Exhibit 10.1


 


SECURITIES
PURCHASE AGREEMENT


 


This
Securities Purchase Agreement (this “Agreement”) is dated as of November 20, 2018, between uSell.com, Inc.,
a Delaware corporation (the “Company”), and each purchaser identified on the signature page to this Agreement
(each, including its successors and assigns, a “Purchaser” and collectively the “Purchasers”).


 


WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933
(the “Securities Act”), and Rule 506(b) promulgated thereunder, the Company desires to issue and sell to each
Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more
fully described in this Agreement.


 


NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration
the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:


 


ARTICLE
I

DEFINITIONS


 


1.1       Definitions.
In addition to the terms defined elsewhere in this Agreement the following words and terms have the meanings set forth in this
Section 1.1:


 


“Action”
shall have the meaning ascribed to such term in Section 3.1(k).


 


“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act. With respect to a Purchaser,
any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such Purchaser
will be deemed to be an Affiliate of such Purchaser.


 


“Agreement”
shall have the meaning ascribed to such term in the Preamble.


 


“Board
of Directors” means the board of directors of the Company.


 


“Closing”
means the closing of the purchase and sale of the Notes pursuant to Section 2.2(a).


 


“Closing
Date” means the Trading Day when all of the Transaction Documents have been executed and delivered by the applicable
parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii)
the Company’s obligations to deliver the Notes have been satisfied or waived.


 


“Commission”
means the United States Securities and Exchange Commission.


 






     


     


    

 


“Common
Stock” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which
such securities may hereafter be reclassified or changed into.


 


“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to
acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other
instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to
receive, Common Stock.


 


“Company”
shall have the meaning ascribed to such term in the Preamble.


 


“Company
Counsel” means Nason Yeager Gerson Harris & Fumero, P.A., with offices located at 3001 PGA Blvd, Suite 305, Palm
Beach Gardens, Florida 33410.


 


“Discussion
Time” shall have the meaning ascribed to such term in Section 3.2(g).


 


“Evaluation
Date” shall have the meaning ascribed to such term in Section 3.1(s).


 


“Exchange
Act” means the Securities Exchange Act of 1934, and the rules and regulations promulgated thereunder.


 


“Escrow
Agent” is Company Counsel.


 


“Escrow
Agreement” means the Escrow Agreement, dated the date hereof, among the Company, Escrow Agent and the Purchasers, in
the form of Exhibit D to the Term Sheet under which the Notes are offered.


 


“GAAP”
shall have the meaning ascribed to such term in Section 3.1(i).


 


“Indebtedness”
shall have the meaning ascribed to such term in Section 3.1(mm).


 


“Initial
Closing” shall have the meaning ascribed to such term in Section 2.2(a).


 


“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(p).


 


“Legend
Removal Date” shall have the meaning ascribed to such term in Section 4.1(c).


 


“Liens”
means a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.


 


“Master
License Agreement” shall mean that certain Master License and Services Agreement by and among the Company, PhoneX, Inc.,
and Brightstar Corp.;


 






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“Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(a).


 


“Material
Permits” shall have the meaning ascribed to such term in Section 3.1(n).


 


“Maximum
Offering” means the sale of Notes for aggregate gross proceeds of up to a maximum of $5,500,000.


 


“Minimum
Offering Amount” means the sale of Notes for aggregate gross proceeds of a minimum of $3,500,000.


 


“Money
Laundering Laws” shall have the meaning ascribed to such term in Section 3.1(kk).


 


“Notes”
mean the Convertible Promissory Notes issued to the Purchasers, in the form of Exhibit C to the Term Sheet, which bear
interest at the rate of 5% per annum, with interest payable in cash or shares of Common Stock, as described in the Term Sheet.


 


“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.


 


“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or threatened.


 


“Public
Information Failure” shall have the meaning ascribed to such term in Section 4.13.


 


“Public
Information Failure Payments” shall have the meaning ascribed to such term in Section 4.13.


 


“Purchaser”
shall have the meaning ascribed to such term in the Preamble.


 


“Purchasers”
shall have the meaning ascribed to such term in the Preamble.


 


“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.8.


 


“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).


 


“Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.


 


“SEC
Reports” shall have the meaning ascribed to such term in Section 3.1(i).


 






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“Securities”
means the Notes and/or the Underlying Shares.


 


“Securities
Act” shall have the meaning ascribed to such term in the Recitals.


 


“Senior
Secured Lender” shall mean TCUS Financial LLC, a Delaware limited liability company, or any successor senior lender;


 


“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall
not be deemed to include the location and/or reservation of borrowable shares of Common Stock).


 


“Subscription
Amount” shall mean, as to each Purchaser, the aggregate amount to be paid for the Notes purchased hereunder as specified
below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,”
in United States dollars and in immediately available funds.


 


“Subsidiary”
means any subsidiary of the Company as set forth on Schedule 3.1(b) and shall, where applicable, also include any direct
or indirect subsidiary of the Company formed or acquired after the date hereof.


 


“Term
Sheet” means the Confidential Term Sheet dated November 13, 2018.


 


“Trading
Day” means a day on which the New York Stock Exchange is open for trading.


 


“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock
Exchange, the NYSE American, or any market operated by the OTC Markets Group, Inc. (or any successors to any of the foregoing).


 


“Transaction
Documents” means this Agreement, the Note, the Escrow Agreement, all schedules and exhibits thereto and hereto and any
other documents or agreements executed in connection with the transactions contemplated hereunder.


 


“Transfer
Agent” means Island Stock Transfer the transfer agent of the Company, with a mailing address of 15500 Roosevelt Blvd,
Suite 301, Clearwater, FL 33760, and a facsimile number of (727) 289-0069, and any successor transfer agent of the Company.


 


“Underlying
Shares” means the shares of Common Stock underlying the Notes.


 


“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.9.


