Exhibit 10.1


 


Execution Version


INVESTMENT
AGREEMENT


 


INVESTMENT
AGREEMENT (this “AGREEMENT”), dated as of September 27, 2013 by and between CARDIOGENICS HOLDINGS INC. a Nevada corporation
(the “Company”), and Dutchess Opportunity Fund, II, LP, a Delaware Limited Partnership (the “Investor”).


 


WHEREAS,
the parties desire that, upon the terms and subject to the conditions contained herein, the Investor shall invest up to five
million dollars ($5,000,000) (the “Cap Amount”) to purchase the Company’s Common Stock with $.00001 par
value per share (the “Common Stock”);


 


WHEREAS,
such investments will be made in reliance upon the provisions of Section 4(2) under the Securities Act of 1933, as amended, and
the rules and regulations thereunder (the “1933 Act”), Rule 506 of Regulation D, and the rules and regulations promulgated
thereunder, and/or upon such other exemption from the registration requirements of the 1933 Act as may be available with respect
to any or all of the investments in Shares to be made hereunder; and


 


WHEREAS,
contemporaneously with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Registration
Rights Agreement substantially in the form attached hereto (the “Registration Rights Agreement”) pursuant to which
the Company has agreed to provide certain registration rights under the 1933 Act, and applicable state securities laws.


 


NOW
THEREFORE, in consideration of the foregoing recitals, which shall be considered an integral part of this Agreement, the covenants
and agreements set forth hereafter, and other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and the Investor hereby agree as follows:


 


SECTION
1. DEFINITIONS.


 


As
used in this Agreement, the following terms shall have the following meanings specified or indicated below, and such meanings
shall be equally applicable to the singular and plural forms of such defined terms.


 


“1933
Act” shall have the meaning set forth in the recitals of this Agreement.


 


“1934
Act” shall mean the Securities Exchange Act of 1934, as it may be amended.


 


“AAA”
shall have the meaning specified in Section 11.


 


“Affiliate”
shall have the meaning specified in Section 5(H).


 


“Agreement”
shall mean this Investment Agreement.


 


“Articles
of Incorporation” shall have the meaning specified in Section 4(C).


 


“By-laws”
shall have the meaning specified in Section 4(C).


 


“Closing”
shall have the meaning specified in Section 2(E).


 


“Closing
Date” shall have the meaning specified in Section 2(E).


 




    	 



    	 



    

 


“Common
Stock” shall have the meaning set forth in the recitals of this Agreement.


 


“Company”
shall have the meaning set forth in the preamble of this Agreement.


 


“Control”
or “Controls” shall have the meaning specified in Section 5(H).


 


“DTC”
shall have the meaning specified in Section 2(E).


 


“DWAC”
shall have the meaning specified in Section 2(E).


 


“Effective
Date” shall mean the date the SEC declares effective under the 1933 Act the Registration Statement covering the Securities.


 


“Equity
Line Transaction Documents” shall mean this Agreement and the Registration Rights Agreement.


 


“FAST”
shall have the meaning specified in Section 2(E).


 


“Indemnities”
shall have the meaning specified in Section 10.


 


“Indemnified
Liabilities” shall have the meaning specified in Section 10.


 


“Indemnitor”
shall have the meaning specified in Section 10.


 


“Investor”
shall have the meaning indicated in the preamble of this Agreement.


 


“Material
Adverse Effect” shall have the meaning specified in Section 4(A).


 


“Maximum
Common Stock Issuance” shall have the meaning specified in Section 2(F).


 


“Minimum
Acceptable Price” with respect to any Put Notice Date shall be the price defined by the Company in the applicable Put
Notice.


 


“Open
Market Adjustment Amount” shall have the meaning specified in Section 2(G).


 


“Open
Market Share Purchase” shall have the meaning specified in Section 2(G).


 


“Open
Period” shall mean the period beginning on and including the Trading Day immediately following the Effective Date and
ending on the earlier to occur of (i) the date which is thirty-six (36) months from the Effective Date; or (ii) termination of
the Agreement in accordance with Section 9, below.


 


“Person”
shall mean any individual, corporation, limited liability company, partnership, joint venture, association, joint stock company,
trust, unincorporated organization or government or any agency or political subdivision thereof or other similar entity.


 


“Pricing
Period” shall mean the five (5) consecutive Trading Days beginning on the Put Notice Date and ending on and including
the date that is four (4) Trading Days after such Put Notice Date.


 




    	 



    	 



    

 


“Principal
Market” shall mean the Nasdaq Capital Market, the NYSE Amex, the New York Stock Exchange, the Nasdaq Global Market,
the Nasdaq Global Select Market, the London AIM, the TSX Venture Exchange, the OTC Bulletin Board, the OTCQX or the OTC QB, whichever
is the principal market on which the Common Stock is listed.


 


“Prospectus”
shall mean the prospectus, preliminary prospectus and supplemental prospectus used in connection with the Registration Statement.


 


“Purchase
Amount” shall mean the total amount being paid by the Investor on a particular Closing Date to purchase the Securities.


 


“Purchase
Price” shall mean ninety-five percent (95%) of the lowest daily VWAP (as defined herein) of the Common Stock during
the Pricing Period.


 


“Put”
shall have the meaning set forth in Section 2(B) hereof.


 


“Put
Amount” shall have the meaning set forth in Section 2(B) hereof.


 


“Put
Notice” shall mean a written notice in the form attached hereto as Exhibit B, sent to the Investor by the Company stating
the Put Amount in U.S. dollars the Company intends to sell to the Investor pursuant to the terms of the Agreement and stating
the current number of Shares issued and outstanding on such date.


 


“Put
Notice Date” shall mean the Trading Day, as set forth below, immediately following the day on which the Investor receives
a Put Notice, however a Put Notice shall be deemed delivered on (a) the Trading Day it is received by facsimile or email by the
Investor if such notice is received prior to noon Eastern Time, or (b) the immediately succeeding Trading Day if it is received
by facsimile or otherwise after noon Eastern Time on a Trading Day. No Put Notice may be deemed delivered on a day that is not
a Trading Day.


 


“Put
Restriction” shall mean the days during the Pricing Period. During this time, the Company shall not be entitled to deliver
another Put Notice.


 


“Put
Shares Due” shall have the meaning specified in Section 2(G).


 


“Registration
Rights Agreement” shall have the meaning set forth in the recitals of this Agreement.


 


“Registration
Statement” means the registration statement of the Company filed under the 1933 Act covering the resale by the Investor
of the Shares issuable hereunder.


 


“Related
Party” shall have the meaning specified in Section 5(H).


 


“Resolutions”
shall have the meaning specified in Section 7(E).


 


“SEC”
shall mean the U.S. Securities & Exchange Commission.


 


“SEC
Documents” shall have the meaning specified in Section 4(F).


 


“Securities”
shall mean the Shares issued pursuant to the terms of the Agreement.


 


“Shares”
shall mean the shares of the Company’s Common Stock.


 




    	 



    	 



    

 


“Subsequent
Purchasers” shall have the meaning specified in Section 2(G).


 


“Subsidiary”
of any Person means any corporation, partnership, limited liability company, joint venture, trust or other entity as to which
more than 50% of the voting power of its outstanding capital stock or other ownership interests is owned, directly or indirectly,
by such Person, by one or more other Subsidiaries of such Person or by such Person and one or more other Subsidiaries of such
Person.


 


“Suspension
Price” shall mean a floor amount per share as determined by the Company and as indicated on any Put Notice.


 


“Trading
Day” shall mean any day on which the Principal Market for the Common Stock is open for trading, from the hours of 9:30
am until 4:00 pm Boston Time.


 


“VWAP”
shall mean the volume weighted average price during a Trading Day.


 


SECTION
2. PURCHASE AND SALE OF COMMON STOCK.


 


(A)
PURCHASE AND SALE OF COMMON STOCK. Subject to the terms and conditions set forth herein, the Company may issue and sell to the
Investor, and the Investor shall be obligated to purchase from the Company Shares up to the Cap Amount.


 


(B)
DELIVERY OF PUT NOTICES. Subject to the terms and conditions of the Equity Line Transaction Documents, and from time to time during
the Open Period, the Company may, in its sole discretion, deliver a Put Notice to the Investor which states the dollar amount
(designated in U.S. Dollars) (the “Put Amount”) of Shares which the Company intends to sell to the Investor on a Closing
Date (the “Put”). The Put Amount shall, at the sole discretion of the Company, be equal
to up either 1) two hundred percent (200%) of the average daily volume (U.S. market only) of the Common Stock for the three (3)
Trading Days prior to the applicable Put Notice Date, multiplied by the average of the three (3) daily closing prices immediately
preceding the Put Date or 2) one hundred thousand dollars ($100,000). During the Open Period, the Company shall not be entitled
to submit a Put Notice until the Pricing Period for the prior Put has been completed. The Shares identified in the Put
Notice shall be purchased for a price equal to the Purchase Price.


