
disaster or any acts of terrorism, sabotage, military action or war or any escalation or worsening thereof.
“Maximum
Percentage” means 4.99%; provided, that if at any time after the date hereof an Investor Group beneficially owns in
excess of 4.99% of any class of Equity Interests in the Company that is registered under the Exchange Act (excluding any Equity Interests
deemed beneficially owned by virtue of the Units), then the Maximum Percentage shall automatically increase to 9.99% so long as an Investor
Group owns in excess of 4.99% of such class of Equity Interests (and shall, for the avoidance of doubt, automatically decrease to 4.99%
upon an Investor Group ceasing to own in excess of 4.99% of such class of Equity Interests).
“Money
Laundering Laws” has the meaning set forth in Section 3.25.
“New
Securities” means, collectively, equity securities of the Company that were not issued or outstanding as of the date of this
Agreement, whether or not currently authorized, as well as rights, options, or warrants to purchase such equity securities that were
not issued or outstanding as of the date of this Agreement, or securities of any type whatsoever that were not issued or outstanding
as of the date of this Agreement that are, or may become, convertible or exchangeable into or exercisable for such equity securities.
“Note”
or “Notes” means a 15% original issue discount unsecured subordinated convertible promissory note substantially in
the form attached hereto as Exhibit A.
“OFAC”
has the meaning set forth in Section 3.23.
“Offer
Notice” has the meaning set forth in Section 10.1.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Prepayment
Right” shall have the meaning set forth in Section 2.4.
“Proceedings”
has the meaning set forth in Section 3.6.
“Prohibited
Transaction” means a transaction with a third party or third parties in which the Company issues or sells (or arranges or agrees
to issue or sell):
(a) any
debt, equity or equity-linked securities (including options or warrants) that are convertible into, exchangeable or exercisable for,
or include the right to receive shares of the Company’s Capital Stock:
(i) at
a conversion, repayment, exercise or exchange rate or other price that is based on, and/or varies with, a discount to the future trading
prices of, or quotations for, shares of Common Stock; or
(ii) at
a conversion, repayment, exercise or exchange rate or other price that is subject to being reset at some future date after the initial
issuance of such debt, equity or equity-linked security or upon the occurrence of specified or contingent events (other than warrants
that may be repriced by the Company); or
(b) any
securities in a capital or debt raising transaction or series of related transactions which grant to an investor the right to receive
additional securities based upon future transactions of the Company on terms more favorable than those granted to such investor in such
first transaction or series of related transactions;
and
are deemed to include transactions generally referred to as at-the-market transactions (ATMs) or equity lines of credit and stand-by
equity distribution agreements, and convertible securities and loans having a similar effect. Notwithstanding the foregoing, and for
the avoidance of doubt, rights issuances, stockholder purchase plans, any Equity Plan, convertible securities, or issuances of Equity
Interests, based on the trading price of the Common Stock on the Trading Market (as defined herein) but each at a fixed price per share,
shall not be deemed to be a Prohibited Transaction.
“Prospectus”
means the prospectus included in any Registration Statement (as defined herein), as amended or supplemented by any prospectus supplement,
with respect to the terms of the offering of any portion of an Investor Shares covered by such Registration Statement and by all other
amendments and supplements to the prospectus, including post-effective amendments and all material incorporated by reference in such
prospectus, and any “free writing prospectus” as defined in Rule 405 under the Securities Act.
“register,”
“registered” and “registration” refer to a registration made pursuant to the Registration Rights
Agreement (as defined herein) by preparing and filing a Registration Statement or similar document in compliance with the Securities
Act, and the declaration or ordering of effectiveness of such Registration Statement or document.
“Registration
Rights Agreement” means a registration rights agreement substantially in the form attached hereto as Exhibit B.
“Registration
Statement” means any registration statement of the Company filed under the Securities Act that covers the resale of any Investor
Shares pursuant to the provisions of this Agreement, including the Prospectus and amendments and supplements to such Registration Statement,
and including post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement.
“SEC”
means the United States Securities and Exchange Commission.
“SEC
Documents” has the meaning set forth in Section 3.5(a).
“Securities”
has the meaning set forth in the Background section.
“Securities
Act” has the meaning set forth in the Background section.
“Securities
Termination Event” means either of the following has occurred:
(a) trading
in securities generally in the United States has been suspended or limited for a consecutive period of greater than ten (10) Trading
Days (as defined herein); or
(b) a
banking moratorium has been declared by the United States or the New York State authorities and is continuing for a consecutive period
of greater than three (3) Business Days.
“Stockholder
Approval” shall mean the approval of such number of the holders of the outstanding shares of the Company’s voting Common
Stock as required by the Company’s bylaws (the “Bylaws”) and the Nevada Revised Statutes: (a) if and to the
extent legally required, to amend the Company’s articles of incorporation, as amended (“Articles of Incorporation”),
to increase the number of authorized shares of Common Stock by at least the number of shares of Common Stock equal to the number of Shares
issuable hereunder, (b) to ratify and approve all of the transactions contemplated by the Transaction Documents, including the issuance
of all of the Investor Shares (as such term is defined in each of such documents) issued and potentially issuable to an Investor thereunder,
all as may be required by the Nevada Revised Statutes, the Articles of Incorporation, or the applicable rules and regulations of the
Trading Market (or any successor entity).
“Subsidiaries”
and “Subsidiary” have the meaning set forth in Section 3.4(b).
“Subscription
Amount” means, as to any Investor, the aggregate amount to be paid for the Units purchased hereunder as specified on Appendix
A.
“Trading
Day” means a day on which the Common Stock is traded on a Trading Market.
“Trading
Market” means whichever of the New York Stock Exchange, NYSE American, or The Nasdaq Stock Market LLC (including the Nasdaq
Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market), the OTCQX, the OTCQB, the Pink market or any other tier operated
by OTC Markets Group Inc. (or any successors to any of the foregoing), on which the Common Stock is listed or quoted for trading on the
date in question.
“Transaction
Documents” means this Agreement, the Notes, the Warrants, the Registration Rights Agreement, and any other documents or agreements
executed or delivered in connection with the transactions contemplated hereunder.
“Units”
has the meaning set forth in the Background section.
“Unitholder
Representative” means the representative selected by a Majority in Interest of the Investors to represent their interests upon
the occurrence and continuance of an Event of Default. To this end, the Unitholder Representative shall thereafter be able to act on
behalf of the Investors and pursue remedies under any Transaction, amend or waive any provision under any of the Transaction Documents
or otherwise act on behalf of the Investors.
“Warrants”
means the Class E Warrant and the Class F Warrant, substantially in the form attached hereto as Exhibit C and Exhibit D,
respectively.
“Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Class E Warrant and Class F Warrant.
2. PURCHASE
AND SALE OF THE NOTE AND THE WARRANT.
2.1
Purchase and Sale of the Units.
(a) Subject
to the terms and conditions set forth herein, the Company agrees to sell, and each of the Investors agrees to subscribe for the number
of Units for such Investor’s Subscription Amount as set forth opposite the name of each Investor on Appendix A. Each closing of
this Offering is referred to as a “Closing” and the date associated with each Closing is referred to as a “Closing
Date”. The Company and the Placement Agent shall have mutually determined the timing of each Closing. Each Closing hereunder,
including payment for and delivery of the Units, shall, unless otherwise agreed to by the Company and the Placement Agent, take place
remotely via the exchange of documents and signatures, subject to satisfaction or waiver of the conditions set forth in Section 6.
(b) The
Investors and the Company agree that for U.S. federal income tax purposes and applicable state, local and non-U.S. tax purposes, the
applicable Subscription Amount shall be allocable between the securities comprising the Units based on the relative fair market values
thereof. Neither any Investor nor the Company shall take any contrary position on any tax return, or in any audit, claim, investigation,
inquiry or proceeding in respect of taxes, unless otherwise required pursuant to a final determination within the meaning of Section
1313 of the Internal Revenue Code of 1986, as amended (the “Code”), or any analogous provision of applicable state,
local or non-U.S. Law.
2.2 Closing.
On each Closing Date, upon the terms and subject to the conditions set forth herein, the Company agrees to sell at the respective Closing,
and the Investor(s) who are purchasing Units at such Closing, severally and not jointly, agree to purchase at such Closing, the specified
number of Units, calculated based upon the Price Per Unit, for each Investor equal to such Investor’s Subscription Amount for the
Closing as set forth on Appendix A hereto, and the principal amount of the Note and the Warrants which make up each Investor’s
Units as set forth in Appendix A hereto. Each Investor purchasing Units on a Closing Date shall deliver to the Company such Investor’s
Subscription Amount by wire transfer of immediately available funds in accordance with the Company’s written wire instructions,
and the Company shall deliver to such Investor its respective Units, and the Company and each Investor shall deliver the other items
set forth in Section 2.3 deliverable at the respective Closing. Upon satisfaction of the covenants and conditions set forth in
Section 6, the respective Closing shall occur remotely by exchange of documents or in such other manner and/or at such location
as the Company and the Placement Agent shall mutually agree.
2.3 Deliverables.
(a) On
or prior to each Closing Date (except as noted and unless previously delivered prior thereto), the Company shall deliver or cause to
be delivered to each Investor agreeing to purchase Units in the respective Closing the following:
(i) this
Agreement duly executed by the Company;
(ii) the
Note, duly executed by the Company, having the respective principal amount set forth on Appendix A, registered in the name of
the specified Investor;
(iii) the
Class E Warrant duly executed by the Company, having the respective underlying shares of Common Stock set forth on Appendix A,
registered in the name of the specified Investor;
(iv) the
Class F Warrant duly executed by the Company, having the respective underlying shares of Common Stock set forth on Appendix A,
registered in the name of the specified Investor;
(v) the
Registration Rights Agreement duly executed by the Company;
(vi) an
officer’s certificate and compliance certificate, each in a form reasonably acceptable to the Placement Agent’s counsel;
and
(vii) such
other opinions, certificates, including a Secretary’s Certificate, statements, including, without limitation, a closing statement,
and agreements as the Placement Agent’s counsel may reasonably require.
(b)
On or prior to the Closing Date, each Investor signatory to the specified agreement shall deliver or cause to be delivered to the Company,
as applicable, the following:
(i) this
Agreement duly executed by such Investor;
(ii) the
applicable Investor’s Subscription Amount; and
(iii) the
Registration Rights Agreement duly executed by such Investor.
2.4 Prepayment
Right. As set forth in the Note, the Company will not have the right to pre-pay the entire then-outstanding principal amount of the
Notes without the written consent of a Majority in Interest of the Investors.
3. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to each Investor and covenants with each Investor that, except as is set forth in the schedules being delivered to the respective
Investors as of the date hereof and as of the respective Closing Date, the following representations and warranties are true and correct:
3.1 Organization
and Qualification. The Company is a corporation duly incorporated and validly existing in good standing under the Laws of the State
of Nevada and has the requisite corporate power and authority to own its properties and to carry on its business as now being conducted.
Each Subsidiary is duly formed and validly existing in good standing under the Laws of the state of its incorporation or organization
and has the requisite corporate or limited liability company power and authority, as applicable, to own its properties and to carry on
its business as now being conducted. Each of the Company and the Subsidiaries is duly qualified to do business and is in good standing
in every jurisdiction in which the ownership of its 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 have a Material Adverse Effect.
3.2 Authorization;
Enforcement; Compliance with Other Instruments. The Company has the requisite corporate power and authority to execute the Transaction
Documents and perform its obligations under the Transaction Documents. The execution and delivery of the Transaction Documents by the
Company and the issuance and sale by the Company of the Units pursuant hereto, have been duly and validly authorized by the Company’s
Board of Directors for itself and except as set forth on Schedule 3.2, no further consent or authorization is required by the
Company, its Board of Directors, its stockholders, or any other Person in connection therewith. The Transaction Documents have been duly
and validly executed and delivered by the Company and constitute valid and binding obligations of the Company, enforceable against the
Company in accordance with their 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 creditors’ rights and remedies.
3.3 No
Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the issuance and sale of the Units
by the Company hereunder will not (a) conflict with or result in a violation of the Articles of Incorporation or Bylaws, (b) conflict
with, or constitute a material default (or an event which, with notice or lapse of time or both, would become a material default) under,
or give to others any right of termination, amendment, acceleration or cancellation of, any material agreement to which the Company or
any of the Subsidiaries is a party or (c) subject to the making of the filings referred to in Section 5, violate in any material
respect any Law or any rule or regulation of the Trading Market applicable to the Company or any of the Subsidiaries or by which any
of their properties or assets are bound or affected. Assuming the accuracy of each Investor’s representations in Section 4
and subject to the making of the filings referred to in Section 5, (i) no approval or authorization will be required from any
governmental authority or agency, regulatory or self-regulatory agency or other third party (including the Trading Market) in connection
with the issuance of the Units and the other transactions contemplated by this Agreement (including the issuance of the Conversion Shares
upon conversion of the Note and the Warrant Shares upon exercise of the Warrants by the respective Investor) and (ii) the issuance of
the Note and the Warrants to the respective Investor, and the issuance of the Conversion Shares upon the conversion of the Note and the
Warrant Shares upon exercise of the Warrants by the respective Investor, will be exempt from the registration and qualification requirements
under the Securities Act and all applicable state securities Laws.
3.4
Capitalization and Subsidiaries.
(a) The
authorized Capital Stock of the Company consists of: 300,000,000 shares of Common Stock. As of the close of business on July 10, 2023:
(A) 43,420,350 shares of Common Stock were issued and outstanding. As of July 10, 2023, (x) 3,925,943 shares of Common Stock are issuable
upon exercise of options granted under the Company’s Amended and Restated 2021 Stock Incentive Plan and 3,274,057 additional shares
are reserved for future issuance under such plan; (y) 413,635,535 shares of Common Stock issuable upon exercise of outstanding warrants,
subject to rounding, with exercise prices ranging from $0.10 to $5.00 per share, not including a warrant that may be issuable to Walleye
Opportunities Master Fund Ltd. as reported in the Company’s Current Report on Form 8-K filed with the SEC on February 7, 2023;
and (z) 144,711,770 shares of Common Stock issuable upon conversion of outstanding 10% Secured Convertible Promissory Notes at a weighted
average conversion price of $0.10 per share not including additional shares of Common Stock issuable with respect to accrued interest
thereunder. Other than as set forth on Schedule 3.4(a), no shares of the Capital Stock are subject to preemptive rights or any
other similar rights or any liens or encumbrances suffered or permitted by the Company. The Articles of Incorporation and Bylaws on file
on the SEC’s EDGAR website are true and correct copies of the Articles of Incorporation and Bylaws as in effect as of the date
hereof. The Company is not in violation of any provision of its Articles of Incorporation or Bylaws.
(b) Schedule
3.4(b) lists each direct and indirect subsidiary of the Company (each, a “Subsidiary” and collectively, the “Subsidiaries”)
and indicates for each Subsidiary (i) the authorized capital stock or other Equity Interest of such Subsidiary as of the date hereof,
(ii) the number and kind of shares or other ownership interests of such Subsidiary that are issued and outstanding as of the date hereof,
and (iii) the owner of such shares or other ownership interests. No Subsidiary has any outstanding stock options, warrants or other instruments
pursuant to which such Subsidiary may at any time or under any circumstances be obligated to issue any shares of its capital stock or
other Equity Interests.
(c) Other
than as set forth on Schedule 3.4(c), neither the Company nor any Subsidiary is bound by any agreement or arrangement pursuant
to which it is obligated to register the sale of any securities under the Securities Act. There are no outstanding securities of the
Company or any of the Subsidiaries which contain any redemption or similar provisions, and there are no contracts, commitments, understandings
or arrangements by which the Company or any Subsidiary is or may become bound to redeem or purchase any security of the Company or any
Subsidiary. Other than as set forth on Schedule 3.4(c), there are no outstanding securities or instruments containing anti-dilution
or similar provisions that will be triggered by the issuance of the Note, the Warrants or the Investor Shares to any Investor. Neither
the Company nor any Subsidiary has any stock appreciation rights or “phantom stock” plans or agreements or any similar plan
or agreement.