 


“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based
on a Trading Day from 9:30 a.m. (New York City time) to 4:00 p.m. (New York City time)), (or a similar organization or agency
succeeding to its functions of reporting prices) (b) if no volume weighted average price of the Common Stock is reported by the
Trading Market , the lowest reported price of the Common Stock on a Trading Day during the ten (10) Trading Days preceding such
date, or (c) in all other cases, the fair market value of a share of Common Stock as determined in good faith by the Board of
Directors.


 






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ARTICLE
II

PURCHASE AND SALE


 


2.1       Term
of the Offering; Minimum.


 


(a)       At
Closing, upon the terms and subject to the conditions set forth herein, the Company agrees to sell, and each Purchaser agrees
to purchase a severally and not jointly, a Note in the Subscription Amount contained on such Purchaser’s signature page
to this Agreement.


 


(b)       The
offering of the Notes hereunder, up to the Maximum Offering, shall be made directly by the Company to “accredited investors”
as such term is defined under Rule 501(a) of the Securities Act.


 


(c)       The
minimum purchase that may be made by any prospective investor, which total shall include purchases made by Affiliates of a prospective
investor, shall be $200,000. Subscriptions for investment below the minimum investment may be accepted at the discretion of the
Company. The Company reserves the right to reject any subscription made hereby, in whole or in part, in their sole discretion.
The Company’s agreement with each Purchaser is a separate agreement and the sale of the Notes to each Purchaser is a separate
sale.


 


		2.2	Closing.
                                         



 


(a)       Subject to the satisfaction or waiver of the closing conditions contained herein, the purchase, sale, and issuance of the Notes
shall take place remotely via exchange of documents and signatures on or after the date the Minimum Offering Amount has been received
and all other conditions, including the Contingencies (defined below) for the initial closing (the “Initial Closing”)
have been met. The Initial Closing shall occur on or after November 15, 2018. After the Initial Closing, subsequent closings (along
with the Initial Closing, each a “Closing”), if any, up to the Maximum Offering may take place at any time
prior to January 31, 2019 (the “Termination Date”), as determined by the Company. The last Closing of this
offering, occurring on or prior to the Termination Date, shall be referred to as the “Final Closing.” Any subscription
documents or funds received after the Final Closing will be returned, without interest or deduction.


 






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(b)       Contingencies. In order for the Escrow Agent to release proceeds to the Company, the following must occur (i) the Escrow
Agent must receive proceeds of $3,500,000 (the “Minimum Offering Amount”), (ii) the Company shall have entered
into the Master License Agreement (iii) the Company shall have entered into a loan agreement with a new senior lender (or alternatively
restructuring the current loan with the Senior Secured Lender and removing the default under such loan), and (iv) the Company
shall have raised at least $1 million of subordinated debt or alternatively raising an additional $1 million above the Minimum
in this offering (total of $4.5 million), to repay, in full the Company’s indebtedness under the secured term note issued
under that certain Note Purchase Agreement, dated January 13, 2017, by and among the Company, the Senior Secured Lender and the
other parties named therein (subject to restructuring the current loan) ((i),(ii),(iii) and (iv) are collectively, the “Contingencies”).
All proceeds from the offering shall be held in escrow by the Escrow Agent under the Escrow Agreement to which each of the Purchasers
must become a party. If the Company fails to receive good funds for the Minimum Offering Amount and executed copies of the signature
pages to this Agreement and the Escrow Agreement from each Purchaser by the Escrow Deadline and if all Contingencies have not
been met or if other conditions of the Escrow Agreement are not met, the Escrow Agent will promptly after the Termination Date,
refund the funds to the respective Purchasers, without interest or deduction.


 


(c)       At the Initial Closing, the Escrow Agent shall release to the Company all funds held in escrow (less any sums paid to the Escrow
Agent).


 


2.3       Closing
Conditions.


 


(a)       The
obligations of the Company hereunder in connection with a Closing are subject to the following conditions being met:


 


(i)       the
accuracy in all material respects on the Closing Date of the representations and warranties of the Purchasers contained herein;


 


(ii)       all
obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been
performed; and


 


(iii)       the
delivery by each Purchaser of the items set forth in Section 2.4(b) of this Agreement.


 


(b)       The
respective obligations of the Purchasers hereunder in connection with a Closing are subject to the following conditions being
met:


 


(i)       the
accuracy in all material respects when made and on the Closing Date of the representations and warranties of the Company contained
herein, except any representations and warranties which were qualified by “materiality” or similar terms shall be
accurate in all respects;


 


(ii)       all
obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been
performed;


 


(iii)       the
delivery by the Company of the items set forth in Section 2.4(a) of this Agreement;


 






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(iv)       there
shall have been no Material Adverse Effect with respect to the Company since June 30, 2018; and


 


(v)       from
the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or the Company’s
principal Trading Market (except for any suspension of trading of limited duration agreed to by the Company, which suspension
shall be terminated prior to the Closing), and, at any time prior to Closing, trading in securities generally as reported by Bloomberg
L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are
reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States
or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national
or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in
each case, in the reasonable judgment of each Purchaser, makes it impracticable or inadvisable to purchase the Notes at the Closing.


 


2.4       Deliveries.


 


(a)       On
each Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:


 


(i)       this
Agreement duly executed by the Company;


 


(ii)       a
Note registered in the name of such Purchaser; and


 


(iv)       the
Escrow Agreement executed by the Company and the Escrow Agent.


 


(b)       On
or before each Closing Date, each Purchaser shall deliver or cause to be delivered to the Company (except as noted) the following:


 


(i)       this
Agreement duly executed by such Purchaser;


 


(ii)       the
Escrow Agreement executed by such Purchaser; and


 


(iii)       such
Purchaser shall have delivered to the Escrow Agent its Subscription Amount for the Notes by wire transfer pursuant to the wire
instructions provided by the Escrow Agent.


