Exhibit 10.1


 


SECURITIES
PURCHASE AGREEMENT


 


This
Securities Purchase Agreement (this “Agreement”) is dated as of May 28, 2020, between Recruiter.com Group,
Inc., a Nevada 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 Section 4(a)(2) of the Securities Act of 1933,
as amended (the “Securities Act”), and Rule 506 promulgated thereunder, the Company desires to issue and sell
to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company
as more fully described in this Agreement.


 


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


 


ARTICLE
I.


DEFINITIONS


 


1.1
Definitions. In addition to the terms defined elsewhere in this Agreement: (a) capitalized terms that are not otherwise
defined herein have the meanings given to such terms in the Debentures (as defined herein), and (b) 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 other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed
to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential
employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of
any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks
in The City of New York are generally are open for use by customers on such day.


 


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




    


     


    

 


“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable
parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii)
the Company’s obligations to deliver the Securities, in each case, have been satisfied or waived. Pursuant to the terms
of this Agreement, there may be one or more Closing Dates hereunder.


 


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


 


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


 


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


 


“Conversion
Price” shall have the meaning ascribed to such term in the Debentures.


 


“Debentures”
means the 12.5% Original Issue Discount Senior Subordinated Secured Convertible Debentures due, subject to the terms therein,
12 months from their date of issuance unless extended pursuant to the terms thereunder, issued by the Company to the Purchasers
hereunder, in the form of Exhibit A attached hereto.


 


“Disclosure
Time” means, (i) if this Agreement is signed on a day that is not a Trading Day or after 9:00 a.m. (New York City time)
and before midnight (New York City time) on any Trading Day, 9:01 a.m. (New York City time) on the Trading Day immediately following
the date hereof, and (ii) if this Agreement is signed between midnight (New York City time) and 9:00 a.m. (New York City time)
on any Trading Day, no later than 9:01 a.m. (New York City time) on the date hereof.


 


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


 


“Escrow
Agent” means Signature Bank, with offices located at 565 Fifth Avenue, New York, NY 10017.


 


“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.


 




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“Exempt
Issuance” means the issuance of (a) shares of Common Stock, restricted stock units 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, (b) securities upon the exercise, exchange of or conversion of any Securities issued
hereunder and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding
on the date of this Agreement, 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) or to extend the term of such securities, (c) securities issued pursuant
to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided that
such securities are issued as “restricted securities” (as defined in Rule 144) and carry no registration rights that
require or permit the filing of any registration statement in connection therewith, and 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, (d) restricted stock units,
restricted stock and options to consultants of the Company provided, however, any such issuances to consultants shall not exceed,
in the aggregate, 350,000 shares of underlying Common Stock, (e) Securities pursuant to the Transaction Documents, (f) securities
in a Qualified Offering and (g) additional units consisting of shares of Series D Convertible Preferred Stock of the Company and
related warrants pursuant to an agreement similar to that certain Securities Purchase Agreement, dated March 31, 2019, as amended,
among the Company and the investors named therein, provided that the net proceeds from the sale of such units shall not
exceed $75,000, provided further, that such issuance will be limited to one investor that has previously subscribed for
the units but has not funded as of the date of this Agreement.


 


“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(bb).


 


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


 


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


 


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


 




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“Lock-Up
Agreement” means the Lock-Up Agreement, dated as of the date hereof, by and among the Company and the directors, officers,
and holders of the Company’s Series E Convertible Preferred Stock and Series F Convertible Preferred Stock that are also
beneficial holders of 5% or more of Common Stock or Common Stock Equivalents, in the form of Exhibit E attached hereto.


 


“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(m).


 


“Maximum
Amount” means an aggregate of $2,953,125 in principal amount of Debentures representing cash payments from
Purchasers of $2,625,000based on the 12.5% Original Issue Discount on the Debentures.


 


“Maximum
Rate” shall have the meaning ascribed to such term in Section 5.17.


 


“Minimum
Amount” means a minimum of $450,000 in principal amount of Debentures representing cash payments from Purchasers of
$400,000 based on the 12.5% Original Issue Discount on the Debentures.


 


“Offering”
means the offering of Debentures and Warrants pursuant to this Agreement and the other Transaction Documents.


 


“Offering
Period” means the earlier of (i) the sale of the Maximum Amount, (ii) termination of the Offering as determined by
the Company and the Placement Agent or (iii) June 12, 2020, which date may be extended by the Placement Agent and the Company
in their joint discretion to July 13, 2020, subject to a further extension to August 14, 2020.


 


“Participation
Maximum” shall have the meaning ascribed to such term in Section 4.12(a).


 


“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.


 


“Placement
Agent” means Joseph Gunnar & Co. LLC.


 


“Pledged
Securities” means any and all certificates and other instruments representing or evidencing all of the capital stock
and other equity interests of the Subsidiaries.


 


“Pro
Rata Portion” shall have the meaning ascribed to such term in Section 4.12(e).


 


“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.


 




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“Principal
Amount” means, as to each Purchaser, the amounts set forth below such Purchaser’s signature block on the signature
pages hereto next to the heading “Principal Amount,” in United States Dollars, which shall equal such Purchaser’s
Subscription Amount multiplied by 1.125.


 


“Public
Information Failure” shall have the meaning ascribed to such term in Section 4.3(b).


 


“Public
Information Failure Payments” shall have the meaning ascribed to such term in Section 4.3(b).


