Exhibit
10.2


 


SECURITIES
PURCHASE AGREEMENT


 


THIS
SECURITIES PURCHASE AGREEMENT (the “Agreement”) is made as of April 28, 2017, by and among Mantra Venture Group
Ltd., a British Columbia corporation (the “Company”), and each purchaser identified on the signature pages
hereto (each, including its successors and assigns, a “Purchaser” and, collectively, the “Purchasers”).


 


RECITALS


 


A.         The
Company and each Purchaser are executing and delivering this Agreement in reliance upon the exemption from securities registration
afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”).


 


B.          Each
Purchaser, severally and not jointly, wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated
in this Agreement, the Warrants and the Notes, all in the amounts and for the price set forth on Schedule 1 hereto.


 


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 hereby agrees as follows:


 


ARTICLE
1


DEFINITIONS


 


1.1         Defined
Terms. In addition to terms defined elsewhere in this Agreement or in any Supplement, Amendment or Exhibit hereto, when used
herein, the following terms shall have the following meanings:


 


(a)          “Affiliate”
means any Person which, directly or indirectly, owns or controls, on an aggregate basis, a ten percent (10%) or greater interest
in any other Person, or which is controlled by or is under common control with any other Person.


 


(b)         “Business
Day” means any day other than a Saturday or Sunday or any other day on which the Federal Reserve Bank of New York is
not open for business.


 


(c)         “Closing”
means the time of issuance and sale by the Company of the Warrants and the Notes to the Purchasers.


 


(d)         “Closing
Date” means the date the Warrants and the Notes are purchased by the Purchasers from the Company.


 


(e)         “Closing
Statement” means the Closing Statement in the form on Annex A attached hereto.


 


(f)          “Common
Stock” means (i) the Company’s common stock, $0.00001 par value per share, and (ii) any capital stock into which
such common stock shall have been changed or any share capital resulting from a reclassification of such common stock.


 






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(g)         “Common
Stock Equivalents” means any capital stock or other security of the Company that is at any time and under any circumstances
directly or indirectly convertible into, exercisable or exchangeable for, and/or which otherwise entitles the holder thereof to
acquire, any capital stock or other security of the Company (including, without limitation, Common Stock).


 


(h)         “Contingent
Obligation” means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with
respect to any indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the Person
incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability
will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such liability
will be protected (in whole or in part) against loss with respect thereto.


 


(i)         “Conversion
Date” has the meaning set forth in the Notes.


 


(j)         “Conversion
Shares” has the meaning set forth in the Notes.


 


(k)         “Documents”
means, collectively, this Agreement, the Notes, the Warrants, and such other documents, instruments, certificates, supplements,
amendments, exhibits and schedules required and/or attached pursuant to this Agreement and/or any of the above documents, and/or
any other document and/or instrument related to the above agreements, documents and/or instruments, and the transactions hereunder
and/or thereunder and/or any other agreement, documents or instruments required or contemplated hereunder or thereunder, whether
now existing or at any time hereafter arising.


 


(l)          “Dollar(s)”
and “$” means lawful money of the United States.


 


(m)        “Equity
Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company,
beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling
the holder thereof to purchase or acquire any such Equity Interest.


 


(n)        “Event
of Default” shall have the meaning set forth in the Notes.


 


(o)        “Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.


 


(p)        “GAAP”
means generally accepted accounting principles in the United States of America as in effect from time to time.


 






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(q)        “Indebtedness”
means, with respect to any Person at any date, without duplication, (a) all indebtedness of such Person for borrowed money,
(b) all obligations of such Person for the deferred purchase price of property or services (other than trade payables and
accrued expenses incurred in the ordinary course of business), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or the
Purchasers under such agreement in the event of default are limited to repossession or sale of such property), (e) the capitalized
amount of all capital lease obligations of such Person that would appear on a balance sheet in accordance with GAAP, (f) all
obligations of such Person, contingent or otherwise, to purchase, redeem, retire or otherwise acquire for value any capital stock
of such Person, (g) all obligations of such Person, contingent or otherwise, as an account party or applicant under acceptance,
letter of credit, surety bond or similar facilities in respect of obligations of the kind referred to in clauses (a) through (f)
above, (h) all guarantee obligations of such Person in respect of obligations of the kind referred to in clauses (a) through
(g) above, (i) all obligations of the kind referred to in clauses (a) through (g) above secured by (or for which the
holder of such obligation has an existing right, contingent or otherwise, to be secured by) any Lien on property (including, without
limitation, accounts and contract rights) owned by such Person, whether or not such Person has assumed or become liable for the
payment of such obligation; provided that, if such Person has not assumed or become liable for the payment of such obligation,
the amount of such Indebtedness shall be limited to the lesser of (A) the principal amount of the obligation being secured and
(B) the fair market value of the encumbered property; and (j) all Contingent Obligations in respect to indebtedness or obligations
of any Person of the kind referred to in clauses (a)-(i) above. The Indebtedness of any Person shall include, without duplication,
the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such
Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except
to the extent the terms of such Indebtedness expressly provide that such Person is not liable therefor.


 


(r)          “Liabilities”
means all direct or indirect liabilities and obligations of any kind of Company to the Purchasers pursuant to the Notes, this
Agreement and/or any of the other Documents.


 


(s)         “Liens”
or “liens” means a lien, mortgage, charge pledge, security interest, encumbrance, right of first refusal, preemptive
right or other restriction, or other clouds on title.


 


(t)         “Material
Adverse Effect” means a material adverse effect on (a) the business, assets, property, operations, or condition
(financial or otherwise) of Company, (b) the validity or enforceability of this Agreement or any of the other Documents or
(c) the rights or remedies of the Purchasers hereunder or thereunder.


 


(u)         “Notes”
means all of the 8% Original Issue Discount Senior Secured Convertible Promissory Notes in the form annexed hereto as Exhibit
A and any and all Note(s) issued in exchange, transfer or replacement of the Notes.


 


(v)         “OFAC”
means the United States Department of the Treasury’s Office of Foreign Assets Control.


 


(w)         “OFAC
Regulations” means the regulations promulgated by OFAC, as amended from time to time.


 






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(x)         “Permitted
Governmental Indebtedness” means Indebtedness provided by the Export and Import Bank of the United States of America
or other similar governmental entity for the purpose of supporting product sales by the Company.


 


(y)         “Permitted
Indebtedness” means (i) Indebtedness of the Company evidenced by the Notes, this Agreement and/or any other Document
in favor of the Purchasers including all Liabilities, (ii) Indebtedness of the Company set forth in the Company’s most recent
SEC Report, provided none of such Indebtedness, has been increased, extended and/or otherwise changed since the original issuance
date of Indebtedness), (iii) Indebtedness that is subordinated to and not equal to or senior to the Notes, (iv) trade Indebtedness
incurred in the ordinary course of business, (v) Indebtedness secured by Permitted Liens described in clause “(iv)”
of the definition of Permitted Liens, (vi) Permitted Governmental Indebtedness and (vii) Indebtedness existing as of the date
hereof.


 


(z)         “Permitted
Liens” means (i) any Lien for taxes not yet due or delinquent or being contested in good faith by appropriate proceedings
for which adequate reserves have been established in accordance with GAAP, (ii) any statutory Lien arising in the ordinary course
of business by operation of law with respect to a liability that is not yet due or delinquent, (iii) any Lien created by operation
of law, such as materialmen’s liens, mechanics’ liens and other similar liens, arising in the ordinary course of business
with respect to a liability that is not yet due or delinquent or that are being contested in good faith by appropriate proceedings,
(iv) Liens (A) upon or in any equipment acquired or held by the Company to secure the purchase price of such equipment or indebtedness
incurred solely for the purpose of financing the acquisition or lease of such equipment, and (B) existing on such equipment at
the time of its acquisition, provided that the Lien is confined solely to the property so acquired and improvements thereon, and
the proceeds of such equipment, or (v) any Liens securing Permitted Indebtedness set forth in Sections (i) through (iii) and (vii)
of the definition of Permitted Indebtedness.


 


(aa)       “Person” means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated organization,
association, corporation, institution, entity, party or government (whether national, federal, state, county, city, municipal
or otherwise including, without limitation, any instrumentality, division, agency, body or department thereof).


 


(bb)      “Principal
Market” means the market or exchange on which the Common Stock is listed or quoted for trading on the date in question.


 


(cc)       “Purchase
Price” means the price to be paid by each Purchaser, in cash, to purchase such Purchaser’s Warrants and Note.


 


(dd)       “Required
Minimum” has the meaning set forth in Section 4.4.


 


(ee)       “SEC”
or “Commission” means the United States Securities and Exchange Commission.


 


(ff)         “SEC
Reports” has the meaning set forth in Section 3.1(p) hereof.


 






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(gg)       “Securities”
means the Warrants and Notes purchased pursuant to this Agreement and all Underlying Shares, Warrant Shares and any securities
of the Company issued in replacement, substitution and/or in connection with any exchange, conversion and/or any other transaction
pursuant to which all or any of such securities of the Company to the Purchasers.


 


(hh)       “Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.


