Exhibit 10.1


 


SECURITIES
PURCHASE AGREEMENT


 


THIS
SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of March 1, 2021, is between RETO ECO-SOLUTIONS,
INC., a company incorporated under the laws of the British Virgin Islands, with its principal trading office located at c/o
Beijing REIT Technology Development Co., Ltd., Building X-702, 60 Anli Road, Chaoyang District, Beijing, People’s Republic
of China 100101 (the “Company”), and each of the investors listed on the Schedule of Buyers attached hereto
(individually, a “Buyer” and collectively the “Buyers”).


 


WITNESSETH


 


WHEREAS,
the Company and each Buyer desire to enter into this transaction for the Company to sell and the Buyers to purchase the Convertible
Debentures (as defined below) pursuant to an exemption from registration pursuant to Section 4(2) and/or Rule 506 of Regulation
D (“Regulation D”) as promulgated by the U.S. Securities and Exchange Commission (the “SEC”)
under the Securities Act of 1933, as amended (the “Securities Act”);


 


WHEREAS,
the parties desire that, upon the terms and subject to the conditions contained herein, the Company shall issue and sell to the
Buyer(s), as provided herein, and the Buyer(s) shall purchase $2,300,000 of convertible debentures in the form attached hereto
as “Exhibit A” (the “Convertible Debentures”), which shall be convertible into the Company’s
common shares, par value $0.0001 (the “Common Shares”) (as converted, the “Conversion Shares”)
which shall be purchased upon signing this Agreement (the “Closing), for a total purchase price of $2,300,000 (the
“Purchase Price”) in the amounts set forth opposite the Buyers name on Schedule I (the “Subscription
Amount”);


 


WHEREAS,
contemporaneously with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Registration
Rights Agreement (the “Registration Rights Agreement”) pursuant to which the Company has agreed to provide
certain registration rights under the Securities Act and the rules and regulations promulgated there under, and applicable state
securities laws;


 


WHEREAS,
contemporaneously with the execution and delivery of this Agreement, the Company is delivering Irrevocable Transfer Agent Instructions
(the “Irrevocable Transfer Agent Instructions”) to its transfer agent; and


 


WHEREAS,
the Convertible Debentures and the Conversion Shares are collectively referred to herein as the “Securities.”


 


AGREEMENT


 


NOW,
THEREFORE, in consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and each Buyer hereby agree as follows:


 


1.
PURCHASE AND SALE OF CONVERTIBLE DEBENTURES.


 


(a) Purchase
of Convertible Debentures. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below,
the Company shall issue and sell to each Buyer, and each Buyer severally, but not jointly, agrees to purchase from the Company
at the Closing Convertible Debentures in amounts corresponding with the Subscription Amount set forth opposite each Buyer’s
name on Schedule of Buyers attached as Schedule I hereto.


 






     


     


    




 


(b) Closing
Date. The Closing of the purchase of Convertible Debentures by the Buyers shall occur at the offices Yorkville Advisors Global,
LP, 1012 Springfield Avenue, Mountainside, NJ 07092. The date and time of the Closing shall be 10:00 a.m., New York time, on the
first Business Day on which the conditions to the Closing set forth in Sections 6 and 7 below are satisfied or waived (or such
other date as is mutually agreed to by the Company and each Buyer) (the “Closing Date”). As used herein “Business
Day” means any day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized
or required by law to remain closed.











 


(c) Form
of Payment; Deliveries. Subject to the satisfaction of the terms and conditions of this Agreement, on the Closing Date,
(i) the Buyers shall deliver to the Company such aggregate proceeds for the Convertible Debentures to be issued and sold to such
Buyer at the Closing, minus the fees to be paid directly from the proceeds of the Closing as set forth herein, and (ii) the
Company shall deliver to each Buyer, Convertible Debentures which such Buyer is purchasing at the Closing in amounts indicated
opposite such Buyer’s name on Schedule I, duly executed on behalf of the Company.


 


(d) Maximum
Shares. Notwithstanding anything in this Agreement to the contrary, the Company shall not issue any Common Shares pursuant
to the transactions contemplated hereby or any other Transaction Documents (including the Conversion) if the issuance of such
Common Shares would exceed the aggregate number of shares that the Company may issue in this transaction in compliance with the
Company’s obligations under the rules or regulations of Nasdaq (the number of shares which may be issued without violating
such rules and regulations is 4,824,586 (which is 19.99% of the Company’s outstanding Common Shares on the date hereof)
and shall be referred to as the “Exchange Cap”), except that such limitation shall not apply in the event that
the Company (A) obtains the approval of its stockholders as required by the applicable rules of the Nasdaq for issuances of shares
in excess of such amount or (B) obtains a written opinion from outside counsel to the Company, to the extent required by the Nasdaq,
that such approval is not required and Nasdaq agrees that such approval is not required. The Exchange Cap shall be appropriately
adjusted for any stock dividend, stock split, reverse stock split or similar transaction.


 


2.
BUYER’S REPRESENTATIONS AND WARRANTIES.


 


Each
Buyer, severally and not jointly, represents and warrants to the Company with respect to only itself that, as of the date hereof
and as of the Closing Date:


 


(a) Investment
Purpose. The Buyer is acquiring the Securities for its own account for investment only and not with a view towards, or for
resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the
Securities Act; provided, however, that by making the representations herein, such Buyer reserves the right to dispose of the
Securities at any time in accordance with or pursuant to an effective registration statement covering such Securities or an available
exemption under the Securities Act. Such Buyer does not presently have any agreement or understanding, directly or indirectly,
with any Person to distribute any of the Securities.


 






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(b) Accredited
Investor Status. The Buyer is an “Accredited Investor” as that term is defined in Rule 501(a)(3) of Regulation
D.


 


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


 


(d) Information.
The Buyer and its advisors (and his or, its counsel), if any, have been furnished with all materials relating to the business,
finances and operations of the Company and information he deemed material to making an informed investment decision regarding
his purchase of the Securities, which have been requested by such Buyer. The Buyer and its advisors, if any, have been afforded
the opportunity to ask questions of the Company and its management. Neither such inquiries nor any other due diligence investigations
conducted by such Buyer or its advisors, if any, or its representatives shall modify, amend or affect such Buyer’s right
to rely on the Company’s representations and warranties contained in Section 3 below. The Buyer understands that its investment
in the Securities involves a high degree of risk. The Buyer has sought such accounting, legal and tax advice, as it has considered
necessary to make an informed investment decision with respect to its acquisition of the Securities.


 


(e) Transfer
or Resale. The Buyer understands that: (i) the Securities have not been 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, (B) such Buyer
shall have delivered to the Company an opinion of counsel, in a generally acceptable form, to the effect that such Securities
to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration requirements,
or (C) such Buyer provides the Company with reasonable assurances (in the form of seller and broker representation letters) that
such Securities can be sold, assigned or transferred pursuant to Rule 144 promulgated under the Securities Act, as amended (or
a successor rule thereto) (collectively, “Rule 144”), in each case following the applicable holding period
set forth therein; and (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.


