Exhibit 10.1










SECURITIES PURCHASE AGREEMENT


This
Securities Purchase Agreement (this “Agreement”) is dated as of February 1, 2017, between, Real Goods
Solar, Inc., a Colorado corporation (the “Company”), and each purchaser identified on the signature pages
hereto (each, including its successors and assigns, a “Purchaser” and collectively, the
“Purchasers”).


WHEREAS, subject
to the terms and conditions set forth in this Agreement and pursuant to an effective registration statement under the Securities
Act of 1933, as amended (the “Securities Act”), the Company desires to issue and sell to each Purchaser, and
each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described
in this Agreement.


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


ARTICLE I. 


DEFINITIONS


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


“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.7.


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


“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.


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


“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to
close.


“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1.


“Closing
Date” means the Trading Day on which all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription
Amount and (ii) the Company’s obligations to deliver the Securities, in each case, have been satisfied or waived, but in
no event later than the third Trading Day following the date hereof.


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



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


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


“Company
Counsel” means Brownstein Hyatt Farber Schreck, with offices located at 410 Seventeenth Street, Suite 2200, Denver, CO
80202.


“Convertible
Notes” means one or more of the Company’s Senior Secured Convertible Notes due April 1, 2019 in the aggregate original
principal amount of $10,000,000.


“Disclosure
Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.


 


“EGS”
means Ellenoff Grossman & Schole LLP, with offices located at 1345 Avenue of the Americas, New York, New York 10105-0302.


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


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


 


“Exempt
Issuance” shall have the meaning ascribed to such term in Section 4.13(c).


 


“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.


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


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


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


“Leakout
Agreement” means the letter agreement in the form of Exhibit A attached hereto.


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




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


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


“Placement
Agency Agreement” means the Placement Agency Agreement, dated February 1, 2017, between the Company and the
Placement Agent.


“Placement
Agent” means Roth Capital Partners, LLC.


“Placement
Agent Warrant” means the warrant to purchase Common Stock to be issued by the Company to the Placement Agent pursuant
to the terms of the Placement Agency Agreement.


“Per
Share Purchase Price” means $3.10.


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


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


“Prospectus”
means the final base prospectus filed for the Registration Statement.


“Prospectus
Supplement” means the supplement to the Prospectus complying with Rule 424(b) of the Securities Act that is filed with
the Commission and delivered by the Company to each Purchaser at the Closing.


“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.10.


“Registration
Statement” means the effective registration statement with the Commission file No. 333-193718 which registers the sale
of the Shares, the Warrants and the Warrant Shares.


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


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


“Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.




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


“Securities”
means the Shares and the Warrants.


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


“Series
K Warrants” means Series K Common Stock purchase warrants delivered to the Purchasers at the Closing in accordance with
Section 2.2(a) hereof, which warrants shall be exercisable immediately and have a term of exercise equal to five years, in the
form of Exhibit B-1 attached hereto.


“Series
L Warrants” means Prepaid Series L Common Stock purchase warrants delivered to the Purchasers at the Closing in accordance
with Section 2.2(a) hereof, which warrants shall be exercisable immediately and have a term of exercise equal to five years, in
the form of Exhibit B-2 attached hereto. The purchase price per Series L Warrant shall be the Per Share Purchase Price minus
$0.01.


“Shares”
means the shares of Common Stock issuable to each Purchaser pursuant to this Agreement.


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


“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for the Shares and Warrants purchased hereunder
as specified below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription
Amount,” in United States dollars and in immediately available funds; which shall not be less than $100,000.


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


“Trading
Day” means a day on which the principal Trading Market is open for trading.


“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New
York Stock Exchange, the OTCQB or OTCQX (or any successors to any of the foregoing).




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


“Transfer
Agent” means Computershare Trust Company, N.A., the current transfer agent of the Company, with a mailing address of
8742 Lucent Boulevard, Suite 225, Highlands Ranch, CO 80129 and a facsimile number of 303-226-0609, and any successor transfer
agent of the Company.


“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.13(b).


“Warrants”
means, collectively, the Series K Warrants and the Series L Warrants delivered to the Purchasers at the Closing in accordance with
Section 2.2(a) hereof.


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


ARTICLE II. 


PURCHASE AND SALE


2.1             
Closing. On the Closing Date, upon the terms and subject to the conditions set forth herein, the Company agrees
to sell, and the Purchasers, severally and not jointly, agree to purchase, up to an aggregate of (i) $11,500,000 of Shares for
each Purchaser equal to such Purchaser’s Subscription Amount for Shares as set forth on the signature page hereto executed
by such Purchaser divided by the Per Share Purchase Price, and (ii) Series K Warrants and Series L Warrants, if applicable, as
determined pursuant to Section 2.2(a). Each Purchaser’s Subscription Amount as set forth on the signature page hereto executed
by such Purchaser shall be made available for “Delivery Versus Payment” settlement with the Company or its designee.
The Company shall deliver to each Purchaser its respective Shares, and a Series K Warrant Series and, if applicable, a Series
L Warrant as determined pursuant to Section 2.2(a), and the Company and each Purchaser shall deliver the other items set forth
in Section 2.2 deliverable at the Closing. Upon satisfaction of the covenants and conditions set forth in Section 2.3, the Closing
shall occur at the offices of the Placement Agent or such other location as the parties shall mutually agree. Unless otherwise
directed by the Placement Agent, settlement of the Shares shall occur via “Delivery Versus Payment” (i.e., on the
Closing Date, the Company shall issue the Shares registered in the Purchasers’ names and addresses and released by the Transfer
Agent directly to the account(s) at the Placement Agent identified by each Purchaser; upon receipt of such Shares, the Placement
Agent shall promptly electronically deliver such Shares to the applicable Purchaser, and payment therefor shall be made by the
Placement Agent (or its clearing firm) by wire transfer to the Company. The Company covenants that, if the Purchaser delivers
an Exercise Notice (as defined in the Warrants) to exercise Warrants between the date hereof and the Closing Date, the Company
shall deliver Warrant Shares to the Purchaser on the Closing Date in connection with such Exercise Notice, provided that the Company
shall be obligated to deliver Warrant Shares on the Closing Date only in connection with Exercise Notice(s) that are delivered
to the Company at or prior to 12:00 p.m. (New York City time) on the Trading Day immediately prior to Closing Date.










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2.2           Deliveries.

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


 (i)                this Agreement duly executed by the Company;




(ii)              
a legal opinion of Company Counsel, substantially in the form delivered to the Placement Agent pursuant to the terms of
the Placement Agency Agreement and reasonably acceptable to the Purchasers;


(iii)            
a Series K Warrant registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal to
100% of the sum of such Purchaser’s Shares plus the shares of Common Stock issuable upon exercise of such Purchaser’s
Series L Warrant, if applicable, with an exercise price equal to $3.10, subject to adjustment
therein; 


(iv)            
for those Purchasers purchasing Series L Warrants, Series L Warrants to purchase the number of shares of Common Stock set
forth on the Purchaser’s signature page hereto;


(v)              
the Purchaser’s respective Leakout Agreement substantially in the form of Exhibit A, duly executed by the Company;
and


(vi)            
the Prospectus and Prospectus Supplement (which may be delivered in accordance with Rule 172 under the Securities Act).


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


 (i)                this Agreement duly executed by such Purchaser;




(ii)              
the Purchaser’s duly executed Leakout Agreement substantially in the form of Exhibit A; and


(iii)            
such Purchaser’s Subscription Amount which shall be made available for “Delivery Versus Payment” settlement
with the Company or its designee.


2.3             
Closing Conditions.


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


(i)              
the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material
Adverse Effect, in all respects) on the Closing Date of the representations and warranties of the Purchasers contained herein (unless
as of a specific date therein in which case they shall be accurate as of such date);




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


(iii)            
the delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.