 


(ii)         “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).


 


(jj)         “Subsidiary”
means, with respect to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock
or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power
only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation,
partnership or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly
through one or more intermediaries, or both, by such Person.


 


(kk)       “Trading
Day” means any day on which the Common Stock is traded on the Trading Market, provided that “Trading Day”
shall not include any day on which the Common Stock is scheduled to trade on the Trading Market for less than 4.5 hours or any
day that the Common Stock is suspended from trading during the final hour of trading on the Trading Market (or if the Trading
Market does not designate in advance the closing time of trading on the Trading Market, then during the hour ending at 4:00:00
p.m., New York City time) unless such day is otherwise designated as a Trading Day in writing by the Purchasers.


 


(ll)         “Trading
Market” means any of the following markets or exchanges on which the Common Stock (or any other common stock of any
other Person that references the Trading Market for its common stock) is listed or quoted for trading on the date in question:
the OTC Bulletin Board, The NASDAQ Global Market, The NASDAQ Global Select Market, The NASDAQ Capital Market, the New York Stock
Exchange, NYSE Arca, the NYSE MKT, or the OTCQX Marketplace, the OTCQB Marketplace, the OTCPink Marketplace or any other tier
operated by OTC Markets Group Inc. (or any successor to any of the foregoing).


 


(mm)      “Transfer
Agent” means Island Stock Transfer, and any successor transfer agent of the Company.


 


(nn)       “Transfer
Agent Irrevocable Instruction Letter” means the letter from the Company to the Transfer Agent that instructs the Transfer
Agent to issue shares of Common Stock upon conversion of the Notes, in the form of Exhibit B annexed hereto.


 






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(oo)       “UCC”
means the Uniform Commercial Code of as in effect from time to time in the State of New York; provided, however,
that, in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection, priority, or remedies
with respect to the Purchasers’ Liens on any Collateral is governed by the Uniform Commercial Code as enacted and in effect
in a jurisdiction other than the State of New York, the term “UCC” shall mean the Uniform Commercial code as
enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection,
priority, or remedies.


 


(pp)       “Underlying
Shares” means the Conversion Shares.


 


(qq)       “Warrants”
means, collectively, the Common Stock purchase warrants delivered to the Purchasers at the Closing in accordance with Section
4.7 hereof, which Warrants shall have a term of exercise equal to five years, in the form of Exhibit C attached hereto.


 


(rr)         “Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Warrants.


 


1.2         Other
Definitional Provisions.


 


(a)          Use
of Defined Terms. Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Documents or any certificate or other document made or delivered pursuant hereto or thereto.


 


(b)          Accounting
Terms. As used herein and in the other Documents, and any certificate or other document made or delivered pursuant hereto
or thereto, accounting terms relating to Company not defined in Section 1.1 and accounting terms partly defined in Section
1.1, to the extent not defined, shall have the respective meanings given to them under GAAP (provided that all terms
of an accounting or financial nature used herein shall be construed, and all computations of amounts referred to herein shall
be made without giving effect to (i) any election under Accounting Standards Codification 825-10-25 (previously referred to as
Statement of Financial Accounting Standards 159) (or any other Accounting Standards Codification or Financial Accounting Standard
having a similar result or effect) to value any Indebtedness or other liabilities of Company at “fair value”, as defined
therein, and (ii) any treatment of Indebtedness in respect of convertible debt instruments under Accounting Standards Codification
470-20 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect) to
value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be
valued at the full stated principal amount thereof).


 


(c)          Construction.
The words “hereof”, “herein” and “hereunder” and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and
Section, Schedule and Exhibit references are to this Agreement unless otherwise specified. The meanings given to terms defined
herein shall be equally applicable to both the singular and plural forms of such terms.


 


(d)          UCC
Terms. Terms used in this Agreement that are defined in the UCC shall, unless the context indicates otherwise or are otherwise
defined in this Agreement, have the meanings provided for by the UCC.


 






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ARTICLE
2


PURCHASE
AND SALE OF THE WARRANTS AND NOTES


 


2.1         Closing.
The Closing shall occur at 10:00 am (EDT) on the Closing Date at the offices of Pryor Cashman LLP, 7 Times Square, New
York, New York 10036, on the first (1st) Trading Day on which the conditions to the Closing set forth in Article
V hereof are satisfied or waived in writing as provided elsewhere herein, or on such other date and time as agreed to by the
Company and the Purchasers.


 


2.2         Conditions
to Purchase of Warrants and Notes. Subject to the terms and conditions of this Agreement, each Purchaser will at the Closing,
on the Closing Date, purchase from the Company the Warrants and the Note in the amounts and for the Purchase Price as set forth
on Schedule 1.


 


2.3         Purchase
Price and Payment of the Purchase Price for the Warrants and Notes. The Purchase Price for the Warrants and Note to be purchased
by each Purchaser at the Closing shall be as set forth on Schedule 1 and shall be paid at the Closing (less all of the
Purchasers’ Expenses (as defined below)) by such Purchaser by wire transfer of immediately available funds to the Company
in accordance with the Company’s written wiring instructions, against delivery of the Warrants and Note.


 


2.4         Purchasers’
Costs and Expenses. On the Closing Date, all direct and indirect costs and expenses of the Purchasers related to the negotiation,
due diligence, preparation, closing, and all other items regarding or related to this Agreement and the other Documents and all
of the transactions contemplated herein and/or therein, including, but not limited to, the reasonable legal fees and expenses
of the Purchasers’ legal counsel (collectively, the “Purchasers’ Expenses”), shall be due and payable
from the Company to the Purchasers; and the Purchasers shall subtract from their respective Purchase Price to be paid to the Company
for the purchase of the Warrants and Notes, such Purchasers’ Expenses. Although the Purchasers’ Expenses are being
subtracted by the Purchasers from their respective Purchase Price actually paid to the Company, such Purchasers’ Expenses
shall constitute part of such Purchase Price and shall not directly and/or indirectly reduce and or result in any set-off the
aggregate principal amount of the Note or result in a set-off and/or reduction of any other funds owed by the Company to the Purchasers.
Notwithstanding anything to the contrary contained herein, the Company’s responsibility for the Purchasers’ Expenses
shall not exceed, in the aggregate, $20,000.


 


2.5         Additional
Closings. On the thirtieth (30) calendar day following the date that the Company becomes current in its filing obligations
under the Exchange Act, there shall be an additional Closing Date of Notes and Warrants for an additional Purchase Price of $200,000.
Thereafter, the Company may agree to sell, and the Purchasers may agree to purchase, additional Notes and Warrants such that the
aggregate principal amount of all Notes outstanding may be up to $2,000,000. The date on which any such Notes and Warrants are
issued shall be treated as a Closing Date.


 






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ARTICLE
3


REPRESENTATIONS
AND WARRANTIES; OTHER ITEMS


 


3.1         Representation
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 warranty otherwise made herein to the extent of the disclosure contained
in the corresponding section of the Disclosure Schedules, the Company represents and warrants to each Purchaser that as of the
Closing Date (unless as of a specific date therein):


 


(a)          Subsidiaries.
The Company’s Subsidiaries are as set forth in the SEC Reports.


 


(b)         Organization,
Etc. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority
to own and use its properties and assets and to carry on its business as currently conducted except where the failure to be in
good standing would not have a Material Adverse Effect. Neither the Company nor any Subsidiary is in violation nor default of
any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents.
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 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 Document and no proceeding has been instituted in any such jurisdiction revoking,
limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.


 


(c)          Authorization:
No Conflict. The execution, delivery and performance of the Documents and the transactions contemplated thereby by the Company,
including, but not limited to, the sale and issuance of the Warrants and the Notes for the Purchase Price, the reservation for
issuance of the shares of Common Stock required to be reserved pursuant to the terms of the Notes and Warrants and of the sale
and issuance the (1) Conversion Shares into which the Notes are convertible and (2) Warrant Shares into which the Warrants are
exercisable (i) are within the Company’s corporate powers, (ii) have been duly authorized by all necessary action by or
on behalf of the Company (and/or its stockholders to the extent required by law), (iii) do not and shall not contravene or
conflict with any provision of, or require any consents (except such consents as have already been received) under (1) any law,
rule, regulation or ordinance, (2) the Company’s organizational documents; and/or (3) any agreement binding upon the Company
or any of the Company’s properties, except in the case of (1) and (3) as would not reasonably be expected to have a Material
Adverse Effect, and (iv) do not result in, or require, the creation or imposition of any Lien and/or encumbrance on any of the
Company’s properties or revenues pursuant to any law, rule, regulation or ordinance or otherwise, except as would not reasonably
be expected to have a Material Adverse Effect.


 






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(d)         Validity
and Binding Nature. The Documents to which the Company is a party are the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization and other similar laws of general application affecting the rights and remedies of creditors and by
general equitable principles (whether enforcement is sought by proceedings in equity or at law).


 


(e)         Title
to Assets. The Company has good and marketable title to all assets owned by Company that are material to the business of the
Company in each case free and clear of all Liens, except for 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.


