Exhibit 10.22
SECURITIES PURCHASE AGREEMENT
This Securities
Purchase Agreement (this “Agreement”) is dated as of March ___, 2024 and is between Inspire Veterinary Partners, Inc.,
a Nevada corporation (the “Company”), and each purchaser identified on the Annex A hereto (each,
including its successors and assigns, an “Investor” or “Holder”) and collectively, the “Investors”).
WHEREAS, the
Investors wish to purchase from the Company, and the Company wishes to sell and issue to the Investors Increasing OID Senior Notes in
the form of Appendix A hereto (each, a “Note” and collectively, the “Notes”); and
WHEREAS,
the Company and Investors are executing and delivering this Agreement in reliance upon an exemption from securities registration requirements
of the Securities Act of 1933, as amended (the “Securities Act”), afforded by the provisions of Section 4(a)(2) and/or
Rule 506(b) of Regulation D promulgated thereunder by the U.S. Securities and Exchange Commission.
NOW, THEREFORE,
in consideration of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the Company and each Investor agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. In
addition to the terms defined elsewhere in this Agreement:
(a)
capitalized terms that are not otherwise defined herein have the meanings given to such terms in the Notes (as defined herein),
and (b) the following terms have the meanings set forth in this Agreement.
“$”
means United States Dollars.
“Action”
shall have the meaning ascribed to such term in Section 3.01(k).
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Board
of Directors” means the board of directors of the Company.
“Business
Day” means any day except Saturday, Sunday, any day which is a federal legal holiday in the United States or any day on which
banking institutions in the State of New York are authorized or required by law or other governmental action to close. If the last or
appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then
such action may be taken or such right may be exercised on the next succeeding Business Day.
“Closing”
means the closing of the purchase and sale of Notes pursuant to Section 2.01.
“Closing
Date” means for any Securities, the Business Day when all of the Transaction Documents for such Securities have been executed
and delivered by the applicable parties thereto, and conditions precedent to: (i) the applicable Investors’ obligations to pay the
Subscription Amount and (ii) the Company’s obligations to deliver such Securities have been satisfied or waived.
“Commission”
means the United States Securities and Exchange Commission.
“Common
Stock” means the Class A common stock of the Company, par value $0.0001 per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.
Common Stock
Equivalent” means any convertible security or warrant, option or other right to subscribe for or purchase any additional shares
of Common Stock or any convertible security.
“Conversion
Shares” has the meaning provided in the Notes.
“Conversion
Price” has the meaning provided in the Notes.
“Exempt
Issuance” means: (i) the issuance by the Company of Notes and (upon conversion thereof) Conversion Shares, (ii) the issuance
by the Company of Common Stock upon the exercise of an outstanding stock option or warrant or the conversion of a security outstanding
on the date hereof as disclosed in SEC Reports, or (iii) the issuance by the Company of any Common Stock or standard options to purchase
Common Stock to directors, officers, employees or consultants of the Company or its Subsidiaries in their capacity as such pursuant to
an 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 Common Stock and standard options to purchase Common Stock may be issued to any employee, officer, director or consultant for
services provided to the Company or its subsidiaries in their capacity as such.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“FINRA”
means the Financial Industry Regulatory Authority.
“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.01(p).
“Lead
Investor” means Target Capital 1 LLC.
“Legend
Removal Date” shall have the meaning ascribed to such term in Section 4.01(c).
“Liens”
shall mean a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction or adverse claim
of a third party.
“Material
Adverse Effect” shall have the meaning ascribed to such term in Section 3.01(b).
“Maximum
Offering Amount” means an aggregate Subscription Amount of up to Five Hundred Thousand Dollars ($500,000) before applying
OID (as defined in the Notes).
“Notes”
means the Increasing OID Senior Notes issued by the Company to the Investors hereunder, in the form of Appendix A attached
hereto.
“Person”
means an individual or corporation, partnership, trust, incorporated or un-incorporated association, joint-venture, limited liability
company, joint-stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.
“Required
Approvals” shall have the meaning ascribed to such term in Section 3.01(e).
“Required
Minimum” means, as of any date, upon the request of the Holder, 200% of the maximum aggregate number of Conversion Shares then
issued or potentially issuable in the future upon the conversion of all outstanding Notes (ignoring any conversion limits set forth therein).
“Rule 144”
means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.
“SEC Reports”
has the meaning ascribed to such term in Section 3.01(h).
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“State
Securities Laws” means the securities (or “blue sky”) rules, regulations, or other similar laws of a particular
state.
“Subscription
Amount” means, as to each Investor, the aggregate amount to be paid for Notes purchased hereunder as specified below such Investor’s
name on the signature page of this Agreement and next to the heading “Aggregate Subscription Amount,” in United States Dollars
and in immediately available funds.
“Subsidiary”
means any subsidiary of the Company as set forth on Section 3.01(a) and shall, where applicable, include any direct or indirect subsidiary
of the Company formed or acquired after the date hereof.
“Termination
Date” means a date determined by the Company on which the offering of the Securities shall terminate.
“Transaction
Documents” means this Agreement, the Notes, and all appendices, exhibits and schedules hereto and thereto and any other documents
or agreements executed in connection with the transactions contemplated hereunder.
ARTICLE II
PURCHASE AND SALE
Section 2.01 Closing.
On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery
of this Agreement by the parties hereto, the Company agrees to sell, and the Investors, severally and not jointly, agree to purchase Notes.
At the Closing, the Investors shall deliver, via wire transfer, immediately available funds equal to the Investors’ aggregate Subscription
Amounts to the Lead Investor’s counsel and the Company shall deliver to each Investor its Notes. The Company and each Investor shall
deliver the other items set forth in Section 2.02 deliverable at the Closing. Upon satisfaction of the conditions set forth in Sections
2.02 and 2.03, the Closing shall occur at the offices of the Lead Investor’s counsel, or such other location as the parties shall
mutually agree or may be closed remotely by electronic delivery of documents. The Company may conduct multiple closings for the sale of
the Notes until it has received the Maximum Offering Amount. The Closing Date for any Notes shall be the date indicated on the applicable
Investor signature pages attached hereto and the final Closing Date shall be no later than the Termination Date.