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


(i)                
the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material
Adverse Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Company contained
herein (unless as of a specific date therein in which case they shall be accurate as of such date);


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


(iii)            
the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;


(iv)            
there shall have been no Material Adverse Effect with respect to the Company since the date hereof; and


(v)              
from the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or
the Company’s principal Trading Market, and, at any time prior to the 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 any Trading Market, nor shall a banking moratorium have been declared either by the
United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or
other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market
which, in each case, in the reasonable judgment of such Purchaser, makes it impracticable or inadvisable to purchase the Securities
at the Closing.


ARTICLE III. 


REPRESENTATIONS AND WARRANTIES


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




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(a)           
Subsidiaries. All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1(a).
Except as set forth on Schedule 3.1(a), the Company owns, directly or indirectly, all of the capital stock or other equity
interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding shares of capital stock of each
Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or
purchase securities. If the Company has no subsidiaries, all other references to the Subsidiaries or any of them in the Transaction
Documents shall be disregarded.


(b)           
Organization and Qualification. 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.
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 Transaction Document, (ii) a material adverse effect on the results of operations,
assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii)
a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under
any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) 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; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate
the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations
hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company
and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action
on the part of the Company and no further action is required by the Company, the Board of Directors or the Company’s shareholders
in connection herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction
Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in
accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii)
as limited by laws relating to the availability of specific performance, injunctive relief
or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.



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


(e)           
Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order
of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental
authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents,
other than: (i) the filings required pursuant to Section 4.6 of this Agreement, (ii) the filing with the Commission of the Prospectus
Supplement, (iii) the notice and/or application(s) to each applicable Trading Market for the issuance and sale of the Securities
and the listing of the Warrant Shares for trading thereon in the time and manner required thereby, (iv) any such consent, waiver,
authorization or order of, notice to, or filing or registration with the Financial Industry Regulatory Authority, Inc., or under
state securities or Blue Sky laws, and (v) as set forth in Schedule 3.1(e) (collectively, the “Required Approvals”).


(f)            
Issuance of the Securities; Registration. The Securities are duly authorized and, when issued and paid for in accordance
with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all
Liens imposed by the Company. The Warrant Shares, when issued in accordance with the terms of the Warrants, will be validly issued,
fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Company has reserved from its duly authorized
capital stock a number of shares of Common Stock issuable pursuant to this Agreement and the maximum number of shares of Common
Stock issuable upon



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exercise of the Warrants. The
Company has prepared and filed the Registration Statement in conformity with the requirements of the Securities Act, which became
effective on February 10, 2014 (the “Effective Date”), including the Prospectus, and such amendments and supplements
thereto as may have been required to the date of this Agreement. The Registration Statement is effective under the Securities Act
and no stop order preventing or suspending the effectiveness of the Registration Statement or suspending or preventing the use
of the Prospectus has been issued by the Commission and no proceedings for that purpose have been instituted or, to the knowledge
of the Company, are threatened by the Commission. The Company, if required by the rules and regulations of the Commission, shall
file the Prospectus Supplement with the Commission pursuant to Rule 424(b). At the time the Registration Statement and any amendments
thereto became effective, at the date of this Agreement and at the Closing Date, the Registration Statement and any amendments
thereto conformed and will conform in all material respects to the requirements of the Securities Act and did not and will not
contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading; and the Prospectus and any amendments or supplements thereto, at the time the Prospectus
or any amendment or supplement thereto was issued and at the Closing Date, conformed and will conform in all material respects
to the requirements of the Securities Act and did not and will not contain an untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not
misleading.



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(g)           
Capitalization. The capitalization of the Company is as set forth on Schedule 3.1(g). The Company has not
issued any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the public
offering of shares and warrants on or about December 8, 2016, the exercise of employee stock options under the Company’s
stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase
plans and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently
filed periodic report under the Exchange Act. Except as set forth in Schedule 3.1(g), no Person has any right of first refusal,
preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction
Documents that has not been validly waived or satisfied. Except as set forth in Schedule 3.1(g) and as a result of the purchase
and sale of the Securities, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or
giving any Person any right to subscribe for or acquire any shares of Common Stock or the capital stock of any Subsidiary, or contracts,
commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares
of Common Stock or Common Stock Equivalents or capital stock of any Subsidiary. Except as set forth in Schedule 3.1(g),
the issuance and sale of the Securities will not obligate the Company or any Subsidiary to issue shares of Common Stock or other
securities to any Person (other than the Purchasers) and will not result in a right of any holder of Company securities to adjust
the exercise, conversion, exchange
or reset price under any of such securities. Except as set forth in Schedule 3.1(g), there are no outstanding securities
or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security
of the Company or such Subsidiary. Except as set forth in Schedule 3.1(g), the Company does not have any stock appreciation
rights or “phantom stock” plans or agreements or any similar plan or agreement. All of the outstanding shares of capital
stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all
federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar
rights to subscribe for or purchase securities. Except as set forth in Schedule 3.1(g), no further approval or authorization
of any shareholder, the Board of Directors or others is required for the issuance and sale of the Securities. Except as set forth
in Schedule 3.1(g), there are no shareholders’ agreements, voting agreements or other similar agreements with respect
to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any
of the Company’s shareholders.


(h)          
SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents
required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d)
thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to
file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together
with the Prospectus and the Prospectus Supplement, being collectively referred to herein as the “SEC Reports”)
on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration
of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of
the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading. The Company has never been an issuer subject
to Rule 144(i) under the Securities Act. The financial statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect
at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified
in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes
required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries
as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, immaterial, year-end audit adjustments.




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(i)            
Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial
statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date
hereof or as set forth in Schedule 3.1(i): (i) there has been no event, occurrence or development that has had or that could
reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or
otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past
practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed
in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared
or made any dividend or distribution of cash or other property to its shareholders 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 with respect to the material terms and conditions of the transactions
contemplated by the Transaction Documents, 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 Subsidiaries or their respective businesses, prospects,
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 1 Trading Day prior to
the date that this representation is made.


(j)           
Litigation. There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the
knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before
or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign)
(collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability
of any of the Transaction Documents, the Securities or the Warrant Shares or (ii) could, if there were an unfavorable decision,
have or reasonably be expected to result in a Material Adverse Effect. Except as set forth in Schedule 3.1(j), 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. Except as set forth in
Schedule 3.1(j), 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.





    	 	12	 



    


    

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


(l)            
Compliance. Except as set forth on Schedule 3.1(l), neither the Company nor any Subsidiary: (i) is in default
under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would
result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that
it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument
to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived),
(ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is or has
been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all
foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality
and safety and employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material
Adverse Effect.


(m)       
   Environmental Laws. The Company and its Subsidiaries (i) are in compliance with all federal,
state, local and foreign laws relating to pollution or protection of human health or the environment (including ambient air,
surface water, groundwater, land surface or subsurface strata), including laws relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively,
“Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations,
codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits,
plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii)
have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their
respective businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or approval
other than with respect to such non-compliance or failure to receive permits, licenses or other approvals that could not be
reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.




    	 	13	 



    


    

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


(o)           
Title to Assets. Except as set forth on Schedule 3.1(o), the Company and the Subsidiaries have good and marketable
title in fee simple to all real property owned by them and good and marketable title in all personal property owned by them that
is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens
as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made
of such property by the Company and the Subsidiaries and (ii) Liens for the payment of federal, state or other taxes, for which
appropriate reserves have been made therefor in accordance with GAAP and, the payment of which is neither delinquent nor subject
to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid,
subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance other than with respect to such
non-compliance that could not be reasonably expected to have a Material Adverse Effect.


