Exhibit 10.10
SECURITIES PURCHASE AGREEMENT
This Securities
Purchase Agreement (this “Agreement”) is dated as of , 2020, between FOXO Technologies, Inc., a Delaware
corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors
and assigns, a “Purchaser” and collectively, the “Purchasers”).
WHEREAS, subject
to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the
“Securities Act”), and Rule 506 promulgated thereunder, the Company desires to issue and sell to each Purchaser, and
each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described in
this Agreement.
NOW, THEREFORE,
IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the Company and each Purchaser agree as follows:
ARTICLE I.
DEFINITIONS
1.1 Definitions.
In addition to the terms defined elsewhere in this Agreement: (a) capitalized terms that are not otherwise defined herein have the meanings
given to such terms in the Debentures (as defined herein), and (b) the following terms have the meanings set forth in this Section 1.1:
“Acquiring Person” shall have the meaning
ascribed to such term in Section 4.7.
“Action” shall have the
meaning ascribed to such term in Section 3.1(j). “Affiliate” means any Person that, directly or indirectly
through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in
and construed under Rule 405 under the Securities Act.
“Board of Directors” means the board of
directors of the Company.
“Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized
or required by law to remain closed due to “stay at home,” “shelter-in-place,” “non-essential employee”
or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority
so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are generally
open for use by customers on such day.
“Buyout
Transaction” means any capital raising transaction effectuated by the Company if the proceeds of such transaction are utilized
by the Company to repay in full the total amount owed under the Debentures concurrently with the closing of such transaction.
“Closing”
means any closing of the purchase and sale of the Securities pursuant to Section 2.1.
“Closing
Date” means the Business Day on which all of the Transaction Documents have been executed and delivered by the applicable parties
thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s
obligations to deliver the Securities, in each case, have been satisfied or waived. Pursuant to the terms of this Agreement, there may
be one or more Closing Dates hereunder.
“Commission” means the United States Securities
and Exchange Commission. “Common Stock” means the Class A common stock of the Company, par value
$0.00001 per share, and any other class
of securities into which such securities may
hereafter be reclassified or changed.
“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is
at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Company
Counsel” means Stinson LLP, with offices located at 50 South Sixth Street, Suite 2600, Minneapolis, MN 55402.
“Conversion Price” shall have the meaning
ascribed to such term in the Debentures. “Debentures” means the 12.5% Original Issue Discount Convertible Debentures
due, subject to the terms therein,
12 months from their date of issuance unless extended pursuant to the terms thereunder, issued by the Company to the Purchasers hereunder,
in the form of Exhibit A attached hereto.
“Escrow
Agent” means Signature Bank, with offices located at 565 Fifth Avenue, New York, NY 10017.
“Evaluation Date” shall
have the meaning ascribed to such term in Section 3.1(s). “Exchange Act” means the Securities Exchange Act of 1934,
as amended, and the
rules and regulations promulgated thereunder.
“Exempt
Issuance” means the issuance of (a) shares of Common Stock, restricted stock units or options to employees, officers or
directors of the Company pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee
members of the Board of Directors or a majority of the members of a committee of non- employee directors established for such
purpose for services rendered to the Company, (b) securities upon the exercise, exchange of or conversion of any Securities 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, exchange price or conversion price of such securities
(other than in connection with stock splits or combinations) or to extend the term of such securities, (c) securities issued
pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided
that such securities are issued as “restricted securities” (as defined in Rule 144) and carry no registration rights
that require or permit the filing of any registration statement in connection therewith, and provided that any such issuance shall
only be to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries, an operating company or an
owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in
addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for
the purpose of raising capital or to an entity whose primary business is investing in securities, (d) restricted stock units,
restricted stock and options to consultants of the Company provided, however, any such issuances to consultants shall not exceed, in
the aggregate, greater than 5% of the current issued and outstanding shares of underlying Common Stock, (e) Securities pursuant to
the Transaction Documents, and (f) securities in a Qualified Offering.
“FCPA” means the Foreign Corrupt
Practices Act of 1977, as amended. “GAAP” shall have the meaning ascribed to such term in Section 3.1(h).
“GWG Holdings”
means GWG Holdings, Inc., a corporation incorporated under the laws of the State of Delaware.
“Indebtedness” shall have the meaning ascribed
to such term in Section 3.1(bb). “Intellectual Property Rights” shall have the meaning ascribed to such term in
Section 3.1(o).
“Legend Removal Date” shall
have the meaning ascribed to such term in Section 4.1(c).
“Liens” means a lien, charge,
pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Lock-Up
Agreements” means the Lock-Up Agreements, dated as of the date hereof, by and among the Company and the directors, and officers,
in the form of Exhibit E attached hereto and by and among the Company and the Purchasers, in the form of Exhibit I.
“Material Adverse Effect”
shall have the meaning assigned to such term in Section 3.1(b).
“Material Permits” shall have the meaning
ascribed to such term in Section 3.1(m).
“Maximum
Amount” means an aggregate of $11,250,000 in principal amount of Debentures representing cash payments from Purchasers of $10,000,000
based on the 12.5% Original Issue Discount on the Debentures.
“Maximum
Rate” shall have the meaning ascribed to such term in Section 5.17. “Minimum Amount” means a minimum of
$5,625,000 in principal amount of Debentures representing cash payments from Purchasers of $5,000,000 based on the 12.5% Original
Issue Discount on the Debentures, provided, however, that a minimum of $2,000,000 must be invested by investors introduced by the
Company and not the Placement Agent.
“Offering”
means the offering of Debentures and Warrants pursuant to this Agreement and the other Transaction Documents.
“Offering
Period” means the earlier of (i) the sale of the Maximum Amount, (ii) termination of the Offering as determined by the
Company and the Placement Agent or (iii) February 15, 2021, which date may be extended by the Placement Agent and the Company in
their joint discretion to March 15, 2021.
“Participation
Maximum” shall have the meaning ascribed to such term in Section 4.12(a).
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company,
joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Placement Agent” means Joseph Gunnar &
Co. LLC.
“Pledged
Securities” means any and all certificates and other instruments representing or evidencing all of the capital stock and other
equity interests of the Subsidiaries.
“Pro Rata Portion”
shall have the meaning ascribed to such term in Section 4.12(e).
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.
“Principal
Amount” means, as to each Purchaser, the amounts set forth below such Purchaser’s signature block on the signature pages
hereto next to the heading “Principal Amount,” in United States Dollars, which shall equal such Purchaser’s Subscription
Amount multiplied by 1.125.
“Public
Information Failure” shall have the meaning ascribed to such term in Section 4.3(b).
“Public
Information Failure Payments” shall have the meaning ascribed to such term in Section 4.3(b).
“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.10.
“Qualified Offering” shall mean an
offering of Common Stock (or units consisting of Common Stock and warrants to purchase Common Stock) for an aggregate price of at
least $5,000,000 resulting in the listing for trading of the Common Stock on the NYSE American, the Nasdaq Capital Market, the
Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange (or any successors to any of the
foregoing).
“Qualified
Offering Price” shall mean the price per share (or unit, if units are offered in the Qualified Offering) at which the Qualified
Offering is made. For the avoidance of doubt, if a unit includes more than one share of Common Stock, “Qualified Offering Price”
shall mean the unit price divided by the number of shares of Common Stock contained in a unit.
“Required Approvals” shall
have the meaning ascribed to such term in Section 3.1(e).
“Required Minimum” means
four times (4x) the maximum aggregate number of shares of Common Stock then issued or potentially issuable in the future pursuant to
the Transaction Documents, including any Underlying Shares issuable upon exercise in full of all Warrants or conversion in full of
all Debentures (including Underlying Shares issuable as payment of interest on the Debentures), ignoring any conversion or exercise
limits set forth therein.
“Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time-to-time,
or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.
“Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time-to-time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect
as such Rule.
“Securities”
means the Debentures, the Warrants, the Warrant Shares and the Underlying Shares.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be
deemed to include locating and/or borrowing shares of Common Stock).
“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for the Debentures and Warrants purchased hereunder as
specified below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,”
in United States dollars and in immediately available funds.
“Subsequent
Financing” shall have the meaning ascribed to such term in Section 4.12(a).
“Subsequent
Financing Notice” shall have the meaning ascribed to such term in Section 4.12(b).
“Subsidiary”
means any subsidiary of the Company as set forth in Schedule 3.1(a) and shall, where applicable, also include any direct or indirect subsidiary
of the Company formed or acquired after the date hereof.
“Subsidiary
Guarantee” means the Subsidiary Guarantee, dated as of the date hereof, by each Subsidiary in favor of the Purchasers, in the
form of Exhibit C attached hereto.
“Termination Date” means the date on which
the Offering expires or is terminated.”
“Trading
Day” means a day on which the principal Trading Market is open for trading.
“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date
in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).
“Transaction
Documents” means this Agreement, the Debentures, the Warrants, the Subsidiary Guarantee, the Lock-Up Agreements, all exhibits
and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.
“Transfer
Agent” a transfer agent to be hereafter determined by the Company and any successor transfer agent of the Company.
“Underlying
Shares” means the Warrant Shares and the shares of Common Stock issued and issuable pursuant to the terms of the Debenture,
including without limitation, shares of Common Stock issued and issuable in lieu of the cash payment of interest on the Debentures in
accordance with the terms of the Debentures, in each case without respect to any limitation or restriction on the conversion of the Debentures
or the exercise of the Warrants.
“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average
price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Stock is not
then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported on the Pink Open Market (or a
similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock
so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected
in good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company,
the fees and expenses of which shall be paid by the Company.
“Warrants”
means, collectively, the Common Stock purchase warrants delivered to the Purchasers at the Closing in accordance with Section 2.2(a) hereof,
which Warrants shall be exercisable immediately and have a term of exercise equal to three (3) years, in the form of Exhibit D attached
hereto.
“Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Warrants.
ARTICLE II.
PURCHASE AND
SALE
2.1 Closing.
On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and
delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly, agree
to purchase, Debentures and Warrants as set forth on each Purchaser’s signature page hereto. The Company shall have discretion
regarding whether to accept an investor and for such investor to become a Purchaser under this Agreement and may reject any proposed
investor. Each Purchaser shall have delivered to the Escrow Agent pursuant to the instructions contained on Schedule 2.1, via wire
transfer or a certified check, immediately available funds equal to such Purchaser’s Subscription Amount as set forth on the
signature page hereto executed by such Purchaser. Upon the Escrow Agent’s receipt of the Minimum Amount and the exchange of
items set forth in Section 2.2, the Company and the Placement Agent may give notice to the Escrow Agent to arrange an initial
Closing. At any Closing hereunder, the Company shall deliver to each Purchaser its respective Debenture and Warrant, as determined
pursuant to Section 2.2(a), and the Company and each Purchaser shall deliver the other items set forth in Section 2.2 deliverable at
the Closing. Following the initial Closing where at least the Minimum Amount is sold, subsequent closings may be held up to the sale
of the Maximum Amount. Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur
at such location as the parties shall mutually agree. Closings hereunder shall only be held during the Offering Period and in no
event shall a Closing occur after the Termination Date.
2.2
Deliveries.
(a) On
or prior to the Closing Date, the Company shall deliver or cause to be delivered to the Placement Agent on behalf of each Purchaser the
following:
(i) this
Agreement duly executed by the Company;
(ii) a
Debenture with a principal amount equal to such Purchaser’s Principal Amount, registered in the name of such Purchaser;
(iii)
a Warrant registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal to 100% of the shares
of Common Stock initially issuable pursuant to such Purchaser’s Debenture (without regard for any beneficial ownership
limitations) with an exercise price equal to the lesser of (i) the Qualified Offering Price, or (ii) the Original Issue Price as
defined in the Company’s Certificate of Incorporation;
(iv)
the Subsidiary Guarantee, duly executed by the parties thereto; and
(v)
the Lock-Up Agreements.
(b) On
or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company the following:
(i) this
Agreement duly executed by such Purchaser;
(ii) such
Purchaser’s Subscription Amount as to the Closing by wire transfer to the Escrow Agent to the account specified in Schedule 2.1
hereto; and
(iii)
Purchaser Questionnaire in the form of Exhibit F hereto.
(a) The
obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:
(i) the
accuracy in all material respects on (or, to the extent representations or warranties are qualified by materiality or Material Adverse
Effect, in all respects) the Closing Date of the representations and warranties of the Purchasers contained herein (unless as of a specific
date therein in which case they shall be accurate as of such date);
(ii)
all obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been
performed; and
(iii) the delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.
(b) The
respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being met (it
being understood that the Company may waive any of the conditions for any Closing hereafter):
(i) the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect,
in all respects) when made and on the Closing Date of the representations and warranties of the Company contained herein (unless as of
a specific date therein in which case they shall be accurate as of such date);
(ii) all
obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;
(iii) the
delivery by the Escrow Agent on behalf of the Company of the items set forth in Section 2.2(a) of this Agreement; and
(iv) there
shall have been no Material Adverse Effect with respect to the Company since the date hereof.
ARTICLE
III.
REPRESENTATIONS AND WARRANTIES
3.1 Representations
and Warranties of the Company. The Company hereby makes the following representations and warranties to each Purchaser:
(a) Subsidiaries.
All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1(a). Except as set forth on Schedule 3.1(a), the
Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens,
and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable
and free of preemptive and similar rights to subscribe for or purchase securities. If the Company has no subsidiaries, all other references
to the Subsidiaries or any of them in the Transaction Documents shall be disregarded.
(b)
Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized,
validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite
power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the
Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of
incorporation, bylaws or other organizational or charter documents, except as disclosed on Schedule 3.1(b). Each of the Company and
the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each
jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where
the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a
material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on
the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries,
taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely
basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and
no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail
such power and authority or qualification.
(c)
Authorization; Enforcement.
(i) The
Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement
and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery
of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions contemplated
hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the
Company, the Board of Directors or the Company’s stockholders in connection herewith or therewith other than in connection with
the Required Approvals. This Agreement and each other Transaction Document to which it is a party has been (or upon delivery will have
been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and
binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement
of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief
or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
(ii) With
respect to the Subsidiary Guarantee, each of the Subsidiaries has the requisite corporate power and authority to enter into and to consummate
the transactions contemplated by such agreement and otherwise to carry out its obligations thereunder. The execution and delivery of the
Subsidiary Guarantee and the consummation by the Company of the transactions contemplated thereby have been duly authorized by all necessary
action on the part of the Company, and no further action is required by the respective Subsidiary, its managers or its members in connection
therewith. The Subsidiary Guarantee has been (or upon delivery will have been) duly executed by the respective Subsidiaries and, when
delivered in accordance with the terms thereof, will constitute the valid and binding obligation of the respective Subsidiary enforceable
against such Subsidiary in accordance with its terms, except (A) as listed by general equitable principals and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally,
(B) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (C) insofar
as indemnification and contribution provisions may be limited by applicable law.
(d) No
Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is
a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby do not
and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation,
bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse
of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company
or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution or similar adjustments, acceleration or cancellation
(with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or
Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset
of the Company or any Subsidiary is bound or affected except as disclosed on Schedule 3.1(d), or (iii) subject to the Required Approvals,
conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court
or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations),
or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and
(iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.
(e) Filings,
Consents and Approvals. Except as disclosed on Schedule 3.1(e),the Company is not required to obtain any consent, waiver, authorization
or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental
authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other
than: (i) the filings required pursuant to Section 4.6 of this Agreement, and (ii) the filing of Form D with the Commission and such filings
as are required to be made under applicable state securities laws (collectively, the “Required Approvals”).
(f) Issuance
of the Securities. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents,
will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions
on transfer provided for in the Transaction Documents. The Underlying Shares, when issued in accordance with the terms of the Transaction
Documents, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions
on transfer provided for in the Transaction Documents. On or before the Closing Date, the Company will reserve from its duly authorized
capital stock a number of shares of Common Stock for issuance of the Underlying Shares at least equal to the Required Minimum on the date
hereof.
(g)
Capitalization. The capitalization of the Company as of the date hereof is as set forth on Schedule 3.1(g). No Person has any right
of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by
the Transaction Documents, except as disclosed on Schedule 3.1(g). Except as disclosed on Schedule 3.1(g), there are no outstanding
options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights
or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any
shares of Common Stock or the capital stock of any Subsidiary, or contracts, commitments, understandings or arrangements by which
the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents or
capital stock of any Subsidiary. Except as set forth on Schedule 3.1(g), the issuance and sale of the Securities will not
obligate the Company or any Subsidiary to issue shares of Common Stock or other securities to any Person (other than the
Purchasers). Except as set forth on Schedule 3.1(g), there are no outstanding securities or instruments of the Company or any
Subsidiary with any provision that adjusts the exercise, conversion, exchange or reset price of such security or instrument upon an
issuance of securities by the Company or any Subsidiary. There are no outstanding securities or instruments of the Company or any
Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary.