 


(C)
COMPANY’S RIGHT TO SUSPEND. On each Put Notice submitted to the Investor by the Company, the Company shall have the option
to specify a Suspension Price for that Put. In the event the price of the Common Stock falls below the Suspension Price, the Put
shall be temporarily suspended. The Put shall resume at such time as the price of the Common Stock is above the Suspension Price,
provided the dates for the Pricing Period for that particular Put are still valid. In the event the Pricing Period has been complete,
any shares above the Suspension Price due to the Investor shall be sold to the Investor by the Company at the Suspension Price
under the terms of this Agreement. The Suspension Price for a Put may not be changed by the Company once submitted to the Investor.


 




    	 



    	 



    

 


(D)
CONDITIONS TO INVESTOR’S OBLIGATION TO PURCHASE SHARES. Notwithstanding anything to the contrary in this Agreement, the Company
shall not be entitled to deliver a Put Notice and the Investor shall not be obligated to purchase any Shares at a Closing unless
each of the following conditions are satisfied:


 


(1)
a Registration Statement shall have been declared effective and shall remain effective and available for the resale of all the
Registrable Securities (as defined in the Registration Rights Agreement) at all times until the Closing with respect to the subject
Put Notice;


 


(2)
at all times during the period beginning on the related Put Notice Date and ending on and including the related Closing Date,
the Shares shall have been listed on a Principal Market and shall not have been suspended from trading thereon for a period of
two (2) consecutive Trading Days during the Open Period and the Company shall not have been notified of any pending or threatened
proceeding or other action to suspend the trading of the Shares;


 


(3)
the Company has complied with its obligations and is otherwise not in breach of or in default under the Equity Line Transaction
Documents or any other agreement executed in connection herewith which has not been cured prior to delivery of the Put Notice;


 


(4)
no injunction shall have been issued and remain in force, or action commenced by a governmental authority which has not been stayed
or abandoned, prohibiting the purchase or the issuance of the Securities; and


 


(5)
the issuance of the Securities will not violate any shareholder approval requirements of a Principal Market.


 


If
any of the events described in clauses (1) through (5) above occurs during a Pricing Period, then the Investor shall have no obligation
to purchase the Shares subject to the applicable Put Notice.


 


(E)
MECHANICS OF PURCHASE OF SHARES BY INVESTOR. The closing of the purchase by the Investor of Shares (a “Closing”) shall
occur on the date which is no later than seven (7) Trading Days following the applicable Put Notice Date (each a “Closing
Date”). On each Closing Date, (I) the Company shall deliver to the Investor pursuant to this Agreement, certificates representing
the Shares to be issued to the Investor on such date and registered in the name of the Investor; and (II) the Investor shall deliver
to the Company the Purchase Price to be paid for such Shares, based on the Put Amount set forth in Section 2(B). In lieu of delivering
physical certificates representing the Securities and provided that the Company’s transfer agent then is participating in The
Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program, upon request of
the Investor, the Company shall use all commercially reasonable efforts to cause its transfer agent to electronically transmit
the Securities by crediting the account of the Investor’s prime broker (as specified by the Investor within a reasonable period
in advance of the Investor’s notice) with DTC through its Deposit Withdrawal Agent Commission (“DWAC”) system.


 


The
Company understands that a delay in the issuance of the Securities beyond the Closing Date could result in economic damage to
the Investor. After the Effective Date, as compensation to the Investor for such loss, the Company agrees to make payments to
the Investor for late issuance of the Securities (delivery of the Securities after the applicable Closing Date) in accordance
with the following schedule (where “No. of Days Late” is defined as the number of trading days beyond the Closing
Date, with the Amounts being cumulative.):


 


	LATE
    PAYMENT FOR EACH NO. OF DAYS LATE
	1	$100
	2	$200
	3	$300
	4	$400
	5	$500
	6	$600
	7	$700
	8	$800
	9	$900
	10	$1000
	Over
    10	$1,000
    + $200 for each Business Day late beyond 10 days


 




    	 



    	 



    

 


The
Company shall make any payments incurred under this Section in immediately available funds upon demand by the Investor. Nothing
herein shall limit the Investor’s right to pursue actual damages for the Company’s failure to issue and deliver the Securities
to the Investor, except that such late payments shall offset any such actual damages incurred by the Investor, and any Open Market
Adjustment Amount, as set forth below.


 


(F)
OVERALL LIMIT ON COMMON STOCK ISSUABLE. Notwithstanding anything contained herein to the contrary, if during the Open Period the
Company becomes listed on an exchange that limits the number of Shares that may be issued without shareholder approval, then the
number of Shares issuable by the Company and purchasable by the Investor, shall not exceed that number of the Shares that may
be issuable without shareholder approval (the “Maximum Common Stock Issuance”). If such issuance of Shares could cause
a delisting on a Principal Market, then the Maximum Common Stock Issuance shall first be approved by the Company’s shareholders
in accordance with applicable law and the By-laws and Articles of Incorporation of the Company. The parties understand and agree
that the Company’s failure to seek or obtain such shareholder approval shall in no way adversely affect the validity and due authorization
of the issuance and sale of the Securities or the Investor’s obligation in accordance with the terms and conditions hereof to
purchase a number of Shares in the aggregate up to the Maximum Common Stock Issuance limitation, and that such approval pertains
only to the applicability of the Maximum Common Stock Issuance limitation provided in this Section 2(H).


 


(G)
OPEN MARKET ADJUSTMENT. If, by the third (3rd) business day after a Closing Date, the Company fails to deliver any portion of
the Securities subject to a Put Notice to the Investor (the “Put Shares Due”) and the Investor purchases, in an open
market transaction or otherwise, Shares necessary to make delivery by the Investor of shares in respect of sales to subsequent
purchasers, pursuant to transactions entered into before the Closing Date (“Subsequent Purchasers”), which such Shares
would have been delivered to the Investor by the Company but for the Company’s failure to so deliver (the “Open Market
Share Purchase”), then the Company shall pay to the Investor, in addition to any other amounts due to Investor pursuant
to the Put, and not in lieu thereof, the Open Market Adjustment Amount (as defined below). The “Open Market Adjustment Amount”
is the amount equal to the excess, if any, of (x) the Investor’s total purchase price (including brokerage commissions, if any)
for the Open Market Share Purchase minus (y) the net proceeds (after brokerage commissions, if any) received by the Investor from
the sale of the Put Shares Due to such Subsequent Purchasers. The Company shall pay the Open Market Adjustment Amount to the Investor
in immediately available funds within five (5) business days of written demand by the Investor; provided, however, the Investor
shall provide documentation reasonably requested by the Company to evidence the calculation of the Open Market Adjustment Amount.
By way of illustration and not in limitation of the foregoing, if the Investor purchases Shares having a total purchase price
(including brokerage commissions) of $11,000 to cover an Open Market Share Purchase with respect to Shares it sold to Subsequent
Purchasers for net proceeds of $10,000, the Open Market Adjustment Amount which the Company will be required to pay to the Investor
will be $1,000.


 




    	 



    	 



    

 


(H)
LIMITATION ON AMOUNT OF OWNERSHIP. Notwithstanding anything to the contrary in this Agreement, in no event shall the Investor
be entitled to purchase that number of Shares, which when added to the sum of the number of Shares beneficially owned (as such
term is defined under Section 13(d) and Rule 13d-3 of the 1934 Act), by the Investor, would exceed 4.99% of the number of Shares
outstanding on the Closing Date, as determined in accordance with Rule 13d-1(j) of the 1934 Act.


 


SECTION
3. INVESTOR’S REPRESENTATIONS, WARRANTIES AND COVENANTS. The Investor
represents and warrants to the Company, and covenants, that:


 


(A)
SOPHISTICATED INVESTOR. The Investor has, by reason of its business and financial experience, such knowledge, sophistication and
experience in financial and business matters and in making investment decisions of this type that it is capable of (1) evaluating
the merits and risks of an investment in the Securities and making an informed investment decision; (2) protecting its own interest;
and (3) bearing the economic risk of such investment for an indefinite period of time.


