UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
Date
of Report (Date of earliest event reported): July 23, 2021 (July 22, 2021)
VINCO
VENTURES, INC.
(f/k/a Edison Nation, Inc.)
(Exact Name of Registrant as Specified in Charter)
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Nevada
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001-38448
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82-2199200
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(State
or other jurisdiction
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(Commission
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(IRS
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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1
West Broad Street, Suite 1004
Bethlehem,
Pennsylvania
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18018
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(Address
of principal executive offices)
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(Zip
Code)
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(866)
900-0992
(Registrant’s Telephone Number, Including Area
Code)
(Former name or former address, if changed since last
report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Securities
registered pursuant to Section 12(b) of the Act:
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Title
of each class
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Trading
Symbol(s)
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Name
of each exchange on which registered
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Common
Stock, $0.001 par value per share
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BBIG
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Nasdaq
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Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company [X]
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [X]
Item
1.01. Entry into a Material Definitive Agreement.
On July 22, 2021 (the “Effective Date”),
Vinco Ventures, Inc. (the “Company”) consummated the closing of a private placement offering (the “Offering”)
whereby pursuant to the Securities Purchase Agreement (the “Purchase Agreement”) entered into by the Company on July 22, 2021
with one accredited investor (the “Investor”), the Company issued a $120,000,000 Senior Secured Convertible Note for the purchase
price of $100,000,000 (the “Note”) and warrants (the “Warrants”) to purchase shares of the Company’s common
stock, par value $0.001 per share (“Common Stock”).
The Note bears no interest absent an Event of Default
(as defined below) and matures on July 22, 2022. The Note contains a voluntary conversion mechanism whereby the Noteholder may convert
at any time after the Initial Convertibility Date (as defined therein), in whole or in part, the outstanding principal and interest under
the Note into shares of the Common Stock at a conversion price of $4.00 per share (the “Conversion Shares”). The Note
is guaranteed by the Company’s subsidiaries and certain other guarantors as described below and is a senior secured obligation of
the Company and the guarantors. The Note contains certain events of default as described in the Note (each an “Event of Default”).
If an Event of Default occurs, interest under the Note will accrue at a rate of eighteen percent (18%) per annum and the outstanding principal
amount of the Note, plus accrued but unpaid interest, liquidated damages and other amounts owing with respect to the Note will become,
at the Note holder’s election, immediately due and payable in cash. Upon completion of a Change of Control (as defined in the Note),
the Note’s holder may require the Company to purchase any outstanding portion of the Note in cash at a price in accordance with
the terms of the Note. The Note also include a right of the Company to, subject to certain equity conditions, redeem the Note at 115%
of the conversion amount of the Note being redeemed, as well as a mutual redemption right at a redemption price of $100,000,000 in the
event the transaction with Lomotif (as defined below) does not close on or prior to July 27, 2021.
The Note is guaranteed by the Company’s subsidiaries
and by ZASH Global Media and Entertainment Corporation (“Zash”) and by ZVV Media Partners, LLC (“ZVV”), a joint
venture of the Company and Zash, in contemplation of an acquisition by ZVV of Lomotoif Private Limited (“Lomotif”), which
was previously announced by the Company and Zash on February 23, 2021 in a joint press release issued by the Company and Zash. The Note
and the guarantees are secured by a pledge of substantially all of the assets of the Company and the guarantors.
The Note will not become convertible into Common Stock
and the Warrants will not be exercisable for Common Stock unless certain regulatory filings have been made and such transactions are approved
by the Company’s shareholders. If the Warrants do not become exercisable by November 19, 2021, the Company will be required to redeem
the Warrant at a price of $40,000,000.
Pursuant to the Purchase Agreement, the Investor also
received a Warrant. The Warrant contains an exercise price of $4.00 per share, subject to adjustments as provided under the terms of the
Warrant. In connection with the closing of the Offering, the Warrant was exercisable for an aggregate of 32,697,548 shares of Common Stock
(the “Warrant Shares”).
The Company also entered into a Registration Rights
Agreement with the Investor (the “Registration Rights Agreement”). The Registration Rights Agreement provides that the Company
shall (i) file with the Securities and Exchange Commission (the “Commission”) a Registration Statement by the earlier of (x)
five (5) trading days after the Company obtains shareholder approval of the Note and the Warrants and (y) one hundred twenty (120) calendar
days after the Closing Date (the “Filing Deadline”) of the Purchase Agreement to register the Conversion Shares and Warrant
Shares (the “Registration Statement”); and (ii) use its best efforts to have the Registration Statement declared effective
by the Commission by the earlier of the (A) 30th calendar day after the Filing Deadline (or 45 calendar days after the Filing Deadline
if the Registration Statement receives comments from the Commission) and (B) 2nd Business Day after the date the Company is notified that
such Registration Statement will not be reviewed or will not be subject to further review by the Commission.
Palladium Capital Group, LLC. (the
“Placement Agent”) acted as placement agent for the Offering. The Placement Agent is to receive cash compensation in the
aggregate amount of $9,000,000 (8% of the gross proceeds to the Company plus an additional 1% of the gross proceeds to the Company
for non-accountable expenses) (the “Placement Agent Fee”). $1,000,000 of the Placement Agent Fee is to reimburse the
Placement Agent for fees and expenses and is due and payable upon the closing of the Offering. The additional $8,000,000 of the
Placement Agent Fee is deferred and will only be payable upon the Company’s shareholders approving the Company’s
contemplated merger with Zash. Additionally, in connection with the closing of the Offering, the Placement Agent received a warrant
to purchase shares of the Company’s Common Stock in an amount equal to $8,000,000, which is immediately exercisable
upon the closing of the Offering.
The foregoing provides only brief descriptions of
the material terms of the Purchase Agreement, the Note, the Warrant, the Registration Rights Agreement, the Security Agreement and the
Guarantee, does not purport to be a complete description of the rights and obligations of the parties thereunder, and such descriptions
are qualified in their entirety by reference to the full text of the forms of the Purchase Agreement, the Note, the Warrant and the Registration
Rights Agreement, the Pledge and Security Agreement and the Guarantee filed as exhibits to this Current Report on Form 8-K, and are incorporated
herein by reference.
Item
2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of the
Registrant.
The applicable information set forth in Item 1.01
of this Current Report on Form 8-K is incorporated by reference in this Item 2.03.
Item
3.02. Unregistered Sales of Equity Securities.
Item 1.01 is hereby incorporated by reference.
The applicable information set forth in Item 1.01
of this Current Report on Form 8-K is incorporated by reference in this Item 3.02. The Note, Warrant, Conversion Shares, and Warrant
Shares were not registered under the Securities Act, but qualified for exemption under Section 4(a)(2) and/or Regulation D of the Securities
Act. The securities were exempt from registration under Section 4(a)(2) of the Securities Act because the issuance of such securities
by the Company did not involve a “public offering,” as defined in Section 4(a)(2) of the Securities Act, due to the insubstantial
number of persons involved in the transaction, size of the offering, manner of the offering and number of securities offered. The Company
did not undertake an offering in which it sold a high number of securities to a high number of investors. In addition, the Investors
had the necessary investment intent as required by Section
4(a)(2) of the Securities Act since the Investors agreed to, and received, the securities bearing a legend stating that such securities
are restricted pursuant to Rule 144 of the Securities Act. This restriction ensures that these securities would not be immediately redistributed
into the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, the Company
has met the requirements to qualify for exemption under Section 4(a)(2) of the Securities Act.
Item
7.01. Regulation FD Disclosure
On
July 23, 2021, Vinco Ventures, Inc. (the “Company”), a Nevada corporation, issued
a joint press release with Zash regarding Zash’s entrance into a definitive acquisition agreement (“Acquisition Agreement”)
with Lomotif Private Limited (“Lomotif”) pursuant to which Zash intends to a acquire a majority controlling interest in Lomotif.
Pursuant to that certain Deed of Variation and Supplement to the Acquisition Agreement, dated July19, 2021, the parties to the Acquisition
Agreement have agreed that ZVV Media Partners, LLC shall be the purchaser of Lomotif, which transaction is set to close imminently.
Item
8.01. Other Events.
On
July 22, 2021, Vinco Ventures, Inc. ( the “Company”) entered into a Second Amended and Restated Limited Liability Company
Agreement of ZVV Media Partners, LLC inclusive of an independent Fairness Opinion submitted from Gemini Valuation Services.
Item
9.01. FINANCIAL STATEMENTS AND EXHIBITS.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Date:
July 23, 2021
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VINCO
VENTURES, INC.
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By:
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/s/
Christopher B. Ferguson
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Name:
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Christopher
B. Ferguson
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Title:
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Chief
Executive Officer
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Exhibit
4.1
[FORM
OF SENIOR SECURED CONVERTIBLE NOTE]
NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO
THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES. ANY TRANSFEREE OF THIS NOTE SHOULD CAREFULLY REVIEW THE TERMS OF THIS NOTE,
INCLUDING SECTIONS 3(c)(iii) AND 18(a)HEREOF. THE PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE AND, ACCORDINGLY, THE SECURITIES ISSUABLE
UPON CONVERSION HEREOF MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 3(c)(iii) OF THIS NOTE.
THIS
NOTE HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”). PURSUANT TO TREASURY REGULATION §1.1275-3(b)(1), INVESTOR
RELATIONS, AS A REPRESENTATIVE OF THE COMPANY HEREOF, WILL, BEGINNING TEN DAYS AFTER THE ISSUANCE DATE OF THIS NOTE, PROMPTLY MAKE AVAILABLE
TO THE HOLDER UPON REQUEST THE INFORMATION DESCRIBED IN TREASURY REGULATION §1.1275-3(b)(1)(i). INVESTOR RELATIONS MAY BE REACHED
AT TELEPHONE NUMBER (866) 900-0992.
Vinco
Ventures Inc.
Senior
Secured Convertible Note
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Issuance
Date: July [●], 2021
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Original
Principal Amount: U.S. $120,000,000
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FOR
VALUE RECEIVED, Vinco Ventures Inc., a Nevada corporation (the “Company”), hereby promises to pay to the order
of HUDSON BAY MASTER FUND LTD. or its registered assigns (“Holder”) the amount set forth above as the Original Principal
Amount (as reduced pursuant to the terms hereof pursuant to redemption, conversion or otherwise, the “Principal”)
when due, whether upon the Maturity Date, or upon acceleration, redemption or otherwise (in each case in accordance with the terms hereof)
and, if an Event of Default has occurred and is continuing, to pay interest (“Interest”) on any outstanding Principal
at the applicable Default Rate (as defined below) when the same becomes due and payable, whether upon the Maturity Date or upon acceleration,
conversion, redemption or otherwise (in each case in accordance with the terms hereof). This Senior Secured Convertible Note (including
all Senior Secured Convertible Notes issued in exchange, transfer or replacement hereof, this “Note”) is one of an
issue of Senior Secured Convertible Notes issued pursuant to the Securities Purchase Agreement, dated as of July 22, 2021 (the “Subscription
Date”), by and among the Company and the investors (the “Buyers”) referred to therein, as amended from time
to time (collectively, the “Notes”, and such other Senior Secured Convertible Notes, the “Other Notes”).
Certain capitalized terms used herein are defined in Section 31.
1.
PAYMENTS OF PRINCIPAL. On the Maturity Date, the Company shall pay to the Holder an amount in cash representing all outstanding
Principal, accrued and unpaid Interest and accrued and unpaid Late Charges (as defined in Section 24(c)) on such Principal and Interest.
Other than as specifically permitted by this Note, the Company may not prepay any portion of the outstanding Principal, accrued and unpaid
Interest or accrued and unpaid Late Charges on Principal and Interest, if any.
2.
INTEREST; DEFAULT RATE. No Interest shall accrue hereunder unless and until an Event of Default (as defined in Section 4(a)) has
occurred. From and after the occurrence and during the continuance of any Event of Default, Interest shall accrue hereunder at a rate
of eighteen percent (18.0%) per annum (the “Default Rate”) and shall be computed on the basis of a 360-day year and
twelve 30-day months and shall be payable in arrears on the first Business Day of the calendar month immediately succeeding the month
during which an Event of Default has occurred or is continuing, as applicable (a “Default Interest Date”). Accrued
and unpaid Interest, if any, shall also be payable as part of the Outstanding Amount upon any redemption or conversion hereunder occurring
prior to a Default Interest Date. In the event that such Event of Default is subsequently cured or waived in writing by the Holder (and
no other Event of Default then exists, including, without limitation, for the Company’s failure to pay such Interest at the Default
Rate on the applicable Default Interest Date), Interest shall cease to accrue hereunder as of the calendar day immediately following
the date of such cure or waiver; provided that Interest as calculated and unpaid during the continuance of such Event of Default shall
continue to apply to the extent relating to the days after the occurrence of such Event of Default through and including the date of
such cure or waiver of such Event of Default.
3.
CONVERSION OF NOTES. At any time after the Initial Convertibility Date, this Note shall be convertible into validly issued, fully
paid and non-assessable shares of Common Stock (as defined below), on the terms and conditions set forth in this Section 3.
(a)
Conversion Right. Subject to the provisions of Section 3(d), at any time or times on or after the Initial Convertibility Date,
the Holder shall be entitled to convert any portion of the outstanding and unpaid Conversion Amount (as defined below) into validly issued,
fully paid and non-assessable shares of Common Stock in accordance with Section 3(c), at the Conversion Rate (as defined below). The
Company shall not issue any fraction of a share of Common Stock upon any conversion. If the issuance would result in the issuance of
a fraction of a share of Common Stock, the Company shall round such fraction of a share of Common Stock up to the nearest whole share.
The Company shall pay any and all transfer, stamp, issuance and similar taxes, costs and expenses (including, without limitation, fees
and expenses of the Transfer Agent (as defined below)) that may be payable with respect to the issuance and delivery of Common Stock
upon conversion of any Conversion Amount.
(b)
Conversion Rate. The number of shares of Common Stock issuable upon conversion of any Conversion Amount pursuant to Section 3(a)
shall be determined by dividing (x) such Conversion Amount by (y) the Conversion Price (the “Conversion Rate”).
(i)
“Conversion Amount” means the sum of (x) portion of the Principal to be converted, redeemed or otherwise with respect
to which this determination is being made and (y) all accrued and unpaid Interest with respect to such portion of the Principal amount
and accrued and unpaid Late Charges with respect to such portion of such Principal and such Interest, if any.
(ii)
“Conversion Price” means, as of any Conversion Date or other date of determination, $4.00, subject to adjustment as
provided herein.
(c)
Mechanics of Conversion.
(i)
Optional Conversion. To convert any Conversion Amount into shares of Common Stock on any date following the Initial Convertibility
Date (a “Conversion Date”), the Holder shall deliver (whether via facsimile, electronic mail or otherwise), for receipt
on or prior to 11:59 p.m., New York time, on such date, a copy of an executed notice of conversion in the form attached hereto as Exhibit
I (a “Conversion Notice”) to the Company. For the avoidance of doubt, if the Initial Convertibility Date does
not occur, the Notes shall not be convertible. If required by Section 3(c)(iii), within two (2) Trading Days following a conversion of
this Note as aforesaid, the Holder shall surrender this Note to a nationally recognized overnight delivery service for delivery to the
Company (or an indemnification undertaking with respect to this Note in the case of its loss, theft or destruction as contemplated by
Section 18(b)). On or before the first (1st) Trading Day following the date of receipt of a Conversion Notice, the Company shall transmit
by facsimile or electronic mail an acknowledgment of confirmation of receipt of such Conversion Notice and representation as to whether
such shares of Common Stock may then be resold pursuant to Rule 144 or an effective and available registration statement, in the form
attached hereto as Exhibit II, to the Holder and the Company’s transfer agent (the “Transfer Agent”)
which confirmation shall constitute an instruction to the Transfer Agent to process such Conversion Notice in accordance with the terms
herein. On or before the second (2nd) Trading Day following the date on which the Company has received a Conversion Notice (or such earlier
date as required pursuant to the 1934 Act or other applicable law, rule or regulation for the settlement of a trade initiated on the
applicable Conversion Date of such shares of Common Stock issuable pursuant to such Conversion Notice) (a “Share Delivery Deadline”),
the Company shall (1) provided that the Transfer Agent is participating in The Depository Trust Company’s (“DTC”)
Fast Automated Securities Transfer Program (“FAST”), credit such aggregate number of shares of Common Stock to which
the Holder shall be entitled pursuant to such conversion to the Holder’s or its designee’s balance account with DTC through
its Deposit/Withdrawal at Custodian system or (2) if the Transfer Agent is not participating in FAST, upon the request of the Holder,
issue and deliver (via reputable overnight courier) to the address as specified in the Conversion Notice, a certificate, registered in
the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder shall be entitled pursuant to such
conversion. If this Note is physically surrendered for conversion pursuant to Section 3(c)(iii) and the outstanding Principal of this
Note is greater than the Principal portion of the Conversion Amount being converted, then the Company shall as soon as practicable and
in no event later than five (5) Business Days after receipt of this Note and at its own expense, issue and deliver to the Holder (or
its designee) a new Note (in accordance with Section 18(d)) representing the outstanding Principal not converted. The Person or Persons
entitled to receive the shares of Common Stock issuable upon a conversion of this Note shall be treated for all purposes as the record
holder or holders of such shares of Common Stock on the applicable Conversion Date. Notwithstanding anything to the contrary contained
in this Note or the Registration Rights Agreement, after the effective date of the Registration Statement (as defined in the Registration
Rights Agreement) and prior to the Holder’s receipt of the notice of a Grace Period (as defined in the Registration Rights Agreement),
the Company shall cause the Transfer Agent to deliver unlegended shares of Common Stock to the Holder (or its designee) in connection
with any sale of Registrable Securities (as defined in the Registration Rights Agreement) with respect to which the Holder has entered
into a contract for sale, and delivered a copy of the prospectus included as part of the particular Registration Statement to the extent
applicable, and for which the Holder has not yet settled.
(ii)
Company’s Failure to Timely Convert. If the Company shall fail on or prior to the applicable Share Delivery Deadline, either
(I) if the Transfer Agent is not participating in FAST, to issue and deliver to the Holder (or its designee) a certificate for the number
of shares of Common Stock to which the Holder is entitled and register such shares of Common Stock on the Company’s share register
or, if the Transfer Agent is participating in FAST, to credit the balance account of the Holder or the Holder’s designee with DTC
for such number of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion of this Note (as the case
may be) or (II) if the Registration Statement covering the resale of the shares of Common Stock that are the subject of the Conversion
Notice (the “Unavailable Conversion Shares”) is not available for the resale of such Unavailable Conversion Shares
and the Company fails to promptly, but in no event later than as required pursuant to the Registration Rights Agreement (x) so notify
the Holder and (y) deliver the shares of Common Stock electronically without any restrictive legend by crediting such aggregate number
of shares of Common Stock to which the Holder is entitled pursuant to such conversion to the Holder’s or its designee’s balance
account with DTC through its Deposit/Withdrawal At Custodian system (the event described in the immediately foregoing clause (II) is
hereinafter referred as a “Notice Failure” and together with the event described in clause (I) above, a “Conversion
Failure”), then, in addition to all other remedies available to the Holder, (1) the Company shall pay in cash to the Holder
on each day after such Share Delivery Deadline that the issuance of such shares of Common Stock is not timely effected an amount equal
to one percent (1%) of the product of (A) the sum of the number of shares of Common Stock not issued to the Holder on or prior to the
applicable Share Delivery Deadline and to which the Holder is entitled, multiplied by (B) any trading price of the Common Stock selected
by the Holder in writing as in effect at any time during the period beginning on the applicable Conversion Date and ending on the applicable
Share Delivery Deadline and (2) the Holder, upon written notice to the Company, may void its Conversion Notice with respect to, and retain
or have returned (as the case may be) any portion of this Note that has not been converted pursuant to such Conversion Notice, provided
that the voiding of a Conversion Notice shall not affect the Company’s obligations to make any payments which have accrued prior
to the date of such notice pursuant to this Section 3(c)(ii) or otherwise. In addition to the foregoing, if on or prior to the Share
Delivery Deadline either (A) if the Transfer Agent is not participating in FAST, the Company shall fail to issue and deliver to the Holder
(or its designee) a certificate and register such shares of Common Stock on the Company’s share register or, if the Transfer Agent
is participating in FAST, the Transfer Agent shall fail to credit the balance account of the Holder or the Holder’s designee with
DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion hereunder or pursuant
to the Company’s obligation pursuant to clause (II) below or (B) a Notice Failure occurs, and if on or after such Share Delivery
Deadline the Holder purchases (in an open market transaction or otherwise) shares of Common Stock corresponding to all or any portion
of the number of shares of Common Stock issuable upon such conversion that the Holder is entitled to receive from the Company and has
not received from the Company in connection with such Conversion Failure or Notice Failure, as applicable (a “Buy-In”),
then, in addition to all other remedies available to the Holder, the Company shall, within two (2) Business Days after receipt of the
Holder’s request and in the Holder’s discretion, either: (I) pay cash to the Holder in an amount equal to the Holder’s
total purchase price (including brokerage commissions and other reasonable out-of-pocket expenses, if any) for the shares of Common Stock
so purchased (including, without limitation, by any other Person in respect, or on behalf, of the Holder) (the “Buy-In Price”),
at which point the Company’s obligation to so issue and deliver such certificate (and to issue such shares of Common Stock) or
credit the balance account of such Holder or such Holder’s designee, as applicable, with DTC for the number of shares of Common
Stock to which the Holder is entitled upon the Holder’s conversion hereunder (as the case may be) (and to issue such shares of
Common Stock) shall terminate, or (II) promptly honor its obligation to so issue and deliver to the Holder a certificate or certificates
representing such shares of Common Stock or credit the balance account of such Holder or such Holder’s designee, as applicable,
with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion hereunder (as the
case may be) and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (x) such number
of shares of Common Stock multiplied by (y) the lowest Closing Sale Price of the Common Stock on any Trading Day during the period commencing
on the date of the applicable Conversion Notice and ending on the date of such issuance and payment under this clause (II) (the “Buy-In
Payment Amount”). Nothing shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law
or in equity, including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver certificates representing shares of Common Stock (or to electronically deliver such shares of Common Stock)
upon the conversion of this Note as required pursuant to the terms hereof.
(iii)
Registration; Book-Entry. The Company shall maintain a register (the “Register”) for the recordation of the
names and addresses of the holders of each Note and the principal amount of the Notes held by such holders (the “Registered
Notes”). The entries in the Register shall be conclusive and binding for all purposes absent manifest error. The Company and
the holders of the Notes shall treat each Person whose name is recorded in the Register as the owner of a Note for all purposes (including,
without limitation, the right to receive payments of Principal and Interest hereunder) notwithstanding notice to the contrary. A Registered
Note may be assigned, transferred or sold in whole or in part only by registration of such assignment or sale on the Register. Upon its
receipt of a written request to assign, transfer or sell all or part of any Registered Note by the holder thereof, the Company shall
record the information contained therein in the Register and issue one or more new Registered Notes in the same aggregate principal amount
as the principal amount of the surrendered Registered Note to the designated assignee or transferee pursuant to Section 18, provided
that if the Company does not so record an assignment, transfer or sale (as the case may be) of all or part of any Registered Note within
two (2) Business Days of such a request, then the Register shall be automatically deemed updated to reflect such assignment, transfer
or sale (as the case may be). Notwithstanding anything to the contrary set forth in this Section 3, following conversion of any portion
of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this Note to the Company unless
(A) the full Conversion Amount represented by this Note is being converted (in which event this Note shall be delivered to the Company
following conversion thereof as contemplated by Section 3(c)(i)) or (B) the Holder has provided the Company with prior written notice
(which notice may be included in a Conversion Notice) requesting reissuance of this Note upon physical surrender of this Note. The Holder
and the Company shall maintain records showing the Principal, Interest and Late Charges converted and/or paid (as the case may be) and
the dates of such conversions, and/or payments (as the case may be) or shall use such other method, reasonably satisfactory to the Holder
and the Company, so as not to require physical surrender of this Note upon conversion. If the Company does not update the Register to
record such Principal, Interest and Late Charges converted and/or paid (as the case may be) and the dates of such conversions, and/or
payments (as the case may be) within two (2) Business Days of such occurrence, then the Register shall be automatically deemed updated
to reflect such occurrence.
(iv)
Pro Rata Conversion; Disputes. In the event that the Company receives a Conversion Notice from more than one holder of Notes for
the same Conversion Date and the Company can convert some, but not all, of such portions of the Notes submitted for conversion, the Company,
subject to Section 3(d), shall convert from each holder of Notes electing to have Notes converted on such date a pro rata amount of such
holder’s portion of its Notes submitted for conversion based on the principal amount of Notes submitted for conversion on such
date by such holder relative to the aggregate principal amount of all Notes submitted for conversion on such date. In the event of a
dispute as to the number of shares of Common Stock issuable to the Holder in connection with a conversion of this Note, the Company shall
issue to the Holder the number of shares of Common Stock not in dispute and resolve such dispute in accordance with Section 23.
(d)
Limitations on Conversions. The Company shall not effect the conversion of any portion of this Note, and the Holder shall not
have the right to convert any portion of this Note pursuant to the terms and conditions of this Note and any such conversion shall be
null and void and treated as if never made, to the extent that after giving effect to such conversion, the Holder together with the other
Attribution Parties collectively would beneficially own in excess of 9.99% (the “Maximum Percentage”) of the shares
of Common Stock outstanding immediately after giving effect to such conversion. For purposes of the foregoing sentence, the aggregate
number of shares of Common Stock beneficially owned by the Holder and the other Attribution Parties shall include the number of shares
of Common Stock held by the Holder and all other Attribution Parties plus the number of shares of Common Stock issuable upon conversion
of this Note with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock which would
be issuable upon (A) conversion of the remaining, nonconverted portion of this Note beneficially owned by the Holder or any of the other
Attribution Parties and (B) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company
(including, without limitation, any convertible notes or convertible preferred stock or warrants, including, without limitation, the
Warrants) beneficially owned by the Holder or any other Attribution Party subject to a limitation on conversion or exercise analogous
to the limitation contained in this Section 3(d). For purposes of this Section 3(d), beneficial ownership shall be calculated in accordance
with Section 13(d) of the 1934 Act. For purposes of determining the number of outstanding shares of Common Stock the Holder may acquire
upon the conversion of this Note without exceeding the Maximum Percentage, the Holder may rely on the number of outstanding shares of
Common Stock as reflected in (x) the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report
on Form 8-K or other public filing with the SEC, as the case may be, (y) a more recent public announcement by the Company or (z) any
other written notice by the Company or the Transfer Agent, if any, setting forth the number of shares of Common Stock outstanding (the
“Reported Outstanding Share Number”). If the Company receives a Conversion Notice from the Holder at a time when the
actual number of outstanding shares of Common Stock is less than the Reported Outstanding Share Number, the Company shall notify the
Holder in writing of the number of shares of Common Stock then outstanding and, to the extent that such Conversion Notice would otherwise
cause the Holder’s beneficial ownership, as determined pursuant to this Section 3(d), to exceed the Maximum Percentage, the Holder
must notify the Company of a reduced number of shares of Common Stock to be purchased pursuant to such Conversion Notice. For any reason
at any time, upon the written or oral request of the Holder, the Company shall within one (1) Business Day confirm orally and in writing
or by electronic mail to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares
of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Note,
by the Holder and any other Attribution Party since the date as of which the Reported Outstanding Share Number was reported. In the event
that the issuance of shares of Common Stock to the Holder upon conversion of this Note results in the Holder and the other Attribution
Parties being deemed to beneficially own, in the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common
Stock (as determined under Section 13(d) of the 1934 Act), the number of shares so issued by which the Holder’s and the other Attribution
Parties’ aggregate beneficial ownership exceeds the Maximum Percentage (the “Excess Shares”) shall be deemed
null and void and shall be cancelled ab initio, and the Holder shall not have the power to vote or to transfer the Excess Shares. Upon
delivery of a written notice to the Company, the Holder may from time to time increase (with such increase not effective until the sixty-first
(61st) day after delivery of such notice) or decrease the Maximum Percentage to any other percentage not in excess of 9.99%
as specified in such notice; provided that (i) any such increase in the Maximum Percentage will not be effective until the sixty-first
(61st) day after such notice is delivered to the Company and (ii) any such increase or decrease will apply only to the Holder
and the other Attribution Parties and not to any other holder of Notes that is not an Attribution Party of the Holder. For purposes of
clarity, the shares of Common Stock issuable pursuant to the terms of this Note in excess of the Maximum Percentage shall not be deemed
to be beneficially owned by the Holder for any purpose including for purposes of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No
prior inability to convert this Note pursuant to this paragraph shall have any effect on the applicability of the provisions of this
paragraph with respect to any subsequent determination of convertibility. The provisions of this paragraph shall be construed and implemented
in a manner otherwise than in strict conformity with the terms of this Section 3(d) to the extent necessary to correct this paragraph
(or any portion of this paragraph) which may be defective or inconsistent with the intended beneficial ownership limitation contained
in this Section 3(d) or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitation
contained in this paragraph may not be waived and shall apply to a successor holder of this Note.
4.
RIGHTS UPON EVENT OF DEFAULT.
(a)
Event of Default. Subject to the last sentence of this Section 4(a), each of the following events shall constitute an “Event
of Default” and each of the events in clauses (ix), (x) and (xi) shall also constitute a “Bankruptcy Event of Default”:
(i)
the failure of the applicable Registration Statement (as defined in the Registration Rights Agreement) to be filed with the SEC on or
prior to the date that is five (5) Trading Days after the applicable Filing Deadline (as defined in the Registration Rights Agreement)
or the failure of the applicable Registration Statement to be declared effective by the SEC on or prior to the date that is five (5)
Trading Days after the later of (x) the applicable Effectiveness Deadline (as defined in the Registration Rights Agreement) and (y) the
Initial Convertibility Date;
(ii)
at any time on or following the Initial Convertibility Date, while the applicable Registration Statement is required to be maintained
effective pursuant to the terms of the Registration Rights Agreement, the effectiveness of the applicable Registration Statement lapses
for any reason (including, without limitation, the issuance of a stop order) or such Registration Statement (or the prospectus contained
therein) is unavailable to any holder of Registrable Securities (as defined in the Registration Rights Agreement) for sale of all of
such holder’s Registrable Securities in accordance with the terms of the Registration Rights Agreement, and such lapse or unavailability
continues for a period of twenty (20) consecutive days or for more than an aggregate of forty (40) days in any 365-day period (excluding
days during an Allowable Grace Period (as defined in the Registration Rights Agreement));
(iii)
the suspension (or threatened suspension) from trading or the failure (or threatened failure) of the Common Stock to be trading or listed
(as applicable) on an Eligible Market for a period of five (5) consecutive Trading Days with respect to actual suspensions or failures
and sixty (60) consecutive calendar days following written notice from such Eligible Market with respect to threatened suspensions or
threatened failures;
(iv)
the Company’s (A) failure to cure a Conversion Failure or a Delivery Failure (as defined in the Warrants) by delivery of the required
number of shares of Common Stock within five (5) Trading Days after the applicable Conversion Date or exercise date (as the case may
be) or (B) written notice to any holder of the Notes or Warrants, including, without limitation, by way of public announcement or through
any of its agents, at any time, of its intention not to comply, as required, with a request for conversion of any Notes into shares of
Common Stock that is requested in accordance with the provisions of the Notes, other than pursuant to Section 3(d), or a request for
exercise of any Warrants for shares of Common Stock in accordance with the provisions of the Warrants;
(v)
except to the extent the Company is in compliance with Section 9(b) below, at any time following the tenth (10th) consecutive
day that the Holder’s Authorized Share Allocation (as defined in Section 9(a) below) is less than the sum of (A) the number of
shares of Common Stock that the Holder would be entitled to receive upon a conversion of the full Conversion Amount of this Note (without
regard to any limitations on conversion set forth in Section 3(d) or otherwise), plus (B) the number of shares of Common Stock that the
Holder would be entitled to receive upon exercise in full of the Holder’s Warrants (without regard to any limitations on exercise
set forth in the Warrants);
(vi)
the Company’s, any Guarantor or any Subsidiary’s failure to pay to the Holder any amount of Principal, Interest, Late Charges
or other amounts when and as due under this Note (including, without limitation, the Company’s, any Guarantor’s or any Subsidiary’s
failure to pay any redemption payments or amounts hereunder) or any other Transaction Document (as defined in the Securities Purchase
Agreement) or any other agreement, document, certificate or other instrument delivered in connection with the transactions contemplated
hereby and thereby, and such failure remains uncured for a period of at least five (5) Trading Days;
(vii)
the Company fails to remove any restrictive legend on any certificate or any shares of Common Stock issued to the Holder upon conversion
or exercise (as the case may be) of any Securities (as defined in the Securities Purchase Agreement) acquired by the Holder under the
Securities Purchase Agreement (including this Note) as and when required by such Securities or the Securities Purchase Agreement, unless
otherwise then prohibited by applicable federal securities laws, and any such failure remains uncured for at least five (5) Trading Days;
(viii)
the occurrence of any default under, redemption of or acceleration prior to maturity of at least an aggregate of $1,000,000 of Indebtedness
(as defined in the Securities Purchase Agreement) of the Company, any Guarantor or any Subsidiary, other than with respect to any Other
Notes in which case only if such default, redemption or acceleration, as applicable, remains uncured for a period of at least three (3)
Trading Days;
(ix)
bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors shall be instituted
by or against the Company, any Guarantor or any Subsidiary and, if instituted against the Company, any Guarantor or any Subsidiary by
a third party, shall not be dismissed within thirty (30) days of their initiation;
(x)
the commencement by the Company, any Guarantor or any Subsidiary of a voluntary case or proceeding under any applicable federal, state
or foreign bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt
or insolvent, or the consent by it to the entry of a decree, order, judgment or other similar document in respect of the Company, any
Guarantor or any Subsidiary in an involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing
by it of a petition or answer or consent seeking reorganization or relief under any applicable federal, state or foreign law, or the
consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company, any Guarantor or any Subsidiary or of any substantial part of its property,
or the making by it of an assignment for the benefit of creditors, or the execution of a composition of debts, or the occurrence of any
other similar federal, state or foreign proceeding, or the admission by it in writing of its inability to pay its debts generally as
they become due, the taking of corporate action by the Company, any Guarantor or any Subsidiary in furtherance of any such action or
the taking of any action by any Person to commence a Uniform Commercial Code foreclosure sale or any other similar action under federal,
state or foreign law;
(xi)
the entry by a court of (i) a decree, order, judgment or other similar document in respect of the Company, any Guarantor or any Subsidiary
of a voluntary or involuntary case or proceeding under any applicable federal, state or foreign bankruptcy, insolvency, reorganization
or other similar law or (ii) a decree, order, judgment or other similar document adjudging the Company, any Guarantor or any Subsidiary
as bankrupt or insolvent, or approving as properly filed a petition seeking liquidation, reorganization, arrangement, adjustment or composition
of or in respect of the Company, any Guarantor or any Subsidiary under any applicable federal, state or foreign law or (iii) a decree,
order, judgment or other similar document appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company, any Guarantor or any Subsidiary or of any substantial part of its property, or ordering the winding up or liquidation
of its affairs, and the continuance of any such decree, order, judgment or other similar document or any such other decree, order, judgment
or other similar document unstayed and in effect for a period of thirty (30) consecutive days;
(xii)
a final judgment or judgments for the payment of money aggregating in excess of $1,000,000 are rendered against the Company, any Guarantor
and/or any Subsidiary and which judgments are not, within sixty (60) days after the entry thereof, bonded, discharged, settled or stayed
pending appeal, or are not discharged within sixty (60) days after the expiration of such stay; provided, however, any judgment which
is covered by insurance or an indemnity from a credit worthy party shall not be included in calculating the $1,000,000 amount set forth
above so long as the Company provides the Holder a written statement from such insurer or indemnity provider (which written statement
shall be reasonably satisfactory to the Holder) to the effect that such judgment is covered by insurance or an indemnity and the Company,
such Guarantor or such Subsidiary (as the case may be) will receive the proceeds of such insurance or indemnity within sixty (60) days
of the issuance of such judgment;
(xiii)
the Company, any Guarantor and/or any Subsidiary, individually or in the aggregate, either (i) fails to pay, when due, or within any
applicable grace period, any payment with respect to any Indebtedness in excess of $250,000 due to any third party (other than, with
respect to unsecured Indebtedness only, payments contested by the Company, such Guarantor and/or such Subsidiary (as the case may be)
in good faith by proper proceedings and with respect to which adequate reserves have been set aside for the payment thereof in accordance
with GAAP) or is otherwise in breach or violation of any agreement for monies owed or owing in an amount in excess of $250,000, which
breach or violation permits the other party thereto to declare a default or otherwise accelerate amounts due thereunder, or (ii) suffer
to exist any other circumstance or event that would, with or without the passage of time or the giving of notice, result in a default
or event of default under any agreement binding the Company, any Guarantor or any Subsidiary, which default or event of default would
or is likely to have a material adverse effect on the business, assets, operations (including results thereof), liabilities, properties,
condition (including financial condition) or prospects of the Company, any Guarantor or any Subsidiary, individually or in the aggregate,
in which case only if such failure remains uncured for a period of at least three (3) Trading Days;
(xiv)
other than as specifically set forth in another clause of this Section 4(a), the Company, any Guarantor or any Subsidiary breaches any
representation or warranty, in any material respect (other than representations or warranties subject to material adverse effect or materiality,
which may not be breached in any respect) or any covenant or other term or condition of any Transaction Document, except, in the case
of a breach of a covenant or other term or condition that is curable, only if such breach remains uncured for a period of five (5) consecutive
Trading Days;
(xv)
a false or inaccurate written certification by the Company as to whether any Event of Default or an Equity Conditions Failure has occurred;
(xvi)
any breach or failure in any respect by the Company, any Guarantor or any Subsidiary to comply with clauses (a)-(d), (f), (g), (n) and
(p) of Section 13 of this Note;
(xvii)
any Material Adverse Effect (as defined in the Securities Purchase Agreement, except that, solely for purposes of this Section 4(a)(xvii),
such term shall not include the word “prospects”) occurs and remains uncured following a period of five (5) Trading Days;
(xviii)
other than as specifically set forth in Section 4(a)(xix) or in any other clause of this Section 4(a), the Company, any Guarantor or
any Subsidiary shall fail to perform or comply (I) in any material respect with any covenant or agreement contained in any Security Document
or (II) in any respect with any covenant or agreement contained in any Security Document that is qualified by materiality or Material
Adverse Effect, only if such breach remains uncured for a period that is the longer of five (5) consecutive Trading Days and such applicable
cure period set forth in the applicable Security Document;
(xix)
any material provision of any Security Document (as determined in good faith by the Collateral Agent in its sole discretion) shall at
any time for any reason (other than pursuant to the express terms thereof) cease to be valid and binding on or enforceable against the
Company, any Guarantor or any Subsidiary intended to be a party thereto, or the validity or enforceability thereof shall be contested
by any party thereto, or a proceeding shall be commenced by the Company, any Guarantor or any Subsidiary or any governmental authority
having jurisdiction over any of them, seeking to establish the invalidity or unenforceability thereof, or the Company, any Guarantor
or any Subsidiary shall deny in writing that it has any liability or obligation purported to be created under any Security Document and
such failure remains uncured for a period of five (5) consecutive Trading Days;
(xx)
any Security Document, after delivery thereof pursuant hereto, shall for any reason fail or cease to create a valid and perfected and,
except to the extent permitted by the terms hereof or thereof, first priority Lien (as defined in Section 13(c)) in favor of the Collateral
Agent for the benefit of the holders of the Notes on any Collateral purported to be covered thereby, except to the extent the Collateral
Agent determines not to pursue perfection of any applicable Lien and such failure remains uncured for a period of five (5) consecutive
Trading Days;
(xxi)
any bank at which any deposit account, blocked account, or lockbox account of the Company, any Guarantor or any Subsidiary is maintained
shall fail to comply with any material term of any deposit account, blocked account, lockbox account or similar agreement to which such
bank is a party or any securities intermediary, commodity intermediary or other financial institution at any time in custody, control
or possession of any investment property of the Company, any Guarantor or any Subsidiary shall fail to comply with any of the terms of
any investment property control agreement to which such Person is a party (it being understood that only accounts pursuant to which the
Collateral Agent has requested account control agreements should be subject to this clause (xxi));
(xxii)
any material damage to, or loss, theft or destruction of the Collateral or a material amount of property of the Company, whether or not
insured, or any strike, lockout, labor dispute, embargo, condemnation, act of God or public enemy, or other casualty which causes, for
more than thirty (30) consecutive days, the cessation or substantial curtailment of revenue producing activities at any facility of the
Company, any Guarantor or any Subsidiary, if, in each case, any such event or circumstance would reasonably be expected to have a Material
Adverse Effect; or
(xxiii)
other than as specifically set forth in another clause of this Section 4(a), any Event of Default (as defined in the Other Notes) occurs
with respect to any Other Notes.
To
the extent any Event of Default is solely caused as a result of Zash (as defined in the Securities Purchase Agreement) constituting a
Guarantor for purposes of provisions 4(a)(i)-(xxiii) (a “Zash Default”), then, notwithstanding anything herein to
the contrary, any such Zash Default(s) shall not be deemed to be an Event of Default hereunder provided that any such Zash Defaults are
not reasonably be expected to adversely impact the Company or ZVV (as defined in the Securities Purchase Agreement) (the “Zash
Carve-Out”). For the avoidance of doubt, the Zash Carve-Out shall not apply from and after the date that Zash is merged or
otherwise combined with the Company or ZVV or any Subsidiary thereof.
(b)
Notice of an Event of Default; Redemption Right. Upon the occurrence of an Event of Default with respect to this Note or any Other
Note, the Company shall within two (2) Business Days deliver written notice thereof via electronic mail and overnight courier (with next
day delivery specified) (an “Event of Default Notice”) to the Holder. At any time after the earlier of the Holder’s
receipt of an Event of Default Notice and the Holder becoming aware of an Event of Default (such earlier date, the “Event of
Default Right Commencement Date”) and ending (such ending date, the “Event of Default Right Expiration Date”,
and each such period, an “Event of Default Redemption Right Period”) on the twentieth (20th) Trading Day
after the later of (x) the date such Event of Default is cured and (y) the Holder’s receipt of an Event of Default Notice that
includes (I) a reasonable description of the applicable Event of Default, (II) a certification as to whether, in the opinion of the Company,
such Event of Default is capable of being cured and, if applicable, a reasonable description of any existing plans of the Company to
cure such Event of Default and (III) a certification as to the date the Event of Default occurred and, if cured on or prior to the date
of such Event of Default Notice, the applicable Event of Default Right Expiration Date, the Holder may require the Company to redeem
(regardless of whether such Event of Default has been cured on or prior to the Event of Default Right Expiration Date) all or any portion
of this Note by delivering written notice thereof (the “Event of Default Redemption Notice”) to the Company, which
Event of Default Redemption Notice shall indicate the portion of this Note the Holder is electing to redeem. Each portion of this Note
subject to redemption by the Company pursuant to this Section 4(b) shall be redeemed by the Company at a price equal to the greater of
(i) the product of (A) the Conversion Amount to be redeemed multiplied by (B) the Event of Default Redemption Premium and (ii) the product
of (X) the Conversion Rate with respect to the Conversion Amount in effect at such time as the Holder delivers an Event of Default Redemption
Notice multiplied by (Y) the product of (1) the Event of Default Redemption Premium multiplied by (2) the greatest Closing Sale Price
of the Common Stock on any Trading Day during the period commencing on the date immediately preceding such Event of Default and ending
on the date the Company makes the entire payment required to be made under this Section 4(b) (the “Event of Default Redemption
Price”). Redemptions required by this Section 4(b) shall be made in accordance with the provisions of Section 11. To the extent
redemptions required by this Section 4(b) are deemed or determined by a court of competent jurisdiction to be prepayments of this Note
by the Company, such redemptions shall be deemed to be voluntary prepayments. Notwithstanding anything to the contrary in this Section
4, but subject to Section 3(d), until the Event of Default Redemption Price (together with any Late Charges thereon) is paid in full,
the Conversion Amount submitted for redemption under this Section 4(b) (together with any Late Charges thereon) may be converted, in
whole or in part, by the Holder into Common Stock pursuant to the terms of this Note. In the event of the Company’s redemption
of any portion of this Note under this Section 4(b), the Holder’s damages would be uncertain and difficult to estimate because
of the parties’ inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment
opportunity for the Holder. Accordingly, any redemption premium due under this Section 4(b) is intended by the parties to be, and shall
be deemed, a reasonable estimate of the Holder’s actual loss of its investment opportunity and not as a penalty. Any redemption
upon an Event of Default shall not constitute an election of remedies by the Holder, and all other rights and remedies of the Holder
shall be preserved.
(c)
Mandatory Redemption upon Bankruptcy Event of Default. Notwithstanding anything to the contrary herein, and notwithstanding any
conversion that is then required or in process, upon any Bankruptcy Event of Default, whether occurring prior to or following the Maturity
Date, the Company shall immediately pay to the Holder an amount in cash representing (i) all outstanding Principal, accrued and unpaid
Interest and accrued and unpaid Late Charges on such Principal and Interest, multiplied by (ii) the Event of Default Redemption Premium,
in addition to any and all other amounts due hereunder, without the requirement for any notice or demand or other action by the Holder
or any other person or entity, provided that the Holder may, in its sole discretion, waive such right to receive payment upon a Bankruptcy
Event of Default, in whole or in part, and any such waiver shall not affect any other rights of the Holder hereunder, including any other
rights in respect of such Bankruptcy Event of Default, any right to conversion, and any right to payment of the Event of Default Redemption
Price or any other Redemption Price, as applicable.
5.
RIGHTS UPON FUNDAMENTAL TRANSACTION.
(a)
Assumption. The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity assumes in writing
all of the obligations of the Company under this Note and the other Transaction Documents in accordance with the provisions of this Section
5(a) pursuant to written agreements in form and substance satisfactory to the Holder and approved by the Holder prior to such Fundamental
Transaction, including agreements to deliver to each holder of Notes in exchange for such Notes a security of the Successor Entity evidenced
by a written instrument substantially similar in form and substance to the Notes, including, without limitation, having a principal amount
and interest rate equal to the principal amounts then outstanding and the interest rates of the Notes held by such holder, having similar
conversion rights as the Notes and having similar ranking and security to the Notes, and satisfactory to the Holder. Upon the occurrence
of any Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such
Fundamental Transaction, the provisions of this Note and the other Transaction Documents referring to the “Company” shall
refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations
of the Company under this Note and the other Transaction Documents with the same effect as if such Successor Entity had been named as
the Company herein. Upon consummation of a Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that
there shall be issued upon conversion or redemption of this Note at any time after the consummation of such Fundamental Transaction,
in lieu of the shares of Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections
6 and 15, which shall continue to be receivable thereafter)) issuable upon the conversion or redemption of the Notes prior to such Fundamental
Transaction, such shares of the publicly traded common stock (or their equivalent) of the Successor Entity (including its Parent Entity)
which the Holder would have been entitled to receive upon the happening of such Fundamental Transaction had this Note been converted
immediately prior to such Fundamental Transaction (without regard to any limitations on the conversion of this Note), as adjusted in
accordance with the provisions of this Note. Notwithstanding the foregoing, the Holder may elect, at its sole option, by delivery of
written notice to the Company to waive this Section 5(a) to permit the Fundamental Transaction without the assumption of this Note. The
provisions of this Section 5 shall apply similarly and equally to successive Fundamental Transactions and shall be applied without regard
to any limitations on the conversion of this Note.
(b)
Notice of a Change of Control; Redemption Right. No sooner than twenty (20) Trading Days nor later than ten (10) Trading Days
prior to the consummation of a Change of Control (the “Change of Control Date”), but not prior to the public announcement
of such Change of Control, the Company shall deliver written notice thereof via facsimile or electronic mail and overnight courier to
the Holder (a “Change of Control Notice”). At any time during the period beginning after the Holder’s receipt
of a Change of Control Notice or the Holder becoming aware of a Change of Control if a Change of Control Notice is not delivered to the
Holder in accordance with the immediately preceding sentence (as applicable) and ending on twenty (20) Trading Days after the later of
(A) the date of consummation of such Change of Control or (B) the date of receipt of such Change of Control Notice or (C) the date of
the announcement of such Change of Control, the Holder may require the Company to redeem all or any portion of this Note by delivering
written notice thereof (“Change of Control Redemption Notice”) to the Company, which Change of Control Redemption
Notice shall indicate the Conversion Amount the Holder is electing to redeem. The portion of this Note subject to redemption pursuant
to this Section 5 shall be redeemed by the Company in cash at a price equal to the greatest of (i) the product of (w) the Change of Control
Redemption Premium multiplied by (y) the Conversion Amount being redeemed, (ii) the product of (x) the Change of Control Redemption Premium
multiplied by (y) the product of (A) the Conversion Amount being redeemed multiplied by (B) the quotient determined by dividing (I) the
greatest Closing Sale Price of the shares of Common Stock during the period beginning on the date immediately preceding the earlier to
occur of (1) the consummation of the applicable Change of Control and (2) the public announcement of such Change of Control and ending
on the date the Holder delivers the Change of Control Redemption Notice by (II) the Conversion Price then in effect and (iii) the product
of (y) the Change of Control Redemption Premium multiplied by (z) the product of (A) the Conversion Amount being redeemed multiplied
by (B) the quotient of (I) the aggregate cash consideration and the aggregate cash value of any non-cash consideration per share of Common
Stock to be paid to the holders of the shares of Common Stock upon consummation of such Change of Control (any such non-cash consideration
constituting publicly-traded securities shall be valued at the highest of the Closing Sale Price of such securities as of the Trading
Day immediately prior to the consummation of such Change of Control, the Closing Sale Price of such securities on the Trading Day immediately
following the public announcement of such proposed Change of Control and the Closing Sale Price of such securities on the Trading Day
immediately prior to the public announcement of such proposed Change of Control) divided by (II) the Conversion Price then in effect
(the “Change of Control Redemption Price”). Redemptions required by this Section 5 shall be made in accordance with
the provisions of Section 11 and shall have priority to payments to shareholders in connection with such Change of Control. To the extent
redemptions required by this Section 5(b) are deemed or determined by a court of competent jurisdiction to be prepayments of this Note
by the Company, such redemptions shall be deemed to be voluntary prepayments. Notwithstanding anything to the contrary in this Section
5, but subject to Section 3(d), until the Change of Control Redemption Price (together with any Late Charges thereon) is paid in full,
the Conversion Amount submitted for redemption under this Section 5(b) (together with any Late Charges thereon) may be converted, in
whole or in part, by the Holder into Common Stock pursuant to Section 3. In the event of the Company’s redemption of any portion
of this Note under this Section 5(b), the Holder’s damages would be uncertain and difficult to estimate because of the parties’
inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity for
the Holder. Accordingly, any redemption premium due under this Section 5(b) is intended by the parties to be, and shall be deemed, a
reasonable estimate of the Holder’s actual loss of its investment opportunity and not as a penalty.
6.
RIGHTS UPON ISSUANCE OF PURCHASE RIGHTS AND OTHER CORPORATE EVENTS.
(a)
Purchase Rights. In addition to any adjustments pursuant to Section 7 below, if at any time the Company grants, issues or sells
any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to all or substantially
all of the record holders of any class of Common Stock (the “Purchase Rights”), then the Holder will be entitled to
acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the
Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without taking into account any
limitations or restrictions on the convertibility of this Note, regardless of whether or not the Initial Convertibility Date has occurred
and assuming for such purpose that the Note was converted at the Conversion Price as of the applicable record date) immediately prior
to the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date
as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided,
however, that to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder
and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase
Right to the extent of the Maximum Percentage (and shall not be entitled to beneficial ownership of such shares of Common Stock as a
result of such Purchase Right (and beneficial ownership) to the extent of any such excess) and such Purchase Right to such extent shall
be held in abeyance (and, if such Purchase Right has an expiration date, maturity date or other similar provision, such term shall be
extended by such number of days held in abeyance, if applicable) for the benefit of the Holder until such time or times, if ever, as
its right thereto would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or
times the Holder shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any
subsequent Purchase Right held similarly in abeyance (and, if such Purchase Right has an expiration date, maturity date or other similar
provision, such term shall be extended by such number of days held in abeyance, if applicable)) to the same extent as if there had been
no such limitation).
(b)
Other Corporate Events. In addition to and not in substitution for any other rights hereunder, prior to the consummation of any
Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive securities or other assets with respect
to or in exchange for shares of Common Stock (a “Corporate Event”), the Company shall make appropriate provision to
ensure that the Holder will thereafter have the right to receive upon a conversion of this Note, at the Holder’s option (i) in
addition to the shares of Common Stock receivable upon such conversion, such securities or other assets to which the Holder would have
been entitled with respect to such shares of Common Stock had such shares of Common Stock been held by the Holder upon the consummation
of such Corporate Event (without taking into account any limitations or restrictions on the convertibility of this Note) or (ii) in lieu
of the shares of Common Stock otherwise receivable upon such conversion, such securities or other assets received by the holders of shares
of Common Stock in connection with the consummation of such Corporate Event in such amounts as the Holder would have been entitled to
receive had this Note initially been issued with conversion rights for the form of such consideration (as opposed to shares of Common
Stock) at a conversion rate for such consideration commensurate with the Conversion Rate. Provision made pursuant to the preceding sentence
shall be in a form and substance satisfactory to the Holder. The provisions of this Section 6 shall apply similarly and equally to successive
Corporate Events and shall be applied without regard to any limitations on the conversion or redemption of this Note.
7.
RIGHTS UPON ISSUANCE OF OTHER SECURITIES.
(a)
Adjustment of Conversion Price upon Subdivision or Combination of Common Stock. Without limiting any provision of Section 6 or
Section 15, if the Company at any time on or after the Subscription Date subdivides (by any stock split, stock dividend, stock combination,
recapitalization or other similar transaction) one or more classes of its outstanding shares of Common Stock into a greater number of
shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced. Without limiting any provision
of Section 6 or Section 15, if the Company at any time on or after the Subscription Date combines (by any stock split, stock dividend,
stock combination, recapitalization or other similar transaction) one or more classes of its outstanding shares of Common Stock into
a smaller number of shares, the Conversion Price in effect immediately prior to such combination will be proportionately increased. Any
adjustment pursuant to this Section 7(a) shall become effective immediately after the effective date of such subdivision or combination.
If any event requiring an adjustment under this Section 7(a) occurs during the period that a Conversion Price is calculated hereunder,
then the calculation of such Conversion Price shall be adjusted appropriately to reflect such event.
(b)
Calculations. All calculations under this Section 7 shall be made by rounding to the nearest cent or the nearest 1/100th
of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or
held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.
(c)
Voluntary Adjustment by Company. Subject to the rules and regulations of the Principal Market, the Company may at any time during
the term of this Note, with the prior written consent of the Required Holders (as defined in the Securities Purchase Agreement), reduce
the then current Conversion Price of each of the Notes to any amount and for any period of time deemed appropriate by the board of directors
of the Company.
8.
NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its Certificate of Incorporation
(as defined in the Securities Purchase Agreement), Bylaws (as defined in the Securities Purchase Agreement) or through any reorganization,
transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this Note, and will at all times in good faith carry out
all of the provisions of this Note and take all action as may be required to protect the rights of the Holder of this Note. Without limiting
the generality of the foregoing or any other provision of this Note or the other Transaction Documents, the Company (a) shall not increase
the par value of any shares of Common Stock receivable upon conversion of this Note above the Conversion Price then in effect, and (b)
shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock upon the conversion of this Note. Notwithstanding anything herein to the contrary, if after the
Initial Convertibility Date, the Holder is not permitted to convert this Note in full for any reason (other than pursuant to restrictions
set forth in Section 3(d) hereof), the Company shall use its best efforts to promptly remedy such failure, including, without limitation,
obtaining such consents or approvals as necessary to permit such conversion into shares of Common Stock.
9.
RESERVATION OF AUTHORIZED SHARES.
(a)
Reservation. So long as any Notes remain outstanding, the Company shall at all times reserve at least 100% of the number of shares
of Common Stock as shall from time to time be necessary to effect the conversion of all of the Notes then outstanding (without regard
to any limitations on conversions and assuming such Notes remain outstanding until the Maturity Date) at the Conversion Price then in
effect (the “Required Reserve Amount”). The Required Reserve Amount (including, without limitation, each increase
in the number of shares so reserved) shall be allocated pro rata among the holders of the Notes based on the original principal amount
of the Notes held by each holder on the Closing Date or increase in the number of reserved shares, as the case may be (the “Authorized
Share Allocation”). In the event that a holder shall sell or otherwise transfer any of such holder’s Notes, each transferee
shall be allocated a pro rata portion of such holder’s Authorized Share Allocation. Any shares of Common Stock reserved and allocated
to any Person which ceases to hold any Notes shall be allocated to the remaining holders of Notes, pro rata based on the principal amount
of the Notes then held by such holders.
(b)
Insufficient Authorized Shares. If, notwithstanding Section 9(a), and not in limitation thereof, at any time while any of the
Notes remain outstanding the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy
its obligation to reserve for issuance upon conversion of the Notes at least a number of shares of Common Stock equal to the Required
Reserve Amount (an “Authorized Share Failure”), then the Company shall immediately take all action necessary to increase
the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company to reserve the Required Reserve Amount
for the Notes then outstanding. Without limiting the generality of the foregoing sentence, as soon as practicable after the date of the
occurrence of an Authorized Share Failure, but in no event later than ninety (90) days after the occurrence of such Authorized Share
Failure, the Company shall hold a meeting of its shareholders for the approval of an increase in the number of authorized shares of Common
Stock. In connection with such meeting, the Company shall provide each shareholder with a proxy statement and shall use its best efforts
to solicit its shareholders’ approval of such increase in authorized shares of Common Stock and to cause its board of directors
to recommend to the shareholders that they approve such proposal. In the event that the Company is prohibited from issuing shares of
Common Stock pursuant to the terms of this Note due to the failure by the Company to have sufficient shares of Common Stock available
out of the authorized but unissued shares of Common Stock (such unavailable number of shares of Common Stock, the “Authorized
Failure Shares”), in lieu of delivering such Authorized Failure Shares to the Holder, the Company shall pay cash in exchange
for the redemption of such portion of the Conversion Amount convertible into such Authorized Failure Shares at a price equal to the sum
of (i) the product of (x) such number of Authorized Failure Shares and (y) the greatest Closing Sale Price of the Common Stock on any
Trading Day during the period commencing on the date the Holder delivers the applicable Conversion Notice with respect to such Authorized
Failure Shares to the Company and ending on the date of such issuance and payment under this Section 9(a); and (ii) to the extent the
Holder purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder
of Authorized Failure Shares, any brokerage commissions and other out-of-pocket expenses, if any, of the Holder incurred in connection
therewith. Nothing contained in Section 9(a) or this Section 9(b) shall limit any obligations of the Company under any provision of the
Securities Purchase Agreement.
10.
OTHER REDEMPTION RIGHTS.
(a)
Redemption at the Company’s Election. At any time after the Issuance Date, so long as (i) no Equity Conditions Failure occurs
as of the Company Optional Redemption Notice Date (as defined below) or the Company Optional Redemption Date (as defined below) and (ii)
the Company has sufficient resources to effect a Company Optional Redemption (as defined below) on the Company Optional Redemption Notice
Date and on the Company Optional Redemption Date (the conditions set forth in clauses (i) and (ii) collectively, the “Company
Optional Redemption Conditions”), the Company shall have the right to redeem all or a portion of the Conversion Amount then
remaining under this Note and the Other Notes, provided that, if the Company elects to redeem less than all of this Note and the Other
Notes, the Company shall not redeem less than $10,000,000 of the Conversion Amount of this Note and the Other Notes (the “Company
Optional Redemption Amount”) as designated in the Company Optional Redemption Notice (as defined below) on the Company Optional
Redemption Date (a “Company Optional Redemption”). This Note and the Other Notes subject to redemption pursuant to
this Section 10(a) shall be redeemed by the Company on the Company Optional Redemption Date in cash by wire transfer of immediately available
funds pursuant to wire instructions provided by the Holder in writing to the Company at a price equal to 115% of the Conversion Amount
to be redeemed. The Company may exercise its right to require redemption under this Section 10(a) by delivering a thirty (30) Trading
Days prior written notice thereof by facsimile or electronic mail and overnight courier to the Holder and all, but not less than all,
of the holders of the Other Notes (the “Company Optional Redemption Notice” and the date all of the holders of the
Notes received such notice is referred to as the “Company Optional Redemption Notice Date”). The Company Optional
Redemption Notice shall be irrevocable. The Company Optional Redemption Notice shall (i) state the date on which the Company Optional
Redemption shall occur (the “Company Optional Redemption Date”), which date shall be the thirtieth (30th)
Trading Day immediately following the Company Optional Redemption Notice Date, (ii) state the aggregate Conversion Amount of the Notes
which the Company has elected to be subject to the Company Optional Redemption from the Holder and all of the holders of the Other Notes
pursuant to this Section 10(a) (and analogous provisions under the Other Notes) on the Company Optional Redemption Date, (iii) state
the applicable Company Optional Redemption Price and (iv) certify that each Company Optional Redemption Condition has been satisfied
as of the Company Optional Redemption Notice Date and that the Company Optional Redemption Conditions are expected to be satisfied on
the Company Optional Redemption Date. If after the Company Optional Redemption Notice Date when the Company confirmed that the Company
Optional Redemption Conditions have been satisfied as of the Company Optional Redemption Notice Date, one or more Company Optional Redemption
Conditions fail or is reasonably expected to fail on the Company Optional Redemption Date, the Company shall promptly, but in any event
within one (1) Business Day of such failure or of the Company becoming aware of such expected failure, provide the Holder a subsequent
written notice to that effect. If a Company Optional Redemption Condition fails (which is not waived in writing by the Holder) on the
Company Optional Redemption Date, then the Company Optional Redemption shall be null and void with respect to all or any part designated
by the Holder of the unconverted Company Optional Redemption Amount and the Holder shall be entitled to all the rights of a holder of
this Note with respect to such amount of the Company Optional Redemption Amount. The Company may not deliver more than one (1) Company
Optional Redemption Notice. Notwithstanding anything to the contrary in this Section 10(a), until the Company Optional Redemption Price
is paid in full, the Company Optional Redemption Amount may be converted, in whole or in part, by the Holder into shares of Common Stock
pursuant to Section 3. All Conversion Amounts converted by the Holder after the Company Optional Redemption Notice Date shall reduce
the Company Optional Redemption Amount of this Note required to be redeemed on the Company Optional Redemption Date, unless the Holder
otherwise indicates in the applicable Conversion Notice. Company Optional Redemptions made pursuant to this Section 10(a) shall be made
in accordance with Section 11. To the extent redemptions required by this Section 10(a) are deemed or determined by a court of competent
jurisdiction to be prepayments of the Note by the Company, such redemptions shall be deemed to be voluntary prepayments. The parties
hereto agree that in the event of the Company’s redemption of any portion of the Note under this Section 10(a), the Holder’s
damages would be uncertain and difficult to estimate because of the parties’ inability to predict future interest rates and the
uncertainty of the availability of a suitable substitute investment opportunity for the Holder. If the Company elects to cause a Company
Optional Redemption pursuant to this Section 10(a), then it must simultaneously take the same action in the same proportion with respect
to the Other Notes.
(b)
Redemption Upon Failure of Lomotif Transaction Closing. Promptly following the closing of the Lomotif Transaction (as defined
in the Securities Purchase Agreement), but in no event later than July 27, 2021, the Company shall deliver a certificate to the Holder
certifying that the Lomotif Transaction has been completed (the “Lomotif Closing Certificate”). If, despite the best
efforts of the Company, the Lomotif Transaction has failed to close by July 27, 2021 then the Company shall have the right to redeem
all, but not less than all, of the Conversion Amount outstanding under this Note and the Other Notes for an aggregate redemption price
of $100,000,000 (the “Lomotif Redemption Price”); provided that the Company has paid all amounts payable pursuant
to Section 5(g) of the Securities Purchase Agreement (a “Lomotif Optional Redemption”). The Company may exercise its
right to require redemption under this Section 10(b) by delivering prior written notice thereof at any time on or prior to July 27, 2021
by facsimile or electronic mail and overnight courier to the Holder and all, but not less than all, of the holders of the Other Notes
(the “Lomotif Optional Redemption Notice”). This Note and the Other Notes subject to redemption pursuant to this Section
10(b) shall be redeemed by the Company on July 28, 2021 (the “Lomotif Optional Redemption Date”) in cash by wire transfer
of immediately available funds pursuant to wire instructions provided by the Holder in writing to the Company. If the Company elects
to cause a Lomotif Optional Redemption pursuant to this Section 10(b), then it must simultaneously take the same action in the same proportion
with respect to the Other Notes. If the Company fails to deliver the Lomotif Closing Certificate, or if the Lomotif Transaction fails
to close, on or before July 27, 2021 and the Company does not elect to effect a Lomotif Optional Redemption, then the Holder shall have
the option to require the Company to redeem all, but not less than all, of the Conversion Amount outstanding under this Note for a redempion
price equal to the Lomotif Redemption Price (a “Lomotif Mandatory Redemption”). The Holder may send a notice(the “Lomotif
Mandatory Redemption Notice”) to the Company demanding that the Company effect a Lomotif Mandatory Redemption at any time on
or prior to July 30, 2021 and the Company shall effect the Lomotif Mandatory Redemption one (1) Business Day after the Company’s
receipt of such notice (the “Lomotif Mandatory Redemption Date”). Redemptions required by this Section 10(b) shall
be made in accordance with the provisions of Section 11. To the extent redemptions required by this Section 10(b) are deemed or determined
by a court of competent jurisdiction to be prepayments of this Note by the Company, such redemptions shall be deemed to be voluntary
prepayments. Notwithstanding anything to the contrary in this Section 10(b), but subject to Section 3(d), until the Lomotif Redemption
Price (together with any Late Charges thereon) is paid in full, the Conversion Amount submitted for redemption under this Section 10(b)
(together with any Late Charges thereon) may be converted, in whole or in part, by the Holder into Common Stock pursuant to Section 3.
11.
REDEMPTIONS.
(a)
Mechanics. The Company shall deliver the applicable Event of Default Redemption Price to the Holder in cash within five (5) Business
Days after the Company’s receipt of the Holder’s Event of Default Redemption Notice. If the Holder has submitted a Change
of Control Redemption Notice in accordance with Section 5(b), the Company shall deliver the applicable Change of Control Redemption Price
to the Holder in cash concurrently with the consummation of such Change of Control if such notice is received prior to the consummation
of such Change of Control and within five (5) Business Days after the Company’s receipt of such notice otherwise. The Company shall
deliver the applicable Company Optional Redemption Price to the Holder on the Company Optional Redemption Date. The Company shall deliver
the applicable Lomotif Redemption Price to the Holder on the Lomotif Redemption Date or the Lomotif Mandatory Redemption Date, as applicable.
Notwithstanding anything herein to the contrary, in connection with any redemption hereunder at a time the Holder is entitled to receive
a cash payment under any of the other Transaction Documents, at the option of the Holder delivered in writing to the Company, the applicable
Redemption Price hereunder shall be increased by the amount of such cash payment owed to the Holder under such other Transaction Document
and, upon payment in full or conversion in accordance herewith, shall satisfy the Company’s payment obligation under such other
Transaction Document. In the event of a redemption of less than all of the Conversion Amount of this Note, at the option of the Holder,
the Company shall promptly cause to be issued and delivered to the Holder a new Note (in accordance with Section 18(d)) representing
the outstanding Principal which has not been redeemed. In the event that the Company does not pay the applicable Redemption Price to
the Holder within the time period required, at any time thereafter and until the Company pays such unpaid Redemption Price in full, the
Holder shall have the option, in lieu of redemption, to require the Company to promptly return to the Holder all or any portion of this
Note representing the Conversion Amount that was submitted for redemption and for which the applicable Redemption Price (together with
any Late Charges thereon) has not been paid. Upon the Company’s receipt of such notice, (x) the applicable Redemption Notice shall
be null and void with respect to such Conversion Amount, (y) the Company shall immediately return this Note, or issue a new Note (in
accordance with Section 18(d)), to the Holder, and in each case the principal amount of this Note or such new Note (as the case may be)
shall be increased by an amount equal to the difference between (1) the applicable Redemption Price (as the case may be, and as adjusted
pursuant to this Section 11, if applicable) minus (2) the Principal portion of the Conversion Amount submitted for redemption. The Holder’s
delivery of a notice voiding a Redemption Notice and exercise of its rights following such notice shall not affect the Company’s
obligations to make any payments of Late Charges which have accrued prior to the date of such notice with respect to the Conversion Amount
subject to such notice.
(b)
Redemption by Other Holders. Upon the Company’s receipt of notice from any of the holders of the Other Notes for redemption
or repayment as a result of an event or occurrence substantially similar to the events or occurrences described in Section 4(b) or Section
5(b) (each, an “Other Redemption Notice”), the Company shall immediately, but no later than one (1) Business Day of
its receipt thereof, forward to the Holder by facsimile or electronic mail and overnight courier a copy of such notice. If the Company
receives a Redemption Notice and one or more Other Redemption Notices, during the seven (7) Business Day period beginning on and including
the date which is two (2) Business Days prior to the Company’s receipt of the Holder’s applicable Redemption Notice and ending
on and including the date which is two (2) Business Days after the Company’s receipt of the Holder’s applicable Redemption
Notice and the Company is unable to redeem all principal, interest and other amounts designated in such Redemption Notice and such Other
Redemption Notices received during such seven (7) Business Day period, then the Company shall redeem a pro rata amount from each holder
of the Notes (including the Holder) based on the principal amount of the Notes submitted for redemption pursuant to such Redemption Notice
and such Other Redemption Notices received by the Company during such seven (7) Business Day period.
12.
VOTING RIGHTS. The Holder shall have no voting rights as the holder of this Note, except as required by law (including, without
limitation, Chapter 78 of the Nevada Revised Statute) and as expressly provided in this Note.
13.
COVENANTS. Until all of the Notes have been converted, redeemed or otherwise satisfied in accordance with their terms, without
the prior written consent of the Requisite Holders:
(a)
Rank. All payments due under this Note (a) shall rank pari passu with all Other Notes and (b) shall be senior to all other
Indebtedness of the Company and its Subsidiaries (other than Permitted Indebtedness secured by Permitted Liens).
(b)
Incurrence of Indebtedness. The Company shall not, and the Company shall cause each of its Subsidiaries to not, and each Guarantor
shall not, and each Guarantor shall cause each of its Subsidiaries to not, directly or indirectly, incur or guarantee, assume or suffer
to exist any Indebtedness (other than (i) the Indebtedness evidenced by this Note and the Other Notes and (ii) other Permitted Indebtedness).
(c)
Existence of Liens. The Company shall not, and the Company shall cause each of its Subsidiaries to not, and each Guarantor shall
not, and each Guarantor shall cause each of its Subsidiaries to not, directly or indirectly, allow or suffer to exist any mortgage, lien,
pledge, charge, security interest or other encumbrance upon or in any property or assets (including accounts and contract rights) owned
by the Company or any of its Subsidiaries (collectively, “Liens”) other than Permitted Liens.
(d)
Restricted Payments. The Company shall not, and the Company shall cause each of its Subsidiaries to not, and each Guarantor shall
not, and each Guarantor shall cause each of its Subsidiaries to not, directly or indirectly, redeem, defease, repurchase, repay or make
any payments in respect of, by the payment of cash or cash equivalents (in whole or in part, whether by way of open market purchases,
tender offers, private transactions or otherwise), all or any portion of any Indebtedness (other than the Notes, the January Note (as
defined in the Securities Purchase Agreement), the February Note (as defined in the Securities Purchase Agreement) or Permitted Indebtedness
secured by Permitted Liens) whether by way of payment in respect of principal of (or premium, if any) or interest on, such Indebtedness
if at the time such payment is due or is otherwise made or, after giving effect to such payment, (i) an event constituting an Event of
Default has occurred and is continuing or (ii) an event that with the passage of time and without being cured would constitute an Event
of Default has occurred and is continuing; provided that the Company shall be permitted to make such payments if the aggregate
of such payments is less than $500,000 minus the principal amount of any Indebtedness incurred pursuant to the exception in Section
13(g)(ii).
(e)
Restriction on Redemption and Cash Dividends. The Company shall not, and the Company shall cause each of its Subsidiaries to not,
and each Guarantor shall not, and each Guarantor shall cause each of its Subsidiaries to not, directly or indirectly, redeem, repurchase
or declare or pay any cash dividend or distribution on any of its capital stock, except that any such cash dividend or capital may be
paid to the Company or a Guarantor.
(f)
Restriction on Transfer of Assets. The Company shall not, and the Company shall cause each of its Subsidiaries to not, and each
Guarantor shall not, and each Guarantor shall cause each of its Subsidiaries to not, directly or indirectly, sell, lease, license, assign,
transfer, spin-off, split-off, close, convey or otherwise dispose of any assets or rights of the Company or any Subsidiary owned or hereafter
acquired whether in a single transaction or a series of related transactions, other than (i) sales, leases, licenses, assignments, transfers,
conveyances and other dispositions of such assets or rights by the Company and its Subsidiaries in the ordinary course of business consistent
with its past practice, (ii) sales of inventory and product in the ordinary course of business and (iii) sales, leases, licenses, assignments,
transfers, conveyances and other dispositions to the Company or a Guarantor; and (iv) the Company’s spin-off or sale of all or
any part, in one or more transactions, of its interests in EVNT Platform, LLC (dba Emmersive Entertainment), substantially consistent
with such transactions described to the Holder prior to the Subscription Date (the “Spin-off Transactions”); provided,
that the Company and its Subsidiaries shall not transfer any assets to EVNT Platform, LLC after the Subscription Date.
(g)
Maturity of Indebtedness. The Company shall not, and the Company shall cause each of its Subsidiaries to not, and each Guarantor
shall not, and each Guarantor shall cause each of its Subsidiaries to not, directly or indirectly, permit any Indebtedness of the Company,
any Guarantor or any of their Subsidiaries to mature or accelerate prior to the Maturity Date other than (i) any Indebtedness incurred
pursuant to clause (d) of the definition of Permitted Indebtedness and (ii) Indebtedness in an aggregate principal amount of less than
$500,000 minus any payments made pursuant to the proviso in Section 13(d).
(h)
Change in Nature of Business. The Company shall not, and the Company shall cause each of its Subsidiaries to not, and each Guarantor
shall not, and each Guarantor shall cause each of its Subsidiaries to not, directly or indirectly, engage in any material line of business
substantially different from those lines of business conducted by or publicly contemplated to be conducted by it on the Subscription
Date or any business substantially related or incidental thereto; it being agreed that the Company’s business includes leveraging
new market opportunities by utilizing its B.I.G. Strategy: Buy. Innovate. Grow. The Company shall not, and the Company shall cause each
of its Subsidiaries to not, and each Guarantor shall not, and each Guarantor shall cause each of its Subsidiaries to not, directly or
indirectly, modify its or their corporate structure or purpose. For the avoidance of doubt, the occurrence of the Spin-off Transactions
shall not be deemed to result in a breach of this Section 13(h).
(i)
Preservation of Existence, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve,
and each Guarantor shall maintain and preserve, and each Guarantor shall cause each of its Subsidiaries to maintain and preserve, its
existence, rights and privileges, and become or remain, and cause each of its Subsidiaries to become or remain, duly qualified and in
good standing in each jurisdiction in which the character of the properties owned or leased by it or in which the transaction of its
business makes such qualification necessary. Notwithstanding the foregoing, the occurrence of a merger of Zash and the Company as described
in the Agreement to Complete a Plan of Merger between the Company and Zash, dated January 20, 2021 shall not be deemed to result in a
breach of this Section 13(i).
(j)
Maintenance of Properties, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain and preserve,
and each Guarantor shall maintain and preserve, and each Guarantor shall cause each of its Subsidiaries to maintain and preserve, all
of its material properties which are necessary or useful in the proper conduct of its business in good working order and condition, ordinary
wear and tear excepted, and comply, and cause each of its Subsidiaries to comply, at all times with the provisions of all leases to which
it is a party as lessee or under which it occupies property, so as to prevent any loss or forfeiture thereof or thereunder.
(k)
Maintenance of Intellectual Property. The Company and each Guarantor will, and will cause each of its Subsidiaries to, take all
action necessary or advisable to maintain all of the Intellectual Property Rights (as defined in the Securities Purchase Agreement) of
the Company, any Guarantor and/or any of their Subsidiaries that are necessary or material to the conduct of its business in full force
and effect.
(l)
Maintenance of Insurance. The Company shall maintain, and cause each of its Subsidiaries to maintain, and each Guarantor shall
maintain, and each Guarantor shall cause each of its Subsidiaries to maintain, insurance with responsible and reputable insurance companies
or associations (including, without limitation, comprehensive general liability, hazard, rent and business interruption insurance) with
respect to its properties (including all real properties leased or owned by it) and business, in such amounts and covering such risks
as is required by any governmental authority having jurisdiction with respect thereto or as is carried generally in accordance with sound
business practice by companies in similar businesses similarly situated.
(m)
Transactions with Affiliates. The Company shall not, nor shall it permit any of its Subsidiaries to, and each Guarantor shall
not, not shall it permit any of its Subsidiaries to, enter into, renew, extend or be a party to, any transaction or series of related
transactions (including, without limitation, the purchase, sale, lease, transfer or exchange of property or assets of any kind or the
rendering of services of any kind) with any affiliate, except transactions in the ordinary course of business in a manner and to an extent
consistent with past practice and necessary or desirable for the prudent operation of its business, for fair consideration and on terms
no less favorable to it or its Subsidiaries than would be obtainable in a comparable arm’s length transaction with a Person that
is not an affiliate thereof.
(n)
Restricted Issuances. The Company shall not, and each Guarantor shall not, directly or indirectly, without the prior written consent
of the holders of a majority in aggregate principal amount of the Notes then outstanding, (i) issue any Notes (other than as contemplated
by the Securities Purchase Agreement and the Notes) or (ii) issue any other securities that would cause a breach or default under the
Notes or the Warrants.
(o)
Independent Investigation. At the request of the Holder either (x) at any time when an Event of Default has occurred and is continuing,
(y) upon the occurrence of an event that with the passage of time or giving of notice would constitute an Event of Default or (z) at
any time the Holder reasonably believes an Event of Default may have occurred or be continuing, the Company shall hire an independent,
reputable investment bank selected by the Company and approved by the Holder to investigate as to whether any breach of this Note has
occurred (the “Independent Investigator”). If the Independent Investigator determines that such breach of this Note
has occurred, the Independent Investigator shall notify the Company of such breach and the Company shall deliver written notice to each
holder of a Note of such breach. In connection with such investigation, the Independent Investigator may, during normal business hours,
inspect all contracts, books, records, personnel, offices and other facilities and properties of the Company, each Guarantor and each
of their Subsidiaries and, to the extent available to the Company and each Guarantor after the Company uses reasonable efforts to obtain
them, the records of its legal advisors and accountants (including the accountants’ work papers) and any books of account, records,
reports and other papers not contractually required of the Company or such Guarantor to be confidential or secret, or subject to attorney-client
or other evidentiary privilege, and the Independent Investigator may make such copies and inspections thereof as the Independent Investigator
may reasonably request. The Company and each Guarantor shall furnish the Independent Investigator with such financial and operating data
and other information with respect to the business and properties of the Company and each Guarantor as the Independent Investigator may
reasonably request. The Company and each Guarantor shall permit the Independent Investigator to discuss the affairs, finances and accounts
of the Company and each Guarantor with, and to make proposals and furnish advice with respect thereto to, the Company’s officers,
directors, key employees and independent public accountants or any of them (and by this provision the Company and each Guarantor authorizes
said accountants to discuss with such Independent Investigator the finances and affairs of the Company, each Guarantor and any of their
Subsidiaries), all at such reasonable times, upon reasonable notice, and as often as may be reasonably requested.
(p)
Minimum Cash. The Company shall at all times maintain on deposit in the Control Account (as defined in the Securities Purchase
Agreement) cash in an aggregate amount equal to not less than the sum of (i) $65,000,000, (ii) any proceeds raised by the Company, any
Guarantor or any Subsidiary in one or more Subsequent Placement(s), net of reasonable fees and expenses directly incurred in connection
therewith (the cash referenced in this clause (ii), the “Subsequent Placement Proceeds”) and (iii) any additional
cash at any time raised or otherwise obtained by the Company, any Guarantor or any Subsidiary (the cash referenced in clauses (i), (ii)
and (iii), collectively, the “Minimum Cash”); provided, however, that if (A) Stockholder Approval has
been obtained, (B) the Principal Market has approved the terms of the Transaction Documents without requiring (1) any cap on the number
of shares of Common Stock issuable pursuant to the terms of the Notes or the Warrants, (2) any floor to any price pursuant to which shares
are issuable pursuant to the terms of the Notes or upon exercise of the Warrants or (3) any other changes to the terms of the Transaction
Documents, (C) all, but not less than all, of the Underlying Securities (as defined in the Securities Purchase Agreement) are registered
for resale pursuant to a Registration Statement that names the Holder as a selling shareholder and has been declared effective by the
SEC and for which a prospectus has been filed that is available for use by the Holder and (D) at least $15,000,000 of additional proceeds
have been deposited into the Control Account pursuant to clauses (ii) or (iii) above (the conditions set forth in clause (A), (B), (C)
and (D) are collectively referred to herein as the “Exclusion Conditions”), up to $20,000,000 in the aggregate of
Subsequent Placement Proceeds raised after the date of the satisfaction of the Exclusion Conditions may be excluded from the Minimum
Cash; provided, further, that the Minimum Cash is not required at any time to exceed $100,000,000.
14.
SECURITY. This Note and the Other Notes are secured to the extent and in the manner set forth in the Security Documents.
15.
DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 7, if the Company shall declare or make any dividend
or other distributions of its assets (or rights to acquire its assets) to any or all holders of shares of Common Stock, by way of return
of capital or otherwise (including without limitation, any distribution of cash, stock or other securities, property or options by way
of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (the “Distributions”),
then the Holder will be entitled to such Distributions as if the Holder had held the number of shares of Common Stock acquirable upon
complete conversion of this Note (without taking into account any limitations or restrictions on the convertibility of this Note, regardless
of whether or not the Initial Convertibility Date has occurred and assuming for such purpose that the Note was converted at the Conversion
Price as of the applicable record date) immediately prior to the date on which a record is taken for such Distribution or, if no such
record is taken, the date as of which the record holders of Common Stock are to be determined for such Distributions (provided, however,
that to the extent that the Holder’s right to participate in any such Distribution would result in the Holder and the other Attribution
Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution to the extent of
the Maximum Percentage (and shall not be entitled to beneficial ownership of such shares of Common Stock as a result of such Distribution
(and beneficial ownership) to the extent of any such excess) and the portion of such Distribution shall be held in abeyance for the benefit
of the Holder until such time or times, if ever, as its right thereto would not result in the Holder and the other Attribution Parties
exceeding the Maximum Percentage, at which time or times the Holder shall be granted such Distribution (and any Distributions declared
or made on such initial Distribution or on any subsequent Distribution held similarly in abeyance) to the same extent as if there had
been no such limitation). Notwithstanding anything herein to the contrary, the Holder shall not be entitled to any Distribution with
respect to the Spin-off Transactions pursuant to this Section 15.
16.
AMENDING THE TERMS OF THIS NOTE. Except for Section 3(d), which may not be amended, modified or waived by the parties hereto,
the prior written consent of the Requisite Holders shall be required for any amendment, modification or waiver to this Note. Any amendment,
modification or waiver so approved shall be binding upon all existing and future holders of this Note and any Other Notes; provided,
however, that no such change, waiver or, as applied to any of the Notes held by any particular holder of Notes, shall, without the written
consent of that particular holder, (i) reduce the amount of Principal, reduce the amount of accrued and unpaid Interest, or extend the
Maturity Date, of the Notes, (ii) disproportionally and adversely affect any rights under the Notes of any holder of Notes; or (iii)
modify any of the provisions of, or impair the right of any holder of Notes under, this Section 16.
17.
TRANSFER. This Note and any shares of Common Stock issued upon conversion of this Note may be offered, sold, assigned or transferred
by the Holder without the consent of the Company, subject only to the provisions of Section 2(g) of the Securities Purchase Agreement.
18.
REISSUANCE OF THIS NOTE.
(a)
Transfer. If this Note is to be transferred, the Holder shall surrender this Note to the Company, whereupon the Company will forthwith
issue and deliver upon the order of the Holder a new Note (in accordance with Section 18(d)), registered as the Holder may request, representing
the outstanding Principal being transferred by the Holder and, if less than the entire outstanding Principal is being transferred, a
new Note (in accordance with Section 18(d)) to the Holder representing the outstanding Principal not being transferred. The Holder and
any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of Section 3(c)(iii) following conversion
or redemption of any portion of this Note, the outstanding Principal represented by this Note may be less than the Principal stated on
the face of this Note.
(b)
Lost, Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Note (as to which a written certification and the indemnification contemplated below shall suffice
as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in
customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company shall execute
and deliver to the Holder a new Note (in accordance with Section 18(d) ) representing the outstanding Principal.
(c)
Note Exchangeable for Different Denominations. This Note is exchangeable, upon the surrender hereof by the Holder at the principal
office of the Company, for a new Note or Notes (in accordance with Section 18(d) and in principal amounts of at least $1,000) representing
in the aggregate the outstanding Principal of this Note, and each such new Note will represent such portion of such outstanding Principal
as is designated by the Holder at the time of such surrender.
(d)
Issuance of New Notes. Whenever the Company is required to issue a new Note pursuant to the terms of this Note, such new Note
(i) shall be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding
(or in the case of a new Note being issued pursuant to Section18(a) or Section 18(c), the Principal designated by the Holder which, when
added to the principal represented by the other new Notes issued in connection with such issuance, does not exceed the Principal remaining
outstanding under this Note immediately prior to such issuance of new Notes), (iii) shall have an issuance date, as indicated on the
face of such new Note, which is the same as the Issuance Date of this Note, (iv) shall have the same rights and conditions as this Note,
and (v) shall represent accrued and unpaid Interest and Late Charges on the Principal and Interest of this Note, from the Issuance Date.
19.
REMEDIES, CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Note shall be cumulative
and in addition to all other remedies available under this Note and any of the other Transaction Documents at law or in equity (including
a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s right to pursue actual
and consequential damages for any failure by the Company to comply with the terms of this Note. No failure on the part of the Holder
to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise by the Holder of any right, power or remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. In addition, the exercise of any right or remedy of the Holder at law or equity or under this Note or any
of the documents shall not be deemed to be an election of Holder’s rights or remedies under such documents or at law or equity.
The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided
herein. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall
be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of
the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable
harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event
of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to specific performance
and/or temporary, preliminary and permanent injunctive or other equitable relief from any court of competent jurisdiction in any such
case without the necessity of proving actual damages and without posting a bond or other security. The Company shall provide all information
and documentation to the Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance with the
terms and conditions of this Note.
20.
PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Note is placed in the hands of an attorney for collection or enforcement
or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this Note
or to enforce the provisions of this Note or (b) there occurs any bankruptcy, reorganization, receivership of the Company or other proceedings
affecting Company creditors’ rights and involving a claim under this Note, then the Company shall pay the costs incurred by the
Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization, receivership or other proceeding,
including, without limitation, reasonable attorneys’ fees and disbursements. The Company expressly acknowledges and agrees that
no amounts due under this Note shall be affected, or limited, by the fact that the purchase price paid for this Note was less than the
original Principal amount hereof.
21.
CONSTRUCTION; HEADINGS. This Note shall be deemed to be jointly drafted by the Company and the initial Holder and shall not be
construed against any such Person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form
part of, or affect the interpretation of, this Note. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed
to include the masculine, feminine, neuter, singular and plural forms thereof. The terms “including,” “includes,”
“include” and words of like import shall be construed broadly as if followed by the words “without limitation.”
The terms “herein,” “hereunder,” “hereof” and words of like import refer to this entire Note instead
of just the provision in which they are found. Unless expressly indicated otherwise, all section references are to sections of this Note.
Terms used in this Note and not otherwise defined herein, but defined in the other Transaction Documents, shall have the meanings ascribed
to such terms on the Closing Date in such other Transaction Documents unless otherwise consented to in writing by the Holder.
22.
FAILURE OR INDULGENCE NOT WAIVER. No failure or delay on the part of the Holder in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or privilege. No waiver shall be effective unless it is in writing and
signed by an authorized representative of the waiving party. Notwithstanding the foregoing, nothing contained in this Section 22 shall
permit any waiver of any provision of Section 3(d).
23.
DISPUTE RESOLUTION.
(a)
Submission to Dispute Resolution.
(i)
In the case of a dispute relating to a Closing Bid Price, a Closing Sale Price, a Conversion Price or a fair market value or the arithmetic
calculation of a Conversion Rate, or the applicable Redemption Price (as the case may be) (including, without limitation, a dispute relating
to the determination of any of the foregoing), the Company or the Holder (as the case may be) shall submit the dispute to the other party
via facsimile or electronic mail (A) if by the Company, within two (2) Business Days after the occurrence of the circumstances giving
rise to such dispute or (B) if by the Holder at any time after the Holder learned of the circumstances giving rise to such dispute. If
the Holder and the Company are unable to promptly resolve such dispute relating to such Closing Bid Price, such Closing Sale Price, such
Conversion Price, such fair market value, or the arithmetic calculation of such Conversion Rate or such applicable Redemption Price (as
the case may be), at any time after the second (2nd) Business Day following such initial notice by the Company or the Holder
(as the case may be) of such dispute to the Company or the Holder (as the case may be), then the Holder may, at its sole option, select
an independent, reputable investment bank to resolve such dispute.