(p)           
Intellectual Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications,
trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual
property rights and similar rights as necessary or required for use in connection with their respective businesses as described
in the SEC Reports and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual
Property Rights”). None of, and neither the Company nor any Subsidiary has 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, within two (2) years from the date of this Agreement. Neither the Company nor any Subsidiary has 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 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
and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their
intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect.



    	 	14	 



    


    

(q)          
Insurance. Except as set forth on Schedule 3.1(q), the Company and the Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses
in which the Company and the Subsidiaries
are engaged, including, but not limited to, directors and officers insurance coverage at least equal to the aggregate Subscription
Amount. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue
its business without a significant increase in cost.


(r)            
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, shareholder, 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.


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




    	 	15	 



    


    

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


(u)          
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.


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


(w)    
     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 set forth on Schedule
3.1(w), the Company has not, in the 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. Except as set forth on Schedule 3.1(w), the Company is, and has no
reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and
maintenance requirements. The Common Stock is currently eligible for electronic transfer through the Depository Trust Company
or another established clearing corporation and the Company is current in payment of the fees to the Depository Trust Company
(or such other established clearing corporation) in connection with such electronic transfer.




    	 	16	 



    


    

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


(y)          
Disclosure. The Company confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or
their agents or counsel with any information that it believes constitutes or might constitute material, non-public information
which is not otherwise disclosed in the Prospectus Supplement. The Company understands and confirms that the Purchasers will rely
on the foregoing representation in effecting transactions in securities of the Company. All of the disclosure furnished by or on
behalf of the Company to the Purchasers regarding the Company and its Subsidiaries, their respective businesses and the transactions
contemplated hereby, including the Disclosure Schedules to this Agreement, is true and correct and does not contain any untrue
statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading. The press releases disseminated by the Company during the twelve
months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances
under which they were made and when made, not misleading. The Company acknowledges and agrees that no Purchaser makes or has made
any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth
in Section 3.2 hereof.


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




    	 	17	 



    


    

(aa)         
Solvency. Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect
to the receipt by the Company of the proceeds from the sale of the Securities hereunder: (i) the fair saleable value of the Company’s
assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities
(including known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital
to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular
capital requirements of the business conducted by the Company, consolidated
and projected capital requirements and capital availability thereof, and (iii) the current cash flow of the Company, together with
the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses
of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid.
The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing
and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances which
lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction
within one year from the Closing Date. Schedule 3.1(aa) sets forth as of the date hereof all outstanding secured and unsecured
Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of
this Agreement, “Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess of $50,000
(other than trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent
obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated
balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business; and (z) the present value of any lease payments in excess of $50,000 due under
leases required to be capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is in default with respect to
any Indebtedness.


(bb)        
Tax Status.  Except as set forth on Schedule 3.1(bb) and for matters that would not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and its Subsidiaries each (i)
has made or filed all United States federal, state and local income and all foreign income and franchise tax returns, reports and
declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and
charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set
aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to
which such returns, reports or declarations apply. Except as set forth on Schedule 3.1(bb), 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.


(cc)         
Foreign Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary,
any agent or other person acting on behalf of the Company or any Subsidiary, has: (i) directly or indirectly, used any funds for
unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii)
made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties
or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made
by any person acting on its behalf of which the Company is aware) which is in violation of law or (iv) violated in any material
respect any provision of FCPA.



    	 	18	 



    


    

(dd)        
Accountants. The Company’s accounting firm is set forth on Schedule 3.1(dd) of the Disclosure Schedules.
To the knowledge and belief of the Company, such accounting firm: (i) is a registered public accounting firm as required by the
Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s
Annual Report for the fiscal year ending December 31, 2016.


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


(ff)          
Acknowledgment Regarding Purchaser’s
Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding (except for the Leakout Agreements
and Sections 3.2(f) and 4.15 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers has been
asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities
of the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities or Warrant
Shares for any specified term, (ii) past or future open market or other transactions by any Purchaser, specifically including,
without limitation, Short Sales or “derivative” transactions, before or after the closing of this or future securities
offering transactions, may negatively impact the market price of the Company’s publicly-traded securities, (iii) any Purchaser,
and counter-parties in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, may
presently have a “short” position in the Common Stock and (iv) each Purchaser shall not be deemed to have any affiliation
with or control over any arm’s length counter-party in any “derivative” transaction. The Company further
understands and acknowledges that (y) one or more Purchasers may engage in hedging activities at various times during the period
that the Securities and the Warrant Shares are outstanding, and (z) such hedging activities (if any) could reduce the value of
the existing shareholders’ equity interests in the Company at and after the time that the hedging activities are being conducted.
The Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.




    	 	19	 



    


    

(gg)        
Regulation M Compliance. The Company has not, and to its knowledge no one acting on its behalf has (i) taken, directly
or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of any of the Securities and the Warrant Shares, (ii) sold, bid for, purchased,
or paid any compensation for soliciting purchases of, any of the Securities or Warrant Shares, or (iii) within the restricted period
required by Regulation M, paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities
of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Company’s placement agent in
connection with the placement of the Securities.


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


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


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


(kk)         
Bank Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding
Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve
System (the “Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls,
directly or indirectly, 5% or more of the outstanding shares of any class of voting securities or 25% or more of the total equity
of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its
Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject
to the BHCA and to regulation by the Federal Reserve.


(ll)          
Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in
compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting
Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the
“Money Laundering Laws”), and no Action or Proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company
or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.



    	 	20	 



    


    


3.2          
Representations and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents
and warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein,
in which case they shall be accurate as of such date):


(a)          
Organization; Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly
existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate,
partnership, limited liability company or similar power and authority to enter into and to consummate the transactions contemplated
by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of
the Transaction Documents and performance by such Purchaser of the transactions contemplated by the Transaction Documents have
been duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the
part of such Purchaser. Each Transaction Document to which it is a party has been duly executed by such Purchaser, and when delivered
by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser,
enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally,
(ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and
(iii) insofar as indemnification and contribution provisions may be limited by applicable law.


(b)          
Understandings or Arrangements. Such Purchaser is acquiring the Securities and the Warrant Share as principal for
its own account and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the
distribution of such Securities or Warrant Shares (this representation and warranty not limiting such Purchaser’s right to
sell the Securities or the Warrant Shares in compliance with applicable federal and state securities laws). Such Purchaser is acquiring
the Securities and the Warrant Shares in the ordinary course of its business.


(c)           
Purchaser Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is,
and on each date on which it exercises any Warrants it will be either: (i) an “accredited investor” as defined in Rule
501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as defined
in Rule 144A(a) under the Securities Act.


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




    	 	21	 



    


    


(e)           
Access to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents
(including all exhibits and schedules thereto) and the SEC Reports and has been afforded, (i) the opportunity to ask such questions
as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions
of the offering of the Securities and the Warrant Shares and the merits and risks of investing in the Securities and the Warrant
Shares; (ii) access to information about the Company and its financial condition, results of operations, business, properties,
management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional
information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed
investment decision with respect to the investment. Such Purchaser acknowledges and agrees that neither the Placement Agent nor
any Affiliate of the Placement Agent has provided such Purchaser with any information or advice with respect to the Securities
nor is such information or advice necessary or desired. Neither the Placement Agent nor any Affiliate has made or makes any representation
as to the Company or the quality of the Securities or the Warrant Shares and the Placement Agent and any Affiliate may have acquired
non-public information with respect to the Company which such Purchaser agrees need not be provided to it. In connection with the
issuance of the Securities and the Warrant Shares to such Purchaser, neither the Placement Agent nor any of its Affiliates has
acted as a financial advisor or fiduciary to such Purchaser.