Except as set forth on Schedule 3.1(g), the Company does not have any stock appreciation rights or “phantom
stock” plans or agreements or any similar plan or agreement. All of the outstanding shares of capital stock of the Company are
duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities
laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or
purchase securities. No further approval or authorization of any stockholder, the Board of Directors or others is required for the
issuance and sale of the Securities. Except as set forth on Schedule 3.1(g), there are no stockholders agreements, voting
agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the
knowledge of the Company, between or among any of the Company’s stockholders.
(h)
Financial Statements. Except as set forth on Schedule 3.1(h), the Company’s financial statements have been prepared in accordance
with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and
its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.
(i)
Material Changes; Undisclosed Events, Liabilities or Developments. Except as disclosed on Schedule 3.1(i) since the date of the
latest audited financial statements (i) there has been no event, occurrence or development that has had or that could reasonably be
expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other
than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B)
liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP, (iii) the Company has not
altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property
to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the
Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option
plans. Except for the issuance of the Securities contemplated by this Agreement or as set forth herein, no event, liability, fact,
circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the
Company or its Subsidiaries or their respective businesses, prospects, properties, operations, assets or financial condition, that
would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed
made that has not been disclosed in this Agreement at least 1 calendar day prior to the date that this representation is made.
(j) Litigation.
There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened
against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental
or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which
(i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or
(ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the
Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation
of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge
of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former
director or officer of the Company.
(k) Labor
Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company,
which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees
is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company
nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships
with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected
to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement
or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued
employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any
of the foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and
regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the
failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(l)
Compliance. Except as disclosed on Schedule 3.1(l) neither the Company nor any Subsidiary: (i) is in default under or in violation of
(and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company
or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is
in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or
any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree
or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance
or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes,
environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each
case as could not have or reasonably be expected to result in a Material Adverse Effect.
(m) Environmental
Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating to pollution or
protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata),
including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations,
codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations,
issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have received all permits licenses or other
approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) are in compliance with
all terms and conditions of any such permit, license or approval where in each clause (i), (ii) and (iii), the failure to so comply could
be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.
(n) Regulatory
Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state,
local or foreign regulatory authorities necessary to conduct their respective businesses, except where the failure to possess such permits
could not reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither the Company nor
any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit.
(o)
Title to Assets. Except as set forth on Schedule 3.1(o), the Company and the Subsidiaries have good and marketable title in fee
simple to all real property owned by them and good and marketable title in all personal property owned by them that is material to
the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not
materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such
property by the Company and the Subsidiaries and (ii) Liens for the payment of federal, state or other taxes, for which appropriate
reserves have been made therefor in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties.
Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and
enforceable leases with which the Company and the Subsidiaries are in compliance.
(p) Intellectual
Property. Except as set forth on Schedule 3.1(p), the Company and the Subsidiaries have, or have rights to use, all patents, patent applications,
trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual
property rights and similar rights necessary or required for use in connection with their respective businesses and which the failure
to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). None of, and neither the
Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated
or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement. Neither
the Company nor any Subsidiary has received a written notice of a claim or otherwise has any knowledge that the Intellectual Property
Rights violate or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have a Material Adverse
Effect. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by
another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable security measures to
protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(q) Insurance.
The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged. The Company shall put in
place directors and officers insurance coverage at least equal to the aggregate Subscription Amount prior to Closing unless the Placement
Agent confirms in a writing signed by its CEO that a lesser amount of coverage is acceptable. Neither the Company nor any Subsidiary has
any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.
(r)
Transactions with Affiliates and Employees. Except as set forth in Schedule 3.1(r), none of the officers or directors of the Company
or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party
to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal
property to or from providing for the borrowing of money from or lending of money to, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, other than for (i) payment
of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii)
other employee benefits, including stock option agreements under any stock option plan of the Company.
(s)
[reserved]
(t) Certain
Fees. Except with respect to the fees and expenses payable to the Placement Agent as described in Section 5.2 hereto, no brokerage or
finder’s fees or commissions or other remuneration are or will be payable by the Company or any Subsidiaries directly or indirectly
to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions
contemplated by the Transaction Documents. The Purchasers shall have no obligation with respect to any fees or with respect to any claims
made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions
contemplated by the Transaction Documents.
(u) Private
Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, no registration under
the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers as contemplated hereby. The issuance
and sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market.
(v) Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will not be or be
an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company
shall conduct its business in a manner so that it will not become an “investment company” subject to registration under the
Investment Company Act of 1940, as amended.
(w) Registration
Rights. No Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities Act of any securities
of the Company or any Subsidiaries.
(x)
[reserved]
(y)
[reserved]
(z)
Disclosure. The Company understands and confirms that the Purchasers will rely on the foregoing representation in effecting
transactions in securities of the Company. All of the disclosure furnished by or on behalf of the Company to the Purchasers
regarding the Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby, including the
Transaction Documents and disclosure schedules to this Agreement, is true and correct and does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. The press releases disseminated by the Company during the twelve months
preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances
under which they were made and when made, not misleading. The Company acknowledges and agrees that no Purchaser makes or has made
any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in
Section 3.2 hereof.
(aa) No Integrated
Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, neither the Company,
nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security
or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities to be integrated with
prior offerings by the Company for purposes of (i) the Securities Act which would require the registration of any such securities under
the Securities Act, or (ii) any applicable shareholder approval provisions of any Trading Market on which any of the securities of the
Company are listed or designated.
(bb) Solvency.
Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the Company
of the proceeds from the sale of the Minimum Amount of Securities hereunder, the Company will have sufficient cash to operate its business
as currently operated for a period of three months from the initial Closing Date. The Company has no knowledge of any facts or circumstances
which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction
within one year from the Closing Date. Schedule 3.1(bb) sets forth as of the date hereof all outstanding secured and unsecured
Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement,
“Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade
accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect
of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the
notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary
course of business; and (z) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in
accordance with GAAP. Except as disclosed on Schedule 3.1(bb), neither the Company nor any Subsidiary is in default with respect
to any Indebtedness.
(cc) Tax
Status. Except as disclosed on Schedule 3.1(cc) and except for matters that would not, individually or in the aggregate, have
or reasonably be expected to result in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United
States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction
to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined
to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment
of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid
taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any
Subsidiary know of no basis for any such claim.
(dd) No General
Solicitation. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of the Securities by any
form of general solicitation or general advertising. The Company has offered the Securities for sale only to the Purchasers and certain
other “accredited investors” within the meaning of Rule 501 under the Securities Act.
(ee) Foreign
Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other
person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions, gifts,
entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign
or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii)
failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the
Company is aware) which is in violation of law or (iv) violated in any material respect any provision of FCPA.
(ff) Seniority.
As of the Closing Date, except as provided in Schedule 3.1(ff), no Indebtedness or other claim against the Company is senior to
the Debentures in right of payment, whether with respect to interest or upon liquidation or dissolution, or otherwise, other than indebtedness
secured by purchase money security interests (which is senior only as to underlying assets covered thereby) and capital lease obligations
(which is senior only as to the property covered thereby).
(gg) No Disagreements
with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably anticipated by the Company
to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and the Company is current
with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability to perform any of its obligations
under any of the Transaction Documents.
(hh) Acknowledgment
Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the Purchasers is acting solely
in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby.
The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity)
with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or any of their
respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely
incidental to the Purchasers’ purchase of the Securities. The Company further represents to each Purchaser that the Company’s
decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions
contemplated hereby by the Company and its representatives.
(ii) [reserved]
(jj) [reserved]
(kk) [reserved]
(ll) Office
of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director, officer, agent, employee
or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department (“OFAC”).
(mm) U.S.
Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the meaning
of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s request.
(nn) Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956,
as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent
(5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or more of the total equity of a bank
or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries or
Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to
regulation by the Federal Reserve.
(oo) Money
Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable
financial record- keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable
money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”),
and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or
any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.
(pp) No Disqualification
Events. With respect to the Securities to be offered and sold hereunder in reliance on Rule 506 under the Securities Act, none of
the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company participating
in the offering hereunder, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated
on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company
in any capacity at the time of sale (each, an “Issuer Covered Person” and, together, “Issuer Covered Persons”)
is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a
“Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has
exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company has complied,
to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the Purchasers a copy of any disclosures
provided thereunder.
(qq) Other
Covered Persons. The Company is not aware of any person (other than any Issuer Covered Person) that has been or will be paid (directly
or indirectly) remuneration for solicitation of purchasers in connection with the sale of any Securities.
(rr) Notice
of Disqualification Events. The Company will notify the Purchasers in writing, prior to the Closing Date of (i) any Disqualification
Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a Disqualification Event relating
to any Issuer Covered Person.
3.2 Representations
and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as of the date
hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case they shall be accurate
as of such date):
(a) Organization;
Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company or similar
power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry
out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by such Purchaser
of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate, partnership, limited
liability company or similar action, as applicable, on the part of such Purchaser. Each Transaction Document to which it is a party has
been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid
and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except (i) as limited by general
equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
(b) Own
Account. Such Purchaser understands that the Securities are “restricted securities” and have not been registered under the
Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account and not with a
view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable state
securities law, has no present intention of distributing any of such Securities in violation of the Securities Act or any applicable state
securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution
of such Securities in violation of the Securities Act or any applicable state securities law (this representation and warranty not limiting
such Purchaser’s right to sell the Securities pursuant to a registration statement covering the resale of such security or otherwise
in compliance with applicable federal and state securities laws). Such Purchaser is acquiring the Securities hereunder in the ordinary
course of its business.
(c) Purchaser
Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each date on which it
exercises any Warrants or converts any Debentures it will be either an “accredited investor” as defined in Rule 501(a)(1),
(a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act.
(d) Experience
of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience
in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities,
and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk of an investment in the
Securities and, at the present time, is able to afford a complete loss of such investment.
(e) General
Solicitation. Such Purchaser is not, to such Purchaser’s knowledge, purchasing the Securities as a result of any advertisement,
article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over
television or radio or presented at any seminar or, to the knowledge of such Purchaser, any other general solicitation or general advertisement.
(f) Access
to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including all exhibits
and schedules thereto) and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive
answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities and the merits and
risks of investing in the Securities; (ii) access to information about the Company and its financial condition, results of operations,
business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain
such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make
an informed investment decision with respect to the investment.
(g)
[reserved]
The
Company acknowledges and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such Purchaser’s
right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties
contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement
or the consummation of the transactions contemplated hereby. Notwithstanding the foregoing, for the avoidance of doubt, nothing contained
herein shall constitute a representation or warranty, or preclude any actions, with respect to locating or borrowing shares in order
to effect Short Sales or similar transactions in the future.
ARTICLE
IV.
OTHER
AGREEMENTS OF THE PARTIES
4.1 Transfer
Restrictions.
(a) The
Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities
other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Purchaser or in connection
with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion
of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the
Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and
shall have the rights and obligations of a Purchaser under this Agreement.
(b) The
Purchasers agree to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Securities in the following
form:
[NEITHER]
THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS [EXERCISABLE] [CONVERTIBLE] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES
AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY [AND THE SECURITIES ISSUABLE
UPON [EXERCISE] [CONVERSION] OF THIS SECURITY] MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER
OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES
ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.
The
Company acknowledges and agrees that a Purchaser may from time-to-time pledge pursuant to a bona fide margin agreement with a registered
broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited investor”
as defined in Rule 501(a) under the Securities Act and, if required under the terms of such arrangement, such Purchaser may transfer
pledged or secured Securities to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company
and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no
notice shall be required of such pledge. At the appropriate Purchaser’s expense, the Company will execute and deliver such reasonable
documentation as a pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the Securities,
including, if the Securities have been registered for resale pursuant to a registration statement, the preparation and filing of any
required prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable provision of the Securities Act to appropriately
amend the list of selling stockholders thereunder.
(c) Certificates
evidencing the Underlying Shares shall not contain any legend (including the legend set forth in Section 4.1(b) hereof): (i) while a
registration statement covering the resale of such security is effective under the Securities Act, (ii) following any sale of such Underlying
Shares pursuant to Rule 144 (assuming cashless exercise of the Warrants), or (iii) if such legend is not required under applicable requirements
of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission). The Company shall,
at its expense, cause its counsel, or at the option of a Purchaser, counsel determined by such Purchaser, to issue a legal opinion to
the Transfer Agent or the Purchaser promptly if required by the Transfer Agent to affect the removal of the legend hereunder, or if requested
by a Purchaser, respectively subject to compliance with the Securities Act and/or Rule 144 (for the avoidance of doubt, the Company shall
pay all costs associated with such opinions). If all or any portion of a Debenture is converted or Warrant is exercised at a time when
there is an effective registration statement to cover the resale of the Underlying Shares, or if such Underlying Shares may be sold under
Rule 144 or if such legend is not otherwise required under applicable requirements of the Securities Act (including judicial interpretations
and pronouncements issued by the staff of the Commission) then such Underlying Shares shall be issued free of all legends. The Company
agrees that at such time as such legend is no longer required under this Section 4.1(c), it will, no later than the earlier of (i) three
(3) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined below) following the delivery
by a Purchaser to the Company or the Transfer Agent of a certificate representing Underlying Shares, as applicable, issued with a restrictive
legend (such date, the “Legend Removal Date”), deliver or cause to be delivered to such Purchaser a certificate representing
such shares that is free from all restrictive and other legends. The Company may not make any notation on its records or give instructions
to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section 4. Certificates for Underlying Shares subject
to legend removal hereunder shall be transmitted by the Transfer Agent to the Purchaser by crediting the account of the Purchaser’s
prime broker with the Depository Trust Company System as directed by such Purchaser. As used herein, “Standard Settlement Period”
means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect
to the Common Stock as in effect on the date of delivery of a certificate representing Underlying Shares, as applicable, issued with
a restrictive legend.
(d) In
addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, (i) as partial liquidated
damages and not as a penalty, for each $1,000 of Underlying Shares (based on the VWAP of the Common Stock on the date such Securities
are submitted to the Transfer Agent) delivered for removal of the restrictive legend and subject to Section 4.1(c), $5 per Trading Day
(increasing to $10 per Trading Day five (5) Trading Days after such damages have begun to accrue) for each Trading Day after the Legend
Removal Date until such certificate is delivered without a legend and (ii) if the Company fails to (a) issue and deliver (or cause to
be delivered) to a Purchaser by the Legend Removal Date a certificate representing the Securities so delivered to the Company by such
Purchaser that is free from all restrictive and other legends and (b) if after the Legend Removal Date such Purchaser purchases (in an
open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Purchaser of all or any portion
of the number of shares of Common Stock, or a sale of a number of shares of Common Stock equal to all or any portion of the number of
shares of Common Stock that such Purchaser anticipated receiving from the Company without any restrictive legend, then, an amount equal
to the excess of such Purchaser’s total purchase price (including brokerage commissions and other out-of-pocket expenses, if any)
for the shares of Common Stock so purchased (including brokerage commissions and other out-of-pocket expenses, if any) (the “Buy-In
Price”) over the product of (A) such number of Underlying Shares that the Company was required to deliver to such Purchaser
by the Legend Removal Date multiplied by (B) the lowest closing sale price of the Common Stock on any Trading Day during the period commencing
on the date of the delivery by such Purchaser to the Company of the applicable Underlying Shares (as the case may be) and ending on the
date of such delivery and payment under this clause (ii).
(e) Each
Purchaser, severally and not jointly with the other Purchasers, agrees with the Company that such Purchaser will sell any Securities
pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or
an exemption therefrom, and that if Securities are sold pursuant to a registration statement, they will be sold in compliance with the
plan of distribution set forth therein, and acknowledges that the removal of the restrictive legend from certificates representing Securities
as set forth in this Section 4.1 is predicated upon the Company’s reliance upon this understanding.
4.2 Acknowledgment
of Dilution. The Company acknowledges that the issuance of the Securities may result in dilution of the outstanding shares of Common
Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges that its obligations under
the Transaction Documents, including, without limitation, its obligation to issue the Underlying Shares pursuant to the Transaction Documents,
are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of
any such dilution or any claim the Company may have against any Purchaser and regardless of the dilutive effect that such issuance may
have on the ownership of the other stockholders of the Company.
4.3
Furnishing of Information; Public Information.
