UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
For the month of October 2024
Commission File Number 001-41385
Visionary Holdings Inc.
(Translation of registrant's name into English)
105 Moatfield Dr. Unit 1003
Toronto, Ontario, Canada M3B OA2 905-739-0593
(Address of principal executive offices)
Indicate by check
mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Entry into a Material Definitive Agreement.
On October 2, 2024, Visionary Holdings Inc. (the
“Company”) entered into a Securities Purchase Agreement (the “SPA”) with an accredited investor (the “Buyer”),
to issue and sell to the Buyer one or more new series of senior secured convertible notes of the Company, in the aggregate original principal
amount of $6,000,000 (the “Notes”). At the closing held on October 2, 2024 (the “Initial Closing”), the Company
has issued and sold to the Buyer a Note in the aggregate principal amount of $1,000,000 (the “Initial Note”). In accordance
with the SPA, the Buyer may elect to purchase one or more additional Notes (each an “Additional Note” and collectively, the
“Additional Notes”, and together with the Initial Note, the “Notes”), provided that, if the Buyer does not elect
to purchase Additional Notes within twenty-four months of the anniversary of the Effective Date (as defined in the Registration Statement)
of the initial Registration Statement (as defined in the Registration Statement) or such later date as the Required Holders (as defined
in the SPA) may elect from time to time in writing to the Company, the Buyer shall have no further right to effect an Additional Closing.
The Initial Note is subject to an original issue
discount of 10%, and is convertible, in whole and in part, from time to time at the option of the Buyer commencing on or after the earlier
of (i) July 2, 2025 and (ii) twenty (20) Trading Days prior to the date that any Permitted Securities (as defined in the SPA) may be initially
sold, exercised, converted, exchanged, as applicable, after giving effect to any related Lock-Up Agreement (as defined in the SPA) with
respect thereto, and (y) the initial date of any event of default, as applicable, into the Company’s common shares at a conversion
price equal to the lower of (i) $4.00, and (ii) the greater of (x) the floor price then in effect and (y) 85% of the lowest trading price
of our common shares during the 15 consecutive trading day period preceding the delivery of the conversion notice. Pursuant to the original
issue discount, the Buyer paid $900,000 for the Initial Note, less certain fees, and expenses payable by the Company. The Initial Note
may not be converted to the extent that the number of common shares owned by the Buyer and its affiliates will exceed 9.99% of the issued
and outstanding shares of the Company at the time of conversion.
The Initial Note matures on October 2, 2025, or
earlier under certain conditions set forth in the SPA. The Initial Note accrues interest at the greater of (x) the sum of the prime rate
plus four and a half percent (4.5%) per annum and (y) nine percent (9%) per annum.
The Notes ranks senior to all present and future
indebtedness of the Company and its subsidiaries, subject to certain permitted senior indebtedness (including real estate mortgages).
The Company has the right to redeem all, but not less than all, of the outstanding balance under the Note at a 20% premium to the greater
of the balance of the Note and the equity value of our common shares underlying the Note. The equity value of our common shares underlying
the Note is calculated using the greatest closing sale price of our common shares during the period from the date immediately preceding
the date of the applicable redemption notice to the trading day immediately prior to the date the redemption payment is made.
The Company’s obligations under the Initial
Note, the SPA and other transaction documents are secured by (i) the grant of a first priority security interest upon substantially all
of the personal and real property of the Company and its subsidiaries pursuant to a security agreement between the Company, its subsidiaries
and the Buyer (the “Security Agreement”) and (ii) by a pledge of 1,516,668 shares held by our principal shareholder,
3888 Investment Group Limited (the “Pledge Agreement"). The Company’s obligations under the Note may become subject
to a guaranty by the Company and its U.S. subsidiaries in the future if and when the Company becomes parent to such subsidiaries (the
“Guaranty”).
Under the SPA, the Buyer has customary preemptive
rights to participate in any future financing by the Company and the Company agreed to certain restrictions on changes in its capital
structure, including the Company’s agreement to certain restrictions on the issuance of additional equity securities so long as
the Buyer owns any Notes or common shares underlying the Notes, or to engage in any Dilutive Issuances (as defined in the Note) so long
as the Notes are outstanding.
The Company is required to use its best efforts
to file, within 90 calendar days of the Initial Closing, a registration statement on the appropriate form providing for the resale by
the Buyer of the common shares issuable upon conversion of the Notes, including interest on the Notes through the first anniversary of
the Initial Closing. The Company is also required to use its best efforts to cause such registration statement to become effective and
to always maintain the effectiveness of such registration statement until the Buyer no longer owns any Notes or common shares issuable
upon exercise or conversion thereof.
The foregoing description of the SPA, Note, Pledge Agreement, Registration
Rights Agreement, Security Agreement and Guaranty, is a summary and is qualified in its entirety by reference to the full text of these
documents, forms of which are filed as Exhibits 10.1, 10.2, 10.3, 10.4, 10.5 and 10.6, respectively, to this Current Report on Form 6-K
and incorporated herein by reference.
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,
thereto duly authorized.
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VISIONARY HOLDINGS INC. |
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/s/ Xiyong Hou |
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Xiyong Hou |
| Date: October 3, 2024 |
Chief Executive Officer |
EXHIBIT INDEX
Exhibit 10.1
EXECUTION VERSION
SECURITIES PURCHASE
AGREEMENT
This SECURITIES PURCHASE
AGREEMENT (the “Agreement”), dated as of October 2, 2024, is by and among Visionary Holdings Inc. (f/k/a Visionary
Education Technology Holdings Group Inc.), a company organized under the laws of Canada with offices located at 105 Moatfield Drive, Unit
1003, Toronto, Ontario, Canada M3B 0A2 (the “Company”), and each of the investors listed on the Schedule of Buyers
attached hereto (individually, a “Buyer” and collectively, the “Buyers”).
RECITALS
A.
The Company and each Buyer is executing and delivering this Agreement in reliance upon (i) 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 and (2) in Canada, the exemption from the prospectus requirements of applicable Canadian Securities Laws (as defined
below) afforded by Section 2.3 of National Instrument 45-106 Prospectus Exemptions (“NI 45-106”) of the Canadian Securities
Administrators.
B.
The Company has authorized one or more new series of senior secured convertible notes of the Company, in the aggregate original
principal amount of $6,000,000, substantially in the form attached hereto as Exhibit A (the “Notes”),
which Notes shall be convertible into Common Shares (as defined below) (the Common Shares 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.
C.
Each Buyer wishes to purchase, and the Company wishes to sell at the Initial Closing (as defined below), upon the terms and conditions
stated in this Agreement, a Note in the aggregate original principal amount as set forth opposite such Buyer’s name in column (3)
on the Schedule of Buyers (which aggregate principal amount for all Buyers shall not exceed $1,000,000) (each an “Initial Note”,
and collectively, the “Initial Notes”)(the Conversion Shares issuable pursuant to the terms of the Initial Notes, collectively,
the “Initial Conversion Shares”).
D.
Subject to the terms and conditions set forth in this Agreement, each Buyer, severally, may require the Company to participate
in one or more Additional Closings (as defined below) for the purchase by such Buyer, and the sale by the Company, of one or more Notes
with an aggregate original principal amount for all Additional Closings not to exceed the maximum aggregate principal amount as set forth
opposite such Buyer’s name in column (4) on the Schedule of Buyers (which aggregate principal amount for all Buyers for all Additional
Closings shall not exceed $5,000,000) (each an “Additional Note”, and collectively, the “Additional Notes”,
and together with the Initial Notes, the “Notes”)(the Conversion Shares issuable pursuant to the terms of the Additional
Notes, collectively, the “Additional Conversion Shares”, and collectively with the Initial Conversion Shares, the “Conversion
Shares”).
E.
At the Initial Closing, the parties hereto shall execute and deliver a Registration Rights Agreement, in the form attached hereto
as Exhibit B (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.
F.
The Notes and the Conversion Shares are collectively referred to herein as the “Securities.”
G.
The Notes will rank senior to all outstanding and future indebtedness of the Company, and its Subsidiaries (as defined below) the
Notes will be secured by (a) a first priority security interest in all of the existing and future assets of the Company and its direct
and indirect Subsidiaries, including a pledge of all of the share capital of each of the Subsidiaries, as evidenced by a security agreement
in the form attached hereto as Exhibit C (the “Security Agreement”), (b) a first priority, perfected
security interest in certain of the Common Shares held by 3888 Investment Group Limited (the “Principal Shareholder”),
as evidenced by the pledge agreement attached hereto as Exhibit D (the “Pledge Agreement”, and together
with the Security Agreement, Perfection Certificate (as defined below) and the other security documents and agreements entered into in
connection with this Agreement and each of such other documents and agreements, as each may be amended or modified from time to time,
collectively, the “Security Documents”), and (c) a guaranty executed by each U.S. Subsidiary (if any) of the Company,
in the form attached hereto as Exhibit E (collectively, the “Guaranties”) pursuant to which each of them
guarantees the obligations of the Company under the Transaction Documents (as defined below).
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 Buyer hereby agree as follows:
1.
PURCHASE AND SALE OF NOTES.
(a)
Purchase of Notes .
(i)
Purchase of Initial Notes. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6(a) and 7(a)
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 Initial Closing Date (as defined below) an Initial Note in the original principal amount as is set forth opposite such Buyer’s
name in column (3) on the Schedule of Buyers (the “Initial Closing”).
(ii)
Purchase of Additional Notes. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 1(b)(ii),
6(b) and 7(b) below, the Company shall issue and sell to such Buyer, and such Buyer severally, but not jointly, agrees to purchase from
the Company on the applicable Additional Closing Date (as defined below) such aggregate number of Additional Notes as is set forth in
such applicable Additional Closing Notice (as defined below)(each such closing of the purchase of such Additional Notes, each, an “Additional
Closing”).
(b)
Closing. Each of the Initial Closing and any Additional Closings (collectively, the “Closings”) of the
purchase of the Notes by the Buyers shall occur at the offices of Kelley Drye & Warren LLP, 3 World Trade Center, 175 Greenwich Street,
New York, NY 10007.
(i)
Initial Closing. The date and time of the Initial Closing (the “Initial Closing Date”) shall be 10:00
a.m., New York time, on the first (1st) Business Day on which the conditions to the Initial Closing set forth in Sections 6(a) and 7(b)
below are satisfied or waived (or such other date as is mutually agreed to by the Company 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.
(ii)
Additional Closings. Subject to the satisfaction (or waiver) of the conditions set forth in this Section 1(b)(ii) and Sections
6(b) and 7(b) below, at any time on or after the Initial Closing Date, each Buyer, severally, shall have the right, exercisable by delivery
by e-mail of a written notice to the Company (each, an “Additional Closing Notice”, and the date hereof, each an “Additional
Closing Notice Date”) to purchase, and to require the Company to sell to such Buyer, at one or more Additional Closings, up
to such aggregate principal amount of such Additional Notes as set forth opposite its name in column (4) on the Schedule of Buyers (less
the aggregate principal amount of any Additional Notes issued in any prior Additional Closing) (each, an “Additional Notes Amount”).
Each Additional Closing Notice shall specify (A) the proposed date and time of the Additional Closing (which, if unspecified in such Additional
Closing Notice, shall be the second (2nd) Trading Day after such Additional Closing Notice (or such other date as is mutually
agreed to by the Company and each Buyer)) (each, an “Additional Closing Date”), and (B) the applicable Additional Notes
Amount of the Additional Notes to be issued to such Buyer at such Additional Closing. If a Buyer has not elected to effect an Additional
Closing on or prior to the twenty-four month anniversary of the Effective Date (as defined in the Registration Rights Agreement) of the
initial Registration Statement (as defined in the Registration Rights Agreement) (or such later date as the Required Holders (as defined
below) may elect from time to time in writing to the Company, the “Additional Closing Expiration Date”), such Buyer
shall have no further right to effect an Additional Closing hereunder.
(c)
Purchase Price. The aggregate purchase price for the Initial Notes to be purchased by each Buyer (the “Initial
Purchase Price”) shall be the amount set forth opposite such Buyer’s name in column (5) on the Schedule of Buyers. The
aggregate purchase price for the Additional Notes to be purchased by each Buyer at any given Additional Closing (each, an “Additional
Purchase Price”, and together with the Initial Purchase Price, each, a “Purchase Price”) shall be approximately
$900 for each $1,000 of aggregate principal amount of Additional Notes to be issued in such Additional Closing (which together with the
Additional Purchase Price of each prior Additional Closing, shall not exceed the aggregate amount set forth opposite such Buyer’s
name in column (6) of the Schedule of Buyers).
(d)
Form of Payment.
(i)
Initial Closing. On the Initial Closing Date, (i) each Buyer shall pay its respective Initial Purchase Price (less, in the
case of any Buyer, the amounts withheld pursuant to Section 4(g)) to the Company for the Initial Notes to be issued and sold to such
Buyer at the Initial Closing, by wire transfer of immediately available funds in accordance with the Initial Flow of Funds Letter (as
defined below) and (ii) the Company shall deliver to each Buyer an Initial Note in the aggregate original principal amount as is
set forth opposite such Buyer’s name in column (3) of the Schedule of Buyers, duly executed on behalf of the Company and registered
in the name of such Buyer or its designee.
(ii)
Additional Closing. On each Additional Closing Date, (i) each Buyer shall pay its respective Additional Purchase Price (less,
in the case of any Buyer, the amounts withheld pursuant to Section 4(g)) to the Company for the Additional Notes to be issued and
sold to such Buyer at each Additional Closing, by wire transfer of immediately available funds in accordance with the Additional Flow
of Funds Letter (as defined below) and (ii) the Company shall deliver to each Buyer an Additional Note in the aggregate original
principal amount as is set forth in the applicable Additional Closing Notice to be issued to such Buyer, duly executed on behalf of the
Company and registered in the name of such Buyer or its designee.
2.
BUYER’S REPRESENTATIONS AND WARRANTIES.
Each Buyer, severally and
not jointly, represents and warrants to the Company with respect to only itself that, as of the date hereof and as of each 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 (ii) upon conversion of its Note will acquire
the Conversion Shares issuable upon conversion 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 or qualified for public distribution or exempted under the securities legislation and regulations of, and
the instruments, policies, rules, orders, codes, notices and published interpretation notes of, the securities regulatory authorities
of the provinces and territories of Canada (the “Canadian Securities Laws”); 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 (as defined below) 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. Such Buyer is also an “accredited investor” as such term is defined in NI 45-106 and Section 73.3(1) of the
Securities Act (Ontario).
(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 the Company 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 Company and materials relating to the offer and sale of the Securities that have been requested by such Buyer. Such
Buyer and its advisors, if any, have been afforded the opportunity to ask questions of the Company. 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 the Company’s 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.
(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 4(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 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; (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 and (iv) any sale or transfer of the Securities to a purchaser or transferee whose address is in Canada (or who is a resident
of Canada) is prohibited unless it is made in compliance with applicable Canadian Securities Laws, including without limitation the applicable
provisions of National Instrument 45-102 Resale of Securities. 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)
Residency. Such Buyer is a resident of that jurisdiction specified below its address on the Schedule of Buyers.
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 each Closing Date:
(a)
Organization and Qualification. Each of the Company and each of its Subsidiaries (as defined below) 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 each of its 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, “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 (as defined below), 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 of its Subsidiaries 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 Subsidiaries. “Subsidiaries”
means any Person in which the Company, directly or indirectly, (I) owns any of the outstanding share capital or holds any 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 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 applicable Transaction Documents by the Company and its Subsidiaries,
and the consummation by the Company and its 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)
have been duly authorized by the Company’s board of directors and each of its 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, its Subsidiaries, their respective boards of directors or their
shareholders or other governing body. This Agreement has been, and the other applicable Transaction Documents to which it is a party will
be prior to the such 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 such Closing, the Transaction Documents to which each
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. “Transaction Documents” means, collectively,
this Agreement, the Notes, the Guaranties, the Security Documents, the Registration Rights Agreement, the Irrevocable Transfer Agent Instructions
(as defined below), the Lock-Up Agreement (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.
(c)
Issuance of Securities. The issuance of the Notes 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 Initial Closing, the Company shall have reserved from its
duly authorized share capital not less than 100% of the maximum number of Conversion Shares issuable upon conversion of the Notes (assuming
for purposes hereof that (w) all Additional Notes issuable hereunder shall have been issued at an Additional Closing on the Initial Closing
Date, (x) the Notes are convertible at the Floor Price (as defined in the Notes) assuming an Alternate Conversion Date (as defined in
the Notes) as of the date hereof, (y) interest on the Notes shall accrue through the twelve month anniversary of the Initial Closing Date
and will be converted in Common Shares at a conversion price equal to the Floor Price assuming an Alternate Conversion Date 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).
Upon issuance or conversion in accordance with the Notes, the Conversion Shares 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 Shares. 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 and the prospectus requirements
of Canadian Securities Laws. The Company is not generally in the business of trading in, or advising on, securities.
(d)
No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and its Subsidiaries and
the consummation by the Company and its Subsidiaries of the transactions contemplated hereby and thereby (including, without limitation,
the issuance of the Notes, the Conversion Shares and the reservation for issuance of the Conversion Shares) will not (i) result in a violation
of the Articles (as defined below) (including, without limitation, any certificate of designation contained therein), Bylaws (as defined
below), certificate of formation, memorandum of association, articles of association, bylaws or other organizational documents of the
Company or any of its Subsidiaries, or any share capital or other securities of the Company or any of its Subsidiaries, (ii) 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 its 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, Canadian Securities Laws and the rules and
regulations of the Nasdaq Capital Market (the “Principal Market”) and including all applicable foreign, federal and
state laws, rules and regulations, including, without limitation, the laws, rules and regulations of Canada) applicable to the Company
or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected.
(e)
Consents. Neither the Company nor any 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
or applicable Canadian Securities Laws), any Governmental Entity (as defined below) 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 the Company or any Subsidiary is required to obtain pursuant to the preceding sentence have been or will be obtained or effected
on or prior to the applicable Closing Date, and neither the Company nor any of its Subsidiaries are aware of any facts or circumstances
which might prevent the Company or any of its 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 Shares 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 its Subsidiaries, (ii) an “affiliate”
(as defined in Rule 144) of the Company or any of its Subsidiaries or (iii) to its knowledge, a “beneficial owner” of more
than 10% of the Common Shares (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
its 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 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 Subsidiary and their respective representatives.
(g)
No General Solicitation; No Placement Agent’s Fees. Neither the Company, nor any of its 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 in connection with the sale of the Securities. 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. Neither the Company nor any of its Subsidiaries has engaged any
placement agent or other agent in connection with the offer or sale of the Securities.
(h)
No Integrated Offering. None of the Company, its 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, or the filing of a prospectus in respect
of any of the Securities under Canadian Securities Laws, whether through integration with prior offerings or otherwise, or cause this
offering of the Securities to require approval of shareholders of the Company for purposes of Canadian Securities Laws or under any applicable
shareholder approval provisions, including, without limitation, under the rules and regulations of the Principal Market or any other exchange
or automated quotation system on which any of the securities of the Company are listed or designated for quotation. None of the Company,
its 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 the filing of a prospectus under Canadian Securities Laws 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 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 are, in each case, absolute and unconditional regardless of the dilutive effect that such
issuance may have on the ownership interests of other shareholders 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 shareholder, business combination, poison pill (including,
without limitation, any distribution under a rights agreement), shareholder rights plan or other similar anti-takeover provision under
the Articles, 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 shareholder rights plan or similar arrangement relating to accumulations of beneficial
ownership of Common Shares or a change in control of the Company or any of its Subsidiaries.
(k)
SEC Documents; Financial Statements. During the two (2) years prior to the date hereof, the Company has timely filed 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 its 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 its
Subsidiaries has (i) declared or paid any dividends, (ii) sold any assets, individually or in the aggregate, outside of the ordinary course
of business or (iii) made any capital expenditures, individually or in the aggregate, outside of the ordinary course of business. Neither
the Company nor any of its 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 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 its 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 such Closing, will not be Insolvent
(as defined below). For purposes of this Section 3(l), “Insolvent” means, (i) with respect to the Company and its Subsidiaries,
on a consolidated basis, (A) the present fair saleable value of the Company’s and its Subsidiaries’ assets is less than the
amount required to pay the Company’s and its Subsidiaries’ total Indebtedness (as defined below), (B) the Company and its
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 its 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 Subsidiary, individually, (A) the present fair
saleable value of the Company’s or such 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 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 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 its 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 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 its 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 F-1 filed with the
SEC relating to an issuance and sale by the Company of its Common Shares 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 Material Adverse Effect.
(n)
Conduct of Business; Regulatory Permits. Neither the Company nor any of its Subsidiaries is in violation of any term of
or in default under its Articles, any certificate of designation, preferences or rights of any other outstanding series of preferred shares
of the Company or any of its Subsidiaries or Bylaws or their organizational charter, certificate of formation, memorandum of association,
articles of association, Articles or certificate of incorporation or bylaws, respectively. Neither the Company nor any of its Subsidiaries
is in violation of any judgment, decree or order or any statute, ordinance, rule or regulation applicable to the Company or any of its
Subsidiaries, and neither the Company nor any of its 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 Material Adverse Effect. Without limiting
the generality of the foregoing, the Company is not 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 Shares by the Principal
Market in the foreseeable future. During the two years prior to the date hereof, (i) the Common Shares has been listed or designated for
quotation on the Principal Market, (ii) trading in the Common Shares 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 Shares from the Principal Market. The Company and each of its 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 Material Adverse Effect, and
neither the Company nor any such 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 its Subsidiaries or to which the Company or any of its 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 its Subsidiaries, any acquisition
of property by the Company or any of its Subsidiaries or the conduct of business by the Company or any of its 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
Material Adverse Effect on the Company or any of its Subsidiaries.
(o)
Foreign Corrupt Practices. Neither the Company, the Company’s 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 its Subsidiaries in obtaining or retaining business for or with, or directing business to, the Company
or its Subsidiaries.
(p)
Sarbanes-Oxley Act. The Company and each 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. Except as disclosed in Schedule 3(q) hereto, no current or former employee, partner, director,
officer or shareholder (direct or indirect) of the Company or its 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 its 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 shareholder 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 its 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 its Subsidiaries (except for
a passive investment (direct or indirect) in less than 5% of the common equity 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 its Subsidiaries
which relates to the business of the Company or its Subsidiaries or should properly accrue to the Company or its Subsidiaries. No employee,
officer, shareholder or director of the Company or any of its Subsidiaries or member of his or her immediate family is indebted to the
Company or its Subsidiaries, as the case may be, nor is the Company or any of its 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 share option agreements outstanding under any share option plan approved by the Board of Directors of the Company).
(r)
Equity Capitalization.
(i)
Definitions: “Common Shares” means (x) the Company’s common shares, no par value per share,
and (y) any share capital into which such common shares shall have been changed or any share capital resulting from a reclassification
of such common shares.
(ii)
Authorized and Outstanding Share Capital. As of the date hereof, an unlimited amount of Common Shares are authorized, of
which 3,774,262 Common Shares are issued and outstanding and no shares are reserved for issuance pursuant to Common Share Equivalents
(as defined below) (other than the Notes) exercisable or exchangeable for, or convertible into, Common Shares. No Common Shares are held
in the treasury of the Company. “Common Share Equivalents” means any share capital or other security of the Company
or any of its 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 share capital or other security of the Company (including, without
limitation, Common Shares) or any of its Subsidiaries.
(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 Common Shares
that are (A) reserved for issuance pursuant to Common Share Equivalents (other than the Notes) 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 Shares are “affiliates”
without conceding that any such Persons are “affiliates” for purposes of federal securities laws) of the Company or any of
its Subsidiaries. To the Company’s knowledge, no Person owns 10% or more of the Company’s issued and outstanding Common Shares
(calculated based on the assumption that all Common Share Equivalents, 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% shareholder for purposes of federal securities laws).
(iv)
Existing Securities; Obligations. Except as disclosed in the SEC Documents: (A) none of the Company’s or any Subsidiary’s
shares, interests or share capital is subject to preemptive rights or any other similar rights or Liens suffered or permitted by the Company
or any 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 share capital
of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of its
Subsidiaries is or may become bound to issue additional shares, interests or share capital of the Company or any of its 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 share capital of the Company or any of its Subsidiaries;
(C) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any
of their securities under the 1933 Act (except pursuant to the Registration Rights Agreement) or under applicable Canadian Securities
Laws; (D) there are no outstanding securities or instruments of the Company or any of its Subsidiaries which contain any redemption or
similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to redeem a security of the Company or any of its 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 Subsidiary
has any share appreciation rights or “phantom share” 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 and amendments thereto as in effect on the date hereof (the “Articles”), and the terms of
all Common Share Equivalents and the material rights of the holders thereof in respect thereto.
(s)
Indebtedness and Other Contracts. Neither the Company nor any of its Subsidiaries, (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 of its Subsidiaries or by which the Company or any of its Subsidiaries is or may become bound, (ii)
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 Material Adverse Effect, (iii) has any financing statements securing
obligations in any amounts filed in connection with the Company or any of its 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 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 Material
Adverse Effect. Neither the Company nor any of its 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 the Company’s or
its Subsidiaries’ respective businesses and which, individually or in the aggregate, do not or could not have a 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 (as defined below) 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 of its Subsidiaries, the Common Shares 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 of its subsidiaries 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 of its Subsidiaries or any
current or former director or officer of the Company or any of its 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 of its Subsidiaries 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 Subsidiary has been refused any insurance coverage sought
or applied for, and neither the Company nor any such 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 Material Adverse Effect.
(v)
Employee Relations. Neither the Company nor any of its Subsidiaries 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 of its Subsidiaries has
notified the Company or any such Subsidiary that such officer intends to leave the Company or any such Subsidiary or otherwise terminate
such officer’s employment with the Company or any such Subsidiary. No current (or former) executive officer or other key employee
of the Company or any of its Subsidiaries 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 of its Subsidiaries 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. Except as disclosed in Schedule 3(w)(i) hereto, each of the Company and its Subsidiaries 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
of its Subsidiaries (the “Real Property”) owned by the Company or any of its Subsidiaries (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
of its Subsidiaries 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 of its Subsidiaries.
(ii)
Fixtures and Equipment. Except as disclosed in Schedule 3(w)(ii) hereto, 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 its 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 its Subsidiaries’ businesses (as applicable)
in the manner as conducted prior to such Closing. Each of the Company and its 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 its 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 of its Subsidiaries 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 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 of its Subsidiaries,
being threatened, against the Company or any of its Subsidiaries regarding its Intellectual Property Rights. Neither the Company nor any
of its Subsidiaries 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). (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 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:
(1)
have been disposed of or otherwise released from any Real Property of the Company or any of its Subsidiaries in violation of any
Environmental Laws; or
(2)
are present on, over, beneath, in or upon any 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 of its Subsidiaries 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 of its Subsidiaries.
(iii)
Neither the Company nor any of its Subsidiaries 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 of its Subsidiaries has the unrestricted right to vote, and (subject to limitations
imposed by applicable law) to receive dividends and distributions on, all capital securities of its Subsidiaries as owned by the Company
or such Subsidiary.
(aa)
Tax Status. The Company and each of its Subsidiaries (i) has timely made or filed 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 of its Subsidiaries 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 of
its Subsidiaries 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 of its
Subsidiaries.
(cc)
Off Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company or any of
its 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 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 of its Subsidiaries to agree, nor has any Buyer agreed with the Company or any of its Subsidiaries,
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 Shares 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 Common Shares 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 Shares 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 Press Release (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 Common Shares) 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 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 Common Shares), if any, can reduce the value of the existing shareholders’
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 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 of its Subsidiaries 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 of its Subsidiaries 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, (iii) paid or agreed to pay to
any Person any compensation for soliciting another to purchase any other securities of the Company or any of its Subsidiaries or (iv)
paid or agreed to pay any Person for research services with respect to any securities of the Company or any of its Subsidiaries.
(gg)
U.S. Real Property Holding Corporation. Neither the Company nor any of its 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 the Company and each Subsidiary shall so certify upon any Buyer’s request.
(hh)
Registration Eligibility. The Company is eligible to register the Registrable Securities (as defined in the Registration
Rights Agreement) for resale by the Buyers using Form F-3 promulgated under the 1933 Act.
(ii)
Transfer Taxes. On each Closing Date, all share 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 of its 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 the Company nor any of its Subsidiaries or affiliates owns or controls, directly or indirectly, five percent
(5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (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 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.
(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 of its Subsidiaries 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 of its Subsidiaries or any other business entity or enterprise with which the Company
or any 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 of its Subsidiaries.
(mm)
Money Laundering. The Company and its 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 year period, no current or former
officer or director or, to the knowledge of the Company, no current ten percent (10%) or greater shareholder of the Company or any of
its Subsidiaries 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 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 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 Commodity Futures Trading Commission 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)
Share Option Plans(a). Each share option granted by the Company was granted (i) in accordance with the terms of the applicable
share option plan of the Company and (ii) with an exercise price at least equal to the fair market value of the Common Shares on the date
such share option would be considered granted under GAAP and applicable law. No share option granted under the Company’s share 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, share options prior to, or otherwise knowingly coordinate the grant of share options with, the release or other public announcement
of material information regarding the Company or its Subsidiaries or their financial results or prospects.
(pp)
No Disagreements with Accountants and Lawyers(b). 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(c). 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(d). The Company is not aware of any Person 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 of its 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.
(uu)
Federal Power Act. None of the Company nor any of its Subsidiaries is subject to regulation as a “public utility”
under the Federal Power Act, as amended.
(vv)
Ranking of Notes. Other than Permitted Indebtedness (as defined in the Notes) secured by Permitted Liens (as defined in
the Notes), if any, no Indebtedness of the Company, at the applicable Closing, 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.
(ww)
Cybersecurity. The Company and its Subsidiaries’ information technology assets and equipment, computers, systems,
networks, hardware, software, websites, applications, and databases (collectively, “IT Systems”) are adequate for,
and operate and perform in all material respects as required in connection with the operation of the business of the Company and its subsidiaries
as currently conducted, free and clear of all material bugs, errors, defects, Trojan horses, time bombs, malware and other corruptants
that would reasonably be expected to have a Material Adverse Effect on the Company’s business. The Company and its Subsidiaries
have implemented and maintained commercially reasonable physical, technical and administrative controls, policies, procedures, and safeguards
to maintain and protect their material confidential information and the integrity, continuous operation, redundancy and security of all
IT Systems and data, including “Personal Data,” used in connection with their businesses. “Personal Data”
means (i) a natural person’s name, street address, telephone number, e-mail address, photograph, social security number or tax identification
number, driver’s license number, passport number, credit card number, bank information, or customer or account number; (ii) any
information which would qualify as “personally identifying information” under the Federal Trade Commission Act, as amended;
(iii) “personal data” as defined by the European Union General Data Protection Regulation (“GDPR”) (EU
2016/679); (iv) any information which would qualify as “protected health information” under the Health Insurance Portability
and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act (collectively, “HIPAA”);
and (v) any other piece of information that allows the identification of such natural person, or his or her family, or permits the collection
or analysis of any data related to an identified person’s health or sexual orientation. There have been no breaches, violations,
outages or unauthorized uses of or accesses to same, except for those that have been remedied without material cost or liability or the
duty to notify any other person or such, nor any incidents under internal review or investigations relating to the same except in each
case, where such would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. The
Company and its Subsidiaries are presently in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations
of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy
and security of IT Systems and Personal Data and to the protection of such IT Systems and Personal Data from unauthorized use, access,
misappropriation or modification except in each case, where such would not, either individually or in the aggregate, reasonably be expected
to result in a Material Adverse Effect.
(xx)
Compliance with Data Privacy Laws. The Company and its Subsidiaries are, and at all prior times were, in compliance with
all applicable state and federal data privacy and security laws and regulations, including without limitation HIPAA, and the Company and
its Subsidiaries have taken commercially reasonable actions to prepare to comply with, and since May 25, 2018, have been and currently
are in compliance with, the GDPR (EU 2016/679) (collectively, the “Privacy Laws”) except in each case, where such would
not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. To ensure compliance with
the Privacy Laws, the Company and its Subsidiaries have in place, comply with, and take appropriate steps reasonably designed to ensure
compliance in all material respects with their policies and procedures relating to data privacy and security and the collection, storage,
use, disclosure, handling, and analysis of Personal Data (the “Policies”). The Company and its Subsidiaries have at
all times made all disclosures to users or customers required by applicable laws and regulatory rules or requirements, and none of such
disclosures made or contained in any Policy have, to the knowledge of the Company, been inaccurate or in violation of any applicable laws
and regulatory rules or requirements in any material respect. The Company further certifies that neither it nor any Subsidiary: (i) has
received notice of any actual or potential liability under or relating to, or actual or potential violation of, any of the Privacy Laws,
and has no knowledge of any event or condition that would reasonably be expected to result in any such notice; (ii) is currently conducting
or paying for, in whole or in part, any investigation, remediation, or other corrective action pursuant to any Privacy Law; or (iii) is
a party to any order, decree, or agreement that imposes any obligation or liability under any Privacy Law.
(yy)
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 counsel with any information that constitutes or could reasonably be expected to constitute material, non-public information
concerning the Company or any of its Subsidiaries, 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 of its Subsidiaries 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 of its Subsidiaries 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 of its Subsidiaries 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 of
its Subsidiaries 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 of its Subsidiaries 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.
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 6 of this Agreement. The Company 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.
(b)
Form D and Blue Sky. The Company shall file a Form D with respect to the Securities as required under Regulation D within
ten (10) days of each Closing Date and to provide a copy thereof to each Buyer promptly after such filing. The Company shall, on or before
each 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 applicable 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 each 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 Registrable 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 use the proceeds from the sale of the Securities for general corporate purposes, but not,
directly or indirectly, for (i) except as set forth on Schedule 4(d), the satisfaction of any indebtedness of the Company or any of its
Subsidiaries, (ii) the redemption or repurchase of any securities of the Company or any of its Subsidiaries, or (iii) the settlement of
any outstanding litigation.
(e)
Financial Information. The Company agrees to send the following to each Investor (as defined in the Registration Rights
Agreement) during the Reporting Period (i) unless the following are filed with the SEC through EDGAR and are available to the public through
the EDGAR system, within one (1) Business Day after the filing thereof with the SEC, a copy of its Annual Reports on Form 20-F, Reports
of Foreign Issuer on Form 6-K, any other interim reports or any consolidated balance sheets, income statements, shareholders’ equity
statements and/or cash flow statements for any period other than annual, any Report of Foreign Issuer on Form 6-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 EDGAR or are otherwise widely disseminated via a recognized news release service (such as PR Newswire), on the same day as
the release thereof, e-mail copies of all press releases issued by the Company or any of its Subsidiaries and (iii) unless the following
are filed with the SEC through EDGAR, copies of any notices and other information made available or given to the shareholders of the Company
generally, contemporaneously with the making available or giving thereof to the shareholders.
(f)
Listing. The Company shall promptly secure the listing or designation for quotation (as the case may be) of all of the Registrable
Securities upon each national securities exchange and automated quotation system, if any, upon which the Common Shares 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 Registrable 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 Shares’ listing or authorization
for quotation (as the case may be) on the Principal Market, The New York Stock Exchange, the NYSE American, the Nasdaq Global Market or
the Nasdaq Global Select Market (each, an “Eligible Market”). 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 Shares on an Eligible Market.
The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 4(f).
(g)
Fees. The Company shall reimburse the lead Buyer for the 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, (x) a non-accountable amount of $40,000 to be paid upon the Initial Closing Date and an additional
non-accountable amount of $20,000 to be paid upon each Additional Closing Date, in each case, for the legal fees and disbursements of
Kelley Drye & Warren LLP, counsel to the lead Buyer, and (y) 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 applicable
Purchase Price at the applicable Closing, less any amounts previously paid by the Company to Kelley Drye & Warren LLP; provided, that
the Company shall promptly reimburse Kelley Drye & Warren LLP on demand for all Transaction Expenses described in clause (x) above
not so reimbursed through such withholding at such Closing. The Company shall be responsible for the payment of any placement agent’s
fees, financial advisory fees, Controlled Account Bank 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. 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 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 9:00 a.m., New York time, on the date of this Agreement, the Company shall file
a Report of Foreign Issuer on Form 6-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 Guaranties, the form of Security Agreement, the form of Pledge Agreement,
the form of Lock-Up Agreement, and the form of the Registration Rights Agreement) (including all attachments, the “6-K Filing”).
From and after the filing of the 6-K Filing, the Company shall have disclosed all material, non-public information (if any) provided to
any of the Buyers by the Company or any of its Subsidiaries or any of their respective officers, directors, employees or agents in connection
with the transactions contemplated by the Transaction Documents. In addition, effective upon the filing of the 6-K Filing, the Company
acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between
the Company, any of its Subsidiaries or any of their respective officers, directors, 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. The Company shall not, and the Company 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
the Company 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 4(n) of this Agreement, or any of the covenants or agreements contained in any other Transaction Document,
by the Company, any of its 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 the Company, any of its Subsidiaries, or any of
its or their respective officers, directors, employees or agents. No Buyer shall have any liability to the Company, any of its Subsidiaries,
or any of its or their respective officers, directors, employees, affiliates, shareholders or agents, for any such disclosure. To the
extent that the Company delivers any material, non-public information to a Buyer without such Buyer’s consent, the Company 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 Company, its 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 the Press Release and any press release or other public disclosure with respect
to such transactions (i) in substantial conformity with the 6-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 its 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, the Company 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 Company or any of its Subsidiaries.
(iii)
Other Confidential Information. Disclosure Failures; Disclosure Delay Payments. In addition to other remedies set forth
in this Section 4(i), and without limiting anything set forth in any other Transaction Document, at any time after each Closing Date if
the Company, any of its Subsidiaries, or any of their respective officers, directors, employees or agents, provides any Buyer with material
non-public information relating to the Company or any of its Subsidiaries (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 Report of Foreign Issuer on Form 6-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 of its Subsidiaries or any of their
respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents. In
addition, effective upon 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 of its 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.
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 Common Shares 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 principal of Notes purchased by such
Buyer hereunder 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 a Buyer shall be entitled pursuant to this Section
4(i)(iii) 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 Notes) of the Common Shares 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 Shares 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 Common Share, of any Common Shares 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 Notes)) of the Common Shares on the Principal Market for each Trading Day (as defined
in the Notes) 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 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 or Canadian Securities Laws relating to securities that are not the Registrable 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 (as defined below))). “Applicable Date” means the earlier of (x) the first date on which
the resale by the Buyers of all the Registrable Securities 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. Except as set forth below, 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. The Company agrees
that for the period commencing on the date hereof and ending on the date immediately following the 30th Trading 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 of
its Subsidiaries 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 Common Share Equivalents, any debt, any preferred shares 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 4(k) shall not limit, restrict or prevent the Company’s issuance
of (i) Common Shares or standard options to purchase Common Shares to directors, officers or employees of the Company in their capacity
as such pursuant to an Approved Share Plan (as defined below), provided that (1) all such issuances (taking into account the Common Shares
issuable upon exercise of such options) after the date hereof pursuant to this clause (i) do not, in the aggregate, exceed more than 5%
of the Common Shares 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) Common Shares issued upon
the conversion or exercise of Common Share Equivalents (other than standard options to purchase Common Shares issued pursuant to an Approved
Share 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 Common Share Equivalent is made solely pursuant to the conversion, exercise or other method
of issuance (as the case may be) provisions of such Common Share Equivalent that were in effect on the date immediately prior to the date
of this Agreement, the conversion, exercise or issuance price of any such Common Share Equivalents (other than standard options to purchase
Common Shares issued pursuant to an Approved Share Plan that are covered by clause (i) above) is not lowered, none of such Common Share
Equivalents (other than standard options to purchase Common Shares issued pursuant to an Approved Share 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 Common Share
Equivalents (other than standard options to purchase Common Shares issued pursuant to an Approved Share 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; (iv)
any Common Shares or Common Share Equivalents (including any shares of Common Stock issuable, directly or indirectly, upon conversion,
exercise of exchange thereof, collectively, the “Permitted Securities”)(solely to the extent such Permitted Securities
do not constitute Indebtedness and/or are not issued in connection with the incurrence by the Company or any of its Subsidiaries, directly
or indirectly, of any Indebtedness, as applicable) (each, a “Permitted Issuance”, and the holders of any such Permitted
Securities, the “Permitted Holders”), provided, that, until the later of twenty (20) Trading Days after the (x) Initial
Conversion Date (as reduced for any applicable Permitted Issuance) and (y) the Applicable Date, the Company shall not permit any Permitted
Holder (or any other Person) to (as evidenced by a lock-up agreement acceptable to the Required Holders (each, a “Lock-Up Agreement”)),
directly or indirectly, (a) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase, make any
short sale or otherwise dispose of or agree to dispose of, any securities of the Company, or establish or increase a put equivalent position
or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities and Exchange Act of 1934, as amended
and the rules and regulations of the SEC promulgated thereunder with respect to any securities of the Company owned, directly or indirectly,
by such Permitted Holder (including holding as a custodian) or with respect to which such Permitted Holder has beneficial ownership within
the rules and regulations, or (b) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of any of the Permitted Securities; (each of the foregoing in clauses (i) through (v), collectively
the “Excluded Securities”). “Approved Share 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 Common Shares and standard
options to purchase Common Shares may be issued to any employee, officer or director for services provided to the Company in their capacity
as such.
(l)
Conduct of Business. The business of the Company and its 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 Material Adverse Effect.
(m)
Other Notes; Variable Securities. So long as any Notes remain outstanding, the Company and each 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 Subsidiary (i) issues or sells any Common Share Equivalents
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 Common Shares at any time after the initial issuance of such Common Share Equivalents, 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 Common Share Equivalents 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 Shares, 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 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.