Section 2.02 Closing Deliverables.
(a)
By Each Investor. On or prior to the Closing Date, each Investor shall deliver or cause to be delivered to the Company the
following:
| (i) | this Agreement duly executed by such Investor; and |
ix
| (ii) | such Investor’s Subscription Amount by wire transfer
to the Lead Investor’s counsel pursuant to the wiring instructions set forth in Section 2.02 (c). |
(b)
By the Company. On or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Investor:
| (i) | this Agreement, duly executed by an authorized officer of
behalf of the Company; |
| (ii) | a Note, the form of which is attached hereto as Appendix
A, registered in the name of each relevant Investor, having a “Principal Amount” (as defined in the Notes) calculated
in accordance therewith, duly executed by an authorized officer of behalf of the Company; |
| (iii) | a letter executed by the Company and its transfer agent,
in form and substance reasonably satisfactory to the Lead Investor with respect to the Conversion Shares; and |
| (iv) | an officer’s certificate of the Company certifying
the Company’s: (A) certified charter (or similar formation document); (B) good standing certificate in its state of incorporation
(or formation); (C) bylaws (or similar governing document); and (D) resolutions of its Board of Directors (or similar governing body)
approving and authorizing the execution, delivery and performance of the Transaction Documents and the transactions contemplated thereby
and including (without limitation) reserving the Required Minimum of Conversion Shares for issuance by the Company upon conversion of
the Notes in full. |
Section 2.03 Closing Conditions.
(a)
The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:
| (i) | the accuracy in all material respects on the Closing Date
of each Investor’s representations and warranties contained herein; |
| (ii) | all obligations, covenants and agreements of each Investor
required to be performed at or prior to the Closing Date shall have been performed; and |
| (iii) | the delivery by each Investor of the items set forth in Section
2.02(a) of this Agreement. |
(b)
The respective obligations of the Investors hereunder in connection with the Closing are subject to the following conditions being
met (it being understood that the Company may waive any of the conditions for any Closing hereafter):
| (i) | the accuracy in all material respects (or, to the extent
representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) when made and on the Closing
Date of the representations and warranties of the Company contained herein (unless as of a specific date therein in which case they shall
be accurate as of such date); |
| (ii) | all obligations, covenants and agreements of the Company
required to be performed at or prior to the Closing Date shall have been performed; |
| (iii) | the delivery by the Company of the items set forth in Section
2.02(b) of this Agreement; and |
| (iv) | there shall have been no Material Adverse Effect with respect
to the Company since the date hereof. |
(c) The wiring instructions for the Lead Investor’s counsel are as follows:
| |
Bank Name: |
Citibank |
| |
|
153 East 53rd Street |
| |
|
23rd Floor |
| |
|
New York, NY 10022 |
| |
ABA No. |
021000089 |
| |
Acct. Name: |
Sichenzia Ross Ference Carmel LLP |
| |
Acct. No.: |
4974921703 |
| |
SWIFT Code*: |
CITIUS33 |
| |
(*International only) |
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.01 Representations
and Warranties of the Company. The Company hereby represents and warrants to each Investor that, except as set forth in the SEC Reports,
the following representations are true and complete as of the date of the date hereof.
(a)
Subsidiaries. The Company does not have any Subsidiaries other than as set forth in the SEC Reports.
(b)
Organization and Qualification. The Company is an entity duly incorporated or otherwise organized, validly existing and
in good standing under the laws of the State of Nevada, with the requisite power and authority to own and use its properties and assets
and to carry on its business as currently conducted. The Company is not in violation or default of any of the provisions of its articles
of incorporation or bylaws, each, as amended and in effect. A complete and correct copy of the Company’s certificate or articles
of incorporation and bylaws, each as amended and in effect on the date of this Agreement and as they will be in effect on the Closing
Date, is attached to the officer’s certificate referenced in Section 2.02(b)(iv). There are no other organizational or charter documents
of the Company. The Company is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in
each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where
the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material
adverse effect on the legality, validity or enforceability of any Transaction Document; (ii) a material adverse effect on the results
of operations, assets, business, prospects or condition (financial or otherwise) of the Company or any of its material assets or lines
of business, individually; or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely
basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no
Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power
and authority or qualification; provided, however, that “Material Adverse Effect” shall not include any event, occurrence,
fact, condition or change, directly or indirectly, arising out of or attributable to: (i) general economic or political conditions, (ii)
conditions generally affecting the industry in which the Company or any Subsidiary operates, (iii) any changes in financial or securities
markets in general, (iv) acts of war (whether or not declared), armed hostilities or terrorism, or the escalation or worsening thereof,
(v) any pandemic, epidemics or human health crises (including COVID-19), (vi) any changes in applicable laws or accounting rules, (vii)
the announcement, pendency or completion of the transactions contemplated by the Transaction Documents, or (viii) any action required
or permitted by the Transaction Documents or any action taken (or omitted to be taken) with the written consent of or at the written request
of the Investors holding a majority in principal amount outstanding of the Notes).
(c)
Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate
the transactions contemplated by each of the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of each of the Transaction Documents by the Company and the consummation by it of the transactions contemplated
hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the
Company, the Board of Directors or the Company’s stockholders in connection therewith other than in connection with the Required
Approvals. Each Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and,
when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally; (ii) as limited
by laws relating to the availability of specific performance, injunctive relief or other equitable remedies; and (iii) insofar as indemnification
and contribution provisions may be limited by applicable law.