(ii)
The Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered in accordance
with the first sentence of this Section 23 and (B) written documentation supporting its position with respect to such dispute, in each
case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following the date on which the
Holder selected such investment bank (the “Dispute Submission Deadline”) (the documents referred to in the immediately
preceding clauses (A) and (B) are collectively referred to herein as the “Required Dispute Documentation”) (it being
understood and agreed that if either the Holder or the Company fails to so deliver all of the Required Dispute Documentation by the Dispute
Submission Deadline, then the party who fails to so submit all of the Required Dispute Documentation shall no longer be entitled to (and
hereby waives its right to) deliver or submit any written documentation or other support to such investment bank with respect to such
dispute and such investment bank shall resolve such dispute based solely on the Required Dispute Documentation that was delivered to
such investment bank prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by both the Company and the Holder
or otherwise requested by such investment bank, neither the Company nor the Holder shall be entitled to deliver or submit any written
documentation or other support to such investment bank in connection with such dispute (other than the Required Dispute Documentation).
(iii)
The Company and the Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company and the
Holder of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline. The fees and expenses
of such investment bank shall be borne solely by the Company, and such investment bank’s resolution of such dispute shall be final
and binding upon all parties absent manifest error.
(b)
Miscellaneous. The Company expressly acknowledges and agrees that (i) this Section 23 constitutes an agreement to arbitrate between
the Company and the Holder (and constitutes an arbitration agreement) under § 7501, et seq. of the New York Civil Practice Law and
Rules (“CPLR”) and that the Holder is authorized to apply for an order to compel arbitration pursuant to CPLR §
7503(a) in order to compel compliance with this Section 23, (ii) the terms of this Note and each other applicable Transaction Document
shall serve as the basis for the selected investment bank’s resolution of the applicable dispute, such investment bank shall be
entitled (and is hereby expressly authorized) to make all findings, determinations and the like that such investment bank determines
are required to be made by such investment bank in connection with its resolution of such dispute and in resolving such dispute such
investment bank shall apply such findings, determinations and the like to the terms of this Note and any other applicable Transaction
Documents, (iii) the Holder (and only the Holder), in its sole discretion, shall have the right to submit any dispute described in this
Section 23 to any state or federal court sitting in The City of New York, Borough of Manhattan in lieu of utilizing the procedures set
forth in this Section 23 and (iv) nothing in this Section 23 shall limit the Holder from obtaining any injunctive relief or other equitable
remedies (including, without limitation, with respect to any matters described in this Section 23).
24.
NOTICES; CURRENCY; PAYMENTS.
(a)
Notices. Whenever notice is required to be given under this Note, unless otherwise provided herein, such notice shall be given
in accordance with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice
of all actions taken pursuant to this Note, including in reasonable detail a description of such action and the reason therefore. Without
limiting the generality of the foregoing, the Company will give written notice to the Holder at least fifteen (15) days prior to the
date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution upon the Common Stock,
(B) with respect to any grant, issuances, or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities
or other property to holders of shares of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction,
dissolution or liquidation, provided in each case that such information shall be made known to the public prior to or in conjunction
with such notice being provided to the Holder.
(b)
Currency. All dollar amounts referred to in this Note are in United States Dollars (“U.S. Dollars”), and all
amounts owing under this Note shall be paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall be converted
into the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange Rate”
means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Note, the U.S. Dollar exchange rate as
published in the Wall Street Journal on the relevant date of calculation (it being understood and agreed that where an amount is calculated
with reference to, or over, a period of time, the date of calculation shall be the final date of such period of time).
(c)
Payments. Whenever any payment of cash is to be made by the Company to any Person pursuant to this Note, unless otherwise expressly
set forth herein, such payment shall be made via wire transfer of immediately available funds by providing the Company with prior written
notice setting out such request and the Holder’s wire transfer instructions, provided that the Holder may elect to receive a payment
of cash in lawful money of the United States of America by a certified check drawn on the account of the Company and sent via overnight
courier service to such Person at such address as previously provided to the Company in writing (which address, in the case of each of
the Buyers, shall initially be as set forth on the Schedule of Buyers attached to the Securities Purchase Agreement). Whenever any amount
expressed to be due by the terms of this Note is due on any day which is not a Business Day, the same shall instead be due on the next
succeeding day which is a Business Day. Any amount of Principal or other amounts due under the Transaction Documents which is not paid
when due (except to the extent such amount is simultaneously accruing Interest at the Default Rate hereunder) shall result in a late
charge being incurred and payable by the Company in an amount equal to interest on such amount at the rate of eighteen percent (18%)
per annum from the date such amount was due until the same is paid in full (“Late Charge”).
25.
CANCELLATION. After all Principal, accrued Interest, Late Charges and other amounts at any time owed on this Note have been paid
in full, this Note shall automatically be deemed canceled, shall be surrendered to the Company for cancellation and shall not be reissued.
26.
WAIVER OF NOTICE. To the extent permitted by law, the Company hereby irrevocably waives demand, notice, presentment, protest and
all other demands and notices in connection with the delivery, acceptance, performance, default or enforcement of this Note and the Securities
Purchase Agreement.
27.
GOVERNING LAW. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Note shall be governed by, the internal laws of the State of New York, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause
the application of the laws of any jurisdictions other than the State of New York. Except as otherwise required by Section 23 above,
the Company 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, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is
not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum
or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Nothing contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. Nothing contained herein (i) shall be deemed or operate to preclude the Holder from bringing suit or
taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to the Holder,
to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling in favor of the
Holder or (ii) shall limit, or shall be deemed or construed to limit, any provision of Section 23. THE COMPANY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED HEREBY.
28.
JUDGMENT CURRENCY.
(a)
If for the purpose of obtaining or enforcing judgment against the Company in any court in any jurisdiction it becomes necessary to convert
into any other currency (such other currency being hereinafter in this Section 28 referred to as the “Judgment Currency”)
an amount due in U.S. dollars under this Note, the conversion shall be made at the Exchange Rate prevailing on the Trading Day immediately
preceding:
(i)
the date actual payment of the amount due, in the case of any proceeding in the courts of New York or in the courts of any other jurisdiction
that will give effect to such conversion being made on such date: or
(ii)
the date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date as of
which such conversion is made pursuant to this Section 28(a)(ii)being hereinafter referred to as the “Judgment Conversion Date”).
(b)
If in the case of any proceeding in the court of any jurisdiction referred to in Section 28(a)(ii)above, there is a change in the Exchange
Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable party shall pay
such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the Exchange Rate
prevailing on the date of payment, will produce the amount of US dollars which could have been purchased with the amount of Judgment
Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment Conversion Date.
(c)
Any amount due from the Company under this provision shall be due as a separate debt and shall not be affected by judgment being obtained
for any other amounts due under or in respect of this Note.
29.
SEVERABILITY. If any provision of this Note is prohibited by law or otherwise determined to be invalid or unenforceable by a court
of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply
to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Note so long as this Note as so modified continues to express, without material change,
the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the
provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical
realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations
to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible
to that of the prohibited, invalid or unenforceable provision(s).
30.
MAXIMUM PAYMENTS. Without limiting Section 9(d) of the Securities Purchase Agreement, nothing contained herein shall be deemed
to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the
event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments
in excess of such maximum shall be credited against amounts owed by the Company to the Holder and thus refunded to the Company.
31.
CERTAIN DEFINITIONS. For purposes of this Note, the following terms shall have the following meanings:
(a)
“1934 Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
(b)
“Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled
by, or is under common control with, such Person, it being understood for purposes of this definition that “control” of a
Person means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of
directors of such Person or direct or cause the direction of the management and policies of such Person whether by contract or otherwise.
(c)
“Attribution Parties” means, collectively, the following Persons: (i) any investment vehicle, including, any funds,
feeder funds or managed accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed or advised
by the Holder’s investment manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the Holder
or any of the foregoing, (iii) any Person acting or who could be deemed to be acting as a Group together with the Holder or any of the
foregoing and (iv) any other Persons whose beneficial ownership of the Common Stock would or could be aggregated with the Holder’s
and the other Attribution Parties for purposes of Section 13(d) of the 1934 Act. For clarity, the purpose of the foregoing is to subject
collectively the Holder and all other Attribution Parties to the Maximum Percentage.
(d)
“Bloomberg” means Bloomberg, L.P.
(e)
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New
York are authorized or required by law to remain closed; provided, however, for clarification,
commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”,
“non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the
direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial
banks in The City of New York generally are open for use by customers on such day.
(f)
“Change of Control” means any Fundamental Transaction other than (i) any merger of the Company or any of its, direct
or indirect, wholly-owned Subsidiaries with or into any of the foregoing Persons, (ii) any reorganization, recapitalization or reclassification
of the shares of Common Stock in which holders of the Company’s voting power immediately prior to such reorganization, recapitalization
or reclassification continue after such reorganization, recapitalization or reclassification to hold publicly traded securities and,
directly or indirectly, are, in all material respects, the holders of the voting power of the surviving entity (or entities with the
authority or voting power to elect the members of the board of directors (or their equivalent if other than a corporation) of such entity
or entities) after such reorganization, recapitalization or reclassification, or (iii) pursuant to a migratory merger effected solely
for the purpose of changing the jurisdiction of incorporation of the Company or any of its Subsidiaries. Notwithstanding the foregoing
and anything in this Note to the contrary, the Spin-off Transactions shall not be deemed to be a Change of Control.
(g)
“Change of Control Redemption Premium” means 125%.
(h)
“Closing Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing
bid price and last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the
Principal Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price
(as the case may be) then the last bid price or last trade price, respectively, of such security prior to 4:00:00 p.m., New York time,
as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the
last closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading market where
such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the last closing bid price or last trade
price, respectively, of such security in the over-the-counter market on the electronic bulletin board for such security as reported by
Bloomberg, or, if no closing bid price or last trade price, respectively, is reported for such security by Bloomberg, the average of
the bid prices, or the ask prices, respectively, of any market makers for such security as reported in the “pink sheets”
by OTC Markets Group Inc. (formerly Pink Sheets LLC). If the Closing Bid Price or the Closing Sale Price cannot be calculated for a security
on a particular date on any of the foregoing bases, the Closing Bid Price or the Closing Sale Price (as the case may be) of such security
on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable
to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section
23. All such determinations shall be appropriately adjusted for any stock splits, stock dividends, stock combinations, recapitalizations
or other similar transactions during such period.
(i)
“Closing Date” shall have the meaning set forth in the Securities Purchase Agreement, which date is the date the Company
initially issued Notes pursuant to the terms of the Securities Purchase Agreement.
(j)
“Collateral” shall have the meaning as set forth in the Securities Purchase Agreement.
(k)
“Collateral Agent” shall have the meaning as set forth in the Securities Purchase Agreement.
(l)
“Common Stock” means (i) the Company’s shares of common stock, $0.001 par value per share, and (ii) any capital
stock into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.
(m)
“Common Stock Equivalents” means, collectively, Options and Convertible Securities.
(n)
“Convertible Securities” means any stock or other security (other than Options) that is at any time and under any
circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof
to acquire, any shares of Common Stock.
(o)
“Eligible Market” means The New York Stock Exchange, the NYSE American, the Nasdaq Capital Market, the Nasdaq Global
Select Market or the Nasdaq Global Market.
(p)
“Equity Conditions” means, with respect to an given date of determination: (i) on each day during the period beginning
thirty (30) calendar days prior to the applicable date of determination and ending on and including the applicable date of determination
(the “Equity Conditions Measuring Period”), one or more registration statements (each, the “Company Optional
Redemption Registration Statement”) shall be effective and the prospectus contained therein shall be available on such applicable
date of determination (with, for the avoidance of doubt, any shares of Common Stock previously issued pursuant to such prospectus deemed
unavailable) for the resale of all shares of Common Stock issuable pursuant to the terms of the Notes (without regard to any limitations
on conversion set forth in Section 3(d) or otherwise) (the “Conversion Shares”); (ii) on each day during the Equity
Conditions Measuring Period, the Common Stock (including all of the Conversion Shares) is listed or designated for quotation (as applicable)
on an Eligible Market and shall not have been suspended from trading on an Eligible Market (other than suspensions of not more than two
(2) days and occurring prior to the applicable date of determination due to business announcements by the Company) nor shall delisting
or suspension by an Eligible Market have been threatened (with a reasonable prospect of delisting occurring after giving effect to all
applicable notice, appeal, compliance and hearing periods) or reasonably likely to occur or pending as evidenced by a writing by such
Eligible Market; (iii) during the Equity Conditions Measuring Period, the Company shall have delivered all shares of Common Stock issuable
pursuant to the terms of the Notes on a timely basis as set forth in Section 3(c) hereof and all other shares of capital stock required
to be delivered by the Company on a timely basis as set forth in the other Transaction Documents; (iv) on each day during the Equity
Conditions Measuring Period, all of the Conversion Shares may be issued in full without violating the rules or regulations of the Eligible
Market on which the Common Stock is then listed or designated for quotation (as applicable); (v) on each day during the Equity Conditions
Measuring Period, no public announcement of a pending, proposed or intended Fundamental Transaction shall have occurred which has not
been abandoned, terminated or consummated; (vi) on each day during the Equity Conditions Measuring Period, the Company shall have no
knowledge of any fact that would reasonably be expected to cause the applicable Company Optional Redemption Registration Statement to
not be effective or the prospectus contained therein to not be available for the issuance of any of the Conversion Shares; (vii) on each
day during the Equity Conditions Measuring Period, the Holder shall not be in possession of any material, non-public information provided
by the Company, any of its Subsidiaries or any of their respective affiliates, employees, officers, representatives, agents or the like;
(viii) on each day during the Equity Conditions Measuring Period, the Company shall have been in compliance in material respects will
each covenant and other term or condition of each Transaction Document, including, without limitation, the Company shall not have failed
to timely make any payment pursuant to any Transaction Document; (ix) on each day during the Equity Conditions Measuring Period, there
shall not have occurred any Price Failure or Volume Failure; (x) on each day during the Equity Conditions Measuring Period, (A) no Authorized
Share Failure shall exist or be continuing and (B) all of the Conversion Shares may be issued in full without resulting in an Authorized
Share Failure; (xi) on each day during the Equity Conditions Measuring Period, all shares of Common Stock issuable pursuant to the terms
of the Notes may be issued in full without violating Section 3(d) hereof (or the equivalent provisions of any applicable Other Notes),
(xii) on each day during the Equity Conditions Measuring Period, no bona fide dispute shall exist, by and between any of holders of Notes,
the Company, the Principal Market (or such applicable Eligible Market in which the Common Stock of the Company is then principally trading)
and/or FINRA with respect to any term or provision of the Notes or any other Transaction Document, and (xiii) the Stockholder Approval
shall have been obtained.
(q)
“Equity Conditions Failure” means that on each day during the period commencing twenty (20) Trading Days prior to
the Company Optional Redemption Notice Date through and including the Company Optional Redemption Date, the Equity Conditions have not
been satisfied (or waived in writing by the Holder).
(r)
“Event of Default Redemption Premium” means 120%.
(s)
“Fundamental Transaction” means (A) that the Company shall, directly or indirectly, including through Subsidiaries,
Affiliates or otherwise, in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the
surviving corporation) another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all
of the properties or assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation
S-X) to one or more Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject
to or have its Common Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange offer that
is accepted by the holders of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of
Common Stock calculated as if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated with any Subject
Entities making or party to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares of Common Stock
such that all Subject Entities making or party to, or Affiliated with any Subject Entity making or party to, such purchase, tender or
exchange offer, become collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding
shares of Common Stock, or (iv) consummate a stock or share purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off or scheme of arrangement) with one or more Subject Entities whereby all such Subject Entities,
individually or in the aggregate, acquire, either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the
outstanding shares of Common Stock calculated as if any shares of Common Stock held by all the Subject Entities making or party to, or
Affiliated with any Subject Entity making or party to, such stock purchase agreement or other business combination were not outstanding;
or (z) such number of shares of Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in
Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify
its Common Stock, (B) that the Company shall, directly or indirectly, including through Subsidiaries, Affiliates or otherwise, in one
or more related transactions, allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the “beneficial
owner” (as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition, purchase, assignment,
conveyance, tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination,
reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise
in any manner whatsoever, of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common
Stock, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock not held by all such
Subject Entities as of the Subscription Date calculated as if any shares of Common Stock held by all such Subject Entities were not outstanding,
or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock or other equity
securities of the Company sufficient to allow such Subject Entities to effect a statutory short form merger or other transaction requiring
other shareholders of the Company to surrender their shares of Common Stock without approval of the shareholders of the Company or (C)
directly or indirectly, including through Subsidiaries, Affiliates or otherwise, in one or more related transactions, the issuance of
or the entering into any other instrument or transaction structured in a manner to circumvent, or that circumvents, the intent of this
definition in which case this definition shall be construed and implemented in a manner otherwise than in strict conformity with the
terms of this definition to the extent necessary to correct this definition or any portion of this definition which may be defective
or inconsistent with the intended treatment of such instrument or transaction. Notwithstanding the foregoing and anything in this Note
to the contrary, the Spin-off Transactions shall not be deemed to be a Fundamental Transaction.
(t)
“GAAP” means United States generally accepted accounting principles, consistently applied.
(u)
“Group” means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5
thereunder.
(v)
“Guarantor” shall have the meaning as set forth in the Guarantee Agreement (as defined in the Securities Purchase
Agreement).
(w)
“Indebtedness” shall have the meaning ascribed to such term in the Securities Purchase Agreement.
(x)
“Initial Convertibility Date” means the date the Company obtains the Principal Market’s approval of the transactions
contemplated by the Transaction Documents and the Stockholder Approval.
(y)
“Issuance Date” means the date set forth above as the Issuance Date.
(z)
“Maturity Date” shall mean [ ]1;
provided, however, the Maturity Date may be extended at the option of the Holder (i) in the event that, and for so long as, an Event
of Default shall have occurred and be continuing or any event shall have occurred and be continuing that with the passage of time and
the failure to cure would result in an Event of Default or (ii) through the date that is sixty (60) Business Days after the consummation
of a Fundamental Transaction in the event that a Fundamental Transaction is publicly announced or a Change of Control Notice is delivered
prior to the Maturity Date, provided further that if a Holder elects to convert some or all of this Note pursuant to Section 3 hereof,
and the Conversion Amount would be limited pursuant to Section 3(d) hereunder, the Maturity Date shall automatically be extended until
such time as such provision shall not limit the conversion of this Note.
(aa)
“Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible
Securities.
1
Insert first anniversary of the Issuance Date.
(bb)
“Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose
common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent
Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.
(cc)
“Permitted Indebtedness” means (a) Indebtedness evidenced by this Note and the Other Notes, (b) Indebtedness set forth
on Schedule 3(s) to the Securities Purchase Agreement, as in effect as of the Subscription Date, (c) Indebtedness secured by, or unsecured
but as described in, Permitted Liens pursuant to clauses (o) and (p) of the definition of Permitted Liens, (d) lease obligations of up
to $1,000,000 in the aggregate, (e) trade accounts payable incurred in the ordinary course of business, (f) endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary course of business, not to exceed $1,000,000 in the aggregate
outstanding at any time, (g) vendor payment guarantees entered into in the ordinary course of business and consistent with past practices,
not to exceed $1,000,000 in the aggregate outstanding at any time, (h) Indebtedness that (A) is expressly subordinated to the Notes and
the Other Notes pursuant to a written subordination agreement with the Holders that is reasonably acceptable to the Requisite Holders
and (B) does not require any payment of principal, whether at maturity, pursuant to amortization, a sinking fund or otherwise, at a date
earlier than 91 days following the Maturity Date, (i) Indebtedness in respect of obligations relating to corporate credit cards, purchase
cards or bank card products, in the ordinary course of business and consistent with past practices, (j) Indebtedness consisting of intercompany
loans and advances among the Company and any Guarantors, (k) guarantees of Indebtedness otherwise expressly permitted hereunder and (l)
funds or credit or other support received by the Company or any Subsidiary of the Company from, or with the credit or other support of,
any governmental authority, and incurred with the intent to mitigate (in the good faith determination of the Company) through liquidity
or other financial relief the impact of the COVID-19 global pandemic on the business and operations of the Company and its Subsidiaries
through a program with the express purpose of addressing the impact of the COVID-19 global pandemic.
(dd)
“Permitted Liens” means (a) any Lien for taxes, assessments and other governmental charges or levies not otherwise
delinquent or Liens for taxes, assessments and other governmental charges or levies being contested in good faith and by appropriate
proceedings for which adequate reserves (in the good faith judgment of the Company) have been established in accordance with GAAP, (b)
Liens imposed by law which were incurred in the ordinary course of the Company’s business, such as carriers’, warehousemen’s
and mechanics’ Liens, statutory landlords’ Liens, and other similar Liens arising in the ordinary course of the Company’s
business, and which (i) do not individually or in the aggregate materially detract from the value of such property or assets or materially
impair the use thereof in the operation of the business of the Company and its consolidated Subsidiaries or (ii) are being contested
in good faith by appropriate proceedings, which proceedings have the effect of preventing for the foreseeable future the forfeiture or
sale of the property or asset subject to such Lien, (c) Liens incurred in connection with Permitted Indebtedness under clauses (a), (b)
and (i) thereunder, (d) [intentionally omitted], (e) banker’s liens, rights of set-off and Liens in favor of financial institutions
incurred in the ordinary course of business arising in connection with bank accounts and securities accounts, (f) Liens arising from
judgments, decrees or attachments in circumstances not constituting an Event of Default, (g) easements, reservations, rights-of-way,
restrictions, minor defects or irregularities in title and similar charges or encumbrances affecting real property not constituting a
Material Adverse Effect (as defined in the Securities Purchase Agreement) and not making the property unsuitable for its purpose, (h)
pledges or deposits in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other
social security legislation consistent with past practices, (i) deposits to secure the performance of bids, trade contracts and leases
(other than Indebtedness), statutory obligations, surety and appeal bonds, indemnity and performance bonds and other obligations of a
like nature incurred in the ordinary course of business and consistent with past practices, (j) licenses, sublicenses, leases or subleases
(other than relating to Intellectual Property) granted to others in the ordinary course of business not interfering in any material respect
with the business of the Company and its Subsidiaries consistent with past practices, (k) pledges and deposits in the ordinary course
of business securing liability to insurance carriers providing property, casualty or liability insurance to the Company or any Subsidiary
(including obligations in respect of letters of credit or bank guarantees for the benefit of such insurance carriers) consistent with
past practices, (l) rights of first refusal, voting, redemption, transfer or other restrictions (including call provisions and buy-sell
provisions) with respect to the equity interests of any joint venture, (m) to the extent constituting a Lien, cash escrow arrangements
securing indemnification obligations associated with an acquisition or other investment, (n) Liens solely on cash earnest money deposits
made by the Company or any of its Subsidiaries in connection with any letter of intent or purchase agreement for an acquisition or other
investment, (o) Liens (i) upon or in any equipment acquired or held by the Company or any of its Subsidiaries to secure the purchase
price of such equipment or Indebtedness incurred solely for the purpose of financing the acquisition or lease of such equipment, or (ii)
existing on such equipment at the time of its acquisition, provided that the Lien is confined solely to the property so acquired
and improvements thereon, and the proceeds of such equipment, in either case, with respect to Indebtedness in an aggregate amount not
to exceed $1,000,000 and (p) Liens incurred in connection with the extension, renewal or refinancing of the Indebtedness secured by Liens
of the type described in clause (o) above, provided that any extension, renewal or replacement Lien shall be limited to the property
encumbered by the existing Lien and the principal amount of the Indebtedness being extended, renewed or refinanced does not increase.
(ee)
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust,
an unincorporated organization, any other entity or a government or any department or agency thereof.
(ff)
“Price Failure” means, with respect to a particular date of determination, the VWAP of the Common Stock on any Trading
Day during the twenty (20) Trading Day period ending on the Trading Day immediately preceding such date of determination fails to exceed
$2.00 (as adjusted for stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions occurring after
the Subscription Date). All such determinations to be appropriately adjusted for any stock splits, stock dividends, stock combinations,
recapitalizations or other similar transactions during any such measuring period.
(gg)
“Principal Market” means the Nasdaq Global Select Market.
(hh)
“Redemption Notices” means, collectively, the Event of Default Redemption Notices, the Change of Control Redemption
Notices, the Company Optional Redemption Notice, the Lomotif Optional Redemption Notice, the Lomotif Mandatory Redemption Notice, and
each of the foregoing, individually, a “Redemption Notice.”
(ii)
“Redemption Prices” means, collectively, Event of Default Redemption Prices, the Change of Control Redemption Prices,
the Company Optional Redemption Price and the Lomotif Redemption Price, and each of the foregoing, individually, a “Redemption
Price.”
(jj)
“Registration Rights Agreement” means that certain registration rights agreement, dated as of the Closing Date, by
and among the Company and the initial holders of the Notes relating to, among other things, the registration of the resale of the Common
Stock issuable upon conversion of the Notes or otherwise pursuant to the terms of the Notes and exercise of the Warrants, as may be amended
from time to time.
(kk)
“Requisite Holders” means the holders of a majority in aggregate principal amount of the Notes then outstanding, including
Hudson Bay Master Fund Ltd. for so long as Hudson Bay Master Fund Ltd. or any of its affiliates holds any Notes.
(ll)
“SEC” means the United States Securities and Exchange Commission or the successor thereto.
(mm)
“Securities Purchase Agreement” means that certain securities purchase agreement, dated as of the Subscription Date,
by and among the Company and the initial holders of the Notes pursuant to which the Company issued the Notes, as may be amended from
time to time.
(nn)
“Security Documents” shall have the meaning as set forth in the Securities Purchase Agreement.
(oo)
“Stockholder Approval” shall have the meaning as set forth in the Securities Purchase Agreement.
(pp)
“Subsequent Placement” means any direct or indirect, offer, sale, grant any option to purchase, or other disposition
of any of its or its Subsidiaries’ equity or equity equivalent securities, including without limitation any debt, preferred stock
or other instrument or security that is, at any time during its life and under any circumstances, convertible into or exchangeable or
exercisable for Common Stock or Common Stock Equivalents.
(qq)
“Subsidiaries” shall have the meaning as set forth in the Securities Purchase Agreement.
(rr)
“Subject Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.
(ss)
“Successor Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from
or surviving any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental
Transaction shall have been entered into.
(tt)
“Trading Day” means, as applicable, (x) with respect to all price or trading volume determinations relating to the
Common Stock, any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading
market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded,
provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or
market for less than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange
or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during
the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise designated as a Trading Day in writing by the Holder or
(y) with respect to all determinations other than price determinations relating to the Common Stock, any day on which The New York Stock
Exchange (or any successor thereto) is open for trading of securities.
(uu)
“Volume Failure” means, with respect to a particular date of determination, the aggregate daily dollar composite trading
volume (as reported on Bloomberg) of the Common Stock on the Principal Market of each Trading Day during the twenty (20) Trading Day
period ending on the Trading Day immediately preceding such date of determination is less than $5 million.
(vv)
“VWAP” means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal
Market (or, if the Principal Market is not the principal trading market for such security, then on the principal securities exchange
or securities market on which such security is then traded), during the period beginning at 9:30 a.m., New York time, and ending at 4:00
p.m., New York time, as reported by Bloomberg through its “VAP” function (set to 09:30 start time and 16:00 end time) or,
if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic
bulletin board for such security during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m., New York time, as
reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the
average of the highest closing bid price and the lowest closing ask price of any of the market makers for such security as reported in
the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). If the VWAP cannot be calculated for such security
on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as mutually determined
by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such
dispute shall be resolved in accordance with the procedures in Section 23. All such determinations shall be appropriately adjusted for
any stock dividend, stock split, stock combination, recapitalization or other similar transaction during such period.
(ww)
“Warrants” has the meaning ascribed to such term in the Securities Purchase Agreement, and shall include all warrants
issued in exchange therefor or replacement thereof.
32.
DISCLOSURE. Upon delivery by the Company to the Holder (or receipt by the Company from the Holder) of any notice in accordance
with the terms of this Note, unless the Company has in good faith determined that the matters relating to such notice do not constitute
material, non-public information relating to the Company or any of its Subsidiaries, the Company shall on or prior to 9:00 am, New York
city time on the Business Day immediately following such notice delivery date, publicly disclose such material, non-public information
on a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material, non-public information
relating to the Company or any of its Subsidiaries, the Company shall so indicate to the Holder explicitly in writing in such notice
(or immediately upon receipt of notice from the Holder, as applicable), and in the absence of any such written indication in such notice
(or notification from the Company immediately upon receipt of notice from the Holder), the Holder shall be entitled to presume that information
contained in the notice does not constitute material, non-public information relating to the Company or any of its Subsidiaries. Nothing
contained in this Section 32 shall limit any obligations of the Company, or any rights of the Holder, under Section 4(i) of the Securities
Purchase Agreement.
33.
ABSENCE OF TRADING AND DISCLOSURE RESTRICTIONS. The Company acknowledges and agrees that the Holder is not a fiduciary or agent
of the Company and that the Holder shall have no obligation to (a) maintain the confidentiality of any information provided by the Company
or (b) refrain from trading any securities while in possession of such information in the absence of a written non-disclosure agreement
signed by an officer of the Holder that explicitly provides for such confidentiality and trading restrictions. In the absence of such
an executed, written non-disclosure agreement, the Company acknowledges that the Holder may freely trade in any securities issued by
the Company, may possess and use any information provided by the Company in connection with such trading activity, and may disclose any
such information to any third party.
[signature
page follows]
IN
WITNESS WHEREOF, the Company has caused this Note to be duly executed as of the Issuance Date set out above.
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VINCO
VENTURES INC.
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By:
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Name:
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Title:
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[signature
page follows]
EXHIBIT
I
VINCO
VENTURES INC.
CONVERSION
NOTICE
Reference
is made to the Senior Secured Convertible Note (the “Note”) issued to the undersigned by Vinco Ventures Inc., a Nevada
corporation (the “Company”). In accordance with and pursuant to the Note, the undersigned hereby elects to convert
the Conversion Amount (as defined in the Note) of the Note indicated below into shares of Common Stock, $0.001 par value per share (the
“Common Stock”), of the Company, as of the date specified below. Capitalized terms not defined herein shall have the
meaning as set forth in the Note.
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Date
of Conversion:
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Aggregate
Principal to be converted:
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Aggregate
accrued and unpaid Interest and accrued and unpaid Late Charges with respect to such portion of the Aggregate Principal and such
Aggregate Interest to be converted:
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AGGREGATE
CONVERSION AMOUNT TO BE CONVERTED:
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Please
confirm the following information:
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Conversion
Price:
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Number
of shares of Common Stock to be issued:
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Please
issue the Common Stock into which the Note is being converted to Holder, or for its benefit,
as follows:
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[ ]
Check here if requesting delivery as a certificate to the following name and to the following address:
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Issue
to:
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[ ]
Check here if requesting delivery by Deposit/Withdrawal at Custodian as follows:
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DTC
Participant:
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DTC
Number:
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Account
Number:
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Date:
_____________ __, ______
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Name
of Registered Holder
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By:
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Name:
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Title:
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Tax
ID:
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Facsimile:
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E-mail
Address:
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Exhibit
II
ACKNOWLEDGMENT
The
Company hereby (a) acknowledges this Conversion Notice, (b) certifies that the above indicated number of shares of Common Stock [are][are
not] eligible to be resold by the Holder either (i) pursuant to Rule 144 (subject to the Holder’s execution and delivery to the
Company of a customary 144 representation letter) or (ii) an effective and available registration statement and (c) hereby directs _________________
to issue the above indicated number of shares of Common Stock in accordance with the Transfer Agent Instructions dated _____________,
20__ from the Company and acknowledged and agreed to by ________________________.
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VINCO
VENTURES INC.
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By:
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Exhibit
10.1
EXECUTION
VERSION
SECURITIES
PURCHASE AGREEMENT
This
SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of July 22, 2021, is by and among Vinco Ventures,
Inc., a Nevada corporation with offices located at 1 West Broad Street, Suite 1004, Bethlehem, Pennsylvania (the “Company”),
ZASH Global Media and Entertainment Corporation, a Delaware corporation with offices located at 24 Aspen Park Blvd E., East Syracuse,
New York 13057 (“Zash”), ZVV Media Partners, LLC, a Delaware limited liability company with offices located at 1 West
Broad Street, Suite 1004, Bethlehem, PA 18018 (“ZVV”, together with the Company and Zash, each an “Issuer”
and collectively, the “Issuers”) and each of the investors listed on the Schedule of Buyers attached hereto (individually,
a “Buyer” and collectively, the “Buyers”).
RECITALS
A.
On January 21, 2021, the Company and a Buyer (the “January Buyer”) entered into that certain Securities Purchase Agreement
(the “January Securities Purchase Agreement”), pursuant to which, among other things, the Company issued a senior
convertible note (the “January Note”) and related warrants to purchase Common Stock (as defined below) (the “January
Warrant”) to such January Buyer.
B.
On February 18, 2021, the Company and a Buyer (the “February Buyer”) entered into that certain Securities Purchase
Agreement (the “February Securities Purchase Agreement”), pursuant to which, among other things, the Company issued
a senior convertible note (the “February Note”) and related warrants to purchase Common Stock (as defined below) (the
“February Warrant”) to such February Buyer.
C.
Each Issuer and each Buyer is executing and delivering this Agreement in reliance upon the exemption from securities registration afforded
by Section 4(a)(2) of the Securities Act of 1933, as amended (the “1933 Act”), and Rule 506(b) of Regulation D (“Regulation
D”) as promulgated by the United States Securities and Exchange Commission (the “SEC”) under the 1933 Act.
D.
The Company has authorized the sale of a new series of senior convertible notes of the Company, in the aggregate original principal amount
of $120,000,000, substantially in the form attached hereto as Exhibit A (the “Notes”), which Notes shall
be convertible into shares of Common Stock (as defined below) (the shares of Common Stock issuable pursuant to the terms of the Notes,
including, without limitation, upon conversion or otherwise, collectively, the “Conversion Shares”), in accordance
with the terms of the Notes.
E.
Each Buyer wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, (i) a Note in
the aggregate original principal amount set forth opposite such Buyer’s name in column (3) on the Schedule of Buyers, and (ii)
a warrant to initially acquire up to that aggregate number of additional shares of Common Stock set forth opposite such Buyer’s
name in column (4) on the Schedule of Buyers, substantially in the form attached hereto as Exhibit B (the “Warrants”)
(as exercised, collectively, the “Warrant Shares”).
F.
At the Closing (as defined in Section 1(b)), the Company and the Buyer hereto shall execute and deliver a Registration Rights Agreement,
in the form attached hereto as Exhibit C (the “Registration Rights Agreement”), pursuant to which the
Company has agreed to provide certain registration rights with respect to the Registrable Securities (as defined in the Registration
Rights Agreement), under the 1933 Act and the rules and regulations promulgated thereunder, and applicable state securities laws.
G.
The Notes will rank senior to all outstanding and future indebtedness of the Issuers and their Subsidiaries (as defined below), will
be guaranteed by each of Zash, ZVV and all direct and indirect Subsidiaries of the Issuers (each, a “Guarantor”),
currently formed or formed in the future, each as evidenced by a guarantee agreement (the “Guarantees”), in the form
attached hereto as Exhibit D (each as amended or modified from time to time in accordance with their terms, a “Guarantee
Agreement”), and will be secured by a first priority perfected security interest (subject to Permitted Liens under and as defined
in the Notes) in all of the current and future assets (other than certain Excluded Assets (as defined in the Security Agreement (as defined
below)) of the Issuers and all direct and indirect Subsidiaries of the Issuers, created or acquired in the future and subject to certain
exclusions and limitations, as evidenced by a pledge and security agreement, in the form attached hereto as Exhibit E (as
amended or modified from time to time in accordance with its terms, the “Security Agreement”).
H.
The Notes, the Guarantees, the Conversion Shares, the Warrants and the Warrant Shares are collectively referred to herein as the “Securities.”
AGREEMENT
NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, each Issuer and each Buyer hereby agree as follows:
1.
PURCHASE AND SALE OF NOTES AND WARRANTS.
(a)
Purchase of Notes and Warrants. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below,
the Company shall issue and sell to each Buyer, and each Buyer severally, but not jointly, agrees to purchase from the Company on the
Closing Date (as defined in Section 1(b) below) a Note in the original principal amount as is set forth opposite such Buyer’s name
in column (3) on the Schedule of Buyers along with Warrants to initially acquire up to that aggregate number of Warrant Shares as is
set forth opposite such Buyer’s name in column (4) on the Schedule of Buyers.
(b)
Closing. The closing (the “Closing”) of the sale of the Notes and the Warrants by the Company and the purchase
of the Notes and the Warrants by the Buyers shall take place remotely by electronic transfer of the Closing documentation. The date and
time of the Closing (the “Closing Date”) shall be 10:00 a.m., New York time, on the first (1st) Business Day on which
the conditions to the Closing set forth in Sections 6 and 7 below are satisfied or waived (or such other date as is mutually agreed to
in writing by the Issuers and each Buyer). As used herein “Business Day” means any day other than Saturday, Sunday
or other day on which commercial banks in The City of New York are authorized or required by law to remain closed; provided, however,
for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”,
“shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure of any
physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including
for wire transfers) of commercial banks in The City of New York generally are open for use by customers on such day.
(c)
Purchase Price. The aggregate purchase price for the Notes and the Warrants to be purchased by each Buyer (the “Purchase
Price”) shall be the amount set forth opposite such Buyer’s name in column (5) on the Schedule of Buyers. Each Buyer
and each Issuer agree that the Notes and the Warrants constitute an “investment unit” for purposes of Section 1273(c)(2)
of the Internal Revenue Code of 1986, as amended (the “Code”). The Buyers and the Issuers mutually agree that the
allocation of the issue price of such investment unit between the Notes and the Warrants in accordance with Section 1273(c)(2) of the
Code and Treasury Regulation Section 1.1273-2(h) shall be an aggregate amount allocated to the Warrants as the parties shall mutually
agree prior to the Closing Date with the balance of the Purchase Price allocated to the Notes, and neither the Buyers nor any Issuer
shall take any position inconsistent with such allocation in any tax return or in any judicial or administrative proceeding in respect
of taxes.
(d)
Form of Payment. On the Closing Date, (i) each Buyer shall pay its respective Purchase Price (less, in the case of any Buyer,
the amounts withheld pursuant to Section 5(g)) to the Company for the Notes and the Warrants to be issued and sold to such Buyer at the
Closing, by wire transfer of immediately available funds in accordance with the Flow of Funds Letter (as defined below) and (ii) the
Company shall deliver to each Buyer (A) a Note in the aggregate original principal amount as is set forth opposite such Buyer’s
name in column (3) of the Schedule of Buyers, and (B) a Warrant pursuant to which such Buyer shall have the right to initially acquire
up to such aggregate number of Warrant Shares as is set forth opposite such Buyer’s name in column (4) of the Schedule of Buyers,
in each case, duly executed on behalf of the Company and registered in the name of such Buyer or its designee.
(e)
Waiver. Solely with respect to the Subsequent Placement contemplated hereby, and not with respect to any other Subsequent Placement,
the January Buyer hereby waives any restrictions set forth in the Transaction Documents (as defined in the January Securities Purchase
Agreement) that would otherwise prohibit (i) the issuance of the Securities hereunder or (ii) the filing of a Registration Statement
(as defined in the Registration Rights Agreement) on or prior to the Filing Deadline (as defined in the Registration Rights Agreement)
and the registration of the Registrable Securities (as defined in the Registration Rights Agreement) in accordance with the terms of
the Registration Rights Agreement.
2.
BUYER’S REPRESENTATIONS AND WARRANTIES.
Each
Buyer, severally and not jointly, represents and warrants to each Issuer with respect to only itself that, as of the date hereof and
as of the Closing Date:
(a)
Organization; Authority. Such Buyer is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction
of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated by the Transaction
Documents (as defined below) to which it is a party and otherwise to carry out its obligations hereunder and thereunder.
(b)
No Public Sale or Distribution. Such Buyer (i) is acquiring its Note and Warrants, (ii) upon conversion of its Note will acquire
the Conversion Shares issuable upon conversion thereof, and (iii) upon exercise of its Warrants (other than pursuant to a Cashless Exercise
(as defined in the Warrants)) will acquire the Warrant Shares issuable upon exercise thereof, in each case, for its own account and not
with a view towards, or for resale in connection with, the public sale or distribution thereof in violation of applicable securities
laws, except pursuant to sales registered or exempted under the 1933 Act; provided, however, by making the representations herein, such
Buyer does not agree, or make any representation or warranty, to hold any of the Securities for any minimum or other specific term and
reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an exemption
from registration under the 1933 Act. Such Buyer does not presently have any agreement or understanding, directly or indirectly, with
any Person to distribute any of the Securities in violation of applicable securities laws. For purposes of this Agreement, “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and any Governmental Entity or any department or agency thereof.
(c)
Accredited Investor Status. Such Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation
D.
(d)
Reliance on Exemptions. Such Buyer understands that the Securities are being offered and sold to it in reliance on specific exemptions
from the registration requirements of United States federal and state securities laws and that each Issuer is relying in part upon the
truth and accuracy of, and such Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings
of such Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of such Buyer to acquire
the Securities.
(e)
Information. Such Buyer and its advisors, if any, have been furnished with all materials relating to the business, finances and
operations of the Issuers and materials relating to the offer and sale of the Securities that have been requested by such Buyer and such
Buyer has had the opportunity to review the Company’s public filings with the SEC. Such Buyer and its advisors, if any, have been
afforded the opportunity to ask questions of each Issuer in order that such Buyer can make an informed investment decision with respect
to the investment. Neither such inquiries nor any other due diligence investigations conducted by such Buyer or its advisors, if any,
or its representatives shall modify, amend or affect such Buyer’s right to rely on each Issuers’ representations and warranties
contained herein. Such Buyer understands that its investment in the Securities involves a high degree of risk. Such Buyer has sought
such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition
of the Securities. Such Buyer acknowledges and agrees that neither the Placement Agent (as defined in Section 3(g)) nor any affiliate
of the Placement Agent has provided such Buyer with any information or advice with respect to the Securities nor is such information
or advice necessary or desired. Neither the Placement Agent nor any affiliate of the Placement Agent has made or makes any representation
as to the Issuers or the quality of the Securities and the Placement Agent and any affiliate of the Placement Agent may have acquired
non-public information with respect to the Issuers which such Buyer agrees need not be provided to it. In connection with the issuance
of the Securities to such Buyer, neither the Placement Agent nor any affiliate of the Placement Agent has acted as a financial advisor
or fiduciary to such Buyer.
(f)
No Governmental Review. Such Buyer understands that no United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in
the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.
(g)
Transfer or Resale. Such Buyer understands that except as provided in the Registration Rights Agreement and Section 5(h) hereof:
(i) the Securities have not been and are not being registered under the 1933 Act or any state securities laws, and may not be offered
for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B) such Buyer shall have delivered to the Company
(if requested by the Company) an opinion of legal counsel, in a form reasonably acceptable to the Company, to the effect that such Securities
to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration, or (C) such
Buyer provides the Company with reasonable assurance that such Securities can be sold, assigned or transferred pursuant to Rule 144 or
Rule 144A promulgated under the 1933 Act (or a successor rule thereto) (collectively, “Rule 144”); (ii) any sale of
the Securities made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144, and further, if Rule 144 is not
applicable, any resale of the Securities under circumstances in which the seller (or the Person through whom the sale is made) may be
deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some other exemption under the 1933
Act or the rules and regulations of the SEC promulgated thereunder; and (iii) neither the Company nor any other Person is under any obligation
to register the Securities under the 1933 Act or any state securities laws or to comply with the terms and conditions of any exemption
thereunder. Notwithstanding the foregoing, the Securities may be pledged in connection with a bona fide margin account or other loan
or financing arrangement secured by the Securities and such pledge of Securities shall not be deemed to be a transfer, sale or assignment
of the Securities hereunder, and no Buyer effecting a pledge of Securities shall be required to provide the Company with any notice thereof
or otherwise make any delivery to the Company pursuant to this Agreement or any other Transaction Document (as defined in Section 3(b)),
including, without limitation, this Section 2(g).
(h)
Validity; Enforcement. This Agreement and the Registration Rights Agreement have been duly and validly authorized, executed and
delivered on behalf of such Buyer and shall constitute the legal, valid and binding obligations of such Buyer enforceable against such
Buyer in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or to applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement
of applicable creditors’ rights and remedies.
(i)
No Conflicts. The execution, delivery and performance by such Buyer of this Agreement and the Registration Rights Agreement and
the consummation by such Buyer of the transactions contemplated hereby and thereby will not (i) result in a violation of the organizational
documents of such Buyer, or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would
become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture
or instrument to which such Buyer is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities laws) applicable to such Buyer, except in the case of clauses (ii) and (iii) above, for such
conflicts, defaults, rights or violations which could not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on the ability of such Buyer to perform its obligations hereunder.
(j)
Available Assets. Such Buyer has sufficient available assets (whether cash, cash equivalents or similar assets) to pay the Purchase
Price hereunder and, to timely exercise, in full, all of the Warrants to the extent required by the terms thereof.
3.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The
Company represents and warrants to each of the Buyers that, as of the date hereof and as of the Closing Date:
(a)
Organization and Qualification. Each of the Company and each of the “Company Subsidiaries” (which for purposes of
this Agreement means any Person in which the Company, directly or indirectly, (I) owns a majority of the outstanding capital stock or
holds a majority equity or similar interest of such Person or (II) controls or operates all or any part of the business, operations or
administration of such Person) are entities duly organized and validly existing and in good standing under the laws of the jurisdiction
in which they are formed, and have the requisite power and authority to own their properties and to carry on their business as now being
conducted and as presently proposed to be conducted. Each of the Company and the Company Subsidiaries is duly qualified as a foreign
entity to do business and is in good standing in every jurisdiction in which its ownership of property or the nature of the business
conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would
not reasonably be expected to have a Material Adverse Effect (as defined below). As used in this Agreement, “Company Material
Adverse Effect” means any material adverse effect on (i) the business, properties, assets, liabilities, operations (including
results thereof), condition (financial or otherwise) or prospects of the Company or any Subsidiary, individually or taken as a whole,
(ii) the transactions contemplated hereby or in any of the other Transaction Documents or any other agreements or instruments to be entered
into in connection herewith or therewith or (iii) the authority or ability of the Company or any Company Subsidiary to perform any of
their respective obligations under any of the Transaction Documents (as defined below). Other than the Persons (as defined below) set
forth on Schedule 3(a), the Company has no Company Subsidiaries. “Subsidiaries” means any Person in which any Issuer,
directly or indirectly, (I) owns a majority of the outstanding capital stock or holds a majority equity or similar interest of such Person
or (II) controls or operates all or any part of the business, operations or administration of such Person, and each of the foregoing,
is individually referred to herein as a “Subsidiary.”
(b)
Authorization; Enforcement; Validity. The Company has the requisite power and authority to enter into and perform its obligations
under this Agreement and the other Transaction Documents and to issue the Securities in accordance with the terms hereof and thereof.
Each Company Subsidiary has the requisite power and authority to enter into and perform its obligations under the Transaction Documents
to which it is a party. The execution and delivery of this Agreement and the other Transaction Documents by the Company and the Company
Subsidiaries, and the consummation by the Company and the Company Subsidiaries of the transactions contemplated hereby and thereby (including,
without limitation, the issuance of the Notes and the reservation for issuance and issuance of the Conversion Shares issuable upon conversion
of the Notes and the issuance of the Warrants and the reservation for issuance and issuance of the Warrant Shares issuable upon exercise
of the Warrants) have been duly authorized by the Company’s board of directors and each of the Company Subsidiaries’ board
of directors or other governing body, as applicable, and (other than the filing with the SEC of one or more Registration Statements in
accordance with the requirements of the Registration Rights Agreement, a Form D with the SEC and any other filings as may be required
by any state securities agencies) no further filing, consent or authorization is required by the Company, the Company Subsidiaries, their
respective boards of directors or their stockholders or other governing body. This Agreement has been, and the other Transaction Documents
to which it is a party will be prior to the Closing, duly executed and delivered by the Company, and each constitutes the legal, valid
and binding obligations of the Company, enforceable against the Company in accordance with its respective terms, except as such enforceability
may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar
laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies and except as rights to
indemnification and to contribution may be limited by federal or state securities law. Prior to the Closing, the Transaction Documents
to which each Company Subsidiary is a party will be duly executed and delivered by each such Company Subsidiary, and shall constitute
the legal, valid and binding obligations of each such Company Subsidiary, enforceable against each such Company Subsidiary in accordance
with their respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’
rights and remedies and except as rights to indemnification and to contribution may be limited by federal or state securities law. “Transaction
Documents” means, collectively, this Agreement, the Notes, the Warrants, the Registration Rights Agreement, the Irrevocable
Transfer Agent Instructions (as defined below), the Security Documents (as defined below) and each of the other agreements and instruments
entered into or delivered by any of the parties hereto in connection with the transactions contemplated hereby and thereby, as may be
amended from time to time. “Security Documents” means the Guarantee Agreements, Security Agreement, the Perfection
Certificate (as defined in the Security Agreement), the account control agreement, any and all financing statements, fixture filings,
security agreements, pledges, assignments, mortgages, deeds of trust, opinions of counsel, and all other documents requested by the Collateral
Agent (as defined below) to create, perfect, and continue perfected or to better perfect the Collateral Agent’s security interest
in and liens on all of the assets of the Company and each of the Company Subsidiaries (whether now owned or hereafter arising or acquired,
tangible or intangible, real or personal), and in order to fully consummate all of the transactions contemplated hereby and under the
other Transaction Documents.
(c)
Issuance of Securities. The issuance of the Notes and the Warrants are duly authorized and upon issuance in accordance with the
terms of the Transaction Documents shall be validly issued, fully paid and non-assessable and free from all preemptive or similar rights,
mortgages, defects, claims, liens, pledges, charges, taxes, rights of first refusal, encumbrances, security interests and other encumbrances
(collectively, “Liens”) with respect to the issuance thereof. As of the Closing, the Company shall have reserved from
its duly authorized capital stock not less than the sum of (i) the maximum number of Conversion Shares issuable upon conversion of the
Notes (assuming for purposes hereof that (x) the Notes are convertible at the initial Conversion Price (as defined in the Notes), and
(y) any such conversion shall not take into account any limitations on the conversion of the Notes set forth in the Notes), and (ii)
the maximum number of Warrant Shares initially issuable upon exercise of the Warrants (without taking into account any limitations on
the exercise of the Warrants set forth therein). Upon issuance or conversion in accordance with the Notes or exercise in accordance with
the Warrants (as the case may be), the Conversion Shares and the Warrant Shares, respectively, when issued, will be validly issued, fully
paid and nonassessable and free from all preemptive or similar rights or Liens with respect to the issue thereof, with the holders being
entitled to all rights accorded to a holder of Common Stock. Subject to the accuracy of the representations and warranties of the Buyers
in this Agreement, the offer and issuance by the Company of the Securities is exempt from registration under the 1933 Act.
(d)
No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the Company Subsidiaries
and the consummation by the Company and the Company Subsidiaries of the transactions contemplated hereby and thereby (including, without
limitation, the issuance of the Notes, the Warrants, the Conversion Shares and the Warrant Shares and the reservation for issuance of
the Conversion Shares and the Warrant Shares) will not (i) result in a violation of the Company Articles of Incorporation (as defined
below) (including, without limitation, any certificate of designation contained therein), Company Bylaws (as defined below), certificate
of formation, memorandum of association, articles of association, bylaws or other organizational documents of the Company or any of the
Company Subsidiaries, or any capital stock or other securities of the Company or any of the Company Subsidiaries, (ii) to the knowledge
of the officers and directors of the Company, conflict with, or constitute a default (or an event which with notice or lapse of time
or both would become a default) in any respect under, or give to others any rights of termination, amendment, acceleration or cancellation
of, any agreement, indenture or instrument to which the Company or any of the Company Subsidiaries is a party, or (iii) result in a violation
of any law, rule, regulation, order, judgment or decree (including, without limitation, foreign, federal and state securities laws and
regulations and the rules and regulations of the Nasdaq Global Select Market (the “Principal Market”) and including
all applicable foreign, federal and state laws, rules and regulations) applicable to the Company or any of the Company Subsidiaries or
by which any property or asset of the Company or any of the Company Subsidiaries is bound or affected.
(e)
Consents. Neither the Company nor any Company Subsidiary is required to obtain any consent from, authorization or order of, or
make any filing or registration with (other than the filing with the SEC of one or more Registration Statements in accordance with the
requirements of the Registration Rights Agreement, a Form D with the SEC and any other filings as may be required by any state securities
agencies), any Governmental Entity (as defined below) or any regulatory or self-regulatory agency or any other Person (other than the
Principal Market) in order for it to execute, deliver or perform any of its respective obligations under or contemplated by the Transaction
Documents, in each case, in accordance with the terms hereof or thereof. All consents, authorizations, orders, filings and registrations
which the Company or any Company Subsidiary is required to obtain pursuant to the preceding sentence have been or will be obtained or
effected on or prior to the Closing Date, and neither the Company nor any of the Company Subsidiaries are aware of any facts or circumstances
which might prevent the Company or any of the Company Subsidiaries from obtaining or effecting any of the registration, application or
filings contemplated by the Transaction Documents. The Company is not in violation of the requirements of the Principal Market and has
no knowledge of any facts or circumstances which could reasonably lead to delisting or suspension of the Common Stock in the foreseeable
future. “Governmental Entity” means any nation, state, county, city, town, village, district, or other political jurisdiction
of any nature, federal, state, local, municipal, foreign, or other government, governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, official, or entity and any court or other tribunal), multi-national organization
or body; or body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing
authority or power of any nature or instrumentality of any of the foregoing, including any entity or enterprise owned or controlled by
a government or a public international organization or any of the foregoing.
(f)
Acknowledgment Regarding Buyer’s Purchase of Securities. The Company acknowledges and agrees that each Buyer is acting solely
in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby
and thereby and that no Buyer is (i) an officer or director of the Company or any of the Company Subsidiaries, (ii) an “affiliate”
(as defined in Rule 144) of the Company or any of the Company Subsidiaries or (iii) to its knowledge, a “beneficial owner”
of more than 10% of the shares of Common Stock (as defined for purposes of Rule 13d-3 of the Securities Exchange Act of 1934, as amended
(the “1934 Act”)). The Company further acknowledges that no Buyer is acting as a financial advisor or fiduciary of
the Company or any of the Company Subsidiaries (or in any similar capacity) with respect to the Transaction Documents and the transactions
contemplated hereby and thereby, and any advice given by a Buyer or any of its representatives or agents in connection with the Transaction
Documents and the transactions contemplated hereby and thereby is merely incidental to such Buyer’s purchase of the Securities.
The Company further represents to each Buyer that the Company’s and each Company Subsidiary’s decision to enter into the
Transaction Documents to which it is a party has been based solely on the independent evaluation by the Company, each Company Subsidiary
and their respective representatives.
(g)
No General Solicitation; Placement Agent’s Fees. Neither the Company, nor any of the Company Subsidiaries or affiliates,
nor any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning
of Regulation D) in connection with the offer or sale of the Securities. The Company shall be responsible for the payment of any placement
agent’s fees, financial advisory fees, or brokers’ commissions (other than for Persons engaged by any Buyer or its investment
advisor) relating to or arising out of the transactions contemplated hereby, including, without limitation, placement agent fees payable
to Palladium Capital Group, LLC, as sole placement agent (the “Placement Agent”) in connection with the sale of the
Securities. The fees and expenses of the Placement Agent to be paid by the Company or any of the Company Subsidiaries are as set forth
on Schedule 3(g) attached hereto. The Company shall pay, and hold each Buyer harmless against, any liability, loss or expense (including,
without limitation, attorney’s fees and out-of-pocket expenses) arising in connection with any such claim. The Company acknowledges
that it has engaged the Placement Agent in connection with the sale of the Securities. Other than the Placement Agent, none of the Issuers
nor any of their Subsidiaries has engaged any other placement agent or other agent in connection with the offer or sale of the Securities.
(h)
No Integrated Offering. None of the Company, the Company Subsidiaries or any of their affiliates, nor any Person acting on their
behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances
that would require registration of the issuance of any of the Securities under the 1933 Act, whether through integration with prior offerings
or otherwise, or cause this offering of the Securities to require approval of stockholders of the Company for purposes of the 1933 Act
or under any applicable stockholder approval provisions, including, without limitation, under the rules and regulations of any exchange
or automated quotation system on which any of the securities of the Company are listed or designated for quotation. None of the Company,
the Company Subsidiaries, their affiliates nor any Person acting on their behalf will take any action or steps that would require registration
of the issuance of any of the Securities under the 1933 Act or cause the offering of any of the Securities to be integrated with other
offerings of securities of the Company.
(i)
Dilutive Effect. The Company understands and acknowledges that the number of Conversion Shares and Warrant Shares will increase
in certain circumstances. The Company further acknowledges that its obligation to issue the Conversion Shares pursuant to the terms of
the Notes in accordance with this Agreement and the Notes and the Warrant Shares upon exercise of the Warrants in accordance with this
Agreement, the Notes and the Warrants is, in each case, absolute and unconditional regardless of the dilutive effect that such issuance
may have on the ownership interests of other stockholders of the Company.
(j)
Application of Takeover Protections; Rights Agreement. The Company and its board of directors have taken all necessary action,
if any, in order to render inapplicable any control share acquisition, interested stockholder, business combination, poison pill (including,
without limitation, any distribution under a rights agreement), stockholder rights plan or other similar anti-takeover provision under
the Company Articles of Incorporation, Company Bylaws or other organizational documents or the laws of the jurisdiction of its incorporation
or otherwise which is or could become applicable to any Buyer as a result of the transactions contemplated by this Agreement, including,
without limitation, the Company’s issuance of the Securities and any Buyer’s ownership of the Securities. The Company and
its board of directors have taken all necessary action, if any, in order to render inapplicable any stockholder rights plan or similar
arrangement relating to accumulations of beneficial ownership of shares of Common Stock or a change in control of the Company or any
of the Company Subsidiaries.
(k)
SEC Documents; Financial Statements. During the two (2) years prior to the date hereof, the Company has timely filed (allowing
for any lawful extensions) all reports, schedules, forms, proxy statements, statements and other documents required to be filed by it
with the SEC pursuant to the reporting requirements of the 1934 Act (all of the foregoing filed prior to the date hereof and all exhibits
and appendices included therein and financial statements, notes and schedules thereto and documents incorporated by reference therein
being hereinafter referred to as the “SEC Documents”). The Company has delivered or has made available to the Buyers
or their respective representatives true, correct and complete copies of each of the SEC Documents not available on the EDGAR system.
As of their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules
and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were
filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. As
of their respective dates, the financial statements of the Company included in the SEC Documents complied in all material respects with
applicable accounting requirements and the published rules and regulations of the SEC with respect thereto as in effect as of the time
of filing. Such financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”),
consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes
thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary
statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results
of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments
which will not be material, either individually or in the aggregate). The reserves, if any, established by the Company or the lack of
reserves, if applicable, are reasonable based upon facts and circumstances known by the Company on the date hereof and there are no loss
contingencies that are required to be accrued by the Statement of Financial Accounting Standard No. 5 of the Financial Accounting Standards
Board which are not provided for by the Company in its financial statements or otherwise. No other information provided by or on behalf
of the Company to any of the Buyers which is not included in the SEC Documents (including, without limitation, information referred to
in Section 2(e) of this Agreement or in the disclosure schedules to this Agreement) contains any untrue statement of a material fact
or omits to state any material fact necessary in order to make the statements therein not misleading, in the light of the circumstance
under which they are or were made. The Company is not currently contemplating to amend or restate any of the financial statements (including,
without limitation, any notes or any letter of the independent accountants of the Company with respect thereto) included in the SEC Documents
(the “Financial Statements”), nor is the Company currently aware of facts or circumstances which would require the
Company to amend or restate any of the Financial Statements, in each case, in order for any of the Financials Statements to be in compliance
with GAAP and the rules and regulations of the SEC. The Company has not been informed by its independent accountants that they recommend
that the Company amend or restate any of the Financial Statements or that there is any need for the Company to amend or restate any of
the Financial Statements.
(l)
Absence of Certain Changes. Since the date of the Company’s most recent audited financial statements contained in a Form
10-K, there has been no material adverse change and no material adverse development in the business, assets, liabilities, properties,
operations (including results thereof), condition (financial or otherwise) or prospects of the Company or any of the Company Subsidiaries.
Since the date of the Company’s most recent audited financial statements contained in a Form 10-K, neither the Company nor any
of the Company Subsidiaries has (i) declared or paid any dividends, (ii) sold any assets, individually or in the aggregate, outside of
the ordinary course of business, (iii) made any capital expenditures, individually or in the aggregate, outside of the ordinary course
of business or (iv) made any revaluation of any of their respective assets, including, without limitation, writing down the value of
capitalized inventory or writing off notes or accounts receivable or any sale of assets other than in the ordinary course of business.
Neither the Company nor any of the Company Subsidiaries has taken any steps to seek protection pursuant to any law or statute relating
to bankruptcy, insolvency, reorganization, receivership, liquidation or winding up, nor does the Company or any Company Subsidiary have
any knowledge or reason to believe that any of their respective creditors intend to initiate involuntary bankruptcy proceedings or any
actual knowledge of any fact which would reasonably lead a creditor to do so. The Company and the Company Subsidiaries, individually
and on a consolidated basis, are not as of the date hereof, and after giving effect to the transactions contemplated hereby to occur
at the Closing, will not be Insolvent (as defined below). For purposes of this Section 3(l), “Insolvent” means, (i)
with respect to the Company and the Company Subsidiaries, on a consolidated basis, (A) the present fair saleable value of the Company’s
and the Company Subsidiaries’ assets is less than the amount required to pay the Company’s and the Company Subsidiaries’
total Indebtedness (as defined below), (B) the Company and the Company Subsidiaries are unable to pay their debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become absolute and matured or (C) the Company and the Company Subsidiaries intend
to incur or believe that they will incur debts that would be beyond their ability to pay as such debts mature; and (ii) with respect
to the Company and each Company Subsidiary, individually, (A) the present fair saleable value of the Company’s or such Company
Subsidiary’s (as the case may be) assets is less than the amount required to pay its respective total Indebtedness, (B) the Company
or such Company Subsidiary (as the case may be) is unable to pay its respective debts and liabilities, subordinated, contingent or otherwise,
as such debts and liabilities become absolute and matured or (C) the Company or such Company Subsidiary (as the case may be) intends
to incur or believes that it will incur debts that would be beyond its respective ability to pay as such debts mature. Neither the Company
nor any of the Company Subsidiaries has engaged in any business or in any transaction, and is not about to engage in any business or
in any transaction, for which the Company’s or such Company Subsidiary’s remaining assets constitute unreasonably small capital
with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted.
(m)
No Undisclosed Events, Liabilities, Developments or Circumstances. No event, liability, development or circumstance has occurred
or exists, or is reasonably expected to exist or occur with respect to the Company, any of the Company Subsidiaries or any of their respective
businesses, properties, liabilities, prospects, operations (including results thereof) or condition (financial or otherwise), that (i)
would be required to be disclosed by the Company under applicable securities laws on a registration statement on Form S-1 filed with
the SEC relating to an issuance and sale by the Company of its Common Stock and which has not been publicly announced, (ii) could have
a material adverse effect on any Buyer’s investment hereunder or (iii) could have a Company Material Adverse Effect.
(n)
Conduct of Business; Regulatory Permits. Neither the Company nor any of the Company Subsidiaries is in violation of any term of
or in default under the Company Articles of Incorporation, any certificate of designation, preferences or rights of any other outstanding
series of preferred stock of the Company or any of the Company Subsidiaries or Company Bylaws or their organizational charter, certificate
of formation, memorandum of association, articles of association, articles of incorporation or certificate of incorporation or bylaws,
respectively. Neither the Company nor any of the Company Subsidiaries is in violation of any judgment, decree or order or any statute,
ordinance, rule or regulation applicable to the Company or any of the Company Subsidiaries, and neither the Company nor any of the Company
Subsidiaries will conduct its business in violation of any of the foregoing, except in all cases for possible violations which could
not, individually or in the aggregate, have a Company Material Adverse Effect. Without limiting the generality of the foregoing, neither
the Company nor any of the Company Subsidiaries is in violation of any of the rules, regulations or requirements of the Principal Market
and has no knowledge of any facts or circumstances that could reasonably lead to delisting or suspension of the Common Stock by the Principal
Market in the foreseeable future. During the two (2) years prior to the date hereof, (i) the Common Stock has been listed or designated
for quotation on the Principal Market, (ii) trading in the Common Stock has not been suspended by the SEC or the Principal Market and
(iii) the Company has received no communication, written or oral, from the SEC or the Principal Market regarding the suspension or delisting
of the Common Stock from the Principal Market. The Company and each of the Company Subsidiaries possess all certificates, authorizations
and permits issued by the appropriate regulatory authorities necessary to conduct their respective businesses, except where the failure
to possess such certificates, authorizations or permits would not have, individually or in the aggregate, a Company Material Adverse
Effect, and neither the Company nor any such Company Subsidiary has received any notice of proceedings relating to the revocation or
modification of any such certificate, authorization or permit. There is no agreement, commitment, judgment, injunction, order or decree
binding upon the Company or any of the Company Subsidiaries or to which the Company or any of the Company Subsidiaries is a party which
has or would reasonably be expected to have the effect of prohibiting or materially impairing any business practice of the Company or
any of the Company Subsidiaries, any acquisition of property by the Company or any of the Company Subsidiaries or the conduct of business
by the Company or any of the Company Subsidiaries as currently conducted other than such effects, individually or in the aggregate, which
have not had and would not reasonably be expected to have a Company Material Adverse Effect with respect to the Company or any of the
Company Subsidiaries.
(o)
Foreign Corrupt Practices. Neither the Company, any Company Subsidiary, or any director, officer,
agent, employee, nor any other person acting for or on behalf of the foregoing (individually and collectively, a “Company Affiliate”)
have violated the U.S. Foreign Corrupt Practices Act (the “FCPA”) or any other applicable anti-bribery or anti-corruption
laws, nor has any Company Affiliate offered, paid, promised to pay, or authorized the payment of any money, or offered, given, promised
to give, or authorized the giving of anything of value, to any officer, employee or any other person acting in an official capacity for
any Governmental Entity to any political party or official thereof or to any candidate for political office (individually and collectively,
a “Government Official”) or to any person under circumstances where such Company Affiliate knew or was aware of a
high probability that all or a portion of such money or thing of value would be offered, given or promised, directly or indirectly, to
any Government Official, for the purpose of:
(i)
(A) influencing any act or decision of such Government Official in his/her official capacity, (B) inducing such Government Official to
do or omit to do any act in violation of his/her lawful duty, (C) securing any improper advantage, or (D) inducing such Government Official
to influence or affect any act or decision of any Governmental Entity, or
(ii)
assisting the Company or the Company Subsidiaries in obtaining or retaining business for or with, or directing business to, the Company
or the Company Subsidiaries.
(p)
Sarbanes-Oxley Act. The Company and each Company Subsidiary is in compliance with any and all applicable requirements of the Sarbanes-Oxley
Act of 2002, as amended, and any and all applicable rules and regulations promulgated by the SEC thereunder.
(q)
Transactions With Affiliates. Other than as previously disclosed in writing to the Buyer, no current or former employee, partner,
director, officer or stockholder (direct or indirect) of the Company or the Company Subsidiaries, or any associate, or, to the knowledge
of the Company, any affiliate of any thereof, or any relative with a relationship no more remote than first cousin of any of the foregoing,
is presently, or has ever been, (i) a party to any transaction with the Company or the Company Subsidiaries (including any contract,
agreement or other arrangement providing for the furnishing of services by, or rental of real or personal property from, or otherwise
requiring payments to, any such director, officer or stockholder or such associate or affiliate or relative Subsidiaries (other than
for ordinary course services as employees, officers or directors of the Company or any of the Company Subsidiaries)) or (ii) the direct
or indirect owner of an interest in any corporation, firm, association or business organization which is a competitor, supplier or customer
of the Company or the Company Subsidiaries (except for a passive investment (direct or indirect) in less than 5% of the common stock
of a company whose securities are traded on or quoted through an Eligible Market (as defined in the Notes)), nor does any such Person
receive income from any source other than the Company or the Company Subsidiaries which relates to the business of the Company or the
Company Subsidiaries or should properly accrue to the Company or the Company Subsidiaries. No employee, officer, stockholder or director
of the Company or any of the Company Subsidiaries or member of his or her immediate family is indebted to the Company or the Company
Subsidiaries, as the case may be, nor is the Company or any of the Company Subsidiaries indebted (or committed to make loans or extend
or guarantee credit) to any of them, other than (i) for payment of salary for services rendered, (ii) reimbursement for reasonable expenses
incurred on behalf of the Company, and (iii) for other standard employee benefits made generally available to all employees or executives
(including stock option agreements outstanding under any stock option plan approved by the Board of Directors of the Company).
(r)
Equity Capitalization.
(i)
Definitions:
(A)
“Common Stock” means (x) the Company’s shares of common stock, $0.001 par value per share, and (y) any capital
stock into which such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.
(B)
“Convertible Securities” means any capital stock or other security of the Company or any of the Company Subsidiaries
that is at any time and under any circumstances directly or indirectly convertible into, exercisable or exchangeable for, or which otherwise
entitles the holder thereof to acquire, any capital stock or other security of the Company (including, without limitation, Common Stock)
or any of the Company Subsidiaries.
(C)
“Preferred Stock” means (x) the Company’s blank check preferred stock, $0.001 par value per share, the terms
of which may be designated by the board of directors of the Company in a certificate of designations and (y) any capital stock into which
such preferred stock shall have been changed or any share capital resulting from a reclassification of such preferred stock (other than
a conversion of such preferred stock into Common Stock in accordance with the terms of such certificate of designations).
(ii)
Authorized and Outstanding Capital Stock. As of the date hereof, the authorized capital stock of the Company consists of (A) 250,000,000
shares of Common Stock, of which, 59,957,241 are issued and outstanding and 59,701,401 shares are reserved for issuance pursuant to Convertible
Securities (other than the Notes and the Warrants) exercisable or exchangeable for, or convertible into, shares of Common Stock and (B)
30,000,000 shares of Preferred Stock, zero (0) of which are issued and outstanding. Zero (0) shares of Common Stock are held in the treasury
of the Company.
(iii)
Valid Issuance; Available Shares; Affiliates. All of such outstanding shares are duly authorized and have been, or upon issuance
will be, validly issued and are fully paid and nonassessable. Schedule 3(r)(iii) sets forth the number of shares of Common Stock
that are (A) reserved for issuance pursuant to Convertible Securities (other than the Notes and the Warrants) and (B) that are, as of
the date hereof, owned by Persons who are “affiliates” (as defined in Rule 405 of the 1933 Act and calculated based on the
assumption that only officers, directors and holders of at least 10% of the Company’s issued and outstanding Common Stock are “affiliates”
without conceding that any such Persons are “affiliates” for purposes of federal securities laws) of the Company or any of
the Company Subsidiaries. To the Company’s knowledge, no Person owns 10% or more of the Company’s issued and outstanding
shares of Common Stock (calculated based on the assumption that all Convertible Securities, whether or not presently exercisable or convertible,
have been fully exercised or converted (as the case may be) taking account of any limitations on exercise or conversion (including “blockers”)
contained therein without conceding that such identified Person is a 10% stockholder for purposes of federal securities laws).
(iv)
Existing Securities; Obligations. Except as disclosed in the SEC Documents: (A) none of the Company’s nor any Company Subsidiary’s
shares, interests or capital stock is subject to preemptive rights or any other similar rights or Liens suffered or permitted by the
Company or any Company Subsidiary; (B) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments
of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares, interests
or capital stock of the Company or any of the Company Subsidiaries, or contracts, commitments, understandings or arrangements by which
the Company or any of the Company Subsidiaries is or may become bound to issue additional shares, interests or capital stock of the Company
or any of the Company Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares, interests or capital stock of
the Company or any of the Company Subsidiaries; (C) there are no agreements or arrangements under which the Company or any of the Company
Subsidiaries is obligated to register the sale of any of their securities under the 1933 Act (except pursuant to the Registration Rights
Agreement); (D) there are no outstanding securities or instruments of the Company or any of the Company Subsidiaries which contain any
redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any
of the Company Subsidiaries is or may become bound to redeem a security of the Company or any of the Company Subsidiaries; (E) there
are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities;
and (F) neither the Company nor any Company Subsidiary has any stock appreciation rights or “phantom stock” plans or agreements
or any similar plan or agreement.
(v)
Organizational Documents. The Company has furnished to the Buyers true, correct and complete copies of the Company’s Articles
of Incorporation, as amended and as in effect on the date hereof (the “Company Articles of Incorporation”), and the
Company’s bylaws, as amended and as in effect on the date hereof (the “Company Bylaws”), and the terms of all
Convertible Securities and the material rights of the holders thereof in respect thereto.
(s)
Indebtedness and Other Contracts. Neither the Company nor any Company Subsidiary, (i) except as disclosed on Schedule 3(s),
has any outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments evidencing
Indebtedness of the Company or any Company Subsidiary or by which the Company or any Company Subsidiary is or may become bound, (ii)
other than with respect to the indebtedness disclosed on Schedule 3(s), is a party to any contract, agreement or instrument, the violation
of which, or default under which, by the other party(ies) to such contract, agreement or instrument could reasonably be expected to result
in a Company Material Adverse Effect, (iii) other than with respect to the indebtedness disclosed on Schedule 3(s), has any financing
statements securing obligations in any amounts filed in connection with the Company or any Company Subsidiary; (iv) is in violation of
any term of, or in default under, any contract, agreement or instrument relating to any Indebtedness, except where such violations and
defaults would not result, individually or in the aggregate, in a Company Material Adverse Effect, or (v) is a party to any contract,
agreement or instrument relating to any Indebtedness, the performance of which, in the judgment of the Company’s officers, has
or is expected to have a Company Material Adverse Effect. Neither the Company nor any Company Subsidiary has any liabilities or obligations
required to be disclosed in the SEC Documents which are not so disclosed in the SEC Documents, other than those incurred in the ordinary
course of the Company’s or its Subsidiaries’ respective businesses and which, individually or in the aggregate, do not or
could not have a Company Material Adverse Effect. For purposes of this Agreement: (x) “Indebtedness” of any Person
means, without duplication (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed as the deferred
purchase price of property or services (including, without limitation, “capital leases” in accordance with GAAP) (other than
trade payables entered into in the ordinary course of business consistent with past practice), (C) all reimbursement or payment obligations
with respect to letters of credit, surety bonds and other similar instruments, (D) all obligations evidenced by notes, bonds, debentures
or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses,
(E) all indebtedness created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either
case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the
seller or bank under such agreement in the event of default are limited to repossession or sale of such property), (F) all monetary obligations
under any leasing or similar arrangement which, in connection with GAAP, consistently applied for the periods covered thereby, is classified
as a capital lease, (G) all indebtedness referred to in clauses (A) through (F) above secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien upon or in any property or assets (including accounts and
contract rights) owned by any Person, even though the Person which owns such assets or property has not assumed or become liable for
the payment of such indebtedness, and (H) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds
referred to in clauses (A) through (G) above; and (y) “Contingent Obligation” means, as to any Person, any direct
or indirect liability, contingent or otherwise, of that Person with respect to any Indebtedness, lease, dividend or other obligation
of another Person if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide
assurance to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating thereto will
be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto.
(t)
Litigation. There is no action, suit, arbitration, proceeding, inquiry or investigation before or by the Principal Market, any
court, public board, other Governmental Entity, self-regulatory organization or body pending or, to the knowledge of the Company, threatened
against or affecting the Company or any Company Subsidiary, the Common Stock or any of the Company’s or its Subsidiaries’
officers or directors, whether of a civil or criminal nature or otherwise, in their capacities as such, except as set forth in Schedule
3(t). No director, officer or employee of the Company or any Company Subsidiary has willfully violated 18 U.S.C. §1519 or engaged
in spoliation in reasonable anticipation of litigation. Without limitation of the foregoing, there has not been, and to the knowledge
of the Company, there is not pending or contemplated, any investigation by the SEC involving the Company, any the Company Subsidiaries
or any current or former director or officer of the Company or any the Company Subsidiaries. The SEC has not issued any stop order or
other order suspending the effectiveness of any registration statement filed by the Company under the 1933 Act or the 1934 Act. After
reasonable inquiry of its employees, the Company is not aware of any fact which might result in or form the basis for any such action,
suit, arbitration, investigation, inquiry or other proceeding. Neither the Company nor any Company Subsidiary is subject to any order,
writ, judgment, injunction, decree, determination or award of any Governmental Entity.
(u)
Insurance. The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the
Company and its Subsidiaries are engaged. Neither the Company nor any such Company Subsidiary has been refused any insurance coverage
sought or applied for, and neither the Company nor any such Company Subsidiary has any reason to believe that it will be unable to renew
its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not have a Company Material Adverse Effect.
(v)
Employee Relations. Neither the Company nor any Company Subsidiary is a party to any collective bargaining agreement or employs
any member of a union. The Company and its Subsidiaries believe that their relations with their employees are good. No executive officer
(as defined in Rule 501(f) promulgated under the 1933 Act) or other key employee of the Company or any Company Subsidiary has notified
the Company or any such Company Subsidiary that such officer intends to leave the Company or any such Company Subsidiary or otherwise
terminate such officer’s employment with the Company or any such Company Subsidiary. No executive officer or other key employee
of the Company or any Company Subsidiary is, or is now expected to be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement, non-competition agreement, or any other contract or agreement or any
restrictive covenant, and the continued employment of each such executive officer or other key employee (as the case may be) does not
subject the Company or any Company Subsidiary to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries
are in compliance with all federal, state, local and foreign laws and regulations respecting labor, employment and employment practices
and benefits, terms and conditions of employment and wages and hours, except where failure to be in compliance would not, either individually
or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
(w)
Title.
(i)
Real Property. Each of the Company and Company Subsidiaries (as the case may be) holds good title to all real property, leases
in real property, facilities or other interests in real property owned or held by the Company or any Company Subsidiary (the “Real
Property”) owned by the Company or any Company Subsidiary (as applicable). The Real Property is free and clear of all Liens
and is not subject to any rights of way, building use restrictions, exceptions, variances, reservations, or limitations of any nature
except for (a) Liens for current taxes not yet due and (b) zoning laws and other land use restrictions that do not impair the present
or anticipated use of the property subject thereto. Any Real Property held under lease by the Company or any Company Subsidiary are held
by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made
and proposed to be made of such property and buildings by the Company or any Company Subsidiary.
(ii)
Fixtures and Equipment. Each of the Company and its Subsidiaries (as applicable) has good title to, or a valid leasehold interest
in, the tangible personal property, equipment, improvements, fixtures, and other personal property and appurtenances that are used by
the Company or Company Subsidiary in connection with the conduct of its business (the “Fixtures and Equipment”). The
Fixtures and Equipment are structurally sound, are in good operating condition and repair, are adequate for the uses to which they are
being put, are not in need of maintenance or repairs except for ordinary, routine maintenance and repairs and are sufficient for the
conduct of the Company’s and/or the Company Subsidiary’s businesses (as applicable) in the manner as conducted prior to the
Closing. Each of the Company and Company Subsidiaries owns all of its Fixtures and Equipment free and clear of all Liens except for (a)
liens for current taxes not yet due and (b) zoning laws and other land use restrictions that do not impair the present or anticipated
use of the property subject thereto.
(x)
Intellectual Property Rights. The Company and Company Subsidiaries own or possess adequate rights or licenses to use all trademarks,
trade names, service marks, service mark registrations, service names, original works of authorship, patents, patent rights, copyrights,
inventions, licenses, approvals, governmental authorizations, trade secrets and other intellectual property rights and all applications
and registrations therefor (“Intellectual Property Rights”) necessary to conduct their respective businesses as now
conducted and presently proposed to be conducted. Each of patents owned by the Company or any Company Subsidiary is listed on Schedule
3(x)(i). Except as set forth in Schedule 3(x)(ii), none of the Company’s Intellectual Property Rights have expired or terminated
or have been abandoned or are expected to expire or terminate or are expected to be abandoned, within three (3) years from the date of
this Agreement. The Company does not have any knowledge of any infringement by the Company or its Subsidiaries of Intellectual Property
Rights of others. There is no claim, action or proceeding being made or brought, or to the knowledge of the Company or any Company Subsidiary,
being threatened, against the Company or any Company Subsidiary regarding its Intellectual Property Rights. Neither the Company nor any
Company Subsidiary is aware of any facts or circumstances which might give rise to any of the foregoing infringements or claims, actions
or proceedings. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and
value of all of their Intellectual Property Rights.
(y)
Environmental Laws. (i) The Company and its Subsidiaries (A) are in compliance with any and all Environmental Laws (as defined
below), (B) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their
respective businesses and (C) are in compliance with all terms and conditions of any such permit, license or approval where, in each
of the foregoing clauses (A), (B) and (C), the failure to so comply could be reasonably expected to have, individually or in the aggregate,
a Company Material Adverse Effect. The term “Environmental Laws” means all federal, state, local or foreign laws relating
to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater,
land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases
of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”)
into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments,
licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.
(ii)
No Hazardous Materials:
(A)
have been disposed of or otherwise released from any Real Property of the Company or any Company Subsidiary in violation of any Environmental
Laws; or
(B)
are present on, over, beneath, in or upon a Real Property or any portion thereof in quantities that would constitute a violation of any
Environmental Laws. No prior use by the Company or any Company Subsidiary of any Real Property has occurred that violates any Environmental
Laws, which violation would have a material adverse effect on the business of the Company or any Company Subsidiary.
(iii)
Neither the Company nor any Company Subsidiary knows of any other person who or entity which has stored, treated, recycled, disposed
of or otherwise located on any Real Property any Hazardous Materials, including, without limitation, such substances as asbestos and
polychlorinated biphenyls.
(iv)
None of the Real Properties are on any federal or state “Superfund” list or Liability Information System (“CERCLIS”)
list or any state environmental agency list of sites under consideration for CERCLIS, nor subject to any environmental related Liens.
(z)
Subsidiary Rights. The Company or one Company Subsidiary has the unrestricted right to vote, and (subject to limitations imposed
by applicable law) to receive dividends and distributions on, all capital securities Company Subsidiary as owned by the Company or such
Company Subsidiary.
(aa)
Tax Status. The Company and each Company Subsidiary (i) has timely made or filed (allowing for all lawful extensions) all foreign,
federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii)
has timely paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on
such returns, reports and declarations, except those being contested in good faith and (iii) has set aside on its books provision reasonably
adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There
are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company
and its Subsidiaries know of no basis for any such claim. The Company is not operated in such a manner as to qualify as a passive foreign
investment company, as defined in Section 1297 of the Code. The net operating loss carryforwards (“NOLs”) for United
States federal income tax purposes of the consolidated group of which the Company is the common parent, if any, shall not be adversely
effected by the transactions contemplated hereby. The transactions contemplated hereby do not constitute an “ownership change”
within the meaning of Section 382 of the Code, thereby preserving the Company’s ability to utilize such NOLs.
(bb)
Internal Accounting and Disclosure Controls. The Company and each Company Subsidiary maintains internal control over financial
reporting (as such term is defined in Rule 13a-15(f) under the 1934 Act) that is effective to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles, including that (i) transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and
to maintain asset and liability accountability, (iii) access to assets or incurrence of liabilities is permitted only in accordance with
management’s general or specific authorization and (iv) the recorded accountability for assets and liabilities is compared with
the existing assets and liabilities at reasonable intervals and appropriate action is taken with respect to any difference. The Company
maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the 1934 Act) that are effective in ensuring
that information required to be disclosed by the Company in the reports that it files or submits under the 1934 Act is recorded, processed,
summarized and reported, within the time periods specified in the rules and forms of the SEC, including, without limitation, controls
and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under
the 1934 Act is accumulated and communicated to the Company’s management, including its principal executive officer or officers
and its principal financial officer or officers, as appropriate, to allow timely decisions regarding required disclosure. Neither the
Company nor any Company Subsidiary has received any notice or correspondence from any accountant, Governmental Entity or other Person
relating to any potential material weakness or significant deficiency in any part of the internal controls over financial reporting of
the Company or any Company Subsidiary.
(cc)
Off Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company or any of the
Company Subsidiaries and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its 1934
Act filings and is not so disclosed or that otherwise could be reasonably likely to have a Company Material Adverse Effect.
(dd)
Investment Company Status. The Company is not, and upon consummation of the sale of the Securities will not be, an “investment
company,” an affiliate of an “investment company,” a company controlled by an “investment company” or an
“affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company”
as such terms are defined in the Investment Company Act of 1940, as amended.
(ee)
Acknowledgement Regarding Buyers’ Trading Activity. It is understood and acknowledged by the Company that (i) following
the public disclosure of the transactions contemplated by the Transaction Documents, in accordance with the terms thereof, none of the
Buyers have been asked by the Company or any Company Subsidiary to agree, nor has any Buyer agreed with the Company or any Company Subsidiary,
to desist from effecting any transactions in or with respect to (including, without limitation, purchasing or selling, long and/or short)
any securities of the Company, or “derivative” securities based on securities issued by the Company or to hold any of the
Securities for any specified term; (ii) any Buyer, and counterparties in “derivative” transactions to which any such Buyer
is a party, directly or indirectly, presently may have a “short” position in the Common Stock which was established prior
to such Buyer’s knowledge of the transactions contemplated by the Transaction Documents; (iii) each Buyer shall not be deemed to
have any affiliation with or control over any arm’s length counterparty in any “derivative” transaction; and (iv) each
Buyer may rely on the Company’s obligation to timely deliver shares of Common Stock upon conversion, exercise or exchange, as applicable,
of the Securities as and when required pursuant to the Transaction Documents for purposes of effecting trading in the Common Stock of
the Company. The Company further understands and acknowledges that following the public disclosure of the transactions contemplated by
the Transaction Documents pursuant to the 8-K Filing (as defined below) one or more Buyers may engage in hedging and/or trading activities
(including, without limitation, the location and/or reservation of borrowable shares of Common Stock) at various times during the period
that the Securities are outstanding, including, without limitation, during the periods that the value and/or number of the Warrant Shares
or Conversion Shares, as applicable, deliverable with respect to the Securities are being determined and such hedging and/or trading
activities (including, without limitation, the location and/or reservation of borrowable shares of Common Stock), if any, can reduce
the value of the existing stockholders’ equity interest in the Company both at and after the time the hedging and/or trading activities
are being conducted. The Company acknowledges that such aforementioned hedging and/or trading activities do not constitute a breach of
this Agreement, the Notes, the Warrants or any other Transaction Document or any of the documents executed in connection herewith or
therewith.
(ff)
Manipulation of Price. Neither the Company nor any Company Subsidiary has, and, to the knowledge of the Company, no Person acting
on their behalf has, directly or indirectly, (i) taken any action designed to cause or to result in the stabilization or manipulation
of the price of any security of the Company or any Company Subsidiary to facilitate the sale or resale of any of the Securities, (ii)
sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities (other than the Placement Agent),
(iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company or
any Company Subsidiary or (iv) paid or agreed to pay any Person for research services with respect to any securities of the Company or
any Company Subsidiary.
(gg)
U.S. Real Property Holding Corporation. Neither the Company nor any Company Subsidiary is, or has ever been, and so long as any
of the Securities are held by any of the Buyers, shall become, a U.S. real property holding corporation within the meaning of Section
897 of the Code, and the Company and each Company Subsidiary shall so certify upon any Buyer’s request.
(hh)
Registration Eligibility. The Company is eligible to register the Underlying Securities for resale by the Buyers using Form S-1
promulgated under the 1933 Act. “Underlying Securities” means (i) the Conversion Shares, (ii) the Warrant Shares,
and (iii) any capital stock of the Company issued or issuable with respect to the Conversion Shares, the Warrant Shares, the Warrants
or the Notes respectively, including, without limitation, (1) as a result of any stock split, stock dividend, recapitalization, exchange
or similar event or otherwise and (2) shares of capital stock of the Company into which the shares of Common Stock are converted or exchanged
and shares of capital stock of a Successor Entity (as defined in the Warrants) into which the shares of Common Stock are converted, exercised
or exchanged, in each case, without regard to any limitations on conversion of the Notes or exercise of the Warrants, respectively.
(ii)
Transfer Taxes. On the Closing Date, all stock transfer or other taxes (other than income or similar taxes) which are required
to be paid in connection with the issuance, sale and transfer of the Securities to be sold to each Buyer hereunder will be, or will have
been, fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with.
(jj)
Bank Holding Company Act. Neither the Company nor any Company Subsidiary 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 Company Subsidiary or affiliates owns or controls, directly or indirectly, five percent
(5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total equity of
a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any Company Subsidiary
or affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and
to regulation by the Federal Reserve.
(kk)
Shell Company Status. The Company is not, and has never been, an issuer identified in, or subject to, Rule 144(i).