 


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


 


“Qualified
Offering” shall mean an offering of Common Stock (or units consisting of Common Stock and warrants to purchase
Common Stock) for an aggregate price of at least $5,000,000 resulting in the listing for trading of the Common Stock on the
NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock
Exchange (or any successors to any of the foregoing).


 


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


 


“Required
Minimum” means, as of any date beginning 90 days from the date of this Agreement, subject to Section 5.23, four
times (4x) the maximum aggregate number of shares of Common Stock then issued or potentially issuable in the future pursuant
to the Transaction Documents, including any Underlying Shares issuable upon exercise in full of all Warrants or conversion in
full of all Debentures (including Underlying Shares issuable as payment of interest on the Debentures), ignoring any
conversion or exercise limits set forth therein.


 


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


 


“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.


 


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


 


“Securities”
means the Debentures, the Warrants, the Warrant Shares and the Underlying Shares.


 


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


 




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“Security
Agreement” means the Security Agreement, dated the date hereof, by and among the Company and the Purchasers, in the
form of Exhibit B attached hereto.


 


“Security
Documents” shall mean the Security Agreement, the Subsidiary Guarantees, the original Pledged Securities, along with
medallion guaranteed executed blank stock powers to the Pledged Securities, and any other documents and filing required thereunder
in order to grant the Purchasers a security interest in the assets of the Company and the Subsidiaries as provided in the Security
Agreement, including all UCC-1 filing receipts.


 


“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 locating and/or borrowing shares of Common Stock).


 


“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for the Debentures 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.


 


“Subsequent
Financing” shall have the meaning ascribed to such term in Section 4.12(a).


 


“Subsequent
Financing Notice” shall have the meaning ascribed to such term in Section 4.12(b).


 


“Subsidiary”
means any subsidiary of the Company as set forth in 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.


 


“Subsidiary
Guarantee” means the Subsidiary Guarantee, dated as of the date hereof, by each Subsidiary in favor of the Purchasers,
in the form of Exhibit C attached hereto.


 


“Termination
Date” means the date on which the Offering expires or is terminated.”


 


“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 American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market,
the New York Stock Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).


 


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


 




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“Transfer
Agent” means Equity Stock Transfer, the current transfer agent of the Company, with a mailing address of 237 W 37th
St. Suite 602, New York, NY 10018 and a facsimile number of (347) 584-3644, and any successor transfer agent of the Company.


 


“Underlying
Shares” means the Warrant Shares and the shares of Common Stock issued and issuable pursuant to the terms of the Debenture,
including without limitation, shares of Common Stock issued and issuable in lieu of the cash payment of interest on the Debentures
in accordance with the terms of the Debentures, in each case without respect to any limitation or restriction on the conversion
of the Debentures or the exercise of the Warrants.


 


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


 


“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based
on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading
Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX
as applicable, (c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common
Stock are then reported on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting
prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value
of a share of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers of a majority in
interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be
paid by the Company.


 


“Warrants”
means, collectively, the 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 three (3) years, in the form
of Exhibit D attached hereto.


 


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


 






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ARTICLE
II.


PURCHASE
AND SALE


 


2.1 Closing.
On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the
execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally and
not jointly, agree to purchase, Debentures and Warrants as set forth on each Purchaser’s signature page hereto. Each
Purchaser shall have delivered to the Escrow Agent pursuant to the instructions contained on Schedule 2.1, via wire
transfer or a certified check, immediately available funds equal to such Purchaser’s Subscription Amount as set forth
on the signature page hereto executed by such Purchaser. Upon the Escrow Agent’s receipt of the Minimum Amount and the
exchange of items set forth in Section 2.2, the Company and the Placement Agent may give notice to the Escrow Agent to
arrange an initial Closing. At any Closing hereunder, the Company shall deliver to each Purchaser its respective Debenture
and 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. Following the initial Closing where at least the Minimum Amount is sold,
subsequent closings may be held up to the sale of the Maximum Amount. Upon satisfaction of the covenants and conditions set
forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of EGS or such other location as the parties shall
mutually agree. Closings hereunder shall only be held during the Offering Period and in no event shall a Closing occur after
the Termination Date.


 


2.2 Deliveries.




 


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


 


 (i) this Agreement duly executed by the Company;




 


(ii) a
Debenture with a principal amount equal to such Purchaser’s Principal Amount, registered in the name of such Purchaser;


 


(iii) a
Warrant registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal to 100% of the shares
of Common Stock initially issuable pursuant to such Purchaser’s Debenture (without regard for any beneficial ownership limitations)
with an exercise price equal to $2.00 per share (subject to adjustment therein);


 


(iv) the
Security Agreement, duly executed by the Company and each Subsidiary, along with all of the Security Documents, including the
Subsidiary Guarantee, duly executed by the parties thereto, the original Pledged Securities and corresponding stock powers; and


 


 (v) the Lock-Up Agreements.




 


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


 


 (i) this Agreement duly executed by such Purchaser;




 


(ii) such
Purchaser’s Subscription Amount as to the Closing by wire transfer to the Escrow Agent to the account specified in Schedule
2.1 hereto;


 


 (iii) Purchaser Questionnaire in the form of Exhibit F hereto; and




 


 (iv) the Security Agreement duly executed by such Purchaser;




 






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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 on (or, to the extent representations or warranties are qualified by materiality or Material
Adverse Effect, in all respects) 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);


 


(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 (it being understood that the Company may waive any of the conditions for any Closing hereafter):


 


(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 Escrow Agent on behalf of 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.


