Exhibit 10.05


 


SECURITIES PURCHASE AGREEMENT



 


This Securities Purchase Agreement (this “Agreement”)
is dated as of June 22, 2016, between Notis Global, Inc., a Nevada corporation (the “Company”), and each purchaser
identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser” and collectively,
the “Purchasers”).  


 


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


 


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


 


ARTICLE I.


DEFINITIONS


 


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


 


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


 


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


 


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


 


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


 


“Business Day” means any
day 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
Date(s)” means the Trading Day(s) on which all of the Transaction Documents have been executed and delivered by the
applicable parties thereto in connection with a Closing, and all conditions precedent to (i) the Purchaser’s
obligations to pay the Subscription Amount as to such Closing and (ii) the Company’s obligations to deliver the
Securities as to such Closing, in each case, have been satisfied or waived.


 




     


     


    

 


“Closing(s)” means the one or more
closings of the purchase and sale of the Securities pursuant to Section 2.2.


 


“Closing Statement” means
the Closing Statement in the form on Annex A attached hereto.


 


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


 


“Common Stock” means the common
stock of the Company, par value $0.001 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
Manatt, Phelps & Phillips, LLP.


 


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


 


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


 


“Debenture” means the
10% Convertible Debenture due, subject to the terms therein, twelve (12) months from their date of issuance, issued by the Company
to the Purchaser hereunder, in the form of Exhibit A attached hereto.


 


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


 


“Equity Incentive Plan” means the Company’s existing equity
incentive plan, as amended.


 


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


 


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


 


“Exempt Issuance” means the issuance
of (i) shares of Common Stock or options or restricted stock units to consultants, employees, officers or directors of the Company
approved by the Board of Directors, (ii) securities issuable pursuant to the Transaction Documents or upon the exercise or exchange
of or conversion of any Securities issued hereunder and/or other securities exercisable or exchangeable for or convertible into
shares of Common Stock issued and outstanding on the date of this Agreement, (iii) securities issued pursuant to acquisitions or
strategic transactions approved by the Board of Directors, provided that any such issuance shall only be to a Person (or to the
equity  holders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset
in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to
the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose
of raising capital or to an entity whose primary business is investing in securities, (iv) shares of Common Stock issued pursuant
to any equipment loan or leasing arrangement, real property leasing arrangement or debt financing from a bank or similar financial
institution approved by the Board of Directors, and (v) shares of Common Stock with respect to which the holders of a majority
of the outstanding Debentures waive their anti-dilution rights.  


 




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


 


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


 


“Indebtedness” means
(x) any liabilities for borrowed money or amounts owed in excess of $150,000 (other than trade accounts payable or for
services provided incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent
obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s
consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business; and (z) the present value of any lease payments in
excess of $150,000 due under leases required to be capitalized in accordance with GAAP.


 


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


 


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


 


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


 


“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.


 


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


 


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


 




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


 


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


 


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


 


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


 


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


 


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


 


“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 any Underlying Shares issuable upon conversion in full of all Debentures (including Underlying
Shares issuable as payment of interest on the Debentures), ignoring any conversion or exercise limits set forth therein, and assuming
that the Conversion Price is at all times on and after the date of determination 100% of the then Conversion Price on the Trading
Day immediately prior to the date of determination.   


 


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


 


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


 


“Security Agreement”
means the Security Agreement, dated the date hereof, between the Company and the Purchaser, in the form of Exhibit C attached
hereto.


 


“Securities” means the Debentures
and the Underlying Shares.  


 


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


 


“Short Sales” means all “short
sales” as defined in Rule 200 of Regulation SHO under the Exchange Act  


 




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


 


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


 


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


 


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


 


“Tranche(s)” shall have
the meaning ascribed to such term in Section 2.1.  


 


“Transaction Documents”
means this Agreement, the Debentures, 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
Action Stock Transfer, the current transfer agent of the Company, with a mailing address of 2469 E. Fort Union Blvd, Suite 214,
Salt Lake City, UT 84121 and a phone number of (801) 274-1088, and any successor transfer agent of the Company.  


 


“Transfer Agent Instruction
Letter” means the letter from the Company to the Transfer Agent which instructs the Transfer Agent to issue Underlying Shares
pursuant to the Transaction Documents, in the form of Exhibit D attached hereto.  