(ll)
Illegal or Unauthorized Payments; Political Contributions. Neither the Company nor any Company Subsidiary nor, to the best of
the Company’s knowledge (after reasonable inquiry of its officers and directors), any of the officers, directors, employees, agents
or other representatives of the Company or any Company Subsidiary or any other business entity or enterprise with which the Company or
any Company Subsidiary is or has been affiliated or associated, has, directly or indirectly, made or authorized any payment, contribution
or gift of money, property, or services, whether or not in contravention of applicable law, (i) as a kickback or bribe to any Person
or (ii) to any political organization, or the holder of or any aspirant to any elective or appointive public office except for personal
political contributions not involving the direct or indirect use of funds of the Company or any Company Subsidiary.
(mm)
Money Laundering. The Company and the Company Subsidiaries are in compliance with, and have not previously violated, the USA Patriot
Act of 2001 and all other applicable U.S. and non-U.S. anti-money laundering laws and regulations, including, without limitation, the
laws, regulations and Executive Orders and sanctions programs administered by the U.S. Office of Foreign Assets Control, including, but
not limited, to (i) Executive Order 13224 of September 23, 2001 entitled, “Blocking Property and Prohibiting Transactions With
Persons Who Commit, Threaten to Commit, or Support Terrorism” (66 Fed. Reg. 49079 (2001)); and (ii) any regulations contained in
31 CFR, Subtitle B, Chapter V.
(nn)
Management. Except as set forth in Schedule 3(nn) hereto, during the past five (5) year period, no current or former officer
or director or, to the knowledge of the Company, no current ten percent (10%) or greater stockholder of the Company or any Company Subsidiary
has been the subject of:
(i)
a petition under bankruptcy laws or any other insolvency or moratorium law or the appointment by a court of a receiver, fiscal agent
or similar officer for such Person, or any partnership in which such person was a general partner at or within two (2) years before the
filing of such petition or such appointment, or any corporation or business association of which such person was an executive officer
at or within two years before the time of the filing of such petition or such appointment;
(ii)
a conviction in a criminal proceeding or a named subject of a pending criminal proceeding (excluding traffic violations that do not relate
to driving while intoxicated or driving under the influence);
(iii)
any order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or
temporarily enjoining any such person from, or otherwise limiting, the following activities:
(1)
Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage
transaction merchant, any other person regulated by the United States Commodity Futures Trading Commission (the “CFTC”)
or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated
person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing
any conduct or practice in connection with such activity;
(2)
Engaging in any particular type of business practice; or
(3)
Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of
securities laws or commodities laws;
(iv)
any order, judgment or decree, not subsequently reversed, suspended or vacated, of any authority barring, suspending or otherwise limiting
for more than sixty (60) days the right of any such person to engage in any activity described in the preceding sub paragraph, or to
be associated with persons engaged in any such activity;
(v)
a finding by a court of competent jurisdiction in a civil action or by the SEC or other authority to have violated any securities law,
regulation or decree and the judgment in such civil action or finding by the SEC or any other authority has not been subsequently reversed,
suspended or vacated; or
(vi)
a finding by a court of competent jurisdiction in a civil action or by the CFTC to have violated any federal commodities law, and the
judgment in such civil action or finding has not been subsequently reversed, suspended or vacated.
(oo)
Stock Option Plans. Each stock option granted by the Company was granted (i) in accordance with the terms of the applicable stock
option plan of the Company and (ii) with an exercise price at least equal to the fair market value of the Common Stock on the date such
stock option would be considered granted under GAAP and applicable law. No stock option granted under the Company’s stock option
plan has been backdated. The Company has not knowingly granted, and there is no and has been no policy or practice of the Company to
knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release or other public
announcement of material information regarding the Company or the Company Subsidiaries or their financial results or prospects.
(pp)
No Disagreements with Accountants and Lawyers. There are no material disagreements of any kind presently existing, or reasonably
anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company
and the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability
to perform any of its obligations under any of the Transaction Documents. In addition, on or prior to the date hereof, the Company had
discussions with its accountants about its financial statements previously filed with the SEC. Based on those discussions, the Company
has no reason to believe that it will need to restate any such financial statements or any part thereof.
(qq)
No Disqualification Events. With respect to Securities to be offered and sold hereunder in reliance on Rule 506(b) under the 1933
Act (“Regulation D Securities”), none of the Company, any of its predecessors, any affiliated issuer, any director,
executive officer, other officer of the Company participating in the offering contemplated hereby, any beneficial owner of 20% or more
of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term
is defined in Rule 405 under the 1933 Act) connected with the Company in any capacity at the time of sale (each, an “Issuer
Covered Person” and, together, “Issuer Covered Persons”) is subject to any of the “Bad Actor”
disqualifications described in Rule 506(d)(1)(i) to (viii) under the 1933 Act (a “Disqualification Event”), except
for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any
Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure
obligations under Rule 506(e), and has furnished to the Buyers a copy of any disclosures provided thereunder.
(rr)
Other Covered Persons. The Company is not aware of any Person (other than the Placement Agent) that has been or will be paid (directly
or indirectly) remuneration for solicitation of Buyers or potential purchasers in connection with the sale of any Regulation D Securities.
(ss)
No Additional Agreements. The Company does not have any agreement or understanding with any Buyer with respect to the transactions
contemplated by the Transaction Documents other than as specified in the Transaction Documents.
(tt)
Public Utility Holding Act. None of the Company nor any Company Subsidiary is a “holding company,” or an “affiliate”
of a “holding company,” as such terms are defined in the Public Utility Holding Act of 2005.
(uu)
Federal Power Act. None of the Company nor any Company Subsidiary is subject to regulation as a “public utility” under
the Federal Power Act, as amended.
(vv)
Ranking of Notes. At the Closing, no Indebtedness will be senior to, or pari passu with, the Notes in right of payment,
whether with respect to payment or redemptions, interest, damages, upon liquidation or dissolution or otherwise (other than Permitted
Indebtedness (as defined in the Notes) secured by Permitted Liens (as defined in the Notes)).
(ww)
Disclosure. The Company confirms that neither it nor any other Person acting on its behalf has provided any of the Buyers or their
agents or legal counsel with any information that constitutes or could reasonably be expected to constitute material, non-public information
concerning the Company or any Company Subsidiary, other than the existence of the transactions contemplated by this Agreement and the
other Transaction Documents. The Company understands and confirms that each of the Buyers will rely on the foregoing representations
in effecting transactions in securities of the Company. All disclosure provided to the Buyers regarding the Company and its Subsidiaries,
their businesses and the transactions contemplated hereby, including the schedules to this Agreement, furnished by or on behalf of the
Company or any Company Subsidiary 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. All of the written information furnished after the date hereof by or on behalf of the Company or any Company Subsidiary to
each Buyer pursuant to or in connection with this Agreement and the other Transaction Documents, taken as a whole, will be true and correct
in all material respects as of the date on which such information is so provided and will 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. Each press release issued by the Company or any Company Subsidiary during the twelve (12) months
preceding the date of this Agreement did not at the time of release 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 are made, not misleading. No event or circumstance has occurred or information exists with respect to the Company or
any Company Subsidiary or its or their business, properties, liabilities, prospects, operations (including results thereof) or conditions
(financial or otherwise), which, under applicable law, rule or regulation, requires public disclosure at or before the date hereof or
announcement by the Company but which has not been so publicly disclosed. All financial projections and forecasts that have been prepared
by or on behalf of the Company or any Company Subsidiary and made available to you have been prepared in good faith based upon reasonable
assumptions and represented, at the time each such financial projection or forecast was delivered to each Buyer, the Company’s
best estimate of future financial performance (it being recognized that such financial projections or forecasts are not to be viewed
as facts and that the actual results during the period or periods covered by any such financial projections or forecasts may differ from
the projected or forecasted results). The Company acknowledges and agrees that no Buyer makes or has made any representations or warranties
with respect to the transactions contemplated hereby other than those specifically set forth in Section 2.
4.
REPRESENTATIONS AND WARRANTIES OF ZASH AND ZVV.
Each
of Zash and ZVV, severally and not jointly, represents and warrants to each of the Buyers with respect to only itself that, as of the
date hereof and as of the Closing Date:
(a)
Organization and Qualification. Each of Zash, the “Zash Subsidiaries” (which for purposes of this Agreement means
any Person in which Zash, directly or indirectly, (I) owns a majority of the outstanding capital stock or holds a majority equity or
similar interest of such Person or (II) controls or operates all or any part of the business, operations or administration of such Person),
ZVV and the “ZVV Subsidiaries” (which for purposes of this Agreement means any Person in which ZVV, directly or indirectly,
(I) owns a majority of the outstanding capital stock or holds a majority equity or similar interest of such Person or (II) controls or
operates all or any part of the business, operations or administration of such Person) are entities duly organized and validly existing
and in good standing under the laws of the jurisdiction in which they are formed, and have the requisite power and authority to own their
properties and to carry on their business as now being conducted and as presently proposed to be conducted. Each of Zash, the Zash Subsidiaries,
ZVV and the ZVV Subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction in which
its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that
the failure to be so qualified or be in good standing would not reasonably be expected to have a Zash Material Adverse Effect or ZVV
Material Adverse Effect. As used in this Agreement, (x) “Zash Material Adverse Effect” means any material adverse
effect on (i) the business, properties, assets, liabilities, operations (including results thereof), condition (financial) or prospects
of Zash or any Zash Subsidiaries, individually or taken as a whole, (ii) the transactions contemplated hereby or in any of the other
Transaction Documents or any other agreements or instruments to be entered into in connection herewith or therewith or (iii) the authority
or ability of Zash or any of the Zash Subsidiaries to perform any of their respective obligations under any of the Transaction Documents
and (y) “ZVV Material Adverse Effect” means any material adverse effect on (i) the business, properties, assets, liabilities,
operations (including results thereof), condition (financial or otherwise) or prospects of ZVV or any ZVV Subsidiary, individually or
taken as a whole, (ii) the transactions contemplated hereby or in any of the other Transaction Documents or any other agreements or instruments
to be entered into in connection herewith or therewith or (iii) the authority or ability of ZVV or any ZVV Subsidiary to perform any
of their respective obligations under any of the Transaction Documents. Other than the Persons set forth on Schedule 4(a)(i),
Zash has no Zash Subsidiaries. Other than the Persons set forth on Schedule 4(a)(ii), ZVV has no ZVV Subsidiaries.
(b)
Authorization; Enforcement; Validity. Each of Zash and ZVV has the requisite power and authority to enter into and perform its
obligations under this Agreement and the other Transaction Documents. Each Zash Subsidiary and ZVV Subsidiary has the requisite power
and authority to enter into and perform its obligations under the Transaction Documents to which it is a party. The execution and delivery
of this Agreement and the other Transaction Documents by Zash, the Zash Subsidiaries, ZVV and the ZVV Subsidiaries, and the consummation
by Zash, the Zash Subsidiaries, ZVV and the ZVV Subsidiaries of the transactions contemplated hereby and thereby have been duly authorized
by the applicable board of directors or other governing body of each of Zash, the Zash Subsidiaries, ZVV and the ZVV Subsidiaries and
no further filing, consent or authorization is required by Zash, the Zash Subsidiaries, ZVV and the ZVV Subsidiaries, their respective
boards of directors or their stockholders or other governing body. This Agreement has been, and the other Transaction Documents to which
it is a party will be prior to the Closing, duly executed and delivered by each of Zash and ZVV, and each constitutes the legal, valid
and binding obligations of each of Zash and ZVV, enforceable against Zash and ZVV in accordance with its respective terms, except as
such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies and
except as rights to indemnification and to contribution may be limited by federal or state securities law. Prior to the Closing, the
Transaction Documents to which each Zash Subsidiary or ZVV Subsidiary is a party will be duly executed and delivered by each such Subsidiary,
and shall constitute the legal, valid and binding obligations of each such Subsidiary, enforceable against each such Subsidiary in accordance
with their respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’
rights and remedies and except as rights to indemnification and to contribution may be limited by federal or state securities law.
(c)
No Conflicts. The execution, delivery and performance of the Transaction Documents by Zash, the Zash Subsidiaries, ZVV and the
ZVV Subsidiaries and the consummation by Zash, the Zash Subsidiaries, ZVV and the ZVV Subsidiaries of the transactions contemplated hereby
and thereby will not (i) result in a violation of, certificate of formation, memorandum of association, articles of association, bylaws
or other organizational documents of Zash, the Zash Subsidiaries, ZVV or the ZVV Subsidiaries, or any capital stock or other securities
of Zash, the Zash Subsidiaries, ZVV or the ZVV Subsidiaries, (ii) to the knowledge of the officers and directors of Zash and ZVV, as
applicable, conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) in
any respect under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture
or instrument to which Zash, the Zash Subsidiaries, ZVV or the ZVV Subsidiaries is a party, or (iii) result in a violation of any law,
rule, regulation, order, judgment or decree (including, without limitation, foreign, federal and state securities laws and regulations
and the rules and regulations of the Principal Market and including all applicable foreign, federal and state laws, rules and regulations)
applicable to Zash, the Zash Subsidiaries, ZVV or the ZVV Subsidiaries or by which any property or asset of Zash, the Zash Subsidiaries,
ZVV or the ZVV Subsidiaries is bound or affected.
(d)
Consents. Except as set forth elsewhere in the Transaction Documents, none of Zash, the Zash Subsidiaries, ZVV or the ZVV Subsidiaries
is required to obtain any consent from, authorization or order of, or make any filing or registration with any Governmental Entity or
any regulatory or self-regulatory agency or any other Person in order for it to execute, deliver or perform any of its respective obligations
under or contemplated by the Transaction Documents, in each case, in accordance with the terms hereof or thereof. All consents, authorizations,
orders, filings and registrations which Zash, the Zash Subsidiaries, ZVV or the ZVV Subsidiaries is required to obtain pursuant to the
preceding sentence have been or will be obtained or effected on or prior to the Closing Date, and none of Zash, the Zash Subsidiaries,
ZVV or the ZVV Subsidiaries are aware of any facts or circumstances which might prevent Zash, the Zash Subsidiaries, ZVV or the ZVV Subsidiaries
from obtaining or effecting any of the registration, application or filings contemplated by the Transaction Documents.
(e)
Acknowledgment Regarding Buyer’s Purchase of Securities. Each of Zash and ZVV acknowledges and agrees that each Buyer is
acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated
hereby and thereby and that no Buyer is (i) an officer or director of Zash, the Zash Subsidiaries, ZVV or the ZVV Subsidiaries, (ii)
an “affiliate” (as defined in Rule 144) of Zash, the Zash Subsidiaries, ZVV or the ZVV Subsidiaries or (iii) to its knowledge,
a “beneficial owner” of more than 10% of the shares of common stock of Zash or ZVV (as defined for purposes of Rule 13d-3
of the 1934 Act). Each of Zash and ZVV further acknowledges that no Buyer is acting as a financial advisor or fiduciary of Zash, the
Zash Subsidiaries, ZVV or the ZVV Subsidiaries (or in any similar capacity) with respect to the Transaction Documents and the transactions
contemplated hereby and thereby, and any advice given by a Buyer or any of its representatives or agents in connection with the Transaction
Documents and the transactions contemplated hereby and thereby is merely incidental to such Buyer’s purchase of the Securities.
Each of Zash and ZVV further represents to each Buyer that Zash, the Zash Subsidiaries, ZVV and the ZVV Subsidiaries decision to enter
into the Transaction Documents to which it is a party has been based solely on the independent evaluation by Zash, the Zash Subsidiaries,
ZVV and the ZVV Subsidiaries and their respective representatives.
(f)
Intentionally Omitted.
(g)
Intentionally Omitted.
(h)
No Undisclosed Events, Liabilities, Developments or Circumstances. No event, liability, development or circumstance has occurred
or exists, or is reasonably expected to exist or occur with respect to Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries or any
of their respective businesses, properties, liabilities, prospects, operations (including results thereof) or condition (financial or
otherwise), that (i) would be required to be disclosed by any of them under applicable securities laws on a registration statement on
Form S-1 filed with the SEC and which has not been publicly announced, (ii) could have a material adverse effect on any Buyer’s
investment hereunder or (iii) could have a Zash Material Adverse Effect or ZVV Material Adverse Effect.
(i)
Conduct of Business; Regulatory Permits. None of Zash, the Zash Subsidiaries, ZVV or the ZVV Subsidiaries is in violation of any
term of or in default under its Certificate of Incorporation, any certificate of designation, preferences or rights of any other outstanding
series of preferred stock of Zash, the Zash Subsidiaries, ZVV or the ZVV Subsidiaries or Bylaws or their organizational charter, certificate
of formation, memorandum of association, articles of association, articles of incorporation or certificate of incorporation or bylaws,
respectively. Neither Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries is in violation of any judgment, decree or order or any
statute, ordinance, rule or regulation applicable to Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries, and neither Zash, ZVV,
the Zash Subsidiaries or the ZVV Subsidiaries will conduct its business in violation of any of the foregoing, except in all cases for
possible violations which could not, individually or in the aggregate, have a Zash Material Adverse Effect or ZVV Material Adverse Effect.
Without limiting the generality of the foregoing, Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries are not in violation of any
of the rules, regulations or requirements of the Principal Market and have no knowledge of any facts or circumstances that could reasonably
lead to delisting or suspension of the Common Stock by the Principal Market in the foreseeable future. Zash, ZVV, the Zash Subsidiaries
and the ZVV Subsidiaries possess all certificates, authorizations and permits issued by the appropriate regulatory authorities necessary
to conduct their respective businesses, except where the failure to possess such certificates, authorizations or permits would not have,
individually or in the aggregate, a Zash Material Adverse Effect or ZVV Material Adverse Effect, and neither Zash, ZVV, the Zash Subsidiaries
or the ZVV Subsidiaries has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization
or permit. There is no agreement, commitment, judgment, injunction, order or decree binding upon Zash, ZVV, the Zash Subsidiaries or
the ZVV Subsidiaries or to which Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries is a party which has or would reasonably be
expected to have the effect of prohibiting or materially impairing any business practice of Zash, ZVV, the Zash Subsidiaries or the ZVV
Subsidiaries, any acquisition of property by Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries or the conduct of business by Zash,
ZVV, the Zash Subsidiaries or the ZVV Subsidiaries as currently conducted other than such effects, individually or in the aggregate,
which have not had and would not reasonably be expected to have a Zash Material Adverse Effect on Zash or the Zash Subsidiaries or a
ZVV Material Adverse Effect on ZVV or the ZVV Subsidiaries.
(j)
Foreign Corrupt Practices. Neither Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries
or any director, officer, agent, employee, nor any other person acting for or on behalf of the foregoing (individually and collectively,
a “Zash Affiliate”) have violated the U.S. Foreign Corrupt Practices Act (the “FCPA”) or any other
applicable anti-bribery or anti-corruption laws, nor has any Zash Affiliate offered, paid, promised to pay, or authorized the payment
of any money, or offered, given, promised to give, or authorized the giving of anything of value in contravention of the FCPA, to any
officer, employee or any other person acting in an official capacity for any Governmental Entity to any political party or official thereof
or to any candidate for political office (individually and collectively, a “Government Official”) or to any person
under circumstances where such Zash Affiliate knew or was aware of a high probability that all or a portion of such money or thing of
value would be offered, given or promised, directly or indirectly, to any Government Official, for the purpose of:
(i)
(A) influencing any act or decision of such Government Official in his/her official capacity, (B) inducing such Government Official to
do or omit to do any act in violation of his/her lawful duty, (C) securing any improper advantage, or (D) inducing such Government Official
to influence or affect any act or decision of any Governmental Entity, or
(ii)
assisting Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries in obtaining or retaining business for or with, or directing business
to, the Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries.
(k)
Sarbanes-Oxley Act. To the extent applicable to their business, there has been no failure on the part of Zash, ZVV, the Zash Subsidiaries
and the ZVV Subsidiaries to comply with any and all applicable requirements of the Sarbanes-Oxley Act of 2002, as amended, and any and
all applicable rules and regulations promulgated by the SEC thereunder.
(l)
Transactions With Affiliates. Other than as previously disclosed in writing to the Buyer or as would not reasonably be expected
to have a material adverse effect on the Buyer’s interests with respect to ZVV, no current or former employee, partner, director,
officer or stockholder (direct or indirect) of Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries, or any associate, or, to the
knowledge of Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries, any affiliate of any thereof, or any relative with a relationship
no more remote than first cousin of any of the foregoing, is presently, or has ever been, (i) a party to any transaction with Zash, ZVV,
the Zash Subsidiaries or the ZVV Subsidiaries (including any contract, agreement or other arrangement providing for the furnishing of
services by, or rental of real or personal property from, or otherwise requiring payments to, any such director, officer or stockholder
or such associate or affiliate or relative Subsidiaries (other than for ordinary course services as employees, officers or directors
of Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries)) or (ii) the direct or indirect owner of an interest in any corporation,
firm, association or business organization which is a competitor, supplier or customer of Zash, ZVV, the Zash Subsidiaries or the ZVV
Subsidiaries (except for a passive investment (direct or indirect) in less than 5% of the common stock of a company whose securities
are traded on or quoted through an Eligible Market (as defined in the Notes)), nor does any such Person receive income from any source
other than Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries which relates to the business of Zash, ZVV, the Zash Subsidiaries
or the ZVV Subsidiaries or should properly accrue to Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries . No employee, officer,
stockholder or director of Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries or member of his or her immediate family is indebted
to Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries , as the case may be, nor are Zash, ZVV, the Zash Subsidiaries or the ZVV
Subsidiaries indebted (or committed to make loans or extend or guarantee credit) to any of them, other than (i) for payment of salary
for services rendered, (ii) reimbursement for reasonable expenses incurred on their behalf, and (iii) for other standard employee benefits
made generally available to all employees or executives (including stock option agreements outstanding under any stock option plan approved
by the Board of Directors of Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries, as the case may be.).
(m)
Indebtedness and Other Contracts. Neither Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries, (i) except as disclosed on
Schedule 4(m), has any outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents
or instruments evidencing Indebtedness of Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries or by which Zash, ZVV, the Zash Subsidiaries
or the ZVV Subsidiaries is or may become bound, (ii) other than with respect to the indebtedness disclosed on Schedule 4(m), is a party
to any contract, agreement or instrument, the violation of which, or default under which, by the other party(ies) to such contract, agreement
or instrument could reasonably be expected to result in a Zash Material Adverse Effect or ZVV Material Adverse Effect, (iii) other than
with respect to the indebtedness disclosed on Schedule 4(m), has any financing statements securing obligations in any amounts filed in
connection with Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries; (iv) is in violation of any term of, or in default under, any
contract, agreement or instrument relating to any Indebtedness, except where such violations and defaults would not result, individually
or in the aggregate, in a Zash Material Adverse Effect or ZVV Material Adverse Effect, or (v) is a party to any contract, agreement or
instrument relating to any Indebtedness, the performance of which, in the judgment of Zash’s officers or ZVV’s officers,
has or is expected to have a Zash Material Adverse Effect or ZVV Material Adverse Effect. Neither Zash, ZVV, the Zash Subsidiaries or
the ZVV Subsidiaries have any liabilities or obligations required to be disclosed in the SEC Documents which are not so disclosed in
the SEC Documents, other than those incurred in the ordinary course of Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries’
respective businesses and which, individually or in the aggregate, do not or could not have a Zash Material Adverse Effect or ZVV Material
Adverse Effect. For purposes of this Agreement: (x) “Indebtedness” of any Person means, without duplication (A) all
indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed as the deferred purchase price of property or services
(including, without limitation, “capital leases” in accordance with GAAP) (other than trade payables entered into in the
ordinary course of business consistent with past practice), (C) all reimbursement or payment obligations with respect to letters of credit,
surety bonds and other similar instruments, (D) all obligations evidenced by notes, bonds, debentures or similar instruments, including
obligations so evidenced incurred in connection with the acquisition of property, assets or businesses, (E) all indebtedness created
or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to any
property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such
agreement in the event of default are limited to repossession or sale of such property), (F) all monetary obligations under any leasing
or similar arrangement which, in connection with GAAP, consistently applied for the periods covered thereby, is classified as a capital
lease, (G) all indebtedness referred to in clauses (A) through (F) above secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any Lien upon or in any property or assets (including accounts and contract
rights) owned by any Person, even though the Person which owns such assets or property has not assumed or become liable for the payment
of such indebtedness, and (H) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to
in clauses (A) through (G) above; and (y) “Contingent Obligation” means, as to any Person, any direct or indirect
liability, contingent or otherwise, of that Person with respect to any Indebtedness, lease, dividend or other obligation of another Person
if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance to the
obligee of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with,
or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto.
(n)
Litigation. There is no action, suit, arbitration, proceeding, inquiry or investigation before or by the Principal Market, any
court, public board, other Governmental Entity, self-regulatory organization or body pending or, to the knowledge of Zash, threatened
against or affecting Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries, the Common Stock or any of Zash, ZVV, the Zash Subsidiaries
or the ZVV Subsidiaries’ officers or directors, whether of a civil or criminal nature or otherwise, in their capacities as such,
except as set forth in Schedule 4(n). No director, officer or employee of Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries
has willfully violated 18 U.S.C. §1519 or engaged in spoliation in reasonable anticipation of litigation.
(o)
Intentionally Omitted.
(p)
Intentionally Omitted.
(q)
Intentionally Omitted.
(r)
Intellectual Property Rights. Zash, ZVV, the Zash Subsidiaries and the ZVV Subsidiaries (as applicable), own or possess adequate
rights or licenses to use all trademarks, trade names, service marks, service mark registrations, service names, original works of authorship,
patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and other intellectual
property rights and all applications and registrations therefor (“Intellectual Property Rights”) necessary to conduct
their respective businesses as now conducted. Except as set forth in Schedule 4(r)(ii), none of the referenced Intellectual Property
Rights have expired or terminated or have been abandoned or are expected to expire or terminate or are expected to be abandoned, within
three years from the date of this Agreement. Neither Zash nor ZVV have any knowledge of any infringement by Zash, ZVV, the Zash Subsidiaries
or the ZVV Subsidiaries of Intellectual Property Rights of others. There is no claim, action or proceeding being made or brought, or
to the knowledge of Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries, being threatened, against Zash, ZVV, the Zash Subsidiaries
or the ZVV Subsidiaries regarding its Intellectual Property Rights. Neither Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries
is aware of any facts or circumstances which might give rise to any of the foregoing infringements or claims, actions or proceedings.
Zash, ZVV, the Zash Subsidiaries and the ZVV Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality
and value of all of their Intellectual Property Rights.
(s)
Subsidiary Rights. Zash and ZVV, or one of their respective subsidiaries (as the case may be) has the unrestricted right to vote,
and (subject to limitations imposed by applicable law) to receive dividends and distributions on, all capital securities of their respective
subsidiaries as owned by Zash, ZVV, or the Zash Subsidiaries or ZVV Subsidiaries.
(t)
Tax Status. Zash, ZVV, the Zash Subsidiaries and the ZVV Subsidiaries have timely made or filed (allowing for all lawful extensions)
all foreign, federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which they
are subject. Zash and the Zash Subsidiaries (i) have timely paid all taxes and other governmental assessments and charges that are material
in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and (ii)
have set aside on their books provisions reasonably adequate for the payment of all taxes for periods subsequent to the periods to which
such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority
of any jurisdiction, and the officers of Zash, and the Zash Subsidiaries, as the case may be, know of no basis for any such claim. Neither
Zash nor the Zash Subsidiaries is operated in such a manner as to qualify as a passive foreign investment company, as defined in Section
1297 of the Code. The net operating loss carryforwards (“NOLs”) for United States federal income tax purposes of the
consolidated group of which Zash or the Zash Subsidiaries or is the common parent, if any, shall not be adversely effected by the transactions
contemplated hereby. The transactions contemplated hereby do not constitute an “ownership change” within the meaning of Section
382 of the Code, thereby preserving the ability of Zash, or the Zash Subsidiaries, as the case may be, to utilize such NOLs.
(u)
Intentionally Omitted.
(v)
Intentionally Omitted.
(w)
Investment Company Status. Neither Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries is, or upon consummation of the sale
of the Securities will be, an “investment company,” an affiliate of an “investment company,” a company controlled
by an “investment company” or an “affiliated person” of, or “promoter” or “principal underwriter”
for, an “investment company” as such terms are defined in the Investment Company Act of 1940, as amended.
(x)
Acknowledgement Regarding Buyers’ Trading Activity. It is understood and acknowledged by Zash, ZVV, the Zash Subsidiaries
and the ZVV Subsidiaries that (i) to their knowledge, following the public disclosure of the transactions contemplated by the Transaction
Documents, in accordance with the terms thereof, none of the Buyers have been asked by the Company or any Company Subsidiary to agree,
nor has any Buyer agreed with the Company or any Company Subsidiary, to desist from effecting any transactions in or with respect to
(including, without limitation, purchasing or selling, long and/or short) any securities of the Company, or “derivative”
securities based on securities issued by the Company or to hold any of the Securities for any specified term; (ii) any Buyer, and counterparties
in “derivative” transactions to which any such Buyer is a party, directly or indirectly, presently may have a “short”
position in the Common Stock which was established prior to such Buyer’s knowledge of the transactions contemplated by the Transaction
Documents; (iii) each Buyer shall not be deemed to have any affiliation with or control over any arm’s length counterparty in any
“derivative” transaction; and (iv) each Buyer may rely on the Company’s obligation to timely deliver shares of Common
Stock upon conversion, exercise or exchange, as applicable, of the Securities as and when required pursuant to the Transaction Documents
for purposes of effecting trading in the Common Stock of the Company. Each of Zash, ZVV, the Zash Subsidiaries and the ZVV Subsidiaries
further understands and acknowledges that following the public disclosure of the transactions contemplated by the Transaction Documents
pursuant to the 8-K Filing one or more Buyers may engage in hedging and/or trading activities (including, without limitation, the location
and/or reservation of borrowable shares of Common Stock) at various times during the period that the Securities are outstanding, including,
without limitation, during the periods that the value and/or number of the Warrant Shares or Conversion Shares, as applicable, deliverable
with respect to the Securities are being determined and such hedging and/or trading activities (including, without limitation, the location
and/or reservation of borrowable shares of Common Stock), if any, can reduce the value of the existing stockholders’ equity interest
in the Company both at and after the time the hedging and/or trading activities are being conducted. Each of Zash, ZVV, the Zash Subsidiaries
and the ZVV Subsidiaries acknowledges that such aforementioned hedging and/or trading activities do not constitute a breach of this Agreement,
the Notes, the Warrants or any other Transaction Document or any of the documents executed in connection herewith or therewith
(y)
Manipulation of Price. Neither Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries has, and, to the knowledge of each, no
Person acting on their behalf has, directly or indirectly, (i) taken any action designed to cause or to result in the stabilization or
manipulation of the price of any security of the Company or any Company Subsidiary to facilitate the sale or resale of any of the Securities,
(ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities (other than the Placement
Agent), (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company
or any Company Subsidiary or (iv) paid or agreed to pay any Person for research services with respect to any securities of the Company
or any Company Subsidiary.
(z)
U.S. Real Property Holding Corporation. Neither Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries is, or has ever been,
and so long as any of the Securities are held by any of the Buyers, shall become, a U.S. real property holding corporation within the
meaning of Section 897 of the Code, and Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries (as the case may be), shall so certify
upon any Buyer’s request.
(aa)
Intentionally Omitted.
(bb)
Bank Holding Company Act. Neither Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries is subject to the Bank Holding Company
Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the
“Federal Reserve”). Neither Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries or affiliates owns or controls,
directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent
(25%) or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither
Zash, ZVV, the Zash Subsidiaries or the ZVV 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.
(cc)
Shell Company Status. Neither Zash, ZVV, the Zash Subsidiaries nor the ZVV Subsidiaries is, or has never been, an issuer identified
in, or subject to, Rule 144(i).
(dd)
Illegal or Unauthorized Payments; Political Contributions. Neither Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries, to
the best of the their knowledge (as the case may be, after reasonable inquiry of their officers and directors), any of the officers,
directors, employees, agents or other representatives of Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries or any other business
entity or enterprise with which Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries is or has been affiliated or associated, has,
directly or indirectly, made or authorized any payment, contribution or gift of money, property, or services, whether or not in contravention
of applicable law, (i) as a kickback or bribe to any Person or (ii) to any political organization, or the holder of or any aspirant to
any elective or appointive public office except for personal political contributions not involving the direct or indirect use of funds
of Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries.
(ee)
Money Laundering. Zash, ZVV, the Zash Subsidiaries and the ZVV Subsidiaries are in compliance with, and have not previously violated,
the USA Patriot Act of 2001 and all other applicable U.S. and non-U.S. anti-money laundering laws and regulations, including, without
limitation, the laws, regulations and Executive Orders and sanctions programs administered by the U.S. Office of Foreign Assets Control,
including, but not limited, to (i) Executive Order 13224 of September 23, 2001 entitled, “Blocking Property and Prohibiting Transactions
With Persons Who Commit, Threaten to Commit, or Support Terrorism” (66 Fed. Reg. 49079 (2001)); and (ii) any regulations contained
in 31 CFR, Subtitle B, Chapter V.
(ff)
Intentionally Omitted.
(gg)
Equity Capitalization. Except as set forth in the Amended and Restated Limited Liability Company Agreement of ZVV Media Partners,
LLC, dated as of May 28, 2021 (the “Amended ZVV Operating Agreement”): (A) none of ZVV’s shares, interests or
capital stock is subject to preemptive rights or any other similar rights or Liens suffered or permitted by ZVV; (B) there are no outstanding
options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights
convertible into, or exercisable or exchangeable for, any shares, interests or capital stock of ZVV, or contracts, commitments, understandings
or arrangements by which ZVV is or may become bound to issue additional shares, interests or capital stock of ZVV or options, warrants,
scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into,
or exercisable or exchangeable for, any shares, interests or capital stock of ZVV; (C) there are no agreements or arrangements under
which ZVV is obligated to register the sale of any of their securities under the 1933 Act; (D) there are no outstanding securities or
instruments of ZVV which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements
by which ZVV is or may become bound to redeem a security of ZVV; (E) there are no securities or instruments containing anti-dilution
or similar provisions that will be triggered by the issuance of the Securities; and (F) ZVV has no stock appreciation rights or “phantom
stock” plans or agreements or any similar plan or agreement. As of the Closing Date, 50% of the equity interest of ZVV will be
owned by the Company and 50% of the equity interest of ZVV will be owned by Zash.
(hh)
No Disagreements with Accountants and Lawyers. There are no material disagreements of any kind presently existing, or reasonably
anticipated by Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries to arise, between Zash, ZVV, the Zash Subsidiaries or the ZVV
Subsidiaries and the accountants and lawyers formerly or presently employed by such, and each is current with respect to any fees owed
to its accountants and lawyers which could affect the its ability to perform any of its obligations under any of the Transaction Documents.
In addition, on or prior to the date hereof, each of Zash, ZVV, the Zash Subsidiaries and the ZVV Subsidiaries, as applicable, had discussions
with its accountants about its financial statements previously filed with the SEC. Based on those discussions, neither Zash, ZVV, the
Zash Subsidiaries or the ZVV Subsidiaries has reason to believe that it will need to restate any such financial statements or any part
thereof.
(ii)
No Disqualification Events. With respect to Securities to be offered and sold hereunder in reliance on Rule 506(b) under the 1933
Act (“Regulation D Securities”), none of Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries, any of their predecessors,
any affiliated issuer, any director, executive officer, other officer of such participating in the offering contemplated hereby, any
beneficial owner of 20% or more of the outstanding voting securities of Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries, calculated
on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the 1933 Act) connected with Zash, ZVV, the
Zash Subsidiaries or the ZVV Subsidiaries in any capacity at the time of sale (each, an “Issuer Covered Person” and,
together, “Issuer Covered Persons”) is subject to any of the “Bad Actor” disqualifications described in
Rule 506(d)(1)(i) to (viii) under the 1933 Act (a “Disqualification Event”), except for a Disqualification Event covered
by Rule 506(d)(2) or (d)(3). Each of Zash, ZVV, the Zash Subsidiaries and the ZVV Subsidiaries (as applicable), has exercised reasonable
care to determine whether any Issuer Covered Person is subject to a Disqualification Event. Each of Zash, ZVV, the Zash Subsidiaries
and the ZVV Subsidiaries has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished
to the Buyers a copy of any disclosures provided thereunder.
(jj)
Other Covered Persons. Neither Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries is aware of any Person (other than the
Placement Agent) that has been or will be paid (directly or indirectly) remuneration for solicitation of Buyers or potential purchasers
in connection with the sale of any Regulation D Securities.
(kk)
No Additional Agreements. Neither Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries have any agreement or understanding
with any Buyer with respect to the transactions contemplated by the Transaction Documents other than as specified in the Transaction
Documents.
(ll)
Public Utility Holding Act. None of Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries is a “holding company,”
or an “affiliate” of a “holding company,” as such terms are defined in the Public Utility Holding Act of 2005.
(mm)
Federal Power Act. None of Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries is subject to regulation as a “public
utility” under the Federal Power Act, as amended.
(nn)
Ranking of Notes. At the Closing, no Indebtedness of Zash, ZVV, the Zash Subsidiaries or the ZVV Subsidiaries will be senior to,
or pari passu with, the Notes in right of payment, whether with respect to payment or redemptions, interest, damages, upon liquidation
or dissolution or otherwise (other than Permitted Indebtedness (as defined in the Notes) secured by Permitted Liens (as defined in the
Notes)).
(oo)
Disclosure. Each of Zash, ZVV, the Zash Subsidiaries and the ZVV Subsidiaries (as the case may be), acknowledges and agrees that
no Buyer makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically
set forth in Section 2.
5.
COVENANTS.
(a)
Best Efforts. Each Buyer shall use its best efforts to timely satisfy each of the covenants hereunder and conditions to be satisfied
by it as provided in Section 7 of this Agreement. Each Issuer shall use its best efforts to timely satisfy each of the covenants hereunder
and conditions to be satisfied by it as provided in Section 8 of this Agreement.
(b)
Form D and Blue Sky. The Company shall file a Form D with respect to the Securities as required under Regulation D and provide
a copy thereof to each Buyer promptly after such filing. The Company shall, on or before the Closing Date, take such action as the Company
shall reasonably determine is necessary in order to obtain an exemption for, or to, qualify the Securities for sale to the Buyers at
the Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of the states of the United States
(or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken to the Buyers on or prior
to the Closing Date. Without limiting any other obligation of the Company under this Agreement, the Company shall timely make all filings
and reports relating to the offer and sale of the Securities required under all applicable securities laws (including, without limitation,
all applicable federal securities laws and all applicable “Blue Sky” laws), and the Company shall comply with all applicable
foreign, federal, state and local laws, statutes, rules, regulations and the like relating to the offering and sale of the Securities
to the Buyers.
(c)
Reporting Status. Until the date on which the Buyers shall have sold all of the Underlying Securities (the “Reporting
Period”), the Company shall timely file all reports required to be filed with the SEC pursuant to the 1934 Act, and the Company
shall not terminate its status as an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations
thereunder would no longer require or otherwise permit such termination.
(d)
Use of Proceeds. The Company will contribute the proceeds from the sale of the Securities to ZVV, which in turn will use such
proceeds to acquire an 80% interest in Lomotif Private Limited (the “Lomotif Transaction”) pursuant to the Amended
ZVV Operating Agreement.
(e)
Financial Information. The Company agrees to send the following to each holder of the Notes and Warrants (each, an “Investor”)
during the Reporting Period (i) unless the following are filed with the SEC through the EDGAR system and are available to the public
through the EDGAR system, within five (5) Business Days after the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K
and Quarterly Reports on Form 10-Q, any interim reports or any consolidated balance sheets, income statements, stockholders’ equity
statements and/or cash flow statements for any period other than annual, any Current Reports on Form 8-K and any registration statements
(other than on Form S-8) or amendments filed pursuant to the 1933 Act, (ii) unless the following are either filed with the SEC through
the EDGAR system or are otherwise widely disseminated via a recognized news release service (such as PR Newswire), on the same day as
the release thereof, facsimile copies of all press releases issued by the Company or any of the Company Subsidiaries and (iii) unless
the following are filed with the SEC through the EDGAR system, copies of any notices and other information made available or given to
the stockholders of the Company generally, contemporaneously with the making available or giving thereof to the stockholders.
(f)
Listing. The Company shall promptly secure the listing or designation for quotation (as the case may be) of all of the Underlying
Securities upon each national securities exchange and automated quotation system, if any, upon which the Common Stock is then listed
or designated for quotation (as the case may be) (subject to official notice of issuance) and shall maintain such listing or designation
for quotation (as the case may be) of all Underlying Securities from time to time issuable under the terms of the Transaction Documents
on such national securities exchange or automated quotation system. The Company shall maintain the Common Stock’s listing or authorization
for quotation (as the case may be) on The New York Stock Exchange, the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market
or the Nasdaq Global Select Market (each, an “Eligible Market”). The Company shall use its best efforts to cause the
Principal Market to approve the transactions contemplated by the Transaction Documents as promptly as reasonably practicable. Neither
the Company nor any of its Subsidiaries shall take any action which could be reasonably expected to result in the delisting or suspension
of the Common Stock on an Eligible Market. The Company shall pay all fees and expenses in connection with satisfying its obligations
under this Section 5(f).
(g)
Fees. At the Closing, the Company shall reimburse the lead Buyer for all costs and expenses incurred by it or its affiliates in
connection with the structuring, documentation, negotiation and closing of the transactions contemplated by the Transaction Documents
(including, without limitation, as applicable, all reasonable legal fees of outside legal counsel and disbursements of Schulte Roth &
Zabel LLP, counsel to the lead Buyer, any other reasonable fees and expenses in connection with the structuring, documentation, negotiation
and closing of the transactions contemplated by the Transaction Documents and due diligence and regulatory filings in connection therewith)
(the “Transaction Expenses”) and shall be withheld by the lead Buyer from its Purchase Price at the Closing to the
extent not previously deposited by the Company; provided, that the Company shall promptly reimburse Schulte Roth & Zabel LLP on demand
for all Transaction Expenses not so reimbursed through such withholding at the Closing. The Company shall be responsible for the payment
of any placement agent’s fees, financial advisory fees, transfer agent fees, DTC (as defined below) fees or broker’s commissions
(other than for Persons engaged by any Buyer) relating to or arising out of the transactions contemplated hereby (including, without
limitation, any fees or commissions payable to the Placement Agent, who is the Company’s sole placement agent in connection with
the transactions contemplated by this Agreement). The Company shall pay, and hold each Buyer harmless against, any liability, loss or
expense (including, without limitation, reasonable attorneys’ fees and out-of-pocket expenses) arising in connection with any claim
relating to any such payment. Except as otherwise set forth in the Transaction Documents, each party to this Agreement shall bear its
own expenses in connection with the sale of the Securities to the Buyers.
(h)
Pledge of Securities. Notwithstanding anything to the contrary contained in this Agreement, the Company acknowledges and agrees
that the Securities may be pledged by an Investor in connection with a bona fide margin agreement or other loan or financing arrangement
that is secured by the Securities. The pledge of Securities shall not be deemed to be a transfer, sale or assignment of the Securities
hereunder, and no Investor effecting a pledge of Securities shall be required to provide the Company with any notice thereof or otherwise
make any delivery to the Company pursuant to this Agreement or any other Transaction Document, including, without limitation, Section
2(g) hereof; provided, however, that an Investor and its pledgee shall be required to comply with the provisions of Section
2(g) hereof in order to effect a sale, transfer or assignment of Securities to such pledgee. The Company hereby agrees to execute and
deliver such documentation as a pledgee of the Securities may reasonably request in connection with a pledge of the Securities to such
pledgee by a Buyer.
(i)
Disclosure of Transactions and Other Material Information.
(i)
Disclosure of Transaction. On or before 9:30 a.m., New York time, on July 22, 2021, the Company shall file a Current Report on
Form 8-K describing all the material terms of the transactions contemplated by the Transaction Documents in the form required by the
1934 Act and attaching all the material Transaction Documents (including, without limitation, this Agreement (and all schedules to this
Agreement), the form of Notes, the form of the Warrants and the form of the Registration Rights Agreement) (including all attachments,
the “8-K Filing”). From and after the filing of the 8-K Filing, the Company shall have disclosed all material, non-public
information (if any) (including, without limitation, with respect to any potential mergers, acquisitions and/or the proposed Lomotif
Transaction) provided to any of the Buyers by the Issuers or their Subsidiaries or any of their respective officers, directors, employees
or agents in connection with the transactions contemplated by the Transaction Documents. In addition, effective upon the filing of the
8-K Filing, each Issuer acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether
written or oral, between each Issuer, any of their Subsidiaries or any of their respective officers, directors, affiliates, employees
or agents, on the one hand, and any of the Buyers or any of their affiliates, on the other hand, shall terminate.
(ii)
Limitations on Disclosure. Each Issuer shall not, and each Issuer shall cause each of its Subsidiaries and each of its and their
respective officers, directors, employees and agents not to, provide any Buyer with any material, non-public information regarding such
Issuer or any of its Subsidiaries from and after the date hereof without the express prior written consent of such Buyer (which may be
granted or withheld in such Buyer’s sole discretion). In the event of a breach of any of the foregoing covenants, including, without
limitation, Section 5(o) of this Agreement, or any of the covenants or agreements contained in any other Transaction Document, by each
Issuer, any of their Subsidiaries, or any of its or their respective officers, directors, employees and agents (as determined in the
reasonable good faith judgment of such Buyer), in addition to any other remedy provided herein or in the Transaction Documents, such
Buyer shall have the right to make a public disclosure, in the form of a press release, public advertisement or otherwise, of such breach
or such material, non-public information, as applicable, without the prior approval by any Issuer, any of their Subsidiaries, or any
of its or their respective officers, directors, employees or agents. No Buyer shall have any liability to any Issuer, any of their Subsidiaries,
or any of its or their respective officers, directors, employees, affiliates, stockholders or agents, for any such disclosure. To the
extent that any Issuer delivers any material, non-public information to a Buyer without such Buyer’s consent, each Issuer hereby
covenants and agrees that such Buyer shall not have any duty of confidentiality with respect to, or a duty not to trade on the basis
of, such material, non-public information. Subject to the foregoing, neither the Issuers, their Subsidiaries nor any Buyer shall issue
any press releases or any other public statements with respect to the transactions contemplated hereby; provided, however, the Company
shall be entitled, without the prior approval of any Buyer, to make any press release or other public disclosure with respect to such
transactions (i) in substantial conformity with the 8-K Filing and contemporaneously therewith and (ii) as is required by applicable
law and regulations (provided that in the case of clause (i) each Buyer shall be consulted by the Company in connection with any such
press release or other public disclosure prior to its release). Without the prior written consent of the applicable Buyer (which may
be granted or withheld in such Buyer’s sole discretion), the Company shall not (and shall cause each of the Company Subsidiaries
and affiliates to not) disclose the name of such Buyer in any filing, announcement, release or otherwise. Notwithstanding anything contained
in this Agreement to the contrary and without implication that the contrary would otherwise be true, each Issuer expressly acknowledges
and agrees that no Buyer shall have (unless expressly agreed to by a particular Buyer after the date hereof in a written definitive and
binding agreement executed by the Company and such particular Buyer (it being understood and agreed that no Buyer may bind any other
Buyer with respect thereto)), any duty of confidentiality with respect to, or a duty not to trade on the basis of, any material, non-public
information regarding the Issuers or any of their Subsidiaries.
(iii)
Other Confidential Information. Disclosure Failures; Disclosure Delay Payments. In addition to other remedies set forth in this
Section 5(i), and without limiting anything set forth in any other Transaction Document, at any time after the Closing Date if the Company,
any Company Subsidiary, or any of their respective officers, directors, employees or agents, provides any Buyer with material non-public
information relating to the Company or any Company Subsidiary (each, the “Confidential Information”), the Company
shall, on or prior to the applicable Required Disclosure Date (as defined below), publicly disclose such Confidential Information on
a Current Report on Form 8-K or otherwise (each, a “Disclosure”). From and after such Disclosure, the Company shall
have disclosed all Confidential Information provided to such Buyer by the Company or any Company Subsidiary or any of their respective
officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents. In addition,
effective upon such Disclosure, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any
agreement, whether written or oral, between the Company, any Company Subsidiary or any of their respective officers, directors, affiliates,
employees or agents, on the one hand, and any of the Buyers or any of their affiliates, on the other hand, shall terminate. In the event
that the Company fails to effect such Disclosure on or prior to the Required Disclosure Date and such Buyer shall have possessed Confidential
Information for at least ten (10) consecutive Trading Days (each, a “Disclosure Failure”), then, as partial relief
for the damages to such Buyer by reason of any such delay in, or reduction of, its ability to buy or sell shares of Common Stock after
such Required Disclosure Date (which remedy shall not be exclusive of any other remedies available at law or in equity), the Company
shall pay to such Buyer an amount in cash equal to the greater of (I) two percent (2%) of the aggregate Purchase Price and (II) the applicable
Disclosure Restitution Amount, on each of the following dates (each, a “Disclosure Delay Payment Date”): (i) on the
date of such Disclosure Failure and (ii) on every thirty (30) day anniversary such Disclosure Failure until the earlier of (x) the date
such Disclosure Failure is cured and (y) such time as all such non-public information provided to such Buyer shall cease to be Confidential
Information (as evidenced by a certificate, duly executed by an authorized officer of the Company to the foregoing effect) (such earlier
date, as applicable, a “Disclosure Cure Date”). Following the initial Disclosure Delay Payment for any particular
Disclosure Failure, without limiting the foregoing, if a Disclosure Cure Date occurs prior to any thirty (30) day anniversary of such
Disclosure Failure, then such Disclosure Delay Payment (prorated for such partial month) shall be made on the second (2nd) Business Day
after such Disclosure Cure Date. The payments to which an Investor shall be entitled pursuant to this Section 5(i) are referred to herein
as “Disclosure Delay Payments.” In the event the Company fails to make Disclosure Delay Payments in a timely manner
in accordance with the foregoing, such Disclosure Delay Payments shall bear interest at the rate of two percent (2%) per month (prorated
for partial months) until paid in full.
(iv)
For the purpose of this Agreement the following definitions shall apply:
(1)
“Disclosure Failure Market Price” means, as of any Disclosure Delay Payment Date, the price computed as the quotient
of (I) the sum of the five (5) highest VWAPs (as defined in the Warrants) of the Common Stock during the applicable Disclosure Restitution
Period (as defined below), divided by (II) five (5) (such period, the “Disclosure Failure Measuring Period”). All
such determinations to be appropriately adjusted for any share dividend, share split, share combination, reclassification or similar
transaction that proportionately decreases or increases the Common Stock during such Disclosure Failure Measuring Period.
(2)
“Disclosure Restitution Amount” means, as of any Disclosure Delay Payment Date, the product of (x) difference of (I)
the Disclosure Failure Market Price less (II) the lowest purchase price, per share of Common Stock, of any Common Stock issued or issuable
to such Buyer pursuant to this Agreement or any other Transaction Documents, multiplied by (y) 10% of the aggregate daily dollar trading
volume (as reported on Bloomberg (as defined in the Warrants)) of the Common Stock on the Principal Market for each Trading Day (as defined
in the Warrants) either (1) with respect to the initial Disclosure Delay Payment Date, during the period commencing on the applicable
Required Disclosure Date through and including the Trading Day immediately prior to the initial Disclosure Delay Payment Date or (2)
with respect to each other Disclosure Delay Payment Date, during the period commencing the immediately preceding Disclosure Delay Payment
Date through and including the Trading Day immediately prior to such applicable Disclosure Delay Payment Date (such applicable period,
the “Disclosure Restitution Period”).
(3)
“Required Disclosure Date” means (x) if such Buyer authorized the delivery of such Confidential Information, either
(I) if the Company and such Buyer have mutually agreed upon a date (as evidenced by an e-mail or other writing) of Disclosure of such
Confidential Information, such agreed upon date or (II) otherwise, the seventh (7th) calendar day after the date such Buyer
first received any Confidential Information or (y) if such Buyer did not authorize the delivery of such Confidential Information, the
first (1st) Business Day after such Buyer’s receipt of such Confidential Information.
(j)
Additional Registration Statements. Until the thirtieth (30th) calendar day after the Applicable Date (as defined below)
and at any time thereafter while any Registration Statement is not effective or the prospectus contained therein is not available for
use or any Current Public Information Failure (as defined in the Registration Rights Agreement) exists, the Company shall not file a
registration statement or an offering statement under the 1933 Act relating to securities that are not the Underlying Securities (other
than a registration statement on Form S-8 or such supplements or amendments to registration statements that are outstanding and have
been declared effective by the SEC as of the date hereof (solely to the extent necessary to keep such registration statements effective
and available and not with respect to any Subsequent Placement)). “Applicable Date” means the earlier of (x) the first
date on which the resale by the Buyers of all the Registrable Securities (as defined in the Registration Rights Agreement) required to
be filed on the initial Registration Statement (as defined in the Registration Rights Agreement) pursuant to the Registration Rights
Agreement is declared effective by the SEC (and each prospectus contained therein is available for use on such date) or (y) the first
date on which all of the Registrable Securities are eligible to be resold by the Buyers pursuant to Rule 144 (or, if a Current Public
Information Failure has occurred and is continuing, such later date after which the Company has cured such Current Public Information
Failure).
(k)
Additional Issuance of Securities. So long as any Buyer beneficially owns any Securities, the Company will not, without the prior
written consent of the Required Holders, issue any Notes (other than to the Buyers as contemplated hereby) and the Company shall not
issue any other securities that would cause a breach or default under the Notes or the Warrants. The Company agrees that for the period
commencing on the date hereof and ending on the date immediately following the later to occur of (x) the 60th calendar day
after the Closing Date any (y) the thirtieth calendar day after the Applicable Date (provided that such period shall be extended by the
number of calendar days during such period and any extension thereof contemplated by this proviso on which any Registration Statement
is not effective or any prospectus contained therein is not available for use or any Current Public Information Failure exists) (the
“Restricted Period”), neither the Company nor any Company Subsidiary shall directly or indirectly issue, offer, sell,
grant any option or right to purchase, or otherwise dispose of (or announce any issuance, offer, sale, grant of any option or right to
purchase or other disposition of) any equity security or any equity-linked or related security (including, without limitation, any “equity
security” (as that term is defined under Rule 405 promulgated under the 1933 Act), any Convertible Securities (as defined below),
any debt, any preferred stock or any purchase rights) (any such issuance, offer, sale, grant, disposition or announcement (whether occurring
during the Restricted Period or at any time thereafter) is referred to as a “Subsequent Placement”). Notwithstanding
the foregoing, this Section 5(k) shall not apply in respect of the issuance of (i) shares of Common Stock or standard options to purchase
Common Stock to directors, officers or employees of the Company in their capacity as such pursuant to an Approved Stock Plan (as defined
below), provided that (1) all such issuances (taking into account the shares of Common Stock issuable upon exercise of such options)
after the date hereof pursuant to this clause (i) do not, in the aggregate, exceed more than 10% of the Common Stock issued and outstanding
immediately prior to the date hereof and (2) the exercise price of any such options is not lowered, none of such options are amended
to increase the number of shares issuable thereunder and none of the terms or conditions of any such options are otherwise materially
changed in any manner that adversely affects any of the Buyers; (ii) shares of Common Stock issued upon the conversion or exercise of
Convertible Securities (other than standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered
by clause (i) above) issued prior to the date hereof, provided that the conversion, exercise or other method of issuance (as the case
may be) of any such Convertible Security is made solely pursuant to the conversion, exercise or other method of issuance (as the case
may be) provisions of such Convertible Security that were in effect on the date immediately prior to the date of this Agreement, the
conversion, exercise or issuance price of any such Convertible Securities (other than standard options to purchase Common Stock issued
pursuant to an Approved Stock Plan that are covered by clause (i) above) is not lowered, none of such Convertible Securities (other than
standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) are amended
to increase the number of shares issuable thereunder and none of the terms or conditions of any such Convertible Securities (other than
standard options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) are otherwise
materially changed in any manner that adversely affects any of the Buyers; (iii) the Conversion Shares, and (iv) the Warrant Shares (each
of the foregoing in clauses (i) through (iv), collectively the “Excluded Securities”). “Approved Stock Plan”
means any employee benefit plan which has been approved by the board of directors of the Company prior to or subsequent to the date hereof
pursuant to which shares of Common Stock and standard options to purchase Common Stock may be issued to any employee, officer or director
for services provided to the Company in their capacity as such.
(l)
Reservation of Shares. So long as any of the Notes or Warrants remain outstanding, the Company shall take all action necessary
to at all times have authorized, and reserved for the purpose of issuance, no less than (i) the maximum number of shares of Common Stock
issuable upon conversion of all the Notes then outstanding (assuming for purposes hereof that (x) the Notes are convertible at the Conversion
Price then in effect, and (y) any such conversion shall not take into account any limitations on the conversion of the Notes set forth
in the Notes), and (ii) the maximum number of Warrant Shares issuable upon exercise of all the Warrants then outstanding (without regard
to any limitations on the exercise of the Warrants set forth therein) (collectively, the “Required Reserve Amount”);
provided that at no time shall the number of shares of Common Stock reserved pursuant to this Section 5(l) be reduced other than proportionally
in connection with any conversion, exercise and/or redemption, as applicable of Notes and Warrants. If at any time the number of shares
of Common Stock authorized and reserved for issuance is not sufficient to meet the Required Reserve Amount, the Company will promptly
take all corporate action necessary to authorize and reserve a sufficient number of shares, including, without limitation, calling a
special meeting of stockholders to authorize additional shares to meet the Company’s obligations pursuant to the Transaction Documents,
in the case of an insufficient number of authorized shares, obtain stockholder approval of an increase in such authorized number of shares,
and voting the management shares of the Company in favor of an increase in the authorized shares of the Company to ensure that the number
of authorized shares is sufficient to meet the Required Reserve Amount.
(m)
Conduct of Business. The business of the Company and the Company Subsidiaries shall not be conducted in violation of any law,
ordinance or regulation of any Governmental Entity, except where such violations would not reasonably be expected to result, either individually
or in the aggregate, in a Company Material Adverse Effect.
(n)
Other Notes; Variable Securities. So long as any Notes or Warrants remain outstanding, the Company and each Company Subsidiary
shall be prohibited from effecting or entering into an agreement to effect any Subsequent Placement involving a Variable Rate Transaction.
“Variable Rate Transaction” means a transaction in which the Company or any Company Subsidiary (i) issues or sells
any Convertible Securities either (A) at a conversion, exercise or exchange rate or other price that is based upon and/or varies with
the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such Convertible Securities,
or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of
such Convertible Securities or upon the occurrence of specified or contingent events directly or indirectly related to the business of
the Company or the market for the Common Stock, other than pursuant to a customary “weighted average” anti-dilution provision
or (ii) enters into any agreement (including, without limitation, an equity line of credit or an “at-the-market” offering)
whereby the Company or any Company Subsidiary may sell securities at a future determined price (other than standard and customary “preemptive”
or “participation” rights). Each Buyer shall be entitled to obtain injunctive relief against the Company and its Subsidiaries
to preclude any such issuance, which remedy shall be in addition to any right to collect damages.
(o)
Participation Right. At any time on or prior to the later of (i) five (5) years after the Closing Date or (ii) such time as the
Notes are no longer outstanding, neither the Company nor any Company Subsidiary shall, directly or indirectly, effect any Subsequent
Placement unless the Company shall have first complied with this Section 5(o). The Company acknowledges and agrees that the right set
forth in this Section 5(o) is a right granted by the Company, separately, to each Buyer.
(i)
At least three (3) Trading Days prior to any proposed or intended Subsequent Placement, the Company shall deliver to each Buyer a written
notice (each such notice, a “Pre-Notice”), which Pre-Notice shall not contain any information (including, without
limitation, material, non-public information) other than: (A) if the proposed Offer Notice (as defined below) constitutes or contains
material, non-public information, a statement asking whether the Investor is willing to accept material non-public information or (B)
if the proposed Offer Notice does not constitute or contain material, non-public information, (x) a statement that the Company proposes
or intends to effect a Subsequent Placement, (y) a statement that the statement in clause (x) above does not constitute material, non-public
information and (z) a statement informing such Buyer that it is entitled to receive an Offer Notice (as defined below) with respect to
such Subsequent Placement upon its written request. Upon the written request of a Buyer within two (2) Trading Days after the Company’s
delivery to such Buyer of such Pre-Notice, and only upon a written request by such Buyer, the Company shall promptly, but no later than
one (1) Trading Day after such request, deliver to such Buyer an irrevocable written notice (the “Offer Notice”) of
any proposed or intended issuance or sale or exchange (the “Offer”) of the securities being offered (the “Offered
Securities”) in a Subsequent Placement, which Offer Notice shall (A) identify and describe the Offered Securities, (B) describe
the price and other terms upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to
be issued, sold or exchanged, (C) identify the Persons (if known) to which or with which the Offered Securities are to be offered, issued,
sold or exchanged and (D) offer to issue and sell to or exchange with such Buyer in accordance with the terms of the Offer such Buyer’s
pro rata portion of 50% of the Offered Securities, provided that the number of Offered Securities which such Buyer shall have the right
to subscribe for under this Section 5(o) shall be (x) based on such Buyer’s pro rata portion of the aggregate original principal
amount of the Notes purchased hereunder by all Buyers (the “Basic Amount”), and (y) with respect to each Buyer that
elects to purchase its Basic Amount, any additional portion of the Offered Securities attributable to the Basic Amounts of other Buyers
as such Buyer shall indicate it will purchase or acquire should the other Buyers subscribe for less than their Basic Amounts (the “Undersubscription
Amount”), which process shall be repeated until each Buyer shall have an opportunity to subscribe for any remaining Undersubscription
Amount.
(ii)
To accept an Offer, in whole or in part, such Buyer must deliver a written notice to the Company prior to the end of the third (3rd)
Business Day after such Buyer’s receipt of the Offer Notice (the “Offer Period”), setting forth the portion
of such Buyer’s Basic Amount that such Buyer elects to purchase and, if such Buyer shall elect to purchase all of its Basic Amount,
the Undersubscription Amount, if any, that such Buyer elects to purchase (in either case, the “Notice of Acceptance”).
If the Basic Amounts subscribed for by all Buyers are less than the total of all of the Basic Amounts, then each Buyer who has set forth
an Undersubscription Amount in its Notice of Acceptance shall be entitled to purchase, in addition to the Basic Amounts subscribed for,
the Undersubscription Amount it has subscribed for; provided, however, if the Undersubscription Amounts subscribed for exceed the difference
between the total of all the Basic Amounts and the Basic Amounts subscribed for (the “Available Undersubscription Amount”),
each Buyer who has subscribed for any Undersubscription Amount shall be entitled to purchase only that portion of the Available Undersubscription
Amount as the Basic Amount of such Buyer bears to the total Basic Amounts of all Buyers that have subscribed for Undersubscription Amounts,
subject to rounding by the Company to the extent it deems reasonably necessary. Notwithstanding the foregoing, if the Company desires
to modify or amend the terms and conditions of the Offer prior to the expiration of the Offer Period, the Company may deliver to each
Buyer a new Offer Notice and the Offer Period shall expire on the third (3rd) Business Day after such Buyer’s receipt of such new
Offer Notice.
(iii)
The Company shall have five (5) Business Days from the expiration of the Offer Period above (A) to offer, issue, sell or exchange all
or any part of such Offered Securities as to which a Notice of Acceptance has not been given by a Buyer (the “Refused Securities”)
pursuant to a definitive agreement(s) (the “Subsequent Placement Agreement”), but only to the offerees described in
the Offer Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and interest
rates) that are not more favorable to the acquiring Person or Persons or less favorable to the Company than those set forth in the Offer
Notice and (B) to publicly announce (x) the execution of such Subsequent Placement Agreement, and (y) either (I) the consummation of
the transactions contemplated by such Subsequent Placement Agreement or (II) the termination of such Subsequent Placement Agreement,
which shall be filed with the SEC on a Current Report on Form 8-K with such Subsequent Placement Agreement and any documents contemplated
therein filed as exhibits thereto.
(iv)
In the event the Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms
specified in Section 5(o)(iii) above), then each Buyer may, at its sole option and in its sole discretion, withdraw its Notice of Acceptance
or reduce the number or amount of the Offered Securities specified in its Notice of Acceptance to an amount that shall be not less than
the number or amount of the Offered Securities that such Buyer elected to purchase pursuant to Section 5(o)(ii) above multiplied by a
fraction, (i) the numerator of which shall be the number or amount of Offered Securities the Company actually proposes to issue, sell
or exchange (including Offered Securities to be issued or sold to Buyers pursuant to this Section 5(o) prior to such reduction) and (ii)
the denominator of which shall be the original amount of the Offered Securities. In the event that any Buyer so elects to reduce the
number or amount of Offered Securities specified in its Notice of Acceptance, the Company may not issue, sell or exchange more than the
reduced number or amount of the Offered Securities unless and until such securities have again been offered to the Buyers in accordance
with Section 5(o)(i) above.
(v)
Upon the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, such Buyer shall acquire from the
Company, and the Company shall issue to such Buyer, the number or amount of Offered Securities specified in its Notice of Acceptance,
as reduced pursuant to Section 5(o)(iv) above if such Buyer has so elected, upon the terms and conditions specified in the Offer. The
purchase by such Buyer of any Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and
such Buyer of a separate purchase agreement relating to such Offered Securities reasonably satisfactory in form and substance to such
Buyer and its counsel.
(vi)
Any Offered Securities not acquired by a Buyer or other Persons in accordance with this Section 5(o) may not be issued, sold or exchanged
until they are again offered to such Buyer under the procedures specified in this Agreement.
(vii)
The Company and each Buyer agree that if any Buyer elects to participate in the Offer, (x) neither the Subsequent Placement Agreement
with respect to such Offer nor any other transaction documents related thereto (collectively, the “Subsequent Placement Documents”)
shall include any term or provision whereby such Buyer shall be required to agree to any restrictions on trading as to any securities
of the Company or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in
connection with, any agreement previously entered into with the Company or any instrument received from the Company, (y) shall include
any representation, warranty or covenant more adverse to such Buyer than as set forth in the Transaction Documents and (z) any registration
rights set forth in such Subsequent Placement Documents shall be similar in all material respects to the registration rights contained
in the Registration Rights Agreement.
(viii)
Notwithstanding anything to the contrary in this Section 5(o) and unless otherwise agreed to by such Buyer, the Company shall either
confirm in writing to such Buyer that the transaction with respect to the Subsequent Placement has been abandoned or shall publicly disclose
its intention to issue the Offered Securities, in either case, in such a manner such that such Buyer will not be in possession of any
material, non-public information, by the fifth (5th) Business Day following delivery of the Offer Notice. If by such fifth
(5th) Business Day, no public disclosure regarding a transaction with respect to the Offered Securities has been made, and
no notice regarding the abandonment of such transaction has been received by such Buyer, such transaction shall be deemed to have been
abandoned and such Buyer shall not be in possession of any material, non-public information with respect to the Company or any Company
Subsidiary. Should the Company decide to pursue such transaction with respect to the Offered Securities, the Company shall provide such
Buyer with another Offer Notice and such Buyer will again have the right of participation set forth in this Section 5(o). The Company
shall not be permitted to deliver more than one such Offer Notice to such Buyer in any sixty (60) day period, except as expressly contemplated
by the last sentence of Section 5(o)(ii).
(ix)
The restrictions contained in this Section 5(o) shall not apply in connection with the issuance of any Excluded Securities. The Company
shall not circumvent the provisions of this Section 5(o) by providing terms or conditions to one Buyer that are not provided to all.
(p)
Dilutive Issuances. For so long as any Notes or Warrants remain outstanding, the Company shall not, in any manner, enter into
or affect any Subsequent Placement if the effect of such Subsequent Placement is to cause the Company to be required to issue upon conversion
of any Notes or exercise of any Warrant any shares of Common Stock in excess of that number of shares of Common Stock which the Company
may issue upon conversion of the Notes and exercise of the Warrants without breaching the Company’s obligations under the rules
or regulations of the Principal Market.
(q)
Passive Foreign Investment Company. The Company shall conduct its business, and shall cause its Subsidiaries to conduct their
respective businesses, in such a manner as will ensure that the Company will not be deemed to constitute a passive foreign investment
company within the meaning of Section 1297 of the Code.
(r)
Restriction on Redemption and Cash Dividends. So long as any Notes are outstanding, the Company shall not, directly or indirectly,
redeem, or declare or pay any cash dividend or distribution on, any securities of the Company without the prior express written consent
of the Buyers, except for dividends or distributions in connection with the Company’s spin-off or sale of all or any part, in one
or more transactions, of its interests in EVNT Platform, LLC (d/b/a Emmersive Entertainment) (the “EVNT Spin-Off”),
substantially consistent in all respects with such transactions described to the Buyers prior to the date hereof and the Notes and Warrants
participate in the EVNT Spin-Off on an as-converted basis.
(s)
Corporate Existence. So long as any Buyer beneficially owns any Notes or Warrants, the Company shall not be party to any Fundamental
Transaction (as defined in the Notes) unless the Company is in compliance with the applicable provisions governing Fundamental Transactions
set forth in the Notes and the Warrants.
(t)
Stock Splits. Until the Notes and all notes issued pursuant to the terms thereof are no longer outstanding, the Company shall
not effect any stock combination, reverse stock split or other similar transaction (or make any public announcement or disclosure with
respect to any of the foregoing) without the prior written consent of the Required Holders (as defined below).
(u)
Conversion and Exercise Procedures. Each of the form of Exercise Notice (as defined in the Warrants) included in the Warrants
and the form of Conversion Notice (as defined in the Notes) included in the Notes set forth the totality of the procedures required of
a Buyer in order to exercise the Warrants or convert the Notes. Except as provided in Section 6(d), no additional legal opinion, other
information or instructions shall be required of the Buyers to exercise their Warrants or convert their Notes. The Company shall honor
exercises of the Warrants and conversions of the Notes and shall deliver the Conversion Shares and Warrant Shares in accordance with
the terms, conditions and time periods set forth in the Notes and Warrants.
(v)
Regulation M. The Company will not take any action prohibited by Regulation M under the 1934 Act, in connection with the distribution
of the Securities contemplated hereby.
(w)
General Solicitation. None of the Company, any of its affiliates (as defined in Rule 501(b) under the 1933 Act) or any person
acting on behalf of the Company or such affiliate will solicit any offer to buy or offer or sell the Securities by means of any form
of general solicitation or general advertising within the meaning of Regulation D, including: (i) any advertisement, article, notice
or other communication published in any newspaper, magazine or similar medium or broadcast over television or radio; and (ii) any seminar
or meeting whose attendees have been invited by any general solicitation or general advertising.
(x)
Integration. None of the Company, any of its affiliates (as defined in Rule 501(b) under the 1933 Act), or any person acting on
behalf of the Company or such affiliate will sell, offer for sale, or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in the 1933 Act) which will be integrated with the sale of the Securities in a manner which would require the registration
of the Securities under the 1933 Act or require stockholder approval under the rules and regulations of the Principal Market and the
Company will take all action that is appropriate or necessary to assure that its offerings of other securities will not be integrated
for purposes of the 1933 Act or the rules and regulations of the Principal Market, with the issuance of Securities contemplated hereby.
(y)
Notice of Disqualification Events. The Company will notify the Buyers in writing, prior to the Closing Date of (i) any Disqualification
Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a Disqualification Event
relating to any Issuer Covered Person.
(z)
Stockholder Approval. By no later than sixty (60) calendar days after the Closing Date, the
Company shall file with the SEC a definitive proxy statement, in the form which has been previously reviewed by the Buyers and Schulte
Roth & Zabel LLP, at the expense of the Company, for a special meeting of holders of Common Stock (the “Stockholder Meeting”),
soliciting each such stockholder’s affirmative vote at the Stockholder Meeting for approval of resolutions (“Stockholder
Resolutions”) providing for (x) the issuance of all the shares of Common Stock issuable pursuant to the terms of the Notes
and upon exercise of the Warrants without any limitation and without any floor to the Conversion Price (as defined in the Notes) or the
Exercise Price (as defined in the Warrants) in compliance with the rules and regulations of the Principal Market (the “Stockholder
Approval”), (y) the “Stockholder Approval” as defined in the Securities Purchase Agreement, dated as of January
21, 2021, between the Company and the buyers named therein (the “January Stockholder Approval”) and (z) the “Stockholder
Approval” as defined in the Securities Purchase Agreement, dated as of February 18, 2021, between the Company and the buyers named
therein (the “February Stockholder Approval”), and the Company shall use its best efforts to solicit its stockholders’
approval of such resolutions, including, without limitation, by causing (x) the Company’s Board of Directors to unanimously recommend
to the stockholders of the Company that they approve such resolutions, (y) its officers and directors who hold shares of Common Stock
to be present at the Stockholder Meeting for quorum purposes and (z) such officers and directors to vote their respective shares of Common
Stock in accordance with the Company’s Board of Directors recommendation. The Stockholder Meeting shall be promptly called and
held not later than one hundred twenty (120) calendar days after the Closing Date (the “Stockholder Meeting Deadline”).
The Company shall be obligated to use its best efforts to obtain approval of each of the Stockholder Resolutions by the Stockholder Meeting
Deadline. In the event the Principal Market has not approved the transactions contemplated by the Transaction Documents and Stockholder
Approval is not obtained on or prior to the Stockholder Meeting Deadline, the Holder (as defined in the Warrants) may deliver a written
notice (an “Alternate Exercise Notice”) to the Company at any time during the period beginning on the Stockholder
Meeting Deadline and ending on the Expiration Date (as defined in the Warrant) indicating that in lieu of issuing and delivering Warrant
Shares to such holder, the Company shall promptly, but in any event within one (1) Business Day of such holder’s delivery of such
notice to the Company, pay an aggregate cash amount to such holder by wire transfer of immediately available funds pursuant to such holder’s
wiring instructions equal to $40,000,000 to such holder in exchange for the cancellation of the Warrant. Notwithstanding anything in
the Transaction Documents to the contrary, this payment shall not be deemed a prepayment or trigger any other payment. In the event that
the Holder (as defined in the Warrants) shall sell or otherwise transfer any portion of the Warrant, the transferee shall be allocated
a pro rata portion of such cash payment with respect to such portion of the Warrant transferred.
(bb)
Collateral Agent.
(i)
Each Buyer hereby (a) appoints Hudson Bay Master Fund Ltd as the collateral agent hereunder and under the Security Documents (in such
capacity, the “Collateral Agent”), and (b) authorizes the Collateral Agent (and its officers, directors, employees
and agents) to take such action on such Buyer’s behalf in accordance with the terms hereof and thereof. The Collateral Agent shall
not have, by reason hereof or pursuant to any Security Documents, a fiduciary relationship in respect of any Buyer. Neither the Collateral
Agent nor any of its officers, directors, employees and agents shall have any liability to any Buyer for any action taken or omitted
to be taken in connection hereof or the Security Documents except to the extent caused by its own gross negligence or willful misconduct,
and each Buyer agrees to defend, protect, indemnify and hold harmless the Collateral Agent and all of its officers, directors, employees
and agents (collectively, the “Collateral Agent Indemnitees”) from and against any losses, damages, liabilities, obligations,
penalties, actions, judgments, suits, fees, costs and expenses (including, without limitation, reasonable attorneys’ fees, costs
and expenses) incurred by such Collateral Agent Indemnitee, whether direct, indirect or consequential, arising from or in connection
with the performance by such Collateral Agent Indemnitee of the duties and obligations of Collateral Agent pursuant hereto or any of
the Security Documents.
(ii)
The Collateral Agent shall be entitled to rely upon any written notices, statements, certificates, orders or other documents or any telephone
message believed by it in good faith to be genuine and correct and to have been signed, sent or made by the proper Person, and with respect
to all matters pertaining to this Agreement or any of the other Transaction Documents and its duties hereunder or thereunder, upon advice
of counsel selected by it.
(iii)
The Collateral Agent may resign from the performance of all its functions and duties hereunder and under the Notes and the Security Documents
at any time by giving at least ten (10) Business Days prior written notice to the Company and each holder of the Notes. Such resignation
shall take effect upon the acceptance by a successor Collateral Agent of appointment as provided below. Upon any such notice of resignation,
the Required Holders shall appoint a successor Collateral Agent. Upon the acceptance of the appointment as Collateral Agent, such successor
Collateral Agent shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Collateral Agent,
and the retiring Collateral Agent shall be discharged from its duties and obligations under this Agreement, the Notes and the Security
Agreement. After any Collateral Agent’s resignation hereunder, the provisions of this Section 4(aa) shall inure to its benefit.
If a successor Collateral Agent shall not have been so appointed within said ten (10) Business Day period, the retiring Collateral Agent
shall then appoint a successor Collateral Agent who shall serve until such time, if any, as the holders of a majority of the outstanding
principal amount of Notes appoints a successor Collateral Agent as provided above.
(iv)
The Company hereby covenants and agrees to take all actions as promptly as practicable reasonably requested by either the Required Holders
or the Collateral Agent (or its successor), from time to time pursuant to the terms of this Section 5(bb), to secure a successor Collateral
Agent satisfactory to such requesting part(y)(ies), in their sole discretion, including, without limitation, by paying all fees of such
successor Collateral Agent, by having the Company agree to indemnify any successor Collateral Agent and by each of the Company executing
a collateral agency agreement or similar agreement and/or any amendment to the Security Documents reasonably requested or required by
the successor Collateral Agent.
(cc)
DLA Opinion. On or prior to ten (10) calendar days from the date hereof, Zash agrees to deliver, or cause to be delivered, an
opinion from DLA Piper LLP (US), Zash’s and ZVV’s counsel, limited to due authorization, enforceability, execution and delivery,
Investment Company Act status, no conflicts and perfection, in the form reasonably acceptable to Buyer.
(dd)
Closing Documents. On or prior to fourteen (14) calendar days after the Closing Date, the Company agrees to deliver, or cause
to be delivered, to each Buyer and Schulte Roth & Zabel LLP a complete closing set of the executed Transaction Documents, Securities
and any other document required to be delivered to any party pursuant to Section 8 hereof or otherwise.
6.
REGISTER; TRANSFER AGENT INSTRUCTIONS; LEGEND.
(a)
Register. The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may
designate by notice to each holder of Securities), a register for the Notes and the Warrants in which the Company shall record the name
and address of the Person in whose name the Notes and the Warrants have been issued (including the name and address of each transferee),
the principal amount of the Notes held by such Person, the number of Conversion Shares issuable pursuant to the terms of the Notes and
the number of Warrant Shares issuable upon exercise of the Warrants held by such Person. The Company shall keep the register open and
available at all times during business hours for inspection of any Buyer or its legal representatives.
(b)
Transfer Agent Instructions. The Company shall issue irrevocable instructions to its transfer agent and any subsequent transfer
agent (as applicable, the “Transfer Agent”) in a form acceptable to each of the Buyers (the “Irrevocable
Transfer Agent Instructions”) to issue certificates or credit shares to the applicable balance accounts at The Depository Trust
Company (“DTC”), registered in the name of each Buyer or its respective nominee(s), for the Conversion Shares and
the Warrant Shares in such amounts as specified from time to time by each Buyer to the Company upon conversion of the Notes or the exercise
of the Warrants (as the case may be). The Company represents and warrants that no instruction other than the Irrevocable Transfer Agent
Instructions referred to in this Section 6(b), and stop transfer instructions to give effect to Section 2(g) hereof, will be given by
the Company to its transfer agent with respect to the Securities, and that the Securities shall otherwise be freely transferable on the
books and records of the Company, as applicable, to the extent provided in this Agreement and the other Transaction Documents. If a Buyer
effects a sale, assignment or transfer of the Securities in accordance with Section 2(g), the Company shall permit the transfer and shall
promptly instruct its transfer agent to issue one or more certificates or credit shares to the applicable balance accounts at DTC in
such name and in such denominations as specified by such Buyer to effect such sale, transfer or assignment. In the event that such sale,
assignment or transfer involves Conversion Shares or Warrant Shares sold, assigned or transferred pursuant to an effective registration
statement or in compliance with Rule 144, the transfer agent shall issue such shares to such Buyer, assignee or transferee (as the case
may be) without any restrictive legend in accordance with Section 6(d) below. The Company acknowledges that a breach by it of its obligations
hereunder will cause irreparable harm to a Buyer. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations
under this Section 6(b) will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions
of this Section 6(b), that a Buyer shall be entitled, in addition to all other available remedies, to an order and/or injunction restraining
any breach and requiring immediate issuance and transfer, without the necessity of showing economic loss and without any bond or other
security being required. The Company shall cause its counsel to issue the legal opinion referred to in the Irrevocable Transfer Agent
Instructions to the Company’s transfer agent on each Effective Date (as defined in the Registration Rights Agreement). Any fees
(with respect to the transfer agent, counsel to the Company or otherwise) associated with the issuance of such opinion or the removal
of any legends on any of the Securities shall be borne by the Company.
(c)
Legends. Each Buyer understands that the Securities have been issued (or will be issued in the case of the Conversion Shares and
the Warrant Shares) pursuant to an exemption from registration or qualification under the 1933 Act and applicable state securities laws,
and except as set forth below, the Securities shall bear any legend as required by the “blue sky” laws of any state and a
restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of such stock certificates):
[NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE]
[EXERCISABLE] HAVE BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN] REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE
OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF LEGAL
COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING,
THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
(d)
Removal of Legends. Certificates evidencing Securities shall not be required to contain the legend set forth in Section 6(c) above
or any other legend (i) while a registration statement (including a Registration Statement) covering the resale of such Securities is
effective under the 1933 Act, (ii) following any sale of such Securities pursuant to Rule 144 (assuming the transferor is not an affiliate
of the Company), (iii) if such Securities are eligible to be sold, assigned or transferred under Rule 144 (provided that a Buyer provides
the Company with reasonable assurances that such Securities are eligible for sale, assignment or transfer under Rule 144 which shall
not include an opinion of Buyer’s counsel), (iv) in connection with a sale, assignment or other transfer (other than under Rule
144), provided that such Buyer provides the Company with an opinion of counsel to such Buyer, in a generally acceptable form, to the
effect that such sale, assignment or transfer of the Securities may be made without registration under the applicable requirements of
the 1933 Act or (v) if such legend is not required under applicable requirements of the 1933 Act (including, without limitation, controlling
judicial interpretations and pronouncements issued by the SEC). If a legend is not required pursuant to the foregoing, the Company shall
no later than two (2) Trading Days (or such earlier date as required pursuant to the 1934 Act or other applicable law, rule or regulation
for the settlement of a trade initiated on the date such Buyer delivers such legended certificate representing such Securities to the
Company or three (3) Trading Days in the case of such Buyer’s first time delivering a legended certificate representing such Securities
to the Company) following the delivery by a Buyer to the Company or the transfer agent (with notice to the Company) of a legended certificate
representing such Securities (endorsed or with stock powers attached, signatures guaranteed, and otherwise in form necessary to affect
the reissuance and/or transfer, if applicable), together with any other deliveries from such Buyer as may be required above in this Section
6(d), as directed by such Buyer, either: (A) provided that the Company’s transfer agent is participating in the DTC Fast Automated
Securities Transfer Program and such Securities are Conversion Shares or Warrant Shares, credit the aggregate number of shares of Common
Stock to which such Buyer shall be entitled to such Buyer’s or its designee’s balance account with DTC through its Deposit/Withdrawal
at Custodian system or (B) if the Company’s transfer agent is not participating in the DTC Fast Automated Securities Transfer Program,
issue and deliver (via reputable overnight courier) to such Buyer, a certificate representing such Securities that is free from all restrictive
and other legends, registered in the name of such Buyer or its designee (the date by which such credit is so required to be made to the
balance account of such Buyer’s or such Buyer’s designee with DTC or such certificate is required to be delivered to such
Buyer pursuant to the foregoing is referred to herein as the “Required Delivery Date”, and the date such shares of
Common Stock are actually delivered without restrictive legend to such Buyer or such Buyer’s designee with DTC, as applicable,
the “Share Delivery Date”). The Company shall be responsible for any transfer agent fees or DTC fees with respect
to any issuance of Securities or the removal of any legends with respect to any Securities in accordance herewith.
(e)
Failure to Timely Deliver; Buy-In. If the Company fails to fail, for any reason or for no reason, to issue and deliver (or cause
to be delivered) to a Buyer (or its designee) by the Required Delivery Date, either (I) if the Transfer Agent is not participating in
the DTC Fast Automated Securities Transfer Program, a certificate for the number of Conversion Shares or Warrant Shares (as the case
may be) to which such Buyer is entitled and register such Conversion Shares or Warrant Shares (as the case may be) on the Company’s
share register or, if the Transfer Agent is participating in the DTC Fast Automated Securities Transfer Program, to credit the balance
account of such Buyer or such Buyer’s designee with DTC for such number of Conversion Shares or Warrant Shares (as the case may
be) submitted for legend removal by such Buyer pursuant to Section 6(d) above or (II) if the Registration Statement covering the resale
of the Conversion Shares or Warrant Shares (as the case may be) submitted for legend removal by such Buyer pursuant to Section 6(d) above
(the “Unavailable Shares”) is not available for the resale of such Unavailable Shares and the Company fails to promptly,
but in no event later than as required pursuant to the Registration Rights Agreement (x) so notify such Buyer and (y) deliver the Conversion
Shares or Warrant Shares, as applicable, electronically without any restrictive legend by crediting such aggregate number of Conversion
Shares or Warrant Shares (as the case may be) submitted for legend removal by such Buyer pursuant to Section 6(d) above to such Buyer’s
or its designee’s balance account with DTC through its Deposit/Withdrawal At Custodian system (the event described in the immediately
foregoing clause (II) is hereinafter referred as a “Notice Failure” and together with the event described in clause
(I) above, a “Delivery Failure”), then, in addition to all other remedies available to such Buyer, the Company shall
pay in cash to such Buyer on each day after the Share Delivery Date and during such Delivery Failure an amount equal to 2% of the product
of (A) the sum of the number of shares of Common Stock not issued to such Buyer on or prior to the Required Delivery Date and to which
such Buyer is entitled, and (B) any trading price of the Common Stock selected by such Buyer in writing as in effect at any time during
the period beginning on the date of the delivery by such Buyer to the Company of the applicable Conversion Shares or Warrant Shares (as
the case may be) and ending on the applicable Share Delivery Date. In addition to the foregoing, if on or prior to the Required Delivery
Date either (I) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, the Company shall fail
to issue and deliver a certificate to a Buyer and register such shares of Common Stock on the Company’s share register or, if the
Transfer Agent is participating in the DTC Fast Automated Securities Transfer Program, credit the balance account of such Buyer or such
Buyer’s designee with DTC for the number of shares of Common Stock to which such Buyer submitted for legend removal by such Buyer
pursuant to Section 6(d) above (ii) below or (II) a Notice Failure occurs, and if on or after such Trading Day such Buyer purchases (in
an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Buyer of shares of Common
Stock submitted for legend removal by such Buyer pursuant to Section 6(d) above that such Buyer is entitled to receive from the Company
(a “Buy-In”), then the Company shall, within two (2) Trading Days (or three (3) Trading Days if it in the case of
such Buyer’s first time delivering a legended certificate to the Company) after such Buyer’s request and in such Buyer’s
discretion, either (i) pay cash to such Buyer in an amount equal to such Buyer’s total purchase price (including brokerage commissions
and other out-of-pocket expenses, if any, for the shares of Common Stock so purchased) (the “Buy-In Price”), at which
point the Company’s obligation to so deliver such certificate or credit such Buyer’s balance account shall terminate and
such shares shall be cancelled, or (ii) promptly honor its obligation to so deliver to such Buyer a certificate or certificates or credit
the balance account of such Buyer or such Buyer’s designee with DTC representing such number of shares of Common Stock that would
have been so delivered if the Company timely complied with its obligations hereunder and pay cash to such Buyer in an amount equal to
the excess (if any) of the Buy-In Price over the product of (A) such number of shares of Conversion Shares or Warrant Shares (as the
case may be) that the Company was required to deliver to such Buyer by the Required Delivery Date multiplied by (B) the lowest Closing
Sale Price (as defined in the Warrants) of the Common Stock on any Trading Day during the period commencing on the date of the delivery
by such Buyer to the Company of the applicable Conversion Shares or Warrant Shares (as the case may be) and ending on the date of such
delivery and payment under this clause (ii). Nothing shall limit such Buyer’s right to pursue any other remedies available to it
hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive relief with respect
to the Company’s failure to timely deliver certificates representing shares of Common Stock (or to electronically deliver such
shares of Common Stock) as required pursuant to the terms hereof. Notwithstanding anything herein to the contrary, with respect to any
given Notice Failure and/or Delivery Failure, this Section 6(e) shall not apply to the applicable Buyer the extent the Company has already
paid such amounts in full to such Buyer with respect to such Notice Failure and/or Delivery Failure, as applicable, pursuant to the analogous
sections of the Note or Warrant, as applicable, held by such Buyer.
(f)
FAST Compliance. While any Warrants remain outstanding, the Company shall maintain a transfer agent that participates in the DTC
Fast Automated Securities Transfer Program.
7.
CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.
The
obligation of the Company hereunder to issue and sell the Notes and the related Warrants to each Buyer at the Closing is subject to the
satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Company’s
sole benefit and may be waived by the Company at any time in its sole discretion by providing each Buyer with prior written notice thereof:
(i)
Such Buyer shall have executed each of the other Transaction Documents to which it is a party and delivered the same to the Company.
(ii)
Such Buyer and each other Buyer shall have delivered to the Company the Purchase Price (less, in the case of any Buyer, the amounts withheld
pursuant to Section 5(g)) for the Note and the related Warrants being purchased by such Buyer at the Closing by wire transfer of immediately
available funds in accordance with the Flow of Funds Letter.