(n)
Participation Right. At any time on or prior to the later of (x) the first anniversary of the Initial Closing Date and (y)
the last Additional Closing Date hereunder, neither the Company nor any of its Subsidiaries shall, directly or indirectly, effect any
Subsequent Placement unless the Company shall have first complied with this Section 4(n). The Company acknowledges and agrees that
the right set forth in this Section 4(n) is a right granted by the Company, separately, to each Buyer.
(i)
At least five (5) 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 three (3) 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 2% of the Offered Securities, provided that the number of Offered Securities which such Buyer shall have the right
to subscribe for under this Section 4(n) 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 fifth
(5th) 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 fifth (5th) 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 Report of Foreign Issuer on Form 6-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 4(n)(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 4(n)(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 4(n) 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 4(n)(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 4(n)(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 4(n) 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, and (y) 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 4(n) 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 of its
Subsidiaries. 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 4(n). 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 4(n)(ii).
(ix)
The restrictions contained in this Section 4(n) shall not apply in connection with the issuance of any Excluded Securities. The
Company shall not circumvent the provisions of this Section 4(n) by providing terms or conditions to one Buyer that are not provided to
all.
(o)
Dilutive Issuances. For so long as any Notes remain outstanding, the Company shall not, in any manner, enter into or affect
any Dilutive Issuance (as defined in the Notes) if the effect of such Dilutive Issuance is to cause the Company to be required to issue
upon conversion of any Notes any Common Shares in excess of that number of Common Shares which the Company may issue upon conversion of
the Notes without breaching the Company’s obligations under the rules or regulations of the Principal Market.
(p)
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.
(q)
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.
(r)
Corporate Existence. So long as any Buyer beneficially owns any Notes, 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.
(s)
Share Splits. Until the Notes and all notes issued pursuant to the terms thereof are no longer outstanding, the Company
shall not effect any share combination, reverse share 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).
(t)
Conversion Procedures. Each of the form of Conversion Notice (as defined in the Notes) included in the Notes set forth the
totality of the procedures required of the Buyers in order to convert the Notes. Except as provided in Section 5(d), no additional legal
opinion, other information or instructions shall be required of the Buyers to convert their Notes. The Company shall honor conversions
of the Notes and shall deliver the Conversion Shares in accordance with the terms, conditions and time periods set forth in the Notes.
(u)
Collateral Agent. Each Buyer hereby (i) appoints [BUYER], as the collateral agent hereunder and under the other Security
Documents (in such capacity, the “Collateral Agent”), and (ii) 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 any of the other Security Documents, a fiduciary relationship in respect of any Buyer. Neither
the Collateral Agent nor any of its officers, directors, employees or agents shall have any liability to any Buyer for any action taken
or omitted to be taken in connection hereof or any other Security Document 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. The Collateral Agent shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the instructions
of the Required Holders, and such instructions shall be binding upon all holders of Notes; provided, however, that the Collateral Agent
shall not be required to take any action which, in the reasonable opinion of the Collateral Agent, exposes the Collateral Agent to liability
or which is contrary to this Agreement or any other Transaction Document or applicable law. 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.
(v)
Successor Collateral Agent.
(i)
The Collateral Agent may resign from the performance of all its functions and duties hereunder and under the other Transaction
Documents at any time by giving at least ten (10) Business Days’ prior written notice to the Company and each holder of Notes. Such
resignation shall take effect upon the acceptance by a successor Collateral Agent of appointment pursuant to clauses (ii) and (iii) below
or as otherwise provided below. If at any time the Collateral Agent (together with its affiliates) beneficially owns less than $100,000
in aggregate principal amount of Notes, the Required Holders may, by written consent, remove the Collateral Agent from all its functions
and duties hereunder and under the other Transaction Documents.
(ii)
Upon any such notice of resignation or removal, the Required Holders shall appoint a successor collateral agent. Upon the acceptance
of any appointment as Collateral Agent hereunder by a successor agent, such successor collateral agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the collateral agent, and the Collateral Agent shall be discharged
from its duties and obligations under this Agreement and the other Transaction Documents. After the Collateral Agent’s resignation
or removal hereunder as the collateral agent, the provisions of this Section 4(v) shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was the Collateral Agent under this Agreement and the other Transaction Documents.
(iii)
If a successor collateral agent shall not have been so appointed within ten (10) Business Days of receipt of a written notice of
resignation or removal, the Collateral Agent shall then appoint a successor collateral agent who shall serve as the Collateral Agent until
such time, if any, as the Required Holders appoint a successor collateral agent as provided above.
(iv)
In the event that a successor Collateral Agent is appointed pursuant to the provisions of this Section 4(v) that is not a Buyer
or an affiliate of any Buyer (or the Required Holders or the Collateral Agent (or its successor), as applicable, notify the Company that
they or it wants to appoint such a successor Collateral Agent pursuant to the terms of this Section 4(v)), the Company and each Subsidiary
thereof covenants and agrees to promptly take all actions reasonably requested by the Required Holders or the Collateral Agent (or its
successor), as applicable, from time to time, to secure a successor Collateral Agent satisfactory to the requesting part(y)(ies), in their
sole discretion, including, without limitation, by paying all reasonable and customary fees and expenses of such successor Collateral
Agent, by having the Company and each Subsidiary thereof agree to indemnify any successor Collateral Agent pursuant to reasonable and
customary terms and by each of the Company and each Subsidiary thereof 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.
(w)
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.
(x)
General Solicitation(e). 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.
(y)
Integration(f). 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 shareholder 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.
(z)
Notice of Disqualification Events(g). The Company will notify the Buyers in writing, prior to each 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.
(aa)
Subsidiary Guarantee(h). For so long as any Notes remain outstanding, upon any entity becoming a direct, or indirect, U.S.
and/or Canadian Subsidiary of the Company, the Company shall cause each such U.S. and/or Canadian Subsidiary to become party to the Guaranty
by executing a joinder to the Guaranty reasonably satisfactory in form and substance to the Required Holders.
(bb)
Reservation of Shares. So long as any of the Notes 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 100% of the maximum number of Conversion Shares issuable
upon conversion of the Notes then outstanding (assuming for purposes hereof that (w) all Additional Notes issuable hereunder shall have
been issued at an Additional Closing on the Initial Closing Date, (x) the Notes are convertible at the Floor Price (as defined in the
Notes) assuming an Alternate Conversion Date as of such applicable date of determination, (y) interest on the Notes shall accrue through
twelve month anniversary of the Initial Closing Date and will be converted in shares of Common Shares at a conversion price equal to the
Floor Price assuming an Alternate Conversion Date as of such applicable date of determination and (z) any such conversion shall not take
into account any limitations on the conversion of the Notes set forth in the Notes) (collectively, the “Required Reserve Amount”);
provided that at no time shall the number of Common Shares reserved pursuant to this Section 4(bb) be reduced other than proportionally
in connection with any conversion, exercise and/or redemption, as applicable of Notes. If at any time the number of Common Shares 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 shareholders 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 shareholder 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.
(cc)
No Waiver of Lock-Up Agreement. The Company shall not amend, waive, modify or fail to use best efforts to enforce any provision
of the Lock-Up Agreement. For the avoidance of doubt, no Buyer shall be a third party beneficiary of any Lock-Up Agreement.
(dd)
Closing Documents. On or prior to fourteen (14) calendar days after each Closing Date, the Company agrees to deliver, or
cause to be delivered, to each Buyer and Kelley Drye & Warren 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 7 hereof or otherwise.
(ee)
Post-Closing Conditions. On or prior to the fourteen (14) calendar day anniversary of the Initial Closing Date (unless extended
with the written consent of the Buyers):
(i)
The Company shall have delivered to such Buyer a certificate evidencing the formation and good standing of the Company in 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 fourteen (14) days of the Initial Closing Date.
(ii)
The Company shall have delivered to such Buyer a certificate evidencing the Company’s qualification as a foreign corporation
and good standing issued by the Secretary of State (or comparable office) of each jurisdiction in which the Company and conducts business
and is required to so qualify, as of a date within fourteen (14) days of the Initial Closing Date.
(iii)
The Company shall have delivered to such Buyer a certified copy of the Articles within fourteen (14) days of the Initial Closing
Date.
(iv)
The Company shall have delivered or caused to be delivered to each Buyer and the Collateral Agent (A) certified copies of requests
for copies of information on Form UCC-11, listing all effective financing statements which name as debtor the Company or any of its Subsidiaries
and which are filed in such office or offices as may be necessary or, in the opinion of the Collateral Agent or the Buyers, desirable
to perfect the security interests purported to be created by the Security Agreement, together with copies of such financing statements,
none of which, except as otherwise agreed in writing by the Collateral Agent, shall cover any of the Collateral (as defined in the Security
Agreement), and the results of searches for any tax Lien and judgment Lien filed against such Person or its property, which results, except
as otherwise agreed to in writing by the Collateral Agent and the Buyers, shall not show any such Liens; and (B) a perfection certificate,
duly completed and executed by the Company and each of its Subsidiaries, in form and substance satisfactory to the Buyers (the “Perfection
Certificate”).
(v)
The Company shall have delivered to such Buyer a letter from the Company’s transfer agent certifying the number of Common
Shares outstanding on or immediately after the Initial Closing Date.
5.
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 in which the Company shall record the name and address
of the Person in whose name the Notes have been issued (including the name and address of each transferee), the principal amount of the
Notes held by such Person, and the number of Conversion Shares issuable pursuant to the terms of the Notes 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 in such amounts
as specified from time to time by each Buyer to the Company upon conversion of the Notes. The Company represents and warrants that no
instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5(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 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 5(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 5(b) will be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Section 5(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)
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 share certificates):
[NEITHER THE ISSUANCE AND SALE OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE 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 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 5(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)
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 share 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 5(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 (“FAST”) and such Securities are Conversion Shares, credit the aggregate number of Common Shares 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 FAST, 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 Common Shares 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 FAST, a certificate for the number of Conversion Shares to which such Buyer is entitled and register such Conversion Shares on the
Company’s share register or, if the Transfer Agent is participating in FAST, to credit the balance account of such Buyer or such
Buyer’s designee with DTC for such number of Conversion Shares submitted for legend removal by such Buyer pursuant to Section 5(d)
above or (II) if the Registration Statement covering the resale of the Conversion Shares submitted for legend removal by such Buyer pursuant
to Section 5(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 electronically without any restrictive legend by crediting such aggregate number of Conversion Shares
submitted for legend removal by such Buyer pursuant to Section 5(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 Common Shares 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
Shares 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 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 FAST, the Company shall fail to issue
and deliver a certificate to a Buyer and register such Common Shares on the Company’s share register or, if the Transfer Agent is
participating in FAST, credit the balance account of such Buyer or such Buyer’s designee with DTC for the number of Common Shares
to which such Buyer submitted for legend removal by such Buyer pursuant to Section 5(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, stock loan or otherwise) Common Shares corresponding
to all or any portion of the Common Shares submitted for legend removal by such Buyer pursuant to Section 5(d) above (a “Buy-In”),
then the Company shall, within two (2) Trading Days 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, stock loan costs
and other out-of-pocket expenses, if any) for the Common Shares so purchased (including, without limitation, by and other Person in respect,
or on behalf of the holder) (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 Common Shares 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 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 Notes) of the Common Shares 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 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 Common Shares (or to electronically deliver such Common Shares) 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 5(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 held by such Buyer.
(f)
FAST Compliance. While any Notes remain outstanding, the Company shall maintain a transfer agent that participates in FAST.
(g)
Post-Closing Deliverables. If the Company fails to satisfy any condition of Section 7(a) or 7(b) (as applicable) below on
or prior to each Closing Date (other than Sections 7(a)(i) and 7(b)(i), as applicable) and the Buyers elect to effect the applicable Closing
notwithstanding such failure, the Company shall be required to satisfy each such condition in Section 7(a) or 7(b) (as applicable) below
(including, without limitation, providing to the Buyers any deliverables required therein) by no later than the seventh (7th)
calendar day after each Closing Date.
6.
CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.
(a)
The obligation of the Company hereunder to issue and sell the Initial Notes to each Buyer at the Initial Closing is subject to
the satisfaction, at or before the Initial 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 Initial Purchase Price (less, in the case of any Buyer,
the amounts withheld pursuant to Section 4(g)) for the Initial Note being purchased by such Buyer at the Initial Closing by wire
transfer of immediately available funds in accordance with the Initial 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 Initial 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 Initial Closing Date.
(b)
The obligation of the Company hereunder to issue and sell the Additional Notes to each Buyer at each Additional Closing is subject
to the satisfaction, at or before the applicable Additional 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 Additional Purchase Price (less, in the case of any Buyer,
the amounts withheld pursuant to Section 4(g)) for the Additional Note being purchased by such Buyer at the Additional Closing by
wire transfer of immediately available funds in accordance with the Additional 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 Additional 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 Additional Closing Date.
7.
CONDITIONS TO EACH BUYER’S OBLIGATION TO PURCHASE.
(a)
The obligation of each Buyer hereunder to purchase its Initial Note at the Initial Closing is subject to the satisfaction, at or
before the Initial 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 Company with prior written notice thereof:
(i)
The Company 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 an Initial Note in such original
principal amount as is set forth across from such Buyer’s name in column (3) of the Schedule of Buyers, as being purchased by such
Buyer at the Initial Closing pursuant to this Agreement.
(ii)
Such Buyer shall have received the opinion of Loeb & Loeb LLP, the Company’s counsel, dated as of the Initial Closing
Date, in the form acceptable to such Buyer.
(iii)
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.
(iv)
[Intentionally Omitted.]
(v)
[Intentionally Omitted.]
(vi)
[Intentionally Omitted.]
(vii)
[Intentionally Omitted.]
(viii)
The Company and each 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 Subsidiary and dated as of the Initial Closing Date, as to (i) the resolutions consistent with
Section 3(b) as adopted by the Company’s and each Subsidiary’s board of directors in a form reasonably acceptable to
such Buyer, and (ii) the Articles of the Company and the organizational documents of each Subsidiary, each as in effect at the Initial
Closing.
(ix)
Each and every representation and warranty of the Company shall be true and correct as of the date when made and as of the Initial
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 the Company shall have performed, satisfied and complied in all respects with
the covenants, agreements and conditions required to be performed, satisfied or complied with by the Company at or prior to the Initial
Closing Date. Such Buyer shall have received a certificate, duly executed by the Chief Executive Officer of the Company, dated as of the
Initial 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.
(x)
[Intentionally Omitted.]
(xi)
The Common Shares (A) shall be designated for quotation or listed (as applicable) on the Principal Market and (B) shall not have
been suspended, as of the Initial 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 Initial 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.
(xii)
The Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the sale
of the Securities, including without limitation, those required by the Principal Market, if any.
(xiii)
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.
(xiv)
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 Material Adverse Effect.
(xv)
The Company shall have obtained approval of the Principal Market to list or designate for quotation (as the case may be) the Conversion
Shares.
(xvi)
In accordance with the terms of the Security Documents, the Company shall have delivered to the Collateral Agent (A) original certificates
(I) representing the Subsidiaries’ shares of share capital to the extent such subsidiary is a corporation or otherwise has certificated
equity and (II) representing all other equity interests and all promissory notes required to be pledged thereunder, in each case, accompanied
by undated share powers and allonges executed in blank and other proper instruments of transfer and (B) appropriate financing statements
on Form UCC-1 to be duly filed in such office or offices as may be necessary or, in the opinion of the Collateral Agent, desirable to
perfect the security interests purported to be created by each Security Document.
(xvii)
[Intentionally Omitted.]
(xviii)
The Collateral Agent shall have received the Security Agreement, duly executed by the Company and each of its Subsidiaries, together
with the original share certificates representing all of the equity interests and all promissory notes required to be pledged thereunder,
accompanied by undated share powers and allonges executed in blank and other proper instruments of transfer.
(xix)
[Intentionally Omitted.]
(xx)
[Intentionally Omitted.]
(xxi)
The Pledge Agreement shall have been executed and delivered to such Buyer by the Principal Shareholder, the Company and the other
Buyers.
(xxii)
The Company shall deliver, or cause to be delivered, to each Buyer a certificate with respect to the Pledged Shares (as defined
in the Pledge Agreement) to be held by each such Buyer duly manually endorsed for transfer on the back of the share certificate or on
a share power to be attached to such share certificate, in each case duly executed in the name that appears on the face of such certificate,
including a Medallion Guarantee stamp placed below the signature on the back of such certificate or below the signature on any accompanying
share power.
(xxiii)
Such Buyer shall have received a letter on the letterhead of the Company (the “Initial Flow of Funds Letter”)
duly executed by the Chief Financial Officer of the Company, setting forth the wire amounts of each Buyer and the wire transfer instructions
of the Company.
(xxiv)
The Company and its 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.
(b)
The obligation of each Buyer hereunder to purchase its Additional Note at the Additional Closing is subject to the satisfaction,
at or before the Additional 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 Company with prior written notice thereof:
(i)
The Company and each Subsidiary (as the case may be) shall have duly executed and delivered to such Buyer each applicable Transaction
Documents to which it is a party and the Company shall have duly executed and delivered to such Buyer such Additional Note being purchased
by such Buyer at such Additional Closing pursuant to this Agreement.
(ii)
Such Buyer shall have received the opinion of Loeb & Loeb LLP, the Company’s counsel, dated as of the Additional Closing
Date, in the form acceptable to such Buyer.
(iii)
The Company shall have delivered to such Buyer a certificate evidencing the formation and good standing of the Company and each
of its 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 Additional Closing Date.
(iv)
The Company shall have delivered to such Buyer a certificate evidencing the Company’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 the Company
and each Subsidiary conducts business and is required to so qualify, as of a date within ten (10) days of the Additional Closing Date.
(v)
The Company shall have delivered to such Buyer a certified copy of the Articles within ten (10) days of the Additional Closing
Date.
(vi)
Each Subsidiary shall have delivered to such Buyer a certified copy of its Articles (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 Additional Closing Date.
(vii)
The Company and each 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 Subsidiary and dated as of the Additional Closing Date, as to (i) the resolutions consistent
with Section 3(b) as adopted by the Company’s and each Subsidiary’s board of directors in a form reasonably acceptable
to such Buyer, and (ii) the Articles of the Company and the organizational documents of each Subsidiary, each as in effect at the Additional
Closing.
(viii)
Each and every representation and warranty of the Company shall be true and correct as of the date when made and as of the Additional
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 the Company shall have performed, satisfied and complied in all respects with
the covenants, agreements and conditions required to be performed, satisfied or complied with by the Company at or prior to the Additional
Closing Date. Such Buyer shall have received a certificate, duly executed by the Chief Executive Officer of the Company, dated as of the
Initial 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.
(ix)
The Company shall have delivered to such Buyer a letter from the Company’s transfer agent certifying the number of Common
Shares outstanding on the Additional Closing Date immediately prior to the Additional Closing.
(x)
The Common Shares (A) shall be designated for quotation or listed (as applicable) on the Principal Market and (B) shall not have
been suspended, as of the Additional 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 Initial 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.
(xi)
The Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the sale
of the Securities, including without limitation, those required by the Principal Market, if any.
(xii)
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.
(xiii)
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 Material Adverse Effect.
(xiv)
In accordance with the terms of the Security Documents, the Company shall have delivered to the Collateral Agent (A) original certificates
(I) representing the Subsidiaries’ shares of share capital to the extent such subsidiary is a corporation or otherwise has certificated
equity and (II) representing all other equity interests and all promissory notes required to be pledged thereunder, in each case, accompanied
by undated share powers and allonges executed in blank and other proper instruments of transfer and (B) appropriate financing statements
on Form UCC-1 to be duly filed in such office or offices as may be necessary or, in the opinion of the Collateral Agent, desirable to
perfect the security interests purported to be created by each Security Document.
(xv)
Within two (2) Business Days prior to the Additional Closing, the Company shall have delivered or caused to be delivered to each
Buyer and the Collateral Agent (A) certified copies of requests for copies of information on Form UCC-11, listing all effective financing
statements which name as debtor the Company or any of its Subsidiaries and which are filed in such office or offices as may be necessary
or, in the opinion of the Collateral Agent or the Buyers, desirable to perfect the security interests purported to be created by the Security
Agreement, together with copies of such financing statements, none of which, except as otherwise agreed in writing by the Collateral Agent,
shall cover any of the Collateral (as defined in the Security Agreement), and the results of searches for any tax Lien and judgment Lien
filed against such Person or its property, which results, except as otherwise agreed to in writing by the Collateral Agent and the Buyers,
shall not show any such Liens.
(xvi)
The Collateral Agent shall have received amended and restated schedules to the Security Agreement, if applicable.
(xvii)
The Collateral Agent shall have received amended and restated schedules to the Intellectual Property Security Agreement, if applicable.
(xviii)
Such Buyer shall have received a letter on the letterhead of the Company (the “Additional Flow of Funds Letter”)
duly executed by the Chief Financial Officer of the Company, setting forth the wire amounts of each Buyer and the wire transfer instructions
of the Company.
(xix)
The Company and its 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.
8.
TERMINATION.
In the event that the Initial
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 7(b)
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 shall
be applicable only to such Buyer providing such written notice, provided further that no such termination shall affect any obligation
of the Company under this Agreement to reimburse such Buyer for the expenses described in Section 4(g) above. Nothing contained in
this Section 7(b) 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.
9.
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 Delaware, without giving effect to any provision of law or rule
(whether of the State of Delaware or any other jurisdictions) that would cause the application of the laws of any jurisdictions other
than the State of Delaware. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting
in Wilmington, Delaware, 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. The Company hereby appoints such Person set forth on Schedule 9(a) attached hereto (the “Service
Agent”), as its agent for service of process in New York. 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 the Company in any other jurisdiction to collect on the Company’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.
The choice of the laws of the State of Delaware as the governing law of this Agreement is a valid choice of law and would be recognized
and given effect to in any action brought before a court of competent jurisdiction in the Canada, except for those laws (i) which such
court considers to be procedural in nature, (ii) which are revenue or penal laws or (iii) the application of which would be inconsistent
with public policy, as such term is interpreted under the laws of the Canada. The Company or any of their respective properties, assets
or revenues does not have any right of immunity under Canada or Delaware law, from any legal action, suit or proceeding, from the giving
of any relief in any such legal action, suit or proceeding, from set-off or counterclaim, from the jurisdiction of any Canada and the
Delaware or United States federal court, from service of process, attachment upon or prior to judgment, or attachment in aid of execution
of judgment, or from execution of a judgment, or other legal process or proceeding for the giving of any relief or for the enforcement
of a judgment, in any such court, with respect to its obligations, liabilities or any other matter under or arising out of or in connection
with this Agreement; and, to the extent that the Company, or any of its properties, assets or revenues may have or may hereafter become
entitled to any such right of immunity in any such court in which proceedings may at any time be commenced, the Company hereby waives
such right to the extent permitted by law and hereby consents to such relief and enforcement as provided in this Agreement and the other
Transaction Documents.
(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.
(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 the Company and/or any of its 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 Company and its 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 of time 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 Company, its Subsidiaries, their affiliates and Persons acting on their behalf, including, without limitation, any transactions by
any Buyer with respect to Common Shares 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, the Company or any of its 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 the Company or any of its 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 the Company and/or any of its Subsidiaries and any Buyer, or any instruments any
Buyer received from the Company and/or any of its 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 Company 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 Company 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 9(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); and provided
further that the provisions of Sections 4(u) and 4(v) above cannot be amended or waived without the additional prior written approval
of the Collateral Agent or its successor. 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 9(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. From the date hereof and while any Notes are outstanding, the Company shall not be permitted to receive any
consideration from a Buyer or a holder of Notes that is not otherwise contemplated by the Transaction Documents in order to, directly
or indirectly, induce the Company or any Subsidiary (i) to treat such Buyer or holder of Notes in a manner that is more favorable than
to other similarly situated Buyers or holders of Notes, or (ii) to treat any Buyer(s) or holder(s) of Notes in a manner that is less favorable
than the Buyer or holder of Notes 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. The
Company 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, the Company 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 the Company, any Subsidiary or otherwise. As a material inducement for each Buyer to enter into this Agreement, the Company 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 Company’s 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 Company’s representations and warranties contained in this Agreement or any other
Transaction Document. “Required Holders” means (I) prior to the Initial Closing Date, each Buyer entitled to purchase
Notes at the Initial Closing and (II) on or after the Initial Closing Date, holders of a majority of the Registrable Securities as of
such time (excluding any Registrable Securities held by the Company or any of its Subsidiaries as of such time) issued or issuable hereunder
or pursuant to the Notes (or the Buyers, with respect to any waiver or amendment of Section 4(o)); provided, that such majority must include
the [BUYER].
(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 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 an overnight courier service with next day delivery
specified, in each case, properly addressed to the party to receive the same. The mailing addresses and e-mail addresses for such communications
shall be:
If to the Company:
Visionary Holdings Inc.
105 Moatfield Drive
Unit 1003
Toronto, Ontario
Canada M3B 0A2
Telephone: (905) 739-0593
Attention: Charles Y. Fu, director, Senior Vice President &
General Counsel
E-Mail: charlesfuesq@gmail.com
With a copy (for informational purposes only) to:
Loeb & Loeb LLP
345 Park Avenue
New York, NY 10154
Telephone: (212) 407-4159
Attention: Mitchell S. Nussbaum
E-Mail: mnussbaum@loeb.com
GH Law Firm LLC
880 Third Avenue, 5th Floor
New York, NY 10022
Attention: Annie P. Huang
E-Mail: panpinky19@gmail.com
If to the Transfer Agent:
Issuer Direct Corporation
One Glenwood Ave.
Suite 1001, Raleigh NC 27603
Telephone: (919) 744-2722 ext. 711-0
Attention: Julie Felix, Senior Compliance and Corporate Actions Administrator
E-Mail: Julie.Felix@issuerdirect.com
If to a Buyer, to its mailing address and e-mail
address 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:
Kelley Drye & Warren LLP
3 World Trade Center
175 Greenwich Street
New York, NY 10007
Telephone: (212) 808-7540
Attention: Michael A. Adelstein, Esq.
E-mail: madelstein@kelleydrye.com
or to such other mailing address and/or e-mail
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 Kelley Drye & Warren 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 e-mail containing the time, date and recipient’s e-mail or (C)
provided by an overnight courier service shall be rebuttable evidence of personal service, receipt by e-mail 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. The Company shall not 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 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 Company, 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 9(k).
(i)
Survival. The representations, warranties, agreements and covenants shall survive each 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 Company
shall defend, protect, indemnify and hold harmless each Buyer and each holder of any Securities and all of their shareholders, 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 Company or any Subsidiary in any of the Transaction Documents, (ii) any breach of any covenant,
agreement or obligation of the Company 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 for these purposes a derivative action brought
on behalf of the Company or any Subsidiary) 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 4(i), or (D) the status of such Buyer or holder of the Securities either as an investor in the Company 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
Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of
the Indemnified Liabilities which is permissible under applicable law. Except as otherwise set forth herein, the mechanics and procedures
with respect to the rights and obligations under this Section 9(k) shall be the same as those set forth in Section 6 of the
Registration Rights Agreement.
(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, Common Shares
and any other numbers in this Agreement that relate to the Common Shares shall be automatically adjusted for any share splits, share dividends,
share combinations, recapitalizations or other similar transactions that occur with respect to the Common Shares 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 Company 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,
the Company recognizes that in the event that it or any 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. The Company
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 the Company
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 Company 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 the Company 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 the Company,
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 the Company 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 9(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 Delaware 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 9(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 9(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 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 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 Company 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 Company shall not assert any such claim with respect
to such obligations or the transactions contemplated by the Transaction Documents or any matters, and the Company acknowledges that the
Buyers 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 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.
The Company and each Buyer confirms that each Buyer has independently participated with the Company and its Subsidiaries 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 Company,
not the action or decision of any Buyer, and was done solely for the convenience of the Company and its Subsidiaries and not because it
was 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 Company, each Subsidiary and a Buyer, solely, and not between the Company, its Subsidiaries
and the Buyers collectively and not between and among the Buyers.
[signature pages follow]
IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written
above.
|
COMPANY:
|
|
VISIONARY HOLDINGS INC.
By: _______________________________
Name: Charles Y. Fu
Title: Director, Senior Vice President
&
General Counsel
|
[Signature Page to Securities Purchase Agreement]
IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Agreement to be duly executed as of the date first written
above.
| |
BUYER:
|
| |
[BUYER]
By: _______________________________
Name:
Title:
|
[Signature
Page to Securities Purchase Agreement]
SCHEDULE OF BUYERS
| (1) |
(2) |
(3) |
(4) |
(5) |
(6) |
(7) |
| |
|
|
|
|
|
|
| Buyer |
Mailing
Address and E-mail Address |
Original
Principal Amount of Initial Notes |
Aggregate
Maximum Original Principal Amount of
Additional Notes for Additional Closings |
Initial
Purchase Price |
Aggregate
Maximum Additional Purchase Price |
Legal
Representative’s
Mailing Address and E-mail Address |
| |
|
|
|
|
|
|
|
|
$1,000,000 |
$5,000,000 |
$900,000 |
$4,500,000 |
Kelley Drye & Warren
LLP
3 World Trade Center
175 Greenwich Street
New York, NY 10007
Telephone: (212) 808-7540
Attention: Michael A.
Adelstein, Esq.
|
Exhibit 10.2
[FORM OF 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), ZHONG CHEN, 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). ZHONG CHEN MAY BE REACHED AT TELEPHONE NUMBER (905) 739-0593.
Visionary
Holdings Inc.
Senior
Secured Convertible Note
| Issuance Date: [●] 20__ |
Original Principal Amount: U.S. $[●] |
FOR VALUE RECEIVED,
Visionary Holdings Inc., a company organized under the laws of Canada (the “Company”), hereby promises to pay to the
order of [BUYER] 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 to pay interest
(“Interest”) on any outstanding Principal at the applicable Interest Rate (as defined below) from the date set forth
above as the Issuance Date (the “Issuance Date”) until 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 October 2, 2024
(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; INTEREST RATE.
(a)
Interest on this Note shall commence accruing on the Issuance Date and shall be computed on the basis of a 360-day year and twelve
30-day months and shall be payable in arrears on each Interest Date and shall compound on each Interest Date (if unpaid on such Interest
Date), and shall be payable in accordance with the terms of this Note. Interest shall be paid on such Interest Date in cash.
(b)
Prior to the payment of Interest on an Interest Date, Interest on this Note shall accrue at the Interest Rate and be payable by
way of inclusion of the Interest in the Conversion Amount on each Conversion Date in accordance with Section 3(b)(i) or upon any redemption
in accordance with Section 11 or any required payment upon any Bankruptcy Event of Default. From and after the occurrence and during the
continuance of any Event of Default, the Interest Rate shall automatically be increased to eighteen percent (18.0%) per annum (the “Default
Rate”). In the event that such Event of Default is subsequently cured (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 Interest Date), the adjustment
referred to in the preceding sentence shall cease to be effective as of the calendar day immediately following the date of such cure;
provided that the Interest as calculated and unpaid at such increased rate 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
of such Event of Default.
3.
CONVERSION OF NOTES. At any time after the Initial Conversion Date, this Note shall be convertible into validly issued,
fully paid and non-assessable Common Shares (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 earlier of (x) the earlier
of (i) July 2, 2025 and (ii) twenty (20) Trading Days prior to the date that any Permitted Securities (as defined in the Securities Purchase
Agreement) may be initially sold, exercised, converted, exchanged, as applicable, after giving effect to any related Lock-Up Agreement
(as defined in the Securities Purchase Agreement) with respect thereto, and (y) the initial date after the date hereof of any Event of
Default (as applicable, the “Initial Conversion 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 Common Shares in accordance
with Section 3(c), at the Conversion Rate (as defined below). The Company shall not issue any fraction of a Common Share upon any conversion.
If the issuance would result in the issuance of a fraction of a Common Share, the Company shall round such fraction of a Common Share
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 Shares upon conversion of any Conversion Amount.
(b)
Conversion Rate. The number of Common Shares 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 Common Shares on any date (a “Conversion Date”),
the Holder shall deliver (whether via 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 (each, a “Conversion Notice”)
to the Company. If required by Section 3(c)(iii), within one (1) Trading Day 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 the date of receipt of a
Conversion Notice, the Company shall transmit by electronic mail an acknowledgment, in the form attached hereto as Exhibit II,
of confirmation of receipt of such Conversion Notice and representation as to whether such Common Shares may then be resold pursuant to
Rule 144 or an effective and available registration statement (each, an “Acknowledgement”) 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 first (1st) 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 Common Shares issuable pursuant to
such Conversion Notice) (the “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 Common Shares 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 Common Shares 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 two (2) 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 Common Shares issuable upon a conversion of this Note shall be treated for all purposes
as the record holder or holders of such Common Shares on the Conversion Date; provided, that the Holder shall be deemed to have waived
any voting rights of any such Common Shares that may arise during the period commencing on such Conversion Date, through, and including
such applicable Share Delivery Deadline (each, an “Conversion Period”), as necessary, such that the aggregate voting
rights of any Common Shares beneficially owned by the Holder and/or Attribution Parties, collectively, on any such applicable date shall
not exceed the Maximum Percentage (as defined below) as a result of any such conversion of this Note. 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 Common Shares 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, for any reason or for no reason, 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 Common Shares to which the Holder is entitled and register such Common Shares 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 Common Shares 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 Common Shares 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 Common Shares electronically without any restrictive legend by crediting such aggregate number of
Common Shares 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 Common Shares is not timely effected an amount equal to 2% of the product of (A) the
sum of the number of Common Shares not issued to the Holder on or prior to the Share Delivery Deadline and to which the Holder is entitled,
multiplied by (B) any trading price of the Common Shares 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 Common Shares 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 Common Shares 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 acquires (in an open market transaction, stock loan or otherwise) Common
Shares corresponding to all or any portion of the number of Common Shares 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, stock loan costs and other out-of-pocket expenses,
if any) for the Common Shares so acquired (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 Common Shares) or credit the balance account of such Holder or such Holder’s designee, as applicable, with DTC for the
number of Common Shares to which the Holder is entitled upon the Holder’s conversion hereunder (as the case may be) (and to issue
such Common Shares) shall terminate, or (II) promptly honor its obligation to so issue and deliver to the Holder a certificate or certificates
representing such Common Shares or credit the balance account of such Holder or such Holder’s designee, as applicable, with DTC
for the number of Common Shares 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 Common Shares
multiplied by (y) the lowest Closing Sale Price of the Common Shares 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 Common Shares (or to electronically deliver such Common Shares) 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 Common Shares issuable to the Holder in connection with a conversion of this Note, the Company shall issue
to the Holder the number of Common Shares 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 Common Shares outstanding immediately after giving effect to such conversion. For purposes of the foregoing sentence, the aggregate
number of Common Shares beneficially owned by the Holder and the other Attribution Parties shall include the number of Common Shares
held by the Holder and all other Attribution Parties plus the number of Common Shares issuable upon conversion of this Note with respect
to which the determination of such sentence is being made, but shall exclude Common Shares 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 shares or 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 Common Shares the Holder may acquire upon the conversion of this Note without exceeding the Maximum Percentage, the Holder
may rely on the number of outstanding Common Shares as reflected in (x) the Company’s most recent Annual Report on Form 20-F, Report
of Foreign Issuer on Form 6-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 Common Shares 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 Common Shares is less than the Reported Outstanding Share Number, the Company shall notify the Holder in
writing of the number of Common Shares 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 Common Shares 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 Common Shares then outstanding. In any case, the number of outstanding Common Shares 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 Common Shares 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 Common Shares (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 Common Shares 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 amended, modified
waived and shall apply to a successor holder of this Note.
(e) Right of
Alternate Conversion.
(i) General.
(1)
Alternate Optional Conversion. Subject to Section 3(d), at any time, at the option of the Holder, the Holder may convert (each,
an “Alternate Optional Conversion”, and the date of such Alternate Optional Conversion, an “Alternate Optional
Conversion Date”) all, or any part, of this Note into Common Shares (such portion of the Conversion Amount subject to such
Alternate Optional Conversion, the “Alternate Optional Conversion Amount”) at the Alternate Conversion Price.
(2)
Alternate Conversion Upon an Event of Default. Subject to Section 3(d), at any time after the occurrence of an Event of Default
(regardless of whether such Event of Default has been cured, or if the Company has delivered an Event of Default Notice to the Holder
or if the Holder has delivered an Event of Default Redemption Notice to the Company or otherwise notified the Company that an Event of
Default has occurred), the Holder may, at the Holder’s option, convert (each, an “Alternate Event of Default Conversion”
and together with each Alternate Optional Conversion, each, an “Alternate Conversion”, and the date of such Alternate
Event of Default Conversion, each, an “Alternate Event of Default Conversion Date”, and together with each Alternate
Optional Conversion Date, each, an “Alternate Conversion Date”) all, or any part of, the Conversion Amount (such portion
of the Conversion Amount subject to such Alternate Conversion, the “Alternate Event of Default Conversion Amount”
and together with each Alternate Optional Conversion Amount, each, an “Alternate Conversion Amount”) into Common Shares
at the Alternate Conversion Price.
(ii)
Mechanics of Alternate Conversion. On any Alternate Conversion Date, the Holder may voluntarily convert any Alternate Conversion
Amount pursuant to Section 3(c) (with “Alternate Conversion Price” replacing “Conversion Price” for all purposes
hereunder with respect to such Alternate Conversion and, solely with respect to the calculation of the number of Common Shares
issuable upon conversion of any Conversion Amount in an Alternate Event of Default Conversion, with “Redemption Premium of the
Conversion Amount” replacing “Conversion Amount” in clause (x) of the definition of Conversion Rate above with respect
to such Alternate Conversion) by designating in the Conversion Notice delivered pursuant to this Section 3(e) of this Note that the Holder
is electing to use the Alternate Conversion Price for such conversion; provided that in the event of the Conversion Floor Price Condition,
on the applicable Alternate Conversion Date the Company shall also deliver to the Holder the applicable Alternate Conversion Floor Amount.
Notwithstanding anything to the contrary in this Section 3(e), but subject to Section 3(d), until the Company delivers Common Shares
representing the applicable Alternate Conversion Amount to the Holder, such Alternate Conversion Amount may be converted by the Holder
into Common Shares pursuant to Section 3(c) without regard to this Section 3(e).
4.
RIGHTS UPON EVENT OF DEFAULT.
(a)
Event of Default. Each of the following events shall constitute an “Event of Default” and each of the
events in clauses (ix), (x) and (xi) shall 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) 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) days
after the applicable Effectiveness Deadline (as defined in the Registration Rights Agreement);
(ii)
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 five (5) consecutive days or for
more than an aggregate of ten (10) 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 Shares to be trading
or listed (as applicable) on an Eligible Market for a period of five (5) consecutive Trading Days;
(iv)
the Company’s (A) failure to cure a Conversion Failure by delivery of the required number of Common Shares within five (5)
Trading Days after the applicable Conversion Date or exercise date (as the case may be) or (B) notice, written or oral, to any holder
of the Notes, 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 Common Shares that is requested in accordance with the provisions
of the Notes, other than pursuant to Section 3(d);
(v)
except to the extent the Company is in compliance with Section 31(a) below, at any time following the tenth (10th) consecutive
day that the Holder’s Authorized Share Allocation (as defined in Section 31(a) below) is less than the sum of the number of Common
Shares 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);
(vi)
the Company’s 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 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, except,
in the case of a failure to pay Interest and Late Charges when and as due, in which case only if such failure remains uncured for a period
of at least two (2) Trading Days;
(vii)
the Company fails to remove any restrictive legend on any certificate or any Common Shares 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) days;
(viii)
the occurrence of any default under, redemption of or acceleration prior to maturity of at least an aggregate of $50,000 of Indebtedness
(as defined in the Securities Purchase Agreement) of the Company or any of its Subsidiaries, other than with respect to any Other Notes;
(ix)
bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings for the relief of debtors shall be instituted
by or against the Company or any Subsidiary and, if instituted against the Company or any Subsidiary by a third party, shall not be dismissed
within thirty (30) days of their initiation;
(x)
the commencement by the Company 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 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 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 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 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 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 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 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 $50,000 are rendered against the Company and/or
any of its Subsidiaries and which judgments are not, within thirty (30) days after the entry thereof, bonded, discharged, settled or stayed
pending appeal, or are not discharged within thirty (30) 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 $50,000 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 or
such Subsidiary (as the case may be) will receive the proceeds of such insurance or indemnity within thirty (30) days of the issuance
of such judgment;
(xiii)
the Company 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 $50,000 due to any third party (other than, with respect to unsecured
Indebtedness only, payments contested by the Company 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 $50,000, 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 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 or any of its Subsidiaries, individually or in the aggregate;
(xiv)
other than as specifically set forth in another clause of this Section 4(a), the Company or any Subsidiary breaches any representation
or warranty, 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 two (2) consecutive Trading Days;
(xv)
a false or inaccurate certification (including a false or inaccurate deemed certification) by the Company as to whether any Event
of Default has occurred;
(xvi)
any breach or failure in any respect by the Company or any Subsidiary to comply with any provision of Section 13 of this Note;
(xvii)
any Material Adverse Effect (as defined in the Securities Purchase Agreement) occurs;
(xviii)
any provision of any Transaction Document (including, without limitation, the Security Documents and the Guaranties) 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 parties
thereto, or the validity or enforceability thereof shall be contested by any party thereto, or a proceeding shall be commenced by the
Company or any Subsidiary or any governmental authority having jurisdiction over any of them, seeking to establish the invalidity or unenforceability
thereof, or the Company or any Subsidiary shall deny in writing that it has any liability or obligation purported to be created under
any Transaction Document (including, without limitation, the Security Documents and the Guaranties);
(xix)
any Security Document shall for any reason fail or cease to create a separate valid and perfected and, except to the extent permitted
by the terms hereof or thereof, first priority Lien (as defined in the Securities Purchase Agreement) on the Collateral (as defined in
the Security Documents) in favor of the Collateral Agent (as defined in the Securities Purchase Agreement) or any material provision of
any Security Document shall at any time for any reason cease to be valid and binding on or enforceable against the Company or the validity
or enforceability thereof shall be contested by any party thereto, or a proceeding shall be commenced by the Company or any governmental
authority having jurisdiction over the Company, seeking to establish the invalidity or unenforceability thereof;
(xx)
any material damage to, or loss, theft or destruction of, any Collateral, 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 fifteen (15) consecutive days,
the cessation or substantial curtailment of revenue producing activities at any facility of the Company or any Subsidiary, if any such
event or circumstance could have a Material Adverse Effect; or
(xxi)
any Event of Default (as defined in the Other Notes) occurs with respect to any Other Notes.