 


“Underlying Shares” means
the shares of Common Stock issued and issuable upon conversion or redemption of the Debentures and issued and issuable in lieu
of the cash payment of interest on the Debentures in accordance with the terms of the Debentures.


 


ARTICLE II.


PURCHASE AND SALE


 


2.1   Purchase.  The
Purchaser will purchase an aggregate of $240,000 in Subscription Amount of Debentures in two tranches (each, a “Closing”),
with the first tranche of $120,000 being closed on upon execution of this Agreement and the second tranche of $120,000 being closed
upon on July 8, 2016.   


 




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2.2   Closing.  On
each 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 each Purchaser, severally and not
jointly, agrees to purchase, such Purchaser’s Closing Subscription Amount as set forth on the signature page hereto
executed by such Purchaser.  At the Closing, each Purchaser shall deliver to the Company, via wire transfer or a
certified check, immediately available funds equal to such Purchaser’s Subscription Amount as set forth on the
signature page hereto executed by such Purchaser, less a fee payable to the Purchaser in the amount equal to 5% of such
Subscription Amount, and the Company shall deliver to each Purchaser its respective Debenture, as determined pursuant to
Section 2.3(a), and the Company and each Purchaser shall deliver the other items set forth in Section 2.3 deliverable at the
Closing.  Upon satisfaction of the covenants and conditions set forth in Sections 2.3 and 2.4 for the Closing, the
Closing shall occur at the offices of Company Counsel or such other location as the parties shall mutually agree.


 


2.3   Deliveries.


 


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


 


(i)  this Agreement duly
executed by the Company;


 


(ii)  the Security
Agreement duly executed by the Company;


 


(iii) the Transfer Agent Instruction
Letter duly executed by the Company and the Transfer Agent; and


 


(iv) a Debenture with a principal
amount equal to such Purchaser’s Principal Amount as to the applicable Closing, registered in the name of such Purchaser.


 


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


 


(i)
this Agreement duly executed by such Purchaser;  


 


(ii)
the Security Agreement duly executed by such Purchaser; and


 


(iii) such Purchaser’s Subscription
Amount as to the applicable Closing by wire transfer to the account specified in writing by the Company.


 


2.4   Closing Conditions.


 


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


 




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(i)   the accuracy
in all material respects on the applicable Closing Date of the representations and warranties of the Purchaser 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 applicable Closing Date shall have been
performed; and


 


(iii)  the delivery by
each Purchaser of the items set forth in Section 2.3(b) of this Agreement.


 


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


 


(i)   the accuracy
in all material respects when made and on the applicable Closing Date of the representations and warranties of the Company contained
herein (unless as of a specific date therein);


 


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


 


(iii) the delivery by the Company
of the items set forth in Section 2.3(a) of this Agreement;


 


(iv)   there is no
existing Event of Default (as defined in the Debentures) and no existing event which, with the passage of time or the giving of
notice, would constitute an Event of Default;


 


(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 applicable Closing Date, trading in the Common Stock shall not have been suspended by the Commission  or
the Company’s principal Trading Market and, at any time prior to the applicable Closing Date, trading in securities generally
as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities
whose trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by
the United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities
or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial
market which, in each case, in the reasonable judgment of such Purchaser, and without regard to any factors unique to such Purchaser,
makes it impracticable or inadvisable to purchase the Securities at the applicable Closing.


 




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ARTICLE III.


REPRESENTATIONS AND WARRANTIES


 


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


 


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


 


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


 




    	 	8	 



     


    

 


(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 in connection herewith  or therewith other than in
connection with the Required Approvals.  This Agreement and each other Transaction Document to which it is a party
has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms
hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in
accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally;
(ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies;
and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.


 


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


 


(e)   Filings,
Consents and Approvals.  The Company is not required to obtain any consent, waiver, authorization or order of, give
any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental
authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction
Documents, other than: (i) the filings required pursuant to Section 4.6 of this Agreement, (ii) the notice and/or
application(s) to each applicable Trading Market for the issuance and sale of the Securities and the listing of the
Conversion Shares for trading thereon in the time and manner required thereby and (iii) the filing of Form D and 8-K with the
Commission and such filings as are required to be made under applicable state securities laws (collectively, the
“Required Approvals”).