(d) Other
than as set forth on Schedule 3.4(d), the issuance and sale of any of the Securities will not obligate the Company to issue shares
of Common Stock or other securities to any other Person and will not result in the adjustment of the exercise, conversion, exchange,
or reset price of any outstanding securities.
(e) As
of the date of this Agreement, the Company has capacity under the rules and regulations of the Trading Market to issue up to 256,579,650
shares of Common Stock (or securities convertible into or exercisable for Common Stock) without obtaining Stockholder Approval.
3.5 SEC
Documents; Financial Statements.
(a) As
of the date hereof, the Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with
the SEC pursuant to the reporting requirements of the Exchange Act (all of the foregoing filed prior to the date hereof and all exhibits
included therein and financial statements and schedules thereto and documents incorporated by reference therein being hereinafter referred
to as the “SEC Documents”). As of their respective filing dates, the SEC Documents complied in all material respects
with the requirements of the Exchange 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 to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(b) As
of their respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial
statements have been prepared in accordance with generally accepted accounting principles, and audited by a firm that is a member of
the Public Company Accounting Oversight Board consistently applied, during the periods involved (except as may be otherwise indicated
in such financial statements or the notes thereto, or, 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 consolidated financial position of the Company
as of the dates thereof and the consolidated results of its operations and consolidated cash flows for the periods then ended (subject,
in the case of unaudited statements, to normal year-end audit adjustments). No other written information provided by or on behalf of
the Company to any Investor in connection with such Investor’s purchase of the Units which is not included in the SEC Documents
contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements therein, in the
light of the circumstance under which they are or were made, not misleading.
(c) As
of December 31, 2022, the Company’s internal control over financial reporting was not effective for the reasons described in its
Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
3.6 Litigation
and Regulatory Proceedings. Except as disclosed in the SEC Documents or as set forth on Schedule 3.6, there are no material
actions, causes of action, suits, claims, proceedings, inquiries or investigations (collectively, “Proceedings”) before
or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive
officers of the Company or any of the Subsidiaries, threatened against or affecting the Company or any of the Subsidiaries, the Common
Stock or any other class of issued and outstanding shares of the Capital Stock, or any of the Company’s or the Subsidiaries’
officers or directors in their capacities as such and, to the knowledge of the executive officers of the Company, there is no reason
to believe that there is any basis for any such Proceeding.
3.7 No
Undisclosed Events, Liabilities or Developments. Other than as set forth on Schedule 3.7, no event, development or circumstance
has occurred or exists, or to the knowledge of the executive officers of the Company is reasonably anticipated to occur or exist that
(a) would reasonably be anticipated to have a Material Adverse Effect or (b) would be required to be disclosed by the Company under applicable
securities Laws on a registration statement filed with the SEC relating to an issuance and sale by the Company of its Common Stock and
which has not been publicly announced.
3.8 Compliance
with Law. The Company and each of the Subsidiaries have conducted and are conducting their respective businesses in compliance in
all material respects with all applicable Laws and are in compliance in all material respects with the rules and regulations of the Trading
Market. The Company is not aware of any facts which could reasonably be anticipated to lead to a delisting or removal of the quotation
of the Common Stock by the Trading Market in the future.
3.9 Employee
Relations. Neither the Company nor any Subsidiary is involved in any union labor dispute nor, to the knowledge of the Company, is
any such dispute threatened. Neither the Company nor any Subsidiary is a party to any collective bargaining agreement. No executive officer
(as defined in Rule 501(f) of the Securities Act) has notified the Company that such officer intends to leave the Company’s employ
or otherwise terminate such officer’s employment with the Company.
3.10 Intellectual
Property Rights. The Company and each Subsidiary owns or possesses adequate rights or licenses to use all trademarks, trade names,
service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, governmental
authorizations, trade secrets and other intellectual property rights (collectively, “IP Rights”) necessary to conduct
their respective businesses as now conducted. None of the material IP Rights of the Company or any of the Subsidiaries are expected to
expire or terminate within three (3) years from the date of this Agreement. Neither the Company nor any Subsidiary is infringing, misappropriating
or otherwise violating any IP Rights of any other Person. No claim has been asserted, and no Proceeding is pending, against the Company
or any Subsidiary alleging that the Company or any Subsidiary is infringing, misappropriating or otherwise violating the IP Rights of
any other Person, and, to the Company’s knowledge, no such claim or Proceeding is threatened, and the Company is not aware of any
facts or circumstances which might give rise to any such claim or Proceeding. The Company and the Subsidiaries have taken commercially
reasonable security measures to protect the secrecy, confidentiality and value of all of their material IP Rights.
3.11 Environmental
Laws. Except, in each case, as would not be reasonably anticipated to have a Material Adverse Effect, the Company and the Subsidiaries
(a) are in compliance with any and all applicable Laws relating to the protection of human health and safety, the environment or hazardous
or toxic substances or wastes, pollutants or contaminants, (b) have received and hold all permits, licenses or other approvals required
of them under all such Laws to conduct their respective businesses and (c) are in compliance with all terms and conditions of any such
permit, license or approval.
3.12 Title
to Assets. The Company and the Subsidiaries have good and marketable title to all personal property owned by them which is material
to their respective businesses, in each case free and clear of all liens, encumbrances and defects except those set forth on Schedule
3.12. Any real property and facilities held under lease by the Company or any Subsidiary are held 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 and the Subsidiaries.
3.13 Insurance.
The Company and each of the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company reasonably believes to be prudent and customary in the businesses in which the Company
and the Subsidiaries are engaged. Neither the Company nor any of the Subsidiaries has been refused any insurance coverage sought or applied
for, and the Company has no reason to believe that it will not be able to renew all existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers.
3.14 Regulatory
Permits. The Company and the Subsidiaries have in full force and effect all certificates, approvals, authorizations and permits from
all regulatory authorities and agencies necessary to own, lease or operate their respective properties and assets and conduct their respective
businesses, and neither the Company nor any Subsidiary has received any notice of Proceedings relating to the revocation or modification
of any such certificate, approval, authorization or permit, except for such certificates, approvals, authorizations or permits with respect
to which the failure to hold would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
3.15 No
Materially Adverse Contracts, Etc. Other than as set forth on Schedule 3.15, neither the Company nor any of the Subsidiaries
is (a) subject to any charter, corporate or other legal restriction, or any judgment, decree or order which in the judgment of the Company’s
officers has or is expected in the future to have a Material Adverse Effect or (b) a party to any contract or agreement which in the
judgment of the Company’s management has or would reasonably be anticipated to have a Material Adverse Effect.
3.16 Taxes.
The Company and the Subsidiaries each has made or filed, or caused to be made or filed, all United States federal and applicable state,
local and non-U.S. tax returns, reports and declarations required by any jurisdiction to which it is subject and has paid all taxes and
other governmental assessments and charges that are material in amount, required to be paid by it, regardless of whether such amounts
are shown or determined to be due on such returns, reports and declarations, except those being contested in good faith by appropriate
proceedings and for which it 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, to the knowledge of the Company, there is no basis for any such claim.
3.17 Solvency.
After giving effect to the receipt by the Company of the proceeds from the transactions contemplated by this Agreement (a) the Company’s
fair saleable value of its assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing
debts and other liabilities (including known contingent liabilities) as they mature; and (b) the current cash flow of the Company, together
with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of
the cash, would be sufficient to pay all amounts on or in respect of its debt when such amounts are required to be paid. The Company
does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash
to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances which lead it to believe that
it will file for reorganization or liquidation under the bankruptcy or reorganization Laws of any jurisdiction.
3.18 Investment
Company. The Company is not, and is not an Affiliate of, an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.
3.19 Certain
Transactions. Other than as disclosed in the SEC Documents, there are no contracts, transactions, arrangements or understandings
between the Company or any of its Subsidiaries, on the one hand, and any director, officer or employee thereof on the other hand, that
would be required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC in the Company’s Form 10-K or proxy
statement pertaining to an annual meeting of stockholders.
3.20 No
General Solicitation. Neither the Company, nor any of its Affiliates, nor any person acting on its 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 Units
pursuant to this Agreement.
3.21 Acknowledgment
Regarding each Investor’s Purchase of the Units. The Board of Directors has approved the execution of the Transaction Documents
and the issuance and sale of the Units, based on its own independent evaluation and determination that the terms of the Transaction Documents
are reasonable and fair to the Company and in the best interests of the Company and its stockholders. The Company is entering into this
Agreement and is issuing and selling the Units voluntarily and without economic duress. The Company has had independent legal counsel
of its own choosing review the Transaction Documents and advise the Company with respect thereto. The Company acknowledges and agrees
that each Investor is acting solely in the capacity of an arm’s length purchaser with respect to the Units and the transactions
contemplated hereby and that neither such Investor nor any person affiliated with such Investor is acting as a financial advisor to,
or a fiduciary of, the Company (or in any similar capacity) with respect to execution of the Transaction Documents or the issuance of
the Units or any other transaction contemplated hereby.
3.22 No
Brokers’, Finders’ or Other Advisory Fees or Commissions. Except as set forth in Schedule 3.22, no brokers, finders
or other similar advisory fees or commissions will be payable by the Company or any Subsidiary or by any of their respective agents with
respect to the issuance of the Units or any of the other transactions contemplated by this Agreement.
3.23 OFAC.
None of the Company nor any of the Subsidiaries nor, to the best knowledge of the Company, any director, officer, agent, employee, affiliate
or person acting on behalf of the Company and/or any Subsidiary has been or is currently subject to any United States sanctions administered
by the Office of Foreign Assets Control of the United States Department of the Treasury (“OFAC”); and the Company
will not directly or indirectly use any proceeds received from the Investors, or lend, contribute or otherwise make available such proceeds
to its Subsidiaries or to any affiliated entity, joint venture partner or other person or entity, to finance any investments in, or make
any payments to, any country or person currently subject to any of the sanctions of the United States administered by OFAC.
3.24 No
Foreign Corrupt Practices. None of the Company or any of the Subsidiaries has, directly or indirectly: (a) made or authorized any
contribution, payment or gift of funds or property to any official, employee or agent of any governmental authority of any jurisdiction
except as otherwise permitted under applicable Law; or (b) made any contribution to any candidate for public office, in either case,
where either the payment or the purpose of such contribution, payment or gift was, is, or would be prohibited under the Foreign Corrupt
Practices Act or the rules and regulations promulgated thereunder or under any other legislation of any relevant jurisdiction covering
a similar subject matter applicable to the Company or its Subsidiaries and their respective operations and the Company has instituted
and maintained policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance
with such legislation.
3.25 Anti-Money
Laundering. The operations of each of the Company and the Subsidiaries are and have been conducted at all times in compliance with
all applicable anti-money laundering Laws in its jurisdiction of incorporation and in each other jurisdiction in which such entity, as
the case may be, conducts business (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by
or before any court or governmental authority involving the Company or its Subsidiaries with respect to any of the Money Laundering Laws
is, to the best knowledge of the Company, pending, threatened or contemplated.
3.26 Disclosure.
The Company confirms that neither it, nor to its knowledge, any other Person acting on its behalf has provided any Investor or its agents
or counsel with any information that the Company believes constitutes material, non-public information. The Company understands and confirms
that each Investor will rely on the foregoing representations and covenants in effecting transactions in securities of the Company.
3.27 FDA.
As to each product subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”) under the Food, Drug,
and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is manufactured, packaged, labeled, stored,
tested, distributed, sold, and/or marketed by the Company (each such product, a “Pharmaceutical Product”), such Pharmaceutical
Product is being manufactured, packaged, labeled, stored, tested, distributed, sold and/or marketed by the Company in compliance with
all applicable requirements under FDCA and similar Laws relating to registration, investigational use, premarket application approval,
good manufacturing practices, good laboratory practices, good clinical practices (“GCPs”), product listing, quotas,
labeling, advertising, record keeping and filing of reports, except where the failure to be in compliance would not have or reasonably
be expected to result in a Material Adverse Effect. All clinical trials conducted by or on behalf of the Company have been, and are being,
conducted in compliance in all material respects with the applicable requirements of GCPs, informed consent and all other applicable
requirements relating to protection of human subjects specifically contained in 21 CFR Parts 312, 50, 54, 56 and 11. The Company has
filed with the FDA or other appropriate governmental entity all required notices, and annual or other reports, including notices of adverse
experiences and reports of serious and unexpected adverse experiences, related to the use of each Pharmaceutical Product in clinical
trials. The Company has not received any notice that any Institutional Review Board or Ethics Committee has initiated or threatened to
initiate any action to suspend any clinical trial or otherwise restrict any clinical trial of any Pharmaceutical Product. There is no
pending, completed or, to the Company’s knowledge, threatened, action (including any lawsuit, arbitration, or legal or administrative
or regulatory proceeding, charge, complaint, or investigation) against the Company, and the Company has not received any notice, warning
letter or other communication from the FDA or any other governmental entity, which (i) contests the registration, approval, uses, distribution,
manufacturing or packaging, testing, sale, or the labeling and promotion of any Pharmaceutical Product, (ii) withdraws its approval of,
requests the recall, suspension, or seizure of, or withdraws or orders the withdrawal of advertising or sales promotional materials relating
to, any Pharmaceutical Product, (iii) imposes a clinical hold on any clinical investigation by the Company, (iv) enjoins production at
any facility of the Company or any third-party facility where the Pharmaceutical Product is manufactured, (v) enters or proposes to enter
into a consent decree of permanent injunction with the Company, or (vi) otherwise alleges any violation of any Laws, by the Company,
and which, either individually or in the aggregate, would have or reasonably be expected to result in a Material Adverse Effect. The
properties, business and operations of the Company have been and are being conducted in all material respects in accordance with all
applicable Lawsof the FDA and any other governmental entity. The Company has not been informed by the FDA or any other governmental entity
that the FDA or any other governmental entity will prohibit the testing, distribution, marketing, sale, license or use of any product
proposed to be developed, produced, tested, distributed or marketed by the Company nor has the FDA or any other governmental entity expressed
any concern as to approving for marketing any product being developed or proposed to be developed by the Company. Neither the Company
nor any of its officers, employees, agents or clinical investigators has committed any act, made any statement or failed to make any
statement that would reasonably be expected to provide a basis for the FDA to invoke its policy with respect to “Fraud, Untrue
Statements of Material Facts, Bribery, and Illegal Gratuities” set forth in 56 Fed. Reg. 46191 (Sept. 10, 1991) and any amendments
thereto. Neither the Company nor any officer, employee, independent contractor, or agent of the Company has been convicted of any crime
or engaged in any conduct that has resulted in or would reasonably be expected to result in (i) debarment under 21 U.S.C. Section 335a
or any similar state Law or (ii) exclusion under 42 U.S.C. Section 1320a-7 or any similar state Law.