(iii)
The representations and warranties of such Buyer shall be true and correct in all material respects as of the date when made and as of
the Closing Date as though originally made at that time (except for representations and warranties that speak as of a specific date,
which shall be true and correct as of such specific date), and such Buyer shall have performed, satisfied and complied in all material
respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by such
Buyer at or prior to the Closing Date.
8.
CONDITIONS TO EACH BUYER’S OBLIGATION TO PURCHASE.
The
obligation of each Buyer hereunder to purchase its Note and its related Warrants at the Closing is subject to the satisfaction, at or
before the Closing Date, of each of the following conditions, provided that these conditions are for each Buyer’s sole benefit
and may be waived by such Buyer at any time in its sole discretion by providing the Issuers with prior written notice thereof:
(i)
The Issuers and each Subsidiary (as the case may be) shall have duly executed and delivered to such Buyer each of the Transaction Documents
to which it is a party and the Company shall have duly executed and delivered to such Buyer (A) a Note in such original principal amount
as is set forth across from such Buyer’s name in column (3) of the Schedule of Buyers and (B) a Warrant initially exercisable for
such aggregate number of Warrant Shares as is set forth across from such Buyer’s name in column (4) of the Schedule of Buyers,
in each case, as being purchased by such Buyer at the Closing pursuant to this Agreement.
(ii)
Such Buyer shall have received the opinion of Lucosky Brookman LLP, the Company’s counsel, dated as of the Closing Date, in the
form acceptable to such Buyer.
(iii)
Intentionally Omitted.
(iv)
The Company shall have delivered to such Buyer a copy of the Irrevocable Transfer Agent Instructions, in the form acceptable to such
Buyer, which instructions shall have been delivered to and acknowledged in writing by the Company’s transfer agent.
(v)
The Company shall have delivered to such Buyer a certificate evidencing the formation and good standing of each Issuer and each of their
Subsidiaries in each such entity’s jurisdiction of formation issued by the Secretary of State (or comparable office) of such jurisdiction
of formation as of a date within ten (10) days of the Closing Date.
(vi)
The Company shall have delivered to such Buyer a certificate evidencing each Issuer’s and each Subsidiary’s qualification
as a foreign corporation and good standing issued by the Secretary of State (or comparable office) of each jurisdiction in which such
Issuer and each Subsidiary conducts business and is required to so qualify, as of a date within ten (10) days of the Closing Date.
(vii)
The Company shall have delivered to such Buyer a certified copy of the Company Articles of Incorporation as certified by the Nevada Secretary
of State within ten (10) days of the Closing Date. Zash shall have delivered to such Buyer a certified copy of its certificate of incorporation
as certified by the Delaware Secretary of State within ten (10) days of the Closing Date. ZVV shall have delivered to such Buyer a certified
copy of its Certificate of Formation as certified by the Delaware Secretary of State within ten (10) days of the Closing Date.
(viii)
Each Subsidiary shall have delivered to such Buyer a certified copy of its certificate of incorporation (or such equivalent organizational
document) as certified by the Secretary of State (or comparable office) of such Subsidiary’s jurisdiction of incorporation within
ten (10) days of the Closing Date.
(ix)
The Company and each Company Subsidiary shall have delivered to such Buyer a certificate, in the form acceptable to such Buyer, executed
by the Secretary of the Company and each Company Subsidiary and dated as of the Closing Date, as to (i) the resolutions consistent with
Section 3(b) as adopted by the Company’s and each Company Subsidiary’s board of directors in a form reasonably acceptable
to such Buyer, (ii) the Company Articles of Incorporation and the organizational documents of each Company Subsidiary and (iii) the Company
Bylaws of the Company and the bylaws of each Company Subsidiary, each as in effect at the Closing.
(x)
Each of Zash, the Zash Subsidiaries, ZVV and the ZVV Subsidiaries shall have delivered to such Buyer a certificate, in the form acceptable
to such Buyer, executed by the Secretary of the Company and each such subsidiary and dated as of the Closing Date, as to (i) the resolutions
consistent with Section 4(b) as adopted by such entity’s board of directors in a form reasonably acceptable to such Buyer, (ii)
the organizational documents of each of Zash, the Zash Subsidiaries, ZVV and the ZVV Subsidiaries and (iii) the bylaws of each of Zash,
the Zash Subsidiaries, ZVV and the ZVV Subsidiaries, each as in effect at the Closing.
(xi)
All conditions to the closing of the Lomotif Transaction, other those conditions related to the payment of the purchase price, shall
have been satisfied.
(xii)
The Lomotif Transaction shall have been consummated, or substantially simultaneously with the issuance and sale of the Notes and Warrants,
shall be consummated, in accordance with the terms of the Agreement to Complete a Plan of Merger between the Company, Vinco Acquisition
Corporation and Zash, dated January 20, 2021, as amended by the First Amendment thereto, dated March 30, 2021 (the “Lomotif
Agreement”) without giving effect to any modifications, amendments, consents or waivers thereto by the Company or its Subsidiaries
that are materially adverse to the Company or any Buyer without the prior consent of the Required Holders, such consent not to be unreasonably
withheld, delayed or conditioned (it being understood that any increase in the cash purchase price of, or consideration for, the Lomotif
Transaction under the Lomotif Agreement or any amendment to the definition of “Material Adverse Effect” in the Lomotif Agreement
shall be deemed to be materially adverse to the interests of the Buyers).
(xiii)
The Company shall have delivered to each Buyer all executed documents related to the consummation of the Lomotif Transaction, in a form
acceptable to each such Buyer.
(xiv)
Each and every representation and warranty of each Issuer shall be true and correct as of the date when made and as of the Closing Date
as though originally made at that time (except for representations and warranties that speak as of a specific date, which shall be true
and correct as of such specific date) and each Issuer shall have performed, satisfied and complied in all respects with the covenants,
agreements and conditions required to be performed, satisfied or complied with by such Issuer at or prior to the Closing Date. Such Buyer
shall have received a certificate, duly executed by the Chief Executive Officer of each Issuer, dated as of the Closing Date, to the
foregoing effect and as to such other matters as may be reasonably requested by such Buyer in the form acceptable to such Buyer.
(xv)
The Company shall have delivered to such Buyer a letter from the Company’s transfer agent certifying the number of shares of Common
Stock outstanding on the Closing Date immediately prior to the Closing.
(xvi)
The Common Stock (A) shall be designated for quotation or listed (as applicable) on the Principal Market and (B) shall not have been
suspended, as of the Closing Date, by the SEC or the Principal Market from trading on the Principal Market nor shall suspension by the
SEC or the Principal Market have been threatened, as of the Closing Date, either (I) in writing by the SEC or the Principal Market or
(II) by falling below the minimum maintenance requirements of the Principal Market.
(xvii)
The Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the sale of
the Securities other than the Principal Market.
(xviii)
No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or Governmental Entity of competent jurisdiction that prohibits the consummation of any of the transactions contemplated
by the Transaction Documents.
(xix)
Since the date of execution of this Agreement, no event or series of events shall have occurred that reasonably would have or result
in a Company Material Adverse Effect.
(xx)
Such Buyer shall have received a letter on the letterhead of the Company, duly executed by the Chief Executive Officer of the Company,
setting forth the wire amounts of each Buyer and the wire transfer instructions of the Company (the “Flow of Funds Letter”).
(xxi)
Such Buyer shall have received a valuation report with respect to Lomotif reflecting a valuation of no less than $500,000,000.
(xxii)
Each of Zash, ZVV, and the Company’s Subsidiaries shall have executed and delivered to such Buyer the Guarantee Agreement.
(xxiii)
The Collateral Agent shall have received all documents, instruments, filings and recordations and searches reasonably necessary in connection
with the perfection of a valid security interest in the Collateral of the Company and each of the Company Subsidiaries, and, in the case
of UCC filings, such filings shall be in proper form for filing.
(xxiv)
The Collateral Agent shall have received the results of searches (including comparable searches in any jurisdiction outside the United
States) for any effective UCC financing statements, tax liens or judgment liens filed against the Company or any of the Company Subsidiaries
or any property of any of the foregoing, which results shall not show any such liens (other than Permitted Liens acceptable to the Collateral
Agent).
(xxv)
The Collateral Agent shall have received the Security Agreement, duly executed by the Company and each of the Company Subsidiaries, together
with the original stock certificates representing all of the equity interests and all promissory notes required to be pledged thereunder,
accompanied by undated stock powers and allonges executed in blank and other proper instruments of transfer.
(xxvi)
The Collateral Agent shall have received an account control agreement with respect to each account referred to in Schedule IV of the
Security Agreement (such subject account, the “Control Account”), in form and substance satisfactory to the Collateral
Agent, duly executed by the Company and such bank or financial institution and at least $65,000,000 in cash shall have been deposited
in the Control Account as set forth in Section 13(p) of the Note.
(xxvii)
Each Issuer and their Subsidiaries shall have delivered to such Buyer such other documents, instruments or certificates relating to the
transactions contemplated by this Agreement as such Buyer or its counsel may reasonably request.
9.
TERMINATION.
In
the event that the Closing shall not have occurred with respect to a Buyer within five (5) days of the date hereof, then such Buyer shall
have the right to terminate its obligations under this Agreement with respect to itself at any time on or after the close of business
on such date without liability of such Buyer to any other party; provided, however, (i) the right to terminate this Agreement under this
Section 9 shall not be available to such Buyer if the failure of the transactions contemplated by this Agreement to have been consummated
by such date is the result of such Buyer’s breach of this Agreement and (ii) the abandonment of the sale and purchase of the Notes
and the Warrants shall be applicable only to such Buyer providing such written notice, provided further that no such termination shall
affect any obligation of any of the Issuers under this Agreement to reimburse such Buyer for the expenses described in Section 5(g) above.
Nothing contained in this Section 9 shall be deemed to release any party from any liability for any breach by such party of the terms
and provisions of this Agreement or the other Transaction Documents or to impair the right of any party to compel specific performance
by any other party of its obligations under this Agreement or the other Transaction Documents.
10.
MISCELLANEOUS.
(a)
Governing Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of
this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict
of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of
any jurisdictions other than the State of New York. Each Issuer 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 under any of the other Transaction Documents or with any transaction contemplated hereby or thereby, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding
is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit,
action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to
limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude
any Buyer from bringing suit or taking other legal action against any Issuer in any other jurisdiction to collect on the each Issuer’s
obligations to such Buyer or to enforce a judgment or other court ruling in favor of such Buyer. EACH PARTY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION
DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY
OR THEREBY.
(b)
Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the
same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event
that any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an
executed signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such signature page were an original thereof. Counterparts may be delivered
via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com)
or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and
effective for all purposes.
(c)
Headings; Gender. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation
of, this Agreement. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine,
neuter, singular and plural forms thereof. The terms “including,” “includes,” “include” and words
of like import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,”
“hereunder,” “hereof” and words of like import refer to this entire Agreement instead of just the provision in
which they are found.
(d)
Severability; Maximum Payment Amounts. If any provision of this Agreement is prohibited by law or otherwise determined to be invalid
or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall
be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such
provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues
to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature,
invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal
obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties
will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s),
the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s). Notwithstanding anything
to the contrary contained in this Agreement or any other Transaction Document (and without implication that the following is required
or applicable), it is the intention of the parties that in no event shall amounts and value paid by any Issuer and/or any of their Subsidiaries
(as the case may be), or payable to or received by any of the Buyers, under the Transaction Documents (including without limitation,
any amounts that would be characterized as “interest” under applicable law) exceed amounts permitted under any applicable
law. Accordingly, if any obligation to pay, payment made to any Buyer, or collection by any Buyer pursuant the Transaction Documents
is finally judicially determined to be contrary to any such applicable law, such obligation to pay, payment or collection shall be deemed
to have been made by mutual mistake of such Buyer, the Issuers and their Subsidiaries and such amount shall be deemed to have been adjusted
with retroactive effect to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by the applicable
law. Such adjustment shall be effected, to the extent necessary, by reducing or refunding, at the option of such Buyer, the amount of
interest or any other amounts which would constitute unlawful amounts required to be paid or actually paid to such Buyer under the Transaction
Documents. For greater certainty, to the extent that any interest, charges, fees, expenses or other amounts required to be paid to or
received by such Buyer under any of the Transaction Documents or related thereto are held to be within the meaning of “interest”
or another applicable term to otherwise be violative of applicable law, such amounts shall be pro-rated over the period to which they
relate.
(e)
Entire Agreement; Amendments. This Agreement, the other Transaction Documents and the schedules and exhibits attached hereto and
thereto and the instruments referenced herein and therein supersede all other prior oral or written agreements between the Buyers, the
Issuers, their Subsidiaries, their affiliates and Persons acting on their behalf, including, without limitation, any transactions by
any Buyer with respect to Common Stock or the Securities, and the other matters contained herein and therein, and this Agreement, the
other Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments referenced herein and therein
contain the entire understanding of the parties solely with respect to the matters covered herein and therein; provided, however, nothing
contained in this Agreement or any other Transaction Document shall (or shall be deemed to) (i) have any effect on any agreements any
Buyer has entered into with, or any instruments any Buyer has received from, any Issuer or any of their Subsidiaries prior to the date
hereof with respect to any prior investment made by such Buyer in the Company or (ii) waive, alter, modify or amend in any respect any
obligations of any Issuer or any of their Subsidiaries, or any rights of or benefits to any Buyer or any other Person, in any agreement
entered into prior to the date hereof between or among any Issuer and/or any of their Subsidiaries and any Buyer, or any instruments
any Buyer received from the Issuer and/or any of their Subsidiaries prior to the date hereof, and all such agreements and instruments
shall continue in full force and effect. Except as specifically set forth herein or therein, neither the Issuers nor any Buyer makes
any representation, warranty, covenant or undertaking with respect to such matters. For clarification purposes, the Recitals are part
of this Agreement. No provision of this Agreement may be amended other than by an instrument in writing signed by the Issuers and the
Required Holders (as defined below), and any amendment to any provision of this Agreement made in conformity with the provisions of this
Section 10(e) shall be binding on all Buyers and holders of Securities, as applicable; provided that no such amendment shall be effective
to the extent that it (A) applies to less than all of the holders of the Securities then outstanding or (B) imposes any obligation or
liability on any Buyer without such Buyer’s prior written consent (which may be granted or withheld in such Buyer’s sole
discretion). No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party, provided
that the Required Holders may waive any provision of this Agreement, and any waiver of any provision of this Agreement made in conformity
with the provisions of this Section 10(e) shall be binding on all Buyers and holders of Securities, as applicable, provided that no such
waiver shall be effective to the extent that it (1) applies to less than all of the holders of the Securities then outstanding (unless
a party gives a waiver as to itself only) or (2) imposes any obligation or liability on any Buyer without such Buyer’s prior written
consent (which may be granted or withheld in such Buyer’s sole discretion). No consideration (other than reimbursement of legal
fees) shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of the Transaction
Documents unless the same consideration also is offered to all of the parties to the Transaction Documents, all holders of the Notes
or all holders of the Warrants (as the case may be). From the date hereof and while any Notes or Warrants are outstanding, the Company
shall not be permitted to receive any consideration from a Buyer or a holder of Notes or Warrants that is not otherwise contemplated
by the Transaction Documents in order to, directly or indirectly, induce the Company or any Company Subsidiary (i) to treat such Buyer
or holder of Notes or Warrants in a manner that is more favorable than to other similarly situated Buyers or holders of Notes or Warrants,
as applicable, or (ii) to treat any Buyer(s) or holder(s) of Notes or Warrants in a manner that is less favorable than the Buyer or holder
of Notes or Warrants that is paying such consideration; provided, however, that the determination of whether a Buyer has been treated
more or less favorably than another Buyer shall disregard any securities of the Company purchased or sold by any Buyer. Each Issuer has
not, directly or indirectly, made any agreements with any Buyers relating to the terms or conditions of the transactions contemplated
by the Transaction Documents except as set forth in the Transaction Documents. Without limiting the foregoing, each Issuer confirms that,
except as set forth in this Agreement, no Buyer has made any commitment or promise or has any other obligation to provide any financing
to any Issuer, any Subsidiary or otherwise. As a material inducement for each Buyer to enter into this Agreement, each Issuer expressly
acknowledges and agrees that (x) no due diligence or other investigation or inquiry conducted by a Buyer, any of its advisors or any
of its representatives shall affect such Buyer’s right to rely on, or shall modify or qualify in any manner or be an exception
to any of, the Issuers’ representations and warranties contained in this Agreement or any other Transaction Document and (y) unless
a provision of this Agreement or any other Transaction Document is expressly preceded by the phrase “except as disclosed in the
SEC Documents,” nothing contained in any of the SEC Documents shall affect such Buyer’s right to rely on, or shall modify
or qualify in any manner or be an exception to any of, the Issuers’ representations and warranties contained in this Agreement
or any other Transaction Document. “Required Holders” means (I) prior to the Closing Date, each Buyer entitled to
purchase Notes at the Closing and (II) on or after the Closing Date, holders of a majority of the Underlying Securities as of such time
(excluding any Underlying Securities held by the Company or any of the Company Subsidiaries as of such time) issued or issuable hereunder
or pursuant to the Notes and/or the Warrants (or the Buyers, with respect to any waiver or amendment of Section 4(o)); provided, that
such majority must include Hudson Bay Master Fund Ltd (“HBMF”), so long as HBMF or any of its affiliates holds any
Notes or Warrants.
(f)
Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement
must be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent
by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party)
or electronic mail (provided that such sent email is kept on file (whether electronically or otherwise) by the sending party and the
sending party does not receive an automatically generated message from the recipient’s email server that such e-mail could not
be delivered to such recipient); or (iii) three (3) Business Days after deposit with an overnight courier service with next day delivery
specified, in each case, properly addressed to the party to receive the same. The addresses, facsimile numbers and e-mail addresses for
such communications shall be:
If
to the Company:
Vinco
Ventures, Inc.
1 West Broad Street, Suite 1004
Bethlehem, Pennsylvania
Telephone: (866) 900-0992
Facsimile: (908) 235-4373
Attention: Chief Executive Officer
E-Mail: cferguson@vincoventures.com
With
a copy (for informational purposes only) to:
Lucosky
Brookman LLP
101 Wood Avenue South, 5th Floor
Woodbridge, New Jersey 08830
Telephone: (732) 395-4400
Facsimile: (732) 395-4401
Attention: Joseph Lucosky, Esq.
E-Mail: jlucosky@lucbro.com
If
to the Transfer Agent:
Nevada
Agency and Transfer Company
50 W. Liberty Street, Suite 880
Reno, Nevada 89501
Telephone: (775) 322-0626
Facsimile: (775) 322-5623
Attention: Tiffany Baxter
E-Mail: stocktransfer@natco.com
If
to a Buyer, to its address, e-mail address and facsimile number set forth on the Schedule of Buyers, with copies to such Buyer’s
representatives as set forth on the Schedule of Buyers,
with
a copy (for informational purposes only) to:
Schulte
Roth & Zabel LLP
919 Third Avenue
New York, New York 10022
Telephone: (212) 756-2000
Facsimile: (212) 593-5955
Attention: Eleazer N. Klein, Esq.
E-mail: eleazer.klein@srz.com
or
to such other address, e-mail address and/or facsimile number and/or to the attention of such other Person as the recipient party has
specified by written notice given to each other party five (5) days prior to the effectiveness of such change, provided that Schulte
Roth & Zabel LLP shall only be provided copies of notices sent to the lead Buyer. Written confirmation of receipt (A) given by the
recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s
facsimile machine or e-mail containing the time, date, recipient facsimile number and, with respect to each facsimile transmission, an
image of the first page of such transmission or (C) provided by an overnight courier service shall be rebuttable evidence of personal
service, receipt by facsimile or receipt from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively.
(g)
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors
and assigns, including any purchasers of any of the Notes and Warrants. None of the Issuers shall assign this Agreement or any rights
or obligations hereunder without the prior written consent of the Required Holders, including, without limitation, by way of a Fundamental
Transaction (as defined in the Warrants) (unless the Company is in compliance with the applicable provisions governing Fundamental Transactions
set forth in the Warrants) or a Fundamental Transaction (as defined in the Notes) (unless the Company is in compliance with the applicable
provisions governing Fundamental Transactions set forth in the Notes). A Buyer may assign some or all of its rights hereunder in connection
with any transfer of any of its Securities without the consent of the Issuers, in which event such assignee shall be deemed to be a Buyer
hereunder with respect to such assigned rights.
(h)
No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, other than the
Indemnitees referred to in Section 10(k).
(i)
Survival. The representations, warranties, agreements and covenants shall survive the Closing. Each Buyer shall be responsible
only for its own representations, warranties, agreements and covenants hereunder.
(j)
Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and
shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request
in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated
hereby.
(k)
Indemnification. In consideration of each Buyer’s execution and delivery of the Transaction Documents and acquiring the
Securities thereunder and in addition to all of the Company’s other obligations under the Transaction Documents, the Issuers shall
defend, protect, indemnify and hold harmless each Buyer and each holder of any Securities and all of their stockholders, partners, members,
officers, directors, employees and direct or indirect investors and any of the foregoing Persons’ agents or other representatives
(including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the
“Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees,
liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for
which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified
Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to (i) any misrepresentation or breach
of any representation or warranty made by the Issuer or any Subsidiary in any of the Transaction Documents, (ii) any breach of any covenant,
agreement or obligation of the Issuer or any Subsidiary contained in any of the Transaction Documents or (iii) any cause of action, suit,
proceeding or claim brought or made against such Indemnitee by a third party (including, without limitation, for these purposes a derivative
action brought on behalf of the Issuers and any Subsidiaries thereof or any cause of action, suit, proceeding or claim, brought by Lomotif
or any Lomotif officer, director, employee, or investor) or which otherwise involves such Indemnitee that arises out of or results from
(A) the execution, delivery, performance or enforcement of any of the Transaction Documents, (B) any transaction financed or to be financed
in whole or in part, directly or indirectly, with the proceeds of the issuance of the Securities, (C) any disclosure properly made by
such Buyer pursuant to Section 5(i), or (D) the status of such Buyer or holder of the Securities either as an investor in the Issuer
or any Subsidiary pursuant to the transactions contemplated by the Transaction Documents or as a party to this Agreement (including,
without limitation, as a party in interest or otherwise in any action or proceeding for injunctive or other equitable relief). To the
extent that the foregoing undertaking by the Issuer may be unenforceable for any reason, such Issuer shall make the maximum contribution
to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law.
(i)
Promptly after receipt by an Indemnitee under this Section 10(k) of notice of the commencement of any action or proceeding (including
any governmental action or proceeding) involving an Indemnified Liability, such Indemnitee shall, if a claim in respect thereof is to
be made against any Issuer under this Section 10(k), deliver to the same a written notice of the commencement thereof, and such Issuer
shall have the right to participate in, and, to the extent they so desire, to assume control of the defense thereof with counsel mutually
satisfactory to such Issuer and the Indemnitee; provided, however, that an Indemnitee shall have the right to retain its own counsel
with the fees and expenses of such counsel to be paid by the Issuers if: (A) such Issuer has agreed in writing to pay such fees and expenses;
(B) such Issuer shall have failed promptly to assume the defense of such Indemnified Liability and to employ counsel reasonably satisfactory
to such Indemnitee in any such Indemnified Liability; or (C) the named parties to any such Indemnified Liability (including any impleaded
parties) include both such Indemnitee and such Issuer, and such Indemnitee shall have been advised by counsel that a conflict of interest
is likely to exist if the same counsel were to represent such Indemnitee and such Issuer (in which case, if such Indemnitee notifies
the Issuer in writing that it elects to employ separate counsel at the expense of such Issuer, then such Issuer shall not have the right
to assume the defense thereof and such counsel shall be at the expense of such Issuer), provided further, that in the case of clause
(C) above such Issuer shall not be responsible for the reasonable fees and expenses of more than one (1) separate legal counsel for the
Indemnitees. The Indemnitee shall reasonably cooperate with the Issuers (as the case may be) in connection with any negotiation or defense
of any such action or Indemnified Liability by such Issuer, and shall furnish to the same all information reasonably available to the
Indemnitee which relates to such action or Indemnified Liability. Such Issuer (as the case may be) shall keep the Indemnitee reasonably
apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. The Issuers shall not be liable
for any settlement of any action, claim or proceeding effected without its prior written consent, provided, however, that the Issuers
shall not unreasonably withhold, delay or condition its consent. The Issuers shall not, without the prior written consent of the Indemnitee,
consent to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof
the giving by the claimant or plaintiff to such Indemnitee of a release from all liability in respect to such Indemnified Liability or
litigation, and such settlement shall not include any admission as to fault on the part of the Indemnitee. Following indemnification
as provided for hereunder, the Issuers shall be subrogated to all rights of the Indemnitee with respect to all third parties, firms or
corporations relating to the matter for which indemnification has been made. The failure to deliver written notice to the Issuers within
a reasonable time of the commencement of any such action shall not relieve the Issuers of any liability to the Indemnitee under this
Section 10(k), except to the extent that the Issuers are materially and adversely prejudiced in their ability to defend such action.
(ii)
The indemnification required by this Section 10(k) shall be made by periodic payments of the amount thereof during the course of the
investigation or defense, within ten (10) days after bills are received or Indemnified Liabilities are incurred.
(iii)
The indemnity agreement contained herein shall be in addition to (A) any cause of action or similar right of the Indemnitee against the
Issuers or others, and (B) any liabilities of the Issuers may be subject to pursuant to the law.
(l)
Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party. No specific representation or warranty shall limit the
generality or applicability of a more general representation or warranty. Each and every reference to share prices, shares of Common
Stock and any other numbers in this Agreement that relate to the Common Stock shall be automatically adjusted for any stock splits, stock
dividends, stock combinations, recapitalizations or other similar transactions that occur with respect to the Common Stock after the
date of this Agreement. Notwithstanding anything in this Agreement to the contrary, for the avoidance of doubt, nothing contained herein
shall constitute a representation or warranty against, or a prohibition of, any actions with respect to the borrowing of, arrangement
to borrow, identification of the availability of, and/or securing of, securities of the Issuers or any Subsidiary (as the case may be)
in order for such Buyer (or its broker or other financial representative) to effect short sales or similar transactions in the future.
(m)
Remedies. Each Buyer and in the event of assignment by Buyer of its rights and obligations hereunder, each holder of Securities,
shall have all rights and remedies set forth in the Transaction Documents and all rights and remedies which such holders have been granted
at any time under any other agreement or contract and all of the rights which such holders have under any law. Any Person having any
rights under any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other security),
to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. Furthermore,
each Issuer recognizes that in the event that it or any Issuer Subsidiary fails to perform, observe, or discharge any or all of its or
such Subsidiary’s (as the case may be) obligations under the Transaction Documents, any remedy at law would inadequate relief to
the Buyers. Each Issuer therefore agrees that the Buyers shall be entitled to specific performance and/or temporary, preliminary and
permanent injunctive or other equitable relief from any court of competent jurisdiction in any such case without the necessity of proving
actual damages and without posting a bond or other security. The remedies provided in this Agreement and the other Transaction Documents
shall be cumulative and in addition to all other remedies available under this Agreement and the other Transaction Documents, at law
or in equity (including a decree of specific performance and/or other injunctive relief).
(n)
Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction
Documents, whenever any Buyer exercises a right, election, demand or option under a Transaction Document and any Issuer or any Subsidiary
does not timely perform its related obligations within the periods therein provided, then such Buyer may rescind or withdraw, in its
sole discretion from time to time upon written notice to the Issuers or such Subsidiary (as the case may be), any relevant notice, demand
or election in whole or in part without prejudice to its future actions and rights.
(o)
Payment Set Aside; Currency. To the extent that any Issuer or any Subsidiary makes a payment or payments to any Buyer hereunder
or pursuant to any of the other Transaction Documents or any of the Buyers enforce or exercise their rights hereunder or thereunder,
and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored
to any Issuer or Subsidiary (as the case may be), a trustee, receiver or any other Person under any law (including, without limitation,
any bankruptcy law, foreign, state or federal law, common law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred. Unless otherwise expressly indicated, all dollar amounts referred
to in this Agreement and the other Transaction Documents are in United States Dollars (“U.S. Dollars”), and all amounts
owing under this Agreement and all other Transaction Documents shall be paid in U.S. Dollars. All amounts denominated in other currencies
(if any) shall be converted into the U.S. Dollar equivalent amount in accordance with the Exchange Rate on the date of calculation. “Exchange
Rate” means, in relation to any amount of currency to be converted into U.S. Dollars pursuant to this Agreement, the U.S. Dollar
exchange rate as published in the Wall Street Journal on the relevant date of calculation.
(p)
Judgment Currency.
(i)
If for the purpose of obtaining or enforcing judgment against any Issuer or any Subsidiary in connection with this Agreement or any other
Transaction Document in any court in any jurisdiction it becomes necessary to convert into any other currency (such other currency being
hereinafter in this Section 10(p) referred to as the “Judgment Currency”) an amount due in US Dollars under this Agreement,
the conversion shall be made at the Exchange Rate prevailing on the Trading Day immediately preceding:
(1)
the date actual payment of the amount due, in the case of any proceeding in the courts of New York or in the courts of any other jurisdiction
that will give effect to such conversion being made on such date: or
(2)
the date on which the foreign court determines, in the case of any proceeding in the courts of any other jurisdiction (the date as of
which such conversion is made pursuant to this Section 10(p)(i)(2) being hereinafter referred to as the “Judgment Conversion
Date”).
(ii)
If in the case of any proceeding in the court of any jurisdiction referred to in Section 10(p)(i)(2) above, there is a change in the
Exchange Rate prevailing between the Judgment Conversion Date and the date of actual payment of the amount due, the applicable party
shall pay such adjusted amount as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the Exchange
Rate prevailing on the date of payment, will produce the amount of US Dollars which could have been purchased with the amount of Judgment
Currency stipulated in the judgment or judicial order at the Exchange Rate prevailing on the Judgment Conversion Date.
(iii)
Any amount due from each Issuer or any Subsidiary (as the case may be) under this provision shall be due as a separate debt and shall
not be affected by judgment being obtained for any other amounts due under or in respect of this Agreement or any other Transaction Document.
(q)
Independent Nature of Buyers’ Obligations and Rights. The obligations of each Buyer under the Transaction Documents are
several and not joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of the
obligations of any other Buyer under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no
action taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as, and the Issuers and any Subsidiary
thereof (as the case may be) acknowledges that the Buyers do not so constitute, a partnership, an association, a joint venture or any
other kind of group or entity, or create a presumption that the Buyers are in any way acting in concert or as a group or entity, and
the Issuers and any Subsidiary shall not assert any such claim with respect to such obligations or the transactions contemplated by the
Transaction Documents or any matters, and the Issuers and any Subsidiary (as applicable) acknowledges that the Buyers are not acting
in concert or as a group, and the Issuers and/or Subsidiary (as the case may be) shall not assert any such claim, with respect to such
obligations or the transactions contemplated by the Transaction Documents. The decision of each Buyer to purchase Securities pursuant
to the Transaction Documents has been made by such Buyer independently of any other Buyer. Each Buyer acknowledges that no other Buyer
has acted as agent for such Buyer in connection with such Buyer making its investment hereunder and that no other Buyer will be acting
as agent of such Buyer in connection with monitoring such Buyer’s investment in the Securities or enforcing its rights under the
Transaction Documents. Each Issuer and each Buyer confirms that each Buyer has independently participated with the Issuers and any Subsidiary
in the negotiation of the transaction contemplated hereby with the advice of its own counsel and advisors. Each Buyer shall be entitled
to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any
other Transaction Documents, and it shall not be necessary for any other Buyer to be joined as an additional party in any proceeding
for such purpose. The use of a single agreement to effectuate the purchase and sale of the Securities contemplated hereby was solely
in the control of the Issuers, not the action or decision of any Buyer, and was done solely for the convenience of the Issuers and any
Subsidiaries and not because they were required or requested to do so by any Buyer. It is expressly understood and agreed that each provision
contained in this Agreement and in each other Transaction Document is between the Issuers, the Subsidiaries thereof (as applicable),
and a Buyer, solely, and not between the Issuer, the Subsidiaries thereof (as applicable) and the Buyers collectively and not between
and among the Buyers.
[signature
pages follow]
IN
WITNESS WHEREOF, each Buyer and each Issuer have caused their respective signature page to this Agreement to be duly executed as
of the date first written above.
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ISSUERS:
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VINCO
VENTURES, INC.
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By:
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Name:
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Christopher
B. Ferguson
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Title:
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Chief
Executive Officer
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ZASH
GLOBAL MEDIA AND ENTERTAINMENT CORPORATION
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By:
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Name:
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Title:
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ZVV
Media Partners, LLC
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By:
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Name:
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Title:
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IN
WITNESS WHEREOF, each Buyer and each Issuer have caused their respective signature page to this Agreement to be duly executed as
of the date first written above.
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BUYER:
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HUDSON
BAY MASTER FUND LTD
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By:
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Name:
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Title:
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SCHEDULE
OF BUYERS
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(1)
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(2)
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(3)
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(4)
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(5)
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(6)
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Buyer
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Address
and Facsimile Number
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Original
Principal Amount of Notes
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Aggregate
Number of Warrant Shares
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Purchase
Price
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Legal
Representative’s Address and Facsimile Number
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Hudson
Bay Master Fund Ltd.
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Please
deliver any notices other than Pre-Notices to:
777
Third Avenue, 30th Floor New York, NY 10017
Attention: Yoav Roth
Facsimile: (212) 571-1279
E-mail: investments@hudsonbaycapital.com Residence:
Cayman Islands
Please
deliver any Pre-Notice to:
777
Third Ave., 30th Floor
New
York, NY 10017
Facsimile:
(646) 214-7946
Attention:
Scott Black
General
Counsel and Chief Compliance Officer
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$120,000,000
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32,697,548
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$100,000,000
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Schulte
Roth & Zabel LLP
919
Third Avenue
New
York, New York 10022
Attention:
Eleazer Klein, Esq.
Facsimile:
(212) 593-5955
Telephone:
(212) 756-2376
E-mail:
eleazer.klein@srz.com
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Exhibit 10.2
[FORM
OF WARRANT]
NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF LEGAL COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), IN A FORM REASONABLY ACCEPTABLE
TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES. THE NUMBER OF SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 1(a)
OF THIS WARRANT.
Vinco
Ventures, Inc.
Warrant
To Purchase Common Stock
Warrant
No.:
Date
of Issuance: July [•], 2021 (“Issuance Date”)
Vinco
Ventures, Inc., a Nevada corporation (the “Company”), hereby certifies that, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, HUDSON BAY MASTER FUND LTD.,
the registered holder hereof or its permitted assigns (the “Holder”), is entitled, subject to the terms set forth
below, to purchase from the Company, at the Exercise Price (as defined below) then in effect, upon exercise of this Warrant to Purchase
Common Stock (including any Warrants to Purchase Common Stock issued in exchange, transfer or replacement hereof, the “Warrant”),
at any time or times on or after the Initial Exercisability Date, but not after 11:59 p.m., New York time, on the Expiration Date (as
defined below), _________________1 (subject to adjustment as provided herein) fully paid and non-assessable shares of Common
Stock (as defined below) (the “Warrant Shares”, and such number of Warrant Shares, the “Warrant Number”).
Except as otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in Section 19. This Warrant is
one of the Warrants to Purchase Common Stock (the “SPA Warrants”) issued pursuant to Section 1 of that certain Securities
Purchase Agreement, dated as of July 22, 2021 (the “Subscription Date”), by and among the Company, ZASH Global Media
and Entertainment Corporation, ZVV Media Partners, LLC, and the investors (the “Buyers”) referred to therein, as amended
from time to time (the “Securities Purchase Agreement”).
Insert
number of shares of Common Stock equal to $120mm divided by the last Closing Bid Price (as defined in the Notes) of the Common Stock
immediately preceding the signing of the Securities Purchase Agreement.
1. EXERCISE
OF WARRANT.
(a) Mechanics
of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section 1(f)),
this Warrant may be exercised by the Holder on any day on or after the Initial Exercisability Date (an “Exercise Date”),
in whole or in part, by delivery (whether via facsimile or otherwise) of a written notice, in the form attached hereto as Exhibit
A (an “Exercise Notice”), of the Holder’s election to exercise this Warrant. For the avoidance of doubt,
if the Initial Exercisability Date does not occur, the Warrants shall not be exercisable. Within one (1) Trading Day following an exercise
of this Warrant as aforesaid, the Holder shall deliver payment to the Company of an amount equal to the Exercise Price in effect on the
date of such exercise multiplied by the number of Warrant Shares as to which this Warrant was so exercised (the “Aggregate Exercise
Price”) in cash or via wire transfer of immediately available funds if the Holder did not notify the Company in such Exercise
Notice that such exercise was made pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder shall not be required to
deliver the original of this Warrant in order to effect an exercise hereunder. Execution and delivery of an Exercise Notice with respect
to less than all of the Warrant Shares shall have the same effect as cancellation of the original of this Warrant and issuance of a new
Warrant evidencing the right to purchase the remaining number of Warrant Shares. Execution and delivery of an Exercise Notice for all
of the then-remaining Warrant Shares shall have the same effect as cancellation of the original of this Warrant after delivery of the
Warrant Shares in accordance with the terms hereof. On or before the first (1st) Trading Day following the date on which the
Company has received an Exercise Notice, the Company shall transmit by facsimile or electronic mail an acknowledgment of confirmation
of receipt of such Exercise Notice, in the form attached hereto as Exhibit B, to the Holder and the Company’s transfer
agent (the “Transfer Agent”), which confirmation shall constitute an instruction to the Transfer Agent to process
such Exercise Notice in accordance with the terms herein. On or before the second (2nd) Trading Day following the date on which the Company
has received such Exercise Notice (or such earlier date as required pursuant to the 1934 Act or other applicable law, rule or regulation
for the settlement of a trade of such Warrant Shares initiated on the applicable Exercise Date), the Company shall (X) provided that
the Transfer Agent is participating in The Depository Trust Company (“DTC”) Fast Automated Securities Transfer Program,
upon the request of the Holder, credit such aggregate number of shares of Common Stock to which the Holder is entitled pursuant to such
exercise to the Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system, or
(Y) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, upon the request of the Holder,
issue and deliver (via reputable overnight courier) to the address as specified in the Exercise Notice, a certificate, registered in
the name of the Holder or its designee, for the number of shares of Common Stock to which the Holder shall be entitled pursuant to such
exercise. Upon delivery of an Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the holder of record
of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares are credited
to the Holder’s DTC account or the date of delivery of the certificates evidencing such Warrant Shares (as the case may be). If
this Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented
by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise and upon surrender
of this Warrant to the Company by the Holder, then, at the request of the Holder, the Company shall as soon as practicable and in no
event later than three (3) Business Days after any exercise and at its own expense, issue and deliver to the Holder (or its designee)
a new Warrant (in accordance with Section 7(d)) representing the right to purchase the number of Warrant Shares purchasable immediately
prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional
shares of Common Stock are to be issued upon the exercise of this Warrant, but rather the number of shares of Common Stock to be issued
shall be rounded up to the nearest whole number. The Company shall pay any and all transfer, stamp, issuance and similar taxes, costs
and expenses (including, without limitation, fees and expenses of the Transfer Agent) that may be payable with respect to the issuance
and delivery of Warrant Shares upon exercise of this Warrant. Notwithstanding the foregoing, except in the case where an exercise of
this Warrant is validly made pursuant to a Cashless Exercise, the Company’s failure to deliver Warrant Shares to the Holder on
or prior to the later of (i) two (2) Trading Days after receipt of the applicable Exercise Notice (or such earlier date as required pursuant
to the 1934 Act or other applicable law, rule or regulation for the settlement of a trade of such Warrant Shares initiated on the applicable
Exercise Date) and (ii) one (1) Trading Day after the Company’s receipt of the Aggregate Exercise Price (or valid notice of a Cashless
Exercise) (such later date, a “Share Delivery Date”) shall not be deemed to be a breach of this Warrant. Notwithstanding
anything to the contrary contained in this Warrant or the Registration Rights Agreement, after the effective date of the Registration
Statement (as defined in the Registration Rights Agreement) and prior to the Holder’s receipt of the notice of a Grace Period (as
defined in the Registration Rights Agreement), the Company shall cause the Transfer Agent to deliver unlegended shares of Common Stock
to the Holder (or its designee) in connection with any sale of Registrable Securities (as defined in the Registration Rights Agreement)
with respect to which the Holder has entered into a contract for sale, and delivered a copy of the prospectus included as part of the
particular Registration Statement to the extent applicable, and for which the Holder has not yet settled. From the Issuance Date through
and including the Expiration Date, the Company shall maintain a transfer agent that participates in the DTC’s Fast Automated Securities
Transfer Program.
(b) Exercise
Price. For purposes of this Warrant, “Exercise Price” means $4.00, subject to adjustment as provided herein.
(c) Company’s
Failure to Timely Deliver Securities. If the Company shall fail, for any reason or for no reason, on or prior to the applicable Share
Delivery Date, either (I) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, to issue
and deliver to the Holder (or its designee) a certificate for the number of Warrant Shares to which the Holder is entitled and register
such Warrant Shares on the Company’s share register or, if the Transfer Agent is participating in the DTC Fast Automated Securities
Transfer Program, to credit the balance account of the Holder or the Holder’s designee with DTC for such number of Warrant Shares
to which the Holder is entitled upon the Holder’s exercise of this Warrant (as the case may be) or (II) if a Registration Statement
covering the resale of the Warrant Shares that are the subject of the Exercise Notice (the “Unavailable Warrant Shares”)
is not available for the resale of such Unavailable Warrant Shares and the Company fails to promptly, but in no event later than as required
pursuant to the Registration Rights Agreement (x) so notify the Holder and (y) deliver the Warrant Shares electronically without any
restrictive legend by crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to
the Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal At Custodian system (the event described
in the immediately foregoing clause (II) is hereinafter referred as a “Notice Failure” and together with the event
described in clause (I) above, a “Delivery Failure”), then, in addition to all other remedies available to the Holder,
(X) the Company shall pay in cash to the Holder on each day after the applicable Share Delivery Date and during such Delivery Failure
an amount equal to 1% of the product of (A) the sum of the number of shares of Common Stock not issued to the Holder on or prior to the
applicable Share Delivery Date and to which the Holder is entitled, multiplied by (B) any trading price of the Common Stock selected
by the Holder in writing as in effect at any time during the period beginning on the applicable Exercise Date and ending on the applicable
Share Delivery Date, and (Y) the Holder, upon written notice to the Company, may void its Exercise Notice with respect to, and retain
or have returned, as the case may be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice; provided
that the voiding of an Exercise Notice shall not affect the Company’s obligations to make any payments which have accrued prior
to the date of such notice pursuant to this Section 1(c) or otherwise. In addition to the foregoing, if on or prior to the Share Delivery
Date either (I) the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, the Company shall fail
to issue and deliver to the Holder (or its designee) a certificate and register such shares of Common Stock on the Company’s share
register or, if the Transfer Agent is participating in the DTC Fast Automated Securities Transfer Program, the Transfer Agent shall fail
to credit the balance account of the Holder or the Holder’s designee with DTC for the number of shares of Common Stock to which
the Holder is entitled upon the Holder’s exercise hereunder or pursuant to the Company’s obligation pursuant to clause (ii)
below or (II) a Notice Failure occurs, and if on or after such Share Delivery Date the Holder purchases (in an open market transaction
or otherwise) shares of Common Stock corresponding to all or any portion of the number of shares of Common Stock issuable upon such exercise
that the Holder is entitled to receive from the Company and has not received from the Company in connection with such Delivery Failure
or Notice Failure, as applicable (a “Buy-In”), then, in addition to all other remedies available to the Holder, the
Company shall, within three (3) Business Days after the Holder’s request and in the Holder’s discretion, either (i) pay cash
to the Holder in an amount equal to the Holder’s total purchase price (including brokerage commissions and other reasonable out-of-pocket
expenses, if any) for the shares of Common Stock so purchased (including, without limitation, by any other Person in respect, or on behalf,
of the Holder) (the “Buy-In Price”), at which point the Company’s obligation to so issue and deliver such certificate
(and to issue such shares of Common Stock) or credit the balance account of such Holder or such Holder’s designee, as applicable,
with DTC for the number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise hereunder (as the case may
be) (and to issue such Warrant Shares) shall terminate, or (ii) promptly honor its obligation to so issue and deliver to the Holder a
certificate or certificates representing such Warrant Shares or credit the balance account of such Holder or such Holder’s designee,
as applicable, with DTC for the number of Warrant Shares to which the Holder is entitled upon the Holder’s exercise hereunder (as
the case may be) and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product of (A) such
number of Warrant Shares multiplied by (B) the lowest Closing Sale Price of the Common Stock on any Trading Day during the period commencing
on the date of the applicable Exercise Notice and ending on the date of such issuance and payment under this clause (ii) (the “Buy-In
Payment Amount”). Nothing shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law
or in equity, including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver certificates representing shares of Common Stock (or to electronically deliver such shares of Common Stock)
upon the exercise of this Warrant as required pursuant to the terms hereof. While this Warrant is outstanding, the Company shall cause
its transfer agent to participate in the DTC Fast Automated Securities Transfer Program. In addition to the foregoing rights, (i) if
the Company fails to deliver the applicable number of Warrant Shares upon an exercise pursuant to Section 1 by the applicable Share Delivery
Date, then the Holder shall have the right to rescind such exercise in whole or in part and retain and/or have the Company return, as
the case may be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice; provided that the rescission
of an exercise shall not affect the Company’s obligation to make any payments that have accrued prior to the date of such notice
pursuant to this Section 1(c) or otherwise, and (ii) if a registration statement covering the issuance or resale of the Warrant
Shares that are subject to an Exercise Notice is not available for the issuance or resale, as applicable, of such Warrant Shares and
the Holder has submitted an Exercise Notice prior to receiving notice of the non-availability of such registration statement and the
Company has not already delivered the Warrant Shares underlying such Exercise Notice electronically without any restrictive legend by
crediting such aggregate number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the Holder’s or
its designee’s balance account with DTC through its Deposit / Withdrawal At Custodian system, the Holder shall have the option,
by delivery of notice to the Company, to (x) rescind such Exercise Notice in whole or in part and retain or have returned, as the case
may be, any portion of this Warrant that has not been exercised pursuant to such Exercise Notice; provided that the rescission of an
Exercise Notice shall not affect the Company’s obligation to make any payments that have accrued prior to the date of such notice
pursuant to this Section 1(c) or otherwise, and/or (y) switch some or all of such Exercise Notice from a cash exercise to a Cashless
Exercise.
(d) Cashless
Exercise. Notwithstanding anything contained herein to the contrary (other than Section 1(f) below), if at the time of exercise hereof
a Registration Statement (as defined in the Registration Rights Agreement) is not effective (or the prospectus contained therein is not
available for use) for the resale by the Holder of all of the Warrant Shares, then the Holder may, in its sole discretion, exercise this
Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise
in payment of the Aggregate Exercise Price, elect instead to receive upon such exercise the “Net Number” of Warrant Shares
determined according to the following formula (a “Cashless Exercise”):
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Net
Number
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=
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(A
x B) - (A x C)
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B
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For purposes of the foregoing formula:
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A=
the total number of shares with respect to which this Warrant is then being exercised.
B
= as elected by the Holder: (i) the VWAP of the shares of Common Stock on the Trading Day immediately preceding the date of the applicable
Exercise Notice if such Exercise Notice is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not a Trading
Day or (2) both executed and delivered pursuant to Section 1(a) hereof on a Trading Day prior to the opening of “regular trading
hours” (as defined in Rule 600(b)(77) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii)
at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Exercise Notice
or (z) the Bid Price of the shares of Common Stock as of the time of the Holder’s execution of the applicable Exercise Notice if
such Exercise Notice is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter
pursuant to Section 1(a) hereof, or (iii) the Closing Sale Price of the shares of Common Stock on the date of the applicable Exercise
Notice if the date of such Exercise Notice is a Trading Day and such Exercise Notice is both executed and delivered pursuant to Section
1(a) hereof after the close of “regular trading hours” on such Trading Day.
C
= the Exercise Price then in effect for the applicable Warrant Shares at the time of such exercise. If the Warrant Shares are issued
in a Cashless Exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the 1933 Act, the Warrant Shares
take on the registered characteristics of the Warrants being exercised.
If
the Warrant Shares are issued in a Cashless Exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the
1933 Act, the Warrant Shares take on the registered characteristics of the Warrants being exercised. For purposes of Rule 144(d) promulgated
under the 1933 Act, as in effect on the Subscription Date, it is intended that the Warrant Shares issued in a Cashless Exercise shall
be deemed to have been acquired by the Holder, and the holding period for the Warrant Shares shall be deemed to have commenced, on the
date this Warrant was originally issued pursuant to the Securities Purchase Agreement.
(e) Disputes.
In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the number of Warrant Shares
to be issued pursuant to the terms hereof, the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed
and resolve such dispute in accordance with Section 15.
(f) Limitations
on Exercises. The Company shall not effect the exercise of any portion of this Warrant, and the Holder shall not have the right to
exercise any portion of this Warrant, pursuant to the terms and conditions of this Warrant and any such exercise shall be null and void
and treated as if never made, to the extent that after giving effect to such exercise, the Holder together with the other Attribution
Parties collectively would beneficially own in excess of 9.99% (the “Maximum Percentage”) of the shares of Common
Stock outstanding immediately after giving effect to such exercise. For purposes of the foregoing sentence, the aggregate number of shares
of Common Stock beneficially owned by the Holder and the other Attribution Parties shall include the number of shares of Common Stock
held by the Holder and all other Attribution Parties plus the number of shares of Common Stock issuable upon exercise of this Warrant
with respect to which the determination of such sentence is being made, but shall exclude shares of Common Stock which would be issuable
upon (A) exercise of the remaining, unexercised portion of this Warrant beneficially owned by the Holder or any of the other Attribution
Parties and (B) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company (including, without
limitation, any convertible notes or convertible preferred stock or warrants, including other SPA Warrants) beneficially owned by the
Holder or any other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation contained in this
Section 1(f). For purposes of this Section 1(f), beneficial ownership shall be calculated in accordance with Section 13(d) of the 1934
Act. For purposes of determining the number of outstanding shares of Common Stock the Holder may acquire upon the exercise of this Warrant
without exceeding the Maximum Percentage, the Holder may rely on the number of outstanding shares of Common Stock as reflected in (x)
the Company’s most recent Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K, or other public
filing with the SEC, as the case may be, (y) a more recent public announcement by the Company or (z) any other written notice by the
Company or the Transfer Agent, if any, setting forth the number of shares of Common Stock outstanding (the “Reported Outstanding
Share Number”). If the Company receives an Exercise Notice from the Holder at a time when the actual number of outstanding
shares of Common Stock is less than the Reported Outstanding Share Number, the Company shall (i) notify the Holder in writing of the
number of shares of Common Stock then outstanding and, to the extent that such Exercise Notice would otherwise cause the Holder’s
beneficial ownership, as determined pursuant to this Section 1(f), to exceed the Maximum Percentage, the Holder must notify the Company
of a reduced number of Warrant Shares to be acquired pursuant to such Exercise Notice (the number of shares by which such purchase is
reduced, the “Reduction Shares”) and (ii) as soon as reasonably practicable, the Company shall return to the Holder
any exercise price paid by the Holder for the Reduction Shares. For any reason at any time, upon the written or oral request of the Holder,
the Company shall within three (3) Business Days confirm orally and in writing or by electronic mail to the Holder the number of shares
of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect
to the conversion or exercise of securities of the Company, including this Warrant, by the Holder and any other Attribution Party since
the date as of which the Reported Outstanding Share Number was reported. In the event that the issuance of shares of Common Stock to
the Holder upon exercise of this Warrant results in the Holder and the other Attribution Parties being deemed to beneficially own, in
the aggregate, more than the Maximum Percentage of the number of outstanding shares of Common Stock (as determined under Section 13(d)
of the 1934 Act), the number of shares so issued by which the Holder’s and the other Attribution Parties’ aggregate beneficial
ownership exceeds the Maximum Percentage (the “Excess Shares”) shall be deemed null and void and shall be cancelled
ab initio, and the Holder shall not have the power to vote or to transfer the Excess Shares. As soon as reasonably practicable after
the issuance of the Excess Shares has been deemed null and void, the Company shall return to the Holder the exercise price paid by the
Holder for the Excess Shares. Upon delivery of a written notice to the Company, the Holder may from time to time increase (with such
increase not effective until the sixty-first (61st) day after delivery of such notice) or decrease the Maximum Percentage
to any other percentage not in excess of 9.99% as specified in such notice; provided that (i) any such increase in the Maximum Percentage
will not be effective until the sixty-first (61st) day after such notice is delivered to the Company and (ii) any such increase
or decrease will apply only to the Holder and the other Attribution Parties and not to any other holder of SPA Warrants that is not an
Attribution Party of the Holder. For purposes of clarity, the shares of Common Stock issuable pursuant to the terms of this Warrant in
excess of the Maximum Percentage shall not be deemed to be beneficially owned by the Holder for any purpose including for purposes of
Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No prior inability to exercise this Warrant pursuant to this paragraph shall have
any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of exercisability. The
provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this
Section 1(f) to the extent necessary to correct this paragraph or any portion of this paragraph which may be defective or inconsistent
with the intended beneficial ownership limitation contained in this Section 1(f) or to make changes or supplements necessary or desirable
to properly give effect to such limitation. The limitation contained in this paragraph may not be waived and shall apply to a successor
holder of this Warrant.
(g) Reservation
of Shares.
(i) Required
Reserve Amount. So long as this Warrant remains outstanding, the Company shall at all times keep reserved for issuance under this
Warrant a number of shares of Common Stock at least equal to the maximum number of shares of Common Stock as shall be necessary to satisfy
the Company’s obligation to issue shares of Common Stock under the SPA Warrants then outstanding (without regard to any limitations
on exercise) (the “Required Reserve Amount”); provided that at no time shall the number of shares of Common Stock
reserved pursuant to this Section 1(g)(i) be reduced other than proportionally in connection with any exercise or redemption of SPA Warrants
or such other event covered by Section 2(a) below. The Required Reserve Amount (including, without limitation, each increase in the number
of shares so reserved) shall be allocated pro rata among the holders of the SPA Warrants based on number of shares of Common Stock issuable
upon exercise of SPA Warrants held by each holder on the Closing Date (as defined in the Securities Purchase Agreement) (without regard
to any limitations on exercise) or increase in the number of reserved shares, as the case may be (the “Authorized Share Allocation”).
In the event that a holder shall sell or otherwise transfer any of such holder’s SPA Warrants, each transferee shall be allocated
a pro rata portion of such holder’s Authorized Share Allocation. Any shares of Common Stock reserved and allocated to any Person
which ceases to hold any SPA Warrants shall be allocated to the remaining holders of SPA Warrants, pro rata based on the number of shares
of Common Stock issuable upon exercise of the SPA Warrants then held by such holders (without regard to any limitations on exercise).
(ii) Insufficient
Authorized Shares. If, notwithstanding Section 1(g)(i) above, and not in limitation thereof, at any time while any of the SPA Warrants
remain outstanding, the Company does not have a sufficient number of authorized and unreserved shares of Common Stock to satisfy its
obligation to reserve the Required Reserve Amount (an “Authorized Share Failure”), then the Company shall immediately
take all action necessary to increase the Company’s authorized shares of Common Stock to an amount sufficient to allow the Company
to reserve the Required Reserve Amount for all the SPA Warrants then outstanding. Without limiting the generality of the foregoing sentence,
as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than sixty (60) days after
the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its shareholders for the approval of an increase
in the number of authorized shares of Common Stock. In connection with such meeting, the Company shall provide each shareholder with
a proxy statement and shall use its best efforts to solicit its shareholders’ approval of such increase in authorized shares of
Common Stock and to cause its board of directors to recommend to the shareholders that they approve such proposal. In the event that
the Company is prohibited from issuing shares of Common Stock upon an exercise of this Warrant due to the failure by the Company to have
sufficient shares of Common Stock available out of the authorized but unissued shares of Common Stock (such unavailable number of shares
of Common Stock, the “Authorization Failure Shares”), in lieu of delivering such Authorization Failure Shares to the
Holder, the Company shall pay cash in exchange for the cancellation of such portion of this Warrant exercisable into such Authorization
Failure Shares at a price equal to the sum of (i) the product of (x) such number of Authorization Failure Shares and (y) the greatest
Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the date the Holder delivers the applicable
Exercise Notice with respect to such Authorization Failure Shares to the Company and ending on the date of such issuance and payment
under this Section 1(f); and (ii) to the extent the Holder purchases (in an open market transaction or otherwise) shares of Common Stock
to deliver in satisfaction of a sale by the Holder of Authorization Failure Shares, any Buy-In Payment Amount, brokerage commissions
and other out-of-pocket expenses, if any, of the Holder incurred in connection therewith. Nothing contained in this Section 1(g)(ii)
shall limit any obligations of the Company under any provision of the Securities Purchase Agreement.
(h) Stockholder
Approval. In the event the Initial Exercisability Date has not occurred on or prior to the Stockholder Meeting Deadline (as defined
in the Securities Purchase Agreement), the Holder may deliver a written notice (an “Alternate Exercise Notice”) to
the Company at any time during the period beginning on the Stockholder Meeting Deadline and ending on the Expiration Date indicating
that in lieu of issuing and delivering Warrant Shares to the Holder, the Company shall promptly, but in any event within one (1) Business
Day of the Holder’s delivery of such notice to the Company, pay an aggregate cash amount to the Holder by wire transfer of immediately
available funds pursuant to the Holder’s wiring instructions equal to $40,000,000 to the Holder in exchange for the cancellation
of the Warrant. In the event that the Holder shall sell or otherwise transfer any portion of this
Warrant, the transferee shall be allocated a pro rata portion of such cash payment with respect to such portion of this Warrant transferred.
2. ADJUSTMENT
OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and number of Warrant Shares issuable upon exercise of
this Warrant are subject to adjustment from time to time as set forth in this Section 2.
(a) Stock
Dividends and Splits. Without limiting any provision of Section 3 or Section 4, if the Company, at any time on or after the Subscription
Date, (i) pays a stock dividend on one or more classes of its then outstanding shares of Common Stock or otherwise makes a distribution
on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides (by any stock split, stock dividend, recapitalization
or otherwise) one or more classes of its then outstanding shares of Common Stock into a larger number of shares or (iii) combines (by
combination, reverse stock split or otherwise) one or more classes of its then outstanding shares of Common Stock into a smaller number
of shares, then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding immediately before such event and of which the denominator shall be the number of shares of Common
Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately
after the record date for the determination of shareholders entitled to receive such dividend or distribution, and any adjustment pursuant
to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination.
If any event requiring an adjustment under this paragraph occurs during the period that an Exercise Price is calculated hereunder, then
the calculation of such Exercise Price shall be adjusted appropriately to reflect such event.
(b) Adjustment
Upon Issuance of Common Stock. If and whenever on or after the Subscription Date, the Company grants, issues or sells (or enters
into any agreement to grant, issue or sell), or in accordance with this Section 2 is deemed to have granted, issued or sold, any shares
of Common Stock (including the grant, issuance or sale of shares of Common Stock owned or held by or for the account of the Company,
but excluding any Excluded Securities granted, issued or sold or deemed to have been granted, issued or sold) for a consideration per
share (the “New Issuance Price”) less than a price equal to the Exercise Price in effect immediately prior to such
grant, issuance or sale or deemed grant, issuance or sale (such Exercise Price then in effect is referred to herein as the “Applicable
Price”) (the foregoing a “Dilutive Issuance”), then immediately after such Dilutive Issuance, the Exercise
Price then in effect shall be reduced to an amount equal to the New Issuance Price. For all purposes of the foregoing (including, without
limitation, determining the adjusted Exercise Price and the New Issuance Price under this Section 2(b)), the following shall be applicable:
(i) Issuance
of Options. If the Company in any manner grants, issues or sells (or enters into any agreement to grant, issue or sell) any Options
and the lowest price per share for which one share of Common Stock is at any time issuable upon the exercise of any such Option or upon
conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise pursuant to the
terms thereof is less than the Applicable Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued
and sold by the Company at the time of the granting , issuance or sale (or the time of execution of such agreement to grant, issue or
sell, as applicable) of such Option for such price per share. For purposes of this Section 2(b)(i), the “lowest price per share
for which one share of Common Stock is at any time issuable upon the exercise of any such Options or upon conversion, exercise or exchange
of any Convertible Securities issuable upon exercise of any such Option or otherwise pursuant to the terms thereof” shall be equal
to (1) the lower of (x) the sum of the lowest amounts of consideration (if any) received or receivable by the Company with respect to
any one share of Common Stock upon the granting, issuance or sale (or pursuant to the agreement to grant, issue or sell, as applicable)
of such Option, upon exercise of such Option and upon conversion, exercise or exchange of any Convertible Security issuable upon exercise
of such Option or otherwise pursuant to the terms thereof and (y) the lowest exercise price set forth in such Option for which one share
of Common Stock is issuable (or may become issuable assuming all possible market conditions) upon the exercise of any such Options or
upon conversion, exercise or exchange of any Convertible Securities issuable upon exercise of any such Option or otherwise pursuant to
the terms thereof minus (2) the sum of all amounts paid or payable to the holder of such Option (or any other Person) upon the granting
, issuance or sale (or the agreement to grant, issue or sell, as applicable) of such Option, upon exercise of such Option and upon conversion,
exercise or exchange of any Convertible Security issuable upon exercise of such Option or otherwise pursuant to the terms thereof plus
the value of any other consideration received or receivable by, or benefit conferred on, the holder of such Option (or any other Person).
Except as contemplated below, no further adjustment of the Exercise Price shall be made upon the actual issuance of such shares of Common
Stock or of such Convertible Securities upon the exercise of such Options or otherwise pursuant to the terms of or upon the actual issuance
of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities.
(ii) Issuance
of Convertible Securities. If the Company in any manner issues or sells (or enters into any agreement to issue or sell) any Convertible
Securities and the lowest price per share for which one share of Common Stock is at any time issuable upon the conversion, exercise or
exchange thereof or otherwise pursuant to the terms thereof is less than the Applicable Price, then such share of Common Stock shall
be deemed to be outstanding and to have been issued and sold by the Company at the time of the issuance or sale (or the time of execution
of such agreement to issue or sell, as applicable) of such Convertible Securities for such price per share. For the purposes of this
Section 2(b)(ii), the “lowest price per share for which one share of Common Stock is at any time issuable upon the conversion,
exercise or exchange thereof or otherwise pursuant to the terms thereof” shall be equal to (1) the lower of (x) the sum of the
lowest amounts of consideration (if any) received or receivable by the Company with respect to one share of Common Stock upon the issuance
or sale (or pursuant to the agreement to issue or sell, as applicable) of the Convertible Security and upon conversion, exercise or exchange
of such Convertible Security or otherwise pursuant to the terms thereof and (y) the lowest conversion price set forth in such Convertible
Security for which one share of Common Stock is issuable (or may become issuable assuming all possible market conditions) upon conversion,
exercise or exchange thereof or otherwise pursuant to the terms thereof minus (2) the sum of all amounts paid or payable to the holder
of such Convertible Security (or any other Person) upon the issuance or sale (or the agreement to issue or sell, as applicable) of such
Convertible Security plus the value of any other consideration received or receivable by, or benefit conferred on, the holder of such
Convertible Security (or any other Person). Except as contemplated below, no further adjustment of the Exercise Price shall be made upon
the actual issuance of such shares of Common Stock upon conversion, exercise or exchange of such Convertible Securities or otherwise
pursuant to the terms thereof, and if any such issuance or sale of such Convertible Securities is made upon exercise of any Options for
which adjustment of this Warrant has been or is to be made pursuant to other provisions of this Section 2(b), except as contemplated
below, no further adjustment of the Exercise Price shall be made by reason of such issuance or sale.
(iii) Change
in Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options, the additional consideration,
if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time (other than
proportional changes in conversion or exercise prices, as applicable, in connection with an event referred to in Section 2(a)), the Exercise
Price in effect at the time of such increase or decrease shall be adjusted to the Exercise Price which would have been in effect at such
time had such Options or Convertible Securities provided for such increased or decreased purchase price, additional consideration or
increased or decreased conversion rate, as the case may be, at the time initially granted, issued or sold. For purposes of this Section
2(b)(iii), if the terms of any Option or Convertible Security that was outstanding as of the Subscription Date are increased or decreased
in the manner described in the immediately preceding sentence, then such Option or Convertible Security and the shares of Common Stock
deemed issuable upon exercise, conversion or exchange thereof shall be deemed to have been issued as of the date of such increase or
decrease. No adjustment pursuant to this Section 2(b) shall be made if such adjustment would result in an increase of the Exercise Price
then in effect.
(iv) Calculation
of Consideration Received. If any Option and/or Convertible Security and/or Adjustment Right is issued in connection with the issuance
or sale or deemed issuance or sale of any other securities of the Company (as determined by the Holder, the “Primary Security”,
and such Option and/or Convertible Security and/or Adjustment Right, the “Secondary Securities” and together with
the Primary Security, each a “Unit”), together comprising one integrated transaction, the aggregate consideration
per share of Common Stock with respect to such Primary Security shall be deemed to be the lower of (x) the purchase price of such Unit,
(y) if such Primary Security is an Option and/or Convertible Security, the lowest price per share for which one share of Common Stock
is at any time issuable upon the exercise or conversion of the Primary Security in accordance with Section 2(b)(i) or 2(b)(ii) above
and (z) the lowest VWAP of the shares of Common Stock on any Trading Day during the period commencing on the date of the public announcement
of such Dilutive Issuance through, and including, the fourth (4th) Trading Day immediately following the closing of such Dilutive
Issuance (the “Adjustment Period”) (for the avoidance of doubt, if this Warrant is exercised on any given Exercise
Date during any such Adjustment Period, solely with respect to such portion of this Warrant exercised on such applicable Exercise Date,
such applicable Adjustment Period shall be deemed to have ended on, and included, the Trading Day immediately prior to such Exercise
Date). If any shares of Common Stock, Options or Convertible Securities are issued or sold or deemed to have been issued or sold for
cash, the consideration received therefor will be deemed to be the net amount of consideration received by the Company therefor. If any
shares of Common Stock, Options or Convertible Securities are issued or sold for a consideration other than cash, the amount of such
consideration received by the Company will be the fair value of such consideration, except where such consideration consists of publicly
traded securities, in which case the amount of consideration received by the Company for such securities will be the arithmetic average
of the VWAPs of such security for each of the five (5) Trading Days immediately preceding the date of receipt. If any shares of Common
Stock, Options or Convertible Securities are issued to the owners of the non-surviving entity in connection with any merger in which
the Company is the surviving entity, the amount of consideration therefor will be deemed to be the fair value of such portion of the
net assets and business of the non-surviving entity as is attributable to such shares of Common Stock, Options or Convertible Securities
(as the case may be). The fair value of any consideration other than cash or publicly traded securities will be determined jointly by
the Company and the Holder. If such parties are unable to reach agreement within ten (10) days after the occurrence of an event requiring
valuation (the “Valuation Event”), the fair value of such consideration will be determined within five (5) Trading
Days after the tenth (10th) day following such Valuation Event by an independent, reputable appraiser jointly selected by
the Company and the Holder. The determination of such appraiser shall be final and binding upon all parties absent manifest error and
the fees and expenses of such appraiser shall be borne by the Company.
(v) Record
Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to receive a dividend
or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to subscribe for or purchase shares
of Common Stock, Options or Convertible Securities, then such record date will be deemed to be the date of the issuance or sale of the
shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend or the making of such other distribution
or the date of the granting of such right of subscription or purchase (as the case may be).
(vi) No
Readjustments. For the avoidance of doubt, in the event the Exercise Price has been adjusted pursuant to this Section 2(b) and the
Dilutive Issuance that triggered such adjustment does not occur, is not consummated, is unwound or is cancelled after the facts for any
reason whatsoever, in no event shall the Exercise Price be readjusted to the Exercise Price that would have been in effect if such Dilutive
Issuance had not occurred or been consummated.
(c) Number
of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to Section 2(a), the number of Warrant Shares
that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such adjustment the
aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate Exercise Price
in effect immediately prior to such adjustment (without regard to any limitations on exercise contained herein).
(d) Calculations.
All calculations under this Section 2 shall be made by rounding to the nearest cent or the nearest 1/100th of a share, as
applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account
of the Company, and the disposition of any such shares shall be considered an issuance or sale of Common Stock.
(e) Voluntary
Adjustment By Company. Subject to the rules and regulations of the Principal Market, the Company may at any time during the term
of this Warrant, with the prior written consent of the Holder, reduce the then current Exercise Price to any amount and for any period
of time deemed appropriate by the board of directors of the Company.
3. RIGHTS
UPON DISTRIBUTION OF ASSETS
(a) General.
In addition to any adjustments pursuant to Section 2 above, other than any Spin-off Distribution (as defined below), if the Company shall
declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock,
by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property,
options, evidence of indebtedness or any other assets by way of a dividend, spin off, reclassification, corporate rearrangement, scheme
of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then,
in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated
therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard
to any limitations or restrictions on exercise of this Warrant, including without limitation, the Maximum Percentage, and regardless
of whether or not the Initial Exercisability Date has occurred) immediately before the date on which a record is taken for such Distribution,
or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation
in such Distribution (provided, however, that to the extent that the Holder’s right to participate in any such Distribution would
result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled to participate
in such Distribution to the extent of the Maximum Percentage (and shall not be entitled to beneficial ownership of such shares of Common
Stock as a result of such Distribution (and beneficial ownership) to the extent of any such excess) and the portion of such Distribution
shall be held in abeyance for the benefit of the Holder until such time or times, if ever, as its right thereto would not result in the
Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder shall be granted such Distribution
(and any Distributions declared or made on such initial Distribution or on any subsequent Distribution held similarly in abeyance) to
the same extent as if there had been no such limitation).
(b) Spin-off
Distribution.
(i) In
addition to any adjustments pursuant to Section 2 above, if the Company shall declare or make any Distribution with respect to the Spin-off
Transactions (the “Spin-off Distribution”), then, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held 200% of the number of shares of Common Stock
acquirable upon complete exercise of this Warrant (without regard to any limitations or restrictions on exercise of this Warrant, including
without limitation, the Maximum Percentage, and regardless of whether or not the Initial Exercisability Date has occurred) immediately
before the date on which a record is taken for such Spin-off Distribution, or, if no such record is taken, the date as of which the record
holders of shares of Common Stock are to be determined for the participation in such Spin-off Distribution.
(ii) Notwithstanding
anything herein to the contrary, the Holder’s participation in the Spin-off Distribution shall not cause the Holder to beneficially
own (calculated in accordance with Section 13(d) of the 1934 Act) in excess of 9.99% of the shares of common stock (or other comparable
common capital, as applicable) (the “Spin-off Common Stock”) of the company resulting from the Spin-off Transactions
(such 9.99% limitation, the “Spin-off Maximum Percentage”).
(iii) To
the extent that the Holder’s right to participate in any such Spin-off Distribution would result in the Holder and the other Attribution
Parties exceeding the Spin-off Maximum Percentage, then the Holder shall not be entitled to participate in such Spin-off Distribution
to the extent of the Spin-off Maximum Percentage (and shall not be entitled to beneficial ownership of such shares of Spin-off Common
Stock as a result of such Spin-off Distribution (and beneficial ownership) to the extent of any such excess) and the portion of such
Spin-off Distribution shall be held in abeyance for the benefit of the Holder until such time or times, if ever, as its right thereto
would not result in the Holder and the other Attribution Parties exceeding the Spin-off Maximum Percentage, at which time or times the
Holder shall be granted such Spin-off Distribution (and any Distributions declared or made on such initial Spin-off Distribution or on
any subsequent Distribution held similarly in abeyance) to the same extent as if there had been no such limitation).
4. PURCHASE
RIGHTS; FUNDAMENTAL TRANSACTIONS.
(a) Purchase
Rights. In addition to any adjustments pursuant to Section 2 above, if at any time the Company grants, issues or sells any Options,
Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class
of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to
such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares
of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations or restrictions on exercise of this
Warrant, including without limitation, the Maximum Percentage, and regardless of whether or not the Initial Exercisability Date has occurred)
immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record
is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issuance or sale of such
Purchase Rights (provided, however, that to the extent that the Holder’s right to participate in any such Purchase
Right would result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, then the Holder shall not be entitled
to participate in such Purchase Right to the extent of the Maximum Percentage (and shall not be entitled to beneficial ownership of such
shares of Common Stock as a result of such Purchase Right (and beneficial ownership) to the extent of any such excess) and such Purchase
Right to such extent shall be held in abeyance for the benefit of the Holder until such time or times, if ever, as its right thereto
would not result in the Holder and the other Attribution Parties exceeding the Maximum Percentage, at which time or times the Holder
shall be granted such right (and any Purchase Right granted, issued or sold on such initial Purchase Right or on any subsequent Purchase
Right held similarly in abeyance) to the same extent as if there had been no such limitation).
(b) Fundamental
Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity assumes in writing
all of the obligations of the Company under this Warrant and the other Transaction Documents (as defined in the Securities Purchase Agreement)
in accordance with the provisions of this Section 4(b) pursuant to written agreements in form and substance satisfactory to the Holder
and approved by the Holder prior to such Fundamental Transaction, including agreements to deliver to the Holder in exchange for this
Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant,
including, without limitation, which is exercisable for a corresponding number of shares of capital stock equivalent to the shares of
Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant)
prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital
stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value
of such shares of capital stock, such adjustments to the number of shares of capital stock and such exercise price being for the purpose
of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction). Upon the consummation
of each Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of the
applicable Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company”
shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations
of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named
as the Company herein. Upon consummation of each Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation
that there shall be issued upon exercise of this Warrant at any time after the consummation of the applicable Fundamental Transaction,
in lieu of the shares of Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections
3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of this Warrant prior to the applicable
Fundamental Transaction, such shares of publicly traded common stock (or its equivalent) of the Successor Entity (including its Parent
Entity) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant
been exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of this
Warrant), as adjusted in accordance with the provisions of this Warrant. Notwithstanding the foregoing, and without limiting Section
1(f) hereof, the Holder may elect, at its sole option, by delivery of written notice to the Company to waive this Section 4(b) to permit
the Fundamental Transaction without the assumption of this Warrant. In addition to and not in substitution for any other rights hereunder,
prior to the consummation of each Fundamental Transaction pursuant to which holders of shares of Common Stock are entitled to receive
securities or other assets with respect to or in exchange for shares of Common Stock (a “Corporate Event”), the Company
shall make appropriate provision to ensure that the Holder will thereafter have the right to receive upon an exercise of this Warrant
at any time after the consummation of the applicable Fundamental Transaction but prior to the Expiration Date, in lieu of the shares
of the Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections 3 and 4(a)
above, which shall continue to be receivable thereafter)) issuable upon the exercise of the Warrant prior to such Fundamental Transaction,
such shares of stock, securities, cash, assets or any other property whatsoever (including warrants or other purchase or subscription
rights) which the Holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant
been exercised immediately prior to the applicable Fundamental Transaction (without regard to any limitations on the exercise of this
Warrant). Provision made pursuant to the preceding sentence shall be in a form and substance reasonably satisfactory to the Holder.
(c) Black
Scholes Value. Notwithstanding the foregoing and the provisions of Section 4(b) above, at the request of the Holder delivered at
any time commencing on the earliest to occur of (x) the public disclosure of any Fundamental Transaction, (y) the consummation of any
Fundamental Transaction and (z) the Holder first becoming aware of any Fundamental Transaction through the date that is ninety (90) days
after the public disclosure of the consummation of such Fundamental Transaction by the Company pursuant to a Current Report on Form 8-K
filed with the SEC, the Company or the Successor Entity (as the case may be) shall purchase this Warrant from the Holder on the date
of such request by paying to the Holder cash in an amount equal to the Black Scholes Value. Payment of such amounts shall be made by
the Company (or at the Company’s direction) to the Holder on or prior to the later of (x) the second (2nd) Trading Day
after the date of such request and (y) the date of consummation of such Fundamental Transaction.
(d) Application.
The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions and Corporate Events and shall
be applied as if this Warrant (and any such subsequent warrants) were fully exercisable and without regard to any limitations on the
exercise of this Warrant (provided that the Holder shall continue to be entitled to the benefit of the Maximum Percentage, applied however
with respect to shares of capital stock registered under the 1934 Act and thereafter receivable upon exercise of this Warrant (or any
such other warrant)).
5. NONCIRCUMVENTION.
The Company hereby covenants and agrees that the Company will not, by amendment of its Articles of Incorporation (as defined in the
Securities Purchase Agreement), Bylaws (as defined in the Securities Purchase Agreement) or through any reorganization, transfer of
assets, consolidation, merger, scheme of arrangement, dissolution, issuance or sale of securities, or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry
out all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. Without limiting
the generality of the foregoing, the Company (a) shall not increase the par value of any shares of Common Stock receivable upon the
exercise of this Warrant above the Exercise Price then in effect, and (b) shall take all such actions as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon the
exercise of this Warrant. Notwithstanding anything herein to the contrary, if after the Initial Exercisability Date, the Holder is
not permitted to exercise this Warrant in full for any reason (other than pursuant to restrictions set forth in Section 1(f)
hereof), the Company shall use its best efforts to promptly remedy such failure, including, without limitation, obtaining such
consents or approvals as necessary to permit such exercise into shares of Common Stock.
6. WARRANT
HOLDER NOT DEEMED A SHAREHOLDER. Except as otherwise specifically provided herein, the Holder, solely in its capacity as a
holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company
for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in its capacity as the
Holder of this Warrant, any of the rights of a shareholder of the Company or any right to vote, give or withhold consent to any
corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or
otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder
of the Warrant Shares which it is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in
this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant
or otherwise) or as a shareholder of the Company, whether such liabilities are asserted by the Company or by creditors of the
Company. Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices and other information
given to the shareholders of the Company generally, contemporaneously with the giving thereof to the shareholders.
7. REISSUANCE
OF WARRANTS.
(a) Transfer
of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company will
forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as the Holder may
request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less than the total
number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 7(d)) to the Holder
representing the right to purchase the number of Warrant Shares not being transferred.
(b) Lost,
Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant (as to which a written certification and the indemnification contemplated below shall suffice as such evidence),
and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary and reasonable
form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder
a new Warrant (in accordance with Section 7(d)) representing the right to purchase the Warrant Shares then underlying this Warrant.
(c) Exchangeable
for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company,
for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the number of Warrant
Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of such Warrant Shares
as is designated by the Holder at the time of such surrender; provided, however, no warrants for fractional shares of Common Stock shall
be given.
(d) Issuance
of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant
(i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to purchase
the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a) or Section 7(c),
the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying the other new Warrants
issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant), (iii) shall have
an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date, and (iv) shall have the same rights
and conditions as this Warrant.
8. NOTICES.
Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in
accordance with Section 9(f) of the Securities Purchase Agreement. The Company shall provide the Holder with prompt written notice
of all actions taken pursuant to this Warrant (other than the issuance of shares of Common Stock upon exercise in accordance with
the terms hereof), including in reasonable detail a description of such action and the reason therefor. Without limiting the
generality of the foregoing, the Company will give written notice to the Holder (i) immediately upon each adjustment of the Exercise
Price and the number of Warrant Shares, setting forth in reasonable detail, and certifying, the calculation of such adjustment(s),
(ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a record (A) with respect to any
dividend or distribution upon the shares of Common Stock, (B) with respect to any grants, issuances or sales of any Options,
Convertible Securities or rights to purchase stock, warrants, securities or other property to holders of shares of Common Stock or
(C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case
that such information shall be made known to the public prior to or in conjunction with such notice being provided to the Holder,
and (iii) at least ten (10) Trading Days prior to the consummation of any Fundamental Transaction. To the extent that any notice
provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of its Subsidiaries (as
defined in the Securities Purchase Agreement), the Company shall simultaneously file such notice with the SEC pursuant to a Current
Report on Form 8-K. If the Company or any of its Subsidiaries provides material non-public information to the Holder that is not
simultaneously filed in a Current Report on Form 8-K and the Holder has not agreed to receive such material non-public information,
the Company hereby covenants and agrees that the Holder shall not have any duty of confidentiality to the Company, any of its
Subsidiaries or any of their respective officers, directors, employees, affiliates or agents with respect to, or a duty to any of
the foregoing not to trade on the basis of, such material non-public information. It is expressly understood and agreed that the
time of execution specified by the Holder in each Exercise Notice shall be definitive and may not be disputed or challenged by the
Company.
9. DISCLOSURE.
Upon delivery by the Company to the Holder (or receipt by the Company from the Holder) of any notice in accordance with the terms of
this Warrant, unless the Company has in good faith determined that the matters relating to such notice do not constitute material,
non-public information relating to the Company or any of its Subsidiaries, the Company shall on or prior to 9:00 am, New York city
time on the Business Day immediately following such notice delivery date, publicly disclose such material, non-public information on
a Current Report on Form 8-K or otherwise. In the event that the Company believes that a notice contains material, non-public
information relating to the Company or any of its Subsidiaries, the Company so shall indicate to the Holder explicitly in writing in
such notice (or immediately upon receipt of notice from the Holder, as applicable), and in the absence of any such written
indication in such notice (or notification from the Company immediately upon receipt of notice from the Holder), the Holder shall be
entitled to presume that information contained in the notice does not constitute material, non-public information relating to the
Company or any of its Subsidiaries. Nothing contained in this Section 9 shall limit any obligations of the Company, or any rights of
the Holder, under Section 4(i) of the Securities Purchase Agreement.
10. ABSENCE
OF TRADING AND DISCLOSURE RESTRICTIONS. The Company acknowledges and agrees that the Holder is not a fiduciary or agent of the Company
and that the Holder shall have no obligation to (a) maintain the confidentiality of any information provided by the Company or (b) refrain
from trading any securities while in possession of such information in the absence of a written non-disclosure agreement signed by an
officer of the Holder that explicitly provides for such confidentiality and trading restrictions. In the absence of such an executed,
written non-disclosure agreement, the Company acknowledges that the Holder may freely trade in any securities issued by the Company,
may possess and use any information provided by the Company in connection with such trading activity, and may disclose any such information
to any third party.
11. AMENDMENT
AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant (other than Section 1(f)) may be amended
and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the
Company has obtained the written consent of the Holder. No waiver shall be effective unless it is in writing and signed by an
authorized representative of the waiving party.
12. SEVERABILITY.
If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest
extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity
of the remaining provisions of this Warrant so long as this Warrant as so modified continues to express, without material change, the
original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s)
in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization
of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the
prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of
the prohibited, invalid or unenforceable provision(s).
13. GOVERNING
LAW.
This Warrant shall be governed by and construed and enforced in accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Warrant shall be governed by, the internal laws of the State of New York, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause
the application of the laws of any jurisdictions other than the State of New York. The Company hereby irrevocably waives personal service
of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to the Company at the
address set forth in Section 9(f) of the Securities Purchase Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. The Company hereby irrevocably submits to the exclusive jurisdiction of the 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, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding
is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or
operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect
on the Company’s obligations to the Holder, to realize on any collateral or any other security for such obligations, or to enforce
a judgment or other court ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES
NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY
TRANSACTION CONTEMPLATED HEREBY.
14. CONSTRUCTION;
HEADINGS. This Warrant shall be deemed to be
jointly drafted by the Company and the Holder and shall not be construed against any Person as the drafter hereof. The headings of
this Warrant are for convenience of reference and shall not form part of, or affect the interpretation of, this Warrant. Terms used
in this Warrant but defined in the other Transaction Documents shall have the meanings ascribed to such terms on the Closing Date
(as defined in the Securities Purchase Agreement) in such other Transaction Documents unless otherwise consented to in writing by
the Holder.
15. DISPUTE
RESOLUTION.
(a) Submission
to Dispute Resolution.
(i) In
the case of a dispute relating to the Exercise Price, the Closing Sale Price, the Bid Price, Black Scholes Value or fair market value
or the arithmetic calculation of the number of Warrant Shares (as the case may be) (including, without limitation, a dispute relating
to the determination of any of the foregoing), the Company or the Holder (as the case may be) shall submit the dispute to the other party
via facsimile (A) if by the Company, within three (3) Business Days after the occurrence of the circumstances giving rise to such dispute
or (B) if by the Holder, at any time after the Holder learned of the circumstances giving rise to such dispute. If the Holder and the
Company are unable to promptly resolve such dispute relating to such Exercise Price, such Closing Sale Price, such Bid Price, such Black
Scholes Value or such fair market value or such arithmetic calculation of the number of Warrant Shares (as the case may be), at any time
after the third (3rd) Business Day following such initial notice by the Company or the Holder (as the case may be) of such
dispute to the Company or the Holder (as the case may be), then the Holder may, at its sole option, select an independent, reputable
investment bank to resolve such dispute.
(ii) The
Holder and the Company shall each deliver to such investment bank (A) a copy of the initial dispute submission so delivered in accordance
with the first sentence of this Section 15 and (B) written documentation supporting its position with respect to such dispute, in each
case, no later than 5:00 p.m. (New York time) by the fifth (5th) Business Day immediately following the date on which the
Holder selected such investment bank (the “Dispute Submission Deadline”) (the documents referred to in the immediately
preceding clauses (A) and (B) are collectively referred to herein as the “Required Dispute Documentation”) (it being
understood and agreed that if either the Holder or the Company fails to so deliver all of the Required Dispute Documentation by the Dispute
Submission Deadline, then the party who fails to so submit all of the Required Dispute Documentation shall no longer be entitled to (and
hereby waives its right to) deliver or submit any written documentation or other support to such investment bank with respect to such
dispute and such investment bank shall resolve such dispute based solely on the Required Dispute Documentation that was delivered to
such investment bank prior to the Dispute Submission Deadline). Unless otherwise agreed to in writing by both the Company and the Holder
or otherwise requested by such investment bank, neither the Company nor the Holder shall be entitled to deliver or submit any written
documentation or other support to such investment bank in connection with such dispute (other than the Required Dispute Documentation).
(iii) The
Company and the Holder shall cause such investment bank to determine the resolution of such dispute and notify the Company and the Holder
of such resolution no later than ten (10) Business Days immediately following the Dispute Submission Deadline. The fees and expenses
of such investment bank shall be borne solely by the Company, and such investment bank’s resolution of such dispute shall be final
and binding upon all parties absent manifest error.
(b) Miscellaneous.
The Company expressly acknowledges and agrees that (i) this Section 15 constitutes an agreement to arbitrate between the Company and
the Holder (and constitutes an arbitration agreement) under the rules then in effect under § 7501, et seq. of the New York Civil
Practice Law and Rules (“CPLR”) and that the Holder is authorized to apply for an order to compel arbitration pursuant
to CPLR § 7503(a) in order to compel compliance with this Section 15, (ii) the terms of this Warrant and each other applicable Transaction
Document shall serve as the basis for the selected investment bank’s resolution of the applicable dispute, such investment bank
shall be entitled (and is hereby expressly authorized) to make all findings, determinations and the like that such investment bank determines
are required to be made by such investment bank in connection with its resolution of such dispute and in resolving such dispute such
investment bank shall apply such findings, determinations and the like to the terms of this Warrant and any other applicable Transaction
Documents, (iii) the Holder (and only the Holder), in its sole discretion, shall have the right to submit any dispute described in this
Section 15 to any state or federal court sitting in The City of New York, Borough of Manhattan in lieu of utilizing the procedures set
forth in this Section 15 and (iv) nothing in this Section 15 shall limit the Holder from obtaining any injunctive relief or other equitable
remedies (including, without limitation, with respect to any matters described in this Section 15).
16. REMEDIES,
CHARACTERIZATION, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The
remedies provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant and the
other Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and
nothing herein shall limit the right of the Holder to pursue actual and consequential damages for any failure by the Company to
comply with the terms of this Warrant. The Company covenants to the Holder that there shall be no characterization concerning this
instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, exercises and
the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided
herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it
of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be
inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant
shall be entitled, in addition to all other available remedies, to specific performance and/or temporary, preliminary and permanent
injunctive or other equitable relief from any court of competent jurisdiction in any such case without the necessity of proving
actual damages and without posting a bond or other security. The Company shall provide all information and documentation to the
Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions
of this Warrant (including, without limitation, compliance with Section 2 hereof). The issuance of shares and certificates for
shares as contemplated hereby upon the exercise of this Warrant shall be made without charge to the Holder or such shares for any
issuance tax or other costs in respect thereof, provided that the Company shall not be required to pay any tax which may be payable
in respect of any transfer involved in the issuance and delivery of any certificate in a name other than the Holder or its agent on
its behalf.
17. PAYMENT
OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Warrant is placed in the hands of an attorney
for collection or enforcement or is collected or enforced through any legal proceeding or the holder otherwise takes action to collect
amounts due under this Warrant or to enforce the provisions of this Warrant or (b) there occurs any bankruptcy, reorganization, receivership
of the company or other proceedings affecting company creditors’ rights and involving a claim under this Warrant, then the Company
shall pay the costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization,
receivership or other proceeding, including, without limitation, attorneys’ fees and disbursements.
18. TRANSFER. This
Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company, except as may otherwise be
required by Section 2(g) of the Securities Purchase Agreement.
19. CERTAIN
DEFINITIONS. For purposes of this Warrant, the
following terms shall have the following meanings:
(a) “1933
Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.