 


(f)          No
Violations of Laws. The Company is not in violation of any law, ordinance, rule, regulation, judgment, decree or order of
any federal, state or local governmental body or court and/or regulatory or self-regulatory body except as would not reasonably
be expected to have a Material Adverse Effect.


 


(g)         Taxes.
All federal, and material state and local tax returns required to be filed by the Company have been filed with the appropriate
governmental agencies and all taxes due and payable by the Company have been timely paid. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know
of no basis for any such claim.


 


(h)         Fiscal
Year. The fiscal year of the Company ends on May 31 of each year.


 


(i)          Accuracy
of Information, etc. No statement or information contained in this Agreement, the SEC Reports, any other Document or any other
document, certificate or statement furnished to the Purchasers by or on behalf of the Company in writing for use in connection
with the transactions contemplated by this Agreement and/or the other Documents contained, as of the date such statement, information,
document or certificate was made or furnished, as the case may be, any untrue statement of a material fact or omitted to state
a material fact necessary to make the statements contained herein or therein, taken as a whole, not materially misleading. There
is no fact known to the Company that could have a Material Adverse Effect that has not been expressly disclosed herein, in the
other Documents, in the SEC Reports or in any other documents, certificates and statements furnished to the Purchasers for use
in connection with the transactions contemplated hereby and by the other Documents.


 






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(j)          Affiliate
Transactions. Except as set forth in the SEC Reports, none of the officers or directors of the Company and, to the knowledge
of the Company, none of the employees of the Company is presently a party to any transaction with the Company (other than for
services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing
of services to or by, providing for rental of real or personal property to or from providing for the borrowing of money from or
lending of money to, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of
the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director,
trustee, stockholder, member or partner, 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 and (iii) other employee benefits,
including stock option agreements under any stock option plan of the Company.


 


(k)          Intellectual
Property. The Company has, or has rights to use, all patents, patent applications, trademarks, trademark applications, service
marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights
as described in the SEC Reports as necessary or required for use in connection with its business and which the failure to so have
could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). None of, and the Company
has not received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated or been
abandoned, or is expected to expire or terminate or be abandoned. The Company has not received, since the date of the latest audited
financial statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual
Property Rights violate or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have
a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is
no existing infringement by another Person of any of the Intellectual Property Rights. The Company has taken reasonable security
measures to protect the secrecy, confidentiality and value of all of its intellectual property, except where failure to do so
could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. All Intellectual Property
Rights of the Company are set forth in the SEC Reports.


 


(l)           USA
Patriot Act. The Company is in compliance, in all material respects, with (i) the Trading with the Enemy Act, as amended,
and each of the foreign assets control regulations of the United States Treasury Department (31 C.F.R., Subtitle B, Chapter V,
as amended) and any other enabling legislation or executive order relating thereto, and (ii) the USA Patriot Act (Title III of
Pub. L. 107-56, signed into law on October 26, 2001) (the “Act”). No part of the proceeds of the Notes will
be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political
party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business
or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended.


 


(m)         Foreign
Asset Control Laws. The Company is not a Person named on a list published by OFAC or a Person with whom dealings are prohibited
under any OFAC Regulations.


 


(n)          Valid
Issuance of the Securities. The Securities have been duly authorized and, when issued and paid for in accordance with the
applicable Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens and all restrictions
on transfer other than those expressly imposed by the federal securities laws and vest in the Purchaser full and sole title and
power to the Securities.


 






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(o)          Capitalization
and Voting Rights. The authorized capital stock of the Company and all securities of the Company issued and outstanding are
set forth in the SEC Reports as of the dates reflected therein. All of the outstanding shares of Common Stock and other securities
of the Company have been duly authorized and validly issued, and are fully paid and nonassessable. Except as set forth in the
SEC Reports, there are no agreements or arrangements under which the Company is obligated to register the sale of any of the Company’s
securities under the Securities Act. Except as set forth in the SEC Reports, no shares of Common Stock and/or other securities
of the Company are entitled to preemptive rights and there are no outstanding debt securities and no contracts, commitments, understandings,
or arrangements by which the Company is or may become bound to issue additional shares of the capital stock and/or other securities
of the Company or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating
to, or securities or rights convertible into or exchangeable for, any shares of capital stock of the Company other than those
issued or granted in the ordinary course of business pursuant to the Company’s equity incentive and/or compensatory plans
or arrangements. Except for customary transfer restrictions contained in agreements entered into by the Company to sell restricted
securities and/or as set forth in the SEC Reports, the Company is not a party to, and it has no knowledge of, any agreement restricting
the voting or transfer of any shares of the capital stock and/or other securities of the Company. Except as set forth in the SEC
Reports, to the Company’s knowledge, the offer and sale of all capital stock, convertible or exchangeable securities, rights,
warrants, options and/or any other securities of the Company when any such securities of the Company were issued complied with
all applicable federal and state securities laws, and no current and/or prior holder of any securities of the Company has any
right of rescission or damages or any “put” or similar right with respect thereto that would have a Material Adverse
Effect. Except as set forth in the SEC Reports, there are no securities or instruments of the Company containing anti-dilution
or similar provisions that will be triggered by the issuance and/or sale of the Securities and/or the consummation of the transactions
described herein or in any of the other Documents. Except as set forth in the SEC Reports, 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 Documents.


 


(p)          SEC
Reports. The Company is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act and the Company is
current in its filing obligations under the Exchange Act, including, without limitation, its filings of Annual Reports on Form
10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K (collectively, the “SEC Reports”). The
SEC Reports, at the time filed with the SEC, did not contain any untrue statement of a material fact or omit to state any fact
necessary to make any statement therein not misleading. The Company is an issuer subject to Rule 144(i) under the Securities Act.
All financial statements included in the SEC Reports (the “Financial Statements”) have been prepared, if so
required, in accordance with GAAP applied on a consistent basis throughout the periods indicated and with each other, except that
unaudited Financial Statements may not contain all footnotes required by generally accepted accounting principles. The Financial
Statements fairly present, in all material respects, the financial condition and operating results of the Company as of the dates,
and for the periods, indicated therein, subject in the case of unaudited Financial Statements to normal year-end audit adjustments.


 






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(q)          Sarbanes-Oxley
Act. The Company is in compliance in all respects with any and all applicable requirements of the Sarbanes-Oxley Act of 2002
that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the SEC thereunder that
are effective as of the date hereof.


 


(r)          Absence
of Litigation. Other than as disclosed in the SEC Reports, there is no action, suit, proceeding, inquiry or investigation
before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of
the Company, threatened against or affecting the Company, the Common Stock or any of the Company’s officers or directors
or 5% or greater stockholders in their capacities as such, that would need to be disclosed on the Company’s next Quarterly
Report on Form 10-Q or Annual Report on Form 10-K. 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.


 


(s)          Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited Financial Statements
included in the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed with the SEC prior to the date
hereof: (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 SEC Reports
pursuant to SEC rules and/or regulations, (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. The Company does
not have pending before the Commission any request for confidential treatment of information. Except for the issuance of the
Securities contemplated by this Agreement, no event, liability, fact, circumstance, occurrence or development has occurred or
exists or is reasonably expected to occur or exist with respect to the Company or its business, properties, operations,
assets or financial condition that would be required to be disclosed by the Company under applicable securities laws at the
time this representation is made or deemed made that has not been publicly disclosed at least one Trading Day prior to the
date that this representation is made.


 






    	 	12	 



     

    

 


(t)          No Integrated Offering. Assuming the accuracy of the 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 the issuance and/or sale of the Securities to be integrated with prior
offerings of securities by the Company for purposes of the Securities Act that would require the registration of any such
Securities and/or any other securities of the Company under the Securities Act.


 


(u)         No
Consents, Etc. No direct or indirect consent, approval, authorization or similar item is required to be obtained by the Company
to enter into this Agreement, the Warrants, the Notes, and/or the other Documents to which it is a party and to perform or undertake
any of the transactions contemplated pursuant to this Agreement, the Warrants, the Notes, and/or any of the other Documents to
which it is a party, except for such consents as have already been received.


 


(v)          Listing
of Securities. All Underlying Shares and Warrant Shares have been approved, if so required, for listing or quotation on the
Trading Market, subject only to notice of issuance.


 


(w)         DTC
Eligible. The Common Stock is DTC eligible and DTC has not placed a “freeze” or a “chill” on the Common
Stock and the Company has no reason to believe that DTC has any intention to make the Common Stock not DTC eligible, or place
a “freeze” or “chill” on the Common Stock.


 


(x)           No
General Solicitation. Neither the Company, nor any of its affiliates, nor, to the knowledge of the Company, any Person acting
on its behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in
connection with the offer or sale of the Securities.


 


(y)          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 Documents. The Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on
behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated
by the Documents.


