Exhibit 10.1


 


SECURITIES PURCHASE AGREEMENT


 


This Securities Purchase
Agreement (this “Agreement”) is dated as of April __, 2016, between Intellect Neurosciences, Inc., a Delaware
corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its
successors and permitted assigns, a “Purchaser” and collectively, the “Purchasers”).


 


PREAMBLE


 


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 (the “Offering”).


 


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, for all purposes of this Agreement, the following terms have the
meanings set forth in this Section 1.1:


 


“Accredited
Investor” shall have the meaning ascribed to it in Section 3.2(c).


 


“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.18.


 


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


 


“Additional
Closing” shall have the meaning ascribed to such term in Section 2.4.


 


“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.


 


“Beneficial
Ownership Limitation” shall have the meaning ascribed to such term in Section 4.24.


 


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


 


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


 


“Buy-In”
shall have the meaning ascribed to such term in Section 4.1(g).


 


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


 






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“Closing
Date” means the Business 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’ obligation to pay the Subscription Amount at such Closing,
and (ii) the Company’s obligations to deliver the Securities to be issued and sold at such Closing, in each case, have been
satisfied or waived.


 


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


 


“Common
Stock” means the common stock of the Company, $0.001 par value, and any other class of securities into which such securities
may hereafter be reclassified.


 


“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.


 


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


 


“Conversion
Shares” means shares of the Company’s Common Stock issuable upon conversion of the Note in accordance with the
terms of the Note.


 


“Company
Counsel” means Sichenzia Ross Friedman Ference LLP, 61 Broadway, 32nd Floor, New York, NY 10006, Attn: Harvey
Kesner, Esq., facsimile: (212) 930-9725.


 


“Disclosure
Schedules” shall have the meaning ascribed to such term in Section 3.1.


 


“Equity
Line of Credit” shall have the meaning ascribed to such term in Section 4.13.


 


“End
Date” shall have the meaning ascribed to such term in Section 4.9.


 


“Escrow
Agent” means G&M.


 


“Escrow
Agreement” means the agreement to be employed in connection with the sale of the Securities, a copy of which is annexed
hereto as Exhibit B.


 


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


 


“Exempt
Issuance” means the issuance of (a) shares of Common Stock and options to officers, directors, or employees of the Company
prior to and after the Closing Date in the amounts and on the terms set forth on Schedule 3.1(g), (b) securities upon the
exercise or exchange of or conversion of Securities issued hereunder (subject to adjustment for forward and reverse stock splits
and the like that occur after the date hereof) 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 and any term thereof have not
been amended since the date of this Agreement to increase the number of such securities or to decrease the issue price, exercise
price, exchange price or conversion price of such securities and which securities and the principal terms thereof are set forth
on Schedule 3.1(g), (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested
directors of the Company, provided that any such issuance shall only be to a Person (or to the equityholders of a Person) which
is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business
of the Company and shall be intended to provide to the Company substantial 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, and (d) securities issued or issuable pursuant to this Agreement
or the Note or upon conversion of any such securities.


 






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“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).


 


“G&M”
means Grushko & Mittman, P.C., with offices located at 515 Rockaway Avenue, Valley Stream, New York 11581, Fax: (212) 697-3575.


 


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


 


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


 


“Intercreditor
Agreement” shall mean the Intercreditor Agreement annexed hereto as Exhibit D.


 


“Junior
Lenders” means the Persons identified in the Intercreditor Agreement.


 


“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.


 


“Listing
Default” shall have the meaning ascribed to such term in Section 4.9.


 


“Majority
in Interest” shall have the meaning ascribed to such term in Section 5.5.


 


“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
Rate” shall have the meaning ascribed to such term in Section 5.21.


 


“Milestone
Event” shall mean the completion by the Company of experimental treatment trials of its caspase cleaved TauC3 Monoclonal
antibody in mouse models of Traumatic Brain Injury (“TBI”) and Progressive Supranuclear Palsy Eplase (“PSP”).
 For purposes of the foregoing, “completion” shall mean receipt by the Company of a Final Collaboration Study
Report indicating that (i) Tau C3 protein is present in animal models of TBI or PSP, or both; at a level detectable by the Company’s
TauC3 antibody; and (ii) the Company’s TauC3 antibody shows sufficient binding specificity to the target TauC3 protein to
indicate that the antibody may be a viable treatment agent.


 


“Money
Laundering Laws” shall have the meaning ascribed to such term in Section 3.1(r).


 


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


 






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“Offering”
shall have the meaning ascribed to such term in the Preamble.


 


“Outstanding
Notes” means the notes held by the Junior Lenders.


 


“Notes”
means the secured convertible notes due April 7, 2018 (2 years), in the form of Exhibit A hereto.


 


“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.


 


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


 


“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.


 


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


 


“Protection
Period” shall have the meaning ascribed to such term in Section 4.14.


 


“Public
Information Failure” shall have the meaning ascribed to such term in Section 4.2(b).


 


“Public
Information Failure Payments” shall have the meaning ascribed to such term in Section 4.2(b).


 


“Purchaser
Counsel” shall mean Grushko & Mittman, P.C., 515 Rockaway Avenue, Valley Stream, New York 11581, Fax: (212) 697-3575.


 


“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.7.


 


“Registration
Expenses” shall have the meaning ascribed to such term in Section 4.23.


 


“Regulation
D” means Regulation D under the Securities Act.


 


“Removal
Date” means the date that all of the issued Shares have been sold pursuant to Rule 144 or may be sold pursuant to Rule
144 without the requirement for the Company to be in compliance with the current public information requirements under Rule 144
and without volume or manner-of-sale restrictions.


 


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


 


“Required
Minimum” shall have the meaning ascribed to such term in Section 4.8.


 


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


 






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“SEC
Reports” shall mean all reports, schedules, forms, statements and other documents filed by the Company under the Securities
Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, since June 30, 2015, including the exhibits thereto
and documents incorporated by reference therein.


 


“Securities”
means the Notes and the Underlying Shares.


 


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


 


“Securities
Laws” means the securities laws of the United States or any state thereof and the rules and regulations promulgated thereunder.


 


“Selling
Expenses” shall have the meaning ascribed to such term in Section 4.23.


 


“Series
G Preferred Stock” shall mean the Series G 8% Preferred Stock of the Company issued to the Purchasers on or about July
1, 2015.


 


“Share
Dilution Adjustment” shall have the meaning ascribed to such term in Section 4.14.


 


“Share
Dilutive Issuance” shall have the meaning ascribed to such term in Section 4.14.


 


“Shares”
means the shares of Common Stock issued or issuable to each Purchaser pursuant to this Agreement, including but not limited to
Shares issued or issuable upon conversion of the Notes provided that any such share of Common Stock shall not constitute a Share
after such share has been irrevocably sold pursuant to an effective registration statement under the Securities Act or pursuant
to Rule 144 without further restrictions or conditions to transfer pursuant to Rule 144.


 


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


 


“Stock
Option Plan” means the Stock Option Plan of the Company in effect as the date of this Agreement, the principal terms
of which have been disclosed in the SEC Reports.


 


“Subscription
Amount” means, as to each Purchaser at a Closing, the aggregate amount to be paid for the Notes purchased hereunder at
a Closing 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 in immediately available funds and/or Surrendered Shares.


 


“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 on Schedule 3.1(a) and shall, where applicable and with regard to future events,
also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.


 


“Surrendered
Shares” means the shares of Series G Preferred Stock surrendered by Purchasers as payment for the Notes.


 






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“Termination
Date” shall have the meaning ascribed to such term in Section 2.1(a).


 


“Trading
Day” means a day on which the principal Trading Market is open for trading; provided, that in the event that the Common
Stock is not listed or quoted for trading on a Trading Market on the date in question, then Trading Day shall mean a Business Day.


 


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


 


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


 


“Transfer
Agent” means American Stock Transfer & Trust Company, LLC, with offices located at 6201 15th Avenue, Brooklyn,
NY 11219, and any successor transfer agent of the Company.


 


“Underlying
Shares” means the shares of Common Stock issued and issuable upon conversion of the Notes and issued and issuable in
lieu of the cash payment of interest on the Notes in accordance with the terms of the Notes and any other shares of Common Stock
issued or issuable to a Purchaser in connection with or pursuant to the Securities or the Transaction Documents.


 


“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.20.


 


“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 the Common Stock is not then listed or
quoted for trading on a Trading Market and if prices for the Common Stock are then reported on the OTC Pink Marketplace maintained
by OTC Markets Group Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent
closing price per share of the Common Stock so reported, or (c) 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.