 




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ARTICLE
III.


REPRESENTATIONS
AND WARRANTIES


 


3.1 Representations
and Warranties of the Company. The Company hereby makes the following representations and warranties to each Purchaser:


 


(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, except as disclosed on Schedule 3.1(b). 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.




 


(i) 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 stockholders 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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(ii) With
respect to the Subsidiary Guarantee, each of the Subsidiaries has the requisite corporate power and authority to enter into and
to consummate the transactions contemplated by such agreement and otherwise to carry out its obligations thereunder. The execution
and delivery of the Subsidiary Guarantee and the consummation by the Company of the transactions contemplated thereby have been
duly authorized by all necessary action on the part of the Company, and no further action is required by the respective Subsidiary,
its managers or its members in connection therewith. The Subsidiary Guarantee has been (or upon delivery will have been) duly
executed by the respective Subsidiaries and, when delivered in accordance with the terms thereof, will constitute the valid and
binding obligation of the respective Subsidiary enforceable against such Subsidiary in accordance with its terms, except (A) as
listed by general equitable principals and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors’ rights generally, (B) as limited by laws relating to the availability of
specific performance, injunctive relief or other equitable remedies and (C) insofar as indemnification and contribution provisions
may be limited by applicable law.


 


(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 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, or (ii) conflict with, or constitute a default
(or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon
any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution
or similar adjustments, 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 except
as disclosed on Schedule 3.1(d), 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.


 




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(e) Filings,
Consents and Approvals. Except as disclosed on Schedule 3.1(e),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 notice and/or
application(s) to each applicable Trading Market for the issuance and sale of the Securities and the listing of the Underlying
Shares for trading thereon in the time and manner required thereby and (iii) the filing of Form D with the Commission and such
filings as are required to be made under applicable state securities laws (collectively, the “Required Approvals”).


 


(f) Issuance
of the Securities. 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 other
than restrictions on transfer provided for in the Transaction Documents. The Underlying Shares, when issued in accordance with
the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed
by the Company other than restrictions on transfer provided for in the Transaction Documents. Subject to Section 5.23 hereof,
on or before 90 days from the date of this Agreement, the Company will reserve from its duly authorized capital stock a number
of shares of Common Stock for issuance of the Underlying Shares at least equal to the Required Minimum on the date hereof.


 


(g) Capitalization.
The capitalization of the Company as of the date hereof is as set forth in the SEC Reports. The Company has not issued any
capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of
employee stock options under the Company’s stock option plans, the issuance of shares of Common Stock to employees or
consultants 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. No
Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the
transactions contemplated by the Transaction Documents, except as disclosed on Schedule 3.1(g). Except as a result of
the purchase and sale of the Securities and, as disclosed in the Company’s SEC Reports and Schedule 3.1(g),
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 on 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). Except as disclosed in the SEC Reports, there are no
outstanding securities or instruments of the Company or any Subsidiary with any provision that adjusts the exercise,
conversion, exchange or reset price of such security or instrument upon an issuance of securities by the Company or any
Subsidiary. 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. 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. No further approval or
authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities,
except for shareholder approval to increase the number of authorized shares of Common Stock. There are no stockholders
agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the
Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.


 






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(h) SEC
Reports; Financial Statements. Except as set forth on Schedule 3.1(h), 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, being collectively referred to herein as the “SEC Reports”) on a timely
basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any
such extension. Except as set forth on Schedule 3.1(h), as of their respective dates, the SEC Reports complied in all material
respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed,
contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Except
as set forth on Schedule 3.1(h), 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.


 


(i) Material
Changes; Undisclosed Events, Liabilities or Developments. Except as disclosed on Schedule 3.1(i) since the date of
the latest audited financial statements included within the SEC Reports, except as set forth on in the SEC Reports, (i) there
has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material
Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and
accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required
to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the
Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to
purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer,
director or Affiliate, except pursuant to existing Company stock option plans. The Company does not have pending before the
Commission any request for confidential treatment of information. Except for the issuance of the Securities contemplated by
this Agreement or as set forth in the SEC Reports, 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 or the
Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse
Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action
involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty.
There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission
involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order
or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange
Act or the Securities Act.


 


(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.


 






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(l) Compliance.
Except as disclosed 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 where
in each clause (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate,
a Material Adverse Effect.


 


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


 




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(o) Title
to Assets. 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.


 


(p) Intellectual
Property. Except as set forth on Schedule 3.1(p), the Company and the Subsidiaries have, or have rights to use, all
patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights,
licenses and other intellectual property rights and similar rights necessary or 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 not have a Material Adverse Effect. To the knowledge of the Company, all
such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual
Property Rights. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality
and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.


 


(q) Insurance.
The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, 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.


 






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(r) Transactions
with Affiliates and Employees. Except as set forth in the SEC Reports and Schedule 3.1(r), none of the officers or
directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary
is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing
for rental of real or personal property to or from providing for the borrowing of money from or lending of money to, or otherwise
requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which
any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member
or partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered,
(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. Except as disclosed in the SEC Reports, 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. Except as disclosed in the SEC Reports, 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) that have materially affected, or is reasonably likely
to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.


 


(t) Certain
Fees. Except with respect to the fees and expenses payable to the Placement Agent as described in Section 5.2 hereto, no
brokerage or finder’s fees or commissions or other remuneration are or will be payable by the Company or any
Subsidiaries directly or indirectly 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.