(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 one (1) Business Day 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, the Holder may require the
Company to redeem (regardless of whether such Event of Default has been cured) 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 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 Redemption
Premium multiplied by (2) the greatest Closing Sale Price of the Common Shares 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 3(e), 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 Shares 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 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 (i) 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 and (ii) the Successor Entity (including its Parent Entity) is a publicly traded corporation whose common equity is quoted
on or listed for trading on an Eligible Market. 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 Common Shares (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 equity (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 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 Common Shares 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 Common Share to be paid to the holders of the Common Shares 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 Shares 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 and 15 below, if at any time the Company grants, issues
or sells any Options, Convertible Securities or rights to purchase shares, warrants, securities or other property pro rata to all or substantially
all of the record holders of any class of Common Shares (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 Common Shares acquirable upon complete conversion of this Note (without taking into account any limitations
or restrictions on the convertibility of this Note and assuming for such purpose that the Note was converted at the Alternate 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 Common Shares 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 Common Shares 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 Common Shares are entitled to receive securities or other assets with respect
to or in exchange for Common Shares (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
Common Shares receivable upon such conversion, such securities or other assets to which the Holder would have been entitled with respect
to such Common Shares had such Common Shares 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 Common Shares otherwise receivable
upon such conversion, such securities or other assets received by the holders of Common Shares 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 Common Shares) 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 Issuance of Common Shares. 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 7(a) is deemed to have
granted, issued or sold, any Common Shares (including the granting, issuance or sale of Common Shares 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 Conversion Price in effect immediately prior to
such granting, issuance or sale or deemed granting, issuance or sale (such Conversion Price then in effect is referred to herein as the
“Applicable Price”) (the foregoing a “Dilutive Issuance”), then, immediately after such Dilutive
Issuance, the Conversion Price then in effect shall be reduced to an amount equal to the New Issuance Price. For all purposes of the foregoing
(including, without limitation, determining the adjusted Conversion Price and the New Issuance Price under this Section 7(a)), 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 Common Share 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 Common Share 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 of such Option for such price per share. For purposes of this Section
7(a)(i), the “lowest price per share for which one Common Share 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” 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 Common Share upon the granting, issuance or sale 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 Common Share 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) with respect to any one Common Share upon the granting, issuance or sale 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 (including, without limitation, consideration consisting
of cash, debt forgiveness, assets or any other property) 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 Conversion Price shall be made upon the actual issuance
of such Common Share or of such Convertible Securities upon the exercise of such Options or otherwise pursuant to the terms thereof or
upon the actual issuance of such Common Shares 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 Common Share 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 Common Share 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
7(a)(ii), the “lowest price per share for which one Common Share is at any time issuable upon the conversion, exercise or exchange
thereof or otherwise pursuant to the terms thereof” shall be equal to (1) the lower of (x) the sum of the lowest amounts of consideration
(if any) received or receivable by the Company with respect to one Common Share 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 Common
Share 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) with respect to any one Common Share 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 (including, without limitation, any consideration consisting
of cash, debt forgiveness, assets or other property) by, or benefit conferred on, the holder of such Convertible Security (or any other
Person). Except as contemplated below, no further adjustment of the Conversion Price shall be made upon the actual issuance of such Common
Shares 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 the Conversion Price has
been or is to be made pursuant to other provisions of this Section 7(a), except as contemplated below, no further adjustment of the Conversion
Price shall be made by reason of such issuance or sale.
(iii)
Change in Option Price or Rate of Conversion. If the purchase or exercise price provided for in any Options, the additional
consideration, if any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any
Convertible Securities are convertible into or exercisable or exchangeable for Common Shares 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 7(b) below),
the Conversion Price in effect at the time of such increase or decrease shall be adjusted to the Conversion Price which would have been
in effect at such time had such Options or 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 7(a)(iii), if the terms of any Option or Convertible Security (including, without limitation, 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 Common Shares 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 7(a) shall be
made if such adjustment would result in an increase of the Conversion 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”),
together comprising one integrated transaction (or one or more transactions if such issuances or sales or deemed issuances or sales of
securities of the Company either (A) have at least one investor or purchaser in common, (B) are consummated in reasonable proximity to
each other and/or (C) are consummated under the same plan of financing), the aggregate consideration per Common Share with respect to
such Primary Security shall be deemed to be equal to the difference of (x) the lowest price per share for which one Common Share was issued
(or was deemed to be issued pursuant to Section 7(a)(i) or 7(a)(ii) above, as applicable) in such integrated transaction solely with respect
to such Primary Security, minus (y) with respect to such Secondary Securities, the sum of (I) the Black Scholes Consideration Value of
each such Option, if any, (II) the fair market value (as determined by the Holder in good faith) or the Black Scholes Consideration Value,
as applicable, of such Adjustment Right, if any, and (III) the fair market value (as determined by the Holder) of such Convertible Security,
if any, in each case, as determined on a per share basis in accordance with this Section 7(a)(iii). If any Common Shares, Options or Convertible
Securities are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor (for the purpose of
determining the consideration paid for such Common Shares, Option or Convertible Security, but not for the purpose of the calculation
of the Black Scholes Consideration Value) will be deemed to be the net amount of consideration received by the Company therefor. If any
Common Shares, Options or Convertible Securities are issued or sold for a consideration other than cash, the amount of such consideration
received by the Company (for the purpose of determining the consideration paid for such Common Shares, Option or Convertible Security,
but not for the purpose of the calculation of the Black Scholes Consideration Value) 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 Common Shares, 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 (for the purpose of determining the
consideration paid for such Common Shares, Option or Convertible Security, but not for the purpose of the calculation of the Black Scholes
Consideration Value) 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 Common Shares, 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 Common Shares for the purpose of entitling them (A) to receive
a dividend or other distribution payable in Common Shares, Options or in Convertible Securities or (B) to subscribe for or purchase Common
Shares, Options or Convertible Securities, then such record date will be deemed to be the date of the issuance or sale of the Common Shares
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).
(b)
Adjustment of Conversion Price upon Subdivision or Combination of Common Shares. Without limiting any provision of Section 6,
Section 15 or Section 7(a), if the Company at any time on or after the Subscription Date subdivides (by any share split, share dividend,
share combination, recapitalization or other similar transaction) one or more classes of its outstanding Common Shares 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, Section 15 or Section 7(a), if the Company at any time on or after the Subscription Date combines
(by any share split, share dividend, share combination, recapitalization or other similar transaction) one or more classes of its outstanding
Common Shares 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(b) shall become effective immediately after the effective date of such subdivision
or combination. If any event requiring an adjustment under this Section 7(b) 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.
(c)
Holder’s Right of Adjusted Conversion Price. In addition to and not in limitation of the other provisions of this
Section 7, if the Company in any manner issues or sells or enters into any agreement to issue or sell, any Common Shares, Options or Convertible
Securities (any such securities, “Variable Price Securities”), after the Subscription Date that are issuable pursuant
to such agreement or convertible into or exchangeable or exercisable for Common Shares at a price which varies or may vary with the market
price of the Common Shares, including by way of one or more reset(s) to a fixed price, but exclusive of such formulations reflecting customary
anti-dilution provisions (such as share splits, share combinations, share dividends and similar transactions) (each of the formulations
for such variable price being herein referred to as, the “Variable Price”), the Company shall provide written notice
thereof via electronic mail and overnight courier to the Holder on the date of such agreement and the issuance of such Common Shares,
Convertible Securities or Options. From and after the date the Company enters into such agreement or issues any such Variable Price Securities,
the Holder shall have the right, but not the obligation, in its sole discretion to substitute the Variable Price for the Conversion Price
upon conversion of this Note by designating in the Conversion Notice delivered upon any conversion of this Note that solely for purposes
of such conversion the Holder is relying on the Variable Price rather than the Conversion Price then in effect. The Holder’s election
to rely on a Variable Price for a particular conversion of this Note shall not obligate the Holder to rely on a Variable Price for any
future conversion of this Note.
(d)
Share Combination Event Adjustments. If at any time and from time to time on or after the Subscription Date there occurs
any share split, share dividend, share combination recapitalization or other similar transaction involving the Common Shares (each, a
“Share Combination Event”, and such date thereof, the “Share Combination Event Date”) and the Event
Market Price is less than the Conversion Price then in effect (after giving effect to the adjustment in Section 7(b) above), then on the
sixteenth (16th) Trading Day immediately following such Share Combination Event Date, the Conversion Price then in effect on
such sixteenth (16th) Trading Day (after giving effect to the adjustment in Section 7(b) above) shall be reduced (but in no
event increased) to the Event Market Price. For the avoidance of doubt, if the adjustment in the immediately preceding sentence would
otherwise result in an increase in the Conversion Price hereunder, no adjustment shall be made.
(e)
Other Events. In the event that the Company (or any Subsidiary) shall take any action to which the provisions hereof are
not strictly applicable, or, if applicable, would not operate to protect the Holder from dilution or if any event occurs of the type contemplated
by the provisions of this Section 7 but not expressly provided for by such provisions (including, without limitation, the granting of
share appreciation rights, phantom share rights or other rights with equity features), then the Company’s board of directors shall
in good faith determine and implement an appropriate adjustment in the Conversion Price so as to protect the rights of the Holder, provided
that no such adjustment pursuant to this Section 7(e) will increase the Conversion Price as otherwise determined pursuant to this Section
7, provided further that if the Holder does not accept such adjustments as appropriately protecting its interests hereunder against such
dilution, then the Company’s board of directors and the Holder shall agree, in good faith, upon an independent investment bank of
nationally recognized standing to make such appropriate adjustments, whose determination shall be final and binding absent manifest error
and whose fees and expenses shall be borne by the Company.
(f)
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 Common Shares 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 Shares.
(g)
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.
(h)
Adjustment Dates. On each of (i) the initial Effective Date (as defined in the Registration Rights Agreement) of the initial
Registration Statement (as defined in the Registration Rights Agreement) filed pursuant to the Registration Rights Agreement, (ii) the
Applicable Date (as defined in the Securities Purchase Agreement), and (iii) the first Trading Day of each Fiscal Quarter after the Issuance
Date (each a “Basic Adjustment Date”) the Conversion Price in effect on any such Basic Adjustment Date is less than
the Market Price then in effect (each, an “Adjustment Measuring Price”) or (iv) any Trading Day (each, a “Volume
Adjustment Date”, and together with each Basic Adjustment Date, each an “Adjustment Date”) in which the aggregate
daily dollar trading volume (as reported on Bloomberg) of the Common Shares is equal to or greater than $200,000 by 11:00 a.m. (New York
City time) (the “Volume Adjustment Measuring Time”) on such Trading Day and the VWAP of the Common Shares of such Trading
Day as of the Volume Adjustment Measuring Time is less than the Conversion Price then in effect, in each case, on each such applicable
Adjustment Date, as applicable, the Conversion Price then in effect shall automatically lower to the Market Price as of such Adjustment
Date.
8.
REDEMPTIONS AT THE COMPANY’S ELECTION.
(a)
Company Optional Redemption. At any time the Company shall have the right to redeem all, but not less than all, of the Conversion
Amount then remaining under this Note (the “Company Optional Redemption Amount”) on the Company Optional Redemption
Date (each as defined below) (a “Company Optional Redemption”). The portion of this Note subject to redemption pursuant
to this Section 8(a) shall be redeemed by the Company in cash at a price (the “Company Optional Redemption Price”)
equal to 120% of the greater of (i) the Conversion Amount being redeemed as of the Company Optional Redemption Date and (ii) the product
of (1) the Conversion Rate with respect to the Conversion Amount being redeemed as of the Company Optional Redemption Date multiplied
by (2) the greatest Closing Sale Price of the Common Shares on any Trading Day during the period commencing on the date immediately preceding
such Company Optional Redemption Notice Date and ending on the Trading Day immediately prior to the date the Company makes the entire
payment required to be made under this Section 8(a). The Company may exercise its right to require redemption under this Section 8(a)
by delivering a written notice thereof by electronic mail and overnight courier to all, but not less than all, of the holders of Notes
(the “Company Optional Redemption Notice” and the date all of the holders of Notes received such notice is referred
to as the “Company Optional Redemption Notice Date”). The Company may deliver only one Company Optional Redemption
Notice hereunder and such Company Optional Redemption Notice shall be irrevocable. The Company Optional Redemption Notice shall (x) state
the date on which the Company Optional Redemption shall occur (the “Company Optional Redemption Date”) which date shall
not be less than sixty (60) Trading Days nor more than one hundred (100) Trading Days following the Company Optional Redemption Notice
Date, and (y) state the aggregate Conversion Amount of the Notes which is being redeemed in such Company Optional Redemption from the
Holder and all of the other holders of the Notes pursuant to this Section 8 (and analogous provisions under the Other Notes) on the Company
Optional Redemption Date. Redemptions made pursuant to this Section 8 shall be made in accordance with Section 11. In the event of the
Company’s redemption of any portion of this Note under this Section 8, 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 8 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.
For the avoidance of doubt, the Company shall have no right to effect a Company Optional Redemption if any Event of Default has occurred
and continuing, but any Event of Default shall have no effect upon the Holder’s right to convert this Note in its discretion.
(b)
Pro Rata Redemption Requirement. If the Company elects to cause a Company Optional Redemption of this Note pursuant to Section
8, then it must simultaneously take the same action with respect to all of the Other Notes.
9.
SUBSEQUENT PLACEMENT OPTIONAL REDEMPTION
(a)
General. At any time from and after the later of (i) the earlier of (x) the date the Holder becomes aware of the occurrence
of a Subsequent Placement (as defined in the Securities Purchase Agreement) (the “Holder Notice Date”), and (y) the
time of consummation of a Subsequent Placement (in each case, other than with respect to Excluded Securities (as defined in the Securities
Purchase Agreement)) (each, an “Eligible Subsequent Placement”), the Holder shall have the right, in its sole discretion,
to require that the Company redeem (each an “Subsequent Placement Optional Redemption”) all, or any portion, of the
Conversion Amount under this Note not in excess of (together with any Subsequent Placement Optional Redemption Amount (as defined in the
applicable other Note of the Holder) of any other Notes of the Holder) the Holder’s Holder Pro Rata Amount of 30% of the gross proceeds
of such Eligible Subsequent Placement (the “Eligible Subsequent Placement Optional Redemption Amount”) by delivering
written notice thereof (an “Subsequent Placement Optional Redemption Notice”) to the Company. Notwithstanding the foregoing,
if the Holder is participating in an Eligible Subsequent Placement, upon the written request of the Holder, the Company shall apply all,
or any part, as set forth in such written request, of any amounts that would otherwise be payable to the Holder in such Subsequent Placement
Optional Redemption, on a dollar-for-dollar basis, against the purchase price of the securities to be purchased by the Holder in such
Eligible Subsequent Placement.
(b)
Mechanics. Each Subsequent Placement Optional Redemption Notice shall indicate that all, or such applicable portion, as
set forth in the applicable Subsequent Placement Optional Redemption Notice, of the Eligible Subsequent Placement Optional Redemption
Amount the Holder is electing to have redeemed (the “Subsequent Placement Optional Redemption Amount”) and the date
of such Subsequent Placement Optional Redemption (the “Subsequent Placement Optional Redemption Date”), which shall
be the later of (x) the fifth (5th) Business Day after the date of the applicable Subsequent Placement Optional Redemption
Notice and (y) the date of the consummation of such Eligible Subsequent Placement. The portion of the outstanding Principal of this Note
subject to redemption pursuant to this Section 9 shall be redeemed by the Company in cash at a price equal to 110% of the Subsequent Placement
Optional Redemption Amount (the “Subsequent Placement Optional Redemption Price”). Redemptions required by this Section
9 shall be made in accordance with the provisions of Section 11.
10.
NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its Articles of Association
(as defined in the Securities Purchase Agreement), Memorandum of Association (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 Common Shares 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 Common Shares upon the conversion of this Note. Notwithstanding anything herein to the contrary,
if after the sixty (60) calendar day anniversary of the Issuance 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 Common Shares.
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 in cash on the applicable Company Optional Redemption Date. The
Company shall deliver the applicable Subsequent Placement Optional Redemption Price to the Holder in cash on the applicable Subsequent
Placement Optional Redemption Date. 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, 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 and (z) the Conversion
Price of this Note or such new Notes (as the case may be) shall be automatically adjusted with respect to each conversion effected thereafter
by the Holder to the lowest of (A) the Conversion Price as in effect on the date on which the applicable Redemption Notice is voided,
(B) the greater of (x) the Floor Price and (y) 75% of the lowest Closing Bid Price of the Common Shares during the period beginning on
and including the date on which the applicable Redemption Notice is delivered to the Company and ending on and including the date on which
the applicable Redemption Notice is voided and (C) the greater of (x) the Floor Price and (y) 75% of the quotient of (I) the sum of the
five (5) lowest VWAPs of the Common Shares during the twenty (20) consecutive Trading Day period ending and including the applicable Conversion
Date divided by (II) five (5) (it being understood and agreed that all such determinations shall be appropriately adjusted for any share
dividend, share split, share combination or other similar transaction during such period). 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 electronic mail 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 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:
(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 Senior Indebtedness solely with respect to Permitted
Senior Indebtedness Collateral).
(b)
Incurrence of Indebtedness. The Company shall not, and the Company 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, 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 and Investments. The Company shall not, and the Company 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) whether by way of payment in respect of principal of (or premium, if any) or interest on, such
Indebtedness or make any Investment, as applicable, if at the time such payment with respect to such Indebtedness and/or Investment, as
applicable, 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.
(e)
Restriction on Redemption and Cash Dividends. The Company shall not, and the Company 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 share capital.
(f)
Restriction on Transfer of Assets. The Company shall not, and the Company 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 and (ii) sales of inventory and product in the ordinary
course of business.
(g)
Maturity of Indebtedness. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or
indirectly, permit any Indebtedness of the Company or any of its Subsidiaries to mature or accelerate prior to the Maturity Date.
(h)
Change in Nature of Business. The Company shall not, and the Company 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 the Company and each of its Subsidiaries on the Subscription Date or any business substantially
related or incidental thereto. The Company shall not, and the Company shall cause each of its Subsidiaries to not, directly or indirectly,
modify its or their corporate structure or purpose.
(i)
Preservation of Existence, Etc. The Company shall maintain and preserve, and 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.
(j)
Maintenance of Properties, Etc. The Company shall maintain and preserve, and cause each of its Subsidiaries to maintain
and preserve, all of its 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 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 and/or
any of its 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, 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, 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, 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.
(o)
New Subsidiaries. Simultaneously with the acquisition or formation of each New Subsidiary, the Company shall cause such
New Subsidiary to execute, and deliver to each holder of Notes, all Security Documents (as defined in the Securities Purchase Agreement)
and Guaranties (as defined in the Securities Purchase Agreement) as requested by the Collateral Agent or the Required Holders, as applicable.
The Company shall also deliver to the Collateral Agent an opinion of counsel to such New Subsidiary that is reasonably satisfactory to
the Collateral Agent and the Required Holders covering such legal matters with respect to such New Subsidiary becoming a guarantor of
the Company’s obligations, executing and delivering the Security Document and the Guaranties and any other matters that the Collateral
Agent or the Required Holders may reasonably request. The Company shall deliver, or cause the applicable Subsidiary to deliver to the
Collateral Agent, each of the physical share certificates of such New Subsidiary, along with undated share powers for each such certificates,
executed in blank (or, if any such shares of share capital are uncertificated, confirmation and evidence reasonably satisfactory to the
Collateral Agent and the Required Holders that the security interest in such uncertificated securities has been transferred to and perfected
by the Collateral Agent, in accordance with Sections 8-313, 8-321 and 9-115 of the Uniform Commercial Code or any other similar or local
or foreign law that may be applicable).
(p)
Change in Collateral; Collateral Records. The Company shall (i) give the Collateral Agent not less than thirty (30) days’
prior written notice of any change in the location of any Collateral (as defined in the Security Documents), other than to locations set
forth in the Perfection Certificate (as defined in the Securities Purchase Agreement) hereto and with respect to which the Collateral
Agent has filed financing statements and otherwise fully perfected its Liens thereon, (ii) advise the Collateral Agent promptly,
in sufficient detail, of any material adverse change relating to the type, quantity or quality of the Collateral or the Lien granted thereon
and (iii) execute and deliver, and cause each of its Subsidiaries to execute and deliver, to the Collateral Agent for the benefit
of the Holder and holders of the Other Notes from time to time, solely for the Collateral Agent’s convenience in maintaining a record
of Collateral, such written statements and schedules as the Collateral Agent or any Holder may reasonably require, designating, identifying
or describing the Collateral.
(q)
Stay, Extension and Usury Laws. To the extent that it may lawfully do so, the Company (A) agrees that it will not at any
time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law (wherever
or whenever enacted or in force) that may affect the covenants or the performance of this Note; and (B) expressly waives all benefits
or advantages of any such law and agrees that it will not, by resort to any such law, hinder, delay or impede the execution of any power
granted to the Holder by this Note, but will suffer and permit the execution of every such power as though no such law has been enacted.
(r)
Taxes. The Company and its Subsidiaries shall pay when due all taxes, fees or other charges of any nature whatsoever (together
with any related interest or penalties) now or hereafter imposed or assessed against the Company and its Subsidiaries or their respective
assets or upon their ownership, possession, use, operation or disposition thereof or upon their rents, receipts or earnings arising therefrom
(except where the failure to pay would not, individually or in the aggregate, have a material effect on the Company or any of its Subsidiaries).
The Company and its Subsidiaries shall file on or before the due date therefor all personal property tax returns (except where the failure
to file would not, individually or in the aggregate, have a material effect on the Company or any of its Subsidiaries). Notwithstanding
the foregoing, the Company and its Subsidiaries may contest, in good faith and by appropriate proceedings, taxes for which they maintain
adequate reserves therefor in accordance with GAAP.
(s)
Available Cash Test; Announcement of Operating Results.
(i)
Available Cash Test. At any time any Notes remains outstanding, the Company’s Available Cash as of the last calendar
day in each Fiscal Quarter (each, a “Covenant Measuring Date”) shall equal or exceed $1 million (the “Financial
Test”).
(ii)
Operating Results Announcement. Commencing on the initial Covenant Measuring Date, the Company shall publicly disclose and
disseminate (such date, the “Announcement Date”), if any Financial Test has not been satisfied for such calendar month,
Fiscal Quarter or Fiscal Year, as applicable, a statement to that effect no later than the tenth (10th) day after the end of
such calendar month, Fiscal Quarter or Fiscal Year, as applicable, and such announcement shall include a statement to the effect that
the Company is (or is not, as applicable) in breach of a Financial Test for such calendar month, Fiscal Quarter or Fiscal Year, as applicable.
On the Announcement Date, the Company shall also provide to the Holder a certification, executed on behalf of the Company by the Chief
Financial Officer of the Company, certifying that the Company satisfied the Financial Tests for such calendar month, Fiscal Quarter or
Fiscal Year, as applicable, if that is the case. If the Company has failed to meet one or more Financial Tests for a calendar month, Fiscal
Quarter or Fiscal Year, as applicable, (each a “Financial Covenant Failure”), on or prior to the Announcement Date,
the Company shall provide to the Holders a written certification, executed on behalf of the Company by the Chief Financial Officer of
the Company, certifying that such Financial Test(s) has not been met for such calendar month, Fiscal Quarter or Fiscal Year, as applicable
(a “Financial Covenant Failure Notice”). Concurrently with the delivery of each Financial Covenant Failure Notice to
the Holders, the Company shall also make publicly available (as part of a Quarterly Report on Form 10-Q, Annual Report on Form 10-K or
on a Current Report on Form 8-K, or otherwise) the Financial Covenant Failure Notice and the fact that an Event of Default has occurred
under the Notes.
(t)
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 and its Subsidiaries and,
to the extent available to the Company 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 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 shall furnish
the Independent Investigator with such financial and operating data and other information with respect to the business and properties
of the Company as the Independent Investigator may reasonably request. The Company shall permit the Independent Investigator to discuss
the affairs, finances and accounts of the Company 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 authorizes said
accountants to discuss with such Independent Investigator the finances and affairs of the Company and any Subsidiaries), all at such reasonable
times, upon reasonable notice, and as often as may be reasonably requested.
14.
SECURITY. This Note and the Other Notes are secured to the extent and in the manner set forth in the Transaction Documents
(including, without limitation, the Security Agreement, the other Security Documents and the Guaranties).
15.
DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Sections 6 and 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 Common Shares, by way of
return of capital or otherwise (including without limitation, any distribution of cash, shares 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 Common Shares acquirable upon complete
conversion of this Note (without taking into account any limitations or restrictions on the convertibility of this Note and assuming for
such purpose that the Note was converted at the Alternate 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
Shares 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 Common Shares 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).
16.
AMENDING THE TERMS OF THIS NOTE. Except for Section 3(d) and this Section 16, which may not be amended, modified or waived
by the parties hereto, the prior written consent of the Holder shall be required for any change, waiver or amendment to this Note.
17.
TRANSFER. This Note and any Common Shares 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 Section 18(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 (including, without limitation, compliance with Section 7).
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, 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 Initial 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, an Alternate Conversion Price,
a Black-Scholes Consideration Value, a VWAP 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 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 Alternate Conversion Price, such
Black-Scholes Consideration Value, such VWAP or 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 the rules then in effect under the Delaware Rapid
Arbitration Act, as amended, (ii) a dispute relating to a Conversion Price includes, without limitation, disputes as to (A) whether an
issuance or sale or deemed issuance or sale of Common Shares occurred under Section 7(a), (B) the consideration per share at which an
issuance or deemed issuance of Common Shares occurred, (C) whether any issuance or sale or deemed issuance or sale of Common Shares was
an issuance or sale or deemed issuance or sale of Excluded Securities, (D) whether an agreement, instrument, security or the like constitutes
and Option or Convertible Security and (E) whether a Dilutive Issuance occurred, (iii) 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, (iv) 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 Wilmington, Delaware in lieu of utilizing the procedures set forth in this Section
23 and (v) 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 (i) immediately upon any adjustment of the
Conversion Price, setting forth in reasonable detail, and certifying, the calculation of such adjustment and (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
Common Shares, (B) with respect to any grant, issuances, or sales of any Options, Convertible Securities or rights to purchase shares,
warrants, securities or other property to holders of Common Shares 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 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), provided that the Holder may elect to receive a payment of cash 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. 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 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 Delaware, without giving
effect to any provision of law or conflict of law provision or rule (whether of the State of Delaware or any other jurisdictions) that
would cause the application of the laws of any jurisdictions other than the State of Delaware. 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 Wilmington,
Delaware, 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 (on behalf of itself and each of its Subsidiaries)
hereby appoints the Service Agent (as defined in the Securities Purchase Agreement), as its agent for service of process in New York.
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. The choice of the laws
of the State of Delaware as the governing law of this Note is a valid choice of law and would be recognized and given effect to in any
action brought before a court of competent jurisdiction in Canada or such other jurisdiction applicable to the Company or any of its Subsidiaries
except for those laws (i) which such court considers to be procedural in nature, (ii) which are revenue or penal laws or (iii) the application
of which would be inconsistent with public policy, as such term is interpreted under the laws of Canada or such other jurisdiction applicable
to the Company or any of its Subsidiaries. The Company or any of their respective properties, assets or revenues does not have any right
of immunity under the laws of Canada or such other jurisdiction applicable to the Company or any of its Subsidiaries or Delaware law,
from any legal action, suit or proceeding, from the giving of any relief in any such legal action, suit or proceeding, from set-off or
counterclaim, from the jurisdiction of any Canadian or such other jurisdiction applicable to the Company or any of its Subsidiaries or
any Delaware or United States federal court, from service of process, attachment upon or prior to judgment, or attachment in aid of execution
of judgment, or from execution of a judgment, or other legal process or proceeding for the giving of any relief or for the enforcement
of a judgment, in any such court, with respect to its obligations, liabilities or any other matter under or arising out of or in connection
with the Transaction Documents; and, to the extent that the Company, or any of its properties, assets or revenues may have or may hereafter
become entitled to any such right of immunity in any such court in which proceedings may at any time be commenced, the Company hereby
waives such right to the extent permitted by law and hereby consents to such relief and enforcement as provided in this Note and the other
Transaction Documents.
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 Delaware 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.
RESERVATION OF AUTHORIZED SHARES.
(a)
Reservation. So long as any Notes remain outstanding, the Company shall at all times reserve at least 100% or of the number
of shares of Common Shares as shall from time to time be necessary to effect the conversion, including without limitation, Alternate Conversions,
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 Floor 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 Initial Closing Date (as defined in the Securities Purchase Agreement)
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 Shares 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 31(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 Common Shares to satisfy its
obligation to reserve for issuance upon conversion of the Notes at least a number of Common Shares 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 Common Shares 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 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 Common Shares. 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 Common Shares 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 Common Shares pursuant to the terms of this Note due to the failure by the Company
to have sufficient Common Shares available out of the authorized but unissued shares of Common Shares (such unavailable number of Common
Shares, 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 VWAP of the Common
Shares 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 31(a); and (ii) to
the extent the Holder purchases (in an open market transaction or otherwise) Common Shares 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 31(a) or this Section 31(a) shall limit any obligations of the Company under any provision of
the Securities Purchase Agreement.
32.
CERTAIN DEFINITIONS. For purposes of this Note, 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)
“Adjusted Floor Price” means, as determined on each six month anniversary of the Issuance Date (each, an “Adjustment
Date”), the lower of (i) the Floor Price then in effect and (ii) 20% of the lower of (x) the Nasdaq Closing Price of the Common
Shares as of the Trading Day ended immediately prior to such applicable Adjustment Date and (y) the quotient of (I) the sum of each Nasdaq
Closing Price of the Common Shares on each Trading Day of the five (5) Trading Day period ended on, and including, the Trading Day ended
immediately prior to such applicable Adjustment Date, divided by (II) five (5). All such determinations to be appropriately adjusted for
any stock split, stock dividend, stock combination or other similar transaction during any such measuring period.
(d)
“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 7) of Common Shares (other than rights of the
type described in Section 6(a) 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).
(e)
“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 shares 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.
(f)
“Alternate Conversion Floor Amount” means an amount in cash, to be delivered by wire transfer of immediately
available funds pursuant to wire instructions delivered to the Company by the Holder in writing, equal to the product obtained by multiplying
(A) the higher of (I) the highest price that the Common Shares trades at on the Trading Day immediately preceding the relevant Alternate
Conversion Date and (II) the applicable Alternate Conversion Price and (B) the difference obtained by subtracting (I) the number of Common
Shares delivered (or to be delivered) to the Holder on the applicable Share Delivery Deadline with respect to such Alternate Conversion
from (II) the quotient obtained by dividing (x) the applicable Conversion Amount that the Holder has elected to be the subject of the
applicable Alternate Conversion, by (y) the applicable Alternate Conversion Price without giving effect to clause (x) of such definition.
(g)
“Alternate Conversion Price” means, with respect to any Alternate Conversion that price which shall be the
lower of (i) the applicable Conversion Price as in effect on the applicable Conversion Date of the applicable Alternate Conversion, and
(ii) the greater of (x) the Floor Price then in effect and (y) 85% of the lowest trading price of the Common Shares during the fifteen
(15) consecutive Trading Day period ending and including the Trading Day immediately preceding the delivery or deemed delivery of the
applicable Conversion Notice (such period, the “Alternate Conversion 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 Shares during such Alternate Conversion Measuring Period.
(h)
“Approved Share Plan” means any employee benefit plan which has been approved by the board of directors of
the Company prior to or subsequent to the Subscription Date pursuant to which Common Shares and standard options to purchase Common Shares
may be issued to any employee, officer or director for services provided to the Company in their capacity as such.
(i)
“Attribution Parties” means, collectively, the following Persons and entities: (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 Company’s Common Shares 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.
(j)
“Available Cash” means, with respect to any date of determination, an amount equal to the aggregate amount of
the Cash of the Company and its Subsidiaries (excluding for this purpose cash held in restricted accounts or otherwise unavailable for
unrestricted use by the Company or any of its Subsidiaries for any reason) as of such date of determination held in bank accounts of financial
banking institutions in the United States of America.
(k)
“Black Scholes Consideration Value” means the value of the applicable Option, Convertible Security or Adjustment
Right (as the case may be) as of the date of issuance thereof 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 Closing Sale Price of the Common Shares
on the Trading Day immediately preceding the public announcement of the execution of definitive documents with respect to the issuance
of such Option, Convertible Security or Adjustment Right (as the case may be), (ii) a risk-free interest rate corresponding to the U.S.
Treasury rate for a period equal to the remaining term of such Option, Convertible Security or Adjustment Right (as the case may be) as
of the date of issuance of such Option, Convertible Security or Adjustment Right (as the case may be), (iii) a zero cost of borrow and
(iv) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the “HVT” function on Bloomberg
(determined utilizing a 365 day annualization factor) as of the Trading Day immediately following the date of issuance of such Option,
Convertible Security or Adjustment Right (as the case may be).
(l)
“Bloomberg” means Bloomberg, L.P.
(m)
“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.
(n)
“Cash” of the Company and its Subsidiaries on any date shall be determined from such Persons’ books maintained
in accordance with GAAP, and means, without duplication, the cash, cash equivalents and Eligible Marketable Securities accrued by the
Company and its wholly owned Subsidiaries on a consolidated basis on such date.
(o)
“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 Common Shares 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.
(p)
“Change of Control Redemption Premium” means 125%.
(q)
“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 Open Market (or a similar
organization or agency succeeding to its functions of reporting prices). 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 share splits, share dividends, share
combinations, recapitalizations or other similar transactions during such period.
(r)
“Common Shares” means (i) the Company’s common shares, no par value per share, and (ii) any share capital
into which such common shares shall have been changed or any share capital resulting from a reclassification of such common shares.
(s)
“Conversion Floor Price Condition” means that the relevant Alternate Conversion Price is being determined based
on clause (x) of such definition.
(t)
“Convertible Securities” means any shares or other security (other than Options) that is at any time and under
any circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof
to acquire, any Common Shares.
(u)
“Current Subsidiary” means any Person in which the Company on the Subscription Date, directly or indirectly,
(i) owns any of the outstanding share capital or holds any 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 all of the foregoing, collectively, “Current Subsidiaries”.
(v)
“Eligible Market” means The New York Stock Exchange, the NYSE American, the Nasdaq Capital Market, the Nasdaq
Global Select Market, the Nasdaq Global Market.
(w)
“Eligible Marketable Securities” as of any date means marketable securities which would be reflected on a consolidated
balance sheet of the Company and its Subsidiaries prepared as of such date in accordance with GAAP, and which are permitted under the
Company’s investment policies as in effect on the Issuance Date or approved thereafter by the Company’s Board of Directors.
(x)
“Event Market Price” means, with respect to any Share Combination Event Date, the quotient determined by dividing
(x) the sum of the VWAP of the Common Shares for each of the five (5) Trading Days with the lowest VWAP of the Common Shares during the
fifteen (15) consecutive Trading Day period ending and including the Trading Day immediately preceding the sixteenth (16th) Trading Day
after such Share Combination Event Date, divided by (y) five (5).
(y)
“Excluded Securities” means (i) Common Shares or standard options to purchase Common Shares issued to directors,
officers or employees of the Company for services rendered to the Company in their capacity as such pursuant to an Approved Share Plan
(as defined above), provided that (A) all such issuances (taking into account the Common Shares issuable upon exercise of such options)
after the Subscription Date pursuant to this clause (i) do not, in the aggregate, exceed more than 5% of the Common Shares 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) Common Shares issued upon the conversion or exercise of
Convertible Securities or Options (other than standard options to purchase Common Shares issued pursuant to an Approved Share 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 standard options to purchase Common Shares issued pursuant to an Approved Share Plan that are covered by clause (i) above)
is not lowered, none of such Convertible Securities or Options (other than standard options to purchase Common Shares issued pursuant
to an Approved Share 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 or Options (other than standard options to purchase Common Shares issued
pursuant to an Approved Share Plan that are covered by clause (i) above) are otherwise materially changed in any manner that adversely
affects any of the Buyers; and (iii) the Common Shares issuable upon conversion of the Notes or otherwise 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 (other than antidilution
adjustments pursuant to the terms thereof in effect as of the Subscription Date).
(z)
“Fiscal Quarter” means each of the fiscal quarters adopted by the Company for financial reporting purposes that
correspond to the Company’s fiscal year as of the date hereof that ends on December 31.
(aa)
“Floor Price” means $0.464 (or such lower amount as permitted, from time to time, by the Principal Market),
subject to adjustment for stock splits, stock dividends, stock combinations, recapitalizations or other similar events; provided, that
if on an Adjustment Date the Floor Price then in effect is higher than the Adjusted Floor Price with respect to such Adjustment Date,
on such Adjustment Date the Floor Price shall automatically lower to such applicable Adjusted Floor Price.
(bb)
“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 Shares 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 Common Shares, (y) 50% of the outstanding Common Shares calculated
as if any Common Shares 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 Common Shares 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 Common Shares, 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 Common Shares, (y) at least 50% of the outstanding Common Shares calculated as if any Common Shares
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 Common Shares 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 Common Shares, or (v) reorganize,
recapitalize or reclassify its Common Shares, (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 Common Shares, 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 Shares, (y) at least 50% of the aggregate ordinary voting power represented by issued and outstanding Common Shares not held by
all such Subject Entities as of the date of this Note calculated as if any Common Shares held by all such Subject Entities were not outstanding,
or (z) a percentage of the aggregate ordinary voting power represented by issued and outstanding Common Shares 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 Common Shares 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.
(cc)
“GAAP” means United States generally accepted accounting principles, consistently applied.
(dd)
“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.
(ee)
“Holder Pro Rata Amount” means a fraction (i) the numerator of which is the original Principal amount of this
Note on the Closing Date and (ii) the denominator of which is the aggregate original principal amount of all Notes issued to the initial
purchasers pursuant to the Securities Purchase Agreement on the Closing Date.
(ff)
“Indebtedness” shall have the meaning ascribed to such term in the Securities Purchase Agreement.
(gg)
“Initial 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.
(hh)
“Interest Date” means March 1, 2023 and each six month anniversary thereafter.
(ii)
“Interest Rate” means the greater of (x) the sum of the Prime Rate plus four and a half percent (4.5%) per annum
(not including any applicable default or penalty rate) and (y) nine percent (9%) per annum, as may be adjusted from time to time in accordance
with Section 2.
(jj)
“Investment” means any beneficial ownership (including stock, partnership or limited liability company interests)
of or in any Person, or any loan, advance or capital contribution to any Person or the acquisition of all, or substantially all, of the
assets of another Person or the purchase of any assets of another Person for greater than the fair market value of such assets.
(kk)
“Market Price” means, with respect to any given Adjustment Date, that price which shall be the lowest of (i)
the applicable Conversion Price as in effect on the applicable Adjustment Date, (ii) 85% of the lowest VWAP of the Common Shares during
the ten (10) consecutive Trading Day period ending and including the Trading Day immediately preceding such applicable Adjustment Date
(such period, the “Market Price Measuring Period”). All such determinations to be appropriately adjusted for any stock
dividend, stock split, stock combination, reclassification or similar transaction that proportionately decreases or increases the Common
Shares during such Market Price Measuring Period.
(ll)
“Maturity Date” shall mean October 2, 2025 (the “Scheduled Maturity Date”); 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, (ii) through the date that is twenty (20) 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, or (iii) if the Note remains outstanding after the Scheduled Maturity Date, for an additional twelve
(12) month period.
(mm)
“New Subsidiary” means, as of any date of determination, any Person in which the Company after the Subscription
Date, directly or indirectly, (i) owns or acquires any of the outstanding share capital or holds any 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 all of the foregoing,
collectively, “New Subsidiaries”.
(nn)
“Options” means any rights, warrants or options to subscribe for or purchase Common Shares or Convertible Securities.
(oo)
“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.
(pp)
“Permitted Indebtedness” means (i) Indebtedness evidenced by this Note and the Other Notes, (ii) Indebtedness
set forth on Schedule 3(s) to the Securities Purchase Agreement, as in effect as of the Subscription Date, (iii) Indebtedness secured
by Permitted Liens or unsecured but as described in clauses (iv) and (v) of the definition of Permitted Liens, (iv) Permitted Senior Indebtedness,
(v) Permitted Pari Passu Indebtedness, and (vi) Permitted Subordinated Indebtedness.