 


(z)          Internal
Accounting and Disclosure Controls. Other than as disclosed in the SEC Reports, the Company maintains 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 generally accepted accounting principles and to maintain asset and liability accountability, (iii) access
to assets or incurrence of liabilities is permitted only in accordance with management’s general or specific authorization
and (iv) the recorded accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable
intervals and appropriate action is taken with respect to any difference. Other than as disclosed in the SEC Reports, the Company
maintains disclosure controls and procedures (as such term is defined in Rule 13a-15 under the Exchange Act) that are effective
in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange
Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC,
including, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company
in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management,
including its principal executive officer or officers and its principal financial officer or officers, as appropriate, to allow
timely decisions regarding required disclosure. Other than as disclosed in the SEC Reports, during the twelve months prior to
a Closing Date, the Company has not received any notice or correspondence from any accountant relating to any material weakness
in any part of the system of internal accounting controls of the Company.


 






    	 	13	 



     

    

 


(aa)        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 Securities by the Company to the Purchasers
as contemplated hereby. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the
Trading Market.


 


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


 


(cc)        Listing
and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the
Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration
of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating
terminating such registration. Except as disclosed in the SEC Reports, the Company has not, in the twelve (12) months preceding
the date hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect
that the Company is not in compliance with the listing or maintenance requirements of such Trading Market.


 


(dd)        Accountants.
The Company’s accounting firm is Sadler, Gibb & Associates, LLC. 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 May 31, 2017.


 


(ee)        Acknowledgment
Regarding Purchaser’s Purchase of Securities. The Company acknowledges and agrees that the Purchasers are each acting
solely in the capacity of an arm’s length purchaser with respect to the Documents and the transactions contemplated thereby.
The Company further acknowledges that the Purchasers are not acting as financial advisors or fiduciaries of the Company (or in
any similar capacity) with respect to the Documents and the transactions contemplated thereby and any advice given by the Purchasers
or any of its representatives or agents in connection with the Documents and the transactions contemplated thereby is merely incidental
to each Purchaser’s purchase of the Securities. The Company further represents to the Purchasers that the Company’s
decision to enter into this Agreement and the other Documents has been based solely on the independent evaluation of the transactions
contemplated hereby by the Company and its representatives.


 






    	 	14	 



     

    

 


(ff)         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 Documents.


 


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


 


(hh)        Insurance.
The Company and the Subsidiaries are currently not 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.


 


 (ii)          Management. During
the past five year period, no current officer or director or, to the knowledge of the Company, no current ten percent (10%)
or greater stockholder of the Company or any of its Subsidiaries has been the subject of:




 


(i)           a
petition under bankruptcy laws or any other insolvency or moratorium law or the appointment by a court of a receiver, fiscal agent
or similar officer for such Person, or any partnership in which such person was a general partner at or within two years before
the filing of such petition or such appointment, or any corporation or business association of which such person was an executive
officer at or within two years before the time of the filing of such petition or such appointment;


 






    	 	15	 



     

    

 


(ii)          a
conviction in a criminal proceeding or a named subject of a pending criminal proceeding (excluding traffic violations that do
not relate to driving while intoxicated or driving under the influence);


 


(iii)         any
order, judgment or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently
or temporarily enjoining any such person from, or otherwise limiting, the following activities:


 


(1)         Acting
as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage
transaction merchant, any other person regulated by the United States Commodity Futures Trading Commission or an associated person
of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person,
director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing
any conduct or practice in connection with such activity;


 


(2)         Engaging
in any particular type of business practice; or


 


(3)         Engaging
in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of securities
laws or commodities laws;


 


(iv)         any
order, judgment or decree, not subsequently reversed, suspended or vacated, of any authority barring, suspending or otherwise
limiting for more than sixty (60) days the right of any such person to engage in any activity described in the preceding sub paragraph,
or to be associated with persons engaged in any such activity;


 


(v)         a
finding by a court of competent jurisdiction in a civil action or by the SEC or other authority to have violated any securities
law, regulation or decree and the judgment in such civil action or finding by the SEC or any other authority has not been subsequently
reversed, suspended or vacated; or


 


(vi)         a
finding by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated
any federal commodities law, and the judgment in such civil action or finding has not been subsequently reversed, suspended or
vacated.


 


3.2         Representations
and Warranties of each Purchaser. Each Purchaser, severally and not jointly, hereby represents and warrants as of the date
hereof and as of the Closing Date to the Company as follows:


 


(a)          Authorization.
Such Purchaser has full power and authority to enter into this Agreement and the other Documents to which it is a party, to perform
its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby and has taken all
action necessary to authorize the execution and delivery of this Agreement and the other Documents to which it is a party, the
performance of its obligations hereunder and thereunder and the consummation of the transactions contemplated hereby and thereby.


 






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(b)          Own
Account. Such Purchaser understands that the Securities are “restricted securities” and have not been registered
under the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account
and not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act
or any applicable state securities law, has no present intention of distributing any of such Securities in violation of the Securities
Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons
to distribute or regarding the distribution of such Securities in violation of the Securities Act or any applicable state securities
law (this representation and warranty not limiting such Purchaser’s right to sell the Securities pursuant to an effective
registration statement or otherwise in compliance with applicable federal and state securities laws). Such Purchaser is acquiring
the Securities hereunder in the ordinary course of its business.


 


(c)          Accredited
Investor Status; Investment Experience. At the time such Purchaser was offered the Securities it was, and as of the date hereof
and as of the Closing Date it is, and on each date on which it converts any portion of the Note or exercises any portion of the
Warrants it will be, an “accredited investor” as that term is defined in Rule 501(a) of Regulation D.


 


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


 


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


 


(f)          Reliance
on Exemptions. Such Purchaser understands that the Securities are being offered and sold to it in reliance on specific exemptions
from the registration requirements of United States federal and state securities laws and that the Company is relying in part
upon the truth and accuracy of, and the Purchasers’ compliance with, the representations, warranties, agreements, acknowledgments
and understandings of the Purchasers set forth herein in order to determine the availability of such exemptions and the eligibility
of the Purchasers to acquire the Securities.


 






    	 	17	 



     

    

 


(g)          Information.
Such Purchaser has been furnished with all materials relating to the business, finances and operations of the Company and materials
relating to the offer and sale of the Securities, which have been requested by such Purchaser. Such Purchaser has been afforded
the opportunity to ask questions of the Company. Such Purchaser understands that its investment in the Securities involves a high
degree of risk. Such Purchaser has sought such accounting, legal and tax advice as it has considered necessary to make an informed
investment decision with respect to its acquisition of its Securities. Such Purchaser is relying solely on its own accounting,
legal and tax advisors, and not on any statements of the Company or any of its agents or representatives, for such accounting,
legal and tax advice with respect to its acquisition of the Securities.


 


(h)          No
Governmental Review. Such Purchaser understands that no United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the Securities, or the fairness or suitability of an investment
in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities.


 


(i)          Validity;
Enforcement; No Conflicts. This Agreement and each Document to which such Purchaser is a party have been duly and validly
authorized, executed and delivered on behalf of such Purchaser and shall constitute the legal, valid and binding obligations of
such Purchaser enforceable against such Purchaser in accordance with their respective terms, except as such enforceability may
be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and
other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.


 


(j)          Organization
and Standing. Such Purchaser is duly organized, validly existing and in good standing under the laws of the State of where
it was formed.


 


(k)          Brokers
or Finders. No brokerage or finder’s fees or commissions are or will be payable by such Purchaser to any broker, financial
advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated
by the Documents. The Company shall have no obligation with respect to any fees or with respect to any claims made by or on behalf
of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated
by the Documents.


 


(l)           Ability
to Perform. There are no actions, suits, proceedings or investigations pending against such Purchaser or such Purchaser’s
assets before any court or governmental agency (nor is there any threat thereof) that would impair in any way such Purchaser’s
ability to enter into and fully perform its commitments and obligations under this Agreement and the Documents to which it is
a party or the transactions contemplated hereby or thereby.


 






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(m)         Certain
Transactions and Confidentiality. 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 as of the time that such Purchaser first 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
and ending immediately prior to the execution hereof. 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 Securities covered by this Agreement. Other than to other Persons party to this
Agreement or to the Purchaser’s representatives, including, without limitation, its officers, directors, partners, legal
and other advisors, employees, agents and Affiliates, 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).


 


(n)          Transfer
or Resale. Such Purchaser understands that (i) the Securities have not been and are not being registered under the Securities
Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently
registered thereunder or (B) such Securities can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A
promulgated under the Securities Act, as amended, (or a successor rule thereto) (collectively, “Rule 144”);
(ii) any sale of the Securities made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144
and, further, if Rule 144 is not applicable, any resale of the Securities under circumstances in which the seller (or the
Person) through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities Act) may
require compliance with some other exemption under the Securities Act or the rules and regulations of the SEC thereunder;
and (iii) except as otherwise provided in the Documents, neither the Company nor any other Person is under any obligation
to register the Securities under the Securities Act or any state securities laws or to comply with the terms and conditions of
any exemption thereunder.


 


The
Company acknowledges and agrees that the representations contained in Section 3.2 shall not modify, amend or affect the Purchaser’s
right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties
contained in any other Document or any other document or instrument executed and/or delivered in connection with this Agreement
or the consummation of the transaction contemplated hereby.