3.28 Heath
Care Laws. The Company has operated and currently is in compliance in all material respects with all applicable Health Care Laws
(defined herein), including, without limitation, the rules and regulations of the FDA, the U.S. Department of Health and Human Services
Office of Inspector General, the Centers for Medicare & Medicaid Services, the Office for Civil Rights, the Department of Justice
or any other governmental agency or body having jurisdiction over the Company or any of its properties, and has not engaged in activities
which are, as applicable, cause for false claims liability, civil penalties, or mandatory or permissive exclusion from Medicare, Medicaid,
or any other state or federal health care program. For purposes of this Agreement, “Health Care Laws” shall mean the federal
Antikickback Statute (42 U.S.C. § 1320a-7b(b)), the Physician Payment Sunshine Act (42 U.S.C. § 1320a-7h), the civil False
Claims Act (31 U.S.C. §§ 3729 et seq.), the criminal False Claims Act (42 U.S.C. § 1320a-7b(a)), all criminal laws relating
to health care fraud and abuse, including but not limited to 18 U.S.C. Sections 286 and 287, and the health care fraud criminal provisions
under the Health Insurance Portability and Accountability Act of 1996 (42 U.S.C. §1320d et seq.) (“HIPAA”), the exclusion
Laws (42 U.S.C. § 1320a-7), the civil monetary penalties Law (42 U.S.C. § 1320a-7a), HIPAA, as amended by the Health Information
Technology for Economic and Clinical Health Act (42 U.S.C. §§ 17921 et seq.), the patient privacy, data security and breach
notification provisions under HIPAA, the FDCA, Medicare (Title XVIII of the Social Security Act), Medicaid (Title XIX of the Social Security
Act), the regulations promulgated pursuant to such Laws, and any other similar local, state or federal Law. The Company has not received
any FDA Form 483, notice of adverse finding, warning letter, untitled letter or other correspondence, communication or notice from the
FDA or any other governmental or regulatory authority alleging or asserting noncompliance with any Health Care Laws applicable to the
Company. The Company is not a party to nor has any ongoing reporting obligations pursuant to any corporate integrity agreements, deferred
prosecution agreements, monitoring agreements, consent decrees, settlement orders, plans of correction or similar agreements with or
imposed by any governmental or regulatory authority. Neither the Company nor any of its employees, officers, directors or, to the Company’s
knowledge, consultants has been excluded, suspended or debarred from participation in any U.S. state or federal health care program or
human clinical research or, to the Company’s knowledge, is subject to a governmental inquiry, investigation, proceeding, or other
similar action that could reasonably be expected to result in debarment, suspension, or exclusion.
3.29 Solvency.
Based on the consolidated financial condition of the Company as of the date of this Agreement, after giving effect to the receipt by
the Company of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s assets exceeds
the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known
contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its
business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements
of the business conducted by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii)
the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after
taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when
such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature
(taking into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any
facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization
laws of any jurisdiction within one year from the applicable Closing Date. Schedule 3.29 sets forth as of the date hereof all
outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments.
For the purposes of this Agreement, “Indebtedness” means (x) any liabilities for borrowed money or amounts owed in
excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and
other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s
consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection
or similar transactions in the ordinary course of business; and (z) the present value of any lease payments in excess of $50,000 due
under leases required to be capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is in default with respect to
any Indebtedness.
3.30 Not
a Shell Company. The Company is not a company described in paragraph (i)(1)(i) of Rule 144 under the Securities Act (“Rule
144”) or a “shell company” as defined by Rule 12b-2 of the Exchange Act; is subject to the reporting requirements
of section 13 or 15(d) of the Exchange Act; has filed all reports and other materials required to be filed by section 13 or 15(d) of
the Exchange Act, as applicable, during the preceding 12 months (or for such shorter period that the Company was required to file such
reports and materials), other than Form 8-K reports; and has filed current “Form 10 information” with the SEC reflecting
its status as an entity that is no longer an issuer described in paragraph (i)(1)(i) of Rule 144.
3.31 D&O
Insurance. As of the date of this Agreement, the Company has Directors and Officers liability insurance with coverage limits of not
less than $1,000,000 and will use commercially reasonable efforts to cause such insurance policies to be maintained.
4. REPRESENTATIONS
AND WARRANTIES OF THE INVESTORS. Each Investor
represents and warrants to the Company as follows:
4.1 Organization
and Qualification. Such Investor, if it is not an individual, is duly organized and validly existing in good standing under the Laws
of the state of organization.
4.2 Authorization;
Enforcement; Compliance with Other Instruments. Such Investor has the requisite power and authority to enter into this Agreement
and to perform its obligations under the Transaction Documents. The execution and delivery by such Investor of the Transaction Documents
to which it is a party, if and as applicable, have been duly and validly authorized by such Investor’s governing body and no further
consent or authorization is required. The Transaction Documents to which it is a party have been duly and validly executed and delivered
by such Investor and constitute valid and binding obligations of such Investor, enforceable against such Investor in accordance with
their 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 creditors’ rights and remedies.
4.3 No
Conflicts. The execution, delivery and performance of the Transaction Documents to which it is a party by such Investor and the purchase
of the Units by such Investor will not (a) if and as applicable, conflict with or result in a violation of such Investor’s organizational
documents, (b) conflict with, or constitute a material default (or an event which, with notice or lapse of time or both, would become
a material default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any material agreement,
contract, indenture mortgage, indebtedness or instrument to which such Investor is a party, or (c) violate any Law applicable to such
Investor or by which any of such Investor’s properties or assets are bound or affected. No approval or authorization will be required
from any governmental authority or agency, regulatory or self-regulatory agency or other third party in connection with the purchase
of the Units and the other transactions contemplated by this Agreement.
4.4 Investment
Intent; Accredited Investor. Such Investor is purchasing the Units for its own account, for investment purposes, and not with a view
towards distribution. The Investor is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D of
the Securities Act. Such Investor has, by reason of its business and financial experience, such knowledge, sophistication and experience
in financial and business matters and in making investment decisions of this type that it is capable of (a) evaluating the merits and
risks of an investment in the Units and the Investor Shares and making an informed investment decision, (b) protecting its own interests
and (c) bearing the economic risk of such investment for an indefinite period of time.
4.5 Opportunity
to Discuss. Such Investor has received all materials relating to the business, finance and operations of the Company and the Subsidiaries
as it has requested and has had an opportunity to discuss the business, management and financial affairs of the Company and the Subsidiaries
with the Company’s management. In making its investment decision, such Investor has relied solely on its own due diligence performed
on the Company by its own representatives.
4.6
No Other Representations. Except for the representations and warranties set forth in this Agreement and in other
Transaction Documents, such Investor makes no other representations or warranties to the Company.
5. OTHER
AGREEMENTS OF THE PARTIES.
5.1 Transfer
Restrictions.
(a) The
Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities
other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of an Investor or in connection
with a pledge as contemplated in Section 5.1(b), the Company may require the transferor thereof to provide to the Company an opinion
of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the
Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and
shall have the rights and obligations of the Investors under this Agreement.
(b) Each
Investor agrees to the imprinting, so long as is required by this Section 5.1, of a legend on any of the Securities in the following
form:
[NEITHER]
THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS [EXERCISABLE] [CONVERTIBLE] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES
AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY [AND THE SECURITIES ISSUABLE
UPON [EXERCISE] [CONVERSION] OF THIS SECURITY] MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER
OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES
ACT OR OTHER LOAN SECURED BY SUCH SECURITIES. UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE
THE SECURITY BEFORE THE DATE WHICH IS 4 MONTHS AND A DAY AFTER THE DISTRIBUTION DATE.
(c) The
Company acknowledges and agrees that the Investors may from time to time pledge pursuant to a bona fide margin agreement with a registered
broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited investor”
as defined in Rule 501(a) under the Securities Act and, if required under the terms of such arrangement, such Investor may transfer pledged
or secured Securities to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company and
no legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice shall be required
of such pledge. At the appropriate Investor’s expense, the Company will execute and deliver such reasonable documentation as a
pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the Securities, including, if
the Securities have been registered for resale pursuant to a registration statement, the preparation and filing of any required prospectus
supplement under Rule 424(b)(3) under the Securities Act or other applicable provision of the Securities Act to appropriately amend the
list of selling stockholders thereunder.
(d) Certificates
evidencing the Conversion Shares and Warrant Shares (collectively, the “Underlying Shares”) shall not contain any
legend (including the legend set forth in Section 5.1(b) hereof): (i) while a registration statement covering the resale of such
security is effective under the Securities Act, (ii) following any sale of such Underlying Shares pursuant to Rule 144 (assuming cashless
exercise of the Warrant), or (iii) if such legend is not required under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the SEC). The Company shall, at its expense, cause its counsel, or at the option
of the Majority in Interest of the Investors, counsel determined by the Majority in Interest of the Investors, to issue a legal opinion
to the Company’s transfer agent (the “Transfer Agent”) or Investors promptly if required by the Transfer Agent
to effect the removal of the legend hereunder, or if requested by the Majority in Interest of the Investors, respectively subject to
compliance with the holding period requirements of Rule 144 (for the avoidance of doubt, the Company shall pay all costs associated with
such opinions). If all or any portion of a Note is converted or Warrant is exercised at a time when there is an effective registration
statement to cover the resale of the Underlying Shares, or if such Underlying Shares may be sold under Rule 144 or if such legend is
not otherwise required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued
by the staff of the Commission) then such Underlying Shares shall be issued free of all legends. The Company agrees that at such time
as such legend is no longer required under this Section 5.1(c), it will, no later than the earlier of (i) two (2) Trading Days
and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined below) following the delivery by the applicable
Investor to the Company or the Transfer Agent of a certificate representing Underlying Shares, as applicable, issued with a restrictive
legend (such date, the “Legend Removal Date”), deliver or cause to be delivered to such Investor a certificate representing
such shares that is free from all restrictive and other legends. The Company may not make any notation on its records or give instructions
to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section 5. Certificates for Underlying Shares
subject to legend removal hereunder shall be transmitted by the Transfer Agent to the applicable Investor by crediting the account of
such Investor’s prime broker with the Depository Trust Company System as directed by the Investor. As used herein, “Standard
Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary
Trading Market with respect to the Common Stock as in effect on the date of delivery of a certificate representing Underlying Shares,
as applicable, issued with a restrictive legend. In addition to each Investor’s other available remedies, the Company shall pay
to such Investor, in cash, as partial liquidated damages and not as a penalty, 2% of the total of the value of the Underlying Shares
for which the removal of the legend is sought (based on the VWAP of the Common Stock on the date such Securities are submitted to the
Transfer Agent) for each full month that said opinion is not delivered after the Legend Removal Date until such certificate is delivered
without a legend.
(e) In
addition to each Investor’s other available remedies, the Company shall pay to the applicable Investor, in cash, (i) as partial
liquidated damages and not as a penalty, for each $1,000 of Underlying Shares (based on the VWAP of the Common Stock on the date such
Securities are submitted to the Transfer Agent) delivered for removal of the restrictive legend and subject to Section 5.1(c),
$10 per Trading Day (increasing to $20 per Trading Day five (5) Trading Days after such damages have begun to accrue) for each Trading
Day after the Legend Removal Date until such certificate is delivered without a legend and (ii) if the Company fails to (a) issue and
deliver (or cause to be delivered) to such Investor by the Legend Removal Date a certificate representing the Securities so delivered
to the Company by Investor that is free from all restrictive and other legends and (b) if after the Legend Removal Date the Investor
purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Investor of
all or any portion of the number of shares of Common Stock, or a sale of a number of shares of Common Stock equal to all or any portion
of the number of shares of Common Stock that the Investor anticipated receiving from the Company without any restrictive legend, then,
an amount equal to the excess of the Investor’s total purchase price (including brokerage commissions and other out-of-pocket expenses,
if any) for the shares of Common Stock so purchased (including brokerage commissions and other out-of-pocket expenses, if any) (the “Buy-In
Price”) over the product of (A) such number of Underlying Shares that the Company was required to deliver to the Investor by
the Legend Removal Date multiplied by (B) the average of the closing sale prices of the Common Stock on any Trading Day during the period
commencing on the date of the delivery by the Investor to the Company of the applicable Underlying Shares (as the case may be) and ending
on the date of such delivery and payment under this clause (ii).
(f) Each
Investor agrees with the Company that the Investors will sell any Securities pursuant to either the registration requirements of the
Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if Securities are sold
pursuant to a registration statement, they will be sold in compliance with the plan of distribution set forth therein, and acknowledges
that the removal of the restrictive legend from certificates representing Securities as set forth in this Section 5.1 is predicated
upon the Company’s reliance upon this understanding.
5.2 Furnishing
of Information.
(a) Until
the time that the Investors do not own any Securities, the Company covenants to maintain the registration of the Common Stock under Section
12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof and file within the applicable grace period)
all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject
to the reporting requirements of the Exchange Act.
(b) At
any time during the period commencing from the six (6) month anniversary of the date hereof and ending at such time that all of the Securities
may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without restriction or limitation
pursuant to Rule 144, if the Company (i) shall fail for any reason to satisfy the current public information requirement under Rule 144(c)
or (ii) has ever been an issuer described in Rule 144 (i)(1)(i) or becomes an issuer in the future, and the Company shall fail to satisfy
any condition set forth in Rule 144(i)(2) (a “Public Information Failure”) then, in addition to each Investor’s
other available remedies, the Company shall pay to each Investor that owns any such Securities at the time of the Public Information
Failure, in cash, as partial liquidated damages and not as a penalty, by reason of any such delay in or reduction of its ability to sell
the Securities, an amount in cash equal to two percent (2.0%) of the aggregate Subscription Amount of such Investor’s Securities
on the day of a Public Information Failure and on every thirtieth (30th) day (pro rated for periods totaling less than thirty
days) thereafter until the earlier of (a) the date such Public Information Failure is cured and (b) such time that such public information
is no longer required for the Investor to transfer the Underlying Shares pursuant to Rule 144, provided that such liquidated damages
shall not exceed in the aggregate to twenty-five percent (25.0%) of such Investor’s aggregate Subscription Amount. The payments
to which the Investors shall be entitled pursuant to this Section 5.2(b) are referred to herein as “Public Information
Failure Payments.” Public Information Failure Payments shall be paid on the earlier of (i) the last day of the calendar month
during which such Public Information Failure Payments are incurred and (ii) the third (3rd) Business Day after the event or
failure giving rise to the Public Information Failure Payments is cured. In the event the Company fails to make Public Information Failure
Payments in a timely manner, such Public Information Failure Payments shall bear interest at the rate of 1.5% per month (prorated for
partial months) until paid in full. Nothing herein shall limit an Investor’s right to pursue actual damages for the Public Information
Failure, and such Investor shall have the right to pursue all remedies available to it at law or in equity including, without limitation,
a decree of specific performance and/or injunctive relief.
5.3 Integration.
The Company shall not, and shall use its best efforts to ensure that no Affiliate of the Company shall, sell, offer for sale or solicit
offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) in a transaction that
would be integrated with the offer or sale of the Securities in a manner that would require the registration under the Securities Act
of the sale of the Securities to an Investor, or that would be integrated with the offer or sale of the Securities for purposes of the
rules and regulations of any Trading Market that would require, under the rules of the Trading Market, any Stockholder Approval.
5.4 Notification
of Certain Events. The Company shall give prompt written notice to the Investors of (a) the occurrence or non-occurrence of any Event,
the occurrence or non-occurrence of which would render any representation or warranty of the Company contained in this Agreement or any
other Transaction Document, if made on or immediately following the date of such Event, untrue or inaccurate in any material respect,
(b) the occurrence of any Event that, individually or in combination with any other Events, has had or could reasonably be expected to
have a Material Adverse Effect, (c) any failure of the Company to comply with or satisfy any covenant or agreement to be complied with
or satisfied by it hereunder or any Event that would otherwise result in the nonfulfillment of any of the conditions to the Investors’
obligations hereunder, (d) any notice or other communication from any Person alleging that the consent of such Person is or may be required
in connection with the consummation of the transactions contemplated by this Agreement or any other Transaction Document, or (e) any
Proceeding pending or, to the Company’s knowledge, threatened against a party relating to the transactions contemplated by this
Agreement or any other Transaction Document.