 




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(f)   Issuance of the Securities.  The
Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly
and  validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions
on transfer provided for in the Transaction Documents.  The Underlying Shares, when issued in accordance with the terms
of the Transaction Documents, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the
Company other than restrictions on transfer provided for in the Transaction Documents.  The Company shall have reserved
from its duly authorized capital stock a number of shares of Common Stock for issuance of the Underlying Shares at least equal
to 200% of the Required Minimum on the date hereof.


 


(g)   Capitalization.  The
capitalization of the Company is as set forth on Schedule 3.1(g), which Schedule 3.1(g) shall also include the number of
shares of Common Stock owned beneficially, and of record, by Affiliates of the Company as of the date hereof. The Company has
not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the
exercise of employee stock options under the Equity Incentive Plan, the issuance of shares of Common Stock to employees
pursuant to the Company’s employee stock purchase plans and pursuant to the conversion and/or exercise of Common Stock
Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act.  Other
than with regard to Exempt Issuances, 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 a result
of the purchase and sale of the Securities and securities issued to employees, officers or directors, or former employees,
officers or directors and other service providers or former service providers of the Company pursuant to the Equity Incentive
Plan or otherwise, there are no outstanding options, warrants, 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.  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 Purchaser) 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 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.  Other than as set forth on Schedule 3.1(g), there are no stockholders agreements, voting
agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or,
to the knowledge of the Company, between or among any of the Company’s stockholders.


 




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


 


(i)   Material
Changes; Undisclosed Events, Liabilities or Developments.  Since the filing of the Company’s Form 10-Q
for the period ended March 31, 2016: (i) there has been no event, occurrence or development that has had or that could
reasonably be expected to result in a Material Adverse Effect; (ii) the Company has not incurred any liabilities (contingent
or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with
past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP
or disclosed in filings made with the Commission; (iii) the Company has not altered its method of accounting; (iv) the
Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased,
redeemed or made any agreements to purchase or redeem any shares of its capital stock; and (v) the Company has not issued any
equity securities to any officer, director or Affiliate, except pursuant to the Equity Incentive Plan or as set forth in the
SEC Reports.  Except for the issuance of the Securities contemplated by this Agreement, or the Exempt Issuances
no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur
or exist with respect to the Company or its Subsidiaries or their respective businesses, properties, operations, assets
or financial condition, that would be required to be disclosed by the Company under applicable securities laws at the time
this representation is made or deemed made that has not been publicly disclosed at least one (1) Trading Day prior to
the date that this representation is made.  


 




    	 	11	 



     


    

(j)   Litigation.  Except
as set forth in the SEC Reports, 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, and 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.  Other than as set forth in the SEC
Reports, there has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by
the Commission involving the Company or any current or former director or officer of the Company that is likely to lead to
action that can reasonably be expected to result in a Material Adverse Effect.  Other than as set forth in the SEC
Reports, there has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by
the Commission involving the Company or any current or former director or officer of the Company.  The Commission
has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company
or any Subsidiary under the Exchange Act or the Securities Act.


 


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


 




    	 	12	 



     


    

 


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


 


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


 


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


 


(o)   Intellectual Property.  The
Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications,
service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar
rights as described in the SEC Reports as necessary or required for use in connection with their respective businesses as presently
conducted and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property
Rights”).  None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that
any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be
abandoned, within two (2) years from the date of this Agreement.  Neither the Company nor any Subsidiary has received,
since the date of the latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise
has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not
have or reasonably be expected to not have a Material Adverse Effect.  To the knowledge of the Company, all such Intellectual
Property Rights are enforceable and there is no existing  infringement by another Person of any of the Intellectual Property
Rights.  The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality
and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.


 




    	 	13	 



     


    

 


(p)   Transactions
with Affiliates and Employees.  Except as set forth in the SEC Reports and for the Exempt Issuances, none of the
officers or directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the
Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other than for services
as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from providing for the borrowing of money from or
lending of money to, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge
of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer,
director, trustee, stockholder, member or partner, in each case in excess of $120,000 other than for: (i) payment of salary
or consulting fees for services rendered; (ii) reimbursement for expenses incurred on behalf of the Company; and (iii) other
employee benefits, including stock option or stock award agreements under the Equity Incentive Plan.  