  






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ARTICLE
III

REPRESENTATIONS AND WARRANTIES


 


3.1       Representations
and Warranties of the Company. Except as set forth in the Disclosure Schedules, which Disclosure Schedules shall be deemed
a part hereof and shall qualify any representation or otherwise made herein to the extent of the disclosure contained in the corresponding
Section of the Disclosure Schedules, the Company hereby makes the following representations and warranties to each Purchaser:



 


(a)       Organization
and Qualification. The Company and each of its Subsidiaries is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the
requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither
the Company nor any Subsidiary is in violation or default of any of the provisions of its respective Certificate or Articles of
Incorporation, bylaws or other organizational or charter documents except as disclosed on Schedule 3.1(a). Except as disclosed
on Schedule 3.1(a), each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing
as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned
by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be,
could not have or reasonably be expected to result in (i) a material adverse effect on the legality, validity or enforceability
of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition
(financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s
ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii)
or (iii), a “Material Adverse Effect”) provided, however, that each of the following, in and
of itself, shall be deemed to not constitute a Material Adverse Effect: (i) changes generally affecting the industry in which
the Company operates, in each case, that do not disproportionally affect the Company in contrast to its competitors; and (ii)
changes in GAAP. No Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke,
limit or curtail such power and authority or qualification.


 


(b)       Subsidiaries.
All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1(b). Except as disclosed on Schedule
3.1(b), the Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free
and clear of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and
are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.


 


(c)       Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution
and delivery of each of the Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby
and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by
the Company, the Board of Directors or the Company’s stockholders in connection therewith other than in connection with
the Required Approvals. Each Transaction Document has been (or upon delivery will have been) duly executed by the Company and,
when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’
rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.


 






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(d)       No
Conflicts. The execution, delivery and performance of the Transaction Documents, the issuance and sale of the Notes and the
consummation by the Company of the other transactions contemplated hereby and thereby do not and will not: (i) conflict with or
violate any provision of the Company’s or any Subsidiary’s Certificate or Articles of Incorporation, bylaws or other
organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company
or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice,
lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or
otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company
or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of
any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to
which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property
or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could
not have or reasonably be expected to result in a Material Adverse Effect.


 


(e)       Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice
to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company of the Transaction Documents other than (i) filings
required pursuant to Section 4.4, (ii) the filing of Form D with the Commission, and (iii) any filings required to be made pursuant
to applicable state securities laws (collectively, the “Required Approvals”).


 


(f)       Issuance
of the Securities. The Securities are duly authorized and, when the Common Stock is issued in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the
Company other than restrictions on transfer provided for in the Transaction Documents.


 


(g)       No
Disqualifying Events.


 


(i)       As
of the date hereof, the Company is not disqualified from relying on Rule 506 of Regulation D under the Securities Act for any
of the reasons stated in Rule 506(d) in connection with the issuance and sale of the Notes, and it has exercised reasonable care
including without limitation, conducting a factual inquiry that is appropriate in light of the circumstances, into whether any
such disqualification under Rule 506(d) exists as of the date hereof;


 


(ii)      The
Company has exercised reasonable care, including without limitation, conducting a factual inquiry that is appropriate in light
of the circumstances, into whether there are any matters that would have triggered disqualification under Rule 506(d) but which
occurred before September 23, 2013, and, if there are any such matters, they have been or will be disclosed to the Purchasers
as required by Rule 506(e); and


 






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(ii)      Any
outstanding securities of the Company (of any kind or nature) that were issued in reliance on Rule 506 at any time on or after
September 23, 2013 have been issued in compliance with Rule 506(d) and (e) and no party has any reasonable basis for challenging
any such reliance on Rule 506 in connection therewith.


 


(h)       Capitalization.
The capitalization of the Company as of as of the date hereof is as set forth on Schedule 3.1(h). Except as set forth on
Schedule 3.1(h), the Company has not issued any capital stock since its most recently filed periodic report under the Exchange
Act, other than pursuant to the exercise of employee stock options under the Company’s stock option plans, the issuance
of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plans and pursuant to the conversion
or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange
Act. Except as set forth on Schedule 3.1(h), no Person has any right of first refusal, preemptive right, right of participation,
or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as set forth on Schedule
3.1(h), and as a result of the purchase and sale of the Notes, there are no outstanding options, warrants, scrip rights to
subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into
and/or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock,
or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue
additional shares of Common Stock or Common Stock Equivalents. Except as disclosed on Schedule 3.1(h), the issuance and
sale of the Notes will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than
the Purchasers) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange
or reset price under any of such securities. All of the outstanding shares of capital stock of the Company are validly issued,
fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding
shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further
approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Notes.
There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital
stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders,
except as disclosed on Schedule 3.1(h).


 






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(i)       SEC
Reports; Financial Statements. Except as set forth on Schedule 3.1(i), the Company has filed all reports, schedules,
forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including
pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company
was required by law or regulation to file such material) (the foregoing materials and any amendments filed through the date hereof,
including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC
Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports
prior to the expiration of any such extension. Except as disclosed on Schedule 3.1(i) as of their respective dates, the
SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable,
and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading. Except as disclosed on Schedule 3.1(i), the financial statements of the Company included
in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the
Commission with respect thereto as in effect at the time of filing. Except as disclosed on Schedule 3.1(i), such financial
statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent
basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements
or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly
present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates
thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements,
to normal, immaterial, year-end audit adjustments.


 


(j)       Material
Changes. Since June 30, 2018, except as described in the SEC Reports or specifically disclosed on Schedule 3.1(j),
(i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material
Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and
accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to
be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii)
the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of
cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its
capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant
to existing Company stock option plans or in connection with private placements in which case the officers and directors purchased
equity securities on the same terms. The Company does not have pending before the Commission any request for confidential treatment
of information. Except for the issuance of the Notes contemplated by this Agreement or as set forth on Schedule 3.1(j),
no event, liability or development has occurred or exists with respect to the Company or its Subsidiaries or their respective
business, properties, operations or financial condition, that would be required to be disclosed by the Company under applicable
securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least one Trading
Day prior to the date that this representation is made.


 


(k)       Litigation.
Except as described in the SEC Reports, or as set forth on Schedule 3.1(k), there is no action, suit, inquiry, notice of
violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company,
any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency
or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely
affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Notes or (ii) could,
if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company
nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation
of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the
knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any
current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.