5.5 Available
Stock. Upon the issuance of the Units, the Company shall comply with the terms of Section 2.6 of the Warrants and Section 7(e) of
the Note contained therein. After such term is complied with, the Company shall at all times use all commercially reasonable efforts
to keep authorized and reserved and available for issuance, free of preemptive rights, such number of shares of Common Stock as are issuable
upon conversion of the Note and exercise of the Warrants contained in the Units issued to each of the Investor at any time. If the Company
determines at any time that it does not have a sufficient number of authorized shares of Common Stock to reserve and keep available for
issuance as described in the prior sentence, the Company shall use all commercially reasonable efforts to increase the number of authorized
shares of Common Stock by seeking Stockholder Approval for the authorization of such additional shares of Common Stock as would be necessary
to have such number of authorized shares of Common Stock as so described.
5.6 Use
of Proceeds. The Company will use the proceeds from the sale of the Units, net of expenses, to expand the business development and
sales activities of the Company as well as fund continuing technology development and working capital and general corporate needs.
5.7 Reserved.
5.8 Intercreditor
Agreement. In the event that the Company or any Subsidiary incurs debt or issues convertible debt securities to a seller as partial
consideration paid to such seller in connection with an Acquisition, unless otherwise waived in writing by a Majority in Interest of
the Investors, as a condition to consummation of such Acquisition, the holder of such debt or convertible debt securities shall enter
into an intercreditor agreement with the Company and the Investors on terms reasonably satisfactory to a Majority in Interest of the
Investors.
5.9 No
Shorting. So long as any Investor continues to hold the Note, the Warrants or any portion thereof, such Investor will comply with
the provisions of Section 9 of the Exchange Act, and the rules promulgated thereunder, with respect to transactions involving the Common
Stock and will not, either directly or indirectly through its Affiliates, principals or advisors, engage in any short sales or other
similar hedging transactions with respect to the Common Stock.
5.10 Prohibited
Transactions. The Company hereby covenants and agrees not to enter into any Prohibited Transactions without each Investor’s
prior written consent, until thirty (30) days after such time as each Note has been repaid in full and/or has been converted into Conversion
Shares and such Investor’s Warrants have been exercised in full or expired in accordance with its terms.
5.11 Securities
Laws Disclosure; Publicity. The Company shall, by 9:30 a.m. (New York City time) on the Trading Day immediately following each Closing
Date hereof, within four (4) Business Days following each Closing Date hereof, file a Current Report on Form 8-K disclosing the material
terms of the transactions contemplated hereby and including this Agreement as an exhibit thereto if required under the Exchange Act.
For the avoidance of doubt, this obligation shall apply for each and every Closing of this Offering and shall include the requirement
to file a final Current Report on Form 8-K disclosing the final Closing and the aggregate amount raised pursuant to this Agreement if
required under the Exchange Act. The Company shall not issue any press release nor otherwise make any such public statement regarding
any Investor or the Transaction Documents without the prior written consent of such Investor, except if such disclosure is required by
Law, in which case the Company shall ensure that such disclosure is restricted and limited in content and scope to the maximum extent
permitted by Law to meet the relevant disclosure requirement. Following the execution of this Agreement, any Investor and its Affiliates
and/or advisors may place announcements on their respective corporate websites and in financial and other newspapers and publications
(including customary “tombstone” advertisements) describing such Investor’s relationship with the Company under this
Agreement and including the name and corporate logo of the Company. Notwithstanding anything herein to the contrary, to comply with United
States Treasury Regulations Section 1.6011-4(b)(3)(i), each of the Company and each Investor, and each employee, representative or other
agent of the Company or each Investor, may disclose to any and all persons, without limitation of any kind, the U.S. federal and state
income tax treatment, and the U.S. federal and state income tax structure, of the transactions contemplated hereby and all materials
of any kind (including opinions or other tax analyses) that are provided to such party relating to such tax treatment and tax structure
insofar as such treatment and/or structure relates to a U.S. federal or state income tax strategy provided to such recipient.
5.12 Indemnification
of the Investors.
(a) The
Company will indemnify and hold each Investor and its respective directors, officers, managers, stockholders, members, partners, employees
and agents and permitted successors and assigns (each, an “Investor Party”) harmless from any and all losses, liabilities,
obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and
reasonable attorneys’ fees and costs of investigation and defense (collectively, “Losses”) that any such Investor
Party may suffer or incur as a result of or relating to:
(i) any
breach or inaccuracy of any representation, warranty, covenant or agreement made by the Company in any Transaction Document;
(ii) any
misrepresentation made by the Company in any Transaction Document or in any SEC Document relating to any of the Transaction Documents
or the consummation of the transactions contemplated thereby;
(iii) any
omission to state any material fact necessary in order to make the statements made in any SEC Document relating to any of the Transaction
Documents or the consummation of the transactions contemplated thereby, in light of the circumstances under which they were made, not
misleading;
(iv) any
Proceeding before or by any court, public board, government agency, self-regulatory organization or body based upon, or resulting from
the execution, delivery, performance or enforcement of any of the Transaction Documents or the consummation of the transactions contemplated
thereby, and whether or not such Investor is party thereto by claim, counterclaim, crossclaim, as a defendant or otherwise, or if such
Proceeding is based upon, or results from, any of the items set forth in clauses (i) through (iii) above.
(b) In
addition to the indemnity contained herein, the Company will reimburse each Investor Party for its reasonable legal and other expenses
(including the cost of any investigation, preparation and travel in connection therewith) incurred in connection therewith, as such expenses
are incurred.
(c) The
provisions of this Section 5.12 shall survive the termination or expiration of this Agreement.
5.13 Non-Public
Information. The Company covenants and agrees that neither it nor any other Person acting on its behalf will provide any Investor
or its agents or counsel with any information that the Company believes constitutes material, non-public information. To the extent the
Company provides an Investor with material, non-public information, the Company shall publicly disclose such information within three
(3) Business Days of providing the information to such Investor; provided, however, in the event that such material non-public information
is provided to such Investor pursuant to Section 10, the Company shall publicly disclose such information within twenty (20) Business
Days of providing the information to such Investor. The Company understands and confirms that each Investor shall be relying on the foregoing
representation in effecting transactions in securities of the Company.
5.14 [Reserved]
5.15 Listing
of Securities. The Company shall, if and as applicable: (a) in the time and manner required by each Trading Market on which the Common
Stock is listed, prepare and file with such Trading Market an additional shares listing application covering the Investor Shares, (b)
take all steps necessary to cause such shares to be approved for listing on each Trading Market on which the Common Stock is listed as
soon as possible thereafter, (c) provide to the Investors evidence of such listing, and (d) maintain the listing of such shares on each
such Trading Market.
5.16 [Reserved]
5.17 [Reserved]
5.18 Share
Transfer Agent. The Company has informed the Investors of the name of its share transfer agent and represents and warrants that the
transfer agent participates in the Depository Trust Company Fast Automated Securities Transfer program. The Company shall not change
its share transfer agent without the prior written consent of a Majority in Interest of the Investors.
5.19 Tax
Treatment. [Reserved].
5.20 Set-Off.
(a) Each
Investor may set off any of its obligations to the Company (whether or not due for payment), against any of the Company’s obligations
to such Investor (whether or not due for payment) under this Agreement and/or any other Transaction Document.
(b) Each
Investor may do anything necessary to effect any set-off undertaken in accordance with this Section 5.20 (including varying the
date for payment of any amount payable by such Investor to the Company).
5.21 Most
Favored Nation. Each Investor shall have the right, exercisable at any time in connection with any issuance by the Company of Common
Stock or Common Stock Equivalents for consideration (a “Subsequent Financing”) to accept the securities and terms
of such Subsequent Financing in lieu of the Securities and the terms of this Agreement (“MFN Right”), subject to the
terms and conditions set forth herein. If the Company receives such notice from an Investor of the exercise of its MFN Right for
such Subsequent Financing, then: (i) effective upon the closing of such Subsequent Financing, the terms of the Securities (and, if and
to the extent relevant, the underlying securities) then held by the Investor and this Agreement (collectively, “Present Terms”)
shall automatically be amended by (x) substituting the form, mix and Present Terms of such securities (and, if and to the extent relevant,
the underlying securities) with those of the securities issued in the Subsequent Financing (and, if and to the extent relevant, the underlying
securities) (the “Subsequent Financing Terms”) and (y) incorporating by reference, mutatis mutandis, the Subsequent
Financing Terms in lieu of the Present Terms; and (ii) thereafter, upon the reasonable request of the Company or such Investor, the parties
shall reasonably cooperate with each other in order to further or better evidence or effect such substitution(s) and amendment(s), and
to otherwise carry out the intent and purposes of this Section, including the physical exchange of securities.
6. CLOSING
CONDITIONS
6.1 Conditions
Precedent to the Obligations of the Investors. The obligation of each Investor to fund the Units at the respective Closing is subject
to the satisfaction or waiver by each Investor, at or before such Closing, of each of the following conditions:
(a) Required
Documentation. The Company must have delivered to the Investors copies of all resolutions duly adopted by the Board of Directors
of the Company, or any such other documentation of the Company approving the Agreement, the Transaction Documents and any of the transactions
contemplated hereby or thereby.
(b) Consents
and Permits. The Company must have obtained and delivered to the Investors copies of all necessary permits, approvals, and registrations
necessary to effect this Agreement, the Transaction Documents and any of the transactions contemplated hereby or thereby, including pursuant
to Section 3.14 of this Agreement.
(c) [Reserved]
(d) No
Event(s) of Default. The Investors must be of the reasonable opinion that no Event of Default has occurred and no Event of Default
would result from the execution of this Agreement or any of the Transaction Documents or the transactions contemplated hereby or thereby.
(e) Representations
and Warranties. The representations and warranties of the Company contained herein shall be true and correct in all material respects
as of the date when made and as of the respective Closing Date as though made on and as of such date.
(f) Performance.
The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required
by the Transaction Documents to be performed, satisfied or complied with by it at or prior to such Closing.
(g) No
Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions
contemplated by the Transaction Documents.
(h) No
Suspensions of Trading in Common Stock; Listing. Trading in the Common Stock shall not have been suspended by the SEC or any Trading
Market (except for any suspensions of trading of not more than one day on which the Trading Market is open solely to permit dissemination
of material information regarding the Company) at any time since the date of execution of this Agreement, and the Common Stock shall
have been at all times since such date eligible for quotation, or listed for trading, as applicable, on a Trading Market.
(i) Limitation
on Beneficial Ownership. The issuance of the Units shall not cause any Investor Group to become, directly or indirectly, a “beneficial
owner” (within the meaning of Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder) of a number
of Equity Interests of a class that is registered under the Exchange Act which exceeds the Maximum Percentage of the Equity Interests
of such class that are outstanding at such time.
(j) Funds
Flow Request. The Company shall have delivered to the Investors a flow of funds request, substantially in the form set out in Exhibit
E hereto.
6.2 Conditions
Precedent to the Obligations of the Company. The obligation of the Company to issue the Units at a Closing is subject to the satisfaction
or waiver by the Company, at or before such Closing, of each of the following conditions:
(a) Representations
and Warranties. The representations and warranties of each Investor contained herein shall be true and correct in all material respects
as of the date when made and as of the respective Closing Date as though made on and as of such date.
(b) Performance.
Each Investor shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required
by the Transaction Documents to be performed, satisfied or complied with by such Investor at or prior to such Closing.
(c) No
Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated
or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions
contemplated by the Transaction Documents.
7. EVENTS
OF DEFAULT
7.1 Events
of Default. The occurrence of any of the following events shall be an “Event of Default” under this Agreement:
(a) an
Event of Default under the Notes or any other Transaction Document;
(b) any
of the representations or warranties made by the Company in any Transaction Document being inaccurate, false or misleading in any material
respect, as of the date as of which it is made or deemed to be made, or any certificate or financial or other written statements furnished
by or on behalf of the Company to the Investors, is inaccurate, false or misleading, in any material respect, as of the date as of which
it is made or deemed to be made, or on the respective Closing Date; or
(c) a
failure by the Company to comply with any of its covenants or agreements set forth in this Agreement, including those set forth in Section
10.
7.2 Investor
Right to Investigate an Event of Default. If in reasonable opinion of a Majority in Interest of the Investors, an Event of Default
has occurred, or is or may be continuing:
(a) the
Unitholder Representative acting on behalf of the Investors may notify the Company that it wishes to investigate such purported Event
of Default;
(b) the
Company shall cooperate with the Unitholder Representative in such investigation;
(c) the
Company shall comply with all reasonable requests made by the Unitholder Representative to the Company in connection with any investigation
by the Unitholder Representative and shall (i) provide all information requested by the Unitholder Representative in relation to the
Event of Default to the Unitholder Representative; provided that the Unitholder Representative agrees that any materially price-sensitive
information and/or non-public information will be subject to confidentiality, and (ii) provide all such requested information within
three (3) Business Days of such request; and
(d) the
Company shall pay all reasonable costs incurred by the Investors, and, if and as applicable, the Unitholder Representative in connection
with any such investigation.
7.3 Remedies
Upon an Event of Default
(a) If
an Event of Default occurs pursuant to Section 7.1(a), the Investors and the Unitholder Representative, as applicable, shall have
such remedies as are set forth in the Note issued to each of the Investors.
(b) If
an Event of Default occurs pursuant to Section 7.1(b) or Section 7.1(c) and is not remedied within (i) two (2) Business
Days for an Event of Default occurring by the Company’s failure to comply with Section 7.1(c), or (ii) ten (10) Business
Days for an Event of Default occurring pursuant to Section 7.1(b), the Unitholder Representative may declare, by notice to the
Company, effective immediately, all outstanding obligations by the Company under the Transaction Documents to be immediately due and
payable in immediately available funds and the Investors shall have no obligation to consummate any Closing under this Agreement or to
accept the conversion of any Note into Conversion Shares.
(c) If
any Event of Default occurs and is not remedied within (i) two (2) Business Days for an Event of Default occurring by the Company’s
failure to comply with Section 7.1(c), or (ii) ten (10) Business Days for an Event of Default occurring pursuant to Section
7.1(b), the Unitholder Representative may, by written notice to the Company, terminate this Agreement effective as of the date set
forth in the Unitholder Representative’s notice.
8. TERMINATION
8.1 Events
of Termination. This Agreement:
(a) may
be terminated:
(i) by
the Investors on the occurrence or existence of a Securities Termination Event or a Change of Control;
(ii) by
the mutual written consent of the Company and the Investors, at any time;
(iii) by
either Party, by written notice to the other Party, effective immediately, if a Closing has not occurred within fifteen (15) Business
Days of the date of this Agreement or such later date as the Company and Placement Agent agree in writing, provided that the right to
terminate this Agreement under this Section 8.1(a)(iii) shall not be available to any party that is in material breach of or material
default under this Agreement or whose failure to fulfill any obligation under this Agreement has been the principal cause of, or has
resulted in the failure of a Closing to occur; or
(iv) by
the Investors or the Unitholder Representative, as applicable, in accordance with Section 7.3(c).
8.2 Automatic
Termination. This Agreement will automatically terminate, without further action by the parties, at the time after a Closing that
the principal amount outstanding under each Note and any accrued but unpaid interest is reduced to zero (0), whether as a result of a
Conversion of each Note or repayment by the Company in accordance with the terms of this Agreement and each Note and each Investor no
longer holds any Investor Shares.
8.3 Effect
of Termination.
(a) Subject
to Section 8.3(b), each party’s right of termination under Section 8.1 is in addition to any other rights it may
have under this Agreement or otherwise, and the exercise of a right of termination will not be an election of remedies.