(f)           [RESERVED]





    	 	22	 



    


    

The Company acknowledges and agrees that the
representations contained in this Section 3.2 shall not modify, amend or affect such 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 Transaction
Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation of
the transactions contemplated hereby.


 


ARTICLE IV. 


OTHER AGREEMENTS OF THE PARTIES


4.1             
Warrant Shares. If all or any portion of a Warrant is exercised at a time when there is an effective registration
statement to cover the issuance or resale of the Warrant Shares or if the Warrant is exercised via cashless exercise, the Warrant
Shares issued pursuant to any such exercise shall be issued free of all legends. If at any time following the date hereof the Registration
Statement (or any subsequent registration statement registering the sale or resale of the Warrant Shares) is not effective or is
not otherwise available for the sale or resale of the Warrant Shares, the Company shall immediately notify the holders of the Warrants
in writing that such registration statement is not then effective and thereafter shall promptly notify such holders when the registration
statement is effective again and available for the sale or resale of the Warrant Shares (it being understood and agreed that the
foregoing shall not limit the ability of the Company to issue, or any Purchaser to sell, any of the Warrant Shares in compliance
with applicable federal and state securities laws). The Company shall use best efforts to keep a registration statement (including
the Registration Statement) registering the issuance or resale of the Warrant Shares effective during the term of the Warrants.


4.2             
Acknowledgment of Dilution. The Company acknowledges that the issuance of the Securities and the Warrant Shares may
result in dilution of the outstanding shares of Common Stock, which dilution may be substantial under certain market conditions.
The Company further acknowledges that its obligations under the Transaction Documents, including, without limitation, its obligation
to issue the Warrant Shares pursuant to exercise of the Warrants, 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 shareholders of the
Company.


4.3             
Furnishing of Information; Public Information. Until the earliest of the time that (i) no Purchaser owns Securities
or (ii) the Warrants have expired, 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.




    	 	23	 



    


    

4.4             
Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect
of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities
for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing
of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.


4.5             
Exercise Procedures. The Warrants set forth the totality of the procedures required of the Purchasers in order to
exercise the Warrants. Without limiting the preceding sentences, no ink-original Notice of Exercise shall be required, nor shall
any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required in order to exercise
the Warrants. No additional legal opinion, other information or instructions shall be required of the Purchasers to exercise their
Warrants. The Company shall honor exercises of the Warrants and shall deliver Warrant Shares in accordance with the terms, conditions
and time periods set forth in the Transaction Documents.


4.6              Securities
Laws Disclosure; Publicity. The Company shall: (a) by 9:00 a.m. (New York City time) on the date hereof, issue a press
release disclosing the material terms of the transactions contemplated hereby; and (b) file a Current Report on Form 8-K,
including the Transaction Documents as exhibits thereto, with the Commission within the time required by the Exchange
Act. From and after the issuance of such press release, the Company represents to the Purchasers that it shall have publicly
disclosed all material, non-public information delivered to any of the Purchasers by the Company or any of its Subsidiaries,
or any of their respective officers, directors, employees or agents. In addition, effective upon the issuance of such press
release, 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, agents,
employees or Affiliates on the one hand, and any of the Purchasers or any of their Affiliates on the other hand, shall
terminate. The Company and each Purchaser shall consult with each other in issuing any other press releases with respect to
the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release nor
otherwise make any such public statement without the prior consent of the Company, with respect to any press release of
any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the Company, which
consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the
disclosing party shall promptly provide the other party with prior notice of such public statement or communication.
Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any
Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of
such Purchaser, except: (a) as required by federal securities law in connection with the filing of final Transaction
Documents with the Commission; and (b) to the extent such disclosure is required by law or Trading Market regulations, in
which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under this clause (b).




    	 	24	 



    


    

4.7             
Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any
other Person, that any Purchaser is an “Acquiring Person” under any control share acquisition,
business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement
in effect or hereafter adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan
or arrangement, by virtue of receiving Securities or Warrant Shares under the Transaction Documents or under any other agreement
between the Company and the Purchasers.


4.8             
Non-Public Information. The Company covenants and agrees that neither it,
nor any other Person acting on its behalf will provide any Purchaser or its agents or counsel with any information that constitutes,
or the Company reasonably believes constitutes, material non-public information, unless prior thereto such Purchaser shall have
consented to the receipt of such information and agreed with the Company to keep such information confidential. The Company understands
and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.
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 to the Company, any of its
Subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates, or a duty to the Company, or any
of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates not to trade on the basis of,
such material, non-public information, provided that the Purchaser shall remain subject to applicable law. To the extent that any
notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding the Company
or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form
8-K. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions
in securities of the Company.


4.9            
Use of Proceeds. The Company shall use the net proceeds from the sale of the Securities hereunder as described in
the Prospectus Supplement under “Use of Proceeds” and shall not use such proceeds in violation of FCPA or OFAC regulations.




    	 	25	 



    


    

4.10         
Indemnification of Purchasers. Subject to the provisions of this Section 4.10, the Company will indemnify and hold
each Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a
functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person
who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent
role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each,
a “Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages,
costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of
the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents
or (b) any action instituted against the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any
shareholder of the Company who is not an Affiliate of such Purchaser
Party, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is based upon a breach
of such Purchaser Party’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings
such Purchaser Party may have with any such shareholder or any violations by such Purchaser Party of state or federal securities
laws or any conduct by such Purchaser Party which constitutes fraud, gross negligence, willful misconduct or malfeasance). If any
action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such
Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof
with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be
at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by
the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel
or (iii) in such action there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position
of the Company and the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees
and expenses of no more than one such separate counsel. The Company will not be liable to any Purchaser Party under this Agreement
(y) for any settlement by a Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably
withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any
Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party
in this Agreement or in the other Transaction Documents. The indemnification required by this Section 4.10 shall be made by periodic
payments of the amount thereof during the course of the investigation or defense, as and when bills are received or are incurred.
The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against
the Company or others and any liabilities the Company may be subject to pursuant to law.


4.11         
Reservation and Listing of Securities.


(a)              
The Company shall maintain a reserve from its duly authorized shares of Common Stock for issuance pursuant to the Transaction
Documents in such amount as may then be required to fulfill its obligations in full under the Transaction Documents.


(b)              
The Company shall, if applicable: (i) in the time and manner required by the principal Trading 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 Shares and Warrant Shares 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 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.




    	 	26	 



    


    

4.12         
[RESERVED]


4.13         
Subsequent Equity Sales.


(a)               
From the date hereof until 90 calendar days after the Closing Date, neither the Company nor any Subsidiary shall issue,
enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents.



(b)              
From the date hereof until 90 calendar days after the Closing Date, the Company shall be prohibited from effecting or entering
into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents
(or a combination of units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction” means
a transaction in which the Company issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable
for, or include the right to receive, additional shares of Common Stock either (i) at a conversion price, exercise price or exchange
rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the shares of Common Stock
at any time after the initial issuance of such debt or equity securities or (ii) with a conversion, exercise or exchange price
that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence
of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock.
For a period of one year from the Closing Date, the Company shall be prohibited from effecting or entering into an agreement to
effect any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents (or a combination of
units thereof) involving an equity line of credit, at-the-market offering (as defined in SEC Rule 415) or similarly structured
transaction, whereby the Company may issue securities at a future determined price. Any Purchaser shall be entitled to obtain injunctive
relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages.