 






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(l)       Labor
Relations. No material labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees
of the Company which could reasonably be expected to result in a Material Adverse Effect. Except as disclosed on Schedule 3.1(l),
none of the Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s
relationship with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective
bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their employees are good. To
the knowledge of the Company, no executive officer, is, or is now expected to be, in violation of any material term of any employment
contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract
or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer
does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company
and its Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment
and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance
could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.


 


(m)       Compliance.
Neither the Company nor any Subsidiary (i) is in default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has
the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in violation of any order of any court, arbitrator or
governmental body, or (iii) is or has been in violation of any statute, rule or regulation of any governmental authority, including
without limitation all foreign, federal, state and local laws applicable to its business and all such laws that affect the environment,
except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.


 


(n)       Regulatory
Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports,
except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has received any notice of Proceedings relating to the revocation
or modification of any Material Permit.


 






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(o)       Title
to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them
and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries,
in each case free and clear of all Liens, except for: (i) Liens as do not materially affect the value of such property and do
not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii)
Liens for the payment of federal, state or other taxes, the payment of which is neither delinquent nor subject to penalties. Any
real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and
enforceable leases with which the Company and the Subsidiaries are in compliance.


 


(p)       Intellectual
Property. Except as disclosed on Schedule 3.1(p) or the SEC Reports, the Company and the Subsidiaries have, or have
rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets,
inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or material for use in connection
with their respective businesses and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual
Property Rights”). Neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of the
Intellectual Property Rights used by the Company or any Subsidiary violates or infringes upon the rights of any Person. To the
knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another
Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable security measures to
protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.


 


(q)       Insurance.
The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged. Neither
the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business
without a significant increase in cost.


 






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(r)       Transactions
with Affiliates and Employees. Except as set forth in the SEC Reports or Schedule 3.1(r), none of the officers or directors
of the Company and, to the knowledge of the Company, none of the employees of the Company is presently a party to any transaction
with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement
or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or
from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any
entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or
partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii)
reimbursement for expenses incurred on behalf of the Company, (iii) other employee benefits, including stock option agreements
under any stock option plan of the Company and (iv) the purchase by a Purchaser under this Agreement.


 


(s)       Sarbanes
Oxley; Internal Accounting Controls. The Company is in material compliance with all provisions of the Sarbanes-Oxley Act of
2002 which are applicable to it as of the Closing Date. The Company and the Subsidiaries maintain a system of internal accounting
controls sufficient to provide reasonable assurance 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 accountability, (iii) access to assets is permitted only in accordance with management’s
general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The Company has established disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such disclosure controls and
procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange
Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.
The Company’s certifying officers have evaluated the effectiveness of the Company’s disclosure controls and procedures
as of the end of the period covered by the Company’s most recently filed periodic report under the Exchange Act (such date,
the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange
Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no change in the Company’s internal control
over financial reporting (as such term is defined in the Exchange Act) that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial reporting.


 


(t)       Certain
Fees. No brokerage or finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor
or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated
by the Transaction Documents. The Purchasers shall have no obligation with respect to any fees or with respect to any claims made
by or on behalf of other Persons for fees of a type contemplated in this Section 3.1(t) that may be due in connection with the
transactions contemplated by the Transaction Documents.


 






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(u)       Private
Placement. Assuming the accuracy of each Purchaser’s representations and warranties set forth in Section 3.2, no registration
under the Securities Act is required for the offer and sale of the Notes to the Purchasers as contemplated hereby. The issuance
and sale of the Notes hereunder does not contravene the rules and regulations of the Trading Market.


 


(v)       Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Notes, will not
be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
The Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration
under the Investment Company Act of 1940, as amended.


 


(w)       Registration
Rights. Except as set forth on Schedule 3.1(w), no Person has any right to cause the Company to effect the registration
under the Securities Act of any securities of the Company.


 


(x)       Application
of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s Certificate of Incorporation (or similar charter documents)
or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and
the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation
as a result of the Company’s issuance of the Notes and the Purchasers’ ownership of the Notes.


 


(y)       Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company
confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel
with any information that it believes constitutes or might constitute material, non-public information. The Company understands
and confirms that the Purchasers will rely on the foregoing representation in effecting transactions in securities of the Company.
All disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company, its business and the transactions
contemplated hereby, including the Disclosure Schedules to this Agreement, is true and correct and does not contain any untrue
statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading. The press releases disseminated by the Company during the twelve
months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances
under which they were made and when made, not misleading.


 


(z)       No
Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2,
neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made
any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering
of the Notes to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which would require the
registration of any such securities under the Securities Act, or (ii) any applicable shareholder approval provisions of any Trading
Market on which any of the securities of the Company are listed or designated.


 






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(aa)      Tax
Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect, the Company and each Subsidiary has filed all necessary federal, state and foreign income and franchise
tax returns and has paid or accrued all taxes shown as due thereon, and the Company has no knowledge of a tax deficiency which
has been asserted or threatened against the Company or any Subsidiary.


 


(bb)      No
General Solicitation. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of the Notes
by any form of general solicitation or general advertising. The Company has offered the Notes for sale only to the Purchasers
and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.


 


(cc)      Accountants.
The Company’s accounting firm is set forth on Schedule 3.1(cc). To the knowledge and belief of the Company, such
accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion
with respect to the financial statements to be included in the Company’s Annual Report for the fiscal year ending December
31, 2018.


 


(dd)      No
Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably anticipated
by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and
the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability
to perform any of its obligations under any of the Transaction Documents.


 


(ee)      Acknowledgment
Regarding Purchasers’ Purchase of the Notes. The Company acknowledges and agrees that each of the Purchasers is acting
solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated
thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given
by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the transactions
contemplated thereby is merely incidental to the Purchasers’ purchase of the Notes. The Company further represents to each
Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents has been based solely
on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.