 


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


 




    	 	14	 



     


    

 


(r)   Certain Fees.  Other
than as set forth on Schedule 3.1(r), no brokerage or finder’s fees or commissions are or will be payable by the Company
or any Subsidiaries 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 Purchaser shall have no obligation with
respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this
Section that may be due in connection with the transactions contemplated by the Transaction Documents.


 


(s)   Private Placement.  Assuming
the accuracy of the Purchaser’s 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 Purchaser as contemplated hereby. The issuance and
sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market.


 


(t)   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.


 


(u)   Registration Rights.  Other
than with regard to the Exempt Issuances, no Person has any right to cause the Company to effect the registration under the Securities
Act of any securities of the Company or any Subsidiaries.


 


(v)   Listing and
Maintenance Requirements.  The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act,
and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is
contemplating terminating such registration.  The Company has not, in the twelve (12) months preceding the date
hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that
the Company is not in compliance with the listing or maintenance requirements of such Trading Market. The Company is, and has
no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and
maintenance requirements.


 




    	 	15	 



     


    

 


(w)   Application of Takeover
Protections.  The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable
any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other
similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents) or the laws
of its state of incorporation that is or could become applicable to the Purchaser as a result of the Purchaser 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 Purchaser’s ownership of the Securities.


 


(x)   Disclosure.  Except
with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms
that neither it nor any other Person acting on its behalf has provided any of the Purchaser or their agents or counsel with any
information that it believes constitutes or might constitute material, non-public information.  The Company understands
and confirms that the Purchaser will rely on the foregoing representation in effecting transactions in securities of the Company.  All
of the disclosure furnished by or on behalf of the Company to the Purchaser regarding the Company and its Subsidiaries, their respective
businesses and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, is true and correct
and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were made, not misleading.     The
Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions
contemplated hereby other than those specifically set forth in Section 3.2 hereof.


 


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


 


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


 




    	 	16	 



     


    

 


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


 


(bb)   Accountants.  The
Company’s accounting firm is set forth on Schedule 3.1(bb) of the Disclosure Schedules.  To the knowledge and
belief of the Company, such accounting firm is a registered public accounting firm as required by the Exchange Act.


 


(cc)   No Disagreements with
Accountants and Lawyers.  There are no disagreements of any kind presently existing, or reasonably anticipated by the
Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company.


 


(dd)   Acknowledgment Regarding
Purchaser’s Purchase of Securities.  The Company acknowledges and agrees that each of the Purchaser 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 Purchaser’s 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.


 


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


 


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


 




    	 	17	 



     


    

 


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


 


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


 


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


 


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


 


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


 




    	 	18	 



     


    

 


(ll)   Acknowledgment
Regarding Purchaser’s Trading Activity.  Anything in this Agreement or elsewhere herein to the contrary notwithstanding
(except for Sections 3.2(f) and 4.12 hereof), it is understood and acknowledged by the Company that: (i) the Purchaser has not
been asked by the Company to agree, nor has the Purchaser agreed, to desist from purchasing or selling, long and/or short, securities
of the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities for
any specified term; (ii) past or future open market or other transactions by the Purchaser, specifically including, without limitation,
Short Sales or “derivative” transactions, before or after the closing of this or future private placement transactions,
may negatively impact the market price of the Company’s publicly-traded securities; (iii) the Purchaser, and counter-parties
in “derivative” transactions to which the Purchaser is a party, directly or indirectly, may presently have a “short”
position in the Common Stock; and (iv) each Purchaser shall not be deemed to have any affiliation with or control over any arm’s
length counter-party in any “derivative” transaction.  The Company further understands and acknowledges that
(y) one or more Purchaser may engage in hedging activities at various times during the period that the Securities are outstanding,
including, without limitation, during the periods that the value of the Underlying Shares deliverable with respect to Securities
are being determined, and (z) such hedging activities (if any) could reduce the value of the existing stockholders’ equity
interests in the Company at and after the time that the hedging activities are being conducted.  The Company acknowledges
that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.  


 


(mm) 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.