(c)               
Notwithstanding the foregoing, this Section 4.13 shall not apply in respect of an Exempt Issuance, except that no Variable
Rate Transaction shall be an Exempt Issuance, other than Exempt Issuances under clause (iii) of the definition thereof. “Exempt
Issuance” means the issuance of: (i) shares of Common Stock or options to employees, officers or directors of the Company
pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors
or a majority of the members of a committee of non-employee directors established for such purpose for services rendered to the
Company; (ii) the Placement Agent Warrant; (iii) securities upon the exercise, exchange or conversion of the Securities, the Warrant
Shares and/or the Placement Agent Warrant and/or other securities exercisable or exchangeable for or convertible into shares of
Common Stock issued and outstanding on the date of this Agreement (including, but not limited to, the  Convertible Notes); provided that
such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease
the exercise price, exchange price or conversion price of such securities (other than in connection with stock splits or combinations;
for the avoidance of doubt, a voluntary reduction of the conversion price of the Convertible Notes pursuant to Section 7(b) of
the Convertible Notes shall constitute such a prohibited amendment) or to extend the term of such securities; (iv) up to 250,000
shares of Common Stock issued pursuant to an exemption from registration under the Securities Act to the lender, or any successor
thereto, who is a party to any revolving credit facility outstanding prior to the date of this Agreement; and (v) securities issued
pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided
that any such issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries,
an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the
Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is
issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.



    	 	27	 



    


    


4.14         
Equal Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be
offered or paid to any Person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless
the same consideration is also offered to all of the parties to such Transaction Documents. For clarification purposes, this provision
constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended
for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or
as a group with respect to the purchase, disposition or voting of the Securities or Warrant Shares or otherwise.


4.15         
[RESERVED] 




    	 	28	 



    


    


ARTICLE V. 


MISCELLANEOUS


5.1             
Termination. This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder
only and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the
other parties, if the Closing has not been consummated on or before February 6, 2017; provided, however, that such
termination will not affect the right of any party to sue for any breach by any other party (or parties).


5.2             
Fees and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay
the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such
party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all
Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered
by the Company and any conversion or exercise notice delivered by a Purchaser), stamp taxes and other taxes and duties levied in
connection with the delivery of any Securities or Warrant Shares to the Purchasers.


5.3             
Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, the Prospectus and
the Prospectus Supplement, contain the entire understanding of the parties with respect to the subject matter hereof and thereof
and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge
have been merged into such documents, exhibits and schedules.


5.4             
Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder
shall be in writing and shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or
communication is delivered via facsimile or email attachment at the facsimile number or email address as set forth on the signature
pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of
transmission, if such notice or communication is delivered via facsimile or email attachment at the facsimile number or email address
as set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time)
on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized
overnight courier service or (d) upon actual receipt by the party to whom such notice
is required to be given. The address, facsimile number and email address for such notices and communications shall be as set forth
on the signature pages attached hereto. To the extent that any notice provided pursuant to any Transaction Document constitutes,
or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file
such notice with the Commission pursuant to a Current Report on Form 8-K.




    	 	29	 



    


    
5.5             
Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a
written instrument signed by the Company and Purchasers which purchased (or prior to the Closing Date, agreed to purchase) at least
50.1% in interest of the Shares based on the initial Subscription Amounts hereunder, provided that if any amendment, modification
or waiver disproportionately and adversely impacts a Purchaser (or group of Purchasers), the consent of such disproportionately
impacted Purchaser (or group of Purchasers) shall also be required. No waiver of any default with respect to any provision, condition
or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default
or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any
right hereunder in any manner impair the exercise of any such right. Any proposed amendment or waiver that disproportionately,
materially and adversely affects the rights and obligations of any Purchaser relative to the comparable rights and obligations
of the other Purchasers shall require the prior written consent of such adversely affected Purchaser. Any amendment effected in
accordance with accordance with this Section 5.5 shall be binding upon each Purchaser and subsequent holder of Securities and Warrant
Shares and the Company.


5.6             
Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not
be deemed to limit or affect any of the provisions hereof.


5.7             
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors
and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written
consent of each Purchaser (other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any
Person to whom such Purchaser assigns or transfers any Securities or Warrant Shares, provided that such transferee agrees in writing
to be bound, with respect to the transferred Securities or Warrant Shares, by the provisions of the Transaction Documents that
apply to the “Purchasers.”


5.8             
No Third-Party Beneficiaries. The Placement Agent shall be the third party beneficiary of the representations and
warranties of the Purchasers in Section 3.2. This Agreement is intended for the benefit of the parties hereto and their respective
successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person,
except as otherwise set forth in Section 4.10 and this Section 5.8.




    	 	30	 



    


    

5.9             
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction
Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without
regard to the principles of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement and defense
of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto
or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively
in the state and federal courts sitting in the City of New York. Each party 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 with any transaction contemplated hereby or discussed herein (including with respect to the enforcement
of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Action or Proceeding, any
claim that it is not personally subject to the jurisdiction of any such court, that such Action or Proceeding is improper or is
an inconvenient venue for such Proceeding. Each party hereby irrevocably waives personal service of process and consents to process
being served in any such Action or Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such
service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to
limit in any way any right to serve process in any other manner permitted by law. If any party shall commence an Action or Proceeding
to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Section 4.10,
the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys’
fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action or Proceeding.


5.10         
Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.


5.11         
Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be
considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered
to each other party, it being understood that the parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create
a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect
as if such facsimile or “.pdf” signature page were an original thereof.


5.12         
Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction
to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result
as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention
of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any
of such that may be hereafter declared invalid, illegal, void or unenforceable.




    	 	31	 



    


    

5.13         
Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any
similar provisions of) any of the Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under
a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then
such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant
notice, demand or election in whole or in part without prejudice to its future actions and rights; provided, however,
that in the case of a rescission of an exercise of a Warrant, the applicable Purchaser shall be required to return any shares of
Common Stock subject to any such rescinded exercise notice concurrently with the return to such Purchaser of the aggregate exercise
price paid to the Company for such shares and the restoration of such Purchaser’s right to acquire such shares pursuant to
such Purchaser’s Warrant (including, issuance of a replacement warrant certificate evidencing such restored right).


5.14         
Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen
or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in
the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under
such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance
of such replacement Securities.


5.15         
Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery
of damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The
parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations
contained in the Transaction Documents and hereby agree to waive and not to assert in any Action for specific performance of any
such obligation the defense that a remedy at law would be adequate.


5.16         
Payment Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction
Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement
or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from,
disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person
under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action),
then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.



    	 	32	 



    


    

5.17         
Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction
Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way
for the performance or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained
herein or in any other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto,
shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the
transactions contemplated by the Transaction Documents. Each Purchaser shall be entitled to independently protect and enforce its
rights, including, without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and
it shall not be necessary for any other Purchaser to be joined as an additional party in any Proceeding for such purpose. Each
Purchaser has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents. For
reasons of administrative convenience only, each Purchaser and its respective counsel have chosen to communicate with the Company
through EGS. EGS does not represent any of the Purchasers and only represents the Placement Agent. The Company has elected to provide
all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was required
or requested to do so by any of the Purchasers. It is expressly understood and agreed that each provision contained in this Agreement
and in each other Transaction Document is between the Company and a Purchaser, solely, and not between the Company and the Purchasers
collectively and not between and among the Purchasers.


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


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


5.20         
WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY
OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY,
UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY. 


 


(Signature Pages
Follow)



    	 	33	 



    


    

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


	
        real goods solar, inc.