(a) Until
the time that no Purchaser owns Securities, the Company covenants, upon consummation of the Qualified Offering, to maintain the registration
of the Common Stock under Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof and
file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange
Act even if the Company is not then subject to the reporting requirements of the Exchange Act.
(b) At
any time during the period commencing from the six (6) month anniversary of the date of the Qualified Offering and ending at such time
that all of the Securities may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise
without restriction or limitation pursuant to Rule 144, if the Company (i) shall fail for any reason to satisfy the current public information
requirement under Rule 144(c) or (ii) has ever been an issuer described in Rule 144 (i)(1)(i) or becomes an issuer in the future, and
the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (a “Public Information Failure”) then,
in addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated
damages and not as a penalty, by reason of any such delay in or reduction of its ability to sell the Securities, an amount in cash equal
to two percent (2.0%) of the aggregate Subscription Amount of such Purchaser’s Securities on the day of a Public Information Failure
and on every thirtieth (30th) day (pro-rated for periods totaling less than thirty days) thereafter until the earlier of (a) the date
such Public Information Failure is cured and (b) such time that such public information is no longer required for the Purchasers to transfer
the Underlying Shares pursuant to Rule 144. The payments to which a Purchaser shall be entitled pursuant to this Section 4.3(b) are referred
to herein as “Public Information Failure Payments.” Public Information Failure Payments shall be paid on the earlier
of (i) the last day of the calendar month during which such Public Information Failure Payments are incurred and (ii) the third (3rd)
Business Day after the event or failure giving rise to the Public Information Failure Payments is cured. In the event the Company fails
to make Public Information Failure Payments in a timely manner, such Public Information Failure Payments shall bear interest at the rate
of 1.5% per month (prorated for partial months) until paid in full. Nothing herein shall limit such Purchaser’s right to pursue
actual damages for the Public Information Failure, and such Purchaser shall have the right to pursue all remedies available to it at
law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.
4.4 Integration.
The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the
registration under the Securities Act of the sale of the Securities or that would be integrated with the offer or sale of the Securities
for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing
of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.
4.5 Conversion
and Exercise Procedures. Each of the form of Notice of Exercise included in the Warrants and the form of Notice of Conversion included
in the Debentures set forth the totality of the procedures required of the Purchasers in order to exercise the Warrants or convert the
Debentures. Without limiting the preceding sentences, no ink-original Notice of Exercise or Notice of Conversion shall be required, nor
shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise or Notice of Conversion form be
required in order to exercise the Warrants or convert the Debentures. No additional legal opinion, other information or instructions
shall be required of the Purchasers to exercise their Warrants or convert their Debentures. The Company shall honor exercises of the
Warrants and conversions of the Debentures and shall deliver Underlying Shares in accordance with the terms, conditions and time periods
set forth in the Transaction Documents.
4.6
Publicity. Following the consummation of a Qualified Offering, the Company represents to the Purchasers that it shall have publicly
disclosed all material, non-public information delivered to any of the Purchasers by the Company or any of its Subsidiaries, or any
of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction
Documents. In addition, effective upon the consummation of a Qualified Offering, the Company acknowledges and agrees that any and
all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its
Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates on the one hand, and any of the
Purchasers or any of their Affiliates on the other hand, shall terminate. The Company and each Purchaser shall consult with each
other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any
Purchaser shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company,
with respect to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press
release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law,
in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or
communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name
of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of
such Purchaser, except (a) as required by federal securities law in connection with the filing of final Transaction Documents with
the Commission and (b) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company
shall provide the Purchasers with prior notice of such disclosure permitted under this clause.
4.7 Shareholder
Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any Purchaser
is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution
under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that any Purchaser
could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents
or under any other agreement between the Company and the Purchasers.
4.8 Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents,
which shall be disclosed pursuant to Section 4.6, the Company covenants and agrees that following the consummation of a Qualified Offering,
neither it, nor any other Person acting on its behalf will provide any Purchaser or its agents or counsel with any information that constitutes,
or the Company reasonably believes constitutes, material non-public information, unless prior thereto such Purchaser shall have consented
to the receipt of such information and agreed with the Company to keep such information confidential. The Company understands and confirms
that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company. To the extent
that the Company delivers any material, non-public information to a Purchaser without such Purchaser’s consent, the Company hereby
covenants and agrees that such Purchaser shall not have any duty of confidentiality to the Company, any of its Subsidiaries, or any of
their respective officers, directors, agents, employees or Affiliates, or a duty to the Company, any of its Subsidiaries or any of their
respective officers, directors, agents, employees or Affiliates not to trade on the basis of, such material, non-public information,
provided that the Purchaser shall remain subject to applicable law. The Company understands and confirms that each Purchaser shall be
relying on the foregoing covenant in effecting transactions in securities of the Company.
4.9 Use
of Proceeds. Except as set forth on Schedule 4.9 attached hereto, the Company shall use the net proceeds from the sale of the
Securities hereunder for working capital purposes and shall not use such proceeds: (a) for the satisfaction of any portion of the
Company’s debt (other than payment of trade payables in the ordinary course of the Company’s business and prior
practices), (b) for the redemption of any Common Stock or Common Stock Equivalents, (c) for the settlement of any outstanding
litigation, (d) in violation of FCPA or OFAC regulations or (e) to lend, give credit or make advances to any officers, directors,
employees or affiliates of the Company other than loans or advances to Subsidiaries.
4.10 Indemnification
of Purchasers. Subject to the provisions of this Section 4.10, the Company will indemnify and hold each Purchaser and its directors,
officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a
Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”)
harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all
judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such
Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties,
covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted
against the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who
is not an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents
(unless such action is solely based upon a material breach of such Purchaser Party’s representations, warranties or covenants
under the Transaction Documents or any agreements or understandings such Purchaser Party may have with any such stockholder or any
violations by such Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which is finally
judicially determined to constitute fraud, gross negligence or willful misconduct). If any action shall be brought against any
Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify
the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing
reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel in any such action
and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party
except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company
has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the
reasonable opinion of counsel, a material conflict on any material issue between the position of the Company and the position of
such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such
separate counsel. The Company will not be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser
Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the
extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any
of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other
Transaction Documents. The indemnification required by this Section 4.10 shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as and when bills are received or are incurred. The indemnity agreements
contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others
and any liabilities the Company may be subject to pursuant to law.
4.11
Reservation and Listing of Securities.
(a) Subject
to Section 4.11(b), the Company shall maintain a reserve of the Required Minimum from its duly authorized shares of Common Stock for
issuance pursuant to the Transaction Documents in such amount as may then be required to fulfill its obligations in full under the Transaction
Documents.
(b) If,
on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than the Required Minimum
on such date, then the Board of Directors shall use commercially reasonable efforts to amend the Company’s certificate or articles
of incorporation to increase the number of authorized but unissued shares of Common Stock to at least the Required Minimum at such time,
as soon as possible and in any event not later than the 90th day after such date.
(c) Upon
consummation of the Qualified Offering, the Company shall, if applicable: (i) in the time and manner required by the principal
Trading Market, prepare and file with such Trading Market an additional shares listing application covering a number of shares of
Common Stock at least equal to the Required Minimum on the date of such application, (ii) take all steps necessary to cause such
shares of Common Stock to be approved for listing or quotation on such Trading Market as soon as possible thereafter,
(iii) provide to the Purchasers evidence of such listing or quotation and (iv) maintain the
listing or quotation of such Common Stock on any date at least equal to the Required Minimum on such date on such Trading Market or
another Trading Market. The Company agrees, upon consummation of the Qualified Offering, to maintain the eligibility of the Common
Stock for electronic transfer through the Depository Trust Company or another established clearing corporation, including, without
limitation, by timely payment of fees to the Depository Trust Company or such other established clearing corporation in connection
with such electronic transfer.
4.12
Participation in Future Financing.
(a) From
the date hereof until the date that is the 12-month anniversary of the Closing Date, upon any issuance by the Company or any of its Subsidiaries
of Common Stock or Common Stock Equivalents for consideration (a “Subsequent Financing”), each Purchaser shall have the right
to participate in up to an amount of the Subsequent Financing equal to 33% of the Subsequent Financing (the “Participation Maximum”)
on the same terms, conditions and price provided for in the Subsequent Financing. Provided, however, that this Section 4.12 does not
apply to any securities offerings of the Company with a broker-dealer acting either as principal or agent. Notwithstanding the foregoing,
in the event that any Purchaser shall remain a shareholder of record the Company, on or after the 12-month anniversary of the Closing
Date, the participation rights provided in this section shall survive for an additional 12-month period for such Purchaser(s).
(b) Between
the time period of 4:00 pm (New York City time) and 6:00 pm (New York City time) on the Trading Day immediately prior to the Trading
Day of the expected announcement of the Subsequent Financing (or, if the Trading Day of the expected announcement of the Subsequent Financing
is the first Trading Day following a holiday or a weekend (including a holiday weekend), between the time period of 4:00 pm (New York
City time) on the Trading Day immediately prior to such holiday or weekend and 2:00 pm (New York City time) on the day immediately prior
to the Trading Day of the expected announcement of the Subsequent Financing), the Company shall deliver to each Purchaser a written notice
of the Company’s intention to effect a Subsequent Financing (a “Subsequent Financing Notice”), which notice shall describe
in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds intended to be raised thereunder and the
Person or Persons through or with whom such Subsequent Financing is proposed to be effected and shall include a term sheet and transaction
documents relating thereto as an attachment.
(c) Any
Purchaser desiring to participate in such Subsequent Financing must provide written notice to the Company by 6:30 am (New York City time)
on the Trading Day following the date on which the Subsequent Financing Notice is delivered to such Purchaser (the “Notice Termination
Time”) that such Purchaser is willing to participate in the Subsequent Financing, the amount of such Purchaser’s participation,
and representing and warranting that such Purchaser has such funds ready, willing, and available for investment on the terms set forth
in the Subsequent Financing Notice. If the Company receives no such notice from a Purchaser as of such Notice Termination Time, such
Purchaser shall be deemed to have notified the Company that it does not elect to participate in such Subsequent Financing.
(d) If,
by the Notice Termination Time, notifications by the Purchasers of their willingness to participate in the Subsequent Financing (or to
cause their designees to participate) is, in the aggregate, less than the total amount of the Subsequent Financing, then the Company
may affect the remaining portion of such Subsequent Financing on the terms and with the Persons set forth in the Subsequent Financing
Notice.
(e) If,
by the Notice Termination Time, the Company receives responses to a Subsequent Financing Notice from Purchasers seeking to purchase more
than the aggregate amount of the Participation Maximum, each such Purchaser shall have the right to purchase its Pro Rata Portion (as
defined below) of the Participation Maximum. “Pro Rata Portion” means the ratio of (x) the Subscription Amount of Securities
purchased on the Closing Date by a Purchaser participating under this Section 4.12 and (y) the sum of the aggregate Subscription Amounts
of Securities purchased on the Closing Date by all Purchasers participating under this Section 4.12.
(f) The
Company must provide the Purchasers with a second Subsequent Financing Notice, and the Purchasers will again have the right of participation
set forth above in this Section 4.12, if the definitive agreement related to the initial Subsequent Financing Notice is not entered into
for any reason on the terms set forth in such Subsequent Financing Notice within two (2) Trading Days after the date of delivery of the
initial Subsequent Financing Notice.
(g) The
Company and each Purchaser agree that, if any Purchaser elects to participate in the Subsequent Financing, the transaction documents
related to the Subsequent Financing shall not include any term or provision that, directly or indirectly, will, or is intended to, exclude
one or more of the Purchasers from participating in a Subsequent Financing, including, but not limited to, provisions whereby such Purchaser
shall be required to agree to any restrictions on trading as to any of the Securities purchased hereunder or be required to consent to
any amendment to or termination of, or grant any waiver, release or the like under or in connection with, this Agreement, without the
prior written consent of such Purchaser. In addition, if a Qualified Financing has been consummated prior to the Subsequent Financing,
the Company and each Purchaser agree that, in connection with a Subsequent Financing, the transaction documents related to the Subsequent
Financing shall include a requirement for the Company to issue a widely disseminated press release by 9:30 am (New York City time) on
the Trading Day of execution of the transaction documents in such Subsequent Financing (or, if the date of execution is not a Trading
Day, on the immediately following Trading Day) that discloses the material terms of the transactions contemplated by the transaction
documents in such Subsequent Financing.
(h) Notwithstanding
anything to the contrary in this Section 4.12 and unless otherwise agreed to by such Purchaser, if a Qualified Financing has been consummated
prior to the Subsequent Financing, the Company shall either confirm in writing to such Purchaser that the transaction with respect to
the Subsequent Financing has been abandoned or shall publicly disclose its intention to issue the securities in the Subsequent Financing,
in either case in such a manner such that such Purchaser will not be in possession of any material, non-public information, by 9:30 am
(New York City time) on the second (2nd) Trading Day following date of delivery of the Subsequent Financing Notice. If by 9:30 am (New
York City time) on such second (2nd) Trading Day, no public disclosure regarding a transaction with respect to the Subsequent Financing
has been made, and no notice regarding the abandonment of such transaction has been received by such Purchaser, such transaction shall
be deemed to have been abandoned and such Purchaser shall not be deemed to be in possession of any material, non-public information with
respect to the Company or any of its Subsidiaries.
(i) Notwithstanding
the foregoing, this Section 4.12 shall not apply in respect of an Exempt Issuance, a Qualified Offering or any other public offering
of Common Stock pursuant to a Registration Statement on Form S-1 or Form S-3.
4.13
Subsequent Equity Sales.
(a) From
the date hereof until 180 days after the Closing Date, neither the Company nor any Subsidiary shall issue, enter into any agreement to
issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents, except as set forth in
subsection 4.13(b) below.
(b) Notwithstanding
the foregoing, this Section 4.13 shall not apply in respect of Qualified Offering or an Exempt Issuance.
4.14 Equal
Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered or paid to any
Person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless the same consideration is
also offered to all of the parties to such Transaction Documents. Further, the Company shall not make any payment of principal or interest
on the Debentures in amounts which are disproportionate to the respective principal amounts outstanding on the Debentures at any applicable
time. For clarification purposes, this provision constitutes a separate right granted to each Purchaser by the Company and negotiated
separately by each Purchaser, and is intended for the Company to treat the Purchasers as a class and shall not in any way be construed
as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise. Notwithstanding
the foregoing, a party to the Transaction Documents may enter into agreements, amend or consent to a waiver or modification of provisions
of the Transaction Documents without offering the same terms or extending the same agreements to all parties, provided, that the terms
of the agreement, amendment, waiver or modification at issue is not more favorable than the terms which are applicable to each other
party or will serve to adversely affect the other parties in any way.
4.15 Certain
Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither it,
nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short
Sales, of any of the Company’s securities during the period commencing with the execution of this Agreement and ending at such
time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described
in Section 4.6. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions
contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described in Section 4.6,
such Purchaser will maintain the confidentiality of the existence and terms of this transaction. Notwithstanding the foregoing, and notwithstanding
anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation,
warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that the
transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section
4.6, (ii) no Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company in accordance
with applicable securities laws from and after the time that the transactions contemplated by this Agreement are first publicly announced
pursuant to the initial press release as described in Section 4.6 and (iii) no Purchaser shall have any duty of confidentiality or duty
not to trade in the securities of the Company to the Company or its Subsidiaries after the issuance of the initial press release as described
in Section 4.6. Notwithstanding the foregoing, in the case of a Purchaser that is a multi- managed investment vehicle whereby separate
portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the
investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth
above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase
the Securities covered by this Agreement.
4.16 Form
D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Securities as required under Regulation D and
to provide a copy thereof, promptly upon request of any Purchaser. The Company shall take such action as the Company shall reasonably
determine is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchasers at the Closing under
applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actions promptly
upon request of any Purchaser.
4.17 Capital
Changes. Except in connection with the Qualified Offering, until the 18- month anniversary of the Closing Date, the Company shall
not undertake a reverse or forward stock split or reclassification of the Common Stock without the prior written consent of the Purchasers
holding a majority in principal amount outstanding of the Debentures.
4.18 [Reserved]
4.19 Purchaser
Lock-Up. On the date of this Agreement, each of the Purchasers covenants and agrees to enter into the Purchaser Lock-Up Agreement.
In connection with the closing of a Qualified Offering, each of the Purchasers covenants and agrees to enter into a standard lock-up
agreement, solely with respect to the Securities, in a form reasonably agreed to by the Purchasers, that shall provide that for a period
beginning on the closing date of a Qualified Offering and ending on the six (6) month anniversary of such closing date, such Purchasers
shall not sell into the market pursuant to Rule 144 or pursuant to a then effective registration statement any of the Securities.