 






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


 


(v) 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.


 


(w) Registration
Rights. 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 Subsidiaries.


 


(x) Listing
and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the
Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration
of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating
terminating such registration. Except as disclosed on Schedule 3.1(x) 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. 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.


 


(y) 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 Purchasers’ ownership of the Securities.


 






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(z) Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents and except
as set forth on Schedule 3.1(z), the Company confirms that neither it nor any other Person acting on its behalf has provided
any of the Purchasers or their agents or counsel with any information that it believes constitutes or might constitute material,
non-public information. The Company understands and confirms that the Purchasers will rely on the foregoing representation in
effecting transactions in securities of the Company. All 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
Transaction Documents and 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 the 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 the 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.


 


(aa)
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 (i) the Securities Act which would
require the registration of any such securities under the Securities Act, or (ii) any applicable shareholder approval provisions
of any Trading Market on which any of the securities of the Company are listed or designated.


 


(bb) 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 Minimum Amount of Securities hereunder, the Company will have sufficient
cash to operate its business as currently operated for a period of three months from the initial Closing Date. 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(bb) 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. Except as disclosed on Schedule
3.1(bb), neither the Company nor any Subsidiary is in default with respect to any Indebtedness.


 






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(cc)
Tax Status. Except as disclosed on Schedule 3.1(cc) and except for matters that would not, individually or in the
aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and 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. 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.


 


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


 


(ee)
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.


 


(ff)
Accountants. The Company’s accounting firm is set forth in the SEC Reports. 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, 2020.


 


(gg)
Seniority. As of the Closing Date, except as provided in Schedule 3.1(gg), no Indebtedness or other claim against
the Company is senior to the Debentures in right of payment, whether with respect to interest or upon liquidation or dissolution,
or otherwise, other than indebtedness secured by purchase money security interests (which is senior only as to underlying assets
covered thereby) and capital lease obligations (which is senior only as to the property covered thereby).


 






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


 


(ii)
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.


 


(jj)
Acknowledgment Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary
notwithstanding (except for Sections 3.2(g) 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 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
private placement 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 are outstanding, including, without limitation, during the periods that the value of the
Underlying Shares deliverable with respect to Securities are being determined, and (z) such hedging activities (if any) could
reduce the value of the existing stockholders’ 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.


 


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


 






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(ll)
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.


 


(mm)
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”).


 


(nn)
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.


 


(oo)
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, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent
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.


 


(pp)
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.


 






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(qq)No
Disqualification Events. With respect to the Securities to be offered and sold hereunder in reliance on Rule 506 under
the Securities Act, none of the Company, any of its predecessors, any affiliated issuer, any director, executive officer,
other officer of the Company participating in the offering hereunder, any beneficial owner of 20% or more of the
Company’s outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term
is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale (each, an
“Issuer Covered Person” and, together, “Issuer Covered Persons”) is subject to any of
the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a
“Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The
Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event.
The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to
the Purchasers a copy of any disclosures provided thereunder.


 


(rr)
Other Covered Persons. The Company is not aware of any person (other than any Issuer Covered Person) that has been or will
be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of any Securities.


 


(ss)
Notice of Disqualification Events. The Company will notify the Purchasers in writing, prior to the Closing Date of (i)
any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become
a Disqualification Event relating to any Issuer Covered Person.


 


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.


 






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


 


(c) 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 or converts any Debentures it will be either an “accredited investor” as defined in
Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) 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 has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk
of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.


 


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


 


(f) 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 merits and risks of investing in the Securities; (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, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 as filed
with the Commission on May 8, 2020, the investor presentation attached as Exhibit G to this Agreement and term sheet attached
as Exhibit H to this Agreement; 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.


 






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(g) Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has not,
nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any
purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such
Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting
forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding
the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions
made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth above shall
only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase
the Securities covered by this Agreement. Other than to other Persons party to this Agreement or to such Purchaser’s representatives,
including, without limitation, its officers, directors, partners, legal and other advisors, employees, agents and Affiliates,
such Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including
the existence and terms of this transaction). Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein
shall constitute a representation or warranty against, or a prohibition of, any actions with respect to the borrowing of, arrangement
to borrow, identification of the availability of, and/or securing of, securities of the Company in order for such Purchaser (or
its broker or other financial representative) to effect Short Sales or similar transactions in the future.


 


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. Notwithstanding the foregoing, for the avoidance
of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to locating
or borrowing shares in order to effect Short Sales or similar transactions in the future.


 


ARTICLE
IV.


OTHER
AGREEMENTS OF THE PARTIES


 


4.1 Transfer
Restrictions.




 


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


 






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


 


[NEITHER]
THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS [EXERCISABLE] [CONVERTIBLE] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES
AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS
SECURITY [AND THE SECURITIES ISSUABLE UPON [EXERCISE] [CONVERSION] OF THIS SECURITY] MAY BE PLEDGED IN CONNECTION WITH A BONA
FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR”
AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.


 


The
Company acknowledges and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a
registered broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited
investor” as defined in Rule 501(a) under the Securities Act and, if required under the terms of such arrangement, such
Purchaser may transfer pledged or secured Securities to the pledgees or secured parties. Such a pledge or transfer would not be
subject to approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required
in connection therewith. Further, no notice shall be required of such pledge. At the appropriate Purchaser’s expense, the
Company will execute and deliver such reasonable documentation as a pledgee or secured party of Securities may reasonably request
in connection with a pledge or transfer of the Securities, including, if the Securities have been registered for resale pursuant
to a registration statement, the preparation and filing of any required prospectus supplement under Rule 424(b)(3) under the Securities
Act or other applicable provision of the Securities Act to appropriately amend the list of selling stockholders thereunder.