         

         
	
        Address for Notice:

         

        RGS Energy

        110 16th Street, 3rd Floor

        Denver, CO 80202

        Attn: Tyler Clarke

	
        By: /s/ Dennis Lacey                                    

        Name: Dennis Lacey

        Title: Chief Executive Officer

         

        With a copy to (which shall not constitute notice):
	
        Fax: (303) 648-5464

        Email: investorrelations@rgsenergy.com

	
         

        Rikard Lundberg

        Brownstein Hyatt Farber Schreck, LLP

        410 Seventeenth Street, Suite 2200

        Denver, CO 80202

        Fax: (303) 223-8032

        Email: RLundberg@BHFS.com

         
	


 


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[PURCHASER
SIGNATURE PAGES TO rgse 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 Warrants to Purchaser (if not same as address
for notice):


 


 


DWAC for Shares: _____________


 


Subscription Amount for Shares: _____________ Number of Shares:______________


 


Subscription Amount for Series L Warrants:________________ Number
of Series L Warrants:_________


 


Series K Warrant Shares: _________________


 


I elect for my Warrants to have a ____4.99% or _____9.99% initial
beneficial ownership blocker (if you do not make an election your Warrants will have a 4.99% blocker)


 


EIN Number: _______________________


 


o
Notwithstanding anything contained in this Agreement to the contrary, by checking this box (i) the obligations of the above-signed
to purchase the securities set forth in this Agreement to be purchased from the Company by the above-signed, and the obligations
of the Company to sell such securities to the above-signed, shall be unconditional and all conditions to Closing shall be disregarded,
(ii) the Closing shall occur on the third (3rd) Trading Day following the date of this Agreement and (iii) any condition
to Closing contemplated by this Agreement (but prior to being disregarded by clause (i) above) that required delivery by the Company
or the above-signed of any agreement, instrument, certificate or the like or purchase price (as applicable) shall no longer be
a condition and shall instead be an unconditional obligation of the Company or the above-signed (as applicable) to deliver such
agreement, instrument, certificate or the like or purchase price (as applicable) to such other party on the Closing Date.


 


[SIGNATURE PAGES CONTINUE]





    	 	35	 



    


    









Disclosure Schedule to Securities Purchase
Agreement


Dated February 1, 2017


 


Schedule 3.1(a) Subsidiaries


 


	Entity Name	 	State or country of 

    Incorporation or 

    Registration	 
	 	 	 	 
	Alteris Renewables, Inc.	 	Delaware	1
	Elemental Energy LLC	 	Hawaii	1
	Real Goods Energy Tech, Inc.	 	Colorado	1
	Real Goods Solar, Inc.	 	Colorado	 
	RGS Financing, Inc.	 	Colorado	1
	Mercury Energy, Inc.	 	Delaware	1
	Real Goods Solar, Inc. – Mercury Solar	 	New York	2
	 	 	 	 
	Other entities without material assets	 	 	 
		 		 
	Alteris RPS, LLC	 	Delaware	3
	Real Goods Syndicated, Inc.	 	Delaware	1
	Richmond Peck Solar Farm, LLC	 	Delaware	3
	Sunetric Management LLC	 	Delaware	4
	Mercury Commercial Solar Fund I, LLC	 	New York	2
	Mercury Solar Birch, LLC	 	Delaware	2
	Mercury Solar Cedar, LLC	 	Delaware	2
	Mercury Solar Pine, LLC	 	Delaware	2
	Mercury Residential Solar Fund I, LLC	 	New York	2
	RGS Energy, LLC	 	Puerto Rico	2
	RGS Energy Asset Management, LLC	 	Delaware	1
	RGS Capital, Inc.	 	Delaware	1
	 	 	 	 
	1. Subsidiary of Real Goods Solar, Inc.	 	 	 
	2. Subsidiary of Mercury Energy, Inc.	 	 	 
	3. Subsidiary of Alteris Renewables, Inc.	 	 	 
	4. Subsidiary of Elemental Energy,  LLC	 	 	 


 


The Company has granted a security interest in substantially
all its and its subsidiaries’ assets to Solar Solutions Distribution, LLC to secure obligations under the Company’s
revolving line of credit.




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Schedule 3.1(e) Filings, Consents
and Approvals 


The Prior SPAs (as defined in Schedule 3.1(g)) contain participation
rights, as discussed in Schedule 3.1(g) and incorporated herein by reference. The Company intends to satisfy or obtain waivers
of these participation rights in connection with the transactions contemplated by this Agreement.


The Securities Purchase Agreement dated as of December 8,
2016 provides that from the 31st calendar day after the closing date and ending on February 15, 2017, neither the Company
nor any subsidiary of the Company shall issue, enter into any agreement to issue, or announce the issuance or proposed issuance
of any shares of Common Stock or securities directly or indirectly convertible into or exchangeable or exercisable for Common Stock
at an effective price per share of at least 110% of the per share purchase price. The Company intends to obtain a waiver of this
covenant in connection with the transactions contemplated by this Agreement.


 




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Schedule 3.1(g) Capitalization


 


Capitalization schedule – Authorized and outstanding
as of January 31, 2017 (reflecting 1 for 30 reverse stock split)


	Class/Category	 	Authorized/Reserved	 	Outstanding
	Total authorized shares	 	 	250,000,000	 	 	 	-	 
	Preferred Stock	 	 	50,000,000	 	 	 	-	 
	Class A Common Stock	 	 	150,000,000	 	 	 	1,360,169	 
	Warrants (for Class A Common Stock)	 	 	-	 	 	 	652,704	 
	Stock Options	 	 	52,536	 	 	 	200	 
	 	 	 	 	 	 	 	2,013,073	 






Rights of participation


The Company is a party to three prior Securities Purchase
Agreements noted below (the “Prior SPAs”):


	SPA Date	 	Party	 	Party	 	Participation Rights
	1-Apr-16	 	The Company	 	As designated in SPA	 	Yes
	26-Jun-15	 	The Company	 	As designated in SPA	 	Yes
	23-Feb-15	 	The Company	 	As designated in SPA	 	Yes



 


Each of the Prior SPAs contain “participation rights”
requiring the Company to offer the counter parties the right to participate, to defined participation levels, in any “Subsequent
Placement.” Generally, Subsequent Placements are defined as:


Directly or indirectly, offering, selling, granting
any option to purchase, or otherwise disposing of (or announcing any offering, sale, granting or any option to purchase or other
disposition of) any of the Company’s or its subsidiaries’ equity or equity equivalent securities, including without
limitation any debt, preferred stock or other instrument or security that is, at any time during its life and under any circumstances,
convertible into or exchangeable or exercisable for shares of the Company’s Class A common stock, par value $0.0001 per share
(“Common Stock”) or Common Stock equivalents.


The Company intends to satisfy or obtain waivers of these
participation rights in connection with the transactions contemplated by this Agreement.




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Outstanding options, warrants 