4.20 Buyout
Transaction. Notwithstanding anything in this Agreement or the Transaction Documents to the contrary, the Company shall be permitted
to effectuate a Buyout Transaction without the consent of the Purchasers and such Buyout Transaction shall not be deemed a breach of
any covenant or term contained in this Agreement.
ARTICLE
V.
MISCELLANEOUS
5.1 Termination.
This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect whatsoever
on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing has not been
consummated on or before the fifth (5th) Trading Day following the date hereof, provided, however, that no such termination will affect
the right of any party to sue for any breach by any other party (or parties).
5.2 Fees
and Expenses. At the Closing, the Company has agreed to reimburse the Placement Agent the non-accountable sum of $25,000 for its
non-legal fees and expenses and $25,000 for its legal fees and expenses. Except as expressly set forth in the Transaction Documents to
the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other
expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The
Company shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction
letter delivered by the Company and any conversion delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection
with the delivery of any Securities to the Purchasers. In addition, Joseph Gunnar & Co., LLC is acting as placement agent for this
private offering pursuant to a placement agency agreement with the Company and will receive cash and warrant compensation on amounts
closed on pursuant to this Agreement, as well as an expense reimbursement from the Company.
5.3 Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.
5.4 Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication is delivered via facsimile
at the facsimile number or email attachment at the email address as set forth on the signature pages attached hereto at or prior to 5:30
p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the time of transmission, if such notice or communication
is delivered via facsimile at the facsimile number or email attachment as set forth on the signature pages attached hereto on a day that
is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading Day following the
date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such
notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached
hereto. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information
regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a
Current Report on Form 8-K if the Company is then an SEC reporting company.
5.5 Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in
the case of an amendment, by the Company and Purchasers which purchased at least 50.01% in interest of the Debentures based on the initial
Subscription Amounts hereunder or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought,
provided that if any amendment, modification or waiver disproportionately and adversely impacts a Purchaser (or group of Purchasers),
the consent of such disproportionately impacted Purchaser (or group of Purchasers) shall also be required. No waiver of any default with
respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver
of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any
party to exercise any right hereunder in any manner impair the exercise of any such right. Any proposed amendment or waiver that disproportionately,
materially and adversely affects the rights and obligations of any Purchaser relative to the comparable rights and obligations of the
other Purchasers shall require the prior written consent of such adversely affected Purchaser. Any amendment effected in accordance with
this Section 5.5 shall be binding upon each Purchaser and holder of Securities and the Company.
5.6 Headings.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any
of the provisions hereof.
5.7 Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser
(other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns
or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities,
by the provisions of the Transaction Documents that apply to the “Purchasers.”
5.8 No
Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in
Section 4.10. Notwithstanding the foregoing, the Placement Agent shall be deemed a third-party beneficiary of the representations and
warranties of the Company as contained in Section 3.1 of this Agreement and shall have the right to enforce such provisions directly
to the extent it may deem such enforcement necessary or advisable to protect its rights.
5.9 Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed
by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts
of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement and defense of the transactions
contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates,
directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts
sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts
sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents),
and hereby irrevocably waives, and agrees not to assert in any Action or Proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such Action or Proceeding is improper or is an inconvenient venue for such Proceeding. Each party
hereby irrevocably waives personal service of process and consents to process being served in any such Action or Proceeding by mailing
a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect
for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.
If any party shall commence an Action or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the
obligations of the Company under Section 4.10, the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing
party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution
of such Action or Proceeding.
5.10 Survival.
The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.
5.11 Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that
the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery
of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original
thereof.
5.12 Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force
and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts
to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.
5.13 Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any
of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document
and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind
or withdraw, in its sole discretion from time-to-time upon written notice to the Company, any relevant notice, demand or election in
whole or in part without prejudice to its future actions and rights; provided, however, that, in the case of a rescission of a conversion
of a Debenture or exercise of a Warrant, the terms of the Debenture or Warrant as applicable will control.
5.14 Replacement
of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall
issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of
and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company
of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable
third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.
5.15 Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers
and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may
not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and
hereby agree to waive and not to assert in any Action for specific performance of any such obligation the defense that a remedy at law
would be adequate.
5.16 Payment
Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or a
Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or
any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or
are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including,
without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such
restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such enforcement or setoff had not occurred.
5.17 Usury.
To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim, and will
resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any time hereafter
in force, in connection with any Action or Proceeding that may be brought by any Purchaser in order to enforce any right or remedy under
any Transaction Document. Notwithstanding any provision to the contrary contained in any Transaction Document, it is expressly agreed
and provided that the total liability of the Company under the Transaction Documents for payments in the nature of interest shall not
exceed the maximum lawful rate authorized under applicable law (the “Maximum Rate”), and, without limiting the foregoing,
in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums in the nature of interest
that the Company may be obligated to pay under the Transaction Documents exceed such Maximum Rate. It is agreed that if the maximum contract
rate of interest allowed by law and applicable to the Transaction Documents is increased or decreased by statute or any official governmental
action subsequent to the date hereof, the new maximum contract rate of interest allowed by law will be the Maximum Rate applicable to
the Transaction Documents from the effective date thereof forward, unless such application is precluded by applicable law. If under any
circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to any Purchaser with respect to indebtedness
evidenced by the Transaction Documents, such excess shall be applied by such Purchaser to the unpaid principal balance of any such indebtedness
or be refunded to the Company, the manner of handling such excess to be at such Purchaser’s election.
5.18 Independent
Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several
and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or non-
performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any other Transaction
Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a partnership,
an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert
or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Purchaser shall be
entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or
out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in
any Proceeding for such purpose. Each Purchaser has been represented by its own separate legal counsel in its review and negotiation
of the Transaction Documents. The Company has elected to provide all Purchasers with the same terms and Transaction Documents for the
convenience of the Company and not because it was required or requested to do so by any of the Purchasers. It is expressly understood
and agreed that each provision contained in this Agreement and in each other Transaction Document is between the Company and a Purchaser,
solely, and not between the Company and the Purchasers collectively and not between and among the Purchasers.
5.19 Liquidated
Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction Documents
is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts have
been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts
are due and payable shall have been canceled.
5.20 Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted
herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
5.21 Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents
and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to
share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.
5.22 WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH
KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND
EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
(Signature
Pages Follow)
IN
WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.
| FOXO TECHNOLOGIES,
INC. |
|
Address for Notice: |
| |
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| By: |
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| |
Name: |
Jon R. Sabes |
|
Stinson LLP |
| |
Title: |
Chief Executive Officer |
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| With a copy to (which shall not constitute
notice): |
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|
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK SIGNATURE PAGE FOR PURCHASER FOLLOWS]
[PURCHASER
SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
IN
WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories
as of the date first indicated above.
Name
of Purchaser: ______________________________________________________________________________
Signature
of Authorized Signatory of Purchaser: _______________________________________________________
Name
of Authorized Signatory: _____________________________________________________________________
Title
of Authorized Signatory:______________________________________________________________________
Email
Address of Authorized Signatory: ______________________________________________________________
Facsimile
Number of Authorized Signatory: ___________________________________________________________
Address
for Notice to Purchaser: ___________________________________________________________________
Address
for Delivery of Securities to Purchaser (if not same as address for notice):
Subscription
Amount: $ __________
Principal
Amount (1.125 x Subscription Amount): $ __________
Warrant
Shares: __________
EIN
Number: __________
[SIGNATURE
PAGES CONTINUE]
Exhibit 10.11
EMPLOYMENT
AGREEMENT
THIS
EMPLOYMENT AGREEMENT (this “Agreement”) is by and between FOXO BioScience LLC, a Delaware limited liability company (the
“Company”), and Jon Sabes (“Employee”), and entered into effective as of April 22, 2020 (the “Effective
Date”).
INTRODUCTION
The
Company is a life science technology company committed to commercializing epigenetic and related science and technology (the “Business”).
Employee desires to serve the Company in such role and provide the Company with such covenants. Accordingly, the parties wish to enter
into this Agreement setting forth their respective rights and obligations.
AGREEMENT
NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants set forth herein, and for other good and valuable consideration
the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
1. Certain
Definitions.
1.1 “Board”
means the Board of Directors of FOXO BioScience LLC.
1.2 “Cause”
means any one or more of the following: (a) the commission by Employee of an act relating to Employee’s duties constituting a felony
under the laws of the United States or any state or political subdivision thereof or any other jurisdiction; (b) the commission by Employee
of an act constituting a breach of fiduciary duty, willful misconduct, or gross negligence;
(c)
the commission by Employee of an act of fraud, dishonesty or misrepresentation related to Employee’s duties that is detrimental
to the Business; or (d) a material breach by Employee of his obligations under this Agreement.
1.3 “Code”
means the Internal Revenue Code of 1986, as amended, including and succeeding provisions of law and any regulations promulgated by the
United States Treasury Department thereunder.
1.4 “Company”
means FOXO BioScience LLC, a Delaware limited liability company, and all of its subsidiaries and affiliates.
1.5 “Employment
Period” means the employment term as defined under Section 7 this Agreement.
1.6 “Good
Reason” means a resignation by Employee of his employment hereunder upon the occurrence of a material breach by the Company of
any of its obligations contained in this Agreement that to the extent an act or omission giving rise to cause to the material breach
is not reasonably susceptible to cure, the Company shall be given a reasonable opportunity, not to exceed thirty (30) days, after
written notice by the Employee to the Company to cure such act or omission.
2. Employment and Duties.
2.1 The
Company agrees to continue to employ Employee for the Employment Period, and Employee agrees to remain in the employ of the Company for
the Employment Period. The term of this Agreement shall continue as described in, and until such time as the employment of Employee is
terminated pursuant to, Section 7 below.
2.2 The
Company is employing Employee hereunder as for the position described in Exhibit A and is expected to perform and fulfill job functions
commonly associated with such positions on behalf of the Company. In this regard, Employee agrees to perform such duties and responsibilities,
in good faith and for the benefit of the Company, as are prescribed for him under this Agreement, the Company’s corporate bylaws,
and as otherwise directed by the Board. The Employee shall report to the Board, and the compensation shall be determined by the Compensation
Committee of the Board.
2.3 Employee
shall reasonably allocate his business time, attention, energies and skills to the Company and the Business; provided, however, that
Employee shall nonetheless be permitted to engage in other business activities as well as participate in social, civic or professional
associations or engage in passive outside investment activities which may require a limited portion of time and effort to manage (consistent
at all times with Company’s policies and procedures), so long as such activities do not materially interfere with the performance
of Employee’s duties nor compete, in any way, with the products or services offered by or through Company.
2.4 Employee
will be permitted to locate and work at a location of Employee’s sole discretion.
3. Compensation,
Expenses, Benefits. For services rendered by Employee during the Employment Period, the Company shall provide the Employee with the
elements of compensation as set forth in Exhibit A.
3.1 Simultaneous
to the execution of this Agreement, shall be execution and delivery of a Profits Interest Agreement in the form attached hereto as Exhibit
B (such incentive, the “Profits Interest”), the purpose and intent of which is to enable Employee to participate in the economic
growth of value of the Business during the Initial Term of this Agreement.
3.2 Employee
shall be entitled during the Employment Period to participate in all current human resource benefit programs made available from time
to time to other management-level employees of Company and its subsidiaries.
3.3 Employee
and Employee’s qualified family members, as the case may be, shall be eligible to participate in, and shall receive all
benefits under, the human resource benefit programs made available from time to time to other management-level employees of the
Company and its subsidiaries.
3.4 As
it relates to travel and vacation, consistent with prior practice Employee may operate on the basis of freedom to operate with no limits
placed on vacation or travel relative to the execution of the role and responsibilities as Chief Executive Officer; provided, however,
that Employee shall be accountable to the Board and Company’s employees in the performance as Chief Executive Officer.
3.5 Employee
shall be entitled to receive reimbursement for all reasonable expenses incurred by Employee in connection with carrying out the position
of Chief Executive Officer on behalf of the Company and its affiliates which shall reimbursement for private travel including the family
members of a Employee for both business and personal use, or social club memberships.
3.6 Employee
shall be entitled to participate in all employee benefit plans and programs made available by the Company.
3.7 Employee
shall be entitled to Company office space and access to needed technology systems and telephony services necessary for any family office
or related business of Employee.
3.8 All compensation payments to Employee are guaranteed by the Company.
4. Inventions.
4.1 Employee
agrees that any Invention, as defined below, shall be the sole and exclusive property of the Company, and further agrees to: (a) promptly
and fully inform the Company in writing of any such Inventions; (b) assign to the Company all of Employee’s rights in and to such
Inventions, and to applications for patents and copyright registrations and to patents and copyright registrations granted upon such
Inventions in the United States or in any foreign country; and (c) promptly acknowledge and deliver to the Company, without charge to
the Company but at the Company’s expense, such written instruments and perform such other acts as may be necessary, in the reasonable
opinion of the Company, to obtain and maintain patents and copyright registrations and to vest the entire rights, interest in and title
thereto in the Company.
4.2 Employee
and the Company understand that the provisions of this Agreement requiring assignment of Inventions to the Company will not apply to
any particular Invention that meets each and all of the following criteria: (a) Employee develops entirely on his own time,
completely outside of Employee’s normal working hours; (b) Employee develops related to the work that is disclosed and
approved by the Board without using Company equipment, supplies, facilities or trade secret or Confidential Information, as defined
below; or (c) does not result from any work performed by Employee for the Company. Any such Invention meeting all of the criteria
set forth in clauses (a) through (c) above will be owned entirely by Employee, even if developed by Employee during the Employment
Period or otherwise during the time period of his employment or association with the Company. Finally, Employee agrees and covenants
that he will not individually file any patent applications relating to Inventions without first obtaining an express release from a
duly authorized Company representative according to the limitations specified in (b) above.
4.3 For
purposes of this Agreement, the term “Inventions” means all discoveries, improvements, inventions, ideas and works of authorship,
whether patentable or copyrightable, conceived or made by Employee either solely or jointly with others, and relating to any consultation,
work or services performed by Employee with, for on behalf of or in conjunction with the Company or based on or derived from Confidential
Information.
5. Confidential Information.
5.1 Employee
will hold all Confidential Information, as defined below, in the strictest confidence and never use, disclose or publish any Confidential
Information in a manner that is detrimental to the Company. Employee agrees to maintain control over any Confidential Information obtained
prior to or during the term of this Agreement, and restrict access thereto to the Company’s employees, agents or other associated
parties who have a need to use such Confidential Information for its intended purpose.
5.2 Promptly
upon the Company’s written request (but in any event within ten days), all records and any compositions, articles, devices and
other items which disclose or embody Confidential Information in Employee’s possession, including all copies or specimens thereof,
regardless of whether prepared or made by Employee or by others, will be destroyed by Employee and Employee will certify in writing to
the Company that he has destroyed all Confidential Information and embodiments thereof as required under this Agreement.
5.3 For
purposes of this Agreement, the term “Confidential Information” shall mean all information developed by Employee as a result
of his work with, for, on behalf of, or in conjunction with, the Company and any information relating to the Company’s processes
and services, including information relating to research, know-how, formulae, product or service ideas, inventions, trade secrets, patents,
patent applications, systems, products, programs and techniques and any secret, proprietary or confidential information, knowledge or
data of the Company, except such information that was developed by Employee prior to or separate from his employment by the Company.
All information disclosed to Employee or to which Employee obtains access, whether originated by Employee or by others, and which is
treated by the Company as “Confidential Information” or which Employee has a reasonable basis to believe is “Confidential
Information,” will be presumed to be “Confidential Information” for purposes of this Agreement. Notwithstanding the
foregoing, the term “Confidential Information” will not apply to information which (i) Employee can establish by documentation
was known to Employee prior to its receipt by Employee from the Company, (ii) is lawfully disclosed to Employee by a third party not
deriving such information from the Company, (iii) is presently in the public domain or becomes a part of the public domain through no
fault of Employee, or (iv) is required to be disclosed pursuant to applicable law, rule, regulation, or court or administrative order;
provided, however, that Employee shall take reasonable steps to obtain confidential treatment for such items and shall promptly advise
the Company of Employee’s notice of any such requirement in order to permit the Company to obtain such confidential treatment on
its own behalf.