 


(ff)      Regulation
M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly,
any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company 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, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase
any other securities of the Company.


 






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(gg)      Stock
Option Plans. Each stock option granted by the Company under the Company’s stock option plan (any, a “Plan”)
was granted (i) in accordance with the terms of the Plan and (ii) with an exercise price at least equal to the fair market value
of the Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted
under the Plan has been backdated. The Company has not knowingly granted, and there is no and has been no Company policy or practice
to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release or
other public announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects.


 


(hh)      Office
of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director, officer,
agent, employee or Affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office
of Foreign Assets Control of the U.S. Treasury Department (“OFAC”).


 


(ii)        U.S.
Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the
meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s
request.


 


(jj)       Bank
Holding Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956,
as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five
percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (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)      Money
Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with
applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970,
as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money
Laundering Laws”), and no Action or Proceeding by or before any court or governmental agency, authority or body or any
arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of
the Company or any Subsidiary, threatened.


 


(ll)        DTC
Eligibility. The Company, through its Transfer Agent, is a participant in the Depository Trust Company Fast Automated Securities
Transfer Program or similar system, which provides for the Company’s Common Stock to be transferred electronically between
brokers.


 






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(mm)    Indebtedness.
The SEC Reports and Schedule 3.1(mm) set forth as of the date hereof all outstanding secured and unsecured Indebtedness
of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement,
“Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess of $10,000 (other than trade
accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations
in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance
sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business; and (z) the present value of any lease payments in excess of $10,000 due under
leases required to be capitalized in accordance with GAAP. Except as set forth on Schedule 3.1(mm), neither the Company
nor any Subsidiary is in default with respect to any Indebtedness.


 


3.2        Representations
and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser hereby, represents and warrants as
of the date hereof and as of the Closing Date to the Company as follows:


 


(a)        Organization;
Authority. If not a natural person, such Purchaser is an entity duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization with full right, corporate, partnership, limited liability company or similar
power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to
carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by
such Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate,
partnership, limited liability company or similar action, as applicable, on the part of such Purchaser. Each Transaction Document
to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms
hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with
its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification
and contribution provisions may be limited by applicable law.


 


(b)       Own
Account. Such Purchaser understands that the Securities are “restricted securities” and have not been registered
under the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account
and not with a view to distribution or reselling such Securities or any part thereof in violation of the Securities Act or any
applicable state securities law, has no present intention of distributing any of such Securities in violation of the Securities
Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other Persons
to distribute or regarding the distribution of such Securities in violation of the Securities Act or any applicable state securities
law. Such Purchaser is acquiring the Notes hereunder in the ordinary course of its business.


 


(c)       Purchaser
Status. At the time such Purchaser was offered the Notes, it was, and at the date hereof it is either: (i) an “accredited
investor” as defined in Rule 501(a) under the Securities Act or (ii) a “qualified institutional buyer” as defined
in Rule 144A(a) under the Securities Act.


 






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(d)       Such
Purchaser is not required to be registered as a broker-dealer under Section 15 of the Exchange Act.


 


(e)       Experience
of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment
in the Notes, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk of
an investment in the Notes and, at the present time, is able to afford a complete loss of such investment.


 


(f)        General
Solicitation. Such Purchaser is not purchasing the Notes as a result of any advertisement, article, notice or other communication
regarding the Notes published in any newspaper, magazine or similar media or broadcast over television or radio or presented at
any seminar or any other general solicitation or general advertisement.


 


(g)       Short
Sales and Confidentiality Prior To The Date Hereof. Other than consummating the transactions contemplated hereunder and described
on Schedule 3.2(g), such Purchaser has not directly or indirectly, nor has any Person acting on behalf of or pursuant to
any understanding with such Purchaser, executed any purchases or sales, including Short Sales, of the securities of the Company
during the period commencing from the time that such Purchaser first delivered or received a term sheet (written or oral) from
the Company or any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder
until the date hereof (“Discussion Time”). Notwithstanding the foregoing, in the case of a Purchaser that is
a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets
and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other
portions of such Purchaser’s assets, the representation set forth above shall only apply with respect to the portion of
assets managed by the portfolio manager that made the investment decision to purchase the Notes covered by this Agreement. Other
than to other Persons party to this Agreement, such Purchaser has maintained the confidentiality of all disclosures made to it
in connection with this transaction (including the existence and terms of this transaction); provided, that a Purchaser
may disclose the existence and terms of this transaction (including any of the Transaction Documents) as may be required by applicable
securities laws.


 


(h)       Information.
The Purchaser acknowledges it has been furnished with or has had access to the Company’s SEC Reports on or prior to Closing.
The Purchaser has been given the opportunity to ask questions of, and receive answers from, the Company concerning the terms and
conditions of this offering and to obtain such additional information necessary to verify the accuracy of same as the Purchaser
reasonably desires in order to evaluate the investment. The Purchaser acknowledges it does not desire to receive any further information
from the Company in order to make an investment in the Notes. The Purchaser has received no representations or warranties from
the Company, its employees, agents or attorneys in making this investment decision other than as set forth in this Agreement and
the Term Sheet.


 






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(i)       Minimum
Offering Amount Compliance. (1) The Purchaser acknowledges that the Company must sell the Minimum Offering Amount of Notes.
The Purchaser further acknowledges that its Subscription Amount shall be held in escrow pending receipt of subscriptions for and
payment of the Minimum Offering Amount and certain other closing conditions which are specified in an Escrow Agreement to which
the Purchaser will become a party. (2) Securities in this offering may be purchased by the affiliates of the Company (including
the Company’s Chief Executive Officer and/or his father of up to $1,200,000 and a director of up to $200,000), or by other
persons who will receive fees or other compensation or are otherwise dependent upon the success of this offering. Such purchases
may be made at any time, and will be counted in determining whether the Minimum Offering Amount has been met. The Purchasers acknowledge
that they do not expect that the sale of sufficient securities to reach the Minimum Offering Amount, or in excess of the Minimum
Offering Amount, indicates that such sales have been made to Purchasers who have no financial or other interest in this offering,
or otherwise are exercising independent investment discretion. The sale of the Minimum Offering Amount, while necessary to the
business opportunities of the Company, is not designed as a protection to the Purchasers, to indicate that each Purchaser’s
investment decisions are shared by other unaffiliated investors. Because there may be substantial purchases by affiliates of the
Company, or other persons who will receive fees or other compensation or are otherwise dependent upon the success of this offering,
the Purchasers should not place any reliance on the sale of the Minimum Offering Amount as an indication of the merits of this
offering. Each Purchaser acknowledges that they must make their investment decision as to the merits of this offering. The Company
is aware of affiliates of the Company who intend to invest in the offering.