(b) “1934
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
(c) “Adjustment
Right” means any right granted with respect to any securities issued in connection with, or with respect to, any issuance or
sale (or deemed issuance or sale in accordance with Section 2) of shares of Common Stock (other than rights of the type described in
Section 3 and 4 hereof) that could result in a decrease in the net consideration received by the Company in connection with, or with
respect to, such securities (including, without limitation, any cash settlement rights, cash adjustment or other similar rights).
(d) “Affiliate”
means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control
with, such Person, it being understood for purposes of this definition that “control” of a Person means the power directly
or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of directors of such Person or direct
or cause the direction of the management and policies of such Person whether by contract or otherwise.
(e) “Approved
Stock Plan” means any employee benefit plan which has been approved by the board of directors of the Company prior to or subsequent
to the date hereof pursuant to which shares of Common Stock and options and restricted stock units to purchase Common Stock may be issued
to any employee, officer or director for services provided to the Company in their capacity as such.
(f) “Attribution
Parties” means, collectively, the following Persons: (i) any investment vehicle, including, any funds, feeder funds or managed
accounts, currently, or from time to time after the Issuance Date, directly or indirectly managed or advised by the Holder’s investment
manager or any of its Affiliates or principals, (ii) any direct or indirect Affiliates of the Holder or any of the foregoing, (iii) any
Person acting or who could be deemed to be acting as a Group together with the Holder or any of the foregoing and (iv) any other Persons
whose beneficial ownership of the Common Stock would or could be aggregated with the Holder’s and the other Attribution Parties
for purposes of Section 13(d) of the 1934 Act. For clarity, the purpose of the foregoing is to subject collectively the Holder and all
other Attribution Parties to the Maximum Percentage.
(g) “Bid
Price” means, for any security as of the particular time of determination, the bid price for such security on the Principal
Market as reported by Bloomberg as of such time of determination, or, if the Principal Market is not the principal securities exchange
or trading market for such security, the bid price of such security on the principal securities exchange or trading market where such
security is listed or traded as reported by Bloomberg as of such time of determination, or if the foregoing does not apply, the bid price
of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg as of such
time of determination, or, if no bid price is reported for such security by Bloomberg as of such time of determination, the average of
the bid prices of any market makers for such security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly
Pink Sheets LLC) as of such time of determination. If the Bid Price cannot be calculated for a security as of the particular time of
determination on any of the foregoing bases, the Bid Price of such security as of such time of determination shall be the fair market
value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value
of such security, then such dispute shall be resolved in accordance with the procedures in Section 15. All such determinations shall
be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period.
(h) “Black
Scholes Value” means the value of the unexercised portion of this Warrant remaining on the date of the Holder’s request
pursuant to Section 4(c), which value is calculated using the Black Scholes Option Pricing Model obtained from the “OV” function
on Bloomberg utilizing (i) an underlying price per share equal to the greater of (1) the highest Closing Sale Price of the Common Stock
during the period beginning on the Trading Day immediately preceding the announcement of the applicable Fundamental Transaction (or the
consummation of the applicable Fundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant
to Section 4(c) and (2) the sum of the price per share being offered in cash in the applicable Fundamental Transaction (if any) plus
the value of the non-cash consideration being offered in the applicable Fundamental Transaction (if any), (ii) a strike price equal to
the Exercise Price in effect on the date of the Holder’s request pursuant to Section 4(c), (iii) a risk-free interest rate corresponding
to the U.S. Treasury rate for a period equal to the greater of (1) the remaining term of this Warrant as of the date of the Holder’s
request pursuant to Section 4(c) and (2) the remaining term of this Warrant as of the date of consummation of the applicable Fundamental
Transaction or as of the date of the Holder’s request pursuant to Section 4(c) if such request is prior to the date of the consummation
of the applicable Fundamental Transaction, (iv) a zero cost of borrow and (v) an expected volatility equal to the greater of 100% and
the 30 day volatility obtained from the “HVT” function on Bloomberg (determined utilizing a 365 day annualization factor)
as of the Trading Day immediately following the earliest to occur of (A) the public disclosure of the applicable Fundamental Transaction,
and (B) the date of the Holder’s request pursuant to Section 4(c).
(i) “Bloomberg”
means Bloomberg, L.P.
(j) “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial
banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”,
“non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the
direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial
banks in The City of New York generally are open for use by customers on such day.
(k) “Closing
Sale Price” means, for any security as of any date, the last closing trade price for such security on the Principal Market,
as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing
trade price, then the last trade price of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg, or, if the Principal
Market is not the principal securities exchange or trading market for such security, the last trade price of such security on the principal
securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing does not
apply, the last trade price of such security in the over-the-counter market on the electronic bulletin board for such security as reported
by Bloomberg, or, if no last trade price is reported for such security by Bloomberg, the average of the ask prices of any market makers
for such security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). If the Closing Sale
Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale Price of such security
on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable
to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section
15. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction
during such period.
(l) “Common
Stock” means (i) the Company’s shares of common stock, $0.001 par value per share, and (ii) any capital stock into which
such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.
(m) “Convertible
Securities” means any stock or other security (other than Options) that is at any time and under any circumstances, directly
or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any shares
of Common Stock.
(n) “Eligible
Market” means The New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, the Nasdaq Global Market or
the Nasdaq Capital Market.
(o) “Excluded
Securities” means (i) shares of Common Stock, restricted stock units or options to purchase Common Stock issued to directors,
officers or employees of the Company for services rendered to the Company in their capacity as such pursuant to an Approved Stock Plan
(as defined above), provided that (A) all such issuances (taking into account the shares of Common Stock issuable upon exercise of such
options and restricted stock units) after the Subscription Date pursuant to this clause (i) do not, in the aggregate, exceed more than
5% of the Common Stock issued and outstanding immediately prior to the Subscription Date and (B) the exercise price of any such options
is not lowered, none of such options are amended to increase the number of shares issuable thereunder and none of the terms or conditions
of any such options are otherwise materially changed in any manner that adversely affects any of the Buyers; (ii) shares of Common Stock
issued upon the conversion or exercise of Convertible Securities (other than options to purchase Common Stock issued pursuant to an Approved
Stock Plan that are covered by clause (i) above) issued prior to the Subscription Date, provided that the conversion price of any such
Convertible Securities (other than restricted stock units and options to purchase Common Stock issued pursuant to an Approved Stock Plan
that are covered by clause (i) above) is not lowered, the term of any such Convertible Securities (other than restricted stock units
and options to purchase Common Stock issued pursuant to an Approved Stock Plan that are covered by clause (i) above) is not extended,
none of such Convertible Securities (other than restricted stock units and options to purchase Common Stock issued pursuant to an Approved
Stock Plan that are covered by clause (i) above) are amended to increase the number of shares issuable thereunder and none of the terms
or conditions of any such Convertible Securities (other than restricted stock units and options to purchase Common Stock issued pursuant
to an Approved Stock Plan that are covered by clause (i) above) are otherwise materially changed in any manner that adversely affects
the Company; (iii) the shares of Common Stock issuable pursuant to the terms of the Notes; provided, that the terms of the Notes are
not amended, modified or changed on or after the Subscription Date.
(p)
“Expiration Date” means the date that is the fifth (5th) anniversary of the Initial Exercisability Date
or, if such date falls on a day other than a Trading Day or on which trading does not take place on the Principal Market (a “Holiday”),
the next date that is not a Holiday.
(q) “Fundamental
Transaction” means (A) that the Company shall, directly or indirectly, including through Subsidiaries, Affiliates or otherwise,
in one or more related transactions, (i) consolidate or merge with or into (whether or not the Company is the surviving corporation)
another Subject Entity, or (ii) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or
assets of the Company or any of its “significant subsidiaries” (as defined in Rule 1-02 of Regulation S-X) to one or more
Subject Entities, or (iii) make, or allow one or more Subject Entities to make, or allow the Company to be subject to or have its Common
Stock be subject to or party to one or more Subject Entities making, a purchase, tender or exchange offer that is accepted by the holders
of at least either (x) 50% of the outstanding shares of Common Stock, (y) 50% of the outstanding shares of Common Stock calculated as
if any shares of Common Stock held by all Subject Entities making or party to, or Affiliated with any Subject Entities making or party
to, such purchase, tender or exchange offer were not outstanding; or (z) such number of shares of Common Stock such that all Subject
Entities making or party to, or Affiliated with any Subject Entity making or party to, such purchase, tender or exchange offer, become
collectively the beneficial owners (as defined in Rule 13d-3 under the 1934 Act) of at least 50% of the outstanding shares of Common
Stock, or (iv) consummate a stock or share purchase agreement or other business combination (including, without limitation, a reorganization,
recapitalization, spin-off or scheme of arrangement) with one or more Subject Entities whereby all such Subject Entities, individually
or in the aggregate, acquire, either (x) at least 50% of the outstanding shares of Common Stock, (y) at least 50% of the outstanding
shares of Common Stock calculated as if any shares of Common Stock held by all the Subject Entities making or party to, or Affiliated
with any Subject Entity making or party to, such stock purchase agreement or other business combination were not outstanding; or (z)
such number of shares of Common Stock such that the Subject Entities become collectively the beneficial owners (as defined in Rule 13d-3
under the 1934 Act) of at least 50% of the outstanding shares of Common Stock, or (v) reorganize, recapitalize or reclassify its Common
Stock, (B) that the Company shall, directly or indirectly, including through Subsidiaries, Affiliates or otherwise, in one or more related
transactions, allow any Subject Entity individually or the Subject Entities in the aggregate to be or become the “beneficial owner”
(as defined in Rule 13d-3 under the 1934 Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance,
tender, tender offer, exchange, reduction in outstanding shares of Common Stock, merger, consolidation, business combination, reorganization,
recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner whatsoever,
of either (x) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Stock, (y) at least 50%
of the aggregate ordinary voting power represented by issued and outstanding Common Stock not held by all such Subject Entities as of
the Subscription Date calculated as if any shares of Common Stock held by all such Subject Entities were not outstanding, or (z) a percentage
of the aggregate ordinary voting power represented by issued and outstanding shares of Common Stock or other equity securities of the
Company sufficient to allow such Subject Entities to effect a statutory short form merger or other transaction requiring other shareholders
of the Company to surrender their shares of Common Stock without approval of the shareholders of the Company or (C) directly or indirectly,
including through Subsidiaries, Affiliates or otherwise, in one or more related transactions, the issuance of or the entering into any
other instrument or transaction structured in a manner to circumvent, or that circumvents, the intent of this definition in which case
this definition shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this definition
to the extent necessary to correct this definition or any portion of this definition which may be defective or inconsistent with the
intended treatment of such instrument or transaction.
(r) “Group”
means a “group” as that term is used in Section 13(d) of the 1934 Act and as defined in Rule 13d-5 thereunder.
(s) “Initial
Exercisability Date” means the date the Company obtains the Principal Market’s approval of the transactions contemplated
by the Transaction Documents and the Stockholder Approval.
(t) “Notes”
has the meaning ascribed to such term in the Securities Purchase Agreement, and shall include all notes issued in exchange therefor or
replacement thereof.
(u) “Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
(v) “Parent
Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock or
equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity, the
Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.
(w) “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity or a government or any department or agency thereof.
(x) “Principal
Market” means the Nasdaq Global Select Market.
(y) “Registration
Rights Agreement” means that certain registration rights agreement, dated as of the Closing Date, by and among the Company
and the initial holders of the Notes and SPA Warrants relating to, among other things, the registration of the resale of the Common Stock
issuable upon conversion of the Notes or otherwise pursuant to the terms of the Notes and upon exercise of the SPA Warrants, as may be
amended from time to time.
(z) “SEC”
means the United States Securities and Exchange Commission or the successor thereto.
(aa) “Spin-off
Transactions” shall have the meaning as set forth in the Notes.
(bb) “Stockholder
Approval” shall have the meaning as set forth in the Securities Purchase Agreement.
(cc) “Subject
Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons or Group.
(dd) “Successor
Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from or surviving any Fundamental
Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental Transaction shall have been
entered into.
(ee) “Trading
Day” means, as applicable, (x) with respect to all price or trading volume determinations relating to the Common Stock, any
day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market for
the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded, provided that
“Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less
than 4.5 hours or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market
(or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the
hour ending at 4:00:00 p.m., New York time) unless such day is otherwise designated as a Trading Day in writing by the Holder or (y)
with respect to all determinations other than price or trading volume determinations relating to the Common Stock, any day on which The
New York Stock Exchange (or any successor thereto) is open for trading of securities.
(ff) “VWAP”
means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market (or, if the
Principal Market is not the principal trading market for such security, then on the principal securities exchange or securities market
on which such security is then traded), during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m., New York time,
as reported by Bloomberg through its “VAP” function (set to 09:30 start time and 16:00 end time) or, if the foregoing does
not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board
for such security during the period beginning at 9:30 a.m., New York time, and ending at 4:00 p.m., New York time, as reported by Bloomberg,
or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the highest
closing bid price and the lowest closing ask price of any of the market makers for such security as reported in the “pink sheets”
by OTC Markets Group Inc. (formerly Pink Sheets LLC). If the VWAP cannot be calculated for such security on such date on any of the foregoing
bases, the VWAP of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If
the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance
with the procedures in Section 15. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock
combination, recapitalization or other similar transaction during such period.
[signature
page follows]
IN
WITNESS WHEREOF, the Company has caused this Warrant to Purchase Common Stock to be duly executed as of the Issuance Date set out
above.
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Vinco
Ventures, Inc.
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By:
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Name:
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Christopher
B. Ferguson
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Title:
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Chief
Executive Officer
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EXHIBIT
A
EXERCISE
NOTICE
TO
BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT TO PURCHASE COMMON STOCK
VINCO
VENTURES, INC.
The
undersigned holder hereby elects to exercise the Warrant to Purchase Common Stock No. _______ (the “Warrant”) of Vinco
Ventures, Inc., a Nevada corporation (the “Company”) as specified below. Capitalized terms used herein and not otherwise
defined shall have the respective meanings set forth in the Warrant.
1. Form
of Exercise Price. The Holder intends that payment of the Aggregate Exercise Price shall be made as:
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[ ]
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a
“Cash Exercise” with respect to _________________ Warrant Shares; and/or
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[ ]
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a
“Cashless Exercise” with respect to _______________ Warrant Shares.
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In
the event that the Holder has elected a Cashless Exercise with respect to some or all of the Warrant Shares to be issued pursuant hereto,
the Holder hereby represents and warrants that (i) this Exercise Notice was executed by the Holder at __________ [a.m.][p.m.] on the
date set forth below and (ii) if applicable, the Bid Price as of such time of execution of this Exercise Notice was $________.
2. Payment
of Exercise Price. In the event that the Holder has elected a Cash Exercise with respect to some or all of the Warrant Shares to
be issued pursuant hereto, the Holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance
with the terms of the Warrant.
3. Delivery
of Warrant Shares. The Company shall deliver to Holder, or its designee or agent as specified below, __________ shares of Common
Stock in accordance with the terms of the Warrant. Delivery shall be made to Holder, or for its benefit, as follows:
[ ] Check here if requesting delivery as a certificate to the following name and to the following address:
[ ] Check
here if requesting delivery by Deposit/Withdrawal at Custodian as follows:
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DTC
Participant:
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DTC
Number:
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Account
Number:
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Date:
_______________ ___, _____
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Name
of Registered Holder
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Tax
ID:____________________________
Facsimile:__________________________
E-mail
Address:_____________________
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EXHIBIT
B
ACKNOWLEDGMENT
The
Company hereby acknowledges this Exercise Notice and hereby directs ______________ to issue the above indicated number of shares of Common
Stock in accordance with the Transfer Agent Instructions dated _________, 202_, from the Company and acknowledged and agreed to by _______________.
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Vinco
Ventures, Inc.
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By:
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Name:
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Title:
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Exhibit
10.3
REGISTRATION
RIGHTS AGREEMENT
This
REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of July 22, 2021, is by and among Vinco Ventures,
Inc., a Nevada corporation with offices located at 1 West Broad Street, Suite 1004, Bethlehem, Pennsylvania (the “Company”),
and the undersigned buyers (each, a “Buyer,” and collectively, the “Buyers”).
RECITALS
A.
In connection with the Securities Purchase Agreement by and among the Company, ZASH Global Media and Entertainment Corporation, ZVV Media
Partners, LLC and the Buyers, dated as of July 22, 2021 (the “Securities Purchase Agreement”), the Company has agreed,
upon the terms and subject to the conditions of the Securities Purchase Agreement, to issue and sell to each Buyer (i) the Notes (as
defined in the Securities Purchase Agreement) which may be convertible into Conversion Shares (as defined in the Securities Purchase
Agreement) in accordance with the terms of the Notes and (ii) the Warrants (as defined in the Securities Purchase Agreement) which may
be exercisable to purchase Warrant Shares (as defined in the Securities Purchase Agreement) in accordance with the terms of the Warrants.
B.
To induce the Buyers to consummate the transactions contemplated by the Securities Purchase Agreement, the Company has agreed to provide
certain registration rights under the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any similar successor
statute (collectively, the “1933 Act”), and applicable state securities laws.
AGREEMENT
NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and each of the Buyers hereby agree as follows:
1.
Definitions.
Capitalized
terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Securities Purchase Agreement.
As used in this Agreement, the following terms shall have the following meanings:
(a)
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New
York are authorized or required by law to remain closed; provided, however, for clarification,
commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”,
“non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the
direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial
banks in The City of New York generally are open for use by customers on such day.
(b)
“Closing Date” shall have the meaning set forth in the Securities Purchase Agreement.
(c)
“Effective Date” means the date that the applicable Registration Statement has been declared effective by the SEC.
(d)
“Effectiveness Deadline” means (i) with respect to the initial Registration Statement required to be filed pursuant
to Section 2(a), the earlier of the (A) 30th calendar day after the Filing Deadline (or 45 calendar days after the Filing
Deadline if subject to a review by the SEC) and (B) 2nd Business Day after the date the Company is notified (orally or in writing, whichever
is earlier) by the SEC that such Registration Statement will not be reviewed or will not be subject to further review and (ii) with respect
to any additional Registration Statements that may be required to be filed by the Company pursuant to this Agreement, the earlier of
the (A) 60th calendar day following the date on which the Company was required to file such additional Registration Statement
(or 75 calendar days after following the date on which the Company was required to file such additional Registration Statement if subject
to a review by the SEC) and (B) 2nd Business Day after the date the Company is notified (orally or in writing, whichever is
earlier) by the SEC that such Registration Statement will not be reviewed or will not be subject to further review.
(e)
“Filing Deadline” means (i) with respect to the initial Registration Statement required to be filed pursuant to Section
2(a), the earlier of (x) five (5) Trading Days after the Company obtains Stockholder Approval (as defined in the Securities Purchase
Agreement) and (y) one hundred twenty (120) calendar days after the Closing Date and (ii) with respect to any additional Registration
Statements that may be required to be filed by the Company pursuant to this Agreement, the date on which the Company was required to
file such additional Registration Statement pursuant to the terms of this Agreement.
(f)
“Investor” means a Buyer or any transferee or assignee of any Registrable Securities, Notes or Warrants, as applicable,
to whom a Buyer assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance
with Section 9 and any transferee or assignee thereof to whom a transferee or assignee of any Registrable Securities, Notes or Warrants,
as applicable, assigns its rights under this Agreement and who agrees to become bound by the provisions of this Agreement in accordance
with Section 9.
(g)
“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust,
an unincorporated organization or a government or any department or agency thereof.
(h)
“register,” “registered,” and “registration” refer to a registration effected
by preparing and filing one or more Registration Statements in compliance with the 1933 Act and pursuant to Rule 415 and the declaration
of effectiveness of such Registration Statement(s) by the SEC.
(i)
“Registrable Securities” means (i) the Conversion Shares, (ii) the Warrant Shares and (iii) any capital stock of the
Company issued or issuable with respect to the Conversion Shares, the Warrant Shares, the Notes or the Warrants, including, without limitation,
(1) as a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise and (2) shares of capital
stock of the Company into which the shares of Common Stock (as defined in the Notes) are converted or exchanged and shares of capital
stock of a Successor Entity (as defined in the Warrants) into which the shares of Common Stock are converted or exchanged, in each case,
without regard to any limitations on conversion of the Notes or exercise of the Warrants.
(j)
“Registration Statement” means a registration statement or registration statements of the Company filed under the
1933 Act covering Registrable Securities.
(k)
“Required Holders” shall have the meaning as set forth in the Securities Purchase Agreement.
(l)
“Required Registration Amount” means the sum of (i) the maximum number of Conversion Shares issuable upon conversion
of the Notes (assuming for purposes hereof that (x) the Notes are convertible at the initial Conversion Price (as defined in the Notes),
(y) interest on the Notes shall accrue through the second anniversary of the Closing Date and will be converted in shares of Common Stock
at an interest conversion price equal to the Interest Conversion Price (as defined in the Notes) assuming an Interest Date (as defined
in the Note) as of the date hereof and (z) any such conversion shall not take into account any limitations on the conversion of the Notes
set forth in the Notes) and (ii) the maximum number of Warrant Shares issuable upon exercise of the Warrants (without taking into account
any limitations on the exercise of the Warrants set forth therein), all subject to adjustment as provided in Section 2(d) and/or Section
2(f).
(m)
“Rule 144” means Rule 144 promulgated by the SEC under the 1933 Act, as such rule may be amended from time to time,
or any other similar or successor rule or regulation of the SEC that may at any time permit the Investors to sell securities of the Company
to the public without registration.
(n)
“Rule 415” means Rule 415 promulgated by the SEC under the 1933 Act, as such rule may be amended from time to time,
or any other similar or successor rule or regulation of the SEC providing for offering securities on a continuous or delayed basis.
(o)
“SEC” means the United States Securities and Exchange Commission or any successor thereto.
2.
Registration.
(a)
Mandatory Registration. The Company shall prepare and, as soon as practicable, but in no event later than the Filing Deadline,
file with the SEC an initial Registration Statement on Form S-1 or another available form reasonably acceptable to the Required Holders
covering the resale of all of the Registrable Securities, provided that such initial Registration Statement shall register for resale
at least the number of shares of Common Stock equal to the Required Registration Amount as of the date such Registration Statement is
initially filed with the SEC. Such initial Registration Statement, and each other Registration Statement required to be filed pursuant
to the terms of this Agreement, shall contain (except if otherwise directed by the Required Holders) the “Selling Stockholders”
and “Plan of Distribution” sections in substantially the form attached hereto as Exhibit B. The Company shall
use its best efforts to have such initial Registration Statement, and each other Registration Statement required to be filed pursuant
to the terms of this Agreement, declared effective by the SEC as soon as practicable, but in no event later than the applicable Effectiveness
Deadline for such Registration Statement.
(b)
Legal Counsel. Subject to Section 5 hereof, Schulte Roth & Zabel LLP, counsel solely to the lead investor (“Legal
Counsel”) shall review and oversee any registration, solely on behalf of the lead investor, pursuant to this Section 2.
(c)
Current Ineligibility to Use Form S-3. Form S-3 is not currently available to the Company for the registration of the resale of
Registrable Securities hereunder. The Company shall undertake to register the resale of the Registrable Securities on Form S-3 as soon
as such form is available, provided that the Company shall maintain the effectiveness of all Registration Statements then in effect until
such time as a Registration Statement on Form S-3 covering the resale of all the Registrable Securities has been declared effective by
the SEC and the prospectus contained therein is available for use.
(d)
Sufficient Number of Shares Registered. In the event the number of shares available under any Registration Statement is insufficient
to cover all of the Registrable Securities required to be covered by such Registration Statement or an Investor’s allocated portion
of the Registrable Securities pursuant to Section 2(h), the Company shall amend such Registration Statement (if permissible), or file
with the SEC a new Registration Statement (on the short form available therefor, if applicable), or both, so as to cover at least the
Required Registration Amount as of the Trading Day (as defined in the Notes) immediately preceding the date of the filing of such amendment
or new Registration Statement, in each case, as soon as practicable, but in any event not later than fifteen (15) days after the necessity
therefor arises (but taking account of any Staff position with respect to the date on which the Staff will permit such amendment to the
Registration Statement and/or such new Registration Statement (as the case may be) to be filed with the SEC). The Company shall use its
best efforts to cause such amendment to such Registration Statement and/or such new Registration Statement (as the case may be) to become
effective as soon as practicable following the filing thereof with the SEC, but in no event later than the applicable Effectiveness Deadline
for such Registration Statement. For purposes of the foregoing provision, the number of shares available under a Registration Statement
shall be deemed “insufficient to cover all of the Registrable Securities” if at any time the number of shares of Common Stock
available for resale under the applicable Registration Statement is less than the product determined by multiplying (i) the Required
Registration Amount as of such time by (ii) 0.90. The calculation set forth in the foregoing sentence shall be made without regard to
any limitations on conversion, amortization and/or redemption of the Notes or exercise of the Warrants (and such calculation shall assume
(A) that the Notes are then convertible in full into shares of Common Stock at the then prevailing Conversion Rate (as defined in the
Notes), (B) the initial outstanding principal amount of the Notes remains outstanding through the scheduled Maturity Date (as defined
in the Notes) and no redemptions of the Notes occur prior to the scheduled Maturity Date and (C) the Warrants are then exercisable in
full into shares of Common Stock at the then prevailing Exercise Price (as defined in the Warrants)).
(e)
Effect of Failure to File and Obtain and Maintain Effectiveness of any Registration Statement. If (i) a Registration Statement
covering the resale of all of the Registrable Securities required to be covered thereby (disregarding any reduction pursuant to Section
2(f)) and required to be filed by the Company pursuant to this Agreement is (A) not filed with the SEC on or before the Filing Deadline
for such Registration Statement (a “Filing Failure”) (it being understood that if the Company files a Registration
Statement without affording each Investor and Legal Counsel the opportunity to review and comment on the same as required by Section
3(c) hereof, the Company shall be deemed to not have satisfied this clause (i)(A) and such event shall be deemed to be a Filing Failure)
or (B) not declared effective by the SEC on or before the Effectiveness Deadline for such Registration Statement (an “Effectiveness
Failure”) (it being understood that if on the Business Day immediately following the Effective Date for such Registration Statement
the Company shall not have filed a “final” prospectus for such Registration Statement with the SEC under Rule 424(b) in accordance
with Section 3(b) (whether or not such a prospectus is technically required by such rule), the Company shall be deemed to not have satisfied
this clause (i)(B) and such event shall be deemed to be an Effectiveness Failure), (ii) other than during an Allowable Grace Period (as
defined below), on any day after the Effective Date of a Registration Statement sales of all of the Registrable Securities required to
be included on such Registration Statement (disregarding any reduction pursuant to Section 2(f)) cannot be made pursuant to such Registration
Statement (including, without limitation, because of a failure to keep such Registration Statement effective, a failure to disclose such
information as is necessary for sales to be made pursuant to such Registration Statement, a suspension or delisting of (or a failure
to timely list) the shares of Common Stock on the Principal Market (as defined in the Securities Purchase Agreement) or any other limitations
imposed by the Principal Market, or a failure to register a sufficient number of shares of Common Stock or by reason of a stop order)
or the prospectus contained therein is not available for use for any reason (a “Maintenance Failure”), or (iii) if
a Registration Statement is not effective for any reason or the prospectus contained therein is not available for use for any reason,
and either (x) the Company fails for any reason to satisfy the requirements of Rule 144(c)(1), including, without limitation, the failure
to satisfy the current public information requirement under Rule 144(c) or (y) the Company has ever been an issuer described in Rule
144(i)(1)(i) or becomes such an issuer in the future, and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2)
(a “Current Public Information Failure”) as a result of which any of the Investors are unable to sell Registrable
Securities without restriction under Rule 144 (including, without limitation, volume restrictions), then, as partial relief for the damages
to any holder by reason of any such delay in, or reduction of, its ability to sell the underlying shares of Common Stock (which remedy
shall not be exclusive of any other remedies available at law or in equity, including, without limitation, specific performance), the
Company shall pay to each holder of Registrable Securities relating to such Registration Statement an amount in cash equal to one percent
(1%) of such Investor’s original principal amount stated in such Investor’s Note on the Closing Date (1) on the date of such
Filing Failure, Effectiveness Failure, Maintenance Failure or Current Public Information Failure, as applicable, and (2) on every thirty
(30) day anniversary of (I) a Filing Failure until such Filing Failure is cured; (II) an Effectiveness Failure until such Effectiveness
Failure is cured; (III) a Maintenance Failure until such Maintenance Failure is cured; and (IV) a Current Public Information Failure
until the earlier of (i) the date such Current Public Information Failure is cured and (ii) such time that such public information is
no longer required pursuant to Rule 144 (in each case, pro rated for periods totaling less than thirty (30) days). The payments to which
a holder of Registrable Securities shall be entitled pursuant to this Section 2(e) are referred to herein as “Registration Delay
Payments.” Following the initial Registration Delay Payment for any particular event or failure (which shall be paid on the
date of such event or failure, as set forth above), without limiting the foregoing, if an event or failure giving rise to the Registration
Delay Payments is cured prior to any thirty (30) day anniversary of such event or failure, then such Registration Delay Payment shall
be made on the third (3rd) Business Day after such cure. In the event the Company fails to make Registration Delay Payments
in a timely manner in accordance with the foregoing, such Registration Delay Payments shall bear interest at the rate of one percent
(1%) per month (prorated for partial months) until paid in full. Notwithstanding the foregoing, no Registration Delay Payments shall
be owed to an Investor (other than with respect to a Maintenance Failure resulting from a suspension or delisting of (or a failure to
timely list) the shares of Common Stock on the Principal Market) with respect to any period during which all of such Investor’s
Registrable Securities may be sold by such Investor without restriction under Rule 144 (including, without limitation, volume restrictions)
and without the need for current public information required by Rule 144(c)(1) (or Rule 144(i)(2), if applicable).
(f)
Offering. Notwithstanding anything to the contrary contained in this Agreement, but subject to the payment of the Registration
Delay Payments pursuant to Section 2(e), in the event the staff of the SEC (the “Staff”) or the SEC seeks to characterize
any offering pursuant to a Registration Statement filed pursuant to this Agreement as constituting an offering of securities by, or on
behalf of, the Company, or in any other manner, such that the Staff or the SEC do not permit such Registration Statement to become effective
and used for resales in a manner that does not constitute such an offering and that permits the continuous resale at the market by the
Investors participating therein (or as otherwise may be acceptable to each Investor) without being named therein as an “underwriter,”
then the Company shall reduce the number of shares to be included in such Registration Statement by all Investors until such time as
the Staff and the SEC shall so permit such Registration Statement to become effective as aforesaid. In making such reduction, the Company
shall reduce the number of shares to be included by all Investors on a pro rata basis (based upon the number of Registrable Securities
otherwise required to be included for each Investor) unless the inclusion of shares by a particular Investor or a particular set of Investors
are resulting in the Staff or the SEC’s “by or on behalf of the Company” offering position, in which event the shares
held by such Investor or set of Investors shall be the only shares subject to reduction (and if by a set of Investors on a pro rata basis
by such Investors or on such other basis as would result in the exclusion of the least number of shares by all such Investors); provided,
that, with respect to such pro rata portion allocated to any Investor, such Investor may elect the allocation of such pro rata portion
among the Registrable Securities of such Investor. In addition, in the event that the Staff or the SEC requires any Investor seeking
to sell securities under a Registration Statement filed pursuant to this Agreement to be specifically identified as an “underwriter”
in order to permit such Registration Statement to become effective, and such Investor does not consent to being so named as an underwriter
in such Registration Statement, then, in each such case, the Company shall reduce the total number of Registrable Securities to be registered
on behalf of such Investor, until such time as the Staff or the SEC does not require such identification or until such Investor accepts
such identification and the manner thereof. Any reduction pursuant to this paragraph will first reduce all Registrable Securities other
than those issued pursuant to the Securities Purchase Agreement. In the event of any reduction in Registrable Securities pursuant to
this paragraph, an affected Investor shall have the right to require, upon delivery of a written request to the Company signed by such
Investor, the Company to file a registration statement within twenty (20) days of such request (subject to any restrictions imposed by
Rule 415 or required by the Staff or the SEC) for resale by such Investor in a manner acceptable to such Investor, and the Company shall
following such request cause to be and keep effective such registration statement in the same manner as otherwise contemplated in this
Agreement for registration statements hereunder, in each case until such time as: (i) all Registrable Securities held by such Investor
have been registered and sold pursuant to an effective Registration Statement in a manner acceptable to such Investor or (ii) all Registrable
Securities may be resold by such Investor without restriction (including, without limitation, volume limitations) pursuant to Rule 144
(taking account of any Staff position with respect to “affiliate” status) and without the need for current public information
required by Rule 144(c)(1) (or Rule 144(i)(2), if applicable) or (iii) such Investor agrees to be named as an underwriter in any such
Registration Statement in a manner acceptable to such Investor as to all Registrable Securities held by such Investor and that have not
theretofore been included in a Registration Statement under this Agreement (it being understood that the special demand right under this
sentence may be exercised by an Investor multiple times and with respect to limited amounts of Registrable Securities in order to permit
the resale thereof by such Investor as contemplated above).
(g)
Piggyback Registrations. Without limiting any obligation of the Company hereunder or under the Securities Purchase Agreement,
if there is not an effective Registration Statement covering all of the Registrable Securities or the prospectus contained therein is
not available for use and the Company shall determine to prepare and file with the SEC a registration statement or offering statement
relating to an offering for its own account or the account of others under the 1933 Act of any of its equity securities (other than on
Form S-4 or Form S-8 (each as promulgated under the 1933 Act) or their then equivalents relating to equity securities to be issued solely
in connection with any acquisition of any entity or business or equity securities issuable in connection with the Company’s stock
option or other employee benefit plans), then the Company shall deliver to each Investor a written notice of such determination and,
if within fifteen (15) days after the date of the delivery of such notice, any such Investor shall so request in writing, the Company
shall include in such registration statement or offering statement all or any part of such Registrable Securities such Investor requests
to be registered; provided, however, the Company shall not be required to register any Registrable Securities pursuant to this Section
2(g) that are eligible for resale pursuant to Rule 144 without restriction (including, without limitation, volume restrictions) and without
the need for current public information required by Rule 144(c)(1) (or Rule 144(i)(2), if applicable) or that are the subject of a then-effective
Registration Statement.
(h)
Allocation of Registrable Securities. The initial number of Registrable Securities included in any Registration Statement and
any increase in the number of Registrable Securities included therein shall be allocated pro rata among the Investors based on the number
of Registrable Securities held by each Investor at the time such Registration Statement covering such initial number of Registrable Securities
or increase thereof is declared effective by the SEC. In the event that an Investor sells or otherwise transfers any of such Investor’s
Registrable Securities, each transferee or assignee (as the case may be) that becomes an Investor shall be allocated a pro rata portion
of the then-remaining number of Registrable Securities included in such Registration Statement for such transferor or assignee (as the
case may be). Any shares of Common Stock included in a Registration Statement and which remain allocated to any Person which ceases to
hold any Registrable Securities covered by such Registration Statement shall be allocated to the remaining Investors, pro rata based
on the number of Registrable Securities then held by such Investors which are covered by such Registration Statement.
(i)
No Inclusion of Other Securities. The Company shall in no event include any securities other than Registrable Securities on any
Registration Statement filed in accordance herewith without the prior written consent of the Required Holders. Until the Applicable Date
(as defined in the Securities Purchase Agreement), the Company shall not enter into any agreement providing any registration rights to
any of its security holders, except as otherwise permitted under the Securities Purchase Agreement.
3.
Related Obligations.
The
Company shall use its best efforts to effect the registration of the Registrable Securities in accordance with the intended method of
disposition thereof, and, pursuant thereto, the Company shall have the following obligations:
(a)
The Company shall promptly prepare and file with the SEC a Registration Statement with respect to all the Registrable Securities (but
in no event later than the applicable Filing Deadline) and use its best efforts to cause such Registration Statement to become effective
as soon as practicable after such filing (but in no event later than the Effectiveness Deadline). Subject to Allowable Grace Periods,
the Company shall keep each Registration Statement effective (and the prospectus contained therein available for use) pursuant to Rule
415 for resales by the Investors on a delayed or continuous basis at then-prevailing market prices (and not fixed prices) at all times
until the earlier of (i) the date as of which all of the Investors may sell all of the Registrable Securities required to be covered
by such Registration Statement (disregarding any reduction pursuant to Section 2(f)) without restriction pursuant to Rule 144 (including,
without limitation, volume restrictions) and without the need for current public information required by Rule 144(c)(1) (or Rule 144(i)(2),
if applicable) or (ii) the date on which the Investors shall have sold all of the Registrable Securities covered by such Registration
Statement (the “Registration Period”). Notwithstanding anything to the contrary contained in this Agreement, the Company
shall ensure that, when filed and at all times while effective, each Registration Statement (including, without limitation, all amendments
and supplements thereto) and the prospectus (including, without limitation, all amendments and supplements thereto) used in connection
with such Registration Statement (1) shall not contain any untrue statement of a material fact or omit to state a material fact required
to be stated therein, or necessary to make the statements therein (in the case of prospectuses, in the light of the circumstances in
which they were made) not misleading and (2) will disclose (whether directly or through incorporation by reference to other SEC filings
to the extent permitted) all material information regarding the Company and its securities. The Company shall submit to the SEC, within
one (1) Business Day after the later of the date that (i) the Company learns that no review of a particular Registration Statement will
be made by the Staff or that the Staff has no further comments on a particular Registration Statement (as the case may be) and (ii) the
consent of Legal Counsel is obtained pursuant to Section 3(c) (which consent shall be immediately sought), a request for acceleration
of effectiveness of such Registration Statement to a time and date not later than twenty-four (24) hours after the submission of such
request. The Company shall respond in writing to comments made by the SEC in respect of a Registration Statement as soon as practicable,
but in no event later than fifteen (15) days after the receipt of comments by or notice from the SEC that an amendment is required in
order for a Registration Statement to be declared effective.
(b)
Subject to Section 3(r) of this Agreement, the Company shall prepare and file with the SEC such amendments (including, without limitation,
post-effective amendments) and supplements to each Registration Statement and the prospectus used in connection with each such Registration
Statement, which prospectus is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may be necessary to keep each such
Registration Statement effective at all times during the Registration Period for such Registration Statement, and, during such period,
comply with the provisions of the 1933 Act with respect to the disposition of all Registrable Securities of the Company required to be
covered by such Registration Statement until such time as all of such Registrable Securities shall have been disposed of in accordance
with the intended methods of disposition by the seller or sellers thereof as set forth in such Registration Statement; provided, however,
by 8:30 a.m. (New York time) on the Business Day immediately following each Effective Date, the Company shall file with the SEC in accordance
with Rule 424(b) under the 1933 Act the final prospectus to be used in connection with sales pursuant to the applicable Registration
Statement (whether or not such a prospectus is technically required by such rule). In the case of amendments and supplements to any Registration
Statement which are required to be filed pursuant to this Agreement (including, without limitation, pursuant to this Section 3(b)) by
reason of the Company filing a report on Form 8-K, Form 10-Q or Form 10-K or any analogous report under the Securities Exchange Act of
1934, as amended (the “1934 Act”), the Company shall, if permitted under the applicable rules and regulations of the
SEC, have incorporated such report by reference into such Registration Statement, if applicable, or shall file such amendments or supplements
with the SEC on the same day on which the 1934 Act report is filed which created the requirement for the Company to amend or supplement
such Registration Statement.
(c)
The Company shall (A) permit Legal Counsel and legal counsel for each other Investor to review and comment upon (i) each Registration
Statement at least five (5) Business Days prior to its filing with the SEC and (ii) all amendments and supplements to each Registration
Statement (including, without limitation, the prospectus contained therein) (except for Annual Reports on Form 10-K, Quarterly Reports
on Form 10-Q, Current Reports on Form 8-K, and any similar or successor reports) within a reasonable number of days prior to their filing
with the SEC, and (B) not file any Registration Statement or amendment or supplement thereto in a form to which Legal Counsel or any
legal counsel for any other Investor reasonably objects. The Company shall not submit a request for acceleration of the effectiveness
of a Registration Statement or any amendment or supplement thereto or to any prospectus contained therein without the prior consent of
Legal Counsel, which consent shall not be unreasonably withheld. The Company shall promptly furnish to Legal Counsel and legal counsel
for each other Investor, without charge, (i) copies of any correspondence from the SEC or the Staff to the Company or its representatives
relating to each Registration Statement, provided that such correspondence shall not contain any material, non-public information regarding
the Company or any of its Subsidiaries (as defined in the Securities Purchase Agreement), (ii) after the same is prepared and filed with
the SEC, one (1) copy of each Registration Statement and any amendment(s) and supplement(s) thereto, including, without limitation, financial
statements and schedules, all documents incorporated therein by reference, if requested by an Investor, and all exhibits and (iii) upon
the effectiveness of each Registration Statement, one (1) copy of the prospectus included in such Registration Statement and all amendments
and supplements thereto. The Company shall reasonably cooperate with Legal Counsel and legal counsel for each other Investor in performing
the Company’s obligations pursuant to this Section 3.
(d)
The Company shall promptly furnish to each Investor whose Registrable Securities are included in any Registration Statement, without
charge, (i) after the same is prepared and filed with the SEC, at least one (1) copy of each Registration Statement and any amendment(s)
and supplement(s) thereto, including, without limitation, financial statements and schedules, all documents incorporated therein by reference,
if requested by an Investor, all exhibits and each preliminary prospectus, (ii) upon the effectiveness of each Registration Statement,
ten (10) copies of the prospectus included in such Registration Statement and all amendments and supplements thereto (or such other number
of copies as such Investor may reasonably request from time to time) and (iii) such other documents, including, without limitation, copies
of any preliminary or final prospectus, as such Investor may reasonably request from time to time in order to facilitate the disposition
of the Registrable Securities owned by such Investor.
(e)
The Company shall use its best efforts to (i) register and qualify, unless an exemption from registration and qualification applies,
the resale by Investors of the Registrable Securities covered by a Registration Statement under such other securities or “blue
sky” laws of all applicable jurisdictions in the United States, (ii) prepare and file in those jurisdictions, such amendments (including,
without limitation, post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain
the effectiveness thereof during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations
and qualifications in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable
to qualify the Registrable Securities for sale in such jurisdictions; provided, however, the Company shall not be required in connection
therewith or as a condition thereto to (x) qualify to do business in any jurisdiction where it would not otherwise be required to qualify
but for this Section 3(e), (y) subject itself to general taxation in any such jurisdiction, or (z) file a general consent to service
of process in any such jurisdiction. The Company shall promptly notify Legal Counsel, legal counsel for each other Investor and each
Investor who holds Registrable Securities of the receipt by the Company of any notification with respect to the suspension of the registration
or qualification of any of the Registrable Securities for sale under the securities or “blue sky” laws of any jurisdiction
in the United States or its receipt of actual notice of the initiation or threatening of any proceeding for such purpose.
(f)
The Company shall notify Legal Counsel, legal counsel for each other Investor and each Investor in writing of the happening of any event,
as promptly as practicable after becoming aware of such event, as a result of which the prospectus included in a Registration Statement,
as then in effect, may include an untrue statement of a material fact or omission to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (provided that
in no event shall such notice contain any material, non-public information regarding the Company or any of its Subsidiaries), and, subject
to Section 3(r), promptly prepare a supplement or amendment to such Registration Statement and such prospectus contained therein to correct
such untrue statement or omission and deliver ten (10) copies of such supplement or amendment to Legal Counsel, legal counsel for each
other Investor and each Investor (or such other number of copies as Legal Counsel, legal counsel for each other Investor or such Investor
may reasonably request). The Company shall also promptly notify Legal Counsel, legal counsel for each other Investor and each Investor
in writing (i) when a prospectus or any prospectus supplement or post-effective amendment has been filed, when a Registration Statement
or any post-effective amendment has become effective (notification of such effectiveness shall be delivered to Legal Counsel, legal counsel
for each other Investor and each Investor by facsimile or e-mail on the same day of such effectiveness and by overnight mail), and when
the Company receives written notice from the SEC that a Registration Statement or any post-effective amendment will be reviewed by the
SEC, (ii) of any request by the SEC for amendments or supplements to a Registration Statement or related prospectus or related information,
(iii) of the Company’s reasonable determination that a post-effective amendment to a Registration Statement would be appropriate;
and (iv) of the receipt of any request by the SEC or any other federal or state governmental authority for any additional information
relating to the Registration Statement or any amendment or supplement thereto or any related prospectus. The Company shall respond as
promptly as practicable to any comments received from the SEC with respect to each Registration Statement or any amendment thereto (it
being understood and agreed that the Company’s response to any such comments shall be delivered to the SEC no later than fifteen
(15) Business Days after the receipt thereof).
(g)
The Company shall (i) use its best efforts to prevent the issuance of any stop order or other suspension of effectiveness of each Registration
Statement or the use of any prospectus contained therein, or the suspension of the qualification, or the loss of an exemption from qualification,
of any of the Registrable Securities for sale in any jurisdiction and, if such an order or suspension is issued, to obtain the withdrawal
of such order or suspension at the earliest possible moment and (ii) notify Legal Counsel, legal counsel for each other Investor and
each Investor who holds Registrable Securities of the issuance of such order and the resolution thereof or its receipt of actual notice
of the initiation or threat of any proceeding for such purpose.
(h)
If any Investor may be required under applicable securities law to be described in any Registration Statement as an underwriter and such
Investor consents to so being named an underwriter, at the request of any Investor, the Company shall furnish to such Investor, on the
date of the effectiveness of such Registration Statement and thereafter from time to time on such dates as an Investor may reasonably
request (i) a letter, dated such date, from the Company’s independent certified public accountants in form and substance as is
customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the Investors,
and (ii) an opinion, dated as of such date, of counsel representing the Company for purposes of such Registration Statement, in form,
scope and substance as is customarily given in an underwritten public offering, addressed to the Investors.
(i)
If any Investor may be required under applicable securities law to be described in any Registration Statement as an underwriter and such
Investor consents to so being named an underwriter, upon the written request of such Investor, the Company shall make available for inspection
by (i) such Investor, (ii) legal counsel for such Investor and (iii) one (1) firm of accountants or other agents retained by such Investor
(collectively, the “Inspectors”), all pertinent financial and other records, and pertinent corporate documents and
properties of the Company (collectively, the “Records”), as shall be reasonably deemed necessary by each Inspector,
and cause the Company’s officers, directors and employees to supply all information which any Inspector may reasonably request;
provided, however, each Inspector shall agree in writing to hold in strict confidence and not to make any disclosure (except to such
Investor) or use of any Record or other information which the Company’s board of directors determines in good faith to be confidential,
and of which determination the Inspectors are so notified, unless (1) the disclosure of such Records is necessary to avoid or correct
a misstatement or omission in any Registration Statement or is otherwise required under the 1933 Act, (2) the release of such Records
is ordered pursuant to a final, non-appealable subpoena or order from a court or government body of competent jurisdiction, or (3) the
information in such Records has been made generally available to the public other than by disclosure in violation of this Agreement or
any other Transaction Document (as defined in the Securities Purchase Agreement). Such Investor agrees that it shall, upon learning that
disclosure of such Records is sought in or by a court or governmental body of competent jurisdiction or through other means, give prompt
notice to the Company and allow the Company, at its expense, to undertake appropriate action to prevent disclosure of, or to obtain a
protective order for, the Records deemed confidential. Nothing herein (or in any other confidentiality agreement between the Company
and such Investor, if any) shall be deemed to limit any Investor’s ability to sell Registrable Securities in a manner which is
otherwise consistent with applicable laws and regulations.
(j)
The Company shall hold in confidence and not make any disclosure of information concerning an Investor provided to the Company unless
(i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information
is necessary to avoid or correct a misstatement or omission in any Registration Statement or is otherwise required to be disclosed in
such Registration Statement pursuant to the 1933 Act, (iii) the release of such information is ordered pursuant to a subpoena or other
final, non-appealable order from a court or governmental body of competent jurisdiction, or (iv) such information has been made generally
available to the public other than by disclosure in violation of this Agreement or any other Transaction Document. The Company agrees
that it shall, upon learning that disclosure of such information concerning an Investor is sought in or by a court or governmental body
of competent jurisdiction or through other means, give prompt written notice to such Investor and allow such Investor, at such Investor’s
expense, to undertake appropriate action to prevent disclosure of, or to obtain a protective order for, such information.
(k)
Without limiting any obligation of the Company under the Securities Purchase Agreement, the Company shall use its best efforts either
to (i) cause all of the Registrable Securities covered by each Registration Statement to be listed on each securities exchange on which
securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registrable Securities is
then permitted under the rules of such exchange, (ii) secure designation and quotation of all of the Registrable Securities covered by
each Registration Statement on an Eligible Market (as defined in the Securities Purchase Agreement), or (iii) if, despite the Company’s
best efforts to satisfy the preceding clauses (i) or (ii) the Company is unsuccessful in satisfying the preceding clauses (i) or (ii),
without limiting the generality of the foregoing, to use its best efforts to arrange for at least two market makers to register with
the Financial Industry Regulatory Authority (“FINRA”) as such with respect to such Registrable Securities. In addition,
the Company shall cooperate with each Investor and any broker or dealer through which any such Investor proposes to sell its Registrable
Securities in effecting a filing with FINRA pursuant to FINRA Rule 5110 as requested by such Investor. The Company shall pay all fees
and expenses in connection with satisfying its obligations under this Section 3(k).
(l)
The Company shall cooperate with the Investors who hold Registrable Securities being offered and, to the extent applicable, facilitate
the timely preparation and delivery of certificates (not bearing any restrictive legend) representing the Registrable Securities to be
offered pursuant to a Registration Statement and enable such certificates to be in such denominations or amounts (as the case may be)
as the Investors may reasonably request from time to time and registered in such names as the Investors may request.
(m)
If requested by an Investor, the Company shall as soon as practicable after receipt of notice from such Investor and subject to Section
3(r) hereof, (i) incorporate in a prospectus supplement or post-effective amendment such information as an Investor reasonably requests
to be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with
respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of
the offering of the Registrable Securities to be sold in such offering; (ii) make all required filings of such prospectus supplement
or post-effective amendment after being notified of the matters to be incorporated in such prospectus supplement or post-effective amendment;
and (iii) supplement or make amendments to any Registration Statement or prospectus contained therein if reasonably requested by an Investor
holding any Registrable Securities.
(n)
The Company shall use its best efforts to cause the Registrable Securities covered by a Registration Statement to be registered with
or approved by such other governmental agencies or authorities as may be necessary to consummate the disposition of such Registrable
Securities.
(o)
The Company shall make generally available to its security holders as soon as practical, but not later than ninety (90) days after the
close of the period covered thereby, an earnings statement (in form complying with, and in the manner provided by, the provisions of
Rule 158 under the 1933 Act) covering a twelve-month period beginning not later than the first day of the Company’s fiscal quarter
next following the applicable Effective Date of each Registration Statement.
(p)
The Company shall otherwise use its best efforts to comply with all applicable rules and regulations of the SEC in connection with any
registration hereunder.
(q)
Within one (1) Business Day after a Registration Statement which covers Registrable Securities is declared effective by the SEC, the
Company shall deliver, and shall cause legal counsel for the Company to deliver, to the transfer agent for such Registrable Securities
(with copies to the Investors whose Registrable Securities are included in such Registration Statement) confirmation that such Registration
Statement has been declared effective by the SEC in the form attached hereto as Exhibit A.
(r)
Notwithstanding anything to the contrary herein (but subject to the last sentence of this Section 3(r)), at any time after the Effective
Date of a particular Registration Statement, the Company may delay the disclosure of material, non-public information concerning the
Company or any of its Subsidiaries the disclosure of which at the time is not, in the good faith opinion of the board of directors of
the Company, in the best interest of the Company and, in the opinion of counsel to the Company, otherwise required (a “Grace
Period”), provided that the Company shall promptly notify the Investors in writing of the (i) existence of material, non-public
information giving rise to a Grace Period (provided that in each such notice the Company shall not disclose the content of such material,
non-public information to any of the Investors) and the date on which such Grace Period will begin and (ii) date on which such Grace
Period ends, provided further that (I) no Grace Period shall exceed ten (10) consecutive days and during any three hundred sixty five
(365) day period all such Grace Periods shall not exceed an aggregate of thirty (30) days, (II) the first day of any Grace Period must
be at least five (5) Trading Days after the last day of any prior Grace Period and (III) no Grace Period may exist during the sixty (60)
Trading Day period immediately following the Effective Date of such Registration Statement (provided that such sixty (60) Trading Day
period shall be extended by the number of Trading Days during such period and any extension thereof contemplated by this proviso during
which such Registration Statement is not effective or the prospectus contained therein is not available for use) (each, an “Allowable
Grace Period”). For purposes of determining the length of a Grace Period above, such Grace Period shall begin on and include
the date the Investors receive the notice referred to in clause (i) above and shall end on and include the later of the date the Investors
receive the notice referred to in clause (ii) above and the date referred to in such notice. The provisions of Section 3(g) hereof shall
not be applicable during the period of any Allowable Grace Period. Upon expiration of each Grace Period, the Company shall again be bound
by the first sentence of Section 3(f) with respect to the information giving rise thereto unless such material, non-public information
is no longer applicable. Notwithstanding anything to the contrary contained in this Section 3(r), the Company shall cause its transfer
agent to deliver unlegended shares of Common Stock to a transferee of an Investor in accordance with the terms of the Securities Purchase
Agreement in connection with any sale of Registrable Securities with respect to which such Investor has entered into a contract for sale,
and delivered a copy of the prospectus included as part of the particular Registration Statement to the extent applicable, prior to such
Investor’s receipt of the notice of a Grace Period and for which the Investor has not yet settled.
(s)
The Company shall take all other reasonable actions necessary to expedite and facilitate disposition by each Investors of its Registrable
Securities pursuant to each Registration Statement.
(t)
Neither the Company nor any Subsidiary or affiliate thereof shall identify any Investor as an underwriter in any public disclosure or
filing with the SEC, the Principal Market or any Eligible Market (as defined in the Notes)and any Buyer being deemed an underwriter by
the SEC shall not relieve the Company of any obligations it has under this Agreement or any other Transaction Document (as defined in
the Securities Purchase Agreement); provided, however, that the foregoing shall not prohibit the Company from including the disclosure
found in the “Plan of Distribution” section attached hereto as Exhibit B in the Registration Statement.
(u)
Neither the Company nor any of its Subsidiaries has entered, as of the date hereof, nor shall the Company or any of its Subsidiaries,
on or after the date of this Agreement, enter into any agreement with respect to its securities, that would have the effect of impairing
the rights granted to the Buyers in this Agreement or otherwise conflicts with the provisions hereof.
4.
Obligations of the Investors.
(a)
At least five (5) Business Days prior to the first anticipated filing date of each Registration Statement, the Company shall notify each
Investor in writing of the information the Company requires from each such Investor with respect to such Registration Statement. It shall
be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the
Registrable Securities of a particular Investor that such Investor shall furnish to the Company such information regarding itself, the
Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it, as shall be reasonably
required to effect and maintain the effectiveness of the registration of such Registrable Securities and shall execute such documents
in connection with such registration as the Company may reasonably request.
(b)
Each Investor, by such Investor’s acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of each Registration Statement hereunder, unless such Investor
has notified the Company in writing of such Investor’s election to exclude all of such Investor’s Registrable Securities
from such Registration Statement.
(c)
Each Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section
3(g) or the first sentence of 3(f), such Investor will immediately discontinue disposition of Registrable Securities pursuant to any
Registration Statement(s) covering such Registrable Securities until such Investor’s receipt of the copies of the supplemented
or amended prospectus contemplated by Section 3(g) or the first sentence of Section 3(f) or receipt of notice that no supplement or amendment
is required. Notwithstanding anything to the contrary in this Section 4(c), the Company shall cause its transfer agent to deliver unlegended
shares of Common Stock to a transferee of an Investor in accordance with the terms of the Securities Purchase Agreement in connection
with any sale of Registrable Securities with respect to which such Investor has entered into a contract for sale prior to the Investor’s
receipt of a notice from the Company of the happening of any event of the kind described in Section 3(g) or the first sentence of Section
3(f) and for which such Investor has not yet settled.
5.
Expenses of Registration.
All
reasonable expenses, other than underwriting discounts and commissions, incurred in connection with registrations, filings or qualifications
pursuant to Sections 2 and 3, including, without limitation, all registration, listing and qualifications fees, printers and accounting
fees, FINRA filing fees (if any) and fees and disbursements of counsel for the Company shall be paid by the Company. The Company shall
reimburse Legal Counsel for its fees and disbursements in connection with registration, filing or qualification pursuant to Sections
2 and 3 of this Agreement which amount shall be limited to $10,000 for each such registration, filing or qualification.
6.
Indemnification.
(a)
To the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend each Investor and each
of its directors, officers, shareholders, members, partners, employees, agents, advisors, representatives (and any other Persons with
a functionally equivalent role of a Person holding such titles notwithstanding the lack of such title or any other title) and each Person,
if any, who controls such Investor within the meaning of the 1933 Act or the 1934 Act and each of the directors, officers, shareholders,
members, partners, employees, agents, advisors, representatives (and any other Persons with a functionally equivalent role of a Person
holding such titles notwithstanding the lack of such title or any other title) of such controlling Persons (each, an “Indemnified
Person”), against any losses, obligations, claims, damages, liabilities, contingencies, judgments, fines, penalties, charges,
costs (including, without limitation, court costs, reasonable attorneys’ fees and costs of defense and investigation), amounts
paid in settlement or expenses, joint or several, (collectively, “Claims”) incurred in investigating, preparing or
defending any action, claim, suit, inquiry, proceeding, investigation or appeal taken from the foregoing by or before any court or governmental,
administrative or other regulatory agency, body or the SEC, whether pending or threatened, whether or not an Indemnified Person is or
may be a party thereto (“Indemnified Damages”), to which any of them may become subject insofar as such Claims (or
actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement
or alleged untrue statement of a material fact in a Registration Statement or any post-effective amendment thereto or in any filing made
in connection with the qualification of the offering under the securities or other “blue sky” laws of any jurisdiction in
which Registrable Securities are offered (“Blue Sky Filing”), or the omission or alleged omission to state a material
fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus if used prior to the effective date of such Registration Statement,
or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with
the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in light
of the circumstances under which the statements therein were made, not misleading or (iii) any violation or alleged violation by the
Company of the 1933 Act, the 1934 Act, any other law, including, without limitation, any state securities law, or any rule or regulation
thereunder relating to the offer or sale of the Registrable Securities pursuant to a Registration Statement or (iv) any violation of
this Agreement (the matters in the foregoing clauses (i) through (iv) being, collectively, “Violations”). Subject
to Section 6(c), the Company shall reimburse the Indemnified Persons, promptly as such expenses are incurred and are due and payable,
for any legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding
anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a): (i) shall not apply to a Claim
by an Indemnified Person arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished
in writing to the Company by such Indemnified Person for such Indemnified Person expressly for use in connection with the preparation
of such Registration Statement or any such amendment thereof or supplement thereto, if such prospectus was timely made available by the
Company pursuant to Section 3(d); and (ii) shall not apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of the Company, which consent shall not be unreasonably withheld or delayed. Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf of the Indemnified Person and shall survive the transfer
of any of the Registrable Securities by any of the Investors pursuant to Section 9.
(b)
In connection with any Registration Statement in which an Investor is participating, such Investor agrees to severally and not jointly
indemnify, hold harmless and defend, to the same extent and in the same manner as is set forth in Section 6(a), the Company, each of
its directors, each of its officers who signs the Registration Statement and each Person, if any, who controls the Company within the
meaning of the 1933 Act or the 1934 Act (each, an “Indemnified Party”), against any Claim or Indemnified Damages to
which any of them may become subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim or Indemnified Damages arise
out of or are based upon any Violation, in each case, to the extent, and only to the extent, that such Violation occurs in reliance upon
and in conformity with written information furnished to the Company by such Investor expressly for use in connection with such Registration
Statement; and, subject to Section 6(c) and the below provisos in this Section 6(b), such Investor will reimburse an Indemnified Party
any legal or other expenses reasonably incurred by such Indemnified Party in connection with investigating or defending any such Claim;
provided, however, the indemnity agreement contained in this Section 6(b) and the agreement with respect to contribution contained in
Section 7 shall not apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent
of such Investor, which consent shall not be unreasonably withheld or delayed, provided further that such Investor shall be liable under
this Section 6(b) for only that amount of a Claim or Indemnified Damages as does not exceed the net proceeds to such Investor as a result
of the applicable sale of Registrable Securities pursuant to such Registration Statement. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such Indemnified Party and shall survive the transfer of any of the Registrable
Securities by any of the Investors pursuant to Section 9.
(c)
Promptly after receipt by an Indemnified Person or Indemnified Party (as the case may be) under this Section 6 of notice of the commencement
of any action or proceeding (including, without limitation, any governmental action or proceeding) involving a Claim, such Indemnified
Person or Indemnified Party (as the case may be) shall, if a Claim in respect thereof is to be made against any indemnifying party under
this Section 6, deliver to the indemnifying party a written notice of the commencement thereof, and the indemnifying party shall have
the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly
noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person
or the Indemnified Party (as the case may be); provided, however, an Indemnified Person or Indemnified Party (as the case may be) shall
have the right to retain its own counsel with the fees and expenses of such counsel to be paid by the indemnifying party if: (i) the
indemnifying party has agreed in writing to pay such fees and expenses; (ii) the indemnifying party shall have failed promptly to assume
the defense of such Claim and to employ counsel reasonably satisfactory to such Indemnified Person or Indemnified Party (as the case
may be) in any such Claim; or (iii) the named parties to any such Claim (including, without limitation, any impleaded parties) include
both such Indemnified Person or Indemnified Party (as the case may be) and the indemnifying party, and such Indemnified Person or such
Indemnified Party (as the case may be) shall have been advised by counsel that a conflict of interest is likely to exist if the same
counsel were to represent such Indemnified Person or such Indemnified Party and the indemnifying party (in which case, if such Indemnified
Person or such Indemnified Party (as the case may be) notifies the indemnifying party in writing that it elects to employ separate counsel
at the expense of the indemnifying party, then the indemnifying party shall not have the right to assume the defense thereof and such
counsel shall be at the expense of the indemnifying party), provided further that in the case of clause (iii) above the indemnifying
party shall not be responsible for the reasonable fees and expenses of more than one (1) separate legal counsel for such Indemnified
Person or Indemnified Party (as the case may be). The Indemnified Party or Indemnified Person (as the case may be) shall reasonably cooperate
with the indemnifying party in connection with any negotiation or defense of any such action or Claim by the indemnifying party and shall
furnish to the indemnifying party all information reasonably available to the Indemnified Party or Indemnified Person (as the case may
be) which relates to such action or Claim. The indemnifying party shall keep the Indemnified Party or Indemnified Person (as the case
may be) reasonably apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying
party shall be liable for any settlement of any action, claim or proceeding effected without its prior written consent; provided, however,
the indemnifying party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior
written consent of the Indemnified Party or Indemnified Person (as the case may be), consent to entry of any judgment or enter into any
settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party or Indemnified Person (as the case may be) of a release from all liability in respect to such Claim or litigation,
and such settlement shall not include any admission as to fault on the part of the Indemnified Party. Following indemnification as provided
for hereunder, the indemnifying party shall be subrogated to all rights of the Indemnified Party or Indemnified Person (as the case may
be) with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made. The failure
to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve
such indemnifying party of any liability to the Indemnified Person or Indemnified Party (as the case may be) under this Section 6, except
to the extent that the indemnifying party is materially and adversely prejudiced in its ability to defend such action.
(d)
The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or Indemnified Damages are incurred.
(e)
The indemnity and contribution agreements contained herein shall be in addition to (i) any cause of action or similar right of the Indemnified
Party or Indemnified Person against the indemnifying party or others, and (ii) any liabilities the indemnifying party may be subject
to pursuant to the law.
7.
Contribution.
To
the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law;
provided, however: (i) no contribution shall be made under circumstances where the maker would not have been liable for indemnification
under the fault standards set forth in Section 6 of this Agreement, (ii) no Person involved in the sale of Registrable Securities which
Person is guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) in connection with such sale shall
be entitled to contribution from any Person involved in such sale of Registrable Securities who was not guilty of fraudulent misrepresentation;
and (iii) contribution by any seller of Registrable Securities shall be limited in amount to the amount of net proceeds received by such
seller from the applicable sale of such Registrable Securities pursuant to such Registration Statement. Notwithstanding the provisions
of this Section 7, no Investor shall be required to contribute, in the aggregate, any amount in excess of the amount by which the net
proceeds actually received by such Investor from the applicable sale of the Registrable Securities subject to the Claim exceeds the amount
of any damages that such Investor has otherwise been required to pay, or would otherwise be required to pay under Section 6(b), by reason
of such untrue or alleged untrue statement or omission or alleged omission.
8.
Reports Under the 1934 Act.
With
a view to making available to the Investors the benefits of Rule 144, the Company agrees to:
(a)
make and keep public information available, as those terms are understood and defined in Rule 144;
(b)
file with the SEC in a timely manner all reports and other documents required of the Company under the 1933 Act and the 1934 Act so long
as the Company remains subject to such requirements (it being understood and agreed that nothing herein shall limit any obligations of
the Company under the Securities Purchase Agreement) and the filing of such reports and other documents is required for the applicable
provisions of Rule 144; and
(c)
furnish to each Investor so long as such Investor owns Registrable Securities, promptly upon request, (i) a written statement by the
Company, if true, that it has complied with the reporting, submission and posting requirements of Rule 144, the 1933 Act and the 1934
Act, (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company
with the SEC if such reports are not publicly available via EDGAR, and (iii) such other information as may be reasonably requested to
permit the Investors to sell such securities pursuant to Rule 144 without registration.
9.
Assignment of Registration Rights.
All
or any portion of the rights under this Agreement shall be automatically assignable by each Investor to any transferee or assignee (as
the case may be) of all or any portion of such Investor’s Registrable Securities, Notes or Warrants if: (i) such Investor agrees
in writing with such transferee or assignee (as the case may be) to assign all or any portion of such rights, and a copy of such agreement
is furnished to the Company within a reasonable time after such transfer or assignment (as the case may be); (ii) the Company is, within
a reasonable time after such transfer or assignment (as the case may be), furnished with written notice of (a) the name and address of
such transferee or assignee (as the case may be), and (b) the securities with respect to which such registration rights are being transferred
or assigned (as the case may be); (iii) immediately following such transfer or assignment (as the case may be) the further disposition
of such securities by such transferee or assignee (as the case may be) is restricted under the 1933 Act or applicable state securities
laws if so required; (iv) at or before the time the Company receives the written notice contemplated by clause (ii) of this sentence
such transferee or assignee (as the case may be) agrees in writing with the Company to be bound by all of the provisions contained herein;
(v) such transfer or assignment (as the case may be) shall have been made in accordance with the applicable requirements of the Securities
Purchase Agreement, the Notes and the Warrants (as the case may be); and (vi) such transfer or assignment (as the case may be) shall
have been conducted in accordance with all applicable federal and state securities laws.
10.
Amendment of Registration Rights.
Provisions
of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively
or prospectively), only with the written consent of the Company and the Required Holders; provided that any such amendment or waiver
that complies with the foregoing, but that disproportionately, materially and adversely affects the rights and obligations of any Investor
relative to the comparable rights and obligations of the other Investors shall require the prior written consent of such adversely affected
Investor. Any amendment or waiver effected in accordance with this Section 10 shall be binding upon each Investor and the Company, provided
that no such amendment shall be effective to the extent that it (1) applies to less than all of the holders of Registrable Securities
or (2) imposes any obligation or liability on any Investor without such Investor’s prior written consent (which may be granted
or withheld in such Investor’s sole discretion). No waiver shall be effective unless it is in writing and signed by an authorized
representative of the waiving party. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification
of any provision of this Agreement unless the same consideration (other than the reimbursement of legal fees) also is offered to all
of the parties to this Agreement.
11.
Stockholder Approval. In the event the Warrants are redeemed pursuant to Section 1(h) thereof and the Notes are no longer outstanding,
this Agreement shall be of no further force and effect.
12.
Miscellaneous.
(a)
Solely for purposes of this Agreement, a Person is deemed to be a holder of Registrable Securities whenever such Person owns, or is deemed
to own, of record such Registrable Securities. If the Company receives conflicting instructions, notices or elections from two or more
Persons with respect to the same Registrable Securities, the Company shall act upon the basis of instructions, notice or election received
from such record owner of such Registrable Securities.
(b)
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile
(provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending party) or electronic
mail (provided that such sent email is kept on file (whether electronically or otherwise) by the sending party and the sending party
does not receive an automatically generated message from the recipient’s email server that such e-mail could not be delivered to
such recipient); or (iii) one (1) Business Day after deposit with a nationally recognized overnight delivery service with next day delivery
specified, in each case, properly addressed to the party to receive the same. The addresses, facsimile numbers and email addresses for
such communications shall be:
If
to the Company:
Vinco
Ventures, Inc.
1 West Broad Street, Suite 1004
Bethlehem, Pennsylvania
Telephone: (866) 900-0992
Facsimile: (908) 235-4373
Attention: Chief Executive Officer
E-Mail: cferguson@edisonnation.com
With
a copy (for informational purposes only) to:
Lucosky
Brookman LLP
101 Wood Avenue South, 5th Floor
Woodbridge, NJ 08830
Telephone: (732) 395-4400
Facsimile: (732) 395-4401
Attention: Joseph Lucosky, Esq.
E-Mail: jlucosky@lucbro.com
If
to the Transfer Agent:
Nevada
Agency and Transfer Company
50 W. Liberty Street, Suite 880
Reno, NV 89501
Telephone: (775) 322-0626
Facsimile: (775) 322-5623
Attention: Tiffany Baxter
E-Mail: stocktransfer@natco.com
If
to Legal Counsel:
Schulte
Roth & Zabel LLP
919 Third Avenue
New York, NY 10022
Telephone: (212) 756-2000
Facsimile: (212) 593-5955
Attention: Eleazer N. Klein, Esq.
Email: eleazer.klein@srz.com
If
to a Buyer, to its address, facsimile number and/or email address set forth on the Schedule of Buyers attached to the Securities Purchase
Agreement, with copies to such Buyer’s representatives as set forth on the Schedule of Buyers, or to such other address, facsimile
number, and/or email address and/or to the attention of such other Person as the recipient party has specified by written notice given
to each other party five (5) days prior to the effectiveness of such change, provided that Schulte Roth & Zabel LLP shall only be
provided notices sent to the lead investor. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver
or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine or email containing the
time, date, recipient facsimile number or email address and an image of the first page of such transmission or (C) provided by a courier
or overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized
overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.
(c)
Failure of any party to exercise any right or remedy under this Agreement or otherwise, or delay by a party in exercising such right
or remedy, shall not operate as a waiver thereof. The Company and each Investor acknowledge and agree that irreparable damage would occur
in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that each party hereto shall be entitled to an injunction or injunctions to prevent or cure breaches
of the provisions of this Agreement by any other party hereto and to enforce specifically the terms and provisions hereof (without the
necessity of showing economic loss and without any bond or other security being required), this being in addition to any other remedy
to which any party may be entitled by law or equity.
(d)
All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal
laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State
of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State 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, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that
it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient
forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process
and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for
such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
(e)
If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest
extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity
of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without material change,
the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the
provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical
realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations
to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible
to that of the prohibited, invalid or unenforceable provision(s).
(f)
This Agreement, the other Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments referenced
herein and therein constitute the entire agreement among the parties hereto and thereto solely with respect to the subject matter hereof
and thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein.
This Agreement, the other Transaction Documents, the schedules and exhibits attached hereto and thereto and the instruments referenced
herein and therein supersede all prior agreements and understandings among the parties hereto solely with respect to the subject matter
hereof and thereof; provided, however, nothing contained in this Agreement or any other Transaction Document shall (or shall be deemed
to) (i) have any effect on any agreements any Investor has entered into with the Company or any of its Subsidiaries prior to the date
hereof with respect to any prior investment made by such Investor in the Company, (ii) waive, alter, modify or amend in any respect any
obligations of the Company or any of its Subsidiaries or any rights of or benefits to any Investor or any other Person in any agreement
entered into prior to the date hereof between or among the Company and/or any of its Subsidiaries and any Investor and all such agreements
shall continue in full force and effect or (iii) limit any obligations of the Company under any of the other Transaction Documents.
(g)
Subject to compliance with Section 9 (if applicable), this Agreement shall inure to the benefit of and be binding upon the permitted
successors and assigns of each of the parties hereto. This Agreement is not for the benefit of, nor may any provision hereof be enforced
by, any Person, other than the parties hereto, their respective permitted successors and assigns and the Persons referred to in Sections
6 and 7 hereof.
(h)
The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. Unless
the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine, neuter, singular and
plural forms thereof. The terms “including,” “includes,” “include” and words of like import shall
be construed broadly as if followed by the words “without limitation.” The terms “herein,” “hereunder,”
“hereof” and words of like import refer to this entire Agreement instead of just the provision in which they are found.
(i)
This Agreement may be executed in two or more identical counterparts, each of which shall be deemed an original, but all of which shall
be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to
the other party. In the event that any signature is delivered by facsimile transmission or by an email which contains a portable document
format (.pdf) file of an executed signature page, such signature page shall create a valid and binding obligation of the party executing
(or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.
(j)
Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents as any other party may reasonably request in order to carry out the intent
and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.
(k)
The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent and no rules
of strict construction will be applied against any party. Notwithstanding anything to the contrary set forth in Section 10, terms used
in this Agreement but defined in the other Transaction Documents shall have the meanings ascribed to such terms on the Closing Date in
such other Transaction Documents unless otherwise consented to in writing by each Investor.
(l)
All consents and other determinations required to be made by the Investors pursuant to this Agreement shall be made, unless otherwise
specified in this Agreement, by the Required Holders, determined as if all of the outstanding Notes then held by the Investors have been
converted for Registrable Securities without regard to any limitations on redemption, amortization and/or conversion of the Notes and
the outstanding Warrants then held by Investors have been exercised for Registrable Securities without regard to any limitations on exercise
of the Warrants.
(m)
This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for
the benefit of, nor may any provision hereof be enforced by, any other Person.
(n)
The obligations of each Investor under this Agreement and the other Transaction Documents are several and not joint with the obligations
of any other Investor, and no Investor shall be responsible in any way for the performance of the obligations of any other Investor under
this Agreement or any other Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken
by any Investor pursuant hereto or thereto, shall be deemed to constitute the Investors as, and the Company acknowledges that the Investors
do not so constitute, a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption that
the Investors are in any way acting in concert or as a group or entity with respect to such obligations or the transactions contemplated
by the Transaction Documents or any matters, and the Company acknowledges that the Investors are not acting in concert or as a group,
and the Company shall not assert any such claim, with respect to such obligations or the transactions contemplated by this Agreement
or any of the other the Transaction Documents. Each Investor shall be entitled to independently protect and enforce its rights, including,
without limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and it shall not be necessary
for any other Investor to be joined as an additional party in any proceeding for such purpose. The use of a single agreement with respect
to the obligations of the Company contained herein was solely in the control of the Company, not the action or decision of any Investor,
and was done solely for the convenience of the Company and not because it was required or requested to do so by any Investor. It is expressly
understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between the Company and
an Investor, solely, and not between the Company and the Investors collectively and not between and among Investors.
[signature
page follows]
IN
WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Registration Rights Agreement to
be duly executed as of the date first written above.
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COMPANY:
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VINCO
VENTURES INC.
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By:
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Name:
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Title:
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IN
WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Registration Rights Agreement to
be duly executed as of the date first written above.
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BUYERS:
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HUDSON
BAY MASTER FUND LTD
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By:
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Name:
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Title:
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EXHIBIT
A
FORM
OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
______________________
______________________
______________________
Attention: _____________
Re:
Vinco Ventures Inc.
Ladies
and Gentlemen:
[We
are][I am] counsel to Vinco Ventures Inc., a Nevada corporation (the “Company”), and have represented the Company
in connection with that certain Securities Purchase Agreement (the “Securities Purchase Agreement”) entered into by
and among the Company, ZASH Global Media and Entertainment Corporation, ZVV Media Partners, LLC and the buyers named therein (collectively,
the “Holders”) pursuant to which the Company issued to the Holders senior secured convertible notes (the “Notes”)
which may be convertible into the Company’s shares of common stock, $0.001 par value per share (the “Common Stock”),
and warrants which may be exercisable for shares of Common Stock (the “Warrants”). Pursuant to the Securities Purchase
Agreement, the Company also has entered into a Registration Rights Agreement with the Holders (the “Registration Rights Agreement”)
pursuant to which the Company agreed, among other things, to register the Registrable Securities (as defined in the Registration Rights
Agreement), including the shares of Common Stock issuable upon conversion of the Notes and exercise of the Warrants, under the Securities
Act of 1933, as amended (the “1933 Act”). In connection with the Company’s obligations under the Registration
Rights Agreement, on ____________ ___, 20__, the Company filed a Registration Statement on Form [S-1][S-3] (File No. 333-_____________)
(the “Registration Statement”) with the Securities and Exchange Commission (the “SEC”) relating
to the Registrable Securities which names each of the Holders as a selling stockholder thereunder.
In
connection with the foregoing, [we][I] advise you that [a member of the SEC’s staff has advised [us][me] by telephone that [the
SEC has entered an order declaring the Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS] on [ENTER
DATE OF EFFECTIVENESS]] [an order declaring the Registration Statement effective under the 1933 Act at [ENTER TIME OF EFFECTIVENESS]
on [ENTER DATE OF EFFECTIVENESS]] has been posted on the web site of the SEC at www.sec.gov] and [we][I] have no knowledge, after a review
of information posted on the website of the SEC at http://www.sec.gov/litigation/stoporders.shtml, that any stop order suspending its
effectiveness has been issued or that any proceedings for that purpose are pending before, or threatened by, the SEC and the Registrable
Securities are available for resale under the 1933 Act pursuant to the Registration Statement.
This
letter shall serve as our standing opinion to you that the shares of Common Stock underlying the Notes and Warrants are freely transferable
by the Holders pursuant to the Registration Statement. You need not require further letters from us to effect any future legend-free
issuance or reissuance of such shares of Common Stock to the Holders as contemplated by the Company’s Irrevocable Transfer Agent
Instructions dated _________ __, 20__.
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Very
truly yours,
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[ISSUER’S
COUNSEL]
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By:
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CC:
Hudson Bay Master Fund Ltd
EXHIBIT
B
SELLING
STOCKHOLDERS
The
shares of common stock being offered by the selling stockholders are those issuable to the selling stockholders upon conversion of the
notes and exercise of the warrants. For additional information regarding the issuance of the notes and the warrants, see “Private
Placement of Notes and Warrants” above. We are registering the shares of common stock in order to permit the selling stockholders
to offer the shares for resale from time to time. Except for the ownership of the notes and the warrants issued pursuant to the Securities
Purchase Agreement, the selling stockholders have not had any material relationship with us within the past three years.
The
table below lists the selling stockholders and other information regarding the beneficial ownership (as determined under Section 13(d)
of the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder) of the shares of common stock held by each
of the selling stockholders. The second column lists the number of shares of common stock beneficially owned by the selling stockholders,
based on their respective ownership of shares of common stock, notes and warrants, as of ________, 202_, assuming conversion of the notes
and exercise of the warrants held by each such selling stockholder on that date but taking account of any limitations on conversion and
exercise set forth therein.
The
third column lists the shares of common stock being offered by this prospectus by the selling stockholders and does not take in account
any limitations on (i) conversion of the notes set forth therein or (ii) exercise of the warrants set forth therein.
In
accordance with the terms of a registration rights agreement with the holders of the notes and the warrants, this prospectus generally
covers the resale of the sum of 200% of (i) the maximum number of shares of common stock issued or issuable pursuant to the Notes, including
payment of interest on the notes through the maturity date of the notes, and (ii) the maximum number of shares of common stock issued
or issuable upon exercise of the warrants, in each case, determined as if the outstanding notes (including interest on the notes through
the maturity date of the notes) and warrants were converted or exercised (as the case may be) in full (without regard to any limitations
on conversion or exercise contained therein solely for the purpose of such calculation) at a conversion price or exercise price (as the
case may be) calculated as of the trading day immediately preceding the date this registration statement was initially filed with the
SEC. Because the conversion price of the notes and the exercise price of the warrants may be adjusted, the number of shares that will
actually be issued may be more or less than the number of shares being offered by this prospectus. The fourth column assumes the sale
of all of the shares offered by the selling stockholders pursuant to this prospectus.
Under
the terms of the notes and the warrants, a selling stockholder may not convert the notes or exercise the warrants to the extent (but
only to the extent) such selling stockholder or any of its affiliates would beneficially own a number of shares of our common stock which
would exceed 4.99% of the outstanding shares of the Company. The number of shares in the second column reflects these limitations. The
selling stockholders may sell all, some or none of their shares in this offering. See “Plan of Distribution.”
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Name
of Selling Stockholder
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Number
of Shares of Common Stock Owned Prior to Offering
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Maximum
Number of Shares of Common Stock to be Sold Pursuant to this Prospectus
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Number
of Shares of Common Stock of Owned After Offering
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Hudson Bay Master Fund Ltd (1)
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PLAN
OF DISTRIBUTION
We
are registering the shares of common stock issuable upon conversion of the notes and exercise of the warrants to permit the resale of
these shares of common stock by the holders of the notes and warrants from time to time after the date of this prospectus. We will not
receive any of the proceeds from the sale by the selling stockholders of the shares of common stock, although we will receive the exercise
price of any Warrants not exercised by the selling stockholders on a cashless exercise basis. We will bear all fees and expenses incident
to our obligation to register the shares of common stock.
The
selling stockholders may sell all or a portion of the shares of common stock held by them and offered hereby from time to time directly
or through one or more underwriters, broker-dealers or agents. If the shares of common stock are sold through underwriters or broker-dealers,
the selling stockholders will be responsible for underwriting discounts or commissions or agent’s commissions. The shares of common
stock may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of the sale, at varying prices
determined at the time of sale or at negotiated prices. These sales may be effected in transactions, which may involve crosses or block
transactions, pursuant to one or more of the following methods:
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on
any national securities exchange or quotation service on which the securities may be listed or quoted at the time of sale;
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in
the over-the-counter market;
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in
transactions otherwise than on these exchanges or systems or in the over-the-counter market;
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through
the writing or settlement of options, whether such options are listed on an options exchange or otherwise;
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ordinary
brokerage transactions and transactions in which the broker-dealer solicits purchasers;
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block
trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
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purchases
by a broker-dealer as principal and resale by the broker-dealer for its account;
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an
exchange distribution in accordance with the rules of the applicable exchange;
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privately
negotiated transactions;
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short
sales made after the date the Registration Statement is declared effective by the SEC;
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broker-dealers
may agree with a selling security holder to sell a specified number of such shares at a stipulated price per share;
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a
combination of any such methods of sale; and
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any
other method permitted pursuant to applicable law.
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The
selling stockholders may also sell shares of common stock under Rule 144 promulgated under the Securities Act of 1933, as amended, if
available, rather than under this prospectus. In addition, the selling stockholders may transfer the shares of common stock by other
means not described in this prospectus. If the selling stockholders effect such transactions by selling shares of common stock to or
through underwriters, broker-dealers or agents, such underwriters, broker-dealers or agents may receive commissions in the form of discounts,
concessions or commissions from the selling stockholders or commissions from purchasers of the shares of common stock for whom they may
act as agent or to whom they may sell as principal (which discounts, concessions or commissions as to particular underwriters, broker-dealers
or agents may be in excess of those customary in the types of transactions involved). In connection with sales of the shares of common
stock or otherwise, the selling stockholders may enter into hedging transactions with broker-dealers, which may in turn engage in short
sales of the shares of common stock in the course of hedging in positions they assume. The selling stockholders may also sell shares
of common stock short and deliver shares of common stock covered by this prospectus to close out short positions and to return borrowed
shares in connection with such short sales. The selling stockholders may also loan or pledge shares of common stock to broker-dealers
that in turn may sell such shares.
The
selling stockholders may pledge or grant a security interest in some or all of the notes, warrants or shares of common stock owned by
them and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares
of common stock from time to time pursuant to this prospectus or any amendment to this prospectus under Rule 424(b)(3) or other applicable
provision of the Securities Act amending, if necessary, the list of selling stockholders to include the pledgee, transferee or other
successors in interest as selling stockholders under this prospectus. The selling stockholders also may transfer and donate the shares
of common stock in other circumstances in which case the transferees, donees, pledgees or other successors in interest will be the selling
beneficial owners for purposes of this prospectus.
To
the extent required by the Securities Act and the rules and regulations thereunder, the selling stockholders and any broker-dealer participating
in the distribution of the shares of common stock may be deemed to be “underwriters” within the meaning of the Securities
Act, and any commission paid, or any discounts or concessions allowed to, any such broker-dealer may be deemed to be underwriting commissions
or discounts under the Securities Act. At the time a particular offering of the shares of common stock is made, a prospectus supplement,
if required, will be distributed, which will set forth the aggregate amount of shares of common stock being offered and the terms of
the offering, including the name or names of any broker-dealers or agents, any discounts, commissions and other terms constituting compensation
from the selling stockholders and any discounts, commissions or concessions allowed or re-allowed or paid to broker-dealers.
Under
the securities laws of some states, the shares of common stock may be sold in such states only through registered or licensed brokers
or dealers. In addition, in some states the shares of common stock may not be sold unless such shares have been registered or qualified
for sale in such state or an exemption from registration or qualification is available and is complied with.
There
can be no assurance that any selling stockholder will sell any or all of the shares of common stock registered pursuant to the registration
statement, of which this prospectus forms a part.
The
selling stockholders and any other person participating in such distribution will be subject to applicable provisions of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder, including, without limitation, to the extent applicable,
Regulation M of the Exchange Act, which may limit the timing of purchases and sales of any of the shares of common stock by the selling
stockholders and any other participating person. To the extent applicable, Regulation M may also restrict the ability of any person engaged
in the distribution of the shares of common stock to engage in market-making activities with respect to the shares of common stock. All
of the foregoing may affect the marketability of the shares of common stock and the ability of any person or entity to engage in market-making
activities with respect to the shares of common stock.
We
will pay all expenses of the registration of the shares of common stock pursuant to the registration rights agreement, estimated to be
$[ ] in total, including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance with state securities
or “blue sky” laws; provided, however, a selling stockholder will pay all underwriting discounts and selling commissions,
if any. We will indemnify the selling stockholders against liabilities, including some liabilities under the Securities Act in accordance
with the registration rights agreements or the selling stockholders will be entitled to contribution. We may be indemnified by the selling
stockholders against civil liabilities, including liabilities under the Securities Act that may arise from any written information furnished
to us by the selling stockholder specifically for use in this prospectus, in accordance with the related registration rights agreements
or we may be entitled to contribution.
Once
sold under the registration statement, of which this prospectus forms a part, the shares of common stock will be freely tradable in the
hands of persons other than our affiliates.
Exhibit 10.4
AMENDMENT
AGREEMENT
THIS
AMENDMENT AGREEMENT (this “Amendment”) is entered into and made effective as of July 7, 2021, by and among Vinco
Ventures, Inc., a Nevada corporation (the “Company”) and the investor listed on the signature page attached hereto
(the “Holder”). Unless otherwise stated, capitalized terms used herein and not otherwise defined shall have the respective
meanings set forth in the June Warrants (as defined below).
RECITALS
A.
Pursuant to that certain Securities Purchase Agreement dated as of January 21, 2021 by and between the Company and the Holder, the Company
sold to the Holder warrants (the “January Warrants”), representing the right to acquire shares of the Company’s
common stock, $0.001 par value per share (the “Common Stock”).
B.
Pursuant to that certain Securities Purchase Agreement dated as of February 18, 2021 by and between the Company and the Holder, the Company
sold to the Holder warrants (the “February Warrants”), representing the right to acquire shares of Common Stock.
C.
Pursuant to that certain Warrant Exercise Agreement dated as of June 4, 2021 by and between the Company and the Holder (the “Warrant
Exercise Agreement”), the Company issued to the Holder warrants (the “June Warrants”) to purchase shares
of Common Stock (the “Common Stock”); and
D.
Pursuant to Section 11 of the June Warrants, the Company and the Holder desire to amend the June Warrants pursuant to the terms and conditions
of this Amendment.
AGREEMENT
NOW,
THEREFORE, in consideration of the foregoing premises and the mutual covenants and conditions set forth below, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
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1.
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AMENDMENT
TO THE JUNE WARRANTS. Section 19(c) of the June Warrants are hereby deleted in its entirety and replaced with the following (additions
are indicated by bold underline blue font and deletions with strikethrough red font):
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“(c)
“Adjustment Date” means each date on which the Holder of this Warrant delivers an Exercise Notice (as defined
in the January Warrants or the February Warrants) to the Company at any time and from time to time from and after the Subscription
Date and on or prior to July 7, 2021 August 9,
2021.”
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2.
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ACKNOWLEDGEMENTS.
The Company and the Holder hereby acknowledge and agree that, as of the date of this Amendment:
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a.
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1,930,000
shares of Common Stock were issued to the Holder upon exercise of the January Warrants from and after June 4, 2021;
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b.
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13,968,188
shares of Common Stock were issued to the Holder upon exercise of the February Warrants from and after June 4, 2021; and
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c.
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the
Maximum Eligibility Number under the June Warrants equals 27,821,829 shares of Common Stock. For the avoidance of doubt, such Maximum
Eligibility Number remains subject to further adjustments pursuant to the terms and conditions set forth in the June Warrants (as
amended hereby).