 


(B)
AUTHORIZATION; ENFORCEMENT. The Investor has the requisite power and authority to enter into and perform this Agreement and the
Registration Rights Agreement. The execution and delivery of the Equity Line Transaction Documents by the Investor and the consummation
by it of the transactions contemplated hereby and thereby have been duly and validly authorized by the Investor’s general partners
and no further consent or authorization is required in respect thereof. The Equity Line Transaction Documents have been duly and
validly authorized, executed and delivered on behalf of the Investor and are valid and binding agreements of the Investor enforceable
against the Investor in accordance with their terms, subject as to enforceability to general principles of equity and to applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the
enforcement of applicable creditors’ rights and remedies.


 


(C)
SECTION 9 OF THE 1934 ACT. During the term of this Agreement, the Investor will comply with the provisions of Section 9 of the
1934 Act, and the rules promulgated thereunder, with respect to transactions involving the Shares. The Investor agrees not to
short the Common Stock, either directly or indirectly through its affiliates, principals or advisors, during the term of this
Agreement.


 


(D)
ACCREDITED INVESTOR. Investor is an “Accredited Investor” as that term is defined in Rule 501(a) of Regulation D of
the 1933 Act.


 


(E)
NO CONFLICTS. The execution, delivery and performance of the Equity Line Transaction Documents by the Investor and the consummation
by the Investor of the transactions contemplated hereby and thereby will not (1) result in a violation of the partnership agreement
or other organizational documents of the Investor, (2) conflict with, or constitute a breach (or an event which with notice or
lapse of time or both would become an event of default) under, or result in the creation or imposition of any lien, charge or
encumbrance upon on property or assets of the Investor pursuant to, or give to others any rights of termination, amendment, acceleration
or cancellation of, any material agreement, contract, indenture mortgage, indebtedness or instrument to which the Investor is
a party, or result in a violation of any law, rule, regulation, order, judgment or decree (including United States federal and
state securities laws and regulations) applicable to the Investor or by which any property or asset of the Investor is bound or
affected, except in the case of clause (2), as would not be reasonably expected to have a Material
Adverse Effect.


 




    	 



    	 



    

 


(F)
NO VIOLATIONS. The Investor is not in violation of any term of, or in default under, the partnership agreement of other organizational
documents of the Investor or any material contract, agreement, mortgage, indebtedness, indenture, instrument, judgment, decree
or order or any statute, rule or regulation applicable to the Investor, except for conflicts, defaults, terminations, amendments,
accelerations, cancellations and violations that would not, individually or in the aggregate, constitute or reasonably be expected
to constitute a Material Adverse Effect on the Investor. The business of the Investor is not being conducted, and shall not be
conducted, in violation of any law, statute, ordinance, rule, order or regulation of any governmental authority or agency, regulatory
or self-regulatory agency, or court, except for violations the sanctions for which either, individually or in the aggregate, would
not have or reasonably be expected to have a Material Adverse Effect on the Investor. Except as specifically contemplated by this
Agreement and as required under the 1933 Act or any securities laws of any states, the Investor is not required to obtain any
consent, authorization, permit or order of, or make any filing or registration (except the filing of a registration statement
as outlined in the Registration Rights Agreement) with, any court, governmental authority or agency, regulatory or self-regulatory
agency or other third party in order for it to execute, deliver or perform any of its obligations under, or contemplated by, the
Equity Line Transaction Documents in accordance with the terms hereof or thereof except for those consents, authorizations, permits,
orders or filings as have been obtained or effected on or prior to the date hereof and are in full force and effect as of the
date hereof. The Investor is unaware of any facts or circumstances which might give rise to any violation or default set forth
in this Section 3(F).


 


(G)
OPPORTUNITY TO DISCUSS. The Investor has received all materials relating to the Company’s business, finance and operations which
it has requested. The Investor has had an opportunity to discuss the business, management and financial affairs of the Company
with the Company’s management.


 


(H)
INVESTMENT PURPOSES. The Investor is purchasing the Securities for its own account for investment purposes and not with a view
towards distribution and agrees to resell or otherwise dispose of the Securities solely in accordance with the registration provisions
of the 1933 Act (or pursuant to an exemption from such registration provisions).


 


(I)
NO REGISTRATION AS A DEALER. The Investor is not and will not be required to be registered as a “broker” or “dealer”
under the 1934 Act, either as a result of its execution and performance of its obligations under this Agreement or otherwise.


 


(J)
GOOD STANDING. The Investor is a Limited Partnership, duly organized, validly existing and in good standing in the state of Delaware.


 


(K)
TAX LIABILITIES. The Investor understands that it is liable for its own tax liabilities.


 




    	 



    	 



    

 


SECTION
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as disclosed
in the Company’s SEC Documents, the Company represents and warrants to the Investor that:


 


(A)
ORGANIZATION AND QUALIFICATION. The Company is a corporation duly organized and validly existing in good standing under the laws
of the State of Nevada, and has the requisite corporate power and authorization to own its properties and to carry on its business
as now being conducted. Both the Company and its Subsidiaries are duly qualified to do business and are in good standing in every
jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary,
except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect. As used
in this Agreement, “Material Adverse Effect” means any material adverse effect on (1) the properties, assets, operations,
results of operations, or financial condition of a Person and its Subsidiaries, if any, taken as a whole, (2) the transactions
contemplated hereby or by the agreements and instruments to be entered into in connection herewith, or (3) the authority or ability
of a Person to perform its obligations under the Equity Line Transaction Documents other than as a result of (a) changes adversely
affecting the United States economy (so long as such Person is not disproportionately affected thereby), (b) changes adversely
affecting the industry in which such Person operates (so long as such Person is not disproportionately affected thereby), (c)
the announcement or consummation of the transactions contemplated by this Agreement, and (d) changes in the market price of the
Common Stock.


 


(B)
AUTHORIZATION; ENFORCEMENT; COMPLIANCE WITH OTHER INSTRUMENTS.


 


(1)
The Company has the requisite corporate power and authority to enter into and perform the Equity Line Transaction Documents, and
to perform its obligations contemplated hereby and thereby.


 


(2)
The execution and delivery of the Equity Line Transaction Documents by the Company and the consummation by it of the transactions
contemplated hereby and thereby, have been duly and validly authorized by the Company’s Board of Directors and no further consent
or authorization is required by the Company, its Board of Directors, or its shareholders.


 


(3)
The Equity Line Transaction Documents have been duly and validly executed and delivered by the Company.


 


(4)
The Equity Line Transaction Documents constitute the valid and binding obligations of the Company enforceable against the Company
in accordance with their terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors’
rights and remedies.


 




    	 



    	 



    

 


(C)
CAPITALIZATION. As of the date hereof, the authorized capital stock of the Company consists of 150,000,000 shares of Common
Stock with $.00001 par value per share, and as of August 28, 2013, 33,106,857 shares were outstanding. Except as disclosed in
the Company’s publicly available filings with the SEC: (1) no shares of the Company’s capital stock are subject
to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company; (2) there
are no outstanding debt securities; (3) there are no outstanding shares of capital stock, options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any
shares of capital stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements
by which the Company or any of its Subsidiaries is or may become bound to issue additional shares of capital stock of the
Company or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company or any of its
Subsidiaries; (4) there are no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to
register the sale of any of their securities under the 1933 Act (except the Registration Rights Agreement); (5) there are no
outstanding securities of the Company or any of its Subsidiaries which contain any redemption or similar provisions, and
there are no contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may
become bound to redeem a security of the Company or any of its Subsidiaries; (6) there are no securities or instruments
containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities as described in this
Agreement; (7) the Company does not have any stock appreciation rights or “phantom stock” plans or agreements or
any similar plan or agreement; and (8) there is no dispute as to the classification of any shares of the
Company’s capital stock.


 


The
Company has furnished to the Investor, or the Investor has had access through the SEC’s EDGAR website to, true and correct
copies of the Company’s Articles of Incorporation, as amended and in effect on the date hereof (the “Articles of Incorporation”),
and the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms of all securities convertible
into or exercisable for Shares and the material rights of the holders thereof in respect thereto.


 


(D)
ISSUANCE OF SHARES. Upon issuance in accordance with this Agreement, the Securities will be validly issued, fully paid for and
non-assessable and free from all taxes, liens and charges with respect to the issue thereof.