 


ARTICLE
IV


OTHER
AGREEMENTS OF THE PARTIES


 


4.1       Transfer
Restrictions.


 


(a)       The
Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities
other than pursuant to an effective registration statement or Rule 144 or Section 4(a)(1) under the Securities Act to the Company
or to an Affiliate of a Purchaser or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the
transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the
Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer
does not require registration of such transferred Securities under the Securities Act. As a condition of such transfer, any such
transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights of a Purchaser under this
Agreement.


 






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(b)       The
Purchasers agree to the imprinting, so long as is required by this Section 4.1(b), of a legend on any of the Notes in the following
form:


 


NEITHER
THIS SECURITY NOR THE SECURITY ISSUABLE UPON EXERCISE OF THIS SECURITY HAS BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933 (THE
“SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE
TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITY
ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY
SUCH SECURITIES.


 


The
Company acknowledges and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a
registered broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited
investor” as defined in Rule 501(a) under the Securities Act and, if required under the terms of such arrangement, such
Purchaser may transfer pledged or secured Securities to the pledgees or secured parties. Such a pledge or transfer would not be
subject to approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required
in connection therewith. Further, no notice shall be required of such pledge. At the appropriate Purchaser’s expense, the
Company will execute and deliver such reasonable documentation as a pledgee or secured party of Securities may reasonably request
in connection with a pledge or transfer of the Securities.


 


(c)       Certificates
evidencing the Underlying Shares shall not contain any legend (including the legend set forth in Section 4.1(b) hereof): (i) while
a registration statement covering the resale of such security is effective under the Securities Act, or (ii) following any sale
of such Shares pursuant to Rule 144, or (iii) if such Underlying Shares are eligible for sale under Rule 144, without the requirement
for the Company to be in compliance with the current public information required under Rule 144 as to such Underlying Shares and
without volume or manner-of-sale restrictions or (iv) if such legend is not required under applicable requirements of the Securities
Act (including judicial interpretations and pronouncements issued by the staff of the Commission). If all or any portion of the
Underlying Shares are sold when there is an effective registration statement to cover the resale of the Underlying Shares, or
if such Underlying Shares may be sold under Rule 144 and the Company is then in compliance with the current public information
required under Rule 144, or if such Underlying Shares may be sold under Rule 144 without the requirement for the Company to be
in compliance with the current public information required under Rule 144 as to such Underlying Shares and without volume or manner-of-sale
restrictions or if such legend is not otherwise required under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the Commission) then such Underlying Shares shall be issued free of
all legends. The Company agrees that at such time as such legend is no longer required under this Section 4.1(c), it will, no
later than five Trading Days following the delivery by a Purchaser to the Company or the Transfer Agent of a certificate representing
the Underlying Shares issued with a restrictive legend (such fifth Trading Day, the “Legend Removal Date”),
deliver or cause to be delivered to such Purchaser a certificate representing such Underlying Shares that is free from all restrictive
and other legends. The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge
the restrictions on transfer set forth in this Section. Certificates for Underlying Shares subject to legend removal hereunder
shall be transmitted by the Transfer Agent to the Purchaser by crediting the account of the Purchaser’s prime broker with
the Depository Trust Company System as directed by such Purchaser.


 






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(d)       In
addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated
damages and not as a penalty, for each $1,000 of Underlying Shares (based on the VWAP of the Common Stock on the date such Underlying
Shares are submitted to the Transfer Agent) delivered for removal of the restrictive legend and subject to Section 4.1(c), $10
per Trading Day (increasing to $20 per Trading Day five (5) Trading Days after such damages have begun to accrue) for each Trading
Day after the Legend Removal Date until such certificate is delivered without a legend. Nothing herein shall limit such Purchaser’s
right to pursue actual damages for the Company’s failure to deliver certificates representing any Underlying Shares as required
by the Transaction Documents, and such Purchaser shall have the right to pursue all remedies available to it at law or in equity
including, without limitation, a decree of specific performance and/or injunctive relief.


 


4.2       Furnishing
of Information. Until the time that no Purchaser owns any Securities, the Company covenants to timely file (or obtain extensions
in respect thereof and file within the applicable grace period) all reports that are required to be filed by the Company pursuant
to Section 13(a) the Exchange Act, even if the Company is not then otherwise subject to the reporting requirements of the Exchange
Act. As long as any Purchaser owns the Securities, if the Company is not required to file reports pursuant to the Exchange Act,
it will prepare and furnish to the Purchasers and make publicly available in accordance with Rule 144(c) such information as is
required for the Purchasers to sell the Securities under Rule 144. The Company further covenants that it will take such further
action as any holder of the Securities may reasonably request, to the extent required from time to time to enable such Person
to sell such Securities without registration under the Securities Act within the requirements of the exemption provided by Rule
144.


 


4.3       Integration.
The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined
in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Notes to the Purchasers in a manner
that would require the registration under the Securities Act of the sale of the Notes to the Purchasers or that would be integrated
with the offer or sale of the Notes for purposes of the rules and regulations of any Trading Market.