(d)
No Conflicts. The execution, delivery and performance by the Company of the Transaction Documents to which it is a party,
the issuance and sale of the Notes, the issuance of the Conversion Shares in accordance with the provisions of the Transaction Documents,
and the consummation by the Company of the other transactions contemplated hereby and thereby do not and will not: (i) conflict with or
violate any provision of the Company’s certificate of incorporation, bylaws or other organizational or charter documents; (ii) conflict
with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation
of any Lien upon any of the properties or assets of the Company, or give to others any rights of termination, amendment, acceleration
or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing
a Company debt or otherwise) or other understanding to which the Company is a party or by which any property or asset of the Company is
bound or affected; or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order,
judgment, injunction, decree or other restriction of any court or governmental authority to which the Company is subject (including federal
and State Securities Laws and regulations), or by which any property or asset of the Company is bound or affected; except in the case
of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.
(e)
Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give
any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) such consents,
waivers, or authorizations as have been obtained before the Closing; and (ii) the filing of Form D with the Commission and such filings
as are required to be made under applicable State Securities Laws (collectively, the “Required Approvals”).
(f)
Issuance of the Notes. The Notes are duly authorized and, when issued and/or paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens other than restrictions
on transfer provided for in the Transaction Documents. The Conversion Shares, when issued in accordance with the terms of the Notes, will
be validly issued, fully paid and nonassessable, free and clear of all Liens other than restrictions on transfer provided for in the Notes.
The Company has reserved from its duly authorized capital stock a number of shares of Common Stock for issuance of the Conversion Shares
at least equal to the Required Minimum on the date hereof.
(g)
Capitalization. The capitalization of the Company is as set forth in the most recent SEC Reports. Since the date of the
most recently filed SEC Report, the Company has not issued any Common Stock, Common Stock Equivalents or other equity interests (other
than Exempt Issuances) or (without duplication) pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as
of the date of the most recently filed SEC Report. Except in instances where valid waivers have been obtained, no Person has any right
of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the
Transaction Documents. Except as set forth in the SEC Reports, there are no outstanding options, warrants, scrip rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or
exchangeable for, or giving any Person any right to subscribe for or acquire, any Common Stock or the capital stock of any Subsidiary,
or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional
Common Stock or Common Stock Equivalents or capital stock of any Subsidiary. The issuance and sale of the Notes and Conversion Shares
will not obligate the Company or any Subsidiary to issue Common Stock or other securities to any Person (other than the Investors) and
will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of
such securities. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable,
have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation
of any preemptive rights or similar rights to subscribe for or purchase securities. Except for the Required Approvals and waivers that
have heretofore been obtained, no further approval or authorization of any stockholder, the Board of Directors or others is required for
the issuance and sale of the Notes and Conversion Shares. There are no stockholder agreements, voting agreements or other similar agreements
with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among
any of the Company’s stockholders.
(h)
SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required
to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the
two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the
foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein
as the “SEC Reports”). As of their respective dates, the SEC Reports complied in all material respects with the requirements
of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, 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. The financial statements of the Company included in the
SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect
thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted
accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise
specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes
required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries
as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal year-end audit adjustments.
(i)
Undisclosed Liabilities. The Company has no liability, indebtedness, obligation, expense, claim, deficiency or guaranty
of any type, whether accrued, absolute, contingent, matured, unmatured or otherwise, required to be reflected in financial statements
in accordance with GAAP, which individually or in the aggregate: (A) has not been reflected in the latest balance sheet included in the
financial statements referenced hereinabove; or (B) has not arisen: (i) in the ordinary course of business, consistent with past practices,
since the date of the latest balance sheet included in such financial statements in an amount that does not exceed $25,000 in any one
case or $50,000 in the aggregate, (ii) pursuant to or in connection with this Agreement or other Transaction Document, or (c) are executory
performance obligations to be performed after the date hereof in the ordinary course of business pursuant to agreement(s) entered into
in the ordinary course of business, consistent with past practices. The Company is not in default with respect to any Indebtedness.
(j)
Material Changes. Since the date of the latest financial statements made available to Investors prior to the date hereof:
(A) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse
Effect; (B) the Company has not incurred any liabilities (contingent or otherwise) other than (i) trade payables and accrued expenses
incurred in the ordinary course of business consistent with past practice, and (ii) liabilities not required to be reflected in the Company’s
financial statements pursuant to GAAP; (C) the Company has not altered their method of accounting; (D) the Company has not declared or
made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase
or redeem any shares of its capital stock except; and (E) the Company has not issued any equity securities except in favor of an officer,
director or consultant pursuant to an existing Company equity incentive plans.
(k)
Litigation. There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge
of the Company, threatened against or affecting the Company, or any of its properties, before or by any court, arbitrator, governmental
or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”)
which: (A) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Notes;
or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. None of the
Company or any director or officer thereof, is or has been the subject of any Action involving: (x) a claim of violation of or liability
under the Securities Act, the Exchange Act, FINRA rules or any State Securities Laws; (y) breach of fiduciary duty; or (z) fraud (statutory
or common law), embezzlement, misappropriation or conversion of property or rights, or any other crime involving deceit.
(l)
Labor Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees
of the Company which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s employees is a member
of a union that relates to such employee’s relationship with the Company, and the Company is not a party to any collective bargaining
agreement. The Company believes that its relationships with its employees are good. No executive officer, to the knowledge of the Company,
is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary
information agreement or non- competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third
party, and the continued employment of each such executive officer does not subject the Company to any liability with respect to any of
the foregoing matters. To the best of the Company’s knowledge, it is in compliance with all U.S. federal, state, local and foreign
laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where
the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(m)
Compliance. Except as disclosed set forth in the SEC Reports, the Company: (i) is neither in default under nor in violation
of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company
under), nor has the Company received notice of a claim that it is in default under or that it is in violation of, any indenture, loan
or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether
or not such default or violation has been waived); (ii) is not in violation of any order of any court, arbitrator or governmental body;
and (iii) is not and has not been in material violation of any statute, law, rule or regulation of any governmental authority, including
without limitation all foreign, federal, state and local laws applicable to its business and all such laws that affect the environment.