 


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, an aggregate of up to $6,050,000 principal amount of Notes as determined pursuant to Section 2.2(a) (such purchase
and sale being the “Closing”. Each Purchaser shall deliver to the Company such Purchaser’s Subscription
Amount, and the Company shall deliver to each Purchaser its respective Note as determined pursuant to Section 2.2(a), and the Company
and each Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Closing. Upon satisfaction of the
covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of G&M or such other location
as the parties shall mutually agree.


 






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(a)          Initial
Closing and Second Closing. Notwithstanding anything herein to the contrary, the initial Closing must take place on not less
than $750,000 of cash Subscription Amount. The initial Closing must take place on or before April 15, 2016 (the “Initial
Closing”). Subsequent to the Initial Closing, and on or prior to such date as is one year following the Initial Closing,
an additional Closing (the “Second Closing”) may take place on up to $300,000 of cash Subscription Amount, provided
that the Milestone Event has occurred.


 


(b)          Additional
Closings. At any time after the Initial Closing and prior to the Termination Date (as defined below), additional Closings may
take place on up to $5,544,000 of cash Subscription Amounts, in the aggregate, for all Closings. The final Closing must take place
on or before April 5, 2017 (the “Termination Date”). If on the Termination Date a final Closing has not taken
place, the Escrow Agent will return to the respective parties all deliverables received by the Escrow Agent in connection with
proposed Closings in respect of which the conditions of Sections 2.2 and 2.3 hereof have not been satisfied prior to the Termination
Date. Notwithstanding the date of any Closing subsequent to the Initial Closing, all time effective clauses in the Transaction
Documents shall commence on the initial Closing Date and Transaction Documents will be deemed modified mutatis mutandis in
connection with such additional Closings, if any, that take place after the Initial Closing.


 


(c)          The
Notes. The Maturity Date of the Notes issued at all Closings subsequent to the Initial Closing shall be the same as the Maturity
Date of the Notes issued at the Initial Closing, provided that interest shall not begin to accrue on any Note prior to the date
on which consideration for such Note is fully paid to the Company.


 


(d)          Exchange
of Series G Preferred Stock. A Purchaser who acquires any Notes for cash at the Initial Closing, and at the Second Closing
shall be permitted to pay a portion of any Subscription Amount in excess of such cash amounts by tendering to the Company at such
Closing shares of Series G Preferred Stock of the Company held by such Purchaser. With respect to such surrendered preferred stock
(the “Surrendered Shares”), the liquidation value, including accrued dividends, of each Surrendered Share, will
be treated as the cash equivalent value of such Surrendered Share for the purpose of determining the portion of Subscription Amount
paid by such surrender. The maximum value, including accrued dividends, of the Surrendered Shares which may be tendered as Subscription
Amount, shall not exceed $4.28 for each $1.00 of actual cash investment.


 


2.2          Deliveries.


 


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


 


(i)           this
Agreement duly executed by the Company;


 


(ii)         
a legal opinion of Company Counsel, substantially in the form of Exhibit C attached hereto;


 


(iii)        a
Note registered in the name of such Purchaser with a principal amount equal to such Purchaser’s Closing Subscription Amount;


 






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(iv)        Escrow
Agreement duly executed by the Company; and


 


(v)         Intercreditor
Agreement duly executed by the Company and the Junior Lenders.


 


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


 


(i)          this
Agreement duly executed by such Purchaser;


 


(ii)         Intercreditor
Agreement duly executed by Purchaser;


 


(iii)        Escrow
Agreement duly executed by each Purchaser;


 


(iv)         such
Purchaser’s Closing Subscription Amount by wire transfer to the account specified in the Escrow Agreement; and


 


(v)         such
Purchaser’s Series G Preferred Stock being surrendered and exchanged for Notes.


  


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 (determined without regard to any materiality, Material Adverse Effect or other similar qualifiers
therein) on the Closing Date of the representations and warranties of the Purchasers contained herein (unless as of a specific
date therein in which case they shall be accurate as of such date);


 


(ii)         all
obligations, covenants and agreements of each 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 a Purchaser hereunder to effect a Closing, unless waived by such Purchaser, are subject to the following
conditions being met:


 


(i)           the
accuracy in all material respects (determined without regard to any materiality, Material Adverse Effect or other similar qualifiers
therein) when made and on the Closing Date of the representations and warranties of the Company contained herein (unless as of
a specific date therein in which case they shall be accurate as of such date);


 


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


 


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


 






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


 


(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 from the date hereof 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;


 


(vi)        from
the date hereof until the Closing Date, (a) an Event of Default has not occurred, whether or not such Event of Default has been
cured, and (b) there is no existing event which, with the passage of time or the giving of notice, would constitute an Event of
Default; and


 


(vii)       the
Escrow Agent shall have received executed signature pages to this Agreement and the Escrow Agent shall have received an aggregate
Subscription Amount of $750,000 with respect to the Initial Closing and not less than $300,000 with respect to the Second Closings
in corresponding Subscription Amounts in the form of Surrendered Shares.


 


2.4           Additional
Closings.


 


(a)          Purchaser
Additional Closing Request. Subject to the satisfaction of all the Closing Conditions contained in Article 2.2(b) unless waived
by a Purchaser only with respect to such Purchaser, at any time after the Initial Closing, any Purchaser may request from the Company
in writing that an Additional Closing take place with respect to an amount of Subscription Amount equal to up to two-thirds (2/3)
of such Purchaser’s initial cash Subscription Amount (and at the discretion of the Purchaser an additional Subscription Amount
in connection with the surrender of the Series G Preferred Stock). Upon request by a Purchaser to the Company for an Additional
Closing, the Company must notify all other Purchasers in writing within ten (10) Trading Days of such Purchaser’s request.
Any other Purchaser who wants to participate in an Additional Closing must notify the Company in writing of its intention within
four (4) Trading Days of receipt by Purchaser of the Company’s notice. An Additional Closing must take place within five
(5) Trading Days after the Company gives the forgoing notice.         


 


(b)          Company
Additional Closing Request. Until the Termination Date but not later than ten (10) Trading Days after the occurrence of the
Milestone Event, the Company may require all, but not less than all, Purchasers who participated in the initial Closing to participate
in an Additional Closing with respect to not more than two-thirds (2/3) of the amount of each Purchaser’s initial cash Closing
Subscription Amount (which Subscription Amount may be increased at the sole discretion of the Purchaser for an additional Subscription
Amount paid for by the surrender by Purchaser of the Series G Preferred Stock). Such Additional Closing must take place not later
than fifteen (15) Trading Days after the foregoing notice is given to all Purchasers.


 






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ARTICLE III.


REPRESENTATIONS AND WARRANTIES


 


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


 


(a)           Subsidiaries. 
All of the direct and indirect subsidiaries of the Company and the Company’s ownership interests therein as of the date of
this Agreement are 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 relevant to any component of this Agreement as of a particular date,
then such reference shall not be applicable.


 


(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 except for the Company’s
Israel subsidiary, Intellect Neurosciences (Israel) Ltd., which is currently inactive and conducts no operations. Neither the Company
nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation,
bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business
and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity
or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects
or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect
on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document
(any of (i), (ii) or (iii), a “Material Adverse Effect”) and, no Proceeding has been instituted in any such
jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.


 


(c)           Authorization;
Enforcement.  The Company has the requisite corporate power and authority to enter into and to consummate the transactions
contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder
and thereunder.  The execution and delivery of each of this Agreement and 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, liquidation 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) to the extent the indemnification provisions contained in this Agreement may be limited by applicable law and principals
of public policy.


 






    	 	10	 



     


    

 


(d)           No
Conflicts.  Other than as disclosed on Schedule 3.1(d), 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,
(ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) by the
Company, any Subsidiary or, any third party under, result in the creation of any Lien upon any of the properties or assets of the
Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without
notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary
debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of
the Company or any Subsidiary is bound or affected, or (iii) conflict with or result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary
is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a
Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be
expected to result in a Material Adverse Effect.


 


(e)           Filings,
Consents and Approvals.  Other than 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 provincial or
foreign or domestic 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 4.4 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, if any, all of which, if
any, shall have been effectuated prior to the Closing, and (iii) the filing of a Form D with the Commission and such filings as
are required to be made under applicable 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 other than restrictions
on transfer provided for in the Transaction Documents and Liens resulting from the activities of any Purchaser. The Company has
reserved from its duly authorized capital stock the maximum stated number of shares of Common Stock issuable pursuant to this Agreement.