 


ARTICLE
4


COVENANTS


 


4.1         Transfer
Restrictions.


 


(a)         The
Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities
other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Purchaser, the
Company may require, at the Company’s expense, 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 satisfactory to the
Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities Act.
As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have
the rights and obligations of a Purchaser under this Agreement.


 






    	 	19	 



     

    

 


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


 


[NEITHER]
THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS [EXERCISABLE] [CONVERTIBLE]] HAS [NOT] BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL IN A FORM ACCEPTABLE TO THE COMPANY.


 


4.2         Public
Information. From and after the six month anniversary of the Closing Date until such time that no Purchaser owns Securities,
the Company covenants to maintain the registration of the Common Stock under Section 12(b) or 12(g) of the Exchange Act, and to
timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed
by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements
of the Exchange Act.


 


4.3         Acknowledgment
of Dilution. The Company acknowledges that the issuance of the Securities may result in dilution of the outstanding shares
of Common Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges that its
obligations under the Documents, including, without limitation, its obligation to issue the Underlying Shares pursuant to the
Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless
of the effect of any such dilution or any claim the Company may have against any Purchaser and regardless of the dilutive effect
that such issuance may have on the ownership of the other stockholders of the Company.


 


4.4         Conversion
and Exercise Procedures. The form of Notice of Conversion included in the Notes sets forth the totality of the procedures
required of a Purchaser in order to convert the Notes. Without limiting the preceding sentences, no ink-original Notice of Conversion
shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion
form be required in order to convert the Note. No additional legal opinion, other information or instructions shall be required
of a Purchaser to convert its Notes. The Company shall honor conversions of the Notes and shall deliver Underlying Shares in accordance
with the terms, conditions and time periods set forth in the Documents.


 






    	 	20	 



     

    

 


4.5         Disclosure
of Transactions and Other Material Information.


 


(i)           Disclosure
of Transaction. The Company shall, on or before 9:30 a.m., New York time, on the second (2nd) Business Day
after the date of this Agreement, issue a press release (the “Press Release”) reasonably acceptable to the
Purchasers disclosing all the material terms of the transactions contemplated by the Documents. On or before 9:30 a.m., New York
time, on the third (3rd) Business Day after the date of this Agreement, the Company shall file a Current Report on
Form 8-K describing all the material terms of the transactions contemplated by the Documents in the form required by the 1934
Act and attaching all the material Documents (including, without limitation, this Agreement, the form of Notes, the form of Warrant
and the Security Agreement) (including all attachments, the “8-K Filing”). From and after the filing of the
8-K Filing, the Company shall have disclosed all material, non-public information (if any) provided to any of the Purchasers by
the Company or any of its Subsidiaries or any of their respective officers, directors, employees or agents in connection with
the transactions contemplated by the Documents. In addition, effective upon the filing of the 8-K Filing, the Company acknowledges
and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company,
any of its Subsidiaries or any of their respective officers, directors, affiliates, employees or agents, on the one hand, and
any of the Purchasers or any of their affiliates, on the other hand, shall terminate.


 


(ii)          Limitations
on Disclosure. The Company shall not, and the Company shall cause each of its Subsidiaries and each of its and their respective
officers, directors, employees and agents not to, provide any Purchaser with any material, non-public information regarding the
Company or any of its Subsidiaries from and after the date hereof without the express prior written consent of such Purchaser
(which may be granted or withheld in such Purchaser’s sole discretion). To the extent that the Company delivers any material,
non-public information to a Purchaser without such Purchaser’s consent, the Company hereby covenants and agrees that such Purchaser
shall not have any duty of confidentiality with respect to, or a duty not to trade on the basis of, such material, non-public
information. Subject to the foregoing, neither the Company, its Subsidiaries nor any Purchaser shall issue any press releases
or any other public statements with respect to the transactions contemplated hereby; provided, however, the Company shall be entitled,
without the prior approval of any Purchaser, to make the Press Release and any press release or other public disclosure with respect
to such transactions (i) in substantial conformity with the 8-K Filing and contemporaneously therewith and (ii) as is required
by applicable law and regulations (provided that in the case of clause (i) each Purchaser shall be consulted by the Company in
connection with any such press release or other public disclosure prior to its release). Without the prior written consent of
the applicable Purchaser (which may be granted or withheld in such Purchaser’s sole discretion), the Company shall not (and
shall cause each of its Subsidiaries and affiliates to not) disclose the name of such Purchaser in any filing, announcement, release
or otherwise, unless required by law or regulations. Notwithstanding anything contained in this Agreement to the contrary and
without implication that the contrary would otherwise be true, the Company expressly acknowledges and agrees that no Purchaser,
except as set forth in this Agreement, shall have (unless expressly agreed to by a particular Purchaser after the date hereof
in a written definitive and binding agreement executed by the Company and such particular Purchaser (it being understood and agreed
that no Purchaser may bind any other Purchaser with respect thereto)), any duty of confidentiality with respect to, or a duty
not to trade on the basis of, any material, non-public information regarding the Company or any of its Subsidiaries.


 






    	 	21	 



     

    

 


(iii)         Other
Confidential Information. Disclosure Failures; Disclosure Delay Payments. In addition to other remedies set forth in this
Section 4.5, and without limiting anything set forth in any other Transaction Document, at any time after the Closing Date if
the Company, any of its Subsidiaries, or any of their respective officers, directors, employees or agents, provides any Purchaser
with material non-public information relating to the Company or any of its Subsidiaries (each, the “Confidential Information”),
the Company shall, on or prior to the applicable Required Disclosure Date (as defined below), publicly disclose such Confidential
Information on a Current Report on Form 8-K or otherwise (each, a “Disclosure”). From and after such Disclosure,
the Company shall have disclosed all Confidential Information provided to such Purchaser by the Company or any of its Subsidiaries
or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction
Documents. In addition, effective upon such Disclosure, the Company acknowledges and agrees that any and all confidentiality or
similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their
respective officers, directors, affiliates, employees or agents, on the one hand, and any of the Purchasers or any of their affiliates,
on the other hand, shall terminate. In the event that the Company fails to effect such Disclosure on or prior to the Required
Disclosure Date and such Purchaser shall have possessed Confidential Information for at least ten (10) consecutive Trading Days
(each, a “Disclosure Failure”), then, as partial relief for the damages to such Purchaser by reason of any
such delay in, or reduction of, its ability to buy or sell shares of Common Stock after such Required Disclosure Date (which remedy
shall not be exclusive of any other remedies available at law or in equity), the Company shall pay to such Purchaser an amount
in cash equal to the greater of (I) two percent (2%) of the aggregate Purchase Price and (II) the applicable Disclosure Restitution
Amount, on each of the following dates (each, a “Disclosure Delay Payment Date”): (i) on the date of such Disclosure
Failure and (ii) on every thirty (30) day anniversary such Disclosure Failure until the earlier of (x) the date such Disclosure
Failure is cured and (y) such time as all such non-public information provided to such Purchaser shall cease to be Confidential
Information (as evidenced by a certificate, duly executed by an authorized officer of the Company to the foregoing effect) (such
earlier date, as applicable, a “Disclosure Cure Date”). Following the initial Disclosure Delay Payment for
any particular Disclosure Failure, without limiting the foregoing, if a Disclosure Cure Date occurs prior to any thirty (30) day
anniversary of such Disclosure Failure, then such Disclosure Delay Payment (prorated for such partial month) shall be made on
the third (3rd) Business Day after such Disclosure Cure Date. The payments to which an Investor shall be entitled pursuant to
this Section 4.6 are referred to herein as “Disclosure Delay Payments.” In the event the Company fails to make
Disclosure Delay Payments in a timely manner in accordance with the foregoing, such Disclosure Delay Payments shall bear interest
at the rate of two percent (2%) per month (prorated for partial months) until paid in full.


 






    	 	22	 



     

    

 


For
the purpose of this Agreement the following definitions shall apply:


 


“Disclosure
Failure Market Price” means, as of any Disclosure Delay Payment Date, the price computed as the quotient of (I) the
sum of the five (5) highest VWAPs (as defined in the Debentures) of the Common Stock during the applicable Disclosure Restitution
Period (as defined below), divided by (II) five (5) (such period, the “Disclosure Failure Measuring Period”).
All such determinations to be appropriately adjusted for any share dividend, share split, share combination, reclassification
or similar transaction that proportionately decreases or increases the Common Stock during such Disclosure Failure Measuring Period.


 


“Disclosure
Restitution Amount” means, as of any Disclosure Delay Payment Date, the product of (x) difference of (I) the Disclosure
Failure Market Price less (II) the lowest purchase price, per share of Common Stock, of any Common Stock issued or issuable to
such Purchaser pursuant to this Agreement or any other Transaction Documents, multiplied by (y) 10% of the aggregate daily dollar
trading volume (as reported on Bloomberg (as defined in the Debentures)) of the Common Stock on the Principal Market for each
Trading Day either (1) with respect to the initial Disclosure Delay Payment Date, during the period commencing on the applicable
Required Disclosure Date through and including the Trading Day immediately prior to the initial Disclosure Delay Payment Date
or (2) with respect to each other Disclosure Delay Payment Date, during the period commencing the immediately preceding Disclosure
Delay Payment Date through and including the Trading Day immediately prior to such applicable Disclosure Delay Payment Date (such
applicable period, the “Disclosure Restitution Period”).