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3.
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REPRESENTATIONS
AND WARRANTIES. The Company hereby represents and warrants to the Holder, and the Holder hereby represents and warrants to the
Company, in each case, as of the date hereof that: (a) such Person is an entity duly organized and validly existing under the laws
of the jurisdiction of its formation, has the requisite power and authority to execute and deliver this Amendment and to carry out
and perform all of its obligations under the terms of this Amendment; (b) this Amendment has been duly executed and delivered on
behalf of such Person, and this Amendment constitutes the valid and legally binding obligation of such Person enforceable against
such Person in accordance with its terms, except as such enforceability may be limited by general principles of equity or to applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement
of applicable creditors’ rights and remedies; (c) the execution, delivery and performance by such Person of this Amendment
and the consummation by such Person of the transactions contemplated hereby will not (i) result in a violation of the organizational
documents of such Person, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would
become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which such Person is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment
or decree (including federal and state securities laws) applicable to such Person, except in the case of clause (ii) and (iii) above,
for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have
a material adverse effect on the ability of such Person to perform its obligations hereunder.
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4.
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CLEANSING.
On or before 8:30 a.m., New York City time, on the first Business Day following the delivery by the Holder of a written notice to
the Company requesting to be cleansed (the “Cleansing Time”), the Company shall file one or more Current Reports
on Form 8-K (collectively, the “Cleansing Document”) describing the terms of the transactions contemplated hereby
and any other material, non-public information that the Company, any of its subsidiaries or any of their respective officers, directors,
affiliates, employees or agents has provided to the Holder at any time prior to the Cleansing Time in the form required by the 1934
Act and attaching the form of this Amendment as an exhibit to any such Disclosure Document. From and after the Cleansing Time, the
Company hereby acknowledges and agrees that the Holder shall not be in possession of any material, nonpublic information received
from the Company, any of its subsidiaries or any of its officers, directors, affiliates, employees or agents, that is not disclosed
in the Cleansing Document. The Company understands and confirms that the Holder and its Affiliates will rely on the foregoing in
effecting transactions in securities of the Company.
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5.
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CONTINUING
EFFECTIVENESS; ENTIRE AGREEMENT. Except as expressly modified by this Amendment, the June Warrants shall remain in full force
and effect in accordance with their terms. This Amendment shall be deemed an amendment to the June Warrants and shall become effective
as of the date hereof. The terms of this Amendment amend and modify the June Warrants as if fully set forth in the June Warrants.
As of the date hereof, (i) all references in the Warrant Exercise Agreement to the “June Warrants” shall refer to the
June Warrants, as modified by this Amendment and (ii) all references in the June Warrants to “this Warrant” or “June
Warrants,” as applicable, shall refer to the June Warrants, as modified by this Amendment. If there is any conflict between
the terms, conditions and obligations of this Amendment and the Warrant Exercise Agreement or the June Warrants, this Amendment’s
terms, conditions and obligations shall control. This Amendment constitutes the entire agreement between and among the parties hereto
with respect to the subject matter hereof, and supersedes in their entirety all prior negotiations and agreements with respect to
such subject matter, whether written or oral.
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6.
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GOVERNING
LAW; SEVERABILITY. All questions concerning the construction, validity, enforcement and interpretation of this Amendment shall
be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision
or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of New York. If any provision of this Amendment is prohibited by law or otherwise determined to be invalid or
unenforceable by a court of competent jurisdiction, such provision shall be deemed amended to apply to the broadest extent that it
would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining
provisions of this Amendment so long as this Amendment as so modified continues to express, without material change, the original
intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s)
in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization
of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace
the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to
that of the prohibited, invalid or unenforceable provision(s).
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7.
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HEADINGS.
The headings of this Amendment are for convenience of reference and shall not form part of, or affect the interpretation of, this
Amendment.
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8.
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ASSIGNABILITY.
This Amendment shall be binding upon and inure to the benefit of the parties and their respective successors and assigns.
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9.
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COUNTERPARTS.
This Amendment may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any
electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and
any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
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[Signature
Pages Follow]
IN
WITNESS WHEREOF, the parties have executed this Amendment as of the date first written above.
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VINCO VENTURES, INC.
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By:
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Name:
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Title:
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HUDSON BAY MASTER FUND LTD.
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By:
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Name:
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Title:
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[Signature
Page to Amendment Agreement]
Exhibit
10.5
Execution
Version
GUARANTEE
AGREEMENT
GUARANTEE,
dated as of July 22, 2021 (this “Guarantee), made by ZASH Global Media and Entertainment Corporation, a Delaware corporation
(“Zash”) and ZVV Media Partners, LLC, a Delaware limited liability (“ZVV”, together with Zash and
each other Person that becomes an “Additional Guarantor” hereunder, each a “Guarantor” and collectively,
the “Guarantors”), in favor of each of the Secured Parties (as hereinafter defined) and Hudson Bay Master Fund Ltd.,
a Cayman Islands exempted company, as collateral agent for the Buyers and Holders (in such capacity, together with any successors or
assigns in such capacity, if any, the “Collateral Agent”) pursuant to the Securities Purchase Agreement, the Notes
and each other Transaction Document referred to herein.
W
I T N E S S E T H:
WHEREAS,
Vinco Ventures, Inc., a Nevada corporation, (the “Company”), ZASH and ZVV (together with the Company and Zash, each
an “Issuer” and collectively, the “Issuers”) have entered into that certain Securities Purchase
Agreement (the “Securities Purchase Agreement”), dated as of the date hereof, by and among the Issuers and each of
the investors listed on the Schedule of Buyers attached thereto (individually, a “Buyer” and collectively, the “Buyers”);
WHEREAS,
pursuant to the Securities Purchase Agreement, the Buyers will purchase, and the Company will sell, Notes (as defined in the Securities
Purchase Agreement) in an aggregate principal amount of $120,000,000;
WHEREAS,
the Notes rank senior to all outstanding and future indebtedness of the Issuers and their Subsidiaries and the Obligations thereunder
(and under this Guarantee) are secured by substantially all assets of the Issuers and each of their direct and indirect Subsidiaries;
WHEREAS,
pursuant to the Securities Purchase Agreement and the Notes, each Guarantor is required to execute and deliver to the Collateral Agent
a guaranty guaranteeing the Notes and all other Obligations under the Transaction Documents; and
WHEREAS,
each Guarantor has determined that the execution, delivery and performance of this Guarantee directly benefit, and are in the best interest
of, such Guarantor.
NOW,
THEREFORE, in consideration of the premises and the agreements herein and in order to induce the Collateral and the Buyers to purchase
the Notes and to provide other financial accommodations to the Guarantors pursuant to and as contemplated by the Securities Purchase
Agreement, the Notes and each other Transaction Document, the Guarantors hereby jointly and severally agree with the Collateral Agent,
for the benefit of the Secured Parties, as follows:
Section
1. Definitions.
(a)
Reference is hereby made to the Securities Purchase Agreement, the Notes and each other Transaction Document for a statement of the terms
thereof. All terms used in this Guarantee which are defined in the Securities Purchase Agreement, the Notes or any other Transaction
Document and not otherwise defined herein shall have the same meanings herein as set forth therein, as applicable.
Section
2. Guarantee.
(a)
Each Guarantor hereby (i) irrevocably, absolutely and unconditionally guarantees the payment by the Issuers, as and when due and payable
(whether by scheduled maturity, required prepayment, acceleration, demand or otherwise), of all Obligations (as defined in the Security
Agreement) from time to time owing in respect of the Securities Purchase Agreement, the Notes and any other Transaction Document, whether
for principal, interest (including, without limitation, all interest that accrues after the commencement of any Insolvency Proceeding
(as defined in the Security Agreement) with respect to any Issuer or Guarantor, whether or not a claim for post-filing interest is allowed
in such proceeding), fees, commissions, expense reimbursements, indemnifications or otherwise, and whether accruing before or subsequent
to the commencement of any Insolvency Proceeding with respect to any Issuer or Guarantor (notwithstanding the operation of the automatic
stay under Section 362(a) of the U.S. Bankruptcy Code), and the due performance and observance by each Issuer or Guarantor of its other
obligations now or hereafter existing in respect of the Transaction Documents (the “Guaranteed Obligations”), and
(ii) agrees to pay any and all reasonable costs and expenses (including reasonable outside counsel fees and expenses) incurred by the
Collateral Agent, the Buyers, the Holders and other Secured Party in enforcing any rights under this Guarantee. Without limiting the
generality of the foregoing, each Guarantor’s liability shall extend to all amounts that constitute part of the Guaranteed Obligations
and would be owed by the Issuers to the Collateral, the Buyers, the Holders or any other Secured Party under any Transaction Document
but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding
involving any Issuer or Guarantor. In no event shall the obligations of a Guarantor exceed the maximum amount such Guarantor could guarantee,
under any bankruptcy, insolvency or similar law.
(b)
Upon the occurrence and during the continuance of an Event of Default under Section 4 of the Notes, the Collateral Agent may declare
the Guaranteed Obligations due and payable hereunder, in which case, each Guarantor shall be obligated to satisfy the Guaranteed Obligations
immediately (and, in any event, within 5 Business Days) following receipt of notice from the Collateral Agent, and the Collateral and
the other Secured Parties shall be entitled to enforce all Guaranteed Obligations of each Guarantor hereunder after such due date.
Section
3. Guarantee Absolute; Continuing Guarantee.
(a)
Each Guarantor hereby guarantees that the Guaranteed Obligations will be paid strictly in accordance with the terms of the Transaction
Documents, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Collateral Agent or other Secured Parties with respect thereto. Each Guarantor agrees that its guarantee constitutes a
guaranty of payment when due and not of collection and waives any right to require that any resort be made by the Collateral Agent or
other Secured Parties to any Collateral (as defined in the Security Agreement). The obligations of each Guarantor under this Guarantee
are independent of the obligations under the Securities Purchase Agreement, the Notes and any other Transaction Document, and a separate
action or actions may be brought and prosecuted against each Guarantor to enforce this Guarantee, irrespective of whether any action
is brought against any other Issuer or Guarantor or whether any Issuer or Guarantor is joined in any such action or actions. The liability
of each Guarantor under this Guarantee shall be irrevocable, absolute and unconditional irrespective of, and each Guarantor, to the maximum
extent permitted by law, hereby irrevocably waives any defenses it may now or hereafter have in any way relating to, any or all of the
following:
(i)
any lack of validity or enforceability of any Transaction Document or any agreement or instrument relating thereto;
(ii)
any change in the time, manner or place of payment of, or in any other term in respect of, all or any of the Guaranteed Obligations,
or any other amendment or waiver of or any consent to departure from any Transaction Document, including, without limitation, any increase
in the Guaranteed Obligations resulting from the extension of additional credit to any Issuer or Guarantor or otherwise;
(iii)
any taking, exchange, release or non-perfection of any lien on or security interest in any Collateral, or any taking, release or amendment
or waiver of or consent to departure from any other guarantee, for all or any of the Guaranteed Obligations (other than an express written
release given upon satisfaction of the Guaranteed Obligations);
(iv)
the existence of any claim (other than payment in full of the Guaranteed Obligations), set-off, defense or other right that a Guarantor
may have against any Person, including, without limitation, the Collateral Agent or any other Secured Party, whether in connection with
this Guarantee or any Transaction Document or the transactions contemplated herein, therein or in any unrelated transaction;
(v)
any change, restructuring or termination of the corporate, limited liability company or partnership structure or existence of any Issuer
or Guarantor; or
(vi)
any other circumstance (including any statute of limitations) or a discharge of, any Issuer or Guarantor or any other guarantor or surety.
(b)
This Guarantee shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Guaranteed
Obligations is rescinded or must otherwise be returned by the Collateral Agent, Buyers, the Holders, any other Secured Party or any other
Person upon the insolvency, bankruptcy or reorganization of any Issuer or Guarantor or otherwise, all as though such payment had not
been made.
(c)
This Guarantee is a continuing guaranty and shall (i) remain in full force and effect until the payment in full of the Guaranteed Obligations
and all other amounts payable under this Guarantee, (ii) be binding upon each Guarantor, its successors and assigns, and (iii) inure
to the benefit of and be enforceable by the Collateral Agent, the Secured Parties and their respective successors, pledgees, transferees
and assigns. Without limiting the generality of the foregoing clause (iii), any Secured Party may pledge, assign or otherwise transfer
all or any portion of its rights and obligations under any Transaction Document to any other Person to the extent not prohibited by the
provisions of such Transaction Document, and such other Person shall thereupon become vested with all the benefits in respect thereof
granted to such Secured Party herein or otherwise.
Section
4. Waivers. Each Guarantor hereby waives, to
the full extent permitted by applicable law, (i) promptness and diligence; (ii) notice of acceptance and notice of the incurrence of
any Obligation by the Issuers or other Guarantors; (iii) notice of any actions taken by the Collateral Agent, the Issuers, any Guarantor
or any Secured Party under any Transaction Document or any other agreement or instrument related thereto; (iv) all other notices, demands
and protests, and all other formalities of every kind in connection with the enforcement of the Obligations or of the obligations of
such Guarantor hereunder, the omission of or delay in which, but for the provisions of this Section 4, might constitute grounds for relieving
such Guarantor of its obligations hereunder; (v) any right to compel or direct the Collateral Agent or any other Secured Party to seek
payment or recovery of any amounts owed under this Guarantee from any one particular fund or source; (vi) any requirement that the Collateral
Agent or any other Secured Party protect, secure, perfect or insure any security interest or Lien on any property subject thereto or
exhaust any right or take any action against the Issuers, any other Guarantor or any other Person or any Collateral; and (vii) any other
defense available to any Guarantor. Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing
arrangements contemplated herein and that the waiver set forth in this Section 4 is knowingly made in contemplation of such benefits.
Each Guarantor hereby waives any right to revoke this Guarantee, and acknowledges that this Guarantee is continuing in nature and applies
to all Guaranteed Obligations, whether existing now or in the future.
Section
5. Subrogation.
(a)
Until the final payment and performance in full of all of the Obligations, no Guarantor shall exercise any rights against any Issuer
or any other Guarantor arising as a result of payment by an Issuer or other Guarantor hereunder, by way of subrogation, reimbursement,
restitution, contribution or otherwise, and no Guarantor will prove any claim in competition with the Collateral Agent or any other Secured
Party in respect of any payment hereunder in any Insolvency Proceedings; no Guarantor will claim any set-off, recoupment or counterclaim
against the Issuers or any other Guarantor in respect of any liability of such Guarantor to the Issuers or any other Guarantor; and each
Guarantor and the Issuers waives any benefit of, and any right to participate in, any collateral security which may be held by the Collateral
Agent or any other Secured Party.
(b)
The payment of any amounts due with respect to any Indebtedness of the Issuers or any Guarantor for money borrowed or credit received
now or hereafter owed to any Guarantor is hereby subordinated to the prior payment in full of all of the Obligations. Each Guarantor
agrees that, after the occurrence and during the continuance of any default in the payment or performance of any of the Obligations,
such Guarantor will not demand, sue for or otherwise attempt to collect any such indebtedness of the Issuers or other Guarantor to such
Guarantor until all of the Obligations shall have been paid in full. If, notwithstanding the foregoing sentence, any Guarantor shall
collect, enforce or receive any amounts in respect of such indebtedness while any Obligations are still outstanding, such amounts shall
be collected, enforced and received by such Guarantor as trustee for the Collateral Agent and the other Secured Parties and be paid over
to the Collateral Agent, for the benefit of the Collateral Agent and the other Secured Parties, on account of the Obligations without
affecting in any manner the liability of such Guarantor under the other provisions of this Guarantee.
Section
6. Representations, Warranties and Covenants.
Each Guarantor, severally and not jointly, hereby represents and warrants as follows:
(a)
such Guarantor (i) is a corporation, limited partnership or limited liability company, as applicable, duly organized, validly existing
and in good standing under the laws of the state or other applicable jurisdiction of its organization, (ii) has all requisite power and
authority to conduct its business as now conducted and as presently contemplated and to execute and deliver this Guarantee and each other
Transaction Document to which such Guarantor is a party, and to consummate the transactions contemplated hereby and thereby, and (iii)
other than jurisdictions where the failure to be so qualified and in good standing could not reasonably be expected to have a Material
Adverse Effect, is duly qualified to do business and is in good standing in each jurisdiction in which the character of the properties
owned or leased by it or in which the transaction of its business makes such qualification necessary.
(b)
The execution, delivery and performance by such Guarantor of this Guarantee and each other Transaction Document to which such Guarantor
is or will be a party (i) have been duly authorized by all necessary corporate or other entity action on the part of such Guarantor,
(ii) do not and will not contravene its charter or by-laws, its limited liability company or operating agreement or its certificate of
partnership or partnership agreement, as applicable, (iii) do not and will not contravene any applicable law or regulation or any material
contractual restriction binding on or otherwise affecting such Guarantor or its properties, (iv) do not and will not result in or require
the creation of any Lien (other than pursuant to any Transaction Document) upon or with respect to any of its properties, and (v) do
not and will not result in any default, noncompliance, suspension, revocation, impairment, forfeiture or nonrenewal of any material permit,
license, authorization or approval applicable to it or its operations or any of its properties.
(c)
No authorization or approval or other action by, and no notice to or filing with, any Governmental Entity is required in connection with
the due execution, delivery and performance by such Guarantor of this Guarantee or any of the other Transaction Documents to which such
Guarantor is or will be a party, other than authorizations, approvals, other actions, notices or filings which have been obtained or
made and the filing of any UCC financing statement or such other registrations, filings or recordings as may be necessary to perfect
the Lien purported to be created by any Transaction Documents to which such Guarantor is a party.
(d)
Each of this Guarantee and the other Transaction Documents to which such Guarantor is or will be a party, when executed and delivered,
is and will be a legal, valid and binding obligation of such Guarantor, enforceable against such Guarantor in accordance with its terms,
except as may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws
affecting creditors’ rights generally or general equitable principles (whether considered in a proceeding in equity or at law)
relating to enforceability.
(e)
(i) As of the date hereof, there is no pending, or to the knowledge of such Guarantor, threatened, claim, action, suit, investigation,
litigation or proceeding (including any shareholder or derivative litigation) affecting such Guarantor before any court or other Governmental
Entity or any arbitrator that (x) if adversely determined could reasonably be expected to have a Material Adverse Effect or (y) relates
to this Guarantee or any of the other Transaction Documents to which such Guarantor is a party or any transaction contemplated hereby
or thereby, and (ii) as of the date hereof, such Guarantor does not hold any commercial tort claims in respect of which a claim has been
filed in a court of law or a written notice by an attorney has been given to a potential defendant.
(f)
Such Guarantor (i) has read and understands the terms and conditions of the Securities Purchase Agreement, the Notes and the other Transaction
Documents, and (ii) now has and will continue to have independent means of obtaining information concerning the affairs, financial condition
and business of the Issuers and the other Guarantors, and has no need of, or right to obtain from the Collateral Agent or any other Secured
Party, any credit or other information concerning the affairs, financial condition or business of the Issuers and the other Guarantors
that may come under the control of the Collateral Agent or any other Secured Party.
(g)
Such Guarantor covenants and agrees with the Collateral Agent and other Secured Parties that until full and final payment of the Guaranteed
Obligations, it will comply with each of the covenants set forth the Securities Purchase Agreement, the Notes or any other Transaction
Document applicable to it, whether as a Subsidiary or Affiliate of an Issuer or otherwise.
Section
7. Right of Set-off. Upon the occurrence and
during the continuance of any Event of Default, the Collateral Agent and the other Secured Parties may, and are hereby authorized to,
at any time and from time to time, without notice to any Guarantor (any such notice being expressly waived by each Guarantor) and to
the fullest extent permitted by law, set-off and apply any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by the Collateral Agent or any other Secured Party to or for the credit or
the account of any Guarantor against any and all obligations of such Guarantor now or hereafter existing under this Guarantee or any
other Transaction Document, irrespective of whether the Collateral Agent or any other Secured Party shall have made any demand under
this Guarantee or any other Transaction Document and although such obligations may be contingent or unmatured. Each of the Collateral
Agent and each Secured Party agrees to notify the applicable Guarantor promptly after any such set-off and application made by the Collateral
Agent or such Secured Party; provided that the failure to give such notice shall not affect the validity of such set-off and application
(and each of the Collateral Agent and each Secured Party agrees to notify the applicable Guarantor promptly after becoming aware of any
such failure to give such notice). The rights of the Collateral Agent and the other Secured Parties under this Section 7 are in addition
to other rights and remedies (including, without limitation, other rights of set-off) which the Collateral Agent and the other Secured
Parties may have under this Guarantee or any other Transaction Document in law or otherwise.
Section
8. Maximum Liability. Notwithstanding any provision
in this Guarantee or any other Transaction Document to the contrary, the liability of any Guarantor under this Guarantee shall be limited
to an amount not to exceed as of any date of determination the greater of:
(a)
the net amount of all Obligations and other extensions of credit advanced under the Securities Purchase Agreement, the Notes and any
other Transaction Document, plus interest thereon at the applicable rate specified in the Securities Purchase Agreement, the Notes or
any other applicable Transaction Document; and
(b)
the amount which could be claimed by the Collateral Agent and the other Secured Parties from such Guarantor under this Guarantee without
rendering such claim voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under any applicable state Uniform
Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or common law after taking into account, among other things,
such Guarantor’s right of contribution and indemnification from any Issuer or other Guarantor.
Section
9. Notices. All notices and other communications
provided for hereunder shall be given in accordance with the notice provision of the Securities Purchase Agreement and/or the Notes or
other Transactions Documents, as applicable.
Section
10. CONSENT TO JURISDICTION; SERVICE OF PROCESS AND
VENUE. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTEE OR ANY OTHER TRANSACTION DOCUMENT SHALL BE BROUGHT IN THE COURTS
OF THE STATE OF NEW YORK IN THE COUNTY OF NEW YORK OR OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND,
BY EXECUTION AND DELIVERY OF THIS GUARANTEE, EACH GUARANTOR HEREBY IRREVOCABLY ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY,
THE JURISDICTION OF THE AFORESAID COURTS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR
OTHER PROPERTY MAY BE BROUGHT, AT COLLATERAL AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE THE COLLATERAL AGENT ELECTS
TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH GUARANTOR HEREBY IRREVOCABLY CONSENTS TO THE SERVICE
OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS IN ANY SUIT, ACTION, OR PROCEEDING BROUGHT IN THE UNITED STATES OF AMERICA
ARISING OUT OF OR IN CONNECTION WITH THIS GUARANTEE OR ANY OTHER TRANSACTION DOCUMENT BY THE MAILING (BY REGISTERED MAIL OR CERTIFIED
MAIL, POSTAGE PREPAID) OR DELIVERING OF A COPY OF SUCH PROCESS TO SUCH GUARANTOR, CARE OF THE COMPANY, AT THE COMPANY’S ADDRESS
FOR NOTICES AS SET FORTH IN THE SECURITIES PURCHASE AGREEMENT AND/OR THE NOTES. EACH GUARANTOR AGREES THAT A FINAL JUDGMENT IN ANY SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED
BY LAW. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE COLLATERAL AGENT AND THE OTHER SECURED PARTIES TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW. EACH GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE
AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT A GUARANTOR HAS OR HEREAFTER MAY
ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO
JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, SUCH GUARANTOR HEREBY IRREVOCABLY WAIVES
SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTEE AND THE OTHER TRANSACTION DOCUMENTS.
Section
11. WAIVER OF JURY TRIAL, ETC. EACH GUARANTOR
HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS GUARANTEE OR THE
OTHER TRANSACTION DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE
FUTURE MAY BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION WITH THIS
GUARANTEE OR THE OTHER TRANSACTION DOCUMENTS, AND AGREES THAT ANY SUCH ACTION, PROCEEDING OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT
AND NOT BEFORE A JURY. EACH GUARANTOR CERTIFIES THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF THE COLLATERAL AGENT OR ANY OTHER
SECURED PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE COLLATERAL AGENT OR ANY OTHER SECURED PARTY WOULD NOT, IN THE EVENT OF
ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING WAIVERS. EACH GUARANTOR HEREBY ACKNOWLEDGES THAT THIS PROVISION
IS A MATERIAL INDUCEMENT FOR THE COLLATERAL AGENT AND SECURED PARTIES ENTERING INTO THIS GUARANTEE.
Section
12. Taxes. Any and all payments made by a Guarantor
hereunder or under any other Transaction Document shall be made in accordance with the terms of the Transaction Documents and shall be
made without set-off, counterclaim, deduction or defense.
Section
13. Additional Guarantors. Upon the execution
and delivery, or authentication, by any Person of a guarantee agreement joinder in substantially the form of Exhibit A hereto (each a
“Guarantee Joinder”), such Person shall be referred to as an “Additional Guarantor” and shall be
and become a Guarantor for all purposes hereunder and under each other Transaction Document, and each reference in this Agreement or
any other Transaction Document to “Guarantor” shall also mean and be a reference to such Additional Guarantor.
Section
14. Release. A Guarantor (other than Zash or
ZVV) shall automatically be released from its obligations under this Agreement, and all security interests created by the Security Agreement
in Collateral owned by such Guarantor shall be automatically released, upon the consummation of any transaction permitted by the Transaction
Documents as a result of which such Guarantor ceases to be a Subsidiary of the Company, Zash or ZVV.
Section
15. Miscellaneous.
(a)
Each Guarantor will make each payment hereunder in lawful money of the United States of America and in immediately available funds to
the Collateral Agent, for the benefit of the Secured Parties, at such address specified by the Collateral Agent from time to time by
notice to such Guarantor.
(b)
No amendment of any provision of this Guarantee shall be effective unless it is in writing and signed by all Guarantors and the Collateral
Agent, and no waiver of any provision of this Guarantee, and no consent to any departure by any Guarantor therefrom, shall in any event
be effective unless the same shall be in writing and signed by such Guarantor and the Collateral Agent, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose for which given.
(c)
No failure on the part of the Collateral Agent or any Secured Party to exercise, and no delay in exercising, any right hereunder or under
any other Transaction Document shall operate as a waiver thereof, nor shall any single or partial exercise of any right hereunder or
under any other Transaction Document preclude any other or further exercise thereof or the exercise of any other right. The rights and
remedies of the Collateral Agent and other Secured Parties provided herein and in the other Transaction Documents are cumulative and
are in addition to, and not exclusive of, any rights or remedies provided by law. The rights of the Collateral Agent and other Secured
Parties under any Transaction Document against any party thereto are not conditional or contingent on any attempt by the Collateral Agent
and/or other Secured Parties to exercise any of their rights under any other Transaction Document against such party or against any other
Person.
(d)
Any provision of this Guarantee which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
(e)
This Guarantee shall (i) be binding on each Guarantor and its successors and assigns, and (ii) inure, together with all rights and remedies
of the Collateral Agent and other Secured Parties hereunder, to the benefit of the Collateral Agent and other Secured Parties and their
respective successors, transferees and assigns. Without limiting the generality of clause (ii) of the immediately preceding sentence,
to the extent permitted by the Transaction Documents, any Secured Party may assign or otherwise transfer its rights under the Notes or
any other Transaction Document to any other Person, and such other Person shall thereupon become vested with all of the benefits in respect
thereof granted to the Secured Parties herein or otherwise. Each Guarantor agrees that each participant shall be entitled to the benefits
of Section 7 and 12 hereof with respect to its participation in any portion of the Notes as if it were a Secured Party. None of the rights
or obligations of a Guarantor hereunder may be assigned or otherwise transferred without the prior written consent of the Collateral
Agent.
(f)
This Guarantee and the other Transaction Documents reflect the entire understanding of the transactions contemplated hereby and thereby
and shall not be contradicted or qualified by any other agreement, oral or written, before the date hereof.
(g)
Section headings herein are included for convenience of reference only and shall not constitute a part of this Guarantee for any other
purpose.
(h)
This Guarantee and the other Transaction Documents (unless expressly provided to the contrary in another Transaction Document in respect
of such other Transaction Document) shall be governed by, and construed in accordance with, the laws of the State of New York applicable
to contracts made and to be performed in the State of New York.
(i)
This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which
shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement. Delivery of an executed
signature page of this Guarantee by facsimile or electronic mail shall be effective as delivery of a manually executed counterpart of
this Guarantee. Any party delivering an executed counterpart of this Guarantee by facsimile or electronic mail also shall deliver an
original executed counterpart of this Guarantee, but the failure to deliver an original executed counterpart shall not affect the validity,
enforceability, and binding effect of this Guarantee.
[Remainder
of page intentionally left blank]
IN
WITNESS WHEREOF, each Guarantor has caused this Guarantee to be executed by an officer thereunto duly authorized, as of the date first
above written.
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GUARANTORS:
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ZASH
GLOBAL MEDIA AND ENTERTAINMENT CORPORATION
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By:
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Name:
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Title:
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ZVV
MEDIA PARTNERS, LLC
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By:
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Name:
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Title:
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[Guarantee
Agreement]
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CBAV1,
LLC
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By:
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Name:
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Title:
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EDISON
NATION HOLDINGS, LLC
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By:
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Name:
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Title:
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EVERYDAY
EDISONS, LLC
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By:
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Name:
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Title:
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EVNT
PLATFORM, LLC
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By:
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Name:
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Title:
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FERGUSON
CONTAINERS, INC.
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By:
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Name:
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Title:
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HONEY
BADGER MEDIA, LLC
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By:
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Name:
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Title:
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[Guarantee
Agreement]
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PIRASTA,
LLC
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By:
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Name:
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Title:
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SAFE
TV SHOP, LLC
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By:
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Name:
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Title:
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TBD
SAFETY, LLC
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By:
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Name:
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Title:
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VINCO
SHARED SERVICES, LLC
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By:
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Name:
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Title:
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[Guarantee
Agreement]
Execution
Version
EXHIBIT
A
FORM
OF GUARANTEE JOINDER
THIS
JOINDER TO GUARANTEE AGREEMENT, dated as of [________] (this “Guarantee Joinder”) is entered into by [__________],
a [__________] company (the “Additional Guarantor”) with respect to that certain Guarantee, dated as of July [__],
2021 (the “Guarantee”), made by ZASH Global Media and Entertainment Corporation, a Delaware corporation (“Zash”)
and ZVV Media Partners, LLC, a Delaware limited liability (“ZVV”, together with Zash and each other Person that becomes an
“Additional Guarantor” thereunder, each a “Guarantor” and collectively, the “Guarantors”), in favor
of each of the Secured Parties (as defined therein) and [Hudson Bay Master Fund Ltd], a [_________] company, as collateral agent for
the Buyers and Holders (in such capacity, together with any successors or assigns in such capacity, if any, the “Collateral
Agent”) pursuant to the Securities Purchase Agreement, the Notes and each other Transaction Document referred to therein.
WHEREAS,
pursuant to the terms of the Transaction Documents, the Additional Guarantor is required to become a Guarantor by, among other things,
executing and delivering this Guarantee Joinder to the Collateral Agent; and
WHEREAS,
the Additional Guarantor has determined that the execution, delivery and performance of this Guarantee Joinder and the Guarantee directly
benefit, and are within the corporate purposes and in the best interests of, the Additional Guarantor.
NOW
THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt of which is hereby acknowledged, the
parties hereto hereby agree as follows:
SECTION
1. Definitions. Reference is hereby made to the Guarantee and the other Transaction Documents for a statement of the terms thereof.
All terms used in this Guarantee Joinder which are defined in the Guarantee or other Transaction Documents and not otherwise defined
herein shall have the same meanings herein as set forth therein, as applicable.
SECTION
2. Joinder of Additional Guarantor. Pursuant to Section 13 of the Guarantee, by its execution of this Guarantee Joinder, the Additional
Guarantor hereby (i) confirms that the representations and warranties contained in Section 6 of the Guarantee (and in any other Transaction
Document applicable to Guarantors) are true and correct in all material respects as to the Additional Guarantor as of the effective date
of this Guarantee Joinder, except to the extent that any such representation or warranty expressly relates solely to an earlier date
(in which case such representation or warranty shall be true and correct in all material respects on and as of such earlier date), and
(ii) agrees that, from and after the effective date of this Guarantee Joinder, the Additional Guarantor shall be a party to the Guarantee
and shall be bound, as a Guarantor, by all the provisions thereof and shall comply with and be subject to all of the terms, conditions,
covenants, agreements and obligations set forth therein and the other Transaction Documents and applicable to the Guarantors, including,
without limitation, the guaranty of the Obligations made by the Guarantors, severally and not jointly with the Issuers and other Guarantors,
in favor of the Collateral Agent and the other Secured Parties. The Additional Guarantor hereby agrees that from and after the effective
date of this Guarantee Joinder each reference to a “Guarantor” and each reference to the “Guarantors” Guarantee
Joinder in the Securities Purchase Agreement, the Notes or any other Transaction Document shall include the Additional Guarantor.
SECTION
3. Effectiveness. This Guarantee Joinder shall become effective upon its execution by the Additional Guarantor and acknowledgement
by the Collateral Agent and receipt by the Collateral Agent of a duly executed counterpart hereof by the Additional Guarantor and such
other certificates, resolutions and written opinions of counsel to the Additional Guarantor, in each case, as to such matters as the
Collateral Agent may reasonably request.
SECTION
4. General Provisions. (a) Except as supplemented hereby, the Transaction Documents shall continue to be, and shall remain, in
full force and effect. This Guarantee Joinder shall not be deemed (i) to be a waiver of, or consent to, or a modification or amendment
of, any other term or condition of the Guarantee, the Notes or any other Transaction Document or (ii) to prejudice any right or rights
which the Collateral Agent or Secured Parties may now have or may have in the future under or in connection with the Guarantee, the Notes
or any other Transaction Document or any of the instruments or agreements referred to therein, as the same may be amended, restated,
supplemented or otherwise modified from time to time.
(b)
To the extent required under the terms of the Transaction Documents, the Additional Guarantor hereby agrees to pay or reimburse the Collateral
Agent for all of its reasonable and documented out-of-pocket costs and expenses incurred in connection with the preparation, negotiation
and execution of this Guarantee Joinder, including, without limitation, the reasonable and documented out-of-pocket fees and disbursements
of counsel.
(c)
This Guarantee Joinder may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of
which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement. Delivery of an
executed signature page of this Guarantee Joinder by facsimile or electronic mail shall be effective as delivery of a manually executed
counterpart of this Guarantee Joinder. Any party delivering an executed counterpart of this Guarantee Joinder by facsimile or electronic
mail also shall deliver an original executed counterpart of this Guarantee Joinder, but the failure to deliver an original executed counterpart
shall not affect the validity, enforceability, and binding effect of this Guarantee Joinder or the Guarantee.
(d)
Section headings in this Guarantee Joinder are included herein for the convenience of reference only and shall not constitute a part
of this Guarantee Joinder for any other purpose.
(e)
In addition to and without limitation of any of the foregoing, this Guarantee Joinder shall be deemed to be a Transaction Document and
shall otherwise be subject to all of the terms and conditions contained therein and applicable to Guarantors and/or Subsidiaries of the
Issuers.
(f)
This Guarantee Joinder shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts
made and to be performed in the State of New York.
[Remainder
of Page Intentionally Left Blank]
IN
WITNESS WHEREOF, each party hereto has caused this Guarantee Joinder to be executed by its respective officers thereunto duly authorized,
as of the date first above written.
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ADDITIONAL
GUARANTOR:
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[_____________________________]
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By:
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Name:
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Title:
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[Guarantee Joinder]
Exhibit
10.6
Execution
Version
PLEDGE
AND SECURITY AGREEMENT
PLEDGE
AND SECURITY AGREEMENT (this “Agreement”), dated as of July 22, 2021, made by each of the Grantors referred to below,
in favor of Hudson Bay Master Fund Ltd, a Cayman Islands exempted company, in its capacity as collateral agent for the Secured Parties
referred to below (in such capacity, together with its successors and assigns in such capacity, if any, the “Collateral Agent”).
R
E C I T A L S:
WHEREAS,
Vinco Ventures, Inc., a Nevada corporation, (the “Company”), ZASH Global Media and Entertainment Corporation, a Delaware
corporation (“Zash”) and ZVV Media Partners, LLC, a Delaware limited liability (“ZVV”, together
with the Company and Zash, each an “Issuer” and collectively, the “Issuers”) have entered into
that certain Securities Purchase Agreement (the “Securities Purchase Agreement”), dated as of the date hereof, by
and among the Issuers and each of the investors listed on the Schedule of Buyers attached thereto (individually, a “Buyer”
and collectively, the “Buyers”);
WHEREAS,
pursuant to the Securities Purchase Agreement, the Buyers will purchase, and the Company will sell, Notes (as defined in the Securities
Purchase Agreement) in an aggregate principal amount of $120,000,000;
WHEREAS,
the Notes rank senior to all outstanding and future indebtedness of the Issuers and their Subsidiaries and are guaranteed by each of
ZASH, ZVV and all direct and indirect Subsidiaries of the Issuers (each, a “Guarantor” and, collectively, the “Guarantors”,
and, together with the Company, Zash and ZVV and each other Person that becomes an “Additional Grantor” hereunder, each,
a “Grantor” and, collectively, the “Grantors”);
WHEREAS,
it is a condition precedent to the Buyers purchasing any Notes and providing any other financial accommodation to the Issuers pursuant
to the Securities Purchase Agreement or the Notes that each Grantor shall have executed and delivered this Agreement to the Collateral
Agent for the benefit of the Secured Parties; and
WHEREAS,
each Grantor has determined that the execution, delivery and performance of this Agreement directly benefit, and are in the best interest
of, such Grantor.
NOW,
THEREFORE, in consideration of the premises and the agreements herein and in order to induce the Collateral Agent and the Buyers to purchase
the Notes and to provide other financial accommodations to the Grantors pursuant to and as contemplated by the Securities Purchase Agreement
and the Notes, the Grantors hereby jointly and severally agree with the Collateral Agent, for the benefit of the Secured Parties, as
follows:
SECTION 1. Definitions.
(a)
Reference is hereby made to the Securities Purchase Agreement and the Notes for a statement of the terms thereof. All capitalized terms
used in this Agreement that are defined in the Securities Purchase Agreement or the Notes or in Article 8 or 9 of the Code and which
are not otherwise defined herein shall have the same meanings herein as set forth therein, as applicable; provided that terms used herein
which are defined in the Code on the date hereof shall continue to have the same meaning notwithstanding any replacement or amendment
of such statute except as the Collateral Agent may otherwise determine.
(b)
The following terms shall have the respective meanings provided for in the Code: “Accounts”, “Account Debtor”,
“Cash Proceeds”, “Certificate of Title”, “Chattel Paper”, “Commercial
Tort Claim”, “Commodity Account”, “Commodity Contracts”, “Deposit Account”,
“Documents”, “Electronic Chattel Paper”, “Equipment”, “Fixtures”,
“General Intangibles”, “Goods”, “Instruments”, “Inventory”,
“Investment Property”, “Letter-of-Credit Rights”, “Noncash Proceeds”, “Payment
Intangibles”, “Proceeds”, “Promissory Notes”, “Record”, “Security
Account”, “Software”, “Supporting Obligations” and “Tangible Chattel Paper”.
(c)
As used in this Agreement, the following terms shall have the respective meanings indicated below, such meanings to be applicable equally
to both the singular and plural forms of such terms:
“Additional
Collateral” has the meaning specified therefor in Section 4(a)(i) hereof.
“Additional
Grantor” has the meaning specified therefor in Section 13(f) hereof.
“Bankruptcy
Code” means Title 11 of the United States Code, as amended from time to time and any successor statute or any similar federal
or state law for the relief of debtors.
“Buyers”
has the meaning specified therefor in the Recitals hereto.
“Certificated
Entities” has the meaning specified therefor in Section 5(m) hereof.
“Code”
means the Uniform Commercial Code as in effect from time to time in the State of New York.
“Collateral”
has the meaning specified therefor in Section 2 hereof.
“Collateral
Agent” has the meaning specified therefor in the Preamble hereto.
“Copyright
Licenses” means all licenses, contracts or other agreements, whether written or oral, naming any Grantor as licensee or licensor
and providing for the grant of any right to use or sell any works covered by any Copyright.
“Copyrights”
means all domestic and foreign copyrights, whether registered or unregistered, including, without limitation, all copyright rights (whether
now or hereafter arising) in any and all media (whether now or hereafter developed), in and to all original works of authorship fixed
in any tangible medium of expression (including computer software and internet website content) now or hereafter owned, acquired, developed
or used by any Grantor, all applications, registrations and recordings thereof (including, without limitation, applications, registrations
and recordings in the United States Copyright Office or in any similar office or agency of the United States or any other country or
any political subdivision thereof), and all reissues, divisions, continuations, continuations in part and extensions or renewals thereof.
“Debtor
Relief Law” means the Bankruptcy Code and any other liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief law of the United States or
other applicable jurisdiction from time to time in effect.
“Designated
Account” means that certain deposit account maintained by [the Company] with First Republic Bank (account number: [XXXX]),
which account shall (x) be subject to a “blocked” account control agreement in favor of the Collateral Agent and (y) have
a minimum cash balance on deposit at all times not less than the amount required pursuant to Section 6(e)(ii).
“Excluded
Accounts” means any deposit account specifically and exclusively used for payroll, payroll taxes and other employee wage and
benefit payments to or for the benefit of any Grantor’s employees.
“Grantors”
has the meaning specified therefor in the Recitals hereto.
“Holder”
means any Buyers and/or its registered assigns.
“Indemnitee”
has the meaning specified therefor in Section 10(k) of the Securities Purchase Agreement.
“Insolvency
Proceeding” means any proceeding commenced by or against any Person under any provision of any Debtor Relief Law
“Intellectual
Property” means all Copyrights, Patents, Trademarks and Other Intellectual Property.
“Irrevocable
Proxy” has the meaning specified therefor in Section 4(a)(i) hereof.
“Issuers”
has the meaning specified therefor in the Recitals hereto.
“Licenses”
means the Copyright Licenses, the Patent Licenses and the Trademark Licenses.
“Notes”
has the meaning specified therefor in the Securities Purchase Agreement.
“Obligations”
means all present and future indebtedness, obligations, and liabilities of each Grantor to the Collateral Agent and the Buyers and Holders
arising under or in connection with the Securities Purchase Agreement, the Notes and/or any other Transaction Document, whether or not
the right of payment in respect of such claim is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, disputed,
undisputed, legal, equitable, secured, unsecured, and whether or not such claim is discharged, stayed or otherwise affected by any proceeding.
Without limiting the generality of the foregoing, the Obligations of each Grantor under the Transaction Documents include (a) the obligation
(irrespective of whether a claim therefor is allowed in an Insolvency Proceeding) to pay principal, interest, charges, expenses, fees,
premiums, attorneys’ fees and disbursements, indemnities and other amounts payable by such Person under the Transaction Documents,
and (b) the obligation of such Person to reimburse any amount in respect of any of the foregoing that the Collateral Agent or any Buyer
or Holder (in its sole discretion) may elect to pay or advance on behalf of such Person.
“Other
Intellectual Property” means all trade secrets, ideas, concepts, methods, techniques, processes, proprietary information, technology,
know-how, formulae, rights of publicity and privacy and other general intangibles of like nature, now or hereafter acquired, owned, developed
or used by any Grantor.
“Patent
Licenses” means all licenses, contracts or other agreements, whether written or oral, naming any Grantor as licensee or licensor
and providing for the grant of any right to manufacture, use or sell any invention covered by any Patent.
“Patents”
means all domestic and foreign letters patent, design patents, utility patents, industrial designs, inventions, trade secrets, ideas,
concepts, methods, techniques, processes, proprietary information, technology, know-how, formulae, rights of publicity and other general
intangibles of like nature, now existing or hereafter acquired, all applications, registrations and recordings thereof, and all reissues,
divisions, continuations, continuations in part and extensions or renewals thereof.
“Perfection
Requirements” has the meaning specified therefor in Section 5(j) hereof.
“Pledge
Amendment” has the meaning specified therefor in Section 4(a)(ii) hereof.
“Pledged
Debt” means the indebtedness described in Schedule VI hereto and all indebtedness from time to time owned or acquired by a
Grantor, the Promissory Notes and other Instruments evidencing any or all of such indebtedness, and all interest, cash, Instruments,
Investment Property, financial assets, securities, Equity Interests, stock options and Commodity Contracts, notes, debentures, bonds,
Promissory Notes or other evidences of indebtedness and all other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of such indebtedness.
“Pledged
Interests” means, collectively, (a) the Pledged Debt, (b) the Pledged Shares and (c) all security entitlements in any and all
of the foregoing.
“Pledged
Issuers” means, collectively, (a) the issuers of the shares of Equity Interests described in Schedule VII hereto and (b) any
other issuer of Equity Interests at any time and from time to time owned or acquired by a Grantor whose shares of Equity Interests are
required to be pledged as Collateral under this Agreement.
“Pledged
Partnership/LLC Agreement” has the meaning specified therefor in Section 6(h)(ii) hereof.
“Pledged
Shares” means (a) the shares of Equity Interests of the Pledged Issuers, whether or not evidenced or represented by any stock
certificate, certificated security or other Instrument, (b) the certificates representing such shares of Equity Interests, all options
and other rights, contractual or otherwise, in respect thereof and all dividends, distributions, cash, Instruments, Investment Property,
financial assets, securities, Equity Interests, stock options and Commodity Contracts, notes, debentures, bonds, Promissory Notes or
other evidences of indebtedness and all other property (including, without limitation, any stock dividend and any distribution in connection
with a stock split) from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such
Equity Interests and (c) without affecting the obligations of any Grantor under any provision prohibiting such action under this Agreement,
the Securities Purchase Agreement or any other Transaction Document, in the event of any consolidation or merger involving any Pledged
Issuer and in which such Pledged Issuer is not the surviving entity or any division of any Pledged Issuer, all Equity Interests of the
successor entity formed by or resulting from such consolidation, merger or division.
“Registration
Page” has the meaning specified therefor in Section 4(a)(i) hereof.
“Secured
Party” has the meaning specified therefor in Section 1.01 of the Securities Purchase Agreement.
“Secured
Obligations” has the meaning specified therefor in Section 3 hereof.
“Securities
Purchase Agreement” has the meaning specified therefor in the Recitals hereto.
“Security
Agreement Supplement” has the meaning specified therefor in Section 13(f) hereof.
“Termination
Date” means the first date on which all of the Obligations are paid in full in cash.
“Trademark
Licenses” means all licenses, contracts or other agreements, whether written or oral, naming any Grantor as licensor or licensee
and providing for the grant of any right concerning any Trademark, together with any goodwill connected with and symbolized by any such
trademark licenses, contracts or agreements and the right to prepare for sale or lease and sell or lease any and all Inventory now or
hereafter owned by any Grantor and now or hereafter covered by such licenses.
“Trademarks”
means all domestic and foreign trademarks, service marks, collective marks, certification marks, trade names, business names, d/b/a’s,
Internet domain names, trade styles, designs, logos and other source or business identifiers and all general intangibles of like nature,
now or hereafter owned, adopted, acquired or used by any Grantor, all applications, registrations and recordings thereof (including,
without limitation, applications, registrations and recordings in the United States Patent and Trademark Office or in any similar office
or agency of the United States, any state thereof or any other country or any political subdivision thereof), and all reissues, extensions
or renewals thereof, together with all goodwill of the business symbolized by such marks and all customer lists, formulae and other Records
of any Grantor relating to the distribution of products and services in connection with which any of such marks are used.
SECTION 2. Grant
of Security Interest. As collateral security for the payment, performance and observance of all of the Secured Obligations, each
Grantor hereby pledges and assigns to the Collateral Agent (and its agents and designees), and grants to the Collateral Agent (and its
agents and designees), for the benefit of the Secured Parties, a continuing security interest in, all personal property and Fixtures
of such Grantor, wherever located and whether now or hereafter existing and whether now owned or hereafter acquired, of every kind and
description, tangible or intangible, including, without limitation, the following (all being collectively referred to herein as the “Collateral”):
(a)
all Accounts;
(b)
all Chattel Paper (whether tangible or electronic);
(c)
all Commercial Tort Claims, including, without limitation, the Commercial Tort Claims described in Schedule V hereto;
(d)
all Deposit Accounts, all cash, and all other property from time to time deposited therein or otherwise credited thereto and the monies
and property in the possession or under the control of the Collateral Agent or any affiliate, representative, agent or participant of
the Collateral Agent;
(e)
all Documents;
(f)
all General Intangibles (including, without limitation, all Payment Intangibles, Intellectual Property and Licenses);
(g)
all Goods, including, without limitation, all Equipment, Fixtures and Inventory;
(h)
all Instruments (including, without limitation, Promissory Notes);
(i)
all Investment Property;
(j)
all Letter-of-Credit Rights;
(k)
all Pledged Interests;
(l)
all Supporting Obligations;
(m)
all Additional Collateral;
(n)
all other tangible and intangible personal property and Fixtures of such Grantor (whether or not subject to the Code), including, without
limitation, all bank and other accounts and all cash and all investments therein, all proceeds, products, offspring, accessions, rents,
profits, income, benefits, substitutions and replacements of and to any of the property of such Grantor described in the preceding clauses
of this Section 2 hereof (including, without limitation, any proceeds of insurance thereon and all causes of action, claims and warranties
now or hereafter held by such Grantor in respect of any of the items listed above), and all books, correspondence, files and other Records,
including, without limitation, all tapes, disks, cards, Software, data and computer programs in the possession or under the control of
such Grantor or any other Person from time to time acting for such Grantor that at any time evidence or contain information relating
to any of the property described in the preceding clauses of this Section 2 hereof or are otherwise necessary or helpful in the collection
or realization thereof; and
(o)
all Proceeds, including all Cash Proceeds and Noncash Proceeds, and products of any and all of the foregoing Collateral;
in
each case, howsoever such Grantor’s interest therein may arise or appear (whether by ownership, security interest, claim or otherwise).
Notwithstanding
anything herein to the contrary, the term “Collateral” shall not include and the security interest granted under this Section
2 shall not attach to, and no Grantor is pledging, nor granting a security interest hereunder in, (i) any of such Grantor’s right,
title or interest in any lease, license, contract, property right or agreement (for purposes hereof, including General Intangibles) to
which such Grantor is a party or any of its right, title or interest thereunder or any asset subject to any such lease, license, contract,
property right or agreement to the extent, but only to the extent, that such a grant would, under the express terms of such lease, license,
contract, property or agreement constitute or result in (x) a breach or termination pursuant to the terms of, or constitute a default
under, such lease, license, contract, property or agreement (other than to the extent that any such term (A) has been waived by the affected
party or (B) would be rendered ineffective pursuant to Sections 9-406, 9-408, 9-409 of the Code or other applicable provisions of the
Uniform Commercial Code of any relevant jurisdiction or any other applicable law (including the Bankruptcy Code) or principles of equity)
or (y) the abandonment, invalidation or unenforceability of any right, title or interest of any Grantor therein; provided that (I) immediately
upon the ineffectiveness, lapse, termination or waiver by the affected party of any such provision, the Collateral shall include, and
such Grantor shall be deemed to have granted a security interest in, all such right, title and interest that does not result in any of
the consequences specified in (x) or (y) above as if such provision had never been in effect and (II) the foregoing exclusion shall in
no way be construed so as to limit, impair or otherwise affect the Collateral Agent’s unconditional continuing security interest
in and liens upon any rights or interests of a Grantor in or to the proceeds of, or any monies due or to become due under, any such license,
contract or agreement, (ii) any intent-to-use United States trademark applications for which an amendment to allege use or statement
of use has not been filed under 15 U.S.C. § 1051(c) or 15 U.S.C. § 1051(d), respectively, or if filed, has not been deemed
in conformance with 15 U.S.C. § 1051(a) or examined and accepted, respectively, by the United States Patent and Trademark Office,
provided that upon such filing and acceptance, such intent-to-use applications shall be included in the definition of Collateral or (iii)
any Excluded Accounts.
SECTION
3. Security for Secured Obligations. The security interest created hereby in the Collateral constitutes continuing collateral
security for all of the following obligations, whether now existing or hereafter incurred (the “Secured Obligations”):
(a)
the prompt payment by each Grantor, as and when due and payable (whether by scheduled maturity, required prepayment, acceleration, demand
or otherwise), of all amounts from time to time owing by any Grantor in respect of the Securities Purchase Agreement, the Notes and/or
the other Transaction Documents, including, without limitation, (i) all Obligations, (ii) in the case of a Guarantor, all amounts from
time to time owing by such Grantor in respect of its guaranty made pursuant to any Guarantee Agreement, including, without limitation,
all obligations guaranteed by such Grantor and (iii) all interest, fees, commissions, charges, expense reimbursements, indemnifications
and all other amounts due or to become due under any Transaction Document (including, without limitation, all interest, fees, commissions,
charges, expense reimbursements, indemnifications and other amounts that accrue after the commencement of any Insolvency Proceeding of
any Grantor, whether or not the payment of such interest, fees, commissions, charges, expense reimbursements, indemnifications and other
amounts are unenforceable or are not allowable, in whole or in part, due to the existence of such Insolvency Proceeding); and
(b)
the prompt payment and due performance and observance by each Grantor of all of its other obligations from time to time existing in respect
of this Agreement and any other Transaction Document.
SECTION
4. Delivery of the Pledged Interests.
(a)
(i) All Promissory Notes currently evidencing the Pledged Debt and all certificates currently representing the certificated Pledged Shares
shall be delivered to the Collateral Agent promptly (and in any event, no more than five Business Days (or such longer period as the
Collateral Agent may agree) following the Closing Date. All other Promissory Notes, certificates and Instruments constituting Pledged
Interests from time to time required to be pledged to the Collateral Agent pursuant to the terms of this Agreement, the Securities Purchase
Agreement or the Notes (the “Additional Collateral”) shall be delivered to the Collateral Agent promptly upon, but
in any event within five Business Days of, receipt thereof by or on behalf of any of the Grantors. All such Promissory Notes, certificates
and Instruments shall be (A) held by or on behalf of the Collateral Agent pursuant hereto, (B) delivered in suitable form for transfer
by delivery or shall be accompanied by duly executed instruments of transfer or assignment executed in blank and (C) with respect to
any certificated Pledged Shares, accompanied by (1) a duly executed irrevocable proxy coupled with an interest, in substantially the
form of Exhibit D hereto (an “Irrevocable Proxy”), and (2) a duly acknowledged Equity Interest registration page,
in blank, from each Pledged Issuer, substantially in the form of Exhibit E hereto, or otherwise in form and substance satisfactory to
the Collateral Agent (a “Registration Page”), all in form and substance reasonably satisfactory to the Collateral
Agent. If any Pledged Interests consist of uncertificated securities, unless the immediately following sentence is applicable thereto,
such Grantor shall cause (x) the Collateral Agent (or its designated custodian or nominee) to become the registered holder thereof, or
(y) each issuer (or with respect to any issuer which is not a Subsidiary of a Grantor or is not subject to the control of a Grantor,
use its commercially reasonable efforts to cause such issuer) of such securities to agree that it will comply with instructions originated
by the Collateral Agent with respect to such securities without further consent by such Grantor. If any Pledged Interests consist of
security entitlements, such Grantor shall (x) transfer such security entitlements to the Collateral Agent (or its custodian, nominee
or other designee), or (y) cause the applicable securities intermediary to agree that it will comply with entitlement orders by the Collateral
Agent without further consent by such Grantor.
(ii)
Within five Business Days of the receipt by a Grantor of any Additional Collateral, a pledge amendment duly executed by such Grantor,
in substantially the form of Exhibit A hereto (a “Pledge Amendment”), shall be delivered to the Collateral Agent,
in respect of the Additional Collateral that must be pledged pursuant to this Agreement or the Securities Purchase Agreement. The Pledge
Amendment shall from and after delivery thereof constitute part of Schedules VI and VII hereto. Each Grantor hereby authorizes the Collateral
Agent to attach each Pledge Amendment to this Agreement and agrees that all Promissory Notes, certificates or Instruments listed on any
Pledge Amendment delivered to the Collateral Agent shall for all purposes hereunder constitute Pledged Interests and such Grantor shall
be deemed upon delivery thereof to have made the representations and warranties set forth in Section 5 hereof with respect to such Additional
Collateral.
(b)
If any Grantor shall receive, by virtue of such Grantor being or having been an owner of any Pledged Interests, any Additional Collateral
consisting of any (i) Equity Interest certificate (including, without limitation, any certificate representing an Equity Interest dividend
or distribution in connection with any increase or reduction of capital, reclassification, merger, consolidation, division, sale of assets,
combination of shares, stock split, spin-off or split-off), Promissory Note or other Instrument, (ii) option or right, whether as an
addition to, substitution for, or in exchange for, any Pledged Interests, or otherwise, (iii) dividends or distributions payable in cash
(except such dividends and/or distributions permitted to be retained by any such Grantor pursuant to Section 7 hereof) or in securities
or other property or (iv) dividends, distributions, cash, Instruments, Investment Property and other property in connection with a partial
or total liquidation or dissolution or in connection with a reduction of capital, capital surplus or paid-in surplus, such Grantor shall
receive such Equity Interest certificate, Promissory Note, Instrument, option, right, payment or distribution in trust for the benefit
of the Collateral Agent, shall segregate it from such Grantor’s other property and shall promptly deliver it to the Collateral
Agent, in the exact form received, with any necessary indorsement and/or instrument of transfer or assignment executed in blank (and,
in the case of any Additional Collateral described in clause (b)(i) above, with an Irrevocable Proxy and Registration Page with respect
to any such Additional Collateral), all in form and substance reasonably satisfactory to the Collateral Agent, to be held by the Collateral
Agent as Pledged Interests.
SECTION
5. Representations and Warranties. Each Grantor represents and warrants as follows:
(a)
Schedule I hereto sets forth a complete and accurate list as of the date hereof of (i) the exact legal name of each Grantor, (ii) the
jurisdiction of organization of each Grantor, (iii) the type of organization of each Grantor, (iv) each Grantor’s chief place of
business and chief executive office and (v) each trade name used by each Grantor.
(b)
As of the date hereof, none of the Accounts is evidenced by Promissory Notes or other Instruments except for Promissory Notes that have
been (or will be) delivered to the Collateral Agent in accordance with the terms hereof. Set forth in Schedule III hereto (as it may
be amended to reflect the opening or closing of any new accounts (other than Excluded Accounts)) is a complete and accurate list, as
of the date of this Agreement, of each Deposit Account, Securities Account and Commodities Account of each Grantor (other than Excluded
Accounts), together with the name and address of each institution at which each such Account is maintained, the account number for each
such Account and a description of the purpose of each such Account.
(c)
Each material License of such Grantor now existing is, and each other such License will be, the legal, valid and binding obligation of
the parties thereto, enforceable against such parties in accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally. To the knowledge
of the Grantor to which any such material License belongs, no default under any such material License by any such party has occurred,
nor does any defense, offset, deduction or counterclaim exist thereunder in favor of any such party. Grantor has not received any notice
of its intention to cancel, terminate or fail to renew any such material License.
(d)
All issued, registered, or applied-for Intellectual Property owned or used by each Grantor as of the date hereof is subsisting and in
full force and effect, has not been adjudged invalid or unenforceable, is valid and enforceable and has not been abandoned in whole or
in part. No Intellectual Property owned or used by a Grantor conflicts with the rights of others to any Intellectual Property and, to
the knowledge of each Grantor, such Grantor is not now infringing or in conflict with any such rights of others, and to the knowledge
of each Grantor, no other Person is now infringing or in conflict with any such properties, assets and rights owned or used by any Grantor,
except for infringements and conflicts that could not reasonably be expected to have, individually or in the aggregate, a Material Adverse
Effect. No Grantor has received any notice that it is violating or has violated the Intellectual Property rights of any third party.
(e)
None of the Other Intellectual Property of any Grantor, to such Grantor’s knowledge, has been used, divulged, disclosed or appropriated
to the detriment of such Grantor for the benefit of any other Person other than such Grantor; no employee, independent contractor or
agent of any Grantor has misappropriated any Other Intellectual Property of any other Person in the course of the performance of his
or her duties as an employee, independent contractor or agent of such Grantor; and to such Grantor’s knowledge, no employee, independent
contractor or agent of any Grantor is in default or breach of any term of any employment agreement, non-disclosure agreement, assignment
of inventions agreement or similar agreement, or contract relating in any way to the protection, ownership, development, use or transfer
of such Grantor’s Intellectual Property.
(f)
The Pledged Issuers set forth in Schedule VII that are Subsidiaries of a Grantor are as of the date hereof such Grantor’s only
direct Subsidiaries. The Pledged Shares have been duly authorized and validly issued and are fully paid and nonassessable and the holders
thereof are not entitled to any preemptive, first refusal or other similar rights. Except as noted in Schedule VII hereto, the Pledged
Shares constitute 100% of the issued shares of Equity Interests of the Pledged Issuers as of the date hereof. All other shares of Equity
Interests constituting Pledged Interests will be duly authorized and validly issued, fully paid and nonassessable.
(g)
The Promissory Notes evidencing the Pledged Debt have been, and all other Promissory Notes from time to time evidencing Pledged Debt,
when executed and delivered, will have been, duly authorized, executed and delivered by the respective makers thereof, and all such Promissory
Notes are or will be, as the case may be, legal, valid and binding obligations of such makers, enforceable against such makers in accordance
with their respective terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting creditors’ rights generally.
(h)
The Grantors are and will be at all times the sole and exclusive owners of, or otherwise have and will have adequate rights in, the Collateral
free and clear of any Liens except for the Permitted Liens. No effective financing statement or other instrument similar in effect covering
all or any part of the Collateral is on file in any recording or filing office except such as may have been filed to perfect or protect
any Permitted Lien.
(i)
The exercise by the Collateral Agent of any of its rights and remedies hereunder will not contravene any law or contractual obligation
binding on or otherwise affecting any Grantor or any of its properties and will not result in, or require the creation of, any Lien upon
or with respect to any of its properties.
(j)
No authorization or approval or other action by, and no notice to or filing with, any Governmental Entity or any other Person, is required
for (i) the due execution, delivery and performance by any Grantor of this Agreement, (ii) the grant by any Grantor of the security interest
purported to be created hereby in the Collateral or (iii) the exercise by the Collateral Agent of any of its rights and remedies hereunder,
except, in the case of this clause (iii), as may be required in connection with any sale of any Pledged Interests by laws affecting the
offering and sale of securities generally. No authorization or approval or other action by, and no notice to or filing with, any Governmental
Entity or any other Person, is required for the perfection of the security interest purported to be created hereby in the Collateral,
except (A) for the filing under the Uniform Commercial Code as in effect in the applicable jurisdiction of the financing statements described
in Schedule IV hereto, all of which financing statements have been (or, promptly following the date hereof, will be) duly filed and are
(or, promptly following the date hereof, will be) in full force and effect, (B) with respect to the perfection of the security interest
created hereby in the United States Intellectual Property and Licenses, for the recording of the appropriate Assignment for Security,
substantially in the form of Exhibit B hereto in the United States Patent and Trademark Office or the United States Copyright Office,
as applicable, (C) with respect to any action that may be necessary to obtain control of Collateral constituting Deposit Accounts, Electronic
Chattel Paper or Investment Property, the taking of such actions, and (D) the Collateral Agent’s having possession of Documents,
Chattel Paper, Instruments and cash constituting Collateral (subclauses (A) – (D), each, a “Perfection Requirement”
and, collectively, the “Perfection Requirements”).
(k)
As of the date hereof, no Grantor holds any Commercial Tort Claims in respect of which a claim has been filed in a court of law or a
written notice by an attorney has been given to a potential defendant, except for such claims described in Schedule V.
(l)
This Agreement creates a legal, valid and enforceable security interest in favor of the Collateral Agent, for the benefit of the Secured
Parties, in the Collateral, as security for the Secured Obligations. The Perfection Requirements will result in the perfection of such
security interests. Such security interests are, or in the case of Collateral in which any Grantor obtains rights after the date hereof,
will be, perfected, first priority security interests, subject in priority only to the Permitted Liens, and the recording of such instruments
of assignment described above. Such Perfection Requirements and all other action necessary or desirable to perfect and protect such security
interest have been duly made or taken, except for (i) the Collateral Agent’s having possession of all Instruments, Documents, Chattel
Paper and cash constituting Collateral after the date hereof, (ii) the Collateral Agent’s having control of all Deposit Accounts,
Electronic Chattel Paper, Investment Property or Letter-of-Credit Rights constituting Collateral after the date hereof, and (iii) the
other filings and recordations and actions described in Section 5(j) hereof.
(m)
Each Grantor and any of its Subsidiaries that is a partnership or a limited liability company with certificated Equity Interests, has
irrevocably opted into (and has caused each of its Subsidiaries that is a partnership or a limited liability company with certificated
Equity Interests, and a Pledged Issuer to opt into) Article 8 of the relevant Uniform Commercial Code (collectively, the “Certificated
Entities”). Such interests are securities for purposes of Article 8 of the relevant Uniform Commercial Code. With respect to
each Grantor and its Subsidiaries that is a partnership or a limited liability company and is not a Certificated Entity, the partnership
interests or membership interests of each such Person are not and will not be (i) dealt in or traded on securities exchanges or in securities
markets, (ii) securities for purposes of Article 8 of any relevant Uniform Commercial Code, (iii) investment company securities within
the meaning of Section 8-103 of any relevant Uniform Commercial Code or (iv) evidenced by a certificate.
SECTION
6. Covenants as to the Collateral. During the period from the Closing Date until the Termination Date, unless the Collateral Agent
shall otherwise consent in writing:
(a)
Further Assurances. Each Grantor will take such action and execute, acknowledge and deliver, at its sole cost and expense, such
agreements, instruments or other documents as the Collateral Agent may reasonably require from time to time in order (i) to perfect and
protect, or maintain the perfection of, the security interest and Lien purported to be created hereby; (ii) to enable the Collateral
Agent to exercise and enforce its rights and remedies hereunder in respect of the Collateral; or (iii) otherwise to effect the purposes
of this Agreement, including, without limitation: (A) at the reasonable request of the Collateral Agent, marking conspicuously all Chattel
Paper, Instruments, Licenses and all of its Records pertaining to the Collateral with a legend, in form and substance reasonably satisfactory
to the Collateral Agent, indicating that such Chattel Paper, Instrument, License or Records is subject to the security interest created
hereby, (B) if any Account shall be evidenced by a Promissory Note or other Instrument or Chattel Paper, delivering and pledging to the
Collateral Agent such Promissory Note, other Instrument or Chattel Paper, duly endorsed and accompanied by executed instruments of transfer
or assignment, all in form and substance reasonably satisfactory to the Collateral Agent, (C) executing and filing (to the extent, if
any, that such Grantor’s signature is required thereon) or authenticating the filing of, such financing or continuation statements,
or amendments thereto, (D) with respect to Intellectual Property hereafter existing and not covered by an appropriate security interest
grant, the executing and recording in the United States Patent and Trademark Office or the United States Copyright Office, as applicable,
appropriate instruments granting a security interest, as may be necessary or desirable or that the Collateral Agent may reasonably request
in order to perfect and preserve the security interest purported to be created hereby, (E) delivering to the Collateral Agent Irrevocable
Proxies and Registration Pages in respect of the Pledged Interests, (F) furnishing to the Collateral Agent from time to time statements
and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as the Collateral
Agent may reasonably request, all in reasonable detail, (G) if at any time after the date hereof, any Grantor acquires or holds any Commercial
Tort Claim, promptly (and in event within 10 Business Days of so acquiring or holding) notifying the Collateral Agent in a writing signed
by such Grantor setting forth a brief description of such Commercial Tort Claim and granting to the Collateral Agent a security interest
therein and in the proceeds thereof, which writing shall incorporate the provisions hereof and shall be in form and substance reasonably
satisfactory to the Collateral Agent and (H) taking all actions required by law in any relevant Uniform Commercial Code jurisdiction,
or by other law as applicable in any foreign jurisdiction in connection with the Collateral. No Grantor shall take or fail to take any
action which could in any manner impair the validity or enforceability of the Collateral Agent’s security interest in and Lien
on any Collateral.
(b)
Provisions Concerning the Accounts and the Material Licenses.
(i)
Each Grantor will, except as otherwise provided in this subsection (d), continue to collect, at its own expense, all amounts due or to
become due under the Accounts. In connection with such collections, each Grantor may (and, at the Collateral Agent’s direction,
will) take such action as such Grantor (or, if applicable, the Collateral Agent) may deem reasonably necessary or advisable to enforce
collection or performance of the Accounts; provided, however, that the Collateral Agent shall have the right at any time,
upon the occurrence and during the continuance of an Event of Default, to notify the Account Debtors or obligors under any Accounts of
the assignment of such Accounts to the Collateral Agent and to direct such Account Debtors or obligors to make payment of all amounts
due or to become due to such Grantor thereunder directly to the Collateral Agent or its designated agent and, upon such notification
and at the expense of such Grantor and to the extent permitted by law, to enforce collection of any such Accounts and to adjust, settle
or compromise the amount or payment thereof, in the same manner and to the same extent as such Grantor might have done. After receipt
by any Grantor of a notice from the Collateral Agent that the Collateral Agent has notified, intends to notify, or has enforced or intends
to enforce a Grantor’s rights against the Account Debtors or obligors under any Accounts as referred to in the proviso to the immediately
preceding sentence, (A) all amounts and proceeds (including Instruments) received by such Grantor in respect of the Accounts shall be
received in trust for the benefit of the Collateral Agent hereunder, shall be segregated from other funds of such Grantor and shall be
forthwith paid over to the Collateral Agent or its designated agent in the same form as so received (with any necessary endorsement)
to be held as cash collateral and applied as specified in the Securities Purchase Agreement hereof or Notes, as applicable, and (B) such
Grantor will not adjust, settle or compromise the amount or payment of any Account or release wholly or partly any Account Debtor or
obligor thereof or allow any credit or discount thereon. Any such securities, cash, investments and other items so received by the Collateral
Agent or its designated agent shall (in the sole and absolute discretion of the Collateral Agent) be held as additional Collateral for
the Secured Obligations or distributed in accordance with Section 8 hereof.
(ii)
Upon the occurrence and during the continuance of any material breach or default under any material License by any party thereto other
than a Grantor, (A) the relevant Grantor will, promptly after obtaining knowledge thereof, give the Collateral Agent written notice of
the nature and duration thereof, specifying what action, if any, it has taken and proposes to take with respect thereto, (B) no Grantor
will, without the prior written consent of the Collateral Agent, declare or waive any such material breach or default or affirmatively
consent to the cure thereof or exercise any of its remedies in respect thereof, and (C) each Grantor will, upon written instructions
from the Collateral Agent and at such Grantor’s expense, take such action as the Collateral Agent may deem reasonably necessary
or advisable in respect thereof.
(iii)
Each Grantor will, at its expense, promptly deliver to the Collateral Agent a copy of each notice or other communication received by
it by which any other party to any material License (A) declares a breach or default by a Grantor of any material term thereunder, (B)
terminates such material License or (C) purports to exercise any of its rights or affect any of its obligations thereunder, together
with a copy of any reply by such Grantor thereto.
(iv)
Each Grantor will exercise promptly and diligently each and every right which it may have under each material License (other than any
right of termination) and will duly perform and observe in all respects all of its obligations under each material License and will take
all action necessary to maintain the material Licenses in full force and effect.
(c)
Notices and Communications; Defense of Title; Amendments; Equity Issuances. Each Grantor will:
(i)
at each Grantors’ expense, promptly deliver to the Collateral Agent a copy of each material notice or other communication received
by it in respect of the Pledged Interests;
(ii)
at the Grantors’ expense, defend the Collateral Agent’s right, title and security interest in and to the Pledged Interests
against the claims of any Person, keep the Pledged Interests free from all Liens (except Permitted Liens), and not sell, exchange, transfer,
assign, lease or otherwise dispose of the Pledged Interests or any interest therein, except as permitted under the Securities Purchase
Agreement and the other Transaction Documents;
(iii)
not make or consent to any amendment or other modification or waiver with respect to any Pledged Interests or enter into any agreement
or permit to exist any restriction with respect to any Pledged Interests other than as expressly permitted under the Securities Purchase
Agreement; and
(iv)
not permit the issuance of (A) any additional shares of any class of Equity Interests of any Pledged Issuer, (B) any securities convertible
voluntarily by the holder thereof or automatically upon the occurrence or non-occurrence of any event or condition into, or exchangeable
for, any such shares of Equity Interests or (C) any warrants, options, contracts or other commitments entitling any Person to purchase
or otherwise acquire any such shares of Equity Interests, in each case, other than as permitted under the Securities Purchase Agreement.
(d)
Intellectual Property.
(i)
If applicable, each Grantor has duly executed and delivered the applicable Assignment for Security in the form attached hereto as Exhibit
B. Except as provided in subsection (ii) below, each Grantor (either itself or through licensees) will, and will cause each licensee
thereof to, take all action necessary to maintain all of the Intellectual Property in full force and effect, including, without limitation,
using the proper statutory notices and markings and using the Trademarks on each applicable trademark class of goods in order to so maintain
the Trademarks in full force, free from any claim of abandonment for non-use, and no Grantor will (nor permit any licensee thereof to)
do any act or knowingly omit to do any act whereby any Intellectual Property may become invalidated.
(ii)
Notwithstanding the foregoing, so long as no Event of Default has occurred and is continuing, no Grantor shall have an obligation to
use or to maintain any Intellectual Property (A) that relates solely to any product or work, that has been, or is in the process of being,
discontinued, abandoned or terminated, (B) that is being replaced with Intellectual Property substantially similar to the Intellectual
Property that may be abandoned or otherwise become invalid, so long as the failure to use or maintain such Intellectual Property does
not materially adversely affect the validity of such replacement Intellectual Property and so long as such replacement Intellectual Property
is subject to the Lien created by this Agreement or (C) that is substantially the same as any other Intellectual Property that is in
full force, so long as the failure to use or maintain such Intellectual Property does not materially adversely affect the validity of
such replacement Intellectual Property and so long as such other Intellectual Property is subject to the Lien and security interest created
by this Agreement.
(iii)
Each Grantor will cause to be taken all necessary steps in any proceeding before the United States Patent and Trademark Office and the
United States Copyright Office or any similar office or agency in any other country or political subdivision thereof to maintain each
registration of the Intellectual Property (other than the Intellectual Property described in the proviso to the immediately preceding
sentence), including, without limitation, filing of renewals, affidavits of use, affidavits of incontestability and opposition, interference
and cancellation proceedings and payment of maintenance fees, filing fees, taxes or other governmental fees. If any Intellectual Property
is infringed, misappropriated, diluted or otherwise violated in any material respect by a third party, the Grantors shall (A) upon obtaining
knowledge of such infringement, misappropriation, dilution or other violation, promptly notify the Collateral Agent and (B) to the extent
the Grantors shall deem appropriate under the circumstances, promptly take commercially reasonable actions to sue for infringement, misappropriation,
dilution or other violation, seek injunctive relief where appropriate and recover any and all damages for such infringement, misappropriation,
dilution or other violation, or take such other actions as the Grantors shall deem appropriate under the circumstances to protect such
Intellectual Property.
(iv)
Within 10 Business Days of the date of this Agreement (or such longer time as the Collateral Agent may agree in its reasonable discretion),
the Grantors shall deliver to the Collateral Agent a supplement to this Agreement containing the information necessary to complete Schedule
II hereto, which such Schedule shall set forth a complete and accurate list as of the date of delivery thereof of each material License
of the Grantors. Schedule II hereto, when delivered pursuant to the immediately preceding sentence, shall set forth a complete and accurate
list of all issued, registered, or applied-for Intellectual Property owned or used by each Grantor as of the date thereof.
(v)
Each Grantor shall furnish to the Collateral Agent statements and schedules further identifying and describing the Intellectual Property
and Licenses and such other reports in connection with the Intellectual Property and Licenses as the Collateral Agent may reasonably
request, all in reasonable detail and promptly upon the request of the Collateral Agent, following receipt by the Collateral Agent of
any such statements, schedules or reports, the Grantors shall modify this Agreement by amending Schedule II hereto to include any Intellectual
Property and Licenses, as the case may be, which become part of the Collateral under this Agreement, and shall execute and authenticate
such documents and do such acts as shall be necessary or, in the judgment of the Collateral Agent, desirable to subject such Intellectual
Property and Licenses to the Lien and security interest created by this Agreement.
(vi)
Notwithstanding anything herein to the contrary, upon the occurrence and during the continuance of an Event of Default, no Grantor may
abandon or otherwise permit any Intellectual Property to become invalid without the prior written consent of the Collateral Agent, and
if any Intellectual Property is infringed, misappropriated, diluted or otherwise violated in any material respect by a third party, the
Grantors will take such action as the Collateral Agent shall deem appropriate under the circumstances to protect such Intellectual Property.
(vii)
In the event that any Grantor shall (A) obtain rights to any new Trademarks necessary for the operation of its business, or any reissue,
renewal or extension of any existing Trademark necessary for the operation of its business, (B) obtain rights to or develop any new patentable
inventions, or become entitled to the benefit of any Patent, or any reissue, division, continuation, renewal, extension or continuation-in-part
of any existing Patent or any improvement thereof (whether pursuant to any license or otherwise), (C) obtain rights to or develop any
new works protectable by Copyright, or become entitled to the benefit of any rights with respect to any Copyright or any registration
or application therefor, or any renewal or extension of any existing Copyright or any registration or application therefor, or (D) obtain
rights to or develop new Other Intellectual Property, the provisions of Section 2 hereof shall automatically apply thereto and such Grantor
shall give to the Collateral Agent prompt notice thereof in accordance with the terms of this Agreement and the Securities Purchase Agreement.
Except as otherwise provided herein or in the Securities Purchase Agreement, each Grantor, either itself or through any agent, employee,
licensee or designee, shall give the Collateral Agent written notice of each application submitted by it for the registration of any
Trademark or Copyright or the issuance of any Patent with the United States Patent and Trademark Office or the United States Copyright
Office, as applicable, or in any similar office or agency of the United States or any country or any political subdivision thereof.
(viii)
Each Grantor shall execute, authenticate and deliver any and all assignments, agreements, instruments, documents and papers as the Collateral
Agent may reasonably request to evidence the Collateral Agent’s security interest hereunder in such Intellectual Property and the
General Intangibles of such Grantor relating thereto or represented thereby, and each Grantor hereby appoints the Collateral Agent its
attorney-in-fact to execute and/or authenticate and file all such writings for the foregoing purposes, all acts of such attorney being
hereby ratified and confirmed, and such power (being coupled with an interest) shall be irrevocable until the Termination Date.
(e)
Deposit, Commodities and Securities Accounts.
(i)
Each Grantor shall cause each bank and other financial institution with an account referred to in Schedule IV hereto to execute and deliver
to the Collateral Agent (or its designee) a Control Agreement, in form and substance reasonably satisfactory to the Collateral Agent,
duly executed by such Grantor and such bank or financial institution, or enter into other arrangements in form and substance reasonably
satisfactory to the Collateral Agent, pursuant to which such institution shall irrevocably agree (unless otherwise agreed to by the Collateral
Agent), among other things, that (i) it will comply at any time with the instructions originated by the Collateral Agent (or its designee)
to such bank or financial institution directing the disposition of cash, Commodity Contracts, securities, Investment Property and other
items from time to time credited to such account, without further consent of such Grantor, which instructions the Collateral Agent (or
its designee) will not give to such bank or other financial institution in the absence of a continuing default under any Transaction
Document; provided that the Control Agreement in respect of the Designated Account shall be a “blocked” control agreement
subject at all times to the instructions of the Collateral Agent without any consent of any Grantor1 and (ii) all cash,
Commodity Contracts, securities, Investment Property and other items of such Grantor deposited with such institution shall be subject
to a perfected, first priority security interest in favor of the Collateral Agent (or its designee). The provisions of this Section 6(e)
shall not apply to any Excluded Accounts.
(ii)
The Company shall at all times maintain a minimum cash balance on deposit in the Designated Account of not less than $65,000,000.00.
(f)
Control. Each Grantor hereby agrees to take any or all action that may be necessary or desirable or that the Collateral Agent
may request in order for the Collateral Agent to obtain control in accordance with Sections 9-104, 9-105, 9-106, and 9-107 of the Code
with respect to the following Collateral: (i) Deposit Accounts, (ii) Securities Accounts; (iii) Electronic Chattel Paper and (iv) Investment
Property. Each Grantor hereby acknowledges and agrees that any agent or designee of the Collateral Agent shall be deemed to be a “secured
party” with respect to the Collateral under the control of such agent or designee for all purposes.
(g)
Records; Inspection and Reporting.
(i)
Each Grantor shall keep adequate records concerning the Accounts, Chattel Paper and Pledged Interests.
(ii)
No Grantor shall, without at least five Business Days’ (or such other timeframe as the Collateral Agent may agree in its sole discretion)
prior notice to the Collateral Agent, amend, modify or otherwise change (A) its name, (B) its jurisdiction of organization, (C) its type
of entity or (D) its chief executive office, in each case, as set forth in Schedule I hereto.
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1
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NTD:
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Operating/deposit
accounts of Grantors (other than the Designated Account) are to be subject to “springing” account control agreements
(i.e., Grantors permitted use accounts in ordinary course prior to any event of default)… The Designated Account to be subject
to “blocked” form of control agreement subject to Agent control/instructions at all times from the Closing Date.
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(h)
Partnership and Limited Liability Company Interests.
(i)
Except with respect to partnership interests and limited liability company interests evidenced by a certificate, which certificate has
been pledged and delivered to the Collateral Agent pursuant to Section 4 hereof, no Grantor that is a partnership or a limited liability
company shall, nor shall any Grantor with any Subsidiary that is a partnership or a limited liability company, permit such Subsidiary’s
partnership interests or membership interests to (A) be dealt in or traded on securities exchanges or in securities markets, (B) become
a security for purposes of Article 8 of any relevant Uniform Commercial Code, (C) become an investment company security within the meaning
of Section 8-103 of any relevant Uniform Commercial Code or (D) be evidenced by a certificate. Each Grantor agrees that such partnership
interests or membership interests shall constitute General Intangibles.
(ii)
Each Grantor covenants and agrees that each limited liability agreement, operating agreement, membership agreement, partnership agreement
or similar agreement to which a Grantor is a party and relating to any Pledged Interests (as amended, restated, supplemented or otherwise
modified from time to time, each a “Pledged Partnership/LLC Agreement”) is hereby amended by this Section 6(h) (A)
to permit each member, manager and partner that is a Grantor (1) to pledge all of the Pledged Interests in which such Grantor has rights,
(2) to grant and collaterally assign to the Collateral Agent, for the benefit of each Secured Party, a lien on and security interest
in such Pledged Interests and (3) to, upon any foreclosure by the Collateral Agent on such Pledged Interests (or any other sale or transfer
of such Pledged Interests in lieu of such foreclosure), transfer to the Collateral Agent (or to the purchaser or other transferee of
such Pledged Interests in lieu of such foreclosure) its rights and powers to manage and control the affairs of the applicable Pledged
Issuer, in each case, without any further consent, approval or action by any other party, including, without limitation, any other party
to any Pledged Partnership/LLC Agreement or otherwise and (B) to provide that (1) the bankruptcy or insolvency of such Grantor shall
not cause such Grantor to cease to be a holder of such Pledged Interests, (2) upon the occurrence of such an event, the applicable Pledged
Issuer shall continue without dissolution and (3) such Grantor waives any right it might have to agree in writing to dissolve the applicable
Pledged Issuer upon the bankruptcy or insolvency of such Grantor, or the occurrence of an event that causes such Grantor to cease to
be a be a holder of such Pledged Interests.
(iii)
Upon the occurrence and during the continuance of an Event of Default, the Collateral Agent or its designee shall have the right (but
not the obligation) to be substituted for the applicable Grantor as a member, manager or partner under the applicable Pledged Partnership/LLC
Agreement, and the Collateral Agent or its designee shall have all rights, powers and benefits of such Grantor as a member, manager or
partner, as applicable, under such Pledged Partnership/LLC Agreement in accordance with the terms of this Section 6(h). For avoidance
of doubt, such rights, powers and benefits of a substituted member, manager or partner shall include all voting and other rights and
not merely the rights of an economic interest holder.
(iv)
During the period from the Closing Date until the Termination Date, no further consent, approval or action by any other party, including,
without limitation, any other party to the applicable Pledged Partnership/LLC Agreement or otherwise shall be necessary to permit the
Collateral Agent or its designee to be substituted as a member, manager or partner pursuant to this Section 6(h) The rights, powers and
benefits granted pursuant to this paragraph shall inure to the benefit of the Collateral Agent, on its own behalf and on behalf of each
other Secured Party, and each of their respective successors, assigns and designees, as intended third party beneficiaries.
(v)
Each Grantor and each applicable Pledged Issuer agrees that during the period from the Closing Date until the Termination Date, no Pledged
Partnership/LLC Agreement shall be amended to be inconsistent with the provisions of this Section 6(h)without the prior written consent
of the Collateral Agent.
(i)
Pledge of Lomotif. The Company, Zash and ZVV shall promptly (and in any event, no more than ten Business Days (or such longer
period as the Collateral Agent may agree) following the date hereof, commence the use of reasonable best efforts to remove any restrictions
or prohibitions on ZVV’s pledge over the Equity Interests of Lomotif Private Limited, a company organized under the laws of Singapore
(“Lomotif”) and to cause such Equity Interests to be pledged to the Collateral Agent for the benefit of the Secured
Parties (and thereafter, at the reasonable request of the Collateral Agent, shall continue to use such reasonable best efforts); provided
that the failure to procure the removal of such restrictions or prohibitions shall not constitute a default hereunder to the extent
the Company, Zash and ZVV have undertaken such reasonable best efforts. Such reasonable best efforts shall include, but not be limited
to, amending Lomotif’s memorandum and articles of association to permit the pledge of its Equity Interests (and remove any limitations
or restrictions on the Collateral Agent’s ability to exercise remedies in respect of such Equity Interests) and seeking the consent
of any third parties that may be necessary to permit such pledge and any other actions that may be necessary or advisable (including
pursuant to the advice of Singapore counsel). Furthermore, to the extent the restrictions on pledging the Equity Interests in Lomotif
are removed, if requested by the Collateral Agent, ZVV shall enter into a Singapore law governed share pledge promptly following the
request therefor.
SECTION
7. Voting Rights, Dividends, Etc. in Respect of the Pledged Interests.
(a)
So long as no Event of Default shall have occurred and be continuing:
(i)
each Grantor may exercise any and all voting and other consensual rights pertaining to any Pledged Interests for any purpose not inconsistent
with the terms of this Agreement, the Securities Purchase Agreement or the other Transaction Documents; provided, however,
that (A) no Grantor will exercise or refrain from exercising any such right, as the case may be, if the Collateral Agent gives such Grantor
notice that, in the Collateral Agent’s reasonable good faith judgment, such action (or inaction) could reasonably be expected to
violate the terms of any Transaction Document or have a Material Adverse Effect and (B) each Grantor will give the Collateral Agent at
least five Business Days’ notice of the manner in which it intends to exercise, or the reasons for refraining from exercising,
any such right which could reasonably be expected to adversely affect the value, liquidity or marketability of any Collateral or the
creation, perfection and priority of the Collateral Agent’s Lien thereon; and
(ii)
each Grantor may receive and retain any and all dividends, interest or other distributions paid in respect of the Pledged Interests to
the extent permitted by the Securities Purchase Agreement; provided, however, that any and all (A) dividends and interest
paid or payable other than in cash in respect of, and Instruments and other property received, receivable or otherwise distributed in
respect of or in exchange for, any Pledged Interests, (B) dividends and other distributions paid or payable in cash in respect of any
Pledged Interests in connection with a partial or total liquidation or dissolution or in connection with a reduction of capital, capital
surplus or paid-in surplus, and (C) cash paid, payable or otherwise distributed in redemption of, or in exchange for, any Pledged Interests,
together with any dividend, interest or other distribution or payment which at the time of such payment was not permitted by the Securities
Purchase Agreement, shall be, and shall forthwith be delivered to the Collateral Agent, to hold as, Pledged Interests and shall, if received
by any of the Grantors, be received in trust for the benefit of the Collateral Agent, shall be segregated from the other property or
funds of the Grantors, and shall be forthwith delivered to the Collateral Agent in the exact form received with any necessary indorsement
and/or appropriate instruments of transfer or assignment or undated stock powers duly executed in blank, to be held by the Collateral
Agent as Pledged Interests and as further collateral security for the Secured Obligations.