(qq)
“Permitted Liens” means (i) any Lien for taxes not yet due or delinquent or being contested in good faith by
appropriate proceedings for which adequate reserves have been established in accordance with GAAP, (ii) any statutory Lien arising in
the ordinary course of business by operation of law with respect to a liability that is not yet due or delinquent, (iii) any Lien created
by operation of law, such as materialmen’s liens, mechanics’ liens and other similar liens, arising in the ordinary course
of business with respect to a liability that is not yet due or delinquent or that are being contested in good faith by appropriate proceedings,
(iv) Liens (A) 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 (B) 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 $50,000,
(v) Liens incurred in connection with the extension, renewal or refinancing of the Indebtedness secured by Liens of the type described
in clause (iv) 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, (vi) Liens in favor of customs
and revenue authorities arising as a matter of law to secure payments of custom duties in connection with the importation of goods, and
(vii) Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Section 4(a)(xii),(viii)
Liens with respect to the Permitted Senior Indebtedness, and (ix) Liens with respect to Permitted Pari Passu Indebtedness that are subject
to the Pari Passu Intercreditor Agreement.
(rr)
“Permitted Pari Passu Indebtedness” means up to $10 million of pari passu Indebtedness (other than Convertible
Securities) incurred by the Company that is made expressly pari passu in right of payment to the Indebtedness evidenced by this Note,
as reflected in a written agreement reasonably acceptable to the Holder (the “Pari Passu Intercreditor Agreement”),
which does not include any equity or equity-linked features or the issuance or transfer of any securities (including, with limitation,
any Options or the right to convert, exchange or otherwise satisfy the payment of such Indebtedness with any equity security of the Company
or any of its Subsidiaries).
(ss)
“Permitted Senior Indebtedness” means (i) a real estate mortgage on the Permitted Senior Indebtedness Collateral
in an aggregate principal amount not to exceed the fair market value of the Permitted Senior Indebtedness Collateral (as reasonably determined
by the Holder), and (ii) up to $600,000 of senior secured Indebtedness (other than Convertible Securities) incurred by the Company that
is senior to the Indebtedness evidenced by this Note, which does not include any equity or equity-linked features or the issuance or transfer
of any securities (including, with limitation, any Options or the right to convert, exchange or otherwise satisfy the payment of such
Indebtedness with any equity security of the Company or any of its Subsidiaries).
(tt)
“Permitted Subordinated Indebtedness” means unsecured Indebtedness (other than Convertible Securities) incurred
by the Company that is made expressly subordinate in right of payment to the Indebtedness evidenced by this Note, as reflected in a written
agreement reasonably acceptable to the Holder, which does not include any equity or equity-linked features or the issuance or transfer
of any securities (including, with limitation, any Options or the right to convert, exchange or otherwise satisfy the payment of such
Indebtedness with any equity security of the Company or any of its Subsidiaries) and which Indebtedness does not provide at any time for
(1) the payment, prepayment, repayment, repurchase or defeasance, directly or indirectly, of any principal or premium, if any, thereon
until at least ninety-one (91) days after the Maturity Date and (2) total interest and fees at a rate in excess of 12% per annum.
(uu)
“Permitted Senior Indebtedness Collateral” means that certain Real Property (as defined in the Securities Purchase
Agreement) of the Company described on Schedule I attached hereto.
(vv)
“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.
(ww)
“Prime Rate” means the “prime rate” which from time to time published in the “Money Rates”
column of The Wall Street Journal (Eastern Edition, New York Metro); provided, however, if the Money Rates column of The Wall Street Journal
(Eastern Edition, New York Metro) ceases to be published or otherwise does not designate a “prime rate” as of a Business Day,
the Holder has the right to obtain such information from a similar business publication of its selection.
(xx)
“Principal Market” means the Nasdaq Capital Market.
(yy)
“Redemption Notices” means, collectively, the Event of Default Redemption Notices, the Company Optional Redemption
Notices, the Subsequent Placement Optional Redemption Notices and the Change of Control Redemption Notices, and each of the foregoing,
individually, a “Redemption Notice.”
(zz)
“Redemption Premium” means 125%.
(aaa)
“Redemption Prices” means, collectively, Event of Default Redemption Prices, the Change of Control Redemption
Prices, the Company Optional Redemption Prices and the Subsequent Placement Optional Redemption Prices, and each of the foregoing, individually,
a “Redemption Price.”
(bbb)
“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
Shares issuable upon conversion of the Notes or otherwise pursuant to the terms of the Notes, as may be amended from time to time.
(ccc)
“SEC” means the United States Securities and Exchange Commission or the successor thereto.
(ddd)
“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.
(eee)
“Security Agreement” shall have the meaning as set forth in the Securities Purchase Agreement.
(fff)
“Subscription Date” means October 2, 2024.
(ggg)
“Subsidiaries” means, as of any date of determination, collectively, all Current Subsidiaries and all New Subsidiaries,
and each of the foregoing, individually, a “Subsidiary.”
(hhh)
“Subject Entity” means any Person, Persons or Group or any Affiliate or associate of any such Person, Persons
or Group.
(iii)
“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.
(jjj)
“Trading Day” means, as applicable, (x) with respect to all price or trading volume determinations relating
to the Common Shares, any day on which the Common Shares is traded on the Principal Market, or, if the Principal Market is not the principal
trading market for the Common Shares, then on the principal securities exchange or securities market on which the Common Shares is then
traded, provided that “Trading Day” shall not include any day on which the Common Shares is scheduled to trade on such exchange
or market for less than 4.5 hours or any day that the Common Shares 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 Shares, any day on which The New
York Stock Exchange (or any successor thereto) is open for trading of securities.
(kkk)
“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 Open
Market (or a similar organization or agency succeeding to its functions of reporting prices). 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 share dividend, share split, share combination, recapitalization or other similar transaction during such period.
33.
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 Report of Foreign Private Issuer on Form 6-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 33 shall limit any obligations of the Company, or any rights of the Holder, under
Section 4(i) of the Securities Purchase Agreement.
34.
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.
|
VISIONARY HOLDINGS INC.
|
| By: _________________________________ |
| Name: Charles Y. Fu |
| Title: Director, Senior Vice President & General Counsel |
Senior Convertible Note - Signature Page
EXHIBIT
I
VISIONARY HOLDINGS INC.
CONVERSION NOTICE
Reference is made to the Senior
Secured Convertible Note (the “Note”) issued to the undersigned by Visionary Holdings Inc., a company organized under
the laws of Canada (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 Common Shares, no par value per share (the “Common
Shares”), of the Company, as of the date specified below. Capitalized terms not defined herein shall have the meaning as set
forth in the Note.
| Date of Conversion: |
|
| |
|
| Aggregate Principal to be converted: |
|
| |
|
| 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: |
|
| |
|
AGGREGATE CONVERSION AMOUNT
TO BE CONVERTED: |
|
| |
|
| Please confirm the following information: |
| |
| Conversion Price: |
|
| |
|
| Number of Common Shares to be issued: |
|
| |
|
|
If this Conversion Notice
is being delivered with respect to an Alternate Conversion, check here if Holder is electing to use the following Alternate Conversion
Price:____________
Please issue the Common Shares into which the
Note is being converted 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:
|
| Issue to: |
|
| |
|
| |
|
| |
|
| Check here if requesting delivery by Deposit/Withdrawal at Custodian as follows: |
| |
| DTC Participant: |
|
| DTC Number: |
|
| Account Number: |
|
| |
|
|
|
|
|
|
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Date: __________ __, ____
____________________________
Name of Registered Holder
|
|
By: _________________________
Name:
Title:
Tax ID: _____________________
E-mail Address:
|
| |
Exhibit II
ACKNOWLEDGMENT
The Company hereby (a) acknowledges
this Conversion Notice, (b) certifies that the above indicated number of Common Shares [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 Common Shares in accordance with the Transfer Agent Instructions dated _____________, 20__ from the Company and acknowledged
and agreed to by ________________________.
| VISIONARY HOLDINGS INC. |
| |
| |
| By: _________________________________ |
| Name: |
| Title: |
Schedule I
Permitted Senior Indebtedness Collateral
Mortgages on:
(1) 105 Moatfield Dr, North
York, Toronto, Ontario, Canada, M3B 0A2
(2) 95 Moatfield Drive, North York, Ontario, M3B 3L6
Exhibit 10.3
EXECUTION VERSION
AMENDED AND RESTATED
SHAREHOLDER PLEDGE AGREEMENT
AMENDED AND RESTATED SHAREHOLDER
PLEDGE AGREEMENT (this “Agreement”), dated as of October 2, 2024, made by and between 3888 Investment Group Limited
(the “Pledgor”), Visionary Holdings Inc. (f/k/a Visionary Education Technology Holdings Group Inc.), a company organized
under the laws of Canada, with offices located at 105 Moatfield Drive, Unit 1003, Toronto, Ontario, Canada M3B 0A2 (the “Company”),
Fan Zhou and the secured parties listed on the signature pages hereof (collectively, the “Secured Parties” and each,
individually, a “Secured Party”).
W I T N E S S E T H:
WHEREAS, the Company and the
Secured Party are parties to the Securities Purchase Agreement, dated as of October 2, 2024 (as amended, restated or otherwise modified
from time to time, the “Securities Purchase Agreement”), pursuant to which the Company has agreed to sell, and the
Secured Party has agreed to purchase, the Notes (as defined in the Securities Purchase Agreement); and
WHEREAS, in order to induce
the Secured Party to purchase, severally and not jointly, the Notes as provided for in the Securities Purchase Agreement, the Pledgor
has agreed to agreed to grant the Secured Party a separate, continuing security interest in and to the Pledged Collateral (as defined
below) in order to secure the prompt and complete payment, observance and performance of the Secured Obligations (as defined below).
NOW, THEREFORE, for and in consideration
of the recitals made above and other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged,
the parties hereto agree as follows:
SECTION 1.
Definitions and Rules of Interpretation.
(a)
Definitions. Reference is made to the Securities Purchase Agreement and the Notes for a statement of terms thereof.
All terms used in this Agreement which are defined in the Securities Purchase Agreement or the Notes or in Article 8 or Article 9 of the
Uniform Commercial Code as in effect from time to time in the State of New York (the “Code”) and which are not otherwise
defined herein shall have the same meanings herein as set forth therein; provided, that terms used herein which are defined in
the Code as in effect in the State of New York on the date hereof shall continue to have the same meaning notwithstanding any replacement
or amendment of such statute except as the Secured Parties holding a majority of the Secured Obligations then outstanding (the “Required
Holders”) may otherwise determine. In the event that any such term is defined in both the Securities Purchase Agreement, the
Notes and the Code, the definition of such term in the Securities Purchase Agreement or the Notes shall control.
(b)
Rules of Interpretation. Except as otherwise expressly provided in this Agreement, the following rules of interpretation
apply to this Agreement: (i) the singular includes the plural and the plural includes the singular; (ii) “or” and “any”
are not exclusive and “include” and “including” are not limiting; (iii) a reference to any agreement or other
contract includes permitted supplements and amendments; (iv) a reference to a law includes any amendment or modification to such law and
any rules or regulations issued thereunder; (v) a reference to a person includes its permitted successors and assigns; and (vi) a reference
in this Agreement to an Article, Section, Annex, Exhibit or Schedule is to the Article, Section, Annex, Exhibit or Schedule of this Agreement.
SECTION 2.
Pledge and Grant of Security Interest. As collateral security for all of the Secured Obligations (as defined in Section
3 hereof), the Pledgor hereby pledges and assigns and grants to each Secured Party a separate, continuing security interest in, and Lien
on, all of his right, title and interest in and to the following (collectively, the “Pledged Collateral”):
(a)
The Pledgor’s Common Shares of the Company as set forth in Schedule I (as such Schedule is amended from time
to time in accordance with the terms hereof), and all future, issued and outstanding share capital, or other equity or investment securities
of, or partnership, membership, or joint venture interests in, the Company that are required to be pledged from time to time in accordance
with the terms hereof including without limitation, any Additional Pledged Shares required to be pledged in accordance with Section 4(a)
of this Agreement, whether now owned or hereafter acquired by the Pledgor and whether or not evidenced or represented by any share certificate,
certificated security or other instrument, together with the certificates representing such equity interests, all options and other rights,
contractual or otherwise, in respect thereof and all dividends, distributions, cash, instruments, investment property and any other property
(including, but not limited to, any share dividend and any distribution in connection with a share split) from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all of the foregoing and all cash and noncash proceeds thereof
(collectively, the “Pledged Shares”);
(b)
all present and future increases, profits, combinations, reclassifications, and substitutes and replacements for all or
part of the foregoing collateral heretofore described;
(c)
all investment property, financial assets, securities, share capital, other equity interests, share options and commodity
contracts of the Pledgor, all notes, debentures, bonds, promissory notes or other evidences of indebtedness payable or owing to the Pledgor,
and all other assets now or hereafter received or receivable with respect to the foregoing;
(d)
all securities entitlements of the Pledgor in any and all of the foregoing; and
(e)
all proceeds (including proceeds of proceeds) of any and all of the foregoing;
in each case, whether now owned or hereafter acquired
by the Pledgor and howsoever his interest therein may arise or appear (whether by ownership, security interest, Lien, claim or otherwise).
SECTION 3.
Security for Secured Obligations. The security interest created hereby in the Pledged Collateral constitutes continuing
collateral security for the prompt payment and due performance and observance of all of the following Secured Obligations (the “Secured
Obligations”):
(a)
all liabilities, obligations, or undertakings owing by the Company to the Secured Parties of any kind or description arising out
of or outstanding under, advanced or issued pursuant to, or evidenced by the Securities Purchase Agreement, the Notes or any of the other
Transaction Documents, and
(b)
all liabilities, obligations, or undertakings owing by Pledgor to the Secured Parties under this Agreement, in each case with respect
to the foregoing liabilities, obligations or undertakings, irrespective of whether for the payment of money, whether direct or indirect,
absolute or contingent, liquidated or unliquidated, determined or undetermined, due or to become due, voluntary or involuntary, whether
now existing or hereafter arising, and including all interest, costs, indemnities, fees (including attorneys fees), and expenses (including
interest, costs, indemnities, fees, and expenses that, but for the provisions of the Bankruptcy Code, would have accrued irrespective
of whether a claim therefor is allowed) and any and all other amounts which Company or Pledgor is required to pay pursuant to any of the
foregoing, by law, or otherwise.
SECTION 4.
Delivery of the Pledged Collateral.
(a)
The fair market value of the Pledged Shares held by any Secured Party as of any time of determination shall equal the product
of (i) the aggregate number of Common Shares pledged to such Secured Party hereunder and (ii) the quotient of (x) the sum of the two (2)
lowest VWAP (as defined in the Notes) of the Common Shares during the five (5) Trading Day period immediately prior to such time of determination,
divided by (y) two (2) (subject to adjustment for any share splits, share dividends, share combinations, recapitalizations and similar
events during such measuring period) (the “Pledged Share Value”) and shall at all times equal or exceed the aggregate
principal amount outstanding under the Note (whether or not then due and payable) of such Secured Party. The Pledgor shall, within five
business days following the receipt of notice from such Secured Party that the Pledged Share Value is less than the aggregate principal
amount outstanding under the Note of such Secured Party, deliver additional shares (“Additional Pledged Shares”) to
such Secured Party in accordance with the terms of this Section 4 such that the Pledged Share Value (taking into account the fair
market value of such Additional Pledged Shares) shall be no less than the aggregate principal amount outstanding under the Note.
(b)
In accordance with the terms and conditions set forth in the Securities Purchase Agreement, the Pledgor shall deliver to
each of the Secured Parties as of date hereof a certificate with respect to the Pledged Shares to be initially held by such Security Party
in such amounts as set forth on Schedule I attached hereto. As of any given date, with respect to all other promissory notes, certificates
and instruments constituting Pledged Collateral from time to time or required to be pledged to the Secured Parties pursuant to the terms
of this Agreement or the Securities Purchase Agreement, including without limitation, any Additional Pledged Shares required to be pledged
in accordance with Section 4(a) above (collectively the “Additional Collateral”) such amount equal to a fraction (i)
the numerator of which is the principal amount of such Secured Party’s Note on such given date and (ii) the denominator of which
is the aggregate principal amount of all Notes outstanding as of such given date (the “Secured Party Pro Rata Amount”)
of such Additional Collateral shall be delivered to each Secured Party promptly upon receipt thereof by or on behalf of the Pledgor. All
such promissory notes, certificates and instruments shall be held by each Secured Party pursuant hereto and shall be delivered in suitable
form for transfer by delivery or shall be accompanied by duly executed instruments of transfer or assignment or undated share powers executed
in blank, all in form and substance reasonably satisfactory to the Secured Parties. If any Pledged Collateral consists of uncertificated
securities, unless the immediately following sentence is applicable thereto, the Pledgor shall cause the applicable Secured Party (or
its designated custodian, nominee or other designee) to become the registered holder thereof, or cause each issuer of such securities
to agree that it will comply with instructions originated by the applicable Secured Party (or its designated custodian, nominee or other
designee), with respect to such securities without further consent by the Pledgor. If any Pledged Collateral consists of securities entitlements,
the Pledgor shall transfer the applicable Secured Party Pro Rata Amount of such securities entitlements to each Secured Party (or its
designated custodian, nominee or other designee) or cause the applicable securities intermediary to agree that it will comply with entitlement
orders by such Secured Party (or its designated custodian, nominee or other designee) without further consent by the Pledgor.
(c)
Promptly upon the receipt by the Pledgor of any Additional Collateral and contemporaneously with any delivery of Additional
Pledged Shares in accordance with Section 4(a), a Pledge Amendment, duly executed by the Pledgor, in substantially the form of Annex
I hereto (a “Pledge Amendment”), shall be delivered to each Secured Party, in respect of the Additional Collateral
which is or are to be pledged pursuant to this Agreement and the Securities Purchase Agreement, which Pledge Amendment shall from and
after delivery thereof constitute part of Schedule I hereto. The Pledgor hereby authorizes each Secured Party to attach each Pledge
Amendment to this Agreement and agrees that all promissory notes, certificates or instruments listed on any Pledge Amendment shall for
all purposes hereunder constitute Pledged Collateral and the Pledgor shall be deemed upon delivery thereof to have made the representations
and warranties set forth in Section 6 with respect to such Additional Collateral.
(d)
If the Pledgor shall receive, by virtue of the Pledgor’s being or having been an owner of any Pledged Collateral,
any (i) share certificate (including, without limitation, any certificate representing a share dividend or distribution in connection
with any increase or reduction of capital, reclassification, merger, consolidation, sale of assets, combination of shares, share 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 Collateral, or otherwise, (iii) dividends payable in cash (except such dividends permitted to be retained
by the Pledgor pursuant to Section 8 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 (collectively, the “Distribution Collateral”), the Pledgor shall hold
such Distribution Collateral in trust for the benefit of the Secured Parties, shall segregate it from the Pledgor’s other property
and shall deliver the applicable Secured Party Pro Rata Amount of such Distribution Collateral forthwith to each Secured Party in the
exact form received, with any necessary endorsement and/or appropriate share powers duly executed in blank, to be held by the each Secured
Party as Pledged Collateral and as further collateral security for the Secured Obligations.
SECTION 5.
Taxes.
(a)
All payments made by the Pledgor hereunder or under any other Transaction Document shall be made in accordance with the
terms of the respective Transaction Document and shall be made without set-off, counterclaim, deduction or other defense. All such payments
shall be made free and clear of and without deduction for any present or future taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto, excluding taxes imposed on the net income of any Secured Party by the jurisdiction in
which such Secured Party is organized or where it has its principal lending office (all such nonexcluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities, collectively or individually, “Taxes”). If the Pledgor shall be required to
deduct or to withhold any Taxes from or in respect of any amount payable hereunder or under any other Transaction Document:
(i)
the amount so payable shall be increased to the extent necessary so that after making all required deductions and withholdings
(including Taxes on amounts payable to any Secured Party pursuant to this sentence) each Secured Party receives an amount equal to the
sum it would have received had no such deduction or withholding been made,
(ii)
the Pledgor shall make such deduction or withholding,
(iii)
the Pledgor shall pay the full amount deducted or withheld to the relevant taxation authority in accordance with applicable
law, and
(iv)
as promptly as possible thereafter, the Pledgor shall send the Secured Parties an official receipt (or, if an official receipt
is not available, such other documentation as shall be satisfactory to the Secured Parties, as the case may be) showing payment.
In addition, the Pledgor agrees to pay any present or future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies that arise from any payment made hereunder or from the execution, delivery, registration or enforcement of, or otherwise
with respect to, this Agreement or any other Transaction Document (collectively, “Other Taxes”).
(b)
The Pledgor hereby indemnifies and agrees to hold each Secured Party (each an “Indemnified Party”) harmless
from and against Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 5) paid by any Indemnified Party as a result of any payment made hereunder or from the execution,
delivery, registration or enforcement of, or otherwise with respect to, this Agreement or any other Transaction Document, and any liability
(including penalties, interest and expenses for nonpayment, late payment or otherwise) arising therefrom or with respect thereto, whether
or not such Taxes or Other Taxes were correctly or legally asserted. This indemnification shall be paid within 30 days from the
date on which such Secured Party makes written demand therefor, which demand shall identify the nature and amount of such Taxes or Other
Taxes.
(c)
If the Pledgor fails to perform any of its obligations under this Section 5, the Pledgor shall indemnify each
Secured Party for any taxes, interest or penalties that may become payable as a result of any such failure. The obligations of the Pledgor
under this Section 5 shall survive the termination of this Pledge Agreement and the payment of the Obligations and all other
amounts payable hereunder.
SECTION 6.
Representations and Warranties. The Pledgor represents and warrants as follows:
(a)
The Pledgor has all requisite legal capacity, power and authority to execute, deliver and perform its obligations under
this Agreement. This Agreement has been duly executed and delivered by the Pledgor and constitutes a legal, valid and binding obligation
of the Pledgor, enforceable against the Pledgor in accordance with its terms, except (a) as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or similar laws now or hereafter in effect relating to, or affecting
generally, the enforcement of creditors’ and other obligees’ rights and (b) where the remedy of specific performance or other
forms of equitable relief may be subject to certain equitable defenses and principles and to the discretion of the court before which
the proceeding may be brought.
(b)
The Pledged Shares have been duly authorized and validly issued, are fully paid and nonassessable and the holders thereof
are not entitled to any preemptive first refusal or other similar rights. All other shares constituting Pledged Collateral will be, when
issued, duly authorized and validly issued, fully paid and nonassessable.
(c)
The Pledgor is and will be at all times the legal and beneficial owner of the Pledged Collateral free and clear of any Lien,
security interest, option or other charge or encumbrance except for the security interest and Lien created by this Agreement or any Permitted
Liens.
(d)
The exercise by any Secured Party of any of its rights and remedies hereunder will not contravene any law or any contractual
restriction binding on or affecting the Pledgor or any of the properties of the Pledgor and will not result in or require the creation
of any Lien, security interest or other charge or encumbrance upon or with respect to any of the properties of the Pledgor other than
pursuant to this Agreement and the other Transaction Documents, as defined in the Securities Purchase Agreement, the “Transaction
Documents”).
(e)
No authorization or approval or other action by, and no notice to or filing with, any governmental authority is required
to be obtained or made by the Pledgor for (i) the due execution, delivery and performance by the Pledgor of this Agreement, (ii) the grant
by the Pledgor, or the perfection, of the security interest and Lien purported to be created hereby in the Pledged Collateral or (iii)
the exercise by any Secured Party of any of its rights and remedies hereunder, except as may be required in connection with any sale of
any Pledged Collateral by laws affecting the offering and sale of securities generally.
(f)
This Agreement creates a valid security interest and Lien in favor of the Secured Parties in the Pledged Collateral, as
security for the Secured Obligations. Each Secured Party having possession of the certificates representing the Pledged Shares and all
other certificates, instruments and cash constituting Pledged Collateral from time to time results in the perfection of such security
interest and Lien. Such security interest and Lien is, or in the case of Pledged Collateral in which the Pledgor obtains rights after
the date hereof, will be, a perfected Lien, subject only to the Permitted Liens. All action necessary or desirable to perfect and protect
such security interest and Lien has been duly taken, except for such Secured Party’s having possession of certificates, instruments
and cash constituting Pledged Collateral after the date hereof.
SECTION 7.
Covenants as to the Pledged Collateral. So long as any Secured Obligations shall remain outstanding, the Pledgor will, unless
the Required Holders, shall otherwise consent in writing:
(a)
keep adequate records concerning the Pledged Collateral and permit the Secured Parties, or any designees or representatives
thereof at any time or from time to time during reasonable hours after prior written notice to examine and make copies of and abstracts
from such records;
(b)
at the Pledgor’s expense, promptly deliver to each Secured Party a copy of each material notice or other material
communication received by the Pledgor in respect of the Pledged Collateral;
(c)
at the Pledgor’s expense, defend each Secured Party’s right, title and security interest in and to the Pledged
Collateral against the claims of any Person;
(d)
at the Pledgor’s expense, at any time and from time to time, promptly execute and deliver all further instruments
and documents and take all further action that may be necessary or desirable or that any Secured Party may reasonably request in order
to (i) perfect and protect, or maintain the perfection of, the security interest and Lien purported to be created hereby, (ii) enable
such Secured Party to exercise and enforce its rights and remedies hereunder in respect of the Pledged Collateral or (iii) otherwise effect
the purposes of this Agreement, including, without limitation, delivering to such Secured Party irrevocable proxies in respect of the
Pledged Collateral;
(e)
not sell, assign (by operation of law or otherwise), exchange or otherwise dispose of any Pledged Collateral or any interest
therein except as expressly permitted by the Securities Purchase Agreement or the Notes;
(f)
not create or suffer to exist any Lien, upon or with respect to any Pledged Collateral except for the Lien created hereby
or for any Permitted Lien;
(g)
not make or consent to any amendment or other modification or waiver with respect to any Pledged Collateral or enter into
any agreement or permit to exist any restriction with respect to any Pledged Collateral;
(h)
except as expressly permitted by the Securities Purchase Agreement, not permit the issuance of (i) any additional shares
of any class of share capital, partnership interests, member interests or other equity of the Company, (ii) 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 share capital or (iii) any warrants, options, contracts or other commitments entitling any Person to purchase
or otherwise acquire any such shares of share capital;
(i)
not issue any share certificate, certificated security or other instrument to evidence or represent any share capital, any
partnership interest or membership interest described in Schedule I hereto; and
(j)
not take or fail to take any action which would in any manner impair the validity or enforceability of each Secured Party’s
security interest in and Lien on any Pledged Collateral.
SECTION 8.
Voting Rights, Dividends, Etc. in Respect of the Pledged Collateral.
(a)
So long as no Event of Default shall have occurred and be continuing:
(i)
the Pledgor may exercise any and all voting and other consensual rights pertaining to any Pledged Collateral for any purpose
not inconsistent with the terms of this Agreement, the Securities Purchase Agreement or the Notes;
(ii)
the Pledgor may receive and retain any and all dividends, interest or other distributions paid in respect of the Pledged
Collateral 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 Collateral, (B) dividends and other distributions paid or payable in cash in respect of
any Pledged Collateral 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
Collateral, together with any dividend, distribution, interest or other payment which at the time of such dividend, distribution, interest
or other payment was not permitted by the Securities Purchase Agreement, shall be, and shall forthwith be delivered to each Secured Party
in proportion to their Secured Party Pro Rata Amount to hold as, Pledged Collateral and shall, if received by the Pledgor, be received
in trust for the benefit of such Secured Party, shall be segregated from the other property or funds of the Pledgor, and shall be forthwith
delivered to such Secured Party in the exact form received with any necessary indorsement and/or appropriate share powers duly executed
in blank, to be held by such Secured Party as Pledged Collateral and as further collateral security for the Secured Obligations; and
(iii)
each Secured Party will execute and deliver (or cause to be executed and delivered) to the Pledgor all such proxies and
other instruments as the Pledgor may reasonably request for the purpose of enabling the Pledgor to exercise the voting and other rights
which it is entitled to exercise pursuant to paragraph (i) of this Section 8(a) and to receive the dividends, distributions, interest
and other payments which it is authorized to receive and retain pursuant to paragraph (ii) of this Section 8(a), in each case,
to the extent that such Secured Party has possession of such Pledged Collateral.
(b)
Upon the occurrence and during the continuance of an Event of Default (as defined in the Notes) (an “Event of Default”),
:
(i)
all rights of the Pledgor to exercise the voting and other consensual rights which he would otherwise be entitled to exercise
pursuant to paragraph (i) of subsection (a) of this Section 8, and to receive the dividends, distributions, interest and other
payments which he would otherwise be authorized to receive and retain pursuant to paragraph (ii) of subsection (a) of this Section 8,
shall cease, and all such rights shall thereupon become vested in each Secured Party which shall thereupon have the sole right to exercise
such voting and other consensual rights and to receive and hold as Pledged Collateral such dividends, distributions, interest and other
payments;
(ii)
without limiting the generality of the foregoing, each Secured Party may at his option exercise any and all rights of conversion,
exchange, subscription or any other rights, privileges or options pertaining to any of the Pledged Collateral as if it were the absolute
owner thereof, including, without limitation, the right to exchange, in its discretion, any and all of the Pledged Collateral upon the
merger, consolidation, reorganization, recapitalization or other adjustment of any issuer of the Pledged Collateral or upon the exercise
by any issuer of the Pledged Collateral of any right, privilege or option pertaining to any Pledged Collateral, and, in connection therewith,
to deposit and deliver any and all of the Pledged Collateral with any committee, depository, transfer agent, registrar or other designated
agent upon such terms and conditions as the Secured Parties may determine; and
(iii)
all dividends, distributions, interest and other payments which are received by the Pledgor contrary to the provisions of
paragraph (i) of this Section 8(b) shall be received in trust for the benefit of the Secured Parties, shall be segregated from
other funds of the Pledgor, and shall be forthwith paid over to the Secured Parties in proportion to the applicable Secured Party Pro
Rata Amount as Pledged Collateral in the exact form received with any necessary indorsement and/or appropriate share powers duly executed
in blank, to be held by such Secured Party as Pledged Collateral and as further collateral security for the Secured Obligations.
SECTION 9.
Additional Provisions Concerning the Pledged Collateral.
(a)
The Pledgor hereby (i) authorizes the Secured Parties to file one or more financing or continuation statements, and amendments
thereto, relating to the Pledged Collateral, without the signature of the Pledgor where permitted by law, (ii) ratifies such authorization
to the extent that the Secured Parties has filed any such financing or continuation statements, or amendments thereto, without the signature
of the Pledgor prior to the date hereof and (iii) authorizes each Secured Party to execute any agreements, instruments or other documents
in the Pledgor’s name and to file such agreements, instruments or other documents that are related to the security interest and
Lien of each Secured Party in the Pledged Collateral or as provided under Article 8 or Article 9 of the Code or any other applicable uniform
commercial code or other law in any appropriate filing office. Not withstanding anything to the contrary contained herein, no Secured
Party shall have any responsibility for the preparing, recording, filing, re-recording, or re-filing of any financing statement, continuation
statement or other instrument in any public office.
(b)
The Pledgor hereby irrevocably appoints each Secured Party as his attorney-in-fact and proxy, with full authority in the
place and stead and in his name or otherwise, from time to time in the Secured Parties’ discretion to take any action and to execute
any instrument which the Secured Parties may deem necessary or advisable to accomplish the purposes of this Agreement (subject to the
rights of the Pledgor under Section 8(a) hereof), including, without limitation, to receive, indorse and collect all instruments
made payable to the Pledgor representing any dividend, interest payment or other distribution in respect of any Pledged Collateral and
to give full discharge for the same. This power is coupled with an interest and is irrevocable until the termination of this Agreement.
(c)
If the Pledgor fails to perform any agreement or obligation contained herein, each Secured Party may perform, or cause performance
of, such agreement or obligation, and the expenses of such Secured Party incurred in connection therewith shall be payable by the Pledgor
pursuant to Section 11 hereof and shall be secured by the Pledged Collateral.
(d)
Other than the exercise of reasonable care to assure the safe custody of the Pledged Collateral while held hereunder, no
Secured Party shall have any duty or liability to preserve rights pertaining thereto and shall be relieved of all responsibility for the
Pledged Collateral upon surrendering it or tendering surrender of it to any of the Pledgor. Each Secured Party shall be deemed to have
exercised reasonable care in the custody and preservation of the Pledged Collateral in its possession if the Pledged Collateral is accorded
treatment substantially equal to that which such Secured Party accords its own property, it being understood that no Secured Party shall
have responsibility for (i) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other
matters relating to any Pledged Collateral, whether or not such Secured Party has or is deemed to have knowledge of such matters, or (ii)
taking any necessary steps to preserve rights against any parties with respect to any Pledged Collateral. Each Secured Party agrees that,
with respect to any Pledged Collateral at any time or times in its possession and in which any other Secured Party has a Lien, the Secured
Party in possession of any such Pledged Collateral shall be the bailee of each other Secured Party solely for purposes of perfecting (to
the extent not otherwise perfected) each other Secured Party’s Lien in such Pledged Collateral, provided that no Secured Party shall
be obligated to obtain or retain possession of any such Pledged Collateral. Without limiting the generality of the foregoing, Secured
Parties and Pledgor hereby agree that any Secured Party that is in possession of any Pledged Collateral at such time as the Secured Obligations
owing to such Secured Party have been paid in full may deliver such Pledged Collateral to the Company or, if requested by any Secured
Party prior to such delivery, may deliver such Pledged Collateral (unless otherwise restricted by applicable law or court order and subject
in all events to the receipt of an indemnification of all liabilities arising from such delivery) to the requesting Secured Party, without
recourse to or representation or warranty by the Secured Party in such possession. No later than the third business day after the Company’s
receipt of such Pledged Collateral, the Company shall deliver to each Secured Party with Secured Obligations then outstanding the applicable
Secured Party Pro Rata Amount of such Pledged Collateral.
(e)
The powers conferred on each Secured Party hereunder are solely to protect its interest in the Pledged Collateral and shall
not impose any duty upon it to exercise any such powers. Except for the safe custody of any Pledged Collateral in its possession and the
accounting for monies actually received by it hereunder, no Secured Party shall have any duty as to any Pledged Collateral or as to the
taking of any necessary steps to preserve rights against prior parties or any other rights pertaining to any Pledged Collateral.
(f)
Upon the occurrence and during the continuation of any Default or Event of Default, each Secured Party may at any time in
its discretion (i) without notice to the Pledgor, transfer or register in the name of such Secured Party or any of its nominees any or
all of the Pledged Collateral, subject only to the revocable rights of the Pledgor under Section 8(a) hereof, and (ii) exchange
certificates or instruments constituting Pledged Collateral for certificates or instruments of smaller or larger denominations.
SECTION 10.
Remedies Upon Default. If any Event of Default shall have occurred and be continuing:
(a)
Each Secured Party may exercise in respect of the Pledged Collateral, in addition to other rights and remedies provided
for herein or otherwise available to it, all of the rights and remedies of a secured party on default under the Code then in effect in
the State of New York; and without limiting the generality of the foregoing and without notice except as specified below, sell the Pledged
Collateral or any part thereof in one or more parcels at public or private sale, at any exchange or broker’s board or elsewhere,
at such price or prices and on such other terms as such Secured Party may deem commercially reasonable. The Pledgor agrees that, to the
extent notice of sale shall be required by law, at least ten (10) days’ notice to any of the Pledgor of the time and place of any
public sale or the time after which any private sale is to be made shall constitute reasonable notification. No Secured Party shall be
obligated to make any sale of Pledged Collateral regardless of notice of sale having been given. Each Secured Party may adjourn any public
or private sale by such Secured Party 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.
(b)
The Pledgor recognizes that it may be impracticable to effect a public sale of all or any part of the Pledged Shares or
any other securities constituting Pledged Collateral and that each Secured Party 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 its own account, for investment and not with a view to the distribution or resale thereof. The Pledgor 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 no Secured Party shall have any obligation to delay 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 of 1933, as amended (the
“Securities Act”). The Pledgor 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 (15) bona fide offerees shall be deemed to involve a “public
disposition” for the purposes of Section 9-610 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 any Secured Party may, in such event, bid for the purchase of such securities.
(c)
Any cash held by any Secured Party as Pledged Collateral and all cash proceeds received by such Secured Party in respect
of any sale of, collection from, or other realization upon, all or any part of the Pledged Collateral shall be applied (after payment
of any amounts payable to such Secured Party pursuant to Section 11 hereof) by such Secured Party against, all or any part of the
Secured Obligations in such order as such Secured Party shall elect consistent with the provisions of the Securities Purchase Agreement.
(d)
In the event that the proceeds of any such sale, collection or realization are insufficient to pay all amounts to which
any Secured Party is legally entitled, the Pledgor shall be jointly and severally liable for the deficiency, together with interest thereon
at the highest rate specified in the Notes 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 and expenses of any attorneys employed by such Secured Party
to collect such deficiency.
SECTION 11.
Indemnity and Expenses.
(a)
The Pledgor hereby agrees to indemnify and hold each Secured Party (and all of its officers, directors, employees, attorneys,
consultants) harmless from and against any and all claims, damages, losses, liabilities, obligations, penalties, fees, costs and expenses
(including, without limitation, reasonable legal fees and disbursements of counsel) to the extent that they arise out of or otherwise
result from this Agreement (including, without limitation, enforcement of this Agreement), except claims, losses or liabilities arising
or resulting directly from such Person’s gross negligence or willful misconduct as determined by a court of competent jurisdiction.
(b)
The Pledgor shall be obligated for, and will upon demand pay to each Secured Party the reasonable amount of any and all
out-of-pocket costs and expenses, including the reasonable fees and disbursements of such Secured Party’s counsel and of any experts
which such Secured Party may incur in connection with (i) the preparation, negotiation, execution, delivery, recordation, administration,
amendment, waiver or other modification or termination of this Agreement, (ii) the custody, preservation, use or operation of, or the
sale of, collection from, or other realization upon, any Pledged Collateral, (iii) the exercise or enforcement of any of the rights of
such Secured Party hereunder, or (iv) the failure by the Pledgor to perform or observe any of the provisions hereof.
SECTION 12.
Notices, Etc. All notices and other communications provided for hereunder shall be in writing and shall be mailed (by certified
mail, postage prepaid and return receipt requested), sent by Federal Express or other recognized courier service (return receipt requested),
telecopied or delivered, if to the Pledgor, to him at the address specified in the Securities Purchase Agreement or if to the Secured
Parties, to it at the address specified in the Securities Purchase Agreement; or as to either such Person at such other address as shall
be designated by such Person in a written notice to such other Person complying as to delivery with the terms of this Section 12. All
such notices and other communications shall be effective (i) if sent by certified mail, postage prepaid, return receipt requested, when
received or three (3) Business Days after mailing, whichever first occurs, (ii) if telecopied, when transmitted and confirmation is received,
provided same is on a Business Day and, if not, on the next Business Day or (iii) if delivered or sent by Federal Express or other recognized
courier service (return receipt requested), upon delivery, provided same is on a Business Day and, if not, on the next Business Day.
SECTION 13.
Security Interest Absolute. All rights of the Secured Parties, all Liens and all obligations of the Pledgor hereunder shall
be absolute and unconditional irrespective of: (i) any lack of validity or enforceability of the Securities Purchase Agreement, the Notes
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,
the Notes 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 which might otherwise constitute a defense available to, or a discharge of, the Pledgor in respect of the Secured Obligations
(other than the payment in full of the Secured Obligations or complete conversion to equity securities of the Company of all indebtedness
obligations owed by the Company to the Secured Parties under the Notes (including, without limitation, all principal, interest and fees
related to the Notes)). All authorizations and agencies contained herein with respect to any of the Pledged Collateral are irrevocable
and powers coupled with an interest.
SECTION 14.
Beneficial Ownership. Each Secured Party shall not have the right to exercise its rights under this Agreement 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, such applicable
Secured Party together with its other Attribution Parties collectively would beneficially own in excess of 9.99% (the “Maximum
Percentage”) of the Common Shares outstanding immediately after giving effect to such exercise. For purposes of the foregoing
sentence, the aggregate number of Common Shares beneficially owned by a Secured Party and its other Attribution Parties shall include
the number of Common Shares held by such Secured Party and all its other Attribution Parties plus the number of Common Shares to be acquired
by such Secured Party with respect to which the determination of such sentence is being made, but shall exclude the remaining Common Shares
pledged to such Secured Party that are not then being acquired upon such Secured Party’s exercise of its right hereunder and any
Common Shares which would be issuable upon (A) conversion of the remaining, nonconverted portion of the Note beneficially owned by such
Secured Party or any its other Attribution Parties, (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 shares or warrants) beneficially
owned by such Secured Party or any its other Attribution Party subject to a limitation on conversion or exercise analogous to the limitation
contained in this Section 14. For purposes of this Section 14, beneficial ownership shall be calculated in accordance with Section 13(d)
of the 1934 Act. For purposes of determining the number of outstanding Common Shares a Secured Party may acquire upon exercise of its
rights hereunder at any time of determination without exceeding the Maximum Percentage, each Secured Party may rely on the number of outstanding
Common Shares as reflected in (x) the Company’s most recent Annual Report on Form 20-F, Report of Foreign Issuer on Form 6-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 Common Shares outstanding (the “Reported Outstanding
Share Number”). For any reason at any time, upon the written or oral request of a Secured Party, the Company shall within one
(1) Business Day confirm orally and in writing or by electronic mail to such Secured party the number of Common Shares then outstanding.