 




    	 



    	 



    

 


(E)
NO CONFLICTS. The execution, delivery and performance of the Equity Line Transaction Documents by the Company and the consummation
by the Company of the transactions contemplated hereby and thereby will not (I) result in a violation of the Articles of Incorporation,
any certificate of designations, preferences and rights of any outstanding series of preferred stock of the Company or the By-laws;
or (II) conflict with, or constitute a breach (or an event which with notice or lapse of time or both would become an event of
default) under, or result in the creation or imposition of any lien, charge or encumbrance upon on property or assets of the Company
pursuant to, or give to others any rights of termination, amendment, acceleration or cancellation of, any material agreement,
contract, indenture mortgage, indebtedness or instrument to which the Company or any of its Subsidiaries is a party, or result
in a violation of any law, rule, regulation, order, judgment or decree (including United States federal and state securities laws
and regulations and the rules and regulations of the Principal Market or principal securities exchange or trading market on which
the Shares are traded or listed) applicable to the Company or any of its Subsidiaries or by which any property or asset of the
Company or any of its Subsidiaries is bound or affected, except in the case of clause (II), as would not be reasonably expected
to have a Material Adverse Effect. Neither the Company nor its Subsidiaries is in violation of any term of, or in default under,
the Articles of Incorporation, any certificate of designations, preferences and rights of any outstanding series of preferred
stock of the Company or the By-laws or their organizational charter or by-laws, respectively, or any contract, agreement, mortgage,
indebtedness, indenture, instrument, judgment, decree or order or any statute, rule or regulation applicable to the Company or
its Subsidiaries, except for possible conflicts, defaults, terminations, amendments, accelerations, cancellations and violations
that would not individually or in the aggregate have or constitute a Material Adverse Effect. The business of the Company and
its Subsidiaries is not being conducted, and shall not be conducted, in violation of any law, statute, ordinance, rule, order
or regulation of any governmental authority or agency, regulatory or self-regulatory agency, or court, except for possible violations
the sanctions for which either individually or in the aggregate would not have a Material Adverse Effect. Except as specifically
contemplated by this Agreement and as required under the 1933 Act or any securities laws of any states, to the Company’s knowledge,
the Company is not required to obtain any consent, authorization, permit or order of, or make any filing or registration (except
the filing of a registration statement as outlined in the Registration Rights Agreement) with, any court, governmental authority
or agency, regulatory or self-regulatory agency or other third party in order for it to execute, deliver or perform any of its
obligations under, or contemplated by, the Equity Line Transaction Documents in accordance with the terms hereof or thereof. All
consents, authorizations, permits, orders, filings and registrations which the Company is required to obtain pursuant to the preceding
sentence have been obtained or effected on or prior to the date hereof and are in full force and effect as of the date hereof.
The Company is not, and will not be, in violation of the listing requirements of the Principal Market as in effect on the date
hereof and on each of the Closing Dates and is not aware of any facts which would reasonably lead to delisting of the Shares by
the Principal Market in the foreseeable future.


 


(F)
SEC DOCUMENTS; FINANCIAL STATEMENTS. As of the date hereof, the Company has filed all reports, schedules, forms, statements and
other documents required to be filed by it with the SEC pursuant to the reporting requirements of the 1934 Act (all of the foregoing
filed prior to the date hereof and all exhibits included therein and financial statements and schedules thereto and documents
incorporated by reference therein being hereinafter referred to as the “SEC Documents”). As of their respective filing
dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations
of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed
with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. As of their
respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all material respects
with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial
statements have been prepared in accordance with generally accepted accounting principles, and audited by a firm that is a member
a member of the Public Companies Accounting Oversight Board (“PCAOB”) consistently applied, during the periods involved
(except (I) as may be otherwise indicated in such financial statements or the notes thereto, or (II) in the case of unaudited
interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in
all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash
flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). No other
written information provided by or on behalf of the Company to the Investor which is not included in the SEC Documents, including,
without limitation, information referred to in Section 4(C) of this Agreement, contains any untrue statement of a material fact
or omits to state any material fact necessary to make the statements therein, in the light of the circumstance under which they
are or were made, not misleading. Neither the Company nor any of its Subsidiaries or any of their officers, directors, employees
or agents have provided the Investor with any material, nonpublic information which was not publicly disclosed prior to the date
hereof and any material, nonpublic information provided to the Investor by the Company or its Subsidiaries or any of their officers,
directors, employees or agents prior to any Closing Date shall be publicly disclosed by the Company prior to such Closing Date.


 




    	 



    	 



    

 


(G)
ABSENCE OF CERTAIN CHANGES. Except as otherwise set forth in the SEC Documents, the Company does not intend to change the business
operations of the Company in any material way. The Company has not taken any steps, and does not currently expect to take any
steps, to seek protection pursuant to any bankruptcy law nor does the Company or its Subsidiaries have any knowledge or reason
to believe that its creditors intend to initiate involuntary bankruptcy proceedings.


 


(H)
ABSENCE OF LITIGATION AND/OR REGULATORY PROCEEDINGS. Except as set forth in the SEC Documents, there is no action, suit, proceeding,
inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending
or, to the knowledge of the executive officers of Company or any of its Subsidiaries, threatened against or affecting the Company,
the Common Stock or any of the Company’s Subsidiaries or any of the Company’s or the Company’s Subsidiaries’ officers or directors
in their capacities as such, in which an adverse decision could have a Material Adverse Effect.


 


(I)
ACKNOWLEDGMENT REGARDING INVESTOR’S PURCHASE OF SHARES. The Company acknowledges and agrees that the Investor is acting solely
in the capacity of an arm’s length purchaser with respect to the Equity Line Transaction Documents and the transactions contemplated
hereby and thereby. The Company further acknowledges that the Investor is not acting as a financial advisor or fiduciary of the
Company (or in any similar capacity) with respect to the Equity Line Transaction Documents and the transactions contemplated hereby
and thereby and any advice given by the Investor or any of its respective representatives or agents in connection with the Equity
Line Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to the Investor’s purchase
of the Securities, and is not being relied on by the Company. The Company further represents to the Investor that the Company’s
decision to enter into the Equity Line Transaction Documents has been based solely on the independent evaluation by the Company
and its representatives.


 


(J)
NO UNDISCLOSED EVENTS, LIABILITIES, DEVELOPMENTS OR CIRCUMSTANCES. Except as set forth in the SEC Documents, as of the date hereof,
no event, liability, development or circumstance has occurred or exists, or to the Company’s knowledge is contemplated to occur,
with respect to the Company or its Subsidiaries or their respective business, properties, assets, prospects, operations or financial
condition, that would be required to be disclosed by the Company under applicable securities laws.


 


(K)
EMPLOYEE RELATIONS. Neither the Company nor any of its Subsidiaries is involved in any union labor dispute nor, to the knowledge
of the Company or any of its Subsidiaries, is any such dispute threatened. Neither the Company nor any of its Subsidiaries is
a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that relations with their employees
are good. No executive officer (as defined in Rule 501(f) of the 1933 Act) has notified the Company that such officer intends
to leave the Company’s employ or otherwise terminate such officer’s employment with the Company.


 




    	 



    	 



    

 


(L)
INTELLECTUAL PROPERTY RIGHTS. Except as would not be reasonably expected to have a Material Adverse Effect, the Company and its
Subsidiaries own or possess adequate rights or licenses to use all trademarks, trade names, service marks, service mark registrations,
service names, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets
and rights necessary to conduct their respective businesses as now conducted. Except as would not be reasonably expected to have
a Material Adverse Effect and except as set forth in the SEC Documents, none of the Company’s trademarks, trade names, service
marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, government
authorizations, trade secrets or other intellectual property rights necessary to conduct its business as now or as proposed to
be conducted have expired or terminated, or are expected to expire or terminate within two (2) years from the date of this Agreement.
The Company and its Subsidiaries do not have any knowledge of any infringement by the Company or its Subsidiaries of trademark,
trade name rights, patents, patent rights, copyrights, inventions, licenses, service names, service marks, service mark registrations,
trade secret or other similar rights of others, or of any such development of similar or identical trade secrets or technical
information by others and, except as set forth in the SEC Documents, there is no claim, action or proceeding being made or brought
against, or to the Company’s knowledge, being threatened against, the Company or its Subsidiaries regarding trademark, trade name,
patents, patent rights, invention, copyright, license, service names, service marks, service mark registrations, trade secret
or other infringement; and the Company and its Subsidiaries are unaware of any facts or circumstances which might give rise to
any of the foregoing. The Company and its Subsidiaries have taken commercially reasonable security measures to protect the secrecy,
confidentiality and value of all of their intellectual properties.


 


(M)
ENVIRONMENTAL LAWS. The Company and its Subsidiaries (I) are, to the knowledge of the Company and its Subsidiaries, in compliance
with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”);
(II) have, to the knowledge of the Company, received all permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses; and (III) are in compliance, to the knowledge of the Company, with
all terms and conditions of any such permit, license or approval where, in each of the three (3) foregoing cases, the failure
to so comply would have, individually or in the aggregate, a Material Adverse Effect.