 






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(f) Legends.
The Buyer agrees to the imprinting, so long as its required by this Section 2(f), of a restrictive legend on the Securities in
substantially the following form:


 


THE
SECURITIES REPRESENTED BY THIS CERTIFICATE [AND THOSE SECURITIES INTO WHICH THEY ARE CONVERTIBLE] HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES [AND THOSE SECURITIES INTO WHICH THEY
ARE CONVERTIBLE] HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TOWARD RESALE AND MAY NOT BE OFFERED FOR
SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION
IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS


 


Certificates
evidencing the Conversion Shares shall not contain any legend (including the legend set forth above), (i) while a registration
statement covering the resale of such security is effective under the Securities Act, (ii) following any sale of such Conversion
Shares pursuant to Rule 144, (iii) if such Conversion Shares are eligible for sale under Rule 144, or (iv) if such legend is not
required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by
the staff of the SEC). The Buyer agrees that the removal of restrictive legend from certificates representing Securities as set
forth in this Section 3(f) is predicated upon the Company’s reliance that the Buyer will sell any Securities pursuant to
either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption
therefrom, and that if Securities are sold pursuant to a registration statement, they will be sold in compliance with the plan
of distribution set forth therein.


 


(g) Organization;
Authority. Such Buyer is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction
of its organization with the requisite power and authority to enter into and to consummate the transactions contemplated by the
Transaction Documents (as defined below) to which it is a party and otherwise to carry out its obligations hereunder and thereunder.


 


(h) Authorization,
Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of such Buyer and shall
constitute the legal, valid and binding obligations of such Buyer enforceable against such Buyer in accordance with its terms,
except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights
and remedies.


 


(i) No
Conflicts. The execution, delivery and performance by such Buyer of this Agreement and the consummation by such Buyer of the
transactions contemplated hereby will not (i) result in a violation of the organizational documents of such Buyer, (ii) conflict
with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which
such Buyer is a party or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal
and state securities laws) applicable to such Buyer, except, in the case of clauses (ii) and (iii) above, for such conflicts,
defaults, rights or violations which could not, individually or in the aggregate, reasonably be expected to have a material adverse
effect on the ability of such Buyer to perform its obligations hereunder.


 






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(j) Certain
Trading Activities. The Buyer has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding
with the Buyer, engaged in any transactions in the securities of the Company (including, without limitation, any Short Sales (as
defined below) involving the Company’s securities) during the period commencing as of the time that the Buyer first contacted
the Company or the Company’s agents regarding the specific investment in the Company contemplated by this Agreement and ending
immediately prior to the execution of this Agreement by such Buyer. The Buyer hereby agrees that it shall not directly or indirectly,
engage in any Short Sales involving the Company’s securities during the period commencing on the date hereof and ending
when no Convertible Debentures remain outstanding. “Short Sales” means all “short sales” as defined in Rule
200 promulgated under Regulation SHO under the 1934 Act (as defined below). The Buyer is aware that Short Sales and other hedging
activities may be subject to applicable federal and state securities laws, rules and regulations and the Buyer acknowledges that
the responsibility of compliance with any such federal or state securities laws, rules and regulations is solely the responsibility
of the Buyer.


 


(k) Trading
Limitation and Information. For so long as the Buyer holds any Convertible Debentures or Conversion Shares, provided no event
of default has occurred and is continuing, on any given Trading Day, the Buyer agrees that it (together with any affiliates) shall
not sell such number of Common Shares that would exceed 20% of the aggregate trading volume on such Trading Day. Upon the Company’s
request, the Buyer agrees to provide the Company with trading reports setting forth the number and average sales prices of Common
Shares sold the Buyer on each Trading Day the prior trading week along with the total aggregate number of Common Shares traded
on each Trading Day. “Trading Day” means a day on which the Common Shares are quoted or traded on an Eligible
Market on which the shares of Common Stock are then quoted or listed; provided, that in the event that the Common Shares are not
listed or quoted, then Trading Day shall mean a Business Day.


 


		3.	REPRESENTATIONS
                                         AND WARRANTIES OF THE COMPANY.



 


Except
as set forth under the corresponding section of the Disclosure Schedules which Disclosure Schedules shall be deemed a part hereof
and to qualify any representation or warranty otherwise made herein to the extent of such disclosure, the Company hereby makes
the representations and warranties set forth below to the Buyer:


 


(a) Organization
and Qualification. The Company and each of its Subsidiaries are entities duly formed, validly existing and in good standing
under the laws of the jurisdiction in which they are formed, and have the requisite power and authority to own their properties
and to carry on their business as now being conducted and as presently proposed to be conducted. The Company and each of its Subsidiaries
is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction in which its ownership of property
or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be
so qualified or be in good standing would not reasonably be expected to have a Material Adverse Effect (as defined below). As
used in this Agreement, “Material Adverse Effect” means any material adverse effect on (i) the business, properties,
assets, liabilities, operations (including results thereof), condition (financial or otherwise) or prospects of the Company and
its Subsidiaries, taken as a whole, (ii) the transactions contemplated hereby or in any of the other Transaction Documents or
any other agreements or instruments to be entered into by the Company in connection herewith or therewith or (iii) the authority
or ability of the Company to perform any of its obligations under any of the Transaction Documents (as defined below). “Subsidiaries”
means any Person in which the Company, directly or indirectly, owns a majority of the outstanding capital stock having voting
power or holds a majority of the equity or similar interest of such Person, and each of the foregoing, is individually referred
to herein as a “Subsidiary”.


 






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(b) Authorization;
Enforcement; Validity. The Company has the requisite power and authority to enter into and perform its obligations under
this Agreement and the other Transaction Documents and to issue the Securities in accordance with the terms hereof and thereof.
The execution and delivery of this Agreement and the other Transaction Documents by the Company and the consummation by the Company
of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Convertible Debentures,
the reservation for issuance and issuance of the Conversion Shares issuable upon conversion of the Convertible Debentures), have
been duly authorized by the Company’s board of directors and no further filing, consent or authorization is required by the Company,
its board of directors or its stockholders or other governmental body. This Agreement has been, and the other Transaction Documents
to which the Company is a party will be prior to the Closing, duly executed and delivered by the Company, and each constitutes
the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with its respective terms,
except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and
remedies and except as rights to indemnification and to contribution may be limited by federal or state securities law. “Transaction
Documents” means, collectively, this Agreement, the Convertible Debentures, the Registration Rights Agreement, the Irrevocable
Transfer Agent Instructions, and each of the other agreements and instruments entered into by the Company or delivered by the
Company in connection with the transactions contemplated hereby and thereby, as may be amended from time to time.


 


(c) Issuance
of Securities. The issuance of the Securities are duly authorized and, upon issuance and payment in accordance with the terms
of the Transaction Documents the Securities shall be validly issued, fully paid and non-assessable and free from all preemptive
or similar rights, mortgages, defects, claims, liens, pledges, charges, taxes, rights of first refusal, encumbrances, security
interests and other encumbrances (collectively “Liens”) with respect to the issuance thereof. As of the Closing
Date, the Company shall have reserved from its duly authorized capital stock not less than 300% of the maximum number of Common
Shares issuable upon conversion of all Convertible Debentures (assuming for purposes hereof that (x) such Convertible Debentures
are convertible at the Conversion Price (as defined therein) as of the date of determination, (y) any such conversion shall not
take into account any limitations on the conversion of the Convertible Debentures set forth therein, including the Floor Price).
Upon issuance or conversion in accordance with the Convertible Debentures, the Conversion Shares, when issued, will be validly
issued, fully paid and nonassessable and free from all preemptive or similar rights or Liens with respect to the issue thereof,
with the holders being entitled to all rights accorded to a holder of Common Shares.


 






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(d)
No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation
by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Convertible
Debentures, the Conversion Shares, and the reservation for issuance of the Conversion Shares) will not (i) result in a violation
of the Articles of Incorporation (as defined below), Bylaws (as defined below), certificate of formation, memorandum of association,
articles of association, bylaws or other organizational documents of the Company or any of its Subsidiaries, or any capital stock
or other securities of the Company or any of its Subsidiaries, (ii) conflict with, or constitute a default under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company
or any of its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree
(including, without limitation, U.S. federal and state securities laws and regulations, the securities laws of the jurisdictions
of the Company’s incorporation or in which it or its subsidiaries operate and the rules and regulations of the Nasdaq (the “Principal
Market”) and including all applicable laws, rules and regulations of the Cayman Islands) applicable to the Company or
any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected, except
in the case of (ii) and (iii) for any conflict, default, right or violation that would not reasonably be expected to result in
a Material Adverse Effect.