 






    	 	11	 



     


    

 


(g)           Capitalization. 
The capitalization of the Company is as set forth in Schedule 3.1(g). The Company has not issued any capital stock
since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options
under the Stock Option Plans, the issuance of shares of Common Stock to employees pursuant to the Stock Option 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 set forth on 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 material 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. Except as set
forth on Schedule 3.1(g), the issuance and sale of the Securities will not obligate the Company to issue shares of Common
Stock or other securities to any Person (other than the Purchasers) and will not result in a right of any holder of Company securities
to adjust the exercise, conversion, exchange or reset price under any of such securities. All Shares reserved for issuance including
the number of such reserved Shares and the purpose of such issuances are disclosed on Schedule 3.1(g). All of the outstanding
shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in material
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. 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.


 


(h)          
Financial Statements. Except as described in the SEC Reports or 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, since June 30, 2015 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 described in
the SEC Reports, as of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities
Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.  The Form 8-K described in Section 4.4, upon its
filing, will comply in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and
will 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, not misleading. Except as
described in the SEC Reports, the latest audited 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 are subject to normal, immaterial, year end audit adjustments, 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.


 






    	 	12	 



     


    

 


(i)           Material
Changes; Undisclosed Events, Liabilities or Developments.  Since the date of the latest audited financial statements included
within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed not later than five Trading Days prior
to the date hereof or not later than five Trading Days prior to the applicable Closing Date as of which this representation and
warranty is being made and except as set forth in Schedule 3.1(i): (i) there has been no event, occurrence or development
that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any
liabilities (contingent or otherwise) other than (A) trade payables, and accrued expenses incurred in the ordinary course of business
consistent with past practice, (B) transaction expenses incurred in connection with the Transaction Documents, and (C) 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 or employment agreements which issuances prior to the date of this Agreement
are described on Schedule 3.1(g). 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 and as set forth on Schedule 3.1(i),
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, properties, operations, assets or financial
condition, that would be required to be disclosed by the Company under applicable Securities Laws at the time this representation
is made or deemed made that has not been publicly disclosed at least one (1) Trading Day prior to the date that this representation
is made.


 


(j)           Litigation. 
Except as set forth on Schedule 3.1(j), 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”) that would, if there were an unfavorable decision, have or reasonably
be expected to result in a Material Adverse Effect, nor to the knowledge of the Company is there any reasonable basis for any such
Action that would, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. 
Except as described in the SEC Reports, neither the Company nor any Subsidiary, nor, to the Company’s knowledge, any director
or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under 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, to the knowledge of the Company, any current or former director or
officer of the Company, nor to the knowledge of the Company is there any reasonable basis for any of the foregoing. 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.


 






    	 	13	 



     


    

 


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


 


(l)         
Compliance.  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)          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 actually conducted
and 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.


 


(n)           Title
to Assets.  The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by
them and good and, except as set forth on Schedule 3.1(n), 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 Permitted
Liens. Except as set forth on Schedule 3.1(n), 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, except where the non-compliance would not reasonably be expected to result in a Material Adverse Effect.


 


(o)          Intellectual
Property.


 


(i)          The
term “Intellectual Property Rights” includes:


 


		1.	the name of the Company, all fictional business names,
trading names, registered and unregistered trademarks, service marks, and applications (collectively, “Marks'');



 


		2.	all patents, patent applications, and inventions and discoveries
that may be patentable (collectively, “Patents'');



 






    	 	14	 



     


    

 


		3.	all copyrights in both published works and unpublished
works (collectively, “Copyrights”);



 


		4.	all rights in mask works (collectively, “Rights
in Mask Works'');



 


		5.	all know-how, trade secrets, confidential information,
customer lists, software, technical information, data, process technology, plans, drawings, and blue prints (collectively, “Trade
Secrets''); owned, used, or licensed by the Company as licensee or licensor; and



 


		6.	the license or right to directly or indirectly use any
of the foregoing, whether perpetually or for a fixed term, whether or not subject to defeasement, and whether or not reduced to
writing or otherwise memorialized.



 


(ii)         Agreements.
Schedule 3.1(o) contains a complete and accurate list of all contracts relating to the Intellectual Property Rights to which
the Company is a party or by which the Company is bound, except for any license implied by the sale of a product and perpetual,
paid-up licenses for commonly available software programs with a value of less than $10,000 under which the Company is the licensee.
There are no outstanding and, to Company’s knowledge, no threatened disputes or disagreements with respect to any such agreement.


 


(iii)        Know-How
Necessary for the Business. The Intellectual Property Rights are all those necessary for the operation of the Company’s
businesses as it is currently conducted or as represented, in writing, to the Purchasers to be conducted. The Company is the owner
of all right, title, and interest in and to each of the Intellectual Property Rights, free and clear of all liens, security interests,
charges, encumbrances, equities, and other adverse claims, and has the right to use all of the Intellectual Property Rights, subject
in each case to Permitted Liens. To the Company’s knowledge, no employee of the Company has entered into any contract that
restricts or limits in any way the scope or type of work in which the employee may be engaged or requires the employee to transfer,
assign, or disclose information concerning his work to anyone other than of the Company.


 


(iv)        Know-How
Necessary for the Business. Schedule 3.1(o) contains a complete and accurate list of all Patents. The Company is the
owner of all right, title and interest in and to each of the Patents, free and clear of all Liens and other adverse claims other
than Permitted Liens. All of the issued Patents are currently in compliance with formal legal requirements (including payment of
filing, examination, and maintenance fees and proofs of working or use), are valid and enforceable, and are not subject to any
maintenance fees or taxes or actions falling due within ninety days after the Closing Date. No Patent has been or is now involved
in any interference, reissue, reexamination, or opposition proceeding. To the Company’s knowledge: (1) there is no potentially
interfering patent or patent application of any third party, and (2) no Patent is infringed or has been challenged or threatened
in any way. To the Company’s knowledge, none of the products manufactured and sold, nor any process or know-how used, by
the Company infringes or is alleged to infringe any patent or other proprietary right of any other Person.


 






    	 	15	 



     


    

 


(v)         Trademarks.
Schedule 3.1(o) contains a complete and accurate list and summary description of all Marks. The Company is the owner of
all right, title, and interest in and to each of the Marks, free and clear of all Liens and other adverse claims other than Permitted
Liens. All Marks that have been registered with the United States Patent and Trademark Office are currently in compliance with
all formal legal requirements (including the timely post-registration filing of affidavits of use and incontestability and renewal
applications), are valid and enforceable, and are not subject to any maintenance fees or taxes or actions falling due within ninety
days after the Closing Date. No Mark has been or is now involved in any opposition, invalidation, or cancellation and, to the Company’s
knowledge, no such action is threatened with respect to any of the Marks. To the Company’s knowledge: (1) there is no potentially
interfering trademark or trademark application of any third party, and (2) no Mark is infringed or has been challenged or threatened
in any way. To the Company’s knowledge, none of the Marks used by the Company infringes or is alleged to infringe any trade
name, trademark, or service mark of any third party. 


 


(vi)        Copyrights.
Schedule 3.1(o) contains a complete and accurate list of all Copyrights. The Company is the owner of all right, title, and
interest in and to each of the Copyrights, free and clear of all Liens and other adverse claims other than Permitted Liens. All
the Copyrights have been registered and are currently in compliance with formal requirements, are valid and enforceable, and are
not subject to any maintenance fees or taxes or actions falling due within ninety days after the date of the Closing. No Copyright
is infringed or, to the Company’s knowledge, has been challenged or threatened in any way. To the Company’s knowledge,
none of the subject matter of any of the Copyrights infringes or is alleged to infringe any copyright of any third party or is
a derivative work based on the work of a third party. All works encompassed by the Copyrights have been marked with the proper
copyright notice.


 


(vii)       Trade
Secrets. With respect to each Trade Secret, the documentation relating to such Trade Secret is current, accurate, and sufficient
in detail and content to identify and explain it and to allow its full and proper use without reliance on the knowledge or memory
of any individual. The Company has taken all reasonable precautions to protect the secrecy, confidentiality, and value of its Trade
Secrets. The Company has good title and an absolute (but not necessarily exclusive) right to use the Trade Secrets subject
to Permitted Liens. The Trade Secrets are not part of the public knowledge or literature, and, to the Company’s knowledge,
have not been used, divulged, or appropriated either for the benefit of any Person (other than the Company) or to the detriment
of the Company. No Trade Secret is subject to any adverse claim or has been challenged or threatened in any way.


 


(p)           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. 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.


 






    	 	16	 



     


    

 


(q)           Transactions
With Affiliates and Employees.  Except as set forth in the SEC Reports, none of the officers or directors of the Company
or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party
to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including
any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or
personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case
in excess of $100,000 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 except as disclosed on Schedule 3.1(g).


 


(r)         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, suit 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.