 


“Required
Disclosure Date” means (x) if such Purchaser authorized the delivery of such Confidential Information, either (I) if
the Company and such Purchaser have mutually agreed upon a date (as evidenced by an e-mail or other writing) of Disclosure of
such Confidential Information, such agreed upon date or (II) otherwise, the seventh (7th) calendar day after the date
such Purchaser first received any Confidential Information or (y) if such Purchaser did not authorize the delivery of such Confidential
Information, the first (1st) Business Day after such Purchaser’s receipt of such Confidential Information


 


4.6         Reservation
of Shares.


 


(a)          The
Company covenants and agrees that it will, within five (5) days after the Company completes its redomiciliation to the State of
Nevada but in no event later than three (3) months from the Closing Date, and at all times thereafter, reserve and keep available
out of its authorized and unissued shares of Common Stock a number of shares of Common Stock at least equal to the Required Minimum
(as defined below). The “Required Minimum” means, as of any date, two (2) times the maximum aggregate number
of shares of Common Stock then issued or potentially issuable in the future pursuant to the Documents, including any Underlying
Shares issuable upon conversion in full of the Notes (including Conversion Shares issuable as payment of interest on the Notes),
ignoring any conversion or exercise limits set forth therein, and Warrant Shares issuable upon exercise of the Warrants. The Company
shall be required to calculate the Required Minimum on the first Trading Day of each month that any Securities are outstanding
and provide such calculation to the Purchasers and the Transfer Agent promptly. For purposes of calculating the Required Minimum,
the Company shall assume that all outstanding principal of all Notes will remain outstanding until the applicable Maturity Date
as defined in the Notes and all accrued but unpaid interest thereon accrues at the rate of 8% per annum and is paid on the applicable
Maturity Date.


 






    	 	23	 



     

    

 


(b)          The
Company shall, if applicable: (i) in the time and manner required by the Principal Market, prepare and file with such Trading
Market an additional shares listing application covering a number of shares of Common Stock at least equal to the Required Minimum
on the date of such application, (ii) take all steps necessary to cause such shares of Common Stock to be approved for listing
or quotation on such Trading Market as soon as possible thereafter, (iii) provide to the Purchasers evidence of such listing or
quotation and (iv) maintain the listing or quotation of such Common Stock on any date at least equal to the Required Minimum on
such date on such Trading Market or another Trading Market. The Company agrees to maintain the eligibility of the Common Stock
for electronic transfer through the Depository Trust Company or another established clearing corporation, including, without limitation,
by timely payment of fees to the Depository Trust Company or such other established clearing corporation in connection with such
electronic transfer.


 


4.7        Certain
Transactions and Confidentiality. Each Purchaser agrees, severally and not jointly, that such Purchaser will not enter into
any Net Short Sales (as hereinafter defined) from the period commencing on the Closing Date and ending on the date that such Purchaser
no longer holds any Notes. For purposes of this Section 4.6, a “Net Short Sale” by any Purchaser shall
mean a sale of Common Stock by such Purchaser that is marked as a short sale and that is made at a time where there is no equivalent
offsetting long position in Common Stock held by such Purchaser. For purposes of determining whether there is an equivalent offsetting
long position in Common Stock held by the Purchaser, Underlying Shares that have not yet been converted pursuant to the Notes
shall be deemed to be held long by the Purchaser, and the amount of shares of Common Stock held in a long position shall be all
unconverted Underlying Shares (subject, however to all conversion limitations included in the Notes) issuable to such Purchaser
on such date, plus any shares of Common Stock or Common Stock Equivalents otherwise then held by such Purchaser. Notwithstanding
the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle, whereby separate portfolio managers manage
separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions
made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only
apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the
Securities covered by this Agreement.


 






    	 	24	 



     

    

 


4.8         Negative
Covenants. Until all the Liabilities are paid in full, Company covenants and agrees that:


 


(a)          Restricted
Payments. Except as contemplated by the Documents, the Company shall not directly or indirectly, redeem, defease, repurchase,
repay or make any payments in respect of, by the payment of cash or cash equivalents (in whole or in part, whether by way of open
market purchases, tender offers, private transactions or otherwise), all or any portion of any Indebtedness, whether by way of
payment in respect of principal of (or premium, if any) or interest on, such Indebtedness, except for Permitted Indebtedness;
provided, however, that, notwithstanding anything to the contrary provided herein or elsewhere, in no event shall
the Company directly and/or indirectly make any payment to any officer, director, or 5% or greater beneficial holder of the Company’s
voting stock or Common Stock or an affiliate of the Company and/or any affiliate of any such person representing the direct and/or
indirect repayment of Indebtedness, premiums and/or interest on Indebtedness, unpaid salaries, unpaid consulting fees, unpaid
expenses, accrued but unpaid interest and/or otherwise.


 


(b)          Restriction
on Redemption and Dividends. Other than as permitted or required under the Documents, the Company shall not, directly or indirectly,
redeem or repurchase more than a de minimis number of shares of or declare or pay any dividend or distribution on any of
its capital stock whether in cash, stock rights and/or property, except as set forth in the SEC Reports.


 


(c)          Indebtedness.
The Company shall not incur or permit to exist any Indebtedness, except for Permitted Indebtedness.


 


(d)          Liens.
The Company shall not create or permit to exist any Liens or security interests with respect to any assets, whether now owned
or hereafter acquired and owned, except for Permitted Liens.


 


(e)          Guaranties,
Loans or Advances. The Company shall not become or be a guarantor or surety of, or otherwise become or be responsible in any
manner with respect to any undertaking of any other Person, or make or permit to exist any loans or advances to or investments
in any other Person, except for the endorsement, in the ordinary course of collection, of instruments payable to it or to its
order.


 


(f)           Use
of Proceeds. The Company shall not permit any proceeds of the Note to be used either directly or indirectly for the purpose,
whether immediate, incidental or ultimate, of “purchasing or carrying any margin stock” within the meaning of Regulation
U, as amended from time to time, of the Board of Governors of the Federal Reserve System.


 


(g)          Transactions
with Affiliates. The Company shall not directly and/or indirectly enter into, renew, extend or be a party to, any transaction
or series of related transactions which would be required to be disclosed in any public filing with the SEC (including, without
limitation, lending funds to an Affiliate and/or borrowing funds from any Affiliate, the purchase, sale, lease, transfer or exchange
of property, securities or assets of any kind or the rendering of services of any kind) with any officer, director, Affiliate
and/or any Affiliate of such person, unless such transaction is made on an arms’ length basis and expressly approved by
a majority of the disinterested directors (even if less than a quorum otherwise required for board approval).


 






    	 	25	 



     

    

 


4.9         Additional
Documentation. Within five (5) Business Days of the Closing Date, the Company shall deliver (i) the Notes and (ii) the Warrants.


 


4.10       Redomicilation.
Within twenty (20) Trading Days of the Closing Date, the Company shall complete the process of domiciling the Company in the State
of Nevada.


 


4.11       Legal
Opinion. Within sixty (60) calendar days of the Closing Date, the Company shall deliver an opinion of legal counsel to the
Company, in form reasonably acceptable to the Purchasers.


 


4.12       Further
Assurances. The Company shall, from time to time execute and deliver, or cause to be executed and delivered, such additional
instruments, certificates or documents, and take such actions, as the Purchasers may reasonably request for the purposes of implementing
or effectuating the provisions of this Agreement and the other Documents.


 


ARTICLE
5


CLOSING
CONDITIONS


 


5.1        Closing
Conditions of Purchaser. Each Purchaser’s obligation to purchase the Warrants and the Note at the Closing is subject
to the fulfillment of each and every one of the following conditions prior to or contemporaneously with such Closing (unless waived
by such Purchaser in writing in its sole and absolute discretion):


 


(a)          Delivery
of Documents. Each Purchaser shall have received from the Company each of the following (together with all Exhibits, Schedules,
and annexes to each of the following), in form and substance reasonably satisfactory to such Purchaser and its counsel and, where
applicable, duly executed and recorded (to the extent required):


 


(i)          this
Agreement;


 


(ii)         the
Note in such Purchaser’s name having the principal amount set forth on Schedule 1;


 


(iii)        the
Warrant;


 


(iv)        the
Transfer Agent Letter;


 


(v)         a
certificate evidencing the formation and good standing of the Company in such entity’s jurisdiction of formation issued
by the Secretary of State (or comparable office) of such jurisdiction of formation as of a date within ten (10) days of the Closing
Date;


 


(vi)        a
certificate, executed by the Secretary of the Company and dated as of the Closing Date, as to (i) the resolutions as adopted by
the Company’s board of directors in a form reasonably acceptable to the Purchasers, (ii) the Articles of Incorporation of
the Company, and (iii) the Bylaws of the Company, each as in effect at the Closing; and


 


(vii)       the
fully executed Closing Statement.