 


(N)
TITLE. Except as would not be reasonably expected to have a Material Adverse Effect, the Company and its Subsidiaries have good
and marketable title to all personal property owned by them which is material to the business of the Company and its Subsidiaries,
in each case free and clear of all liens, encumbrances and defects except such as are described in the SEC Documents or such as
do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property
by the Company or any of its Subsidiaries. Except as would not be reasonably expected to have a Material Adverse Effect, any real
property and facilities held under lease by the Company or any of its Subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of
such property and buildings by the Company and its Subsidiaries.


 


(O)
INSURANCE. Each of the Company’s and its Subsidiaries are insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as management of the Company reasonably believes to be prudent and customary in the businesses
in which the Company and its Subsidiaries are engaged. Neither the Company nor any of its Subsidiaries has been refused any insurance
coverage sought or applied for and neither the Company nor its Subsidiaries 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 at a cost that would not have a Material Adverse Effect.


 




    	 



    	 



    

 


(P)
REGULATORY PERMITS. The Company and its Subsidiaries have in full force and effect all certificates, approvals, authorizations
and permits from the appropriate federal, state, local or foreign regulatory authorities and comparable foreign regulatory agencies,
necessary to own, lease or operate their respective properties and assets and conduct their respective businesses, and neither
the Company nor any such Subsidiary has received any notice of proceedings relating to the revocation or modification of any such
certificate, approval, authorization or permit, except for such certificates, approvals, authorizations or permits which if not
obtained, or such revocations or modifications which, would not have a Material Adverse Effect.


 


(Q)
INTERNAL ACCOUNTING CONTROLS. The Company and each of its 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 generally accepted
accounting principles by a firm with membership to the PCAOB and to maintain asset accountability; (III) reasonable controls to
safeguard assets are in place; 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.


 


(R)
NO MATERIALLY ADVERSE CONTRACTS, ETC. Neither the Company nor any of its Subsidiaries is subject to any charter, corporate or
other legal restriction, or any judgment, decree or order which in the judgment of the Company’s officers has or is expected in
the future to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is a party to any contract or agreement
which in the judgment of the Company’s officers has or is expected to have a Material Adverse Effect.


 


(S)
TAX STATUS. Except as would not be reasonably expected to have a Material Adverse Effect, the Company and each of its Subsidiaries
has made or filed all United States federal and state income and all other tax returns, reports and declarations required by any
jurisdiction to which it is subject (unless and only to the extent that the Company and each of its Subsidiaries has set aside
on its books provisions reasonably adequate for the payment of all unpaid and unreported taxes) and 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,
except those being contested in good faith and has set aside on its books provision reasonably adequate for the payment of all
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 know of no
basis for any such claim.


 


(T)
CERTAIN TRANSACTIONS. Except as set forth in the SEC Documents and except for arm’s length transactions pursuant to which the
Company makes payments in the ordinary course of business upon terms no less favorable than the Company could obtain from disinterested
third parties and other than the grant of stock options disclosed in the SEC Documents or stock options granted in the future
as contemplated by current compensation agreements or plans disclosed in the SEC Documents, none of the officers, directors, or
employees of the Company is presently a party to any transaction with the Company or any of its Subsidiaries (other than for services
as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the Company, any corporation, partnership, trust or other entity in
which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.


 




    	 



    	 



    

 


(U)
DILUTIVE EFFECT. The Company understands and acknowledges that any Shares issuable upon purchases pursuant to this Agreement will
increase in certain circumstances including, but not necessarily limited to, the circumstance wherein the trading price of the
Common Stock declines during the period between the Effective Date and the end of the Open Period. The Company’s executive officers
and directors have studied and fully understand the nature of the transactions contemplated by this Agreement and recognize that
they have a potential dilutive effect on the shareholders of the Company. The Board of Directors of the Company has concluded,
in its good faith business judgment, and with full understanding of the implications, that such issuance is in the best interests
of the Company. The Company specifically acknowledges that, subject to such limitations as are expressly set forth in the Equity
Line Transaction Documents, its obligation to issue Shares upon purchases pursuant to this Agreement is absolute and unconditional
regardless of the dilutive effect that such issuance may have on the ownership interests of other shareholders of the Company.


 


(V)
LOCK-UP. The Company shall cause its officers and directors to refrain from selling Shares during each Pricing Period.


 


(W)
NO BROKERS, FINDERS OR FINANCIAL ADVISORY FEES OR COMMISSIONS. No brokers, finders or financial advisory fees or commissions will
be payable by the Company, its agents or Subsidiaries, with respect to the transactions contemplated by this Agreement, except
as otherwise disclosed in this Agreement.


 


SECTION
5. COVENANTS OF THE COMPANY


 


(A)
EFFORTS. The Company shall use all commercially reasonable efforts to timely satisfy each of the conditions set forth in Section
7 of this Agreement.


 


(B)
BLUE SKY. The Company shall, at its sole cost and expense, on or before each of the Closing Dates, take such action as the Company
shall reasonably determine is necessary to qualify the Securities for, or obtain exemption for the Securities for, sale to the
Investor at each of the Closings pursuant to this Agreement under applicable securities or “Blue Sky” laws of such
states of the United States, as reasonably specified by the Investor, and shall provide evidence of any such action so taken to
the Investor on or prior to the Closing Date.


 


(C)
REPORTING STATUS. Until the earlier of either (1) this Agreement terminates pursuant to Section 9, or (2) the date on which the
Investor has sold all the Shares, the Company shall file all reports required to be filed with the SEC pursuant to the 1934 Act,
and the Company shall not terminate its status, or take an action or fail to take any action, which would terminate its status
as a reporting company under the 1934 Act; provided, however, the Investor shall promptly notify the Company when it has sold
all the Securities.


 


(D)
USE OF PROCEEDS. The Company will use the proceeds from the sale of the Securities (excluding amounts paid by the Company for
fees as set forth in the Equity Line Transaction Documents) for general corporate and working capital purposes and acquisitions
or assets, businesses or operations or for other purposes that the Board of Directors, in its good faith, deems to be in the best
interest of the Company.


 




    	 



    	 



    

 


(E)
RESERVATION OF SHARES. In the event that the Company determines that it does not have a sufficient number of authorized Shares
to reserve and keep available for issuance as described in this Section 5(F), the Company shall use all commercially reasonable
efforts to increase the number of authorized Shares by seeking shareholder approval for the authorization of such additional shares.


 


(F)
LISTING. The Company shall promptly secure and maintain the listing of all of the Registrable Securities (as defined in the Registration
Rights Agreement) on the Principal Market and each other national securities exchange and automated quotation system, if any,
upon which the Common Stock is then listed (subject to official notice of issuance) and shall maintain, such listing of all Registrable
Securities from time to time issuable under the terms of the Equity Line Transaction Documents. Neither the Company nor any of
its Subsidiaries shall take any action which would be reasonably expected to result in the delisting or suspension of the Common
Stock on the Principal Market (excluding suspensions of not more than one (1) trading day resulting from business announcements
by the Company). The Company shall promptly provide to the Investor copies of any notices it receives from the Principal Market
regarding the continued eligibility of the Common Stock for listing on such automated quotation system or securities exchange.
The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section 5(G).


 


(G)
TRANSACTIONS WITH AFFILIATES. The Company shall not, and shall cause each of its Subsidiaries not to, enter into, amend, modify
or supplement, or permit any Subsidiary to enter into, amend, modify or supplement, any agreement, transaction, commitment or
arrangement with any of its or any Subsidiary’s officers, directors, persons who were officers or directors at any time during
the previous two (2) years, shareholders who beneficially own 5% or more of the Common Stock, or Affiliates or with any individual
related by blood, marriage or adoption to any such individual or with any entity in which any such entity or individual owns a
5% or more beneficial interest (each a “Related Party”), except for (1) customary employment arrangements and benefit
programs on reasonable terms, (2) any agreement, transaction, commitment or arrangement on an arms-length basis on terms no less
favorable than terms which would have been obtainable from a disinterested third party other than such Related Party,(3) any agreement,
transaction, commitment or arrangement which is approved by a majority of the disinterested directors of the Company, or (4) extensions
or amendments of any existing employment agreement. For purposes hereof, any director who is also an officer of the Company or
any Subsidiary of the Company shall not be a disinterested director with respect to any such agreement, transaction, commitment
or arrangement. “Affiliate” for purposes hereof means, with respect to any person or entity, another person or entity
that, directly or indirectly, (1) has a 5% or more equity interest in that person or entity, (2) has 5% or more common ownership
with that person or entity, (3) controls that person or entity, or (4) is under common control with that person or entity. “Control”
or “Controls” for purposes hereof means that a person or entity has the power, directly or indirectly, to conduct
or govern the policies of another person or entity.