	Outstanding Options, Warrants	 	Current Exercise Price	 	Outstanding	 	 
	Stock options	 	 	$1,428-$46,560	 	 	 	176	 	 	Options outstanding under the Company’s 2008 Long-Term Incentive Plan.
	June 2013 Warrants	 	$	275.00	 	 	 	13,667	 	 	Formula anti-dilution (shares and exercise price); purchase rights for pro-rata issuances; redemption for fundamental transactions and going private
	November 2013 warrants	 	$	40,920	 	 	 	418	 	 	Adjustment of shares and exercise price for splits; purchase rights for pro-rata issuances; redemption for fundamental transactions and going private
	June, 2014 Warrants	 	$	38,280	 	 	 	76	 	 	Adjustment of shares and exercise price for splits; purchase rights for pro-rata issuances; redemption for fundamental transactions and going private
	Feb 2015 A & C Warrants	 	$	6,000	 	 	 	6	 	 	full ratchet anti-dilution (exercise price); purchase rights for pro-rata issuances; adjustment of shares and exercise price for splits; redemption in certain circumstances in fundamental transactions
	Feb 2015 Westpark warrants	 	$	6,000	 	 	 	47	 	 	Adjustment of shares and exercise price for splits; purchase rights for pro-rata issuances; redemption in certain circumstances in fundamental transactions.
	SVB Warrants	 	 	$9,720-$28,320	 	 	 	42	 	 	Ratchet for 12 months (expired); adjustment of shares and exercise price for splits;
	June 2015 Series F warrants	 	$	744.00	 	 	 	685	 	 	One time adjustment of exercise price on July 9, 2015; adjustment of shares and exercise price for splits; purchase rights for pro-rata issuances;
	June 2015 Westpark warrants	 	$	744.00	 	 	 	183	 	 	Adjustment of shares and exercise price for splits; purchase rights for pro-rata issuances; adjustment of exercise price for splits; purchase rights for pro-rata issuances;
	April 2016 Series G Warrants	 	$	496.80	 	 	 	8,300	 	 	One time adjustment of exercise price on April 1, 2017; adjustment of shares and exercise price for splits; purchase rights for pro-rata issuances;
	April 2016 Roth Warrants	 	$	496.80	 	 	 	1,411	 	 	One time adjustment of exercise price on April 1, 2017; adjustment of shares and exercise price for splits; purchase rights for pro-rata issuances;
	September 2016 Series H Warrants	 	$	165.00	 	 	 	7,455	 	 	One time adjustment of exercise price on date all Notes are paid-off; adjustment of shares and exercise price for splits; purchase rights for pro-rata issuances;
	September 2016 Underwriter Warrants	 	$	30,000	 	 	 	5	 	 	Includes 90,177 Class A Common shares, and 25,454 Series H Warrants (see Series H Warrants above);
	December 2016 Series I Warrants	 	$	10.50	 	 	 	616,667	 	 	One time adjustment of exercise price on April 1, 2017; adjustment of shares and exercise price for splits; purchase rights for pro-rata issuances.
	December 2016 Roth Warrants	 	$	10.50	 	 	 	30,834	 	 	Adjustment of shares and exercise price for splits; purchase rights for pro-rata issuances.




In June 2013 the Company issued warrants originally exercisable
to purchase 1,683,488 shares (pre reverse stock splits) of Common Stock (the “June 2013 Warrants), which contain a “formula”
anti-dilution provision as well as a provision adjusting the shares and conversion price for stock splits, reverse stock splits
and the like. There are currently a total of 14,000 shares of Common Stock issuable upon the exercise of the June 2013 Warrants
at an exercise price of $275.00 per share, after adjusting for the applicable reverse stock splits and subsequent issuances of
securities but prior to giving effect to the securities issuable under this Agreement.



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In addition, there are warrants to purchase 6 shares of
Common Stock issued in February 2015 currently outstanding with the right to have their exercise price adjusted to the price of
the securities issued under this Agreement.


Convertible Notes


	Outstanding Convertible Notes	 	Current Conversion Price	 	Note Payable	 	 
	April 2016 Senior Secured Convertible Notes	 	see below	 	$	1,000.00	 	 	Redemption features



 


As previously disclosed, on April 1, 2016, the Company issued
an aggregate of $10,000,000 principal amount of Senior Secured Convertible Notes due April 1, 2019. The Convertible Notes are convertible
at any time, at the option of the holders, into shares of Common Stock at the lower of a fixed and floating conversion price. The
fixed conversion price is currently $482.10 per share, subject to adjustment for stock splits and similar events. The floating
conversion price is equal to the lowest of (i) 85% of the arithmetic average of the five lowest volume-weighted average prices
of the Common Stock during the 20 consecutive trading day period ending on the trading day immediately preceding the delivery of
the applicable conversion notice by such holder of Convertible Notes, (ii) 85% of the volume-weighted average price of the Common
Stock on the trading day immediately preceding the delivery of the applicable conversion notice by such holder of Convertible Notes,
and (iii) 85% of the volume-weighted average price of the Common Stock on the trading day of the delivery of the applicable conversion
notice by such holder of Convertible Notes. The terms of the Convertible Notes permit the Company’s board of directors, with
the prior consent of the “required holders” (as defined in the Convertible Notes), to reduce the then current conversion
price to any amount and for any period of time deemed appropriate by the Company’s board of directors. In no event may the
conversion price be less than $0.25 per share.


In accordance with the terms of the Convertible Notes, the
Company has reduced the conversion price under the Convertible Notes for certain time periods at different prices. Most recently,
the Company reduced the conversion price to $7.50 for November 22, 2016, November 25, 2016, and November 28 through November 30,
2016. The Company expects to continue to offer the holders of the Convertible Notes the ability to convert the remaining amounts
owed under the Convertible Notes at a reduced conversion price as deemed appropriate and in the Company’s interest.


As of January 31, 2017, the holders of the Convertible Notes
have converted an aggregate of $10.5 million of principal and interest under the Convertible Notes, and the Company has issued
659,095 shares of Common Stock at conversion prices between $2.82 and $52.21 per share. After giving effect to the conversions
made as of January 31, 2017, there remains outstanding Convertible Notes with an aggregate principal amount of approximately $1,000.


The Convertible Notes contain certain redemption rights upon,
among other things, the occurrence of an event or default or a “fundamental transaction” (as defined in the Convertible
Notes).


 



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Stock Appreciation Rights


Under the 2008 Long-Term Incentive Plan (amended and restated
November 16, 2016) the Company may grant Stock Appreciation Rights either alone, or in conjunction with other awards, either at
the time of grant or by amendment thereafter. 


Additional Consent


The Securities Purchase Agreement dated as of December 8,
2016 provides that from the 31st calendar day after the closing date and ending on February 15, 2017, neither the Company
nor any subsidiary of the Company shall issue, enter into any agreement to issue, or announce the issuance or proposed issuance
of any shares of Common Stock or securities directly or indirectly convertible into or exchangeable or exercisable for Common
Stock at an effective price per share of at least 110% of the per share purchase price. The Company intends to obtain a waiver
of this covenant in connection with the transactions contemplated by this Agreement. 


Shareholder Agreement


Shareholders Agreement, dated as of December 19, 2011, between
the Company and Riverside Renewable Energy Investments, LLC.


 




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Schedule 3.1(j) Litigation 


On July 9, 2014, the Company completed a private offering
of approximately $7.0 million of its Common Stock and warrants (the “July 2014 PIPE Offering”). Five of the investors
that participated in the offering (out of approximately 20 total investors that participated in the offering) asserted claims against
the Company in three separate lawsuits alleging certain misrepresentations and omissions in the offering. The Company subsequently
reached settlements with all five investors. The Company recorded a charge to operations of $0.5 million as of June 30, 2015, in
recognition of the loss contingency for the July 2014 PIPE offering. That charge was equal to the retention under the Company’s
2014-15 Officers and Directors liability insurance policy as the Company expects the insurance policy will cover any future claims
in excess of the retention limit.


The Company received a subpoena from the U.S. Securities and
Exchange Commission (“SEC”) requesting certain information pertaining to the Company’s 2014 PIPE Offering. The
Company established a special committee of the board of directors to review the facts and circumstances surrounding the PIPE offering
and engaged outside counsel to assist it with its review. On May 11, 2016, the Company was advised by the staff of SEC (the “Staff”)
that the Staff did not intend to recommend any enforcement action against the Company with respect to the investigation commenced
by the Staff in June 2015.