 






    	 	26	 



     

    

 


(b)         Approvals.
The receipt by each Purchaser of all governmental and third-party approvals necessary in connection with the execution and performance
of the Documents and the transactions contemplated thereby, all of which consents/approvals shall be in full force and effect.


 


(c)         Additional
Conditions. The fulfillment of each and every one of the following conditions prior to or contemporaneously with the Closing:


 


(i)          Representations
and Warranties. Each of the representations and warranties made by Company in or pursuant to the Documents and all Schedules
and/or Exhibits to this Agreement and/or any of the other Documents shall be true and correct in all material respects on and
as of the Closing Date as if made (or given) on and as of such date (except where such representation and warranty speaks of a
specific date, in which case such representation and warranty shall be true and correct as of such date).


 


(ii)         No
Events of Default. No Event of Default or any other event that, with the passage of time or the giving of notice or both,
would become an Event of Default shall have occurred or would result from the sale of the Warrants and the Notes to the Purchaser
or the performance of any other transaction set forth or contemplated by any of the Documents.


 


(iii)        Fees,
Etc. The Purchasers’ Expenses allocated to the Purchasers’ counsel shall have been received by the Purchasers’
counsel.


 


(iv)        Compliance
with Laws. The Company shall have complied with all applicable federal, state and local governmental laws, rules, regulations
and ordinances in connection with the execution, delivery and performance of this Agreement and the other Documents to which it
is a party and the consummation of the transactions contemplated hereby and thereby, including, without limitation, the Company
shall have obtained all permits and qualifications required by any applicable state securities or “Blue Sky” laws
for the offer and sale of the Securities by the Company to the Purchasers.


 


(v)        No
Injunction. No statute, regulation, order, decree, writ, ruling or injunction shall have been enacted, entered, promulgated,
threatened in writing or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation
of or which would materially modify or delay the execution and performance of the Documents and/or any of the transactions contemplated
by the Documents.


 


(vi)       No
Proceedings or Litigation. No action, suit or proceeding before any arbitrator or any court or governmental authority shall
have been commenced or threatened in writing, and no inquiry or investigation by any governmental authority shall have been commenced
or threatened in writing, against the Company, or any of the officers, directors or affiliates of the Company, seeking to restrain,
prevent or change the Documents and/or any of the transactions contemplated by the Documents, or seeking material damages in connection
with such Documents and/or transactions.


 






    	 	27	 



     

    

 


(vii)       No
Material Adverse Effect. No condition, occurrence, state of facts or event constituting a Material Adverse Effect shall have
occurred and be continuing.


 


(viii)       No
Suspension of Trading in or Notice of Delisting of Common Stock. Trading in the Common Stock shall not have been suspended
and/or halted by the SEC, the Principal Market or FINRA. The Company shall not have received any final and non-appealable notice
that the listing or quotation of the Common Stock on the Principal Market shall be terminated on a date certain (unless, prior
to such date certain, the Common Stock is listed or quoted on any other Trading Market); trading in securities generally as reported
on the Principal Market shall not have been suspended or limited, nor shall a banking moratorium have been declared either by
the U.S. or New York State authorities; there shall not have been imposed any suspension of electronic trading or settlement services
by the Depository Trust Company (“DTC”) with respect to the Common Stock that is continuing; the Company shall
not have received any notice from DTC to the effect that a suspension of electronic trading or settlement services by DTC with
respect to the Common Stock is being imposed or is contemplated (unless, prior to such suspension, DTC shall have notified the
Company in writing that DTC has determined not to impose any such suspension); nor shall there have occurred any material outbreak
or escalation of hostilities or other national or international calamity or crisis that has had or would reasonably be expected
to have a material adverse change in any U.S. financial, credit or securities market that is continuing.


 


(ix)        Completion
of Due Diligence. Each Purchaser shall have completed its legal, business and financial due diligence of the Company to its
full satisfaction and shall be fully satisfied with the results thereof.


 


(x)        Completion
of AWS Acquisition. The Asset Purchase Agreement among the Company and InterCloud Systems, Inc., in the form attached hereto
as Exhibit D, shall have been consummated.


 


5.2        Closing
Conditions of Company. The obligation of the Company to sell and issue the Warrants and Notes to the Purchasers at the Closing
is subject to the fulfillment, to the Company’s reasonable satisfaction, prior to or contemporaneously with the Closing,
of each of the following conditions (unless waived by the Company in writing in its sole and absolute discretion):


 


(a)         Delivery
of Documents. The Company shall have received from each Purchaser each of the following (together with all Exhibits, Schedules,
and annexes to each of the following), in form and substance reasonably satisfactory to the Company and its counsel and, where
applicable, duly executed and recorded (to the extent required):


 


(i)          this
Agreement; and


 


(ii)         the
fully executed Closing Statement.


 






    	 	28	 



     

    

 


(b)         Approvals.
The receipt by the Company of all governmental and third-party approvals necessary in connection with the execution and performance
of the Documents and the transactions contemplated thereby, all of which consents/approvals shall be in full force and effect.


 


(c)         Additional
Conditions. The fulfillment of each and every one of the following conditions prior to or contemporaneously with the Closing:


 


(i)          Representations
and Warranties. Each of the representations and warranties made by the Purchasers in or pursuant to the Documents and all
Schedules and/or Exhibits to this Agreement and/or any of the other Documents shall be true and correct in all material respects
on and as of the Closing Date as if made (or given) on and as of such date (except where such representation and warranty speaks
of a specific date, in which case such representation and warranty shall be true and correct as of such date).


 


(ii)         Compliance
with Laws. The Purchasers shall have complied with all applicable federal, state and local governmental laws, rules, regulations
and ordinances in connection with the execution, delivery and performance of this Agreement and the other Documents to which it
is a party and the consummation of the transactions contemplated hereby and thereby, including, without limitation, any applicable
state securities or “Blue Sky” laws.


 


(iii)         No
Injunction. No statute, regulation, order, decree, writ, ruling or injunction shall have been enacted, entered, promulgated,
threatened in writing or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation
of or that would materially modify or delay any of the transactions contemplated by the Documents.


 


(iv)        Receipt
of the Purchase Price. The Company shall have received the Purchase Price from each Purchaser as set forth on Schedule
1 hereto (less the applicable pro rata portion of the Purchasers’ Expenses).


 


ARTICLE
6


MISCELLANEOUS


 


6.1        No
Waiver; Modifications In Writing. No failure or delay on the part of any Purchaser in exercising any right, power or remedy
pursuant to the Documents shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power
or remedy preclude any other or further exercise thereof, or the exercise of any other right, power or remedy. No provision of
the Documents 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, or, in the case of a waiver, by the party against whom enforcement of any such waived provision
is sought. Any waiver of any provision of the Documents and any consent by any Purchaser to any departure by the Company from
the terms of any provision of the Documents shall be effective only in the specific instance and for the specific purpose for
which given. No notice to or demand on the Company in any case shall entitle the Company to any other or further notice or demand
in similar or other circumstances.


 






    	 	29	 



     

    

 


6.2        Notices.
All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery
to the party to be notified, (b) when sent by confirmed facsimile or e-mail if sent during normal business hours of the recipient;
if not, then on the next Business Day, (c) five (5) days after having been sent by registered or certified mail, return receipt
requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt:


 


If
to Company:


 


Mantra
Venture Group Ltd.


c/o
AW Solutions, Inc.


300
Crown Oak Centre Drive


Longwood,
Florida 32750


Attention:
Chief Executive Officer


Fax
No.: (407) 260-0749


 


With
copies to:


(which
shall not constitute notice):


 


Pryor
Cashman LLP


7
Times Square


New
York, New York 10036


Attention:
M. Ali Panjwani, Esq.


Fax
No.: (212) 798-6319


 


If
to the Purchasers:


 


To
the address on each Purchaser’s signature page.


 


With
copies to:


(which
shall not constitute notice):


 


Sichenzia
Ross Ference Kesner LLP


61
Broadway


New
York, NY 10006


Attention:
Thomas A. Rose, Esq.


Fax
No.: (212) 930-9700


 


Any
party hereto may from time to time change its address for notices by giving written notice of such changed address to the other
party hereto.


 






    	 	30	 



     

    

 


6.3         Costs,
Expenses and Taxes. Notwithstanding anything to the contrary provided herein or elsewhere, Company agrees to pay the Purchasers’
Expenses in accordance with Section 2.4. In addition, Company shall pay any and all stamp, transfer and other similar taxes
payable or determined to be payable in connection with the execution and delivery of the Documents and the Company agrees to hold
the Purchasers harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission
to pay such taxes. If any suit or proceeding arising from any of the foregoing is brought against any Purchaser, Company, to the
extent and in the manner reasonably directed by the Purchaser, will resist and defend such suit or proceeding or cause the same
to be resisted and defended by counsel reasonably approved by such Purchaser. If Company shall fail to do any act or thing which
each has covenanted and/or agreed to do under this Agreement and/or any other Document or any representation or warranty on the
part of Company contained in this Agreement and/or any other Document shall be breached, such Purchaser may, in its sole and absolute
discretion, do the same or cause it to be done or remedy any such breach, and may expend its funds for such purpose; and any and
all amounts so expended by such Purchaser shall be repayable to the Purchaser by Company immediately upon such Purchaser’s
demand therefor, with interest at a rate equal to eighteen (18%) percent during the period from and including the date funds are
so expended by such Purchaser to the date of repayment in full, and any such amounts due and owing to such Purchaser shall be
deemed to be part of the Liabilities secured hereunder and under the other Documents. The obligations of Company under this Section
6.3 shall survive the termination of this Agreement and the discharge of the other obligations of Company under the Documents.