 


(H)
FILING OF FORM 8-K. On or before the date which is four (4) Trading Days after the date of execution of this Agreement, the Company
shall file a Current Report on Form 8-K with the SEC describing the terms of the transaction contemplated by the Equity Line Transaction
Documents in the form required by the 1934 Act, if such filing is required.


 




    	 



    	 



    

 


(I)
CORPORATE EXISTENCE. The Company shall use all commercially reasonable efforts to preserve and continue the corporate existence
of the Company.


 


(J)
NOTICE OF CERTAIN EVENTS AFFECTING REGISTRATION; SUSPENSION OF RIGHT TO MAKE A PUT. The Company shall promptly notify the Investor
upon the occurrence of any of the following events in respect of a Registration Statement or related prospectus in respect of
an offering of the Securities: (1) receipt of any request for additional information by the SEC or any other federal or state
governmental authority during the period of effectiveness of the Registration Statement for amendments or supplements to the Registration
Statement or related prospectus; (2) the issuance by the SEC or any other federal or state governmental authority of any stop
order suspending the effectiveness of any Registration Statement or the initiation of any proceedings for that purpose; (3) receipt
of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Securities
for sale in any jurisdiction or the initiation or notice of any proceeding for such purpose; (4) the happening of any event that
makes any statement made in such Registration Statement or related prospectus or any document incorporated or deemed to be incorporated
therein by reference untrue in any material respect or that requires the making of any changes in the Registration Statement,
related prospectus or documents so that, in the case of a Registration Statement, it will not contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not
misleading, and that in the case of the related prospectus, it will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and (5) the Company’s reasonable determination that a post-effective amendment to
the Registration Statement would be appropriate, and the Company shall promptly make available to Investor any such supplement
or amendment to the related prospectus. The Company shall not deliver to the Investor any Put Notice during the continuation of
any of the foregoing events in this Section 5(K).


 


(K)
TRANSFER AGENT. Upon effectiveness of the Registration Statement, and for so long as the Registration Statement is effective,
the Company shall deliver instructions to its transfer agent to issue Shares to the Investor that are covered for resale by the
Registration Statement free of restrictive legends.


 


(L)
ACKNOWLEDGEMENT OF TERMS. The Company hereby represents and warrants to the Investor that: (1) it is voluntarily entering
into this Agreement of its own free will, (2) it is not entering this Agreement under economic duress, (3) the terms of this
Agreement are reasonable and fair to the Company, and (4) the Company has had independent legal counsel of its own choosing
review this Agreement, advise the Company with respect to this Agreement, and represent the Company in connection with this
Agreement.


 


SECTION
6. CONDITIONS OF THE COMPANY’S OBLIGATION TO SELL. The obligation
hereunder of the Company to issue and sell the Securities to the Investor is further subject to the satisfaction, at or before
each Closing Date, of each of the following conditions set forth below. These conditions are for the Company’s sole benefit and
may be waived by the Company at any time in its sole discretion.


 


(A)
The Investor shall have executed this Agreement and the Registration Rights Agreement and delivered the same to the Company.


 




    	 



    	 



    

 


(B)
The Investor shall have received the Shares being purchased by the Investor via a Put Settlement Sheet (hereto attached as Exhibit
C). Immediately after receipt of confirmation of delivery of such Securities by the Investor, the Investor, by wire transfer of
immediately available funds pursuant to the wire instructions provided by the Company, will disburse the funds constituting the
Purchase Amount.


 


(C)
The representations and warranties of the Investor shall be true and correct in all material respects as of the date when made
and as of the applicable Closing Date as though made at that time and the Investor shall have performed, satisfied and complied
in all material respects with the covenants, agreements and conditions required by the Equity Line Transaction Documents to be
performed, satisfied or complied with by the Investor on or before such Closing Date.


 


(D)
No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated
by this Agreement.


 


SECTION
7. FURTHER CONDITIONS OF THE INVESTOR’S OBLIGATION TO PURCHASE.
The obligation of the Investor hereunder to purchase Shares is subject to the satisfaction, on or before each Closing Date, of
each of the following conditions set forth below.


 


(A)
The Company shall have executed the Equity Line Transaction Documents and delivered the same to the Investor.


 


(B)
The Common Stock shall be authorized for quotation on the Principal Market and trading in the Common Stock shall not have been
suspended by the Principal Market or the SEC, at any time beginning on the date hereof and through and including the respective
Closing Date (excluding suspensions of not more than one (1) Trading Day resulting from business announcements by the Company,
provided that such suspensions occur prior to the Company’s delivery of the Put Notice related to such Closing).


 


(C)
The representations and warranties of the Company shall be true and correct in all material respects as of the date when made
and as of the applicable Closing Date as though made at that time and the Company shall have performed, satisfied and complied
in all material respects with the covenants, agreements and conditions required by the Equity Line Transaction Documents to be
performed, satisfied or complied with by the Company on or before such Closing Date.


 


(D)
The Company shall have executed and delivered to the Investor the certificates representing, or have
executed electronic book-entry transfer of, the Securities (in such denominations as the Investor
shall request) being purchased by the Investor at such Closing.


 


(E)
No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed
by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated
by this Agreement.


 




    	 



    	 



    

 


(F)
The Registration Statement shall be effective on each Closing Date and no stop order suspending the effectiveness of the Registration
statement shall be in effect or to the Company’s knowledge shall be pending or threatened. Furthermore, on each Closing Date (1)
neither the Company nor the Investor shall have received notice that the SEC has issued or intends to issue a stop order with
respect to such Registration Statement or that the SEC otherwise has suspended or withdrawn the effectiveness of such Registration
Statement, either temporarily or permanently, or intends or has threatened to do so (unless the SEC’s concerns have been addressed
and Investor is reasonably satisfied that the SEC no longer is considering or intends to take such action), and (2) no other suspension
of the use or withdrawal of the effectiveness of such Registration Statement or related prospectus shall exist.


 


(G)
At the time of each Closing, the Registration Statement (including information or documents incorporated by reference therein)
and any amendments or supplements thereto shall not contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein not misleading or which would require public disclosure
or an update supplement to the prospectus.


 


(H)
If applicable, the shareholders of the Company shall have approved the issuance of any Shares in excess of the Maximum Common
Stock Issuance in accordance with Section 2(F) or the Company shall have obtained appropriate approval pursuant to the requirements
of Nevada law and the Company’s Articles of Incorporation and By-laws.


 


(I)
The mechanics of such Closing set forth in Section 2(E) shall have been satisfied on or before such Closing Date.


 


(J)
The Company shall have certified to the Investor the number of Shares outstanding when a Put Notice is given to the Investor.
The Company’s delivery of a Put Notice to the Investor constitutes the Company’s certification of the availability for issuance
of the necessary number of Shares subject to a Put Notice.


 


SECTION
8. TERMINATION. This Agreement shall terminate upon any of the following
events:


 


(A)
when the Investor has purchased the Cap Amount of Shares pursuant to this Agreement; or,


 


(B)
on the date which is thirty-six (36) months after the Effective Date; or,


 


(C)
upon written notice of the Company to the Investor. Any and all shares, or penalties, if any, due under this Agreement shall be
immediately payable and due upon termination of this Agreement.


 


SECTION
9. SUSPENSION. The Company’s right to cause the Investor to
purchase Shares pursuant to a Put Notice, and the Investor’s obligation to purchase Shares under this Agreement shall be
suspended upon any of the following events, and shall remain suspended until such event is rectified:


 


(A)
The trading of the Common Stock is suspended by the SEC, the Principal Market or Financial Industry Regulatory Authority for a
period of two (2) consecutive Trading Days during the Open Period; or,


 


(B)
The Common Stock ceases to be registered under the 1934 Act or listed or traded on the Principal Market. Immediately upon the
occurrence of one of the above-described events, the Company shall send written notice of such event to the Investor.