In the event that the exercise of rights by a Secured Party hereunder and transfer of Common Shares from the Pledgor to such Secured Party
hereunder would result in such Secured Party and its other Attribution Parties being deemed to beneficially own, in the aggregate, more
than the Maximum Percentage of the number of outstanding Common Shares (as determined under Section 13(d) of the 1934 Act), the transfer
from the Pledgor to such Secured Party of such number of shares by which such Secured Party’s and its 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 such Secured Party shall not have the power to vote or to transfer the Excess Shares. Upon delivery
of a written notice to the Company, a Secured Party 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 such Secured Party and its other Attribution
Parties and not to any other Secured Party that is not an Attribution Party of such Secured Party. For purposes of clarity, the Common
Shares in excess of the Maximum Percentage shall not be deemed to be beneficially owned by such Secured Party for any purpose including
for purposes of Section 13(d) or Rule 16a-1(a)(1) of the 1934 Act. No prior inability of a Secured Party to exercise its rights hereunder
and acquire any Common Shares from the Pledger to such Secured Party pursuant to this paragraph shall have any effect on the applicability
of the provisions of this paragraph with respect to any subsequent determination of transferability. The provisions of this paragraph
shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 14 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 14 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 Secured Party.
SECTION 15.
Acknowledgment.
(a)
Each Secured Party hereby agrees and acknowledges that no other Secured Party has agreed to act for it as an administrative
or collateral agent, and each Secured Party is and shall remain solely responsible for the attachment, perfection and priority of all
Liens created by this Agreement or any other Security Document in favor of such Secured Party. No Secured Party shall have by reason of
this Agreement or any other Transaction Document an agency or fiduciary relationship with any other Secured Party. No Secured Party
(which term, as used in this sentence, shall include reference to each Secured Party’s officers, directors, employees, attorneys,
agents and affiliates and to the officers, directors, employees, attorneys and agents of such Secured Party’s affiliates) shall:
(i) have any duties or responsibilities except those expressly set forth in this Agreement and the other Security Documents or (ii) be
required to take, initiate or conduct any enforcement action (including any litigation, foreclosure or collection proceedings hereunder
or under any of the other Security Documents). Without limiting the foregoing, no Secured Party shall have any right of action whatsoever
against any other Secured Party as a result of such Secured Party acting or refraining from acting hereunder or under any of the Security
Documents except as a result and to the extent of losses caused by such Secured Party’s actual gross negligence or willful misconduct.
No Secured Party assumes any responsibility for any failure or delay in performance or breach by the Pledgor or any Secured Party of its
obligations under this Agreement or any other Transaction Document. No Secured Party makes to any other Secured Party any express
or implied warranty, representation or guarantee with respect to any Secured Obligations, Pledged Collateral, Transaction Document or
the Pledgor. No Secured Party nor any of its officers, directors, employees, attorneys or agents shall be responsible to any other Secured
Party or any of its officers, directors, employees, attorneys or agents for: (i) any recitals, statements, information, representations
or warranties contained in any of the Transaction Documents or in any certificate or other document furnished pursuant to the terms hereof;
(ii) the execution, validity, genuineness, effectiveness or enforceability of any of the Transaction Documents; (iii) the validity,
genuineness, enforceability, collectability, value, sufficiency or existence of any Pledged Collateral, or the attachment, perfection
or priority of any Lien therein; or (iv) the assets, liabilities, financial condition, results of operations, business, creditworthiness
or legal status of the Pledgor. No Secured Party nor any of its officers, directors, employees, attorneys or agents shall have any obligation
to any other Secured Party to ascertain or inquire into the existence of any default or Event of Default, the observance or performance
by the Pledgor of any of the duties or agreements of the Pledgor under any of the Transaction Documents or the satisfaction of any conditions
precedent contained in any of the Transaction Documents.
(b)
Each Secured Party hereby acknowledges and represents that it has, independently and without reliance upon any other Secured
Party, and based upon such documents, information and analyses as it has deemed appropriate, made its own credit analysis of the Pledgor
and the Company and its own decision to enter into the Transaction Documents and to purchase the Notes, and each Secured Party has
made such inquiries concerning the Transaction Documents, the Pledged Collateral, the Company and the Pledgor as such Secured Party feels
necessary and appropriate, and has taken such care on its own behalf as would have been the case had it entered into the Transaction Documents
without any other Secured Party. Each Secured Party hereby further acknowledges and represents that the other Secured Parties have not
made any representations or warranties to it concerning the Pledgor, any of the Pledged Collateral or the legality, validity, sufficiency
or enforceability of any of the Transaction Documents. Each Secured Party also hereby acknowledges that it will, independently and without
reliance upon the other Secured Parties, and based upon such financial statements, documents and information as it deems appropriate at
the time, continue to make and rely upon its own credit decisions in taking or refraining to take any other action under this Agreement
or the Transaction Documents. No Secured Party shall have any duty or responsibility to provide any other Secured Party with any notices,
reports or certificates furnished to such Secured Party by the Pledgor or any credit or other information concerning the affairs, financial
condition, business or assets of the Company (or any of its affiliates) or any Pledgor which may come into possession of such Secured
Party
SECTION 16.
Miscellaneous.
(a)
No amendment of any provision of this Agreement shall be effective unless it is in writing and signed by the Pledgor and
the Required Holders, and no waiver of any provision of this Agreement, and no consent to any departure by the Pledgor therefrom, shall
be effective unless it is in writing and signed by the Required Holders, 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 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 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 each Secured Party under any Transaction Document against any party thereto are not conditional or contingent on any attempt
by such Secured Party to exercise any of its rights under any other Transaction Document against such party or against any other Person.
(c)
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.
(d)
This Agreement shall create a continuing security interest in and Lien on the Pledged Collateral and shall (i) remain in
full force and effect until the termination of this Agreement in accordance with the terms hereof and (ii) be binding on the Pledgor
and his heirs and assigns and shall inure, together with all rights and remedies of each Secured Party and its 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 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 such Secured Party herein or otherwise. Upon any such assignment or transfer, all references in this Agreement to such Secured
Party shall mean the assignee of such Secured Party. None of the rights or obligations of the Pledgor hereunder may be assigned or otherwise
transferred without the prior written consent of the Required Holders, and any such assignment or transfer without such consent shall
be null and void.
(e)
Notwithstanding anything to the contrary in this Agreement, (i) this Agreement (along with all powers of attorney granted
hereunder) and the security interests and Lien created hereby shall terminate and all rights to the Pledged Collateral shall revert to
the Pledgor upon the repayment in full and/or complete conversion to equity securities of the Company of all indebtedness obligations
owed by the Company to the Secured Parties under the Notes (including, without limitation, all principal, interest and fees related to
the Notes), and (ii) the Secured Parties will, upon the Pledgor’s request and at the Pledgor’s expense, (A) return to the
Pledgor such of the Pledged Collateral (to the extent delivered to such Secured Party) as shall not have been sold or otherwise disposed
of or applied pursuant to the terms hereof, and (B) execute and deliver to the Pledgor, without recourse, representation or warranty,
such documents as the Pledgor shall reasonably request to evidence such termination.
(f)
The internal laws, and not the laws of conflicts, of the State of New York shall govern the enforceability and validity
of this Agreement, the construction of its terms and the interpretation of the rights and duties of the parties, except as required by
mandatory provisions of law and except to the extent that the validity and perfection or the perfection and the effect of perfection or
non-perfection of the security interest and Lien created hereby, or remedies hereunder, in respect of any particular Pledged Collateral
are governed by the law of a jurisdiction other than the State of New York.
(g)
Each party to this Agreement hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive
jurisdiction of the United States District Court for the Southern District of New York sitting in Manhattan or the Commercial Division,
Civil Branch of the Supreme Court of the State of New York sitting in New York County in connection with any suit, action or proceeding
directly or indirectly arising out of, under or in connection with this Agreement or the other Transaction Documents or the transactions
contemplated hereby or thereby. No party to this Agreement may move to (i) transfer any such suit, action or proceeding brought in such
New York court or federal court to another jurisdiction, (ii) consolidate any such suit, action or proceeding brought in such New York
court or federal court with a suit, action or proceeding in another jurisdiction or (iii) dismiss any such suit, action or proceeding
brought in such New York court or federal court for the purpose of bringing the same in another jurisdiction. Each party to this Agreement
agrees that a final judgment in any such suit, action or proceeding shall be conclusive and may be enforced in any other jurisdiction
by suit on the judgment or in any other manner provided by law. Each party to this Agreement hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement, or the other Transaction Documents in any New York court
sitting in New York County or any federal court sitting in the Southern District of New York.
(h)
The Company hereby appoints Simon L. Tang, with an address of 9999 Bellaire Blvd. #350, Houston, TX 77036, as its agent
for service of process in New York. Nothing contained herein shall affect the right of each Secured Party to serve process in any other
manner permitted by law or commence legal proceedings or otherwise proceed against the Pledgor or any property of the Pledgor in any other
jurisdiction.
(i)
The Pledgor irrevocably and unconditionally waives any right he may have to claim or recover in any legal action, suit or
proceeding referred to in this Section any special, exemplary, punitive or consequential damages.
(j)
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR
OTHER TRANSACTION DOCUMENTS.
(k)
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit
or affect any of the provisions hereof. The language used in this Agreement will be deemed to be the language chosen by the parties to
express their mutual intent, and no rules of strict construction will be applied against any party.
(l)
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.
[Signature
Page Follows]
In
Witness Whereof, the Pledgor, the Company and the Secured Parties have executed and delivered this Agreement as of the date first
above written.
| |
FAN ZHOU:
By: __________________________
Fan Zhou
|
| |
|
[Signature
Page to Shareholder Pledge Agreement]
In
Witness Whereof, the Pledgor, the Company and the Secured Parties have executed and delivered this Agreement as of the date first
above written.
| |
PLEDGOR:
3888 INVESTMENT
GROUP LIMITED
By: __________________________
Name:
Fan Zhou
|
| |
Title: Sole Director |
[Signature
Page to Shareholder Pledge Agreement]
In
Witness Whereof, the Pledgor, the Company and the Secured Parties have executed and delivered this Agreement as of the date first
above written.
| |
SECURED PARTY:
[SECURED
PARTY]
By: __________________________
Name:
|
| |
Title: |
[Signature
Page to Shareholder Pledge Agreement]
In
Witness Whereof, the Pledgor, the Company and the Secured Parties have executed and delivered this Agreement as of the date first
above written.
| |
COMPANY:
Visionary
Holdings Inc.
By: __________________________
Name:
Charles Y. Fu
|
| |
Title: Director, Senior Vice President & General Counsel |
[Signature
Page to Shareholder Pledge Agreement]
SCHEDULE I TO PLEDGE
AGREEMENT
Pledged Shares
| Pledgor |
Name of Issuer |
Number of
Shares |
%
of
Shares
|
Class |
Secured Party
to Initially
Hold Certificate
with respect to such
Pledged Shares |
| |
|
|
|
|
|
|
3888 Investment Group Limited
|
Visionary Holdings Inc.
|
1,516,668
|
40.2%
|
Common Shares
|
|
| |
|
|
|
|
|
| |
|
|
|
|
|
ANNEX I
TO
PLEDGE AGREEMENT
PLEDGE AMENDMENT
This Pledge Amendment, dated
__, 20__, is delivered pursuant to Section 4 of the Pledge Agreement referred to below. The undersigned hereby agrees that this
Pledge Amendment may be attached to the Amended and Restated Pledge Agreement, dated as of __, 20__, made by ___________ in favor of the
secured parties signatory thereto (the “Secured Parties”) as it may heretofore have been or hereafter may be amended
or otherwise modified or supplemented from time to time and that the promissory notes [and/or] shares or other equity interests listed
on this Pledge Amendment shall be hereby pledged and assigned to the Secured Parties and become part of the Pledged Collateral referred
to in such Pledge Agreement and shall secure all of the obligations referred to in such Pledge Agreement.
Pledged Shares
| Pledgor |
Name of Issuer |
Number of Shares or
Other Equity Interests
|
Class |
Certificate No(s) |
| |
|
|
|
|
| |
[PLEDGOR] |
| |
|
| |
By: |
|
| |
|
[SHAREHOLDER] |
Exhibit 10.4
EXECUTION VERSION
REGISTRATION RIGHTS
AGREEMENT
This REGISTRATION RIGHTS
AGREEMENT (this “Agreement”), dated as of October 2, 2024, is by and among Visionary Holdings Inc. (f/k/a Visionary
Education Technology Holdings Group Inc.), a company organized under the laws of Canada with offices located at 105 Moatfield Drive, Unit
1003, Toronto, Ontario, Canada M3B 0A2 (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 parties hereto, dated as of October 2, 2024 (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 the Notes (as defined in the Securities Purchase Agreement) which will be convertible into Conversion
Shares (as defined in the Securities Purchase Agreement) in accordance with the terms of the Notes.
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)
“Effective Date” means the date that the applicable Registration Statement has been declared effective by the
SEC.
(c)
“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) 120th calendar day after the Initial Closing Date and (B) 5thBusiness 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) 120th calendar day following the date on which
the Company was required to file such additional Registration Statement and (B) 5th 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.
(d)
“Filing Deadline” means (i) with respect to the initial Registration Statement required to be filed pursuant
to Section 2(a), the 90th calendar day after the Initial 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.
(e)
“Initial Closing Date” shall have the meaning set forth in the Securities Purchase Agreement.
(f)
“Investor” means a Buyer or any transferee or assignee of any Registrable Securities or Notes, 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 or Notes, 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, and (ii) any share capital of the Company issued or
issuable with respect to the Conversion Shares or the Notes, including, without limitation, (1) as a result of any share split, share
dividend, recapitalization, exchange or similar event or otherwise and (2) any share capital of the Company into which the Common Shares
(as defined in the Notes) are converted or exchanged and share capital of a Successor Entity (as defined in the Notes) into which the
Common Shares are converted or exchanged, in each case, without regard to any limitations on conversion of the Notes.
(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, as of any time of determination, the maximum number of Conversion Shares
issuable upon conversion of the Notes (assuming for purposes hereof that (w) all Additional Notes (as defined in the Securities Purchase
Agreement) issuable pursuant to the Securities Purchase Agreement shall have been issued at an Additional Closing (as defined in the Securities
Purchase Agreement) on the Initial Closing Date, (x) the Notes are convertible at the Floor Price (as defined in the Notes) as of such
time of determination, (y) interest on the Notes shall accrue through the first anniversary of the Initial Closing Date and will be converted
in Common Shares at the Floor Price as of such time of determination and (z) any such conversion shall not take into account any limitations
on the conversion of the Notes set forth in the Notes), 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 F-3 covering the resale of all of the Registrable Securities, provided that
such initial Registration Statement shall register for resale at least the number of Common Shares equal to the Required Registration
Amount as of the date such Registration Statement is initially filed with the SEC; provided further that if Form F-3 is unavailable for
such a registration, the Company shall use such other form as is required by Section 2(c). 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 Shareholders” 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, Kelley Drye & Warren 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)
Ineligibility to Use Form F-3. In the event that Form F-3 is not available for the registration of the resale of Registrable
Securities hereunder, the Company shall (i) register the resale of the Registrable Securities on Form F-1 or another appropriate form
reasonably acceptable to the Required Holders and (ii) undertake to register the resale of the Registrable Securities on Form F-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 F-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 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 Common Shares 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 (and such calculation shall assume (A) that the Notes are then convertible in full into Common Shares at
the then prevailing Conversion Rate (as defined in the Notes), and (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).
(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 Common Shares 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 Common Shares 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 Common Shares (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 two percent (2%) of such Investor’s original
principal amount stated in such Investor’s Note on the Initial 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 two percent (2%) 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 Common Shares
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 F-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 share
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 Common Shares 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 6-K, Form 20-F 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 20-F, Report of Foreign
Issuer on Form 6-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 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 Common Shares 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 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 Common
Shares 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, or Notes 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 (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.
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
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 an overnight courier service with next day delivery specified, in
each case, properly addressed to the party to receive the same. The mailing addresses and e-mail addresses for such communications shall
be:
If to the Company:
Visionary Holdings Inc.
105 Moatfield Drive
Unit 1003
Toronto, Ontario
Canada M3B 0A2
Telephone: (905) 739-0593
Attention: Charles Y. Fu, Director, Senior Vice President &
General Counsel
E-Mail: charlesfuesq@gmail.com
With a copy (for informational purposes only) to:
Loeb & Loeb LLP
345 Park Avenue
New York, NY 10154
Telephone: (212) 407-4990
Attention: James A. Prestiano
E-Mail: jprestiano@loeb.com
GH Law Firm LLC
880 Third Avenue, 5th Floor
New York, NY 10022
Attention: Annie P. Huang
E-mail: panpinky@gmail.com
If to the Transfer Agent:
Issuer Direct Corporation
One Glenwood Ave.
Suite 1001, Raleigh NC 27603
Telephone: (919) 744-2722 ext. 711-0
Attention: Julie Felix, Senior Compliance and Corporate Actions Administrator
E-Mail: Julie.Felix@issuerdirect.com
If to Legal Counsel:
Kelley Drye & Warren LLP
3 World Trade Center
175 Greenwich Street
New York, NY 10007
Telephone: (212) 808-7540
Facsimile: (212) 808-7897
Attention: Michael A. Adelstein, Esq.
E-mail: madelstein@kelleydrye.com
If to a Buyer, to its mailing address 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 mailing address 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 Kelley Drye & Warren 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
e-mail containing the time, date and recipient’s e-mail or (C) provided by a courier or overnight courier service shall be rebuttable
evidence of personal service, receipt by e-mail 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 Delaware, without giving effect to any provision of law or rule (whether of the State of Delaware or any
other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Delaware. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in Wilmington, Delaware, 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. The Company hereby appoints the Service Agent (as defined in the Securities Purchase Agreement), as its agent for service
of process in New York. 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. The choice of the laws of the State of Delaware as the governing law of this Agreement
is a valid choice of law and would be recognized and given effect to in any action brought before a court of competent jurisdiction in
the Canada, except for those laws (i) which such court considers to be procedural in nature, (ii) which are revenue or penal laws or (iii)
the application of which would be inconsistent with public policy, as such term is interpreted under the laws of the Canada. The Company
or any of their respective properties, assets or revenues does not have any right of immunity under Canada or Delaware law, from any legal
action, suit or proceeding, from the giving of any relief in any such legal action, suit or proceeding, from set-off or counterclaim,
from the jurisdiction of any Canada, Delaware or United States federal court, from service of process, attachment upon or prior to judgment,
or attachment in aid of execution of judgment, or from execution of a judgment, or other legal process or proceeding for the giving of
any relief or for the enforcement of a judgment, in any such court, with respect to its obligations, liabilities or any other matter under
or arising out of or in connection with this Agreement; and, to the extent that the Company, or any of its properties, assets or revenues
may have or may hereafter become entitled to any such right of immunity in any such court in which proceedings may at any time be commenced,
the Company hereby waives such right to the extent permitted by law and hereby consents to such relief and enforcement as provided in
this Agreement and the other Transaction Documents.
(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 Initial 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 then
held by Investors.
(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.
COMPANY:
|
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VISIONARY HOLDINGS INC.
By: ___________________________
Name:
Title:
|
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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[BUYER]
By: _____________________________
Name:
Title:
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EXHIBIT A
FORM OF NOTICE OF EFFECTIVENESS
OF REGISTRATION STATEMENT
______________________
______________________
______________________
Attention: ______________
Re:Visionary Holdings
Inc.
Ladies and Gentlemen:
[We are][I am] counsel to Visionary
Holdings Inc., a company organized under the laws of Canada (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 and the buyers named therein (collectively, the “Holders”) pursuant to which the Company issued to the Holders
senior secured convertible notes (the “Notes”) convertible into the Company’s common shares, no par value per
share (the “Common Shares”). 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 Common Shares issuable
upon conversion of the Notes, 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 [F-1][F-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 shareholder
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 Common Shares underlying the Notes 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 Common Shares
to the Holders as contemplated by the Company’s Irrevocable Transfer Agent Instructions dated _________ __, 20__.
| |
Very truly yours,
[ISSUER’S COUNSEL]
By:_____________________
|
EXHIBIT B
SELLING SHAREHOLDERS
The common shares being offered
by the selling shareholders are those issuable to the selling shareholders upon conversion of the notes. For additional information regarding
the issuance of the notes, see “Private Placement of Notes” above. We are registering the common shares in order to permit
the selling shareholders to offer the shares for resale from time to time. Except for the ownership of the notes issued pursuant to the
Securities Purchase Agreement, the selling shareholders have not had any material relationship with us within the past three years.
The table below lists the
selling shareholders 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 common shares held by each of the selling shareholders. The
second column lists the number of common shares beneficially owned by the selling shareholders, based on their respective ownership of
common shares and notes, as of ________, 20__, assuming conversion of the notes held by each such selling shareholder on that date but
taking account of any limitations on conversion set forth therein.
The third column lists the
common shares being offered by this prospectus by the selling shareholders and does not take in account any limitations on conversion
of the notes set forth therein.
In accordance with the terms
of a registration rights agreement with the holders of the notes, this prospectus generally covers the resale of the sum of the maximum
number of common shares issued or issuable pursuant to the notes, including payment of interest on the notes through [DATE], determined
as if the outstanding notes (including interest on the notes through [DATE]) were converted in full (without regard to any limitations
on conversion contained therein solely for the purpose of such calculation) at the $[ ] floor price of the notes then in effect calculated
as of the trading day immediately preceding the date this registration statement was initially filed with the SEC. Because the conversion
price and alternate conversion price of the notes 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
shareholders pursuant to this prospectus.
Under the terms of the notes,
a selling shareholder may not convert the notes to the extent (but only to the extent) such selling shareholder or any of its affiliates
would beneficially own a number of shares of our common shares 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 shareholders may sell all, some or none of their shares
in this offering. See “Plan of Distribution.”
Name of Selling Shareholder
|
Number of Common Shares Owned Prior to Offering |
Maximum Number of Common Shares to be Sold Pursuant
to this Prospectus |
Number of Common Shares of Owned After Offering |
| [BUYERS] |
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PLAN OF DISTRIBUTION
We are registering the common
shares issuable upon conversion of the notes to permit the resale of these common shares by the holders of the notes from time to time
after the date of this prospectus. We will not receive any of the proceeds from the sale by the selling shareholders of the common shares.
We will bear all fees and expenses incident to our obligation to register the common shares.
The selling shareholders may
sell all or a portion of the common shares held by them and offered hereby from time to time directly or through one or more underwriters,
broker-dealers or agents. If the common shares are sold through underwriters or broker-dealers, the selling shareholders will be responsible
for underwriting discounts or commissions or agent’s commissions. The common shares 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:
| · | on any national securities exchange or quotation service on which the securities may be listed or quoted
at the time of sale; |
| | | |
| · | in the over-the-counter market; |
| | | |
| · | in transactions otherwise than on these exchanges or systems or in the over-the-counter market; |
| | | |
| · | through the writing or settlement of options, whether such options are listed on an options exchange or
otherwise; |
| | | |
| · | ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers; |
| | | |
| · | 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; |
| | | |
| · | purchases by a broker-dealer as principal and resale by the broker-dealer for its account; |
| | | |
| · | an exchange distribution in accordance with the rules of the applicable exchange; |
| | | |
| · | privately negotiated transactions; |
| | | |
| · | short sales made after the date the Registration Statement is declared effective by the SEC; |
| | | |
| · | broker-dealers may agree with a selling security holder to sell a specified number of such shares at a
stipulated price per share; |
| | | |
| · | a combination of any such methods of sale; and |
| | | |
| · | any other method permitted pursuant to applicable law. |
The selling shareholders may
also sell common shares under Rule 144 promulgated under the Securities Act of 1933, as amended, if available, rather than under
this prospectus. In addition, the selling shareholders may transfer the common shares by other means not described in this prospectus.
If the selling shareholders effect such transactions by selling common shares 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 shareholders
or commissions from purchasers of the common shares 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 common shares or otherwise, the selling shareholders may enter into hedging transactions
with broker-dealers, which may in turn engage in short sales of the common shares in the course of hedging in positions they assume. The
selling shareholders may also sell common shares short and deliver common shares covered by this prospectus to close out short positions
and to return borrowed shares in connection with such short sales. The selling shareholders may also loan or pledge common shares to broker-dealers
that in turn may sell such shares.
The selling shareholders may
pledge or grant a security interest in some or all of the notes or common shares owned by them and, if they default in the performance
of their secured obligations, the pledgees or secured parties may offer and sell the common shares 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 shareholders to include the pledgee, transferee or other successors in interest as selling shareholders under this
prospectus. The selling shareholders also may transfer and donate the common shares 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 shareholders and any broker-dealer participating in the distribution
of the common shares 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 common shares is made, a prospectus supplement, if required, will be distributed,
which will set forth the aggregate amount of common shares 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 shareholders and any
discounts, commissions or concessions allowed or re-allowed or paid to broker-dealers.
Under the securities laws
of some states, the common shares may be sold in such states only through registered or licensed brokers or dealers. In addition, in some
states the common shares 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 shareholder will sell any or all of the common shares registered pursuant to the registration statement, of which this
prospectus forms a part.
The selling shareholders 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 common shares by the selling shareholders 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 common shares
to engage in market-making activities with respect to the common shares. All of the foregoing may affect the marketability of the common
shares and the ability of any person or entity to engage in market-making activities with respect to the common shares.
We will pay all expenses of
the registration of the common shares 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 shareholder will pay all underwriting discounts and selling commissions,
if any. We will indemnify the selling shareholders against liabilities, including some liabilities under the Securities Act in accordance
with the registration rights agreements or the selling shareholders will be entitled to contribution. We may be indemnified by the selling
shareholders against civil liabilities, including liabilities under the Securities Act that may arise from any written information furnished
to us by the selling shareholder 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 common shares will be freely tradable in the hands of persons other than our affiliates.
Exhibit 10.5
EXECUTION VERSION
SECURITY AND PLEDGE
AGREEMENT
SECURITY AND PLEDGE AGREEMENT,
dated as of October 2, 2024 (this “Agreement”), made by Visionary Holdings Inc. (f/k/a Visionary Education Technology
Holdings Group Inc.), a company organized under the laws of Canada, with offices located at 105 Moatfield Drive, Unit 1003, Toronto, Ontario,
Canada M3B 0A2 (the “Company”), and each of the undersigned direct and indirect Domestic Subsidiaries (as defined below)
of the Company from time to time, if any (each a “Grantor” and together with the Company, collectively, the “Grantors”),
in favor of [COLLATERAL AGENT], with office located at One Penn Plaza, Floor 48, Suite 4810, New York 10119, in its capacity as collateral
agent (together with its successors and assignees, in such capacity, the “Collateral Agent”) for the Noteholders (as
defined below) party to the Securities Purchase Agreement (as defined below).
W I T N E S S E T H:
WHEREAS, the Company is party
to that certain Amended and Restated Securities Purchase Agreement, dated as of October 2, 2024 (as amended, modified, supplemented, extended,
renewed, restated or replaced from time to time in accordance with the terms thereof, the “Securities Purchase Agreement”)
by and among the Company, [COLLATERAL AGENT] a Delaware limited partnership and each party listed as a “Buyer” on the Schedule
of Buyers attached thereto (each a “Buyer” and collectively, the “Buyers”), pursuant to which the
Company shall be required to sell, and the Buyers shall purchase or have the right to purchase, the “Notes” issued pursuant
thereto (as such Notes may be amended, modified, supplemented, extended, renewed, restated or replaced from time to time in accordance
with the terms thereof, collectively, the “Notes”);
WHEREAS, certain Grantors (other
than the Company) from time to time (each a “Guarantor” and collectively, the “Guarantors”) may
execute and deliver one or more guarantees (each, a “Guaranty” and collectively, the “Guaranties”)
in form and substance acceptable to and in favor of the Collateral Agent, for the ratable benefit of itself and the Noteholders, with
respect to the Company’s obligations under the Securities Purchase Agreement, the Notes and the other “Transaction Documents”
(as defined below);
WHEREAS, it is a condition precedent
to the Buyers’ obligation to purchase the Notes that the Grantors shall have executed and delivered to the Collateral Agent this
Agreement providing for the grant to the Collateral Agent, for the ratable benefit of itself and the Noteholders, of a valid, enforceable,
and perfected security interest in all personal property of each Grantor to secure all of the Company’s obligations under the Transaction
Documents and the Guarantors’ obligations under the Guaranties, as applicable; and
WHEREAS, the Grantors are Affiliates
that are part of a common enterprise such that each Grantor will derive substantial direct and indirect financial and other benefits from
the consummation of the transactions contemplated under the Transaction Documents and, accordingly, the consummation of such transactions
are in the best interests of each Grantor;
NOW, THEREFORE, in consideration
of the premises and the agreements herein and in order to induce the Buyers to perform under the Securities Purchase Agreement, each Grantor
agrees with the Collateral Agent, for the ratable benefit of the Collateral Agent and the Noteholders, 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 terms used
in this Agreement and the recitals hereto which are defined in the Securities Purchase Agreement, the Notes or in the Code, and which
are not otherwise defined herein shall have the same meanings herein as set forth therein; 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 the
Code except as the Collateral Agent may otherwise determine in its sole and absolute discretion.
(b)
Without limiting the generality of, and subject to the proviso at the end of, Section 1(a) of this Agreement, 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”, “Security”, “Record”, “Security Account”, “Software”,
“Supporting Obligations” and “Uncertificated Securities”.
(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:
“Affiliate”
of any Person means any other Person which, directly or indirectly, controls or is controlled by or is under common control with such
Person and any officer or director of such Person. Without limiting the generality of the foregoing, a Person shall be deemed to be “controlled
by” any other Person if such Person possesses, directly or indirectly, power to vote 10% or more of the securities (on a fully diluted
basis) having ordinary voting power for the election of directors or managers or power to direct or cause the direction of the management
and policies of such Person, whether by contract or otherwise.
“Bankruptcy Code”
means Chapter 11 of Title 11 of the United States Code, 11 U.S.C §§ 101 et seq. (or other applicable bankruptcy, insolvency
or similar laws).
“Bankruptcy Event
of Default” means any Event of Default under Section 4(a)(viii) of the Note.
“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.
“Buyer”
or “Buyers” shall have the meaning set forth in the recitals hereto.
“Capital Stock”
means (i) with respect to any Person that is a corporation, any and all shares, interests, participations or other equivalents (however
designated and whether or not voting) of corporate stock (including, without limitation, any warrants, options, rights or other securities
exercisable or convertible into equity interests or securities of such Person), and (ii) with respect to any Person that is not an individual
or a corporation, any and all partnership, membership, trust or other equity interests of such Person.
“Closing Date”
means the date the Company initially issues the Notes pursuant to the terms of the Securities Purchase Agreement.
“Code”
means Articles 8 or 9 of the Uniform Commercial Code as in effect from time to time in the State of New York; provided that, if
perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, “Code” means the Uniform Commercial
Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect
of perfection or non-perfection or priority.
“Collateral”
shall have the meaning set forth in Section 3(a) of this Agreement.
“Collateral Agent”
shall have the meaning set forth in the preamble hereto.
“Company”
shall have the meaning set forth in the preamble hereto.
“Controlled Account
Agreement” means a deposit account control agreement or securities account control agreement with respect to a Pledged Account,
pursuant to which the Collateral Agent is granted control over such Pledged Account in a manner that perfects its security interest in
such Pledged Account under applicable law, all in form and substance satisfactory to the Collateral Agent, as the same may be amended,
modified, supplemented, extended, renewed, restated or replaced from time to time.
“Controlled Accounts”
means the Deposit Accounts, Commodity Accounts, Securities Accounts, and/or Foreign Currency Controlled Account of the Grantors listed
on Schedule IV attached hereto.
“Controlled Account
Bank” shall have the meaning set forth in Section 6(i) of this Agreement.
“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 (including, without limitation, all Copyright Licenses set forth
in Schedule II hereto).
“Copyrights”
means all domestic and foreign copyrights, whether registered or not, including, without limitation, all copyright rights throughout the
universe (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, acquired or used by any Grantor (including, without limitation, all copyrights
described in Schedule II hereto), 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.
“Domestic Subsidiary”
means any Subsidiary other than a Foreign Subsidiary.
“Event of Default”
shall have the meaning set forth in Section 4(a) of the Notes.
“Excluded Collateral”
means such portion of the voting Capital Stock of any Foreign Subsidiary in excess of 65% of the issued and outstanding voting Capital
Stock of such Foreign Subsidiary at any time the pledging of more than 65% of the total outstanding voting Capital Stock of such Foreign
Subsidiary would result in a material adverse tax consequence to a Grantor.
“Foreign Currency
Controlled Accounts” means any Controlled Account of a Grantor or any of its Subsidiaries holding a deposit denominated in a
currency other than United States dollar.
“Foreign Subsidiary”
means any Subsidiary of a Grantor organized under the laws of a jurisdiction other than the United States, any of the states thereof,
Puerto Rico or the District of Columbia.
“GAAP”
means U.S. generally accepted accounting principles consistently applied.
“Governmental Authority”
means any nation or government, any Federal, state, city, town, municipality, county, local, foreign or other political subdivision thereof
or thereto and any department, commission, board, bureau, court, tribunal, instrumentality, agency or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
“Guaranteed Obligations”
shall have the meaning set forth in Section 2 of each Guaranty.
“Guarantor”
or “Guarantors” shall have the meaning set forth in the recitals hereto.
“Guaranty”
or “Guaranties” shall have the meaning set forth in the recitals hereto.
“Insolvency Proceeding”
means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other bankruptcy or insolvency
law or law for the relief of debtors, any proceeding relating to assignments for the benefit of creditors, formal or informal moratoria,
compositions, or extensions generally with creditors, or any proceeding seeking reorganization, arrangement, or other similar relief.
“Intellectual Property”
means, collectively, all intellectual property rights and assets, and all rights, interests and protections that are associated with,
similar to, or required for the exercise of, any of the foregoing, however arising, under the applicable laws of any jurisdiction throughout
the world, whether registered or unregistered, including, without limitation, any and all: (a) Trademarks; (b) internet domain names,
whether or not trademarks, registered in any top-level domain by any authorized private registrar or Governmental Authority, web addresses,
web pages, websites and related content; (c) accounts with YouTube, LinkedIn, Twitter, Instagram, Facebook and other social media companies
and the content found thereon (to the extent that such accounts and content are transferable pursuant to the terms, conditions, and policies
of each applicable social media platform); (d) Copyrights; (e) Patents; and (f) business and technical information, databases, data collections
and other confidential and proprietary information and all rights therein.
“Intellectual Property
Security Agreement” means the Intellectual Property Security Agreement required to be delivered pursuant to Section 6(h)(i)
of this Agreement, substantially in the form attached hereto as Exhibit A.
“Licenses”
means, collectively, the Copyright Licenses, the Trademark Licenses and the Patent Licenses.
“Lien”
means any mortgage, lien, pledge, charge, security interest, adverse claim or other encumbrance upon or in any property or assets.
“Noteholders”
means, at any time, the holders of the Notes at such time.
“Notes”
shall have the meaning set forth in the recitals hereto.
“Obligations”
shall have the meaning set forth in Section 4 of this Agreement.
“Paid in Full”
or “Payment in Full” means the indefeasible payment in full in cash of all of the Obligations.
“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 (including, without limitation, all Patent Licenses
set forth in Schedule II hereto).
“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 (including, without limitation, 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 and formulae described in Schedule II hereto), 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 or any other country or any political subdivision thereof), and all reissues, reexaminations,
divisions, continuations, continuations in part and extensions or renewals thereof.
“Perfection Requirement”
or “Perfection Requirements” shall have the meaning set forth in Section 5(j) of this Agreement.
“Permitted Liens”
shall have the meaning set forth in the Notes.
“Person”
means an individual, corporation, limited liability company, partnership, association, joint-stock company, trust, unincorporated organization,
joint venture or other enterprise or entity or Governmental Authority.
“Pledged Accounts”
means all of each Grantor’s right, title and interest in all of its Deposit Accounts, Commodity Accounts and Securities Accounts
(in all cases, including, without limitation, all Controlled Accounts and Foreign Currency Control Accounts).
“Pledged Collateral”
shall have the meaning set forth in Section 2(a).
“Pledged Debt”
shall have the meaning set forth in Section 2(a).
“Pledged Entity”
means, each Person listed from time to time on Schedule IV hereto as a “Pledged Entity,” together with each other Person,
any right in or interest in or to all or a portion of whose Securities or Capital Stock is acquired or otherwise owned by a Grantor after
the date hereof.
“Pledged Equity”
means all of each Grantor’s right, title and interest in and to all of the Securities and Capital Stock now or hereafter owned by
such Grantor (including, without limitation, those interests listed opposite the name of such Grantor on Schedule IV), regardless
of class or designation, including all substitutions therefor and replacements thereof, all proceeds thereof and all rights relating thereto,
also including, without limitation, any certificates representing such Securities and/or Capital Stock, the right to receive any certificates
representing any of such Securities and/or Capital Stock, all warrants, options, subscription, share appreciation rights and other rights,
contractual or otherwise, in respect thereof, and the right to receive dividends, distributions of income, profits, surplus, or other
compensation by way of income or liquidating distributions, in cash or in kind, and cash, instruments, and other property from time to
time received, receivable, or otherwise distributed in respect of or in addition to, in substitution of, on account of, or in exchange
for any or all of the foregoing.
“Pledged Operating
Agreements” means all of each Grantor’s rights, powers and remedies under the limited liability company operating agreements
of each of the Pledged Entities that is a limited liability company, as may be amended, modified, supplemented, extended, renewed, restated
or replaced from time to time.
“Pledged Partnership
Agreements” means all of each Grantor’s rights, powers, and remedies under the general or limited partnership agreements
of each of the Pledged Entities that is a general or limited partnership, as may be amended, modified, supplemented, extended, renewed,
restated or replaced from time to time.
“Pledged Securities”
means any Promissory Notes, stock certificates, limited liability membership interests or other Securities, certificates or Instruments
now or hereafter included in the Pledged Collateral, including all Pledged Equity, Pledged Debt and all other certificates, instruments
or other documents representing or evidencing any Pledged Collateral.
“Securities Purchase
Agreement” shall have the meaning set forth in the recitals hereto.
“Subsidiary”
means any Person in which a Grantor directly or indirectly, (i) owns any of the outstanding Capital Stock or holds any 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
all of the foregoing, collectively, “Subsidiaries”.
“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 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, contracts or agreements (including, without limitation, all Trademark Licenses described
in Schedule II hereto).
“Trademarks”
means all domestic and foreign trademarks, service marks, collective marks, certification marks, trade names, business names, d/b/a’s,
assumed names, 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 (including, without limitation, all domestic and foreign
trademarks, service marks, collective marks, certification marks, trade names, business names, d/b/a’s, assumed names, Internet
domain names, trade styles, designs, logos and other source or business identifiers described in Schedule II hereto), 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. Pledge of Pledged
Collateral.
(a)
As collateral security for the due and punctual payment and performance in full of the Obligations, as and when due, each Grantor
hereby assigns and pledges to the Collateral Agent, its successors and permitted assigns, and hereby grants to the Collateral Agent, its
successors and permitted assigns, for the ratable benefit of the Collateral Agent and the Noteholders, a continuing Lien on and security
interest in, all of such Grantor’s right, title and interest in, to and under all of the following, wherever located and whether
now or hereafter existing and whether now owned or hereafter acquired: (i) the Pledged Equity; (ii) all Promissory Notes, Security and
Instruments evidencing debt now owned or at any time hereafter acquired by it (including, without limitation, those listed opposite the
name of such Grantor on Schedule IV) (the “Pledged Debt”); (iii) subject to Section 2(g) and 2(h),
all payments of principal or interest, dividends, distributions, cash, Promissory Notes, Securities, Instruments and other property from
time to time received, receivable or otherwise distributed in respect of, in exchange for or upon the conversion of, and all other Proceeds
received in respect of, the Pledged Equity and the Pledged Debt; (iv) all rights and privileges of such Grantor with respect to the Securities
and other property referred to in clauses (i), (ii), and (iii) above; and (v) all Proceeds of, and Security Entitlements in respect of,
any of the foregoing (the items referred to in clauses (a) through (v) above being collectively referred to as the “Pledged Collateral”);
provided that the Pledged Collateral shall not include any item referred to in clauses (a) through (f) above if, for so long as and to
the extent such item constitutes Excluded Collateral.
(b)
On the Closing Date (in the case of any Grantor that grants a Lien on any of its assets hereunder on the Closing Date) or on the
date on which it becomes a party to this Agreement pursuant to Section 6(m) (in the case of any other Grantor), each Grantor shall
deliver or cause to be delivered to the Collateral Agent any and all Pledged Securities (other than any Uncertificated Securities, but
only for so long as such Securities remain uncertificated) to the extent such Pledged Securities, in the case of Promissory Notes and
other Instruments evidencing debt, are required to be delivered pursuant to Section 2(c). Thereafter, whenever such Grantor acquires
any other Pledged Security (other than any Uncertificated Securities, but only for so long as such Uncertificated Securities remain uncertificated),
such Grantor shall promptly, and in any event within 30 days (or such longer period as the Collateral Agent may agree to in writing),
deliver or cause to be delivered to the Collateral Agent such Pledged Security as Collateral hereunder to the extent such Pledged Securities,
in the case of Promissory Notes and Instruments evidencing debt, are required to be delivered pursuant to Section 2(c).
(c)
Each Grantor will cause all debt for borrowed money in an aggregate principal amount of $10,000 or more owed to such Grantor by
any other Person to be evidenced by a duly executed Promissory Note, and shall cause each such Promissory Note to be pledged and delivered
to the Collateral Agent, (i) on the date hereof, in the case of any such debt existing on the date hereof (or, in the case of any
Grantor that becomes a party hereto after the date hereof, on the date such Grantor becomes a party hereto, in the case of any such debt
existing on such date) or (ii) promptly following the incurrence thereof, in the case of any such debt incurred after the date hereof
(or such other date), in each case pursuant to the terms hereof.