(b) If
an Investor terminates this Agreement under Section 8.1(a)(i):
(i) such
Investor may declare, by notice to the Company, all outstanding obligations by the Company under the Transaction Documents to be due
and payable (including, without limitation, the immediate repayment of any principal amount outstanding under its Note plus accrued but
unpaid interest) without presentment, demand, protest or any other notice of any kind, all of which are expressly waived by the Company,
anything to the contrary contained in this Agreement or in any other Transaction Document notwithstanding; and
(ii) the
Company must within five (5) Business Days of such notice being received, pay to such Investor in immediately available funds the outstanding
principal amount for the respective Note plus all accrued interest thereon (if any), unless such Investor terminates this Agreement as
a result of an Event of Default and provided that (A) subsequent to the termination under Section 8.1(a)(i), such Investor is
not prohibited by Law or otherwise from exercising its conversion rights pursuant to this Agreement or the respective Note or exercise
rights pursuant to the respective Warrants, (B) such Investor actually exercises its conversion rights under this Agreement or the respective
Note or exercise rights under the Warrant, and (C) the Company otherwise complies in all respects with its obligation to issue Conversion
Shares in accordance with the respective Note or issue the respective Warrant Shares in accordance with the respective Warrants (which
obligation will survive termination).
(c) Upon
termination of this Agreement, such Investor will not be required to fund any further amount after the date of termination of this Agreement,
provided that termination will not affect any undischarged obligation under this Agreement, and any obligation of the Company to pay
or repay any amounts owing to such Investor hereunder and which have not been repaid at the time of termination.
(d) Nothing
in this Agreement will be deemed to release any party from any liability for any breach by such party of the terms and provisions of
this Agreement or to impair the right of any party to compel specific performance by any other party of its obligations under this Agreement.
(e) Notwithstanding
anything herein to the contrary, the Company’s covenant under Section 5.8 of this Agreement shall survive the termination
of this Agreement in accordance with its terms.
9. REGISTRATION
RIGHTS
9.1 The
Investors’ Registration Rights. The Investors’ registration rights are set forth in the Registration Rights Agreement.
10. RIGHTS
TO FUTURE STOCK ISSUANCES. Subject to the terms
and conditions of this Section 10 and applicable securities Laws, if at any time prior to the first anniversary of the first Closing
hereunder, the Company proposes to offer or sell any New Securities, the Company shall first offer the Investors the opportunity to purchase
up to one hundred percent (100%) of such New Securities. The Investors shall be entitled to apportion the right of first offer hereby
granted to them in proportion to their respective percentages of the total Subscription Amount including every Closing that has occurred
under this Agreement as of such time stated in the preceding sentence.
10.1 The
Company shall give notice (the “Offer Notice”) to the Investors, stating (a) its bona fide intention to offer such
New Securities, (b) the number of such New Securities to be offered, and (c) the price and terms, if any, upon which it proposes to offer
such New Securities.
10.2 By
notification to the Company within ten (10) days after the Offer Notice is given, the Investors may elect to purchase or otherwise acquire,
at the price and on the terms specified in the Offer Notice, up to one hundred percent (100%) of such New Securities. The closing of
any sale pursuant to this Section 10 shall occur within the later of ninety (90) days of the date that the Offer Notice is given
and the date of initial sale of the New Securities pursuant to Section 10.3.
10.3 The
Company may, during the ninety (90) day period following the expiration of the period provided in Section 10.2, offer and sell
the remaining portion of such New Securities to any Person or Persons at a price not less than, and upon terms no more favorable to the
offeree than, those specified in the Offer Notice. If the Company does not enter into an agreement for the sale of the New Securities
within such period, or if such agreement is not consummated within thirty (30) days of the execution thereof, the right provided hereunder
shall be deemed to be revived and such New Securities shall not be offered unless first reoffered to the Investors in accordance with
this Section 10.
10.4 The
right of first offer in this Section 10 shall not be applicable to an Exempt Issuance (as defined in the Note), or any New Securities
registered for sale under the Securities Act.
11. GENERAL
PROVISIONS
11.1 Fees
and Expenses. Prior to the date of this Agreement, the Company has not paid Sullivan & Worcester LLP in connection with this
Agreement. Subject to the limitations set forth in the Placement Agency Agreement between the Company and the Placement Agent, dated
as of April 27, 2023, at each Closing, the Company shall reimburse the Placement Agent for its due diligence costs and reasonable fees
and disbursements of Sullivan & Worcester LLP in connection with the preparation of the Transaction Documents it being understood
that Sullivan & Worcester LLP has not rendered any legal advice to the Company in connection with the transactions contemplated hereby
and that the Company has relied for such matters on the advice of its own counsel. Except as specified above, each party shall pay the
fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident
to the negotiation, preparation, execution, delivery and performance of the Transaction Documents. The Company shall pay all stamp and
other taxes and duties levied in connection with the sale of the Units. In addition, Walleye Opportunities Master Fund Ltd. shall be
entitled to an expense reimbursement from the Company of up to $20,000 for their legal fees.
11.2 Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via email
at the email address specified in this Section prior to 5:00 p.m. (New York time) on a Business Day, (b) the next Business Day after
the date of transmission, if such notice or communication is delivered via email at the email address specified in this Section on a
day that is not a Business Day or later than 5:00 p.m. (New York time) on any date and earlier than 11:59 p.m. (New York time) on such
date, (c) the Business Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (d) upon
actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as
follows:
If
to the Company:
Marizyme,
Inc.
555
Heritage Drive, Suite 205
Jupiter,
Florida 33458
Attention:
David Barthel, CEO
Email:
DBarthel@marizyme.com
With
a copy (which shall not constitute notice) to:
Bevilacqua
PLLC
1050
Connecticut Ave NW #500
Washington,
DC 20036
Attention:
Louis A. Bevilacqua, Esq.
Email:
lou@bevilacquapllc.com
If
to the Placement Agent:
Univest
Securities, LLC
375
Park Avenue, 27th Floor
New
York, NY 10152
Email:
brichmond@univest.us
Attention:
Bradley Richmond
With
a copy (which shall not constitute notice) to:
Sullivan
& Worcester LLP
1633
Broadway
New
York, NY 10019
(212)
660-3060
Email:
ddanovitch@sullivanlaw.com
Attention:
David E. Danovitch, Esq.
If
to an Investor, to the address set forth on the applicable Investor’s signature page.
Or
such other address as may be designated in writing hereafter, in the same manner, by such Person.
11.3 Severability.
If any provision of this Agreement is held by a court of competent jurisdiction to be excessive in scope or otherwise invalid or unenforceable,
such provision shall be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent possible, and the validity
and enforceability of the remaining provisions of this Agreement will not in any way be affected or impaired thereby.
11.4 Governing
Law. This Agreement shall be governed by and construed in accordance with the Laws of the State of Nevada, without reference to principles
of conflict of laws or choice of laws.
11.5 Jurisdiction
and Venue. Any action, proceeding or claim arising out of, or relating in any way to this Agreement shall be brought and enforced
in a state or federal court located in the Palm Beach County, State of Florida. The Company and each Investor irrevocably submit to the
jurisdiction of such courts, which jurisdiction shall be exclusive, and hereby waive any objection to such exclusive jurisdiction or
that such courts represent an inconvenient forum. The prevailing party in any such action shall be entitled to recover its reasonable
and documented attorneys’ fees and out-of-pocket expenses relating to such action or proceeding.
11.6 WAIVER
OF RIGHT TO JURY TRIAL. THE COMPANY AND THE INVESTOR HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS.
11.7 Survival.
The representations, warranties, agreements and covenants contained herein shall survive the applicable Closing and the delivery of the
Securities.
11.8 Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such
matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.
11.9 Amendments;
Waivers. No provision of this Agreement may be waived or amended except in a written instrument signed by the Company and a Majority
in Interest of the Investors. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall
be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition
or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise
of any such right.
11.10 Construction.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any
of the provisions hereof. 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. This Agreement shall be construed as if drafted
jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provisions of this Agreement or any of the Transaction Documents.
11.11 Successors
and Assigns. This Agreement shall be binding upon, and inure to the benefit of and be enforceable by, the Company and each Investor
and their respective successors and assigns. The Company may not assign this Agreement or any rights or obligations hereunder without
the prior written consent of a Majority in Interest of the Investors. Each Investor may assign any or all of its rights under this Agreement
to any Person to whom such Investor assigns or transfers any Securities, provided such transferee agrees in writing to be bound, with
respect to the Securities so transferred, by the provisions hereof that apply to the “Investor” and such transferee is an
“accredited investor” as such term is defined in Rule 501(a) of Regulation D of the Securities Act.
11.12 No
Third-Party Beneficiaries. Except for the indemnification provisions set forth herein, this Agreement is intended for the benefit
of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof
be enforced by, any other Person.
11.13 Further
Assurances. Each party hereto 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 the 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.
11.14 Counterparts.
This Agreement may be executed in two or more identical counterparts, both 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. Signature pages delivered by
facsimile or e-mail shall have the same force and effect as an original signature.
11.15 Specific
Performance. The Company acknowledges that monetary damages alone would not be adequate compensation to any Investor for a breach
by the Company of this Agreement and such Investor may seek an injunction or an order for specific performance from a court of competent
jurisdiction if (a) the Company fails to comply or threatens not to comply with this Agreement or (b) any Investor has reason to believe
that the Company will not comply with this Agreement.
11.16 Appointment
of Agent and Unitholder Representative. In furtherance of the authority granted to each Investor pursuant to Section 2.2(b) of the
respective Note and under Section 1 of this Agreement with respect to the right of the Majority in Interest of the Investors to appoint
a Unitholder Representative, a Majority in Interest of the Investors hereby appoints Univest Securities, LLC to act as their agent with
respect to administering their rights under the Transaction Documents and to act as their Unitholder Representative upon the occurrence
and continuance of an Event of Default (as defined in the applicable Transaction Document). The rights and obligations of Univest Securities,
LLC as agent and Unitholder Representative may be further described in one or more separate agreements. So long as an Unitholder Representative
has been duly appointed in accordance with the terms hereof and is carrying out its obligations under each Note, no Investor other than
the Unitholder Representative may pursue any remedy with respect to any Note in connection with an Event of Default.
[Signature
Page Follows]
IN
WITNESS WHEREOF, the undersigned have executed this Unit Purchase Agreement as of the date first set forth above.
MARIZYME, INC. |
|
|
|
By: |
/s/ David Barthel |
|
Name: |
David Barthel |
|
Title: |
Chief
Executive Officer |
|
[Signature
Page of Unit Purchase Agreement]
INVESTOR
SIGNATURE PAGE TO THE Marizyme, INC. UNIT PURCHASE AGREEMENT
IN
WITNESS WHEREOF, the undersigned has caused this Unit Purchase Agreement to be duly executed by its authorized signatory as of the date
first indicated above.
Name
of Investor:
Signature of Authorized Signatory of Investor: |
|
/s/
Chuntao Zhou |
Name of Authorized Signatory: |
|
Chuntao Zhou |
Title of Authorized Signatory: |
|
Owner |
Email Address of Authorized Signatory: |
|
HEXINGLOBAL@163.COM |
Facsimile Number of Authorized Signatory: |
|
|
Address
for Notice to Investor:
Closing Subscription Amount: |
|
$ 1,000,000 |
|
|
|
Number of Shares Issuable Under Class E Warrants |
|
14,705,998 |
|
|
|
Number of Shares Issuable Under Class F Warrants |
|
14,705,998 |
EIN
Number:
APPENDIX
A
SCHEDULE OF INVESTORS
Name of Investor | |
Units | | |
Principal
Sum of
Note | | |
Shares
Underlying
Class E
Warrant | | |
Shares
Underlying Class
F Warrant | | |
Subscription
Amount | |
Hexin Global Ltd. | |
| 11,764,710 | | |
$ | 1,176,471 | | |
| 14,705,887 | | |
| 14,705,887 | | |
$ | 1,000,000 | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| TOTAL: | | |
$ | 1,000,000 | |
EXHIBIT
A
FORM
OF NOTE
[See
attached]
EXHIBIT
B
FORM
OF REGISTRATION RIGHTS AGREEMENT
[See
attached]
EXHIBIT
C
FORM
OF Class e Warrant
[See
attached]
EXHIBIT
D
FORM
OF Class f Warrant
[See
attached]
EXHIBIT
E
FLOW
OF FUNDS REQUEST
Marizyme,
Inc. – Unit Purchase Agreement – Flow of Funds Request
In
connection with the Unit Purchase Agreement, dated July 10, 2023 (the “Agreement”) between Marizyme, Inc. (the “Company”)
and the Investors, the Company irrevocably authorizes the Investors to distribute such funds as set out below, in the manner set out
below, at a Closing.
Capitalized
terms used but not otherwise defined in this letter will have the meaning given to such terms in the Agreement.
Item | |
Amount | |
Closing | |
$ | | |
Total | |
$ | | |
Please
transfer the net amount of US $___________ due at the Closing, to the following bank account:
Beneficiary
Bank:
Swift
code:
ABA/Routing
#:
Account
#:
Beneficiary
name and address:
Yours sincerely, |
|
|
|
MARIZYME, INC. |
|
|
|
By: |
|
|
Name: |
|
|
Title: |
|
|
Exhibit
10.2
REGISTRATION
RIGHTS AGREEMENT
This
Registration Rights Agreement (as amended, supplemented, restated and/or modified from time to time, this “Agreement”)
is made and entered into as of July 10, 2023 among Marizyme, Inc., a Nevada corporation
(the “Company”), and each of the several purchasers signatory hereto (each such purchaser, a “Purchaser”
and, collectively, the “Purchasers”).
WHEREAS,
in connection with that certain Unit Purchase Agreement of even date herewith by and between the Company and the Purchasers (as amended,
supplemented, restated and/or modified from time to time, the “Purchase Agreement”), the Purchasers purchased or may
purchase from the Company, severally and not jointly, an aggregate of up to 100,000,000 units (the “Units”) comprised
of, (i) a 15% original issue discount unsecured subordinated convertible promissory note with 10% interest (the “Note”)
convertible into Common Stock at an initial price per share of $0.10, (ii) a warrant to purchase one and twenty-five hundredths (1.25)
shares of Common Stock per Unit at an initial price per share of $0.10 (the “Class E Warrant”), and (iii) a second
warrant to purchase one and twenty-five hundredths (1.25) shares of the Common Stock per Unit at an initial price per share of $0.20
(the “Class F Warrant” and together with the “Class E Warrant”, the “Warrants”,
and, together with the Note, the Class E Warrant, and/or such other securities as the Company and the Placement Agent may agree upon,
collectively referred to as the “Securities”), at a price per Unit of $0.10; and
WHEREAS,
to induce the Purchasers to purchase the Securities, the Company has agreed to grant the Purchasers certain rights with respect to the
registration of Registrable Securities (as defined below) under the Securities Act pursuant to the terms of this Agreement.
NOW,
THEREFORE, the Company and each Purchaser hereby agree as follows:
1.
Definitions.
Capitalized
terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given such terms in the
Purchase Agreement. As used in this Agreement, the following terms shall have the following meanings:
“Advice”
shall have the meaning set forth in Section 6(d).
“Blue
Sky Application” shall have the meaning set forth in Section 5.
“Commission”
means the U.S. Securities and Exchange Commission.
“Cut-Off
Date” shall have the meaning set forth in Section 2(a).
“Effectiveness
Date” means, with respect to the Initial Registration Statement required to be filed hereunder, the 120th calendar
day following the Filing Date and with respect to any additional Registration Statements which may be required pursuant to Section 2(c)
or Section 3(c), the 75th calendar day following the date on which an additional Registration Statement is required to be
filed hereunder; provided, however, that in the event the Company is notified by the Commission that one or more of the
above Registration Statements will not be reviewed or is no longer subject to further review and comments, the Effectiveness Date as
to such Registration Statement shall be the 10th calendar day following the date on which the Company is so notified if such
date precedes the dates otherwise required above (unless the Company is required to update its financial statements prior to requesting
acceleration of such Registration Statement, which will require the Company to file an amendment to such Registration Statement, in which
case the Company shall file any necessary amendment to such Registration Statement and request effectiveness thereof as soon as reasonably
practicable and in no event later than the 120th calendar day following the Filing Date); provided, further,
if such Effectiveness Date falls on a day that is not a Trading Day, then the Effectiveness Date shall be the next succeeding Trading
Day.