6. No
Solicitation of Customers or Employees; Restrictive Covenant. Employee acknowledges that the Company has invested and will continue
to invest substantial time, effort and expense in acquiring and compiling its confidential, proprietary and trade secret information
and in assembling its present staff of personnel. In order to protect the business value of the Company’s confidential, proprietary
and trade secret information, during Employee’s employment with the Company and for twelve (12) months immediately following the
termination of that employment with the Company, Employee agrees: (a) that all information regarding actual or prospective (i) partners
of the Company (including but not limited to financiers, reinsurance companies, insurance companies, digital start-ups, research companies,
academic institutions, and testing/processing companies) or (ii) customers of the Company, of which Employee learns during his employment
with the Company, constitutes “Confidential Information” of the Company; (b) not to, directly or indirectly, induce or solicit
any employees of the Company or its affiliates to leave their employment with the Company or any of its affiliates without the unanimous
prior written consent of the Board. Each of the restrictive covenants set forth above are separate and severable covenants under this
Section 6.
7. Termination.
The initial term of this Agreement will begin on the date first written above and shall continue until the five-year anniversary of such
date (“Initial Term”) and shall automatically renew for five year terms thereafter (“Renewal Terms”) (collectively
the Initial Term and Renewal Terms referred to herein as “Employment Period”). Nevertheless, Employee’s employment
under this Agreement may be earlier terminated in any of the followings ways: (a) by the Board or Employee by providing written notice
no less than thirty (30) days prior to the completion of the Initial Term or a Renewal Term; (b) immediately and automatically upon Employee’s
death; (c) by the Board, upon not less than fourteen (14) days prior written notice to Employee, as a result of Employee’s incapacity
due to physical or mental illness or injury resulting in Employee’s absence from his full-time duties hereunder for four (4) consecutive
months, subject to Employee’s right to cure during the 14-day period; (d) by the Board immediately for Cause; (e) by the Board
upon not less than fourteen (14) days prior written notice to Employee for any reason or no reason; (f) by Employee immediately for Good
Reason; or (g) by Employee upon not less than ninety (90) days prior written notice to the Company for any reason or no reason.
8. Effects
of Termination. Following any termination of Employee’s employment under this Agreement, all compensation and benefits provided
to Employee under this Agreement shall cease to accrue as of the date of such termination, except as set forth in the paragraphs below.
8.1 In
the case of a termination arising under Section 7(b) from Employee’s death or under Section 7(c) from Employee’s incapacity,
the Company shall pay to the estate of Employee an amount equal to Employee’s then current Base Salary through the balance of the
Agreement, including any earned but unpaid annual compensation and continue the welfare benefit programs contemplated under Section 3.5
above, including paying all premiums for coverage for Employee’s dependent family members under all health, hospitalization, disability,
dental, life and other insurance plans that the Company maintained at the time of Employee’s death.
8.2 In
the case of a termination by the Board (i) under Section 7(a) from the Company without a Renewal Term; or (ii) under Section 7(e)
from the Company’s termination without Cause; then, any rights under the Profits Interest Agreement or any subsequent equity
agreements shall immediately vest as specified in those agreements, and Employee shall receive a severance equal to thirty-six (36)
months of base salary.
8.3 In
the case of a termination arising under Section 7(d) from the Company’s termination with Cause or under Section 7(g) from the resignation
of the Employee, then (a) no severance or continued benefits shall be due to Employee.
9. Return
of Company Property. All correspondence, reports, records, charts, advertising materials, designs, patents, business plans, financial
statements, manuals, memoranda, lists, and other personal property of the Company or its affiliates and in the possession of Employee
shall be and remain the property of the Company and its affiliates, as applicable. Any such documentation, information or property that
is in the possession of Employee shall, at the request of Company, be delivered promptly to the Company upon termination of Employee’s
employment.
10. Non-Competition.
10.1 In
consideration of the various benefits provided by the Company to Employee under this Agreement, Employee agrees to be bound by the restrictive
covenant set forth in this Section. Employee recognizes and acknowledges the competitive and proprietary nature of the Business. Accordingly,
Employee agrees that, during the term of this Agreement, , Employee shall not, without the prior written consent of the Company (which
the Company shall not unreasonably withhold or condition), for himself or on behalf of any other person or entity, directly or indirectly,
either as principal, agent, stockholder, lender, consultant, officer, director, employee, agent, representative or in any other capacity,
own, manage, operate or control, or be concerned, connected or employed by, or otherwise associate in any manner with, or engage in or
have any financial interest in, any enterprise engaging in a Business that competes with the Company.
11. Indemnification.
If Employee is made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than (i) an action directly by the Company against Employee, and other than (ii) a
threatened, pending or completed suit or proceeding brought against Employee and/or the Company by a third- party and which
obligates Employee to provide the Company indemnity under Section 13 below), by reason of or in connection with the fact that
Employee is or was performing services for the Company under this Agreement, then the Company shall indemnify Employee against all
expenses (including reasonable attorneys’ fees), judgments, fines and amounts paid in settlement, as actually and reasonably
incurred by Employee in connection therewith to the maximum extent permitted by applicable law. In the event that both Employee and
the Company are made a party to the same third-party action, complaint, suit or proceeding, the Company agrees to engage competent
legal representation, and Employee agrees to use the same representation, provided that if counsel selected by the Company shall
have a conflict of interest preventing such counsel from representing Employee, Employee may engage separate counsel of his choosing
and the Company shall pay all reasonable attorneys’ fees of such separate counsel. To the maximum extent permitted by law,
Employee shall not be entitled to indemnification or expense advances under this Agreement in any case where he has exhibited gross
negligence or willful misconduct, or performed criminal or fraudulent acts, or engaged in violations of federal securities laws; and
the Company may withhold expense advances if it reasonably determines that Employee is not entitled to indemnification hereunder
because of gross negligence, willful misconduct, the performance of criminal or fraudulent acts or the violation of federal
securities laws.
12. Parachute
Payments. If any payment or benefit (any “Payment”) Employee would receive from the Company pursuant to or in
connection with a “Change in Control” as defined in the Treasury Regulations promulgated under Code §280G would (i)
constitute a “parachute payment” within the meaning of Code §280G, and (ii) but for this sentence, be subject to the
excise tax imposed by Code §4999 (the “Excise Tax”), then such Payment shall be adjusted to equal the Reduced Amount.
The “Reduced Amount” shall be either (x) the largest portion of the Payment (prior to adjustment) that would result in no
portion of the Payment being subject to the Excise Tax or (y) the largest portion of the Payment (prior to adjustment), which, after
taking into account all applicable federal, state and local employment taxes, income taxes and the Excise Tax (all computed at the highest
applicable marginal rate), results in Employee’s receipt, on an after-tax basis, of the greater amount of the Payment (than that
calculated under clause (x) above) notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction
in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount, reduction
shall occur in the following order unless Employee elects, in writing, a different order (provided, however, that such election shall
be subject to the Company’s approval if made on or after the effective date of the event that triggers the Payment): reduction
of cash payments; cancellation of accelerated vesting of stock options, if any; and reduction of employee benefits. In the event that
acceleration of vesting of the stock options is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of
the date of grant of Employee’s stock options (i.e., the earliest granted stock option will be cancelled last) unless Employee
elects, in writing, a different order for cancellation.
13. No
Conflicting Agreements. Employee represents and warrants to the Company that the execution of this Agreement by Employee and
Employee’s employment by the Company, and the performance of Employee’s duties hereunder, will not violate or breach any
agreement with any former or existing employer, client, or any other person, firm or entity, to which agreement Employee is a party or
by which agreement Employee is bound. Except as disclosed to the Board, Employee also represents and warrants that he is not affiliated
in any manner (whether as a member, partner, manager, director, officer, employee or otherwise) with any person or non- affiliate entity
that has any business relationship with the Company. Furthermore, Employee agrees to indemnify the Company from and against any and all
losses, liabilities, damages and claims, including but not limited to reasonable attorneys’ fees and costs and expenses of investigation,
arising from any third-party claim made against the Company and based upon or arising out of any non-competition or confidentiality agreement
between or among Employee and any such third party.
14. Assignment;
Binding Effect. Employee understands that the Company is employing him on the basis of his personal qualifications, experience
and skills. Therefore, Employee agrees that he cannot delegate any portion of his obligations of performance under this Agreement.
To the extent the Company provides staffing to assist Employee in carrying out his job responsibilities; the failure of such staff,
or the failure to provide staff, cannot serve as a reason for inadequate job performance by Employee. Employee may also not assign
any of his rights under this Agreement without the prior written consent of the Company, which consent may be conditioned or
withheld in the sole and complete discretion of the Company. Subject to the preceding two sentences, this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the parties and their respective heirs, legal representatives, and permitted
successors and assigns.
15. Complete
Agreement. This Agreement is not a promise of future employment. Except as specifically provided herein, Employee has received no
oral representations, and has no other understandings or agreements with the Company (oral or written) or any of its officers, directors
or representatives covering the same subject matter as this Agreement. This written Agreement, together with its exhibits and schedules,
is the final, complete and exclusive statement and expression of the agreement between the Company and Employee pertaining to Employee’s
employment. This written Agreement may not be later modified except in a writing signed by a duly authorized officer of the Company and
Employee, and no term of this Agreement may be waived except by a writing signed by the party waiving the benefit of such term. This
Agreement hereby supersedes any other employment agreements or understandings, written or oral, between the Company and Employee.
16. Notices.
Whenever any notice is required hereunder, it shall be given in writing addressed as follows:
| |
If to the Company: |
220 South Sixth Street, Suite 1200 |
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Minneapolis, MN 55402 Attention: General Counsel |
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|
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If to Employee: |
Jon Sabes |
Notice
shall be deemed to be delivered four days after it is mailed by registered or certified mail, postage prepaid, return receipt requested
or one day after it is sent by a reputable overnight courier service. Either party may change the address for notice by notifying the
other party of such change in accordance with this Section.
17. Severability;
Blue Pencil Doctrine. In the event that any one or more of the provisions of this Agreement or any application thereof, shall
be found to be invalid, illegal or otherwise unenforceable, the validity, legality and enforceability of the remaining provisions and
any application thereof, shall not in any way be affected or impaired thereby. To the extent any provision of this Agreement is determined
by an arbitrator or court of competent jurisdiction to be unenforceable, the arbitrator or court of competent jurisdiction shall reform
any such provision to make it enforceable. The provisions of this Agreement shall, where possible, be interpreted so as to sustain their
legality and enforceability.
18. Dispute Resolution.
18.1 To
the greatest extent possible, the parties will endeavor to resolve any disputes relating to the Agreement through amicable negotiations.
Failing an amicable settlement, any controversy, claim or dispute arising under or relating to this Agreement, including the existence,
validity, interpretation, performance, termination or breach of this Agreement, will finally be settled by binding arbitration before
a three person arbitration panel (the “Arbitration Tribunal”) which will be jointly appointed by the parties. The Arbitration
Tribunal shall self- administer the arbitration proceedings utilizing the Commercial Rules of the American Arbitration Association (“AAA”);
provided, however, the AAA shall not be involved in administration of the arbitration. The Arbitration Tribunal must consist of one retired
judge of a state or federal court of the United States or a licensed lawyer with at least 15 years of corporate or commercial law experience.
18.2 The
arbitration will be held in Minneapolis, Minnesota. Each party will have discovery rights as provided by the Federal Rules of Civil
Procedure within the limits imposed by the arbitrators. It is the intent of the parties that any arbitration will be concluded as
quickly as reasonably practicable. Once commenced, the hearing on the disputed matters will be held four days a week until
concluded, with each hearing date to begin at 9:00 a.m. and to conclude at 5:00 p.m. The arbitrators will use all reasonable efforts
to issue the final written report containing the award or awards within a period of five (5) business days after closure of the
proceedings. Failure of the arbitrators to meet the time limits of this Section will not be a basis for challenging the award. The
Arbitration Tribunal will not have the authority to award punitive damages to either party. Each party will bear its own expenses,
but the parties will share equally the expenses of the Arbitration Tribunal. The Arbitration Tribunal shall award attorneys’
fees and other related costs payable by the losing party to the successful party as it deems equitable. This Agreement will be
enforceable, however the Employee may appeal any arbitration award in any court of competent jurisdiction. Notwithstanding the
foregoing, claims for injunctive relief for breaches of Sections 4, 5, 6, 9 and 10, and claims to enforce arbitration awards, may be
brought in a state or federal court in the State of Minnesota.
19. Equitable
Relief. Employee acknowledges and agrees that it would be difficult to fully compensate the Company for damages resulting from the
breach or threatened breach of the covenants contained in Sections 4, 5, 6, 9 and 10 of this Agreement, and that any such breach may
cause the Company irreparable harm. Accordingly, the Company will be entitled to seek injunctive relief, including but not limited to
temporary restraining orders, preliminary injunctions and permanent injunctions, to enforce the terms thereof, without the need to demonstrate
irreparable harm or, to the extent permitted by applicable law, the need to post any bond. This right to injunctive relief will not,
however, diminish any of the Company’s other legal rights under this Agreement or at law.
20. Governing
Law; Jurisdiction and Venue. This Agreement shall in all respects be construed according to the laws of the State of Minnesota,
notwithstanding the conflicts-of-law provisions of such state. Subject to the provisions of Section 18 above, any claims for
injunctive relief arising under this Agreement, and any claims to enforce an earlier issued arbitration award, shall be exclusively
decided by a state or federal court in the State of Minnesota. Employee hereby irrevocably waives his right, if any, to have any
disputes between him and the Company arising out of or related to this Agreement decided in any jurisdiction or venue other than a
state or federal court in the State of Minnesota. Furthermore, Employee hereby irrevocably (a) waives any objection that he might
have now or hereafter to the foregoing jurisdiction and venue of any such proceeding, (b) submits to the exclusive jurisdiction of
any such court set forth above in any such proceeding, and (c) waives any claim or defense of inconvenient forum.
21. Further
Assurances. Each party shall, without further consideration, execute such additional documents as may be reasonably required in order
to carry out the purposes and intents of this Agreement.
22. Interpretation.
Employee has had a meaningful opportunity to work with legal counsel of his choosing and has either availed himself of such opportunity
to his satisfaction or has independently determined not to seek such counsel. Furthermore, Employee has a meaningful opportunity to review
and negotiate the terms and conditions of this Agreement. Since both parties have participated in the negotiation, drafting and finalization
of their business relationship and documented such relationship in this Agreement, this Agreement will not be interpreted as though it
has been drafted solely by the Company.
23. Waivers.
No term or condition of this Agreement will be deemed to have been waived nor shall there be any estoppel to enforce any provision hereof,
except by a written instrument executed by the party charged with waiver or estoppel. A party’s delay, waiver or failure to enforce
any of the terms of this Agreement or any similar agreement in one instance shall not constitute a waiver of its rights hereunder with
respect to other violations of this or any other agreement.
24. Counterparts
and Delivery. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together
shall constitute but one and the same instrument. Counterpart signatures delivered by facsimile or other means of electronic transmission
shall be valid and binding to the same as the delivery of original ink signatures.
IN
WITNESS WHEREOF, the parties have executed this Employment Agreement as of the date first above written.
| COMPANY: |
|
EMPLOYEE: |
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| FOXO BIOSCIENCE LLC |
|
JON SABES |
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| By: |
/s/ Laurence Zipkin |
|
/s/ Jon Sabes |
| Name: Laurence Zipkin |
|
Name: Jon Sabes |
| Title: Director |
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Signature
Page —
Exhibit
A
| Titles: |
Chief Executive Officer of the Company (“CEO”) |
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Chairman of the Board of Directors of FOXO BioScience LLC (“Chairman”) |
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|
| Summary: |
The business of the Company is highly reliant on the founder (Jon Sabes/Employee) for his entrepreneurial vision of the business and the execution of its business plan. As a result, Employee provides a unique and valuable role as the Company’s Chief Executive Officer and Chairman. |
| |
|
| Description: |
Chief Executive Officer: The duties of the Chief Executive Officer will be to generally oversee and direct the strategy and activities of the Business of the Company for developing and implementing Company’s strategic plan; ensuring reporting on Company performance metrics, including compliance with operating budgets and annual business plans; and being informed of and meeting all legal and fiduciary responsibilities; or as otherwise directed by the Board. |
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|
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Chairman: The duties of the Chairman will be to preside over the Board of Directors of FOXO BioScience LLC. In this role, the Chairman will be responsible for planning, presiding over, and facilitating Board and committee meetings; Board resolutions are carried out; and providing governance leadership. |
Compensation
Base:
$480,000 annually
Incentive:
| o | The
annual Cash Bonus Compensation of up to 50% of CEO’s Base Salary. |
| o | CEO
shall be reviewed by the Compensation Committee of the Board on a semi-annual basis, which
shall determine CEO’s Cash Bonus Compensation. |
| ● | Profits
Interest Equity Incentive Compensation: |
| o | 10%
Profits Interest as participation in the Company’s Equity Incentive Compensation Plan. |
| o | Additional
Profits Interest Terms: |
| ▪ | The
Committee, in its sole discretion, may annually vest some, or all of the available Profits
Interests based upon the achievement of one or more of the strategic and/or operational goals. |
| ▪ | Daily
vesting over a three-year period, provided all Profits Interests shall become fully vested
immediately prior to a Change in Control or termination of employment by Company. |
| ▪ | Hurdle
Distribution Rate $0 |
Life
Insurance: Individual life insurance coverage of $20,000,000, with beneficiaries to be the Company and CEO’s spouse 50/50.