 


(s)           Certain
Fees.  No brokerage, finder’s fees, commissions or due diligence fees are or will be payable by the Company or any
Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with
respect to the transactions contemplated by the Transaction Documents except as set forth on Schedule 3.1(s). The Purchasers
shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of any Persons for fees of
a type contemplated in this Section 3.1(s) that may be due in connection with the transactions contemplated by the Transaction
Documents.


 


(t)           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.


 


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


 


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


 


(w)          Listing
and Maintenance Requirements.  The Common Stock is quoted on the OTCQB under the symbol ILNS. The Company has not 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.


 






    	 	17	 



     


    

 


(x)           Application
of Takeover Protections.  As of the Closing Date, the Company and the Board of Directors will 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 the State of Delaware 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.


 


(y)           Disclosure. 
Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, 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 Disclosure Schedules to this
Agreement, taken as a whole is true and correct and does not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made,
not misleading. For the avoidance of doubt, information disclosed in one section of the Disclosure Schedule shall not be deemed
disclosed in any other section of the Disclosure Schedule unless there is an explicit cross reference to such other section. The
Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in Section 3.2 hereof.


 


(z)           No
Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2,
neither the Company, nor, to the knowledge of the Company, any of its Affiliates, nor any Person acting on its or, to the knowledge
of the Company, 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 by the Company 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.


 


(aa)         Solvency. 
Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the
Company of the Subscription Amount: (i) the fair saleable value of the assets of the Company and its Subsidiaries taken as a whole
exceeds the amount that will be required to be paid on or in respect of the existing debts and other liabilities (including known
contingent liabilities) of the Company and its Subsidiaries as they mature (without giving assurance of the Company’s ability
to sell such assets at any given price, or at all), (ii) the assets of the Company and its Subsidiaries do not constitute unreasonably
small capital to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into
account the particular capital requirements of the business conducted by the Company and its Subsidiaries consolidated and projected
capital requirements and capital availability thereof, and (iii) the current cash flow of the Company and its Subsidiaries together
with the proceeds the Company would receive, were they to liquidate all of their assets, after taking into account all anticipated
uses of the cash, would be sufficient to pay all amounts on or in respect of their liabilities when such amounts are required to
be paid.  The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account
the timing and amounts of cash to be payable on or in respect of its debt).  The Company has no knowledge of any facts or
circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization
laws of any jurisdiction within one year from the Closing Date. Schedule 3.1(aa) sets forth as of the date hereof all Liens
and 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 $200,000 (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 $200,000 due under leases required to be capitalized in accordance with GAAP.  The
Company is not in default with respect to any Indebtedness.


 






    	 	18	 



     


    

 


(bb)         Tax
Status.  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 required 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 reasonable basis for any such claim.


 


(cc)         No
General Solicitation or Integration.  Neither the Company nor, to the knowledge of the Company, 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.


 


(dd)         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.


 


(ee)         Accountants. 
The Company’s accounting firm is set forth on Schedule 3.1(ee) of the Disclosure Schedules. To the knowledge and belief
of the Company, such accounting firm is registered with the Public Company Accounting Oversight Board, and shall express its opinion
with respect to the financial statements to be included in the Company’s Annual Report for the fiscal year ending June 30,
2016.


 






    	 	19	 



     


    

 


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


 


(gg)        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.


 


(hh)        Acknowledgment
Regarding Purchaser’s Trading Activity.  Anything in this Agreement or elsewhere herein to the contrary notwithstanding
(except for Sections 3.2(f) and 4.21 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 in accordance with all applicable laws at various
times during the period that the Securities are outstanding, 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.


  


(ii)          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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(jj)         Stock
Option Plans. Except as set forth on Schedule 3.1(jj), as of the date hereof, no stock options have been granted, nor
any commitments made to grant stock options, under the Stock Option Plan, and neither the Company nor any Subsidiary has ever had
an option plan, other than the Stock Option Plan. 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.


 


(kk)         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”).       


 


(ll)         Reporting
Company/Shell Company. The Company is a publicly-held company subject to reporting obligations pursuant to Section 12(g), 13,
or 15(d) of the Exchange Act. Pursuant to the provisions of the Exchange Act, except as set forth in the SEC Reports or on Schedule
3.1(ll), the Company has filed all reports and other materials required to be filed by the Company thereunder with the SEC
during the preceding twelve months. As of the Closing Date, the Company is not a “shell company” but is a “former
shell company” as those terms are employed in Rule 144 under the Securities Act. 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.


 


(mm)         Sarbanes-Oxley;
Internal Accounting Controls. The Company and the Subsidiaries are in material compliance with any and all applicable requirements
of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated
by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. The Company and the Subsidiaries
maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed
in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted
only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The
Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers
have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of
the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”).
The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers
about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the
Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange
Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal
control over financial reporting of the Company and its Subsidiaries. The foregoing representations in this Section 3.1(mm) are
qualified by disclosure in the SEC Reports.


 


(nn)         Indebtedness
and Seniority. As of the date hereof, all Indebtedness and Liens are as set forth on Schedule 3.1(i). Except as set
forth on Schedule 3.1(i), as of a Closing Date, no Indebtedness, equity or Common Stock Equivalent is senior to the Notes
in right of payment, whether with respect to interest or upon liquidation or dissolution, or otherwise, and capital lease obligations
(which is senior only as to the property covered thereby).


 






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(oo)         FDA.
As to each product subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”) under the Federal
Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is manufactured, packaged,
labeled, tested, distributed, sold, and/or marketed by the Company or any of its Subsidiaries (each such product, a “Pharmaceutical
Product”), such Pharmaceutical Product is being manufactured, packaged, labeled, tested, distributed, sold and/or marketed
by the Company in compliance with all applicable requirements under FDCA and similar laws, rules and regulations relating to registration,
investigational use, premarket clearance, licensure, or application approval, good manufacturing practices, good laboratory practices,
good clinical practices, product listing, quotas, labeling, advertising, record keeping and filing of reports, except where the
failure to be in compliance would not have a Material Adverse Effect. There is no pending, completed or, to the Company's knowledge,
threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge, complaint,
or investigation) against the Company or any of its Subsidiaries, and none of the Company or any of its Subsidiaries has received
any notice, warning letter or other communication from the FDA or any other governmental entity, which (i) contests the premarket
clearance, licensure, registration, or approval of, the uses of, the distribution of, the manufacturing or packaging of, the testing
of, the sale of, or the labeling and promotion of any Pharmaceutical Product, (ii) withdraws its approval of, requests the recall,
suspension, or seizure of, or withdraws or orders the withdrawal of advertising or sales promotional materials relating to, any
Pharmaceutical Product, (iii) imposes a clinical hold on any clinical investigation by the Company or any of its Subsidiaries,
(iv) enjoins production at any facility of the Company or any of its Subsidiaries, (v) enters or proposes to enter into a consent
decree of permanent injunction with the Company or any of its Subsidiaries, or (vi) otherwise alleges any violation of any laws,
rules or regulations by the Company or any of its Subsidiaries, and which, either individually or in the aggregate, would have
a Material Adverse Effect. The properties, business and operations of the Company have been and are being conducted in all material
respects in accordance with all applicable laws, rules and regulations of the FDA.  The Company has not been informed by the
FDA that the FDA will prohibit the marketing, sale, license or use in the United States of any product proposed to be developed,
produced or marketed by the Company nor has the FDA expressed any concern as to approving or clearing for marketing any product
being developed or proposed to be developed by the Company.


 


(pp)         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.


 


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


 






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(rr)         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.


 


(ss)         Survival.
The foregoing representations and warranties shall survive the Closing Date.


 


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):


 


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


 


(b)           Understandings
or Arrangements. Such Purchaser 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 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, either: (i) an
“accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii)
a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act. Such Purchaser is not required
to be registered as a broker-dealer under Section 15 of the Exchange Act. Such Purchaser has the authority and is duly and legally
qualified to purchase and own the Securities. Such Purchaser is able to bear the risk of such investment for an indefinite period
and to afford a complete loss thereof. Such Purchaser has provided the information in the Accredited Investor Questionnaire attached
hereto as Exhibit E (the “Investor Questionnaire”). The information set forth on the signature pages
hereto and the Investor Questionnaire regarding such Purchaser is true and complete in all respects. Except as disclosed in the
Investor Questionnaire, such Purchaser has had no position, office or other material relationship within the past three years with
the Company or Persons (as defined below) known to such Purchaser to be affiliates of the Company, and is not a member of the Financial
Industry Regulator-y Authority or an “associated person” (as such term is defined under the FINRA Membership and Registration
Rules Section 1011).