 


3.2   Representations and Warranties
of the Purchaser.  The 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):


 




    	 	19	 



     


    

 


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


 


(b)   Own Account.  Such
Purchaser understands that the Securities are “restricted securities” and have not been registered under the Securities
Act or any applicable state securities law and is acquiring the Securities as principal for its own account and not with a view
to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable state
securities law, has no present intention of distributing any of such Securities in violation of the Securities Act or any applicable
state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding
the distribution of such Securities in violation of the Securities Act or any applicable state securities law (this representation
and warranty not limiting such Purchaser’s right to sell the Securities 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
any Debentures it will be an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under
the Securities Act.


 


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


 


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


 




    	 	20	 



     


    

 


(f)   Certain Transactions
and Confidentiality.  Other than consummating the transactions contemplated hereunder, such Purchaser has not directly
or indirectly, nor has any Person  acting on behalf of or pursuant to any understanding with such Purchaser, executed
any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that
such Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting
forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof.  Notwithstanding
the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions
made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth above shall
only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase
the Securities covered by this Agreement.  Other than to other Persons party to this Agreement, such Purchaser has maintained
the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this
transaction). Notwithstanding the foregoing, for avoidance of doubt, nothing contained herein shall constitute a representation
or warranty, or preclude any actions, with respect to the identification of the availability of, or securing of, available shares
to borrow in order to effect Short Sales or similar transactions in the future.


 


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.  


 


ARTICLE IV.


OTHER AGREEMENTS OF THE PARTIES


 


4.1   Transfer Restrictions.


 


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


 


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


 




    	 	21	 



     


    

 


[NEITHER] THIS SECURITY [NOR THE SECURITIES
INTO WHICH THIS SECURITY IS [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 [CONVERSION] OF THIS SECURITY] MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER
OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES
ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.  


 


The Company acknowledges and agrees that a
Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or grant a security
interest in some or all of the Securities to a financial institution that is an “accredited investor” as defined in
Rule 501(a) under the Securities Act and who agrees to be bound by the provisions of this Agreement and, if required under the
terms of such arrangement, such Purchaser may transfer pledged or secured Securities to the pledgees or secured parties.  Such
a pledge or transfer would not be subject to approval of the Company and no legal opinion of legal counsel of the pledgee, secured
party or pledgor shall be required in connection therewith.  Further, no notice shall be required of such pledge.  At
the appropriate Purchaser’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured
party of Securities may reasonably request in connection with a pledge or transfer of the Securities.  


 




    	 	22	 



     


    

 


(c)   Certificates evidencing
the Underlying Shares shall not contain any legend (including the legend set forth in Section 4.1(b) hereof): (i) while a registration
statement covering the resale of such security is effective under the Securities Act; (ii) following any sale of such Underlying
Shares pursuant to Rule 144; (iii) if such Underlying Shares are eligible for sale under Rule 144 without the need for current
public information; or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial
interpretations and pronouncements issued by the staff of the Commission).  The Company shall upon request of a Purchaser
and at such Purchaser’s expense cause its counsel to issue a legal opinion to the Transfer Agent promptly after any of the
events described in (i)-(iv) in the preceding sentence if required by the Transfer Agent to effect the removal of the legend hereunder
(with a copy to the applicable Purchaser and its broker).  If all or any portion of a Debenture is converted at a time
when there is an  effective registration statement to cover the resale of the Underlying Shares, or if such Underlying
Shares may be sold under Rule 144 without the need for current public information or if such legend is not otherwise required under
applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the
Commission) then such Underlying Shares shall be issued free of all legends.  The Company agrees that at such time as
such legend is no longer required under this Section 4.1(c), it will, no later than two Trading Days following the delivery by
a Purchaser to the Company or the Transfer Agent of a certificate representing Underlying Shares, as applicable, issued with a
restrictive legend (such third Trading Day, the “Legend Removal Date”), instruct the Transfer Agent to deliver or cause
to be delivered to such Purchaser a certificate representing such shares that is free from all restrictive and other legends.  The
Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer
set forth in this Section 4.  Certificates for Underlying Shares subject to legend removal hereunder shall be transmitted
by the Transfer Agent to the Purchaser by crediting the account of the Purchaser’s prime broker with the Depository Trust
Company System as directed by such Purchaser.


 


(d)  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, $1,000 per Trading Day for each Trading Day after the Legend Removal Date until such certificate is delivered without
a legend.  Nothing herein shall limit such Purchaser’s right to pursue actual damages for the Company’s failure
to deliver certificates representing any Securities as required by the Transaction Documents, and such Purchaser shall have the
right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance
and/or injunctive relief.  