“Effectiveness
Period” shall have the meaning set forth in Section 2(a).
“Event”
shall have the meaning set forth in Section 2(d).
“Event
Date” shall have the meaning set forth in Section 2(d).
“Filing
Date” means, with respect to the Initial Registration Statement required hereunder, the 67th calendar day following
the Closing Date and, with respect to any additional Registration Statements which may be required pursuant to Section 2(c) or Section
3(c), the earliest practical date on which the Company is permitted by SEC Guidance (as defined herein) to file such additional Registration
Statement related to the Registrable Securities.
“Holder”
or “Holders” means the holder or holders, as the case may be, from time to time of Registrable Securities.
“Indemnified
Party” shall have the meaning set forth in Section 5(c).
“Indemnifying
Party” shall have the meaning set forth in Section 5(c).
“Initial
Registration Statement” means the initial Registration Statement filed pursuant to this Agreement.
“Losses”
shall have the meaning set forth in Section 5(a).
“Plan
of Distribution” shall have the meaning set forth in Section 2(a).
“Prospectus”
means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated by the
Commission pursuant to the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to
the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference
in such Prospectus.
“Registrable
Securities” means, as of any date of determination, (a) all of the Conversion Shares then issued and issuable upon conversion
in full of each Note (assuming on such date each Note is converted in full without regard to any conversion limitations therein), (b)
all shares of Common Stock issued and issuable as interest or principal under each Note assuming all permissible interest and principal
payments are made in shares of Common Stock and each Note is held until maturity, (c) any additional shares of Common Stock issued and
issuable in connection with any anti-dilution provisions in the Notes (without giving effect to any limitations on conversion set forth
in each Note), (d) all of the Warrant Shares then issued and issuable upon exercise in full of the Warrants (assuming on such date the
Warrants are exercised in full without regard to any exercise limitations therein), (e) any additional shares of Common Stock issued
and issuable in connection with any anti-dilution provisions in the Warrants (without giving effect to any limitations on exercise set
forth in the Warrants), and (f) any securities issued or then issuable upon any stock split, dividend or other distribution, recapitalization
or similar event with respect to the foregoing; provided, however, that any such Registrable Securities shall cease to be Registrable
Securities (and the Company shall not be required to maintain the effectiveness of any, or file another, Registration Statement hereunder
with respect thereto) for so long as (a) a Registration Statement with respect to the sale of such Registrable Securities is declared
effective by the Commission under the Securities Act and such Registrable Securities have been disposed of by the Holder in accordance
with such effective Registration Statement, (b) such Registrable Securities have been previously sold in accordance with Rule 144, or
(c) such securities become eligible for resale without volume or manner-of-sale restrictions and without the requirement for the Company
to be in compliance with the current public information requirement under Rule 144, as determined by counsel to the Company pursuant
to a written opinion letter to such effect, addressed, delivered and acceptable to the Company’s transfer agent and the affected
Holders (assuming that such securities, any securities upon the exercise, conversion or exchange of or as a dividend upon which such
securities were issued, or any securities issuable upon the exercise, conversion or exchange of, or as a dividend upon such securities,
were at no time during the prior 90 days held by any Affiliate (as defined by Rule 405 of the Securities Act) of the Company), as reasonably
determined by the Company, upon the advice of counsel to the Company. For the avoidance of doubt, any such Registrable Securities shall
cease to be Registrable Securities after the Cut-Off Date.
“Registration
Statement” means any registration statement required to be filed hereunder pursuant to Section 2(a) and any additional registration
statements contemplated by Section 2(c) or Section 3(c), including (in each case) the Prospectus, amendments and supplements to any such
registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated
by reference or deemed to be incorporated by reference in any such registration statement.
“Rule
415” means Rule 415 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect
as such Rule.
“Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect
as such Rule.
“SEC
Guidance” means (i) any publicly available written or oral guidance of the Commission staff, or any comments, requirements
or requests of the Commission staff and (ii) the Securities Act.
2.
Shelf Registration.
(a)
On or prior to the Filing Date, the Company shall prepare and file with the Commission a Registration Statement covering the resale of
all of the Registrable Securities that are not then registered on an effective Registration Statement for an offering to be made on a
continuous basis pursuant to Rule 415. The Registration Statement filed hereunder shall be on Form S-3 (except if the Company is not
then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on another appropriate
form in accordance herewith, subject to the provisions of Section 2(e)) and shall contain (unless otherwise directed by the Majority
in Interest of the Investors) substantially the “Plan of Distribution” attached hereto as Annex A. Subject
to the terms of this Agreement, the Company shall use its reasonable best efforts to cause a Registration Statement filed under this
Agreement (including, without limitation, under Section 3(c)) to be declared effective under the Securities Act as promptly as possible
after the filing thereof, but in any event no later than the applicable Effectiveness Date, and shall use its reasonable best efforts
to keep such Registration Statement continuously effective and to keep the Prospectus current and available for resales of securities
under the Securities Act until the first to occur of the following (the “Cut-Off Date”): (A) the date that is one
(1) year from the date the Registration Statement is declared effective by the Commission and (B) the date that all Registrable Securities
covered by such Registration Statement (i) have been sold, thereunder or pursuant to Rule 144, or (ii) may be sold without volume or
manner-of-sale restrictions pursuant to Rule 144 and without the requirement for the Company to be in compliance with the current public
information requirement under Rule 144, as determined by the counsel to the Company pursuant to a written opinion letter which shall
be obtained at the company’s expense, to such effect, addressed, delivered and acceptable to the Company’s transfer agent
and the affected Holders (assuming that such securities, any securities upon the exercise, conversion or exchange of or as a dividend
upon which such securities were issued, or any securities issuable upon the exercise, conversion or exchange of, or as a dividend upon
such securities, were at no time held by any Affiliate of the Company) (the “Effectiveness Period”). The Company shall
telephonically request effectiveness of a Registration Statement as of 5:00 p.m. Eastern Time on a Trading Day. The Company shall immediately
notify the Holders via facsimile or by e-mail of the effectiveness of a Registration Statement on the same Trading Day that the Company
telephonically confirms effectiveness with the Commission, which shall be the date requested for effectiveness of such Registration Statement.
The Company shall, by 9:30 a.m. Eastern Time on the Trading Day after the effective date of such Registration Statement, file a final
Prospectus with the Commission as required by Rule 424. Failure to so notify the Holder within one (1) Trading Day of such notification
of effectiveness or failure to file a final Prospectus as foresaid shall be deemed an Event under Section 2(d).
(b)
Notwithstanding the registration obligations set forth in Section 2(a), if the Commission informs the Company that all of the Registrable
Securities covered by such Registration Statement cannot, as a result of the application of Rule 415, be registered for resale as a secondary
offering on a single registration statement, the Company agrees to promptly inform each of the Holders thereof and use its commercially
reasonable best efforts to file amendments to the Initial Registration Statement as required by the Commission, covering the maximum
number of Registrable Securities permitted to be registered by the Commission, on Form S-3 or such other form available to register for
resale the Registrable Securities as a secondary offering, subject to the provisions of Section 2(e); provided, however,
that prior to filing such amendment, the Company shall be obligated to use diligent efforts to advocate with the Commission for the registration
of all of the Registrable Securities in accordance with the SEC Guidance, including without limitation, Securities Act Rules Compliance
and Disclosure Interpretation 612.09.
(c)
Notwithstanding any other provision of this Agreement and subject to the payment of liquidated damages pursuant to Section 2(d), if the
Commission or any SEC Guidance sets forth a limitation on the number of Registrable Securities permitted to be registered on a particular
Registration Statement as a secondary offering (and notwithstanding that the Company used diligent efforts to advocate with the Commission
for the registration of all or a greater portion of Registrable Securities), unless otherwise directed in writing by a Holder as to its
Registrable Securities, the number of Registrable Securities to be registered on such Registration Statement will be reduced as follows:
(i)
First, the Company shall reduce or eliminate any securities to be included by any Person other than a Holder;
(ii)
Second, the Company shall reduce Registrable Securities represented by Warrant Shares (applied, in the case that some Warrant Shares
may be registered, to the Holders on a pro rata basis based on the total number of unregistered Warrant Shares held by such Holders,
collectively); and
(iii)
third, the Company shall reduce Registrable Securities represented by Conversion Shares (applied, in the case that some Conversion Shares
may be registered, to the Holders on a pro rata basis based on the total number of unregistered Conversion Shares held by such Holders,
collectively).
In
the event of a cutback hereunder, the Company shall give the respective Holder at least five (5) Trading Days prior written notice along
with the calculations as to such Holder’s allotment. In the event the Company amends the Initial Registration Statement in accordance
with the foregoing, the Company will use its reasonable best efforts to file with the Commission, as promptly as allowed by the Commission
or SEC Guidance provided to the Company or to registrants of securities in general, one or more registration statements on Form S-3 or
such other form available to register for resale those Registrable Securities that were not registered for resale on the Initial Registration
Statement, as amended.
(d)
Subject to Section 2(a), if: (i) the Initial Registration Statement is not filed on or prior to its Filing Date (if the Company files
the Initial Registration Statement without affording the Holders the opportunity to review and comment on the same as required by Section
3(a) herein or without providing the Notice with notice of such failure, the Company shall be deemed to have not satisfied this clause
(i)), or (ii) the Company fails to file with the Commission a request for acceleration of a Registration Statement in accordance with
Rule 461 promulgated by the Commission pursuant to the Securities Act, within five Trading Days of the date that the Company is notified
(orally or in writing, whichever is earlier) by the Commission that such Registration Statement will not be “reviewed” or
will not be subject to further review, or (iii) prior to the effective date of a Registration Statement, the Company fails to file a
pre-effective amendment and otherwise respond in writing to comments made by the Commission in respect of such Registration Statement
within thirty (30) calendar days after the receipt of comments by or notice from the Commission that such amendment is required in order
for such Registration Statement to be declared effective, or (iv) a Registration Statement registering for resale all of the Registrable
Securities is not declared effective by the Commission by the Effectiveness Date of the Initial Registration Statement, or (v) after
the effective date of a Registration Statement, such Registration Statement ceases for any reason to remain continuously effective as
to all Registrable Securities included in such Registration Statement, or the Holders are otherwise not permitted to utilize the Prospectus
therein to resell such Registrable Securities, for more than ten (10) consecutive calendar days or more than an aggregate of fifteen
(15) calendar days (which need not be consecutive calendar days) during any 12-month period (any such failure or breach being referred
to as an “Event”, and for purposes of clauses (i) and (iv), the date on which such Event occurs, and for purpose of
clause (ii) the date on which such five (5) Trading Day period is exceeded, and for purpose of clause (iii) the date which such thirty
(30) calendar day period is exceeded, and for purpose of clause (v) the date on which such ten (10) or fifteen (15) calendar day period,
as applicable, is exceeded being referred to as an “Event Date”), then, in addition to any other rights the Holders
may have hereunder or under applicable law, on each such Event Date and on each thirty (30) calendar day anniversary of each such Event
Date (if the applicable Event shall not have been cured by such date) until the applicable Event is cured, the Company shall pay to each
Holder an amount in cash, as partial liquidated damages and not as a penalty, equal to 1.0% of the aggregate purchase price paid by such
Holder pursuant to the Purchase Agreement; provided, however, that the Company shall not be required to make any payments
pursuant to this Section 2(d) if an Event occurred at such time that all Registrable Securities are eligible for resale pursuant to Rule
144 (without volume restrictions or current public information requirements) promulgated by the Commission pursuant to the Securities
Act and the Company has complied with the conditions set forth in section 2(a), as applicable; provided, further, that
the Company shall not be required to make any payments pursuant to this Section 2(d) with respect to any Registrable Securities the Company
is unable to register due to limits imposed by the Commission’s interpretation of Rule 415 under the Securities Act after compliance
with section 2(b). The parties agree that the maximum aggregate liquidated damages payable to a Holder under this Agreement shall be
10.0% of the aggregate Subscription Amount paid by such Holder pursuant to the Purchase Agreement. If the Company fails to pay any partial
liquidated damages pursuant to this Section in full within seven (7) days after the date payable, the Company will pay interest thereon
at a rate of 18% per annum (or such lesser maximum amount that is permitted to be paid by applicable law) to the Holder, accruing daily
from the date such partial liquidated damages are due until such amounts, plus all such interest thereon, are paid in full. The partial
liquidated damages pursuant to the terms hereof shall apply on a daily pro rata basis for any portion of a thirty (30) calendar day period
prior to the cure of an Event.
(e)
If 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 another appropriate form and (ii) undertake to register the Registrable Securities on Form S-3
as soon as such form is available, provided that the Company shall maintain the effectiveness of the Registration Statement then
in effect until such time as a Registration Statement on Form S-3 covering the Registrable Securities has been declared effective by
the Commission.
3.
Registration Procedures.
In
connection with the Company’s registration obligations hereunder, the Company shall:
(a)
Not less than one (1) Trading Day prior to the filing of the Registration Statement and not less than one (1) Trading Day prior to the
filing of any related Prospectus or any amendment or supplement thereto (including any document that would be incorporated or deemed
to be incorporated therein by reference), the Company shall (i) furnish to the Holders, copies of all such documents proposed to be filed,
which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the review of such Holders,
and (ii) cause its officers and directors, counsel and independent registered public accountants to respond to such inquiries as shall
be necessary, in the reasonable opinion of respective counsel to each Holder, to conduct a reasonable investigation within the meaning
of the Securities Act. Notwithstanding the above, the Company shall not be obligated to provide the Holders advance copies of any universal
shelf registration statement registering securities in addition to those required hereunder, or any Prospectus prepared thereto. The
Company shall not file a Registration Statement or any such Prospectus or any amendments or supplements thereto to which the Holders
of 67% or more of the Registrable Securities shall reasonably object in good faith, provided that, the Company is notified of such objection
in writing no later than five (5) Trading Days after the Holders have been so furnished copies of a Registration Statement or one (1)
Trading Day after the Holders have been so furnished copies of any related Prospectus or amendments or supplements thereto. Each Holder
agrees to furnish to the Company a completed questionnaire in the form attached hereto as Exhibit A on a date that is not less
than two (2) Trading Days prior to the Filing Date or by the end of the fourth (4th) Trading Day following the date on which
the Holders, receives draft materials in accordance with this Section.
(b)
(i) Prepare and file with the Commission such amendments, including post-effective amendments, to a Registration Statement and the Prospectus
used in connection therewith as may be necessary to keep a Registration Statement continuously effective as to the applicable Registrable
Securities for the Effectiveness Period and prepare and file with the Commission such additional Registration Statements in order to
register for resale under the Securities Act all of the Registrable Securities subject to Section 2hereof, (ii) cause the related Prospectus
to be amended or supplemented by any required Prospectus supplement (subject to the terms of this Agreement), and, as so supplemented
or amended, to be filed pursuant to Rule 424 subject to Section 2 hereof, (iii) respond as promptly as reasonably possible to any comments
received from the Commission with respect to a Registration Statement or any amendment thereto and provide as promptly as reasonably
possible to the Holders true and complete copies of all correspondence from and to the Commission relating to a Registration Statement
(provided that, the Company shall excise any information contained therein which would constitute material non-public information regarding
the Company or any of its Subsidiaries), subject to Section 2 hereof, and (iv) comply in all material respects with the applicable provisions
of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by a Registration Statement
during the applicable period in accordance (subject to the terms of this Agreement) with the intended methods of disposition by the Holders
thereof set forth in such Registration Statement as so amended or in such Prospectus as so supplemented.