 




    	 



    	 



    

 


SECTION
10. INDEMNIFICATION. In consideration of the parties’
mutual obligations set forth in the Equity Line Transaction Documents, each of the parties (in such capacity, an
“Indemnitor”) shall defend, protect, indemnify and hold harmless the other and all of the other party’s
shareholders, officers, directors and employees (collectively, the “Indemnitees”) from and against any and all
actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and reasonable expenses in
connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification
hereunder is sought), and including reasonable documented attorneys’ fees and disbursements (the “Indemnified
Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to (A) any material
misrepresentation or breach of any representation or warranty made by the Indemnitor in the Equity Line Transaction Documents
or any other certificate, instrument or document contemplated hereby or thereby; (B) any material breach of any covenant,
agreement or obligation of the Indemnitor contained in the Equity Line Transaction Documents or any other certificate,
instrument or document contemplated hereby or thereby; (C) any cause of action, suit or claim brought or made against such
Indemnitee by a third party and arising out of or resulting from the execution, delivery, performance or enforcement of the
Equity Line Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby; (D) any
action, proceeding or investigation brought by any shareholder of the Company, in connection with or as a result of
the consummation of the transactions contemplated by the Equity Line Transaction Documents, or if an Indemnitee is impleaded
in any such action, proceeding or investigation by any person (other than as a result of a breach of the such
Indemnitee’s representations and warranties set forth in this Agreement); or (E) an Indemnitee becomes involved in any
capacity in any action, proceeding or investigation brought by the SEC against or involving the Company (unless the Company
is involved in the action, proceeding or investigation as a witness only) in connection with or as a result of the
consummation of the transactions contemplated by the Equity Line Transaction Documents (other than as a result of a breach of
such Indemnitee’s representations and warranties set forth in this Agreement), or if such Indemnitee is impleaded in
any such action, proceeding or investigation by any person, then in any such case, except insofar as (Y) any such
misrepresentation, breach or any untrue statement, alleged untrue statement, omission or alleged omission is made in reliance
upon and in conformity with information furnished to Indemnitor which is specifically intended for use in the preparation of
any such Registration Statement, preliminary prospectus, prospectus or amendments to the prospectus, (Z) any such Indemnified
Liabilities resulted or arose from (i) the breach by the Indemnitee party hereto of any representation, warranty, covenant or
agreement of such Indemnitee contained in the Equity Line Transaction Documents (ii) the Indemnitee is found to be guilty of
violating federal or state securities laws (or pleads “no-consent” or other similar plea or settles an
investigation or pleading without a specific finding of liability but is still subject to civil or criminal liability) or
(iii) the negligence, recklessness, willful misconduct or bad faith of such Indemnitee. To the extent that the foregoing
undertaking by the Indemnitor may be unenforceable for any reason, the Indemnitor shall make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. The indemnity
provisions contained herein shall be in addition to any cause of action or similar rights Indemnitor may have, and any
liabilities the Indemnitor or the Indemnitees may be subject to.


 


SECTION
11. GOVERNING LAW; DISPUTES SUBMITTED TO ARBITRATION. All disputes
arising under this agreement shall be governed by and interpreted in accordance with the laws of the State of New York, without
regard to principles of conflict of laws. The parties to this agreement will submit all disputes arising under this agreement
to arbitration in New York, NY before a single arbitrator of the American Arbitration Association (“AAA”). The arbitrator
shall be selected by application of the rules of the AAA, or by mutual agreement of the parties, except that such arbitrator shall
be an attorney admitted to practice law in the State of New York. No party to this Agreement will challenge the jurisdiction or
venue provisions as provided in this section. No party to this agreement will challenge the jurisdiction or venue provisions as
provided in this section. Nothing contained herein shall prevent the party from obtaining an injunction.


 




    	 



    	 



    

 


SECTION
12. LEGAL EXPENSES; AND MISCELLANEOUS EXPENSES. Except as
otherwise set forth in the Equity Line Transaction Documents, each party shall pay the fees and expenses of its advisers,
counsel, the 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. Any attorneys’ fees and expenses
incurred by either the Company or the Investor in connection with the preparation, negotiation, execution and delivery of any
amendments to this Agreement or relating to the enforcement of the rights of any party, after the occurrence of any breach of
the terms of this Agreement by another party or any default by another party in respect of the transactions contemplated
hereunder, shall be paid on demand by the party which breached the Agreement and/or defaulted, as the case may be. The
Company shall pay all stamp and other taxes and duties levied in connection with the issuance of any Securities. The Company
has paid $5,000 toward the preparation of the Equity Line Transaction Documents. The remaining $10,000 shall be paid at the
earlier of: 1) the Closing of the first Put; or, 2) September 6, 2013. If the Company is not DWAC eligible at the time of a
Put Closing, there will be a $2,000 charge on each Closing Date to cover costs associated with, but not limited to: deposit
costs, legal review fees and wire fees. If the Company is DWAC eligible at the time of a Put Closing, there will be a $250
charge on each Closing Date.


 


SECTION
13. COUNTERPARTS. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts
have been signed by each party and delivered to the other party; provided that a facsimile signature shall be considered due execution
and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original signature.


 


SECTION
14. HEADINGS; SINGULAR/PLURAL. The headings of this Agreement are
for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement. Whenever required by
the context of this Agreement, the singular shall include the plural and masculine shall include the feminine.


 


SECTION
15. SEVERABILITY. If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other
jurisdiction.


 


SECTION
16. ENTIRE AGREEMENT; AMENDMENTS. This Agreement is the FINAL AGREEMENT
between the Company and the Investor with respect to the terms and conditions set forth herein, and, the terms of this Agreement
may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the Parties. No provision of this
Agreement may be amended other than by an instrument in writing signed by the Company and the Investor, and no provision hereof
may be waived other than by an instrument in writing signed by the party against whom enforcement is sought. The execution and
delivery of the Equity Line Transaction Documents shall not alter the force and effect of any other agreements between the Parties,
and the obligations under those agreements.


 




    	 



    	 



    

 


SECTION
17. NOTICES. Any notices or other communications required or permitted
to be given under the terms of this Agreement must be in writing and will be deemed to have been delivered (A) upon receipt, when
delivered personally; (B) upon receipt, when sent by facsimile or email with the signed document attached in PDF format (provided
confirmation of transmission is mechanically or electronically generated and kept on file by the sending party); or (C) one (1)
day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive
the same. The addresses and facsimile numbers for such communications shall be:


 


If
to the Company:


 


CARDIOGENICS
HOLDINGS, INC.


6295
Northam Drive, Unit 8


Mississauga,
Ontario L4V 1WB


Telephone:
(905) 673-8501


 


with
a copy to:


 


Thompson
Hine LLP


335
Madison Avenue, 12th Floor


New
York, NY 10017


Attn:
Peter Gennuso


Telephone:
(212) 908-3958


Facsimile:
(212) 344-6101


 


If
to the Investor:


 


Dutchess
Opportunity Fund, II, LP


50
Commonwealth Avenue, Suite 2


Boston,
MA 02116


Telephone:
(617) 301-4700


 


Each
party shall provide five (5) days prior written notice to the other party of any change in address or facsimile number.


 


SECTION
18. NO ASSIGNMENT. This Agreement and any rights, agreements or
obligations hereunder may not be assigned, by operation of law, merger or otherwise, and any purported assignment by a party will
be null and void and not binding on such other party. Subject to the preceding sentence, all of the terms, agreements, covenants,
representations, warranties and conditions of this Agreement are binding upon, and inure to the benefit of and are enforceable
by, the parties and their respective successors and assigns.


 


SECTION
19. NO THIRD PARTY BENEFICIARIES. This Agreement is intended for
the benefit of the parties hereto and is not for the benefit of, nor may any provision hereof be enforced by, any other person,
except that the Company acknowledges that the rights of the Investor may be enforced by its general partner.


 


SECTION
20. SURVIVAL. The indemnification provisions set forth in Section
11, shall survive each of the Closings and the termination of this Agreement.


 




    	 



    	 



    

 


SECTION
21. PUBLICITY. The Company and the Investor shall consult with each
other in issuing any press releases or otherwise making public statements with respect to the transactions contemplated hereby
and no party shall issue any such press release or otherwise make any such public statement without the prior consent of the other
party, which consent shall not be unreasonably withheld or delayed, except that no prior consent shall be required if such disclosure
is required by applicable law, in which such case the disclosing party shall provide the other party with prior notice of such
public statement. The Investor acknowledges that this Agreement and all or part of the Equity Line Transaction Documents may be
deemed to be “material contracts” as that term is defined by Item 601(b)(10) of Regulation S-B under the 1934 Act,
and that the Company may therefore be required to file such documents as exhibits to reports or registration statements filed
under the 1933 Act or the 1934 Act. The Investor further agrees that the status of such documents and materials as material contracts
shall be determined solely by the Company, in consultation with its counsel.


 


SECTION
22. FURTHER ASSURANCES. Each party shall do and perform, or cause
to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates,
instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes
of this Agreement and the consummation of the transactions contemplated hereby.


 


SECTION
23. NO STRICT CONSTRUCTION. The language used in this Agreement
will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will
be applied against any party, as the parties mutually agree that each has had a full and fair opportunity to review this Agreement
and seek the advice of counsel on it.