 






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(c) Certificates
evidencing the Underlying Shares shall not contain any legend (including the legend set forth in Section 4.1(b) hereof): (i)
while a registration statement covering the resale of such security is effective under the Securities Act, (ii) following any
sale of such Underlying Shares pursuant to Rule 144 (assuming cashless exercise of the Warrants), or (iii) if such legend is
not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements
issued by the staff of the Commission). The Company shall, at its expense, cause its counsel, or at the option of a
Purchaser, counsel determined by such Purchaser, to issue a legal opinion to the Transfer Agent or the Purchaser promptly if
required by the Transfer Agent to effect the removal of the legend hereunder, or if requested by a Purchaser, respectively
subject to compliance with the Securities Act and/or Rule 144 (for the avoidance of doubt, the Company shall pay all costs
associated with such opinions). If all or any portion of a Debenture is converted or Warrant is exercised at a time when
there is an effective registration statement to cover the resale of the Underlying Shares, or if such Underlying Shares may
be sold under Rule 144 or if such legend is not otherwise required under applicable requirements of the Securities Act
(including judicial interpretations and pronouncements issued by the staff of the Commission) then such Underlying Shares
shall be issued free of all legends. The Company agrees that at such time as such legend is no longer required under this
Section 4.1(c), it will, no later than the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising
the Standard Settlement Period (as defined below) following the delivery by a Purchaser to the Company or the Transfer Agent
of a certificate representing Underlying Shares, as applicable, issued with a restrictive legend (such date, the
“Legend Removal Date”), deliver or cause to be delivered to such Purchaser a certificate representing such
shares that is free from all restrictive and other legends. The Company may not make any notation on its records or give
instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section 4. Certificates for
Underlying Shares subject to legend removal hereunder shall be transmitted by the Transfer Agent to the Purchaser by
crediting the account of the Purchaser’s prime broker with the Depository Trust Company System as directed by such
Purchaser. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in
a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the
date of delivery of a certificate representing Underlying Shares, as applicable, issued with a restrictive legend.


 


(d) In
addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, (i) as partial
liquidated damages and not as a penalty, for each $1,000 of Underlying Shares (based on the VWAP of the Common Stock on the
date such Securities are submitted to the Transfer Agent) delivered for removal of the restrictive legend and subject to
Section 4.1(c), $10 per Trading Day (increasing to $20 per Trading Day five (5) Trading Days after such damages have begun to
accrue) for each Trading Day after the Legend Removal Date until such certificate is delivered without a legend and (ii) if
the Company fails to (a) issue and deliver (or cause to be delivered) to a Purchaser by the Legend Removal Date a certificate
representing the Securities so delivered to the Company by such Purchaser that is free from all restrictive and other legends
and (b) if after the Legend Removal Date such Purchaser purchases (in an open market transaction or otherwise) shares of
Common Stock to deliver in satisfaction of a sale by such Purchaser of all or any portion of the number of shares of Common
Stock, or a sale of a number of shares of Common Stock equal to all or any portion of the number of shares of Common Stock
that such Purchaser anticipated receiving from the Company without any restrictive legend, then, an amount equal to the
excess of such Purchaser’s total purchase price (including brokerage commissions and other out-of-pocket expenses, if
any) for the shares of Common Stock so purchased (including brokerage commissions and other out-of-pocket expenses, if any)
(the “Buy-In Price”) over the product of (A) such number of Underlying Shares that the Company was
required to deliver to such Purchaser by the Legend Removal Date multiplied by (B) the lowest closing sale price of the
Common Stock on any Trading Day during the period commencing on the date of the delivery by such Purchaser to the Company of
the applicable Underlying Shares (as the case may be) and ending on the date of such delivery and payment under this clause
(ii).


 






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(e) Each
Purchaser, severally and not jointly with the other Purchasers, agrees with the Company that such Purchaser will sell any Securities
pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements,
or an exemption therefrom, and that if Securities are sold pursuant to a registration statement, they will be sold in compliance
with the plan of distribution set forth therein, and acknowledges that the removal of the restrictive legend from certificates
representing Securities as set forth in this Section 4.1 is predicated upon the Company’s reliance upon this understanding.


 


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


 


4.3 Furnishing
of Information; Public Information.




 


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


 