 


(e) Consents.
The Company is not required to obtain any material consent from, authorization or order of, or make any filing or registration
with (other than any filings as may be required by any federal or state securities agencies and any filings as may be required
by the Principal Market), any Governmental Entity (as defined below) or any regulatory or self-regulatory agency or any other Person
in order for it to execute, deliver or perform any of its obligations under or contemplated by the Transaction Documents, in each
case, in accordance with the terms hereof or thereof. All consents, authorizations, orders, filings and registrations which the
Company or any Subsidiary is required to obtain pursuant to the preceding sentence have been or will be obtained or effected on
or prior to the Closing Date, and neither the Company nor any of its Subsidiaries are aware of any facts or circumstances which
might prevent the Company or any of its Subsidiaries from obtaining or effecting any of the registration, application or filings
contemplated by the Transaction Documents. The Company is not in violation of the requirements of the Principal Market and has
no knowledge of any facts or circumstances which could reasonably lead to delisting or suspension of the Common Shares in the
foreseeable future. The Company has notified the Principal Market of the issuance of all of the Securities hereunder, which does
not require obtaining the approval of the stockholders of the Company or any other Person or Governmental Entity, and the Principal
Market has completed its review of the related Listing of Additional Share form. “Governmental Entity” means
any nation, state, county, city, town, village, district, or other political jurisdiction of any nature, federal, state, local,
municipal, foreign, or other government, governmental or quasi-governmental authority of any nature (including any governmental
agency, branch, department, official, or entity and any court or other tribunal), multi-national organization or body; or
body exercising, or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing
authority or power of any nature or instrumentality of any of the foregoing, including any entity or enterprise owned or controlled
by a government or a public international organization or any of the foregoing.


 






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(f) Acknowledgment
Regarding Buyer’s Purchase of Securities. The Company acknowledges and agrees that each Buyer is acting solely in the capacity
of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby and
that no Buyer is (i) an officer or director of the Company or any of its Subsidiaries, (ii) to its knowledge, an “affiliate”
(as defined in Rule 144 promulgated under the 1933 Act (or a successor rule thereto) (collectively, “Rule 144”))
of the Company or any of its Subsidiaries or (iii) to its knowledge, a “beneficial owner” of more than 10% of the
Common Shares (as defined for purposes of Rule 13d-3 of the 1934 Act). The Company further acknowledges that no Buyer is acting
as a financial advisor or fiduciary of the Company or any of its Subsidiaries (or in any similar capacity) with respect to the
Transaction Documents and the transactions contemplated hereby and thereby, and any advice given by a Buyer or any of its representatives
or agents in connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental
to such Buyer’s purchase of the Securities. The Company further represents to each Buyer that the Company’s decision to enter
into the Transaction Documents to which it is a party has been based solely on the independent evaluation by the Company and its
representatives.


 


(g) No
Integrated Offering. None of the Company, its Subsidiaries or any of their affiliates, nor any Person acting on their behalf
has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances
that would cause this offering of the Securities to require approval of stockholders of the Company under any applicable stockholder
approval provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation system
on which any of the securities of the Company are listed or designated for quotation. None of the Company, its Subsidiaries, their
affiliates nor any Person acting on their behalf will take any action or steps that would cause the offering of any of the Securities
to be integrated with other offerings of securities of the Company.


 


(h) Dilutive
Effect. The Company understands and acknowledges that the number of Conversion Shares will increase in certain circumstances.
The Company further acknowledges its obligation to issue the Conversion Shares upon conversion of the Convertible Debentures in
accordance with this Agreement and the Convertible Debentures is, absolute and unconditional regardless of the dilutive effect
that such issuance may have on the ownership interests of other stockholders of the Company.


 


(i) Application
of Takeover Protections; Rights Agreement. The Company and its board of directors have taken all necessary action, if
any, in order to render inapplicable any control share acquisition, interested stockholder, business combination, poison pill
(including, without limitation, any distribution under a rights agreement), stockholder rights plan or other similar anti-takeover
provision under the Articles of Incorporation, Bylaws or other organizational documents or the laws of the jurisdiction of its
incorporation or otherwise which is or could become applicable to any Buyer as a result of the transactions contemplated by this
Agreement, including, without limitation, the Company’s issuance of the Securities and any Buyer’s ownership of the Securities.


 






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(j)
SEC Documents; Financial Statements. During the two (2) years prior to the date hereof, the Company has filed all
reports, schedules, forms, proxy statements, statements and other documents required to be filed by it with the SEC pursuant to
the reporting requirements of the Securities Exchange Act of 1934, as amended (the “1934 Act”) (all of the
foregoing filed prior to the date hereof and all exhibits and appendices included therein and financial statements, notes and
schedules thereto and documents incorporated by reference therein being hereinafter referred to as the “SEC Documents”).
The Company has delivered or has made available to the Buyers or their respective representatives true, correct and complete copies
of each of the SEC Documents not available on the EDGAR system. As of their respective dates, the SEC Documents complied in all
material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable
to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading. As of their respective dates, the financial
statements of the Company included in the SEC Documents complied in all material respects with applicable accounting requirements
and the published rules and regulations of the SEC with respect thereto as in effect as of the time of filing. Such financial
statements have been prepared in accordance with generally accepted accounting principles (“GAAP”), consistently
applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto,
or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements)
and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments
which will not be material, either individually or in the aggregate). The reserves, if any, established by the Company or the
lack of reserves, if applicable, are reasonable based upon facts and circumstances known by the Company on the date hereof and
there are no loss contingencies that are required to be accrued by the Statement of Financial Accounting Standard No. 5 of the
Financial Accounting Standards Board which are not provided for by the Company in its financial statements or otherwise. No other
information provided by or on behalf of the Company to any of the Buyers which is not included in the SEC Documents (including,
without limitation, information in the disclosure schedules to this Agreement) contains any untrue statement of a material fact
or omits to state any material fact necessary in order to make the statements therein not misleading, in the light of the circumstance
under which they are or were made. The Company is not currently contemplating to amend or restate any of the financial statements
(including, without limitation, any notes or any letter of the independent accountants of the Company with respect thereto) included
in the SEC Documents (the “Financial Statements”), nor is the Company currently aware of facts or circumstances
which would require the Company to amend or restate any of the Financial Statements, in each case, in order for any of the Financials
Statements to be in compliance with GAAP and the rules and regulations of the SEC. The Company has not been informed by its independent
accountants that they recommend that the Company amend or restate any of the Financial Statements or that there is any need for
the Company to amend or restate any of the Financial Statements.


 






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(k) Absence
of Certain Changes. Since the date of the Company’s most recent audited financial statements contained in a Form 20-F, there
has been no Material Adverse Effect, nor any event or occurrence specifically affecting the Company or its Subsidiaries that would
be reasonably expected to result in a Material Adverse Effect. Since the date of the Company’s most recent audited financial statements
contained in a Form 20-F, neither the Company nor any of its Subsidiaries has (i) declared or paid any dividends, (ii) sold any
material assets, individually or in the aggregate, outside of the ordinary course of business or (iii) made any material capital
expenditures, individually or in the aggregate, outside of the ordinary course of business. Neither the Company nor any of its
Subsidiaries has taken any steps to seek protection pursuant to any law or statute relating to bankruptcy, insolvency, reorganization,
receivership, liquidation or winding up, nor does the Company or any Subsidiary have any knowledge or reason to believe that any
of their respective creditors intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which
would reasonably lead a creditor to do so.