(c)
If during the Effectiveness Period, the number of Registrable Securities at any time exceeds 100% of the number of shares of Common Stock
then registered in a Registration Statement, then the Company shall file as soon as reasonably practicable, but in any case, prior to
the applicable Filing Date, an additional Registration Statement covering the resale by the Holders of not less than the number of such
Registrable Securities, subject to Section 2 hereof.
(d)
Notify the Holders of Registrable Securities to be sold (which notice shall, pursuant to clauses (iii) through (vi) hereof, be accompanied
by an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably possible
(and, in the case of (i)(A) below, not less than one (1) Trading Day prior to such filing) and (if requested by any such Person) confirm
such notice in writing no later than one (1) Trading Day following the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective
amendment to a Registration Statement is proposed to be filed, (B) when the Commission notifies the Company whether there will be a “review”
of such Registration Statement and whenever the Commission comments in writing on such Registration Statement, and (C) with respect to
a Registration Statement or any post-effective amendment, when the same has become effective, (ii) of any request by the Commission or
any other federal or state governmental authority for amendments or supplements to a Registration Statement or Prospectus or for additional
information, (iii) of the issuance by the Commission or any other federal or state governmental authority of any stop order suspending
the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings
for that purpose, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceedings
for such purpose, (v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration
Statement ineligible for inclusion therein or any statement made in a Registration Statement or Prospectus or any document incorporated
or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to a Registration Statement,
Prospectus or other documents so that, in the case of a Registration Statement or the Prospectus, as the case may be, it will not contain
any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not misleading, and (vi) of the occurrence or existence of any pending
corporate development with respect to the Company that the Company believes may be material and that, in the determination of the Company,
makes it not in the best interest of the Company to allow continued availability of a Registration Statement or Prospectus, provided,
however, in no event shall any such notice contain any information which would constitute material, non-public information regarding
the Company or any of its Subsidiaries.
(e)
Use its reasonable best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order stopping or suspending
the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of
the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment.
(f)
Furnish to the Holders, without charge, at least one conformed copy of each such Registration Statement and each amendment thereto, including
financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference to the extent requested
by such Person, and all exhibits to the extent requested by such Person (including those previously furnished or incorporated by reference)
promptly after the filing of such documents with the Commission; provided, that any such item which is available on the EDGAR system
(or successor thereto) need not be furnished in physical form.
(g)
Subject to the terms of this Agreement, the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto
by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and
any amendment or supplement thereto, except after the giving of any notice pursuant to Section 3(d).
(h)
The Company shall cooperate with any broker-dealer through which a Holder proposes to resell its Registrable Securities in effecting
a filing with the Financial Industry Regulatory Authority, Inc. (“FINRA”) Corporate Financing Department pursuant
to FINRA Rule 5110, as requested by any such Holder, and the Company shall pay the filing fee required by such filing within two (2)
Business Days of request therefor.
(i)
Prior to any resale of Registrable Securities by a Holder, use its commercially reasonable best efforts to register or qualify or cooperate
with the selling Holders in connection with the registration or qualification (or exemption from the registration or qualification) of
such Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such jurisdictions within the United
States as any Holder reasonably requests in writing, to keep the registration or qualification (or exemption therefrom) effective during
the Effectiveness Period and to do any and all other acts or things reasonably necessary to enable the disposition in such jurisdictions
of the Registrable Securities covered by the Registration Statement subject to Section 2(a); provided, that, the Company shall not be
required to qualify generally to do business in any jurisdiction where it is not then so qualified, subject the Company to any material
tax in any such jurisdiction where it is not then so subject or file a general consent to service of process in any such jurisdiction.
(j)
If requested by a Holder, cooperate with such Holder to facilitate the timely preparation and delivery of certificates representing Registrable
Securities to be delivered to a transferee pursuant to a Registration Statement, which certificates shall be free, to the extent permitted
by the Purchase Agreement and applicable law, of all restrictive legends, and to enable such Registrable Securities to be in such denominations
and registered in such names as any such Holder may request.
(k)
Subject to Section 2(a), upon the occurrence of any event contemplated by Section 3(d), as promptly as reasonably possible under the
circumstances taking into account the Company’s good faith assessment of any adverse consequences to the Company and its stockholders
of the premature disclosure of such event, prepare a supplement or amendment, including a post-effective amendment, to a Registration
Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and
file any other required document so that, as thereafter delivered, neither a Registration Statement nor such Prospectus will contain
an 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 light of the circumstances under which they were made, not misleading. If the Company notifies the Holders in accordance
with clauses (iii) through (vi) of Section 3(d) above to suspend the use of any Prospectus until the requisite changes to such Prospectus
have been made, then the Holders shall suspend use of such Prospectus. Subject to Section 2(a), the Company will use its reasonable best
efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company shall be entitled to exercise
its right under this Section 3(k) to suspend the availability of a Registration Statement and Prospectus, subject to the payment of partial
liquidated damages otherwise required pursuant to Section 2(d), for a period not to exceed 60 calendar days (which need not be consecutive
days) in any 12-month period.
(l)
Comply with all applicable rules and regulations of the Commission.
(m)
The Company shall use its reasonable best efforts to obtain and maintain eligibility for use of Form S-3 (or any successor form thereto)
for the registration of the resale of Registrable Securities.
(n)
The Company may require each selling Holder to furnish to the Company a certified statement as to the number of shares of Common Stock
beneficially owned by such Holder and, if required by the Commission, the natural persons thereof that have voting and dispositive control
over the shares. During any periods that the Company is unable to meet its obligations hereunder with respect to the registration of
the Registrable Securities solely because any Holder fails to furnish such information within three Trading Days of the Company’s
request, any liquidated damages that are accruing at such time as to such Holder only shall be tolled and any Event that may otherwise
occur solely because of such delay shall be suspended as to such Holder only, until such information is delivered to the Company.
4.
Registration Expenses. All fees and expenses incident to the performance of or compliance with, this Agreement by the Company
shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses
referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses of the Company’s counsel and independent registered public accountants) (A) with respect to filings made with
the Commission, (B) with respect to filings required to be made with any Trading Market on which the Common Stock is then listed for
trading, (C) in compliance with applicable state securities or Blue Sky laws reasonably agreed to by the Company in writing (including,
without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions of the
Registrable Securities) and (D) if not previously paid by the Company, with respect to any filing that may be required to be made by
any broker through which a Holder intends to make sales of Registrable Securities with FINRA pursuant to FINRA Rule 5110, so long as
the broker is receiving no more than a customary brokerage commission in connection with such sale, (ii) printing expenses (including,
without limitation, expenses of printing certificates for Registrable Securities), (iii) messenger, telephone and delivery expenses,
(iv) fees and disbursements of counsel for the Company, (v) Securities Act liability insurance, if the Company so desires such insurance,
and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated
by this Agreement. In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation
of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing
of the Registrable Securities on any securities exchange as required hereunder. Notwithstanding the foregoing, the Company shall be responsible
for the reasonable counsel fees of the Holders; provided, however, that any such counsel fees of the Holders shall not exceed $10,000
incurred in connection with the review of the registration statement.
5.
Indemnification.
(a)
Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless
each Holder, the officers, directors, members, partners, agents, brokers (including brokers who offer and sell Registrable Securities
as principal as a result of a pledge or any failure to perform under a margin call of Common Stock), investment advisors and employees
(and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any
other title) of each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) and the officers, directors, members, stockholders, partners, agents and employees (and any other Persons with
a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of each such
controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities,
costs (including, without limitation, reasonable attorneys’ fees) and expenses (collectively, “Losses”), as
incurred, arising out of or relating to (1) any untrue or alleged untrue statement of a material fact contained in a Registration Statement,
any Prospectus or any form of prospectus, including any blue sky application (as defined below) or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto, in light of the circumstances
under which they were made) not misleading; (2) any blue sky application or other document executed by the Company specifically for that
purpose or based upon written information furnished by the Company filed in any state or other jurisdiction in order to qualify any or
all of the Registrable Securities under the securities laws thereof (any such application, document or information herein called a “Blue
Sky Application”); or (3) any violation or alleged violation by the Company of the Securities Act, the Exchange Act or any
state securities law, or any rule or regulation thereunder, in connection with the performance of its obligations under this Agreement,
except to the extent, but only to the extent, that (i) such untrue statements or omissions are based solely upon information regarding
such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates
to such Holder or such Holder’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in a Registration Statement, such Prospectus or in any amendment or supplement thereto (it
being understood that the Holder has approved Annex A hereto for this purpose) or (ii) in the case of an occurrence of an event of the
type specified in Section 3(d)(iii)-(vi), the use by such Holder of an outdated, defective or otherwise unavailable Prospectus after
the Company has notified such Holder in writing that the Prospectus is outdated, defective or otherwise unavailable for use by such Holder
and prior to the receipt by such Holder of the Advice contemplated in Section 6(d), but only if and to the extent that following the
receipt of the Advice the misstatement or omission giving rise to such Loss would have been corrected. The Company shall notify the Holders
promptly of the institution, threat or assertion of any Proceedings arising from or in connection with the transactions contemplated
by this Agreement of which the Company is aware. Such indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such indemnified person and shall survive the transfer of any Registrable Securities by any of the Holders in
accordance with Section 6(g).
(b)
Indemnification by Holders. Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its directors,
officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons (and any other Persons with a functionally
equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title), to the fullest extent permitted
by applicable law, from and against all Losses, as incurred, to the extent arising out of or based solely upon: (x) such Holder’s
failure to comply with any applicable prospectus delivery requirements of the Securities Act or the plan of distribution in any Registration
Statement through no fault of the Company or (y) any untrue or alleged untrue statement of a material fact contained in any Registration
Statement, any Prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating
to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in
the case of any Prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading (i) to the
extent, but only to the extent, that such untrue statement or omission is contained in any information so furnished in writing by such
Holder to the Company expressly for inclusion in such Registration Statement or such Prospectus or (ii) to the extent, but only to the
extent, that such information relates to such Holder’s proposed method of distribution of Registrable Securities and was reviewed
and expressly approved in writing by such Holder expressly for use in a Registration Statement (it being understood that the Holder has
approved Annex A hereto for this purpose), such Prospectus or in any amendment or supplement thereto or (iii) in the case of an occurrence
of an event of the type specified in Section 3(d)(iii)-(vi), to the extent, but only to the extent, related to the use by such Holder
of an outdated, defective or otherwise unavailable Prospectus after the Company has notified such Holder in writing that the Prospectus
is outdated, defective or otherwise unavailable for use by such Holder and prior to the receipt by such Holder of the Advice contemplated
in Section 6(d), but only if and to the extent that following the receipt of the Advice the misstatement or omission giving rise to such
Loss would have been corrected. In no event shall the liability of any selling Holder under this Section 5(b) be greater in amount than
the dollar amount of the net proceeds actually received by such Holder upon the sale of the Registrable Securities giving rise to such
indemnification obligation.
(c)
Conduct of Indemnification Proceedings. If any Proceedings shall be brought or asserted against any Person entitled to indemnity
hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is
sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume the defense
thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses
incurred in connection with defense thereof; provided, that, the failure of any Indemnified Party to give such notice shall not relieve
the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be
finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure
shall have materially and adversely prejudiced the Indemnifying Party.
An
Indemnified Party shall have the right to employ separate counsel in any such Proceedings and to participate in the defense thereof,
but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party
has agreed in writing to pay such fees and expenses, (2) the Indemnifying Party shall have failed promptly to assume the defense of such
Proceedings and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceedings, or (3) the named parties
to any such Proceedings (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and counsel
to the Indemnified Party shall reasonably believe that a material conflict of interest is likely to exist if the same counsel were to
represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party
in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have
the right to assume the defense thereof and the reasonable fees and expenses of no more than one separate counsel shall be at the expense
of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such Proceedings effected without its
written consent, which consent shall not be unreasonably withheld or delayed. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any pending Proceedings in respect of which any Indemnified Party is a party,
unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject
matter of such Proceedings.
Subject
to the terms of this Agreement, all reasonable fees and expenses of the Indemnified Party (including reasonable fees and expenses to
the extent incurred in connection with investigating or preparing to defend such Proceedings in a manner not inconsistent with this Section)
shall be paid to the Indemnified Party, as incurred, within ten Trading Days of written notice thereof to the Indemnifying Party; provided,
that, the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and expenses applicable to
such actions for which such Indemnified Party is finally determined by a court of competent jurisdiction (which determination is not
subject to appeal or further review) not to be entitled to indemnification hereunder.
(d)
Contribution. If the indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party or insufficient to hold
an Indemnified Party harmless for any Losses, then each Indemnifying Party shall contribute to the amount paid or payable by such Indemnified
Party, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection
with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative
fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in
question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has
been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties’ relative
intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in this Agreement, any
reasonable attorneys’ or other fees or expenses incurred by such party in connection with any Proceedings to the extent such party
would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party
in accordance with its terms.
The
parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding the provisions of this Section 5(d), no Holder shall be required to contribute pursuant to this
Section 5(d), in the aggregate, any amount in excess of the amount by which the net proceeds actually received by such Holder from the
sale of the Registrable Securities subject to the Proceedings exceeds the amount of any damages that such Holder has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.
The
indemnity and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have
to the Indemnified Parties.
6.
Miscellaneous.
(a)
Remedies. In the event of a breach by the Company or by a Holder of any of their respective obligations under this Agreement,
each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement,
including recovery of damages, shall be entitled to specific performance of its rights under this Agreement. Each of the Company and
each Holder agrees that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it
of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect
of such breach, it shall not assert or shall waive the defense that a remedy at law would be adequate.
(b)
No Piggyback on Registrations; Prohibition on Filing Other Registration Statements. Neither the Company nor any of its security
holders (other than the Holders in such capacity pursuant hereto) may include securities of the Company in any Registration Statements
other than the Registrable Securities. The Company shall not file any other registration statements (other than any registration statement
on Form S-1 or Form S-3 for an underwritten public offering of any of the Company’s securities (an “Underwritten Offering”))
until all Registrable Securities are registered pursuant to a Registration Statement that is declared effective by the Commission, provided
that this Section 6(b) shall not prohibit the Company from filing amendments to registration statements filed prior to the date of this
Agreement.
(c)
Compliance. Each Holder covenants and agrees that it will comply with the prospectus delivery requirements of the Securities Act
as applicable to it (unless an exemption therefrom is available) in connection with sales of Registrable Securities pursuant to a Registration
Statement.
(d)
Discontinued Disposition. By its acquisition of Registrable Securities, each Holder agrees that, upon receipt of a notice from
the Company of the occurrence of any event of the kind described in Section 3(d)(iii) through (vi), such Holder will forthwith discontinue
disposition of such Registrable Securities under a Registration Statement until it is advised in writing (the “Advice”)
by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed. The Company will
use its reasonable best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company agrees
and acknowledges that any periods during which the Holder is required to discontinue the disposition of the Registrable Securities hereunder
shall be subject to the provisions of Section 2(d).
(e)
Piggy-Back Registrations. If, at any time during the Effectiveness Period, there is not an effective Registration Statement covering
all of the Registrable Securities and the Company shall determine to prepare and file with the Commission a registration statement, other
than with respect to an Underwritten Offering relating to an offering for its own account or the account of others under the Securities
Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities 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 Holder a written notice of such determination and, if within fifteen days after the date of the delivery of such notice, any
such Holder shall so request in writing, the Company shall include in such registration statement all or any part of such Registrable
Securities such Holder requests to be registered; provided, however, that the Company shall not be required to register
any Registrable Securities pursuant to this Section 6(e) that are eligible for resale pursuant to Rule 144 (without volume restrictions
or current public information requirements) promulgated by the Commission pursuant to the Securities Act or that are the subject of a
then effective Registration Statement.