12
Exhibit 10.13
ROBERT
POTASHNICK EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the “Agreement”)
is made and entered into on this
29th day of December 2020, by and between
FOXO Technologies, Inc., a Delaware corporation (the Company”) and Robert Potashnick (the “Executive”).
RECITALS
WHEREAS, the
Company desires to enter into this Agreement with the Executive for his full-time employment to serve as its Chief Financial Officer;
and
WHEREAS, the
Executive desires to serve as the Chief Financial Officer of the Company and enter into this Agreement with the Company.
NOW, THEREFORE,
in consideration of the recitals above and the mutual covenants and promises contained herein, and other good and valuable consideration,
the receipt and sufficiency of which are hereby expressly acknowledged, the Company and Executive (collectively the “Parties”
and each a “Party”) agree as follows:
| 1. | Title, Duties and Term of Employment: |
(a) Executive
will serve as the Chief Financial Officer of the Company and report to the Company’s Chief Executive Officer and Board of Directors.
Executive understands and agrees that the Company is a rapidly growing organization and the precise nature of the work of the Chief Financial
Officer asked to be completed on behalf of the Company may be adjusted from time to time but, in any event, the duties and responsibilities
will include those duties and responsibilities normally associated with and appropriate for someone in the position of Chief Financial
Officer, which shall include, but not be limited to preparing and maintaining the Company’s financial reporting to the SEC in compliance
with GAAP and all regulatory requirements, providing day-to- day effective oversight of all operational and regulatory matters, ensuring
operational integrity and best practices; helping the Company to achieve and exceed strategic and operating goals; presenting and maintaining
investor relationships in support of the strategies and objectives of the Company; advising the Board of Directors (“Board”)
and the Chief Executive Officer concerning Company performance, strategy, operations, initiatives and developments in the industry; working
with outside accounting, audit, tax, SOX, legal counsel, advisors, and other vendors appropriate; and travel as needed and requested by
the Company.
(b) Executive
shall perform his duties and responsibilities to the best of his professional skill and ability. In all such matters, Executive will act
in good faith, in the best interests of the Company.
(c) Executive’s
employment under this Agreement shall commence on or before January 14, 2021 (the “Commencement Date”). Executive’s
employment shall continue until such time either party terminates this agreement pursuant to paragraph 3 of this Agreement. The period
during which Executive’s employment continues in effect pursuant to this Agreement is hereinafter referred to as the Employment
Period.
| 2. | Compensation: During the Employment Period, Executive shall be compensated as follows: |
(a) Base
Salary: As used in this Agreement, the term “Base Salary” refers to the annual amount of Executive’s salary, and does
not include any other amounts. For example, Base Salary does not include option or incentive compensation or bonus awards. For the services
to be rendered by Executive, the Company agrees to pay Executive a Base Salary of $180,000 per year, subject to all payroll deductions
as required by law. Executive’s Base Salary shall be reviewed annually throughout the Employment Period.
(b) Standard
Incentive Compensation: The Executive shall participate in the Company’s discretionary Standard Incentive Compensation Plan. The
Standard Incentive Compensation Plan is subject to review and change by the approval of the Board of Directors. Currently, the Company’s
Standard Incentive Compensation Plan provides all employees with the opportunity to receive an annual bonus of up to 20% of an individual’s
base salary, paid semi- annually pursuant to management performance reviews. The Company may pay the Standard Incentive Compensation bonus
compensation in the form of cash or stock options.
(c) Executive
Incentive Compensation: The Compensation Committee of the Board of Directors shall work with the Executive to develop an Executive Incentive
Compensation plan that creates benchmark goals and objectives for key executives and provides additional bonus compensation opportunities
key executives to receive additional annual bonus of up to 20% of an individual’s Base Salary upon achievement of specified goals
and objectives of the Company. In the absence of the development of such Executive Incentive Compensation plan, the Executive shall be
eligible for an additional annual bonus of up to 20% of the Executive’s Base Salary based on meeting the objectives in the Standard
Incentive Compensation Plan.
(d) Signing
Bonus & Initial Option Grant: Within thirty days of the Commencement Date, the Company shall compensate the Executive with (i) a cash
compensation signing bonus of
$30,000; and (ii) an initial grant
of incentive stock options valued in an amount of $360,000 of the Company’s common stock, with a strike price of approximately $3.60
per share (subject to final adjustment per the Company’s Certificate of Incorporation) and shall vest in accordance with the Company’s
2020 Equity Incentive Compensation Plan and Incentive Stock Option Agreement (copies of which have been provided to the Executive).
(e) Benefit
Plans and Programs: Beginning on the Commencement Date, Executive shall be entitled to participate in all employee benefit plans and programs
made available by the Company to the Company’s executive employees generally, including, without limitation: health insurance, dental
insurance, life insurance, disability insurance, 401k plan and health spending account (HSA) plan. During the Employment Period, the Company
shall the same portion of the costs of such benefits and programs as other senior executive employees for Executive. In the event that
the provision of, or payment for, such benefits is prohibited or otherwise adversely impacted by the Patient Protection and Affordable
Care Act or other similar laws, the Parties shall negotiate in good faith to determine an equitable benefit in lieu thereof.
(f) Vacation
and Personal Days: Executive shall receive paid vacation during the Employment Period of no less than 20 days per calendar year.
(g) Reimbursement: Executive
is authorized to incur reasonable expenses in carrying out the Executive’s duties for the Company under this Agreement and shall
be entitled to reimbursement for all reasonable business expenses, including but not limited to Executive’s monthly cell phone
bill, that Executive incurs during the Employment Period. The Company also agrees to reimburse Executive for all reasonable expenses incurred
in relation to keeping Executive’s CPA license active, including but not limited to annual dues for the AICPA, MNCPA, and Minnesota
Board of Accountancy, and fees for continuing professional education courses.
| 3. | Termination of Employment: |
(a) Terms
Applicable to Any Type of Termination: In the event of a termination of Executive’s employment, the Company shall pay Executive:
(A) any unpaid Base Salary on the Company’s regular payday, prorated to the effective date of termination; and (B) the dollar value
of all accrued and unused vacation benefits based upon Executive’s Base Salary. The Company shall also reimburse Executive in accordance
with and subject to the requirements of the Company’s expense reimbursement practices for any reasonable and necessary business
expenses incurred by Executive on behalf of the Company on or before the date on which his employment terminates, and reported and properly
documented on expense reports.
(b) Termination
Without Cause: The Company shall have the right to terminate Executive’s employment without cause during the Employment Period upon
notice to Executive. In the event of a Termination Without Cause, the Company will pay Executive severance compensation in an amount equal
to an amount of one half of Executive’s Base Salary in effect on the date on which Executive’s employment is terminated, payable
in a lump sum within thirty (30) days after the date of the termination. If Executive is eligible for and elects to continue group health
coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”). The Company will also pay Executive a
bonus under the Incentive Compensation Plan prorated based upon the number of days for which Executive was employed during the period
for which such payments are made (e.g., quarter), and any Options or other equity incentives which have been granted to Executive shall
fully vest on the date of termination.
(c) Termination
For Cause: The Company shall have the right immediately to terminate Executive’s employment for cause during the Employment Period
upon notice to Executive.
(i) Termination
For Cause shall mean:
(A) A
breach by Executive of any term of this Agreement or of Executive’s fiduciary duties to the Company, which breach remains uncured
more than thirty (30) days after Executive receives written notice from Company specifying such breach;
(B) The
material failure of Executive to perform Executive’s duties or responsibilities as Chief Financial Officer which remains uncured
more than thirty (30) days after Executive receives written notice from Company specifying such failure (“Failure Notice”);
(C) Executive’s
violation of any law, statute or regulation relating to the operation of the Company’s business; or
(D) The
commission of, or conviction for (or its procedural equivalent), or the entering of a guilty plea or plea of no contest with respect to,
a crime or any conduct of Executive which involves moral turpitude.
(ii) If
Executive’s employment is Terminated For Cause, except as set forth in subparagraph 3(a), the Company shall have no obligation to
make payments of any kind to Executive.
(d) Resignation
for Good Reason: Executive shall have the right to resign from employment with the Company for Good Reason during the Employment Period
upon notice to the Company.
(i) As
used in this Agreement, the term “Good Reason” means (a) a breach of this Agreement by the Company which breach, where curable,
has not been cured within thirty (30) days after written notice to the Company setting forth the particulars of such alleged breach; (b)
a reduction in Executive’s Base Salary; (c) assignment to Executive of duties inconsistent with the Executive’s position,
or a diminution in Executive’s authority, responsibility, status, title, or offices; (d) relocation of Executive’s primary
office to a location more than thirty (30) miles away from Executive’s primary office location as of the Commencement Date; (f)
a Change in Control; and (j) the failure of the Company to comply fully with its obligations under subparagraph 9(d) of this Agreement.
The Executive shall not be able to resign for Good Reason once the Executive has been provided a Failure Notice under Section 3(c)(i)(B)
until such time the Company has agreed in writing that such failure has been cured (a “Remedied Notice”).
(ii) In
the event of a Resignation for Good Reason, Executive shall be entitled to all payments and other benefits provided under subparagraphs
3(a) and 3(b) above.
(e) Voluntary
Resignation: Executive may voluntarily resign Executive’s employment under this Agreement without Good Reason at any time; however
Executive agrees to provide at least thirty (30) days advance written notice to the Company.
(f) Death:
If Executive’s employment ends through Executive’s death, Executive shall be entitled to all payments and other benefits provided
under subparagraph 3(a) above. The Company will also pay Executive’s estate a bonus under the any incentive compensation plans prorated
based upon the number of days for which Executive was employed during the period for which such payments are made (e.g., quarter).
| 4. | Confidential Information: |
(a) Confidential
Information: As used in this Agreement, the term “Confidential Information” means information in whatever form, pertaining
to the business of the Company that is not generally known outside of the Company, or that is known outside of the Company through improper
means. Without limiting the foregoing definition, Confidential Information includes, but is not limited to: (i) technical information,
formulas, teaching and development techniques, methodologies, processes, trade secrets, computer programs, electronic codes, designs,
product development information, inventions, improvements, and research projects; (ii) information about finances, costs, profits, markets,
proposals, sales, and lists of customers or clients; (iii) business, marketing, and strategic plans; and (iv) employee personnel files
and compensation information.
(b) Non-Disclosure of Confidential
Information: During the Employment Period, Executive agrees to hold all Confidential Information in strict confidence and trust for the
sole benefit of the Company and Executive agrees that Executive will not disclose any Confidential Information, directly or indirectly,
to anyone outside of the Company, and Executive will not use, copy, publish, summarize, or remove from Company premises Confidential
Information except to the extent necessary to carry out Executive’s responsibilities as an employee of the Company. After Executive’s
employment with the Company ends, Executive will not, directly or indirectly, use or disclose any Confidential Information to any person
or entity, except as authorized in advance by an officer of the Company in writing. The restrictions in this subparagraph, however, will
not apply to Confidential Information that is or has become known to the public generally through no fault of or breach by Executive,
or was previously known to Executive other than as a result of employment with the Company.
| 5. | Non-Solicitation Covenants: |
(a) Non-Solicitation
of Employees: Executive agrees that, during the Employment Period, and for a period of twelve (12) months following the termination of
Executive’s employment, regardless of the reason for such termination, Executive will not, directly or indirectly, solicit, or attempt
to solicit, for employment, with Executive or with any other person or entity, any employee of the Company.
(b) Non-Solicitation
of Customers or Financing Relationships: Executive agrees that, during the Employment Period, and for a period of twelve (12) months following
the termination of Executive’s employment, regardless of the reason for such termination, Executive will not, directly or indirectly,
solicit any business for Executive, or for any other person or entity, from any client or financing relationship of the Company with which
Executive had contact within the twelve
(12) months prior to the termination
of Executive’s employment with the Company or concerning which Executive had access to Confidential Information, during and by virtue
of Executive’s employment with the Company.
| 6. | Resolution of Disputes: |
The Parties
agree submit any disputes between them to final and binding arbitration pursuant to the then-current AAA national rules for the resolution
of employment disputes before a neutral arbitrator selected from the list of Arbitrators. THE PARTIES EXPRESSLY AGREE THAT SUCH ARBITRATION
SHALL BE THE EXCLUSIVE REMEDY FOR ANY DISPUTE INVOLVING THIS AGREEMENT, THE EXECUTIVE’S EMPLOYMENT, TERMINATION, COMPENSATION, OR
BENEFITS AND HEREBY EXPRESSLY WAIVE ANY RIGHT THEY HAVE, OR MAY HAVE, TO A COURT TRIAL OR A JURY TRIAL OF ANY SUCH DISPUTE.
In making an award, the arbitrator
shall have no power to add to, delete from or modify this Agreement, or to enforce purported unwritten or prior agreements, or to construe
implied terms or covenants into the Agreement. In reaching a decision, the arbitrator shall adhere to the relevant law and applicable
precedent, and shall have no power to vary therefrom. In construing this Agreement, its language shall be given a fair and reasonable
construction in accordance with the intention of the parties and without regard to which party drafted it. At the time of issuing a decision,
the arbitrator shall (in the decision or separately) make specific findings of fact, and shall set forth such facts as support the decision,
as well as conclusions of law, and the reasons and bases for the opinion. In the event the arbitrator exceeds the powers or jurisdiction
here conferred, or fails to issue a decision in conformance herewith, it is specifically agreed that the aggrieved party may petition
a court of competent jurisdiction to correct or vacate such award, and that the arbitrator’s act of exceeding his or her powers
shall be grounds for granting such relief. If any one or more provisions of this arbitration clause shall for any reason be held invalid
or unenforceable, it is the specific intent of the parties that such provisions shall be modified to the minimum extent necessary to make
it or its application valid and enforceable.
| 7. | Jurisdiction and Venue: |
To the extent
that either party is permitted to file any action in court that involves any aspect of this Agreement, or arises out of, or is related
to or connected with Executive’s employment, compensation or benefits, or the termination thereof, the parties agree that such action
must be brought in either federal court in Minnesota, or in state courts of the Fourth Judicial District (Hennepin County), and the parties
irrevocably consent to jurisdiction and venue in such courts.
Should any arbitration
or litigation commence between the parties concerning this Agreement or the rights and obligations of either party, whether it be an action
for damages, equitable or declaratory relief, if the party commencing legal action is the prevailing party in any arbitration or litigation,
said party shall be entitled to recovery from the other party, as an element of its costs, in addition to other relief as may be granted
by the arbitrator or court, reasonable sums as and for attorneys’ fees incurred in such arbitration or litigation.
| 9. | Miscellaneous Provisions: |
(a) All
payments required to be made by the Company to Executive (or his heirs, executors, administrators, or estate) shall be subject to the
withholding of such amounts, if any, relating to federal, state and local taxes and other payroll deductions as the Company may reasonably
determine it should withhold pursuant to any applicable law, regulation or order.
(b) The
Company’s or Executive’s refraining from exercising any right under this Agreement for a reasonable period of time when it
is permissible for the Company or Executive to exercise such right shall not constitute a waiver by either of them of any such right,
unless so provided in a writing signed by both Parties and shall not prevent the Company or Executive from exercising any such right at
any time.
(c) Executive
agrees to keep the financial terms of this Agreement confidential; provided, however, that Executive may disclose the financial terms
of this Agreement to his attorney, accountant, financial advisor and spouse, and to government agencies for the purpose of payment or
collection of taxes or application for unemployment compensation benefits. Executive may also disclose the financial terms of this Agreement
if required to do so by lawful subpoena, in any proceeding to enforce the terms of this Agreement, or in any mediation or arbitration
under the terms of this Agreement. Executive may also disclose the existence and terms of the covenants in paragraphs 4 and 5 of this
Agreement to any prospective or subsequent employer.
(d) If
any claim is asserted or any litigation is threatened or pursued against Executive by a previous employer or an affiliate of a previous
employer related to Executive’s previous employment, the Company shall either: (i) defend and indemnify Executive, and hold Executive
harmless, against and in respect of any and all such demands, judgments, costs, and expenses (including reasonable attorneys’ fees),
losses, and damages arising from such claim or litigation; or (ii) terminate Executive’s employment Without Cause as provided under
subparagraph 3(b) of this Agreement.