 


(l) No
Undisclosed Events, Liabilities, Developments or Circumstances. No event, liability, development or circumstance has occurred
or exists, or is reasonably expected to exist or occur specific to the Company, any of its Subsidiaries or any of their respective
businesses, properties, liabilities, prospects, operations (including results thereof) or condition (financial or otherwise),
that has not been publicly disclosed and would reasonably be expected to have a Material Adverse Effect.


 


(m) Conduct
of Business; Regulatory Permits. Neither the Company nor any of its Subsidiaries is in violation of any term under its
Articles of Incorporation, any certificate of designation, preferences or rights of any other outstanding series of preferred
stock of the Company or any of its Subsidiaries or Bylaws or their organizational charter, certificate of formation, memorandum
of association, articles of association, Articles of Incorporation or certificate of incorporation or bylaws, respectively. Neither
the Company nor any of its Subsidiaries is in violation of any judgment, decree or order or any statute, ordinance, rule or regulation
applicable to the Company or any of its Subsidiaries, and neither the Company nor any of its Subsidiaries will conduct its business
in violation of any of the foregoing, except in all cases for violations which would not reasonably be expected to have a Material
Adverse Effect. Without limiting the generality of the foregoing, the Company is not in violation of any of the rules, regulations
or requirements of the Principal Market and has no knowledge of any facts or circumstances that could reasonably lead to delisting
or suspension of the Common Shares by the Principal Market in the foreseeable future. During the one year prior to the date hereof,
(i) the Common Shares has been listed or designated for quotation on the Principal Market, (ii) trading in the Common Shares has
not been suspended by the SEC or the Principal Market and (iii) the Company has received no communication, written or oral, from
the SEC or the Principal Market regarding the suspension or delisting of the Common Stock from the Principal Market, which has
not been publicly disclosed. The Company and each of its Subsidiaries possess all certificates, authorizations and permits issued
by the appropriate regulatory authorities necessary to conduct their respective businesses, except where the failure to possess
such certificates, authorizations or permits would not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, and neither the Company nor any of its Subsidiaries has received any notice of proceedings relating to the revocation
or modification of any such certificate, authorization or permit. There is no agreement, commitment, judgment, injunction, order
or decree binding upon the Company or any of its Subsidiaries or to which the Company or any of its Subsidiaries is a party which
has or would reasonably be expected to have the effect of prohibiting or materially impairing any business practice of the Company
or any of its Subsidiaries, any acquisition of property by the Company or any of its Subsidiaries or the conduct of business by
the Company or any of its Subsidiaries as currently conducted other than such effects, individually or in the aggregate, which
have not had and would not reasonably be expected to have a Material Adverse Effect on the Company or any of its Subsidiaries.


 






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(n) Foreign
Corrupt Practices. Neither the Company nor any of its Subsidiaries nor any director, officer, agent, employee, nor any other
person acting for or on behalf of the Company or any of its Subsidiaries (individually and collectively, a “Company Affiliate”)
have violated the U.S. Foreign Corrupt Practices Act (the “FCPA) or any other applicable anti-bribery or anti-corruption
laws, nor has any Company Affiliate offered, paid, promised to pay, or authorized the payment of any money, or offered, given,
promised to give, or authorized the giving of anything of value, to any officer, employee or any other person acting in an official
capacity for any Governmental Entity to any political party or official thereof or to any candidate for political office (individually
and collectively, a “Government Official”) or to any person under circumstances where such Company Affiliate
knew or was aware of a high probability that all or a portion of such money or thing of value would be offered, given or promised,
directly or indirectly, to any Government Official, for the purpose, in violation of applicable law, of: (i) (A) influencing any
act or decision of such Government Official in his/her official capacity, (B) inducing such Government Official to do or omit
to do any act in violation of his/her lawful duty, (C) securing any improper advantage, or (D) inducing such Government Official
to influence or affect any act or decision of any Governmental Entity, or (ii) assisting the Company or its Subsidiaries in obtaining
or retaining business for or with, or directing business to, the Company or its Subsidiaries.


 


(o) Equity
Capitalization.


 


(i) Authorized
and Outstanding Capital Stock. As of the date hereof, the Company is authorized to issue 200,000,000 Common Shares, of which,
24,135,000 are issued and outstanding.


 


(ii) Valid
Issuance; Available Shares. All of such outstanding shares are duly authorized and have been validly issued and are fully
paid and nonassessable.


 


(iii) Existing
Securities; Obligations. Except as disclosed in the SEC Documents: (A) none of the Company’s or any Subsidiary’s shares,
interests or capital stock is subject to preemptive rights or any other similar rights or Liens suffered or permitted by the Company
or any Subsidiary; (B) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of
any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares,
interests or capital stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements
by which the Company or any of its Subsidiaries is or may become bound to issue additional shares, interests or capital stock
of the Company or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any shares, interests or
capital stock of the Company or any of its Subsidiaries; (C) there are no agreements or arrangements under which the Company
or any of its Subsidiaries is obligated to register the sale of any of their securities under the 1933 Act (except pursuant to
this Agreement); (D) there are no outstanding securities or instruments of the Company or any of its Subsidiaries which contain
any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company
or any of its Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries; (E) there
are no securities or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities;
and (G) neither the Company nor any Subsidiary has any stock appreciation rights or “phantom stock” plans or agreements
or any similar plan or agreement.


 


(iv) Organizational
Documents. The Company has furnished to the Buyers or filed on EDGAR true, correct and complete copies of the Company’s Articles
of Incorporation, as amended and as in effect on the date hereof (the “Articles of Incorporation”), and the
Company’s bylaws, as amended and as in effect on the date hereof (the “Bylaws”), and the terms of all convertible
securities and the material rights of the holders thereof in respect thereto.


 






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(p) Litigation.
Except as disclosed in the SEC Documents, there is no action, suit, arbitration, proceeding, inquiry or investigation before or
by the Principal Market, any court, public board, other Governmental Entity, self-regulatory organization or body pending or, to
the knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries, the Common Shares or any
of the Company’s or its Subsidiaries’ officers or directors, whether of a civil or criminal nature or otherwise, in their capacities
as such, which would reasonably be expected to result in a Material Adverse Effect. After reasonable inquiry of its employees,
the Company is not aware of any event which might result in or form the basis for any such action, suit, arbitration, investigation,
inquiry or other proceeding. Without limitation of the foregoing, there has not been, and to the knowledge of the Company, there
is not pending or contemplated, any investigation by the SEC involving the Company, any of its Subsidiaries or any current or
former director or officer of the Company or any of its Subsidiaries. Neither the Company nor any of its Subsidiaries is the subject
of any order, writ, judgment, injunction, decree, determination or award of any Governmental Entity that would reasonably be expected
to result in a Material Adverse Effect.


 


(q) Insurance.
The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and
risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company
and its Subsidiaries are engaged. In accordance with the previous sentence, the Company currently maintains no insurance policies.
Neither the Company nor any such Subsidiary has been refused any insurance coverage sought or applied for, and neither the Company
nor any such Subsidiary has any reason to believe that it will be unable to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost
that would not have a Material Adverse Effect.