 


6.4         Indemnity,
Etc. In addition to the payment of expenses pursuant to Section 6.3, Company agrees to indemnify, pay and hold each
Purchaser, and such Purchaser’s affiliates and their respective officers, directors, employees, agents, consultants, auditors,
and attorneys of any of them (collectively called the “Indemnitees”) harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of
any kind or nature whatsoever (including the reasonable fees and disbursements of counsel for such Indemnitees in connection with
any investigative, administrative or judicial proceeding commenced or threatened, whether or not such Indemnitee shall be designated
a party thereto) that may be imposed on, incurred by, or asserted against that Indemnitee, in any manner relating to or arising
out of this Agreement and/or the other Documents or the consummation of the transactions contemplated by this Agreement and/or
the other Documents (the “Indemnified Liabilities”); provided that Company shall have no obligation
to an Indemnitee hereunder with respect to Indemnified Liabilities directly resulting from the gross negligence or willful misconduct
of that Indemnitee, as determined by a court of competent jurisdiction by a final and nonappealable judgment. In no event shall
such Purchaser and/or any of its employees, agents, partners, affiliates, members, equity and/or debt holders, managers, officers,
directors and/or other related or similar type of Person, have any liability to the Company and/or any of its officers, directors,
employees, agent, attorneys, affiliates, consultants, equity and/or debt holders except for any actions or lack of actions of
such persons that are found by a court of competent jurisdiction after the time for all appeals has passed to have resulted directly
from such Person’s willful misconduct or gross negligence.


 


6.5         Counterparts;
Signatures. This Agreement may be executed in any number of counterparts, each of which counterparts, once they are executed
and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the
same agreement. This Agreement and the Documents may be executed by any party to this Agreement or any of the Documents by original
signature, facsimile and/or electronic signature.


 






    	 	31	 



     

    

 


6.6         Binding
Effects; Assignment. 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 a majority in interest of the Notes (other than by merger). A Purchaser may assign any or all of its rights under this
Agreement to any Person to whom the Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing
to be bound, with respect to the transferred Securities, by the provisions of the Documents that apply to the “Purchaser.”


 


6.7         Headings.
Captions contained in this Agreement are inserted only as a matter of convenience and in no way define, limit or extend the scope
or intent of this Agreement or any provision of this Agreement and shall not affect the construction of this Agreement.


 


6.8         Entire
Agreement. This Agreement, together with the other Documents, contains the entire agreement between the parties hereto with
respect to the transactions contemplated herein and therein and supersedes all prior representations, agreements, covenants and
understandings, whether oral or written, related to the subject matter of this Agreement and the other Documents.


 


6.9         GOVERNING
LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED EXCLUSIVELY IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAWS.


 


6.10       Severability
Of Provisions. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective only to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this
Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.


 


6.11       Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of)
any of the other Documents, whenever any Purchaser exercises a right, election, demand or option under a Document and the Company
does not timely perform its related obligations within the periods therein provided, then the Purchaser may rescind or withdraw,
in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole
or in part without prejudice to its future actions and rights; provided, however, that in the case of a rescission
of a conversion of a Note, the applicable Purchaser shall be required to return any shares of Common Stock subject to any such
rescinded conversion concurrently with the return to the Purchaser of the applicable Note.


 


6.12       Usury.
To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim,
and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at
any time hereafter in force, in connection with any claim, action or proceeding that may be brought by any Purchaser in order
to enforce any right or remedy under any Document. Notwithstanding any provision to the contrary contained in any Document, it
is expressly agreed and provided that the total liability of the Company under the Documents for payments in the nature of interest
shall not exceed the maximum lawful rate authorized under applicable law (the “Maximum Rate”), and, without
limiting the foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated with any
other sums in the nature of interest that the Company may be obligated to pay under the Documents exceed such Maximum Rate. It
is agreed that if the maximum contract rate of interest allowed by law and applicable to the Documents is increased or decreased
by statute or any official governmental action subsequent to the date hereof, the new maximum contract rate of interest allowed
by law will be the Maximum Rate applicable to the Documents from the effective date thereof forward, unless such application is
precluded by applicable law. If under any circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company
to any Purchaser with respect to indebtedness evidenced by the Documents, such excess shall be applied by the Purchaser to the
unpaid principal balance of any such indebtedness or be refunded to the Company, the manner of handling such excess to be at the
Purchaser’s election.


 






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6.13       Exculpation
Among Purchasers. Each Purchaser acknowledges that it is not relying upon any person or entity, other than the Company and
its representatives, in making its investment or decision to invest in the Company. Each Purchaser agrees that no Purchaser nor
the respective controlling persons, officers, directors, partners, members, agents, or employees of any Purchaser shall be liable
to any other Purchaser for any action heretofore or hereafter taken or omitted to be taken by any of them in connection with the
purchase of the Securities.


 


6.14       Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the 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 Documents or any amendments thereto. In addition, each and every reference
to share prices and shares of Common Stock in any 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.


 


6.15       JURISDICTION;
WAIVER. EACH PARTY HEREBY ACKNOWLEDGES THAT THIS AGREEMENT IS BEING SIGNED BY EACH OTHER PARTY IN PARTIAL CONSIDERATION OF
SUCH OTHER PARTY’S RIGHT TO ENFORCE IN THE JURISDICTION STATED BELOW THE TERMS AND PROVISION OF THIS AGREEMENT AND THE DOCUMENTS.
EACH PARTY IRREVOCABLY CONSENTS TO THE EXCLUSIVE AND SOLE JURISDICTION IN NEW YORK, NEW YORK AND VENUE IN ANY FEDERAL OR STATE
COURT IN NEW YORK, NEW YORK FOR SUCH PURPOSES AND WAIVES ANY AND ALL RIGHTS TO CONTEST SAID JURISDICTION AND VENUE AND ANY OBJECTION
THAT NEW YORK, NEW YORK IS NOT CONVENIENT. EACH PARTY HEREBY WAIVES ANY RIGHTS TO COMMENCE ANY ACTION AGAINST ANY OTHER PARTY
IN ANY JURISDICTION EXCEPT NEW YORK, NEW YORK. EACH PARTY HEREBY EXPRESSLY WAIVES ANY AND ALL RIGHTS TO A TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY WITH RESPECT TO ANY MATTER WHATSOEVER RELATING
TO, ARISING OUT OF OR IN ANY WAY CONNECTED WITH THE LOAN, THE DOCUMENTS AND/OR THE TRANSACTIONS WHICH ARE THE SUBJECT OF THE DOCUMENTS.


 


6.16       Survival.
The representations, and warranties of the Company and each Purchaser herein and/or in the other Documents shall survive the execution
and delivery hereof and the Closing Date; the obligations, Liabilities, agreements and covenants of the Company and each Purchaser
set forth herein and/or in the other Documents shall survive the execution and delivery hereof and the Closing Date, as shall
all rights and remedies of the Company and each Purchaser set forth in this Agreement and/or in any of the other Documents.


 


6.17       No
Integration. Neither the Company, nor any of its affiliates, nor any person acting on behalf of the Company or such affiliate,
will sell, offer for sale, or solicit offers to buy or otherwise negotiate with respect to any security (as defined in the Securities
Act) which will be integrated with the sale and/or issuance of any of the Securities in a manner which would require the registration
of the Securities under the Securities Act, or require stockholder approval, under the rules and regulations of the Trading Market
for the Common Stock. The Company will take all action that is appropriate or necessary to assure that its offerings of other
securities will not be integrated for purposes of the Securities Act or the rules and regulations of the Trading Market, with
the issuance of Securities contemplated herein.


 


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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first above written.


 


	COMPANY:	MANTRA
    VENTURE GROUP LTD.
	 	 	 
	 	By:	/s/
Larry Kristof
	 	Name:	Larry
    Kristof
	 	Title:	Chief
    Executive Officer








 






     

     

    

 


PURCHASER
SIGNATURE PAGES TO COPSYNC SECURITIES PURCHASE AGREEMENT


 


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


 


Name
of Purchaser: ________________________________________________________


 


Signature
of Authorized Signatory of Purchaser: __________________________________


 


Name
of Authorized Signatory: ____________________________________________________


 


Title
of Authorized Signatory: _____________________________________________________


 


Email
Address of Authorized Signatory: _____________________________________________


 


Facsimile
Number of Authorized Signatory: __________________________________________


 


Address
for Notice to Purchaser:


 


 


Address
for Delivery of Securities to Purchaser (if not same as address for notice):


 


 


EIN
Number: _______________________