(b) At
any time during the period commencing from the six (6) month anniversary of the date hereof and ending at such time that all
of the Securities may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise
without restriction or limitation pursuant to Rule 144, if the Company (i) shall fail for any reason to satisfy the current
public information requirement under Rule 144(c) or (ii) has ever been an issuer described in Rule 144 (i)(1)(i) or becomes
an issuer in the future, and the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (a “Public
Information Failure”) then, in addition to such Purchaser’s other available remedies, the Company shall pay
to a Purchaser, in cash, as partial liquidated damages and not as a penalty, by reason of any such delay in or reduction of
its ability to sell the Securities, an amount in cash equal to two percent (2.0%) of the aggregate Subscription Amount of
such Purchaser’s Securities on the day of a Public Information Failure and on every thirtieth (30th) day (pro rated for
periods totaling less than thirty days) thereafter until the earlier of (a) the date such Public Information Failure is cured
and (b) such time that such public information is no longer required for the Purchasers to transfer the Underlying Shares
pursuant to Rule 144. The payments to which a Purchaser shall be entitled pursuant to this Section 4.3(b) are referred to
herein as “Public Information Failure Payments.” Public Information Failure Payments shall be paid on the
earlier of (i) the last day of the calendar month during which such Public Information Failure Payments are incurred and (ii)
the third (3rd) Business Day after the event or failure giving rise to the Public Information Failure Payments is cured. In
the event the Company fails to make Public Information Failure Payments in a timely manner, such Public Information Failure
Payments shall bear interest at the rate of 1.5% per month (prorated for partial months) until paid in full. Nothing herein
shall limit such Purchaser’s right to pursue actual damages for the Public Information Failure, and such Purchaser
shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief.


 






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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 in a manner that would require
the registration under the Securities Act of the sale of the Securities or 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 Conversion
and Exercise Procedures. Each of the form of Notice of Exercise included in the Warrants and the form of Notice of Conversion
included in the Debentures set forth the totality of the procedures required of the Purchasers in order to exercise the Warrants
or convert the Debentures. Without limiting the preceding sentences, no ink-original Notice of Exercise or Notice of Conversion
shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise or
Notice of Conversion form be required in order to exercise the Warrants or convert the Debentures. No additional legal opinion,
other information or instructions shall be required of the Purchasers to exercise their Warrants or convert their Debentures.
The Company shall honor exercises of the Warrants and conversions of the Debentures and shall deliver Underlying 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 the Disclosure Time, 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 connection with the transactions contemplated by the Transaction Documents. 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).


 






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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 under the Transaction Documents or under any other agreement between the Company and the Purchasers.


 


4.8 Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction
Documents, which shall be disclosed pursuant to Section 4.6, 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, 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.


 






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4.9 Use
of Proceeds. Except as set forth on Schedule 4.9 attached hereto, the Company shall use the net proceeds from the
sale of the Securities hereunder for working capital purposes and shall not use such proceeds: (a) for the satisfaction of
any portion of the Company’s debt (other than payment of trade payables in the ordinary course of the Company’s
business and prior practices), (b) for the redemption of any Common Stock or Common Stock Equivalents, (c) for the settlement
of any outstanding litigation (d) in violation of FCPA or OFAC regulations or (e) to lend, give credit or make advances to
any officers, directors, employees or affiliates of the Company.


 


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 stockholder of the Company who is not an Affiliate of such Purchaser Party, with
respect to any of the transactions contemplated by the Transaction Documents (unless such action is solely based upon a
material 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 stockholder or any violations by such Purchaser
Party of state or federal securities laws or any conduct by such Purchaser Party which is finally judicially determined to
constitute fraud, gross negligence or willful misconduct). 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.


 






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4.11 Reservation
and Listing of Securities.




 


(a) Subject
to Section 4.11(b), the Company shall maintain a reserve of the Required Minimum 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) If,
on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than the Required
Minimum on such date, then the Board of Directors shall use commercially reasonable efforts to amend the Company’s certificate
or articles of incorporation to increase the number of authorized but unissued shares of Common Stock to at least the Required
Minimum at such time, as soon as possible and in any event not later than the 90th day after such date.


 


(c) 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 Required
Minimum on the date of such application, (ii) take all steps necessary to cause such shares of Common Stock to be approved for
listing or quotation on such Trading Market as soon as possible thereafter, (iii) provide to the Purchasers evidence of such listing
or quotation and (iv) maintain the listing or quotation of such Common Stock on any date at least equal to the Required Minimum
on such date on such Trading Market or another Trading Market. The Company agrees to maintain the eligibility of the Common Stock
for electronic transfer through the Depository Trust Company or another established clearing corporation, including, without limitation,
by timely payment of fees to the Depository Trust Company or such other established clearing corporation in connection with such
electronic transfer.


 


4.12 Participation
in Future Financing.




 


(a) From
the date hereof until the date that is the 24 month anniversary of the Closing Date, upon any issuance by the Company or any of
its Subsidiaries of Common Stock or Common Stock Equivalents for consideration (a “Subsequent Financing”),
each Purchaser shall have, subject to the prior participation rights of the holders of the Company’s Series D Convertible
Preferred Stock under that certain Securities Purchase Agreement, dated March 31, 2019, as amended, the right to participate in
up to an amount of the Subsequent Financing equal to 33% of the Subsequent Financing (the “Participation Maximum”)
on the same terms, conditions and price provided for in the Subsequent Financing. Provided, however, that this Section
4.12 does not apply to any securities offerings of the Company with a broker-dealer acting either as principal or agent.


 






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(b) Between
the time period of 4:00 pm (New York City time) and 6:00 pm (New York City time) on the Trading Day immediately prior to the
Trading Day of the expected announcement of the Subsequent Financing (or, if the Trading Day of the expected announcement of
the Subsequent Financing is the first Trading Day following a holiday or a weekend (including a holiday weekend), between the
time period of 4:00 pm (New York City time) on the Trading Day immediately prior to such holiday or weekend and 2:00 pm (New
York City time) on the day immediately prior to the Trading Day of the expected announcement of the Subsequent Financing),
the Company shall deliver to each Purchaser a written notice of the Company’s intention to effect a Subsequent
Financing (a “Subsequent Financing Notice”), which notice shall describe in reasonable detail the proposed
terms of such Subsequent Financing, the amount of proceeds intended to be raised thereunder and the Person or Persons through
or with whom such Subsequent Financing is proposed to be effected and shall include a term sheet and transaction documents
relating thereto as an attachment.