 


(r) Manipulation
of Price. Neither the Company nor any of its Subsidiaries has, and, to the knowledge of the Company, no Person acting on their
behalf has, directly or indirectly, (i) taken any action designed to cause or to result in the stabilization or manipulation of
the price of any security of the Company or any of its Subsidiaries to facilitate the sale or resale of any of the Securities,
(ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed
to pay to any Person any compensation for soliciting another to purchase any other securities of the Company or any of its Subsidiaries.


 






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(s) Registration
Eligibility. The Company is eligible to register the resale of the Conversion Shares by the Buyers using Form F-3 promulgated
under the 1933 Act.


 


(t) Shell
Company Status. The Company is not, and has never been, an issuer identified in, or subject to, Rule 144(i).


 


(u) Money
Laundering. The Company and its Subsidiaries are in compliance with, and have not previously violated, the USA Patriot Act
of 2001 and all other applicable U.S. and non-U.S. anti-money laundering laws and regulations, including, but not limited to, the
laws, regulations and Executive Orders and sanctions programs (“Sanctions Programs”) administered by the U.S.
Office of Foreign Assets Control (“OFAC”), including, without limitation, (i) Executive Order 13224 of September
23, 2001 entitled, “Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support
Terrorism” (66 Fed. Reg. 49079 (2001)); and any regulations contained in 31 CFR, Subtitle B, Chapter V.


 


(v) Disclosure.
The Company confirms that neither it nor any other Person acting on its behalf has provided any of the Buyers or their agents
or counsel with any information that constitutes or could reasonably be expected to constitute material, non-public information
concerning the Company or any of its Subsidiaries, other than the existence of the transactions contemplated by this Agreement
and the other Transaction Documents. The Company understands and confirms that each of the Buyers will rely on the foregoing representations
in effecting transactions in securities of the Company. All disclosure provided to the Buyers regarding the Company and its Subsidiaries,
their businesses and the transactions contemplated hereby, including the schedules to this Agreement, furnished by or on behalf
of the Company or any of its Subsidiaries, taken as a whole, is true and correct and does not contain any untrue statement of
a material fact or omit to state any material fact necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading. All of the written information furnished after the date hereof by or
on behalf of the Company or any of its Subsidiaries to each Buyer pursuant to or in connection with this Agreement and the other
Transaction Documents, taken as a whole, will be true and correct in all material respects as of the date on which such information
is so provided and will not contain any untrue statement of a material fact or omit to state any material fact necessary in order
to make the statements made therein, in the light of the circumstances under which they were made, not misleading. No event or
circumstance has occurred or information exists with respect to the Company or any of its Subsidiaries or its or their business,
properties, liabilities, prospects, operations (including results thereof) or conditions (financial or otherwise), which, under
applicable law, rule or regulation, requires public disclosure at or before the date hereof or announcement by the Company but
which has not been so publicly disclosed. All financial projections and forecasts that have been prepared by or on behalf of the
Company or any of its Subsidiaries and made available to the Buyers have been prepared in good faith based upon reasonable assumptions
and represented, at the time each such financial projection or forecast was delivered to each Buyer, the Company’s best estimate
of future financial performance (it being recognized that such financial projections or forecasts are not to be viewed as facts
and that the actual results during the period or periods covered by any such financial projections or forecasts may differ from
the projected or forecasted results). The Company acknowledges and agrees that no Buyer makes or has made any representations
or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 2.


 






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


 


(x) Private
Placement. Assuming the accuracy of the Buyers’ representations and warranties set forth in Section 2, no registration
under the Securities Act is required for the offer and sale of the Securities by the Company to the Buyers as contemplated hereby.
The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Primary Market.


 


		4.	COVENANTS.



 


(a) Reporting
Status. For the period beginning on the date hereof, and ending 6 months after the date on which all the Convertible Debentures
are no longer outstanding (the “Reporting Period”), the Company shall use its best efforts to file on a timely
basis all reports required to be filed with the SEC pursuant to the 1934 Act, and the Company shall not terminate its status as
an issuer required to file reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would no longer
require or otherwise permit such termination.


 


(b) Use
of Proceeds. Neither the Company nor any Subsidiary will, directly or indirectly, use the proceeds of the transactions contemplated
herein to repay any loans to any executives or employees of the Company. Neither the Company nor any Subsidiary will, directly
or indirectly, use the proceeds of the transactions contemplated herein, or lend, contribute, facilitate or otherwise make
available such proceeds to any Person (i) to fund, either directly or indirectly, any activities or business of or with any Person
that is identified on the list of Specially Designated Nationals and Blocker Persons maintained by OFAC, or in any country or
territory, that, at the time of such funding, is, or whose government is, the subject of Sanctions Programs, or (ii) in any other
manner that will result in a violation of Sanctions Programs.


 


(c) Listing.
The Company shall promptly secure the listing or designation for quotation (as the case may be) of all of the Underlying Securities
(as defined below) upon each national securities exchange and automated quotation system, if any, upon which the Common Shares
are then listed or designated for quotation (as the case may be, each an “Eligible Market”), subject to official
notice of issuance, and shall use reasonable efforts to maintain such listing or designation for quotation (as the case may be)
of all Underlying Securities from time to time issuable under the terms of the Transaction Documents on such Eligible Market for
the Reporting Period. Neither the Company nor any of its Subsidiaries shall take any action which could be reasonably expected
to result in the delisting or suspension of the Common Shares on an Eligible Market during the Reporting Period. The Company shall
pay all fees and expenses in connection with satisfying its obligations under this Section 4(c). “Underlying Securities”
means the (i) the Conversion Shares, and (ii) any common shares of the Company issued or issuable with respect to the Conversion
Shares, including, without limitation, (1) as a result of any stock split, stock dividend, recapitalization, exchange or similar
event or otherwise and (2) shares of capital stock of the Company into which the Common Shares are converted or exchanged without
regard to any limitations on conversion of the Convertible Debentures.


 






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(d) Fees.
The Company shall pay to YA Global II SPV, LLC, an affiliate of the lead Buyer (the “Subsidiary Fund”), a commitment
fee (the “Commitment Fee”) equal to 3.5% of the Purchase Price of the Closing and a due diligence and structuring
fee of $10,000. The Commitment Fee due and payable at the Closing shall be deducted from the gross proceeds of the Closing. The
due diligence and structuring fee shall be deducted from the gross proceeds of the Closing. The Company authorizes each Buyer
to deduct any fees due hereunder from the gross process of the purchase of any Convertible Debentures.


 


(e) Pledge
of Securities. Notwithstanding anything to the contrary contained in this Agreement, the Company acknowledges and agrees that,
subject to compliance with applicable federal and state securities laws, the Securities may be pledged by an Investor in connection
with a bona fide margin agreement or other loan or financing arrangement that is secured by the Securities. The Company hereby
agrees to execute and deliver such documentation as a pledgee of the Securities may reasonably request in connection with a pledge
of the Securities to such pledgee by a Buyer.


 


(f) Disclosure
of Transactions and Other Material Information. On or before 9:30 a.m., New York time, on the first Business Day after the
date of this Agreement, the Company shall file a current report of foreign private issuer on Form 6-K describing all the material
terms of the transactions contemplated by the Transaction Documents in the form required by the 1934 Act and attaching all the
material Transaction Documents (including, without limitation, this Agreement (and all schedules to this Agreement) and the form
of Statement of Designations) (including all attachments, the “Current Report”). From and after the filing
of the Current Report, the Company shall have disclosed all material, non-public information (if any) provided to any of the Buyers
by the Company or any of its Subsidiaries or any of their respective officers, directors, employees or agents in connection with
the transactions contemplated by the Transaction Documents. In addition, effective upon the filing of the Current Report, the
Company acknowledges and agrees that any and all confidentiality or similar obligations with respect to the transactions contemplated
by the Transaction Documents under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any
of their respective officers, directors, affiliates, employees or agents, on the one hand, and any of the Buyers or any of their
affiliates, on the other hand, shall terminate. The Company shall not, and the Company shall cause each of its Subsidiaries and
each of its and their respective officers, directors, employees and agents not to, provide any Buyer with any material, non-public
information regarding the Company or any of its Subsidiaries from and after the date hereof without the express prior written
consent of such Buyer (which may be granted or withheld in such Buyer's sole discretion).