(d)
Upon delivery to the Collateral Agent, (i) any Pledged Securities required to be delivered pursuant to Section 2(b) and/or
2(c) shall be accompanied by undated stock or note powers duly executed by the applicable Grantor in blank or other instruments
of transfer reasonably satisfactory to the Collateral Agent and by such other instruments and documents as the Collateral Agent may reasonably
request in order to effect the transfer of such Pledged Securities and (ii) all other property comprising part of the Pledged Collateral
required to be delivered pursuant to Section 2(b) and/or 2(c) shall be accompanied by undated proper instruments of assignment
duly executed by the applicable Grantor and such other instruments or documents as the Collateral Agent may reasonably request in order
to effect transfer of such Pledged Collateral. Each delivery of Pledged Securities or other Pledged Collateral shall be accompanied by
a schedule describing such Pledged Securities or Pledged Collateral, as the case may be, which schedule shall be deemed to supplement
Schedule IV and be made a part hereof; provided that failure to attach any such schedule hereto shall not affect the validity
of such pledge of such Pledged Securities. Each schedule so delivered shall supplement any prior schedules so delivered.
(e)
The assignment, pledge, Lien and security interest granted in Section 2(a) are granted as security only and shall not subject the
Collateral Agent or any Buyer to, or in any way alter or modify, any obligation or liability of any Grantor with respect to or arising
out of the Pledged Collateral.
(f)
If an Event of Default shall occur and be continuing and, other than in the case of a Bankruptcy Event of Default, the Collateral
Agent shall have notified the Borrower of its intent to exercise such rights, (a) the Collateral Agent, shall have the right (in its sole
and absolute discretion) to cause each of the Pledged Securities to be transferred of record into the name of the Collateral Agent or
into the name of its nominee (as pledgee or as sub-agent) or the name of the applicable Grantor, endorsed or assigned in blank or in favor
of the Collateral Agent and (b) to the extent permitted by the documentation governing such Pledged Securities and applicable law, the
Collateral Agent shall have the right to exchange the certificates representing Pledged Securities for certificates of smaller or larger
denominations for any purpose consistent with this Agreement. Each Grantor will promptly give to the Collateral Agent copies of any material
notices received by it with respect to Pledged Securities registered in the name of such Grantor. Each Grantor will take any and all actions
reasonably requested by the Collateral Agent to facilitate compliance with this Section 2(f).
(g)
Unless and until an Event of Default shall have occurred and be continuing and, other than in the case of a Bankruptcy Event of
Default, the Collateral Agent shall have notified the Grantors that the rights of the Grantors under this Section 2(g) are being
suspended:
(i) Each Grantor shall
be entitled to exercise any and all voting and/or other consensual rights and powers inuring to an owner of Pledged Collateral or any
part thereof for any purpose consistent with the terms of this Agreement and the other Transaction Documents.
(ii) The Collateral
Agent shall promptly execute and deliver to each Grantor, or cause to be executed and delivered to such Grantor, all such proxies, powers
of attorney and other instruments as such Grantor may reasonably request in writing for the purpose of enabling such Grantor to exercise
the voting and/or consensual rights and powers it is entitled to exercise pursuant to Section 2(g)(i), in each case as shall be
specified in such request.
(iii) Each Grantor
shall be entitled to receive and retain any and all dividends, interest, principal and other distributions paid on or distributed in respect
of the Pledged Collateral, to the extent (and only to the extent) that such dividends, interest, principal and other distributions are
permitted by, the other Transaction Documents and applicable laws; provided that any noncash dividends, interest, principal or
other distributions that would constitute Pledged Equity or Pledged Debt, whether resulting from a subdivision, combination or reclassification
of the outstanding equity interests of the issuer of any Pledged Securities or received in exchange for Pledged Securities or any part
thereof, or in redemption thereof, or as a result of any merger, consolidation, acquisition or other exchange of assets to which such
issuer may be a party or otherwise, shall be and become part of the Pledged Collateral, and, if received by any Grantor, shall be held
in trust for the benefit of the Collateral Agent and shall, to the extent required by Section 2(b) and/or 2(c) be forthwith
delivered to the Collateral Agent in the same form as so received (with any necessary endorsement or documents set forth in Section
2(d) or as otherwise reasonably requested by the Collateral Agent). So long as no Event of Default has occurred and is continuing,
the Collateral Agent shall promptly deliver to each Grantor any Pledged Securities in its possession if requested to be delivered to the
issuer thereof in connection with any exchange or redemption of such Pledged Securities.
(h)
Upon the occurrence and during the continuance of an Event of Default and, other than in the case of a Bankruptcy Event of Default,
after the Collateral Agent shall have notified the Grantors of the suspension of the rights of the Grantors under Section 2(g)(iii), all
rights of any Grantor to dividends, interest, principal or other distributions that such Grantor is authorized to receive pursuant to
Section 2(g)(iii) shall cease, and all such rights shall thereupon become vested in the Collateral Agent, which shall have the sole and
exclusive right and authority to receive and retain such dividends, interest, principal or other distributions as part of the Pledged
Collateral, subject to Section 2(k) and the last sentence of this Section 2(h). All dividends, interest, principal or other
distributions received by any Grantor contrary to the provisions of Section 2(g) or this Section 2(h) shall be held in trust
for the benefit of the Collateral Agent and shall be forthwith delivered to the Collateral Agent upon demand in the same form as so received
(with any necessary endorsement reasonably requested by the Collateral Agent). Any and all money and other property paid over to or received
by the Collateral Agent pursuant to the provisions of Section 2(g) and/or this Section 2(h) shall be retained by the Collateral
Agent in an account to be established by the Collateral Agent upon receipt of such money or other property, shall be held as security
for the payment and performance of the Obligations and shall be applied in accordance with the provisions of Section 8. After all
Events of Default have been cured or waived, and the Grantors have delivered to the Collateral Agent a certificate of an executive officer
to such effect, the Collateral Agent shall promptly repay to each Grantor (without interest) all dividends, interest, principal or other
distributions that such Grantor would otherwise be permitted to retain pursuant to the terms of Section 2(g)(iii) in the absence
of an Event of Default and that remain in such account.
(i)
Upon the occurrence and during the continuance of an Event of Default and, other than in the case of a Bankruptcy Event of Default,
after the Collateral Agent shall have notified the Grantors of the suspension of the rights of the Grantors under Section 2(g)(i),
all rights of any Grantor to exercise the voting and consensual rights and powers it is entitled to exercise pursuant to Section 2(g)(i),
and the obligations of the Collateral Agent under Section 2(g)(ii), shall cease, and all such rights shall thereupon become vested
in the Collateral Agent, which shall have the sole and exclusive right and authority to exercise such voting and consensual rights and
powers subject to Section 2(k) and the last sentence of this Section 2(i); provided that, the Collateral Agent shall
have the right from time to time following and during the continuance of an Event of Default to permit the Grantors to exercise such rights.
After all Events of Default have been cured or waived, and the Grantors have delivered to the Collateral Agent a certificate of an executive
officer to such effect, each Grantor shall have the exclusive right to exercise the voting and/or consensual rights and powers that such
Grantor would otherwise be entitled to exercise pursuant to the terms of Section 2(g)(i), and the obligations of the Collateral
Agent under Section 2(g)(ii) shall be reinstated.
(j)
Any notice given by the Collateral Agent to the Grantors under Section 2(f) or Section 2(g) (i) may be given by telephone
if promptly confirmed in writing, (ii) may be given with respect to one or more of the Grantors at the same or different times and (iii)
may suspend the rights of the Grantors under Section 2(g)(i) or 2(g)(iii) in part without suspending all such rights (as
specified by the Collateral Agent in its sole and absolute discretion) and without waiving or otherwise affecting the Collateral Agent’s
rights to give additional notices from time to time suspending other rights so long as an Event of Default has occurred and is continuing.
(k)
Nothing contained in this Agreement shall be construed to make the Collateral Agent or any Buyer liable as a member of any limited
liability company or as a partner of any partnership, and neither the Collateral Agent nor any Buyer by virtue of this Agreement or otherwise
(except as referred to in the following sentence) shall have any of the duties, obligations or liabilities of a member of any limited
liability company or as a partner in any partnership. The parties hereto expressly agree that, unless the Collateral Agent shall become
the absolute owner of Pledged Equity consisting of a limited liability company interest or a partnership interest pursuant hereto, this
Agreement shall not be construed as creating a partnership or joint venture among the Collateral Agent, any Buyer, any Grantor and/or
any other Person.
Section
3. Grant of Security
Interest
(a)
As collateral security for the due and punctual payment and performance in full of the Obligations, as and when due, each Grantor
hereby pledges and assigns to the Collateral Agent, its successors and permitted assigns, and hereby grants to the Collateral Agent, its
successors and permitted assigns, for the ratable benefit of the Collateral Agent and the Noteholders, a continuing Lien on and security
interest in, all of such Grantor’s right, title and interest in, to and under all personal property and assets of such Grantor,
wherever located and whether now or hereafter existing and whether now owned or hereafter acquired, of every kind, nature and description,
whether tangible or intangible (together with the Pledged Collateral, the “Collateral”), including, without limitation,
the following:
(i)
all Accounts;
(ii)
all Chattel Paper (whether tangible or Electronic Chattel Paper);
(iii)
all Commercial Tort Claims, including, without limitation, those specified on Schedule VI hereto;
(iv)
all Documents;
(v)
all Equipment;
(vi)
all Fixtures;
(vii)
all General Intangibles (including, without limitation, all Payment Intangibles);
(viii)
all Goods;
(ix)
all Instruments;
(x)
all Inventory;
(xi)
all Investment Property (and, regardless of whether classified as Investment Property under the Code, all Pledged Equity, Pledged
Operating Agreements and Pledged Partnership Agreements);
(xii)
all Intellectual Property and all Licenses;
(xiii)
all Letter-of-Credit Rights;
(xiv)
all Pledged Accounts, all cash and other property from time to time deposited therein, and all monies and property in the possession
or under the control of the Collateral Agent or any Noteholder or any Affiliate, representative, agent or correspondent of the Collateral
Agent or any such Noteholder;
(xv)
all Supporting Obligations;
(xvi)
all other tangible and intangible personal property of each Grantor (whether or not subject to the Code), including, without limitation,
all Deposit Accounts 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 any Grantor described in the preceding clauses
of this Section 3(a) (including, without limitation, any proceeds of insurance thereon and all causes of action, claims and warranties
now or hereafter held by each Grantor in respect of any of the items listed above), and all books, correspondence, files and other Records,
including, without limitation, all tapes, desks, cards, Software, data and computer programs in the possession or under the control of
any Grantor or any other Person from time to time acting for any Grantor, in each case, to the extent of such Grantor’s rights therein,
that at any time evidence or contain information relating to any of the property described in the preceding clauses of this Section
3(a) or are otherwise necessary or helpful in the collection or realization thereof; and
(xvii)
all Proceeds, including all Cash Proceeds and Noncash Proceeds, and products of any and all of the foregoing Collateral;
in each case howsoever any Grantor’s interest
therein may arise or appear (whether by ownership, security interest, claim or otherwise).
(b)
Notwithstanding anything herein to the contrary, the term “Collateral” shall not include any Excluded Collateral.
(c)
Each Grantor agrees not to further encumber, or permit any other Lien to exist that encumbers, any of its Intellectual Property,
including, without limitation, any of its Copyrights, Copyright applications, Copyright registrations and like protections in each work
of authorship and derivative work, whether published or unpublished, Licenses, Patents, Patent applications and like protections, including,
without limitation, improvements, divisions, continuations, renewals, reissues, extensions, and continuations-in-part of the same, Trademarks,
service marks and, to the extent permitted under applicable law, any applications therefor, whether registered or not, and the goodwill
of the business of such Grantor connected with and symbolized thereby, know-how, operating manuals, trade secret rights, rights to unpatented
inventions, and any claims for damage by way of any past, present, or future infringement of any of the foregoing, in each case without
the Collateral Agent’s prior written consent (which consent may be withheld or given in the Collateral Agent’s sole and absolute
discretion).
(d)
Each Grantor agrees that the pledge of the shares of Capital Stock acquired by such Grantor of any and all Persons now or hereafter
existing that is a Foreign Subsidiary (other than an Excluded Subsidiary) may be supplemented by one or more separate pledge agreements,
deeds of pledge, share charges or other similar agreements or instruments, executed and delivered by such Grantor in favor of the Collateral
Agent, which agreements or instruments will provide for the pledge of such shares of Capital Stock and perfection of the Lien on such
shares in accordance with the laws of the applicable foreign jurisdiction. With respect to such shares of Capital Stock, the Collateral
Agent may, at any time and from time to time, in its sole and absolute discretion, take such actions in such foreign jurisdictions that
will result in the perfection of the Lien created in such shares of Capital Stock.
(e)
In addition, to secure the due and punctual payment and performance in full of the Obligations, as and when due, and in order to
induce the Buyers as aforesaid, each Grantor hereby grants to the Collateral Agent, its successors and permitted assigns, for the ratable
benefit of the Collateral Agent and the Noteholders, a right of set-off against the property of such Grantor held by the Collateral Agent,
for itself and for the ratable benefit of the Noteholders, consisting of property described above in Section 2(a) and/or Section
3(a) now or hereafter in the possession or custody of or in transit to the Collateral Agent, for any purpose, including safekeeping,
collection or pledge, for the account of such Grantor, or as to which such Grantor may have any right or power; provided that such right
shall only to be exercised after an Event of Default has occurred and is continuing.
Section
4. Security for Obligations.
The Lien and security interest created hereby in the Collateral constitutes continuing collateral security for all of the following obligations,
whether direct or indirect, absolute or contingent, and whether now existing or hereafter incurred (collectively, the “Obligations”):
(a)
(i) the payment by the Company and each other Grantor, as and when due and payable (by scheduled maturity, required prepayment,
acceleration, demand or otherwise), of all amounts from time to time owing by it in respect of the Securities Purchase Agreement, this
Agreement, the Notes and the other Transaction Documents, and (ii) in the case of the Guarantors, the payment by such Guarantors, as and
when due and payable of all Guaranteed Obligations under the Guaranties, including, without limitation, in both cases, (A) all principal
of, interest, make-whole and other amounts on the Notes (including, without limitation, all interest, make-whole and other amounts that
accrues after the commencement of any Insolvency Proceeding of any Grantor, whether or not the payment of such interest is enforceable
or is allowable in such Insolvency Proceeding), and (B) all fees, interest, premiums, penalties, contract causes of action, costs, commissions,
expense reimbursements, indemnifications and all other amounts due or to become due under this Agreement or any of the Transaction Documents;
and
(b)
the due and punctual performance and observance by each Grantor of all of its other obligations from time to time existing in respect
of any of the Transaction Documents, including without limitation, with respect to any conversion or redemption rights of the Noteholders
under the Notes.
Section
5. Representations
and Warranties. Each Grantor represents and warrants as follows:
(a)
Schedule I hereto sets forth (i) the exact legal name of each Grantor, and (ii) the state of incorporation, organization
or formation and the organizational identification number of each Grantor in such state. The information set forth in Schedule I
hereto with respect to such Grantor is true and accurate in all respects. Such Grantor has not previously changed its name (or operated
under any other name), jurisdiction of organization or organizational identification number from those set forth in Schedule I
hereto except as disclosed in Schedule I hereto.
(b)
There is no pending or, to its knowledge, written notice threatening any action, suit, proceeding or claim affecting any Grantor
before any Governmental Authority or any arbitrator, or any order, judgment or award issued by any Governmental Authority or arbitrator,
in each case, that may adversely affect the grant by any Grantor, or the perfection, of the Lien and security interest purported to be
created hereby in the Collateral, or the exercise by the Collateral Agent of any of its rights or remedies hereunder.
(c)
All Federal, state and local tax returns and other reports required by applicable law to be filed by any Grantor have been filed,
or extensions have been obtained, and all taxes, assessments and other governmental charges or levies imposed upon any Grantor or any
property of any Grantor (including, without limitation, all federal income and social security taxes on employees’ wages) and which
have become due and payable on or prior to the date hereof have been paid, except to the extent contested in good faith by proper proceedings
which stay the imposition of any penalty, fine or Lien resulting from the non-payment thereof and with respect to which adequate reserves
have been set aside for the payment thereof in accordance with GAAP.
(d)
All Equipment, Fixtures, Goods and Inventory of each Grantor now existing are, and all Equipment, Fixtures, Goods and Inventory
of each Grantor hereafter existing will be, located and/or based at the addresses specified therefor in Schedule III hereto, except
that each Grantor will give the Collateral Agent written notice of any change in the location of any such Collateral within 20 days of
such change, other than to locations set forth on Schedule III hereto (and with respect to which the Collateral Agent has
filed financing statements and otherwise fully perfected its Liens thereon). Each Grantor’s principal place of business and chief
executive office, the place where each Grantor keeps its Records concerning the Collateral and all originals of all Chattel Paper in which
any Grantor has any right, title or interest are located and will continue to be located at the addresses specified therefor in Schedule III
hereto. None of the Accounts in which any Grantor has any right, title or interest is or will be evidenced by Promissory Notes or other
Instruments.
(e)
Set forth in Schedule IV hereto is a complete and accurate list, as of the date of this Agreement, of (i) all Pledged Debt,
specifying the debtor thereof and the outstanding principal amount thereof as of the Closing Date, Securities and other Instruments in
which any Grantor has any right, title or interest, (ii) each Pledged Account of each Grantor, together with the name and address
of each institution at which each such Pledged Account is maintained, the account number for each such Pledged Account and a description
of the purpose of each such Pledged Account and (iii) the name of each Foreign Currency Controlled Account of each Grantor, together with
the name and address of each institution at which each such Foreign Currency Controlled Account is maintained and the amount of cash or
cash equivalents held in each such Foreign Currency Controlled Account. Set forth in Schedule II hereto is a complete and correct
list of each trade name used by each Grantor and the name of, and each trade name used by, each Person from which each Grantor has acquired
any substantial part of the Collateral. All of the Pledged Debt, to the best of the Grantors’ knowledge (provided that no such knowledge
qualification applies to Pledged Debt issued by a Grantor or a Subsidiary), is the legal, valid and binding obligation of the issuer thereof,
enforceable against such issuer in accordance with its terms.
(f)
Each Grantor has delivered to the Collateral Agent complete and correct copies of each License described in Schedule II
hereto, including all schedules and exhibits thereto, which represent all of the Licenses of the Grantors existing on the date of this
Agreement. Each such License sets forth the entire agreement and understanding of the parties thereto relating to the subject matter thereof,
and there are no other agreements, arrangements or understandings, written or oral, relating to the matters covered thereby or the rights
of such Grantor or any of its Affiliates in respect thereof. Each material License now existing is, and any material License entered into
in the future will be, the legal, valid and binding obligation of the parties thereto, enforceable against such parties in accordance
with its terms. No default under any material License by any such party has occurred, nor does any defense, offset, deduction or counterclaim
exist thereunder in favor of any such party.
(g)
Each Grantor owns and controls, or otherwise possesses adequate rights to use, all of its Intellectual Property, which is the only
Intellectual Property necessary to conduct its business in substantially the same manner as conducted as of the date hereof. Schedule
II hereto sets forth a true and complete list of all Intellectual Property and Licenses owned or used by each Grantor as of the date
hereof, and applications for grant or registration of Intellectual Property. To the knowledge of each Grantor, all such Intellectual Property
of such Grantor 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. Except as set forth in Schedule II, no such Intellectual Property is the subject
of any licensing or franchising agreement. Except as set forth in Schedule II, no Grantor has any knowledge of any infringement
upon or conflict with the Patent, Trademark, Copyright, trade secret rights of others and, each Grantor is not now infringing or in conflict
with any Patent, Trademark, Copyright, trade secret or similar rights of others, and to the knowledge of each Grantor, no other Person
is now infringing or in conflict in any material respect with any such properties, assets and rights owned or used by each Grantor. No
Grantor has received any notice that it is violating or has violated the Trademarks, Patents, Copyrights, inventions, trade secrets, proprietary
information and technology, know-how, formulae, rights of publicity or other intellectual property rights of any third party.
(h)
Each Grantor is and will be at all times the sole and exclusive owner of the Collateral in which such Grantor has granted a Lien
and security interest hereunder free and clear of any Liens, except for (i) Permitted Liens thereon and (ii) certain Intellectual Property
rights of the Company which is jointly owned by the Company with certain third parties as described in Schedule II hereto. 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 (i) may have been filed in favor of the Collateral Agent and/or the Noteholders relating to this Agreement or the
other Transaction Documents, or (ii) are intended to perfect Permitted Liens existing as of the date hereof and disclosed on Schedule
VII hereto.
(i)
The exercise by the Collateral Agent of any of its rights and remedies hereunder will not contravene any law or any contractual
restriction 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 other than as granted pursuant to this Agreement.
(j)
No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority, is required for (i) the
grant by each Grantor, or the perfection, of the Lien and security interest purported to be created hereby in the Collateral, or (ii) the
exercise by the Collateral Agent of any of its rights and remedies hereunder, except for (A) the filing under the Code as in effect
in the applicable jurisdiction of the financing statements described in Schedule V hereto, all of which financing statements have
been duly filed and are in full force and effect, (B) with respect to all Pledged Accounts, and all cash and other property from time
to time deposited therein, the execution of a Controlled Account Agreement with the depository or other institution with which the applicable
Pledged Accounts are maintained, as provided in Section 6(i), (C) with respect to Commodity Contracts, the execution of a
control agreement with the commodity intermediary with which such Commodity Contract is carried, as provided in Section 6(i), (D) with
respect to the perfection of the security interest created hereby in the United States Intellectual Property and Licenses, the recording
of the appropriate Intellectual Property Security Agreement in the United States Patent and Trademark Office or the United States Copyright
Office, as applicable, (E) with respect to the perfection of the security interest created hereby in foreign Intellectual Property
and Licenses, registrations and filings in jurisdictions located outside of the United States and covering rights in such jurisdictions
relating to such foreign Intellectual Property and Licenses, (F) with respect to the perfection of the security interest created hereby
in any Letter-of-Credit Rights, the consent of the issuer of the applicable letter of credit to the assignment of proceeds as provided
in the Code as in effect in the applicable jurisdiction, (G) with respect to Investment Property constituting uncertificated securities,
the applicable Grantor causing the issuer thereof either (i) to register the Collateral Agent as the registered owner of such securities
or (ii) to agree in an authenticated record with such Grantor and the Collateral Agent that such issuer will comply with instructions
with respect to such securities originated by the Collateral Agent without further consent of such Grantor, such authenticated record
to be in form and substance satisfactory to the Collateral Agent, (H) with respect to Investment Property constituting certificated securities
or instruments, such items to be delivered to and held by or on behalf of the Collateral Agent pursuant hereto in suitable form for transfer
by delivery or accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance satisfactory to
the Collateral Agent, (I) with respect to any action that may be necessary to obtain control of Collateral constituting Commodity Contracts,
Electronic Chattel Paper or Letter of Credit Rights, the taking of such actions, and (J) the Collateral Agent having possession of all
Documents, Chattel Paper, Instruments and cash constituting Collateral (except for perfection requirements in any foreign jurisdiction,
subclauses (A) through (J) each a “Perfection Requirement” and collectively, the “Perfection Requirements”).
(k)
This Agreement creates in favor of the Collateral Agent a legal, valid and enforceable Lien on and security interest in the Collateral,
as security for the Obligations. The performance of the Perfection Requirements results in the perfection of such Lien on and security
interest in the Collateral. Such Lien and security interest is (or in the case of Collateral in which any Grantor obtains any right, title
or interest after the date hereof, will be), subject only to Permitted Liens and the Perfection Requirements, a first priority, valid,
enforceable and perfected Lien on and security interest in all personal property of each Grantor (other than Excluded Collateral). Such
recordings and filings and all other action necessary to perfect and protect such Lien and security interest have been duly taken (and,
in the case of Collateral in which any Grantor obtains right, title or interest after the date hereof, will be duly taken), except for
the Collateral Agent’s having possession of all Documents, Chattel Paper, Instruments and cash constituting Collateral after the
date hereof and the other actions, filings and recordations described above, including the Perfection Requirements.
(l)
As of the date hereof, no Grantor holds any Commercial Tort Claims or has knowledge of any pending Commercial Tort Claims, except
for the Commercial Tort Claims described in Schedule VI.
(m)
All of the Pledged Equity is presently owned by the applicable Grantor as set forth in Schedule IV free and clear of all
Liens other than Permitted Liens, and is presently represented by the certificates listed on Schedule IV hereto (if applicable).
As of the date hereof, there are no existing options, warrants, calls or commitments of any character whatsoever relating to the Pledged
Equity other than as contemplated and permitted by the Transaction Documents. Each Grantor is the sole holder of record and the sole beneficial
owner of the Pledged Equity, as applicable. None of the Pledged Equity has been issued or transferred in violation of the securities registration,
securities disclosure or similar laws of any jurisdiction to which such issuance or transfer may be subject. The Pledged Equity constitutes
100% or such other percentage as set forth on Schedule IV of the issued and outstanding shares of Capital Stock of the applicable
Pledged Entity. All of the Pledged Equity has been duly and validly authorized and issued by the issuer thereof and (i) in the case of
Pledged Equity (other than Pledged Equity consisting of limited liability company interests or partnership interests which, pursuant to
the relevant organizational or formation documents, cannot be fully paid and non-assessable), is fully paid and non-assessable.
(n)
Such Grantor (i) is a corporation, limited liability company or limited partnership, as applicable, duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation, organization or formation, (ii) has all requisite corporate,
limited liability company or limited partnership power and authority to conduct its business as now conducted and as presently contemplated
and to execute and deliver this Agreement and each other Transaction Document to which such Grantor is a party, and to consummate the
transactions contemplated hereby and thereby and (iii) 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,
except where the failure to be so qualified would not result in a Material Adverse Effect.
(o)
The execution, delivery and performance by each Grantor of this Agreement and each other Transaction Document to which such Grantor
is a party (i) have been duly authorized by all necessary corporate, limited liability company or limited partnership action, (ii) do
not and will not contravene its charter or by-laws, limited liability company or operating agreement, certificate of partnership or partnership
agreement, as applicable, or any applicable law or any contractual restriction binding on such Grantor or its properties, (iii) 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 assets or properties, and (iv) 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 assets or properties.
(p)
This Agreement has been duly executed and delivered by each Grantor and is the legal, valid and binding obligation of such Grantor,
enforceable against such Grantor in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance, suretyship or other similar laws and equitable principles (regardless of whether enforcement is sought
in equity or at law). Each of the other Transaction Documents to which any Grantor is or will be a party, when delivered, duly executed
and delivered by such Grantor and the legal, valid and binding obligation of such Grantor, enforceable against such Grantor in accordance
with its terms, except as may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, suretyship
or other similar laws and equitable principles (regardless of whether enforcement is sought in equity or at law).
(q)
There are no conditions precedent to the effectiveness of this Agreement that have not been satisfied or waived.
Section
6. Covenants as to
the Collateral. Until all of the Obligations shall have been fully performed and Paid in Full, unless the Collateral Agent shall otherwise
consent in writing (in its sole and absolute discretion):
(a)
Further Assurances. Each Grantor will, at its expense, at any time and from time to time, promptly execute and deliver all
further instruments and documents and take all further action that the Collateral Agent may reasonably request in order to: (i) perfect
and protect the Lien and security interest of the Collateral Agent created hereby; (ii) enable the Collateral Agent to exercise and
enforce its rights and remedies hereunder in respect of the Collateral, including, without limitation, the Controlled Accounts; or (iii) otherwise
effect the purposes of this Agreement, including, without limitation: (A) marking conspicuously all Chattel Paper and each License
and, at the request of the Collateral Agent, each of its Records pertaining to the Collateral with a legend, in form and substance satisfactory
to the Collateral Agent, indicating that such Chattel Paper, License or Collateral is subject to the Lien and security interest created
hereby, (B) delivering and pledging to the Collateral Agent each Promissory Note, Security (subject to the limitations set forth
in Section 3), Chattel Paper or other Instrument, now or hereafter owned by any Grantor, duly endorsed and accompanied by executed
instruments of transfer or assignment, all in form and substance satisfactory to the Collateral Agent, (C) executing and filing (to
the extent, if any, that any Grantor’s signature is required thereon) or authenticating the filing of, such financing or continuation
statements, or amendments thereto, as may be necessary or that the Collateral Agent may reasonably request in order to perfect and preserve
the security interest created hereby, (D) 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 in each case as the Collateral Agent may reasonably
request, all in reasonable detail, (E) if any Collateral shall be in the possession of a third party, notifying such Person of the
Collateral Agent’s security interest created hereby and obtaining a written acknowledgment from such Person, in form and substance
satisfactory to the Collateral Agent, that such Person holds possession of the Collateral for the benefit of the Collateral Agent (for
the ratable benefit of the Collateral Agent and the Noteholders), (F) if at any time after the date hereof, any Grantor acquires
or holds any Commercial Tort Claim, promptly 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 Lien and security interest therein and in the Proceeds
thereof, which writing shall incorporate the provisions hereof and shall be in form and substance satisfactory to the Collateral Agent,
(G) upon the acquisition after the date hereof by any Grantor of any motor vehicle or other Equipment subject to a certificate of
title or ownership (other than a motor vehicle or Equipment that is subject to a purchase money security interest), causing the Collateral
Agent to be listed as the lienholder on such certificate of title or ownership and delivering evidence of the same to the Collateral Agent
in accordance with Section 6(j) hereof; and (H) taking all actions required by the Code or by other law, as applicable, in
any relevant Code jurisdiction, or by other law as applicable in any foreign jurisdiction.
(b)
Location of Collateral. Each Grantor will keep the Collateral (i) at the locations specified therefor on Schedule III
hereto, or (ii) at such other locations set forth on Schedule III and with respect to which the Collateral Agent has filed financing
statements and otherwise fully perfected its Liens thereon, or (iii) at such other locations in the United States, provided that 30 days
prior to any change in the location of any Collateral to such other location, or upon the acquisition of any Collateral to be kept at
such other locations, the Grantors shall give the Collateral Agent written notice thereof and deliver to the Collateral Agent a new Schedule
III indicating such new locations and such other written statements and schedules as the Collateral Agent may require.
(c)
Condition of Equipment. Each Grantor will maintain or cause to be maintained and preserved in good condition, repair and
working order, ordinary wear and tear excepted, the Equipment (necessary or useful to its business) and will forthwith, or in the case
of any loss or damage to any Equipment of any Grantor within a commercially reasonable time after the occurrence thereof, make or cause
to be made all repairs, replacements and other improvements in connection therewith which are necessary or desirable, consistent with
past practice, or which the Collateral Agent may request to such end. Any Grantor will promptly furnish to the Collateral Agent a statement
describing in reasonable detail any such loss or damage in excess of $25,000 per occurrence to any Equipment.
(d)
Taxes, Etc. Each Grantor agrees to pay promptly when due all property and other taxes, assessments and governmental charges
or levies imposed upon, and all claims (including claims for labor, materials and supplies) against, the Equipment and Inventory, except
to the extent the validity thereof is being contested in good faith by proper proceedings which stay the imposition of any penalty, fine
or Lien resulting from the non-payment thereof and with respect to which adequate reserves in accordance with GAAP have been set aside
for the payment thereof.
(e)
Insurance.
(i)
Each Grantor will, at its own expense, maintain insurance (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, in such form and with responsible and reputable insurance companies or associations 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 and in any event, in amount, adequacy and scope reasonably satisfactory to the Collateral
Agent.
(ii)
To the extent requested by the Collateral Agent at any time and from time to time, each such policy for liability insurance shall
provide for all losses to be paid on behalf of the Collateral Agent and any Grantor as their respective interests may appear, and each
policy for property damage insurance shall provide for all losses to be adjusted with, and paid directly to, the Collateral Agent. In
addition to and without limiting the foregoing, to the extent requested by the Collateral Agent at any time and from time to time, each
such policy shall in addition (A) name the Collateral Agent as an additional insured party and/or loss payee, as applicable, thereunder
(without any representation or warranty by or obligation upon the Collateral Agent) as its interests may appear, (B) contain an agreement
by the insurer that any loss thereunder shall be payable to the Collateral Agent on its own account notwithstanding any action, inaction
or breach of representation or warranty by any Grantor, (C) provide that there shall be no recourse against the Collateral Agent for payment
of premiums or other amounts with respect thereto, and (D) provide that at least 30 days’ prior written notice of cancellation,
lapse, expiration or other adverse change shall be given to the Collateral Agent by the insurer. Any Grantor will, if so requested by
the Collateral Agent, deliver to the Collateral Agent original or duplicate policies of such insurance (including certificates demonstrating
compliance with this Section 6(e)) and, as often as the Collateral Agent may reasonably request, a report of a reputable insurance broker
with respect to such insurance. Any Grantor will also, at the request of the Collateral Agent, execute and deliver instruments of assignment
of such insurance policies and cause the respective insurers to acknowledge notice of such assignment.
(iii)
Reimbursement under any liability insurance maintained by any Grantor pursuant to this Section 6(e) may be paid directly
to the Person who shall have incurred liability covered by such insurance. In the case of any loss involving damage to Equipment or Inventory,
to the extent paragraph (iv) of this Section 6(e) is not applicable, any proceeds of insurance involving such damage shall be paid
to the Collateral Agent, and any Grantor will make or cause to be made the necessary repairs to or replacements of such Equipment or Inventory,
and any proceeds of insurance maintained by any Grantor pursuant to this Section 6(e) (except as otherwise provided in paragraph
(iv) in this Section 6(e)) shall be paid by the Collateral Agent to any Grantor as reimbursement for the reasonable costs of such
repairs or replacements.
(iv)
Notwithstanding anything to the contrary in subsection 6(e)(iii) above, following and during the continuance of an Event of Default,
all insurance payments in respect of each Grantor’s properties and business shall be paid to the Collateral Agent and applied as
specified in Section 8(b) hereof.
(f)
Provisions Concerning Name, Organization, Location, Accounts and Licenses.
(i)
Each Grantor will (A) give the Collateral Agent at least 30 days’ prior written notice of any change in such Grantor’s
name, identity or organizational structure, (B) maintain its jurisdiction of incorporation, organization or formation as set forth in
Schedule I hereto, (C) immediately notify the Collateral Agent upon obtaining an organizational identification number, if on the
date hereof such Grantor did not have such identification number, and (D) keep adequate records concerning the Collateral and permit representatives
of the Collateral Agent during normal business hours on reasonable notice to such Grantor, to inspect and make abstracts from such records.
(ii)
Each Grantor will (except as otherwise provided in this subsection (f)), continue to collect, at its own expense, all amounts
due or to become due under the Accounts. In connection with such collections, any Grantor may (and, at the Collateral Agent’s direction,
will) take such action as any Grantor or the Collateral Agent may deem necessary or advisable to enforce collection or performance of
the Accounts; provided, however, that the Collateral Agent shall have the right at any time following 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 any Grantor
thereunder directly to the Collateral Agent or its designated agent and, upon such notification and at the expense of any Grantor and
to the extent permitted by applicable 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 any 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 any 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, without limitation, Instruments) received by any Grantor in respect of the Accounts shall
be received in trust for the benefit of the Collateral Agent hereunder (for the ratable benefit of the Collateral Agent and the Noteholders),
shall be segregated from other funds of any Grantor and shall be forthwith paid over to the Collateral Agent in the same form as so received
(with any necessary endorsement) to be applied as specified in Section 8(b) hereof, and (B) no Grantor will 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. In addition, upon the occurrence and during the continuance of an Event of Default, the Collateral Agent may (in its sole and
absolute discretion) direct any or all of the banks and financial institutions with which any Grantor either maintains a Deposit Account
or a lockbox (including, without limitation, any Controlled Account) or deposits the proceeds of any Accounts to send immediately to the
Collateral Agent by wire transfer (to such deposit account as the Collateral Agent shall specify, or in such other manner as the Collateral
Agent shall direct) all or a portion of such Securities, cash, investments and other items held by such institution. Any such Securities,
cash, investments and other items so received by the Collateral Agent shall be applied as specified in accordance with Section 8(b)
hereof.
(iii)
Upon the occurrence and during the continuance of any breach or default under any material License referred to in Schedule II
hereto by any party thereto other than any Grantor, each Grantor party thereto 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 and thereafter will take reasonable steps to protect and preserve its rights and remedies in respect of such breach
or default, or will obtain or acquire an appropriate substitute License.
(iv)
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 referred to in Schedule II hereto 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.
(v)
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 or reasonable to maintain such Licenses in full force and effect. No Grantor will, without the prior written
consent of the Collateral Agent (in its sole and absolute discretion), cancel, terminate, amend or otherwise modify in any respect, or
waive any provision of, any material License referred to in Schedule II hereto.
(g)
Transfers and Other Liens.
(i)
Except as otherwise expressly permitted in the other Transaction Documents, no Grantor shall, directly or indirectly, sell, lease,
license, assign, transfer, spin-off, split-off, close, convey or otherwise dispose of any Collateral whether in a single transaction or
a series of related transactions, other than (A) sales, leases, licenses, assignments, transfers, conveyances and other dispositions of
such assets or rights by such Grantor for fair value in the ordinary course of business consistent with past practices and (B) sales of
Inventory and product in the ordinary course of business.
(ii)
Except as permitted under Section 14(e) of the Notes, no Grantor shall, directly or indirectly, redeem, repurchase or declare or
pay any cash dividend or distribution on any of its Capital Stock.
(iii)
No Grantor shall, directly or indirectly, without the prior written consent of the Required Holders, (A) issue any Notes (other
than as contemplated by the Securities Purchase Agreement and the Notes) or (B) issue any other Securities that would cause a breach or
default under the Notes.
(iv)
No Grantor shall 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 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 than would be obtainable
in a comparable arm’s length transaction with a Person that is not an Affiliate thereof.
(v)
No Grantor will create, suffer to exist or grant any Lien upon or with respect to any Collateral other than a Permitted Lien.
(h)
Intellectual Property.
(i)
If applicable, each Grantor shall duly execute and deliver the applicable Intellectual Property Security Agreement. 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, numbers and markings (relating to
patent, trademark and copyright rights) and using the Trademarks on each applicable trademark class of goods in order to so maintain the
Trademarks in full force and free from any claim of abandonment for non-use, and each Grantor will not (nor permit any licensee thereof
to) do any act or knowingly omit to do any act whereby any Intellectual Property may become abandoned, cancelled or invalidated; provided,
however, that 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 is no longer necessary or material and has been, or
is in the process of being, discontinued, abandoned or terminated in the ordinary course of business and consistent with the exercise
of reasonable business judgment, (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 and does not have a material adverse effect on the business of any Grantor or (C) that is substantially
the same as other Intellectual Property that is in full force, so long 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 and does not have a material adverse effect on the business of
any Grantor. 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 and application for registration of 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 charges or fees. If any Intellectual Property (other than Intellectual Property described in the proviso
to the second sentence of subsection (i) of this clause (h)) is infringed, misappropriated, diluted or otherwise violated in any material
respect by a third party, each Grantor shall (x) upon learning of such infringement, misappropriation, dilution or other violation, promptly
notify the Collateral Agent and (y) promptly 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 such Grantor shall deem appropriate under the circumstances to protect such Intellectual Property. Each Grantor shall furnish
to the Collateral Agent from time to time upon its request 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 request of the Collateral Agent, following receipt by the Collateral Agent of any
such statements, schedules or reports, each Grantor shall modify this Agreement by amending Schedule II hereto, as the case may
be, to include any Intellectual Property and License, as the case may be, which is or hereafter becomes 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 reasonable judgment of the
Collateral Agent, desirable to subject such Intellectual Property and Licenses to the Lien and security interest created by this Agreement.
Notwithstanding anything herein to the contrary, upon the occurrence and during the continuance of an Event of Default, no Grantor may
abandon, surrender or cancel or otherwise permit any Intellectual Property to become abandoned, surrendered, cancelled or invalid without
the prior written consent of the Collateral Agent (in its sole and absolute discretion), and if any Intellectual Property is infringed,
misappropriated, diluted or otherwise violated in any material respect by a third party, each Grantor will take such reasonable action
as the Collateral Agent shall deem appropriate under the circumstances to protect such Intellectual Property.
(ii)
In no event shall any Grantor, either itself or through any agent, employee, licensee or designee, file an application for the
registration of any Patent, Trademark or Copyright or the United States Copyright Office or the United States Patent and Trademark Office,
as applicable, or in any similar office or agency of the United States or any country or any political subdivision thereof unless it gives
the Collateral Agent prior written notice thereof. Upon request of the Collateral Agent, any 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 any 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 all Obligations are fully performed and Paid in Full.
(i)
Pledged Accounts.
(A) Each Grantor shall cause
each bank and other financial institution which maintains a Controlled Account (each a “Controlled Account Bank”) to
execute and deliver to the Collateral Agent, in form and substance satisfactory to the Collateral Agent, a Controlled Account Agreement
with respect to such Controlled Account, duly executed by each Grantor and such Controlled Account Bank, pursuant to which such Controlled
Account Bank among other things shall irrevocably agree, with respect to such Controlled Account, that (i) at any time after any Grantor,
the Collateral Agent or any Buyer shall have notified such Controlled Account Bank that an Event of Default has occurred or is continuing,
such Controlled Account Bank will comply with any and all instructions originated by the Collateral Agent directing the disposition of
the funds in such Controlled Account without further consent by such Grantor, (ii) such Controlled Account Bank shall waive, subordinate
or agree not to exercise any rights of setoff or recoupment or any other claim against the applicable Controlled Account other than for
payment of its service fees and other charges directly related to the administration of such Controlled Account and for returned checks
or other items of payment, (iii) at any time after any Grantor, the Collateral Agent or any Buyer shall have notified such Controlled
Account Bank that an Event of Default has occurred or is continuing, with respect to each such Controlled Account, such Controlled Account
Bank shall not comply with any instructions, directions or orders of any form with respect to such Controlled Accounts other than instructions,
directions or orders originated by the Collateral Agent, (iv) all funds deposited by any Grantor with such Controlled Account Bank shall
be subject to a perfected, first priority security interest in favor of the Collateral Agent, and (v) upon receipt of written notice from
the Collateral Agent during the continuance of an Event of Default, such Controlled Account Bank shall immediately send to the Collateral
Agent by wire transfer (to such account as the Collateral Agent shall specify, or in such other manner as the Collateral Agent shall direct)
all such funds and other items held by it. No Grantor shall create or maintain any Pledged Account without the prior written consent of
the Collateral Agent (in its sole and absolute discretion) and complying with the terms of this Agreement.