 






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4.4       Securities
Laws Disclosure; Publicity. At any time when the Company has received the Minimum Offering Amount, the Company shall, by 8:30
a.m. (New York City time) on the 2nd Trading Day immediately following the Closing, issue a Current Report on Form 8-K, disclosing
the material terms of the transactions contemplated hereby and including the Transaction Documents as exhibits thereto. Provided,
however, if the Company is required by the SEC’s disclosure rules to file a Form 8-K on an earlier date, the Company will
file the Form 8-K as required by law. The Company and each Purchaser shall consult with each other in issuing any other press
releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such
press release or otherwise make any such public statement without the prior consent of the Company, with respect to any press
release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the Company, which
consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing
party shall promptly provide the other party with prior notice of such public statement or communication. Notwithstanding the
foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing
with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except as
required by the federal securities laws.. Additionally, notwithstanding the foregoing (or anything else to the contrary in this
Agreement), a Purchaser shall not be required to notify the Company or seek the Company’s prior approval to make public
disclosures pursuant to applicable law, including disclosures on a Schedule 13D or Schedule 13G (or any amendment thereto) or
as required by Section 16 of the Exchange Act.


 


4.5       Shareholder
Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that
any Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including
any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the
Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving
Notes under the Transaction Documents or under any other agreement between the Company and the Purchasers.


 


4.6       Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction
Documents, the Company covenants and agrees that neither it nor any other Person acting on its behalf, will provide any Purchaser
or its agents or counsel with any information that the Company believes constitutes material non-public information, unless prior
thereto such Purchaser shall have executed a written agreement regarding the confidentiality and use of such information. The
Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities
of the Company.


 


4.7       Use
of Proceeds. The Company shall use the net proceeds from the sale of the Notes hereunder for working capital, and general
corporate purposes including the reduction of its senior debt held by TCUS Financial, LLC.


 






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4.8       Indemnification
of Purchasers. Subject to the provisions of this Section 4.8, the Company will indemnify and hold each Purchaser and its directors,
officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of
a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser
(within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title) of such controlling Person (each, a “Purchaser Party”)
harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all
judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such
Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants
or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against
the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is
not an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless
such action is based upon a breach of such Purchaser’s representations, warranties or covenants under the Transaction Documents
or any agreements or understandings of such Purchaser Party may have with any such stockholder or any violations by such Purchaser
Party of state or federal securities laws or any conduct by such Purchaser Party which constitutes fraud, gross negligence, willful
misconduct or malfeasance). If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought
pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the
right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser
Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof
has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume
such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of such separate counsel, a material
conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the
Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will
not be liable to any Purchaser Party under this Agreement: (x) for any settlement by a Purchaser Party effected without the Company’s
prior written consent, which shall not be unreasonably withheld or delayed; or (y) to the extent, but only to the extent that
a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties,
covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents. Indemnification
paid pursuant to this Section 4.8 will be made during the course of the investigation or defense, as and when bills are received
or incurred.


 


4.9       Prohibition
on Variable Rate Transactions. From the date hereof until such time as the Purchasers hold in the aggregate less than 5% of
the Shares purchased under this Agreement, the Company shall be prohibited from effecting or entering into an agreement to effect
any Subsequent Financing involving a Variable Rate Transaction. “Variable Rate Transaction” means a transaction
in which the Company issues or sells (i) any debt or equity securities that are convertible into, exchangeable or exercisable
for, or include the right to receive additional shares of Common Stock either (A) at a conversion, exercise or exchange rate or
other price that is based upon and/or varies with the trading prices of or quotations for the shares of Common Stock at any time
after the initial issuance of such debt or equity securities, or (B) with a conversion, exercise or exchange price that is subject
to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified
or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock or (ii)
enters into any agreement, including, but not limited to, an equity line of credit, whereby the Company may sell securities at
a future determined price.


 






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4.10      Equal
Treatment of Purchasers. No consideration 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 is also offered to all of the parties to the
Transaction Documents. For clarification purposes, this provision constitutes a separate right granted to each Purchaser by the
Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers as a class and shall
not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting
of the Securities or otherwise.


 


4.11      Short
Sales and Confidentiality After The Date Hereof. Each Purchaser, severally and not jointly with the other Purchasers, covenants
that neither it, nor any Affiliate acting on its behalf or pursuant to any understanding with it, will execute any Short Sales
during the period commencing with the Discussion Time and ending at such time the transactions contemplated by this Agreement
are first publicly announced as described in Section 4.4. Subject to the last sentence of Section 4.4, each Purchaser, severally
and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated by this Agreement are
publicly disclosed by the Company as described in Section 4.4, such Purchaser will maintain the confidentiality of the existence
and terms of this transaction and the information included in the Transaction Documents and the Disclosure Schedules. Notwithstanding
the foregoing, no Purchaser makes any representation, warranty or covenant hereby that it will not engage in Short Sales of the
common stock of the Company after the time that the transactions contemplated by this Agreement are first publicly announced as
described in Section 4.4. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle
whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have
no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s
assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that
made the investment decision to purchase the Shares covered by this Agreement.


 


4.12       Form
D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Shares as required under Regulation D
and to provide a copy thereof, promptly upon request of any Purchaser. The Company shall take such action as the Company shall
reasonably determine is necessary in order to obtain an exemption for, or to qualify the Shares for, sale to the Purchasers at
the Closing under applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence
of such actions promptly upon request of any Purchaser.


 






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4.13       Public
Information. At any time during the period commencing from the six (6) month anniversary of the Closing Date and ending at
such time that all of the Securities, may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1)
and otherwise without restriction or limitation pursuant to Rule 144, if the Company shall fail for any reason to satisfy the
current public information requirement under Rule 144(c) (a “Public Information Failure”) then, in addition
to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated damages
and not as a penalty, by reason of any such delay in or reduction of its ability to sell the Underlying Shares, an amount in cash
equal to two percent (2%) of the then outstanding principal of the Purchaser’s Note on the day of a Public Information Failure
and on every thirtieth (30th) day (pro rated for periods totaling less than thirty days) thereafter until the earlier of (a) the
date such Public Information Failure is cured and (b) such time that such public information is no longer required for the Purchasers
to transfer the Underlying Shares pursuant to Rule 144. The payments to which a Purchaser shall be entitled pursuant to this Section
4.13 are referred to herein as “Public Information Failure Payments.” Public Information Failure Payments shall
be paid on the earlier of (i) the last day of the calendar month during which such Public Information Failure Payments are incurred
and (ii) the third (3rd) business day after the event or failure giving rise to the Public Information Failure Payments is cured.
In the event the Company fails to make Public Information Failure Payments in a timely manner, such Public Information Failure
Payments shall bear interest at the rate of 1.5% per month (prorated for partial months) until paid in full. Nothing herein shall
limit such Purchaser’s right to pursue actual damages for the Public Information Failure, and such Purchaser shall have
the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance
and/or injunctive relief.