 






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(g) Reservation
of Shares. So long as any of the Convertible Debentures remain outstanding, the Company shall take all action necessary to
at all times have authorized, and reserved for the purpose of issuance, no less than 300% of the maximum number of Common Shares
issuable upon conversion of all the Convertible Debentures then outstanding (assuming for purposes hereof that (x) the Convertible
Debentures are convertible at the Conversion Price then in effect, and (y) any such conversion shall not take into account any
limitations on the conversion of the Convertible Debentures, including the Floor Price) (the “Required Reserve Amount”);
provided that at no time shall the number of Common Shares reserved pursuant to this Section 4(g) be reduced other than proportionally
in connection with any conversion and/or redemption, or reverse stock split. If at any time the number of Common Shares authorized
and reserved for issuance is not sufficient to meet the Required Reserved Amount, the Company will promptly take all corporate
action necessary to authorize and reserve a sufficient number of shares, including, without limitation, calling a special meeting
of stockholders to authorize additional shares to meet the Company's obligations pursuant to the Transaction Documents, in the
case of an insufficient number of authorized shares, recommending that stockholders vote in favor of an increase in such authorized
number of shares sufficient to meet the Required Reserved Amount.


 


(h) Conduct
of Business. The business of the Company and its Subsidiaries shall not be conducted in violation of any law, ordinance or
regulation of any Governmental Entity, except where such violations would not reasonably be expected to result, either individually
or in the aggregate, in a Material Adverse Effect.


 


(i) From
the date hereof until (A) no more than $1,000,000 of Debentures remain outstanding, or (B) the first date when each of the following
conditions are satisfied: (i) 9 months have elapsed from the Closing Date and the Buyers are eligible to freely resell Conversion
Shares pursuant to Rule 144, (ii) the closing price of the Common Shares during each of the five (5) consecutive prior Trading
Days shall be at least 150% of the Floor Price (as defined in the Debentures), and (iii) no Event of Default (as defined in the
Debentures) shall have occurred), unless the holders of at least 67% in principal amount of the then outstanding Convertible Debentures
shall have given prior written consent, the Company shall not, and shall not permit any of its subsidiaries (whether or not a
subsidiary on the date hereof) to, directly or indirectly (i) other than Permitted Indebtedness, enter into, create, incur, assume,
guarantee or suffer to exist any indebtedness for borrowed money of any kind, including, but not limited to, a guarantee, on or
with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits
therefrom, (ii) other than Permitted Liens, enter into, create, incur, assume or suffer to exist any lien, security interest,
option or other charge or encumbrance (each, a “Lien”) of any kind, on or with respect to any of its property
or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom, or (iii) amend its charter
documents, including, without limitation, its certificate of incorporation and bylaws, in any manner that materially and adversely
affects any rights of the holders of the Convertible Debentures.


 






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“Permitted
Indebtedness” shall mean: (i) indebtedness evidenced by the Convertible Debentures; (ii) indebtedness described on a
Disclosure Schedule attached hereto; (iii) indebtedness incurred solely for the purpose of financing the acquisition or lease
of any equipment, including capital lease obligations with no recourse other than to such equipment; (iv) indebtedness (A) the
repayment of which has been subordinated to the payment of the Convertible Debentures on terms and conditions acceptable to the
Buyers, including with regard to interest payments and repayment of principal, (B) which does not mature or otherwise require
or permit redemption or repayment prior to or on the 91st day after the maturity date of any Convertible Debentures then outstanding;
and (C) which is not secured by any assets of the Company or its subsidiaries; (v) indebtedness associated with acquiring new
intellectual property assets and licenses, so long as the proceeds are going to the party(ies) from which the Company is acquiring
the assets, licenses, and other properties and (vi) any indebtedness (other than the indebtedness set out in (i) – (v) above)
incurred after the date hereof, provided that such indebtedness does not exceed $1,500,000 at any given time.


 


“Permitted
Liens” shall mean (1) any security interest granted to the Buyers to secure the obligations under the Convertible Debentures,
(2) any prior security interest granted to the Buyers, (3) existing Liens disclosed by the Company on a Disclosure Schedule attached
hereto; (4) inchoate Liens for taxes, assessments or governmental charges or levies not yet due, as to which the grace period,
if any, related thereto has not yet expired, or being contested in good faith and by appropriate proceedings for which adequate
reserves have been established in accordance with GAAP; (5) Liens of carriers, materialmen, warehousemen, mechanics and landlords
and other similar Liens which secure amounts which are not yet overdue by more than 60 days or which are being contested in good
faith by appropriate proceedings for which adequate reserves have been established in accordance with GAAP; (6) licenses, sublicenses,
leases or subleases granted to other persons not materially interfering with the conduct of the business of the Company; (7) Liens
securing capitalized lease obligations and purchase money indebtedness incurred solely for the purpose of financing an acquisition
or lease; (8) easements, rights-of-way, restrictions, encroachments, municipal zoning ordinances and other similar charges or
encumbrances, and minor title deficiencies, in each case not securing debt and not materially interfering with the conduct of
the business of the Company and not materially detracting from the value of the property subject thereto; (9) Liens arising out
of the existence of judgments or awards which judgments or awards do not constitute an Event of Default; (10) Liens incurred in
the ordinary course of business in connection with workers compensation claims, unemployment insurance, pension liabilities and
social security benefits and Liens securing the performance of bids, tenders, leases and contracts in the ordinary course of business,
statutory obligations, surety bonds, performance bonds and other obligations of a like nature (other than appeal bonds) incurred
in the ordinary course of business (exclusive of obligations in respect of the payment for borrowed money); (11) Liens in favor
of a banking institution arising by operation of law encumbering deposits (including the right of set-off) and contractual set-off
rights held by such banking institution and which are within the general parameters customary in the banking industry and only
burdening deposit accounts or other funds maintained with a creditor depository institution; (12) usual and customary set-off
rights in leases and other contracts; (13) escrows in connection with acquisitions and dispositions and (14) royalties and other
rights to revenue derived from the sale of the Company’s products that are granted in the ordinary course of business.





 



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5.
REGISTER; TRANSFER AGENT INSTRUCTIONS; LEGEND.


 


(a) Register.
The Company shall maintain at its principal executive offices or with the Transfer Agent (or at such other office or agency of
the Company as it may designate by notice to each holder of Securities), a register for the Convertible Debentures in which the
Company shall record the name and address of the Person in whose name the Convertible Debentures have been issued (including the
name and address of each transferee), the amount of Convertible Debentures held by such Person, and the number of Conversion Shares
issuable upon conversion of the Convertible Debentures held by such Person. The Company shall keep the register open and available
at all times during business hours for inspection of any Buyer or its legal representatives.


 


(b) Transfer
Restrictions. 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 Buyer or in connection with a pledge as contemplated herein, the Company may require the transferor thereof to provide to
the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance
of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration
of such transferred Securities under the Securities Act. As a condition of 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 Buyer under this Agreement.