(B) If at any time after the
date of this Agreement, the average daily balance of any Account that is not subject to a Controlled Account Agreement exceeds $10,000
during any calendar month (including the calendar month in which the date of this Agreement occurs), the Company shall, either (x) within
two (2) Business Days following such date, transfer to a Controlled Account an amount sufficient to reduce the total aggregate amount
of the cash in such Account to an amount not in excess of $10,000 or (y) within twenty-one (21) calendar days following the last day of
such calendar month, deliver to the Collateral Agent a Controlled Account Agreement with respect to such Account, duly executed by such
Grantor and the depositary bank in which such Account is maintained.
(C) Notwithstanding anything
to the contrary contained in Section 6(i)(B) above, and without limiting any of the foregoing, if at any time on or after the date
that is twenty-one (21) calendar days following the Closing Date, the total aggregate amount of the cash of the Company and any of its
Subsidiaries, in the aggregate, that is not held in a Controlled Account exceeds $100,000 (the “Maximum Free Cash Amount”),
the Company shall within two (2) Business Days following such date, either (x) transfer to a Controlled Account an amount sufficient to
reduce the total aggregate amount of the cash that is not held in a Controlled Account to an amount not in excess of the Maximum Free
Cash Amount or (y) deliver to the Collateral Agent a Controlled Account Agreement with respect to such Account (or Accounts), duly executed
by such Grantor and the depositary bank in which such Account (or Accounts) is maintained, as necessary to reduce the total aggregate
amount of the cash that is not held in a Controlled Account to an amount not in excess of the Maximum Free Cash Amount.
(j)
Motor Vehicles.
(i)
Upon the Collateral Agent’s written request, each Grantor shall deliver to the Collateral Agent originals of the certificates
of title or ownership for each motor vehicle with a value in excess of $10,000 owned by it, with the Collateral Agent listed as lienholder,
for the ratable benefit of the Collateral Agent and the Noteholders.
(ii)
Each Grantor hereby appoints the Collateral Agent as its attorney-in-fact for the purpose of (A) executing on behalf of such
Grantor title or ownership applications for filing with appropriate Governmental Authorities to enable motor vehicles now owned or hereafter
acquired by such Grantor to be retitled and the Collateral Agent listed as lienholder thereof, (B) filing such applications with such
Governmental Authorities, and (C) executing such other agreements, documents and instruments on behalf of, and taking such other
action in the name of, such Grantor as the Collateral Agent may deem necessary or advisable to accomplish the purposes hereof (including,
without limitation, for the purpose of creating in favor of the Collateral Agent a perfected Lien on the motor vehicles and exercising
the rights and remedies of the Collateral Agent hereunder). This appointment as attorney-in-fact is coupled with an interest and is irrevocable
until all of the Obligations are fully performed and Paid in Full.
(iii)
Any certificates of title or ownership delivered pursuant to the terms hereof shall be accompanied by accurate odometer statements
for each motor vehicle covered thereby.
(iv)
So long as no Event of Default shall have occurred and be continuing, upon the request of any Grantor, the Collateral Agent shall
execute and deliver to any Grantor such instruments as such Grantor shall reasonably request to remove the notation of the Collateral
Agent as lienholder on any certificate of title for any motor vehicle; provided, however, that any such instruments shall
be delivered, and the release effective, only upon receipt by the Collateral Agent of a certificate from any Grantor stating that such
motor vehicle is to be sold or has suffered a casualty loss (with title thereto in such case passing to the casualty insurance company
therefor in settlement of the claim for such loss) and the amount that any Grantor will receive as sale proceeds or insurance proceeds.
Any proceeds of such sale or casualty loss shall be paid to the Collateral Agent hereunder immediately upon receipt, to be applied to
the Obligations then outstanding.
(k)
Control. Each Grantor hereby agrees to take any or all action that may be necessary or that the Collateral Agent may reasonably
request in order for the Collateral Agent to obtain “control” in accordance with Sections 9-105 through 9-107 of the Code
with respect to the following Collateral: (i) Electronic Chattel Paper, (ii) Investment Property, and (iii) Letter-of-Credit Rights.
(l)
Inspection and Reporting. Each Grantor shall permit the Collateral Agent, or any agent or representatives thereof or such
attorneys, accountant or other professionals or other Persons as the Collateral Agent may designate (at Grantors’ sole cost and
expense) (i) to examine and make copies of and abstracts from any Grantor’s Records and books of account, (ii) to visit and
inspect its properties, (iii) to verify materials, leases, Instruments, Accounts, Inventory and other assets of any Grantor from
time to time, and (iv) to conduct audits, physical counts, appraisals, valuations and/or examinations at the locations of any Grantor.
Each Grantor shall also permit the Collateral Agent, or any agent or representatives thereof or such attorneys, accountants or other professionals
or other Persons as the Collateral Agent may designate to discuss such Grantor’s affairs, finances and accounts with any of its
directors, officers, managerial employees, attorneys, independent accountants or any of its other representatives. Without limiting the
foregoing, the Collateral Agent may, at any time, in the Collateral Agent’s own name, in the name of a nominee of the Collateral
Agent, or in the name of any Grantor communicate (by mail, telephone, facsimile or otherwise) with the Account Debtors of such Grantor,
parties to contracts with such Grantor and/or obligors in respect of Instruments or Pledged Debt of such Grantor to verify with such Persons,
to the Collateral Agent’s satisfaction, the existence, amount, terms of, and any other matter relating to, Accounts, Instruments,
Pledged Debt, Chattel Paper, payment intangibles and/or other receivables.
(m)
Future Subsidiaries. If any Grantor hereafter creates or acquires any Subsidiary, simultaneously with the creation or acquisition
of such Subsidiary, such Grantor shall (i) if such Subsidiary is a Domestic Subsidiary, cause such Subsidiary to become a party to this
Agreement as an additional “Grantor” hereunder, (ii) deliver to the Collateral Agent updated Schedules to this Agreement,
as appropriate (including, without limitation, an updated Schedule IV to reflect the grant by such Grantor of a Lien on and security
interest in all Pledged Debt and Pledged Equity now or hereafter owned by such Grantor), (iii) if such Subsidiary is a Domestic Subsidiary,
cause such Subsidiary to duly execute and deliver a guaranty of the Obligations in favor of the Collateral Agent in form and substance
acceptable to the Collateral Agent, (iv) deliver to the Collateral Agent the stock certificates representing all of the Capital Stock
of such Subsidiary, along with undated stock powers for each such certificates, executed in blank (or, if any such shares of Capital Stock
are uncertificated, confirmation and evidence reasonably satisfactory to the Collateral Agent that the security interest in such uncertificated
securities has been transferred to and perfected by the Collateral Agent, in accordance with Sections 8-313, 8-321 and 9-115 of the Code
or any other similar or local or foreign law that may be applicable), and (v) duly execute and/or cause to be delivered to the Collateral
Agent, in form and substance acceptable to the Collateral Agent, such opinions of counsel and other documents as the Collateral Agent
shall request with respect thereto; provided, however, that no Grantor shall be required to pledge any Excluded Collateral. Each Grantor
hereby authorizes the Collateral Agent to attach such updated Schedules to this Agreement and agrees that all Pledged Equity and Pledged
Debt listed on any updated Schedule delivered to the Collateral Agent shall for all purposes hereunder be considered Collateral. .
Section
7. 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 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 or 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 in the Collateral Agent’s discretion,
to take any action and to execute any instrument which the Collateral Agent may deem necessary or advisable to accomplish the purposes
of this Agreement, including, without limitation, (i) to obtain and adjust insurance required to be paid to the Collateral Agent pursuant
to Section 6(e) hereof, (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 file any claims or take any action or institute any action,
suit or proceedings which the Collateral Agent may deem necessary or desirable for the collection of any Collateral or otherwise to enforce
the rights of the Collateral Agent and the Noteholders with respect to any Collateral, (v) to execute assignments, licenses and other
documents to enforce the rights of the Collateral Agent and the Noteholders with respect to any Collateral, and (vi) to verify any and
all information with respect to any and all Accounts. This power is coupled with an interest and is irrevocable until all of the Obligations
are fully performed and Paid in Full.
(c)
For the purpose of enabling the Collateral Agent to exercise rights and remedies hereunder, 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 grants to the Collateral
Agent, to the extent assignable, 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 in which such Grantor now or hereafter has any right, title
or interest, wherever the same may be located, including, without limitation, 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. Notwithstanding
anything contained herein to the contrary, but subject to the provisions of the Securities Purchase Agreement that limit the right of
any Grantor to dispose of its property, and Section 6(g) and Section 6(h) hereof, so long as no Event of Default shall have
occurred and be continuing, any Grantor may exploit, use, enjoy, protect, license, sublicense, assign, sell, dispose of or take other
actions with respect to the Intellectual Property in the ordinary course of its business and as otherwise expressly permitted by any of
the other Transaction Documents. In furtherance of the foregoing, unless an Event of Default shall have occurred and be continuing, the
Collateral Agent shall from time to time, upon the request of any Grantor, execute and deliver any instruments, certificates or other
documents, in the form so requested, which such Grantor shall have certified are appropriate (in such Grantor’s judgment) to allow
it to take any action permitted above (including relinquishment of the license provided pursuant to this clause (c) as to any Intellectual
Property). Further, upon the full performance and Payment in Full of all of the Obligations, the Collateral Agent (subject to Section
11(e) hereof) shall release and reassign to any Grantor all of the Collateral Agent’s right, title and interest in and to the
Intellectual Property, and the Licenses, all without recourse, representation or warranty whatsoever. The exercise of rights and remedies
hereunder by the Collateral Agent shall not terminate the rights of the holders of any licenses or sublicenses theretofore granted by
each Grantor in accordance with the second sentence of this clause (c). Each Grantor hereby releases the Collateral Agent from 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 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 judgment of a court of competent jurisdiction no longer subject to appeal.
(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 expenses of the Collateral
Agent incurred in connection therewith shall be payable by such Grantor pursuant to Section 9 hereof and such obligation shall
be secured by the Collateral.
(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. Except for 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 prior parties or any other rights pertaining to any Collateral.
(f)
Anything herein to the contrary notwithstanding (i) each Grantor shall remain liable under the Licenses and otherwise with
respect to any 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 or remedies 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 with respect to any of the other 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)
As long as no Event of Default shall have occurred and be continuing and, other than in the case of a Bankruptcy Event of Default,
until written notice shall be given to the applicable Grantor:
(i)
Each Grantor shall have the right, from time to time, to vote and give consents with respect to the Pledged Equity, or any part
thereof for all purposes not inconsistent with the provisions of this Agreement, the Securities Purchase Agreement or any other Transaction
Document; provided, however, that no vote shall be cast, and no consent shall be given or action taken, which would have the effect of
impairing the position or interest of the Collateral Agent in respect of the Pledged Equity or which would authorize, effect or consent
to (unless and to the extent expressly permitted by the Securities Purchase Agreement):
(A)the
dissolution or liquidation, in whole or in part, of a Pledged Entity;
(B)the
consolidation or merger of a Pledged Entity with any other Person;
(C)the
sale, disposition or encumbrance of all or substantially all of the assets of a Pledged Entity, except for Liens in favor of the Collateral
Agent;
(D)any
change in the authorized number of shares, the stated capital or the authorized share capital of a Pledged Entity or the issuance of any
additional shares of its Capital Stock; or
(E)the
alteration of the voting rights with respect to the Capital Stock of a Pledged Entity.
(h)
(i) Each Grantor shall be entitled, from time to time, to collect and receive for its own use all cash dividends and interest
paid in respect of the Pledged Equity to the extent not in violation of the Securities Purchase Agreement other than any and all: (A)
dividends and interest paid or payable other than in cash in respect of any Pledged Equity, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for, any Pledged Equity; (B) dividends and other distributions paid
or payable in cash in respect of any Pledged Equity in connection with a partial or total liquidation or dissolution or in connection
with a reduction of capital, capital surplus or paid-in capital of a Pledged Entity; and (C) cash paid, payable or otherwise distributed,
in respect of principal of, or in redemption of, or in exchange for, any Pledged Equity; provided, however, that until actually paid all
rights to such distributions shall remain subject to the Lien created by this Agreement; and
(ii)all
dividends and interest (other than such cash dividends and interest as are permitted to be paid to any Grantor in accordance with clause
(i) above) and all other distributions in respect of any of the Pledged Equity, whenever paid or made, shall be delivered to the Collateral
Agent to hold as Pledged Equity and shall, if received by any Grantor, be received in trust for the benefit of the Collateral Agent (for
the ratable benefit of the Collateral Agent and the Noteholders), be segregated from the other property or funds of such Grantor, and
be forthwith delivered to the Collateral Agent as Pledged Equity in the same form as so received (with any necessary endorsement).
Section
8. Remedies Upon Event
of Default; Application of Proceeds. 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,
in any other Transaction Document 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 ratable benefit of itself and the Noteholders, 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 its respective 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
(including, without limitation, by credit bid), at any of the Collateral Agent’s offices 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 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 its respective Collateral shall be required
by law, at least ten (10) days’ notice to any Grantor of the time and place of any public sale or the time after which any private
sale or other disposition of its respective Collateral is to be made shall constitute reasonable notification. The Collateral Agent shall
not be obligated to make any sale or other disposition of any 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 the
Collateral Agent and the Noteholders arising by reason of the fact that the price at which its respective 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
Obligations, even if the Collateral Agent accepts the first offer received and does not offer such Collateral to more than one offeree,
and waives all rights that any Grantor may have to require that all or any part of such Collateral be marshaled upon any sale (public
or private) thereof. Each Grantor hereby acknowledges that (i) any such sale of its respective Collateral by the Collateral Agent
shall be made without warranty, (ii) the Collateral Agent may specifically disclaim any warranties of title, possession, quiet enjoyment
or the like, and (iii) such actions set forth in clauses (i) and (ii) above shall not adversely affect the commercial reasonableness
of any such sale of Collateral. In addition to the foregoing, (1) upon written notice to any Grantor from the Collateral Agent after
and during the continuance of an Event of Default, such 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
after and during the continuance of an Event of Default, upon 10 days’ prior notice to such 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, pursuant to the authority granted in Section 7 hereof or otherwise (such authority being effective upon
the occurrence and during the continuance of an Event of Default), execute and deliver on behalf of such 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)
Any cash held by the Collateral Agent as Collateral and all Cash Proceeds received by the Collateral Agent in respect of any sale
or disposition of or collection from, or other realization upon, all or any part of the Collateral shall be applied as follows (subject
to the provisions of the Securities Purchase Agreement): first, to pay any fees, indemnities or expense reimbursements then due
to the Collateral Agent (including, without limitation, those described in Section 9 hereof); second, to pay any fees, indemnities
or expense reimbursements then due to the Noteholders, on a pro rata basis; third to pay interest due under the Notes owing to
the Noteholders, on a pro rata basis; fourth, to pay or prepay principal in respect of the Notes, whether or not then due, owing
to the Noteholders, on a pro rata basis; fifth, to pay or prepay any other Obligations, whether or not then due, in such order
and manner as the Collateral Agent shall elect, consistent with the provisions of the Securities Purchase Agreement. Any surplus of such
cash or Cash Proceeds held by the Collateral Agent and remaining after the full performance and Payment in Full of all of the Obligations
shall be paid over to whomsoever shall be lawfully entitled to receive the same or as a court of competent jurisdiction shall direct.
(c)
In the event that the proceeds of any such sale, disposition, collection or realization are insufficient to pay all amounts to
which the Collateral Agent and the Noteholders are legally entitled, each Grantor shall be, jointly and severally, liable for the deficiency,
together with interest thereon at the highest rate specified in the Notes 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 charges
of any attorneys employed by the Collateral Agent to collect such deficiency.
(d)
To the extent that applicable law imposes duties on the Collateral Agent to exercise rights and remedies in a commercially reasonable
manner, each Grantor acknowledges and agrees that it is commercially reasonable for the Collateral Agent (i) to fail to incur expenses
deemed significant by the Collateral Agent to prepare Collateral for disposition or otherwise to transform raw material or work in process
into finished goods or other finished products for disposition, (ii) to fail to obtain third party consents for access to Collateral to
be disposed of, or to obtain or, if not required by other law, to fail to obtain governmental or third party consents for the collection
or disposition of Collateral to be collected or disposed of, (iii) to fail to exercise collection remedies against Account Debtors or
other Persons obligated on Collateral or to remove Liens on or any adverse claims against Collateral, (iv) to exercise collection remedies
against Account Debtors and other Persons obligated on Collateral directly or through the use of collection agencies and other collection
specialists, (v) to advertise dispositions of Collateral through publications or media of general circulation, whether or not the Collateral
is of a specialized nature, (vi) to contact other Persons, whether or not in the same business as any Grantor, for expressions of interest
in acquiring all or any portion of such Collateral, (vii) to hire one or more professional auctioneers to assist in the disposition of
Collateral, whether or not the Collateral is of a specialized nature, (viii) to dispose of Collateral by utilizing internet sites that
provide for the auction of assets of the types included in the Collateral or that have the reasonable capacity of doing so, or that match
buyers and sellers of assets, (ix) to dispose of assets in wholesale rather than retail markets, (x) to disclaim disposition warranties,
such as title, possession or quiet enjoyment, (xi) to purchase insurance or credit enhancements to insure the Collateral Agent against
risks of loss, collection or disposition of Collateral or to provide to the Collateral Agent a guaranteed return from the collection or
disposition of Collateral, or (xii) to the extent deemed appropriate by the Collateral Agent, to obtain the services of brokers, investment
bankers, consultants, attorneys and other professionals to assist the Collateral Agent in the collection or disposition of any of the
Collateral. Each Grantor acknowledges that the purpose of this section is to provide non-exhaustive indications of what actions or omissions
by the Collateral Agent would be commercially reasonable in the Collateral Agent’s exercise of rights and remedies against the Collateral
and that other actions or omissions by the Collateral Agent shall not be deemed commercially unreasonable solely on account of not being
indicated in this section. Without limitation of the foregoing, nothing contained in this section shall be construed to grant any rights
to any Grantor or to impose any duties on the Collateral Agent that would not have been granted or imposed by this Agreement or by applicable
law in the absence of this section.
(e)
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 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 and remedies hereunder
and in respect of such collateral security and other assurances of payment shall be cumulative and in addition to all other rights and
remedies, however existing or arising. To the extent that any Grantor lawfully may, each Grantor hereby agrees that it will not invoke
any law relating to the marshaling of collateral which might cause delay in or impede the enforcement of the Collateral Agent’s
rights and remedies under this Agreement or under any other instrument creating or evidencing any of the Obligations or under which any
of the Obligations is outstanding or by which any of the 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
9. Indemnity and Expenses.
(a)
Each Grantor agrees, jointly and severally, to defend, protect, indemnify and hold the Collateral Agent and each of the Noteholders
harmless from and against any and all claims, damages, losses, liabilities, obligations, penalties, fees, costs and expenses (including,
without limitation, reasonable legal fees, costs, expenses, and disbursements of such Person’s counsel) to the extent that they
arise out of or otherwise result from this Agreement (including, without limitation, enforcement of this Agreement), except to the extent
resulting from such Person’s gross negligence or willful misconduct, as determined by a final judgment of a court of competent jurisdiction
no longer subject to appeal.
(b)
Each Grantor agrees, jointly and severally, to pay to the Collateral Agent upon demand the amount of any and all costs and expenses,
including the reasonable fees, costs, expenses and disbursements of counsel for the Collateral Agent and of any experts and agents (including,
without limitation, any collateral trustee which may act as agent of the Collateral Agent), which the Collateral Agent may incur in connection
with (i) the preparation, negotiation, execution, delivery, recordation, administration, amendment, waiver or other modification
or termination of this Agreement, (ii) the custody, preservation, use or operation of, or the sale of, collection from, or other
realization upon, any Collateral, (iii) the exercise or enforcement of any of the rights or remedies of the Collateral Agent hereunder,
or (iv) the failure by any Grantor to perform or observe any of the provisions hereof.
Section
10. Notices, Etc. All notices and
other communications provided for hereunder shall be in writing and shall be mailed (by certified mail, first-class postage prepaid and
return receipt requested), telecopied, e-mailed or delivered, if to any Grantor, to the Company’s address, or if to the Collateral
Agent or any Noteholder, to it at its respective address, each as set forth in Section 9(f) of the Securities Purchase Agreement; or as
to any such Person, at such other address as shall be designated by such Person in a written notice to all other parties hereto complying
as to delivery with the terms of this Section 10. All such notices and other communications shall be effective (a) if sent by certified
mail, return receipt requested, when received or five Business Days after deposited in the mails, whichever occurs first, (b) if telecopied
or e-mailed, when transmitted (during normal business hours) and confirmation is received, and otherwise, the day after the notice or
communication was transmitted and confirmation is received, or (c) if delivered in person, upon delivery.
Section
11. Miscellaneous.
(a)
No amendment of any provision of this Agreement shall be effective unless it is in writing and signed by each Grantor and the Collateral
Agent (and approved by the Required Holders), and no waiver of any provision of this Agreement, and no consent to any departure by each
Grantor therefrom, shall be effective unless it is in writing and signed by each Grantor and the Collateral Agent (and approved by the
Required Holders), and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which
given. No amendment, modification or waiver of this Agreement shall be effective to the extent that it (1) applies to fewer than all of
the holders of Notes or (2) imposes any obligation or liability on any holder of Notes without such holder’s prior written consent
(which may be granted or withheld in such holder’s sole and absolute discretion).
(b)
No failure on the part of the Collateral Agent to exercise, and no delay in exercising, any right or remedy hereunder or under
any of the other Transaction Documents shall operate as a waiver thereof; nor shall any single or partial exercise of any such right or
remedy preclude any other or further exercise thereof or the exercise of any other right or remedy. The rights and remedies of the Collateral
Agent or any Noteholder 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 and remedies of the Collateral Agent or any Noteholder under any of the other Transaction
Documents against any party thereto are not conditional or contingent on any attempt by such Person to exercise any of its rights or remedies
under any of the other Transaction Documents against such party or against any other Person, including but not limited to, any Grantor.
(c)
Any provision of this Agreement that 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.
(d)
This Agreement shall create a continuing Lien on and security interest in the Collateral and shall (i) remain in full force and
effect until the full performance and Payment in Full of the Obligations, and (ii) be binding on each Grantor and 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 Collateral Agent and the Noteholders hereunder, to the ratable benefit of the Collateral Agent and the Noteholders and
their respective permitted successors, transferees and assigns. Without limiting the generality of clause (ii) of the immediately preceding
sentence, without notice to any Grantor, the Collateral Agent and the Noteholders may assign or otherwise transfer their rights and obligations
under this Agreement and any of the other Transaction Documents, to any other Person and such other Person shall thereupon become vested
with all of the benefits in respect thereof granted to the Collateral Agent and the Noteholders herein or otherwise. Upon any such assignment
or transfer, all references in this Agreement to the Collateral Agent or any such Noteholder shall mean the assignee of the Collateral
Agent or such Noteholder. None of the rights or obligations of any Grantor hereunder may be assigned, delegated or otherwise transferred
without the prior written consent of the Collateral Agent in its sole and absolute discretion, and any such assignment, delegation or
transfer without such consent of the Collateral Agent shall be null and void.
(e)
Upon the full performance and Payment in Full of the Obligations, (i) this Agreement and the security interests created hereby
shall terminate and all rights to the Collateral shall revert to the respective Grantor that granted such security interests hereunder,
and (ii) the Collateral Agent will, upon any Grantor’s request and at such Grantor’s expense, (A) return to such Grantor such
of the Collateral as shall not have been sold or otherwise disposed of or applied pursuant to the terms hereof and (B) execute and deliver
to such Grantor such documents as such Grantor shall reasonably request to evidence such termination, all without any representation,
warranty or recourse whatsoever.
(f)
Governing Law; Jurisdiction; Jury Trial.
(i)
All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of Delaware, without giving effect to any provision or rule of law (whether of the State of Delaware or any
other jurisdictions) that would cause the application of the laws of any jurisdiction other than the State of Delaware.
(ii)
Each Grantor hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in Wilmington, Delaware,
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,
defense or objection 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 Section 9(f) of the Securities Purchase 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 the Collateral
Agent or the Noteholders from bringing suit or taking other legal action against any Grantor in any other jurisdiction to collect on a
Grantor’s obligations or to enforce a judgment or other court ruling in favor of the Collateral Agent or a Noteholder.
(iii)
WAIVER OF JURY TRIAL, ETC. EACH GRANTOR 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.
(iv)
Each Grantor irrevocably and unconditionally waives any right it may have to claim or recover in any legal action, suit or proceeding
referred to in this Section any special, exemplary, indirect, incidental, punitive or consequential damages.
(g)
Section headings herein are included for convenience of reference only and shall not constitute a part of this Agreement for any
other purpose.
(h)
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 constitute one and the same Agreement. Delivery of any executed
counterpart of a signature page of this Agreement by pdf, facsimile or other electronic transmission shall be effective as delivery of
a manually executed counterpart of this Agreement.
(i)
This Agreement shall continue to be effective or be reinstated, as the case may be, if at any time any payment of any of the Obligations
is rescinded or must otherwise be returned by the Collateral Agent, any Noteholder or any other Person (upon (i) the occurrence of any
Insolvency Proceeding of any of the Company or any Grantor or (ii) otherwise, in all cases as though such payment had not been made).
Section
12. Material Non-Public Information.
Upon receipt or delivery by any Grantor of any notice in accordance with the terms of this Agreement, unless such Grantor has in good
faith determined that the matters relating to such notice do not constitute material, non-public information relating to the Grantor or
any of its Subsidiaries, such Grantor shall within one (1) Business Day after any such receipt or delivery publicly disclose such material,
non-public information on a Current Report on Form 8-K or otherwise. In the event that such Grantor believes that a notice contains material,
non-public information relating to such Grantor or any of its Subsidiaries, such Grantor so shall indicate to the Collateral Agent and
any applicable Noteholder contemporaneously with delivery of such notice, and in the absence of any such indication, the Collateral Agent
and each Noteholder shall be allowed to presume that all matters relating to such notice do not constitute material, non-public information
relating to such Grantor or its Subsidiaries. Nothing contained in this Section 12 shall limit any obligations of any Grantor,
or any rights or remedies of the Collateral Agent or any Noteholder, under Section 4(i) of the Securities Purchase 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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VISIONARY HOLDINGS INC. |
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By: |
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Name: Charles Y. Fu
Title: Director, Senior Vice President & General
Counsel |
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CANADA ANIMATION INDUSTRY GROUP
INC. |
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By: |
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Name:
Title: |
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NEOCANAAN INVESTMENT CORPORATION |
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By: |
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Name:
Title: |
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TORONTO ESCHOOL LTD. |
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By: |
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Name:
Title: |
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FARVISION CAREER EDUCATION GROUP INC. |
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By: |
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Name:
Title: |
[Signature Page to Security Agreement]
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MAPLE TORONTO ART ACADEMY INC. |
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By: |
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Name:
Title: |
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7621531 CANADA INC. |
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By: |
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Name:
Title: |
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VISIONARY EDUCATION SERVICES AND MANAGEMENT INC. |
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By: |
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Name:
Title: |
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13995291 CANADA INC. |
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By: |
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Name:
Title: |
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BETHUNE GREAT HEALTH INVESTMENT A MANAGEMENT INC. |
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By: |
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Name:
Title: |
[Signature Page to Security Agreement]
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VISIONARY BIOTECHNOLOGY GROUP INC. |
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By: |
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Name:
Title: |
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MAX THE MUTT ANIMATION INC. |
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By: |
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Name:
Title: |
[Signature Page to Security Agreement]
ACCEPTED BY:
[COLLATERAL AGENT], as Collateral Agent
By: ________________________________
Name:
Title:
[Signature Page to Security Agreement]
EXHIBIT A
FORM OF INTELLECTUAL
PROPERTY SECURITY AGREEMENT
INTELLECTUAL PROPERTY SECURITY AGREEMENT
This INTELLECTUAL PROPERTY SECURITY
AGREEMENT (as amended, modified, supplemented, renewed, restated or replaced from time to time, this “IP Security Agreement”),
dated [ , 2024], is made by the Persons listed on the signature pages hereof (collectively, the “Grantors”) in favor
of [COLLATERAL AGENT], in its capacity as collateral agent (the “Collateral Agent”) for the Noteholders. All capitalized
terms not otherwise defined herein shall have the meanings respectively ascribed thereto in the Security Agreement (as defined below).
WHEREAS, Visionary Holdings
Inc., a company organized under the laws of the Canada (the “Company”), and each party listed as a “Buyer”
therein (collectively, the “Buyers”) are parties to that certain Securities Purchase Agreement, dated September [__],
2024, pursuant to which the Company shall be required to sell, and the Buyers shall purchase or have the right to purchase, the “Notes”
(as defined therein) issued pursuant thereto (as such Notes may be amended, modified, supplemented, renewed, restated or replaced from
time to time in accordance with the terms thereof, collectively, the “Notes”);
WHEREAS, it is a condition precedent
to the purchase of the Notes under the Securities Purchase Agreement that each Grantor has executed and delivered that certain Security
and Pledge Agreement, dated [ , 2024], made by the Grantors to the Collateral Agent (as amended, modified, supplemented, renewed, restated
or replaced from time to time, the “Security Agreement”); and
WHEREAS, under the terms of
the Security Agreement, the Grantors have granted to the Collateral Agent, for the ratable benefit of the Collateral Agent and the Noteholders,
a Lien on and security interest in, among other property, certain intellectual property of the Grantors, and have agreed as a condition
thereof to execute this IP Security Agreement for recording with the U.S. Patent and Trademark Office, the United States Copyright Office
and other governmental authorities.
WHEREAS, the Grantors have determined
that the execution, delivery and performance of this IP Security Agreement directly benefits, and is in the best interest of, the Grantors.
NOW, THEREFORE, in consideration
of the premises and the agreements herein and in order to induce the Buyers to perform under the Securities Purchase Agreement, each Grantor
agrees with the Collateral Agent, for the ratable benefit of the Collateral Agent and the Noteholders, as follows
SECTION 1. Grant of Security.
As collateral security for the due and punctual payment and performance in full of the Obligations, as and when due, each Grantor hereby
pledges and assigns to the Collateral Agent, its successors and permitted assigns, and hereby grants to the Collateral Agent, its successors
and permitted assigns, for the ratable benefit of the Collateral Agent and the Noteholders, a continuing Lien on and security interest
in, all of such Grantor’s right, title and interest in, to and under the following (the “Collateral”):
(i)the
Patents and Patent applications set forth in Schedule A hereto;
(ii)the
Trademark and service mark registrations and applications set forth in Schedule B hereto (provided that no security interest
shall be granted in United States intent-to-use trademark applications to the extent that, and solely during the period in which, the
grant of a security interest therein would impair the validity or enforceability of such intent-to-use trademark applications under applicable
federal law), together with the goodwill symbolized thereby;
(iii)all
Copyrights, whether registered or unregistered, now owned or hereafter acquired by such Grantor, including, without limitation, the copyright
registrations and applications and exclusive copyright licenses set forth in Schedule C hereto;
(iv)all
reissues, divisions, continuations, continuations-in-part, extensions, renewals and reexaminations of any of the foregoing, all rights
in the foregoing provided by international treaties or conventions, all rights corresponding thereto throughout the world and all other
rights of any kind whatsoever of such Grantor accruing thereunder or pertaining thereto;
(v)any
and all claims for damages and injunctive relief for past, present and future infringement, dilution, misappropriation, violation, misuse
or breach with respect to any of the foregoing, with the right, but not the obligation, to sue for and collect, or otherwise recover,
such damages; and
(vi)any
and all Proceeds, including without limitation Cash and Noncash Proceeds of, collateral for, income, royalties and other payments now
or hereafter due and payable with respect to, and Supporting Obligations relating to, any and all of the collateral of or arising from
any of the foregoing.
SECTION 2. Security for Obligations.
The grant of a Lien on and security interest in, the Collateral by each Grantor under this IP Security Agreement constitutes continuing
collateral security for the payment and performance of all Obligations of such Grantor now or hereafter existing under or in respect of
the Notes and 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.
SECTION 3. Recordation.
Each Grantor authorizes and requests that the Register of Copyrights, the Commissioner for Patents and the Commissioner for Trademarks
and any other applicable government officer record this IP Security Agreement.
SECTION 4. Execution in Counterparts.
This IP Security 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 constitute one and the same Agreement.
SECTION 5. Grants, Rights
and Remedies. This IP Security Agreement has been entered into in conjunction with the provisions of the Security Agreement. Each
Grantor does hereby acknowledge and confirm that the grant of the Lien and security interest hereunder to, and the rights and remedies
of, the Collateral Agent with respect to the Collateral are more fully set forth in the Security Agreement, the terms and provisions of
which are incorporated herein by reference as if fully set forth herein.
SECTION 6. Governing
Law; Jurisdiction; Jury Trial.
(i)
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 provision or rule of law (whether of the State of New York or any
other jurisdictions) that would cause the application of the laws of any jurisdiction other than the State of New York.
(ii)
Each Grantor 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, defense or objection 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 Section 9(f) of the Securities Purchase 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 the Collateral Agent or the Noteholders from bringing suit or taking other legal action against any Grantor in any other jurisdiction
to collect on a Grantor’s obligations or to enforce a judgment or other court ruling in favor of the Collateral Agent or a Noteholder.
(iii)
WAIVER OF JURY TRIAL, ETC. EACH GRANTOR 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.
(iv)
Each Grantor irrevocably and unconditionally waives any right it may have to claim or recover in any legal action, suit or proceeding
referred to in this Section any special, exemplary, indirect, incidental, punitive or consequential damages.
[The remainder of the page is
intentionally left blank
IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date first above written.
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VISIONARY HOLDINGS INC. |
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Address for Notices: |
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[Signature Page to IP Agreement]
IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date first above written.
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[GRANTOR] |
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By |
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Name: |
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Title: |
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Address for Notices: |
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[Signature Page to IP Agreement]
Schedule A
Patents
None.
Schedule B
Trademarks
Grantor |
Country |
Trademark |
Application
or
Registration
No. |
Application
or
Registration
Date
|
Assignees |
| Max the Mutt Animation Inc. |
Canada |
 |
TMA699144 |
October
23, 2007 |
NA |
| Visionary
Education Technology Holdings Group Inc. |
Canada |
 |
2123408 |
July 28, 2021 |
NA |
| Visionary Education Technology
Holdings Group Inc. |
Canada |
 |
2123411 |
July
28, 2021 |
NA |
| Visionary
Education Technology Holdings Group Inc. |
Canada |
 |
2123410 |
July 28, 2021 |
NA |
| Visionary Education Technology
Holdings Group Inc. |
Canada |
 |
2123409 |
July
28, 2021 |
NA |
| Visionary
Education Technology Holdings Group Inc. |
Canada |
 |
2123412 |
July 28, 2021 |
NA |
| Visionary Education Technology
Holdings Group Inc. |
Canada |
 |
21205906 |
July
28, 2021 |
NA |
| Visionary
Education Technology Holdings Group Inc. |
Canada |
 |
2123413 |
July
28, 2021 |
NA |
Schedule C
Copyrights
Grantor |
Country |
Title |
Type of Work |
Application
or Registration No.
|
Issue Date |
Assignees |
| Farvision
Education Group Inc |
Canada |
Training
(OSSD) VIDEOS |
Ontario,
Canada High School Videos |
1184407 |
July 28,
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
MCV4U |
Literary |
1184663 |
Aug 4,
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
MHF4U |
Literary |
1184664 |
Aug 4,
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
ELSE0 |
Literary |
1184665 |
Aug 4,
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
HFA4U |
Literary |
1184666 |
Aug 4
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
ESLC0 |
Literary |
1184667 |
Aug 4
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
HNB4M |
Literary |
1184668 |
Aug 4
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
BOH4M |
Literary |
1184669 |
Aug 4
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
SCH4U |
Literary |
1184670 |
Aug 4
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
MDM4U |
Literary |
1184671 |
Aug 4
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
SNC4M |
Literary |
1184672 |
Aug 4
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
SPH4U |
Literary |
1184673 |
Aug 4
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
SBI4U |
Literary |
1184674 |
Aug 4
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
ESLDO |
Literary |
1184675 |
Aug 4
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
ESLBO |
Literary |
1184676 |
Aug 4
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
ESLAO |
Literary |
1184677 |
Aug 4
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
BBB4M |
Literary |
1184678 |
Aug 4
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
AVI4M |
Literary
|
1184679 |
Aug 4
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
ENG4U
|
Literary
|
1184680 |
Aug
4 2021 |
Innovation,
Science & Economic Dev Cda
|
| Farvision
Education Group Inc |
Canada |
VEDU Virtual
Teaching Lab |
Literary |
1188920 |
Aug 4
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
Instructional
Videos of Gr 12 Cda History CHI4U |
Performers
performance |
1184422 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
MCV4U |
Performer
performance |
1184423 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
SCH4U |
Performer
performance |
1184424 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
BBB4M |
Performer
performance |
1184425 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
MCT4C |
Performer
Performance |
1184426 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
SBI3U |
Performer
Performance |
1184427 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
MDM4U |
Performer
Performance |
1184428 |
July 28
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
ESLE0 |
Performer
Performance |
1184429 |
July 28
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
ENG4C |
Performer
Performance |
1184430 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
ENG4U |
Performer
Performance |
1184431 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
SPH4U |
Performer
Performance |
1184432 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
BOH4M |
Performer
Performance |
1184433 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
AVI3M |
Performer
Performance |
1184434 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
SVN3M |
Performer
Performance |
1184435 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
SPH3U |
Performer
Performance |
1184436 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
MHF4U |
Performer
Performance |
1184437 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
SCH3U |
Performer
Performance |
1184438 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
ENG3C |
Performer
Performance |
1184439 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
CIE3M |
Performer
Performance |
1184440 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
SBI4U |
Performer
Performance |
1184441 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
ENG3U |
Performer
Performance |
1184442 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
Farvision
MOOC |
Literary |
1184446 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
Farvision
OSSD APP |
Literary |
1184447 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
SCHEDULE I
Legal Names; Organizational Identification
Numbers;
States or Jurisdiction of Organization
| Grantor’s Name |
State of
Organization |
Federal
Employer I.D. |
Organizational
I.D. |
| Visionary Holdings Inc. |
CA |
84294 6436 |
n.a. |
|
Canada Animation Industry Group
Inc.
|
CA |
70759 7936 |
n.a. |
|
NeoCanaan Investment Corporation
|
CA |
73277 9731 |
n.a. |
|
Toronto eSchool Ltd.
|
CA |
78020 4327 |
n.a. |
|
Farvision Career Education Group
Inc (f/k/a Farvision Education Group Inc.)
|
CA |
73437 6478 |
n.a. |
| Maple Toronto Art Academy Inc. (d/b/a Toronto Art Academy Inc.) |
CA |
72125 9075 |
n.a. |
| 7621531 Canada Inc. |
CA |
24104 2399 |
n.a. |
| Visionary Education Services and Management Inc. |
CA |
85113 0575 |
n.a. |
| 13995291 Canada Inc |
CA |
729288209 |
n.a. |
| 13995191 Canada Inc |
CA |
|
|
| Max the Mutt Animation inc. |
CA |
|
|
| Bethune Great Health Investment Management Inc. |
CA |
|
|
| Visionary Biotechnology Group Inc. |
CA |
|
|
SCHEDULE II
Intellectual Property
Patents
Trademarks
Grantor |
Country |
Trademark |
Application
or
Registration
No. |
Application
or
Registration
Date
|
Assignees |
| Max the Mutt Animation Inc. |
Canada |
|
TMA699144 |
October
23, 2007 |
NA |
| Visionary
Education Technology Holdings Group Inc. |
Canada |
|
2123408 |
July 28, 2021 |
NA |
| Visionary Education Technology
Holdings Group Inc. |
Canada |
|
2123411 |
July
28, 2021 |
NA |
| Visionary
Education Technology Holdings Group Inc. |
Canada |
|
2123410 |
July 28, 2021 |
NA |
| Visionary Education Technology
Holdings Group Inc. |
Canada |
|
2123409 |
July
28, 2021 |
NA |
| Visionary
Education Technology Holdings Group Inc. |
Canada |
|
2123412 |
July 28, 2021 |
NA |
| Visionary Education Technology
Holdings Group Inc. |
Canada |
|
21205906 |
July
28, 2021 |
NA |
| Visionary
Education Technology Holdings Group Inc. |
Canada |
|
2123413 |
July
28, 2021 |
NA |
Copyrights
Grantor |
Country |
Title |
Type of Work |
Application
or Registration No.
|
Issue Date |
Assignees |
| Farvision
Education Group Inc |
Canada |
Training
(OSSD) VIDEOS |
Ontario,
Canada High School Videos |
1184407 |
July 28,
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
MCV4U |
Literary |
1184663 |
Aug 4,
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
MHF4U |
Literary |
1184664 |
Aug 4,
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
ELSE0 |
Literary |
1184665 |
Aug 4,
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
HFA4U |
Literary |
1184666 |
Aug 4
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
ESLC0 |
Literary |
1184667 |
Aug 4
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
HNB4M |
Literary |
1184668 |
Aug 4
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
BOH4M |
Literary |
1184669 |
Aug 4
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
SCH4U |
Literary |
1184670 |
Aug 4
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
MDM4U |
Literary |
1184671 |
Aug 4
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
SNC4M |
Literary |
1184672 |
Aug 4
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
SPH4U |
Literary |
1184673 |
Aug 4
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
SBI4U |
Literary |
1184674 |
Aug 4
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
ESLDO |
Literary |
1184675 |
Aug 4
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
ESLBO |
Literary |
1184676 |
Aug 4
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
ESLAO |
Literary |
1184677 |
Aug 4
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
BBB4M |
Literary |
1184678 |
Aug 4
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
AVI4M |
Literary
|
1184679 |
Aug 4
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
ENG4U
|
Literary
|
1184680 |
Aug
4 2021 |
Innovation,
Science & Economic Dev Cda
|
| Farvision
Education Group Inc |
Canada |
VEDU Virtual
Teaching Lab |
Literary |
1188920 |
Aug 4
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
Instructional
Videos of Gr 12 Cda History CHI4U |
Performers
performance |
1184422 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
MCV4U |
Performer
performance |
1184423 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
SCH4U |
Performer
performance |
1184424 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
BBB4M |
Performer
performance |
1184425 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
MCT4C |
Performer
Performance |
1184426 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
SBI3U |
Performer
Performance |
1184427 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
MDM4U |
Performer
Performance |
1184428 |
July 28
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
ESLE0 |
Performer
Performance |
1184429 |
July 28
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
ENG4C |
Performer
Performance |
1184430 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
ENG4U |
Performer
Performance |
1184431 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
SPH4U |
Performer
Performance |
1184432 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
BOH4M |
Performer
Performance |
1184433 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
AVI3M |
Performer
Performance |
1184434 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
SVN3M |
Performer
Performance |
1184435 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
SPH3U |
Performer
Performance |
1184436 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
MHF4U |
Performer
Performance |
1184437 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
SCH3U |
Performer
Performance |
1184438 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
ENG3C |
Performer
Performance |
1184439 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
CIE3M |
Performer
Performance |
1184440 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
SBI4U |
Performer
Performance |
1184441 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
ENG3U |
Performer
Performance |
1184442 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
Farvision
MOOC |
Literary |
1184446 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
| Farvision
Education Group Inc |
Canada |
Farvision
OSSD APP |
Literary |
1184447 |
July 29
2021 |
Innovation,
Science & Economic Dev Cda |
Licenses
None.