 


ARTICLE
V

MISCELLANEOUS


 


5.1        Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of
the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written,
with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.


 


5.2        Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and
shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number (or e-mail at the e-mail address) set forth on the signature pages attached hereto prior
to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number (or e-mail at the e-mail address) set forth on the signature
pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c)
the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (d)
upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications
shall be as set forth on the signature pages attached hereto.


 


5.3        Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed,
in the case of an amendment, by the Company and the Purchasers holding at least 51% in interest of the principal of Notes then
outstanding purchased pursuant to this Agreement or, in the case of a waiver, by the party against whom enforcement of any such
waived provision is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement
shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision,
condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair
the exercise of any such right.


 






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5.4        Headings.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.


 


5.5        Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted
assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of
each Purchaser (other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to
whom such Purchaser assigns or transfers any Shares, provided that such transferee agrees in writing to be bound, with respect
to the transferred Shares, by the provisions of the Transaction Documents that apply to the “Purchasers.”


 


5.6        No
Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors
and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as
otherwise set forth in Section 4.8.


 


5.7        Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall
be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the
principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively
in the state and federal courts sitting in the New York County, New York. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in New York County, New York for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement
of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such court, that such Action or Proceeding is improper
or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents
to process being served in any such Action or Proceeding by mailing a copy thereof via registered or certified mail or overnight
delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be
deemed to limit in any way any right to serve process in any other manner permitted by law. If either party shall commence an
Action or Proceeding to enforce any provisions of the Transaction Documents, then the prevailing party in such Action or Proceeding
shall be reimbursed by the other party for its reasonable attorneys’ fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such Action or Proceeding.


 






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5.8        Expenses.
The Company and each Purchaser shall pay their own expenses in connection with the transactions contemplated by this Agreement.


 


5.9        Survival.
The representations and warranties shall survive the Closing and the delivery of the Notes for the applicable statute of limitations.


 


5.10      Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being
understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission
or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of
the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original thereof.


 


5.11      Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain
in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.


 


5.12      Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of)
any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction
Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser
may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand
or election in whole or in part without prejudice to its future actions and rights.


 


5.13      Replacement
of the Securities. If any certificate or instrument evidencing any of the Securities is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation),
or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory
to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances
shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement
Securities.


 


5.14      Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of
the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that
monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the
Transaction Documents and hereby agree to waive and not to assert in any action for specific performance of any such obligation
the defense that a remedy at law would be adequate.


 






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5.15      Payment
Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document
or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or
exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from,
disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person
under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action),
then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.


 


5.16      Independent
Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several
and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance
or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any
other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the
Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers
are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction
Documents. Each Purchaser shall be entitled to independently protect and enforce its rights, including without limitation, the
rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser
to be joined as an additional party in any Proceeding for such purpose. Each Purchaser has been represented by its own separate
legal counsel in its review and negotiation of the Transaction Documents. The Company has elected to provide all Purchasers with
the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do
so by any of the Purchasers. It is expressly understood and agreed that each provision contained in this Agreement and in each
other Transaction Document is between the Company and a Purchaser, solely, and not between the Company and the Purchasers collectively
and not between and among the Purchasers.


 


5.17      Liquidated
Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction
Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other
amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages
or other amounts are due and payable shall have been canceled.


 


5.18      Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required
or granted herein shall not be a business day, then such action may be taken or such right may be exercised on the next succeeding
business day.


 






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5.19      Construction.
The parties agree that each of them and/or their respective counsel has reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and
every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after
the date of this Agreement.


 


5.20      Waiver
of Jury Trial. In any action, suit or proceeding in any jurisdiction brought by any party against any other party, the parties
each knowingly and intentionally, to the greatest extent permitted by applicable law, hereby absolutely, unconditionally, irrevocably
and expressly waives forever trial by jury.


  


[Signature
Pages Follow]


 


 




    30 


     


    

 


IN
WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.


 


 


	USELL.COM, INC. 	 
	 	 	 
	By:	 	 	 
		Name:	Nikhil Raman	 
	 	Title:	Chief Executive Officer	 
	 		18
        West 18th Street	 
	 	 	New
        York, NY 10011	 
	 	Email:  	Nik@usell.com	 
	 	 	 	 
	With a copy to (which shall not constitute notice):	 
	 	 
	Nason, Yeager, Gerson, Harris & Fumero, P.A.	 
	3001 PGA Boulevard, Suite 305.	 
	Palm Beach Gardens, FL 33410	 
	Email: mharris@nasonyeager.com	 






 





[Signature Page to Securities Purchase Agreement]


 




     


     


    

 


IN
WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.


 


Name
of Purchaser: ____________________________________________________


 


Signature
of Authorized Signatory of Purchaser: __________________________


 


Name
of Authorized Signatory: ____________________________________


 


Title
of Authorized Signatory: _____________________________________


 


Email
Address of Authorized Signatory: ___________________________________________


 


Fax
Number of Authorized Signatory: _________________________________________


 


Address
for Notice of Purchaser: 


 


Address
for Delivery of the Note for Purchaser (if not same as address for notice): 


 


 


Subscription
Amount: ____________


 


Social
Security Number/ EIN Number: [PROVIDE THIS UNDER SEPARATE COVER]





 





[Purchaser Signature
Page to Securities Purchase Agreement]