 


(c) Any
Purchaser desiring to participate in such Subsequent Financing must provide written notice to the Company by 6:30 am (New York
City time) on the Trading Day following the date on which the Subsequent Financing Notice is delivered to such Purchaser (the
“Notice Termination Time”) that such Purchaser is willing to participate in the Subsequent Financing, the amount
of such Purchaser’s participation, and representing and warranting that such Purchaser has such funds ready, willing, and
available for investment on the terms set forth in the Subsequent Financing Notice. If the Company receives no such notice from
a Purchaser as of such Notice Termination Time, such Purchaser shall be deemed to have notified the Company that it does not elect
to participate in such Subsequent Financing.


 


(d) If,
by the Notice Termination Time, notifications by the Purchasers of their willingness to participate in the Subsequent Financing
(or to cause their designees to participate) is, in the aggregate, less than the total amount of the Subsequent Financing, then
the Company may effect the remaining portion of such Subsequent Financing on the terms and with the Persons set forth in the Subsequent
Financing Notice.


 


(e) If,
by the Notice Termination Time, the Company receives responses to a Subsequent Financing Notice from Purchasers seeking to purchase
more than the aggregate amount of the Participation Maximum, each such Purchaser shall have the right to purchase its Pro Rata
Portion (as defined below) of the Participation Maximum. “Pro Rata Portion” means the ratio of (x) the Subscription
Amount of Securities purchased on the Closing Date by a Purchaser participating under this Section 4.12 and (y) the sum of the
aggregate Subscription Amounts of Securities purchased on the Closing Date by all Purchasers participating under this Section
4.12.


 


(f) The
Company must provide the Purchasers with a second Subsequent Financing Notice, and the Purchasers will again have the right of
participation set forth above in this Section 4.12, if the definitive agreement related to the initial Subsequent Financing Notice
is not entered into for any reason on the terms set forth in such Subsequent Financing Notice within two (2) Trading Days after
the date of delivery of the initial Subsequent Financing Notice.


 




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(g) The
Company and each Purchaser agree that, if any Purchaser elects to participate in the Subsequent Financing, the transaction documents
related to the Subsequent Financing shall not include any term or provision that, directly or indirectly, will, or is intended
to, exclude one or more of the Purchasers from participating in a Subsequent Financing, including, but not limited to, provisions
whereby such Purchaser shall be required to agree to any restrictions on trading as to any of the Securities purchased hereunder
or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in connection
with, this Agreement, without the prior written consent of such Purchaser. In addition, the Company and each Purchaser agree that,
in connection with a Subsequent Financing, the transaction documents related to the Subsequent Financing shall include a requirement
for the Company to issue a widely disseminated press release by 9:30 am (New York City time) on the Trading Day of execution of
the transaction documents in such Subsequent Financing (or, if the date of execution is not a Trading Day, on the immediately
following Trading Day) that discloses the material terms of the transactions contemplated by the transaction documents in such
Subsequent Financing.


 


(h) Notwithstanding
anything to the contrary in this Section 4.12 and unless otherwise agreed to by such Purchaser, the Company shall either confirm
in writing to such Purchaser that the transaction with respect to the Subsequent Financing has been abandoned or shall publicly
disclose its intention to issue the securities in the Subsequent Financing, in either case in such a manner such that such Purchaser
will not be in possession of any material, non-public information, by 9:30 am (New York City time) on the second (2nd) Trading
Day following date of delivery of the Subsequent Financing Notice. If by 9:30 am (New York City time) on such second (2nd) Trading
Day, no public disclosure regarding a transaction with respect to the Subsequent Financing has been made, and no notice regarding
the abandonment of such transaction has been received by such Purchaser, such transaction shall be deemed to have been abandoned
and such Purchaser shall not be deemed to be in possession of any material, non-public information with respect to the Company
or any of its Subsidiaries.


 


(i) Notwithstanding
the foregoing, this Section 4.12 shall not apply in respect of an Exempt Issuance, a Qualified Offering or any other public offering
of Common Stock pursuant to a Registration Statement on Form S-1 or Form S-3.


 


4.13 Subsequent
Equity Sales.




 


(a) From
the date hereof until 180 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, except as set
forth in subsection 4.13(c) below.


 






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(b) From
the date hereof until such time as no Purchaser holds any of the Debentures, 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 (i) 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
(A) 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 (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the
initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or
indirectly related to the business of the Company or the market for the Common Stock or (ii) enters into, or effects a
transaction under, any agreement, including, but not limited to, an equity line of credit, whereby the Company may issue
securities at a future determined price; provided, however, that, after the 180th day following the Closing
Date, the Company’s issuance of shares of Common Stock pursuant to any equity line with Cavalry Fund I LP shall not be
deemed a Variable Rate Transaction hereunder. 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 Qualified Offering or an Exempt Issuance, except that no Variable
Rate Transaction shall be an Exempt Issuance.


 


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. Further, the Company shall not make any payment of principal
or interest on the Debentures in amounts which are disproportionate to the respective principal amounts outstanding on the Debentures
at any applicable time. 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 Securities or otherwise.