(n)
Regulatory Permits. The Company possesses all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct its business, except where the failure to possess such permits could
not reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and the Company has not received
any notice of proceedings relating to the revocation or modification of any Material Permit.
(o)
Title to Assets. The Company and its Subsidiaries have good and marketable title in fee simple to all real property and
good and marketable title in all personal property owned by it that, in each case, is material to the business of the Company and its
Subsidiaries, in each case free and clear of all Liens, except for Liens disclosed in the SEC Reports that do not materially and adversely
(x) affect the value of such property or (y) interfere with the use made and proposed to be made of such property by the Company and its
Subsidiaries. Any real property and facilities held under lease by the Company or a Subsidiary is held by it under valid, subsisting and
enforceable leases with which the Company or such Subsidiary (as applicable) are in compliance.
(p) Patents and Trademarks.
(i) The Company has, or has rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade
names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights as necessary
or material for use in connection with its business and which the failure to so have could reasonably be expected to have a Material
Adverse Effect (collectively, the “Intellectual Property Rights”); (ii) the Company has not received a notice (written
or otherwise) that any of the Intellectual Property Rights violates or infringes upon the intellectual property rights of any other Person;
(iii) all Intellectual Property Rights are enforceable by the Company, and there is no existing infringement by any other Person of any
of the Intellectual Property Rights, except where the failure to be so enforceable or for such infringements as would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect; and (iv) the Company has taken reasonable security measures
to protect the secrecy, confidentiality and value of all of its Intellectual Property Rights, except where failure to do so could not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(q)
Transactions with Officers, Directors and Employees. None of the officers or directors of the Company and, to the knowledge
of the Company, none of the employees of the Company, is presently a party to any transaction with the Company (other than for services
as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services
to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from, any such officer,
director or employee or, to the knowledge of the Company, any entity in which any such officer, director or employee has a substantial
interest or is an officer, director, trustee, member or partner, in each case other than for: (x) payment of salary or fees for services
rendered; (y) reimbursement for expenses incurred on behalf of the Company; and (z) other employee benefits, including stock option agreements
under any stock option plan of the Company.
(r)
[Intentionally Omitted].
(q)
Private Placement. Assuming the accuracy of the Investors’ representations and warranties set forth in Section 3.02,
no registration under the Securities Act is required for the offer and sale of the Notes by the Company to the Investors as contemplated
hereby.
(r)
Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Notes
will not be or be an Affiliate of, an ‘investment company’ within the meaning of the Investment Company Act of 1940, as amended.
The Company shall conduct its business in a manner so that it will not be an “investment company” subject to registration
under the Investment Company Act of 1940, as amended.
(s)
Registration Rights. Other than as described in the SEC Reports, no Person has any right to demand the Company to file a
registration statement under the Securities Act covering the sale of any securities of the Company.
(t)
Disclosure. Except with respect to: (i) the material terms and conditions of the transactions contemplated by the Transaction
Documents; and (ii) information given to the Investors, if any, which the Company hereby confirms will not constitute material non-public
information, the Company confirms that neither it nor any other Person acting on its behalf has provided any of the Investors or their
agents or counsel with any information that it believes constitutes or might constitute material, nonpublic information. The Company
understands and confirms that the Investors will rely on the foregoing representation in effecting transactions in securities of the
Company. All disclosure furnished by or on behalf of the Company to the Investors regarding the Company, its business and the transactions
contemplated hereby, 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 light of the circumstances under which they were made, not misleading.
(u)
No Integrated Offering. Assuming the accuracy of the Investors’ representations and warranties set forth in Section
3.02, neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any
offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the
Notes to be integrated with prior offerings by the Company for purposes of the Securities Act which would require the registration of
any such securities under the Securities Act.
(v)
Solvency. Based on the consolidated financial condition of the Company as of the Closing Date after giving effect to the
receipt by the Company of the proceeds from the sale of the Notes hereunder: (i) the fair saleable value of the Company’s assets
exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including
known contingent liabilities) as they mature; (ii) the Company’s assets do not constitute unreasonably small capital to carry on
its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements
of the business conducted by the Company, and projected capital requirements and capital availability thereof; and (iii) the current cash
flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account
all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required
to be paid. The Company will not, after the Closing Date, incur debts beyond its ability to pay such debts as they mature (taking into
account the timing and amounts of cash to be payable on or in respect of its debt). Except as disclosed in the SEC Reports, the Company
has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the
bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date.
(w) Tax Status.
Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect,
the Company has filed all federal, state and foreign income and franchise tax returns and have paid or accrued all taxes shown as due
thereon, and the Company has no knowledge of a tax deficiency which has been asserted or threatened against the Company.
(x)
No General Solicitation. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of the
Notes or Conversion Shares by any form of general solicitation or general advertising. The Company has offered the Notes and Conversion
Shares for sale only to the Investors and certain other “accredited investors” within the meaning of Rule 501 under the Securities
Act.
(y)
Insurance. The Company is insured by insurers of recognized financial responsibility against such losses and risks and in
such amounts as management of the Company reasonably believes to be prudent and customary in the businesses in which the Company is engaged.
The Company has never been refused any insurance coverage sought or applied for, and the Company has no reason to believe that it will
not be able to renew all existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers.
(z)
Acknowledgment Regarding Investors’ Purchase of Notes. The Company acknowledges and agrees that each of the Investors
is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated
thereby. The Company further acknowledges that no Investor is acting as a financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Investor or
any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby
is merely incidental to the Investors’ purchase of the Notes. The Company further represents to each Investor that the Company’s
decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions
contemplated hereby by the Company and its representatives.