 






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(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)           Information
on Company. Such Purchaser has been furnished with or has had access to the EDGAR Website of the Commission to the Company’s
filings made with the Commission since December 31, 2014, including but not limited to the Risk Factor section of the Company’s
Annual Report on Form 10-K filed with the Commission for the fiscal years ended December 31, 2014 (hereinafter referred to collectively
as the “Reports”).  Purchasers are not deemed to have any knowledge of any information not included
in the Reports unless such information is delivered in the manner described in the next sentence.  In addition, such
Purchaser may have received in writing from the Company such other information concerning its operations, financial condition and
other matters as such Purchaser has requested, identified thereon as OTHER WRITTEN INFORMATION (such other information is collectively,
the “Other Written Information”), and considered all factors such Purchaser deems material in deciding on the
advisability of investing in the Securities.  Such Purchaser was afforded (i) the opportunity to ask such questions as
such Purchaser deemed necessary of, and to receive answers from, representatives of the Company concerning the merits and risks
of acquiring the Securities; (ii) the right of access to information about the Company and its financial condition, results of
operations, business, properties, management and prospects sufficient to enable such Purchaser to evaluate the Securities; 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 acquiring the Securities.


 


(f)           Certain
Transactions and Confidentiality.  Such Purchaser understands and agrees that the Securities have not been registered
under the Securities Act or any applicable state securities laws, by reason of their issuance in a transaction that does not require
registration under the Securities Act, and that such Securities must be held indefinitely unless a subsequent disposition is registered
under the Securities Act or any applicable state securities laws or is exempt from such registration. Such Purchaser understands
and agrees that the Securities are being offered and sold to such Purchaser in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and regulations and that the Company is relying in part upon the
truth and accuracy of, and such Purchaser’s compliance with, the representations, warranties, agreements, acknowledgments
and understandings of such Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility
of such Purchaser to acquire the Securities.


 


(g)           Communication
of Offer. Such Purchaser is not purchasing the Securities as a result of any “general solicitation” or “general
advertising,” as such terms are defined in Regulation D, which includes, but is not limited to, any advertisement, article,
notice or other communication regarding the Securities published in any newspaper, magazine or similar media or on the internet
or broadcast over television, radio or the internet or presented at any seminar or any other general solicitation or general advertisement.


 






    	 	24	 



     


    

 


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


 


(i)          No
Conflicts. The execution, delivery and performance of this Agreement and performance under the other Transaction Documents
and the consummation by such Purchaser of the transactions contemplated hereby and thereby or relating hereto or thereto do not
and will not (i) result in a violation of such Purchaser’s charter documents, bylaws or other organizational documents, if
applicable, (ii) conflict with nor constitute a default (or an event which with notice or lapse of time or both would become a
default) under any agreement to which such Purchaser is a party, nor (iii) result in a violation of any law, rule, or regulation,
or any order, judgment or decree of any court or governmental agency applicable to such Purchaser or its properties (except for
such conflicts, defaults and violations as would not, individually or in the aggregate, have a material adverse effect on such
Purchaser). Such Purchaser is not required to obtain any consent, authorization or order of, or make any filing or registration
with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under this Agreement
or perform under the other Transaction Documents nor to purchase the Securities in accordance with the terms hereof, provided that
for purposes of the representation made in this sentence, such Purchaser is assuming and relying upon the accuracy of the relevant
representations and agreements of the Company herein.


 


(j)          Survival.
The foregoing representations and warranties shall survive the Closing Date.


 


The Company acknowledges and agrees that
the representations contained in 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 transaction contemplated hereby nor any other agreement to which the Purchaser and Company are parties or signators.


 


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, at the Company’s expense, 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 such transfer, any
such transferee shall agree in writing to be bound by the terms of this Agreement and the other applicable Transaction Documents
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 [FOR] WHICH THIS SECURITY IS EXERCISABLE] 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 APPLICABLE STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY.  TO THE EXTENT PERMITTED BY APPLICABLE SECURITIES LAWS, THIS SECURITY [AND THE SECURITIES ISSUABLE
UPON EXERCISE 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 who agrees to be bound by the provisions of this Agreement
and, if required under the terms of such arrangement, such Purchaser may transfer pledged or secured Securities into the name of
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.  At such 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.


 


(c)           Legend
Removal. 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, (iii) if such Underlying Shares are eligible for sale under
Rule 144, without the requirement for the Company to be in compliance with the current public information required under Rule 144
as to such Underlying Shares and without volume or manner-of-sale restrictions or (iv) if such legend is not required under applicable
requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission).
The Company shall cause its counsel to issue a legal opinion to the Transfer Agent promptly if required by the Transfer Agent to
effect the removal of the legend hereunder, provided that the holder of such Securities has provided such documentation as may
reasonably requested by counsel for the purpose of said opinion. If all or any Notes are converted 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 following such time as such legend is no longer required under this Section 4.1(c), it will, no later than
three (3) Trading Days 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 third (3rd) Trading Day, 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 (however, the Corporation shall use reasonable best efforts to deliver such shares within
three (3) Trading Days). 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.


 






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(d)          Remedies.
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, for each $1,000 of Underlying Shares (based on the higher of the actual purchase price or 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 for each Trading Day after the Legend Removal Date (increasing to $20 per Trading
Day after the fifth Trading Day) until such certificate is delivered without a legend. Nothing herein shall limit such Purchaser’s
right to pursue actual damages for the Company’s failure to deliver certificates representing any Securities as required
by the Transaction Documents, 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.


 


(e)          DWAC.
In lieu of delivering physical certificates representing the Unlegended Shares, upon request of a Purchaser, so long as the certificates
therefor do not bear a legend and the Purchaser is not obligated to return such certificate for the placement of a legend thereon,
the Company shall cause its transfer agent to electronically transmit the Unlegended Shares by crediting the account of Purchaser’s
prime broker with the Depository Trust Company through its Deposit Withdrawal At Custodian system, provided that the Company’s
Common Stock is DTC eligible and the Company’s transfer agent participates in the Deposit Withdrawal at Custodian system.
Such delivery must be made on or before the Legend Removal Date.


 


(f)          Injunction.
In the event a Purchaser shall request delivery of Unlegended Shares as described in this Section 4.1 and the Company is required
to deliver such Unlegended Shares, the Company may not refuse to deliver Unlegended Shares based on any claim that such Purchaser
or anyone associated or affiliated with such Purchaser has not complied with Purchaser’s obligations under the Transaction
Documents, or for any other reason, unless, an injunction or temporary restraining order from a court, on notice, restraining and
or enjoining delivery of such Unlegended Shares shall have been sought and obtained by the Company and the Company has posted a
surety bond for the benefit of such Purchaser in the amount of the greater of (i) 120% of the amount of the aggregate purchase
price of the Underlying Shares to be subject to the injunction or temporary restraining order, or (ii) the VWAP of the Common Stock
on the trading day before the issue date of the injunction multiplied by the number of Unlegended Shares to be subject to the injunction,
which bond shall remain in effect until the completion of arbitration/litigation of the dispute and the proceeds of which shall
be payable to such Purchaser to the extent Purchaser obtains judgment in Purchaser’s favor.


 




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(g)          Buy-In.
In addition to any other rights available to Purchaser, if the Company fails to deliver to a Purchaser Unlegended Shares as required
pursuant to this Agreement and after the Legend Removal Date the Purchaser, or a broker on the Purchaser’s behalf, purchases
(in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Purchaser of the
shares of Common Stock which the Purchaser was entitled to receive in unlegended form from the Company (a “Buy-In”),
then the Company shall promptly pay in cash to the Purchaser (in addition to any remedies available to or elected by the Purchaser)
the amount, if any, by which (A) the Purchaser’s total purchase price (including brokerage commissions, if any) for the shares
of Common Stock so purchased exceeds (B) the aggregate purchase price of the shares of Common Stock delivered to the Company for
reissuance as Unlegended Shares together with interest thereon at a rate of 15% per annum accruing until such amount and any accrued
interest thereon is paid in full (which amount shall be paid as liquidated damages and not as a penalty). For example, if a Purchaser
purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to $10,000 of purchase
price of Shares delivered to the Company for reissuance as Unlegended Shares, the Company shall be required to pay the Purchaser
$1,000, plus interest, if any. The Purchaser shall provide the Company written notice indicating the amounts payable to the Purchaser
in respect of the Buy-In.


 


4.2           Furnishing
of Information; Public Information.


 


(a)           Until
no Purchasers own any Securities, the Company covenants 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 commencing on the Closing Date 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 shall fail for any reason to satisfy the current public information requirement under Rule 144(c) (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
held by such Purchaser 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.


 


4.3           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 by the Company 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.


 




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4.4           Securities
Laws Disclosure; Publicity.  The Company shall, by 9:00 a.m. (New York City time) on the third (3rd) Trading
Day immediately following the Closing Date, issue a press release disclosing the material terms of the transactions contemplated
hereby, and shall file a Current Report on Form 8-K including the Transaction Documents as exhibits thereto within the time period
proscribed by the Exchange Act. From and after the issuance of such press release and Form 8-K, 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. 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 unless the name of such Purchaser is already included in the body of the
Transaction Documents, 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).


 


4.5           Non-Public
Information.  Except with respect to the material terms and conditions of the transactions contemplated by the Transaction
Documents, 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 the Company believes constitutes material non-public information, unless prior
thereto such Purchaser shall have entered into a written agreement with the Company regarding the confidentiality and use of such
information.  The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting
transactions in securities of the Company.


 


4.6           Use
of Proceeds.  The Company will use the net proceeds to the Company from the sale of the Securities hereunder as set forth
on Schedule 4.6. Except for the repayment at the initial Closing of $100,000 to the Junior Lenders due with respect to the
Outstanding Notes, the Company 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, or (d) in
violation of the law, including FCPA or OFAC.


 




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4.7           Indemnification
of Purchasers.   Subject to the provisions of this Section 4.7, 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 based upon a breach of such Purchaser Party’s representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser Party may have with any such stockholder or any violations by such
Purchaser Party of Securities Laws or any conduct by such Purchaser Party which constitutes fraud, gross negligence, willful misconduct
or malfeasance).  If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant
to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume
the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party.  Any Purchaser Party shall
have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been specifically
authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and
to employ counsel or (iii) in such action there is, in the reasonable opinion of such Purchaser Party’s 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 for all Purchaser Parties. 
The Company will not be liable to any Purchaser Party under this Agreement (iv) for any settlement by a Purchaser Party effected
without the Company’s prior written consent, which shall not be unreasonably withheld, conditioned or delayed; or (v) 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 4.7 shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as and when bills are received or are incurred. The indemnity agreements contained
herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others and any
liabilities the Company may be subject to pursuant to law.


 


4.8          Reservation
of Common Stock. Prior to the initial Closing Date (the “Share Reservation Date”), the Company shall establish
(and shall thereafter maintain) a reserve and keep available at all times, free of preemptive rights, a sufficient number of shares
of Common Stock from its duly authorized shares for the purpose of enabling the Company to issue Shares pursuant to this Agreement
(other than Section 4.14 but only to the extent the number of shares of Common Stock issuable under Section 4.14 is not known)
(such amount being the “Required Minimum”). If, on any date after the Share Reservation 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 60th day after such date.


 




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4.9        Listing
of Common Stock. The Company hereby agrees to maintain the listing or quotation of the Common Stock on the Trading Market on
which it is currently listed, and concurrently with the Closing, if applicable, the Company shall apply to list or quote all of
the Shares on such Trading Market and promptly secure the listing of all of the Shares on such Trading Market. The Company further
agrees, if the Company applies to have the Common Stock traded on any other Trading Market, it will then include in such application
all of the Shares, and will take such other action as is necessary to cause all of the Shares to be listed or quoted on such other
Trading Market as promptly as possible. The Company will then take all action necessary to continue the listing or quotation and
trading of its Common Stock on a Trading Market until at least five years after the final Closing Date, and will comply in all
respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market at least
until five years after the final Closing Date. In the event the forgoing listing is not continuously maintained for five years
after the final Closing Date (a “Listing Default”), then in addition to any other rights the Purchasers may
have hereunder or under applicable law, on the first day of a Listing Default and on each monthly anniversary of each such Listing
Default date (if the applicable Listing Default shall not have been cured by such date) until the applicable Listing Default is
cured, the Company shall pay to each Purchaser an amount in cash, as partial liquidated damages and not as a penalty, equal to
2% of the aggregate Subscription Amount on the day of a Listing Default and on every thirtieth day (pro-rated for periods less
than thirty days) thereafter until the date such Listing Default is cured. If the Company fails to pay any liquidated damages pursuant
to this Section in a timely manner, the Company will pay interest thereon at a rate of 1.5% per month (pro-rated for partial months)
to the Purchaser.


 


4.10       Reimbursement.
If any Purchaser becomes involved in any capacity in any Proceeding by or against any Person who is a stockholder of the Company
(except as a result of sales, pledges, margin sales and similar transactions by such Purchaser to or with any current stockholder),
solely as a result of such Purchaser’s acquisition of the Securities under this Agreement, the Company will reimburse such
Purchaser for its reasonable legal and other expenses (including the cost of any investigation preparation and travel in connection
therewith) incurred in connection therewith, as such expenses are incurred. The reimbursement obligations of the Company under
this paragraph shall be in addition to any liability which the Company may otherwise have, shall extend upon the same terms and
conditions to any Affiliates of the Purchasers who are actually named in such action, proceeding or investigation, and partners,
directors, agents, employees and controlling persons (if any), as the case may be, of the Purchasers and any such Affiliate, and
shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of the Company, the
Purchasers and any such Affiliate and any such Person. The Company also agrees that neither the Purchasers nor any such Affiliates,
partners, directors, agents, employees or controlling persons shall have any liability to the Company or any Person asserting claims
on behalf of or in right of the Company solely as a result of acquiring the Securities under this Agreement. 


 


4.11         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 any of the Transaction Documents unless
the same consideration is also offered to all of the Purchasers that are parties to such Transaction Document. 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.


 


4.12         Participation
in Future Financing.


 


(a)          From
the date hereof until the date that is the twenty-four (24) month anniversary of the final Closing Date, upon any proposed issuance
by the Company or any of its Subsidiaries of Common Stock, Common Stock Equivalents for cash consideration, Indebtedness or a combination
thereof, other than (i) a rights offering to all holders of Common Stock (which may include extending such rights offering to holders
of Preferred Stock) or (ii) an Exempt Issuance, (a “Subsequent Financing”), each Purchaser shall have the right
to participate in up to an amount of the Subsequent Financing equal to 100% of the Subsequent Financing (the “Participation
Maximum”) on the same terms, conditions and price provided for in the Subsequent Financing, unless the Subsequent Financing
is an underwritten public offering, in which case the Company shall offer each Purchaser the right to participate in such public
offering when it is lawful for the Company to do so, but no Purchaser shall be entitled to purchase any particular amount of such
public offering.


 




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(b)          At
least seven (7) Trading Days prior to the closing of the Subsequent Financing, the Company shall deliver to each Purchaser a written
notice of its intention to effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask such Purchaser
if it wants to review the details of such financing (such additional notice, a “Subsequent Financing Notice”).
Upon the request of a Purchaser, and only upon a request by such Purchaser, for a Subsequent Financing Notice, the Company shall
promptly, but no later than one (1) Trading Day after such request, deliver a Subsequent Financing Notice to such Purchaser. The
requesting Purchaser shall be deemed to have acknowledged that the Subsequent Financing Notice may contain material non-public
information. The Subsequent Financing 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 or similar document relating thereto as an attachment.


 


(c)          Any
Purchaser desiring to participate in such Subsequent Financing must provide written notice to the Company by not later than 5:30
p.m. (New York City time) on the fifth (5th) Trading Day after all of the Purchasers have received the Pre-Notice that
the 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 fifth (5th) Trading Day, such Purchaser
shall be deemed to have notified the Company that it does not elect to participate.


 


(d)          If
by 5:30 p.m. (New York City time) on the fifth (5th ) Trading Day after all of the Purchasers have received the Pre-Notice,
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 affect the remaining
portion of such Subsequent Financing on the terms and with the Persons set forth in the Subsequent Financing Notice.


 


(e)          If
by 5:30 p.m. (New York City time) on the fifth (5th) Trading Day after all of the Purchasers have received the Pre-Notice,
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 shares of
Preferred Stock and Warrants purchased hereunder by a Purchaser participating under this Section 4.17 and (y) the sum of the aggregate
Subscription Amounts of Securities purchased hereunder by all Purchasers participating under this Section 4.17.


 


(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 4.17, if the Subsequent Financing subject to the initial Subsequent Financing Notice
is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within thirty (30) Trading Days after
the date of the initial Subsequent Financing Notice.


 


(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 whereby such Purchaser shall be required to agree to
any restrictions on trading as to any of the Securities purchased hereunder (for avoidance of doubt, the securities purchased in
the Subsequent Financing shall not be considered 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.


 




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(h)          Notwithstanding
anything to the contrary in this Section 4.17 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 the tenth (10th) Business Day following delivery of the
Subsequent Financing Notice. If by such tenth (10th) Business 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.


 


4.13        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 Shares pursuant to the Transaction
Documents, are unconditional and absolute, but subject to the terms and conditions of the Transaction Documents, 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.


 


4.14         Indebtedness.
For so long as any Notes are outstanding, the Company will not incur any Indebtedness without the consent of the holders of at
least 51% in principal amount of the then outstanding Notes.


 


4.15         
Most Favored Nation Provision. From the date hereof until no Purchaser owns any Securities, in the event and on each occasion
that the Company issues or sells any Common Stock, if a Purchaser then holding outstanding Securities reasonably believes that
any of the terms and conditions appurtenant to such issuance or sale are more favorable to such investors than are the terms and
conditions granted to the Purchasers hereunder, including but not limited to the issuance of Common Stock or Common Stock Equivalents
to acquire Common Stock for less than the Conversion Price at any time, upon notice to the Company by such Purchaser within five
Trading Days after disclosure of such issuance or sale, the Company shall amend the terms of this transaction as to such Purchaser
only so as to give such Purchaser the benefit of such more favorable terms or conditions. This Section 4.15 shall not apply with
respect to an Exempt Issuance. The Company shall provide each Purchaser with notice of any such issuance or sale in the manner
for disclosure of Subsequent Financings set forth in Section 4.12.


 


4.16         Maintenance
of Property. The Company shall keep all of its property, which is necessary or useful to the conduct of its business, in good
working order and condition, ordinary wear and tear excepted.


 


4.17         Form
D; Blue Sky Filings.  The Company agrees to timely file a Form D with respect to the sale of the Securities by the Company
under this Agreement as required under Regulation D. 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.


 




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4.18         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.


 


4.19         Preservation
of Corporate Existence. The Company shall preserve and maintain its corporate existence, rights, privileges and franchises
in the jurisdiction of its incorporation, and qualify and remain qualified, as a foreign corporation in each jurisdiction in which
such qualification is necessary in view of its business or operations and where the failure to qualify or remain qualified might
reasonably have a Material Adverse Effect upon the financial condition, business or operations of the Company taken as a whole.


 


4.20         Subsequent
Equity Sales. From the date hereof until twelve months after the final Closing Date, the Company will not, without the consent
of the Purchasers, enter into any Equity Line of Credit or similar agreement nor issue nor agree to issue any common stock, Common
Stock Equivalents, floating, or Variable Priced Equity Linked Instruments nor any of the foregoing or equity with price reset rights
at a price per share or effective price per share of less than $0.10 (subject to adjustment for stock splits, distributions, dividends,
recapitalizations and the like) (collectively, the “Variable Rate Transaction”).   For purposes
hereof, “Equity Line of Credit” shall include any transaction involving a written agreement between the Company
and an investor or underwriter whereby the Company has the right to “put” its securities to the investor or underwriter
over an agreed period of time and at an agreed price or price formula, and “Variable Priced Equity Linked Instruments”
shall include: (A) any debt or equity securities which are convertible into, exercisable or exchangeable for, or carry the right
to receive additional shares of Common Stock either (1) at any conversion, exercise or exchange rate or other price that is based
upon and/or varies with the trading prices of or quotations for Common Stock at any time after the initial issuance of such debt
or equity security, or (2) with a fixed conversion, exercise or exchange price that is subject to being reset at some future date
at any time after the initial issuance of such debt or equity security due to a change in the market price of the Company’s
Common Stock since date of initial issuance, and (B) any amortizing convertible security which amortizes prior to its maturity
date, where the Company is required or has the option to (or any investor in such transaction has the option to require the Company
to) make such amortization payments in shares of Common Stock which are valued at a price that is based upon and/or varies with
the trading prices of or quotations for Common Stock at any time after the initial issuance of such debt or equity security (whether
or not such payments in stock are subject to certain equity conditions).  For purposes of determining the total consideration
for a convertible instrument (including a right to purchase equity of the Company) issued, subject to an original issue or similar
discount or which principal amount is directly or indirectly increased after issuance, the consideration will be deemed to be the
actual net cash amount received by the Company in consideration of the original issuance of such convertible instrument. Until
thirty-six (36) months after the final Closing Date, the Company will not, without the consent of the Purchasers, issue any Common
Stock or Common Stock Equivalents to officers, directors, employees, consultants and service providers of the Company, except as
provided for in employment agreements existing as of the Closing Date. For so long as the Notes are outstanding, the Company will
not amend the terms of any securities or Common Stock Equivalents or of any agreement outstanding or in effect as of the date of
this Agreement or at any time thereafter, pursuant to which same were or may be acquired, if such issuance or the result of such
amendment would be at an effective price per share of Common Stock less than the Conversion Price in effect at the time of such
amendment.


 




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4.21       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 disclosed or required to be disclosed, whichever occurs
first, in the Form 8-K described in Section 4.4.  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 or required to be publicly disclosed,
whichever occurs first, by the Company in such Form 8-K, such Purchaser will maintain the confidentiality of the existence and
terms of this transaction and the information included in the Transaction Documents and the Disclosure Schedules. 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 required to be disclosed
in the Form 8-K described in Section 4.4, (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 disclosed or required to be disclosed, whichever occurs first, in the Form 8-K described in Section
4.4, and (iii) no Purchaser shall have any duty of confidentiality to the Company or its Subsidiaries after the filing of such
Form 8-K or after the date such Form 8-K is required to have been filed, whichever occurs first.  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.


 


4.22         Piggy-Back
Registrations. If at any time after the final Closing Date there is not an effective registration statement covering all of
the Underlying Shares and the Company determines to prepare and file with the Commission a registration statement relating to an
offering for its own account or the account of others under the Securities Act of any of its equity securities, but excluding (i)
Forms S-4 or S-8 and similar forms which do not permit such registration and (ii) any amendment to the Company’s Registration
Statement on Form S-1 (File No. 333-191381), then the Company shall send to each holder of any of the issued Securities written
notice of such determination and, if within fifteen calendar days after receipt of such notice, any such holder shall so request
in writing, the Company shall include in such registration statement all or any part of the Underlying Shares such holder requests
to be registered and which inclusion of such Underlying Shares will be subject to customary underwriter cutbacks applicable to
all holders of registration rights and minimum cutbacks in accordance with guidance provided by the Securities and Exchange Commission
(including, but not limited to, Rule 415). The obligations of the Company under this Section may be waived by any holder of any
of the Securities entitled to registration rights under this Section 4.22. The holders whose Underlying Shares are included or
required to be included in such registration statement are granted the same rights, benefits, liquidated or other damages and indemnification
granted to other holders of securities included in such registration statement. In no event shall the liability of any holder of
Securities or permitted successor in connection with any Underlying Shares included in any such registration statement be greater
in amount than the dollar amount of the net proceeds actually received by such Purchaser upon the sale of the Underlying Shares
sold pursuant to such registration or such lesser amount in proportion to all other holders of Securities included in such registration
statement. All expenses incurred by the Company in complying with Section 4.22, including, without limitation, all registration
and filing fees, printing expenses (if required), fees and disbursements of counsel and independent public accountants for the
Company, fees and expenses (including reasonable counsel fees) incurred in connection with complying with state securities or “blue
sky” laws, fees of the FINRA, transfer taxes, and fees of transfer agents and registrars, are called “Registration
Expenses.” All underwriting discounts and selling commissions applicable to the sale of Registrable Securities are called
"Selling Expenses." The Company will pay all Registration Expenses in connection with the registration statement
under Section 4.22. Selling Expenses in connection with each registration statement under Section 4.22 shall be borne by the holder
and will be apportioned among such holders in proportion to the number of Underlying Shares included therein for a holder relative
to all the securities included therein for all selling holders, or as all holders may agree. It shall be a condition precedent
to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the Underlying Shares
of a particular Purchaser that such Purchaser shall furnish to the Company in writing such information and representation letters,
including a completed form of a securityholder questionnaire, with respect to itself and the proposed distribution by it as the
Company may reasonably request to assure compliance with federal and applicable state securities laws.