On November 22, 2016, the Company provided the remaining cash
collateral to Argonaut Insurance Company to fully secure the full amount of the $624,000 Final Acceptance Payment and Performance
Bond for a large commercial photovoltaic project the Company’s subsidiary Regrid Power, Inc. completed in 2012. As previously
disclosed, the customer has raised warranty claims pertaining to the project and the Company currently maintains a specific warranty
liability for the project of approximately $200,000. On November 30, 2016, the Company received a letter from the customer in which
the customer alleged that the Company has not completed agreed-upon remedial work to remedy alleged deficiencies and notified the
Company that the customer intends to perform such remedial work at the Company’s expense using a third-party contractor.
The customer also requested that the owner of the project demand the full amount of the performance bond. In addition, the customer
demanded an aggregate of approximately $400,000 as liquidated damages under the terms of the project contract. The Company denies
these assertions and disputes that the customer is entitled to liquidate damages. The Company plans to avail itself of all defenses
and remedies available. The Company estimates that the range of loss related to this warranty claim is from approximately $200,000
to a maximum of approximately $1 million. The Company has recorded a liability for the minimum amount of the range of loss.




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Schedule 3.1(l) Compliance 


The disclosure about the Regrid Power, Inc. warranty claim
and Final Acceptance Payment and Performance Bond set forth under schedule 3.1(j) above is incorporated by reference herein.


 




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Schedule 3.1(o) Title to Assets


The Company has granted a security interest in substantially
all its and its subsidiaries’ assets to Solar Solutions Distribution, LLC to secure obligations under the Company’s
revolving line of credit.


The Company has granted a security interest in certain cash
collateral accounts to the holders of the Company’s Senior Secured Convertible Notes due April 1, 2019.


 




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Schedule 3.1(q) Insurance 


The Company carries directors’ and officers’ liability
insurance for the annual period ending on May 8th. Under the terms of the current policy, which expires on May 8, 2017, the Company
has coverage limits of $3,000,000 maximum aggregate limit of liability with retentions ranging from $750,000 to $1,000,000 depending
on the claim made. Additionally, the Company has “Excess D&O” coverage in the amount of $3,000,000 but has no right
to renew this claims-made policy. The Company may acquire a run off period for another 12 months upon payment of an additional
premium.


 




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Schedule 3.1(v) Registration Rights 


The Company has granted registration rights under the following:


The Amended and Restated Registration Rights Agreement, dated
as of December 19, 2011, by and among the Company, Gaiam, Inc., and Riverside Renewable Energy Investments, LLC. [Note: On November
5, 2013, Gaiam ceased to be a party to the Amended and Restated Registration Rights Agreement pursuant to the terms of an Agreement,
dated November 5, 2013, among the parties.]


The Registration Rights Agreement, dated as of June 3, 2013,
by and among the Company and the investors party thereto.


The Warrants to purchase the Company’s Common Stock,
issued November 20, 2013.


The Registration Rights Agreement, dated as of July 9, 2014,
by and among the Company and the investors party thereto.


The Conversion Agreement dated as of June 24, 2015 by and
between the Company and Riverside Fund III, L.P.


Registration right granted to the Placement Agent.


Pursuant to Section 4.1 of the Securities Purchase Agreement,
dated as of December 8, 2016, by and among the Company and the investors party thereto, the Company has agreed to use its best
efforts to keep a registration statement effective registering the issuance or resale of the shares of Common Stock issuable upon
exercise of the Company’s Series I Warrants, during the term of the Series I Warrants.


 




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Schedule 3.1(w) Listing and Maintenance
Requirements 


The Company received written notice (the “Notice”)
from Nasdaq on April 14, 2016, indicating that, based on the stockholders’ equity reported in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2015, as filed with the SEC on April 1, 2016, the Company was not in compliance
with the minimum stockholders’ equity requirement for continued listing on the Nasdaq Capital Market. As set forth in Nasdaq
Listing Rule 5550(b)(1) (the “Minimum Stockholders’ Equity Requirement”), listed companies are required to maintain
stockholders’ equity of at least $2,500,000.


The Notice had no immediate effect on the listing of the Company’s
Common Stock, par value $0.0001 per share and the Common Stock continues to trade on the Nasdaq Capital Market under the symbol
“RGSE.” The Company had a period of 45 calendar days, or until May 31, 2016, to submit a plan to regain compliance
with the Minimum Stockholders’ Equity Requirement. In the Notice, Nasdaq indicated that, if the Company’s plan is accepted,
Nasdaq may grant an extension of up to 180 calendar days, or until October 11, 2016, to evidence compliance. The Company initially
submitted its plan to regain compliance with the Minimum Stockholders’ Equity Requirement to Nasdaq on May 31, 2016 and provided
Nasdaq with supplemental information in June 2016.


On July 7, 2016, based on the information the Company submitted
to Nasdaq, Nasdaq granted the Company the maximum allowable 180-day extension to October 11, 2016 to evidence compliance with the
Minimum Stockholders’ Equity Requirement.


On October 17, 2016, the Company received a letter from NASDAQ
notifying the Company that it did not meet the terms of the extension and that the Common Stock would be subject to delisting unless
it requests a hearing before a NASDAQ Listing Qualifications Panel (the “Panel”). Accordingly, the Company requested
a hearing, and on December 15, 2016, members of the Company’s management attended a hearing before the Panel. On January
26, 2017, the Company received a determination letter from the Panel, dated January 25, 2017, providing notice that it had regained
compliance with Nasdaq’s minimum shareholders’ equity requirement and as such are eligible for continued listing on
Nasdaq.


The Company will remain subject to a “Panel Monitor”
as that term is defined under Nasdaq Listing Rule 5815(d)(4)(A), through January 15, 2018. Under the terms of the Panel Monitor,
in the event the Company’s shareholders’ equity falls below the $2,500,000 threshold (or any other requirement that
would ordinarily require the Company to submit a compliance plan to the Nasdaq Staff) during the monitor period and the Company
does not qualify for continued listing under an alternative to the shareholders’ equity requirement, the Panel will promptly
conduct a hearing with respect to the shareholders’ equity deficiency.


On December 20, 2016, the Company received a letter from Nasdaq
notifying it that for the prior 30 consecutive business days, the bid price of the Company’s Common Stock had closed below
the minimum $1.00 per-share requirement for continued inclusion on Nasdaq based on Listing Rule 5550(a)(2), and describing a timetable
for bringing the Company into compliance with that rule. Under Listing Rule 5810(c)(3)(A), the Company has 180 calendar days, or
until June 19, 2017, to regain compliance. If at any time before then, the Company’s Common Stock has a closing bid price
of $1.00 or more for a minimum of 10 consecutive business days, Nasdaq staff will provide the Company with notice that it has have regained compliance. If the Company does
not meet the requirements of Rule 5550(a)(2) by June 19, 2017, but meet the continued listing requirement for market value of publicly
held shares and all other applicable standards for initial listing on The Nasdaq Capital Market (other than the minimum bid price
requirement), the Company may be eligible for an additional 180-day compliance period.



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Schedule 3.1(aa) Solvency 


Outstanding secured and unsecured Indebtedness owed in excess
of $50,000 (other than trade accounts payable incurred in the ordinary course of business) as of January 26, 2017: 





	Vendor	 	Type	 	Indebtedness	 	 
	 Hudson Bay Capital	 	 Convertible Notes	 	$	1,000	 	 	 	 Secured 	 
	 California Board of Equalization	 	 Sales tax audit	 	$	82,071	 	 	 	 Unsecured 	 
	 CNA Insurance	 	 Legal fees paid	 	$	1,503,609	 	 	 	 Unsecured 	 












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Schedule 3.1(bb) – Tax Status


 


On October 13, 2015 the California Board of Equalization issued
a determination that the Company owes $272,333 in past due sales taxes for the period from October 1, 2011 to March 31, 2014. The
Company has booked this liability on its financial statements for the year ended December 31, 2015. The Company intends to pay
this assessment in monthly installments through February 28, 2017 and evaluate this determination and the opportunity to obtain
a refund of some or all of this amount. The balance due as of January 31, 2017 is $82,071.


 




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Schedule 3.1(dd) Accountants


 


The Company’s accounting firm for its 2016 financial
statements is Hein & Associates, LLP


 


 



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