 


4.15 Certain
Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that
neither it, nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or
sales, including Short Sales, of any of the Company’s securities during the period commencing with the execution of
this Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly announced
pursuant to the initial press release as described in Section 4.6. Each Purchaser, severally and not jointly with the other
Purchasers, covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the
Company pursuant to the initial press release as described in Section 4.6, such Purchaser will maintain the confidentiality
of the existence and terms of this transaction and the information included in the SEC Reports. Notwithstanding the
foregoing, and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and
agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will not engage in effecting
transactions in any securities of the Company after the time that the transactions contemplated by this Agreement are first
publicly announced pursuant to the initial press release as described in Section 4.6, (ii) no Purchaser shall be restricted
or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities laws
from and after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the
initial press release as described in Section 4.6 and (iii) no Purchaser shall have any duty of confidentiality or duty not
to trade in the securities of the Company to the Company or its Subsidiaries after the issuance of the initial press release
as described in Section 4.6. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment
vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio
managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such
Purchaser’s assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the
portfolio manager that made the investment decision to purchase the Securities covered by this Agreement.


 






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


 


4.17 Capital
Changes. Except in connection with the Qualified Offering, until the 18 month anniversary of the Closing Date, the Company
shall not undertake a reverse or forward stock split or reclassification of the Common Stock without the prior written consent
of the Purchasers holding a majority in principal amount outstanding of the Debentures.


 


 4.18 [Reserved]




 


4.19 Purchaser
Lock-Up. In connection with the closing of a Qualified Offering, each of the Purchasers covenants and agrees to enter into
a standard lock-up agreement, solely with respect to the Securities, in a form reasonably agreed to by the Purchasers, that shall
provide that for a period beginning on the closing date of a Qualified Offering and ending on the six (6) month anniversary of
such closing date, such Purchasers shall not sell into the market pursuant to Rule 144 or pursuant to a then effective registration
statement any of the Securities.


 


4.20 No
Further Cash Advances. The Company covenants and agrees that until the date no Debentures are outstanding, the Company will
not, directly or indirectly, receive any additional cash advances under those certain Merchant Receivables Purchase and Security
Agreements by and between the Company and Change Capital Holdings I, LLC identified on Schedule 3.1(bb).


 


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 the fifth (5th) Trading Day following the date hereof, provided, however,
that no such termination will affect the right of any party to sue for any breach by any other party (or parties).


 






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5.2 Fees
and Expenses. At the Closing, the Company has agreed to reimburse Cavalry Fund I LP the non-accountable sum of $35,000 for
its legal 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 delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection with
the delivery of any Securities to the Purchasers. In addition, Joseph Gunnar & Co., LLC is acting as placement agent for this
private offering pursuant to a placement agency agreement with the Company and will receive cash and warrant compensation on amounts
closed on pursuant to this Agreement, as well as an expense reimbursement from the Company.


 


5.3 Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of
the parties with respect to the subject matter hereof and 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 time of transmission, if such notice or communication is
delivered via facsimile at the facsimile number or email attachment at the 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 time of
transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment 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
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 of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a
Current Report on Form 8-K.


 


5.5 Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument
signed, in the case of an amendment, by the Company and Purchasers which purchased at least 51% in interest of the Debentures
based on the initial Subscription Amounts hereunder or, in the case of a waiver, by the party against whom enforcement of any
such waived provision is sought, 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 this Section 5.5 shall be binding upon each Purchaser and holder of Securities and the
Company.


 






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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, provided that such transferee agrees in writing to be bound, with respect
to the transferred Securities, by the provisions of the Transaction Documents that apply to the “Purchasers.”


 


5.8 No
Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors
and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as
otherwise set forth in Section 4.10. Notwithstanding the foregoing, the Placement Agent shall be deemed a third party beneficiary
of the representations and warranties of the Company as contained in Section 3.1 of this Agreement and shall have the right to
enforce such provisions directly to the extent it may deem such enforcement necessary or advisable to protect its rights.


 


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.


 






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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.


 


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


 






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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.


 


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


 






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5.18  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 only represents Cavalry. 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.


 


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


 


5.20 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.


 


5.21 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.


 


5.22 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)


 




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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.


 





	RECRUITER.COM GROUP, INC.	 	
        Address for Notice:

        100 Waugh Drive, Suite 300 Houston, Texas 77007

	By:	 	 	Email:
miles@recruiter.com
	 	Name: Miles Jennings	 	Fax:
	 	Title: Chief Executive Officer	 	 
	 	 	 	 
	With a copy to (which shall not constitute notice):	 	 


 


[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK


SIGNATURE PAGE FOR PURCHASER FOLLOWS]


 




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[PURCHASER
SIGNATURE PAGES TO RCRT SECURITIES PURCHASE AGREEMENT]


 


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


 


Name
of Purchaser: ________________________________________________________________


 


Signature
of Authorized Signatory of Purchaser: _________________________________________


 


Name
of Authorized Signatory: ______________________________________________________


 


Title
of Authorized Signatory: _________________________________________________________


 


Email
Address of Authorized Signatory: _________________________________________________________


 


Facsimile
Number of Authorized Signatory: _________________________________________________________


 


Address
for Notice to Purchaser:


 


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


 


Subscription
Amount: $ _____________


 


Principal
Amount (1.125 x Subscription Amount): $ _____________


 


Warrant
Shares: ______________


 


EIN
Number: _________________


 


[SIGNATURE
PAGES CONTINUE]


 


 


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