 


6.
CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.


 


The
obligation of the Company hereunder to issue and sell the Convertible Debentures to each Buyer at the Closing is subject to the
satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Company's
sole benefit and may be waived by the Company at any time in its sole discretion by providing each Buyer with prior written notice
thereof:


 


(a) Such
Buyer shall have executed each of the Transaction Documents to which it is a party and delivered the same to the Company.


 


(b) Such
Buyer and each other Buyer shall have delivered to the Company the Purchase Price (less, in the case of any Buyer, the amounts
withheld pursuant to Section 4(d)) for the Convertible Debentures being purchased by such Buyer at the Closing by wire transfer
of immediately available funds in accordance with the Closing Statement.


 


(c) The
representations and warranties of such Buyer shall be true and correct in all material respects as of the date when made and as
of the Closing Date as though originally made at that time (except for representations and warranties that speak as of a specific
date, which shall be true and correct as of such specific date), and such Buyer shall have performed, satisfied and complied in
all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied
with by such Buyer at or prior to the Closing Date.


 






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7.
CONDITIONS TO EACH BUYER'S OBLIGATION TO PURCHASE.


 


The
obligation of each Buyer hereunder to purchase its Convertible Debentures at the Closing is subject to the satisfaction, at or
before the Closing Date, of each of the following conditions, provided that these conditions are for each Buyer's sole benefit
and may be waived by such Buyer at any time in its sole discretion by providing the Company with prior written notice thereof:


 


(a) The
Company shall have duly executed and delivered to such Buyer each of the Transaction Documents to which it is a party and the
Company shall have duly executed and delivered to such Buyer such aggregate principal amount of Convertible Debentures as is set
forth opposite such Buyer's name in column (b) of the Schedule of Buyers for the Closing.


 


(b) Such
Buyer shall have received the opinion of counsel/s to the Company, dated as of the Closing Date, in a form reasonably acceptable
to such Buyer.


 


(c) The
Company shall have delivered to each Buyer copies of its and each Subsidiaries certified copies of its charter, as well as any
shareholder or operating agreements by or among the shareholders or members of any of the Company’s Subsidiaries.


 


(d) The
Company shall have delivered to such Buyer a certificate evidencing the incorporation and good standing of the Company issued
by the Registrar for the British Virgin Islands as of a date within ten (10) days of the Closing Date.


 


(e) Each
and every representation and warranty of the Company shall be true and correct in all material respects (other than representations
and warranties qualified by materiality, which shall be true and correct in all respects) as of the date when made and as of the
Closing Date as though originally made at that time (except for representations and warranties that speak as of a specific date,
which shall be true and correct as of such specific date) and the Company shall have performed, satisfied and complied in all
respects with the covenants, agreements and conditions required to be performed, satisfied or complied with by the Company at
or prior to the Closing Date, as set forth in section 3 and 4.


 


(f) The
Common Shares (A) shall be designated for quotation or listed (as applicable) on the Principal Market and (B) shall not have been
suspended, as of the Closing Date, by the SEC or the Principal Market from trading on the Principal Market nor shall suspension
by the SEC or the Principal Market have been threatened, as of the Closing Date, either (I) in writing by the SEC or the Principal
Market or (II) by falling below the minimum maintenance requirements of the Principal Market.


 


(g) The
Company shall have obtained all governmental, regulatory or third-party consents and approvals, if any, necessary for the sale
of the Securities, including without limitation, those required by the Principal Market, if any.


 


(h) No
statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or Governmental Entity of competent jurisdiction that prohibits the consummation of any of the transactions contemplated
by the Transaction Documents.


 






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(i) Since
the date of execution of this Agreement, no event or series of events shall have occurred that has resulted in or would reasonably
be expected to result in a Material Adverse Effect.


 


(j) The
Company shall have obtained approval of the Principal Market to list or designate for quotation (as the case may be) the Conversion
Shares, if applicable.


 


(k) Such
Buyer shall have received a letter, duly executed by an officer of the Company, setting forth the wire amounts of each Buyer and
the wire transfer instructions of the Company (the “Closing Statement”).


 


(l) From
the date hereof to the Closing Date, (i) trading in the Common Shares shall not have been suspended by the SEC or the Principal
Market (except for any suspension of trading of limited duration agreed to by the Company, which suspension shall be terminated
prior to the Closing), (ii) the closing price of the Common Shares during each of the five (5) consecutive Trading Days immediately
prior to the Closing Date shall be at least 120% of the Floor Price (as defined in the Convertible Debentures), and (iii) at any
time prior to the applicable Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended
or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on the
Principal Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities
nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of
such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable
judgment of each Buyer, makes it impracticable or inadvisable to purchase the Securities at the Closing.


 


(m) The
Company and its Subsidiaries shall have delivered to such Buyer such other documents, instruments or certificates relating to
the transactions contemplated by this Agreement as such Buyer or its counsel may reasonably request.


 


8.
TERMINATION.


 


In
the event that the Closing shall not have occurred with respect to a Buyer within five (5) days of the date hereof, then such
Buyer shall have the right to terminate its obligations under this Agreement with respect to itself at any time on or after the
close of business on such date without liability of such Buyer to any other party; provided, however, (i) the right to terminate
this Agreement under this Section 8 shall not be available to such Buyer if the failure of the transactions contemplated by this
Agreement to have been consummated by such date is the result of such Buyer's breach of this Agreement and (ii) the abandonment
of the sale and purchase of the Convertible Debentures shall be applicable only to such Buyer providing such written notice, provided
further that no such termination shall affect any obligation of the Company under this Agreement to reimburse such Buyer for the
expenses described herein. Nothing contained in this Section 8 shall be deemed to release any party from any liability for any
breach by such party of the terms and provisions of this Agreement or the other Transaction Documents or to impair the right of
any party to compel specific performance by any other party of its obligations under this Agreement or the other Transaction Documents.


 






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9.
MISCELLANEOUS.


 


(a) Governing
Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law
or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of New York. The Company hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder
or in connection herewith or under any of the other Transaction Documents or with any transaction contemplated hereby or thereby,
and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that
the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address
for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process
and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted
by law. Nothing contained herein shall be deemed or operate to preclude any Buyer from bringing suit or taking other legal action
against the Company in any other jurisdiction to collect on the Company's obligations to such Buyer or to enforce a judgment or
other court ruling in favor of such Buyer. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT OR IN CONNECTION WITH
OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.


 


(b) Counterparts.
This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event that
any signature is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an
executed signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf
such signature is executed) with the same force and effect as if such signature page were an original thereof.


 


(c) Headings;
Gender. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation
of, this Agreement. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine,
feminine, neuter, singular and plural forms thereof. The terms "including," "includes," "include"
and words of like import shall be construed broadly as if followed by the words "without limitation." The terms "herein,"
"hereunder," "hereof" and words of like import refer to this entire Agreement instead of just the provision
in which they are found.


 






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(d) Entire
Agreement, Amendments. This Agreement supersedes all other prior oral or written agreements between the Buyer, the Company,
their affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement and the instruments
referenced herein contain the entire understanding of the parties with respect to the matters covered herein and therein and,
except as specifically set forth herein or therein, neither the Company nor any Buyer makes any representation, warranty, covenant
or undertaking with respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument
in writing signed by the party to be charged with enforcement.


 


(e) Notices.
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must
be in writing by letter and email and will be deemed to have been delivered: upon the later of (A) either (i) receipt, when delivered
personally or (ii) one (1) Business Day after deposit with an overnight courier service with next-day international delivery specified,
in each case, properly addressed to the party to receive the same and (B) receipt, when sent by electronic mail. The addresses
and email addresses for such communications shall be:


 


	If
to the Company, to:
	RETO
    ECO-SOLUTIONS, INC.
	 	c/o
                                         Beijing REIT Technology Development Co., Ltd.