(aa)
No Disqualification Events. With respect to Notes to be offered and sold hereunder in reliance on Rule 506(b) under the
Securities 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 hereunder, any beneficial owner of twenty percent (20%)
or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that
term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale (each, an “Issuer
Covered Person” and, together, “Issuer Covered Persons”) is subject to any of the ‘Bad Actor’ disqualifications
described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification
Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person is
subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e),
and has furnished to the Investors a copy of any disclosures provided thereunder.
(bb)
Other Covered Persons. The Company is not aware of any person (other than any Issuer Covered Person) that has been or will
be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of any Regulation D Securities.
(cc)
Notice of Disqualification Events. The Company will notify the Investors 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.
(dd)
Foreign Corrupt Practices. Neither the Company nor, to the knowledge of the Company, no agent or other person acting on
behalf of the Company, has: (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful
expenses related to foreign or domestic political activity; (ii) made any unlawful payment to foreign or domestic government officials
or employees or to any foreign or domestic political parties or campaigns from corporate funds; (iii) failed to disclose fully any contribution
made by the Company (or made by any person acting on its behalf of which the Company is aware) which is in violation of law; or (iv) violated
in any material respect any provision of the Foreign Corrupt Practices Act.
(ee)
Office of Foreign Assets Control. Neither the Company nor, to the Company's knowledge, any director, officer, agent, employee
or Affiliate of the Company, is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S.
Treasury Department (“OFAC”).
(ff)
U.S. Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation
within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon an Investor’s
request.
(gg)
Bank Holding Company Act. Neither the Company nor any of its Affiliates is subject to the Bank Holding Company Act of 1956,
as amended (“BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (“Federal Reserve”).
Neither the Company nor any of its Affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares
of any class of voting securities or twenty-five percent (25%) or more of the total equity of a bank or any entity that is subject to
the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its 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.
(hh) Money Laundering. The operations of the Company are and have been conducted at all times in compliance with
applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money
Laundering Laws”), and no Action or Proceeding by or before any court or governmental agency, authority or body or any
arbitrator involving the Company with respect to the Money Laundering Laws is pending or, to the knowledge of the Company,
threatened.
(ii)
Representations. The representations and warranties of the Company contained in this Agreement, and the certificate(s)
furnished or to be furnished to the Investors at the Closing, when taken as a whole, do not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements contained herein or therein not misleading in light of
the circumstances under which they were made. The Company acknowledges and agrees that the representations contained in section 3.02
shall not modify, amend or affect such Investor’s right to rely on the Company’s representations and warranties contained
in this section 3.01 or elsewhere in this Agreement or any representations and warranties contained in any other Transaction Document,
or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation of the transactions
contemplated hereby.
Section 3.02 Representations
and Warranties of the Investors.
Each Investor, for
itself and for no other Investor, hereby represents and warrants as of the date hereof and as of the Closing Date to the Company as follows
(unless as of a specific date therein, in which case they shall be accurate as of such date):
(a)
Authority; Organization. Such Investor has full power and authority (and, if such Investor is an individual, the capacity)
to enter into this Agreement and to perform all obligations required to be performed by it hereunder. If an entity, Such Investor is an
entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with full right, corporate
or partnership power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise
to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by such
Investor of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate or similar
action on the part of such Investor. Each Transaction Document to which it is a party has been duly executed by such Investor, and when
delivered by such Investor in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Investor,
enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally,
(ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies, and (iii)
insofar as indemnification and contribution provisions may be limited by applicable law.
(b)
Own Account. Such Investor understands that the Notes are “restricted securities” and have not been registered
under the Securities Act or any applicable State Securities Law and is acquiring the Notes as principal for its own account and not with
a view to or for distributing or reselling such Notes or any part thereof in violation of the Securities Act or any applicable State Securities
Law, has no present intention of distributing any of such Notes in violation of the Securities Act or any applicable State Securities
Law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of
such Notes (this representation and warranty not limiting such Investor’s right to sell the Notes in compliance with applicable
federal and State Securities Laws) in violation of the Securities Act or any applicable State Securities Law. Such Investor is acquiring
the Notes hereunder in the ordinary course of its business.
(c)
Non-Transferrable. Such Investor agrees: (i) that the Investor will not sell, assign, pledge, give, transfer or otherwise
dispose of the Notes or any interest therein, or make any offer or attempt to do any of the foregoing, except pursuant to a registration
of the Notes under the Securities Act and all applicable State Securities Laws, or in a transaction which is exempt from the registration
provisions of the Securities Act and all applicable State Securities Laws, (ii) that the certificates representing the Notes will bear
a legend making reference to the foregoing restrictions, and (iii) that the Company and its Affiliates shall not be required to give effect
to any purported transfer of such Notes except upon compliance with the foregoing restrictions.
(d)
Investor Status. Such Investor is an “accredited investor” as defined in Rule 501(a) under Regulation D of the
Securities Act. The undersigned agrees to furnish any additional information requested by the Company or any of its Affiliates to assure
compliance with applicable U.S. federal and state securities laws in connection with the purchase and sale of the Notes. Any information
that has been furnished or that will be furnished by the undersigned to evidence its status as an accredited investor is accurate and
complete, and does not contain any misrepresentation or material omission.
(e)
Experience of Such Investor. Such Investor, either alone or together with its representatives, has such knowledge, sophistication,
and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment
in the Notes, and has so evaluated the merits and risks of such investment. Such Investor is able to bear the economic risk of an investment
in the Notes and, at the present time, is able to afford a complete loss of such investment.
(f)
No Trading Market. Such Investor acknowledges that there is currently no trading market for the Notes and that none is expected
to develop for the Notes.
(g)
General Solicitation. Such Investor undersigned acknowledges that neither the Company nor any other person offered to sell
the Notes to it by means of any form of general solicitation or advertising, including, but not limited to: (i) any advertisement, article,
notice, or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, or (ii) any
seminar or meeting whose attendees were invited by any general solicitation or general advertising.
(h)
Confidentiality. Other than to other Persons party to this Agreement and its advisors who have agreed to keep information
confidential or have a fiduciary obligation to keep such information confidential, such Investor has maintained the confidentiality of
all disclosures made to it in connection with the transaction (including the existence and terms of this transaction).