(f)
Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified
or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing
and signed by the Company and the Holders of 67% or more of the then outstanding Registrable Securities (for purposes of clarification,
this includes any Registrable Securities issuable upon exercise or conversion of any Security). If a Registration Statement does not
register all of the Registrable Securities pursuant to a waiver or amendment made in compliance with the previous sentence, then the
number of Registrable Securities to be registered for each Holder shall be reduced pro rata among all Holders and each Holder shall have
the right to designate which of its Registrable Securities shall be omitted from such Registration Statement. Notwithstanding the foregoing,
a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of a Holder
or some Holders and that does not directly or indirectly affect the rights of other Holders may be given only by such Holder or Holders
of all of the Registrable Securities to which such waiver or consent relates; provided, however, that the provisions of
this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the first sentence of this Section
6(f). 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 also is offered to all of the parties to this Agreement.
(g)
Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be delivered
as set forth in the Purchase Agreement.
(h)
Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns
of each of the parties and shall inure to the benefit of each Holder. The Company may not assign (except by merger) its rights or obligations
hereunder without the prior written consent of all of the Holders of the then outstanding Registrable Securities. Each Holder may assign
their respective rights hereunder in the manner and to the Persons as permitted under Section 11.11 of the Purchase Agreement.
(i)
No Inconsistent Agreements. 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 Holders in this Agreement or otherwise conflicts with the provisions
hereof. Neither the Company nor any of its Subsidiaries has previously entered into any agreement granting any registration rights with
respect to any of its securities to any Person that have not been satisfied in full except as disclosed in the schedules to the Purchase
Agreement. Notwithstanding the foregoing, any Registration Rights Agreement concerning the Securities sold under the Purchase Agreement
will not be considered an inconsistent agreement.
(j)
Execution and Counterparts. This Agreement may be executed in two or more counterparts, all of which when taken together shall
be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to
the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered
by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding
obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile
or “.pdf” signature page were an original thereof.
(k)
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be
determined in accordance with the provisions of the Purchase Agreement.
(l)
Cumulative Remedies. The remedies provided herein are cumulative and not exclusive of any other remedies provided by law.
(m)
Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall
remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would
have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared
invalid, illegal, void or unenforceable.
(n)
Headings. The headings in this Agreement are for convenience only, do not constitute a part of the Agreement and shall not be
deemed to limit or affect any of the provisions hereof.
(o)
Independent Nature of Holders’ Obligations and Rights. The obligations of each Holder hereunder are several and not joint
with the obligations of any other Holder hereunder, and no Holder shall be responsible in any way for the performance of the obligations
of any other Holder hereunder. Nothing contained herein or in any other agreement or document delivered at any closing, and no action
taken by any Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture
or any other kind of group or entity, or create a presumption that the Holders are in any way acting in concert or as a group or entity
with respect to such obligations or the transactions contemplated by this Agreement or any other matters, and the Company acknowledges
that the Holders are not acting in concert or as a group, and the Company shall not assert any such claim, with respect to such obligations
or transactions. Each Holder shall be entitled to protect and enforce its rights, including without limitation the rights arising out
of this Agreement, and it shall not be necessary for any other Holder 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 was solely in the control of the Company,
not the action or decision of any Holder, and was done solely for the convenience of the Company and not because it was required or requested
to do so by any Holder. It is expressly understood and agreed that each provision contained in this Agreement is between the Company
and a Holder, solely, and not between the Company and the Holders collectively and not between and among Holders.
********************
(Signature
Pages Follow)
IN
WITNESS WHEREOF, the parties hereto have executed this Registration Rights Agreement as of the date first written above.
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MARIZYME,
INC., a Nevada
corporation |
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By: |
/s/
David Barthel |
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Name: |
David
Barthel |
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Title: |
Chief
Executive Officer |
[SIGNATURE
PAGE OF PURCHASERS FOLLOWS]
SIGNATURE
PAGE OF PURCHASERS TO MARIZYME,
INC. REGISTRATION RIGHTS AGREEMENT
HEXIN
Global Ltd. |
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/s/
Chuntao Zhou |
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Annex
A
Plan
of Distribution
Each
selling stockholder (the “Selling Stockholders”) of the securities of Marizyme,
Inc., a Nevada corporation (the “Company”), and any of their pledgees, assignees and successors-in-interest
may, from time to time, sell any or all of their Company securities covered hereby on the _________ or any other stock exchange, market
or trading facility on which such securities are traded or in private transactions. These sales may be at fixed or negotiated prices.
A Selling Stockholder may use any one or more of the following methods when selling securities:
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ordinary
brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
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block
trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block
as principal to facilitate the transaction; |
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purchases by a broker-dealer
as principal and resale by the broker-dealer for its account; |
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an exchange distribution in
accordance with the rules of the applicable exchange; |
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privately negotiated transactions; |
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settlement
of short sales entered into after the effective date of the registration statement of which this prospectus is a part; |
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in transactions
through broker-dealers that agree with the Selling Stockholders to sell a specified number of such securities at a stipulated price
per security; |
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through
the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise; |
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a combination of any such
methods of sale; or |
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any other method permitted
pursuant to applicable law. |
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The
Selling Stockholders may also sell securities under Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”),
if available, rather than under this prospectus.
Broker-dealers
engaged by the Selling Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser)
in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction not in
excess of a customary brokerage commission in compliance with FINRA Rule 2121; and in the case of a principal transaction a markup or
markdown in compliance with FINRA Rule 2121.
In
connection with the sale of the securities or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers
or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they
assume. The Selling Stockholders may also sell securities short and deliver these securities to close out their short positions, or loan
or pledge the securities to broker-dealers that in turn may sell these securities. The Selling Stockholders may also enter into option
or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the
delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer
or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).
The
Selling Stockholders and any broker-dealers or agents that are involved in selling the securities may be deemed to be “underwriters”
within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers
or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act. Each Selling Stockholder has informed the Company that it does not have any written or oral agreement or understanding,
directly or indirectly, with any person to distribute the securities. In no event shall any broker-dealer receive fees, commissions and
markups which, in the aggregate, would exceed eight percent (8%).
The
Company is required to pay certain fees and expenses incurred by the Company incident to the registration of the securities. The Company
has agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under
the Securities Act.
Because
Selling Stockholders may be deemed to be “underwriters” within the meaning of the Securities Act, they will be subject to
the prospectus delivery requirements of the Securities Act including Rule 172 thereunder. In addition, any securities covered by this
prospectus which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than under this prospectus.
The Selling Stockholders have advised us that there is no underwriter or coordinating broker acting in connection with the proposed sale
of the resale securities by the Selling Stockholders.
We
agreed to keep this prospectus effective until the earliest of (i) one (1) year from the date the Registration Statement is declared
effective by the Commission, (ii) the date on which the securities may be resold by the Selling Stockholders without registration and
without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for the Company to be in compliance
with the current public information under Rule 144 under the Securities Act or any other rule of similar effect or (iii) the date on
which all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule of similar
effect. The resale securities will be sold only through registered or licensed brokers or dealers if required under applicable state
securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered
or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is
complied with.
Under
applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously
engage in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation M,
prior to the commencement of the distribution. In addition, the Selling Stockholders will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of securities
of the common stock by the Selling Stockholders or any other person. We will make copies of this prospectus available to the Selling
Stockholders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the
sale (including by compliance with Rule 172 under the Securities Act).
EXHIBIT
A
FORM
OF QUESTIONNAIRE
Selling
Securityholder Notice and Questionnaire
The
undersigned beneficial owner of shares of common stock of Marizyme, Inc., a Nevada corporation
(the “Company”), understands that the Company has filed or intends to file with the Securities and Exchange Commission
(the “Commission”) a Registration Statement for the registration and resale of shares of common stock held by the
undersigned (the “Registrable Securities”).
The
undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate:
QUESTIONNAIRE
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(a) |
Full
Legal Name of Selling Securityholder |
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(b) |
Full
Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities Listed in Item 3 below are held: |
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(c) |
Full
Legal Name of Natural Control Person (which means a natural person who directly or indirectly alone or with others has power to vote
or dispose of the securities covered by the questionnaire): |
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2. |
Address for Notices to Selling Securityholder: |
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Telephone: |
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Fax: |
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Contact Person: |
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3. |
Beneficial Ownership of Registrable Securities: |
Type
and Principal Amount of Registrable Securities beneficially owned:
(a)
Are you a broker-dealer?
Yes
☐ No ☐
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Note: |
If
yes, the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement. |
(b)
Are you an affiliate of a broker-dealer?
Yes
☐ No ☐
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(c) |
If
you are an affiliate of a broker-dealer, do you certify that you bought or acquired the Registrable Securities in the ordinary course
of business, and at the time of the purchase of the Registrable Securities to be resold, you had no agreements or understandings,
directly or indirectly, with any person to distribute the Registrable Securities? |
Yes
☐ No ☐
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Note: |
If
no, the Commission’s staff has indicated that you should be identified as an underwriter in the Registration Statement. |
5. |
Beneficial Ownership of Other Securities of the
Company Owned by the Selling Securityholder. |
Except
as set forth below in this Item 5, the undersigned is not the beneficial or registered owner of any securities of the Company other than
the Registrable Securities listed above in Item 3.
Type
and Amount of Other Securities beneficially owned by the Selling Securityholder:
6. |
Relationships
with the Company: |
Except
as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5%
of more of the equity securities of the undersigned) has held any position or office or has had any other material relationship with
the Company (or its predecessors or affiliates) during the past three years.
State
any exceptions here:
7.
The Company has advised each Selling Securityholder that it is the view of the Commission that it may not use shares registered on
the Registration Statement to cover short sales of shares of common stock made prior to the date on which the Registration Statement
is declared effective by the Commission, in accordance with 1997 Securities and Exchange Commission Manual of Publicly Available Telephone
Interpretations Section A.65. If a Selling Securityholder uses the prospectus for any sale of the shares of common stock, it will be
subject to the prospectus delivery requirements of the Securities Act. The Selling Securityholder will be responsible to comply with
the applicable provisions of the Securities Act and Exchange Act, and the rules and regulations thereunder promulgated, including, without
limitation, Regulation M, as applicable to such Selling Securityholder in connection with resales of their respective shares under the
Registration Statement.
The
undersigned agrees to promptly notify the Company of any inaccuracies or changes in the information provided herein that may occur subsequent
to the date hereof and prior to the effective date for the Registration Statement.
Certain
legal consequences arise from being named as a Selling Securityholder in the Registration Statement and related prospectus. Accordingly,
the undersigned is advised to consult their own securities law counsel regarding the consequence of being named or not being named as
a Selling Securityholder in the Registration Statement and the related prospectus.
By
signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through 6 and
the inclusion of such information in the Registration Statement and the related prospectus. The undersigned understands that such information
will be relied upon by the Company in connection with the preparation or amendment of the Registration Statement and the related prospectus.
The undersigned hereby elects to include the Registrable Securities owned by it and listed above in Item 3 (unless otherwise specified
in Item 3) in the Registration Statement.
IN
WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either
in person or by its duly authorized agent.
Dated: |
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Beneficial Owner: |
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By: |
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Name: |
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Title: |
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Exhibit
10.4
AMENDMENT
TO REGISTRATION RIGHTS AGREEMENT
This
AMENDMENT TO REGISTRATION RIGHTS AGREEMENT (this “Amendment”) is made and entered into as of July 6, 2023,
by and between Marizyme, Inc., a Nevada corporation (the “Company”) and each of the several investors signatory hereto
(each such investor, an “Investor” and, collectively, the “Investors”).
WHEREAS,
each of the Investors holds any or all of the following: (1) one or more 15% Original Issue Discount Unsecured Subordinated Convertible
Promissory Notes issued by the Company, (2) one or more Class E Common Stock Purchase Warrants issued by the Company, and (3) one or
more Class F Common Stock Purchase Warrants issued by the Company (collectively, the “Securities”).
WHEREAS,
pursuant to the terms of the Securities, the Company has agreed to grant the Investors certain rights with respect to the registration
of all of the securities issuable upon conversion or exercise of the Securities (the “Registrable Securities”) under
the Securities Act of 1933, as amended, in accordance with the terms of a Registration Rights Agreement between the Company and the respective
Investors (the “Respective RRA”). All capitalized terms used but not otherwise defined herein shall have their respective
meanings given to them in each Respective RRA.
WHEREAS,
pursuant to Section 6(f) of each Respective RRA, the Respective RAA may be amended, modified or supplemented, and waivers of consents
to departures from the provisions thereof with the written consent of the Company and the Holders of 67% or more of the then outstanding
Registrable Securities.
WHEREAS,
the Company and the Investors desire to amend the definition of “Filing Date” under Section 1 of each Respective RAA.
NOW,
THEREFORE, in consideration of the mutual agreements herein contained, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1.
General. This Amendment amends each Respective RAA. Except as expressly set forth in this Amendment, all terms and conditions
of each Respective RAA shall remain in full force and effect.
2.
Confirmation of Amendment and Definition of Filing Date. The Investors hereby agree to amend the definition of “Filing
Date” under Section 1 of each Respective RAA. The definition of “Filing Date” is amended to read in its entirety as
follows:
“Filing
Date” means, with respect to the Initial Registration Statement required hereunder, the 67th calendar day following the Closing
Date and, with respect to any additional Registration Statements which may be required pursuant to Section 2(c) or Section 3(c), the
earliest practical date on which the Company is permitted by SEC Guidance (as defined herein) to file such additional Registration Statement
related to the Registrable Securities.
3.
Conditions to Effectiveness of Amendment. This Amendment shall become effective upon receipt by the Company and the Investors
of counterpart signatures to this Amendment duly executed and delivered by the Company and the Investor.
4.
No Implied Consent or Waiver. Except as expressly set forth in this Amendment, this Amendment shall not, by implication
or otherwise, limit, impair, constitute a waiver of or otherwise affect any rights or remedies of the Investors under each Respective
RRA, or alter, modify, amend or in any way affect any of the terms, obligations or covenants contained in each Respective RRA, all of
which shall continue in full force and effect. Nothing in this Amendment shall be construed to imply any willingness on the part of the
Investors to agree to or grant any similar or future amendment, consent or waiver of any of the terms and conditions of each Respective
RRA.
5.
Counterparts. This Amendment may be executed by the parties hereto in several counterparts, each of which shall be an original
and all of which shall constitute together but one and the same agreement. Delivery of an executed counterpart of a signature page of
this Amendment by e-mail (e.g., “pdf” or “tiff”) or fax transmission shall be effective as delivery of a manually
executed counterpart of this Amendment.
6.
Governing Law. THIS AMENDMENT SHALL BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEVADA APPLICABLE
TO CONTRACTS MADE AND TO BE PREPARED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
[Remainder
of Page Intentionally Left Blank.]
IN
WITNESS WHEREOF, the parties hereto have caused this Limited Waiver and Consent to be executed by their respective officers thereunto
duly authorized as of the day and year first above written.
MARIZYME, INC. |
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By: |
/s/
David Barthel |
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Name: |
David
Barthel |
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Title: |
Chief
Executive Officer |
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INVESTORS |
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Walleye Opportunities Master Fund Ltd |
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By: |
/s/
Walleye Opportunities Master Fund Ltd |
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Name: |
William
England |
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Title: |
CEO
of the Manager |
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IN
WITNESS WHEREOF, the parties hereto have caused this Limited Waiver and Consent to be executed by their respective officers thereunto
duly authorized as of the day and year first above written.
MARIZYME, INC.
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By:
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/s/ David Barthel |
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Name:
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David
Barthel |
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Title:
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Chief
Executive Officer |
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INVESTORS |
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Hexin Global Ltd. |
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By: |
/s/ Chuntao Zhou |
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Name: |
Chuntao
Zhou |
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Title: |
Sole
Director |
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