(b)
Upon the occurrence and during the continuance of an Event of Default:
(i)
all rights of each Grantor to exercise the voting and other consensual rights which it would otherwise be entitled to exercise pursuant
to Section 7(a)(i) hereof, and to receive the dividends, distributions, interest and other payments that it would otherwise be authorized
to receive and retain pursuant to Section 7(a)(ii) hereof, shall cease, and all such rights shall thereupon become vested in the Collateral
Agent, which shall thereupon have the sole right to exercise such voting and other consensual rights and to receive and hold as Pledged
Interests such dividends, distributions and interest payments, and the Collateral Agent (personally or through an agent) shall thereupon
be solely authorized and empowered to transfer and register in the Collateral Agent’s name, or in the name of the Collateral Agent’s
nominee, the whole or any part of the Pledged Interests, it being acknowledged by each Grantor that such transfer and registration may
be effected by the Collateral Agent by the delivery of a Registration Page to the Grantor or to the Pledged Issuer, as applicable, reflecting
the Collateral Agent or its designee as the holder of such Pledged Interests, or otherwise by the Collateral Agent through its irrevocable
appointment as attorney-in-fact pursuant to Section 8 hereof;
(ii)
the Collateral Agent is authorized to notify each debtor with respect to the Pledged Debt to make payment directly to the Collateral
Agent (or its designee) and may collect any and all moneys due or to become due to any Grantor in respect of the Pledged Debt, and each
of the Grantors hereby authorizes each such debtor to make such payment directly to the Collateral Agent (or its designee) without any
duty of inquiry;
(iii)
without limiting the generality of the foregoing, the Collateral Agent may, at its option, exercise any and all rights of conversion,
exchange, subscription or any other rights, privileges or options pertaining to any of the Pledged Interests as if it were the absolute
owner thereof, including, without limitation, the right to exchange, in its discretion, any and all of the Pledged Interests upon the
merger, consolidation, division, reorganization, recapitalization or other adjustment of any Pledged Issuer, or upon the exercise by
any Pledged Issuer of any right, privilege or option pertaining to any Pledged Interests, and, in connection therewith, to deposit and
deliver any and all of the Pledged Interests with any committee, depository, transfer agent, registrar or other designated agent upon
such terms and conditions as it may determine; and
(iv)
all dividends, distributions, interest and other payments that are received by any of the Grantors contrary to the provisions of Section
7(a)(i) hereof shall be received in trust for the benefit of the Collateral Agent, shall be segregated from other funds of the Grantors,
and shall be forthwith paid over to the Collateral Agent as Pledged Interests in the exact form received with any necessary indorsement
and/or appropriate instruments of transfer or assignment or undated Equity Interest powers duly executed in blank, to be held by the
Collateral Agent as Pledged Interests and as further collateral security for the Secured Obligations.
SECTION 8. Additional
Provisions Concerning the Collateral.
(a)
To the maximum extent permitted by applicable law, and for the purpose of taking any action that the Collateral Agent may deem necessary
or advisable to accomplish the purposes of this Agreement, each Grantor hereby (i) authorizes the Collateral Agent to execute any such
agreements, instruments or other documents in such Grantor’s name and to file such agreements, instruments or other documents in
such Grantor’s name and in any appropriate filing office, (ii) authorizes the Collateral Agent at any time and from time to time
to file, one or more financing or continuation statements and amendments thereto, relating to the Collateral (including, without limitation,
any such financing statements that (A) describe the Collateral as “all assets” or “all personal property” (or
words of similar effect) or that describe or identify the Collateral by type or in any other manner as the Collateral Agent may determine,
regardless of whether any particular asset of such Grantor falls within the scope of Article 9 of the Uniform Commercial Code or whether
any particular asset of such Grantor constitutes part of the Collateral, and (B) contain any other information required by Part 5 of
Article 9 of the Code for the sufficiency or filing office acceptance of any financing statement, continuation statement or amendment,
including, without limitation, whether such Grantor is an organization, the type of organization and any organizational identification
number issued to such Grantor) and (iii) ratifies such authorization to the extent that the Collateral Agent has filed any such financing
statements, continuation statements, or amendments thereto, prior to the date hereof. A photocopy or other reproduction of this Agreement
or any financing statement covering the Collateral or any part thereof shall be sufficient as a financing statement where permitted by
law.
(b)
Each Grantor hereby irrevocably appoints the Collateral Agent as its attorney-in-fact and proxy, with full authority in the place and
stead of such Grantor and in the name of such Grantor or otherwise, from time to time following the occurrence and during the continuance
of an Event of Default in the Collateral Agent’s discretion, to take any action and to execute any instrument that the Collateral
Agent may deem necessary or advisable to accomplish the purposes of this Agreement (subject to the rights of a Grantor under Section
6 hereof and Section 7(a) hereof), including, without limitation, (i) to obtain and adjust insurance required to be paid to the Collateral
Agent pursuant to the Securities Purchase Agreement, (ii) to ask, demand, collect, sue for, recover, compound, receive and give acquittance
and receipts for moneys due and to become due under or in respect of any Collateral, (iii) to receive, endorse, and collect any drafts
or other Instruments, Documents and Chattel Paper in connection with clause (i) or (ii) above, (iv) to receive, indorse and collect all
Instruments made payable to such Grantor representing any dividend, interest payment or other distribution in respect of any Pledged
Interests and to give full discharge for the same, (v) to file any claims or take any action or institute any proceedings which the Collateral
Agent may deem necessary or desirable for the collection of any Collateral or otherwise to enforce the rights of each Secured Party with
respect to any Collateral, (vi) to execute assignments, licenses and other documents to enforce the rights of each Secured Party with
respect to any Collateral, (vii) to pay or discharge taxes or Liens levied or placed upon or threatened against the Collateral, the legality
or validity thereof and the amounts necessary to discharge the same to be determined by the Collateral Agent (in its sole discretion),
and such payments made by the Collateral Agent shall constitute additional Secured Obligations of such Grantor to the Collateral Agent,
be due and payable immediately without demand, and shall bear interest from the date payment of said amounts is demanded at the Default
Rate, and (viii) to sign and endorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, assignments,
verifications and notices in connection with Accounts, Chattel Paper and other documents relating to the Collateral. This power is coupled
with an interest and is irrevocable until the Termination Date.
(c)
For the purpose of enabling the Collateral Agent to exercise rights and remedies hereunder, following the occurrence of an Event of Default
at such time as the Collateral Agent shall be lawfully entitled to exercise such rights and remedies, and for no other purpose, each
Grantor hereby (i) grants to the Collateral Agent an irrevocable, non-exclusive license (exercisable without payment of royalty or other
compensation to any Grantor) to use, assign, license or sublicense any Intellectual Property now or hereafter owned by any Grantor, wherever
the same may be located, including in such license reasonable access to all media in which any of the licensed items may be recorded
or stored and to all computer programs used for the compilation or printout thereof; and (ii) assigns to the Collateral Agent, to the
extent assignable, all of its rights to any Intellectual Property now or hereafter licensed or used by any Grantor. Each Grantor hereby
releases the Collateral Agent from, and indemnifies the Collateral Agent against, any claims, causes of action and demands at any time
arising out of or with respect to any actions taken or omitted to be taken by the Collateral Agent under the powers of attorney, proxy
or license, granted herein other than actions taken or omitted to be taken through the Collateral Agent’s gross negligence or willful
misconduct, as determined by a final determination of a court of competent jurisdiction, provided that Collateral Agent shall be accountable
only for amounts that it receives as a result of the exercise of such powers.
(d)
If any Grantor fails to perform any agreement or obligation contained herein, the Collateral Agent may itself perform, or cause performance
of, such agreement or obligation, in the name of such Grantor or the Collateral Agent, and the fees and expenses of the Collateral Agent
incurred in connection therewith shall be payable by the Grantors pursuant to Section 10 hereof, constitute additional Secured Obligations
of the Grantor to the Collateral Agent, be due and payable immediately without demand and bear interest from the date payment of said
amounts is demanded at the Default Rate.
(e)
The powers conferred on the Collateral Agent hereunder are solely to protect its interest in the Collateral and shall not impose any
duty upon it to exercise any such powers. Other than the exercise of reasonable care to assure the safe custody of any Collateral in
its possession and the accounting for moneys actually received by it hereunder, the Collateral Agent shall have no duty as to any Collateral
or as to the taking of any necessary steps to preserve rights against other parties or any other rights pertaining to any Collateral
and shall be relieved of all responsibility for any Collateral in its possession upon surrendering it or tendering surrender of it to
any of the Grantors (or whomsoever shall be lawfully entitled to receive the same or as a court of competent jurisdiction shall direct).
The Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation of any Collateral in its possession
if such Collateral is accorded treatment substantially equal to that which the Collateral Agent accords its own property, it being understood
that the Collateral Agent shall not have responsibility for ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relating to any Collateral, whether or not the Collateral Agent has or is deemed to have knowledge
of such matters. The Collateral Agent shall not be liable or responsible for any loss or damage to any of the Collateral, or for any
diminution in the value thereof, by reason of the act or omission of any warehouseman, carrier, forwarding agency, consignee or other
agent or bailee selected by the Collateral Agent in good faith.
(f)
Anything herein to the contrary notwithstanding (i) each Grantor shall remain liable under the Licenses and otherwise in respect of the
Collateral to the extent set forth therein to perform all of its obligations thereunder to the same extent as if this Agreement had not
been executed, (ii) the exercise by the Collateral Agent of any of its rights hereunder shall not release any Grantor from any of its
obligations under the Licenses or otherwise in respect of the Collateral, and (iii) the Collateral Agent shall not have any obligation
or liability by reason of this Agreement under the Licenses or otherwise in respect of the Collateral, nor shall the Collateral Agent
be obligated to perform any of the obligations or duties of any Grantor thereunder or to take any action to collect or enforce any claim
for payment assigned hereunder.
(g)
The Collateral Agent may at any time in its discretion (i) without notice to any Grantor, transfer or register in the name of the Collateral
Agent or any of its nominees any or all of the Pledged Interests, subject only to the revocable rights of such Grantor under Section
7(a) hereof, and (ii) exchange certificates or Instruments constituting Pledged Interests for certificates or Instruments of smaller
or larger denominations.
SECTION
9. Remedies Upon Default. If any Event of Default shall have occurred and be continuing:
(a)
The Collateral Agent may exercise in respect of the Collateral, in addition to any other rights and remedies provided for herein or otherwise
available to it, all of the rights and remedies of a secured party upon default under the Code (whether or not the Code applies to the
affected Collateral), and also may (i) take absolute control of the Collateral, including, without limitation, transfer into the Collateral
Agent’s name or into the name of its nominee or nominees (to the extent the Collateral Agent has not theretofore done so) and thereafter
receive, for the benefit of each Secured Party, all payments made thereon, give all consents, waivers and ratifications in respect thereof
and otherwise act with respect thereto as though it were the outright owner thereof, (ii) require each Grantor to, and each Grantor hereby
agrees that it will at its expense and upon request of the Collateral Agent forthwith, assemble all or part of the Collateral as directed
by the Collateral Agent and make it available to the Collateral Agent at a place or places to be designated by the Collateral Agent that
is reasonably convenient to both parties, and the Collateral Agent may enter into and occupy any premises owned or leased by any Grantor
where the Collateral or any part thereof is located or assembled for a reasonable period in order to effectuate the Collateral Agent’s
rights and remedies hereunder or under law, without obligation to any Grantor in respect of such occupation, and (iii) without notice
except as specified below and without any obligation to prepare or process the Collateral for sale, (A) sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any of the Collateral Agent’s offices, at any exchange or broker’s
board or elsewhere, for cash, on credit or for future delivery, and at such price or prices and upon such other terms as the Collateral
Agent may deem commercially reasonable and/or (B) lease, license or otherwise dispose of the Collateral or any part thereof upon such
terms as the Collateral Agent may deem commercially reasonable. Each Grantor agrees that, to the extent notice of sale or any other disposition
of the Collateral shall be required by law, at least five Business Days’ prior notice to the applicable Grantor of the time and
place of any public sale or the time after which any private sale or other disposition of the Collateral is to be made shall constitute
reasonable notification. If the Collateral Agent sells any of the Collateral upon credit, the Grantors will be credited only with payments
actually received by the Collateral Agent from the purchaser thereof, and if such purchaser fails to pay for the Collateral, the Collateral
may resell the Collateral and the Grantors shall be credited with proceeds of the sale. The Collateral Agent shall not be obligated to
make any sale or other disposition of Collateral regardless of notice of sale having been given. The Collateral Agent may adjourn any
public or private sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice,
be made at the time and place to which it was so adjourned. Each Grantor hereby waives any claims against each Secured Party arising
by reason of the fact that the price at which the Collateral may have been sold at a private sale was less than the price which might
have been obtained at a public sale or was less than the aggregate amount of the Secured Obligations, even if the Collateral Agent accepts
the first offer received and does not offer the Collateral to more than one offeree, and waives all rights that such Grantor may have
to require that all or any part of the Collateral be marshaled upon any sale (public or private) thereof. Each Grantor hereby acknowledges
that (A) any such sale of the Collateral by the Collateral Agent shall be made without warranty, (B) the Collateral Agent may specifically
disclaim any warranties of title, possession, quiet enjoyment or the like, (C) the Collateral Agent may bid (which bid may be, in whole
or in part, in the form of cancellation of indebtedness), if permitted by law, for the purchase, lease, license or other disposition
of the Collateral or any portion thereof for the account of the Collateral Agent (on behalf of itself and each Secured Party) and (D)
such actions set forth in clauses (A), (B) and (C) above shall not adversely affect the commercial reasonableness of any such sale of
the Collateral. In addition to the foregoing, (1) upon written notice to any Grantor from the Collateral Agent, each Grantor shall cease
any use of the Intellectual Property or any trademark, patent or copyright similar thereto for any purpose described in such notice;
(2) the Collateral Agent may, at any time and from time to time, upon five Business Days’ prior notice to any Grantor, license,
whether general, special or otherwise, and whether on an exclusive or non-exclusive basis, any of the Intellectual Property, throughout
the universe for such term or terms, on such conditions, and in such manner, as the Collateral Agent shall in its sole discretion determine;
and (3) the Collateral Agent may, at any time, execute and deliver on behalf of a Grantor, one or more instruments of assignment of the
Intellectual Property (or any application or registration thereof), in form suitable for filing, recording or registration in any country.
(b)
In the event that the Collateral Agent determines to exercise its right to sell all or any part of the Pledged Interests pursuant to
Section 9(a) hereof, each Grantor will, at such Grantor’s expense and upon request by the Collateral Agent: (i) execute and deliver,
and cause each issuer of such Pledged Interests and the directors and officers thereof to execute and deliver, all such instruments and
documents, and do or cause to be done all such other acts and things, as may be necessary or, in the opinion of the Collateral Agent,
advisable to register such Pledged Interests under the provisions of the Securities Act, and to cause the registration statement relating
thereto to become effective and to remain effective for such period as prospectuses are required by law to be furnished, and to make
all amendments and supplements thereto and to the related prospectus which, in the opinion of the Collateral Agent, are necessary or
advisable, all in conformity with the requirements of the Securities Act and the rules and regulations of the SEC applicable thereto,
(ii) cause each issuer of such Pledged Interests to qualify such Pledged Interests under the state securities or “Blue Sky”
laws of each jurisdiction, and to obtain all necessary governmental approvals for the sale of the Pledged Interests, as requested by
the Collateral Agent, (iii) cause each Pledged Issuer to make available to its security holders, as soon as practicable, an earnings
statement which will satisfy the provisions of Section 11(a) of the Securities Act, and (iv) do or cause to be done all such other acts
and things as may be necessary to make such sale of such Pledged Interests valid and binding and in compliance with applicable law. Each
Grantor acknowledges the impossibility of ascertaining the amount of damages which would be suffered by the Collateral Agent by reason
of the failure by any Grantor to perform any of the covenants contained in this Section 9(b) and, consequently, agrees that, if any Grantor
fails to perform any of such covenants, it shall pay, as liquidated damages and not as a penalty, an amount equal to the value of the
Pledged Interests on the date the Collateral Agent demands compliance with this Section 9(b) provided, however, that the payment of such
amount shall not release any Grantor from any of its obligations under any of the other Transaction Documents.
(c)
Notwithstanding the provisions of Section 9(b) hereof, each Grantor recognizes that the Collateral Agent may deem it impracticable to
effect a public sale of all or any part of the Pledged Shares or any other securities constituting Pledged Interests and that the Collateral
Agent may, therefore, determine to make one or more private sales of any such securities to a restricted group of purchasers who will
be obligated to agree, among other things, to acquire such securities for their own account, for investment and not with a view to the
distribution or resale thereof. Each Grantor acknowledges that any such private sale may be at prices and on terms less favorable to
the seller than the prices and other terms which might have been obtained at a public sale and, notwithstanding the foregoing, agrees
that such private sales shall be deemed to have been made in a commercially reasonable manner and that the Collateral Agent shall have
no obligation to delay the sale of any such securities for the period of time necessary to permit the issuer of such securities to register
such securities for public sale under the Securities Act. Each Grantor further acknowledges and agrees that any offer to sell such securities
which has been (i) publicly advertised on a bona fide basis in a newspaper or other publication of general circulation in the financial
community of New York, New York (to the extent that such an offer may be so advertised without prior registration under the Securities
Act) or (ii) made privately in the manner described above to not less than fifteen bona fide offerees shall be deemed to involve
a “public disposition” for the purposes of Section 9-610(c) of the Code (or any successor or similar, applicable statutory
provision) as then in effect in the State of New York, notwithstanding that such sale may not constitute a “public offering”
under the Securities Act, and that the Collateral Agent may, in such event, bid for the purchase of such securities.
(d)
Any cash held by the Collateral Agent (or its agent or designee) as Collateral and all Cash Proceeds received by the Collateral Agent
(or its agent or designee) in respect of any sale of or collection from, or other realization upon, all or any part of the Collateral,
may, in the discretion of the Collateral Agent, be held by the Collateral Agent (or its agent or designee) as collateral for, and/or
then or at any time thereafter applied (after payment of any amounts payable to the Collateral Agent pursuant to Section 10 hereof) in
whole or in part by the Collateral Agent against, all or any part of the Secured Obligations in such order as the Collateral Agent shall
elect, consistent with the provisions of the Securities Purchase Agreement and the Notes. Any surplus of such cash or Cash Proceeds held
by the Collateral Agent (or its agent or designee) and remaining after the Termination Date shall be paid over to whomsoever shall be
lawfully entitled to receive the same or as a court of competent jurisdiction shall direct.
(e)
In the event that the proceeds of any such sale, collection or realization are insufficient to pay all amounts to which each Secured
Party is legally entitled, the Grantors shall be jointly and severally liable for the deficiency, together with interest thereon at the
highest rate specified in any applicable Transaction Document for interest on overdue principal thereof or such other rate as shall be
fixed by applicable law, together with the costs of collection and the reasonable fees, costs, expenses and other client charges of any
attorneys employed by the Collateral Agent to collect such deficiency.
(f)
Each Grantor hereby acknowledges that if the Collateral Agent complies with any applicable requirements of law in connection with a disposition
of the Collateral, such compliance will not adversely affect the commercial reasonableness of any sale or other disposition of the Collateral.
(g)
The Collateral Agent shall not be required to marshal any present or future collateral security (including, but not limited to, this
Agreement and the Collateral) for, or other assurances of payment of, the Secured Obligations or any of them or to resort to such collateral
security or other assurances of payment in any particular order, and all of the Collateral Agent’s rights hereunder and in respect
of such collateral security and other assurances of payment shall be cumulative and in addition to all other rights, however existing
or arising. To the extent that any Grantor lawfully may, such Grantor hereby agrees that it will not invoke any law relating to the marshalling
of collateral which might cause delay in or impede the enforcement of the Collateral Agent’s rights under this Agreement or under
any other instrument creating or evidencing any of the Secured Obligations or under which any of the Secured Obligations is outstanding
or by which any of the Secured Obligations is secured or payment thereof is otherwise assured, and, to the extent that it lawfully may,
each Grantor hereby irrevocably waives the benefits of all such laws.
SECTION
10. Indemnity and Expenses.
(a)
Each Grantor agrees to defend, protect, indemnify and hold harmless the Collateral Agent and each other Indemnitee in accordance with
Section 10 of the Securities Purchase Agreement.
(b)
Each Grantor agrees to pay to the Collateral Agent fees, costs and expenses in accordance with Section 5(g) of the Securities Purchase
Agreement and Section 20 of the Notes.
SECTION
11. Notices, Etc. All notices and other communications provided for hereunder shall be given in accordance with the notice provision
of the Securities Purchase Agreement and/or the Notes or other Transactions Documents, as applicable.
SECTION
12. Security Interest Absolute; Joint and Several Obligations.
(a)
All rights of the Secured Parties, all Liens and all obligations of each of the Grantors hereunder shall be absolute and unconditional
irrespective of (i) any lack of validity or enforceability of the Securities Purchase Agreement or any other Transaction Document, (ii)
any change in the time, manner or place of payment of, or in any other term in respect of, all or any of the Secured Obligations, or
any other amendment or waiver of or consent to any departure from the Securities Purchase Agreement or any other Transaction Document,
(iii) any exchange or release of, or non-perfection of any Lien on any Collateral, or any release or amendment or waiver of or consent
to departure from any guaranty, for all or any of the Secured Obligations, or (iv) any other circumstance that might otherwise constitute
a defense available to, or a discharge of, any of the Grantors in respect of the Secured Obligations. All authorizations and agencies
contained herein with respect to any of the Collateral are irrevocable and powers coupled with an interest.
(b)
Each Grantor hereby waives (i) promptness and diligence, (ii) notice of acceptance and notice of the incurrence of any Secured Obligation
by any Issuer or Guarantor, (iii) notice of any actions taken by the Collateral Agent, any Buyer or Holder, any Guarantor or any other
Person under any Transaction Document or any other agreement, document or instrument relating thereto, (iv) all other notices, demands
and protests, and all other formalities of every kind in connection with the enforcement of the Secured Obligations, the omission of
or delay in which, but for the provisions of this subsection (b), might constitute grounds for relieving such Grantor of any such Grantor’s
obligations hereunder and (v) any requirement that the Collateral Agent or any Buyer or Holder protect, secure, perfect or insure any
security interest or other lien on any property subject thereto or exhaust any right or take any action against any Grantor or any other
Person or any collateral.
(c)
All of the obligations of the Grantors hereunder are joint and several. The Collateral Agent may, in its sole and absolute discretion,
enforce the provisions hereof against any of the Grantors and shall not be required to proceed against all Grantors jointly or seek payment
from the Grantors ratably. In addition, the Collateral Agent may, in its sole and absolute discretion, select the Collateral of any one
or more of the Grantors for sale or application to the Secured Obligations, without regard to the ownership of such Collateral, and shall
not be required to make such selection ratably from the Collateral owned by all of the Grantors. The release or discharge of any Grantor
by the Collateral Agent shall not release or discharge any other Grantor from the obligations of such Person hereunder.
SECTION 13. Miscellaneous.
(a)
No amendment of any provision of this Agreement (including any Schedule attached hereto) shall be effective unless it is in writing and
signed by each Grantor affected thereby and the Collateral Agent, and no waiver of any provision of this Agreement, and no consent to
any departure by any Grantor therefrom, shall be effective unless it is in writing and signed by the Collateral Agent, and then such
waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.
(b)
No failure on the part of the Secured Parties to exercise, and no delay in exercising, any right hereunder or under any other Transaction
Document shall operate as a waiver thereof; nor shall any single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The rights and remedies of the Secured Parties provided herein and in the other
Transaction Documents are cumulative and are in addition to, and not exclusive of, any rights or remedies provided by law. The rights
of the Secured Parties under any Transaction Document against any party thereto are not conditional or contingent on any attempt by such
Person to exercise any of its rights under any other Transaction Document against such party or against any other Person, including but
not limited to, any Grantor.
(c)
This Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect, subject to
paragraph (e) below, until the Termination Date and (ii) be binding on each Grantor all other Persons who become bound as debtor to this
Agreement in accordance with Section 9-203(d) of the Code, and shall inure, together with all rights and remedies of the Secured Parties
hereunder, to the benefit of the Secured Parties and their respective successors, transferees and assigns. Without limiting the generality
of clause (ii) of the immediately preceding sentence, each Secured Party may assign or otherwise transfer its respective rights and obligations
under this Agreement and any other Transaction Document to any other Person pursuant to the terms of the Securities Purchase Agreement,
and such other Person shall thereupon become vested with all of the benefits in respect thereof granted to the Secured Parties herein
or otherwise. Upon any such assignment or transfer, all references in this Agreement to any Secured Party shall mean the assignee of
any such Secured Party. None of the rights or obligations of any Grantor hereunder may be assigned or otherwise transferred without the
prior written consent of the Collateral Agent, and any such assignment or transfer shall be null and void.
(d)
After the occurrence of the Termination Date, (i) subject to paragraph (e) below, this Agreement and the security interests and licenses
created hereby shall terminate and all rights to the Collateral shall revert to the Grantors, (ii) the Collateral Agent agrees to file
UCC amendments on or promptly after the Termination Date to evidence the termination of the Liens so released and (iii) the Collateral
Agent will, upon the Grantors’ request and at the Grantors’ cost and expense, (A) promptly return to the Grantors (or whomsoever
shall be lawfully entitled to receive the same or as a court of competent jurisdiction shall direct) such of the Collateral as shall
not have been sold or otherwise disposed of or applied pursuant to the terms hereof, and (B) promptly execute and deliver to the Grantors
such documents and make such other filings as the Grantors shall reasonably request to evidence such termination, without representation,
warranty or recourse of any kind. In addition, upon any sale or disposition of any item of Collateral in a transaction expressly permitted
under the Securities Purchase Agreement, the Collateral Agent agrees to execute a release of its security interest in such item of Collateral,
and the Collateral Agent shall, upon the reasonable request of the Grantors and at the Grantors’ cost and expense, execute and
deliver to the Grantors such documents as the Grantors shall reasonably request to evidence such release, without representation, warranty
or recourse of any kind.
(e)
This Agreement shall remain in full force and effect and continue to be effective should any petition be filed by or against any Grantor
for liquidation or reorganization, should any Grantor become insolvent or make an assignment for the benefit of any creditor or creditors
or should a receiver or trustee be appointed for all or any significant part of any Grantor’s assets, and shall continue to be
effective or be reinstated, as the case may be, if at any time payment or performance of the Secured Obligations, or any part thereof,
is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Secured
Obligations, whether as a “voidable preference,” “fraudulent conveyance”, or otherwise, all as though such payment
or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the
Secured Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.
(f)
Upon the execution and delivery, or authentication, by any Person of a security agreement supplement in substantially the form of Exhibit
C hereto (each a “Security Agreement Supplement”), (i) such Person shall be referred to as an “Additional
Grantor” and shall be and become a Grantor, and each reference in this Agreement to “Grantor” shall also mean and
be a reference to such Additional Grantor, and each reference in this Agreement and the other Transaction Documents to “Collateral”
shall also mean and be a reference to the Collateral of such Additional Grantor, and (ii) the supplemental Schedules I-VII attached to
each Security Agreement Supplement shall be incorporated into and become a part of and supplement Schedules I-VII, respectively, hereto,
and the Collateral Agent may attach such Schedules as supplements to such Schedules, and each reference to such Schedules shall mean
and be a reference to such Schedules, as supplemented pursuant hereto.
(g)
THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT TO THE
EXTENT THAT THE VALIDITY AND PERFECTION OR THE PERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE SECURITY INTEREST CREATED
HEREBY, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAW OF A JURISDICTION OTHER THAN THE STATE
OF NEW YORK.
(h)
In addition to and without limitation of any of the foregoing, this Agreement shall be deemed to be a Transaction Document and shall
otherwise be subject to all of terms and conditions contained in Section 10 of the Securities Purchase Agreement (including the submission
to jurisdiction and waiver of jury trial provisions therein), mutatis mutandi.
(i)
Each Grantor irrevocably and unconditionally waives any right it may have to claim or recover in any legal action, suit or proceeding
with respect to this Agreement any special, exemplary, punitive or consequential damages.
(j)
Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the remaining portions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
(k)
Section headings herein are included for convenience of reference only and shall not constitute a part of this Agreement for any other
purpose.
(l)
This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which
shall be deemed an original, but all of such counterparts taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of this Agreement by facsimile or electronic mail shall be equally effective as delivery of an original executed
counterpart.
(m)
For purposes of this Agreement, all references to Schedules I-VII attached hereto shall be deemed to refer to each such Schedule as updated
from time to time in accordance with the terms of this Agreement.
[Remainder
Of This Page Intentionally Left Blank]
IN
WITNESS WHEREOF, each Grantor has caused this Agreement to be executed and delivered by its officer thereunto duly authorized, as of
the date first above written.
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GRANTORS:
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Vinco Ventures, Inc.
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By:
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Name:
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Title:
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ZASH
Global Media and Entertainment Corporation
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By:
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Name:
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Title:
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ZVV
Media Partners, LLC
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By:
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Name:
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Title:
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CBAV1,
LLC
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By:
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Name:
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Title:
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EDISON
NATION HOLDINGS, LLC
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By:
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Name:
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Title:
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EVERYDAY
EDISONS, LLC
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By:
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Name:
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Title:
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EVNT
PLATFORM, LLC
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By:
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Name:
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Title:
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FERGUSON
CONTAINERS, INC.
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By:
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Name:
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Title:
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HONEY
BADGER MEDIA, LLC
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By:
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Name:
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Title:
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PIRASTA,
LLC
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By:
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Name:
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Title:
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SAFE
TV SHOP, LLC
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By:
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Name:
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Title:
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TBD
SAFETY, LLC
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By:
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Name:
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Title:
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VINCO
SHARED SERVICES, LLC
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By:
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Name:
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Title:
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Acknowledged
and Agreed by:
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COLLATERAL
AGENT:
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[hudson
bay master fund ltd]
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By:
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Name:
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Title:
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SCHEDULE
I
LEGAL NAME; JURISDICTION OF ORGANIZATION; TYPE OF ORGANIZATION; ORGANIZATIONAL IDENTIFICATION NUMBER
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Legal
Name
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Jurisdiction
of Organization
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Type
of Organization
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Chief
Place of Business and Chief Executive Office
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Trade
Names
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CBAV1,
LLC
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Nevada
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Limited
Liability Company
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1
West Broad Street, Suite 1004
Bethlehem, PA 18018
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N/A
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Edison
Nation Holdings, LLC
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North
Carolina
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Limited
Liability Company
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1
West Broad Street, Suite 1004
Bethlehem, PA 18018
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N/A
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Edison
Nation, LLC
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North
Carolina
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Limited
Liability Company
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1
West Broad Street, Suite 1004
Bethlehem, PA 18018
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N/A
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Everyday
Edisons, LLC
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North
Carolina
|
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Limited
Liability Company
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1
West Broad Street, Suite 1004
Bethlehem, PA 18018
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N/A
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EVNT
Platform, LLC
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|
Nevada
|
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Limited
Liability Company
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1
West Broad Street, Suite 1004
Bethlehem, PA 18018
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Emmmersive
Entertainment
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Ferguson
Containers, Inc.
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New
Jersey
|
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Corporation
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1
West Broad Street, Suite 1004
Bethlehem, PA 18018
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N/A
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Honey
Badger Media, LLC
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Nevada
|
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Limited
Liability Company
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1
West Broad Street, Suite 1004
Bethlehem, PA 18018
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N/A
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Pirasta,
LLC
|
|
North
Carolina
|
|
Limited
Liability Company
|
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1
West Broad Street, Suite 1004
Bethlehem, PA 18018
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N/A
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Safe
TV Shop, LLC
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North
Carolina
|
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Limited
Liability Company
|
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1
West Broad Street, Suite 1004
Bethlehem, PA 18018
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N/A
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TBD
Safety, LLC
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Delaware
|
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Limited
Liability Company
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1
West Broad Street, Suite 1004
Bethlehem, PA 18018
|
|
N/A
|
|
Vinco
Shared Services, LLC
|
|
Nevada
|
|
Limited
Liability Company
|
|
1
West Broad Street, Suite 1004
Bethlehem, PA 18018
|
|
N/A
|
|
Vinco
Ventures, Inc.
|
|
Nevada
|
|
Corporation
|
|
1
West Broad Street, Suite 1004
Bethlehem, PA 18018
|
|
N/A
|
|
Zash
Global Media and Entertainment Corporation
|
|
Delaware
|
|
Corporation
|
|
Corp.
Office:
1000 5th St., Suite 200 H-2
Miami Beach, FL 33139
Chief
Place of Business:
24 Aspen Park Blvd.
East Syracuse, NY 13057
|
|
N/A
|
|
ZVV
Media Partners LLC
|
|
Delaware
|
|
Limited
Liability Company
|
|
24
Aspen Park Blvd
East Syracuse, NY13057
|
|
N/A
|
SCHEDULE
II2
INTELLECTUAL PROPERTY AND LICENSES; TRADE NAMES
|
A.
|
COPYRIGHTS
|
|
|
|
|
|
|
1.
|
Registered
Copyrights
|
|
|
|
|
|
|
2.
|
Copyright
Applications
|
|
|
|
|
|
|
3.
|
Copyright
Licenses
|
|
|
|
|
|
B.
|
PATENTS
|
|
|
|
|
|
|
1.
|
Registered
Patents
|
|
|
|
|
|
|
2.
|
Patents
Applications
|
|
|
|
|
|
|
3.
|
Patents
Licenses
|
|
|
|
|
|
C.
|
TRADEMARKS
|
|
|
|
|
|
|
1.
|
Registered
Trademarks
|
|
|
|
|
|
|
2.
|
Trademark
Applications
|
|
|
|
|
|
|
3.
|
Trademark
Licenses
|
2
To be provided pursuant to Section 6(d)(iv) (and as may be amended pursuant to Section 6(d)(v).
SCHEDULE
III
DEPOSIT
ACCOUNTS, SECURITIES ACCOUNTS AND COMMODITIES ACCOUNTS
|
Grantor
|
|
Name
and Address of Institution Maintaining Account
|
|
Account
Number
|
|
Purpose
of Account
|
|
Best
Party Concepts LLC
|
|
Bank
of America
|
|
|
|
Operating
– Closed
|
|
CBAV
1
|
|
Bank
of America
|
|
|
|
Operating
– Debtor in Possession
|
|
Ed
Roses LLC
|
|
Bank
of America
|
|
|
|
Closed
2021
|
|
Edison
Nation Holdings LLC
|
|
BB&T
|
|
|
|
Operating
|
|
Edison
Nation Holdings LLC
|
|
BB&T
|
|
|
|
Operating
|
|
Edison
Nation Holdings LLC
|
|
Enterprise
Bank & Trust
|
|
|
|
Operating
|
|
Edison
Nation Inc. (Vinco Ventures, Inc.)
|
|
Bank
of America
|
|
|
|
Operating
|
|
Edison
Nation Inc. (Vinco Ventures, Inc.)
|
|
First
Trust Bank
|
|
|
|
Operating
- PPP
|
|
Edison
Nation LLC
|
|
BB&T
|
|
|
|
Operating
|
|
Edison
Nation LLC
|
|
Enterprise
Bank & Trust
|
|
|
|
Operating
|
|
Everyday
Edisons LLC
|
|
BB&T
|
|
|
|
Operating
|
|
EVNT
Platform LLC
|
|
Enterprise
Bank & Trust
|
|
|
|
Operating
|
|
Ferguson
Containers Inc.
|
|
Bank
of America
|
|
|
|
Operating
|
|
Ferguson
Containers Inc.
|
|
PNC
Bank
|
|
|
|
Operating
|
|
Ferguson
Containers Inc.
|
|
PNC
Bank
|
|
|
|
Operating
|
|
Grantor
|
|
Name
and Address of Institution Maintaining Account
|
|
Account
Number
|
|
Purpose
of Account
|
|
Ferguson
Containers Inc.
|
|
PNC
Bank
|
|
|
|
Operating
|
|
Ferguson
Containers Inc.
|
|
PNC
Bank
|
|
|
|
Operating
|
|
Ferguson
Containers Inc.
|
|
Heritage
Bank of Commerce
|
|
|
|
Operating
|
|
Ferguson
Containers Inc.
|
|
Heritage
Bank of Commerce
|
|
|
|
Operating
|
|
Ferguson
Containers Inc.
|
|
Heritage
Bank of Commerce
|
|
|
|
Operating
|
|
Global
Clean Solutions LLC
|
|
Bank
of America
|
|
|
|
Operating
|
|
Honey
Badger LLC
|
|
Enterprise
Bank & Trust
|
|
|
|
Operating
|
|
Pirasta
LLC
|
|
Bank
of America
|
|
|
|
Operating
- Closed
|
|
Safe
TV Ship LLC
|
|
BB&T
|
|
|
|
Operating
|
|
TBD
Safety LLC
|
|
Enterprise
Bank & Trust
|
|
|
|
Operating
|
|
Vinco
Shared Services LLC
|
|
Enterprise
Bank & Trust
|
|
|
|
Operating
|
|
Vinco
Ventures Inc.
|
|
Enterprise
Bank & Trust
|
|
|
|
Operating
|
|
Vinco
Ventures Inc.
|
|
First
Republic
|
|
|
|
Operating
– DACA
|
|
Xspand
Products Lab Inc. (Vinco Ventures Inc.)
|
|
Bank
of America
|
|
|
|
Operating
- Closed
|
|
Zash
Global Media and Entertainment Corporation
|
|
JP
Morgan Chase
295 NE 18th St.
Miami, Fl. 33132
|
|
|
|
Operating
Account
|
|
ZVV
Media Partners LLC
|
|
Pathfinder
Bank
3775 Route 31
Liverpool, NY 13090
|
|
|
|
Operating
Account
|
|
ZVV
Media Partners LLC
|
|
Pathfinder
Bank
|
|
|
|
Operating
|
SCHEDULE
IV
UCC FINANCING STATEMENTS
UCC
Financing Statements have been (or substantially simultaneously herewith will be) filed in the jurisdictions below against the Grantors:
|
Name
of Grantor
|
|
Secretary
of State
|
|
CBAV1,
LLC
|
|
Nevada
|
|
Edison
Nation Holdings, LLC
|
|
North
Carolina
|
|
Edison
Nation, LLC
|
|
North
Carolina
|
|
Everyday
Edisons, LLC
|
|
North
Carolina
|
|
EVNT
Platform, LLC
|
|
Nevada
|
|
Ferguson
Containers, Inc.
|
|
New
Jersey
|
|
Honey
Badger Media, LLC
|
|
Nevada
|
|
Pirasta,
LLC
|
|
North
Carolina
|
|
Safe
TV Shop, LLC
|
|
North
Carolina
|
|
TBD
Safety, LLC
|
|
Delaware
|
|
Vinco
Shared Services, LLC
|
|
Nevada
|
|
Vinco
Ventures, Inc.
|
|
Nevada
|
|
Zash
Global Media and Entertainment Corporation
|
|
Delaware
|
|
ZVV
Media Partners LLC
|
|
Delaware
|
SCHEDULE
V
COMMERCIAL
TORT CLAIMS
None.
SCHEDULE
VI
PLEDGED
DEBT
|
Grantor
|
|
Name
of Maker
|
|
Description
|
|
Original
Principal Amount
|
|
Vinco
Ventures, Inc.
|
|
Zash
Global Media and Entertainment
|
|
Note
|
|
$5,000,000
|
|
ZVV
Media Partners LLC
|
|
Zash
Global Media and Entertainment
|
|
Note
|
|
$5,000,000
|
|
Vinco
Ventures, Inc.
|
|
Zash
Global Media and Entertainment and Fortress Entertainment Media Group
|
|
Advance
|
|
$2,000,000
|
|
Vinco
Ventures, Inc.
|
|
PZAJ
Holdings, LLC
|
|
Note
|
|
$150,000
|
|
Vinco
Ventures, Inc.
|
|
PZAJ
Holdings, LLC
|
|
Note
|
|
$950,000
|
SCHEDULE
VII
PLEDGED SHARES
|
Grantor
|
|
Pledged
Issuer
|
|
Number
of Shares
|
|
Percentage
of Outstanding Shares
|
|
Class
|
|
Certificate
Number
|
|
Vinco
Ventures, Inc.
|
|
Best
Party Concepts LLC
|
|
|
|
50%
|
|
Units
|
|
N/A
|
|
Vinco
Ventures, Inc.
|
|
ZVV
Media Partners LLC
|
|
|
|
50%
|
|
Units
|
|
N/A
|
|
Vinco
Ventures, Inc.
|
|
Ed
Roses LLC
|
|
|
|
50%
|
|
Units
|
|
N/A
– No operations. Will be closed.
|
|
Vinco
Ventures, Inc.
|
|
Global
Clean Solutions LLC
|
|
|
|
50%
|
|
Units
|
|
N/A
|
|
Vinco
Ventures, Inc.
|
|
CBAV1,
LLC
|
|
|
|
100%
|
|
Units
|
|
N/A
|
|
Vinco
Ventures, Inc.
|
|
Edison
Nation Holdings, LLC
|
|
|
|
100%
|
|
Units
|
|
N/A
|
|
Vinco
Ventures, Inc.
|
|
Edison
Nation, LLC
|
|
|
|
100%
|
|
Units
|
|
N/A
|
|
Vinco
Ventures, Inc.
|
|
Everyday
Edisons, LLC
|
|
|
|
100%
|
|
Units
|
|
N/A
|
|
Vinco
Ventures, Inc.
|
|
EVNT
Platform, LLC
|
|
|
|
100%
|
|
Units
|
|
N/A
|
|
Vinco
Ventures, Inc.
|
|
Ferguson
Containers, Inc.
|
|
|
|
100%
|
|
|
|
|
|
Vinco
Ventures, Inc.
|
|
Honey
Badger Media, LLC
|
|
|
|
100%
|
|
Units
|
|
N/A
|
|
Vinco
Ventures, Inc.
|
|
Pirasta,
LLC
|
|
|
|
100%
|
|
Units
|
|
N/A
|
|
Vinco
Ventures, Inc.
|
|
Safe
TV Shop, LLC
|
|
|
|
100%
|
|
Units
|
|
N/A
|
|
Vinco
Ventures, Inc.
|
|
TBD
Safety, LLC
|
|
|
|
100%
|
|
Units
|
|
N/A
|
|
Vinco
Ventures, Inc.
|
|
Vinco
Shared Services, LLC
|
|
|
|
100%
|
|
Units
|
|
N/A
|
|
Zash
Global Media and Entertainment Corporation
|
|
ZVV
Media Partners LLC
|
|
|
|
50%
|
|
Units
|
|
N/A
|
EXHIBIT
A
PLEDGE AMENDMENT
This
Pledge Amendment, dated _________ ____, ___, is delivered pursuant to Section 4 of the Security Agreement referred to below. The undersigned
hereby agrees that this Pledge Amendment may be attached to the Pledge and Security Agreement, dated [__________ ____], 202[__], as it
may heretofore have been or hereafter may be amended, restated, supplemented, modified or otherwise changed from time to time (the “Security
Agreement”) and that the Promissory Notes, Instruments or shares listed on this Pledge Amendment shall be hereby pledged and
assigned to the Collateral Agent and become part of the Pledged Interests referred to in such Security Agreement and shall secure all
of the Secured Obligations referred to in such Security Agreement.
|
Pledged
Debt
|
|
|
|
Grantor
|
|
Name
of Maker
|
|
Description
|
|
Original
Principal Amount
|
|
|
|
|
|
|
|
|
|
___________
|
|
___________
|
|
___________
|
|
___________
|
|
___________
|
|
___________
|
|
___________
|
|
___________
|
|
Pledged
Shares
|
|
|
|
Grantor
|
|
Name
of
Pledged Issuer
|
|
Number
of Shares
|
|
Percentage
of Outstanding Shares
|
|
Class
|
|
Certificate
Number
|
|
|
|
|
|
|
|
|
|
|
|
|
|
___________
|
|
___________
|
|
___________
|
|
___________
|
|
___________
|
|
___________
|
|
___________
|
|
___________
|
|
___________
|
|
___________
|
|
___________
|
|
___________
|
|
|
[GRANTOR]
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
[NAME
OF AGENT],
|
|
|
as
the Collateral Agent
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
EXHIBIT
B
ASSIGNMENT FOR SECURITY - - [TRADEMARKS] [PATENTS] [COPYRIGHTS]
WHEREAS,
________________ (the “Assignor”) [has adopted, used and is using, and holds all right, title and interest in and
to, the trademarks and service marks listed on the attached Schedule A, which trademarks and service marks are registered or applied
for in the United States Patent and Trademark Office (the “Trademarks”)] [holds all right, title and interest in the
letter patents, design patents and utility patents listed on the attached Schedule A, which patents are issued or applied for in the
United States Patent and Trademark Office (the “Patents”)] [holds all right, title and interest in the copyrights
listed on the attached Schedule A, which copyrights are registered or applied for in the United States Copyright Office (the “Copyrights”)];
WHEREAS,
the Assignor has entered into a Pledge and Security Agreement, dated [_________ __], 202[__] (as amended, restated, supplemented, modified
or otherwise changed from time to time, the “Security Agreement”), in favor of [_______________], as the Collateral
Agent for itself and certain other secured parties (in such capacity, together with its successors and assigns, if any, the “Assignee”);
and
WHEREAS,
pursuant to the Security Agreement, the Assignor has assigned to the Assignee and granted to the Assignee for the benefit of the Secured
Parties (as defined in the Security Agreement) a continuing security interest in all right, title and interest of the Assignor in, to
and under the [Trademarks, together with, among other things, the good-will of the business symbolized by the Trademarks] [Patents] [Copyrights]
and the applications and registrations thereof, and all proceeds thereof, including, without limitation, any and all causes of action
which may exist by reason of infringement thereof and any and all damages arising from past, present and future violations thereof (the
“Collateral”), to secure the payment, performance and observance of the Secured Obligations (as defined in the Security
Agreement);
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Assignor does hereby
pledge, convey, sell, assign, transfer and set over unto the Assignee and grants to the Assignee for the benefit of the Assignee and
the Secured Parties a continuing security interest in the Collateral to secure the prompt payment, performance and observance of the
Secured Obligations.
The
Assignor does hereby further acknowledge and affirm that the rights and remedies of the Assignee with respect to the Collateral are more
fully set forth in the Security Agreement, the terms and provisions of which are hereby incorporated herein by reference as if fully
set forth herein.
IN
WITNESS WHEREOF, the Assignor has caused this Assignment to be duly executed by its officer thereunto duly authorized as of _____________
____, 20___.
|
|
[GRANTOR]
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
|
Title:
|
|
SCHEDULE
A TO ASSIGNMENT FOR SECURITY
[Trademarks
and Trademark Applications]
[Patent
and Patent Applications]
[Copyright
and Copyright Applications]
Owned
by ______________________________
EXHIBIT
C
FORM OF SECURITY AGREEMENT SUPPLEMENT
[Date
of Security Agreement Supplement]
[____________],
as Collateral Agent
[____________]
[____________]
Ladies
and Gentlemen:
Reference
hereby is made to
(a)
the Securities Purchase Agreement, dated as of July [__], 2021 (the “Securities Purchase Agreement”), by and among
Vinco Ventures, Inc., a Nevada corporation, (the “Company”), ZASH Global Media and Entertainment Corporation, a Delaware
corporation (“Zash”) and ZVV Media Partners, LLC, a Delaware limited liability (“ZVV”, together
with the Company and Zash, each an “Issuer” and collectively, the “Issuers”) and each of the investors
listed on the Schedule of Buyers attached thereto (individually, a “Buyer” and collectively, the “Buyers”);
and
(b)
the Pledge and Security Agreement, dated as of [________ __], 201[_] (as amended, restated, supplemented or otherwise modified from time
to time, the “Security Agreement”), made by the Grantors from time to time party thereto in favor of the Collateral
Agent.
Capitalized
terms defined in the Securities Purchase Agreement, the Notes or the Security Agreement and not otherwise defined herein are used herein
as defined in the Securities Purchase Agreement, the Notes or the Security Agreement, as applicable.
SECTION
1. Grant of Security. The undersigned hereby grants to the Collateral Agent, for the ratable benefit of each Secured Party, a
security interest in, all of its right, title and interest in and to all of the Collateral (as defined in the Security Agreement) of
the undersigned, whether now owned or hereafter acquired by the undersigned, wherever located and whether now or hereafter existing or
arising, including, without limitation, the property and assets of the undersigned set forth on the attached supplemental schedules to
the Schedules to the Security Agreement.
SECTION
2. Security for Obligations. The grant of a security interest in the Collateral by the undersigned under this Security Agreement
Supplement and the Security Agreement secures the payment of all Secured Obligations of the undersigned now or hereafter existing under
or in respect of the Transaction Documents, whether direct or indirect, absolute or contingent, and whether for principal, reimbursement
obligations, interest, premiums, penalties, fees, indemnifications, contract causes of action, costs, expenses or otherwise. Without
limiting the generality of the foregoing, each of this Security Agreement Supplement and the Security Agreement secures the payment of
all amounts that constitute part of the Secured Obligations and that would be owed by the undersigned to the Collateral Agent or any
Secured Party under the Transaction Documents but for the fact that such Secured Obligations are unenforceable or not allowable due to
the existence of a bankruptcy, reorganization or similar proceeding involving a Grantor.
SECTION
3. Supplements to Security Agreement Schedules. The undersigned has attached hereto supplemental Schedules I through VII
to Schedules I through VII, respectively, to the Security Agreement, and the undersigned hereby certifies, as of the
date first above written, that such supplemental Schedules have been prepared by the undersigned in substantially the form of the equivalent
Schedules to the Security Agreement, and such supplemental Schedules include all of the information required to be scheduled to the Security
Agreement and do not omit to state any information material thereto.
SECTION
4. Representations and Warranties. The undersigned hereby makes each representation and warranty set forth in Section 5
of the Security Agreement (as supplemented by the attached supplemental Schedules) to the same extent as each other Grantor.
SECTION
5. Obligations Under the Security Agreement. The undersigned hereby agrees, as of the date first above written, to be bound as
a Grantor by all of the terms and provisions of the Security Agreement to the same extent as each of the other Grantors. The undersigned
further agrees, as of the date first above written, that each reference in the Security Agreement to an “Additional Grantor”
or a “Grantor” shall also mean and be a reference to the undersigned.
SECTION
6. Governing Law. This Security Agreement Supplement shall be governed by, and construed in accordance with, the laws of the State
of New York.
SECTION
7. Transaction Document. In addition to and without limitation of any of the foregoing, this Security Agreement Supplement shall
be deemed to be a Transaction Document and shall otherwise be subject to all of terms and conditions contained in Section 10 of the Securities
Purchase Agreement, mutatis mutandi.
|
|
Very
truly yours,
|
|
|
|
|
|
[NAME
OF ADDITIONAL GRANTOR]
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
Acknowledged
and Agreed:
|
|
|
as
the Collateral Agent
|
|
|
|
|
|
By:
|
|
|
|
Name:
|
|
|
|
Title:
|
|
|
EXHIBIT
D
FORM OF IRREVOCABLE PROXY
(Interests
of [_______] (the “Issuer”))
For
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, [_____________] a [_______________] (the
“Grantor”), hereby irrevocably (to the fullest extent permitted by law) appoints and constitutes [_____________],
a [______________], in its capacity as Collateral Agent for the Secured Parties (in such capacity, the “Proxy Holder”)
under the Securities Purchase Agreement, dated as of [_________ __], 201[_] (as amended, restated, supplemented or otherwise modified
from time to time, the “Securities Purchase Agreement”), to which the Proxy Holder, the Grantor, certain affiliates
of the Grantor and Buyers and/or Holders are a party, the attorney and proxy of the Grantor with full power of substitution and resubstitution,
to the full extent of the Grantor’s rights with respect to all of the Pledged Interests (as defined in the Security Agreement,
defined below) which constitute the Equity Interests of the Issuer (the “Interests”) owned by the Grantor. Upon the
execution hereof, all prior proxies given by the Grantor with respect to any of the Interests are hereby revoked, and no subsequent proxies
will be given with respect to any of the Interests.
This
proxy is irrevocable, is coupled with an interest, and is granted pursuant to that certain Pledge and Security Agreement, dated as of
[_________ __], 202[_], by and among the Grantor, certain affiliates of the Grantor and Proxy Holder (as amended, restated, supplemented
or otherwise modified from time to time, the “Security Agreement”) for the benefit of Proxy Holder in consideration
of the credit extended pursuant to the Securities Purchase Agreement. Capitalized terms used herein but not otherwise defined in this
Irrevocable Proxy have the meanings ascribed to such terms in the Security Agreement.
The
Proxy Holder named above will be empowered and may exercise this Irrevocable Proxy to vote the Interests at any and all times after the
occurrence and during the continuation of an Event of Default, including, but not limited to, at any meeting of the [members/board] of
the Issuer, however called, and at any adjournment thereof, or in any written action by consent of the [members/board] of the Issuer.
This Irrevocable Proxy shall remain in effect with respect to the Interests until the Termination Date, and will continue to be effective
or automatically reinstated, as the case may be, if at any time payment, in whole or in part, of any of the Secured Obligations is rescinded
or must otherwise be restored or returned by Proxy Holder as a preference, fraudulent conveyance, or otherwise under any bankruptcy,
insolvency, or similar law, all as though such payment had not been made (provided that in the event payment of all or any part of the
Secured Obligations is rescinded or must be restored or returned, all reasonable out-of-pocket costs and expenses (including, without
limitation, reasonable attorneys’ fees and disbursements) incurred by Proxy Holder in defending and enforcing such reinstatement
shall be deemed to be included as a part of the Secured Obligations), notwithstanding any time limitations set forth in the [operating
agreement/by-laws] and other organization documents of the Issuer or the [Limited Liability Company Act/Corporations Act] of the State
of [__________].
Any
obligation of the Grantor hereunder shall be binding upon the heirs, successors, and assigns of the Grantor (including, without limitation,
any transferee of any of the Interests).
[Signature
Page Follows]
IN
WITNESS WHEREOF, the Grantor has executed this Irrevocable Proxy as of this [__] day of [___________ ____], 202[___].
EXHIBIT
E
FORM OF REGISTRATION PAGE
[Issuer]
[Stock/Membership/Partnership]
Ledger as of ________, ___*
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Name
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Certificate
No.
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Number
of Interests
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Acknowledged
By:
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[Issuer]
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By:
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*To
Remain Blank - Not Completed at Closing
* To Remain Blank - Not Completed at Closing.
Exhibit 10.7
Second
Amended and Restated
Limited
Liability Company Agreement
of
ZVV
Media Partners, LLC
a
Delaware limited liability company
MEMBERSHIP
INTERESTS IN ZVV MEDIA PARTNERS, LLC HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR QUALIFIED
UNDER ANY STATE SECURITIES OR BLUE SKY LAWS. SUCH MEMBEERSHIP INTERESTS MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED, PLEDGED
OR HYPOTHECATED UNLESS SUCH SALE OR OTHER TRANSFER, PLEDGE OR HYPOTHECATION IS REGISTERED OR QUALIFIED UNDER FEDERAL AND APPLICABLE STATE
SECURITIES LAWS OR AN EXEMPTION FROM SUCH REGISTRATION AND QUALIFICATION IS AVAILABLE. ANY TRANSFER OF THE MEMBEERSHIP INTERESTS IS FURTHER
SUBJECT TO OTHER RESTRICTIONS, TERMS, AND CONDITIONS SET FORTH HEREIN.
TABLE
OF CONTENTS
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Page
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ARTICLE
I DEFINITIONS
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2
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1.1.
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Defined
Terms
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2
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1.2.
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Rules
of Construction
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8
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ARTICLE
II ORGANIZATIONAL MATTERS
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9
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2.1.
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Formation
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9
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2.2.
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Name
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9
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2.3.
|
Term
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9
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2.4.
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Principal
Office; Registered Agent
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9
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2.5.
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Purpose
of Company
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10
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2.6.
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Liability
of Members
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10
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2.7.
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Title
to Property
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10
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ARTICLE
III CAPITAL CONTRIBUTIONS AND MEMBERSHIP INTERESTS
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10
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3.1.
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Membership
Interests; Capital Contributions
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10
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|
3.2.
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Additional
Capital Contributions
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11
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3.3.
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Capital
Accounts
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11
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3.4.
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No
Interest
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12
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3.5.
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No
Withdrawal
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12
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3.6.
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Loans
from Members or Affiliates
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12
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3.7.
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Interest
of Creditors
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12
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3.8.
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Membership
Interests
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12
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3.9.
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Membership
Interests Uncertificated
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12
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ARTICLE
IV MEMBERS
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12
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4.1.
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Admission
of Additional Members
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13
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4.2.
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Meetings
of Members; Action by Written Consent
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13
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4.3.
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Voting
by Members
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13
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4.4.
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Members
Are Not Agents
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13
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4.5.
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No
Withdrawal
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14
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4.6.
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Confidentiality
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14
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ARTICLE
V MANAGEMENT AND CONTROL OF THE COMPANY
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15
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5.1.
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Board
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15
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5.2.
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Officers.
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17
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5.3.
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Limitations
on Authority
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18
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5.4.
|
Remuneration
of Officers and Managers
|
18
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TABLE
OF CONTENTS (cont.)
|
5.5.
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Competing
Activities
|
18
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ARTICLE
VI DUTIES, EXCULPATION, AND INDEMNIFICATION
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19
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6.1.
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Exculpation
of Covered Persons.
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19
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6.2.
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Liabilities
and Duties
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19
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6.3.
|
Indemnification
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20
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ARTICLE
VII ALLOCATIONS OF NET PROFITS AND NET LOSSES
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22
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|
7.1.
|
Book
Allocations of Net Profits and Net Losses.
|
22
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|
7.2.
|
Regulatory
Allocations
|
22
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|
7.3.
|
Curative
Allocations
|
24
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|
7.4.
|
Excess
Nonrecourse Liabilities
|
24
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|
7.5.
|
Tax
Allocations
|
24
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|
7.6.
|
Reporting
and Information Obligations of Members
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24
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ARTICLE
VIII DISTRIBUTIONS
|
25
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8.1.
|
Distributions
by the Company to Members
|
25
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|
8.2.
|
Withholding
Tax Payments and Obligations
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26
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ARTICLE
IX TRANSFERS OF INTERESTS
|
27
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|
9.1.
|
Transfers
of Interests In General
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27
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9.2.
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Drag-Along
Rights
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28
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9.3.
|
Call
Right
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30
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9.4.
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Invalid
Transfers
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31
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9.5.
|
Effective
Date of Transfers
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31
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9.6.
|
Effect
of Transfers
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31
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|
9.7.
|
Substitution
of Members
|
31
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ARTICLE
X BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS
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32
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10.1.
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Books
and Records
|
32
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|
10.2.
|
Delivery
to Members and Inspection
|
32
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|
10.3.
|
Tax
Returns
|
32
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|
10.4.
|
Other
Filings
|
32
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|
10.5.
|
Bank
Accounts
|
33
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|
10.6.
|
Accounting
Decisions and Reliance on Others
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33
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|
10.7.
|
Tax
Matters
|
33
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ARTICLE
XI DISSOLUTION AND WINDING UP
|
34
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|
11.1.
|
Dissolution
|
34
|
|
11.2.
|
Winding
Up
|
35
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|
11.3.
|
No
Deficit Restoration Obligation
|
35
|
TABLE
OF CONTENTS (cont.)
|
11.4.
|
Distributions
in Kind
|
35
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|
11.5.
|
Limitations
on Payments Made in Dissolution
|
35
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11.6.
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Certificate
of Cancellation
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35
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|
11.7.
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Termination
|
35
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|
11.8.
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No
Action for Dissolution
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36
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11.9.
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Bankruptcy
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36
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ARTICLE
XII MISCELLANEOUS
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36
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12.1.
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Complete
Agreement
|
36
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|
12.2.
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Binding
Effect
|
36
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|
12.3.
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Parties
in Interest
|
36
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|
12.4.
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Statutory
References
|
36
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|
12.5.
|
Headings
|
36
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|
12.6.
|
References
to this Agreement
|
36
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|
12.7.
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Governing
Law
|
36
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|
12.8.
|
Consent
To Exclusive Jurisdiction
|
36
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|
12.9.
|
Severability
|
37
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|
12.10.
|
Additional
Documents and Acts
|
37
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|
12.11.
|
Notices
|
37
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|
12.12.
|
Amendments
|
38
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|
12.13.
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No
Interest in Company Property, Waiver of Action for Partition
|
38
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|
12.14.
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Remedies
Cumulative
|
38
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|
12.15.
|
Survival
|
38
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|
12.16.
|
Counterparts
|
38
|
TABLE
OF CONTENTS (cont.)
SCHEDULES
AND EXHIBITS
|
Schedule
A:
|
Members/Addresses;
Initial Unreturned Capital; Membership Interests
|
|
Exhibit
A:
|
Form
of Adoption Agreement
|
|
Exhibit
B:
|
Form
of Spousal Consent
|
Second
Amended and Restated
Limited
Liability Company Agreement
of
ZVV
Media Partners, LLC
a
Delaware limited liability company
This
Second Amended and Restated Limited Liability Company Agreement (this “Agreement”) of ZVV Media Partners, LLC, a Delaware
limited liability company (the “Company”), is made and entered into effective as of July __, 2021 (the “Effective
Date”), by and among the Company, Vinco Ventures, Inc., a Nevada corporation (the “Vinco Member”), and ZASH
Global Media and Entertainment Corporation, a Delaware corporation (the “ZASH Member” and, together with the Vinco
Member, the “Members”), with reference to the following facts:
WHEREAS,
the Company was formed upon the filing and acceptance of Articles of Organization (the “Nevada Articles”) with the
Secretary of State of the State of Nevada on January 24, 2021.
WHEREAS,
the original Members of the Company entered into that certain Limited Liability Company Agreement of the Company dated as of January
27, 2021 (the “Original LLC Agreement”).
WHEREAS,
the Company was converted to a Delaware limited liability company upon the filing and acceptance of (a) Articles of Conversion (the “Nevada
Articles of Conversion”) with the Secretary of State of the State of Nevada and (b) a Certificate of Conversion and a Certificate
of Formation (as amended or restated from time to time, the “Certificate”) with the Secretary of State of the State
of Delaware on May 28, 2021.
WHEREAS,
the Members of the Company entered into that certain Amended and Restated Limited Liability Company Agreement of the Company dated as
of May 28, 2021 (the “A&R LLC Agreement), which amended and restated the Original LLC Agreement in its entirety.
WHEREAS,
the Vinco Member, the ZASH Member and the Company intend to become parties to, or otherwise signors for, debt financing provided by Hudson
Bay Master Fund, LTD., the proceeds from which will be utilized to fund all or substantially all of the Vinco Member’s Capital
Contribution to the Company ( the “Debt Financing”).
WHEREAS,
the transaction documents for the Debt Financing shall contain representations, warranties, covenants and other conditions (“Financing
Documents”) that will have a direct effect on certain terms in the A&R LLC Operating Agreement relating to, among other
things, repayment of capital contributions, making distributions, selling assets, and the taking of certain other actions.
WHEREAS,
the original Members of the Company desire to amend and restate the A&R LLC Agreement to establish the Members rights and responsibilities
to be consistent with, and not in violation of, the obligations of Vinco Member, the ZASH Member and the Company under the Financing
Documents, while the Debt Financing is outstanding.
NOW,
THEREFORE, in consideration of the mutual promises made herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Members, intending to be legally bound, hereby agree that the A&R LLC Agreement is hereby amended
and restated as follows:
ARTICLE
I
DEFINITIONS
1.1.
Defined Terms. When used in this Agreement, unless the context otherwise requires, the following terms have the meanings
set forth below:
“Act”
means the Delaware Limited Liability Company Act, codified in the Delaware General Corporation Law Section 18-101, et seq.
“Adjusted
Capital Account” means, with respect to any Member, such Member’s Capital Account as of the end of the relevant Fiscal
Year, after giving effect to the following adjustments:
(a)
Credit to such Capital Account any amounts that such Member is obligated to restore pursuant to any provision of this Agreement, or is
treated as obligated to restore pursuant to Regulations Section 1.704-1(b)(2)(ii)(c), or is deemed to be obligated to restore pursuant
to the penultimate sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and
(b)
Debit to such Capital Account the items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6).
The
foregoing definition of Adjusted Capital Account is intended to comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d)
and is to be interpreted consistently therewith.
“Affiliate”
means, as to a Person, any other Person that, directly or indirectly, controls, is controlled by or is under common control with such
Person. The term “control” (including the terms “controlling,” “controlled by” and “under common
control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and polices
of a Person, whether through the ownership of voting equity, by contract, or otherwise.
“Agreement”
has the meaning set forth in the preamble hereto.
“Assumed
Tax Rate” means the highest effective combined marginal United States federal, state and local income tax rate applicable to
individuals resident in Los Angeles, California, taking into account the deductibility of state and local taxes for federal income tax
purposes and the tax character of the income, but without taking into account the alternative minimum tax or any limitations on deductions
or separate tax attributes that may be applicable to a Member and not including self-employment or similar taxes.
“Available
Cash” means the amount of cash held by the Company, less (a) all current liabilities of the Company, and (b) reasonable working
capital and other amounts determined by the Board to be necessary for the operation of the business of the Company, including amounts
necessary to place into reserves for customary and usual claims with respect to the Business.
“Bankruptcy”
means, with respect to any Person, (a) the filing of an application by such Person for, or such Person’s consent to, the appointment
of a trustee, receiver, or custodian of its assets; (b) the entry of an order for relief with respect to such Person in proceedings under
the United States Bankruptcy Code, as amended or superseded from time to time; (c) the making by such Person of a general assignment
for the benefit of creditors; (d) the entry of an order, judgment or decree by any court of competent jurisdiction appointing a trustee,
receiver or custodian of the assets of such Person unless the proceedings and the trustee, receiver or custodian appointed are dismissed
within one hundred twenty (120) calendar days; or (e) the failure by such Person generally to pay such Person’s debts as the debts
become due within the meaning of Section 303(h)(1) of the United States Bankruptcy Code, as determined by the Bankruptcy Court, or the
admission in writing of such Person’s inability to pay its debts as they become due.
“Board”
has the meaning set forth in Section 5.1.1.
“Business”
has the meaning set forth in Section 2.1.2.
“Business
Day” means any day that is not a Saturday, a Sunday or other day on which commercial banking institutions in Los Angeles are
authorized or obligated by law or order to be closed.
“Call
Price” has the meaning set forth in Section 9.3.2.
“Called
Members” has the meaning set forth in Section 9.3.1.
“Capital
Account” means, with respect to a Member, the capital account that the Company establishes and maintains for such Member pursuant
to Section 3.3.
“Capital
Contribution” means a contribution in cash and the Gross Asset Value of other property contributed to the capital of the Company
with respect to a Member’s Membership Interest.
“Certificate”
has the meaning set forth in the Recitals.
“Code”
means the Internal Revenue Code of 1986, as amended from time to time.
“Company”
has the meaning set forth in the preamble hereto.
“Company
Minimum Gain” has the meaning ascribed to the term “partnership minimum gain” in Regulations Section 1.704-2(b)(2)
and 1.704-2(d).
“Confidential
Information” has the meaning set forth in Section 4.6.
“Contribution
Agreements” means, collectively, (i) that certain Contribution Agreement dated as of the Effective Date by and between the
Company and the Vinco Member, and (ii) that certain Contribution Agreement dated as of the Effective Date by and between the Company
and the ZASH Member.
“Covered
Person” has the meaning set forth in Section 6.1.1.
“Debt
Financing” has the meaning set forth in the Recitals.
“Depreciation”
means, for each Fiscal Year, an amount equal to the depreciation, amortization or other cost recovery deductions allowable for federal
income tax purposes with respect to an asset for such Fiscal Year, except that:
(a)
with respect to any asset whose Gross Asset Value differs from its adjusted tax basis for federal income tax purposes at the beginning
of such Fiscal Year and which difference is being eliminated by the use of the “remedial method” as defined in Regulations
Section 1.704-3(d), Depreciation for such Fiscal Year will be the amount of book basis recovered for such Fiscal Year under Regulations
Section 1.704-3(d)(2), and
(b)
with respect to any other asset whose Gross Asset Value differs from its adjusted basis for federal income tax purposes at the beginning
of such Fiscal Year, Depreciation will be “book depreciation, depletion or amortization” as determined under Section 1.704-1(b)(2)(iv)(g)(3)
of the Regulations; provided, however, that if the adjusted basis for federal income tax purposes of an asset at the beginning of such
Fiscal Year equals zero, then Depreciation will be determined with reference to such beginning Gross Asset Value using any reasonable
method selected by the Board and consistently applied.
“Dissolution
Event” has the meaning set forth in Section 11.1.
“Drag-Along
Consideration” has the meaning set forth in Section 9.2.1.
“Drag-Along
Notice” has the meaning set forth in Section 9.2.1.
“Drag-Along
Objection” has the meaning set forth in Section 9.2.2.
“Drag-Along
Rights” has the meaning set forth in Section 9.2.1.
“Drag-Along
Transaction” has the meaning set forth in Section 9.2.1.
“Dragged
Members” has the meaning set forth in Section 9.2.1.
“Economic
Interest” means a Person’s right to share in the income, gains, losses, deductions, credit or similar items of, and to
receive distributions from, the Company, and expressly does not include any other rights of a Member, including the right to vote, participate
in the management of the Company, as applicable, or the right to information concerning the business and affairs the Company.
“Effective
Date” has the meaning set forth in the preamble hereto.
“Fair
Market Value” means the gross fair market value of any property determined as determined by the Board in good faith (with expert
input from a third party appraiser if so determined by the Board) and in making such determination, it may, but need not, rely on the
opinion of qualified third party appraisers.
“Final
Valuation Report” has the meaning set forth in Section 9.2.2(b).
“Fiscal
Year” means the Company’s fiscal year, which will be the calendar year, or any portion of such period for which the Company
is required by the Code to allocate Net Profits, Net Losses or other items of Company income, gain, loss or deduction pursuant hereto,
or such other period otherwise required by law.
“Gross
Asset Value” means with respect to any asset of the Company (other than cash), the asset’s adjusted basis for federal
income tax purposes, except as follows:
(a)
The initial Gross Asset Value of any asset contributed by a Member to the Company will be the gross Fair Market Value of such asset;
(b)
The Gross Asset Value of all the Company’s assets will be adjusted to equal their respective gross Fair Market Values (taking Code
Section 7701(g) into account) as of the following times: (i) the acquisition of an interest or an additional interest in the Company
by any new or existing Member in exchange for more than a de minimis Capital Contribution; (ii) the distribution by the Company
to a Member of more than a de minimis amount of property or money as consideration for an interest in the Company; (iii) the grant
of an interest in the Company as consideration for the provision of services to or for the benefit of the Company; (iv) under generally
accepted industry accounting practices, provided substantially all of the Company’s property (excluding money) consists of stock,
securities, commodities, options, warrants, futures, or similar instruments that are readily tradable on an established securities market;
(v) the liquidation of the Company within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g); and (vi) in connection with the issuance
by the partnership of a noncompensatory option within the meaning of Regulations Section 1.721-2(f) (other than an option for a de minimis
partnership interest within the meaning of Regulations Section 1.704-1(b)(2)(ii)(f)(5)(iv); provided, however, that adjustments pursuant
to clauses (i), (ii), (iii) and (iv) above will be made only if the Board determines that such adjustments
are necessary or appropriate to reflect the relative economic interests of the Members in the Company;
(c)
The Gross Asset Value of any Company asset distributed to a Member will be the gross Fair Market Value (taking Code Section 7701(g) into
account) of such asset on the date of distribution;
(d)
The Gross Asset Values of the Company’s assets will be increased or decreased to reflect any adjustments to the adjusted basis
of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account
in determining capital accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m) and paragraph (a) of the definition of “Net
Profits” and “Net Losses” or Section 7.2.6; provided, however, that Gross Asset Values may not be adjusted pursuant
to this paragraph (d) to the extent that an adjustment pursuant to paragraph (b) is required in connection with a transaction
that would otherwise result in an adjustment pursuant to this paragraph (d); and
(e)
If the Gross Asset Value of an asset has been determined or adjusted pursuant to paragraphs (a), (b), or (d), then
the Gross Asset Value will thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing
Net Profits and Net Losses.
“Incapacitated”
means, as to any natural person, the death, adjudication of incompetence, or insanity of such person.
“Independent
Third Party” means with respect to any Member, any Person who is not the Company or an Affiliate of such Member.
“Liquidation
Value” means in connection with any proposed transaction and with respect to the Membership Interest of each Member, a value
equal to the amount that would be distributed in respect of such Membership Interest if an amount equal to the value of one hundred percent
(100%) of the equity of the Company implied by the consideration to be paid by the proposed purchaser in the proposed transaction, as
determined by the Board in good faith (with expert input from a third party appraiser if so determined by the Board), were distributed
to the Members in accordance with Section 11.2.3 at such time.
“Losses”
has the meaning set forth in Section 6.3.1.
“Manager”
means any Person holding the office of Manager as selected pursuant to Section 5.1.4.
“Member”
means each Person who (a) is an initial signatory to this Agreement, or (b) has been admitted to the Company as a Member in accordance
with this Agreement.
“Member
Nonrecourse Debt” has the meaning given the term “partner nonrecourse debt” in Regulations Section 1.704-2(b)(4).
“Member
Nonrecourse Debt Minimum Gain” has the meaning given the term “partner nonrecourse debt minimum gain” in Regulations
Section 1.704-2(i)(2).
“Member
Nonrecourse Deductions” has the meaning given the term “partner nonrecourse deductions” in Regulations Section
1.704-2(i).
“Member
Vote” means the affirmative vote of Members holding a majority of the outstanding Membership Interests made at a meeting of
the Members or by written consent in accordance with Section 4.2.
“Membership
Interest” means a Member’s entire interest in the Company, which may be expressed as a percentage, including the Member’s
right to share in income, gains, losses, deductions, credits or similar items of, and to receive distributions from, the Company pursuant
to this Agreement and the Act, the right to vote or participate in the management of the Company to the extent herein provided or as
specifically required by the Act, and the right to receive information concerning the business and affairs of the Company pursuant to
this Agreement and the Act.
“Merger”
means the transaction contemplated pursuant to that certain Agreement and Plan of Merger and Reorganization to be executed by the Vinco
Member and the ZASH Member no later than June 24, 2021.
“Merger
Deadline” means September 30, 2021, if the Merger has not been consummated prior to such date.
“Net
Profits” and “Net Losses” means, for each Fiscal Year, an amount equal to the Company’s taxable income
or loss for such Fiscal Year, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss, or
deduction required to be stated separately pursuant to Code Section 703(a)(1) are included in taxable income or loss), with the following
adjustments:
(a)
any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Net Profits or Net
Losses pursuant to this definition are added to such taxable income or loss;
(b)
any expenditures of the Company described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant
to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Net Profits or Net Losses pursuant to
this definition are subtracted from such taxable income or loss;
(c)
in the event the Gross Asset Value of any Company asset is adjusted pursuant to paragraph (b) or (c) of the definition
of Gross Asset Value, the amount of such adjustment is taken into account as gain (if the adjustment increases the Gross Asset Value
of the asset) or loss (if the adjustment decreases the Gross Asset Value of the asset) from the disposition of such asset and are taken
into account for purposes of computing Net Profits or Net Losses;
(d)
gain or loss resulting from any disposition of property with respect to which gain or loss is recognized for federal income tax purposes
is computed by reference to the Gross Asset Value of the property disposed of, rather than such property’s adjusted tax basis;
(e)
in lieu of the depreciation, amortization and other cost recovery deductions taken into account in computing such taxable income or loss,
Depreciation is taken into account for such Fiscal Year or other period, computed in accordance with the definition thereof;
(f)
to the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Section 734(b) is required, pursuant to Regulations
Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as a result of a distribution other than in
liquidation of a Member’s interest in the Company, the amount of such adjustment is treated as an item of gain (if the adjustment
increases the basis of such asset) or loss (if the adjustment decreases such basis) from the disposition of such asset and is taken into
account for purposes of computing Net Profits or Losses; and
(g)
notwithstanding any other provision of this definition, any items that are specially allocated pursuant to Section 7.2 are not
taken into account in computing Net Profits or Net Losses. Instead, the amounts of the items of Company income, gain, loss or deduction
available to be specially allocated pursuant to Section 7.2 hereof are determined by applying rules analogous to those set forth
in clauses(a) through (f) above.
The
foregoing definition of Net Profits and Net Losses is intended to comply with the provisions of Regulations Section 1.704-1(b) and is
to be interpreted consistently therewith. In the event the Board determines that it is prudent to modify the manner in which Net Profits
and Net Losses are computed in order to comply with such Regulations, the Board may make such modification.
“Nevada
Act” means the Nevada Limited Liability Company Act, codified in the Nevada Revised Statutes Chapter 86.
“Nevada
Articles” has the meaning set forth in the Recitals.
“Nevada
Articles of Conversion” has the meaning set forth in the Recitals.
“Nonrecourse
Deductions” has the meaning set forth in Regulations Section 1.704-2(b)(1).
“Nonrecourse
Liability” has the meaning set forth in Regulations Section 1.704-2(b)(3).
“Original
LLC Agreement” has the meaning set forth in the Recitals.
“Partnership
Audit Rules” means the partnership audit rules contained in the Bipartisan Budget Act of 2015 and enacted as Sections 6221
through 6241 of the Code.
“Partnership
Representative” has the meaning set forth in Section 10.7.2.
“Patriot
Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism
Act of 2001, P.L. 107-56, as amended.
“Person”
means any natural or legal person, including any individual, general partnership, limited partnership, limited liability company, limited
liability partnership, corporation, trust, estate, association or other entity.
“Regulations”
means the final or temporary United States federal income tax regulations promulgated under the Code as such Regulations may amended
from time to time.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Transfer”
means any direct or indirect sale, transfer, assignment, hypothecation, encumbrance or other disposition, whether voluntary or involuntary,
whether by gift, bequest or otherwise. In the case of a hypothecation, encumbrance or other collateral assignment, the Transfer is deemed
to occur both at the time of the initial collateral assignment and at any collateral assignee’s sale or a sale by any secured creditor.
A Transfer of a direct or indirect ownership interest in any Person will constitute a Transfer of a corresponding portion of any ownership
interest or asset held by such Person.
“Unreturned
Capital” means with respect to any Member as of any date, the excess, if any, of (a) the aggregate Capital Contributions made
by such Member, over (b) the aggregate amount of cash and the Gross Asset Value (net of any liabilities secured by any such distributed
property) of any property distributed to such Member pursuant to Section 8.1.1(a)(i) or Section 11.2.3 (or by reference
to such Sections) on or prior to such date.
“Unreturned
Capital Shortfall” has the meaning set forth in Section 9.2.2.
“Valuation
Firm” has the meaning set forth in Section 9.2.2.
“Valuation
Parties” has the meaning set forth in Section 9.2.2.
“Vinco
Managers” has the meaning set forth in Section 5.1.1.
“Vinco
Member” has the meaning set forth in the Recitals.
“Vinco
Valuation Report” has the meaning set forth in Section 9.2.2.
“ZASH
Managers” has the meaning set forth in Section 5.1.1.
“ZASH
Member” has the meaning set forth in the Recitals.
“ZASH
Valuation Report” has the meaning set forth in Section 9.2.2(a).
1.2.
Rules of Construction. Unless the context otherwise clearly requires:
1.2.1
whenever the context may require, any pronoun includes the corresponding masculine, feminine and neuter forms;
1.2.2
the singular includes the plural and the plural includes the singular;
1.2.3
the words “include,” “includes” and “including” are to be deemed to be followed by the phrase “without
limitation”;
1.2.4
any definition of or reference to any agreement, instrument, schedule, exhibit or other document herein is to be construed as referring
to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions
on such amendments, supplements or modification set forth herein);
1.2.5
any reference to any law herein is to be construed as referring to such Law as from time to time amended;
1.2.6
any reference herein to any Person, or to any Person in a specified capacity, is to be construed to include such Person’s successors
and assigns or such Person’s successors in such capacity, as the case may be; and
1.2.7
the words “herein,” “hereunder” and other words of similar import refer to this Agreement as a whole and not
to any particular Section, clause or other subdivision.
ARTICLE
II
ORGANIZATIONAL MATTERS
2.1.
Formation.
2.1.1
The Company was formed as a Nevada limited liability company under the laws of the State of Nevada on January 24, 2021, by the execution
and filing of the Nevada Articles by an authorized person within the meaning of the Nevada Act, with the Nevada Secretary of State, which
execution, delivery, and filing are hereby ratified and confirmed. The Company was converted to a Delaware limited liability company
upon the filing and acceptance of (a) the Nevada Articles of Conversion with the Secretary of State of the State of Nevada and (b) the
Certificate by an authorized person within the meaning of the Act with the Secretary of State of the State of Delaware, which execution,
delivery, and filing are hereby ratified and confirmed. The rights and liabilities of the Members are as described in the Act and this
Agreement. To the extent that the rights or obligations of any Member are different by reason of any provision of this Agreement than
they would be in the absence of such provision, this Agreement, to the extent permitted by the Act, controls.
2.1.2
The Company was formed for the purpose of performing all business to be determined by the Members (the “Business”).
2.1.3
The Board must maintain a record of the name, mailing address, and Membership Interest held by each Member in the books and records of
the Company and on Schedule A attached hereto. The Company is hereby authorized and directed to update its books and records and
Schedule A hereto from time to time as necessary to accurately reflect the information therein, and the update of any such information
resulting from an event accomplished in accordance with this Agreement will not constitute an amendment to this Agreement. Any reference
in this Agreement to Schedule A is a reference to Schedule A as amended and in effect from time to time.
2.2.
Name. The name of the Company is “ZVV Media Partners, LLC.” The business and affairs of the Company may be
conducted under that name or, upon compliance with applicable laws, any other name that the Board may deem appropriate or advisable.
The Company is authorized to file any fictitious name certificates and similar filings, and any amendments thereto, that the Board deems
appropriate or advisable.
2.3.
Term. The term of the Company commenced on the date of the filing of the Nevada Articles with the Nevada Secretary of State and
will continue until the Company is dissolved in accordance with the provisions of this Agreement.
2.4.
Principal Office; Registered Agent. The principal office of the Company is at 1 West Broad Street, Suite 1004, Bethlehem,
PA 18018, or such other location approved by the Board. The Company must continuously maintain a registered agent and registered office
in the State of Delaware as required by the Act. The registered agent of the Company in the State of Delaware is as stated in the Certificate
or as otherwise determined by the Board.
2.5.
Purpose of Company. The nature of the business or purposes to be conducted or promoted by the Company is to engage in the
Business and such other activities directly related to the Business as may be necessary, advisable or appropriate in the opinion of the
Board in furtherance of the Business, and exercise any powers permitted to be exercised by limited liability companies organized under
the Act.
2.6.
Liability of Members.
2.6.1
Except as otherwise provided by the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or
otherwise, are solely the debts, obligations and liabilities of the Company, and no Member will be obligated personally for any such
debt, obligation or liability of the Company solely by reason of being a Member of the Company. Except as otherwise expressly required
herein or by law, a Member, in its capacity as such, will have no liability in respect of claims against the Company in excess of (a)
the amount of its Capital Contributions, (b) its share of any assets and undistributed profits of the Company, and (c) the amount of
any distributions wrongfully distributed to it. No Member will be required to lend any funds to the Company or, after its Capital Contribution
has been funded, subject to the provisions of Section 2.6.2 and Section 8.2.2, to make any further Capital Contributions
to the Company or to repay to the Company, any Member, or any creditor of the Company all or any portion of any negative amount of such
Member’s Capital Account. No Member will be required to guarantee or pledge any assets as security for any debts, liabilities,
or other obligations of the Company.
2.6.2
If any Member receives or is deemed to have received a distribution from the Company pursuant to ARTICLE VIII or otherwise, and
the aggregate of such distributions exceeds the distributions to which such Member is otherwise entitled pursuant to this Agreement,
such Member will be obligated, as provided in ARTICLE VIII, to repay such excess to the Company.
2.6.3
To the fullest extent permitted by law, in exercising any of its or their voting rights, rights to direct and consent or any other rights
as a Member hereunder or under the Act, subject to the terms and conditions of this Agreement, a Member or Members, as the case may be,
(a) will not, except as may be expressly provided herein with respect to any particular matter, have any obligation or duty otherwise
existing at law, in equity or otherwise, to any Person (including any other Member or the Company) or to consider or take into account
the interests of any Person (including any other Member or the Company) and (b) will not be liable to any Person for any action taken
by it or them or at its or their direction or any failure by it or them to act or to direct that an action be taken, without regard to
whether such action or inaction benefits or adversely affects any Member, the Company or any other Person, except for any liability to
which such Member may be subject to the extent that the same results from such Member’s taking or directing an action, or failing
to take or direct an action, in violation of the express terms of this Agreement.
2.7.
Title to Property. All property of the Company must be owned by the Company as an entity and no Member may have any ownership
interest in such property in its individual name. Each Member’s Membership Interest in the Company will be personal property for
all purposes.
ARTICLE
III
CAPITAL CONTRIBUTIONS AND MEMBERSHIP INTERESTS
3.1.
Membership Interests; Capital Contributions. As of the Effective Date, and subject to having made or making when due the
additional Capital Contributions to the Company pursuant to the Contribution Agreements, each Member has (or shall have) the initial
Unreturned Capital and has received the Membership Interest set forth opposite such Member’s name on Schedule A attached
hereto. The Members (a) have made Capital Contributions to the Company pursuant to that certain Contribution Agreement dated as of January
19, 2021, by and among the Company, the Vinco Member, and the ZASH Member, and (b) are making certain additional Capital Contributions
to the Company pursuant to the Contribution Agreements.
3.2.
Additional Capital Contributions.
3.2.1
Except as may be explicitly agreed in writing by the Member and the Company, no Member is required to make any additional Capital Contributions
to the Company.
3.2.2
If the Board determines that additional Capital Contributions are necessary or appropriate for the conduct of the Company’s business
and affairs, including, without limitation, expansion or diversification thereof, the Members may be permitted from time to time to make
additional Capital Contributions, but no Member can be required to make any such additional Capital Contributions. The Board may determine
all material aspects of any such additional Capital Contribution, including the class of such Membership Interests, the amount and nature
of the consideration to be paid for additional Membership Interests issued in respect thereof, the resulting dilution of interest to
be incurred by other Members and the extent to which the Member or other Person making the Capital Contribution will participate in the
Net Profits, Net Losses and distributions of the Company. The Membership Interest of each Member must be updated upon the issuance of
additional Membership Interests or the admission of an additional Member in connection herewith and must be reflected on the books and
records of the Company and Schedule A hereto, as amended from time to time, and such changes adopted in accordance with this Agreement
will not be an amendment to this Agreement and are not subject to Section 12.12 hereof.
3.3.
Capital Accounts. The Company must establish separate Capital Accounts for each Member. The Board will determine and maintain
each Capital Account in accordance with Regulations Section 1.704-1(b)(2)(iv) and, pursuant thereto, the following provisions apply:
3.3.1
To each Member’s Capital Account there will be credited such Member’s Capital Contributions, such Member’s allocated
share of Net Profits and any items in the nature of income or gain that are specially allocated to such Member pursuant to Section
7.2, and the amount of any Company liabilities assumed by such Member or that are secured by any property distributed to such Member.
The principal amount of a promissory note that is not readily traded on an established securities market and that is contributed to the
Company by the maker of the note (or a Member related to the maker of the note within the meaning of Regulations Section 1.704-1(b)(2)(ii)(c))
will not be included in the Capital Account of any Member until the Company makes a taxable disposition of the note or until (and to
the extent) principal payments are made on the note, all in accordance with Regulations Section 1.704-1(b)(2)(iv)(d) (2).
3.3.2
To each Member’s Capital Account there will be debited the amount of cash and the Gross Asset Value of any property distributed
to such Member pursuant to any provision of this Agreement, such Member’s allocated share of Net Losses and items thereof, any
items in the nature of expenses or losses that are specially allocated to such Member pursuant to Section 7.2, and the amount
of any liabilities of such Member assumed by the Company or that are secured by any property contributed by such Member to the Company;
3.3.3
In the event all or a portion of a Member’s Membership Interest is Transferred in accordance with the terms of this Agreement,
the transferee will succeed to the Capital Account of the transferor to the extent it relates to the transferred Membership Interest;
and
3.3.4
In determining the amount of any liability for purposes of Section 3.3.1 and Section 3.3.2, Code Section 752(c) and any
other applicable provisions of the Code and the Regulations will be taken into account.
The
foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply
with Regulations Section 1.704-1(b), and will be interpreted and applied in a manner consistent with such Regulations. In the event the
Board determines that it is prudent to modify the manner in which the Capital Accounts, or any debits or credits thereto, are computed
in order to comply with such Regulations, the Board may cause the Company to make such modification; provided, however, that no such
modification has a material adverse effect upon any Member’s economic entitlement under this Agreement.
3.4.
No Interest. No Member is entitled to receive or demand any interest or other payments on such Member’s Capital Contributions
or on the balance of any Capital Account.
3.5.
No Withdrawal. No Member has the right to withdraw such Member’s Capital Contributions or to demand or receive property
of the Company or any distribution in return for such Member’s Capital Contributions, except as may be specifically provided in
this Agreement or as required by applicable law.
3.6.
Loans from Members or Affiliates. If necessary to pay expenses or obligations of the Company, the Company may borrow amounts from
any Member or Affiliate of any Member at such times and on such terms as determined by the Board. No such loan will constitute additional
capital or entitle the lending Member to an increased share of the Net Profits or Net Losses. Prior to the Merger Deadline, no loan,
including loans from Members or Affiliates, may be secured by any assets of the Company without the prior written consent of the Vinco
Managers.
3.7.
Interest of Creditors. A creditor (including a Member or Affiliate of a Member) who makes a recourse or nonrecourse loan
to the Company will not have or acquire at any time as a result of making the loan, any direct or indirect interest in the profits, capital
or property of the Company other than as a secured creditor to the extent such loan is secured.
3.8.
Membership Interests.
3.8.1
General. Membership Interests may be split into one or more classes or series, having such rights, preferences, privileges and
obligations as approved by the Board. There is initially one (1) class of Membership Interests. The Company as determined by the Board
may issue Membership Interests at any time and from time to time, including additional classes or series of Membership Interests having
rights, preferences and privileges senior to or on parity with one or more of the existing classes or series of Membership Interests.
The Board may split or combine the number of Membership Interests into additional or fewer Membership Interests, with all Membership
Interest economic terms and voting rights to be adjusted so as to not affect the overall economic and voting relationships among the
Members as a result of such split or combination. For avoidance of doubt, any amendment to this Agreement documenting any of the foregoing
will not be an amendment to this Agreement subject to Section 12.12.