(i)
Foreign Investor. If such Investor is not a United States person, such Investor represents that it has satisfied itself
as to the full observance of the laws of its jurisdiction in connection with any invitation to subscribe for the Notes or any use of this
Agreement, including: (i) the legal requirements within its jurisdiction for the purchase of the Notes, (ii) any foreign exchange restrictions
applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other
tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale or transfer of the Notes. The Investor further
represents that its payment for, and its continued beneficial ownership of the Notes, will not violate any applicable securities or other
laws of its jurisdiction.
(j) Information from Company. Such Investor and its investment managers, if any, have been afforded the opportunity to obtain
any information necessary to verify the accuracy of any representations or information presented by the Company in this Agreement and
have had all inquiries to the Company answered, and have been furnished all requested materials, relating to the Company and the Offering
and sale of the Notes and anything set forth in the Transaction Documents. Neither the Investor nor the Investor’s investment managers,
if any, have been furnished any offering literature by the Company or any of its Affiliates, associates, or agents other than the Transaction
Documents, and the agreements referenced therein.
(k)
[Intentionally Omitted]
(l) Speculative Nature of Investment; Risk Factors. SUCH INVESTOR UNDERSTANDS THAT AN INVESTMENT IN THE NOTES INVOLVES A
HIGH DEGREE OF RISK. Such Investor acknowledges that: (i) any projections, forecasts or estimates as may have been provided to the
Investor are purely speculative and cannot be relied upon to indicate actual results that may be obtained through this investment; any
such projections, forecasts and estimates are based upon assumptions which are subject to change and which are beyond the control of
the Company or its management, (ii) the tax effects which may be expected by this investment are not susceptible to absolute prediction,
and new developments and rules of the Internal Revenue Service, audit adjustment, court decisions or legislative changes may have an
adverse effect on one or more of the tax consequences of this investment, and (iii) the Investor has been advised to consult with his
own advisor regarding legal matters and tax consequences involving this investment. The Investor represents that the Investor’s
investment objective is speculative in that the Investor seeks the maximum total return through an investment in a broad spectrum of
securities, which involves a higher degree of risk than other investment styles and therefore the Investor’s risk exposure is also
speculative. The Notes offered hereby are highly speculative and involve a high degree of risk and Investor should only purchase these
securities if Investor can afford to lose their entire investment.
(m)
Money Laundering. If an entity, the operations of such Investor are and have been conducted at all times in compliance
with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as
amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering
Laws”), and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving
the Company with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.
The Company acknowledges
and agrees that the representations contained in Section 3.02 shall not modify, amend or affect such Investor’s right to rely on
the Company’s representations and warranties contained in this Agreement or any representations and warranties contained in any
other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation
of the transaction contemplated hereby.
ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES
Section 4.01 Transfer Restrictions.
(a)
The Notes and Conversion Shares may only be disposed of in compliance with state and federal securities laws. In connection
with any transfer of Notes or Conversion Shares other than pursuant to an effective registration statement or Rule 144, the Company may
require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to
the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer
does not require registration of such transferred Notes or Conversion Shares under the Securities Act. The Notes may not be sold or transferred
by the Investors without the written consent of the Company, which shall not be unreasonably withheld. As a condition of such sale or
transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights of an Investor
under this Agreement.
(b)
The Investors agree to the imprinting, so long as is required by this Section 4.01, of a legend on any of the Notes and
Conversion Shares in the following form:
[NEITHER]
THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS [CONVERTIBLE/EXERCISABLE] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES
AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL
TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.
(c)
Upon the Investor’s request in connection with a proposed sale of Notes pursuant to Rule 144 and if the Company reasonably
determines it is so required, upon receipt of customary documentation from Investor’s broker (if the Conversion Shares are sold
in brokers transactions), the Company shall, at its own cost and effort, retain legal counsel to provide an opinion letter to the Company’s
transfer agent opining that the Conversion Shares may be resold without registration under the Securities Act, pursuant to Rule 144, promulgated
thereunder, so long as the requirements of Rule 144 are met for any Conversion Shares to be resold thereunder. The Company shall arrange
for any such opinion letter to be provided not later than two (2) Business Days after the date of delivery to and receipt by the Company
of a written request by any Investor together with (if required in order to render the opinion) any broker’s representation letter
of other customary documentation reasonably requested by the Company evidencing compliance with Rule 144 (the “Legend Removal
Date”), and such opinion letter may be a “blanket” opinion letter covering Conversion Shares held by more than one
Investor (if applicable to more than one Investor).
(d)
Each Investor, severally and not jointly with the other Investors, agrees that such Investor will sell any Notes and Conversion
Shares only pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements,
or an exemption therefrom, and that if Notes or Conversion Shares are sold pursuant to a registration statement, they will be sold in
compliance with the plan of distribution set forth therein, and acknowledges that the removal of the restrictive legend from certificates
representing Notes as set forth in this Section 4.01 is predicated upon the Company’s reliance upon this understanding.
Section 4.02 Acknowledgment
of Dilution. The Company acknowledges that the issuance of the Conversion Shares may result in dilution of the outstanding shares
of Common Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges that its obligations
under the Transaction Documents, including, without limitation, its obligation to issue the Conversion Shares pursuant to the Notes, are
unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of any
such dilution or any claim the Company may have against any Investor and regardless of the dilutive effect that such issuance may have
on the ownership of the other stockholders of the Company.
Section 4.03 Registration
Rights. If, for any reason beyond the control of the Investor, all or any portion of the Conversion Shares, upon issuance by the Company,
are not eligible for sale/resale by the Investor under Rule 144, the Investor shall have the right to demand that the Company register
for sale/resale by the Investor under the Securities Act all the Conversion Shares.
Section 4.04 Integration.
