Exhibit 10.1
Inpixon
Up to $25,000,000 of Shares of Common Stock
Equity Distribution Agreement
July 22, 2022
Maxim Group LLC
300 Park Avenue, 16th Floor
New York, New York 10022
Ladies and Gentlemen:
Inpixon, a Nevada corporation
(the “Company”), proposes to issue and sell through Maxim Group LLC (the “Agent”),
as exclusive sales agent, shares of common stock, par value $0.001 per share (“Common Stock”), of the Company
(the “Shares”) having an aggregate offering price of up to $25,000,000 on terms set forth herein. The Shares
consist entirely of authorized but unissued shares of Common Stock to be issued and sold by the Company.
The Company hereby confirms
its agreement with the Agent (this “Agreement”) with respect to the sale of the Shares.
1. Representations and Warranties of the Company.
(a) The
Company represents and warrants to, and agrees with, the Agent as follows:
(i)
A registration statement on Form S-3 (File No. 333-256827) was initially declared effective by the Securities and Exchange Commission
(the “Commission”) on June 17, 2021, and is currently effective under the Securities Act of 1933, as amended
(the “Securities Act of 1933”), and the rules and regulations promulgated thereunder (the “Rules
and Regulations” and collectively with the Securities Act of 1933, the “Securities Act”); since
the date of effectiveness of the registration statement, no additional or supplemental information was requested by the Commission. No
stop order of the Commission preventing or suspending the use of the Base Prospectus (as defined below), the Prospectus Supplement (as
defined below), the Prospectus (as defined below) or any Permitted Free Writing Prospectus (as defined below), or the effectiveness of
the Registration Statement, has been issued, and no proceedings for such purpose have been instituted or, to the Company’s knowledge,
are contemplated by the Commission. Except where the context otherwise requires, “Registration Statement,” as
used herein, means the registration statement (Reg. No. 333-256827), as amended at the time of such registration statement’s effectiveness
for purposes of Section 11 of the Securities Act, as such section applies to the Agent, including (1) all documents filed as a part thereof
or incorporated or deemed to be incorporated by reference therein, (2) any information contained or incorporated by reference in a prospectus
filed with the Commission pursuant to Rule 424(b) under the Securities Act, to the extent such information is deemed, pursuant to Rule
430B or Rule 430C under the Securities Act, to be part of the registration statement at such time, and (3) any registration statement
filed to register the offer and sale of Shares pursuant to Rule 462(b) under the Securities Act (the “462(b) Registration
Statement”). Except where the context otherwise requires, “Base Prospectus,” as used herein, means
the base prospectus filed as part of the Registration Statement, together with any amendments or supplements thereto as of the date of
this Agreement. Except where the context otherwise requires, “Prospectus Supplement,” as used herein, means
the most recent prospectus relating to the Shares, filed or to be filed by the Company with the Commission as part of the Base Prospectus
pursuant to Rule 424(b) under the Securities Act and in accordance with the terms of this Agreement. Except where the context otherwise
requires, “Prospectus,” as used herein, means the Prospectus Supplement together with the Base Prospectus attached
to or used with the Prospectus Supplement, as may be amended or supplemented from time to time. “Permitted Free Writing Prospectus,”
as used herein, means the documents, if any, listed on Schedule A attached hereto and, after the date hereof, any “issuer
free writing prospectus” as defined in Rule 433 of the Securities Act, that is expressly agreed to by the Company and the Agent
in writing to be a Permitted Free Writing Prospectus. Any reference herein to the Registration Statement, the Base Prospectus, the Prospectus
Supplement, the Prospectus or any Permitted Free Writing Prospectus shall be deemed to refer to and include the documents, if any, incorporated
by reference, or deemed to be incorporated by reference, therein pursuant to Item 12 of Form S-3 (the “Incorporated Documents”),
including, unless the context otherwise requires, the documents, if any, filed as exhibits to such Incorporated Documents. For purposes
of this Agreement, all references to the Registration Statement, the Rule 462(b) Registration Statement, the Base Prospectus, the Prospectus
or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval System (“EDGAR”). All references in this Agreement to financial statements
and schedules and other information which is “described,” “contained,” “included” or “stated”
in the Registration Statement, the Base Prospectus, the Prospectus or any Permitted Free Writing Prospectus (or other references of like
import) shall be deemed to mean and include all such financial statements and schedules and other information which is incorporated by
reference in or otherwise deemed by the Rules and Regulations to be a part of or included in the Registration Statement, the Base Prospectus,
the Prospectus or Permitted Free Writing Prospectus as the case may be. Any reference herein to the terms “amend,”
“amendment” or “supplement” with respect to the Registration Statement, any Base Prospectus,
the Prospectus, the Prospectus Supplement or any Permitted Free Writing Prospectus shall be deemed to refer to and include the filing
of any document under the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder (collectively, the “Exchange
Act”) on or after the initial effective date of the Registration Statement, or the date of such Base Prospectus, the Prospectus,
the Prospectus Supplement or such Permitted Free Writing Prospectus, if any, as the case may be, and incorporated or deemed to be incorporated
therein by reference pursuant to Item 12 of Form S-3. “Time of Sale” means each time a Share is purchased pursuant
to this Agreement.
(ii)
(A) The Registration Statement complied when it became effective, complies
as of the date hereof, and will comply upon the effectiveness of any amendment thereto and at each Time of Sale and each Settlement Date
(as defined below) (as applicable), in all material respects, with the requirements of the Securities Act; at all times during which a
prospectus is required by the Securities Act to be delivered (whether physically or through compliance with Rule 172 under the Securities
Act or any similar rule) in connection with any sale of Shares (the “Prospectus Delivery Period”), the Registration
Statement, as may be amended, will comply, in all material respects, with the requirements of the Securities Act; the conditions to the
use of Form S-3 in connection with the offering and sale of the Shares as contemplated hereby (the “Offering”)
have been satisfied, subject to the limitations required by General Instruction I.B.6 of Form S-3, if then applicable; the Registration
Statement meets, and the Offering complies with, the requirements of Rule 415 under the Securities Act (including, without limitation,
Rule 415(a)(5)); the Registration Statement did not, as of the time of effectiveness and as of the date hereof, and will not, as of the
effective date of any amendment thereto, at each Time of Sale, if any, and at all times during a Prospectus Delivery Period, 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 not misleading.
(B) The
Prospectus, as of the date of the Prospectus Supplement, as of the date hereof (if filed with the Commission on or prior to the date hereof),
at each Settlement Date and Time of Sale (as applicable), and at all times during a Prospectus Delivery Period, complied, complies or
will comply, in all material respects, with the requirements of the Securities Act; and the Prospectus, and each supplement thereto, as
of their respective dates, at each Settlement Date or Time of Sale (as applicable), and at all times during a Prospectus Delivery Period,
did not and will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading.
(C) Each
Permitted Free Writing Prospectus, if any, as of its date and as of each Settlement Date and Time of Sale (as applicable), and at all
times during a Prospectus Delivery Period (when taken together with the Prospectus at such time) will not include an untrue statement
of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
The representations and warranties set
forth in subparagraphs (A), (B) and (C) above shall not apply to any statement contained in the Registration Statement, the Base Prospectus,
the Prospectus or any Permitted Free Writing Prospectus in reliance upon and in conformity with information concerning the Agent that
is furnished in writing by or on behalf of the Agent expressly for use in the Registration Statement, the Base Prospectus, the Prospectus
or such Permitted Free Writing Prospectus, if any, it being understood and agreed that only such information furnished by the Agent as
of the date hereof consists of the information described in Section 5(b)(ii).
(iii)
Prior to the execution of this Agreement, the Company has not, directly
or indirectly, offered or sold any Shares by means of any “prospectus” (within the meaning of the Securities Act) or used
any “prospectus” (within the meaning of the Securities Act) in connection with the Offering, in each case other than the Base
Prospectus or any Permitted Free Writing Prospectus; the Company has not, directly or indirectly, prepared, used or referred to any Permitted
Free Writing Prospectus except in compliance with Rules 164 and 433 under the Securities Act; assuming that a Permitted Free Writing Prospectus,
if any, is sent or given after the Registration Statement was filed with the Commission (and after such Permitted Free Writing Prospectus,
if any, was, if required pursuant to Rule 433(d) under the Securities Act, filed with the Commission), the Company will satisfy the provisions
of Rule 164 or Rule 433 necessary for the use of a free writing prospectus (as defined in Rule 405) in connection with the Offering; the
conditions set forth in one or more of subclauses (i) through (iv), inclusive, of Rule 433(b)(1) under the Securities Act are satisfied,
and the Registration Statement relating to the Offering, as initially filed with the Commission, includes a prospectus that, other than
by reason of Rule 433 or Rule 431 under the Securities Act, satisfies the requirements of Section 10 of the Securities Act; neither the
Company nor the Agent is disqualified, by reason of subsection (f) or (g) of Rule 164 under the Securities Act, from using, in connection
with the Offering, “free writing prospectuses” (as defined in Rule 405 under the Securities Act) pursuant to Rules 164 and
433 under the Securities Act; the Company is not an “ineligible issuer” (as defined in Rule 405 under the Securities Act)
as of the eligibility determination date for purposes of Rules 164 and 433 under the Securities Act with respect to the offering of the
Shares contemplated by the Registration Statement; the parties hereto agree and understand that the content of any and all “road
shows” (as defined in Rule 433 under the Securities Act) related to the Offering is solely the property of the Company.
(iv) Each
Permitted Free Writing Prospectus, as of its issue date, each Time of Sale and each Settlement Date occurring after such issue date
and at all subsequent times through the Prospectus Delivery Period (as defined below) or until any earlier date that the Company
notified or notifies the Agent as described in Section 3(c)(iii), did not, does not and will not include any information that
conflicted, conflicts or will conflict with the information contained in the Registration Statement, any Base Prospectus or the
Prospectus. The foregoing sentence does not apply to statements in or omissions from any Permitted Free Writing Prospectus based
upon and in conformity with written information furnished to the Company by the Agent specifically for use therein, it being
understood and agreed that the only such information furnished by the Agent as of the date hereof consists of the information
described in Section 5(b) (ii).
(v)
The financial statements, including the notes thereto, and the supporting
schedules incorporated by reference in the Registration Statement and the Prospectus comply in all material respects with the requirements
of the Securities Act, the Exchange Act and the Rules and Regulations, and present fairly the financial condition of the Company and its
Subsidiaries on a consolidated and financial position as of the dates indicated and the cash flows and results of operations for the periods
specified of the Company. The term “Subsidiaries” as used herein, refers to all subsidiaries of the Company,
as of any date of determination, that would constitute a “significant subsidiary” under
Rule 1-02 of Regulation S-X promulgated by the Commission. Except as otherwise stated in the
Registration Statement and the Prospectus, said financial statements have been prepared in conformity with United States generally accepted
accounting principles (“GAAP”) applied on a consistent basis throughout the periods involved. Any selected financial
data and summary financial information included in the documents in the Registration Statement and in the Prospectus constitute or will
constitute a fair summary of the information purported to be summarized and have been compiled on a basis consistent with that of the
audited financial statements included in the Registration Statement. No other financial statements or supporting schedules are required
to be included or incorporated by reference in the Registration Statement or the Prospectus. All disclosures, if any, contained in the
Registration Statement or the Prospectus or incorporated by reference therein regarding “non-GAAP financial measures” (as
such term is defined by the applicable rules and regulations of the Commission) comply, in all material respects, with Regulation G of
the Exchange Act and Item 10 of Regulation S-K of the Securities Act to the extent applicable. The other financial information included
in the Registration Statement and the Prospectus present fairly the information included therein and have been prepared on a basis consistent
with that of the financial statements that are included in the Registration Statement and the Prospectus and the books and records of
the Company.
(vi) The
Company and each of its Subsidiaries has been duly incorporated and validly exists as a corporation in good standing under the laws
of its jurisdiction of incorporation. The Company and each of its Subsidiaries has all requisite corporate power and authority to
own, lease and operate its respective properties and carry on its business as it is currently being conducted and as described in
the Registration Statement and the Prospectus. The Company and each of its Subsidiaries is duly qualified to do business and is in
good standing as a foreign corporation in each jurisdiction in which the character or location of its properties (owned, leased or
licensed) or the nature or conduct of its business makes such qualification necessary, except, in each case, for those failures to
be so qualified or in good standing which (individually or in the aggregate) would not reasonably be expected to have a Material
Adverse Effect (as defined below).
(vii) All
of the issued shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and
nonassessable, have been issued in compliance in all material respects with all applicable federal and state securities laws and
none of those shares was issued in violation of any preemptive rights, rights of first refusal or other similar rights to the extent
any such rights were not waived; the Shares have been duly authorized and, when issued and delivered against payment therefor as
provided in this Agreement, will be validly issued, fully paid and non-assessable, and the issuance of the Shares is not subject to
any preemptive rights, rights of first refusal or other similar rights that have not heretofore been waived (with copies of such
waivers provided or made available to the Agent). The Shares conform in all material respects to the descriptions thereof contained
in the Registration Statement and the Prospectus under the heading “Description of Capital Stock.”
(viii)
Marcum LLP (the “Auditor”), whose reports
relating to the Company are incorporated by reference into the Registration Statement and the Prospectus, is an independent registered
public accounting firm as required by the Securities Act, the Exchange Act and the Rules and Regulations and the Public Company Accounting
Oversight Board (the “PCAOB”). To the Company’s knowledge, the Auditor is not in violation of the auditor
independence requirements of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) as such requirements pertain
to the Auditor’s relationship with the Company. Except as disclosed in the Registration Statement and the Prospectus, and except
for any such non-audit services that were pre-approved by the Audit Committee of the Company’s Board of Directors in accordance
with Sections 10A(h) and (i) of the Exchange Act, the Auditor has not, during the periods covered by the financial statements included
in the Registration Statement and the Prospectus, provided to the Company any non-audit services, as such term is used in Section 10A(g)
of the Exchange Act.
(ix) Subsequent
to the respective dates as of which information is presented in the Registration Statement and the Prospectus, and except as
disclosed in the Registration Statement and the Prospectus: (i) the Company (including its Subsidiaries) has not declared, paid or
made any dividends or other distributions of any kind on or in respect of its capital stock, and (ii) there has been no material
adverse change or, to the Company’s knowledge, any development which could reasonably be expected to result in a material
adverse change in the future, whether or not arising from transactions in the ordinary course of business, in or affecting: (A) the
business, condition (financial or otherwise), results of operations, stockholders’ equity, properties or prospects of the
Company or its Subsidiaries; (B) the long-term debt or capital stock of the Company or its Subsidiaries; or (C) the Offering or
consummation of any of the other transactions contemplated by this Agreement, the Registration Statement and the Prospectus (a
“Material Adverse Effect”). Since the date of the latest balance sheet included in the Registration
Statement and the Prospectus, the Company (including its Subsidiaries) has not incurred or undertaken any liabilities or
obligations, whether direct or indirect, liquidated or contingent, matured or unmatured, or entered into any transactions, including
any acquisition or disposition of any business or asset, which are material to the Company, except (I) for liabilities, obligations
and transactions which are disclosed in the Registration Statement and the Prospectus and (II) as would not be reasonably expected
(individually or in the aggregate) to result in a Material Adverse Effect.
(x)
There are no statutes, regulations, contracts or documents that are required to be described in the Registration Statement and
the Prospectus or to be filed as exhibits to the Registration Statement by the Securities Act that have not been so described or filed.
(xi) Neither
the Company nor any of its Subsidiaries is: (i) in violation of its articles of incorporation or bylaws or other organizational
documents, (ii) in default under any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which it
is a party or by which it is bound or to which any of its property or assets is subject; and no event has occurred which, with
notice or lapse of time or both, would constitute a default under or result in the creation or imposition of any lien, security
interest, charge or other encumbrance (a “Lien”) upon any of its property or assets pursuant to, any
indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which it is a party or by which it is bound
or to which any of its property or assets is subject, or (iii) in violation in any respect of any applicable law, rule, regulation,
ordinance, directive, judgment, decree or order of any judicial, regulatory or other legal or governmental agency or body, foreign
or domestic, except, in the case of subsections (ii) and (iii) above, for such violations, defaults or Liens which (individually or
in the aggregate) would not reasonably be expected to have a Material Adverse Effect.
(xii)
The Company has all requisite corporate power and authority to execute and deliver this Agreement and all other agreements, documents,
certificates and instruments required to be delivered pursuant to this Agreement. The Company’s execution, delivery and performance
under this Agreement and each of the transactions contemplated hereby have been duly authorized by all necessary corporate action. This
Agreement has been duly and validly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the
Company and is enforceable against the Company in accordance with its terms, except (i) as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors’ rights generally; (ii) as enforceability of any indemnification
or contribution provision may be limited under federal and state securities laws; and (iii) that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
(xiii)
The execution, delivery and performance of this Agreement and all other
agreements, documents, certificates and instruments required to be delivered pursuant to this Agreement and the consummation of the transactions
contemplated hereby do not and will not: (i) conflict with, require consent under or result in a breach of any of the terms and provisions
of, or constitute a default (or an event which with notice or lapse of time, or both, would constitute a default) under, or result in
the creation or imposition of any Lien upon any property or assets of the Company pursuant to, any indenture, mortgage, deed of trust,
loan agreement or other agreement, instrument, franchise, license or permit to which the Company is a party or by which the Company or
any of its properties, operations or assets may be bound, (ii) violate or conflict with any provision of the articles of incorporation,
bylaws or other organizational documents of the Company, or (iii) violate or conflict with any applicable law, rule, regulation, ordinance,
directive, judgment, decree or order of any judicial, regulatory or other legal or governmental agency or body, domestic or foreign, except
in the case of subsections (i) and (iii) for any default, conflict, violation or Lien for which the Company has received a waiver or that
would not reasonably be expected to result in a Material Adverse Effect.
(xiv) Except
as disclosed in the Registration Statement and the Prospectus, the Company and each of its Subsidiaries has all consents, approvals,
authorizations, orders, registrations, qualifications, licenses, filings, grants, certificates and permits of, with and from all
judicial, regulatory and other legal or governmental agencies, self-regulatory agencies, authorities and bodies and all third
parties, foreign and domestic (collectively, the “Consents”), to own, lease and operate its properties and
conduct its business as it is now being conducted and as disclosed in the Registration Statement and the Prospectus, and each such
Consent is valid and in full force and effect, except which (individually or in the aggregate), in each such case, would not
reasonably be expected to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries has received notice of any
investigation or proceedings which results in or, if decided adversely to the Company or such Subsidiary, could reasonably be
expected to result in, the revocation of, or imposition of a restriction on, any Consent, except such restriction or revocation of
such Consent which (individually or in the aggregate) would not reasonably be expected to have a Material Adverse Effect. No Consent
contains any material restriction not adequately disclosed in the Registration Statement and the Prospectus.
(xv) The
Company and each of its Subsidiaries is in compliance with all applicable laws, rules, regulations, ordinances, directives,
judgments, decrees and orders, foreign and domestic, except for any non-compliance the consequences of which would not have a
Material Adverse Effect.
(xvi) Prior
to the Settlement Date, the Company shall have submitted the Listing of Additional Shares Form to the Nasdaq Capital Market (the
“Exchange”) with respect to the Offering, the Exchange shall not have raised any objections to the
submission, and the Company has taken no action designed to, or likely to have the effect of, delisting the Shares nor, except as
disclosed in the Registration Statement and the Prospectus, has the Company received any notification that the Exchange is
contemplating terminating such listing.
(xvii) No
consents, approvals, authorizations or filings of, with or from any judicial, regulatory or other legal or governmental agency or
body or any third party, foreign or domestic is required for the execution, delivery and performance of this Agreement or
consummation of each of the transactions contemplated by this Agreement, including the issuance, sale and delivery of the Shares to
be issued, sold and delivered hereunder, except (i) such as may have previously been obtained (with copies of such consents provided
to the Agent), each of which is in full force and effect as of the date hereof, (ii) the registration under the Securities Act of
the Shares, which has become effective and which remains in full force and effect as of the date hereof, (iii) such consents as may
be required under state securities or blue sky laws or the bylaws and rules of the Exchange, and (iv) by the Financial Industry
Regulatory Authority, Inc. (“FINRA”) in connection with the purchase and distribution of the Shares by the
Agent.