3.9.
Membership Interests Uncertificated. The Membership Interests of the Company are initially not certificated. If so determined
by the Board, the Membership Interests of the Company may be certificated.
ARTICLE
IV
MEMBERS
4.1.
Admission of Additional Members. No additional Members may be admitted as Members unless approved by the Board (which, prior to
the Merger Deadline, must include all of the Vinco Managers); provided, that the admission of Members upon a Transfer of Membership Interests
will be governed by Section 9.1. No additional Member will become a Member until such additional Member has complied with the
terms and conditions of this Agreement, including, without limitation, agreeing to be bound by the terms and conditions hereof pursuant
to an Adoption Agreement substantially in the form attached hereto as Exhibit A, or in such other form as approved by the Board.
4.2.
Meetings of Members; Action by Written Consent.
4.2.1
No annual or regular meetings of the Members as such are required; however, if convened, meetings of the Members may be held at
such date, time and place as the Board or as the Member or Members who properly noticed such meeting, as the case may be, may fix from
time to time. At any meeting of the Members, the chairman (or, if there is no chairman, an individual appointed by the Members) will
preside at the meeting and will act as the secretary or appoint another individual to act as secretary of the meeting. The secretary
of the meeting must prepare written minutes of the meeting, which are to be maintained in the books and records of the Company.
4.2.2
A meeting of the Members may be called at any time by the Board for the purpose of addressing any matter on which the vote, consent or
approval of the Members is required or permitted under this Agreement.
4.2.3
Notice of any meeting of the Members must be sent or otherwise given by the Board to the Members in accordance with this Agreement not
less than two (2) or more than sixty (60) calendar days before the date of the meeting. The notice must specify the place, date and hour
of the meeting and the general nature of the business to be transacted. Except as the Members may otherwise agree by Member Vote, no
business other than that described in the notice may be transacted at the meeting.
4.2.4
Attendance in person (or telephonically) of a Member at a meeting will constitute a waiver of notice of that meeting, except when the
Member objects at the beginning of the meeting to the transaction of any business because the meeting is not duly called or convened.
Attendance at a meeting by a Member is not a waiver of any right to object to the consideration of matters not included in the notice
of the meeting if that objection is expressly made at the meeting. Neither the business to be transacted nor the purpose of any meeting
of the Members need be specified in any written waiver of notice. The Members may participate in any meeting of the Members by means
of conference telephone or similar means as long as all Members can hear one another. The Company must provide a means of participating
by a method described in the prior sentence upon request of any Member. A Member so participating will be deemed to be present in person
at the meeting.
4.2.5
Any action that can be taken at a meeting of the Members may be taken without a meeting if a consent in writing setting forth the action
so taken is signed and delivered to the Company by Members representing not less than the minimum vote necessary under this Agreement
to approve the action.
4.3.
Voting by Members. The Members, acting solely in their capacities as Members, have the right to vote on, consent to or otherwise
approve only those matters as to which this Agreement specifically requires such approval. Except as otherwise specifically provided
in this Agreement, references herein to the determination, consent, approval or vote of the Members means the approval of the Members
by Member Vote.
4.4.
Members Are Not Agents. No Member acting solely in the capacity of a Member is an agent of the Company, nor can any Member
acting solely in the capacity of a Member bind the Company or execute any instrument on behalf of the Company.
4.5.
No Withdrawal. Except as provided in this Section 4.5 or in ARTICLE IX, no Member may withdraw, retire or
resign from the Company without approval of the Board. A Member that resigns and withdraws pursuant to this Section 4.5 forfeits
all economic, voting and other rights in any Membership Interests or the Company and will not receive (for the purposes of Section 18-604
of the Act or otherwise) any cash, property or other distribution upon such resignation and withdrawal unless otherwise determined by
the Board.
4.6.
Confidentiality.
4.6.1
Each Member acknowledges that during the term of this Agreement, it will have access to and become acquainted with trade secrets, proprietary
information and confidential information belonging to the Company and its Affiliates that are not generally known to the public, including,
but not limited to, information concerning business plans, financial statements and other information provided pursuant to this Agreement,
operating practices and methods, expansion plans, strategic plans, marketing plans, personnel information, contracts, customer lists
or other business documents that the Company treats as confidential, in any format whatsoever (including oral, written, electronic or
any other form or medium) (collectively, “Confidential Information”). In addition, each Member acknowledges that:
(i) the Company has invested, and continues to invest, substantial time, expense and specialized knowledge in developing its Confidential
Information; (ii) the Confidential Information provides the Company with a competitive advantage over others in the marketplace; and
(iii) the Company would be irreparably harmed if the Confidential Information were disclosed to competitors or made available to the
public. Without limiting the applicability of any other agreement to which any Member is subject, no Member shall, without the Board’s
consent, directly or indirectly, disclose or use (other than solely for the purposes of such Member monitoring and analyzing its investment
in the Company) at any time, including, without limitation, use for personal, commercial or proprietary advantage or profit, any Confidential
Information of which such Member is or becomes aware. Each Member in possession of Confidential Information shall take all appropriate
steps to safeguard such information and to protect it against disclosure, misuse, espionage, loss and theft.
4.6.2
Nothing contained in this Section 4.6 shall prevent any Member from disclosing Confidential Information: (i) upon the order of
any court or administrative agency; (ii) upon the request or demand of any regulatory agency or authority having jurisdiction over such
Member; (iii) to the extent compelled by legal process or required or requested pursuant to subpoena, interrogatories or other discovery
requests; (iv) to the extent necessary in connection with the exercise of any remedy hereunder; (v) to any other Member; (vi) to such
Member’s employees, agents, representatives and advisors who, in the reasonable judgment of such Member, need to know such Confidential
Information and agree to be bound by the provisions of this Section 4.6 as if a Member (provided that the Member will remain liable
for any breach of this Section 4.6 by any such Person); or (vii) to any transferee of Membership Interests permitted in accordance
with this Agreement, as long as such transferee agrees to be bound by the provisions of this Section 4.6 as if a Member(provided
that the Member will remain liable for any breach of this Section 4.6 by any such Person); provided, that in the case of clause
(i), (ii) or (iii), such Member shall notify the Board of the proposed disclosure as far in advance of such disclosure as practicable
(but in no event make any such disclosure before notifying the Board) and use reasonable efforts to ensure that any Confidential Information
so disclosed is accorded confidential treatment satisfactory to the Company, when and if available.
4.6.3
The restrictions of Section 4.6 shall not apply to Confidential Information that: (i) is or becomes generally available to the
public other than as a result of a disclosure by a Member in violation of this Agreement; (ii) is or has been independently developed
or conceived by such Member without use of Confidential Information; or (iii) becomes available to such Member or any of its employees,
agents, representatives and advisors on a non-confidential basis from a source other than the Company, any other Member or any of their
respective employees, agents, representatives and advisors, provided, that such source is not known by the receiving Member to be bound
by a confidentiality agreement regarding the Company.
4.6.4
The obligations of each Member under this Section 4.6 shall survive (i) the termination, dissolution, liquidation and winding
up of the Company, (ii) the withdrawal of such Member from the Company, and (iii) such Member’s Transfer of its Membership Interest.
4.6.5
The Members hereby acknowledge that the provisions of Section 4.6 are reasonable and necessary to protect the legitimate interests
of the Company and that any violation of such provisions would result in irreparable injury to the Company. In the event of a violation
of the provisions of this Section 4.6, the Members further agree that the Company shall, in addition to all other remedies available
to it, be entitled to equitable relief by way of injunction and any other legal or equitable remedies without any requirement to post
bond.
ARTICLE
V
MANAGEMENT AND CONTROL OF THE COMPANY
5.1.
Board.
5.1.1
Management by Board of Managers. Subject to the provisions of this Agreement (including, without limitation, Sections 5.1.4(c)
and 5.3) a board of managers (the “Board”), and only the Board, is authorized to manage the business, property
and affairs of the Company and to exercise any and all powers of the Company. Subject to Section 5.1.4(c), the Vinco Member will
have the right to designate two (2) Managers (the “Vinco Managers”) to the Board, and the ZASH Member will have the
right to designate three (3) Managers (the “ZASH Managers”) to the Board. The Board will be a “manager”
within the meaning of the Act. Each Manager shall be a natural person but need not be a Member or an Affiliate of a Member.
5.1.2
Agency Authority of Managers. Subject to the provisions of this Agreement, only the Managers, acting in their capacities as the
Managers, have the authority to endorse checks, drafts and other evidences of indebtedness made payable to the order of the Company or
to sign checks, drafts and other instruments obligating the Company to pay money, or sign agreements or other documents in the name of
or on behalf of the Company; provided, however, the Board may by a written resolution grant such authority to any other Person subject
to any restrictions pursuant to the written authorization of the Board, which authorization may be general or specific.
5.1.3
Term. Each Manager will hold office for a term commencing on the date of designation (or in the case of an initial Manager, commencing
on the Effective Date) and expiring upon the earlier of (i) the date on which the Manager is removed or (ii) the date on which the Manager
resigns.
5.1.4
Selection of Managers.
(a)
Initial Managers. The initial Vinco Managers are Chris Ferguson and Brett Vroman. The initial ZASH Managers are Theodore Farnsworth,
Roderick Vanderbilt, and Lisa King.
(b)
Resignation. A Manager may resign at any time by giving written notice to the Members of the Company. The resignation of a Manager
will take effect upon receipt of that notice or at such later time as may be specified in the notice; and, unless otherwise specified
in the notice, the acceptance of the resignation is not necessary to make it effective. If a Manager becomes Incapacitated, the Manager
will be deemed to have resigned. The resignation of a Manager will not affect the Manager’s rights, if any, as a Member and will
not by itself constitute a withdrawal of a Member. Upon the resignation of a Manager, a new Manager may be appointed by the Member entitled
to appoint such Manager.
(c)
Removal.
(i)
Each Manager may be removed at any time, with or without cause, by the Member(s) entitled to appoint such Manager.
(ii)
Any removal of a Manager will be without prejudice to the rights, if any, of the Manager and the Company under any contract to which
the Manager is a party, and shall not affect the Manager’s rights as a Member or constitute its withdrawal as a Member, except
as otherwise provided in this Agreement or any other contract with the Manager.
5.1.5
Meetings; Place of Meetings; Telephonic Participation. Meetings of the Board may be held at such times and places as the Board
may from time to time by resolution designate or as shall be designated by the Person or Persons calling the meeting in the notice or
waiver of notice of any such meeting. Meetings of the Board shall be held whenever called by a Manager. Notice of the time and place
of each such meeting, shall be sent by electronic mail sent to and received by each member of the Board not less than forty-eight (48)
hours before the date on which the meeting is to be held. Notice of any meeting of the Board shall not be required to be given to any
member of the Board who waives such notice in writing or who is present at such meeting, except a member who shall attend such meeting
for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not
lawfully called or convened. At the request of any Manager, any or all Managers may participate in any meeting of the Board by means
of conference telephone or similar communications equipment pursuant to which all persons participating in the meeting of the Board can
hear each other, and such participation shall constitute presence in person at such meeting.
5.1.6
Manner of Acting and Quorum. Except as otherwise provided in this Agreement or the Act, the presence of at least a majority of
all Managers shall be required to constitute a quorum for the transaction of business at any meeting of the Board. The Board shall act
only as a Board, and the individual Managers shall have no power to act on behalf of or bind the Company in their capacity as a Manager
(except for certain limited circumstances expressly provided herein). All matters shall be deemed approved by the Board at any meeting
duly called and held, a quorum being present, by the affirmative vote of a majority of the members of the Board then present.
5.1.7
Action Without Meeting. Any action required or permitted to be taken or which may be taken at any meeting of the Board may be
taken without a meeting if a consent in writing, setting forth the action so taken, is signed by all of the Managers. Such written consent
shall be filed with the minutes of proceedings of the Board.
5.1.8
Actions Requiring Unanimous Board Approval Prior to the Merger Deadline. Prior to the Merger Deadline (for the avoidance of doubt,
this Section 5.1.8 shall have no effect from and after the Merger Deadline) and while the Debt Financing is outstanding, the Board
shall not cause the Company to, and the Company shall not, take any of the following actions without the unanimous approval of the Managers:
(a)
materially amend, alter or repeal the Certificate, this Agreement, or any other organizational or governance documents of the Company;
(b)
create any new class of Membership Interests or change the rights or preferences of any of the Company’s existing Membership Interests;
(c)
issue additional Membership Interests;
(d)
admit any other Person as an additional member;
(e)
agree to or effectuate any merger, consolidation or reorganization with any other Person;
(f)
take any action to dissolve, liquidate or wind-up the Company;
(g)
enter into any debt arrangement that involves creating a lien on any assets of the Company;
(h)
replace the chief financial officer or equivalent of the Company;
(i)
effect any voluntary filing of a petition for Bankruptcy or reorganization in respect of the Company, or any similar action under applicable
laws and regulations; or
(j)
enter into any commitment to take any of the actions described in this Section 5.1.8.
5.1.9
Actions Requiring Unanimous Board Approval After the Merger Deadline. From and after the Merger Deadline, and while the Debt Financing
is outstanding, the Board shall not cause the Company to, and the Company shall not, take any of the following actions without the unanimous
approval of the Managers:
(a)
materially amend, alter or repeal the Certificate, this Agreement, or any other organizational or governance documents of the Company
in a manner that is materially and disproportionately adverse to the Vinco Member as compared with all other Members;
(b)
replace the chief financial officer or equivalent of the Company;
(c)
effect any voluntary filing of a petition for Bankruptcy or reorganization in respect of the Company, or any similar action under applicable
laws and regulations;
(d)
take any action which would disproportionately dilute the interest of the Vinco Member as compared with all other Members; or
(e)
enter into any commitment to take any of the actions described in this Section 5.1.9.
5.2.
Officers.
5.2.1
Appointment of Officers. The Board may from time to time appoint (and subsequently remove) individuals to act on behalf of the
Company as officers of the Company within the meaning of Section 18-407 of the Act to conduct the day-to-day management of the Company
with such general or specific authority as the Board may specify and are permitted or authorized in this Agreement. The officers of the
Company may include, but are not limited to, a Chairman, a Chief Executive Officer, President, Vice President, Secretary, Chief Financial
Officer and Chief Operating Officer, or any co-officer of the any of the foregoing. The officers will serve at the pleasure of the Board,
subject to any rights of such officers under any employment contract. The officers may exercise such powers and perform such duties,
as are determined from time to time by approval of the Board and as permitted or authorized in this Agreement. Any individual may hold
any number of offices. An officer need not be a Member.
5.2.2
Removal, Resignation, and Filling of Vacancy of Officers. Any officer may be removed, either with or without cause, by the Board
at any time. Any officer may resign at any time by giving written notice to the Board. Any resignation will take effect on the date of
the receipt of that notice by the Board or at any later time specified in that notice; and, unless otherwise specified in that notice,
the acceptance of the resignation is not necessary to make it effective. Any resignation or removal is without prejudice to the rights,
if any, of the parties under any contract to which the officer is a party. A vacancy in any office because of death, resignation, removal,
disqualification or any other cause may be filled, if at all, by the Board.
5.2.3
Signing Authority of Officers. Subject to any restrictions imposed by the Board and this Agreement, any officer, acting alone,
is authorized to endorse checks, drafts and other evidences of indebtedness made payable to the order of the Company, but only for the
purpose of deposit into the Company’s accounts. Officers of the Company are authorized to sign checks, drafts, or other instruments
obligating the Company to pay money, and to sign contracts and other obligations on behalf of the Company, but only to the extent expressly
provided in and subject to any restrictions contained in a written authorization of the Board, which authorization may be general or
specific.
5.3.
Limitations on Authority. No Manager or officer is authorized to do any act in contravention of this Agreement or possess
Company property in its capacity as officer or Manager, or assign rights in Company property other than for Company purposes.
5.4.
Remuneration of Officers and Managers. The officers and Managers of the Company may be entitled to remuneration for providing
services to the Company and will be entitled to reimbursement of reasonable out-of-pocket business expenses, all as determined by the
Board or as set forth in any employment or service agreement with such officer or Manager, which agreement must be approved by the Managers.
5.5.
Competing Activities. Notwithstanding any provision of the Agreement, (i) any Manager or Member may engage or invest in,
independently or with others, any business activity of any type or description, including, without limitation, those that might be the
same as or similar to the Company’s business and that might be in direct or indirect competition with the Company; (ii) neither
the Company nor any Member or Manager have any right in or to such other ventures or activities or to the income or proceeds derived
therefrom; (iii) neither any Manager nor any Member is obligated to present any investment opportunity or prospective economic advantage
to the Company, even if the opportunity is of the character that, if presented to the Company, could be taken by the Company; and (iv)
each Manager and each Member has the right to hold any investment opportunity or prospective economic advantage for such Manager’s
or such Member’s own account or to recommend such opportunity to Persons other than the Company. Each Member and Manager acknowledges
that (except as provided in any individual contract) the other Members and Managers might own or manage other businesses, including businesses
that may compete with the Company for the time of any Manager or any Member. Except for any rights or claims under any individual contract,
each Member and Manager hereby waives any and all rights and claims that the Member or Manager may otherwise have against any Manager
or any Member as a result of any such permitted activities. However, neither any Manager nor any Member is permitted to utilize the Company’s
assets for any competing activities or businesses.
ARTICLE
VI
DUTIES, EXCULPATION, AND INDEMNIFICATION
6.1.
Exculpation of Covered Persons.
6.1.1
Covered Persons. As used herein, the term “Covered Person” means
(i) each Member, (ii) each Manager; (iii) each officer, director, stockholder, partner, member, manager, Affiliate, employee, trustee,
agent or representative of each Member and Manager, and each of their Affiliates; and (iv) each officer, employee, agent or representative
of the Company.
6.1.2
Standard of Care. No Covered Person will be liable to the Company or any other Covered
Person for any loss, damage or claim incurred by reason of any action taken or omitted to be taken by such Covered Person in good faith
reliance on the provisions of this Agreement, so long as such action or omission does not constitute fraud, gross negligence, willful
misconduct or a material breach of this Agreement by such Covered Person or is not made in knowing violation of the provisions of this
Agreement.
6.1.3
Good Faith Reliance. A Covered Person will be fully protected in relying in good
faith upon the records of the Company and upon such information, opinions, reports or statements (including financial statements and
information, opinions, reports or statements as to the value or amount of the assets, liabilities, Net Profits or Net Losses of the Company
or any facts pertinent to the existence and amount of assets from which distributions might properly be paid) of the following Persons
or groups that the Covered Person does not have actual knowledge to be false: (i) another Member; (ii) a Manager or one or more officers
or employees of the Company; (iii) any attorney, independent accountant, appraiser or other expert or professional employed or engaged
by or on behalf of the Company; or (iv) any other Person selected in good faith by or on behalf of the Company, in each case as to matters
that such relying Person reasonably believes to be within such other Person’s professional or expert competence. The preceding
sentence in no way limits any Person’s right to rely on information to the extent provided in § 18-406 of the Act.
6.1.4
Standard of Good Faith. Whenever in this Agreement a Covered Person is permitted or required to make a decision in such Covered
Person’s “good faith,” such Covered Person must act under such express standard and will not be subject to any other
or different standard imposed by this Agreement or any other applicable law.
6.2.
Liabilities and Duties.
6.2.1
Limitation of Liability; Waiver of Duties. This Agreement is not intended to, and does not, create or impose any fiduciary duty
on any Member or Manager. Furthermore, each of the Members and the Company hereby waives any and all fiduciary duties that, absent such
waiver, may be implied by applicable law, and in doing so, acknowledges and agrees that the duties and obligations of each Member and
Manager to each other and to the Company are only as expressly set forth in this Agreement. The provisions of this Agreement, to the
extent that they restrict the duties and liabilities of a Member or Manager otherwise existing at law or in equity, are agreed by the
Members to replace such other duties and liabilities of the Members and Managers.
6.2.2
Member and Manager Decisions. Whenever in this Agreement a Member or Manager is permitted or required to make a decision, such
Member or Manager is entitled to consider only such interests and factors as such Member or Manager desires, including its own interests,
and has no duty or obligation to give any consideration to any interest of or factors affecting the Company or any other Person.
6.3.
Indemnification.
6.3.1
Indemnification. To the fullest extent permitted by the Act, as the same now exists
or may hereafter be amended, substituted or replaced (but, in the case of any such amendment, substitution or replacement, only to the
extent that such amendment, substitution or replacement permits the Company to provide broader indemnification rights than the Act permitted
the Company to provide prior to such amendment, substitution or replacement), the Company must indemnify, hold harmless, defend, pay
and reimburse any Covered Person against any and all losses, claims, damages, judgments, fines or liabilities, including reasonable legal
fees or other expenses incurred in investigating or defending against such losses, claims, damages, judgments, fines or liabilities,
and any amounts expended in settlement of any claims (collectively, “Losses”) to which such Covered Person may become
subject by reason of:
(a)
any act or omission or alleged act or omission performed or omitted to be performed on behalf of the Company or any direct or indirect
subsidiary of the Company in connection with the Business of the Company; or
(b)
such Covered Person being or acting in connection with the Business of the Company as a Member, stockholder, Affiliate, Manager, director,
officer, employee or agent of the Company, any Member, any Manager, or any of their respective Affiliates, or that such Covered Person
is or was serving at the request of the Company as a member, manager, director, officer, trustee, employee or agent of any Person including
the Company;
provided,
that (x) such Covered Person acted in good faith and in a manner believed by such Covered Person to be in, or not opposed to, the best
interests of the Company and, with respect to any criminal proceeding, had no reasonable cause to believe such Covered Person’s
conduct was unlawful, (y) such Covered Person’s conduct did not constitute fraud, gross negligence, willful misconduct or a material
breach of this Agreement by such Covered Person or a knowing violation of the provisions of this Agreement, and (z) the Loss does not
result from a proceeding or claim initiated or asserted by the Company or any other Member against such Covered Person. In connection
with the foregoing, the termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, will not, of itself, create a presumption that the Covered Person did not act in good faith or, with
respect to any criminal proceeding, had reasonable cause to believe that such Covered Person’s conduct was unlawful, or that the
Covered Person’s conduct constituted fraud, gross negligence, willful misconduct or a knowing violation or material breach of this
Agreement.
6.3.2
Permissive Indemnification. Subject to the mandatory indemnification obligations of the Company set forth in Section 6.3.1,
upon approval of the Board, the Company may, but is not obligated to, indemnify any Person for Losses incurred by reason of such Person
being a Covered Person or in connection with any matter related to the Company.
6.3.3
Control of Defense. Upon a Covered Person’s discovery of any claim, lawsuit
or other proceeding relating to any Losses for which such Covered Person may be indemnified pursuant to this Section 6.3, the
Covered Person must give prompt written notice to the Company of such claim, lawsuit or proceeding, provided, that the failure
of the Covered Person to provide such notice will not relieve the Company of any indemnification obligation under this Section 6.3,
unless the Company has been materially prejudiced thereby. The Company may participate in or assume the defense of any such claim, lawsuit
or proceeding at its own expense. After notice from the Company to the Covered Person of its election to assume the defense of any such
claim, lawsuit or proceeding, the Company will not be liable to the Covered Person under this Agreement or otherwise for any legal or
other expenses subsequently incurred by the Covered Person in connection with investigating, preparing to defend or defending any such
claim, lawsuit or other proceeding. If the Company does not elect (or fails to elect) to assume the defense of any such claim, lawsuit
or proceeding, the Covered Person will have the right to assume the defense of such claim, lawsuit or proceeding as it deems appropriate,
but it may not settle any such claim, lawsuit or proceeding without the consent of the Company (which consent may not be unreasonably
withheld, conditioned or delayed).
6.3.4
Reimbursement. The Company must promptly reimburse (and/or advance to the extent
reasonably required) each Covered Person for reasonable legal or other expenses (as incurred) of such Covered Person in connection with
investigating, preparing to defend or defending any claim, lawsuit or other proceeding relating to any Losses for which such Covered
Person may be indemnified pursuant to Section 6.3.1; provided that if such Covered Person agrees in writing that if it is finally
judicially determined that such Covered Person is not entitled to the indemnification provided by Section 6.3.1, then such Covered
Person will promptly reimburse the Company for any reimbursed or advanced expenses.
6.3.5
Entitlement to Indemnity. The indemnification provided by this Section 6.3
is not exclusive of any other rights to indemnification to which those seeking indemnification may be entitled under any agreement or
otherwise. The provisions of this Section 6.3 will continue to afford protection to each Covered Person regardless of whether
such Covered Person remains in the position or capacity pursuant to which such Covered Person became entitled to indemnification under
this Section 6.3 and will inure to the benefit of the executors, administrators, legatees and distributees of such Covered Person.
6.3.6
Insurance. The Company may purchase, at its expense, insurance to cover Losses covered
by the foregoing indemnification provisions and to otherwise cover Losses for any breach or alleged breach by any Covered Person of such
Covered Person’s duties in such amount and with such deductibles as the Board may reasonably determine; provided, that the failure
to obtain such insurance will not affect the right to indemnification of any Covered Person under the indemnification provisions contained
herein, including the right to be reimbursed or advanced expenses or otherwise indemnified for Losses hereunder. If any Covered Person
recovers any amounts in respect of any Losses from any insurance coverage, then such Covered Person must, to the extent that such recovery
is duplicative, reimburse the Company for any amounts previously paid to such Covered Person by the Company in respect of such Losses.
6.3.7
Funding of Indemnification Obligation. Notwithstanding anything contained herein
to the contrary, any indemnity by the Company relating to the matters covered in this Section 6.3 must be provided out of and
to the extent of Company assets only, and no Member (unless such Member otherwise agrees in writing) has personal liability on account
thereof or is required to make additional Capital Contributions to help satisfy such indemnity by the Company.
6.3.8
Savings Clause. If this Section 6.3 or any portion hereof is invalidated on
any ground by any court of competent jurisdiction, then the Company must nevertheless indemnify and hold harmless each Covered Person
pursuant to this Section 6.3 to the fullest extent permitted by any applicable portion of this Section 6.3 that has not
been invalidated and to the fullest extent permitted by applicable law.
6.3.9
Amendment. The provisions of this Section 6.3 constitute a contract between
the Company, on the one hand, and each Covered Person who serves in such capacity at any time while this Section 6.3 is in effect,
on the other hand, pursuant to which the Company and each such Covered Person intend to be legally bound. No amendment, modification
or repeal of this Section 6.3 that adversely affects the rights of a Covered Person to indemnification for Losses incurred or
relating to a state of facts existing prior to such amendment, modification or repeal will apply in such a way as to eliminate or reduce
such Covered Person’s entitlement to indemnification for such Losses without the Covered Person’s prior written consent.
6.4.
Survival. The provisions of this ARTICLE VI will survive the dissolution,
liquidation, winding up and termination of the Company.
ARTICLE
VII
ALLOCATIONS OF NET PROFITS AND NET LOSSES
7.1.
Book Allocations of Net Profits and Net Losses.
7.1.1
Generally. Except as provided in Section 7.2, Net Profits and Net Losses (but not gross items of income, gain, loss or
deduction, unless otherwise determined by the Board) for each Fiscal Year will, after giving effect to all Capital Account adjustments
attributable to the Capital Contributions and distributions, and all allocations pursuant to Section 7.2, made during such Fiscal
Year, be allocated among the Members such that the Adjusted Capital Account of each Member, immediately after making such allocation
is, as nearly as possible, equal (proportionately) to the distributions that would be made to such Member pursuant to Section 11.2.3
if (i) the Company were dissolved, (ii) its affairs wound up and its assets sold for cash equal to their Gross Asset Values, (iii)
all Company liabilities were satisfied (limited with respect to each Nonrecourse Liability to the Gross Asset Values of the assets securing
such liability) and (iv) the remaining assets of the Company were distributed in accordance with Section 11.2.3 immediately after
making such allocations.
7.1.2
Allocations in Respect of Transferred Membership Interests. If during any Fiscal Year any Membership Interests are Transferred,
any additional Membership Interests are issued by reason of the admission of a new Member or otherwise, any Membership Interests are
redeemed, or there is any other change to the Membership Interests, then each item of income, gain, loss, deduction or credit of the
Company for that Fiscal Year will be allocated among the Members, as determined by the Board in accordance with any method permitted
by Code Section 706(d) and the Regulations thereunder in order to take into account the Members’ varying interests in the Company
during the Fiscal Year.
7.1.3
Limitation on Allocation of Net Losses. Notwithstanding any other provision contained in Section 7.1, Net Losses and individual
items of loss or deduction may not be allocated to a Member to the extent the allocation would result in a deficit balance in the Member’s
Adjusted Capital Account at the end of any Fiscal Year. Any such items in excess of this limitation will be allocated as follows:
(a)
First, among the other Members who would not have a deficit balance in their Adjusted Capital Accounts, pro rata, in proportion
to their Adjusted Capital Account until the Adjusted Capital Account balances of all the Members have been reduced to zero; and
(b)
Thereafter, to all the Members, pro rata, in proportion to their respective rights to distributions under Section 8.1.1(a)(ii).
7.2.
Regulatory Allocations. The following special allocations will be made in the following order:
7.2.1
Minimum Gain Chargeback. Except as otherwise provided in Regulations Section 1.704-2(f), notwithstanding any other provision of
this ARTICLE VII, if there is a net decrease in Company Minimum Gain during any Fiscal Year, then each Member will be specially
allocated items of Company income and gain for such Fiscal Year (and, if necessary, subsequent Fiscal Years) to the extent required by
Regulations Section 1.704-2(f). Allocations pursuant to the previous sentence will be made in proportion to the respective amounts required
to be allocated to each Member pursuant thereto. This Section 7.2.1 is intended to comply with the minimum gain chargeback requirement
contained in Regulations Section 1.704-2(f) and is to be interpreted consistently therewith.
7.2.2
Member Minimum Gain Chargeback. Except as otherwise provided in Regulations Section 1.704-2(i)(4), notwithstanding any other provision
of this ARTICLE VII, if there is a net decrease in Member Nonrecourse Debt Minimum Gain attributable to a Member Nonrecourse Debt
during any Fiscal Year, then each Member who has a share of the Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse
Debt (determined in accordance with Regulations Section 1.704-2(i)(5)) will be specially allocated items of Company income and gain for
such Fiscal Year (and, if necessary, subsequent Fiscal Years) in an amount equal to that portion of such Member’s share of the
net decrease in Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Regulations
Section 1.704-2(i)(4). Allocations pursuant to the previous sentence will be made in proportion to the amounts required to be allocated
to each Member pursuant thereto. The items to be so allocated will be determined in accordance with Regulations Section 1.704-2(i)(4)
and 1.704-2(j)(2). This Section 7.2.2 is intended to comply with the minimum gain chargeback requirement contained in Regulations
Section 1.704-2(i)(4) and is to be interpreted consistently therewith.
7.2.3
Qualified Income Offset. In the event any Member unexpectedly receives any adjustments, allocations, or distributions described
in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6) and such Member has a deficit Adjusted Capital Account, items of Company income
and gain will be specially allocated to each such Member in an amount and manner sufficient to eliminate any deficit in the Adjusted
Capital Account deficit of such Member as quickly as possible, provided that an allocation pursuant to this Section 7.2.3 will
be made only if and to the extent that such Member would have a deficit Adjusted Capital Account balance after all other allocations
provided for in this ARTICLE VII have been tentatively made as if this Section 7.2.3 were not in the Agreement. This Section
7.2.3 is intended to be a “qualified income offset” as that term is used in Regulations Section 1.704-1(b)(2)(ii)(d)
and is to be interpreted consistently therewith.
7.2.4
Member Nonrecourse Deductions. Any Member Nonrecourse Deductions for any Fiscal Year will be specially allocated to the Member
who bears the economic risk of loss with respect to the Member Nonrecourse Debt or other liability to which such Member Nonrecourse Deductions
are attributable in accordance with Regulations Section 1.704-2(i) and Regulations Section 1.704-1(b).
7.2.5
Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal Year will be allocated to the Members in accordance with their respective
rights to distributions under Section 8.1.1(a)(ii).
7.2.6
Section 754 Adjustments. To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Section 734(b)
or Section 743(b) is required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m) to be taken into account in determining Capital Accounts,
the amount of such adjustment to Capital Accounts will be treated as an item of gain (if the adjustment increases the basis of the asset)
or loss (if the adjustment decreases such basis), and such gain or loss will be specially allocated to the Members in a manner consistent
with that which their Capital Accounts are required to be adjusted pursuant to Regulations Section 1.704-1(b)(2)(iv)(m).
7.3.
Curative Allocations. The allocations set forth in Section 7.2 (the “Regulatory Allocations”) are intended
to comply with certain requirements of Regulations Section 1.704-1(b). The Regulatory Allocations may not be consistent with the manner
in which the Members intend to divide distributions from the Company. Accordingly, it is the intent of the Members that, to the extent
possible, all Regulatory Allocations will be offset either with other Regulatory Allocations or with special allocations of other items
of Company income, gain, loss, or deduction pursuant to this Section 7.3. Therefore, notwithstanding any other provision of this
ARTICLE VII other than the Regulatory Allocations, the Board must cause to be made such offsetting special allocations of Company
income, gain, loss, or deduction in whatever manner the Board determines appropriate so that, after such offsetting allocations are made,
a Member’s Capital Account balance is, to the extent possible, equal to the Capital Account balance such Member would have had
if the Regulatory Allocations were not part of this Agreement and all Company items were allocated pursuant to Section 7.1. In
exercising discretion under this Section 7.3, the Board may take into account any future Regulatory Allocations under Section
7.2.1 and Section 7.2.2 that, although not yet made, are likely to offset other Regulatory Allocations previously made.
7.4.
Excess Nonrecourse Liabilities. For the purpose of determining each Member’s share of “excess nonrecourse liabilities,”
if any, of the Company within the meaning of Regulations Section 1.752-3(a)(3) and 1.707-5(a)(2)(ii), and solely for such purpose, the
Members’ interests in Company profits will be determined, pro rata, in proportion to their respective rights to distributions under
Section 8.1.1(a)(ii).
7.5.
Tax Allocations. Allocations pursuant to this Section 7.5 are solely for purposes of United States federal, state and local
taxes and will neither affect nor be taken in account in computing, any Member’s Capital Account or share of Net Profits, Net Losses,
distributions or other items pursuant to any provision of this Agreement.
7.5.1
General Allocations. Except as otherwise provided in this Section 7.5, each item of Company income, gain, loss or deduction
for federal income tax purposes will be allocated among the Members in the same manner as such items are allocated for book purposes
pursuant to this ARTICLE VII. Notwithstanding the foregoing, the Board will have the power to make such allocations for United
States federal, state and local income tax purposes as may be necessary to maintain “substantial economic effect” or to ensure
that such allocations are in accordance with each “partner’s interest in the partnership,” in each case within the
meaning of Code Section 704(b) and the Regulations thereunder.
7.5.2
Code Section 704(c) Allocations. If any Company property is subject to Code Section 704(c) or is reflected in the Capital Accounts
of the Members and on the books of the Company at a value that differs from the adjusted tax basis of such property, then the tax items
with respect to such property will, in accordance with the requirements of Regulations Section 1.704-1(b)(4)(i), be shared among the
Members in a manner that takes account of the variation between the adjusted tax basis of the applicable property and its value in the
same manner as variations between the adjusted tax basis and Fair Market Value of property contributed to the Company are taken into
account in determining the Members’ share of tax items under Code Section 704(c). The Board is authorized to choose any reasonable
method permitted by the Regulations issued pursuant to Code Section 704(c) to account for such differences.
7.5.3
Tax Credits. Tax credits will be allocated among the Members in accordance with Regulations Section 1.704-1(b)(4)(ii).
7.6.
Reporting and Information Obligations of Members. The Members are aware of the income tax consequences of the allocations
made by this ARTICLE VII and hereby agree to be bound by the provisions of this ARTICLE VII in reporting their shares of
Company income and loss for income tax purposes. Each Member agrees to provide the Company any information or documentation within the
possession of the Member that is reasonably requested by the Company for the purposes of preparing any tax form or other governmental
filing promptly upon written request from the Company.
ARTICLE
VIII
DISTRIBUTIONS
8.1.
Distributions by the Company to Members.
8.1.1
Distributions.
(a)
General. Subject to (1) applicable law, (2) any limitations contained in Section 8.1, (3) the Company’s obligation
to make Tax Distributions pursuant to Section 8.1.1(a), and (4) the Company’s obligation not to make distributions to the
Members for so long as the Debt Financing remains outstanding in accordance with the Financing Documents and Section 8.2.5 distributions
may be made at such times and in such amounts as the Board (which, prior to the Merger Deadline, must include all of the Vinco Managers)
may determine. Except as provided in Section 11.2.3 with respect to distributions in connection with a Dissolution Event, all
distributions must be made to the Members as follows:
(i)
First, to the Members, pro rata in proportion to their respective Unreturned Capital, until the Unreturned Capital of each Member
is reduced to zero; and
(ii)
Thereafter, to the Members pro rata on the basis of 75% to the ZASH Member and 25% to the Vinco Member.
(b)
Tax Distributions. Subject to Sections 8.1.1(c) through Section 8.1.5, to the extent of Available Cash, the Company
must make distributions (“Tax Distributions”) each Fiscal Year to the Members pro rata in proportion to the Tax Shortfall
of each in an amount sufficient to provide each Member a distribution that is at least equal to such Member’s Tax Shortfall. The
“Tax Shortfall” for these purposes means with respect to each Member the amount, if any, of (i) the aggregate Federal,
state and local tax income tax liabilities attributable to all allocations of net taxable income and gain (not including amounts treated
as guaranteed payments), net of the tax benefit of allocations of Company loss, deduction and credit, to the Member for such Fiscal Year,
as determined in good faith by the Board on the basis of the Assumed Tax Rate, reduced (but not to an amount below zero) by (ii) all
distributions made to the Member by the Company during such Fiscal Year pursuant to Section 8.1.1(a) (including amounts distributed
under this Section 8.1.1(a) treated as distributions of amounts under Section 8.1.1(a)). Tax Distributions must be made
quarterly (on or about fifteen (15) days prior to the earliest estimated tax due date (determined without reference to any extension
thereof)) applicable to any Member at such time in amounts intended to match the Members’ estimated tax liabilities. Upon the filing
of the Company’s tax return for such Fiscal Year, (a) the Company must distribute to each Member the amount of any deficiency in
the Tax Distributions for such Fiscal Year or (b) the amount of any excess Tax Distributions for such Fiscal Year will be credited against
future Tax Distributions or, if requested by the Board, promptly returned to the Company. Tax Distributions will be treated as preliminary
distributions of, and will offset, future distributions by the Company to the Members pursuant to (or made by reference to) Section
8.1.1(a) or Section 11.2.3. If Available Cash is not sufficient to pay the entire amount of the Tax Distribution in any Fiscal
Year in respect of all Membership Interests, any Available Cash must, unless otherwise determined by the Board in its sole and absolute
discretion, be distributed to the Members pro rata in proportion to the Tax Shortfall of each Member.
(c)
Tax Distribution Adjustments. In the event that (i) there is any audit adjustment by a taxing authority affecting the amount of
taxable income allocated or required to be allocated to the Members in any Fiscal Year or (ii) the Company files an amended tax return
having such effect, the aggregate amount of Tax Distributions that should have been made with respect to such year will be recalculated
by giving effect to such audit adjustment or changes reflected in the amended return, as applicable (treating any interest or penalties
incurred by any of the Members in connection therewith as an addition to the assumed tax liability of such Members), and the Members
will be entitled to an additional Tax Distribution or (in the discretion of the Board) must refund any overpayment required as a result
of such audit adjustment or amended return. No former Member will be entitled to Tax Distributions or be required to refund any overpayment
resulting from an audit adjustment or amended return for any reason after ceasing to be a Member.
8.1.2
Distributees; Liability for Distributions. All distributions made pursuant to this ARTICLE VIII will be made only to the
Persons who, according to the books and records of the Company, hold the Membership Interests in respect of which such distributions
are made on the actual date of distribution. None of the Company, the Managers or any Member or officer will have any liability as a
result of making distributions in accordance with this ARTICLE VIII.
8.1.3
Form of Distributions. A Member, regardless of the nature of the Member’s Capital Contributions, has no right to demand
and receive any distribution from the Company. No Member may be compelled to accept from the Company a distribution of any asset in kind
in lieu of a proportionate distribution of money being made to other Members.
8.1.4
Return of Distributions. No Member will be obligated to return any distribution to the Company or pay the amount of any distribution
for the account of the Company or to any creditor of the Company except (i) for distributions made in violation of the Act or this Agreement,
(ii) as otherwise required by law, (iii) if such Member is deemed to receive distributions in an aggregate amount that exceeds the distributions
to which such Member is otherwise entitled to receive pursuant to this Agreement and (iv) as required under Section 8.2.
8.1.5
Distributions in Violation of Act. Notwithstanding any provision to the contrary in this Agreement, the Company will not be required
to make a distribution to any Member on account of such Member’s interest in the Company if such distribution would violate Section
18-607 of the Act or other applicable law.
8.2.
Withholding Tax Payments and Obligations.
8.2.1
Authorization to Withhold. If the Company is obligated to withhold tax with respect to any distribution or the share of any income
allocated to any Member, then the Company is hereby authorized to withhold from distributions, including Tax Distributions, to a Member,
and to pay over to any United States federal, state or local or non-United States governmental or taxing authority, any amounts required
to be so withheld pursuant to the Code, the Regulations or any provisions of state, local and non-United States law and regulations.
8.2.2
Payments by the Company. If the Company is required to withhold tax with respect to any distribution or allocation of income to
any Member, then the amount so withheld and paid over to any taxing authority will be treated for all purposes under this Agreement as
if such amount had been distributed to such Member under this ARTICLE VIII, and will reduce the amount otherwise distributable
to such Member pursuant to this ARTICLE VIII. If the amount required to be withheld and paid over to any taxing authority exceeds
the amount otherwise distributable to such Member, then this excess amount will be treated as an advance to such Member made as of the
date of payment to the applicable taxing authority. Amounts treated as advanced to any Member pursuant to this Section 8.2.2 must
be repaid by such Member to the Company within fifteen (15) calendar days after the Company gives notice to such Member making demand
therefor. Any amounts so advanced will bear interest, commencing on the date of advancement, compounded monthly on unpaid balances, at
an annual rate equal to the short-term Applicable Federal Rate as of the date of such advance. The Company may collect any unpaid advances
to a Member from any Company distributions, including any distributions under this ARTICLE VIII, that would otherwise be made
to such Member. The foregoing is not intended to in any way limit the remedies otherwise available to the Company in connection with
the collection of any unpaid advances to Members pursuant to this Section 8.2.2. Each Member agrees to indemnify and hold harmless
the Company and the other Members from and against any liability with respect to taxes, interest or penalties, except to the extent that
such amounts do not result from any act or omission thereof of such Member, that may be asserted by reason of the failure of the Company
to deduct and withhold tax on amounts distributable or allocable to such Member. Any amount payable as indemnity hereunder by any Member
will be paid promptly to the Company, and if not so paid, the Company will be entitled to retain any distribution due to such Member
for all such amounts. The amount payable as indemnity hereunder will bear interest commencing on the date on which the amount giving
rise to the indemnity was paid by the Company or the Member, compounded monthly at an annual rate equal to the short-term Applicable
Federal Rate as of such date.
8.2.3
Overwithholding. None of the Company, the Managers or the other Members will be liable for any excess taxes withheld in respect
of any Member’s Membership Interest. In the event of overwithholding, a Member’s sole recourse will be to apply for a refund
from the appropriate governmental authority.
8.2.4
Withholding and Other Tax Certifications. Each Member must provide to the Company an original Internal Revenue Service Form W-9,
W-8BEN, W-8BEN-E, W-8IMY, W-8ECI, W-8EXP or other applicable withholding certificate, as appropriate, no later than ten (10) calendar
days after the Effective Date and thereafter from time to time as required by law or requested by the Company. In addition, each Member
must provide the Company such other certifications and documentation as are reasonably requested by the Board to reduce or eliminate
taxes imposed or withheld on payments to the Company or any of its subsidiaries or to satisfy any filing or reporting obligations of
the Company.
8.2.5
Notwithstanding anything to the contrary in this Agreement, the Company shall not make any distributions hereunder while the Debt Financing
is outstanding.
ARTICLE
IX
TRANSFERS OF INTERESTS
9.1.
Transfers of Interests In General.
9.1.1
Conditions to Transfer. Except as otherwise provided in this ARTICLE IX, no Member may Transfer all or any part of such
Member’s Membership Interest, including an Economic Interest therein, unless (i) approved by the Board (which, prior to the Merger
Deadline, must include all of the Vinco Managers), (ii) such Member complies with the provisions of this ARTICLE IX, as applicable,
and (iii) unless waived by the Board, all of the following conditions have been met:
(a)
the Company has received written notice of the proposed Transfer at least forty-five (45) days prior to the proposed effective date of
such Transfer setting forth the circumstances and details thereof (including, without limitation, the name of the transferee, evidence
of financial ability to consummate the Transfer, and source of funding of the purchase price);
(b)
the Company has (at its option) received, from or on behalf of the transferring Member (at its expense), an attorney’s written
opinion from a reputable and recognized law firm, in form and substance reasonably satisfactory to the Company, specifying the nature
and circumstances of the proposed Transfer, and based on such facts stating that the proposed Transfer will not be in violation of any
of the registration provisions of the Securities Act or any applicable state securities laws;
(c)
if the Transfer results in the transferee acquiring a Membership Interest in the Company, the Company has received from the transferee
a written agreement substantially in the form of the Adoption Agreement attached hereto as Exhibit A, or in such other form as
approved by the Board, to be bound by all of the terms and conditions of this Agreement;
(d)
if the Transfer results in the transferee acquiring a Membership Interest in the Company and the transferee is a natural person that
is married, the Company has received a written consent substantially in the form of the Spousal Consent attached hereto as Exhibit
B, or in such other form as approved by the Board, executed by such transferee’s spouse;
(e)
the Transfer will not result in the loss of any license or regulatory approval or exemption that has been obtained by the Company and
is materially useful in the conduct of its business as then being conducted or proposed to be conducted;
(f)
the Transfer will not result in the violation of the Patriot Act or any other applicable law or regulation;
(g)
the Company is reimbursed upon request for its reasonable expenses in connection with the Transfer;
(h)
the transferring Member is not otherwise restricted from transferring such Membership Interest pursuant to the terms of an agreement
between such Member and the Company;
(i)
the Transfer will not cause the Company to be treated as a “publicly traded partnership” within the meaning of Section 7704
of the Code, as determined by the Board or pursuant to a ruling received from the IRS; and
(j)
the Transfer complies with all other applicable requirements of this Agreement.
9.2.
Drag-Along Rights.
9.2.1
Without the need to comply with any of the other provisions of this ARTICLE IX, but subject to Section 9.2.2 below, if
the Merger has not been consummated prior to the Merger Deadline, then at any time from and after the Merger Deadline, the ZASH Member
may by written notice (a “Drag-Along Notice”) to the other Members (the “Dragged Members”) cause
the Dragged Members to participate (and the Dragged Members must participate) in a bona fide sale, in a single transaction or a series
of related transactions, of all of the Membership Interests to one or more Independent Third Parties (such transaction, a “Drag-Along
Transaction,” and the right to cause the Dragged Members to participate in such Drag-Along Transaction, the “Drag-Along
Rights”). Such Drag-Along Notice must specify (a) the consideration to be received by the Members (it being agreed that the
consideration will be allocated to the Members as described in Section 9.2.7) (“Drag-Along Consideration”)
and any other material terms and conditions of the Drag-Along Transaction, (b) the identity of the other Person or Persons party to the
transaction(s), and (c) the date of completion of the Drag-Along Transaction.
9.2.2
Notwithstanding the foregoing, in the event that the Drag-Along Transaction is not approved by at least one (1) Vinco Manager, then if,
and only if, the amount of the Drag-Along Consideration which is payable to the Vinco Member from such Drag-Along Transaction is not
sufficient to reduce to zero the Vinco Member’s Unreturned Capital as of the date of such Drag-Along Notice (an “Unreturned
Capital Shortfall”), the Vinco Member shall have the right to object to the Drag-Along Transaction on such basis (the “Drag-Along
Objection”). In such case, the Vinco Member shall within ten (10) days after receipt of the Drag-Along Notice provide written
notice to the ZASH Member of its Drag-Along Objection. Upon the ZASH Member’s receipt of the Drag-Along Objection, the Vinco Member
and the ZASH Member (for the purposes of this Section 9.2, the “Valuation Parties”) shall thereafter promptly
meet and confer for a period of ten (10) days to attempt to resolve the Drag-Along Objection in good faith; provided, however, that if
the Valuation Parties are unable to reach a resolution with respect to the Drag-Along Objection, then no later than thirty (30) days
after providing its Drag-Along Objection, the Vinco Member shall provide the ZASH Member an independent valuation (which shall be prepared
at the Vinco Member’s expense) from one of the so-called “Big Four” accounting firms (each a “Valuation Firm”)
demonstrating that the fair market value of the Membership Interests of the Company if sold to another Independent Third Party would
result in the payment of consideration sufficient to eliminate an Unreturned Capital Shortfall (“Vinco Valuation Report”).
If the Vinco Member fails to timely provide a Drag-Along Objection or Vinco Valuation Report, then the ZASH Member may proceed with the
Drag-Along Transaction as set forth in this Section 9.2.
(a)
Upon timely receipt of the Vinco Valuation Report in accordance with Section 9.2.2 above, the ZASH Member shall have the right
in its sole discretion to (i) terminate the Drag-Along Transaction, (ii) arrange, upon the closing of the Drag-Along Transaction, for
payment to the Vinco Member of an amount sufficient to reduce to zero the Vinco Member’s Unreturned Capital as of the date of the
Drag-Along Notice, or (iii) within thirty (30) days of receipt of the Vinco Valuation Report, provide to the Vinco Member an independent
valuation (which shall be prepared at the ZASH Member’s expense) from a Valuation Firm demonstrating that the fair market value
of the Membership Interests of the Company if sold to another Independent Third Party would not result in the payment of
consideration sufficient to eliminate an Unreturned Capital Shortfall (“ZASH Valuation Report”).
(b)
The Vinco Member shall have a period of ten (10) days after receipt of the ZASH Valuation Report to object thereto; provided that if
the Vinco Member fails to so timely object, the ZASH Member may proceed with the Drag-Along Transaction as set forth in this Section
9.2. Within five (5) days of receipt by the ZASH Member of the Vinco Member’s timely objection to the ZASH Valuation Report,
the Valuation Parties shall require the Valuation Firms engaged by them as set forth herein to jointly agree upon and select a third
Valuation Firm to perform a valuation and analysis and to prepare and deliver to the Valuation Parties within thirty (30) days after
its engagement therefor a final, independent valuation report (the expense of which shall be borne equally by the Valuation Parties)
based on the information provided by each Valuation Firm and other information available or requested by such Valuation Firm and setting
forth the fair market value of the Membership Interests of the Company (the “Final Valuation Report”).
(c)
If the Final Valuation Report demonstrates that the fair market value of the Membership Interests of the Company if sold to another Independent
Third Party would result in the payment of consideration sufficient to eliminate an Unreturned Capital Shortfall, then the ZASH Member
shall have the right to (i) terminate the Drag-Along Transaction, or (ii) arrange, upon the closing of the Drag-Along Transaction, for
payment to the Vinco Member of an amount sufficient to reduce to zero the Vinco Member’s Unreturned Capital as of the date of the
Drag-Along Notice. If the Final Valuation Report demonstrates that the fair market value of the Membership Interests of the Company if
sold to another Independent Third Party would not result in the payment of consideration sufficient to eliminate an Unreturned
Capital Shortfall, then the ZASH Member may proceed with the Drag-Along Transaction as set forth in this Section 9.2.
9.2.3
With respect to such Drag-Along Transaction, the Dragged Members (a) will be deemed to have voted all of their Membership Interests in
favor of such Drag-Along Transaction(s), (b) will be deemed to have waived all applicable consent rights, veto rights, appraisal or dissenters’
rights, or other similar protective provisions, and (c) must take all actions and execute all documents necessary to consummate such
Drag-Along Transaction.
9.2.4
With respect to such Drag-Along Transaction, the Dragged Members will only be required to execute transaction documents specifically
related to the Transfer of the Dragged Members’ Membership Interests, provided that all representations, warranties, covenants
and indemnities will be made by the Dragged Members severally and not jointly and any indemnification obligation will be pro rata based
on the consideration received by the Dragged Members, in each case in an amount not to exceed the aggregate proceeds received by the
Dragged Members in connection with the Drag-Along Transaction.
9.2.5
At the closing, the Dragged Members must deliver title to the Transferred Membership Interests free and clear of liens and encumbrances.
9.2.6
Each Member hereby grants to the Board a limited power of attorney to execute any and all documents necessary to carry out the Drag-Along
Rights if any Member fails to execute and deliver after a reasonable period of time any document or instrument or fails to take any required
action to consummate the Drag-Along Transaction. It is expressly intended by each Member that the power of attorney granted by this Section
9.2.6 is coupled with an interest, is irrevocable, and will survive and not be affected if a Member subsequently becomes Incapacitated
(or if such Member is a corporation, partnership, trust, association, limited liability company or other legal entity, by the dissolution
or termination thereof) or by the Transfer (if any) of any of the Member’s Membership Interest.
9.2.7
In any Drag-Along Transaction, any proceeds payable directly to the holders of Membership Interests will be allocated (a) first to reimburse
the Managers and Members for any reasonable expenses incurred by them in furtherance of (and not in opposition to or to hinder) the consummation
of the Drag-Along Transaction, (b) with the balance to be allocated among the Membership Interests pro rata based on the relative Liquidation
Values of the Membership Interests disposed of in the Drag-Along Transaction.
9.3.
Call Right.
9.3.1
Call Right. Notwithstanding anything herein to the contrary, if the Merger has not been consummated prior to the Merger Deadline,
then at any time from and after the Merger Deadline, the ZASH Member will have the right (but will have no obligation) to purchase all
of the other Members’ Membership Interests at the Call Price (as defined below) upon written notice to such other Members (the
“Called Members”).
9.3.2
Call Price. The call price (the “Call Price”) of each Called Member’s Membership Interest (other than
the Vinco Member) will be an amount equal to (a) 100% of the aggregate cash (or Fair Market Value cash equivalent) Capital Contributions
made with respect to such Called Member’s Membership Interest, minus (b) the aggregate amount of cash distributions made
with respect to the Called Member’s Membership Interest under this Agreement. The Call Price of the Vinco Member’s Membership
Interest will be an amount equal to (x) 120% of the aggregate cash (or Fair Market Value cash equivalent) Capital Contributions made
with respect to the Vinco Member’s Membership Interest, minus (y) the aggregate amount of cash distributions made with respect
to the Vinco Member’s Membership Interest under this Agreement; provided, that the proceeds of such Call Price must, and will be
deemed automatically to, be used first to repay any outstanding indebtedness owed by the ZASH Member to the Vinco Member.
9.3.3
Closing. At the closing, (a) the ZASH Member will pay each Called Member the Call Price for the Called Member’s Membership
Interest in cash by wire transfer of immediately available funds to an account as designed by the Called Member, and (b) each Called
Member will deliver to the ZASH Member such other documents or instruments as the ZASH Member may reasonably request to effect the purchase
of the Called Member’s Membership Interest.
9.3.4
Power of Attorney. Each Called Member hereby grants to the ZASH Member a limited power of attorney to execute any and all documents
necessary to carry out the transactions contemplated by this Section 9.3 if the Called Member fails to execute and deliver after
a reasonable period of time any document or instrument or fails to take any required action to consummate such transactions. It is expressly
intended by each Called Member that the power of attorney granted by this Section 9.3.4 is coupled with an interest, is irrevocable,
and will survive and not be affected by the Incapacitation of the Called Member (or if the Called Member is a corporation, partnership,
trust, association, limited liability company or other legal entity, by the dissolution or termination thereof) or by the Transfer (if
any) of any of the Called Member’s Membership Interest.
9.3.5
Delegation of Rights. At the ZASH Member’s election, the ZASH Member may delegate its rights under this Section 9.3
to any other Person (including the Company) and such Person may purchase the Called Members’ Membership Interests in accordance
with this Section 9.3. In such case, as the context requires, references in this Section 9.3 to the “ZASH Member”
will be read to refer to such Person.
9.4.
Invalid Transfers. Transfers in violation of this ARTICLE IX or this Agreement are null and void ab initio and of no effect
whatsoever; provided, however, that if any such Transfer is not null and void ab initio as a matter of law, the transferee of
the Transferred Membership Interest will be an “assignee” for purposes of the Act, will hold only an Economic Interest in
such Membership Interest, and will not possess or benefit from any of the other rights of a Member hereunder but will be subject to any
and all covenants, restrictions and obligations of a Member hereunder (including, without limitation, Section 4.6 and ARTICLE IX). Any
Membership Interest so Transferred in violation of this ARTICLE IX or this Agreement will, to the extent permitted by applicable law,
lose any and all voting rights, and, to the extent any voting rights may not be eliminated, the transferring Member will retain such
voting rights, if any, with respect to the Membership Interest transferred to such assignee.
9.5.
Effective Date of Transfers. Any Transfer permitted under the terms of this Agreement of all or any portion of a Member’s
Membership Interest will be effective no earlier than the date following the date upon which the requirements of this Agreement have
been met.
9.6.
Effect of Transfers. After the effective date of any Transfer of any part of a Member’s Membership Interest in accordance
with this Agreement, subject to Section 9.2, the Membership Interest (or other Economic Interest) so Transferred will continue to be
subject to the terms, provisions, and conditions of this Agreement and any further Transfers will be required to comply with all of the
terms, provisions, and conditions of this Agreement. Any transferee of all or any portion of any Membership Interest will take such Membership
Interest subject to the restrictions on Transfer imposed by this Agreement.
9.7.
Substitution of Members. Notwithstanding any provision to the contrary in this Agreement, a transferee of a Membership Interest
will not have the right to become a substitute Member until:
9.7.1
the requirements of Section 9.1 are satisfied;
9.7.2
such Person pays (or causes to be paid) any reasonable expenses in connection with such Person’s admission as a new Member; and
9.7.3
if such Membership Interest is certificated, the certificate representing that Membership Interest has been returned to the Company to
be reissued in the name of the transferee.
The
admission of a substitute Member will not result in the release of the Member who assigned the Membership Interest from any liability
that such Member may have to the Company unless otherwise agreed by the Board.
ARTICLE
X
BOOKS
AND RECORDS; ACCOUNTING; TAX MATTERS
10.1.
Books and Records. The Board must keep the books and records of the Company in a professional manner; provided, however,
to the extent appropriate under applicable tax and accounting principles, separate and corresponding records for book and tax purposes
may be maintained. The books and records of the Company must reflect all the Company transactions and must be appropriate and adequate
for the Company’s business.
10.2.
Delivery to Members and Inspection. Pursuant to Section 18-305(g) of the Act, the Members desire to restrict the rights of Members
to obtain information as otherwise provided in Section 18-305(a) of the Act. The Members agree that, except as otherwise required by
applicable law, each Member will only be entitled to information and reports to the extent provided by the Board and will not be entitled
to any other information concerning the Company or its business or affairs or the Members or their Membership Interests in the Company
whether pursuant to Section 18-305(a) of the Act or otherwise. Without limiting the generality of the foregoing, each Member agrees that
it will have no access to, and will not be entitled to know, the name and/or address (whether business, residence or mailing) of any
other Member. If, notwithstanding the foregoing restriction, any Member obtains any information concerning the Company or its business
or affairs or any other Member or such Member’s Membership Interest in the Company or any other information other than that provided
by the Board, such information will constitute “Confidential Information” and will be subject to the terms of Section 4.6.
Notwithstanding anything contained in this Agreement or the Act to the contrary, pursuant to Section 18-305(c) of the Act, the Board
will have the right to keep confidential from the Members, for such period of time as the Board deems reasonable, any information that
the Board reasonably believes to be in the nature of trade secrets or other information the disclosure of which the Board in good faith
believes is not in the best interests of the Company or could damage the Company or its business or which the Company is required by
law or by agreement with a third party to keep confidential. The Members agree that the foregoing limitations on the information rights
of the Members are reasonable and in the best interests of the Company.
10.3.
Tax Returns. The Board must cause to be prepared at least annually information necessary for the preparation of the Members’
federal, state and local income tax and information returns. The Board must send or cause to be sent to each Member within ninety (90)
calendar days after the end of each taxable year, or as soon as practicable thereafter, such information as is necessary to complete
such Member’s federal and state income tax or information returns, and a copy of the Company’s federal, state and local income
tax or information returns for that year. The Board must cause all income tax and information returns for the Company to be timely filed
with the appropriate authorities.
10.4. Other
Filings. The Board must cause to be prepared and timely filed, with appropriate federal and state regulatory and administrative
bodies, amendments to, or restatements of, the Certificate effected in accordance with this Agreement and all reports required to be
filed by the Company with those entities under the Act or other then current applicable laws, rules, and regulations.
10.5.
Bank Accounts. Funds of the Company must be maintained in one or more separate bank accounts in the name of the Company, and must
not be permitted to be commingled in any fashion with the funds of any other Person.
10.6.
Accounting Decisions and Reliance on Others. All decisions as to accounting matters, except as otherwise expressly provided herein,
may be made by the Board. The Board may rely upon the advice of the Company’s accountants as to whether such decisions are in accordance
with accounting methods followed for federal income tax purposes or financial accounting purposes (as applicable).
10.7.
Tax Matters.
10.7.1 Taxation as Partnership. The Members intend that the Company initially be treated as a partnership for federal
and state income tax purposes. Unless otherwise determined by the Board, the Members must cooperate with the Company in connection with
preserving the Company’s status as a partnership for income tax purposes and hereby authorize the Company to take whatever actions
and execute whatever documents are necessary or appropriate to effectuate the foregoing. To that end, unless otherwise determined under
the immediately preceding sentence, the Members direct the Board to use commercially reasonable efforts to cause the Company to be treated,
for United States federal income tax purposes, as a partnership and not a “publicly-traded partnership” within the meaning
of Section 7704(b) of the Code or an association taxable as a corporation, including, without limitation, filing any returns, elections
or statements by the Company with the applicable United States authorities.
10.7.2
Partnership Representative.
(a)
The Company must designate itself as its own “partnership representative” for purposes of the Partnership Audit Rules and
any comparable provisions of state or local income tax laws (the “Partnership Representative”). Each Member and the
Board must take such actions as are necessary to perfect such designation.
(b)
The Company must appoint an individual who meets the requirements of Treasury Regulations Section 301.6223-1(b)(2) as the sole individual
through whom the Partnership Representative will act for all purposes under the Partnership Audit Rules and any comparable provisions
of state or local income tax laws (the “Designated Individual”), and each Member (and the Board) must take such actions
as are necessary to perfect such designation. The Board may replace the Designated Individual in accordance with applicable laws, rules,
and regulations. Without approval of the Board, no Person may take any action to cause the Company to elect into the Partnership Audit
Rules where such rules would not otherwise be mandatory. The initial Designated Individual is Brett Vroman.
(c)
The Company will have all of the rights, powers, obligations and duties of a “partnership representative” and the Designated
Individual will have all of the rights, powers, obligations and duties of a “designated individual,” each as set forth in
the Partnership Audit Rules. Notwithstanding the previous sentence, the Designated Individual must cause the Company to act at, and only
at, the direction of the Board. The Designated Individual is, to the fullest extent permitted by law, absolved from all liability for
any and all consequences to any current or former Member resulting from any action that the Designated Individual causes the Company
to take at the direction of the Board.
(d)
The Company must indemnify and reimburse the Designated Individual for all reasonable expenses, including legal and accounting fees,
claims, liabilities, losses and damages incurred in connection with any administrative or judicial proceeding with respect to the tax
liability of the Members. The payment of such expenses must be made before any distributions are made to the Members under this Agreement
and before any discretionary reserves are set aside by the Board.
(e)
Each Member must take all actions that the Board informs it are reasonably necessary to effect a decision of the Board with respect to
the Partnership Audit Rules, including without limitation (i) providing any information reasonably requested in connection with any tax
audit or related proceeding (which information may be freely disclosed to the Internal Revenue Service or other relevant taxing authorities),
(ii) paying all liabilities attributable to such Member as the result of an election under Code Section 6226, (iii) filing any amended
returns that the Board determines to be necessary or appropriate to reduce an imputed underpayment under Code Section 6225(c) and/or
(iv) paying all liabilities associated with such an amended return. The costs and expenses incurred by a Member in connection with the
preceding sentence (other than the Designated Individual in its capacity as such) will not be treated as Company expenses and will not
be reimbursed by the Company.
(f)
If any tax audit results in the imposition of a tax liability on the Company itself, the Board is authorized to allocate the economic
burden of that liability (including interest and penalties) among the Members (including both current and former Members) based upon
their interests in the Company for the “Reviewed Year” (as defined in Section 6225(d)(1) of the Code. If requested in writing
by the Board, each Member must pay to the Company the amount allocated to it under the preceding sentence within ten (10) Business Days
of notice thereof. Such payment (i) may, at the Board’s discretion, be made by withholding distributions that would otherwise be
paid to a Member, and (ii) will not be treated as a Capital Contribution for purposes of determining a Member’s Unreturned Capital
or any right to distributions hereunder.
(g)
Notwithstanding any other provision of this Agreement to the contrary, each Member agrees that its obligations to comply with this Section
10.7.2(g) will survive any transfer of its Membership Interest and the dissolution of the Company. Accordingly, each Person that
ceases to be a Member will, notwithstanding such divestiture, reimburse and indemnify the Company against any liability that would be
allocated to such Person under Section 10.7.2(f) if the Person were a Member at the time of determination.
10.7.3
Elections. Except as otherwise provided herein, the Board is authorized to make all determinations regarding whether to make any
tax election provided under the Code, or any provision of state, local or foreign tax law. The Board is, to the fullest extent permitted
by law, absolved from all liability for any and all consequences to any previously admitted or subsequently admitted Members resulting
from its making or failing to make any such election. The Board is authorized to make all decisions and other matters concerning the
computation and allocation of items of income, gain, loss, deduction and credits among the Members, and accounting procedures not specifically
and expressly provided for by the terms of this Agreement. Any determination made in accordance with this Section 10.7.2(a) by
the Board will be conclusive and binding on all Members.
ARTICLE
XI
DISSOLUTION
AND WINDING UP
11.1.
Dissolution. The Company must be dissolved, its assets disposed of, and its affairs wound up on the first to occur of the following
(each, a “Dissolution Event”):
11.1.1
The entry of a decree of judicial dissolution pursuant to Section 18-802 of the Act;
11.1.2
A sale or disposition of substantially all of the assets of the Company (except as otherwise determined by the Board); or
11.1.3
The determination of the Board.
11.2.
Winding Up. Upon the occurrence of a Dissolution Event, the Company will continue solely for the purpose of winding up its affairs
in an orderly manner, liquidating its assets and satisfying the claims of its creditors. The Board will be responsible for overseeing
the winding up and liquidation of the Company, must take full account of the assets and liabilities of the Company, must either cause
its assets to be sold to any Person or distributed to a Member, and if sold, as promptly as is consistent with obtaining the Fair Market
Value thereof, must cause the proceeds therefrom, to the extent sufficient therefor, to be applied and distributed, to the maximum extent
provided by law, in the following order:
11.2.1
First, to creditors in satisfaction of all of the Company’s debts and liabilities, whether by payment or the making of a
reasonable provision for payment thereof to the extent required by Section 18-804 of the Act other than liabilities for distribution
to Members under Section 18-601 or Section 18-604 of the Act;
11.2.2
Second, to the Members in satisfaction of liabilities for distribution under Section 18-601 or Section 18-604 of the Act;
11.2.3
Third, the remaining amount to the Members in accordance with Section 8.1.1(a).
All
distributions must be made not later than ninety (90) days after the end of the taxable year in which the taxable event generating the
distributions occurs.
11.3.
No Deficit Restoration Obligation. Notwithstanding anything to the contrary in this Agreement, upon a liquidation of the Company
(within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g) or otherwise), if any Member has a negative Capital Account after giving
effect to all contributions, distributions, allocations and other Capital Account adjustments for all taxable years, including the taxable
year during which the liquidation occurs, that Member will nevertheless have no obligation to make any contribution to the capital of
the Company with respect to such negative Capital Account, and the negative balance of such Member’s Capital Account will not be
considered a debt owed by such Member to the Company or to any other Person for any purpose whatsoever.
11.4.
Distributions in Kind. Any non-cash asset distributed to one or more Members must first be valued at its Fair Market Value to
determine the gain or loss that would have been included in the amounts allocated pursuant to ARTICLE VII if such asset were sold
for such value. Such gain or loss must then be allocated pursuant to ARTICLE VII, and the Members’ Capital Accounts must
be adjusted to reflect such allocations. The amount distributed and charged to the Capital Account of each Member receiving an interest
in such distributed asset will be the Fair Market Value of such interest (net of any liability secured by such asset that such Member
assumes or takes subject to).
11.5.
Limitations on Payments Made in Dissolution. The Members may look solely to the assets of the Company for the return of their
Capital Contributions and have no right or power to demand or receive property other than cash of the Company. If the assets of the Company
remaining after payment or discharge of the debts and liabilities of the Company are insufficient to return the Members’ Capital
Contributions, the Members will have no recourse against the Company, any Manager or any Member.
11.6.
Certificate of Cancellation. Upon completion of the winding up of the affairs of the Company, the Board or other Person(s) winding
up the affairs of the Company, must cause to be filed in the office of, and on a form prescribed by, the Delaware Secretary of State,
a certificate of cancellation.
11.7.
Termination. The Company will terminate when all of the assets of the Company have been distributed in the manner provided for
in this ARTICLE XI, and the certificate of cancellation is filed in accordance with Section 11.6.
11.8.
No Action for Dissolution. Except as expressly permitted in this Agreement, a Member must not take any voluntary action that directly
causes a dissolution of the Company.
11.9.
Bankruptcy. The Company may not commence any voluntary Bankruptcy, or make a petition or application to any tribunal for, or consent
to the appointment of, or taking of possession by, a trustee, receiver, custodian, liquidator or similar official without a Member Vote
made in writing and given prior to such action.
ARTICLE
XII
MISCELLANEOUS
12.1.
Complete Agreement. This Agreement (including any schedules, annexes or exhibits attached hereto) and the Certificate constitute
the complete and exclusive statement of agreement among the Members with respect to the subject matter herein and therein and replace
and supersede all prior written and oral agreements or statements by and among the Members or any of them concerning the subject matter
herein and therein. No representation, statement, agreement, condition or warranty with respect to such subject matter not contained
in this Agreement and the Certificate will be binding on the Members or have any force or effect whatsoever.
12.2.
Binding Effect. Except as otherwise provided herein, this Agreement is binding upon and inures to the benefit of the Members,
and their respective successors and permitted assigns.
12.3.
Parties in Interest. Except as expressly provided in the Act, nothing in this Agreement confers any rights or remedies under or
by reason of this Agreement on any Persons other than the Covered Persons and their respective successors and permitted assigns, relieves
or discharges the obligation or liability of any third Person to any party to this Agreement, or gives any third Person any right of
subrogation or action over or against any party to this Agreement.
12.4.
Statutory References. Any reference to the Code, the Regulations, the Act or other statutes or laws includes all amendments, modifications
or replacements of the specific sections and provisions concerned.
12.5.
Headings. All headings herein are inserted only for convenience and ease of reference and are not to be considered in the construction
or interpretation of any provision of this Agreement.
12.6.
References to this Agreement. Numbered or lettered articles, sections and subsections herein contained refer to articles, sections
and subsections of this Agreement unless otherwise expressly stated.
12.7.
Governing Law. This agreement is to be enforced, governed by and construed in accordance with the laws of the State of Delaware,
without regard to the conflict of laws provisions thereof.
12.8.
Consent To Exclusive Jurisdiction. Except as otherwise required by §18-109(d) of the Act, each party hereto hereby irrevocably
submits to the exclusive jurisdiction of any Delaware state or United States federal court sitting in Delaware, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this Agreement, and each party hereto hereby irrevocably
agrees that all claims in respect of such action or proceeding are to be heard and determined in such Delaware state court or in such
federal court. Each party hereto irrevocably waives, to the fullest extent it may effectively do so, the defense of an inconvenient forum
to the maintenance of such an action or proceeding. Each party hereto irrevocably consents to the service of any and all process in any
such action or proceeding by the mailing of copies of such process to such party at its address specified in this agreement, including
Schedule A attached hereto (which mailing must be by certified mail). Each party hereto agrees that a final non-appealable judgment
in any such action or proceeding will be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.
12.9.
Severability. If any provision of this Agreement or the application of such provision to any Person or circumstance is held to
be invalid, the remainder of this Agreement or the application of such provision to Persons or circumstances other than those to which
it is held invalid are not to be affected thereby.
12.10.
Additional Documents and Acts. Each Member agrees to execute and deliver, from time to time, such additional documents and instruments
and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and perform all of the terms, provisions
and conditions of this Agreement and the transactions contemplated hereby.
12.11.
Notices. All notices and other communications required or permitted hereunder must be in writing and will be deemed to have been
duly and sufficiently given only if (a) personally delivered with proof of delivery thereof (any notice or communication so delivered
being deemed to have been received at the time so delivered), (b) sent by Federal Express, UPS, DHL, or other similar overnight courier
(any notice or communication so delivered being deemed to have been received only when delivered), (c) sent by electronic mail, telecopier
or facsimile (any notice or communication so delivered being deemed to have been received only if a copy is also promptly delivered by
one of the other means of delivery and will be deemed to have been received (i) on the Business Day such electronic transmission is sent,
if sent prior to 4:00 p.m. (based upon the recipient’s time) on the Business Day so sent, and (ii) on the Business Day following
the day such electronic transmission is sent, if sent on a non-Business Day or on or after 4:00 p.m. (based upon the recipient’s
time) on the Business Day so sent), or (d) sent by United States registered or certified mail, postage prepaid, at a post office regularly
maintained by the United States Postal Service (any notice or communication so sent being deemed to have been received only when delivered),
in any such case addressed to the respective parties as follows:
If
to the Company:
ZVV
Media Partners, LLC
1
West Broad Street, Suite 1004
Bethlehem,
PA 18018
If
to a Member:
Vinco
Ventures Inc.
1
West Broad Street, Suite 1004
Bethlehem,
PA 18018
With
a copy to (such copy not to constitute notice):
Lucosky
Brookman LLP
101
Wood Avenue South
5th
Floor
Woodbridge,
NJ 08830
Attn:
Joseph Lucosky, Esq.
to
the respective address of such Member as set forth on Schedule A attached hereto.
Any
party may change the address to which notices, requests, demands, claims and other communications hereunder are to be delivered by giving
the other parties notice in the manner herein set forth.
12.12.
Amendments. Except as otherwise expressly provided herein (including, without limitation, amendments to reflect the admission
of new Members, amendments in accordance with Section 3.2 or in connection with the establishment of additional classes or series
of Membership Interests under Section 3.8.1), this Agreement may be amended by, and only by, a Member Vote and the approval of
the Board; provided, however, that except for amendments expressly contemplated in this Agreement, no amendment may reduce the Capital
Account of any Member, or increase the obligations or liabilities of a Member hereunder unless such Member has consented in writing to
such amendment. The Company may amend Schedule A hereto at any time and from time to time to reflect the admission or withdrawal
of any Member or any changes in the Member’s addresses, all as contemplated by this Agreement.
12.13.
No Interest in Company Property, Waiver of Action for Partition. No Member has any interest in specific property of the Company.
Without limiting the foregoing, each Member irrevocably waives during the duration of the Company any right that such Member may have
to maintain any action for partition with respect to the property of the Company.
12.14.
Remedies Cumulative. Except as expressly provided herein, the rights, obligations and remedies created by this Agreement are cumulative
and in addition to any other rights, obligations, or remedies otherwise available at Law or in equity. Except as expressly provided herein,
nothing herein will be considered an election of remedies.
12.15.
Survival. The provisions of this Agreement that contemplate performance or obligations subsequent to the termination, dissolution
or winding up of the Company, will survive such termination, dissolution or winding up of the Company.
12.16.
Counterparts. This Agreement may be executed in separate counterparts, each of which will be deemed an original and all of which
will constitute one and the same document. Facsimile machine copies, DocuSign, electronic portable document format (PDF), and other electronic
copies of original signatures of any of the parties hereto will be binding as if they were original signatures.
[Remainder
of page intentionally left blank]
IN
WITNESS WHEREOF, the Company and the Members have executed this Second Amended and Restated Limited Liability Company Agreement, effective
as of the date first written above.
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THE
COMPANY:
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ZVV
MEDIA PARTNERS, LLC
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By:
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Name:
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Roderick
Vanderbilt
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Title:
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Manager
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By:
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Name:
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Ted
Farnsworth
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Title:
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Manager
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By:
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Name:
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Lisa
King
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Title:
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Manager
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By:
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Name:
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Brett
Vroman
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Title:
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Manager
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By:
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Name:
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Chris
Ferguson
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Title:
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Manager
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MEMBERS:
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VINCO
VENTURES, INC.
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By:
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Name:
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Title:
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ZASH
GLOBAL MEDIA AND ENTERTAINMENT CORPORATION
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By:
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Name:
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Title:
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[Signature
Page to Second Amended and Restated Limited Liability Company Agreement of ZVV Media Partners, LLC]
SCHEDULE
A
MEMBER/ADDRESS;
INITIAL UNRETURNED CAPITAL; MEMBERSHIP INTERESTS
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Member/Address
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Initial
Unreturned Capital
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Membership
Interests
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Vinco
Ventures, Inc.
1
West Broad Street
Suite
1004
Bethlehem,
PA 18018
Attention:
Chief Executive Officer
With
a copy, which shall not constitute notice, to:
Lucosky
Brookman LLP
101
Wood Avenue South
Woodbridge,
New Jersey 08830
Attention:
Joseph M. Lucosky
Email:
jlucosky@lucbro.com
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$125,000,000
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50%
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ZASH
Global Media and Entertainment Corporation
24
Aspen Park Blvd
East
Syracuse, NJ 13057
Attention:
Chief Executive Officer
With
a copy, which shall not constitute notice, to:
DLA
Piper LLP (US)
2000
Avenue of the Stars
Suite
400 North Tower
Los
Angeles, California 90067
Attention:
Tom K. Ara, Esq.
E-mail:
tom.ara@us.dlapiper.com
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An
amount equal to the average of the “low” and the “high” “Equity Value” allocated to ZASH with
respect to Lomotif Private Limited which equals a value of $338 million for the Zash Initial Unreturned Capital Account as
set forth in the Fairness Opinion of Gemini Valuation Services dated as of March 28, 2020.
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50%
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Total
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100%
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EXHIBIT
A
FORM
OF ADOPTION AGREEMENT
ADOPTION
AGREEMENT
This
Adoption Agreement (“Adoption Agreement”) is executed by the undersigned (the “Member”) pursuant
to the terms of that certain Second Amended and Restated Limited Liability Company Agreement of ZVV Media Partners, LLC (the “Company”),
dated as of [_____ __], 2021, by and among the Members named therein (as such agreement may be amended or supplemented from time to time,
the “Agreement”). Capitalized terms used but not defined herein have the respective meanings ascribed to such terms
in the Agreement. By the execution of this Adoption Agreement, the Member signing below agrees as follows:
1.
Acknowledgment. The Member acknowledges that such Member is acquiring a Membership Interest in the Company, subject to the terms
and conditions of the Agreement.
2.
Agreement. The Member (i) agrees that the Membership Interest acquired by the Member will be bound by and subject to the terms
of the Agreement, and (ii) hereby adopts the Agreement with the same force and effect as if the Member were originally a party thereto.
3.
Notice. Any notice required or permitted by the Agreement may be given to the Member at the address listed beside the Member’s
signature below.
EXECUTED
AND DATED this ______ day of _________________, ____.
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MEMBER:
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Name
of Member:
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Signature:
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Printed
Name:
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Title
(if applicable):
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Address:
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Accepted and Agreed:
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ZVV Media Partners, LLC
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By:
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Name:
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Title:
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EXHIBIT
B
FORM
OF SPOUSAL CONSENT
SPOUSAL
CONSENT
I,
________________________, am the spouse of ________________________, a member of ZVV Media Partners, LLC, a Delaware limited liability
company (the “Company”), and I acknowledge and agree as follows:
1.
I have received and read the Second Amended and Restated Limited Liability Company Agreement of the Company dated as of [_____ __], 2021
(the “Agreement”). Capitalized terms used herein but not defined have the meaning ascribed to them in the Agreement.
2.
I am aware that by the provisions of the Agreement (including, without limitation, Article IX of the Agreement) my spouse grants to the
Company and/or the other Members of the Company certain rights with respect to the Transfer of his/her Membership Interest in the Company,
including my community property interest or quasi-community property interest therein, if any, on the occurrence of certain events in
accordance with the terms and provisions of the Agreement.
3.
I hereby consent to and approve of all of the terms and conditions of the Agreement, including, without limitation, those terms, conditions
and obligations relating to the Transfer of Membership Interests as set forth in Article IX of the Agreement, and agree that my spouse’s
Membership Interest and my interest in them are subject to the terms and conditions of the Agreement and that I will take no action at
any time to hinder operation of the Agreement with respect to such Transfer provisions with respect to the Membership Interest or my
interest in the same.
4.
I have read and understand this Spouse Consent and have signed it voluntarily after having the opportunity to consult with an attorney
of my choice.
EXHIBIT
C
GEMINI
FAIRNESS OPINION LETTER
Exhibit
99.1
VInco
Ventures and ZASH Global Media and Entertainment through
their Joint Venture, ZVV Media Partners, Completes Acquisition of Lomotif
BETHLEHEM,
Pa. July 23, 2021 / Vinco Ventures, Inc. (NASDAQ: BBIG), a leader in selective acquisitions leveraging new market opportunities by utilizing
the B.I.G. Strategy: Buy. Innovate. Grow., is pleased to announce the closing of the Lomotif Private Limited (“Lomotif”)
acquisition, which owns the Lomotif short form video platform, through their joint venture entity ZVV Media. This acquisition
makes ZVV Media, a subsidiary of Vinco Ventures Inc., one of the most powerful global short form media companies in the marketplace.
Some
key highlights of the Lomotif acquisition by Vinco Ventures:
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●
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Lomotif
is one of the top short form video platforms in the world with hundreds of millions of installs around the world and tens
of millions of monthly users (*Sensor Tower data, June 2021) and over 31 million on-platform monthly active users (“MAUs”)
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●
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LoMo
will be Lomotif’s new name and will be rebranded and re-positioned in a new North American marketing campaign
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Third-party independent valuation shows the combined
companies have a valuation over $5 billion as of June 30 according to recent private financing comparable valuation by Gemini Valuation
Services
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●
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Paul
Yang, the founder and CEO of Lomotif, has entered into a five-year employment agreement as well as being named Chairman of
the Board of Lomotif
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●
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Lomotif
currently has content deals with Instagram, Facebook, and Snapchat
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Recent
Lomotif highlights:
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○
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Facebook
+ Lomotif: https://developers.facebook.com/success-stories/lomotif/
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○
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Snapchat
+ Lomotif: https://www.prweb.com/releases/lomotif_announce_semi_exclusive_two_way_integration_with_snapchat_stories/prweb17221384.htm
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○
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TikTok
7 best alternatives: https://www.techytab.com/best-tiktok-alternatives.html/amp
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○
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5
Up and Coming Apps For Gen Z, to Challenge TikTok: https://fortune.com/2020/09/23/5-social-apps-gen-z-triller-lomotif-unfold-bunch-genies/
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○
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Lomotif
Set To Enter India: https://economictimes.indiatimes.com/tech/startups/short-video-app-lomotif-is-set-to-enter-india/articleshow/81433107.cms
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○
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ZASH
and Lomotif chosen by Variety Magazine as Top Innovators in the Media and Entertainment Industry : https://variety.com/lists/silicon-valley-hollywood-report/
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○
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Lomotif
Partners with Teddy Riley: https://finance.yahoo.com/news/lomotif-partners-grammy-award-winning-141500088.html
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“This
is an exciting time for us here at Lomotif, as we’re building one of the largest short form video platforms in the
world in such a short period of time” said Paul Yang, CEO of Lomotif. “With this acquisition, we are taking
Lomotif to the next level and combining new touch points in the media and entertainment industry such as syndicated television
and music with short form video and user generated content which is currently one of the fastest growing segments. We are very well positioned
to be one of the top video platforms for the long-term. Just in the short time we have been together, we have seen
tremendous growth from the marketing and positioning strategies brought from the ZASH, Vinco Ventures and ZVV Media team. I am
excited about the future, which looks bright for us.”
“We
couldn’t be more proud to have Lomotif as the crown jewel of our media and entertainment company alongside ZASH and Vinco Ventures,”
said Ted Farnsworth, co-founder of ZASH. “The combination of these three entities makes an incredibly robust and totally
disruptive media and entertainment company worldwide, with tens of millions of monthly users around the world that allows
us to leverage all of our content globally.”
“We’re
thrilled to implement the next part of the plan for these three companies now that we have closed the deal with Lomotif”
said Christopher Ferguson, CEO of Vinco Ventures. “From day one we knew Lomotif would be a key part of our plan to
disrupt the media and entertainment industry, and the job is to execute that vision going forward.”
The
addition of Lomotif enhances Vinco Ventures and ZVV Media’s offering by adding a short-form video component to its overall
ecosystem as the company continues to grow a global content-centric technology company.
Lomotif
is one of the fastest growing video-sharing social networking platforms in its category over the last three years, with 225+ million
installations of the Lomotif app globally in over 200 countries in 300+ languages. According to outside tracking services, over
300 million videos are watched on the platform per month and over 10 billion atomic clips (User Generated Content (UGC)) have been used
to create more than 750 million videos on the platform since its launch.
Current
global expansion is underway in India, the world’s second largest market, and a country where competitor TikTok is banned. With
the number of social media users in India currently over 350 million, and social network users in the country expected to be nearly
450 million in 2023, the push into India is a major focus for Lomotif.
Throughout
Asia, Europe and South America, Lomotif has increased its average monthly community by over 400 percent in this time span. The platform’s
dominant, global user traction and reach demonstrates massive untapped value and Lomotif’s potential growth.
Lomotif
is also carving out an imposing presence in the music space, having recently partnered with LiveXLive for global live streaming distribution
of Music Lives 2021, which drew over 37+ million views on the Lomotif platform alone.
The acquisition
of Lomotif by ZVV Media was led by Ted Farnsworth. Investment bank BTIG represents ZASH on the buy side of transactions.
Palladium Capital Group, LLC served as advisor on the capital raise to fund the transaction. CEO Christopher Ferguson, CSO
Brian McFadden, and CFO Brett Vroman led the Vinco Ventures team. Vinco was represented by Joseph Lucosky, Adele Hogan and the team
at Lucosky Brookman LLP law firm. The media and entertainment team led by Tom K. Ara at law firm DLA Piper LLP negotiated and
advised ZASH on the Lomotif acquisition deal. Cooley LLP represented Lomotif.
About
Lomotif
Lomotif
is the leading video-sharing social networking platform that is democratizing video creation. Since the company was co-founded by video
enthusiast Paul Yang in 2014, Lomotif has been granted three technology patents uniquely focused on empowering creators to share and
watch short videos with ease through remix and collaboration. Yang’s bold vision is to build the world’s largest video vocabulary
to accelerate the world’s transition to video-first expression. Lomotif, available in the Apple and Google stores, is a downloadable
app for hip hop, rap, and urban culture across the United States and Latin America. Lomotif is one of five partners selected by Snapchat
for a bi-directional integration for posting stories between the two platforms. For additional information about Lomotif Private
Limited, please visit Lomotif’s website at www.lomotif.com.
About
ZASH Global Media and Entertainment Corporation
ZASH
Global Media and Entertainment Corporation is an evolving network of synergetic companies working together to disrupt the media and entertainment
industry. For additional information about ZASH Global Media and Entertainment Corporation, please visit ZASH’s website at www.zash.global.
About
Vinco Ventures, Inc.
Vinco
Ventures, Inc. (BBIG) is a selective acquisitions company focused on digital media and content technologies. Vinco’s B.I.G.
(Buy. Innovate. Grow.) strategy is to seek acquisition opportunities that are poised for scale and will “BE
BIG”. For more information visit Investors.vincoventures.com.
Forward-Looking
Statements and Disclaimers
To
the extent any statements contained in this press release contains “forward-looking statements” as defined in the Private
Securities Litigation Reform Act of 1995 and the information that are based upon beliefs of, and information currently available to,
the company’s management as well as estimates and assumptions made by the company’s management. These statements can be identified
by the fact that they do not relate strictly to historic or current facts. When used in this presentation the words “estimate,”
“expect,” “intend,” “believe,” “plan,” “anticipate,” “projected”
and other words or the negative of these terms and similar expressions as they relate to the company or the company’s management
identify forward-looking statements. Such statements reflect the current view of the company with respect to future events and are subject
to risks, uncertainties, assumptions and other factors relating to the company’s industry, its operations and results of operations
and any businesses that may be acquired by the company. Should one or more of these risks or uncertainties materialize, or the underlying
assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended,
or planned. Although the company believes that the expectations reflected in the forward-looking statements are reasonable, the company
cannot guarantee future results, performance, or achievements. Except as required by applicable law, including the security laws of the
United States, the company does not intend to update any of the forward-looking statements to conform these statements to actual results.
#
# #
Press
Contact
Jason
Magner
Rogers & Cowan PMK
Jason.magner@rogersandcowanpmk.com
310-854-8128