The Company shall not sell, offer for sale, or solicit offers to buy or otherwise negotiate in respect of any security (as defined in
Section 2 of the Securities Act) that would be integrated with the offer or sale of the Notes to the Investors in a manner that would
require the registration under the Securities Act of the sale of the Notes to the Investors.
Section 4.05 Publicity.
The Company and each Investor shall consult with each other in issuing any other press releases with respect to the transactions contemplated
hereby, and neither the Company nor any Investor shall issue any such press release nor otherwise make any such public statement without
the prior consent of the Company with respect to any press release of any Investor, or without the prior consent of each Investor with
respect to any press release of the Company mentioning such Investor, which consent shall not unreasonably be withheld or delayed, except
if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of
such public statement or communication.
Section 4.06 Indemnification
of Investors. The Company shall indemnify, reimburse and hold harmless the Investors and their respective partners, members, shareholders,
officers, directors, employees and agents (and any other persons with other titles that have similar functions) (collectively, “Indemnitees”)
from and against any and all losses, claims, liabilities, damages, penalties, suits, costs and expenses, of any kind or nature, (including
fees relating to the cost of investigating and defending any of the foregoing) imposed on, incurred by or asserted against such Indemnitee
in any way related to or arising from or alleged to arise from: (i) any breach of any of the representations, warranties, covenants or
agreements made by the Company in this Agreement or in the other Transaction Documents and (ii) any action instituted against such Indemnitee
in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Indemnitee,
with respect to any of the transactions contemplated by the Transaction Documents (unless such action is based upon a breach of such Indemnitee’s
representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Indemnitee may have
with any such stockholder or any violations by such Indemnitee of state or federal securities laws or any conduct by such Indemnitee which
results from the gross negligence or willful misconduct of the Indemnitee as determined by a final, non-appealable decision of a court
of competent jurisdiction).
Section 4.07 Reservation
of Conversion Shares.
(a)
The Company shall maintain a reserve from its duly authorized shares of Common Stock for issuance pursuant to the Notes
in such amount, as the Required Minimum, as may then be required to fulfill its obligations in full under the Notes.
(b)
If, on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than the
Required Minimum on such date, then the Board of Directors shall use commercially reasonable efforts to amend the Company’s certificate
or articles of incorporation to increase the number of authorized but unissued shares of Common Stock to at least the Required Minimum
at such time, as soon as possible and in any event not later than the 60th day after such date.
Section 4.08
Mandatory Paydown of Notes. Upon the consummation by the Company or any of its Subsidiaries of any debt or equity financing, including
by way of loan or credit agreement (other than in an Exempt Issuance (each, a “Subsequent Financing”) on or prior to
the Maturity Date of the Notes (as defined therein), including by way of loan or credit agreement, the Company shall utilize and apply
one-hundred percent (100%) of the net cash proceeds thereof to the payment or prepayment of the Notes in full, or such lesser amount of
such net proceeds as shall be required to satisfy and pay all of the Notes in full.
Section 4.09 Use
of Proceeds. The Company shall use the net proceeds from the sale of the Securities hereunder to: (a) cover the fees and expenses
related to the Offering, and (b) for general working capital purposes. The Company may not use such proceeds: (i) for the satisfaction
of any other portion of the Company’s debt (other than the payment of trade payables in the ordinary course of the Company’s
business and prior practices); (ii) for the redemption of any Common Stock, Class B Common Stock or Common Stock Equivalents; (iii) for
the settlement of any outstanding litigation; (iv) in violation of FCPA or OFAC regulations; or (v) to lend, give credit or make advances
to any officers, directors, employees or Affiliates of the Company.
ARTICLE V
MISCELLANEOUS
Section 5.01 Termination.
This Agreement may be terminated by any Investor, as to such Investor’s obligations hereunder only and without any effect whatsoever
on the obligations between the Company and the other Investors, by written notice to the other parties, if the Closing has not been consummated
on or before the Termination Date; provided, however, that such termination will not affect the right of any party to sue for any breach
by the other party (or parties).
Section 5.02 Fees
and Expenses. The Company shall bear its own expenses incurred in connection with its negotiation, preparation, execution, delivery
and performance of the Transaction Documents, including, without limitation, reasonable attorneys’ and consultants’ fees and
expenses, transfer agent fees, fees for stock quotation services, fees relating to any amendments or modifications of the Transaction
Documents or any consents or waivers of provisions in the Transaction Documents, fees for the preparation of opinions of counsel, escrow
fees, and costs of restructuring the transactions contemplated by the Transaction Documents. When possible, the Company must pay these
fees directly, including, but not limited to, any and all wire fees, otherwise the Company must make immediate payment for reimbursement
to an Investor for all fees and expenses immediately upon written notice by an Investor or the submission of an invoice by an Investor.
In addition, the Company shall pay $20,000 to the Lead Investor’s counsel in respect of their fees and expenses in connection with
the negotiation, preparation, execution, delivery and performance of the Transaction Documents.
Section 5.03 Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such
matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.
Section 5.04 Notices.
Any notice, request, instruction or other document to be given hereunder by any party to the others shall be in writing and delivered
personally or sent by registered or certified mail, postage prepaid, or by or email:
if to any
Investor:
To the address
set forth on such Investor’s signature page hereto;
with a copy
to:
Sichenzia Ross
Ference Carmel LLP
1185 Avenue of
the Americas, 31st Floor
New York, NY
10036
Attn: Ross Carmel,
Esq.
Email: rcarmel@srfc.law
if to the
Company:
Inspire Veterinary
Partners, Inc.
780 Lynnhaven
Pkwy #400
Virginia Beach
VA 23452
Attn: Kimball
Carr, CEO
Email: kcarr@inspirevet.com
with a copy
to:
The Crone Law Group, PC
420 Lexington Avenue, Suite 2446
New York, NY
10170
Attn.:
Email:
or to such other persons or addresses
as may be designated in writing by the party to receive such notice as provided above.