SCHEDULE III
Locations
| Grantor’s Name |
Chief
Executive Office |
Chief
Place of Business |
Books
and Records |
Inventory,
Equipment, Etc. |
| Visionary
Holdings Inc. |
105
Moatfield Dr, Unit 1003, North York, Toronto, Ontario, Canada, M3B 0A2 |
105
Moatfield Dr, Unit 1003, North York, Toronto, Ontario, Canada, M3B 0A2 |
105
Moatfield Dr, Unit 1003, North York, Toronto, Ontario, Canada, M3B 0A2 |
105
Moatfield Dr, Unit 1003, North York, Toronto, Ontario, Canada, M3B 0A2 |
Canada
Animation Industry Group Inc.
|
408-200
Town Centre Blvd
Markham,
ON
L3R
8G5
|
408-200
Town Centre Blvd
Markham,
ON
L3R
8G5 |
408-200
Town Centre Blvd
Markham,
ON
L3R
8G5
|
408-200
Town Centre Blvd
Markham,
ON
L3R
8G5
|
NeoCanaan
Investment Corp.
|
408-200
Town Centre Blvd
Markham,
ON
L3R
8G5
|
408-200
Town Centre Blvd
Markham,
ON
L3R
8G5
|
408-200
Town Centre Blvd Markham, ON
L3R
8G5
|
408-200
Town Centre Blvd
Markham,
ON
L3R
8G5
|
Toronto
eSchool Ltd.
|
105
Moatfield Dr, 11f. North York, Toronto, Ontario, Canada, M3B 0A2 |
105
Moatfield Dr, 11f, North York, Toronto, Ontario, Canada, M3B 0A2 |
105
Moatfield Dr, 11f, North York, Toronto, Ontario, Canada, M3B 0A2 |
105
Moatfield Dr, 11f, North York, Toronto, Ontario, Canada, M3B 0A2 |
| MAX
THE MUTT ANIMATION INC. |
95
Moatfield Drive
North
York, Toronto, Ontario, Canada, M3B 3L6
|
95
Moatfield Drive
North
York, Toronto, Ontario, Canada, M3B 3L6
|
95
Moatfield Drive
North
York, Toronto, Ontario, Canada, M3B 3L6
|
95
Moatfield Drive
North
York, Toronto, Ontario, Canada, M3B 3L6
|
| Farvision
Career Education Group Inc. |
408-200
Town Centre Blvd
Markham,
ON
L3R
8G5 |
408-200
Town Centre Blvd
Markham,
ON
L3R
8G5
|
408-200
Town Centre Blvd Markham, ON
L3R
8G5 |
408-200
Town Centre Blvd
Markham,
ON
L3R
8G5
|
| Maple
Toronto Art Academy Inc. d/b/a Toronto Art Academy Inc. |
408-200
Town Centre Blvd
Markham,
ON
L3R
8G5
|
408-200
Town Centre Blvd
Markham,
ON
L3R
8G5
|
408-200
Town Centre Blvd Markham, ON
L3R
8G5
|
408-200
Town Centre Blvd
Markham,
ON
L3R
8G5
|
| 7621531
Canada Inc. |
408-200
Town Centre Blvd
Markham,
ON
L3R
8G5
|
408-200
Town Centre Blvd
Markham,
ON
L3R
8G5
|
408-200
Town Centre Blvd Markham, ON
L3R
8G5
|
408-200
Town Centre Blvd
Markham,
ON
L3R
8G5
|
| Visionary
Education Services & Management Inc. |
408-200
Town Centre Blvd
Markham,
ON
L3R
8G5
|
408-200
Town Centre Blvd
Markham,
ON
L3R
8G5
|
408-200
Town Centre Blvd Markham, ON
L3R
8G5
|
408-200
Town Centre Blvd
Markham,
ON
L3R
8G5
|
| 13995291
Canada Inc |
105
Moatfield Dr, Unit 1003, North York, Toronto, Ontario, Canada, M3B 0A2 |
105
Moatfield Dr, Unit 1003, North York, Toronto, Ontario, Canada, M3B 0A2 |
105
Moatfield Dr, Unit 1003, North York, Toronto, Ontario, Canada, M3B 0A2 |
105
Moatfield Dr, Unit 1003, North York, Toronto, Ontario, Canada, M3B 0A2 |
| Bethune
Great Health Investment Management Inc. |
105
Moatfield Dr, Unit 1003, North York, Toronto, Ontario, Canada, M3B 0A2 |
105
Moatfield Dr, Unit 1003, North York, Toronto, Ontario, Canada, M3B 0A2 |
105
Moatfield Dr, Unit 1003, North York, Toronto, Ontario, Canada, M3B 0A2 |
105
Moatfield Dr, Unit 1003, North York, Toronto, Ontario, Canada, M3B 0A2 |
| Visionary
Biotechnology Group Inc. |
105
Moatfield Dr, Unit 1003, North York, Toronto, Ontario, Canada, M3B 0A2 |
105
Moatfield Dr, Unit 1003, North York, Toronto, Ontario, Canada, M3B 0A2 |
105
Moatfield Dr, Unit 1003, North York, Toronto, Ontario, Canada, M3B 0A2 |
105
Moatfield Dr, Unit 1003, North York, Toronto, Ontario, Canada, M3B 0A2 |
SCHEDULE IV
Promissory Notes, Securities, Deposit Accounts,
Securities Accounts and Commodities Accounts
Securities
| Grantor |
Name of Issuer /
Pledged Entity
|
Number
of Shares |
Class |
Certificate
No.(s) |
| None. |
|
|
|
|
Deposit Accounts, Securities Accounts and Commodities Accounts
| Grantor |
Name and Address of Institution |
Purpose of the Account |
Account No. |
| None. |
|
|
|
Foreign Currency Controlled Accounts
| Entity |
Name
and Address of Institution |
Amount
Held in Account |
Visionary
Holdings Inc. (GV)
|
Toronto-Dominion
Bank (TD Bank)
Dundas
and Spadina store, 247 Spadina Ave, Toronto, ON M5T 3A8
|
CAD
$85,673.90
|
Farvision
Career Education Group Inc.
|
Toronto-Dominion
Bank (TD Bank)
Dundas
and Spadina store, 247 Spadina Ave, Toronto, ON M5T 3A8
|
CAD
$8,960.00 |
| Maple
Toronto Art Academy Inc. d/b/a Toronto Art Academy Inc. |
Toronto-Dominion
Bank (TD Bank)
Richmond
Hill Times Square, 550 Highway 7 E, Unit 55, Richmond Hill, ON L4B 3Z4
|
CAD
$11,450.00 |
| 7621531
Canada Inc. |
Toronto-Dominion Bank (TD Bank)
Dundas
and Spadina store, 247 Spadina Ave, Toronto, ON M5T 3A8
|
CAD
$9,374.00 |
| Visionary
Education Services and Management Inc. |
Bank
of China (Candada)
Unit
28, 3040 Don mills road east, Toronto, On M2T 3C1
|
CAD
$6,720.00 |
| Canada
Animation Industry Group Inc. |
Toronto-Dominion
Bank (TD Bank)
Dundas
and Spadina store, 247 Spadina Ave, Toronto, ON M5T 3A8
|
CAD
$2,500.00 |
| NeoCanaan
Investment Corp. |
Toronto-Dominion Bank (TD Bank)
Dundas
and Spadina store, 247 Spadina Ave, Toronto, ON M5T 3A8
|
CAD
$0 |
| Toronto
eSchool |
Toronto-Dominion
Bank (TD Bank)
heppard
& Aragon, 3477 Speppard Ave East , Scarborough, ON, M1T 3K6
|
CAD
$35,750.00 |
| Max
the Mutt Animation Inc. (Toronto Animation College Inc.) |
Toronto-Dominion Bank (TD Bank)
Dundas
and Spadina store, 247 Spadina Ave, Toronto, ON M5T 3A8
|
CAD
$54,200.00 |
| 13995291
Canada Inc |
Toronto-Dominion
Bank (TD Bank)
Dundas
and Spadina store, 247 Spadina Ave, Toronto, ON M5T 3A8
|
CAD
$0 |
| Bethune
Great Health Investment Management Inc. |
Not
in operation |
|
| Visionary
Biotechnology Group Inc. |
Not
in operation |
|
Pledged Equity
None.
SCHEDULE V
Financing Statements
| Grantor |
Jurisdiction for Filing Financing Statement |
| |
|
| Visionary Holdings Inc. |
Washington, D.C. |
| |
|
| |
|
| |
|
SCHEDULE VI
Commercial Tort Claims
None.
SCHEDULE VII
Permitted Liens
Mortgages on:
(1) 105 Moatfield Dr, North York, Toronto, Ontario,
Canada, M3B 0A2
(2) 95 Moatfield Drive, North York, Ontario, M3B 3L6
Exhibit 10.6
GUARANTY
This GUARANTY, dated as of October
[_], 2024 (this “Guaranty”), is made by each of the undersigned (each a “Guarantor”,
and collectively, the “Guarantors”), in favor of [COLLATERAL
AGENT], in its capacity as collateral agent (in such capacity, the “Collateral Agent” as hereinafter further defined)
for the “Buyers” party to the Securities Purchase Agreement (each as defined below).
W
I T N E S S E T H:
WHEREAS, Visionary Holdings
Inc. (f/k/a Visionary Education Technology Holdings Group Inc.), a company organized under the laws of Canada, with offices located at
105 Moatfield Drive, Unit 1003, Toronto, Ontario, Canada M3B 0A2 (the “Company”),
and each party listed as a “Buyer” on the Schedule
of Buyers attached thereto (collectively, the “Buyers”)
are parties to the Amended and Restated Securities Purchase Agreement, dated as of September [__], 2024 (as amended, restated, extended,
replaced or otherwise modified from time to time, the “Securities Purchase
Agreement”), pursuant to which the Company shall be required to sell, and the Buyers shall purchase or have the right
to purchase, the “Notes” issued pursuant thereto (as such Notes may be amended, restated, extended, replaced or otherwise
modified from time to time in accordance with the terms thereof, collectively, the “Notes”);
WHEREAS, the Securities Purchase
Agreement requires that the Guarantors execute and deliver to the Collateral Agent, (i) a guaranty guaranteeing all of the obligations
of the Company under the Securities Purchase Agreement, the Notes and the other Transaction Documents (as defined below); and (ii) a Security
and Pledge Agreement, dated as of the date hereof, granting the Collateral Agent a lien on and security interest in all of their assets
and properties (the “Security Agreement”); and
WHEREAS, each Guarantor has
determined that the execution, delivery and performance of this Guaranty directly benefits, and is in the best interest of, such Guarantor.
NOW, THEREFORE, in consideration
of the premises and the agreements herein and in order to induce the Buyers to perform under the Securities Purchase Agreement, each Guarantor
hereby agrees with each Buyer as follows:
Section
1. Definitions.
Reference is hereby made to the Securities Purchase Agreement and the Notes for a statement of the terms thereof. All terms used in this
Guaranty and the recitals hereto which are defined in the Securities Purchase Agreement or the Notes, and which are not otherwise defined
herein shall have the same meanings herein as set forth therein. In addition, the following terms when used in the Guaranty shall have
the meanings set forth below:
“Bankruptcy Code”
means Chapter 11 of Title 11 of the United States Code, 11 U.S.C §§ 101 et seq. (or other applicable bankruptcy, insolvency
or similar laws).
“Business Day”
means any day other than Saturday, Sunday or other day on which commercial banks in New York City 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.
“Buyer”
or “Buyers” shall have the meaning set forth in the recitals hereto.
“Capital Stock”
means (i) with respect to any Person that is a corporation, any and all shares, interests, participations or other equivalents (however
designated and whether or not voting) of corporate stock (including, without limitation, any warrants, options, rights or other securities
exercisable or convertible into equity interests or securities of such Person), and (ii) with respect to any Person that is not a corporation,
any and all partnership, membership or other equity interests of such Person.
“Collateral”
means all assets and properties of the Company and each Guarantor, 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 collateral
described in Section 3(a) of the Security Agreement.
“Collateral Agent”
shall have the meaning set forth in the recitals hereto.
“Company”
shall have the meaning set forth in the recitals hereto.
“Governmental Authority”
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.
“Guaranteed Obligations”
shall have the meaning set forth in Section 2 of this Guaranty.
“Guarantor”
or “Guarantors” shall have the meaning set forth in the recitals hereto.
“Indemnified Party”
shall have the meaning set forth in Section 13(a) of this Guaranty.
“Insolvency Proceeding”
means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other bankruptcy or insolvency
law, assignments for the benefit of creditors, formal or informal moratoria, compositions, or extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.
“Notes”
shall have the meaning set forth in the recitals hereto.
“Obligations”
shall have the meaning set forth in Section 4 of the Security Agreement.
“Other Taxes”
shall have the meaning set forth in Section 12(a)(iv) of this Guaranty.
“Paid in Full”
or “Payment in Full” means the indefeasible payment in full in cash of all of the Guaranteed Obligations.
“Person”
means an individual, corporation, limited liability company, partnership, association, joint-stock company, trust, unincorporated organization,
joint venture or other enterprise or entity or Governmental Authority.
“Securities Purchase
Agreement” shall have the meaning set forth in the recitals hereto.
“Security Agreement”
shall have the meaning set forth in the recitals hereto.
“Subsidiary”
means any Person in which a Guarantor directly or indirectly, (i) owns any of the outstanding Capital Stock or holds any 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 all of the foregoing, collectively, “Subsidiaries”.
“Taxes”
shall have the meaning set forth in Section 12(a) of this Guaranty.
“Transaction Party”
means the Company and each Guarantor, collectively, “Transaction Parties”.
Section
2. Guaranty.
(a)
The Guarantors, jointly and severally, hereby unconditionally and irrevocably, guaranty to the Collateral Agent, for the benefit
of the Collateral Agent and the Buyers, the punctual payment, as and when due and payable, by stated maturity or otherwise, of all Obligations,
including, without limitation, all interest, make-whole and other amounts that accrue after the commencement of any Insolvency Proceeding
of the Company or any Guarantor, whether or not the payment of such interest, make-whole and/or other amounts are enforceable or are allowable
in such Insolvency Proceeding, and all fees, interest, premiums, penalties, causes of actions, costs, commissions, expense reimbursements,
indemnifications and all other amounts due or to become due under any of the Transaction Documents (all of the foregoing collectively
being the “Guaranteed Obligations”), and agrees to
pay any and all costs and expenses (including counsel fees and expenses) incurred by the Collateral Agent in enforcing any rights under
this Guaranty or any other Transaction Document. Without limiting the generality of the foregoing, each Guarantor’s liability hereunder
shall extend to all amounts that constitute part of the Guaranteed Obligations and would be owed by the Company to the Collateral Agent
or any Buyer under the Securities Purchase Agreement and the Notes but for the fact that they are unenforceable or not allowable due to
the existence of an Insolvency Proceeding involving any Transaction Party.
(b)
Each Guarantor, and by its acceptance of this Guaranty, the Collateral Agent and each Buyer, hereby confirms that it is the intention
of all such Persons that this Guaranty and the Guaranteed Obligations of each Guarantor hereunder not constitute a fraudulent transfer
or conveyance for purposes of the Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
foreign, federal, provincial, state, or other applicable law to the extent applicable to this Guaranty and the Guaranteed Obligations
of each Guarantor hereunder. To effectuate the foregoing intention, the Collateral Agent, the Buyers and the Guarantors hereby irrevocably
agree that the Guaranteed Obligations of each Guarantor under this Guaranty at any time shall be limited to the maximum amount as will
result in the Guaranteed Obligations of such Guarantor under this Guaranty not constituting a fraudulent transfer or conveyance.
Section
3. Guaranty Absolute;
Continuing Guaranty; Assignments.
(a)
The Guarantors, jointly and severally, guaranty 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 any Buyer with respect thereto. The obligations of each Guarantor under this Guaranty
are independent of the Guaranteed Obligations, and a separate action or actions may be brought and prosecuted against any Guarantor to
enforce such obligations, irrespective of whether any action is brought against any Transaction Party or whether any Transaction Party
is joined in any such action or actions. The liability of any Guarantor under this Guaranty shall be as a primary obligor (and not merely
as a surety) and shall be irrevocable, absolute and unconditional irrespective of, and each Guarantor hereby irrevocably waives, to the
extent permitted by law, 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;
(ii)
any change in the time, manner or place of payment of, or in any other term 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 Transaction Party or extension of the maturity of
any Guaranteed Obligations or otherwise;
(iii)
any taking, exchange, release or non-perfection of any Collateral;
(iv)
any taking, release or amendment or waiver of or consent to departure from any other guaranty, for all or any of the Guaranteed
Obligations;
(v)
any change, restructuring or termination of the corporate, limited liability company or partnership structure or existence of any
Transaction Party;
(vi)
any manner of application of Collateral or any other collateral, or proceeds thereof, to all or any of the Guaranteed Obligations,
or any manner of sale or other disposition of any Collateral or any other collateral for all or any of the Guaranteed Obligations or any
other Obligations of any Transaction Party under the Transaction Documents or any other assets of any Transaction Party or any of its
Subsidiaries;
(vii)
any failure of the Collateral Agent or any Buyer to disclose to any Transaction Party any information relating to the business,
condition (financial or otherwise), operations, performance, properties or prospects of any other Transaction Party now or hereafter known
to the Collateral Agent or any Buyer (each Guarantor waiving any duty on the part of the Collateral Agent or any Buyer to disclose such
information);
(viii)
taking any action in furtherance of the release of any Guarantor or any other Person that is liable for the Obligations from all
or any part of any liability arising under or in connection with any Transaction Document without the prior written consent of the Collateral
Agent; or
(ix)
any other circumstance (including, without limitation, any statute of limitations) or any existence of or reliance on any representation
by the Collateral Agent or any Buyer that might otherwise constitute a defense available to, or a discharge of, any Transaction Party
or any other guarantor or surety.
(b)
This Guaranty 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, any Buyer, or any other Person upon the insolvency, bankruptcy
or reorganization of any Transaction Party or otherwise, all as though such payment had not been made.
(c)
This Guaranty is a continuing guaranty and shall (i) remain in full force and effect until Payment in Full of the Guaranteed Obligations
(other than inchoate indemnity obligations) and shall not terminate for any reason prior to the respective Maturity Date of each Note
(other than Payment in Full of the Guaranteed Obligations) and (ii) be binding upon each Guarantor and its respective successors and assigns.
This Guaranty shall inure to the benefit of and be enforceable by the Collateral Agent, the Buyers, and their respective successors, and
permitted pledgees, transferees and assigns. Without limiting the generality of the foregoing sentence, the Collateral Agent or any Buyer
may pledge, assign or otherwise transfer all or any portion of its rights and obligations under and subject to the terms of any Transaction
Document to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to
the Collateral Agent or such Buyer (as applicable) herein or otherwise, in each case as provided in the Securities Purchase Agreement
or such Transaction Document.
Section
4. Waivers. To
the extent permitted by applicable law, each Guarantor hereby waives promptness, diligence, protest, notice of acceptance and any other
notice or formality of any kind with respect to any of the Guaranteed Obligations and this Guaranty and any requirement that the Collateral
Agent exhaust any right or take any action against any Transaction Party or any other Person or any Collateral. 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. The Guarantors hereby waive any right to revoke this Guaranty, and acknowledge that this Guaranty is continuing in nature and
applies to all Guaranteed Obligations, whether existing now or in the future. Without limiting the foregoing, to the extent permitted
by applicable law, each Guarantor hereby unconditionally and irrevocably waives (a) any defense arising by reason of any claim or
defense based upon an election of remedies by the Collateral Agent or any Buyer that in any manner impairs, reduces, releases or otherwise
adversely affects the subrogation, reimbursement, exoneration, contribution or indemnification rights of such Guarantor or other rights
of such Guarantor to proceed against any of the other Transaction Parties, any other guarantor or any other Person or any Collateral,
and (b) any defense based on any right of set-off or counterclaim against or in respect of the Guaranteed Obligations of such Guarantor
hereunder. Each Guarantor hereby unconditionally and irrevocably waives any duty on the part of the Collateral Agent or any Buyer to disclose
to such Guarantor any matter, fact or thing relating to the business, condition (financial or otherwise), operations, performance, properties
or prospects of any other Transaction Party or any of its Subsidiaries now or hereafter known by the Collateral Agent or a Buyer.
Section
5. Subrogation.
No Guarantor may exercise any rights that it may now or hereafter acquire against any Transaction Party or any other guarantor that arise
from the existence, payment, performance or enforcement of any Guarantor’s obligations under this Guaranty, including, without limitation,
any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy
of the Collateral Agent or any Buyer against any Transaction Party or any other guarantor or any Collateral, whether or not such claim,
remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive
from any Transaction Party or any other guarantor, directly or indirectly, in cash or other property or by set-off or in any other manner,
payment or security solely on account of such claim, remedy or right, unless and until there has been Payment in Full of the Guaranteed
Obligations. If any amount shall be paid to a Guarantor in violation of the immediately preceding sentence at any time prior to Payment
in Full of the Guaranteed Obligations and all other amounts payable under this Guaranty, such amount shall be held in trust for the benefit
of the Collateral Agent and shall forthwith be paid to the Collateral Agent to be credited and applied to the Guaranteed Obligations and
all other amounts payable under this Guaranty, whether matured or unmatured, in accordance with the terms of the Transaction Document,
or to be held as Collateral for any Guaranteed Obligations or other amounts payable under this Guaranty thereafter arising. If (a) any
Guarantor shall make payment to the Collateral Agent of all or any part of the Guaranteed Obligations, and (b) there has been Payment
in Full of the Guaranteed Obligations, the Collateral Agent will, at such Guarantor’s request and expense, execute and deliver to
such Guarantor appropriate documents, without recourse and without representation or warranty, necessary to evidence the transfer by subrogation
to such Guarantor of an interest in the Guaranteed Obligations resulting from such payment by such Guarantor.
Section
6. Representations,
Warranties and Covenants.
(a)
Each Guarantor hereby represents and warrants as of the date first written above as follows:
(i)
such Guarantor (A) is a corporation, limited liability company or limited partnership duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization as set forth on the signature pages hereto, (B) has all requisite corporate,
limited liability company or limited partnership power and authority to conduct its business as now conducted and as presently contemplated
and to execute, deliver and perform its obligations under this Guaranty and each other Transaction Document to which such Guarantor is
a party, and to consummate the transactions contemplated hereby and thereby and (C) 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 except where the failure to be so qualified (individually or in the aggregate) would not result in a Material
Adverse Effect.
(ii)
The execution, delivery and performance by such Guarantor of this Guaranty and each other Transaction Document to which such Guarantor
is a party (A) have been duly authorized by all necessary corporate, limited liability company or limited partnership action, (B) do not
and will not contravene its charter, articles, certificate of formation or by-laws, its limited liability company or operating agreement
or its certificate of partnership or partnership agreement, as applicable, or any applicable law or any contractual restriction binding
on such Guarantor or its properties do not and will not result in or require the creation of any lien, security interest or encumbrance
(other than pursuant to any Transaction Document) upon or with respect to any of its properties, and (C) 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.
(iii)
No authorization or approval or other action by, and no notice to or filing with, any Governmental Authority or other Person is
required in connection with the due execution, delivery and performance by such Guarantor of this Guaranty or any of the other Transaction
Documents to which such Guarantor is a party (other than expressly provided for in any of the Transaction Documents).
(iv)
This Guaranty has been duly executed and delivered by each Guarantor and is, and each of the other Transaction Documents to which
such Guarantor is or will be a party, when executed and delivered, 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 the Bankruptcy Code or other applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, suretyship or similar laws and equitable principles (regardless of whether enforcement
is sought in equity or at law).
(v)
There is no pending or, to the best knowledge of such Guarantor, threatened action, suit or proceeding against such Guarantor or
to which any of the properties of such Guarantor is subject, before any court or other Governmental Authority or any arbitrator that (A) if
adversely determined, could reasonably be expected to have a Material Adverse Effect or (B) relates to this Guaranty or any of the
other Transaction Documents to which such Guarantor is a party or any transaction contemplated hereby or thereby.
(vi)
Such Guarantor (A) has read and understands the terms and conditions of the Securities Purchase Agreement and the other Transaction
Documents, and (B) now has and will continue to have independent means of obtaining information concerning the affairs, financial
condition and business of the Company and the other Transaction Parties, and has no need of, or right to obtain from the Collateral Agent
or any Buyer, any credit or other information concerning the affairs, financial condition or business of the Company or the other Transaction
Parties.
(vii)
There are no conditions precedent to the effectiveness of this Guaranty that have not been satisfied or waived.
(b)
Each Guarantor covenants and agrees that until Payment in Full of the Guaranteed Obligations, it will comply with each of the covenants
(except to the extent applicable only to a public company) which are set forth in Section 4 of the Securities Purchase Agreement
as if such Guarantor were a party thereto.
Section
7. Right of Set-off.
Upon the occurrence and during the continuance of any Event of Default, the Collateral Agent and any Buyer may, and is hereby authorized
to, at any time and from time to time, without notice to the Guarantors (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 Buyer to or for the credit or the account of
any Guarantor against any and all obligations of the Guarantors now or hereafter existing under this Guaranty or any other Transaction
Document, irrespective of whether or not the Collateral Agent or any Buyer shall have made any demand under this Guaranty or any other
Transaction Document and although such obligations may be contingent or unmatured. The Collateral Agent and each Buyer agrees to notify
the relevant Guarantor promptly after any such set-off and application made by the Collateral Agent or such Buyer, provided that the failure
to give such notice shall not affect the validity of such set-off and application. The rights of the Collateral Agent or any Buyer under
this Section 7 are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which the Collateral Agent or such Buyer may have under this Guaranty or any
other Transaction Document in law or otherwise.
Section
8. Limitation on Guaranteed
Obligations.
(a)
Notwithstanding any provision herein contained to the contrary, each Guarantor’s liability hereunder shall be limited to
an amount not to exceed as of any date of determination the greater of:
(i)
the amount of all Guaranteed Obligations, plus interest thereon at the applicable Interest Rate as specified in the Note; and
(ii)
the amount which could be claimed by the Collateral Agent from any Guarantor under this Guaranty without rendering such claim voidable
or avoidable under 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, Guarantor’s right of contribution and indemnification.
(b)
Each Guarantor agrees that the Guaranteed Obligations may at any time and from time to time exceed the amount of the liability
of such Guarantor hereunder without impairing the guaranty hereunder or affecting the rights and remedies of the Collateral Agent or any
Buyer hereunder or under applicable law.
(c)
No payment made by the Company, any Guarantor, any other guarantor or any other Person or received or collected by the Collateral
Agent or any other Buyer from the Company, any of the Guarantors, any other guarantor or any other Person by virtue of any action or proceeding
or any set-off or appropriation or application at any time or from time to time in reduction of or in payment of the Guaranteed Obligations
shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder which shall, notwithstanding any
such payment (other than any payment made by such Guarantor in respect of the Guaranteed Obligations or any payment received or collected
from such Guarantor in respect of the Guaranteed Obligations), remain liable for the Guaranteed Obligations up to the maximum liability
of such Guarantor hereunder until after all of the Guaranteed Obligations and all other amounts payable under this Guaranty shall have
been Paid in Full.
Section
9. Notices, Etc.
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Guaranty 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 (iii) one (1) Business
Day after deposit with an nationally recognized overnight courier service with next day delivery specified, in each case, properly addressed
to the party to receive the same. All notices and other communications provided for hereunder shall be sent, if to any Guarantor, to the
Company’s address and/or facsimile number, or if to the Collateral Agent or any Buyer, to it at its respective address and/or facsimile
number, each as set forth in Section 9(f) of the Securities Purchase Agreement.
Section
10. Governing Law; Jurisdiction.
All questions concerning the construction, validity, enforcement and interpretation of this Guaranty shall be governed by the internal
laws of the State of Delaware, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of
Delaware or any other jurisdictions) that would cause the application of the laws of any jurisdiction other than the State of Delaware.
Each Guarantor hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in Wilmington, Delaware,
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,
obligation or defense 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 Section 9(f) of the Securities Purchase 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 the Collateral
Agent or the Buyers from bringing suit or taking other legal action against any Guarantor in any other jurisdiction to collect on a Guarantor’s
obligations or to enforce a judgment or other court ruling in favor of the Collateral Agent or a Buyer.
Section
11. WAIVER OF JURY TRIAL, ETC. EACH
GUARANTOR 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 GUARANTY, ANY OTHER TRANSACTION DOCUMENT
OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.
Section
12. Taxes.
(a)
All payments made by any Guarantor hereunder or under any other Transaction Document shall be made in accordance with the terms
of the respective Transaction Document and shall be made without set-off, counterclaim, withholding, deduction or other defense. Without
limiting the foregoing, all such payments shall be made free and clear of and without deduction or withholding for any present or future
taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto, excluding
taxes imposed on the net income of the Collateral Agent or any Buyer by the jurisdiction in which the Collateral Agent or such Buyer is
organized or where it has its principal lending office (all such nonexcluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities, collectively or individually, “Taxes”).
If any Guarantor shall be required to deduct or to withhold any Taxes from or in respect of any amount payable hereunder or under any
other Transaction Document:
(i)
the amount so payable shall be increased to the extent necessary so that after making all required deductions and withholdings
(including Taxes on amounts payable to the Collateral Agent or any Buyer pursuant to this sentence) the Collateral Agent or each Buyer
receives an amount equal to the sum it would have received had no such deduction or withholding been made,
(ii)
such Guarantor shall make such deduction or withholding,
(iii)
such Guarantor shall pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable
law, and
(iv)
as promptly as possible thereafter, such Guarantor shall send the Collateral Agent or each Buyer an official receipt (or, if an
official receipt is not available, such other documentation as shall be satisfactory to the Collateral Agent, as the case may be) showing
payment. In addition, each Guarantor agrees to pay any present or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies that arise from any payment made hereunder or from the execution, delivery, registration or enforcement
of, or otherwise with respect to, this Guaranty or any other Transaction Document (collectively, “Other
Taxes”).
(b)
Each Guarantor hereby indemnifies and agrees to hold each Indemnified Party harmless from and against Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this Section 12)
paid by any Indemnified Party as a result of any payment made hereunder or from the execution, delivery, registration or enforcement
of, or otherwise with respect to, this Guaranty or any other Transaction Document, and any liability (including penalties, interest and
expenses for nonpayment, late payment or otherwise) arising therefrom or with respect thereto, whether or not such Taxes or Other Taxes
were correctly or legally asserted. This indemnification shall be paid within thirty (30) days from the date on which the Collateral
Agent or such Buyer makes written demand therefor, which demand shall identify the nature and amount of such Taxes or Other Taxes.
(c)
If any Guarantor fails to perform any of its obligations under this Section 12,
such Guarantor shall indemnify the Collateral Agent and each Buyer for any taxes, interest or penalties that may become payable as a result
of any such failure. The obligations of the Guarantors under this Section 12
shall survive the termination of this Guaranty and the payment of the Obligations and all other amounts payable hereunder.
Section
13. Indemnification.
(a)
Without limitation of any other obligations of any Guarantor or remedies of the Collateral Agent or the Buyers under this Guaranty
or applicable law, except to the extent resulting from such Indemnified Party’s gross negligence or willful misconduct, as determined
by a final judgment of a court of competent jurisdiction no longer subject to appeal, each Guarantor shall, to the fullest extent permitted
by law, indemnify, defend and save and hold harmless the Collateral Agent and each Buyer and each of their affiliates and their respective
officers, directors, employees, agents and advisors (each, an “Indemnified Party”) from and against, and shall pay
on demand, any and all claims, damages, losses, liabilities and expenses (including, without limitation, reasonable fees and expenses
of counsel) that may be incurred by or asserted or awarded against any Indemnified Party in connection with or as a result of any failure
of any Guaranteed Obligations to be the legal, valid and binding obligations of any Transaction Party enforceable against such Transaction
Party in accordance with their terms.
(b)
Each Guarantor hereby also agrees that none of the Indemnified Parties shall have any liability (whether direct or indirect, in
contract, tort or otherwise) or any fiduciary duty or obligation to any of the Guarantors or any of their respective affiliates or any
of their respective officers, directors, employees, agents and advisors, and each Guarantor hereby agrees not to assert any claim against
any Indemnified Party on any theory of liability, for special, indirect, consequential, incidental or punitive damages arising out of
or otherwise relating to the facilities, the actual or proposed use of the proceeds of the advances, the Transaction Documents or any
of the transactions contemplated by the Transaction Documents.
Section
14. 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 or each Buyer, at such address specified by the Collateral Agent or such Buyer from time to time by notice to
the Guarantors.
(b)
No amendment or waiver of any provision of this Guaranty 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 each Guarantor, the Collateral Agent and each Buyer, 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 Buyer to exercise, and no delay in exercising, any right or remedy 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 Transaction Document preclude any other or further exercise thereof or the exercise of any other right or remedy. The rights
and remedies of the Collateral Agent and the Buyers 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 and remedies of the Collateral Agent and the Buyers under
any Transaction Document against any party thereto are not conditional or contingent on any attempt by the Collateral Agent or any Buyer
to exercise any of their respective rights or remedies under any other Transaction Document against such party or against any other Person.
(d)
Any provision of this Guaranty that 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.
(e)
This Guaranty is a continuing guaranty and shall (i) remain in full force and effect until Payment in Full of the Guaranteed Obligations
(other than inchoate indemnity obligations) and shall not terminate for any reason prior to the respective Maturity Date of each Note
(other than Payment in Full of the Guaranteed Obligations) and (ii) be binding upon each Guarantor and its respective successors and assigns.
This Guaranty shall inure, together with all rights and remedies of the Collateral Agent hereunder, to the benefit of and be enforceable
by the Collateral Agent, the Buyers, and their respective successors, and permitted pledgees, transferees and assigns. Without limiting
the generality of the foregoing sentence, the Collateral Agent or any Buyer may pledge, assign or otherwise transfer all or any portion
of its rights and obligations under and subject to the terms of the Securities Purchase Agreement or any other Transaction Document to
any other Person in accordance with the terms thereof, and such other Person shall thereupon become vested with all the benefits in respect
thereof granted to the Collateral Agent or such Buyer (as applicable) herein or otherwise, in each case as provided in the Securities
Purchase Agreement or such Transaction Document. None of the rights or obligations of any Guarantor hereunder may be assigned or otherwise
transferred without the prior written consent of each Buyer.
(f)
This Guaranty and the other Transaction Documents reflect the entire understanding of the transaction contemplated hereby and shall
not be contradicted or qualified by any other agreement, oral or written, entered into before the date hereof.
(g)
Section headings herein are included for convenience of reference only and shall not constitute a part of this Guaranty for any
other purpose.
Section
15. Currency Indemnity.
If, for the purpose of obtaining
or enforcing judgment against Guarantor in any court in any jurisdiction, it becomes necessary to convert into any other currency (such
other currency being hereinafter in this Section 15 referred to as the “Judgment Currency”) an amount due under
this Guaranty in any currency (the “Obligation Currency”) other than the Judgment Currency, the conversion shall be
made at the rate of exchange prevailing on the Business Day immediately preceding (a) the date of actual payment of the amount due, in
the case of any proceeding in the courts of courts of the jurisdiction that will give effect to such conversion being made on such date,
or (b) the date on which the judgment is given, in the case of any proceeding in the courts of any other jurisdiction (the applicable
date as of which such conversion is made pursuant to this Section 15 being hereinafter in this Section 15 referred to as
the “Judgment Conversion Date”).
If, in the case of any proceeding
in the court of any jurisdiction referred to in the preceding paragraph, there is a change in the rate of exchange prevailing between
the Judgment Conversion Date and the date of actual receipt of the amount due in immediately available funds, the Guarantors shall pay
such additional amount (if any, but in any event not a lesser amount) as may be necessary to ensure that the amount actually received
in the Judgment Currency, when converted at the rate of exchange prevailing on the date of payment, will produce the amount of the Obligation
Currency which could have been purchased with the amount of the Judgment Currency stipulated in the judgment or judicial order at the
rate of exchange prevailing on the Judgment Conversion Date. Any amount due from the Guarantors under this Section 15 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 Guaranty.
[REMAINDER OF
THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, each Guarantor
has caused this Guaranty to be executed by its respective duly authorized officer, as of the date first above written.
GUARANTORS:
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VISIONARY HOLDINGS INC. |
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By: |
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Name:
Title: |
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CANADA ANIMATION INDUSTRY GROUP
INC. |
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By: |
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Name:
Title: |
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NEOCANAAN INVESTMENT CORPORATION |
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By: |
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Name:
Title: |
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TORONTO ESCHOOL LTD. |
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By: |
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Name:
Title: |
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MAPLE TORONTO ART ACADEMY INC. |
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By: |
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Name:
Title: |
[Signature Page to Guaranty]
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7621531 CANADA INC. |
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By: |
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Name:
Title: |
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VISIONARY EDUCATION SERVICES AND MANAGEMENT INC. |
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By: |
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Name:
Title: |
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13995191 CANADA INC. |
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By: |
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Name:
Title: |
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13995291 CANADA INC. |
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By: |
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Name:
Title: |
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BETHUNE GREAT HEALTH INVESTMENT A MANAGEMENT INC. |
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By: |
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Name:
Title: |
[Signature Page to Guaranty]
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SHANGHAI YUANJIAN TRILLION COMMERCIAL
GROUP CO., LTD. |
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By: |
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Name:
Title: |
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SHANGHAI AIRONG HUNDRED BILLION TECHNOLOGY
DEVELOPMENT GROUP CO., LTD. |
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By: |
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Name:
Title: |
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SHANGHAI YULANKANG
HEALTH TECHNOLOGY GROUP CO., LTD. |
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By: |
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Name:
Title: |
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SHANGHAI YUANJIAN
SHULIAN EDUCATION TECHNOLOGY CO., LTD. |
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By: |
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Name:
Title: |
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SHANGHAI YUANJIAN CAILAI
CONSULTING MANAGEMENT CO., LTD.
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By: |
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Name:
Title: |
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CHANGLE SHUANG
(GUANGZHOU) HEALTH INDUSTRY INVESTMENT CO., LTD.
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By: |
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Name:
Title: |
[Signature Page to Guaranty]
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YULANKANG (HUAI'AN)
HEALTH MANAGEMENT CO., LTD.
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By: |
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Name:
Title: |
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VISIONARY ASIA SDN. BHD
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By: |
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Name:
Title: |
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VISIONARY INTERNATIONAL SDN. BHD
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By: |
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Name:
Title: |
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VISIONARY INTERNATIONAL SDN. BHD
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By: |
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Name:
Title: |
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MAX THE MUTT ANIMATION INC. |
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By: |
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Name:
Title: |
[Signature Page to Guaranty]
ACCEPTED BY:
[COLLATERAL AGENT],
as Collateral Agent
By: _____________________________
Name:
Title:
Visionary (NASDAQ:GV)
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