        Building
        X-702, 60 Anli Road, Chaoyang District, Beijing

        People’s
        Republic of China 100101

        Attention:
        Hengfang Li

        Telephone:
        (+86) 10-64827328

        Email:
        ir@retoeco.com

         

	With
    Copy to:	William
                                         Rosenstadt, Esq.

        Ortoli
        Rosenstadt LLP

        366
        Madison Avenue, 3rd Floor

        New
        York, NY 10017

        Telephone: 
        212-588-0022

        E-Mail:  wsr@orllp.legal

	 	 
	If
    to a Buyer, to its address and email address set forth on the Schedule of Buyers, with copies to such Buyer's representatives
    as set forth on the Schedule of Buyers,
	 	 
	With
    copy to:	David
                                         Fine, Esq.

        c/o
        Yorkville Advisors Global, LP

        1012
        Springfield Avenue

        Mountainside,
        NJ 07092

        Email:
        legal@yorkvilleadvisors.com

	 	 


or
to such other address, email address and/or to the attention of such other Person as the recipient party has specified by written
notice given to each other party five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A)
given by the recipient of such notice, consent, waiver or other communication, (B) electronically generated by the sender's e-mail
service provider containing the time, date, recipient e-mail address or (C) provided by an overnight courier service shall be
rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight courier service in accordance with
clause (i), (ii) or (iii) above, respectively


 






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(f) Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors
and assigns, including any purchasers of any of the Convertible Debentures (but excluding any purchasers of Underlying Securities,
unless pursuant to a written assignment by such Buyer). The Company shall not assign this Agreement or any rights or obligations
hereunder without the prior written consent of the Buyers. In connection with any transfer of any or all of its Securities, a
Buyer may assign all, or a portion, of its rights and obligations hereunder in connection with such Securities without the consent
of the Company, in which event such assignee shall be deemed to be a Buyer hereunder with respect to such transferred Securities.


 


(g) Indemnification.


 


(i) In
consideration of each Buyer's execution and delivery of the Transaction Documents and acquiring the Securities thereunder and
in addition to all of the Company's other obligations under the Transaction Documents, the Company shall defend, protect, indemnify
and hold harmless each Buyer and each holder of any Securities and all of their stockholders, partners, members, officers, directors,
employees and direct or indirect investors and any of the foregoing Persons' agents or other representatives (including, without
limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”)
from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages,
and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification
hereunder is sought), and including reasonable attorneys' fees and disbursements (the “Indemnified Liabilities”),
incurred by any Indemnitee as a result of, or arising out of, or relating to (i) any misrepresentation or breach of any representation
or warranty made by the Company in any of the Transaction Documents, (ii) any breach of any covenant, agreement or obligation
of the Company or any Subsidiary contained in any of the Transaction Documents or (iii) any cause of action, suit, proceeding
or claim brought or made against such Indemnitee by a third party (including for these purposes a derivative action brought on
behalf of the Company or any Subsidiary) or which otherwise involves such Indemnitee that arises out of or results from (A) the
execution, delivery, performance or enforcement of any of the Transaction Documents, (B) any transaction financed or to be financed
in whole or in part, directly or indirectly, with the proceeds of the issuance of the Securities, or (C) any disclosure properly
made by such Buyer pursuant to Section 4(f), or (D) the status of such Buyer or holder of the Securities either as an investor
in the Company pursuant to the transactions contemplated by the Transaction Documents or as a party to this Agreement (including,
without limitation, as a party in interest or otherwise in any action or proceeding for injunctive or other equitable relief).
To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law.


 






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(ii) Promptly
after receipt by an Indemnitee under this Section 9(g) of notice of the commencement of any action or proceeding (including any
governmental action or proceeding) involving an Indemnified Liability, such Indemnitee shall, if a claim in respect thereof is
to be made against the Company under this Section 9(g), deliver to the Company a written notice of the commencement thereof, and
the Company shall have the right to participate in, and, to the extent the Company so desires, to assume control of the defense
thereof with counsel mutually reasonably satisfactory to the Company and the Indemnitee; provided, however, that an Indemnitee
shall have the right to retain its own counsel with the fees and expenses of such counsel to be paid by the Company if: (A) the
Company has agreed in writing to pay such fees and expenses; (B) the Company shall have failed promptly to assume the defense
of such Indemnified Liability and to employ counsel reasonably satisfactory to such Indemnitee in any such Indemnified Liability;
or (C) the named parties to any such Indemnified Liability (including any impleaded parties) include both such Indemnitee and
the Company, and such Indemnitee shall have been advised by counsel that a conflict of interest is likely to exist if the same
counsel were to represent such Indemnitee and the Company (in which case, if such Indemnitee notifies the Company in writing that
it elects to employ separate counsel at the expense of the Company, then the Company shall not have the right to assume the defense
thereof and such counsel shall be at the expense of the Company), provided further, that in the case of clause (C) above the Company
shall not be responsible for the reasonable fees and expenses of more than one (1) separate legal counsel for the Indemnitees.
The Indemnitee shall reasonably cooperate with the Company in connection with any negotiation or defense of any such action or
Indemnified Liability by the Company and shall furnish to the Company all information reasonably available to the Indemnitee which
relates to such action or Indemnified Liability. The Company shall keep the Indemnitee reasonably apprised at all times as to
the status of the defense or any settlement negotiations with respect thereto. The Company shall not be liable for any settlement
of any action, claim or proceeding effected without its prior written consent, provided, however, that the Company shall not unreasonably
withhold, delay or condition its consent. The Company shall not, without the prior written consent of the Indemnitee, consent
to entry of any judgment or enter into any settlement or other compromise which does not include as an unconditional term thereof
the giving by the claimant or plaintiff to such Indemnitee of a release from all liability in respect to such Indemnified Liability
or litigation, and such settlement shall not include any admission as to fault on the part of the Indemnitee. Following indemnification
as provided for hereunder, the Company shall be subrogated to all rights of the Indemnitee with respect to all third parties,
firms or corporations relating to the matter for which indemnification has been made. The failure to deliver written notice to
the Company within a reasonable time of the commencement of any such action shall not relieve the Company of any liability to
the Indemnitee under this Section 9(g), except to the extent that the Company is materially and adversely prejudiced in its ability
to defend such action.


 


(iii) The
indemnification required by this Section 9(g) shall be made by periodic payments of the amount thereof during the course of the
investigation or defense, within ten (10) days after bills supporting the Indemnified Liabilities are received by the Company.


 


(iv) The
indemnity agreement contained herein shall be in addition to (A) any cause of action or similar right of the Indemnitee against
the Company or others, and (B) any liabilities the Company may be subject to pursuant to the law.


 


(h) No
Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against any party.


 


[REMAINDER
PAGE INTENTIONALLY LEFT BLANK]


 




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IN
WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.


 


	 	COMPANY:

	 	 
	 	RETO
    ECO-SOLUTIONS, INC.
	 	 
	 	By:	/s/
    Hengfang Li
	 	Name:  	Hengfang
Li
	 	Title: 	Chief Executive Officer





 




    25


     


    

 


IN
WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Securities Purchase
Agreement to be duly executed as of the date first written above.


 


 


	 	BUYER:

        

	 	 
	 	YA
    II PN, LTD. 
	 	 
	 	By:	Yorkville Advisors Global, LP
	 	 	Its:Investment Manager
	 	 
	 	By:	Yorkville Advisors Global II,
LLC
	 	 	Its:General Partner
	 	 
	 	By:	/s/
    Matt Beckman
	 	Name:  	Matt Beckman
	 	Title:	Member



 

 


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