Section 5.05 Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented, or amended except in a written instrument signed, in
the case of an amendment, by the Company and the Investors holding at least a majority in principal amount of the Notes then outstanding
(including the Lead Investor, if then a holder of any Notes) or, in the case of a waiver, by the party against whom enforcement of any
such waived provision is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall
be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition
or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise
of any such right.
Section 5.06 Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Investor (other
than by merger). Any Investor may assign any or all of its rights under this Agreement to any Person to whom such Investor assigns or
transfers any Notes, provided that such transfer complies with all applicable federal and State Securities Laws and that such transferee
agrees in writing with the Company to be bound, with respect to the transferred Notes, by the provisions of the Transaction Documents
that apply to the “Investors.”
Section 5.07 No
Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.
Section 5.08 Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed
by and construed and enforced in accordance with the internal laws of the State of Arizona, without regard to the principles of conflict
of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions
contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors, officers,
shareholders, employees or agents) shall be commenced exclusively in the federal and state courts sitting in the County of New York, New
York (the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New
York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed
herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not
to assert in any suit, Action or Proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts,
or such New York Courts are improper or inconvenient venue for such proceeding. 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 via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and
agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be
deemed to limit in any way any right to serve process in any other manner permitted by applicable law. Each party hereto hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or
relating to the Transaction Documents or the transactions contemplated hereby. If any party shall commence an Action or Proceeding to
enforce any provisions of the Transaction Documents, then the prevailing party in such Action or Proceeding shall be reimbursed by the
other party for its attorney’s fees and other costs and expenses incurred in the investigation, preparation and prosecution of such
Action or Proceeding.
Section 5.09 Survival.
The representations and warranties contained herein shall survive the Closing and the delivery of the Notes.
Section 5.10 Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that
both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery
of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page was an original
thereof.
Section 5.11 Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force
and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts
to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
Section 5.12 Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of
the other Transaction Documents, whenever any Investor exercises a right, election, demand or option under a Transaction Document and
the Company does not timely perform its related obligations within the periods therein provided, then such Investor may rescind or withdraw,
in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part
without prejudice to its future actions and rights; provided, however, that in the case of a rescission of a conversion of a Note, the
Investor shall be required to return any shares of Common Stock subject to any such rescinded conversion or exercise notice.
Section 5.13 Replacement
of Notes. If any certificate or instrument evidencing any Notes is mutilated, lost, stolen or destroyed, the Company shall issue or
cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution
therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft
or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs
(including customary indemnity) associated with the issuance of such replacement Notes.
Section 5.14 Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Investors
and the Company will be entitled to seek specific performance under the Transaction Documents. The parties agree that monetary damages
may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and
hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law
would be adequate.
Section 5.15 Payment
Set Aside. To the extent that the Company makes a payment or payments to any Investor pursuant to any Transaction Document or an Investor
enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required
to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other person under any law (including, without
limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or setoff had not occurred.
Section 5.16 Independent
Nature of Investors’ Obligations and Rights. The obligations of each Investor under any Transaction Document are several and
not joint with the obligations of any other Investor, and no Investor shall be responsible in any way for the performance or non-performance
of the obligations of any other Investor under any Transaction Document. Nothing contained herein or in any other Transaction Document,
and no action taken by any Investor pursuant thereto, shall be deemed to constitute the Investors as a partnership, an association, a
joint venture, or any other kind of entity, or create a presumption that the Investors are in any way acting in concert or as a group
with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Investor shall be entitled to independently
protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of the other Transaction
Documents, and it shall not be necessary for any other Investor to be joined as an additional party in any proceeding for such purpose.
Each Investor has been represented by its own separate legal counsel in their review and negotiation of the Transaction Documents. The
Company has elected to provide all Investors with the same terms and Transaction Documents for the convenience of the Company and not
because it was required or requested to do so by the Investors.
Section 5.17 Construction.
The parties agree that each of them and/or their respective counsel has reviewed and had an opportunity to revise the Transaction Documents
and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of the Transaction Documents or any amendments hereto. In addition, each and every reference to
share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits,
stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.
Section 5.18 Headings.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any
of the provisions hereof.
Section 5.19 WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH
KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY
WAIVES FOREVER TRIAL BY JURY.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF,
the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of
the date below.
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INSPIRE VETERINARY PARTNERS, INC. |
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By: |
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Name: |
Kimball Carr |
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Title: |
Chief Executive Officer |
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INVESTORS: |
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The Investors executing the Signature
Page in the form attached hereto as Annex A and delivering the same to the Company or its agents shall be deemed
to have executed this Agreement and agreed to the terms hereof. |
Annex A
Securities
Purchase Agreement Investor Counterpart Signature Page
The undersigned,
desiring to: (i) enter into this Securities Purchase Agreement dated as of March ___, 2024 V(the “Agreement”), with
the undersigned, Inspire Veterinary Partners, Inc., a Nevada corporation (the “Company”), in or substantially in the
form furnished to the undersigned and (ii) purchase the Securities as set forth below, hereby agrees to purchase such Securities from
the Company as of the Closing and further agrees to join the Agreement as a party thereto, with all the rights and privileges appertaining
thereto, and to be bound in all respects by the terms and conditions thereof. The undersigned specifically acknowledges having read the
representations in this Agreement’s section entitled “Representations Warranties of the Investors”, and hereby represents
that the statements contained therein are complete and accurate with respect to the undersigned as an Investor.
| INVESTOR (if an individual): |
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INVESTOR
(if an entity): |
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| Name: |
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(Legal Name of Entity) |
| Date: |
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By |
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| INVESTOR (if investing jointly) |
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Name: |
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Title: |
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| By |
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Date: |
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| Name: |
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State/Country of Domicile or
Formation: ___________________________________________________________
Aggregate Subscription Amount: $ ___________________________________________________________
SSN/EIN/ITIN: ____________________________________________________
Address: ___________________________________________________________________