 


SECTION
24. REMEDIES. The Investor and the Company shall have all rights
and remedies set forth in this Agreement and the Registration Rights Agreement and all rights and remedies which such holders
have been granted at any time under any other agreement or contract and all of the rights which the Investor or the Company has
by applicable law. Any person having any rights under any provision of this Agreement shall be entitled to enforce such rights
specifically (without posting a bond or other security), to recover damages by reason of any default or breach of any provision
of this Agreement, including the recovery of reasonable attorneys fees and costs, and to exercise all other rights granted by
law.


 


SECTION
25. PAYMENT SET ASIDE. To the extent that the Company makes a payment
or payments to the Investor hereunder or under the Registration Rights Agreement or the Investor enforces or exercises its rights
hereunder or 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 of 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.


 


SECTION
26. PRICING OF COMMON STOCK. For purposes of this Agreement, the
VWAP of the Common Stock shall be as reported on a direct feed service.


 




    	 



    	 



    

 


SECTION
27. NON-DISCLOSURE OF NON-PUBLIC INFORMATION.


 


(A)
The Company shall not disclose non-public information concerning the Company to the Investor, its advisors, or its representatives.


 


(B)
Nothing herein shall require the Company to disclose non-public information to the Investor or its advisors or representatives,
provided, however, that notwithstanding anything herein to the contrary, the Company will, as hereinabove provided, immediately
notify the advisors and representatives of the Investor and, if any, underwriters, of any event or the existence of any circumstance
(without any obligation to disclose the specific event or circumstance) of which it becomes aware, constituting non-public information
(whether or not requested of the Company specifically or generally during the course of due diligence by such persons or entities),
which, if not disclosed in the prospectus included in the Registration Statement would cause such prospectus to include a material
misstatement or to omit a material fact required to be stated therein in order to make the statements, therein, in light of the
circumstances in which they were made, not misleading. Nothing contained in this Section 27 shall be construed to mean that such
persons or entities other than the Investor may not obtain non-public information in the course of conducting due diligence in
accordance with the terms of this Agreement and nothing herein shall prevent any such persons or entities from notifying the Company
of their opinion that based on such due diligence by such persons or entities, that the Registration Statement contains an untrue
statement of material fact or omits a material fact required to be stated in the Registration Statement or necessary to make the
statements contained therein, in light of the circumstances in which they were made, not misleading.


 


SECTION
28. ACKNOWLEDGEMENTS OF THE PARTIES. Notwithstanding anything in
this Agreement to the contrary, the parties hereto hereby acknowledge and agree to the following: (A) the Investor makes no representations
or covenants that it will not engage in trading in the securities of the Company, other than the Investor will not sell any of
the Company’s common stock at any time during a Pricing Period; (B) the Company shall, by 8:30 a.m. Boston Time on the fourth
Trading Day following the date hereof, file a current report on Form 8-K disclosing the material terms of the transactions contemplated
hereby and in the other Equity Line Transaction Documents; (C) the Company has not and shall not provide material non-public information
to the Investor unless prior thereto the Investor shall have executed a written agreement regarding the confidentiality and use
of such information; and (D) the Company understands and confirms that the Investor will be relying on the acknowledgements set
forth in clauses (A) through (C) above if the Investor effects any transactions in the securities of the Company.


 


[Signature
Page Follows]


 




    	 



    	 



    

 


SIGNATURE
PAGE OF INVESTMENT AGREEMENT


 


Your
signature on this Signature Page evidences your agreement to be bound by the terms and conditions of the Investment Agreement
as of the date first written above.


 


The
undersigned signatory hereby certifies that he has read and understands the Investment Agreement, and the representations made
by the undersigned in this Investment Agreement are true and accurate, and agrees to be bound by its terms.


 


	 	DUTCHESS
    OPPORTUNITY FUND, II, L.P.
	 	 	 
	 	By:	/s/
Douglas H. Leighton
	 	 	Douglas
    H. Leighton
	 	 	Managing
    Member of:
	 	 	Dutchess
    Capital Management, II, LLC
	 	 	General
    Partner to:
	 	 	Dutchess
    Opportunity Fund, II, LP
	 	 	 
	 	CARDIOGENICS
    HOLDINGS INC.
	 	 	 
	 	By:	/s/
    Yahia Gawad 
	 	 	Yahia
    Gawad
	 	 	Chief
    Executive Officer
	 	 	 
	 	By:	/s/
    James Essex
	 	 	James
    Essex
	 	 	Chief
    Financial Officer


 


Signature
Page to Investment Agreement


 




    	 



    	 



    

 


LIST
OF EXHIBITS


 


EXHIBIT
A Registration Rights Agreement


EXHIBIT
B Put Notice


EXHIBIT
C Put Settlement Sheet


 




    	 



    	 



    

 


EXHIBIT
A


 


REGISTRATION
RIGHTS AGREEMENT


 


(See
Exhibit 10.2 of this Form 8-K)


 




    	 



    	 



    

 








EXHIBIT B


 


FORM OF PUT NOTICE


 


Date:                                 


 


RE: Put Notice Number
                                 


 


Dear Mr. Leighton:


 


This is to inform you that as of today, CARDIOGENICS
HOLDINGS INC.a Nevada corporation (the “Company”), hereby elects to exercise its right pursuant to the
Investment Agreement, entered into by and between the Company and Dutchess Opportunity Fund II, LP (“Dutchess”),
dated as of September [__], 2013 (the “Agreement”), to require Dutchess to purchase shares of its common stock. The
Company hereby certifies that:


 


1. The undersigned is the duly elected ______________
of the Company.


 


2. There are no fundamental changes to the
information set forth in the Registration Statement which would require the Company to file a post effective amendment to the Registration
Statement.


 


3. The Company has performed in all material
respects all covenants and agreements to be performed by the Company and has complied in all material respects with all obligations
and conditions contained in the Agreement on or prior to the Put Notice Date, and shall continue to perform in all material respects
all covenants and agreements to be performed by the Company through the applicable Closing Date. All conditions to the delivery
of this Put Notice are satisfied as of the date hereof.


 


4. The undersigned hereby represents,
warrants and covenants that it has made all filings (“SEC Filings”) required to be made by it pursuant to
applicable securities laws (including, without limitation, all filings required under the Securities Exchange Act of 1934,
which include Forms 10-Q, 10-K, 8-K, etc.). All SEC Filings and other public disclosures made by the Company, including,
without limitation, all press releases, analysts meetings and calls, etc. (collectively, the “Public
Disclosures”), have been reviewed and approved for release by the Company and, if containing financial information,
the Company’s independent certified public accountants. None of the Company’s Public Disclosures contain any
untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading.


 


5. The Put Amount for this put is $__________________.


 


6. The Pricing Period runs from                                   until
                                 .


 


7. The Suspension Price is $                                  .


 


8. The current number of shares of Common
Stock issued and outstanding are:                                  


 


9. The number of shares of Common Stock currently
available for resale pursuant to the Registration Statement on Form S-1 for the Equity Line are:                                  .


 


[Company Name]


 


	By:	 	 
	Name:	 	 
	Title:	 	 


 




    	 



    	 



    


 


EXHIBIT C


 


FORM OF PUT SETTLEMENT SHEET


 


Date: 
                                 


 


TO:DUTCHESS OPPORTUNITY FUND, II, LP


 


RE: CARDIOGENICS HOLDINGS INC. /PUT NOTICE
No. _____


 


Dear                                  :


 


This will confirm that, pursuant to Put
Notice No. ___ given by CARDIOGENICS HOLDINGS INC. to Dutchess Opportunity Fund, II, LP on                                  
20__, we are now deliveringto Dutchess Opportunity Fund, II, LP [___________] shares of Common Stock,without restrictive
legend, via book entry and immediate DWAC, in accordance with the following instructions provided by you:


 


	Broker:	 	 
	 	 	 
	DTC #:	 	 
	 	 	 
	Account #:	 	 
	 	 	 
	Account Name:	 	 


 


Upon your receipt of the above shares of Common
Stock, please wire transfer to our account the Put Amount for this put in accordance with the wire instructions attached to this
Put Settlement Sheet.


 


Regards,


  


	CARDIOGENICS HOLDINGS INC.	 
	 	 	 
	By:	 	 
	Name:	 	 
	Title:	 	 


 


 


Attachment to Settlement
Sheet


 




    	 



    	 



    


 


CARDIOGENICS HOLDINGS INC.


 


WIRE INSTRUCTIONS


 


	Bank:	 	 
	 	 	 
	ABA #:	 	 
	 	 	 
	SWIFT Code:	 	 
	 	 	 
	Account Name:	 	 
	 	 	 
	Account #: