Exhibit 10.1


 


SECURITIES PURCHASE AGREEMENT


 


This Securities Purchase
Agreement (this “Agreement”) is dated as of December 23, 2014, between Accelerated Pharma, 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”).


 


WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended
(the “Securities Act”). and Rule 506 promulgated thereunder, the Company desires to issue and sell to each
Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more
fully described in this Agreement.


 


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


 


ARTICLE I.


DEFINITIONS


 


1.1           Definitions.
In addition to the terms defined elsewhere in this Agreement: (a) capitalized terms that are not otherwise defined herein have
the meanings given to such terms in the Articles of Incorporation (as defined herein), and (b) the following terms have the meanings
set forth in this Section 1,1:


 


“Acquiring Person”
shall have the meaning ascribed to such term in Section 4.15.


 


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


 


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


 


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


 


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


 


“Closing” means the Initial
Closing and Subsequent Closing, if any, of the purchase and sale of the Securities pursuant to Section 2.1 or 2.4.


 


“Closing Date”
means each of the Initial Closing Date and the Subsequent Closing Date, if any, and is 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, but in no event later than the tenth Business Day following
the date hereof in the case of the Initial Closing.


 


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


 




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“Common Stock” means
the common stock of the Company, 80.00001 par value per share, and any other class of securities into which such securities may
hereafter be reclassified or changed.


 


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


 


“Company Counsel” means
Polsinelli PC, 161 N. Clark Avenue, Suite 4200, Chicago, IL 60601, Attn: Teddy C. Scot:, Jr., Ph.D., Fax: (012)873-2913.


 


“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 and interest in accordance with the terms of the Note.


 


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


 


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


 


“Equity Line of Credit” shall have
the meaning ascribed to such term in Section 4.9.


 


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


 


“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, employees, or consultants of the Company prior
to and after the Closing Date in the amounts and on the terms set forth on Schedule 3.1(g). (5) 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 :hereof 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 CT issuable pursuant to this Agreement, the Note or
the Warrants, or upon exercise or conversion of any such securities.


 


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


 


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


  




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


 


“Financial Statements” means the
financial information annexed hereto as Schedule 3.1(h).


 


“Fuliy-Dhuted
Basis” means the assumption that all options, warrants or other convertible securities or instruments or other rights
to acquire Common Stock or any other existing or future classes of capital stock have been exercised or converted, as applicable,
in full, regardless of whether any such options, warrants, convertible securities or instruments or other rights are then vested
or exercisable or convertible, in accordance with their terms.


 


“GAAP” shall mean United
States generally accepted accounting principals applied on a consistent basis.


 


“Going Public Event” shall have
the meaning ascribed to such term in Section 4.13.


 


“Guaranty” means the form guaranty
attached to the Security Agreement.


 


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


 


“Initial Closing” shall have the
meaning ascribed to such term in Section 2.1.


 


“Initial Closing Date” shall mean
the date upon which the Initial Closing occurs.


 


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


 


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


 


“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 5.17.


 


“Money Laundering Laws” shall have
the meaning ascribed to such term in Sect on 3.1(aa).


 


“Notes” means the convertible notes,
in the form of Exhibit A hereto.


 


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


 


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


 


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


 


“Public Company
Date” means not later than the 150th day after the Qualified Offering has been consummated.


 




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


 


“Purchaser Parry” shall have the
meaning ascribed to such term in Section 4.6.


 


“Qualified
Offering” means the first occurrence of an offering of the Company’s Common Stock which closes in one or more closings
in connection with which the Company receives not less than $2,500,000 of gross cash proceeds from the sale of Common Stock at
a pre-money valuation of not less than $12,000,000 on a Fully-Diluted Basis on or before August 31, 20:5 by Palladium Capita: Advisors,
LLC pursuant to the terms of an investment banking agreement between the Company and Palladium Capital Advisors, LLC, and thereafter
by the Company or other placement agent until the Maturity Date (as defined in the Note) accelerated or otherwise.


 


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


 


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


 


“Required
Minimum” means, as of any date, the maximum aggregate number of shares of Common Stock then issued or potentially issuable
in the future pursuant to the Transaction Documents, including but not limited to any Underlying •Shares issuable upon conversion
in nil: of the Notes and the interest that could accrue through the term thereof and the Warrant Shares issuable upon exercise
of the Warrants, ignoring any conversion or exercise limits set forth therein.


 


“Rule 144”
means Rule :44 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.


 


“Securities” means the Notes, the
Warrants, and the Underlying Shares.


 


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


 


“Security Agreement”
means the security agreement annexed hereto as Exhibit D, entered into between the Company and Purchasers.


 


“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for the Notes and Warrants purchased hereunder as
specified below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,”
in United States dollars and in immediately available funds.


 


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


 


“Subsidiary”
means with respect to any entity at any date, any direct or indirect corporation, limited or general partnership, limited liability
company, trust, estate, association, joint venture or other business entity of which (A) more than 50% of (i) the outstanding capita:
stock having (in the absence of contingencies) ordinary voting power to elect a majority of the board of directors or other managing
body of such entity, (ii) in the case of a partnership or limited liability company, the interest in the capital or profits of
such partnership or limited liability company or (iii) in the case of a trust, estate, association, joint venture or other entity,
the beneficial interest in such trust, estate, association or other entity business is, at the time of determination, owned or
controlled directly or indirectly through one or more intermediaries, by such entity, or (B) is under the actual control of the
Company. Representations, undertakings and obligations set forth in this Agreement shall be applicable only to Subsidiaries which
exist or have existed at the applicable and relevant time.


 




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


 


“Trading Market”
means any of the following markets or exchanges: the NYSE MKT LLC, 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 Warrants, the Escrow Agreement, the Security Agreement, all exhibits
and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated
hereunder.


 


“Transfer Agent” means
the transfer agent for the Common Stock, and any successor transfer agent of the Company. As of the Closing Date, the Company is
the Transfer Agent.


 


“Underlying
Shares” means the shares of Common Stock issued and issuable upon conversion of the Notes and payment of interest on
the Notes in accordance with the terms of the Notes and upon exercise of the Warrants in accordance with the terms of the Warrants.


 


“Variable Priced Equity Linked
Instruments” shall have the meaning ascribed to such term in Section 4.9.


 


“Variable Rate Transaction” shall
have the meaning ascribed to such term in Section 4.9.


 


“Warrants” means the
Common Stock purchase warrants delivered to the Purchasers at the Closing in accordance with Article II hereof, in the form of
Exhibit B attached hereto.


 


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


 


ARTICLE II.


PURCHASE AND SALE


 


2.1           Initial
Closing. On the Initial 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 $1,000,000 principal amount of Notes (but not less than $300,000 of
principal amount of Notes) and Warrants as determined pursuant to Section 2.2(a) (such purchase and sale being the “Initial
Closing”. Each Purchaser shall deliver to the Company such Purchaser’s Subscription Amount, and the Company shall deliver
to each Purchaser its respective Note and Warrants, 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. Notwithstanding anything herein to the contrary, the Initial Closing Date shall occur on or before December 22,
2014 (the “Termination Date”). If the Closing is not held on or before the Termination Date, the Company shall
cause all subscription documents and funds to be returned, without interest or deduction to each prospective Purchaser.


 




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2.2           Deliveries.


 


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


 


(i)          this
Agreement duly executed by the Company;


 


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


 


(iii)        Warrants
registered in the names of such Purchaser with an aggregate exercise price equal to one hundred percent (100%) of such Purchaser’s
Subscription Amount, subject to adjustment as provided therein;


 


(iv)        the
Security Agreement executed by the Company and if applicable, the Subsidiaries; and


 


(v)         the
Escrow Agreement duly executed by the Company.


 


(b)          On
or prior to the Initial 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)         such
Purchaser’s Subscription Amount by wire transfer or as otherwise permitted under the Escrow Agreement, to the Escrow Agent;


 


(iii)        the
Security Agreement executed by the Purchaser for itself and as the Collateral Agent; and


 


(iv)        the
Escrow Agreement duly executed by such Purchaser.


 


2.3           Initial
Closing Conditions.


 


(a)          The
obligations of the Company hereunder to effect the Initial 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 Initial Closing Date of the representations and warranties of the Purchasers contained herein (unless as of a specific
date therein in which case they shall be accurate as of such date);


 


(ii)         all
obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Initial 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 the Initial 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) on the Initial Closing Date of the representations and warranties of the Purchasers contained herein (unless as of a specific
date therein in which case they shall be accurate as of such date);


 






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


 


(iii)        the Escrow Agent shall have received executed signature pages to this Agreement and aggregate Subscription Amount of not less than
$300,000 prior to the Initial Closing;


 


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


 


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


 


(vi)        from
the date hereof to the Initial Closing Date, trading in securities in the United States generally as reported by Bloomberg I..P.
shall not have been suspended or limited, 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.


 


2.4           Subsequent
Closings. In the event that the maximum offered amount of up to $1,000,000 of principal amount of Notes and Warrants are not
sold and paid for at the initial Closing, subsequent Closings may be held on the same terms and conditions as the Initial Closing
through January 9, 2015 (each a “Subsequent Closing”).


 


2.5           Subsequent
Closing Deliveries.


 


(a)          On
or prior to any Subsequent Closing, 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
Note in the principal amount equal to such Purchaser’s Subsequent Closing Subscription Amount registered in the name of such Purchaser.
The maturity date on the Notes issued on any Subsequent Closing will be identical to the maturity date of the Notes issued on the
Initial Closing Date; and


 


(iii)        Warrants
registered in the names of such Purchaser with an aggregate exercise price equal to one hundred percent (100%) of such Purchaser’s
Subscription Amount, subject to adjustment as provided therein; and


 


(iv)        the
Security Agreement executed by the Company and, if applicable, its Subsidiaries.


 




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


 


(i)          this
Agreement dub, executed by such Purchaser;


 


(ii)         the
Security Agreement executed by the Purchaser;


 


(iii)        the
Subsequent Closing Escrow Agreement duly executed by such Purchaser; and


 


(iv)        to
Escrow Agent, such Purchaser’s Subscription Amount by wire transfer to the account specified in the Subsequent Closing Escrow Agreement.


 


2.6           Subsequent
Closing Conditions.


 


(a)          The
obligations of the Company hereunder in connection with the Subsequent 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 Subsequent Closing Date of the representations and warranties of the Purchasers contained herein (unless as of
a specific date therein in which case they shall be accurate as of such date);


 


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


 


(iii)        the
delivery by each Purchaser to the Escrow Agent of the hems set forth in Section 2,5(b) of this Agreement;


 


(iv)        the
Escrow Agent shall have received Subsequent Closims Subscription Amounts from Purchasers in good funds in the amount designated
on such Purchaser’s signed signature page to this Agreement.


 


(b)          The
respective obligations of the Purchasers hereunder in connection with the Subsequent 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 Subsequent 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 under this Agreement required to be performed at or prior to the Subsequent Closing Date shall have
been performed;


 


(iii)        the
delivery by the Company to the Escrow Agent of the hems set forth in Section 2.5(a) of this Agreement;


 


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


 




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(v)         the
Escrow Agent shall have received Subsequent Closing Subscription Amounts from Purchasers in good funds in the amount
designated on such Purchaser’s signed signature page to this Agreement; and


 


(vi)        from
the date hereof to the Subsequent Closing Date, trading in securities in the United States generally as reported by Bloomberg L.P.
shall not have been suspended or limited, 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 Subsequent Closing.


 


ARTICLE III.


REPRESENTATIONS AND WARRANTIES


 


3.1           Representations
and Warranties of the Company. Except as set forth in the Disclosure Schedules, which Disclosure Schedules shall be deemed
a part hereof and shall qualify any representation made herein to which it refers and any other representation to the extent such
Disclosure Schedule reasonably relates thereto without a requirement of a cross-reference. The Company hereby makes the following
representations and warranties to each Purchaser as of the date hereof and each Closing Date unless as of a specific date therein
in which case they shall be accurate as of such 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 arc 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. 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.


 




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(c)          Authorization;
Enforcement. The Company Has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder.
The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by
it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company
and no further action is required by the Company, the Board of Directors or the Company’s stockholders
and creditors in connection herewith or therewith other than in connection with the Required Approvals except those filings requires
to be made with the Commission and state agencies after the Closing Date. This Agreement and each other Transaction Document to
which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with
the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification
and contribution provisions may be limited by applicable law.


 


(d)          No
Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents, the
issuance and sale of the Securities and the consummation by it of the transactions contemplated
hereby and thereby to which it is a party 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 :apse of time or both would become a default) under, result in
the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary’, or give to others any rights
of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of;
any agreement, credit facility, debt or other instrument (evidencing a Company or •Subsidiary debt or otherwise) or
other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any
Subsidiary is bound or affected, or (iii) 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.


 


(e)          Filings.
Consents and Aporovals. The Company is not required to obtain any consent, waiver, authorization or order of; give any notice
to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and perforniance by the Company of the Transaction Documents, other than: (i)
the filing of Form D with the Commission, and (ii) such filings as are required to be made under applicable state securities laws
(collectively, the “Reguired 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 0:ear of all Liens imposed by the Company. The
Company has reserved from its duly authorized capita: stock a number of shares of Common Stock for issuance of the Underlying Shares
at least equal to the Required Minimum on the date hereof.


 




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(g)          Capitalization.
The capitalization of the Company is as set forth in Schedule 3.1(g). Except as disclosed on Schedule 3.1(g), no
Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents. Except as disclosed on Schedule 3.1(g), there are no outstanding options, employee
or incentive stock option plans 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 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. There is no stock
option plan in effect as of any Closing Date. 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 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. Annexed hereto as Schedule 3.1(h) is financial information of the Company (“Financial Statements”).
The Financial Statements have not been prepared in accordance with GAAP. The Financial Statements 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 to normal, immaterial adjustments and inclusion of footnotes
which would be required pursuant to generally accepted accounting principles.


 


(i)          Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the Financial Statements except as disclosed on
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 material liabilities (contingent or otherwise) other
than trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice, (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.


 


(j)          Litigation.
There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the
Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any
court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign)
(collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or the Securities or (ii) could, if there were an unfavorable decision,
have or reasonably be expected to result in a Material Adverse Effect. At no time, neither the Company nor any Subsidiary,
nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability
under federal or state securities laws or a claim of breach of fiduciary duty.


 




    	 	11	 



     


    

 


(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, loca: and foreign laws and regulations relating to employment and employment practices, tenns 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: (:) is in default under or in violation of (and no event has occuffed 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 ir. 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 presently conducted, and as contemplated to be conducted, 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 all personal property owned by them that is material
to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially
affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by
the Company and the Subsidiaries and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves
have been made and, the payment of which is neither delinquent nor subject to penalties. The Company and Subsidiaries do not own
any real property. 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.


 


(0)         Intellectual
Property.


 


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


 


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


 


2.          all
patents, patent applications, and inventions and discoveries that may be patentable of the Company and each Subsidiary (collectively,
“Patents”); 


 


3.          all
copyrights in both unpublished works and published works of the Company and each Subsidiary (collectively, “Copyrights”);


 




    	 	12	 



     


    

 


4.          all
rights in mask works of the Company and each Subsidiary (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 and each Subsidiary
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 and description of all material Intellectual Property Rights and of all contracts
relating to the Intellectua: Property Rights to which the Company is a party or by which the Company is bound, except for any
license implied by the sae 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 Properv Rights are all those necessary for the operation of the Company’s businesses
as it is currently conducted or contemplated 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. 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)        Patents.
The Company is the owner of or licensee of all right, title and interest in and to each of the Patents, free and clear of all Liens
and other adverse claims. 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 failing 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.


 


(v)         Trademarks,
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. All Marks that have been registered with the United States Patent and Trademark Office are currently in compliance with
all forma: 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.


 




    	 	13	 



     


    

 


(vi)        Copyrights.
The Company is the owner of all right, tide, and interest in and to each of the Copyrights, free and clear of all: Liens and other
adverse claims 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. The Trade Secrets
are not part of the public knowledge or literature, and, to the Company’s know:edge, have not been used, divulged, or appropriated
either for the benefit of any Person (other 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.


 


(q)          Transactions
With Affiliates and Employees. Except as set forth in the Financial Statements and Transaction Documents, 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 3100,000 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) except as disclosed on Schedule 3.1(g). A copy
of all employment agreements to which the Company and any Subsidiary are parties is annexed as Schedule 3.1(q).


 




    	 	14	 



     


    

 


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


 


(s)          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.


 


(t)          Registration
Rights. No Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities Act
of any securities of the Company or any Subsidiary.


 


(u)          Application
of Takeover Protections. As of the Initial Closing Date, the Company will have taken all necessary action, if any, in order
to render inapplicable as of the Initial Closing Date and thereafter 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.


 


(v)         Disclosure.
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, when taken
together as a whole, is true and correct in all material respects and does not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under
which they were made, not misleading. The Company acknowledges and agrees that no Purchaser makes or has made any representations
or warranties with respect to the transactions contemplated her eby other than those specifically set forth in Section 3.2.


 


(w)          Solvency.
Based on the consolidated financial condition of the Company as of the Closing Date, and the Company’s good faith estimate of the
Fair market value of its assets, after giving effect to the receipt by the Company of the proceeds from the sale of the Securities
hereunder: (i) the fair saleable value of the Company’s assets exceeds the amount that will be required to be paid on or in respect
of the Company’s existing debts and other liabilities (including known contingent liabilities) as they mature, (ii) the Company’s
assets do not constitute unreasonably small capital to carry on its business as now conducted and as proposed to be conducted including
its capital needs taking into account the particular capital requirements of the business conducted by the Company, consolidated
and projected capital requirements and capital availability thereof, and (iii) the current cash flow of the Company, together with
the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses
of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid.
The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing
and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any filets 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 Ciosing: Date. The Company Financial Statements and Schedule 3.1(i) set forth all outstanding liens
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 5100,000 other than (i) trade accounts payable incurred by the Company and its •Subsidiaries in the ordinary
course of business or (ii) debt financing from a licensed United States bank regularly engaged in such :ending activity, and (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 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, but excluding trade accounts payable incurred
by the Company and its Subsidiaries in the ordinary course of business; and (z) the present value of any lease payments in excess
of $100,000 due under leases required to be capitalized in accordance with generally accepted accounting principles. Neither the
Company nor any Subsidiary is in default with respect to any Indebtedness.


 




    	 	15	 



     


    

 


 


(x)          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 (1) has made or filed all United States federal, state and local
income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to -which
it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined
to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the
payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There
are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the
Company or of any Subsidiary know of no basis for any such claim.


 


(y)          Foreign
Corrupt Practices. Neither the Company nor any Subsidiary, nor to the know:edge 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, (E) 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.


 


(z)          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.


 


(aa)         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.


 




    	 	16	 



     


    

 


(bb)         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 is currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department (“OFAC”).


 


(cc)         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.


 


(dd)        No
General Solicitation or Integration. To the best knowledge of the Company, neither the Company nor any person acting on behalf
of the Company has offered or sold any of the Securities by an), form of general solicitation or general advertising.
To the best knowledge of the Company, the Company has offered the Securities for sale only to the Purchasers and certain other
“accredited investors” within the meaning of Rule 501 under the Securities Act.


 


(ee)         Indebtedness
and Seniority. As of the date hereof, all Indebtedness and Liens are as set forth on the Company Financial Statements and Schedule
3.1(i). Except as set forth on the Company Financial Statements and Schedule 3.1(i), as of the Closing Date, no Indebtedness,
equity, 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).


 


(ff)          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 an), 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, (Hi) imposes a clinical hold on any clinical investigation by the Company or
any of its Subsidiaries, (iv) enjoins production at an), 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 an), 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.


 




    	 	17	 



     


    

  


(gg)         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.


 


(hh)         Other
Covered Persons. The Company is not aware of any person (other than Palladium Capital Advisors LLC) 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.


 


(ii)           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.


 


(jj)           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)          Oraanization:
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) to the extent the indemnification provisions contained
in this Agreement may be limited by applicable law.


 




    	 	18	 



     


    

 


 


(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, and on each date on
which it converts a Note or exercises any Warrants, it will be either: (i) an “accredited investor” as defined in Rule
501(a)(I), (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 Regulatory Authority or an “associated person” (as such
term is defined under the FINRA Membership and Registration Rules Section 1011).


 


(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. Purchasers are not deemed to have any knowledge of any information not included in the Financial Statements or
the Transaction Documents unless such information is delivered in the manner described in the next sentence. Each 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. 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.


 




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(f)          Compliance
with Securities Act; Reliance on Exemptions. Such Purchaser understands and agrees that the Securities have not been registered
under the 1933 Act or any applicable state securities laws, by reason of their issuance in a transaction that does not require
registration under the 1933 Act, and that such Securities must be held indefinitely unless a subsequent disposition is registered
under the 1933 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 intemet
or broadcast over television, radio or the internet or presented at any seminar or any other general solicitation or general advertisement.


 


(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)          Tax
Liability. Such Purchaser has reviewed with its own tax advisors the federal, state, local and foreign tax consequences of
this investment and the transactions contemplated by this Agreement. Such Purchaser understands that it (and not the Company) shall
be responsible for its own tax liability that may arise as a result of this investment or the transactions contemplated by this
Agreement.


 


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


 


3.3           Reliance.
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.


 




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ARTICLE IV.


OTHER AGREEMENTS OF THE PARTIES


 


4.1           Transfer
Restrictions.


 


(a)          Disposition
of Securities. 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 transfer, any
such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights and obligations of
a Purchaser under this Agreement.


 


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


 


[NEITHER] THIS SECURITY
[NOR THE SECURITIES INTO WHICH THIS SECURITY IS [EXERCISABLE] [CONVERTIBLE]] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS 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.
THIS SECURITY [AND THE SECURITIES ISSUABLE UPON [EXERCISE] [CONVERSION] OF THIS SECURITY] MAY BE PLEDGED IN CONNECTION WITH A BONA
FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR”
AS DEFINED IN RULE 50I(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 pledge or secure Securities to the pledgees or secured parties.
Such a pledge or transfer would not be subject to approval of the Company and no legal opinion of legal counsel of the pledge;
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(6) 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, or (iii) if such legend is not required under applicable
requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission).
The Company agrees that following such time as such legend is no longer required under this Section 4.1(c), it will, no later than
ten (10) Business Days following the delivery by a Purchaser to the Company or the Transfer Agent of a certificate representing
Underlying Shares issued with a restrictive legend (such tenth Business Day, the “Legend Removal Date”), together
with all representation letters, certificates and legal opinions required by the Transfer Agent, 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 seven (7) Business 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.


 




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


 


(e)          Remedies.
Commencing after the occurrence of a Going Public Event, 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 Conversion Shares or
Warrant Shares delivered for removal of the restrictive legend and Conversion Shares delivered for conversion into Shares, $10
per Trading Day for each Trading Day following the Legend Removal Date or the date such Securities are to be delivered pursuant
to the Note until such Common Stock certificate is delivered without a legend pursuant to Section 4.1(c) or such Conversion Shares.
Nothing herein shall limit such Purchaser’s right to elect in lieu of the aforedescribed liquidated damages to pursue actual damages
for the Company’s failure to deliver certificates representing any Underlying Shares 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.


 


(f)          Injunction
In the event a Purchaser shall request delivery of Securities as described in this Section 4.1 or Common Stock pursuant to the
Note and the Company is required to deliver such Securities, the Company may not refuse to deliver Securities 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 120% of the amount of the aggregate purchase price
of the Securities intended to be subject to the injunction or temporary restraining order, 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.


 




    	 	22	 



     


    

 


(g)          Buy-In.
In addition to any other rights available to Purchaser, if the Company fails to deliver to a Purchaser Securities as required pursuant
to this Agreement or the Note and after the Legend Removal Date or required delivery date pursuant to the Note 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 or as are required to be delivered pursuant
to the Note, as the case may be, together with interest thereon at a rate of :5% 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 S11,000 to cover a Buy-In With respect to S10,000 of purchase
price of Shares delivered to the Company for reissuance as unlegended shares, the Company shall be required to pay the Purchaser
31,000, 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           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, includi 112, without limitation, its obligation to issue the Underlying
Shares pursuant to the Transaction Documents, are unconditional and absolute and not subject to any right of set off,
counterclaim, delay or reduction, regardless of the effect of any such dilution or ally claim the Company may have against
any Purchaser and regardless of the dilutive effect that such issuance may have on the ownership of the other stockholders of
the Company.


 


4.3           Furnishing
of information.


 


(a)          The
Company covenants and agrees with the Purchaser that until the Going Public Event, the Company shall deliver to the Purchaser:
(i) for each of its first three fiscal quarters unaudited quarterly financial statements within 75 days after each quarter-end,
(ii) subject to Section 4.3(b), annual audited financial statements prepared according to GAAP within :20 days of year-end, and
(iii) copies of any documents or data furnished to the Company’s stockholders in their capacity as Company stockholders regarding
the Company or its affairs, simultaneously with the furnishing of such documents or data to such stockholders. The foregoing obligations
will be deemed satisfied if such financial statements have been filed with the Commission and are available on the EDGAR system.


 


(b)          Not
later than ninety (90) days afier the Initial Closing Date, the Company will provide to the Purchasers audited financial statements
prepared according to GAAP by an auditing firm registered with the PCAOB, for the then most recent fiscal year and unaudited stub
period financial statements in form and substance sufficient to meet the minimum requirements for filing with the Commission pursuant
to Regulation S-X and Form S-1 or Form 10.


 


4.4           Conversion
and Exercise Procedures. Each of the form of Notice of Conversion attached to the Note and form of Notice of Exercise included
in the Warrants sets forth the totality of the procedures required of the Purchasers in order to convert the Note or exercise the
Warrant. No additional legal opinion, other information or instructions shall be required of the Purchasers to convert their Note
or exercise their Warrants. The Company shall honor conversions of the Note and exercises of the Warrants and shall deliver Underlying
Shares in accordance with the terms, conditions and time periods se: forth in the Transaction Documents.


 


4.5           Use
of Proceeds. The proceeds of the offering will be employed by the Company substantially for the purposes set forth on Schedule
4.5.


 




    	 	23	 



     


    

 


4.6           Indemnification
of Purchasers. Subject to the provisions of this Section 4.6, 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 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 state or federal securities laws or any
conduct by such Purchaser Party which constitutes fraud, gross negligence, willful misconduct or malfeasance). If any action shall
be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser
Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel
of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense
of such Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in
writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in
such action there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position of
the Company and the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and
expenses of no more than one such separate counsel. The Company will not be liable to any Purchaser Party under this Agreement
(y) for any settlement by a Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably
withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any
Purchaser Party’s breach of its representations, warranties or covenants under the Transaction Documents. The indemnification
required by this Section 4.6 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.


 


4.7           Reservation
and Listing of Securities.


 


(a)          The
Company shall maintain a reserve from its duly authorized shares of Common Stock for issuance pursuant to the Transaction Documents
in such amount as may then be required to fulfill its obligations in full under the Transaction Documents, but not less than the
Required Minimum.


 


(b)          If,
on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than the Required
Minimum on such date, then the Board of Directors shall 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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4.8           Form
D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Securities as required under
Regulation D and to provide a copy thereof, promptly upon request of any Purchaser. The Company shall lake 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
Stales, and shall provide evidence of such actions promptly upon request of any Purchaser.


 


4.9           Subsequent
Equity Sales. Except in connection with the Securities offered in this Agreement or a Qualified Offering, without prior written
approval fi-orn Purchaser, until the later to occur of: (i) a Going Public Event, and (ii) two years after the Closing
Date (“End Date”), from the date hereof until the End 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, floating
or Variable Priced Equity Linked Instruments nor any of the foregoing or equity with price reset rights (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 dale 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
\yin be deemed to be the actual cash amount received by the Company in consideration of the original issuance of such convertible
instrument.


 


4.10         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 on a ratable basis to all of the parties to this Agreement. 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
othenvise.


 


4.11         Integration.
The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined
in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require
the registration under the Securities Act of the sale of the Securities.


 


4.12         Maintenance
of Property and Insurance. Until the End Date, 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. Until the End Date, the Company
will maintain insurance coverage of the type and not less than the amount in effect as of the Initial Closing Date.


 




    	 	25	 



     


    

 


4.13         Going
Public Event. On or before the Public Company Date, the Company (i) will, subject to the approval of a Majority in Interest,
consummate a merger or business combination with 8 company that has a class of equity subject to the reporting requirements of
Section 13 or 15(d) under the Exchange Act, or (ii) file a registration statement on Form S-1 or Form 10, for the purpose of having
the class of Common Stock comprising the Underlying Shares subject to the reporting requirements of Section 13 or 15(d) under
the Exchange Act. The Company having the same class of equity as the Underlying Shares subject to the reporting requirements of
Section 13 or I5(d) is referred to herein as the “Going Public Event”. The Company will cause the Going Public
Event to occur on or before the Public Company Date.


 


4.14         Preservation
of Corporate Existence. Until the End Date, 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.


 


4.15         Shareholder
Rip,hts 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.


 


4.16         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 I iability 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 Cif 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 A fldiate 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.


 


ARTICLE V.

MISCELLANEOUS


 


5.1           Termination.
This Agreement may he terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect
whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the
Initial Closing has riot been consummated on or before December 22, 2014; provided, however, that such
termination will not affect the right of any party to sue for any breach by any other party (or panics).


 




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5.2           Fees
and Expenses. Except as expressly set forth on  Schedule 3.1 (r). 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 al: Transfer Agent
fees, stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers. The
Company agrees to pay pursuant to the Escrow Agreement reasonable legal and Escrow Agent fees of O&M, counsel to some of
the Purchasers, in the amount of $25,000 (of which $20,000 is payable at the Initial Closing and 55,000 is payable at the
Subsequent Closing), 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 ;hereof and supersede all prior agreements and understandings, oral or
written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.


 


5.4           Notices.
All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder or with respect to
the Preferred Stock 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 or. 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: Accelerated Pharma, Inc.,
15W155 8l Street, Burr Ridge, IL 60527, Attn: Michael Fonstein, Chief Executive Officer, facsimile: (630) 325- 4179, with a copy
by fax only to (which shall not constitute notice): Polsinelli PC, 161 N. Clark Avenue, Suite 4200, Chicago, IL 60601, Attn: Teddy
C. Scott, Jr., Ph.D., facsimile: (3:2) 873-2913, 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., 5:5 Rockaway Avenue, Valley Stream, New York 115E, Ann: Edward M. Grushko, Esc,., facsimile: (2:2) 697-3575.


 


5.5           Amendments:
Waivers. No provision of this Agreement nor any other Transaction Document 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 part); 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 nor any other Transaction Document 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
thereof, nor shall any delay or omission of any party to exercise any right thereunder 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.


 




    	 	27	 



     


    

 


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). Following the Closing, any Purchaser may assign, on ten (10) Business Day prior notice 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” and is able to make each and every representation made by Purchasers in this Agreement.
No assignment by a Purchaser will be allowed if the result would be an increase in the number of actual or beneficial owners of
the assigned securities.


 


5.8           No Third-Party
Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of; nor may any provision hereof be enforced by, any other Person, except as otherwise set forth
in Section 4.10.


 


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 except as to these matters which are required by the laws of the State of Delaware to
be governed by the laws of the State of Delaware. Each party agrees that all legal proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought
against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents)
shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits
to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with
respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any
action, suit 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 persona:
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
parry shall commence an action or proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations
of the Company under Section 4.10, the prevailing party in such action, 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.


 


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.




    	 	28	 



     


    

 


5.12         Severabilitv.
If any term, provision, covenant or restriction of any Transaction Document 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 End 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; at any time prior to the Company’s performance of such obligations, rescind
or withdraw; in its sole discretion from time to time upon written notice to the
Company; any relevant notice, demand or election in whole or in part without prejudice
to its future actions and rights; provided, however, that in the case of a rescission of a conversion of a Note
or exercise of a Warrant, the applicable Purchaser shall be required to return any shares of Common Stock subject to any such
rescinded conversion or exercise notice concurrently with the return to such -Purchaser of the aggregate exercise price
paid to the Company for such shares and the restoration of such Purchaser’s right to acquire such shares pursuant to such Purchaser’s
Note or Warrant (including, issuance of a replacement warrant certificate evidencing such restored right).


 


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


 


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


 


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


 






    	 	29	 



     


    

 


5.17         Usury.
To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim;
and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now
or at any time hereafter in force, in connection with any 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 effective date thereof forward, unless such application is precluded by applicable law. If under any circumstances whatsoever,
interest in excess of the Maximum Rate is paid by the Company to any Purchaser with respect to indebtedness evidenced by the Transaction
Documents, such excess shall be applied by such Purchaser to the unpaid principal balance of any such indebtedness or be refunded
to the Company, the manner of handling such excess to be at such Purchaser’s election.


 


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


 


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


 


5.20         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.


 




    	 	30	 



     


    

  


5.21         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.


 


5.22         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
and Warrants.


 


(Signature Pages Follow)


 




    	 	31	 



     


    

  


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.


 


	ACCELERATED PHARMA, INC.	Address for Notice: 
	 	 
	 	15W155 81st Street
	 	Burr Ridge, IL 60527
	 	Fax: (630) 325-4179


 


	By:	/s/ Michael Fonstein	 
	 	Name: Michael Fonstein	 
	 	Title: Chief Executive Officer	 


 


With a copy to (which shall not constitute notice):


 


Polsinelli PC


161 N. Clark Avenue, Suite 4200


Chicago, IL 60601


Attn: Teddy C. Scott, Jr., Ph.D.


Fax: (312) 873-2913


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK


SIGNATURE PAGE FOR PURCHASER FOLLOWS]


 




    	 	32	 



     


    

  


 





EXHIBITS AND SCHEDULES


 


	Exhibit A	Form of Note
	Exhibit B	Form of Warrant
	Exhibit C	Escrow Agreement
	Exhibit 13	Security Agreement
	Exhibit E	Form of Investor Questionnaire


 


Schedule 3.1(g)


Schedule 3.1(h)


Schedule 3.1(i)


Schedule 3.1(o)


Schedule 3.1(q)


Schedule 3.1(r)


Schedule 4.5


 




    33 


     


    

  


EXHIBIT E


 


ACCREDITED INVESTOR QUESTIONNAIRE

IN CONNECTION WITH INVESTMENT IN NOTES AND WARRANTS

OF ACCELERATED PHARMA, INC.,

A DELAWARE CORPORATION

PURSUANT TO SECURITIES PURCHASE AGREEMENT DATED DECEMBER ___, 2014


 


	TO:	Palladium Capital Advisors, LLC	 
	 	230 Park Avenue, Suite 539	 
	 	New York, NY 10169	 
	 	Fax: (646) 390-6328	 


 


INSTRUCTIONS


 


PLEASE ANSWER ALL QUESTIONS.
If the appropriate answer is “None” or “Not Applicable”, so state. Please print or type your answers to all
questions. Attach additional sheets if necessary to complete your answers to any item.


 


Your answers will be
kept strictly confidential at all times. However, Palladium Capital Advisors, LLC (the “Company”) may present this Questionnaire
to such parties as it deems appropriate in order to assure itself that the offer and sale of securities of the Company will
not result in a violation of the registration provisions of the Securities Act of 1933, as amended, or a violation of the securities
laws of any state.


 


	1.	Please provide the following information:


 


	Name: 	 


 


	Name of additional purchaser: 	 


(Please complete information in Question 5)


 


	Date of birth, or if other than an individual, year of organization or incorporation:
	 
	 
	 
	 


 


	2.	Residence address, or if other than an individual, principal office address:
	 	 
	 	 
	 	 
	 	 
	 	 
	 	 


 


	Telephone number:	 


 


	Social Security Number:	 


 




    34 


     


    

  


	Taxpayer Identification Number: 	 


 


	3.	Business address:	 


 


	 
	 
	 


 


	Business telephone number:	 


 


	4.	Send mail to:	Residence _____	Business ______


 


5.          With
respect to tenants in common, joint tenants and tenants by the entirety, complete only if information differs from that above:


 


	Residence address:	 


 


 





 



 


 





 



  


	Telephone number:	 


 


	Social Security Number:	 


 


	Taxpayer Identification Number:   	 


 


	Business address:	 


 


	 
	 
	 


 


	Business telephone number:	 


 


	Send Mail to:	Residence _______	Business _______


 


6.          Please
describe your present or most recent business or occupation and indicate such information as the nature of your employment, how
long you have been employed there, the principal business of your employer, the principal activities under your management or supervision
and the scope (e.g. dollar volume, industry rank, etc.) of such activities:


	 
	 
	 
	 
	 
	 


 




    35 


     


    

  


7.          Please
state whether you (i) are associated with or affiliated with a member of the Financial Industry Regulatory Association, Inc. (“FINRA”),
(ii) are an owner of stock or other securities of FINRA member (other than stock or other securities purchased on the open market),
or (iii) have made a subordinated loan to any FINRA member:


 


	_______	______
	Yes	No


 


If you answered yes to any of (i) — (iii) above,
please indicate the applicable answer and briefly describe the facts below:


 





 



 





 



 





 



 


8A.           Applicable
to Individuals ONLY. Please answer the following questions concerning your financial condition as an “accredited investor”
(within the meaning of Rule 50: of Regulation D). If the purchaser is more than one individual, each individual must initial an
answer where the question indicates a “yes” or “no” response and must answer any other question fully, indicating
to which individual such answer applies. If the purchaser is purchasing jointly with his or her spouse, one answer may be indicated
for the couple as a whole:


 


8.1           Does
your net worth* (or joint net worth with your spouse) exceed $1,000,000?


 


	_______	______
	Yes	No


 


8.2Did you have an individual income** in
excess of 5200,000 or joint income together with your spouse in excess of 5300,000 in each of the two most recent years and
do you reasonably expect to reach the same income level in the current year?


 


	_______	______
	Yes	No


 


8.3           Are
you an executive officer of the Company?


 


	_______	______
	Yes	No


 


* For purposes hereof, net worth shall be deemed
to include ALL of your assets, liquid or illiquid MIYLTS any liabilities.


 


** For purposes hereof, the
term “income” is not limited to “adjusted gross income” as that term is defined for federal income tax purposes,
but rather includes certain items of income which are deducted in computing “adjusted gross income”. For investors who
are salaried employees, the gross salary of such investor, minus any significant expenses personally incurred by such investor
in connection with earning the salary, plus any income from any other source including unearned income, is a fair measure of “income”
for purposes hereof. For investors who are self-employed, “income” is generally construed to mean total revenues received
during the calendar year minus significant expenses incurred in connection with earning such revenues.


 




    36 


     


    

 


8.B       Applicable
to Corporations, Partnerships, Trusts, Limited Liability Companies and other Entities ONLY:


 


The purchaser is an accredited investor because the purchaser
falls within at least one of the following categories (Check all appropriate lines):


 


	 	___	(i) a bank as defined in Section 3(a)(2) of the Act or a savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Act whether acting in its individual or fiduciary capacity;
	 	 	 
	 	___	(ii) a broker-dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, as amended;
	 	 	 
	 	___	(iii) an insurance company as defined in Section 203) of the Act;
	 	 	 
	 	___	(iv) an investment company registered under the Investment Company Act of 1940, as amended (the “Investment Act”) or a business development company as defined in Section 2(a)(48) of the Investment Act;
	 	 	 
	 	___	(v) a Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958, as amended;
	 	 	 
	 	___	(vi) a plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, where such plan has total assets in excess of $5,000,000;
	 	 	 
	 	___	(vii) an employee benefit plan within the meaning of Title 1 of the Employee Retirement Income Security Act of 1974, as amended (the “Employee Act”), where the investment decision is made by a plan fiduciary, as defined in Section 3(21) of the Employee Act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or an employee benefit plan that has total assets in excess of $5,000,000, or a self-directed plan the investment decisions of which are made solely by persons that are accredited investors;
	 	 	 
	 	___	(viii) a private business development company, as defined in Section 202(a)(22) of the Investment Advisers Act of 1940, as amended;
	 	 	 
	 	___	(ix) an organization described in Section 501(c)(3) of the Internal Revenue Code, a corporation, a Massachusetts or similar business trust, or a partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;
	 	 	 
	 	___	(x) a trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a “sophisticated” person, as described in Rule 506(b)(2)(ii) promulgated under the Act, who has such knowledge and experience in financial and business matters that he or she is capable of evaluating the merits and risks of the prospective investment;


 




    37 


     


    

  


	 	___	(xi) an entity in
    which all of the equity investors are persons or entities described above     (“accredited investors”). ALL
    EQUITY OWNERS MUST COMPLETE “EXHIBIT A” ATTACHED HERETO.


 


9.A          Do you have sufficient knowledge and
experience in financial and business matters so as to be capable of evaluating the merits and risks associated with investing
in the Company?


 


	_______	______
	Yes	No


 


ANSWER QUESTION 9B ONLY IF THE ANSWER TO QUESTION
9A WAS “NO.”


 


9.B        If the answer to Question 9A was “NO,”
do you have a financial or investment adviser (a) that is acting in the capacity as a purchaser representative and (b) who has
sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risks associated
with investing in the Company?


 


	_______	______
	Yes	No


 


If you have a financial or investment
adviser(s), please identify each such person and indicate his or her business address and telephone number in the space below.
(Each such person must complete, and you must review and acknowledge, a separate Purchaser Representative Questionnaire which will
be supplied at your request).


 


 





 



 


 





 



 


10.         You
have the right, will be afforded an opportunity, and are encouraged to investigate the Company and review relevant factors and
documents pertaining to the officers of the Company, and the Company and its business and to ask questions of a qualified representative
of the Company regarding this investment and the properties, operations, and methods of doing business of the Company.


 


Have you or has your purchaser
representative, if any, conducted any such investigation, sought such documents or asked questions of a qualified representative
of the Company regarding this investment and the properties, operations, and methods of doing business of the Company?


 


	_______	______
	Yes	No


 


	If so, briefly describe:	 


 


 


 



 


If so, have you completed your investigation and/or
received satisfactory answers to your questions?


 


	_______	______
	Yes	No


 


11.         Do
you understand the nature of an investment in the Company and the risks associated with such an investment?


 


	_______	______
	Yes	No


 




    38 


     


    

  


12.         Do
you understand that there is no guarantee of any financial return on this investment and that vou will be exposed to the risk of
losing your entire investment?


 


	_______	______
	Yes	No


 


13.         Do
you understand that this investment is not liquid?


 


	_______	______
	Yes	No


 


14.         Do
you have adequate means of providing for your current needs and personal contingencies in view of the fact that this is not a liquid
investment?


 


	_______	______
	Yes	No


 


15.         Are
you aware of the Company’s business affairs and financial condition, and have you acquired all such information about the Company
as you deem necessary and appropriate to enable you to reach an informed and knowledgeable decision to acquire the Interests?


 


	_______	______
	Yes	No


 


16.         Do
you have a “pre-existing relationship” with the Company or any of the officers of the Company?


 


	_______	______
	Yes	No


 


(For purposes hereof; “pre-existing
relationship” means any relationship consisting of personal or business contacts of a nature and duration such as would enable
a reasonably prudent investor to be aware of the character, business acumen, and general business and financial circumstances of
the person with whom such relationship exists.)


 


If so, please name the individual or other person
with whom you rave a pre-existing relationship and describe the relationship:


  


 





 



 


 





 



 


 




    39 


     


    

  


17.         Exceptions
to the representations and warranties made in Section 3.2 of the Securities Purchase Agreement (if no exceptions, write “none”
— if left blank, the response will be deemed to be “none”): _______________________


 


 


 






 


Dated: ________________, 2014


 


If purchaser is one or more individuals (all individuals
must sign):


 


 





 



(Type or print name of prospective purchaser)


 


 





 



Signature of prospective purchaser


 


 





 



Social Security Number


 


 





 



(Type or print name of additional purchaser)


 


 





 



Signature of spouse, joint tenant, tenant in common
or other signature, if required


 


 





 



Social Security Number


 




    40 


     


    

  


Annex A


 


Definition of Accredited Investor


 


The securities
will only be sold to investors who represent in writing in the Securities Purchase Agreement that they are accredited investors,
as defined M Regulation U. Rule 501 under the Act which definition is set forth below:


 


1.          A
natural person whose net worth, or joint net worth with spouse, at the time of purchase exceeds $1 million (excluding home); or


 


2.          A
natural person whose individual gross income exceeded S200,000 or whose joint income with that person’s spouse exceeded S300,000
in each of the last two years, and who reasonably expects to exceed such income level in the current year; or


 


3.          A
trust with total assets in excess of 85 million, not formed for the specific purpose of acquiring the securities offered, whose
purchase is directed by a sophisticated person described in Regulation D; or


 


4.          A
director or executive officer of the Company; or


 


5.          The
investor is an entity, all of the owners of which are accredited investors; or


 


6.          (a)
bank as defined in Section 3(a)(2) of the Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A)
of the Act, (b) any broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934, (c) an insurance
Company as defined in Section 2(13) of the Act, (d) an investment Company registered under the Investment Company Act of :940 or
a business development Company as defined in Section 2(a)(48) of such Act, (c) a Small Business Investment Company licensed by
the United States Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958, (f) an
employee benefit plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a
state or its political subdivisions, if such plan has total assets in excess of 85 in on, (g) an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Securities Act of 1974, and the employee benefit plan has assets in excess
of $5 million, or the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such act, that is either
a bank, savings and loan institution, insurance Company, or registered investment advisor, or, if a self-directed plan, with an
investment decisions made solely by persons that are accredited investors, (h) a private business development company as defined
in Section 202(a)(22) of the Investment Advisers Act of 1940, or (i) an organization described in Section 501(c)(3) of the Internal
Revenue code, corporation, Massachusetts or similar business :rust, or partnership, not formed for the specific purpose of acquiring
the securities offered, with assets in excess of $5 million.


 




    41 


     


    

  


EXHIBIT “A” TO ACCREDITED INVESTOR
QUESTIONNAIRE


 


ACCREDITED CORPORATIONS, PARTNERSHIPS,
LIMITED LIABILITY COMPANIES, TRUSTS OR OTHER ENTITLES INITIALING QUESTION 313(xi) MUST PROVIDE THE FOLLOWING INFORMATION.


 


I hereby certify that set forth
below is a complete list of a:I equity owners in __________________________ [NAME OF ENTITY], a _________________________ [TYPE
OF ENTITY] formed pursuant to the laws of the State of ___________________. I also certify that EACH SUCH OWNER HAS INITIALED
THE SPACE OPPOSITE HIS OR HER NAME and that each such owner understands that by initialing: that space he or she is representing
that he or she is an accredited individual investor satisfying the test for accredited individual investors indicated under “Type
of Accredited Investor.”


 


	 	 
	 	signature of authorized corporate officer, general partner or trustee


 


	 	Name
    of Equity Owner	 	Type
    of Accredited Investor l
	 	 	 	 
	1.	 	 	 
	 	 	 	 
	2.	 	 	 
	 	 	 	 
	3.	 	 	 
	 	 	 	 
	4.	 	 	 
	 	 	 	 
	5.	 	 	 
	 	 	 	 
	6.	 	 	 
	 	 	 	 
	7.	 	 	 
	 	 	 	 
	8.	 	 	 
	 	 	 	 
	9.	 	 	 
	 	 	 	 
	10.	 	 	 


  





 



1Indicate which Subparagraph of 8.1 - 8.3 the
equity owner satisfies.


 



    42