(e) Notwithstanding anything
in this Agreement to the contrary, all payments to be made upon a termination of employment under this Agreement shall only be made upon
a “separation from service” within the meaning of Section 409A of the Internal Revenue Code (the “Code”). To
the maximum extent permitted under Section 409A of the Code and its corresponding regulations, the cash severance benefits payable
under this Agreement are intended to meet the requirements of the short-term deferral exemption under Section 409A of the Code and the
“separation pay exception” under Treas. Reg. §1.409A-1(b)(9)(iii). For purposes of the application of Treas. Reg. §
1.409A-1(b)(4)(or any successor provision), each payment in a series of payments to the Executive will be deemed a separate payment.
With respect to any expense, reimbursement or in-kind benefit provided pursuant to this Agreement that constitutes a “deferral
of compensation” within the meaning of Section 409A of the Code and its implementing regulations and guidance, (i) the expenses
eligible for reimbursement or in-kind benefits provided to the Executive must be incurred during the Employment Period (or applicable
survival period), (ii) the amount of expenses eligible for reimbursement or in-kind benefits provided to the Executive during any calendar
year will not affect the amount of expenses eligible for reimbursement or in-kind benefits provided to the Executive in any other calendar
year, (iii) the reimbursements for expenses for which the Executive is entitled to be reimbursed shall be made on or before the last
day of the calendar year following the calendar year in which the applicable expense is incurred, and (iv) the right to payment or reimbursement
or in-kind benefits hereunder may not be liquidated or exchanged for any other benefit.
(f) All
notices and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have
been given if delivered personally or sent by Federal Express or UPS next-day delivery, or by certified express mail, return receipt requested,
postage prepaid, to the parties to this Agreement as the following addresses or to such other address as either party may specify by notice
to the other:
If to the Company:
Chief Executive Officer
FOXO Technologies, Inc.
220 S 6th St #1200
Minneapolis, MN 55415
If to the Executive:
Robert Potashnick
| 10. | Prior Obligations and Information of Others: |
(a) Prior
Obligations: Executive represents and warrants that he is free to enter into this Agreement and accept employment with the Company upon
the terms and conditions set forth in this Agreement, and that the terms and conditions in this Agreement will not cause Executive to
violate any obligation that Executive owes to any prior employer.
(b) Information
of Others: During Executive’s employment with the Company, Executive will not disclose to the Company, or use, or induce the Company
to use, any confidential or proprietary information of any prior employer in violation of any obligation that Executive owes to such prior
employer.
| 11. | Effective Date: Each of the Parties is signing this Agreement with
the intent to be legally bound by it. This Agreement shall become effective upon the date on which Executive executes a copy of this Agreement
that has already been signed by the Chief Executive Officer on behalf of the Company, and delivers the executed Agreement to the Company. |
| 12. | Construction: Except as may be expressly provided herein, the validity,
interpretation, construction, performance and enforceability of this Agreement shall be governed in all respects by the laws of the State
of Minnesota, without application of its conflict of laws principles. |
| 13. | Successors and Assigns: This Agreement shall be binding upon the parties’
heirs, successors and assigns. The obligations and covenants of the Executive under this Agreement, being personal, may not be delegated
or assigned. |
| 14. | Severability: If any provision of this Agreement is held invalid
or unenforceable by any court of competent jurisdiction or by an arbitrator, the other provisions of this Agreement will remain in full
force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect
to the extent not held invalid or unenforceable. |
| 15. | Entire Agreement: This Agreement is the entire agreement between the
parties concerning the terms of Executive’s employment and supersedes any and all prior agreements or understandings between them
concerning its subject matter, oral or written. This Agreement may be not changed or terminated orally, and no change, termination or
attempted waiver of any of the provisions hereof shall be binding unless in writing signed by Executive and the President. |
| 16. | No Waiver: The waiver by either party of any term, condition or provision
of this Agreement shall not be construed as a waiver of any other or subsequent term, condition or provision of this Agreement. |
| 17. | Voluntary Agreement: Executive and the Company represent and agree
that each has reviewed all aspects of this Agreement, each has carefully read and fully understands all provisions of this Agreement,
each has had opportunity to review any and all aspects of this Agreement with the legal, tax, or other advisors of such party’s
choice, and each is voluntarily entering into this Agreement. |
| 18. | Photocopies: Photocopies of this signed Agreement are as binding and
as legally enforceable as a signed original. |
| |
For FOXO Technologies, Inc. |
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By: |
/s/ Jon Saves |
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Jon Sabes |
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12/29/2020 |
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Date |
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By: |
/s/ Robby Potashnick |
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Robby Potashnick |
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12/29/2020 |
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|
Date |
Exhibit 10.14
AMENDED & RESTATED EMPLOYMENT
AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT
AGREEMENT (this “Agreement”) is by and between GWG Holdings, Inc., a Delaware corporation (together with its
subsidiaries including Life Epigenetics Inc. (“LEGX”), the “Company”), and Brian Chen
(“Employee”), and entered into effective as of August 20, 2017 (the “Effective Date”) and replaces all
previous agreements, whether written or oral between the Company and the Employee.
INTRODUCTION
The
Company, through its wholly owned subsidiary, LEGX, is a life science technology company committed to finding and applying
epigenetic and related science and technology to transforming the life insurance and health and wellness industries (the
“Business”). Employee desires to serve the Company in such role and provide the Company with such covenants.
Accordingly, the parties wish to enter into this Agreement setting forth their respective rights and obligations.
AMENDED AND RESTATED AGREEMENT
NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants set forth herein, and for other
good and new valuable consideration set forth in Section 3.1 below in the form of the Phantom Equity Rights, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
1. Certain
Definitions.
1.1 “Code”
means the Internal Revenue Code of 1986, as amended, including and succeeding provisions of law and any regulations promulgated by the
United States Treasury Department thereunder.
1.2 “Employment
Period” means the employment term as defined under Section 7 this Agreement.
1.3
“Good Cause” means any one or more of the following: (a) the commission by Employee of an act relating to
Employee’s duties constituting a misdemeanor or a felony under the laws of the United States or any state or political
subdivision thereof or any other jurisdiction; (b) the commission by Employee of an act constituting a breach of fiduciary duty or
willful misconduct; (c) conduct by Employee that is detrimental to the Business or the reputation, character or standing of the
Company or any of its affiliates; (d) the commission by Employee of an act of fraud, dishonesty or misrepresentation related to
Employee’s duties that is detrimental to the Business or the reputation, character or standing of the Company or any of its
affiliates; (e) Employee’s engagement in self-dealing, or his involvement in a transaction involving a conflict of interest
without the prior written approval of the Board; (f) the failure of the Employee to perform the functions required by the Company at
a level satisfactory to the Employee’s direct supervisor; or (g) a breach by Employee of his obligations under this
Agreement.
1.4 “Good
Reason” means a resignation by Employee of his employment hereunder upon the occurrence of any of the following events taking place
without Employee’s prior written approval: (a) a material reduction, either from one year to the next, or within the current year,
in the Employee’s base salary or bonus; (b) a failure by the Company to provide adequate resources to develop Technology; (c) decision
by the Company to stop developing, contracting, or funding the development of Technology; or (d) a material breach by the Company of any
of its obligations contained in this Agreement that to the extent an act or omission giving rise to cause to the material breach is not
reasonably susceptible to cure, the Company shall be given a reasonable opportunity, not to exceed thirty (30) days, after written notice
by the Employee to the Company to cure such act or omission.
1.5 “Technology”
means the commercialization of epigenetic methylation technology in general.
2. Employment and Duties.
2.1 The
Company agrees to continue to employ Employee for the Employment Period, and Employee agrees to remain in the employ of the Company for
the Employment Period. The term of this Agreement shall continue as described in, and until such time as the employment of Employee is
terminated pursuant to, Section 7 below.
2.2 The
Company is employing Employee hereunder as for the position of Chief Science Officer described in Exhibit A and is expected to perform
and fulfill job functions commonly associated with such positions on behalf of the Company. In this regard, Employee agrees to perform
such duties and responsibilities, in good faith and for the exclusive benefit of the Company, as are prescribed for him under this Agreement,
the Company’s corporate bylaws, and as otherwise directed by the Employee’s direct supervisory report, or their superior officer
within the Company. Without limiting the foregoing, Employee’s duties shall in any event include overseeing the development of Company
Technology as set forth in Exhibit A.
2.3 Employee
shall reasonably allocate his business time, attention, energies and skills shall to the Company and the Business; provided, however,
that Employee shall be entitled to participate in social, civic or professional associations or engage in passive outside investment activities
which may require a limited portion of time and effort to manage (consistent at all times with Company’s policies and procedures),
so long as such activities do not interfere with the performance of Employee’s duties nor compete, in any way, with the products
or services offered by or through Company.
3. Compensation.
For services rendered by Employee during the Employment Period, the Company shall provide the Employee with the elements of compensation
as set forth in Exhibit A.
3.1
Simultaneous to the execution of this Agreement, shall be execution and delivery of a Phantom Equity Rights Agreement in the form
attached hereto as Exhibit B (such incentive, the “Phantom Equity”), the purpose and intent of which is to enable
Employee to participate in the economic growth of value of the Business during the Initial Term of this Agreement.
3.2 Employee
shall be entitled during the Employment Period to participate in all current human resource benefit programs made available from time
to time to other management-level employees of the Company and its subsidiaries.
3.3 Employee
and Employee’s qualified family members, as the case may be, shall be eligible to participate in, and shall receive all benefits
under, the human resource benefit programs made available from time to time to other management-level employees of the Company and its
subsidiaries.
3.4 Employee
shall be entitled to receive reimbursement for all reasonable expenses incurred by Employee in connection with the Business of the Company
in accordance with the applicable policies, practices and procedures of the Company and its affiliates.
4. Inventions.
4.1 Employee
agrees that any Invention, as defined below, shall be the sole and exclusive property of the Company, and further agrees to: (a) promptly
and fully inform the Company in writing of any such Inventions; (b) assign to the Company all of Employee’s rights in and to such
Inventions, and to applications for patents and copyright registrations and to patents and copyright registrations granted upon such Inventions
in the United States or in any foreign country; and (c) promptly acknowledge and deliver to the Company, without charge to the Company
but at the Company’s expense, such written instruments and perform such other acts as may be necessary, in the reasonable opinion
of the Company, to obtain and maintain patents and copyright registrations and to vest the entire rights, interest in and title thereto
in the Company.
4.2 Employee
and the Company understand that the provisions of this Agreement requiring assignment of Inventions to the Company will not apply to any
particular Invention that meets each and all of the following criteria: (a) Employee develops entirely on his own time, completely outside
of Employee’s normal working hours; (b) Employee develops related to the work detailed in Exhibit A without using Company equipment,
supplies, facilities or trade secret or Confidential Information, as defined below; (c) does not result from any work performed by Employee
for the Company; and (d) does not, either at the time of conception or at the time of reduction to practice, directly relate to the Company’s
Business, as then conducted or planned to be conducted at the time of conception or at the time of reduction to practice. Any such Invention
meeting all of the criteria set forth in clauses (a) through (d) above will be owned entirely by Employee, even if developed by Employee
during the Employment Period or otherwise during the time period of his employment or association with the Company. Finally, Employee
agrees and covenants that he will not individually file any patent applications relating to Inventions without first obtaining an express
release from a duly authorized Company representative, except for those related to the work detailed in Exhibit A according to the limitations
specified in (b) above.
4.3 For purposes of this
Agreement, the term “Inventions” means all discoveries, improvements, inventions, ideas and works of authorship, whether
patentable or copyrightable, conceived or made by Employee either solely or jointly with others, and relating to any consultation,
work or services performed by Employee with, for on behalf of or in conjunction with the Company or based on or derived from
Confidential Information.
5. Confidential Information.
5.1 Employee
will hold all Confidential Information, as defined below, in the strictest confidence and never use, disclose or publish any Confidential
Information without the prior express written permission obtained from a representative duly authorized by the CEO. Employee agrees to
maintain control over any Confidential Information obtained prior to or during the term of this Agreement, and restrict access thereto
to the Company’s employees, agents or other associated parties who have a need to use such Confidential Information for its intended
purpose.
5.2 Promptly
upon the Company’s written request (but in any event within ten days), all records and any compositions, articles, devices and other
items which disclose or embody Confidential Information in Employee’s possession, including all copies or specimens thereof, regardless
of whether prepared or made by Employee or by others, will be destroyed by Employee and Employee will certify in writing to the Company
that he has destroyed all Confidential Information and embodiments thereof as required under this Agreement.
5.3 For
purposes of this Agreement, the term “Confidential Information” shall mean all information developed by Employee as a result
of his work with, for, on behalf of, or in conjunction with, the Company and any information relating to the Company’s processes
and services, including information relating to research, know-how, formulae, product or service ideas, inventions, trade secrets, patents,
patent applications, systems, products, programs and techniques and any secret, proprietary or confidential information, knowledge or
data of the Company, except such information that was developed by Employee prior to his employment by the Company. All information disclosed
to Employee or to which Employee obtains access, whether originated by Employee or by others, and which is treated by the Company as “Confidential
Information” or which Employee has a reasonable basis to believe is “Confidential Information,” will be presumed to
be “Confidential Information” for purposes of this Agreement. Notwithstanding the foregoing, the term “Confidential
Information” will not apply to information which (i) Employee can establish by documentation was known to Employee prior to its
receipt by Employee from the Company, (ii) is lawfully disclosed to Employee by a third party not deriving such information from the Company,
(iii) is presently in the public domain or becomes a part of the public domain through no fault of Employee, or (iv) is required to be
disclosed pursuant to applicable law, rule, regulation, or court or administrative order; provided, however, that Employee shall take
reasonable steps to obtain confidential treatment for such items and shall promptly advise the Company of Employee’s notice of any
such requirement in order to permit the Company to obtain such confidential treatment on its own behalf.
6. No Solicitation
of Customers or Employees; Restrictive Covenant. Employee acknowledges that the Company has invested and will continue to invest
substantial time, effort and expense in acquiring and compiling its confidential, proprietary and trade secret information and in
assembling its present staff of personnel. In order to protect the business value of the Company’s confidential, proprietary
and trade secret information, during Employee’s employment with the Company and for twelve (12) months immediately following
the termination of that employment with the Company, Employee agrees: (a) that all information regarding actual or prospective (i)
partners of the Company (including but not limited to financiers, reinsurance companies, insurance companies, digital start-ups and
insurance testing companies) relating to Technology or (ii) customers of the Company relating to Technology, of which Employee
learns during his employment with the Company, constitutes “Confidential Information” of the Company; (b) not to,
directly or indirectly, induce or solicit any employees of the Company or its affiliates to leave their employment with the Company
or any of its affiliates without the unanimous prior written consent of the Chief Executive Officer of the Company. Each of the
restrictive covenants set forth above are separate and severable covenants under this Section 6.
7. Termination.
The initial term of this Agreement will begin on the date first written above and shall continue until the five-year anniversary of such
date (“Initial Term”) and shall automatically renew for one year terms thereafter (“Renewal Terms”) (collectively
the Initial Term and Renewal Terms referred to herein as “Employment Period”). Nevertheless, Employee’s employment under
this Agreement may be earlier terminated in any of the followings ways: (a) by the Company or Employee by providing written notice no
less than thirty (30) days prior to the completion of the Initial Term or a Renewal Term; (b) immediately and automatically upon Employee’s
death; (c) by the Company, upon not less than 14 days prior written notice to Employee, as a result of Employee’s incapacity due
to physical or mental illness or injury resulting in Employee’s absence from his full-time duties hereunder for four consecutive
weeks, subject to Employee’s right to cure during the 14-day period; (d) by the Company immediately for Good Cause; (e) by the Company
upon not less than 14 days prior written notice to Employee for any reason or no reason; (f) by Employee immediately for Good Reason;
or (g) by Employee upon not less than 90 days prior written notice to the Company for any reason or no reason.
8. Effects
of Termination. Following any termination of Employee’s employment under this Agreement, all compensation and benefits provided
to Employee under this Agreement shall cease to accrue as of the date of such termination, except as set forth in the paragraphs below.
8.1 In
the case of a termination arising under Section 7(b) from Employee’s death or under Section 7(c) from Employee’s incapacity,
the Company shall, for a period of one month following such death, pay to the estate of Employee an amount equal to Employee’s monthly
payment of the then current Base Salary, including any earned but unpaid annual compensation and continue the welfare benefit programs
contemplated under Section 3.5 above, including paying all premiums for coverage for Employee’s dependent family members under all
health, hospitalization, disability, dental, life and other insurance plans that the Company maintained at the time of Employee’s
death.