 




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4.23         Purchaser’s
Exercise Limitations. The Company shall not effect any exercise of the option granted to each Purchaser in Sections 4.12 and
4.15 of this Agreement, and a Purchaser shall not have the right to exercise any portion of such option, pursuant to Sections 4.12
and 4.15 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Exercise
Notice, the Purchaser (together with the Purchaser’s Affiliates, and any other Persons acting as a group together with the
Purchaser or any of the Purchaser’s Affiliates), would beneficially own in excess of the Beneficial Ownership Limitation
(as defined below).  For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the
Purchaser and its Affiliates shall include the number of shares of Common Stock issuable upon exercise of the option with respect
to which such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon
(i) exercise of the remaining, nonexercised portion of the option beneficially owned by the Purchaser or any of its Affiliates
and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without
limitation, any other Common Stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained
herein beneficially owned by the Purchaser or any of its Affiliates.  Except as set forth in the preceding sentence, for purposes
of this Section 4.23, beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder, it being acknowledged by the Purchaser that the Company is not representing to the Purchaser
that such calculation is in compliance with Section 13(d) of the Exchange Act and the Purchaser is solely responsible for any schedules
required to be filed in accordance therewith. To the extent that the limitation contained in this Section 4.23 applies, the determination
of whether the option is exercisable (in relation to other securities owned by the Purchaser together with any Affiliates) and
of which portion of the option is exercisable shall be in the sole discretion of the Purchaser, and the submission of an Exercise
Notice shall be deemed to be the Purchaser’s determination of whether the option is exercisable (in relation to other securities
owned by the Purchaser together with any Affiliates) and of which portion of the option is exercisable, in each case subject to
the Beneficial Ownership Limitation. To ensure compliance with this restriction, a Purchaser will be deemed to represent to the
Company when it delivers an Exercise Notice that such Exercise Notice has not violated the restrictions set forth in this paragraph,
and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination
as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder. For purposes of this Section 4.23, in determining the number of outstanding shares of Common
Stock, a Purchaser may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s most recent
periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or
(C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common Stock outstanding. 
Upon the written or oral request of a Purchaser, the Company shall within two Trading Days confirm orally and in writing to the
Purchaser the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common
Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including the Warrants
(to the extent applicable), by the Purchaser or its Affiliates since the date as of which such number of outstanding shares of
Common Stock was reported. The “Beneficial Ownership Limitation” shall be 9.99%, unless a Purchaser elects on
its signature page hereto a different amount for its own Beneficial Ownership Limitation (which shall also apply to and supercede
the corresponding Beneficial Ownership Limitation as same relates to the Warrants issued to such electing Purchaser, to the extent
applicable) of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of
Common Stock issuable upon exercise of the option. The Purchaser may decrease the Beneficial Ownership Limitation at any time and
the Purchaser, upon not less than 61 days’ prior notice to the Company, may increase the Beneficial Ownership Limitation
provisions of this Section 4.23, provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares
of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of the
option held by the Purchaser and the provisions of this Section 4.23 shall continue to apply. Any such increase will not be effective
until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed
and implemented in a manner otherwise than in strict conformity with the terms of this Section 4.23 to correct this paragraph (or
any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or
to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in
this paragraph shall apply to a successor holder of the option right. In the event the limitations in this Section 4.23 would prevent
the exercise of a Purchaser’s rights under Sections 4.12 and 4.19, then such Purchaser may exercise all such rights and comply
with all obligations applicable thereto except that the delivery of Common Stock will be deferred until such time as such Purchaser
provides notice to the Company that such Purchaser may receive or beneficially own such Common Stock which exceeds the Beneficial
Ownership Limitation without exceeding the then applicable Beneficial Ownership Limitation.


 




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4.24         Waiver
and Consent. Solely in connection with the completion of this Offering and only on the terms described in the Transaction Documents,
Purchaser agrees to waive its rights granted pursuant to the transaction documents dated July 25, 2014 and July 1, 2015.


 


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 given at any time to the Company,
if an initial Closing has not been consummated on or before April 15, 2016; provided, however, that such termination will
not affect the right of any party to sue for any breach by any other party (or parties). In the event of any termination by a Purchaser
under this Section 5.1, the Company shall promptly (and in any event within two (2) Business Days of such termination) send a Subscription
Termination Notice (as defined in the Escrow Agreement) to the Escrow Agent with respect to all of such Purchaser’s subscription
amount.


 


5.2         Fees
and Expenses.  Except as expressly set forth in the Transaction Documents and on Schedule 3.1(s) 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, stamp taxes and other similar taxes and duties levied in connection with the delivery
of any Securities to the Purchasers. At the Initial Closing the Company agrees to pay pursuant to the Escrow Agreement reasonable
legal and Escrow Agent fees of G&M in the amount of $25,000 for the initial Closing, counsel to some, but not all of the Purchasers,
incurred in connection with the negotiation, preparation, execution and delivery of the Transaction Documents.


 


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.


 




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5.4         Notices. 
All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted
by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party shall have specified
most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall be deemed
effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine,
at the address or number designated below (if delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered other than on a business day during normal business
hours where such notice is to be received) or (b) on the second business day following the date of mailing by express courier service,
fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for
such communications shall be: (i) if to the Company, to: Intellect Neurosciences, Inc., 550 Sylvan Avenue, Suite 101, Englewood
Cliffs, NJ 07632, Attn: Elliot Maza, CEO, facsimile: (201) 608-5103, with a copy to: Sichenzia, Ross Friedman Ference LLP, 61 Broadway,
New York, NY 10006, Attn: Harvey Kesner, Esq., facsimile: (212) 930-9725, and (ii) if to the Purchasers, to: the addresses and
fax numbers indicated on the signature pages hereto, with an additional copy by fax only to (which shall not constitute notice):
Grushko & Mittman, P.C., 515 Rockaway Avenue, Valley Stream, New York 11581, facsimile: (212) 697-3575.


 


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 the Purchasers holding at least a majority in interest (“Majority
in Interest”) of the component of the affected Securities then outstanding or, in the case of a waiver, by the party against
whom enforcement of any such waived provision is sought. 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.


 


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 4.7.


 




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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
suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit,
action or proceeding is 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 suit, 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
either 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 4.7, the prevailing party in such action, suit or proceeding shall be reimbursed by
the other party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation
and prosecution of such action or proceeding.


 


5.10         Survival. 
The representations and warranties contained herein shall survive the Closing and the delivery of the Securities at the Closings
for the applicable statute of limitations.


 


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.


 


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 surrender and 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, destruction, or mutilation, and of the ownership of such Security. 
The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including
customary indemnity and bonds) 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         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 hereof 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 G&M. 
G&M does not represent all of the Purchasers.  The Company has elected to provide all Purchasers with the same terms and
Transaction Documents for the convenience of the Company and not because it was required or requested to do so by any of the Purchasers.
It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction Document is
between the Company and a Purchaser, solely, and not between the Company and the Purchasers collectively and not between and among
the Purchasers.


 


5.18         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 due thereunder 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.


 


5.19         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.


 




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5.20         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.


 


5.21         Usury.
To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim, and
will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any
time hereafter in force, in connection with any claim, action or proceeding that may be brought by any Purchaser in order to enforce
any right or remedy under any 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 Closing 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.


 


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.


 


5.23         Equitable
Adjustment. Trading volume amounts, price/volume amounts and similar figures in the Transaction Documents shall be equitably
adjusted (but without duplication) to offset the effect of stock splits, similar events and as otherwise described in this Agreement.


 




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5.24         Consent.
As employed herein, “consent” of the Purchasers and similar terms shall mean consent of the holders of the majority
of the then outstanding effected component of the Securities on the date such consent is requested or required.


 


(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.


 


	Intellect Neurosciences, Inc.	Address for Notice:
	 	 
	 	550 Sylvan Avenue, Suite 101
	 	Englewood Cliffs, NJ 07632
	 	Fax: (201) 608-5103


 


	By:	 	 
	 	Name: Elliot Maza	 
	 	Title: Chief Executive Officer	 


 


	With a copy to (which shall not constitute notice):	 
	 	 
	Sichenzia Ross Friedman Ference LLP	 
	61 Broadway, 32nd Floor	 
	New York, NY 10006	 
	Attn: Harvey Kesner, Esq.	 
	Fax: (212) 930-9725	 


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK


SIGNATURE PAGE FOR PURCHASER FOLLOWS]


 




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[PURCHASER SIGNATURE PAGES TO INTELLECT
NEUROSCIENCES, INC.


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: ________________________________________________________


 


Address for Notice of Purchaser:


 


 


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


 


 


Subscription Amount: US$________________


 


Note principal amount: ___________________


 


EIN Number, if applicable, will be provided under separate cover:
________________________


 


Date: ___________________________


 




    	 	44	 



     


    

 


EXHIBITS AND SCHEDULES


 


	Exhibit A	Form of Note
	Exhibit B	Escrow Agreement
	Exhibit C	Form of Legal Opinion
	Exhibit D	Intercreditor Agreement
	Exhibit E	Form of Investor Questionnaire


 


 


 


 







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