(xviii) Except
as disclosed in the Registration Statement and the Prospectus, there is no judicial, regulatory, arbitral or other legal or
governmental proceeding or other litigation or arbitration, domestic or foreign, pending to which the Company or any of its
Subsidiaries is a party or of which any property, operations or assets of the Company or its Subsidiaries is the subject which (i)
individually or in the aggregate, if determined adversely to the Company or applicable Subsidiary would reasonably be expected to
have a Material Adverse Effect, or (ii) is reasonably likely to materially and adversely affect the consummation of the transactions
contemplated in this Agreement or the performance by the Company of its obligations hereunder. To the Company’s knowledge, no
such proceeding, litigation or arbitration is threatened or contemplated against the Company or its Subsidiaries.
(xix) The
statistical, industry-related and market-related data included in the Registration Statement and the Prospectus are based on or
derived from sources which the Company reasonably and in good faith believes are reliable and accurate, and the Company has obtained
the written consent to the use of such data from such sources, to the extent required, except for such failures to obtain written
consent which (individually or in the aggregate) would not reasonably be expected to have a Material Adverse Effect.
(xx) The
Company has established and maintains disclosure controls and procedures over financial reporting (as defined in Rules 13a-15 and
15d-15 under the Exchange Act) and such controls and procedures are designed to ensure that information relating to the Company
required to be disclosed in the reports that it files or submits under the Exchange Act is accumulated and communicated to the
Company’s management, including its principal executive and financial officer, or persons performing similar functions, as
appropriate to allow timely decisions regarding required disclosure. The Company has utilized such controls and procedures in
preparing and evaluating the disclosures in the Registration Statement and in the Prospectus.
(xxi) Except
as disclosed in the Registration Statement and the Prospectus, neither the board of directors nor the audit committee has been
informed, nor is the Company aware, of: (i) any significant deficiencies or material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record,
process, summarize and report financial information; or (ii) any fraud, whether or not material, that involves management or other
employees who have a significant role in the Company’s internal control over financial reporting.
(xxii) The
Company has not taken, directly or indirectly, any action which constitutes or is designed to cause or result in, or which could
reasonably be expected to constitute, cause or result in, the stabilization or manipulation of the price of any security to
facilitate the sale or resale of the Shares.
(xxiii) Neither
the Company nor any of its Affiliates (within the meaning of the Securities Act) has, prior to the date hereof, made any offer or
sale of any securities which are required to be “integrated” pursuant to the Securities Act or the Rules and Regulations
with the offer and sale of the Shares pursuant to the Registration Statement. Except as disclosed in the Registration Statement and
the Prospectus or Forms 4 filed by Affiliates, neither the Company nor any of its Affiliates has sold or issued any securities
during the six-month period preceding the date of the Prospectus, including but not limited to any sales pursuant to Rule 144A,
Regulation D or Regulation S under the Securities Act, other than shares of Common Stock issued pursuant to equity incentive plans,
employee stock purchase plans, employee benefit plans, qualified stock option plans or employee compensation plans or pursuant to
outstanding options, convertible notes, convertible preferred stock, rights or warrants to purchase shares of Common
Stock.
(xxiv)
To the knowledge of the Company, the biographies of the Company’s
officers and directors incorporated into the Registration Statement are true and correct in all material respects and the Company has
not become aware of any information which would cause the information disclosed in the questionnaires previously completed by the directors
and officers of the Company to become inaccurate and incorrect in any material respect.
(xxv)
To the knowledge of the Company, no director or officer of the Company
is subject to any non-competition agreement or non-solicitation agreement with any employer or prior employer which could materially affect
his or her ability to be and act in his or her respective capacity of the Company.
(xxvi)
The Company is not and, at all times up to and including the consummation
of the transactions contemplated by this Agreement, and after giving effect to application of the Net Proceeds (as defined below), will
not be, subject to registration as an “investment company” under the Investment Company Act of 1940, as amended, and is not
and will not be an entity “controlled” by an “investment company” within the meaning of such act.
(xxvii) No
relationship, direct or indirect, exists between or among any of the Company or, to the Company’s knowledge, any Affiliate of
the Company, on the one hand, and any director, officer, stockholder, customer or supplier of the Company or, to the Company’s
knowledge, any Affiliate of the Company, on the other hand, which is required by the Securities Act, the Exchange Act or the Rules
and Regulations to be described in the Registration Statement or the Prospectus which is not so described as required. There are no
outstanding loans, advances (except normal advances for business expenses in the ordinary course of business) or guarantees of
indebtedness by the Company to or for the benefit of any of the officers or directors of the Company or any of their respective
family members, except as described in the Registration Statement and the Prospectus. The Company has not, in violation of
Sarbanes-Oxley, directly or indirectly extended or maintained credit, arranged for the extension of credit, or renewed an extension
of credit, in the form of a personal loan to or for any director or executive officer of the Company.
(xxviii)
Except as disclosed in the Registration Statement and the Prospectus,
the Company is in compliance with the rules and regulations promulgated by the Exchange or any other governmental or self-regulatory entity
or agency having jurisdiction over the Company, except for such failures to be in compliance which (individually or in the aggregate)
would not reasonably be expected to have a Material Adverse Effect. Without limiting the generality of the foregoing: (i) all members
of the Company’s board of directors who are required to be “independent” (as that term is defined under the rules of
the Exchange), including, without limitation, all members of the audit committee of the Company’s board of directors, meet the qualifications
of independence as set forth under applicable laws, rules and regulations and (ii) the audit committee of the Company’s board of
directors has at least one member who is an “audit committee financial expert” (as that term is defined under applicable laws,
rules and regulations).
(xxix)
The Company and each of its Subsidiaries owns or leases all such properties
(other than intellectual property, which is covered below) as are necessary to the conduct of its business as presently operated and as
described in the Registration Statement and the Prospectus. The Company and each of its Subsidiaries has good and marketable title in
fee simple to all real property and good and marketable title to all personal property owned by it, in each case free and clear of all
Liens except such as are described in the Registration Statement and the Prospectus or such as would not (individually or in the aggregate)
have a Material Adverse Effect. Any real property and buildings held under lease or sublease by the Company or its Subsidiaries are held
by it under valid, subsisting and, to the Company’s knowledge, enforceable leases with such exceptions as are not material to, and
do not materially interfere with, the use made and proposed to be made of such property and buildings by the Company or its Subsidiaries.
Neither the Company nor its Subsidiaries has received any written notice of any claim adverse to its ownership of any real or material
personal property or of any claim against the continued possession of any real property, whether owned or held under lease or sublease
by the Company or its Subsidiaries, except for such claims that, if successfully asserted against the Company or its Subsidiaries, would
not (individually or in the aggregate) reasonably be expected to have a Material Adverse Effect.
(xxx)
The Company (including all of its Subsidiaries): (i) owns, possesses or
has the right to use all patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations,
copyrights, licenses, formulae, customer lists and know-how and other intellectual property (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or procedures, “Intellectual Property”)
necessary for the conduct of its businesses as being conducted and as described in the Registration Statement and the Prospectus, except
as disclosed in the Registration Statement or the Prospectus, and (ii) has no knowledge that the conduct of its business conflicts or
will conflict with the rights of others, and it has not received any written notice of any claim of conflict with, any right of others.
To the Company’s knowledge, there is no infringement by third parties of any such Intellectual Property. There is no pending or,
to the Company’s knowledge, threatened, action, suit, proceeding or claim by others challenging the Company’s rights in or
to any such Intellectual Property, and the Company is unaware of any facts which would form a reasonable basis for any such claim; and
there is no pending or, to the Company’s knowledge, threatened, action, suit, proceeding or claim by others that the Company infringes
or otherwise violates any patent, trademark, copyright, trade secret or other proprietary rights of others, and the Company is unaware
of any other fact which would form a reasonable basis for any such claim. Except as set forth in the Registration Statement and the Prospectus,
the Company has not received any claim for royalties or other compensation from any person, including any employee of the Company who
made inventive contributions to Company’s technology or products that are pending or unsettled, and except as set forth in the Registration
Statement and the Prospectus the Company does not and will not have any obligation to pay royalties or other compensation to any person
on account of inventive contributions.
(xxxi)
The agreements and documents described in the Registration Statement and
the Prospectus conform in all material respects to the descriptions thereof contained therein and there are no agreements or other documents
required by the applicable provisions of the Securities Act to be described in the Registration Statement or the Prospectus or to be filed
with the Commission as exhibits to the Registration Statement, that have not been so described or filed. Each agreement or other instrument
(however characterized or described) to which the Company (or its Subsidiaries) is a party or by which its property or business is or
may be bound or affected and (i) that is referred to in the Registration Statement or the Prospectus or attached as an exhibit thereto,
or (ii) is material to the Company’s business, has been duly and validly executed by the Company, is in full force and effect in
all material respects and is enforceable against the Company in accordance with its terms, except (x) as such enforceability may be limited
by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally, (y) as enforceability of any indemnification
or contribution provision may be limited under the foreign, federal and state securities laws, and (z) that the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought, and none of such agreements or instruments has been assigned by the Company (including any
Subsidiaries), and neither the Company nor, to the Company’s knowledge, any other party is in material breach or default thereunder
and, to the Company’s knowledge, no event has occurred that, with the lapse of time or the giving of notice, or both, would constitute
a breach or default thereunder, in any such case, which would result in a Material Adverse Effect.
(xxxii) The
disclosures in the Registration Statement and the Prospectus concerning the effects of foreign, federal, state and local regulation
on the Company’s business as currently contemplated are correct in all material respects.
(xxxiii)
The Company has accurately prepared and filed all federal, state, foreign
and other tax returns that are required to be filed by it through the date hereof, or has received timely extensions thereof, except where
the failure to so file would not (individually or in the aggregate) reasonably be expected to have a Material Adverse Effect, and has
paid or made provision for the payment of all material taxes, assessments, governmental or other similar charges, including without limitation,
all sales and use taxes and all taxes which the Company is obligated to withhold from amounts owing to employees, creditors and third
parties, with respect to the periods covered by such tax returns, whether or not such amounts are shown as due on any tax return (except
as currently being contested in good faith and for which reserves required by GAAP have been created in the financial statements of the
Company) and except for such taxes, assessments, governmental or other similar charges the nonpayment of which would not (individually
or in the aggregate) reasonably be expected to have a Material Adverse Effect. No deficiency assessment with respect to a proposed adjustment
of the Company’s federal, state, local or foreign taxes is pending or, to the Company’s knowledge, threatened. The accruals
and reserves on the books and records of the Company in respect of tax liabilities for any taxable period not finally determined are adequate
to meet any assessments and related liabilities for any such period and, since the date of the Company’s most recent audited financial
statements, the Company has not incurred any material liability for taxes other than in the ordinary course of its business. There is
no tax lien, whether imposed by any federal, state, foreign or other taxing authority, outstanding against the assets, properties or business
of the Company.
(xxxiv) No
labor disturbance or dispute by or with the employees of the Company which, individually or in the aggregate, would reasonably be expected
to have a Material Adverse Effect, currently exists or, to the Company’s knowledge, is threatened. The Company is in compliance
in all material respects with the labor and employment laws and collective bargaining agreements and extension orders applicable to its
employees.
(xxxv)
Except as would not be reasonably expected, individually or in the aggregate,
to have a Material Adverse Effect, the Company (and its Subsidiaries) is in compliance with all material Environmental Laws (as defined
below), and, to the Company’s knowledge, no future material expenditures are or will be required in order to comply therewith. The
Company has not received any written notice or communication that relates to or alleges any actual or potential violation or failure to
comply with any Environmental Laws that would, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect.
As used herein, the term “Environmental Laws” means all applicable laws and regulations, including any licensing,
permits or reporting requirements, and any action by a federal, state or local government entity, pertaining to the protection of the
environment, protection of public health, protection of worker health and safety, or the handling of hazardous materials, including without
limitation, the Clean Air Act, 42 U.S.C. § 7401, et seq., the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, 42 U.S.C. § 9601, et seq., the Federal Water Pollution Control Act, 33 U.S.C. § 1321, et seq., the Hazardous Materials
Transportation Act, 49 U.S.C. § 1801, et seq., the Resource Conservation and Recovery Act, 42 U.S.C. § 690-1, et seq., and the
Toxic Substances Control Act, 15 U.S.C. § 2601, et seq.
(xxxvi) Except
as would not result in a Material Adverse Effect, the Company (including its Subsidiaries) has not failed to file with the applicable
regulatory authorities any filing, declaration, listing, registration, report or submission that is required to be so filed for the Company’s
business operation as currently conducted. All such filings were in material compliance with applicable laws when filed and no material
deficiencies have been asserted in writing by any applicable regulatory authority with respect to any such filings, declarations, listings,
registrations, reports or submissions.
(xxxvii) The
Registration Statement and the Prospectus identify each employment, severance or other similar agreement, arrangement or policy and each
material arrangement providing for insurance coverage, benefits, bonuses, stock options or other forms of incentive compensation, or
post-retirement insurance, compensation or benefits which: (i) is entered into, maintained or contributed to, as the case may be, by
the Company and (ii) covers any officer or director or former officer or former director of the Company, in each case to the extent required
by the Rules and Regulations. These contracts, plans and arrangements are referred to collectively in this Agreement as the “Benefit
Arrangements.” Each Benefit Arrangement has been maintained in material compliance with its terms and with requirements
prescribed by any and all statutes, orders, rules and regulations that are applicable to that Benefit Arrangement in each case except
where the failure to comply is not reasonably likely to have a Material Adverse Effect.
(xxxviii) Except
as set forth in the Registration Statement or the Prospectus, the Company is not a party to or subject to any employment contract or
arrangement providing for annual future compensation, or the opportunity to earn annual future compensation (whether through fixed salary,
bonus, commission, options or otherwise) of more than $120,000 to any executive officer (as defined in Rule 405 under the Securities
Act) or director on the Company’s board of directors.
(xxxix) The
conditions for use of Form S-3 to register the Offering under the Securities Act, as set forth in the General Instructions to such Form,
have been satisfied.
(xl) Except
as disclosed in the Registration Statement and the Prospectus, neither the execution of this Agreement nor the consummation of the Offering,
constitutes a triggering event under any Benefit Arrangement or any other employment contract, whether or not legally enforceable, which
(either alone or upon the occurrence of any additional or subsequent event) will or may result in any payment (of severance pay or otherwise),
acceleration, increase in vesting or increase in benefits to any current or former participant, employee or director of the Company other
than an event that is not material to the financial condition or business of the Company.
(xli) Neither
the Company nor, to the Company’s knowledge, any of its employees or agents, has at any time during the last three (3) years: (i)
made any unlawful contribution to any candidate for foreign office, or failed to disclose fully any contribution in violation of law,
or (ii) made any payment to any federal or state governmental officer or official or other person charged with similar public or quasi-public
duties in the United States, other than payments that are not prohibited by the laws of the United States or any jurisdiction thereof.
(xlii) The
Company has not offered, or caused the Agent to offer, any Shares to any person or entity with the intention of unlawfully influencing:
(i) a supplier of the Company to alter the supplier’s level or type of business with the Company or (ii) a journalist or publication
to write or publish favorable information about the Company.
(xliii) The
operations of the Company are and have been conducted at all times in compliance in all material respects with applicable financial
record keeping and reporting requirements and money laundering statutes of the United States and, to the Company’s knowledge,
all other applicable jurisdictions to which the Company is subject, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines, issued, administered or enforced by any applicable governmental agency (collectively, the
“Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company with respect to the Money Laundering Laws is pending or, to the
Company’s knowledge, threatened.
(xliv) Neither
the Company nor, to the Company’s knowledge, any director, officer, agent, employee or Affiliate of the Company is currently
subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department
(“OFAC”); and the Company will not directly or indirectly use the proceeds of the Offering, or lend,
contribute or otherwise make available such proceeds to any joint venture partner or other person or entity, for the purpose of
financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.
(xlv) None
of the Company, its directors or officers or, to the Company’s knowledge, any agent, employee, affiliate or other person
acting on behalf of the Company has engaged in any activities sanctionable under the Comprehensive Iran Sanctions, Accountability,
and Divestment Act of 2010, the Iran Sanctions Act of 1996, the National Defense Authorization Act for Fiscal Year 2012, the Iran
Threat Reduction and Syria Human Rights Act of 2012 or any Executive Order relating to any of the foregoing (collectively, and as
each may be amended from time to time, the “Iran Sanctions”); and the Company will not directly or
indirectly use the proceeds of the Offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint
venture partner or other person or entity, for the purpose of engaging in any activities sanctionable under the Iran
Sanctions.
(xlvi) Except
as described in the Registration Statement and the Prospectus, there are no claims, payments, arrangements, agreements or
understandings relating to the payment of a finder’s, consulting or origination fee by the Company or any officer, director or
stockholder of the Company (each, an “Insider”) with respect to the sale of the Shares hereunder or any
other arrangements, agreements or understandings of the Company or, to the Company’s knowledge, any of its stockholders that
may affect the Agent’s compensation, as determined by FINRA. Except as described in the Registration Statement and the
Prospectus, the Company has not made any direct or indirect payments (in cash, securities or otherwise) to: (i) any person, as a
finder’s fee, consulting fee or otherwise, in consideration of such person raising capital for the Company or introducing to
the Company persons who raised or provided capital to the Company; (ii) to any FINRA member participating in the offering as defined
in FINRA Rule 5110 (a “Participating Member”); or (iii) to any person or entity that has any direct or
indirect affiliation or association with any Participating Member, within the 180 days prior to the commencement of sales of this
offering. None of the Net Proceeds will be paid by the Company to any Participating Member or its affiliates, except as specifically
authorized herein. No officer, director or, to the Company’s knowledge, any beneficial owner of 10% or more of the
Company’s securities (whether debt or equity, registered or unregistered, regardless of the time acquired or the source from
which derived) (any such individual or entity, a “Company Affiliate”) has any direct or indirect
affiliation or association with any Participating Member (as determined in accordance with the rules and regulations of FINRA); no
Company Affiliate is an owner of stock or other securities of any Participating Member (other than securities purchased on the open
market); no Company Affiliate has made a subordinated loan to any Participating Member; and no Net Proceeds from the sale of the
Shares will be paid to any Participating Member, or any persons associated with or affiliated with any Participating Member. Except
as disclosed in the Registration Statement and the Prospectus, the Company has not issued any warrants or other securities or
granted any options, directly or indirectly, to any within the 180-day period prior to the initial filing date of the Registration
Statement; no person to whom securities of the Company have been privately issued within the 180-day period prior to the initial
filing date of the Registration Statement has any relationship or affiliation or association with any Participating Member; and no
Participating Member in the offering has a conflict of interest with the Company. For this purpose, a “conflict of
interest” has the meaning ascribed to such term in FINRA Rule 5121(f)(5).
(xlvii) Cybersecurity.
(i)(x) There has been no security breach or other compromise of or relating to any of the Company’s or any Subsidiary’s
information technology and computer systems, networks, hardware, software, data (including the data of its respective customers,
employees, suppliers, vendors and any third party data maintained by or on behalf of it), equipment or technology (collectively,
“IT Systems and Data”), except as would not, individually, or in the aggregate have a Material Adverse Effect, and (y)
the Company and the Subsidiaries have not been notified of, and has no knowledge of any event or condition that would reasonably be
expected to result in, any security breach or other compromise to its IT Systems and Data; (ii) the Company and the Subsidiaries are
presently in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or
arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and
security of IT Systems and Data and to the protection of such IT Systems and Data from unauthorized use, access, misappropriation or
modification, except as would not, individually or in the aggregate, have a Material Adverse Effect; (iii) the Company and the
Subsidiaries have implemented and maintained commercially reasonable safeguards to maintain and protect its material confidential
information and the integrity, continuous operation, redundancy and security of all IT Systems and Data; and (iv) the Company and
the Subsidiaries have implemented backup and disaster recovery technology consistent with industry standards and
practices.
(xlviii) The
Company has not distributed and will not distribute any prospectus or other offering material in connection with the Offering other
than the Registration Statement and the Prospectus or other materials permitted by the Securities Act to be distributed by the
Company; provided, however, that the Company has not made and will not make any offer relating to the Shares that would constitute a
“free writing prospectus” as defined in Rule 405 under the Securities Act, except any Permitted Free Writing
Prospectus.
(b) Any certificate signed
by any officer of the Company and delivered to the Agent or the Agent’s counsel shall be deemed a representation and warranty by
the Company to Agent as to the matters covered thereby.
(c) At each Bringdown Date
(as defined below) and each Time of Sale, the Company shall be deemed to have affirmed each representation and warranty contained in or
made pursuant to this Agreement as of such date as though made at and as of such date (except that such representations and warranties
shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented relating to such Shares on such
date).
(d) As used in this Agreement,
references to matters being “material” with respect to the Company shall mean a material event, change, condition,
status or effect related to the condition (financial or otherwise), properties, assets (including intangible assets), liabilities, business,
prospects, operations or results of operations of the Company, either individually or taken as a whole, as the context requires.
(e) As used in this Agreement,
the term “to the Company’s knowledge” (or similar language) shall mean the knowledge of the executive
officers and directors of the Company who are named in the Prospectus, with the assumption that such executive officers and directors
shall have made reasonable and diligent inquiry of the matters presented (with reference to what is customary and prudent for the applicable
individuals in connection with the discharge by the applicable individuals of their duties as executive officers or directors of the Company).
2. Purchase, Sale and
Delivery of Shares.
(a) At the Market Sales.
On the basis of the representations, warranties and agreements herein the Company agrees that, from time to time on the terms and subject
to the conditions set forth herein, it may issue and sell through the Agent, acting as sales agent, Shares having an aggregate offering
price of up to $25,000,000 (the “Offering Size”); provided, however, that in no event shall the Company issue
or sell through the Agent such number of Shares that (a) exceeds the number or dollar amount of shares of Common Stock registered on the
Registration Statement pursuant to which the Offering is being made, (b) exceeds the number of authorized but unissued shares of Common
Stock under the Company’s Articles of Incorporation, as amended or (c) would cause the Company or the Offering to not satisfy the
eligibility and transaction requirements for use of Form S-3 (including, if then applicable, General Instruction I.B.6 of Form S-3) (the
lesser of (a), (b) and (c), the “Maximum Amount”). Notwithstanding anything to the contrary contained herein,
the parties hereto agree that compliance with the limitations set forth in this Section 2(a) on the number and aggregate sales price of
Shares issued and sold under this Agreement shall be the sole responsibility of the Company and the Agent shall have no obligation in
connection with such compliance. Notwithstanding the foregoing, the Company agrees that it will provide the Agent with written notice
of the Maximum Amount available for sale of the Shares no less than one (1) business day prior to the date on which it makes the initial
sale of Shares under this Agreement.
(i)
For purposes of selling the Shares through the Agent, the Company hereby appoints the Agent as exclusive agent of the Company (including
in the event the Company increases the Offering Size) for the purpose of soliciting purchases of the Shares from the Company pursuant
to this Agreement and the Agent agrees to use its commercially reasonable efforts to sell the Shares on the terms and subject to the conditions
stated herein.
(ii)
Each time the Company wishes to issue and sell the Shares hereunder (each, a “Transaction”), it will
notify the Agent by telephone (confirmed promptly by e-mail to the appropriate individual listed on Schedule D hereto, using a
form substantially similar to that set forth on Schedule C hereto) (a “Transaction Notice”) as to the
maximum number of Shares to be sold by the Agent on such day and in any event not in excess of the amount available for issuance under
the Prospectus and the currently effective Registration Statement, the time period during which sales are requested to be made, any limitation
on the number of shares that may be sold in any one Trading Day (as defined below), and any minimum price below which sales may not be
made. The Transaction Notice shall originate from any of the individuals from the Company set forth on Schedule B (with a copy
to each of the other individuals from the Company listed on such Schedule), and shall be addressed to each of the individuals from the
Agent set forth on Schedule D, as such Schedule D may be amended from time to time. Subject to the terms and conditions
hereof and unless the sale of the Shares described therein has been declined, suspended, or otherwise terminated in accordance with the
terms of this Agreement, the Agent shall promptly acknowledge the Transaction Notice by e-mail (or by some other method mutually agreed
to in writing by the parties) and shall use its commercially reasonable efforts to sell all of the Shares so designated by the Company
in the Transaction Notice and in accordance with the terms set forth herein; provided, however, that any obligation of the Agent to use
such commercially reasonable efforts shall be subject to the continuing accuracy of the representations and warranties of the Company
herein, to the performance by the Company of its obligations hereunder and to the continuing satisfaction of the additional conditions
specified in Section 4 of this Agreement. The gross sales price of the Shares sold under this Section 2(a) shall be equal
to the market price for the Common Stock sold by the Agent under this Section 2(a) on the Exchange at the time of such sale. For
the purposes hereof, “Trading Day” means any day on which shares of Common Stock are purchased and sold on the
principal market on which the Common Stock is listed or quoted.
(iii)
The Company or the Agent may, upon notice to the other party hereto by telephone (confirmed promptly by e-mail to the respective
individuals of the other party set forth on Schedule D hereto, which confirmation shall be promptly acknowledged by the other party),
suspend the Offering for any reason and at any time, whereupon the Agent shall so suspend the offering of Shares until further notice
is provided by the other party to the contrary; provided, however, that such suspension or termination shall not affect
or impair the parties’ respective obligations with respect to the Shares sold hereunder prior to the receipt by the Agent of such
notice. Each of the parties agrees that no such notice under this Section 2(a)(iii) shall be effective against the other unless
it is made to one of the individuals named on Schedule D hereto, as such Schedule may be amended from time to time. Notwithstanding
the foregoing, if the Agent suspends the Offering for any three (3) consecutive business days or on more than three (3) separate occasions
(in each instance other than as a result of the Company’s breach of its obligations hereunder), the Company, in its sole discretion,
may elect to terminate this Agreement.
(iv) The
Company acknowledges and agrees that (A) there can be no assurance that the Agent will be successful in selling the Shares, (B) the
Agent will incur no liability or obligation to the Company or any other person or entity if it does not sell Shares for any reason
other than a failure by the Agent to use its commercially reasonable efforts consistent with its normal trading and sales practices
and applicable law and regulations to sell such Shares as required under this Agreement, and (C) the Agent shall be under no
obligation to purchase shares on a principal basis pursuant to this Agreement.
(v)
The Agent may sell Shares by any method permitted by law to be an “at-the-market offering” as defined in Rule 415 of
the Securities Act including without limitation sales made directly on the Exchange, on any other existing trading market for the Common
Stock or to or through a market maker. With the prior written consent of the Company, which may be provided in a Transaction Notice, the
Agent may also sell Shares in privately negotiated transactions.
(vi) The
compensation to the Agent for sales of the Shares, as an agent of the Company, shall be 3.0% (the “Transaction
Fee”) of the gross sales price of all of Shares sold pursuant to this Section 2(a). The remaining proceeds,
after further deduction for any transaction or other fees imposed by any governmental or self-regulatory organization in respect of
such sales, shall constitute the net proceeds to the Company for such Shares (the “Net Proceeds”). The
Agent shall notify the Company as promptly as practicable if any deduction referenced in the preceding sentence will be
required.
(vii)
The Agent shall provide written confirmation to the Company following the close of trading on the Exchange each day in which the
Shares are sold under this Section 2(a) setting forth the number of the Shares sold on such day, the aggregate gross sale proceeds,
the Net Proceeds to the Company, and the compensation payable by the Company to the Agent with respect to such sales.
(viii)
All Shares sold pursuant to this Section 2(a) will be delivered by the Company to Agent for the accounts of the Agent on
the second full business day following the date on which such Shares are sold, or at such other time and date as Agent and the Company
determine pursuant to Rule 15c6-1(a) under the Exchange Act, each such time and date of delivery being herein referred to as a “Settlement
Date.” On each Settlement Date, the Shares sold through the Agent for settlement on such date shall be issued and delivered
by the Company to the Agent against payment of the Net Proceeds from the sale of such Shares. Settlement for all such Shares shall be
effected by free delivery of the Shares by the Company or its transfer agent (i) to the Agent or its designee’s account (provided
the Agent shall have given the Company written notice of such designee prior to the Settlement Date) at The Depository Trust Company (“DTC”)
or (ii) by such other means of delivery as may be mutually agreed upon by the parties hereto, which in all cases shall be freely tradable,
transferable, registered shares in good deliverable form, in return for payment in same day funds delivered to an account designated by
the Company. If the Company or its transfer agent (if applicable) shall default on its obligation to deliver the Shares on any Settlement
Date, the Company shall (A) indemnify and hold the Agent harmless against any loss, claim or damage arising from or as a result of such
default by the Company and (B) pay the Agent any commission to which it would otherwise be entitled absent such default. If the Agent
breaches this Agreement by failing to deliver the Net Proceeds on any Settlement Date for the shares delivered by the Company, the Agent
will pay the Company interest based on the effective prime rate until such proceeds, together with such interest, have been fully paid.
(ix) Under
no circumstances shall the Company cause or request the offer or sale of any Shares if, after giving effect to the sale of such
Shares, the aggregate gross sales proceeds sold pursuant to this Agreement would exceed the lesser of (A) together with all sales of
Shares under this Agreement, the Maximum Amount, (B) the amount available for offer and sale under the currently effective
Registration Statement and (C) the amount authorized from time to time to be issued and sold under this Agreement by the
Company’s board of directors, a duly authorized committee thereof or a duly authorized executive committee, and notified to
the Agent in writing. Under no circumstances shall the Company cause or request the offer or sale of any Shares at a price lower
than the minimum price authorized from time to time by the Company’s board of directors, duly authorized committee thereof or
a duly authorized executive committee, and notified to the Agent in writing. Further, under no circumstances shall the aggregate
offering amount of Shares sold pursuant to this Agreement, including any separate underwriting or similar agreement covering
principal transactions, exceed the Maximum Amount.
(x)
The Company agrees that any offer to sell, any solicitation of an offer to buy, or any sales of Shares in the Offering shall only
be effected by or through the Agent.
(b) Nothing
herein contained shall constitute the Agent an unincorporated association or partner with the Company. Under no circumstances shall any
Shares be sold pursuant to this Agreement after the date which is three years after the Registration Statement was first declared effective
by the Commission.
(c) Notwithstanding
any other provisions of this Agreement, the Company agrees that no sale of Shares shall take place, and the Company shall not request
the sale of any Shares, and the Agent shall not be obligated to sell, during any period in which the Company is, or could be deemed to
be, in possession of material non-public information.
(d) Unless
the exceptive provisions set forth in Rule 101(c)(1) of Regulation M under the Exchange Act are satisfied with respect to the
Shares, the Company shall give the Agent at least one business day’s prior notice of its intent to sell any Shares in order to allow
the Agent time to comply with Regulation M.
3. Covenants.
The Company covenants and agrees with the Agent as follows:
(a) After
the date hereof and through any Prospectus Delivery Period, prior to amending or supplementing the Registration Statement (including any
Rule 462(b) Registration Statement), Base Prospectus, the Prospectus or any Permitted Free Writing Prospectus, the Company shall furnish
to the Agent for review a copy of each such proposed amendment or supplement, allow the Agent a reasonable amount of time to review and
comment on such proposed amendment or supplement, and the Company shall not file any such proposed amendment or supplement to which the
Agent or counsel to the Agent reasonably object; provided that the foregoing shall not apply with regards to the filing by the Company
of any Form 10-K, 10-Q, 8-K, proxy statement or other Incorporated Document. Subject to this Section 3(a), immediately following
execution of this Agreement, if not previously prepared, the Company will prepare a prospectus supplement describing the selling terms
of the Shares hereunder, the plan of distribution thereof and such other information as may be required by the Securities Act or the Rules
and Regulations or as the Agent and the Company may deem appropriate, and if requested by the Agent, a Permitted Free Writing Prospectus
containing the selling terms of the Shares hereunder and such other information as the Company and the Agent may deem appropriate, and
will file or transmit for filing with the Commission, in accordance with Rule 424(b) or Rule 433, as the case may be, copies of the Prospectus
as supplemented and each such Permitted Free Writing Prospectus.
(b) After
the date of this Agreement, the Company shall promptly advise the Agent in writing (i) of the receipt of any comments of, or requests
for additional or supplemental information from, the Commission or for any amendments or supplements to the Registration Statement, the
Base Prospectus, the Prospectus or any Permitted Free Writing Prospectus (excluding any Incorporated Documents), (ii) of the time and
date of any filing of any post-effective amendment to the Registration Statement or any amendment or supplement to any Base Prospectus,
the Prospectus or any Permitted Free Writing Prospectus (excluding any Incorporated Documents), (iii) of the time and date that any post-effective
amendment to the Registration Statement becomes effective, (iv) of the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment thereto or of any order preventing or suspending its use or the use of any
Base Prospectus, the Prospectus or any Permitted Free Writing Prospectus, or (v) of any proceedings to remove, suspend or terminate from
listing or quotation the Common Stock from any securities exchange upon which it is listed for trading or included or designated for quotation,
or of the threatening or initiation of any proceedings for any of such purposes. If the Commission shall enter any such stop order at
any time, the Company may terminate this Agreement. Additionally, the Company agrees that it shall comply with the provisions of Rules
424(b), 430B and 430C, as applicable, under the Securities Act and will use its reasonable efforts to confirm that any filings made by
the Company under Rule 424(b), Rule 433 or Rule 462 were received in a timely manner by the Commission (without reliance on Rule 424(b)(8)
or Rule 164(b)).
(c) From
the date hereof through the later of (A) the termination of this Agreement and (B) the end of any applicable Prospectus Delivery Period,
the Company will comply in all material respects with all requirements imposed upon it by the Securities Act, as now and hereafter amended,
and by the Rules and Regulations, as from time to time in force, and by the Exchange Act so far as necessary to permit the continuance
of sales of or dealings in the Shares as contemplated by the provisions hereof, the Base Prospectus, the Prospectus and any Permitted
Free Writing Prospectus. If during any applicable Prospectus Delivery Period any event occurs as a result of which the Base Prospectus,
the Prospectus, or any Permitted Free Writing Prospectus would include an untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances then existing, not misleading, or if during any applicable
Prospectus Delivery Period it is necessary or appropriate in the opinion of the Company or its counsel or in the reasonable opinion of
the Agent or counsel to the Agent to amend the Registration Statement or supplement the Base Prospectus, the Prospectus or any Permitted
Free Writing Prospectus, to comply with the Securities Act or to file under the Exchange Act any document which would be deemed to be
incorporated by reference in the Prospectus in order to comply with the Securities Act or the Exchange Act, the Company will promptly
notify Agent (or the Agent will notify the Company, as applicable), and the Agent shall suspend the offering and sale of any such Shares,
and the Company will amend the Registration Statement or supplement the Base Prospectus, the Prospectus or any Permitted Free Writing
Prospectus or file such document (at the expense of the Company) so as to correct such statement or omission or effect such compliance
within the time period prescribed by the Securities Act or the Exchange Act.
(i) In
case the Agent is required to deliver (whether physically or through compliance with Rule 172 under the Securities Act or any similar
rule), in connection with the sale of the Shares, a Prospectus after the nine-month period referred to in Section 10(a)(3) of the Securities
Act, or after the time a post-effective amendment to the Registration Statement is required pursuant to Item 512(a) of Regulation S-K
under the Securities Act, the Company will prepare, at its expense, promptly upon request such amendment or amendments to the Registration
Statement and the Prospectus as may be necessary to permit compliance with the requirements of Section 10(a)(3) of the Securities Act
or Item 512(a) of Regulation S-K under the Securities Act, as the case may be. The Company shall cause each amendment or supplement to
any Base Prospectus or the Prospectus to be filed with the Commission as required pursuant to the applicable paragraph of Rule 424(b)
of the Securities Act or, in the case of any document which would be deemed to be incorporated by reference therein, to be filed with
the Commission as required pursuant to the Exchange Act, within the time period prescribed. The Company shall promptly notify the Agent
if any Material Contract is terminated or if the other party thereto gives written notice of its intent to terminate any such Material
Contract.
(ii) If
at any time following issuance of a Permitted Free Writing Prospectus there occurs an event or development as a result of which such Permitted
Free Writing Prospectus would conflict with the information contained in the Registration Statement, the Base Prospectus or the Prospectus,
or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances prevailing at that subsequent time, not misleading, the Company promptly will notify
the Agent and will promptly amend or supplement, at its own expense, such Permitted Free Writing Prospectus to eliminate or correct such
conflict, untrue statement or omission.
(d) The
Company shall use commercially reasonable efforts to take or cause to be taken all necessary action to qualify the Shares for sale under
the securities laws of such jurisdictions as Agent reasonably designates and to continue such qualifications in effect so long as required
for the distribution of the Shares, except that the Company shall not be required in connection therewith to qualify as a foreign corporation
or to execute a general consent to service of process in any state. The Company shall promptly advise the Agent of the receipt by the
Company of any notification with respect to the suspension of the qualification of the Shares for offer or sale in any jurisdiction or
the initiation or threatening of any proceeding for such purpose.
(e) The
Company will furnish to the Agent and counsel for the Agent, to the extent requested, copies of the Registration Statement, the Base Prospectus,
the Prospectus, any Permitted Free Writing Prospectus, and all amendments and supplements to such documents, in each case as soon as available
and in such quantities as the Agent may from time to time reasonably request.
(f) The
Company will make generally available to its security holders as soon as practicable an earnings statement (which need not be audited)
covering a 12-month period that shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 of the Rules and Regulations.
If the Company makes any public announcement or release disclosing its results of operations or financial condition for a completed quarterly
or annual fiscal period (each, an “Earnings Release”) and the Company has not yet filed an Annual Report on
Form 10-K or a Quarterly Report on Form 10-Q or a Form 8-K with respect to such information, as applicable, then, prior to any sale of
Shares, the Company shall be obligated to (x) file a prospectus supplement with the Commission under the applicable paragraph of Rule
424(b), which prospectus supplement shall include the applicable financial information or (y) file a Report on Form 8-K, which Form 8-K
shall include the applicable financial information.
(g) The
Company, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, will pay or cause to
be paid (i) all expenses (including stock or transfer taxes and stamp or similar duties allocated to the respective transferees) incurred
in connection with the registration, issue, sale and delivery of the Shares, (ii) all reasonable expenses and fees (including, without
limitation, fees and expenses of the Company’s accountants and counsel) in connection with the preparation, printing, filing, delivery,
and shipping of the Registration Statement (including the financial statements therein and all amendments, schedules, and exhibits thereto),
the Base Prospectus, each Prospectus, any Permitted Free Writing Prospectus, and any amendment thereof or supplement thereto, and the
producing, word-processing, printing, delivery, and shipping of this Agreement and other closing documents, including blue sky memoranda
(covering the states and other applicable jurisdictions) and including the cost to furnish copies of each thereof to the Agent, (iii)
all filing fees, (iv) listing fees, if any, and (v) all other costs and expenses of the Company incident to the performance of its obligations
hereunder that are not otherwise specifically provided for herein (including the costs and expenses related to any investor presentations
or “roadshow” undertaken in connection with marketing of the Shares as agreed to by the Company). Company shall reimburse
the Agent upon request for its actual, reasonable and documented costs and out-of-pocket expenses incurred in connection with this Agreement,
whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, including the actual, reasonable
and documented fees and out-of-pocket expenses of its legal counsel up to $50,000, provided, however, that any costs and out-of-pocket
expenses (excluding fees and expenses of legal counsel) in an amount equal to or in excess of $5,000 individually and in the aggregate
shall require the advance written consent of the Company. In addition, the Company shall pay the Agent, for each quarter the Offering
is open and during which sales of the Shares have occurred an additional legal fee equal to $5,000.
(h) The
Company will apply the net proceeds from the sale of the Shares in the manner set forth under the caption “Use of Proceeds”
in the Base Prospectus, the Prospectus, and any Permitted Free Writing Prospectus.
(i)
The Company will not, without (1) giving the Agent at least two business days’ prior written notice specifying the nature
of the proposed sale and the date of such proposed sale, and (2) the Agent suspending activity under this Agreement for such period of
time as requested by the Company or as reasonably deemed appropriate by the Agent in light of the proposed sale, offer for sale, sell,
contract to sell, pledge, grant any option for the sale of, enter into any transaction which is designed to, or might reasonably be expected
to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by
the Company or any Subsidiary, or otherwise issue or dispose of, directly or indirectly (or publicly disclose the intention to make any
such offer, sale, pledge, grant, issuance or other disposition), of any Common Stock or any securities convertible into or exchangeable
for, or any options or rights to purchase or acquire, Common Stock, or permit the registration under the Securities Act of any Common
Stock, such securities, options or rights, except for (i) the registration of the Shares and the sales through the Agent pursuant to this
Agreement, (ii) the issuance of securities issuable upon exercise, exchange or conversion of any options, convertible preferred stock,
promissory notes, whether or not convertible, and warrants that are outstanding as of the date of this Agreement and described in the
Registration Statement and the Prospectus, (iii) the filing of a registration statement on Form S-8 relating to employee benefit plans,
(iv) the issuance of securities pursuant to any employee stock incentive plan, stock ownership plan or employee stock purchase plan of
the Company in effect at the time of this Agreement or any compensatory agreement or inducement grants made by the Company to employees,
consultants and other service providers and approved by the Board, (v) the issuance of Common Stock or any securities convertible into
or exchangeable for, or any options or rights to purchase or acquire Common Stock pursuant to any agreement or transaction of which the
primary purpose is not to raise capital, (vi) the registration of the shares of Common Stock for resale in accordance with the terms and
conditions of agreements outstanding as of the date of this Agreement and described in the Registration Statement and Prospectus (collectively,
clauses (i)-(vi), “Exempt Issuances”).
(j) The
Company shall not, at any time at or after the execution of this Agreement, offer or sell any of the Shares in this offering by means
of any “prospectus” (within the meaning of the Securities Act), or use any “prospectus” (within the meaning of
the Securities Act) in connection with the offer or sale of the Shares, in each case other than the Prospectus or any Permitted Free Writing
Prospectus.
(k)
The Company has not taken and will not take, directly or indirectly, any action designed to or which might reasonably be expected to cause
or result in, or which has constituted, (i) the stabilization or manipulation of the price of any security of the Company to facilitate
the sale or resale of the Shares or (ii) a violation of Regulation M. The Company shall notify the Agent of any violation of Regulation
M by the Company or any of its officers or directors promptly after the Company has received notice or obtained knowledge of any such
violation.
(l) The
Company will not incur any liability for any finder’s or broker’s fee or agent’s commission in connection with the execution
and delivery of this Agreement or the consummation of the transactions contemplated hereby or thereby, except as contemplated herein.
(m) During
any applicable Prospectus Delivery Period, the Company will file on a timely basis (which shall include any filing filed during the grace
period set forth in Rule 12b-25 of the Exchange Act) with the Commission such periodic and current reports as required by the Rules and
Regulations.
(n) The
Company has maintained, and will maintain, such controls and procedures, including without limitation those required by Sections 302 and
906 of Sarbanes-Oxley and the applicable regulations thereunder, that are designed to ensure that information required to be disclosed
by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the
time periods specified in the Commission’s rules and forms, including without limitation, controls and procedures designed to ensure
that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated
and communicated to the Company’s management, including its principal executive officer and its principal financial officer, or
persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure, to ensure that material
information relating to Company is made known to them by others within those entities.
(o) Intentionally
left blank.
(p) Each
of the Company and Agent hereby represent and agree that, neither the Company nor the Agent has made nor will make any offer relating
to the Shares that would constitute an “issuer free writing prospectus,” as defined in Rule 433 under the Securities Act,
or that would otherwise constitute a “free writing prospectus,” as defined in Rule 405 under the Securities Act, required
to be filed with the Commission other than a Permitted Free Writing Prospectus. The Company represents that it has treated or agrees that
it will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule 433, and has
complied and will comply with the requirements of Rule 433 applicable to any Permitted Free Writing Prospectus, including timely Commission
filing where required, legending and record keeping.
(q) (1)
On the date hereof, the Company shall cause (A) Mitchell Silberberg & Knupp LLP, counsel for the Company, to furnish to the Agent
its written opinion and negative assurance letter, in form and substance reasonably acceptable to Agent’s counsel, and (B) Nadir
Ali, Chief Executive Officer of the Company, to furnish to the Agent the signed certificate (addressed to the Agent) with respect to certain
intellectual property matters, and in form and substance satisfactory to Agent’s counsel, and the Agent shall cause (C) Ellenoff
Grossman & Schole LLP, as counsel for the Agent to furnish to the Agent its negative assurance letter.
(2)
On each date that the Company (i) amends or supplements the Registration Statement or the Prospectus (other than by means of incorporation
by reference); (ii) files an annual report on Form 10-K under the Exchange Act; (iii) files its quarterly reports on Form 10-Q under the
Exchange Act; (iv) files a report on Form 8-K under the Exchange Act containing amended financial information (other than an earnings
release, to “furnish” information pursuant to Items 2.02 or 7.01 of Form 8-K, unless the Agent reasonably determines that
the information in such Form 8-K is material); or (v) otherwise after each reasonable request by Agent (each of such date referred to
herein as a "Bringdown Date"), the Company shall cause (X) Mitchell Silberberg & Knupp LLP, counsel for the
Company, to furnish to the Agent its opinion and negative assurance letter, in form and substance reasonably acceptable to Agent’s
counsel, and (Y) Nadir Ali, Chief Executive Officer of the Company, to furnish
to the Agent the signed certificate (addressed to the Agent) with respect to certain intellectual property matters, and in form and substance
satisfactory to Agent’s counsel, and the Agent shall cause (Z) Ellenoff Grossman & Schole LLP, as counsel for the Agent
to furnish to the Agent its negative assurance letter, each dated as of a date within ten (10) days after the applicable Bringdown Date,
addressed to the Agent and modified as necessary to relate to the Registration Statement and the Prospectus as amended and supplemented
to the time of delivery of such opinions. With respect to this Section 3(q)(2), in lieu of delivering such opinions or letters
for Bringdown Dates subsequent to the date of effectiveness of the Registration Statement, such counsel may furnish Agent with a letter
(a "Reliance Letter") to the effect that Agent may rely upon a prior opinion or letter delivered under Section
3(q)(1) or this Section 3(q)(2) to the same extent as if it were dated the date of such letter (except that statements in such
prior opinion shall be deemed to relate to the Registration Statement and the Prospectus as amended or supplemented as of the date of
Reliance Letter). Provided, however, the requirement to provide opinions and letters under this Section 3(q)(2) is hereby waived
for any Bringdown Date occurring at a time at which no Transaction Notice is pending, which waiver shall continue until the earlier to
occur of the date the Company delivers a Transaction Notice hereunder and the next occurring Bringdown Date. Notwithstanding the foregoing,
if the Company subsequently decides to sell Shares following a Bringdown Date when the Company relied on such waiver and did not provide
Agent with opinions and letters under this Section 3(q)(2), then before the Company delivers the Transaction Notice or Agent sells
any Shares, the Company shall cause each of Mitchell Silberberg & Knupp LLP
to furnish to the Agent a written opinion and negative assurance letter, and Nadir
Ali to furnish to the Agent the signed certificate (addressed to the Agent) with respect to certain intellectual property matters,
and the Agent shall cause Ellenoff Grossman & Schole LLP to furnish to the Agent its negative assurance letter, dated the date of
the Transaction Notice.
(r) On
or prior to the delivery date of the first Transaction Notice issued hereunder and within ten (10) days after each Bringdown Date, the
Company shall cause the Auditor, or other independent accountants satisfactory to the Agent, to deliver to the Agent (x) a customary comfort
letter (the initial letter, the “Initial Comfort Letter,” and each subsequent letter, a “Bringdown
Comfort Letter”) addressed to Agent, in form and substance satisfactory to Agent, confirming that they are independent public
accountants within the meaning of the Securities Act and are in compliance with the applicable requirements relating to the qualifications
of accountants under Rule 2-01 of Regulation S-X of the Commission, and stating the conclusions and findings of said firm with respect
to the financial information and other matters and (y) a letter updating the Initial Comfort Letter with any information that would have
been included in the Initial Comfort Letter had it been given on such date and as modified as necessary to relate to the date of such
letter. Provided, however, the requirement to provide a Bringdown Comfort Letter under this Section 3(r) is hereby waived for any
Bringdown Date occurring at a time at which no Transaction Notice is pending, which waiver shall continue until the earlier to occur of
the date the Company delivers a Transaction Notice hereunder and the next occurring Bringdown Date. Notwithstanding the foregoing, if
the Company subsequently decides to sell Shares following a Bringdown Date when the Company relied on such waiver and did not provide
Agent with a Bringdown Comfort Letter under this Section 3(r), then before the Company delivers the Transaction Notice or Agent
sells any Shares, the Company shall cause the Auditor, or other independent accountants satisfactory to the Agent, to deliver to the Agent
a Bringdown Comfort Letter dated the date of the Transaction Notice.
(s) On
the date hereof and each Bringdown Date, the Company shall furnish to the Agent an officer’s certificate, dated as of a date within
ten (10) days after the applicable Bringdown Date and addressed to Agent, signed by the chief executive officer and by the chief financial
officer of the Company, to the effect that:
(i)
The representations and warranties of the Company in this Agreement are true and correct in all material respects as if made at
and as of the date of the certificate, and the Company has complied in all material respects with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or prior to the date of the certificate;
(ii)
No stop order or other order suspending the effectiveness of the Registration Statement or any part thereof or any amendment thereof
or the qualification of the Shares for offering or sale or notice that would prevent use of the Registration Statement, nor suspending
or preventing the use of the Base Prospectus, the Prospectus or any Permitted Free Writing Prospectus, has been issued, and no proceeding
for that purpose has been instituted or, to the best of their knowledge, is contemplated by the Commission or any state or regulatory
body;
(iii)
The Shares to be sold on that date, if any, have been duly and validly authorized by the Company and all corporate action required
to be taken for the authorization, issuance and sale of the Shares on that date, if any, has been validly and sufficiently taken;
(iv)
Subsequent to the respective dates as of which information is given in the Base Prospectus, the Prospectus or any Permitted Free
Writing Prospectus, as amended and supplemented, and except for pending transactions disclosed therein, the Company has not incurred any
material liabilities or obligations, direct or contingent, or entered into any material transactions, not in the ordinary course of business,
or declared or paid any dividends or made any distribution of any kind with respect to its capital stock, and there has not been any change
in the capital stock or any issuance of options, warrants, convertible securities or other rights to purchase the capital stock (other
than as a result of Exempt Issuances), or any material change in the short-term or long-term debt, of the Company, or any Material Adverse
Effect or any development that would reasonably be likely to result in a Material Adverse Effect (whether or not arising in the ordinary
course of business), or any material loss by strike, fire, flood, earthquake, accident or other calamity, whether or not covered by insurance,
incurred by the Company; and
(v)
Except as stated in the Prospectus and any Permitted Free Writing Prospectus, as amended and supplemented, there is not pending,
or, to the knowledge of the Company, threatened or contemplated, any action, suit or proceeding to which the Company is a party before
or by any court or governmental agency, authority or body, or any arbitrator, which would reasonably be likely to result in any Material
Adverse Effect;
provided, however, the requirement
to provide a certificate under this Section 3(s) is hereby waived for any Bringdown Date occurring at a time at which no Transaction
Notice is pending, which waiver shall continue until the earlier to occur of the date the Company delivers a Transaction Notice hereunder
and the next occurring Bringdown Date. Notwithstanding the foregoing, if the Company subsequently decides to sell Shares following a Bringdown
Date when the Company relied on such waiver and did not provide Agent with a certificate under this Section 3(s), then before the
Company delivers the Transaction Notice or Agent sells any Shares, the Company shall provide Agent with a certificate dated the date of
the Transaction Notice.
(t) A
reasonable time prior to each Bringdown Date, the Company, if so requested by the Agent, shall conduct a due diligence session, in form
and substance, satisfactory to the Agent, which shall include representatives of the management and the accountants of the Company.
(u) The
Company shall disclose in its annual report on Form 10-K and its quarterly reports on Form 10-Q the number of Shares sold through the
Agent under this Agreement, the Net Proceeds to the Company and the compensation paid by the Company with respect to sales of the Shares
pursuant to this Agreement.
(v) The
Company shall ensure that there are at all times sufficient shares of Common Stock to provide for the issuance, free of any preemptive
rights, out of its authorized but unissued Common Stock, of the maximum aggregate number of Shares authorized for issuance by the Board
pursuant to the terms of this Agreement. The Company will use its reasonable best efforts to cause the Shares to be listed on the Exchange,
and to maintain such listing. The Company shall cooperate with Agent and use its reasonable efforts to permit Shares to be eligible for
clearance and settlement through the facilities of DTC.
(w) At
any time during the term of this Agreement, the Company will advise the Agent promptly after it receives notice or obtains knowledge of
any information or fact that would alter or affect any opinion, certificate, letter and other document provided to the Agent pursuant
to Section 3.
(x) Subject
to compliance with any applicable requirements of Regulation M under the Exchange Act and compliance with applicable securities laws,
the Company consents to the Agent trading in the Common Stock for the Agent’s own account and for the account of its clients (in
compliance with all applicable laws) at the same time as sales of the Shares occur pursuant to this Agreement.
(y) If
to the knowledge of the Company, any condition set forth in Section 4 shall not have been satisfied on the applicable Settlement
Date or will not be satisfied on or prior to the date required by this Agreement, the Company will offer to any person who has agreed
to purchase the Shares on such Settlement Date from the Company as the result of an offer to purchase solicited by the Agent the right
to refuse to purchase and pay for such Shares.
(z) On
the date hereof and each Bringdown Date, the Company shall furnish to the Agent an incumbency certificate, dated as of such date and addressed
to Agent, signed by the secretary of the Company.
(aa) Each
acceptance by the Company of an offer to purchase the Shares hereunder shall be deemed to be an affirmation to the Agent that the representations
and warranties of the Company contained in or made pursuant to this Agreement are true and correct as of the date of such acceptance as
though made at and as of such date, and an undertaking that such representations and warranties will be true and correct as of the Settlement
Date for the Shares relating to such acceptance, as though made at and as of such date (except that such representations and warranties
shall be deemed to relate to the Registration Statement and the Prospectus as amended and supplemented relating to such Shares).
(bb) During any period
when the delivery of a prospectus relating to the Shares is required (including in circumstances where such requirement may be satisfied
pursuant to Rule 172, 173 or any similar rule) to be delivered under the Securities Act, the Company will file all documents required
to be filed with the Commission pursuant to the Exchange Act within the time periods required by the Exchange Act and the regulations
thereunder.
(cc) The Company shall
cooperate with Agent and use its reasonable efforts to permit the Shares to be eligible for clearance and settlement through the facilities
of DTC.
(dd) The Company will apply
the Net Proceeds from the sale of the Shares in the manner set forth in the Prospectus.
(ee) To the extent that
the Registration Statement is not available for the sales of the Shares as contemplated by this Agreement, the Company shall file a new
registration statement with respect to any additional shares of Common Stock necessary to complete such sales of the Shares and shall
cause such registration statement to become effective as promptly as practicable. After the effectiveness of any such registration statement,
all references to “Registration Statement” included in this Agreement shall be deemed to include such new registration statement,
including all documents incorporated by reference therein pursuant to Item 12 of Form S-3, and all references to “Base Prospectus”
included in this Agreement shall be deemed to include the final form of prospectus, including all documents incorporated therein by reference,
included in any such registration statement at the time such registration statement became effective.
(ff) In furtherance of
the exclusive nature of the relationship between the Agent and the Company, during the term of this Agreement: (i) the Company will not,
and will not permit its representatives to, other than in coordination with the Agent, contact or solicit institutions, corporations or
other entities as potential purchasers of the Shares in the Offering.
4. Conditions
of Agent’s Obligations. The obligations of the Agent hereunder are subject to (i) the accuracy of, as of the date hereof,
each Bringdown Date, and each Time of Sale (in each case, as if made at such date), and compliance with, all representations, warranties
and agreements of the Company contained herein, (ii) the performance by the Company of its obligations hereunder and (iii) the following
additional conditions:
(a) If
filing of the Prospectus, or any amendment or supplement thereto, or any Permitted Free Writing Prospectus, is required under the Securities
Act or the Rules and Regulations, the Company shall have filed the Prospectus (or such amendment or supplement) or such Permitted Free
Writing Prospectus with the Commission in the manner and within the time period so required (without reliance on Rule 424(b)(8) or Rule
164(b)); the Registration Statement shall remain effective; no stop order suspending the effectiveness of the Registration Statement or
any part thereof, any Rule 462(b) Registration Statement, or any amendment thereof, nor suspending or preventing the use of the Base Prospectus,
the Prospectus or any Permitted Free Writing Prospectus shall have been issued; no proceedings for the issuance of such an order shall
have been initiated or threatened; and any request of the Commission for additional information (to be included in the Registration Statement,
the Base Prospectus, the Prospectus, any Permitted Free Writing Prospectus or otherwise) shall have been complied with to the Agent’s
satisfaction.
(b) The
Agent shall not have advised the Company that the Registration Statement, the Base Prospectus, the Prospectus, or any amendment or supplement
thereto, or any Permitted Free Writing Prospectus, contains an untrue statement of fact which, in the Agent’s opinion, is material,
or omits to state a fact which, in the Agent’s opinion, is material and is required to be stated therein or is necessary to make
the statements therein (i) with respect to the Registration Statement, not misleading and (ii) with respect to the Base Prospectus, the
Prospectus or any Permitted Free Writing Prospectus, in light of the circumstances under which they were made, not misleading.
(c) Except
as set forth or contemplated in the Prospectus and any Permitted Free Writing Prospectus, as amended or supplemented, subsequent to the
respective dates as of which information is given therein, the Company shall not have incurred any material liabilities or obligations,
direct or contingent, or entered into any material transactions, or declared or paid any dividends or made any distribution of any kind
with respect to its capital stock and there shall not have been any change in the capital stock, or any issuance of options, warrants,
convertible securities or other rights to purchase the capital stock (other than as a result of Exempt Issuances), or any material change
in the short-term or long-term debt, of the Company, or any Material Adverse Effect or any development that would be reasonably likely
to result in a Material Adverse Effect (whether or not arising in the ordinary course of business), or any material loss by strike, fire,
flood, earthquake, accident or other calamity, whether or not covered by insurance, incurred by the Company, the effect of which, in any
such case described above, in the Agent’s judgment, makes it impractical or inadvisable to offer or deliver the Shares.
(d)
The Company shall have performed each of its obligations under Section 3(q).
(e) The
Company shall have performed each of its obligations under Section 3(r).
(f) The
Company shall have performed each of its obligations under Section 3(s).
(g) FINRA
shall have raised no objection to the fairness and reasonableness of the terms and arrangements related to the sale of the Shares pursuant
to this Agreement.
(h) All
filings with the Commission required by Rule 424 under the Securities Act to have been filed by the Settlement Date shall have been made
within the applicable time period prescribed for such filing by Rule 424.
(i) The
Company shall have furnished to Agent and the Agent’s counsel such additional documents, certificates and evidence as they may have
reasonably requested.
(j) Trading
in the Common Stock shall not have been suspended on the Exchange. The Shares shall have been listed and authorized for trading on the
Exchange prior to the first Settlement Date, and satisfactory evidence of such actions shall have been provided to the Agent and its counsel,
which may include oral confirmation from a representative of the Exchange.
(k) On
each Bringdown Date, Ellenoff Grossman & Schole LLP, counsel for the Agent, shall not have reasonably determined that the Base Prospectus,
the Prospectus, or any Permitted Free Writing Prospectus, as of such date, includes an untrue statement of a material fact or omits to
state a material fact necessary to make the statements therein, in the light of the circumstances then existing, not misleading.
All such opinions, certificates,
letters and other documents will be in compliance with the provisions hereof only if they are reasonably satisfactory in form and substance
to Agent and the Agent’s counsel. The Company will furnish Agent with such conformed copies of such opinions, certificates, letters
and other documents as Agent shall reasonably request.
5. Indemnification and
Contribution.
(a) The
Company agrees to indemnify and hold harmless the Agent and each of the other Indemnified Parties (as defined below) from and against
any losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses and disbursements, and any and all
actions suits proceedings and investigations in respect thereof and any and all legal and other costs, expenses and disbursements in giving
testimony or furnishing documents in response to subpoena or otherwise (including, without limitation, the costs, expenses and disbursements,
as and when incurred, of investigating, preparing, pursuing or defending any such action, suit, proceeding or investigation (whether or
not in connection with litigation in which any Indemnified Party is a party)) (collectively, “Losses”), directly
or indirectly, caused by, relating to, based upon, arising out of, or in connection with this Agreement, including, without limitation,
any act or omission by the Agent in connection with its acceptance of or the performance or non-performance of its obligations under the
Agreement, any breach by the Company of any representation, warranty, covenant or agreement contained in the Agreement (or in any instrument,
document or agreement relating thereto, including any agency agreement), or the enforcement by the Agent of its rights under the Agreement
or these indemnification provisions, except to the extent that any such Losses are found in a final judgment by a court of competent jurisdiction
(not subject to further appeal) to have resulted primarily and directly from the gross negligence or willful misconduct of the Indemnified
Party seeking indemnification hereunder. The Company also agrees that no Indemnified Party shall have any liability (whether direct or
indirect, in contract or tort or otherwise) to the Company for or in connection with this Agreement for any other reason, except to the
extent that any such liability is found in a final judgment by a court of competent jurisdiction (not subject to further appeal) to have
resulted primarily and directly from such Indemnified Party’s gross negligence or willful misconduct this indemnity agreement will
be in addition to any liability that the Company otherwise might have.
(i) These
indemnification provisions shall extend to the following persons (collectively, the “Indemnified Parties”):
the Agent, its present and former affiliated entities, managers, members, officers, employees, legal counsel, agents and controlling persons
(within the meaning of the federal securities laws), and the officers, directors, partners, stockholders, members, managers, employees,
legal counsel, agents and controlling persons of any of them. These indemnification provisions shall be in addition to any liability which
the Company may otherwise have to any Indemnified Party.
(ii) If
any action, suit, proceeding or investigation is commenced, as to which an Indemnified Party proposes to demand indemnification, it shall
notify the Company with reasonable promptness; provided, however, that any failure by an Indemnified Party to notify the
Company shall not relieve the Company from its obligations hereunder except to the extent that the Company is actually and materially
prejudiced by such failure to notify. An Indemnified Party shall have the right to retain counsel of its own choice to represent it, and
the fees, expenses and disbursements of such counsel shall be borne by the Company. Any such counsel shall, to the extent consistent with
its professional responsibilities, cooperate with the Company and any counsel designated by the Company. The Company shall be liable for
any settlement of any claim against any Indemnified Party made with the Company’s written consent. The Company shall not, without
the prior written consent of the Agent, settle or compromise any claim, or permit a default or consent to the entry of any judgment in
respect thereof, unless such settlement, compromise or consent (i) includes, as an unconditional term thereof, the giving by the claimant
to all of the Indemnified Parties of an unconditional release from all liability in respect of such claim, and (ii) does not contain any
factual or legal admission by or with respect to an Indemnified Party or an adverse statement with respect to the character, professionalism,
expertise or reputation of any Indemnified Party or any action or inaction of any Indemnified Party.
(iii) In
order to provide for just and equitable contribution, if a claim for indemnification pursuant to these indemnification provisions is made
but it is found in a final judgment by a court of competent jurisdiction (not subject to further appeal) that such indemnification may
not be enforced in such case, even though the express provisions hereof provide for indemnification in such case, then the Company shall
contribute to the Losses to which any Indemnified Party may be subject (i) in accordance with the relative benefits received by the Company
and its stockholders, Subsidiaries and affiliates, on the one hand, and the Indemnified Party, on the other hand, and (ii) if (and only
if) the allocation provided in clause (i) of this sentence is not permitted by applicable law, in such proportion as to reflect not only
the relative benefits, but also the relative fault of the Company, on the one hand, and the Indemnified Party, on the other hand, in connection
with the statements, acts or omissions which resulted in such Losses as well as any relevant equitable considerations. No person found
liable for a fraudulent misrepresentation shall be entitled to contribution from any person who is not also found liable for fraudulent
misrepresentation. The relative benefits received (or anticipated to be received) by the Company and its stockholders, Subsidiaries and
affiliates shall be deemed to be equal to the aggregate consideration payable or receivable by such parties in connection with the transaction
or transactions to which the Agreement relates relative to the amount of fees actually received by the Agent in connection with such transaction
or transactions. Notwithstanding the foregoing, in no event shall the amount contributed by all Indemnified Parties exceed the amount
of fees previously received by the Agent pursuant to the Agreement.
(b) (i)
The Agent will indemnify and hold harmless the Company and its affiliates, employees, directors, executive officers, including, but not
limited to such executive officers of the Company who signed the Registration Statement and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, legal counsel, agents and controlling persons
of any of them (the “Company Indemnified Parties”) from and against any Losses to which the Company or the Company
Indemnified Parties may become subject, under the Securities Act or otherwise (including in settlement of any litigation, if such settlement
is effected with the written consent of the Agent), insofar as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or omission or alleged untrue statement or omission of a material fact contained in
the Registration Statement, any Base Prospectus, the Prospectus, or any amendment or supplement thereto or any Permitted Free Writing
Prospectus, to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration
Statement, any Base Prospectus, the Prospectus, or any amendment or supplement thereto, or any Permitted Free Writing Prospectus in reliance
upon and in conformity with written information furnished to the Company by Agent expressly for use in the preparation thereof, it being
understood and agreed that the only information furnished by the Agent consists of the information described as such in Section 5(b)(ii),
by the Company in connection with investigating or defending against any such loss, claim, damage, liability or action. (ii) The Agent
confirms and the Company acknowledges that as of the date hereof no information has been furnished in writing to the Company by or on
behalf of the Agent specifically for inclusion in the Registration Statement, any Base Prospectus, the Prospectus or any Permitted Free
Writing Prospectus, other than information about the Agent included in the Prospectus Supplement under the heading “Plan of Distribution”.
(c) If
the indemnification provided for in this Section 5 is unavailable or insufficient to hold harmless an indemnified party under subsection
(a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of
the losses, claims, damages or liabilities referred to in subsection (a) or (b) above, (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the Agent on the other from the Offering or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on the one hand and the Agent on the other in connection with
the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the Agent on the other shall be deemed to be in the same proportion
as the total net proceeds from the Offering (before deducting expenses) received by the Company and the total compensation received by
the Agent from the sale of the Shares on behalf of the Company. The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates
to information supplied by the Company or the Agent and the parties’ relevant intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. The Company and the Agent agree that it would not be just and equitable if contributions
pursuant to this subsection (c) were to be determined by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the first sentence of this subsection (c). The amount paid by an indemnified party
as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (c) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending against
any action or claim which is the subject of this subsection (c). Notwithstanding the provisions of this subsection (c), the Agent shall
not be required to contribute any amount in excess of the amount by which the total price at which the Shares underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages that the Agent has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
(d) Neither
the termination of this Agreement nor completion of the Offering shall affect these indemnification provisions, which shall remain operative
and in full force and effect. The indemnification provisions shall be binding upon the Company and the Agent and their respective successors
and assigns and shall inure to the benefit of the Indemnified Parties and the Company Indemnified Parties and their respective successors,
assigns, heirs and personal representatives.
6. Representations
and Agreements to Survive Delivery. All representations and warranties of the Company herein or in certificates delivered pursuant
hereto, and agreements of the Agent and the Company herein, including but not limited to the agreements of the Agent and the Company contained
in Section 5, shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Agent
or any controlling person thereof, or the Company or any of its officers, directors, or controlling persons, and shall survive delivery
of, and payment for, the Shares to and by the Agent hereunder.
7. Termination of this
Agreement. The term of this Agreement shall begin on the date hereof, and shall continue until the earliest of (i) twelve (12)
months following the date hereof, (ii) the sale of Shares having an aggregate offering price of $25,000,000, or (iii) the termination
by either the Agent or the Company upon the provision of fifteen (15) days written notice. Any such termination shall in all cases be
deemed to provide that Section 3(g), Section 5 and Section 6 shall remain in full force and effect. Notwithstanding
the foregoing, the Agent shall have the right, in its sole discretion, to terminate this Agreement if at any time from the date of this
Agreement to the effectiveness of the Registration Statement, the Agent is not fully satisfied, in its sole discretion, with the results
of its and its representatives’ review of the Company and the Company’s business.
8. Default by the Company.
If the Company shall fail at any Settlement Date to sell and deliver the number of Shares which it is obligated to sell hereunder, then
this Agreement shall terminate without any liability on the part of the Agent or, except as provided in Section 3(g), any non-defaulting
party. No action taken pursuant to this Section 8 shall relieve the Company from liability, if any, in respect of such default,
and the Company shall (A) hold the Agent harmless against any loss, claim or damage arising from or as a result of such default by the
Company and (B) pay the Agent any commission to which it would otherwise be entitled absent such default.
9.
Notices. Except as otherwise provided herein, all communications under this Agreement shall be in writing and, if to the
Agent, shall be mailed, delivered or telecopied to Maxim Group LLC, 300 Park Avenue, 16th Floor, New York, New York 10022,
(fax: (212) 895-3783), Attention: Clifford A. Teller (cteller@maximgrp.com) and
Ritesh Veera (rveera@maximgrp.com), with a required copy (which shall
not constitute notice) to Ellenoff Grossman & Schole LLP, counsel for the Agent, at 1345 Avenue of the Americas, New York, New York
10105 Attention: Sarah Williams, Esq. (swilliams@egsllp.com). Notices to the Company shall be given to it at 2479 E. Bayshore Road, Suite
195, Palo Alto, CA 94303. Attention: Nadir Ali, Chief Executive Officer (nadir.ali@inpixon.com) and Melanie Figueroa, General Counsel
and SVP, Corporate Development (melanie.figueroa@inpixon.com), with required copies (which shall not constitute notice) to Mitchell Silberberg
& Knupp LLP, 437 Madison Ave., 25th Floor, New York, NY 10022 Attention: Blake Baron (bjb@msk.com). Any party to this Agreement
may change such address for notices by sending to the parties to this Agreement written notice of a new address for such purpose.
10. Persons Entitled
to Benefit of Agreement. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective
successors and assigns and the controlling persons, officers and directors referred to in Section 5. Nothing in this Agreement
is intended or shall be construed to give to any other person, firm or corporation any legal or equitable remedy or claim under or in
respect of this Agreement or any provision herein contained. The term “successors and assigns” as herein used shall not include
any purchaser, as such purchaser, of any of the Shares from the Agent.
11. Absence of Fiduciary
Relationship. The Company acknowledges and agrees that: (a) the Agent has been retained solely to act as an sales agent and/or
principal in connection with the sale of the Shares and that no fiduciary, advisory or agency relationship between the Company and the
Agent has been created in respect of any of the transactions contemplated by this Agreement, irrespective of whether the Agent has advised
or are advising the Company on other matters; (b) the price and other terms of the Shares set forth in this Agreement were established
by the Company following discussions and arms-length negotiations with the Agent and the Company is capable of evaluating and understanding
and understands and accepts the terms, risks and conditions of the transactions contemplated by this Agreement; (c) it has been advised
that the Agent and its affiliates are engaged in a broad range of transactions which may involve interests that differ from those of the
Company and that the Agent has no obligation to disclose such interest and transactions to the Company by virtue of any fiduciary, advisory
or agency relationship; (d) it has been advised that the Agent is acting, in respect of the transactions contemplated by this Agreement,
solely for the benefit of the Agent, and not on behalf of the Company; and (e) it waives to the fullest extent permitted by law, any claims
it may have against the Agent for breach of fiduciary duty or alleged breach of fiduciary duty in respect of any of the transactions contemplated
by this Agreement and agrees that the Agent shall have no liability (whether direct or indirect) to the Company in respect of such a fiduciary
duty claim on behalf of or in right of the Company, including stockholders, employees or creditors of the Company.
12. Governing Law.
This Agreement shall be governed by and construed in accordance with the laws of the State of New York, including Section 5-1401 of the
General Obligations Law of the State of New York, but otherwise without regard to conflict of laws rules that would apply the laws of
any other jurisdiction.
13. Counterparts.
This Agreement may be executed in one or more counterparts and, if executed in more than one counterpart, the executed counterparts shall
each be deemed to be an original and all such counterparts shall together constitute one and the same instrument.
14. Adjustments for
Stock Splits. The parties acknowledge and agree that all share-related numbers contained in this Agreement shall be adjusted to
take into account any subsequent stock split, stock dividend or similar event effected with respect to the Shares.
15. Entire Agreement;
Amendment; Severability; Headings. This Agreement (including all schedules and exhibits attached hereto and transaction notices
issued pursuant hereto) constitutes the entire agreement and supersedes all other prior and contemporaneous agreements and undertakings,
both written and oral, among the parties hereto with regard to the subject matter hereof. Neither this Agreement nor any term hereof may
be amended except pursuant to a written instrument executed by the Company and the Agent. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable as written by a court of competent
jurisdiction, then such provision shall be given full force and effect to the fullest possible extent that it is valid, legal and enforceable,
and the remainder of the terms and provisions herein shall be construed as if such invalid, illegal or unenforceable term or provision
was not contained herein, but only to the extent that giving effect to such provision and the remainder of the terms and provisions hereof
shall be in accordance with the intent of the parties as reflected in this Agreement. The section headings used in this Agreement are
for convenience only and shall not affect the construction hereof.
16. Waiver of Jury Trial.
Each of the Company and the Agent hereby waives any right it may have to a trial by jury in respect of any claim based upon or arising
out of this Agreement or the transactions contemplated hereby.
[Signature Page to Follow]
Please sign and return to the Company the enclosed
duplicates of this letter whereupon this letter will become a binding agreement between the Company and the Agent in accordance with its
terms.
| Very truly yours, |
|
| |
|
|
| INPIXON |
|
| |
|
|
| By: |
/s/ Nadir Ali |
|
| Name: |
Nadir Ali |
|
| Title: |
Chief Executive Officer |
|
Confirmed as of the date first above mentioned.
| MAXIM GROUP LLC |
|
| |
|
|
| By: |
/s/ Clifford A. Teller |
|
| Name: |
Clifford A. Teller |
|
| Title: |
Co-President |
|
[Signature page to Inpixon Equity Distribution
Agreement]
Schedule A
Permitted Free Writing Prospectus
None.
Schedule A-1
Schedule B
Individuals Permitted to Authorize Sales of Shares
Nadir Ali, CEO
Wendy Loundermon, CFO
Schedule B-1
Schedule C
Form of E-mail or Telecopy Confirmation
[COMPANY LETTERHEAD]
Date: ______________
Bill Vitale, Head of Equity Trading
Maxim Group LLC
300 Park Ave, 16th Floor
New York, NY 10022
RE: E-mail Confirmation to Sell Stock Utilizing the Equity Distribution
Agreement
Bill Vitale and Maxim Equity Trading Team:
Pursuant to the terms and subject to the conditions
contained in the Equity Distribution Agreement between Inpixon (the “Company”) and Maxim Group LLC (“Maxim”)
dated July 22, 2022 (the “Agreement”), we hereby confirm our request by e-mail transmission on behalf of the
Company that Maxim is authorized to sell for a period of up to _________ business days, up to ______________ shares of the Company’s
Common Stock at a minimum market price of $________ per share.
Thanks for all your help and please contact us
with any questions,
Sincerely,
Schedule D
Individuals to Which Notice Can Be Given
For Maxim Group LLC:
Bill Vitale
Office:
Fax:
Richard Vaughn
Office:
Fax:
For Inpixon:
Nadir Ali
Office:
Fax:
42
Exhibit
10.2
Note
Purchase Agreement***
This
Note Purchase Agreement (this “Agreement”),
dated as of July 22, 2022, is entered into by and between Inpixon, a Nevada corporation
(“Company”), and Streeterville Capital, LLC, a Utah limited liability
company, its successors and/or assigns (“Investor”).
A.
Company and Investor are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded
by the Securities Act of 1933, as amended (the “1933 Act”), and the rules and regulations promulgated thereunder by
the United States Securities and Exchange Commission (the “SEC”).
B.
Investor desires to purchase and Company desires to issue and sell, upon the terms and conditions set forth in this Agreement, a Promissory
Note, in the form attached hereto as Exhibit A (the “Note”), in the original principal amount of $6,465,000.00
(the “Initial Principal Amount”).
C.
This Agreement, the Note, and all other certificates, documents, agreements, resolutions and instruments delivered to any party under
or in connection with this Agreement, as the same may be amended from time to time, are collectively referred to herein as the “Transaction
Documents”.
NOW,
THEREFORE, in consideration of the above recitals and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Company and Investor hereby agree as follows:
1.
Purchase and Sale of Note.
1.1.
Purchase of Note. Company shall issue and sell to Investor and Investor shall purchase from Company the Note. In consideration
thereof, Investor shall pay the Purchase Price (as defined below) to Company.
1.2.
Form of Payment. On the Closing Date (as defined below), Investor shall pay the Purchase Price to Company via wire transfer of
immediately available funds against delivery of the Note.
1.3.
Closing Date. Subject to the satisfaction (or written waiver) of the conditions set forth in Section 5 and Section 6 below, the
date of the issuance and sale of the Note pursuant to this Agreement (the “Closing Date”) shall be July 22, 2022,
or such other mutually agreed upon date. The closing of the transactions contemplated by this Agreement (the “Closing”)
shall occur on the Closing Date by means of the exchange by email of signed .pdf documents, but shall be deemed for all purposes to have
occurred at the offices of Hansen Black Anderson Ashcraft PLLC in Lehi, Utah.
1.4.
Collateral for the Note. The Note shall not be secured.
1.5.
Original Issue Discount; Transaction Expense Amount. The Note carries an original issue discount of $1,450,000.00 (the “OID”).
In addition, Company agrees to pay $15,000.00 to Investor to cover Investor’s legal fees, accounting costs, due diligence, monitoring
and other transaction costs incurred in connection with the purchase and sale of the Note (the “Transaction Expense Amount”),
all of which amount is included in the initial original principal amount of the Note. The “Purchase Price”, therefore,
shall be $5,000,000.00, computed as follows: the Initial Principal Amount, less the OID, less the Transaction Expense Amount.
***
Schedules, exhibits, and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes
to furnish copies of such omitted materials supplementally upon request by the U.S. Securities and Exchange Commission.
2.
Investor’s Representations and Warranties. Investor represents and warrants to Company that as of the date hereof:
2.1.
Organization; Authority. Investor is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction
of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated by the Transaction
Documents to which it is a party and otherwise to carry out its obligations hereunder and thereunder.
2.2.
No Public Sale or Distribution. Investor is acquiring the Note for its own account and not with a view towards, or for resale
in connection with, the public sale or distribution thereof in violation of applicable securities laws, except pursuant to sales registered
or exempted under the 1933 Act; provided, however, by making the representations herein, Investor does not agree, or make any representation
or warranty, to hold the Note for any minimum or other specific term and reserves the right to dispose of the Note at any time in accordance
with or pursuant to a registration statement or an exemption from registration under the 1933 Act. Investor does not presently have any
agreement or understanding, directly or indirectly, with any Person to distribute the Note in violation of applicable securities laws.
For purposes of this Agreement, “Person” means an individual, a limited liability company, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization, any other entity and any governmental entity or any department or agency
thereof.
2.3.
Accredited Investor Status. Investor is an “accredited investor” as that term is defined in Rule 501(a) of Regulation
D promulgated under the 1933 Act.
2.4.
Reliance on Exemptions. Investor understands that the Note is being offered and sold to it in reliance on specific exemptions
from the registration requirements of United States federal and state securities laws and that Company is relying in part upon the truth
and accuracy of, and Investor’s compliance with, the representations, warranties, agreements, acknowledgments and understandings
of Investor set forth herein in order to determine the availability of such exemptions and the eligibility of Investor to acquire the
Note.
2.5.
Information. Investor and its advisors, if any, have been furnished with all materials relating to the business, finances and
operations of Company and materials relating to the offer and sale of the Note that have been requested by Investor. Investor and its
advisors, if any, have been afforded the opportunity to ask questions of Company. Neither such inquiries nor any other due diligence
investigations conducted by Investor or its advisors, if any, or its representatives shall modify, amend or affect Investor’s right
to rely on Company’s representations and warranties contained herein. Investor understands that its investment in the Note involves
a high degree of risk. Investor has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment
decision with respect to its acquisition of the Note.
2.6.
No Governmental Review. Investor understands that no United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the Note or the fairness or suitability of the investment in the Note
nor have such authorities passed upon or endorsed the merits of the offering of the Note.
2.7.
Registration. Investor understands that the Note has not been and is not being registered under the 1933 Act or any state securities
laws. Investor further understands and acknowledges that Company will not be obligated in the future to register the Note under the 1933
Act or the Securities Exchange Act of 1934, as amended (the “1934 Act”), or under any state securities laws and that
Company has not made or is making any representation, warranty or covenant, express or implied, as to the availability of any exemption
from registration under the 1933 Act or any applicable state securities laws for the resale, pledge or other transfer of the Note.
2.8.
Validity; Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of Investor and shall
constitute the legal, valid and binding obligations of Investor enforceable against Investor in accordance with its terms, except as
such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.
2.9.
No Conflicts. The execution, delivery and performance by Investor of this Agreement and the consummation by Investor of the transactions
contemplated hereby will not (i) result in a violation of the organizational documents of Investor, (ii) conflict with, or constitute
a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or instrument to which Investor is a party or (iii) result in a
violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to Investor,
except, in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which could not, individually
or in the aggregate, reasonably be expected to have a material adverse effect on the ability of Investor to perform its obligations hereunder.
3.
Company’s Representations and Warranties. Company represents and warrants to Investor that as of the date hereof: (i) Company
is a corporation duly organized, validly existing and in good standing under the laws of its state of incorporation and has the requisite
corporate power to own its properties and to carry on its business as now being conducted; (ii) Company is duly qualified as a foreign
corporation to do business and is in good standing in each jurisdiction where the nature of the business conducted or property owned
by it makes such qualification necessary; (iii) Company has registered its shares of common stock, $0.001 par value per share (the “Common
Stock”), under Section 12(b) of the 1934 Act, and is obligated to file reports pursuant to Section 13 or Section 15(d)
of the 1934 Act; (iv) each of the Transaction Documents and the transactions contemplated hereby and thereby, have been duly and validly
authorized by Company and all necessary actions have been taken; (v) this Agreement, the Note, and the other Transaction Documents have
been duly executed and delivered by Company and constitute the valid and binding obligations of Company enforceable in accordance with
their terms; (vi) the execution and delivery of the Transaction Documents by Company, the issuance of the Note in accordance with the
terms hereof, and the consummation by Company of the other transactions contemplated by the Transaction Documents do not and will not
conflict with or result in a breach by Company of any of the terms or provisions of, or constitute a default under (a) Company’s
formation documents or bylaws, each as currently in effect, (b) any indenture, mortgage, deed of trust, or other material agreement or
instrument to which Company is a party or by which it or any of its properties or assets are bound, including, without limitation, any
listing agreement for the Common Stock, or (c) any existing applicable law, rule, or regulation or any applicable decree, judgment, or
order of any court, United States federal, state or foreign regulatory body, administrative agency, or other governmental body having
jurisdiction over Company or any of Company’s properties or assets; (vii) no further authorization, approval or consent of any
court, governmental body, regulatory agency, self-regulatory organization, or stock exchange or market or the stockholders or any lender
of Company is required to be obtained by Company for the issuance of the Note to Investor or the entering into any of the Transaction
Documents that has not been obtained; (viii) none of Company’s filings with the SEC contained, at the time they were filed, any
untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they were made, not misleading; (ix) Company has filed all reports, schedules,
forms, statements and other documents required to be filed by Company with the SEC under the 1934 Act on a timely basis or has received
a valid extension of such time of filing and has filed any such report, schedule, form, statement or other document prior to the expiration
of any such extension; (x) other than as disclosed in Company’s filings with the SEC, there is no action, suit, proceeding, inquiry
or investigation before or by any court, public board or body pending or, to the knowledge of Company, threatened against or affecting
Company before or by any governmental authority or non-governmental department, commission, board, bureau, agency or instrumentality
or any other person, wherein an unfavorable decision, ruling or finding would have a material adverse effect on Company or which would
adversely affect the validity or enforceability of, or the authority or ability of Company to perform its obligations under, any of the
Transaction Documents; (xi) Company has not consummated any material financing transaction that has not been disclosed in a periodic
filing or current report with the SEC under the 1934 Act; (xii) Company is not, nor has it been at any time in the previous twelve (12)
months, a “Shell Company,” as such type of “issuer” is described in Rule 144(i)(1) under the 1933 Act; (xiii)
with respect to any commissions, placement agent or finder’s fees or similar payments that will or would become due and owing by
Company to any person or entity as a result of this Agreement or the transactions contemplated hereby (“Broker Fees”),
any such Broker Fees will be made in full compliance with all applicable laws and regulations and only to a person or entity that is
a registered investment adviser or registered broker-dealer; (xiv) Investor shall have no obligation with respect to any Broker Fees
or with respect to any claims made by or on behalf of other persons for fees of a type contemplated in this subsection that may be due
in connection with the transactions contemplated hereby and Company shall indemnify and hold harmless each of Investor, Investor’s
employees, officers, directors, stockholders, members, managers, agents, and partners, and their respective affiliates, from and against
all claims, losses, damages, costs (including the costs of preparation and attorneys’ fees) and expenses suffered in respect of
any such claimed Broker Fees; (xv) neither Investor nor any of its officers, directors, stockholders, members, managers, employees, agents
or representatives has made any representations or warranties to Company or any of its officers, directors, employees, agents or representatives
except as expressly set forth in the Transaction Documents and, in making its decision to enter into the transactions contemplated by
the Transaction Documents, Company is not relying on any representation, warranty, covenant or promise of Investor or its officers, directors,
members, managers, employees, agents or representatives other than as set forth in the Transaction Documents; (xvi) Company acknowledges
that the State of Utah has a reasonable relationship and sufficient contacts to the transactions contemplated by the Transaction Documents
and any dispute that may arise related thereto such that the laws and venue of the State of Utah, as set forth more specifically in Section
9.3 below, shall be applicable to the Transaction Documents and the transactions contemplated therein; (xvii) Company acknowledges that
Investor is not registered as a ‘dealer’ under the 1934 Act; and (xviii) Company has performed due diligence and background
research on Investor and its affiliates and has received and reviewed the due diligence packet provided by Investor. Company, being aware
of the matters and legal issues described in subsections (xvii) and (xviii) above, acknowledges and agrees that such matters, or any
similar matters, have no bearing on the transactions contemplated by the Transaction Documents and covenants and agrees it will not use
any such information or legal theory as a defense to performance of its obligations under the Transaction Documents or in any attempt
to avoid, modify, reduce, rescind or void such obligations.
4.
Company Covenants. Until all of Company’s obligations under all of the Transaction Documents are paid and performed in full,
or within the timeframes otherwise specifically set forth below, Company will at all times comply with the following covenants: (i) so
long as Investor beneficially owns the Note, Company will timely file on the applicable deadline all reports required to be filed with
the SEC pursuant to Sections 13 or 15(d) of the 1934 Act, and will take all reasonable action under its control to ensure that adequate
current public information with respect to Company, as required in accordance with Rule 144 of the 1933 Act, is publicly available, and
will not terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations
thereunder would permit such termination; (ii) the Common Stock shall be listed or quoted for trading on any of (a) NYSE, (b) NASDAQ,
(c) OTCQX, or (d) OTCQB; (iii) trading in Company’s Common Stock will not be suspended, halted, chilled, frozen, reach zero bid
or otherwise cease trading on Company’s principal trading market for a period of five (5) consecutive Trading Days (as defined
in the Note); (iv) Company will not, to the best of its knowledge after due inquiry, enter into any kind of financing transaction with
John Kirkland or any entity affiliated with or controlled by John Kirkland without Investor’s prior written consent, which consent
may be granted or withheld in Investor’s sole and absolute discretion; and (v) Company will not issue or guarantee any debt instrument
or incur any debt other than trade payables in the ordinary course of business without Investor’s prior written consent, which
consent may be granted or withheld in Investor’s sole discretion; provided, however, that no consent is required in connection
with the issuance of any debt instrument to any party that is affiliated with the Investor.
5.
Conditions to Company’s Obligation to Sell. The obligation of Company hereunder to issue and sell the Note to Investor at
the Closing is subject to the satisfaction, on or before the Closing Date, of each of the following conditions:
5.1.
Investor shall have executed this Agreement and delivered the same to Company.
5.2.
Investor shall have delivered the Purchase Price to Company in accordance with Section 1.2 above.
6.
Conditions to Investor’s Obligation to Purchase. The obligation of Investor hereunder to purchase the Note at the Closing
is subject to the satisfaction, on or before the Closing Date, of each of the following conditions, provided that these conditions are
for Investor’s sole benefit and may be waived by Investor at any time in its sole discretion:
6.1.
Company shall have executed this Agreement and the Note and delivered the same to Investor.
6.2.
Company shall have delivered to Investor a fully executed Secretary’s Certificate substantially in the form attached hereto as
Exhibit B evidencing Company’s approval of the Transaction Documents.
6.3.
Company shall have delivered to Investor fully executed copies of all other Transaction Documents required to be executed by Company
herein or therein.
7.
Right of First Refusal. If at any time while the Note is outstanding, Company intends to enter into a financing with a Person
pursuant to which it will issue Company securities that (A) have or may have conversion rights of any kind, contingent, conditional or
otherwise, in which the number of shares that may be issued pursuant to such conversion right varies with the market price of the Common
Stock, or (B) are or may become convertible into Common Stock (including without limitation convertible debt, warrants or convertible
preferred stock), with a conversion price that varies with the market price of the Common Stock, even if such security only becomes convertible
following an event of default, the passage of time, or another trigger event or condition (such a financing, a “Future Offering”),
then Company must first offer such opportunity to Investor to provide such financing to Company on the same terms as each respective
Person’s term no later than five (5) Trading Days immediately prior to the Trading Day of the expected announcement of the Future
Offering. Should Investor be unwilling or unable to provide such financing to Company within five (5) Trading Days from Investor’s
receipt of notice of the Future Offering from Company, then Company may obtain such financing from that respective Person upon the exact
same terms and conditions offered by Company to Investor, which transaction must be completed within 30 days after the date of the notice.
If Company does not receive the financing from the respective Person within 30 days after the date of the respective notice, then Company
must again offer the financing opportunity to Investor as described above, and the process detailed above shall be repeated. For avoidance
of doubt, the issuance of shares of Common Stock under, pursuant to, in exchange for or in connection with any contract or instrument,
whether convertible or not, is deemed a Future Offering for purposes hereof if the number of shares of Common Stock to be issued is based
upon or related in any way to the market price of the Common Stock, including, but not limited to, Common Stock issued in connection
with a Section 3(a)(9) exchange, a Section 3(a)(10) settlement, or any other similar settlement or exchange. This Section 7 shall not
apply to an Exempt Issuance (as defined below) or to a registered offering made pursuant to a registration statement on Form S-1 or Form
S-3.
8.
Participation in Future Offering.
8.1.
So long as the Note is outstanding, upon any offer of securities by Company with any term or condition more favorable to the holder of
such security or with a term in favor of the holder of such security that was not similarly provided to Investor in the Transaction Documents
(“Favorable Transaction”), then Company shall notify Investor of such additional or more Favorable Transaction and,
Investor may, at its option, have the right to participate in such Favorable Transaction on the same terms and conditions in an amount
up to the aggregate amount then outstanding under the Note. The types of terms contained in another security that may be more favorable
to the holder of such security include, but are not limited to, terms addressing conversion rights, conversion discounts, conversion
lookback periods, interest rates, original issue discounts, stock sale price, conversion price per share, warrant coverage, warrant exercise
price, and anti-dilution/conversion and exercise price resets.
8.2.
Notwithstanding the foregoing, this Section 8 shall not apply in respect of an Exempt Issuance, a transaction under Section 3(a)(10)
of 1933 Act, a registered offering made pursuant to a registration statement on Form S-1 or Form S-3, or in connection with the satisfaction
of outstanding trade payables. “Exempt Issuance” means the issuance of (a) shares of Common Stock or any securities
of Company 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 (“Common Stock Equivalents”), to consultants, employees, officers
or directors of the Company pursuant to any stock or option plan duly adopted for such purpose or as approved 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 the Note issued hereunder and/or other securities exercisable or exchangeable for or
convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided that such securities have not
been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, floor 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; and (c) securities issued pursuant to acquisitions, dispositions or strategic transactions approved by a majority
of the disinterested directors of the Company.
9.
Miscellaneous. The provisions set forth in this Section 9 shall apply to this Agreement, as well as all other Transaction Documents
as if these terms were fully set forth therein; provided, however, that in the event there is a conflict between any provision set forth
in this Section 9 and any provision in any other Transaction Document, the provision in such other Transaction Document shall govern.
9.1.
Certain Capitalized Terms. To the extent any capitalized term used in any Transaction Document is defined in any other Transaction
Document (as noted therein), such capitalized term shall remain applicable in the Transaction Document in which it is so used even if
the other Transaction Document (wherein such term is defined) has been released, satisfied, or is otherwise cancelled or terminated.
9.2.
Arbitration of Claims. The parties shall submit all Claims (as defined in Exhibit C) arising under this Agreement or any
other Transaction Document or any other agreement between the parties and their affiliates or any Claim relating to the relationship
of the parties to binding arbitration pursuant to the arbitration provisions set forth in Exhibit C attached hereto (the “Arbitration
Provisions”). For the avoidance of doubt, the parties agree that the injunction described in Section 9.4 below may be pursued
in an arbitration that is separate and apart from any other arbitration regarding other Claims arising under the Transaction Documents.
The parties hereby acknowledge and agree that the Arbitration Provisions are unconditionally binding on the parties hereto and are severable
from all other provisions of this Agreement. By executing this Agreement, Company represents, warrants and covenants that Company has
reviewed the Arbitration Provisions carefully, consulted with legal counsel about such provisions (or waived its right to do so), understands
that the Arbitration Provisions are intended to allow for the expeditious and efficient resolution of any dispute hereunder, agrees to
the terms and limitations set forth in the Arbitration Provisions, and that Company will not take a position contrary to the foregoing
representations. Company acknowledges and agrees that Investor may rely upon the foregoing representations and covenants of Company regarding
the Arbitration Provisions.
9.3.
Governing Law; Venue. This Agreement shall be construed and enforced in accordance with, and all questions concerning the construction,
validity, interpretation and performance of this Agreement shall be governed by, the internal laws of the State of Utah, without giving
effect to any choice of law or conflict of law provision or rule (whether of the State of Utah or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than the State of Utah. Each party consents to and expressly agrees that
the exclusive venue for arbitration of any dispute arising out of or relating to any Transaction Document or the relationship of the
parties or their affiliates shall be in Salt Lake County, Utah. Without modifying the parties’ obligations to resolve disputes
hereunder pursuant to the Arbitration Provisions, for any litigation arising in connection with any of the Transaction Documents (and
notwithstanding the terms (specifically including any governing law and venue terms) of any transfer agent services agreement or other
agreement between the Company’s transfer agent (the “Transfer Agent”) and Company, such litigation specifically
includes, without limitation any action between or involving Company and the Transfer Agent or otherwise related to Investor in any way
(specifically including, without limitation, any action where Company seeks to obtain an injunction, temporary restraining order, or
otherwise prohibit the Transfer Agent from issuing shares of Common Stock to Investor for any reason)), each party hereto hereby (i)
consents to and expressly submits to the exclusive personal jurisdiction of any state or federal court sitting in Salt Lake County, Utah,
(ii) expressly submits to the exclusive venue of any such court for the purposes hereof, (iii) agrees to not bring any such action (specifically
including, without limitation, any action where Company seeks to obtain an injunction, temporary restraining order, or otherwise prohibit
the Transfer Agent from issuing shares of Common Stock to Investor for any reason) outside of any state or federal court sitting in Salt
Lake County, Utah, and (iv) waives any claim of improper venue and any claim or objection that such courts are an inconvenient forum
or any other claim, defense or objection to the bringing of any such proceeding in such jurisdiction or to any claim that such venue
of the suit, action or proceeding is improper. Finally, Company covenants and agrees to name Investor as a party in interest in, and
provide written notice to Investor in accordance with Section 9.12 below prior to bringing or filing, any action (including without limitation
any filing or action against any person or entity that is not a party to this Agreement, including without limitation the Transfer Agent)
that is related in any way to the Transaction Documents or any transaction contemplated herein or therein, including without limitation
any action brought by Company to enjoin or prevent the issuance of any shares of Common Stock to Investor by the Transfer Agent, and
further agrees to timely name Investor as a party to any such action. Company acknowledges that the governing law and venue provisions
set forth in this Section 9.3 are material terms to induce Investor to enter into the Transaction Documents and that but for Company’s
agreements set forth in this Section 9.3 Investor would not have entered into the Transaction Documents.
9.4.
Specific Performance. Company acknowledges and agrees Investor may suffer irreparable harm in the event that Company fails to
perform any material provision of this Agreement or any of the other Transaction Documents in accordance with its specific terms. It
is accordingly agreed that Investor shall be entitled to one or more injunctions to prevent or cure breaches of the provisions of this
Agreement or such other Transaction Document and to enforce specifically the terms and provisions hereof or thereof, this being in addition
to any other remedy to which the Investor may be entitled under the Transaction Documents, at law or in equity. Company specifically
agrees that following an Event of Default (as defined in the Note) under the Note, Investor shall have the right to seek and receive
injunctive relief from a court or an arbitrator prohibiting Company from issuing any of its Common Stock or preferred stock to any party
unless the Note is being paid in full simultaneously with such issuance. For the avoidance of doubt, in the event Investor seeks to obtain
an injunction from a court or an arbitrator against Company or specific performance of any provision of any Transaction Document, such
action shall not be a waiver of any right of Investor under any Transaction Document, at law, or in equity, including without limitation
its rights to arbitrate any Claim pursuant to the terms of the Transaction Documents, nor shall Investor’s pursuit of an injunction
prevent Investor, under the doctrines of claim preclusion, issues preclusion, res judicata or other similar legal doctrines, from pursuing
other Claims in the future in a separate arbitration.
9.5.
Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including
pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method
and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
9.6.
Document Imaging. Investor shall be entitled, in its sole discretion, to image or make copies of all or any selection of the agreements,
instruments, documents, and items and records governing, arising from or relating to any of Company’s loans, including, without
limitation, this Agreement and the other Transaction Documents, and Investor may destroy or archive the paper originals. The parties
hereto (i) waive any right to insist or require that Investor produce paper originals, (ii) agree that such images shall be accorded
the same force and effect as the paper originals, (iii) agree that Investor is entitled to use such images in lieu of destroyed or archived
originals for any purpose, including as admissible evidence in any demand, presentment or other proceedings, and (iv) further agree that
any executed facsimile (faxed), scanned, emailed, or other imaged copy of this Agreement or any other Transaction Document shall be deemed
to be of the same force and effect as the original manually executed document.
9.7.
Headings. The headings of this Agreement are for convenience of reference only and shall not form part of, or affect the interpretation
of, this Agreement.
9.8.
Severability. In the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule
of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to
conform to such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect
the validity or enforceability of any other provision hereof.
9.9.
Entire Agreement. This Agreement, together with the other Transaction Documents, contains the entire understanding of the parties
with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither Company nor Investor
makes any representation, warranty, covenant or undertaking with respect to such matters. For the avoidance of doubt, all prior term
sheets or other documents between Company and Investor, or any affiliate thereof, related to the transactions contemplated by the Transaction
Documents (collectively, “Prior Agreements”), that may have been entered into between Company and Investor, or any
affiliate thereof, are hereby null and void and deemed to be replaced in their entirety by the Transaction Documents. To the extent there
is a conflict between any term set forth in any Prior Agreement and the term(s) of the Transaction Documents, the Transaction Documents
shall govern.
9.10.
No Reliance. Company acknowledges and agrees that neither Investor nor any of its officers, directors, members, managers, representatives
or agents has made any representations or warranties to Company or any of its officers, directors, representatives, agents or employees
except as expressly set forth in the Transaction Documents and, in making its decision to enter into the transactions contemplated by
the Transaction Documents, Company is not relying on any representation, warranty, covenant or promise of Investor or its officers, directors,
members, managers, agents or representatives other than as set forth in the Transaction Documents.
9.11.
Amendments. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by both parties
hereto.
9.12.
Notices. Any notice required or permitted hereunder shall be given in writing (unless otherwise specified herein) and shall be
deemed effectively given on the earliest of: (i) the date delivered, if delivered by personal delivery as against written receipt therefor
or by email to an executive officer, or by facsimile (with successful transmission confirmation), (ii) the earlier of the date delivered
or the third Trading Day after deposit, postage prepaid, in the United States Postal Service by certified mail, or (iii) the earlier
of the date delivered or the third Trading Day after mailing by express courier, with delivery costs and fees prepaid, in each case,
addressed to each of the other parties thereunto entitled at the following addresses (or at such other addresses as such party may designate
by five (5) calendar days’ advance written notice similarly given to each of the other parties hereto):
If
to Company:
Inpixon
Attn:
Nadir Ali
2479
East Bayshore Road, Suite 195
Palo
Alto, California 94303
Nadir.Ali@inpixon.com
If
to Investor:
Streeterville
Capital, LLC
Attn:
John Fife
303
East Wacker Drive, Suite 1040
Chicago,
Illinois 60601
jfife@chicagoventure.com
With
a copy to (which copy shall not constitute notice):
Hansen
Black Anderson Ashcraft PLLC
Attn:
Jonathan Hansen
3051
West Maple Loop Drive, Suite 325
Lehi,
Utah 84043
jhansen@hbaa.law
9.13.
Successors and Assigns. This Agreement or any of the severable rights and obligations inuring to the benefit of or to be performed
by Investor hereunder may be assigned by Investor to a third party, including its affiliates, in whole or in part, without the need to
obtain Company’s consent thereto. Company may not assign its rights or obligations under this Agreement or delegate its duties
hereunder without the prior written consent of Investor.
9.14.
Survival. The representations and warranties of Company and the agreements and covenants set forth in this Agreement shall survive
the Closing hereunder notwithstanding any due diligence investigation conducted by or on behalf of Investor. Company agrees to indemnify
and hold harmless Investor and all its officers, directors, employees, attorneys, and agents for loss or damage arising as a result of
or related to any breach or alleged breach by Company of any of its representations, warranties and covenants set forth in this Agreement
or any of its covenants and obligations under this Agreement, including advancement of expenses as they are incurred.
9.15.
Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and
shall execute and deliver all such other agreements, certificates, instruments and documents, as 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.
9.16.
Investor’s Rights and Remedies Cumulative; Liquidated Damages. All rights, remedies, and powers conferred in this Agreement
and the Transaction Documents are cumulative and not exclusive of any other rights or remedies, and shall be in addition to every other
right, power, and remedy that Investor may have, whether specifically granted in this Agreement or any other Transaction Document, or
existing at law, in equity, or by statute, and any and all such rights and remedies may be exercised from time to time and as often and
in such order as Investor may deem expedient. The parties acknowledge and agree that upon Company’s failure to comply with the
provisions of the Transaction Documents, Investor’s damages would be uncertain and difficult (if not impossible) to accurately
estimate because of the parties’ inability to predict future interest rates and future share prices, Investor’s increased
risk, and the uncertainty of the availability of a suitable substitute investment opportunity for Investor, among other reasons. Accordingly,
any fees, charges, and default interest due under the Note and the other Transaction Documents are intended by the parties to be, and
shall be deemed, liquidated damages. The parties agree that such liquidated damages are a reasonable estimate of Investor’s actual
damages and not a penalty, and shall not be deemed in any way to limit any other right or remedy Investor may have hereunder, at law
or in equity. The parties acknowledge and agree that under the circumstances existing at the time this Agreement is entered into, such
liquidated damages are fair and reasonable and are not penalties. All fees, charges, and default interest provided for in the Transaction
Documents are agreed to by the parties to be based upon the obligations and the risks assumed by the parties as of the Closing Date and
are consistent with investments of this type. The liquidated damages provisions of the Transaction Documents shall not limit or preclude
a party from pursuing any other remedy available at law or in equity; provided, however, that the liquidated damages provided
for in the Transaction Documents are intended to be in lieu of actual damages.
9.17.
Attorneys’ Fees and Cost of Collection. In the event any suit, action or arbitration is filed by either party against the
other to interpret or enforce any of the Transaction Documents, the unsuccessful party to such action agrees to pay to the prevailing
party all costs and expenses, including attorneys’ fees incurred therein, including the same with respect to an appeal. The
“prevailing party” shall be the party in whose favor a judgment is entered, regardless of whether judgment is entered on
all claims asserted by such party and regardless of the amount of the judgment; or where, due to the assertion of counterclaims, judgments
are entered in favor of and against both parties, then the arbitrator shall determine the “prevailing party” by taking into
account the relative dollar amounts of the judgments or, if the judgments involve nonmonetary relief, the relative importance and value
of such relief. Nothing herein shall restrict or impair an arbitrator’s or a court’s power to award fees and expenses for
frivolous or bad faith pleading. If (i) the Note is placed in the hands of an attorney for collection or enforcement prior to commencing
arbitration or legal proceedings, or is collected or enforced through any arbitration or legal proceeding, or Investor otherwise takes
action to collect amounts due under the Note or to enforce the provisions of the Note, or (ii) there occurs any bankruptcy, reorganization,
receivership of Company or other proceedings affecting Company’s creditors’ rights and involving a claim under the Note;
then Company shall pay the costs incurred by Investor for such collection, enforcement or action or in connection with such bankruptcy,
reorganization, receivership or other proceeding, including, without limitation, attorneys’ fees, expenses, deposition costs, and
disbursements.
9.18.
Waiver. No waiver of any provision of this Agreement shall be effective unless it is in the form of a writing signed by the party
granting the waiver. No waiver of any provision or consent to any prohibited action shall constitute a waiver of any other provision
or consent to any other prohibited action, whether or not similar. No waiver or consent shall constitute a continuing waiver or consent
or commit a party to provide a waiver or consent in the future except to the extent specifically set forth in writing.
9.19.
Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ANY AND ALL RIGHTS SUCH PARTY MAY HAVE TO DEMAND THAT ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR THE RELATIONSHIPS
OF THE PARTIES HERETO BE TRIED BY JURY. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER COMMON LAW
OR ANY APPLICABLE STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO ACKNOWLEDGES THAT SUCH PARTY IS KNOWINGLY AND VOLUNTARILY
WAIVING SUCH PARTY’S RIGHT TO DEMAND TRIAL BY JURY.
9.20.
Time is of the Essence. Time is expressly made of the essence with respect to each and every provision of this Agreement and the
other Transaction Documents.
9.21.
No Changes; Signature Pages. Company, as well as the person signing each Transaction Document on behalf of Company, represents
and warrants to Investor that it has not made any changes to this Agreement or any other Transaction Document except those that have
been conspicuously disclosed to Investor in a “redline” or similar draft of the applicable Transaction Document, which clearly
marks all changes Company has made to the applicable Transaction Document. Moreover, the versions of the Transaction Documents signed
by Company are the same versions Investor delivered to Company as being the “final” versions of the Transaction Documents
and Company represents and warrants that it has not made any changes to such “final” versions of the Transaction Documents
and that the versions Company signed are the same versions Investor delivered to it. In the event Company has made any changes to any
Transaction Document that are not conspicuously disclosed to Investor in a “redline” or similar draft of the applicable Transaction
Document and that have not been explicitly accepted and agreed upon by Investor, Company acknowledges and agrees that any such changes
shall not be considered part of the final document set. Finally, and in furtherance of the foregoing, Company agrees and authorizes Investor
to compile the “final” versions of the Transaction Documents, which shall consist of Company’s executed signature pages
for all Transaction Documents being applied to the last set of the Transaction Documents that Investor delivered to Company, and Company
agrees that such versions of the Transaction Documents that have been collated by Investor shall be deemed to be the final versions of
the Transaction Documents for all purposes.
9.22.
Voluntary Agreement. Company has carefully read this Agreement and each of the other Transaction Documents and has asked any questions
needed for Company to understand the terms, consequences and binding effect of this Agreement and each of the other Transaction Documents
and fully understand them. Company has had the opportunity to seek the advice of an attorney of Company’s choosing, or has waived
the right to do so, and is executing this Agreement and each of the other Transaction Documents voluntarily and without any duress or
undue influence by Investor or anyone else.
[Remainder
of page intentionally left blank; signature page follows]
IN
WITNESS WHEREOF, the undersigned Investor and Company have caused this Agreement to be duly executed as of the date first above written.
SUBSCRIPTION
AMOUNT:
| Principal Amount
of Note: | |
$ | 6,465,000.00 | |
| | |
| | |
| Purchase Price: | |
$ | 5,000,000.00 | |
| |
INVESTOR: |
| |
|
| |
Streeterville
Capital, LLC |
| |
|
|
| |
By: |
/s/
John M. Fife |
| |
|
John M. Fife, President |
| |
COMPANY: |
|
| |
|
|
| |
Inpixon |
|
| |
|
|
| |
By: |
/s/ Wendy
Loundermon |
| |
Printed Name: |
Wendy
Loundermon |
| |
Title: |
Chief Financial
Officer |
[Signature
Page to Note Purchase Agreement]
ATTACHED
EXHIBITS:
| Exhibit A |
Note - See Exhibit 4.1 to the Current
Report on Form 8-K filed with the SEC on July 22, 2022. |
| Exhibit B |
Secretary’s Certificate |
| Exhibit C |
Arbitration Provisions |
| |
|
Exhibit
C
ARBITRATION
PROVISIONS
1.
Dispute Resolution. For purposes of this Exhibit C, the term “Claims” means any disputes, claims, demands,
causes of action, requests for injunctive relief, requests for specific performance, liabilities, damages, losses, or controversies whatsoever
arising from, related to, or connected with the transactions contemplated in the Transaction Documents and any communications between
the parties related thereto, including without limitation any claims of mutual mistake, mistake, fraud, misrepresentation, failure of
formation, failure of consideration, promissory estoppel, unconscionability, failure of condition precedent, rescission, and any statutory
claims, tort claims, contract claims, or claims to void, invalidate or terminate the Agreement (or these Arbitration Provisions (defined
below)) or any of the other Transaction Documents. For the avoidance of doubt, Investor’s pursuit of an injunction or other Claim
pursuant to these Arbitration Provisions or with a court will not later prevent Investor under the doctrines of claim preclusion, issue
preclusion, res judicata or other similar legal doctrines from pursuing other Claims in a separate arbitration in the future. The parties
to this Agreement (the “parties”) hereby agree that the Claims may be arbitrated in one or more Arbitrations pursuant
to these Arbitration Provisions. The parties hereby agree that the arbitration provisions set forth in this Exhibit C (“Arbitration
Provisions”) are binding on each of them. As a result, any attempt to rescind the Agreement (or these Arbitration Provisions)
or declare the Agreement (or these Arbitration Provisions) or any other Transaction Document invalid or unenforceable pursuant to Section
29 of the 1934 Act or for any other reason is subject to these Arbitration Provisions. Any capitalized term not defined in these Arbitration
Provisions shall have the meaning set forth in the Agreement.
2.
Arbitration. Except as otherwise provided herein, all Claims must be submitted to arbitration (“Arbitration”)
to be conducted exclusively in Salt Lake County, Utah and pursuant to the terms set forth in these Arbitration Provisions. Subject to
the arbitration appeal right provided for in Paragraph 5 below (the “Appeal Right”), the parties agree that the award
of the arbitrator rendered pursuant to Paragraph 4 below (the “Arbitration Award”) shall be (a) final and binding
upon the parties, (b) the sole and exclusive remedy between them regarding any Claims, counterclaims, issues, or accountings presented
or pleaded to the arbitrator, and (c) promptly payable in United States dollars free of any tax, deduction or offset (with respect to
monetary awards). Subject to the Appeal Right, any costs or fees, including without limitation attorneys’ fees, incurred in connection
with or incident to enforcing the Arbitration Award shall, to the maximum extent permitted by law, be charged against the party resisting
such enforcement. The Arbitration Award shall include default interest (as defined or otherwise provided for in the Note, “Default
Interest”) (with respect to monetary awards) at the rate specified in the Note for Default Interest both before and after the
Arbitration Award. Judgment upon the Arbitration Award will be entered and enforced by any state or federal court sitting in Salt Lake
County, Utah.
3.
The Arbitration Act. The parties hereby incorporate herein the provisions and procedures set forth in the Utah Uniform Arbitration
Act, U.C.A. § 78B-11-101 et seq. (as amended or superseded from time to time, the “Arbitration Act”).
Notwithstanding the foregoing, pursuant to, and to the maximum extent permitted by, Section 105 of the Arbitration Act, in the event
of conflict or variation between the terms of these Arbitration Provisions and the provisions of the Arbitration Act, the terms of these
Arbitration Provisions shall control and the parties hereby waive or otherwise agree to vary the effect of all requirements of the Arbitration
Act that may conflict with or vary from these Arbitration Provisions.
4.
Arbitration Proceedings. Arbitration between the parties will be subject to the following:
4.1
Initiation of Arbitration. Pursuant to Section 110 of the Arbitration Act, the parties agree that a party may initiate Arbitration
by giving written notice to the other party (“Arbitration Notice”) in the same manner that notice is permitted under
Section 9.12 of the Agreement; provided, however, that the Arbitration Notice may not be given by email or fax. Arbitration will
be deemed initiated as of the date that the Arbitration Notice is deemed delivered to such other party under Section 9.12 of the Agreement
(the “Service Date”). After the Service Date, information may be delivered, and notices may be given, by email or
fax pursuant to Section 9.12 of the Agreement or any other method permitted thereunder. The Arbitration Notice must describe the nature
of the controversy, the remedies sought, and the election to commence Arbitration proceedings. All Claims in the Arbitration Notice must
be pleaded consistent with the Utah Rules of Civil Procedure.
4.2
Selection and Payment of Arbitrator.
(a)
Within ten (10) calendar days after the Service Date, Investor shall select and submit to Company the names of three (3) arbitrators
that are designated as “neutrals” or qualified arbitrators by Utah ADR Services (http://www.utahadrservices.com) (such three
(3) designated persons hereunder are referred to herein as the “Proposed Arbitrators”). For the avoidance of doubt,
each Proposed Arbitrator must be qualified as a “neutral” with Utah ADR Services. Within five (5) calendar days after Investor
has submitted to Company the names of the Proposed Arbitrators, Company must select, by written notice to Investor, one (1) of the Proposed
Arbitrators to act as the arbitrator for the parties under these Arbitration Provisions. If Company fails to select one of the Proposed
Arbitrators in writing within such 5-day period, then Investor may select the arbitrator from the Proposed Arbitrators by providing written
notice of such selection to Company.
(b)
If Investor fails to submit to Company the Proposed Arbitrators within ten (10) calendar days after the Service Date pursuant to subparagraph
(a) above, then Company may at any time prior to Investor so designating the Proposed Arbitrators, identify the names of three (3) arbitrators
that are designated as “neutrals” or qualified arbitrators by Utah ADR Service by written notice to Investor. Investor may
then, within five (5) calendar days after Company has submitted notice of its Proposed Arbitrators to Investor, select, by written notice
to Company, one (1) of the Proposed Arbitrators to act as the arbitrator for the parties under these Arbitration Provisions. If Investor
fails to select in writing and within such 5-day period one (1) of the three (3) Proposed Arbitrators selected by Company, then Company
may select the arbitrator from its three (3) previously selected Proposed Arbitrators by providing written notice of such selection to
Investor.
(c)
If a Proposed Arbitrator chosen to serve as arbitrator declines or is otherwise unable to serve as arbitrator, then the party that selected
such Proposed Arbitrator may select one (1) of the other three (3) Proposed Arbitrators within three (3) calendar days of the date the
chosen Proposed Arbitrator declines or notifies the parties he or she is unable to serve as arbitrator. If all three (3) Proposed Arbitrators
decline or are otherwise unable to serve as arbitrator, then the arbitrator selection process shall begin again in accordance with this
Paragraph 4.2.
(d)
The date that the Proposed Arbitrator selected pursuant to this Paragraph 4.2 agrees in writing (including via email) delivered to both
parties to serve as the arbitrator hereunder is referred to herein as the “Arbitration Commencement Date”. If an arbitrator
resigns or is unable to act during the Arbitration, a replacement arbitrator shall be chosen in accordance with this Paragraph 4.2 to
continue the Arbitration. If Utah ADR Services ceases to exist or to provide a list of neutrals and there is no successor thereto, then
the arbitrator shall be selected under the then prevailing rules of the American Arbitration Association.
(e)
Subject to Paragraph 4.10 below, the cost of the arbitrator must be paid equally by both parties. Subject to Paragraph 4.10 below, if
one party refuses or fails to pay its portion of the arbitrator fee, then the other party can advance such unpaid amount (subject to
the accrual of Default Interest thereupon), with such amount being added to or subtracted from, as applicable, the Arbitration Award.
4.3
Applicability of Certain Utah Rules. The parties agree that the Arbitration shall be conducted generally in accordance with the
Utah Rules of Civil Procedure and the Utah Rules of Evidence. More specifically, the Utah Rules of Civil Procedure shall apply, without
limitation, to the filing of any pleadings, motions or memoranda, the conducting of discovery, and the taking of any depositions. The
Utah Rules of Evidence shall apply to any hearings, whether telephonic or in person, held by the arbitrator. Notwithstanding the foregoing,
it is the parties’ intent that the incorporation of such rules will in no event supersede these Arbitration Provisions. In the
event of any conflict between the Utah Rules of Civil Procedure or the Utah Rules of Evidence and these Arbitration Provisions, these
Arbitration Provisions shall control.
4.4
Answer and Default. An answer and any counterclaims to the Arbitration Notice shall be required to be delivered to the party initiating
the Arbitration within twenty (20) calendar days after the Arbitration Commencement Date. If an answer is not delivered by the required
deadline, the arbitrator must provide written notice to the defaulting party stating that the arbitrator will enter a default award against
such party if such party does not file an answer within five (5) calendar days of receipt of such notice. If an answer is not filed within
the five (5) day extension period, the arbitrator must render a default award, consistent with the relief requested in the Arbitration
Notice, against a party that fails to submit an answer within such time period.
4.5
Related Litigation. The party that delivers the Arbitration Notice to the other party shall have the option to also commence concurrent
legal proceedings with any state or federal court sitting in Salt Lake County, Utah (“Litigation Proceedings”), subject
to the following: (a) the complaint in the Litigation Proceedings is to be substantially similar to the claims set forth in the Arbitration
Notice, provided that an additional cause of action to compel arbitration will also be included therein, (b) so long as the other party
files an answer to the complaint in the Litigation Proceedings and an answer to the Arbitration Notice, the Litigation Proceedings will
be stayed pending an Arbitration Award (or Appeal Panel Award (defined below), as applicable) hereunder, (c) if the other party fails
to file an answer in the Litigation Proceedings or an answer in the Arbitration proceedings, then the party initiating Arbitration shall
be entitled to a default judgment consistent with the relief requested, to be entered in the Litigation Proceedings, and (d) any legal
or procedural issue arising under the Arbitration Act that requires a decision of a court of competent jurisdiction may be determined
in the Litigation Proceedings. Any award of the arbitrator (or of the Appeal Panel (defined below)) may be entered in such Litigation
Proceedings pursuant to the Arbitration Act.
4.6
Discovery. Pursuant to Section 118(8) of the Arbitration Act, the parties agree that discovery shall be conducted as follows:
(a)
Written discovery will only be allowed if the likely benefits of the proposed written discovery outweigh the burden or expense thereof,
and the written discovery sought is likely to reveal information that will satisfy a specific element of a claim or defense already pleaded
in the Arbitration. The party seeking written discovery shall always have the burden of showing that all of the standards and limitations
set forth in these Arbitration Provisions are satisfied. The scope of discovery in the Arbitration proceedings shall also be limited
as follows:
(i)
To facts directly connected with the transactions contemplated by the Agreement.
(ii)
To facts and information that cannot be obtained from another source or in another manner that is more convenient, less burdensome or
less expensive than in the manner requested.
(b)
No party shall be allowed (i) more than fifteen (15) interrogatories (including discrete subparts), (ii) more than fifteen (15) requests
for admission (including discrete subparts), (iii) more than ten (10) document requests (including discrete subparts), or (iv) more than
three (3) depositions (excluding expert depositions) for a maximum of seven (7) hours per deposition. The costs associated with depositions
will be borne by the party taking the deposition. The party defending the deposition will submit a notice to the party taking the deposition
of the estimated attorneys’ fees that such party expects to incur in connection with defending the deposition. If the party defending
the deposition fails to submit an estimate of attorneys’ fees within five (5) calendar days of its receipt of a deposition notice,
then such party shall be deemed to have waived its right to the estimated attorneys’ fees. The party taking the deposition must
pay the party defending the deposition the estimated attorneys’ fees prior to taking the deposition, unless such obligation is
deemed to be waived as set forth in the immediately preceding sentence. If the party taking the deposition believes that the estimated
attorneys’ fees are unreasonable, such party may submit the issue to the arbitrator for a decision. All depositions will be taken
in Utah.
(c)
All discovery requests (including document production requests included in deposition notices) must be submitted in writing to the arbitrator
and the other party. The party submitting the written discovery requests must include with such discovery requests a detailed explanation
of how the proposed discovery requests satisfy the requirements of these Arbitration Provisions and the Utah Rules of Civil Procedure.
The receiving party will then be allowed, within five (5) calendar days of receiving the proposed discovery requests, to submit to the
arbitrator an estimate of the attorneys’ fees and costs associated with responding to such written discovery requests and a written
challenge to each applicable discovery request. After receipt of an estimate of attorneys’ fees and costs and/or challenge(s) to
one or more discovery requests, consistent with subparagraph (c) above, the arbitrator will within three (3) calendar days make a finding
as to the likely attorneys’ fees and costs associated with responding to the discovery requests and issue an order that (i) requires
the requesting party to prepay the attorneys’ fees and costs associated with responding to the discovery requests, and (ii) requires
the responding party to respond to the discovery requests as limited by the arbitrator within twenty-five (25) calendar days of the arbitrator’s
finding with respect to such discovery requests. If a party entitled to submit an estimate of attorneys’ fees and costs and/or
a challenge to discovery requests fails to do so within such 5-day period, the arbitrator will make a finding that (A) there are no attorneys’
fees or costs associated with responding to such discovery requests, and (B) the responding party must respond to such discovery requests
(as may be limited by the arbitrator) within twenty-five (25) calendar days of the arbitrator’s finding with respect to such discovery
requests. Any party submitting any written discovery requests, including without limitation interrogatories, requests for production
subpoenas to a party or a third party, or requests for admissions, must prepay the estimated attorneys’ fees and costs, before
the responding party has any obligation to produce or respond to the same, unless such obligation is deemed waived as set forth above.
(d)
In order to allow a written discovery request, the arbitrator must find that the discovery request satisfies the standards set forth
in these Arbitration Provisions and the Utah Rules of Civil Procedure. The arbitrator must strictly enforce these standards. If a discovery
request does not satisfy any of the standards set forth in these Arbitration Provisions or the Utah Rules of Civil Procedure, the arbitrator
may modify such discovery request to satisfy the applicable standards, or strike such discovery request in whole or in part.
(e)
Each party may submit expert reports (and rebuttals thereto), provided that such reports must be submitted within sixty (60) days of
the Arbitration Commencement Date. Each party will be allowed a maximum of two (2) experts. Expert reports must contain the following:
(i) a complete statement of all opinions the expert will offer at trial and the basis and reasons for them; (ii) the expert’s name
and qualifications, including a list of all the expert’s publications within the preceding ten (10) years, and a list of any other
cases in which the expert has testified at trial or in a deposition or prepared a report within the preceding ten (10) years; and (iii)
the compensation to be paid for the expert’s report and testimony. The parties are entitled to depose any other party’s expert
witness one (1) time for no more than four (4) hours. An expert may not testify in a party’s case-in-chief concerning any matter
not fairly disclosed in the expert report.
4.6
Dispositive Motions. Each party shall have the right to submit dispositive motions pursuant Rule 12 or Rule 56 of the Utah Rules
of Civil Procedure (a “Dispositive Motion”). The party submitting the Dispositive Motion may, but is not required
to, deliver to the arbitrator and to the other party a memorandum in support (the “Memorandum in Support”) of the
Dispositive Motion. Within seven (7) calendar days of delivery of the Memorandum in Support, the other party shall deliver to the arbitrator
and to the other party a memorandum in opposition to the Memorandum in Support (the “Memorandum in Opposition”). Within
seven (7) calendar days of delivery of the Memorandum in Opposition, as applicable, the party that submitted the Memorandum in Support
shall deliver to the arbitrator and to the other party a reply memorandum to the Memorandum in Opposition (“Reply Memorandum”).
If the applicable party shall fail to deliver the Memorandum in Opposition as required above, or if the other party fails to deliver
the Reply Memorandum as required above, then the applicable party shall lose its right to so deliver the same, and the Dispositive Motion
shall proceed regardless.
4.7
Confidentiality. All information disclosed by either party (or such party’s agents) during the Arbitration process (including
without limitation information disclosed during the discovery process or any Appeal (defined below)) shall be considered confidential
in nature. Each party agrees not to disclose any confidential information received from the other party (or its agents) during the Arbitration
process (including without limitation during the discovery process or any Appeal) unless (a) prior to or after the time of disclosure
such information becomes public knowledge or part of the public domain, not as a result of any inaction or action of the receiving party
or its agents, (b) such information is required by a court order, subpoena or similar legal duress to be disclosed if such receiving
party has notified the other party thereof in writing and given it a reasonable opportunity to obtain a protective order from a court
of competent jurisdiction prior to disclosure, or (c) such information is disclosed to the receiving party’s agents, representatives
and legal counsel on a need to know basis who each agree in writing not to disclose such information to any third party. Pursuant to
Section 118(5) of the Arbitration Act, the arbitrator is hereby authorized and directed to issue a protective order to prevent the disclosure
of privileged information and confidential information upon the written request of either party.
4.8
Authorization; Timing; Scheduling Order. Subject to all other portions of these Arbitration Provisions, the parties hereby authorize
and direct the arbitrator to take such actions and make such rulings as may be necessary to carry out the parties’ intent for the
Arbitration proceedings to be efficient and expeditious. Pursuant to Section 120 of the Arbitration Act, the parties hereby agree that
an Arbitration Award must be made within one hundred twenty (120) calendar days after the Arbitration Commencement Date. The arbitrator
is hereby authorized and directed to hold a scheduling conference within ten (10) calendar days after the Arbitration Commencement Date
in order to establish a scheduling order with various binding deadlines for discovery, expert testimony, and the submission of documents
by the parties to enable the arbitrator to render a decision prior to the end of such 120-day period.
4.9
Relief. The arbitrator shall have the right to award or include in the Arbitration Award (or in a preliminary ruling) any relief
which the arbitrator deems proper under the circumstances, including, without limitation, specific performance and injunctive relief,
provided that the arbitrator may not award exemplary or punitive damages.
4.10
Fees and Costs. As part of the Arbitration Award, the arbitrator is hereby directed to require the losing party (the party being
awarded the least amount of money by the arbitrator, which, for the avoidance of doubt, shall be determined without regard to any statutory
fines, penalties, fees, or other charges awarded to any party) to (a) pay the full amount of any unpaid costs and fees of the Arbitration,
and (b) reimburse the prevailing party for all reasonable attorneys’ fees, arbitrator costs and fees, deposition costs, other discovery
costs, and other expenses, costs or fees paid or otherwise incurred by the prevailing party in connection with the Arbitration.
5.
Arbitration Appeal.
5.1
Initiation of Appeal. Following the entry of the Arbitration Award, either party (the “Appellant”) shall have
a period of thirty (30) calendar days in which to notify the other party (the “Appellee”), in writing, that the Appellant
elects to appeal (the “Appeal”) the Arbitration Award (such notice, an “Appeal Notice”) to a panel
of arbitrators as provided in Paragraph 5.2 below. The date the Appellant delivers an Appeal Notice to the Appellee is referred to herein
as the “Appeal Date”. The Appeal Notice must be delivered to the Appellee in accordance with the provisions of Paragraph
4.1 above with respect to delivery of an Arbitration Notice. In addition, together with delivery of the Appeal Notice to the Appellee,
the Appellant must also pay for (and provide proof of such payment to the Appellee together with delivery of the Appeal Notice) a bond
in the amount of 110% of the sum the Appellant owes to the Appellee as a result of the Arbitration Award the Appellant is appealing.
In the event an Appellant delivers an Appeal Notice to the Appellee (together with proof of payment of the applicable bond) in compliance
with the provisions of this Paragraph 5.1, the Appeal will occur as a matter of right and, except as specifically set forth herein, will
not be further conditioned. In the event a party does not deliver an Appeal Notice (along with proof of payment of the applicable bond)
to the other party within the deadline prescribed in this Paragraph 5.1, such party shall lose its right to appeal the Arbitration Award.
If no party delivers an Appeal Notice (along with proof of payment of the applicable bond) to the other party within the deadline described
in this Paragraph 5.1, the Arbitration Award shall be final. The parties acknowledge and agree that any Appeal shall be deemed part of
the parties’ agreement to arbitrate for purposes of these Arbitration Provisions and the Arbitration Act.
5.2
Selection and Payment of Appeal Panel. In the event an Appellant delivers an Appeal Notice to the Appellee (together with proof
of payment of the applicable bond) in compliance with the provisions of Paragraph 5.1 above, the Appeal will be heard by a three (3)
person arbitration panel (the “Appeal Panel”).
(a)
Within ten (10) calendar days after the Appeal Date, the Appellee shall select and submit to the Appellant the names of five (5) arbitrators
that are designated as “neutrals” or qualified arbitrators by Utah ADR Services (http://www.utahadrservices.com) (such five
(5) designated persons hereunder are referred to herein as the “Proposed Appeal Arbitrators”). For the avoidance of
doubt, each Proposed Appeal Arbitrator must be qualified as a “neutral” with Utah ADR Services, and shall not be the arbitrator
who rendered the Arbitration Award being appealed (the “Original Arbitrator”). Within five (5) calendar days after
the Appellee has submitted to the Appellant the names of the Proposed Appeal Arbitrators, the Appellant must select, by written notice
to the Appellee, three (3) of the Proposed Appeal Arbitrators to act as the members of the Appeal Panel. If the Appellant fails to select
three (3) of the Proposed Appeal Arbitrators in writing within such 5-day period, then the Appellee may select such three (3) arbitrators
from the Proposed Appeal Arbitrators by providing written notice of such selection to the Appellant.
(b)
If the Appellee fails to submit to the Appellant the names of the Proposed Appeal Arbitrators within ten (10) calendar days after the
Appeal Date pursuant to subparagraph (a) above, then the Appellant may at any time prior to the Appellee so designating the Proposed
Appeal Arbitrators, identify the names of five (5) arbitrators that are designated as “neutrals” or qualified arbitrators
by Utah ADR Service (none of whom may be the Original Arbitrator) by written notice to the Appellee. The Appellee may then, within five
(5) calendar days after the Appellant has submitted notice of its selected arbitrators to the Appellee, select, by written notice to
the Appellant, three (3) of such selected arbitrators to serve on the Appeal Panel. If the Appellee fails to select in writing within
such 5-day period three (3) of the arbitrators selected by the Appellant to serve as the members of the Appeal Panel, then the Appellant
may select the three (3) members of the Appeal Panel from the Appellant’s list of five (5) arbitrators by providing written notice
of such selection to the Appellee.
(c)
If a selected Proposed Appeal Arbitrator declines or is otherwise unable to serve, then the party that selected such Proposed Appeal
Arbitrator may select one (1) of the other five (5) designated Proposed Appeal Arbitrators within three (3) calendar days of the date
a chosen Proposed Appeal Arbitrator declines or notifies the parties he or she is unable to serve as an arbitrator. If at least three
(3) of the five (5) designated Proposed Appeal Arbitrators decline or are otherwise unable to serve, then the Proposed Appeal Arbitrator
selection process shall begin again in accordance with this Paragraph 5.2; provided, however, that any Proposed Appeal Arbitrators
who have already agreed to serve shall remain on the Appeal Panel.
(d)
The date that all three (3) Proposed Appeal Arbitrators selected pursuant to this Paragraph 5.2 agree in writing (including via email)
delivered to both the Appellant and the Appellee to serve as members of the Appeal Panel hereunder is referred to herein as the “Appeal
Commencement Date”. No later than five (5) calendar days after the Appeal Commencement Date, the Appellee shall designate in
writing (including via email) to the Appellant and the Appeal Panel the name of one (1) of the three (3) members of the Appeal Panel
to serve as the lead arbitrator in the Appeal proceedings. Each member of the Appeal Panel shall be deemed an arbitrator for purposes
of these Arbitration Provisions and the Arbitration Act, provided that, in conducting the Appeal, the Appeal Panel may only act or make
determinations upon the approval or vote of no less than the majority vote of its members, as announced or communicated by the lead arbitrator
on the Appeal Panel. If an arbitrator on the Appeal Panel ceases or is unable to act during the
Appeal proceedings, a replacement arbitrator shall be chosen in accordance with Paragraph 5.2 above to continue the Appeal as a member
of the Appeal Panel. If Utah ADR Services ceases to exist or to provide a list of neutrals, then the arbitrators for the Appeal
Panel shall be selected under the then prevailing rules of the American Arbitration Association.
(d)
Subject to Paragraph 5.7 below, the cost of the Appeal Panel must be paid entirely by the Appellant.
5.3
Appeal Procedure. The Appeal will be deemed an appeal of the entire Arbitration Award. In conducting the Appeal, the Appeal Panel
shall conduct a de novo review of all Claims described or otherwise set forth in the Arbitration Notice. Subject to the foregoing and
all other provisions of this Paragraph 5, the Appeal Panel shall conduct the Appeal in a manner the Appeal Panel considers appropriate
for a fair and expeditious disposition of the Appeal, may hold one or more hearings and permit oral argument, and may review all previous
evidence and discovery, together with all briefs, pleadings and other documents filed with the Original Arbitrator (as well as any documents
filed with the Appeal Panel pursuant to Paragraph 5.4(a) below). Notwithstanding the foregoing, in connection with the Appeal, the Appeal
Panel shall not permit the parties to conduct any additional discovery or raise any new Claims to be arbitrated, shall not permit new
witnesses or affidavits, and shall not base any of its findings or determinations on the Original Arbitrator’s findings or the
Arbitration Award.
5.4
Timing.
(a)
Within seven (7) calendar days of the Appeal Commencement Date, the Appellant (i) shall deliver or cause to be delivered to the Appeal
Panel copies of the Appeal Notice, all discovery conducted in connection with the Arbitration, and all briefs, pleadings and other documents
filed with the Original Arbitrator (which material Appellee shall have the right to review and supplement if necessary), and (ii) may,
but is not required to, deliver to the Appeal Panel and to the Appellee a Memorandum in Support of the Appellant’s arguments concerning
or position with respect to all Claims, counterclaims, issues, or accountings presented or pleaded in the Arbitration. Within seven (7)
calendar days of the Appellant’s delivery of the Memorandum in Support, as applicable, the Appellee shall deliver to the Appeal
Panel and to the Appellant a Memorandum in Opposition to the Memorandum in Support. Within seven (7) calendar days of the Appellee’s
delivery of the Memorandum in Opposition, as applicable, the Appellant shall deliver to the Appeal Panel and to the Appellee a Reply
Memorandum to the Memorandum in Opposition. If the Appellant shall fail to substantially comply with the requirements of clause (i) of
this subparagraph (a), the Appellant shall lose its right to appeal the Arbitration Award, and the Arbitration Award shall be final.
If the Appellee shall fail to deliver the Memorandum in Opposition as required above, or if the Appellant shall fail to deliver the Reply
Memorandum as required above, then the Appellee or the Appellant, as the case may be, shall lose its right to so deliver the same, and
the Appeal shall proceed regardless.
(b)
Subject to subparagraph (a) above, the parties hereby agree that the Appeal must be heard by the Appeal Panel within thirty (30) calendar
days of the Appeal Commencement Date, and that the Appeal Panel must render its decision within thirty (30) calendar days after the Appeal
is heard (and in no event later than sixty (60) calendar days after the Appeal Commencement Date).
5.5
Appeal Panel Award. The Appeal Panel shall issue its decision (the “Appeal Panel Award”) through the lead arbitrator
on the Appeal Panel. Notwithstanding any other provision contained herein, the Appeal Panel Award shall (a) supersede in its entirety
and make of no further force or effect the Arbitration Award (provided that any protective orders issued by the Original Arbitrator shall
remain in full force and effect), (b) be final and binding upon the parties, with no further rights of appeal, (c) be the sole and exclusive
remedy between the parties regarding any Claims, counterclaims, issues, or accountings presented or pleaded in the Arbitration, and (d)
be promptly payable in United States dollars free of any tax, deduction or offset (with respect to monetary awards). Any costs or fees,
including without limitation attorneys’ fees, incurred in connection with or incident to enforcing the Appeal Panel Award shall,
to the maximum extent permitted by law, be charged against the party resisting such enforcement. The Appeal Panel Award shall include
Default Interest (with respect to monetary awards) at the rate specified in the Note for Default Interest both before and after the Arbitration
Award. Judgment upon the Appeal Panel Award will be entered and enforced by a state or federal court sitting in Salt Lake County, Utah.
5.6
Relief. The Appeal Panel shall have the right to award or include in the Appeal Panel Award any relief which the Appeal Panel
deems proper under the circumstances, including, without limitation, specific performance and injunctive relief, provided that the Appeal
Panel may not award exemplary or punitive damages.
5.7
Fees and Costs. As part of the Appeal Panel Award, the Appeal Panel is hereby directed to require the losing party (the party
being awarded the least amount of money by the arbitrator, which, for the avoidance of doubt, shall be determined without regard to any
statutory fines, penalties, fees, or other charges awarded to any party) to (a) pay the full amount of any unpaid costs and fees of the
Arbitration and the Appeal Panel, and (b) reimburse the prevailing party (the party being awarded the most amount of money by the Appeal
Panel, which, for the avoidance of doubt, shall be determined without regard to any statutory fines, penalties, fees, or other charges
awarded to any part) the reasonable attorneys’ fees, arbitrator and Appeal Panel costs and fees, deposition costs, other discovery
costs, and other expenses, costs or fees paid or otherwise incurred by the prevailing party in connection with the Arbitration (including
without limitation in connection with the Appeal).
6.
Miscellaneous.
6.1
Severability. If any part of these Arbitration Provisions is found to violate or be illegal under applicable law, then such provision
shall be modified to the minimum extent necessary to make such provision enforceable under applicable law, and the remainder of the Arbitration
Provisions shall remain unaffected and in full force and effect.
6.2
Governing Law. These Arbitration Provisions shall be governed by the laws of the State of Utah without regard to the conflict
of laws principles therein.
6.3
Interpretation. The headings of these Arbitration Provisions are for convenience of reference only and shall not form part of,
or affect the interpretation of, these Arbitration Provisions.
6.4
Waiver. No waiver of any provision of these Arbitration Provisions shall be effective unless it is in the form of a writing signed
by the party granting the waiver.
6.5
Time is of the Essence. Time is expressly made of the essence with respect to each and every provision of these Arbitration Provisions.
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