8.2 In the case of a
termination arising under Section 7(e) from the Company’s termination without Good Cause, or under Section 7(f) from
Employee’s termination with Good Reason, then, subject in all cases to Employee’s execution and delivery to the Company
of a general release and waiver of claims (including claims under contracts, claims under torts, claims as an employee, of the
Company or any of its affiliates, if applicable; it being understood that there will not be a release of any rights under the
Phantom Equity Agreement or any subsequent equity agreements, as specified in those agreements) in a customary and negotiated form
reasonably acceptable to the parties.
8.3 In
the case of a termination arising under Section 7(d) from the Company’s termination with Good Cause or under Section 7(g) from the
resignation of the Employee, then (a) no severance or continued benefits shall be due to Employee.
9. Return
of Company Property. All correspondence, reports, records, charts, advertising materials, designs, patents, business plans, financial
statements, manuals, memoranda, lists, and other personal property of the Company or its affiliates and in the possession of Employee
shall be and remain the property of the Company and its affiliates, as applicable. Any such documentation, information or property that
is in the possession of Employee shall be delivered promptly to the Company upon termination of Employee’s employment.
10. Non-Competition.
10.1 In
consideration of the various benefits provided by the Company to Employee under this Agreement, Employee agrees to be bound by the restrictive
covenant set forth in this Section. Employee recognizes and acknowledges the competitive and proprietary nature of the Business. Accordingly,
Employee agrees that, during the applicable Restricted Period, as defined below, Employee shall not, without the prior written consent
of the Company (which the Company shall not unreasonably withhold or condition), for himself or on behalf of any other person or entity,
directly or indirectly, either as principal, agent, stockholder, lender, consultant, officer, director, employee, agent, representative
or in any other capacity, own, manage, operate or control, or be concerned, connected or employed by, or otherwise associate in any manner
with, or engage in or have any financial interest in, any enterprise engaging in the Restricted Business, as defined below, anywhere in
the Restricted Territory, as defined below.
10.2 Nothing
contained in this Agreement shall preclude Employee from purchasing or owning common stock or equity in any company engaging in the Restricted
Business if such stock is publicly traded and Employee’s holdings therein do not exceed one percent of the total number of issued
and outstanding shares of capital stock of such company.
10.3 For
purposes of this Agreement: (a) “Restricted Period” means the period commencing on the date of this Agreement and ending on
the one year anniversary of the expiration or termination of this Agreement if Employee’s employment is terminated with Good Cause
or if he resigns without Good Reason. (b) “Restricted Business” means the Technology of the Company (including any portion
of the Technology conducted through affiliates or subsidiaries of the Company) as conducted as of the date of expiration or termination
of this Agreement (and as previously conducted within the two years prior to the date of such expiration or termination ), including any
substantially similar business that is competitive with the Technology; and (c) “Restricted Territory” means anywhere in the
United States where the Company or any of its affiliates, directly or indirectly, conducts the Technology as of the date of expiration
or termination of this Agreement.
10.4 If any part of this
Section 10 (or any of the restrictive covenants set forth in Section 6 above) should be determined by an arbitrator or court of
competent jurisdiction to be unreasonable in duration, geographic area, or scope, then this Section 10 (and Section 6 above, if
applicable) is intended to and shall extend only for such period of time, in such geographic area and with respect to such activity
as is determined by such arbitrator or court to be reasonable.
11. Indemnification.
If Employee is made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than (i) an action directly by the Company against Employee, and other than (ii) such a threatened, pending or
completed suit or proceeding brought against Employee and/or the Company by a third- party and which obligates Employee to provide the
Company indemnity under Section 13 below), by reason of or in connection with the fact that Employee is or was performing services for
the Company under this Agreement, then the Company shall indemnify Employee against all expenses (including reasonable attorneys’
fees), judgments, fines and amounts paid in settlement, as actually and reasonably incurred by Employee in connection therewith to the
maximum extent permitted by applicable law. In the event that both Employee and the Company are made a party to the same third-party action,
complaint, suit or proceeding, the Company agrees to engage competent legal representation, and Employee agrees to use the same representation,
provided that if counsel selected by the Company shall have a conflict of interest preventing such counsel from representing Employee,
Employee may engage separate counsel of his choosing and the Company shall pay all reasonable attorneys’ fees of such separate counsel.
To the maximum extent permitted by law, Employee shall not be entitled to indemnification or expense advances under this Agreement in
any case where he has exhibited gross negligence or willful misconduct, or performed criminal or fraudulent acts, or engaged in violations
of federal securities laws; and the Company may withhold expense advances if it reasonably determines that Employee is not entitled to
indemnification hereunder because of gross negligence, willful misconduct, the performance of criminal or fraudulent acts or the violation
of federal securities laws.
12. Parachute
Payments. If any payment or benefit (any “Payment”) Employee would receive from the Company pursuant to or in
connection with a “Change in Control” as defined in the Treasury Regulations promulgated under Code §280G would (i)
constitute a “parachute payment” within the meaning of Code §280G, and (ii) but for this sentence, be subject to
the excise tax imposed by Code §4999 (the “Excise Tax”), then such Payment shall be adjusted to equal to the
Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion of the Payment (prior to adjustment) that
would result in no portion of the Payment being subject to the Excise Tax or (y) the largest portion of the Payment (prior to
adjustment), which, after taking into account all applicable federal, state and local employment taxes, income taxes and the Excise
Tax (all computed at the highest applicable marginal rate), results in Employee’s receipt, on an after-tax basis, of the
greater amount of the Payment (than that calculated under clause (x) above) notwithstanding that all or some portion of the Payment
may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary
so that the Payment equals the Reduced Amount, reduction shall occur in the following order unless Employee elects, in writing, a
different order (provided, however, that such election shall be subject to the Company’s approval if made on or after the
effective date of the event that triggers the Payment): reduction of cash payments; cancellation of accelerated vesting of stock
options, if any; and reduction of employee benefits. In the event that acceleration of vesting of the stock options is to be
reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant of Employee’s stock options
(i.e., the earliest granted stock option will be cancelled last) unless Employee elects, in writing, a different order for
cancellation.
13. No
Conflicting Agreements. Employee represents and warrants to the Company that the execution of this Agreement by Employee and
Employee’s employment by the Company, and the performance of Employee’s duties hereunder, will not violate or breach any agreement
with any former or existing employer, client, or any other person, firm or entity, to which agreement Employee is a party or by which
agreement Employee is bound. Employee also represents and warrants that he is not affiliated in any manner (whether as a stockholder,
member, partner, manager, director, officer, employee or otherwise) with any person or entity that has any business relationship with
the Company. Furthermore, Employee agrees to indemnify the Company from and against any and all losses, liabilities, damages and claims,
including but not limited to reasonable attorneys’ fees and costs and expenses of investigation, arising from any third-party claim
made against the Company and based upon or arising out of any non-competition or confidentiality agreement between or among Employee and
any such third party.
14. Assignment;
Binding Effect. Employee understands that the Company is employing him on the basis of his personal qualifications, experience and
skills. Therefore, Employee agrees that he cannot delegate any portion of his obligations of performance under this Agreement. However,
Employee can employ, as appropriate, a staff to assist him in carrying out his responsibilities; provided that such assistance may be
limited by budgetary constraints and the failure of such staff cannot serve as a reason for inadequate job performance by the Employee.
Employee may also not assign any of his rights under this Agreement without the prior written consent of the Company, which consent may
be conditioned or withheld in the sole and complete discretion of the Company. Subject to the preceding two sentences, this Agreement
shall be binding upon, inure to the benefit of and be enforceable by the parties and their respective heirs, legal representatives, and
permitted successors and assigns.
15. Complete
Agreement. This Agreement is not a promise of future employment. Except as specifically provided herein, Employee has received no
oral representations, and has no other understandings or agreements with the Company (oral or written) or any of its officers, directors
or representatives covering the same subject matter as this Agreement. This written Agreement, together with its exhibits and schedules,
is the final, complete and exclusive statement and expression of the agreement between the Company and Employee pertaining to Employee’s
employment. This written Agreement may not be later modified except in a writing signed by a duly authorized officer of the Company and
Employee, and no term of this Agreement may be waived except by a writing signed by the party waiving the benefit of such term. This Agreement
hereby supersedes any other employment agreements or understandings, written or oral, between the Company and Employee.
16. Notices.
Whenever any notice is required hereunder, it shall be given in writing addressed as follows:
If to the Company:
With a copy to:
If to Employee:
Notice shall be deemed to be delivered four days after
it is mailed by registered or certified mail, postage prepaid, return receipt requested or one day after it is sent by a reputable overnight
courier service. Either party may change the address for notice by notifying the other party of such change in accordance with this Section.
17. Severability;
Blue Pencil Doctrine. In the event that any one or more of the provisions of this Agreement or any application thereof, shall
be found to be invalid, illegal or otherwise unenforceable, the validity, legality and enforceability of the remaining provisions and
any application thereof, shall not in any way be affected or impaired thereby. To the extent any provision of this Agreement is determined
by an arbitrator or court of competent jurisdiction to be unenforceable, the arbitrator or court of competent jurisdiction shall reform
any such provision to make it enforceable. The provisions of this Agreement shall, where possible, be interpreted so as to sustain their
legality and enforceability.
18. Dispute Resolution.
18.1 To
the greatest extent possible, the parties will endeavor to resolve any disputes relating to the Agreement through amicable negotiations.
Failing an amicable settlement, any controversy, claim or dispute arising under or relating to this Agreement, including the existence,
validity, interpretation, performance, termination or breach of this Agreement, will finally be settled by binding arbitration before
a three person arbitrator (the “Arbitration Tribunal”) which will be jointly appointed by the parties. The Arbitration Tribunal
shall self-administer the arbitration proceedings utilizing the Commercial Rules of the American Arbitration Association (“AAA”);
provided, however, the AAA shall not be involved in administration of the arbitration. The Arbitration Tribunal must consist of one retired
judge of a state or federal court of the United States or a licensed lawyer with at least 15 years of corporate or commercial law experience.
18.2 The arbitration will
be held in Minneapolis, Minnesota. Each party will have discovery rights as provided by the Federal Rules of Civil Procedure within
the limits imposed by the arbitrators. It is the intent of the parties that any arbitration will be concluded as quickly as
reasonably practicable. Once commenced, the hearing on the disputed matters will be held four days a week until concluded, with each
hearing date to begin at 9:00 a.m. and to conclude at 5:00 p.m. The arbitrators will use all reasonable efforts to issue the final
written report containing award or awards within a period of five business days after closure of the proceedings. Failure of the
arbitrators to meet the time limits of this Section will not be a basis for challenging the award. The Arbitration Tribunal will not
have the authority to award punitive damages to either party. Each party will bear its own expenses, but the parties will share
equally the expenses of the Arbitration Tribunal. The Arbitration Tribunal shall award attorneys’ fees and other related costs
payable by the losing party to the successful party as it deems equitable. This Agreement will be enforceable, and any arbitration
award will be final and non-appealable, and judgment thereon may be entered in any court of competent jurisdiction. Notwithstanding
the foregoing, claims for injunctive relief for breaches of Sections 4, 5, 6, 9 and 10, and claims to enforce arbitration awards,
may be brought in a state or federal court in the state court in Minnesota.
19. Equitable
Relief. Employee acknowledges and agrees that it would be difficult to fully compensate the Company for damages resulting from the
breach or threatened breach of the covenants contained in Sections 4, 5, 6, 9 and 10 of this Agreement, and that any such breach may cause
the Company irreparable harm. Accordingly, the Company will be entitled to seek injunctive relief, including but not limited to temporary
restraining orders, preliminary injunctions and permanent injunctions, to enforce the terms thereof, without the need to demonstrate irreparable
harm or, to the extent permitted by applicable law, the need to post any bond. This right to injunctive relief will not, however, diminish
any of the Company’s other legal rights under this Agreement or at law.
20. Governing
Law; Jurisdiction and Venue. This Agreement shall in all respects be construed according to the laws of the State of Minnesota, notwithstanding
the conflicts-of-law provisions of such state. Subject to the provisions of Section 18 above, any claims for injunctive relief arising
under this Agreement, and any claims to enforce an earlier issued arbitration award, shall be exclusively decided by a state or federal
court in the State of Minnesota. Employee hereby irrevocably waives his right, if any, to have any disputes between him and the Company
arising out of or related to this Agreement decided in any jurisdiction or venue other than a state or federal court in the State of Minnesota.
Furthermore, Employee hereby irrevocably (a) waives any objection that he might have now or hereafter to the foregoing jurisdiction and
venue of any such proceeding, (b) submits to the exclusive jurisdiction of any such court set forth above in any such proceeding, and
(c) waives any claim or defense of inconvenient forum.
21. Further
Assurances. Each party shall, without further consideration, execute such additional documents as may be reasonably required in order
to carry out the purposes and intents of this Agreement.
22. Interpretation.
Employee has had a meaningful opportunity to work with legal counsel of his choosing and has either availed himself of such opportunity
to his satisfaction or has independently determined not to seek such counsel. Furthermore, Employee has a meaningful opportunity to review
and negotiate the terms and conditions of this Agreement. Since both parties have participated in the negotiation, drafting and finalization
of their business relationship and documented such relationship in this Agreement, this Agreement will not be interpreted as though it
has been drafted solely by the Company.
23. Waivers. No
term or condition of this Agreement will be deemed to have been waived nor shall there be any estoppel to enforce any provision
hereof, except by a written instrument executed by the party charged with waiver or estoppel. A party’s delay, waiver or
failure to enforce any of the terms of this Agreement or any similar agreement in one instance shall not constitute a waiver of its
rights hereunder with respect to other violations of this or any other agreement.
24. Counterparts
and Delivery. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together
shall constitute but one and the same instrument. Counterpart signatures delivered by facsimile or other means of electronic transmission
shall be valid and binding to the same as the delivery of original ink signatures.
IN WITNESS WHEREOF, the parties have
executed this Employment Agreement as of the date first above written.
| COMPANY: |
|
EMPLOYEE: |
| |
|
|
|
| GWG HOLDINGS, INC. |
|
Brian Chen |
| |
|
|
|
| By: |
/s/ Jon Sabes |
|
/s/ Brian Chen |
| Name: |
Jon Sabes |
|
Name: |
Brian Chen |
| Title: |
CEO |
|
|
Signature Page]
Exhibit A
Employment Activities
Title:
Chief Science Officer (“CSO”)
The Chief Science Officer will
be responsible for leading the development of commercializing epigenetic predictive technology.
The scientific efforts will involve
a variety of challenging endeavors as Life Epigenetics seeks to commercialize epigenetic technology initially for the life insurance industry,
but even more broadly for the health and wellness industries.
Job Description:
The Chief Science Officer will
oversee the scientific development of epigenetic biomarkers that are predictive as to individual health and wellness. In addition, the
CSO will work to understand the integration of individual health and wellness measurements into insurance underwriting.
The area of responsibility for
this role encompasses both scientific and analytic expertise. The CSO is required to have and maintain expertise in the biology and epidemiology
of human health, biomarkers, functional testing, and mortality risk factors. In addition, the CSO must have the experience in developing
analytical pipelines for “big data” and stay on the cutting edge of human health research in order to identify new measures
of life expectancy.
Responsibilities/Goals:
| 1. | Design epigenetic signatures that mirror established measures
of health and wellness. |
| 2. | Create a panel of epigenetic signatures capable of replacing
the need for paramedical testing of blood/urine used in life insurance underwriting. |
| 3. | Work to create an intellectual property strategy that protects
the epigenetic signatures developed, as well as maintain the freedom to operate around any outstanding intellectual property. |
| 4. | Actively participate (and manage where appropriate) on organizational
decision making on the operational activities and corporate direction in support of strategic goals. |
Compensation:
Base Salary: $175,000
Incentive Compensation:
| ● | Cash compensation, under development and to be proposed and
approved by the CEO, that shall be based upon the attainment of specific operational benchmarks supporting the development of epigenetic
signatures capable of replacing life insurance paramedical underwriting. |
| ● | Phantom Equity Rights (“PERs”) representing 3%
of the Valuation Amount created in the business of Life Epigenetics, Inc. (“LEGX”). PERs shall vest pro-rata over a 5 year
term, beginning on the original start date of February 6, 2017. |
| Benefits: |
Standard Benefits Health, dental, and vision insurance. 401K. |
| Vacation: |
Standard Benefits |
| Others: | Tele-work and travel and registration for business meetings, conferences, workshops, and trainings related
to health biomarkers, analytics, and aging, as required. |
Exhibit B
Form of Phantom Equity Rights Agreement
B-11