 


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


 


4.3   Furnishing of Information;
Public Information.


 


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


 




    	 	23	 



     


    

 


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


 


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


 


4.5   Conversion and Exercise
Procedures.  The form of Notice of Conversion included in the Debentures sets forth the totality of the procedures required
of the Purchaser in order to convert the Debentures.  Without limiting the preceding sentences, no ink-original Notice
of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of
Conversion form be required in order to convert the Debenture.  No additional legal opinion, other information or instructions
shall be required of the Purchaser to convert the Debenture.  The Company shall honor conversions of the Debenture and
shall deliver Underlying Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents.


 




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


 


4.7   Non-Public Information.  Except
with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company covenants
and agrees that neither it, nor any other Person acting on its behalf, will provide any Purchaser or its agents or counsel with
any information that the Company believes constitutes material non-public information, unless prior thereto such Purchaser shall
have entered into a written agreement with the Company regarding the confidentiality and use of such information.  The
Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities
of the Company.


 


4.8   Use of Proceeds.  The
Company shall use the net proceeds hereunder for dispensary and cultivation license costs, dispensary and cultivation facility
build-out costs, Vaporfection marketing and product costs and for sales, engineering and general and administrative expenses of
the Company.


 


4.9   Indemnification of Purchasers.  Subject
to the provisions of this Section 4.9, the Company will indemnify and hold each Purchaser and its directors, officers, shareholders,
members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners
or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack
of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any and all
losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in
settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer
or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by
the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against the Purchaser Parties
in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such
Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is based
upon a breach of such Purchaser Party’s representations, warranties or covenants under the Transaction Documents or any agreements
or understandings such Purchaser Party may have with any such stockholder or any violations by such  Purchaser Party
of state or federal securities laws or any conduct by such Purchaser Party which constitutes fraud, gross negligence, willful misconduct
or malfeasance).  If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought
pursuant to this Agreement, such Purchaser Party shall promptly notify  the Company in writing, and the Company shall
have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party.  Any
Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment
thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time
to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material
conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the
Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel.  The Company
will not be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the
Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the
extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations,
warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents.  The
indemnification required by this Section 4.9 shall be made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or are incurred.  The indemnity agreements contained herein
shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others and any liabilities
the Company may be subject to pursuant to law.


 




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4.10   Reservation and Listing
of Securities.


 


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


 


(b)   Subject to clause
4.10(a), if, on any date, the number of authorized but unissued (and otherwise unreserved for parties other than the Purchaser)
shares of Common Stock is less than 200% of the Required Minimum on such date, then the Board of Directors shall use commercially
reasonable efforts to either cause a reverse split of the Common Stock or amend the Company’s certificate or articles of
incorporation to increase the number of authorized but unissued shares of Common Stock to at least 200% of the Required Minimum
at such time, as soon as possible and in any event not later than the 75th day after such date.


 


(c)   The Company shall,
if applicable: (i) in the time and manner required by the principal Trading Market, prepare and file with such Trading Market an
additional shares listing application covering a number of shares of Common Stock at least equal to the Required Minimum on the
date of such application; (ii) take all steps necessary to cause such shares of Common Stock to be approved for listing or quotation
on such Trading Market as soon as possible thereafter; (iii) provide to the Purchaser evidence of such listing or quotation; and
(iv) maintain the listing or quotation of such Common Stock on any date at least equal to the Required Minimum on such date on
such Trading Market or another Trading Market.


 




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4.11   Equal Treatment of Purchasers.  No
consideration (including any modification of any Transaction Document) shall be offered or paid to any Person to amend or consent
to a waiver or modification of any provision of this Agreement unless the same consideration is also offered to all of the parties
to this Agreement. Further, the Company shall not make any payment of principal or interest on the Debentures in amounts which
are disproportionate to the respective principal amounts outstanding on the Debentures at any applicable time.  For clarification
purposes, this provision constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each
Purchaser, and is intended for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers
acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise.


 


4.12   Certain Transactions
and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither it, nor any Affiliate
acting on its behalf or pursuant to any understanding with it will execute any Short Sales, of any of the Company’s securities
during the period commencing with the execution of this Agreement and ending on  the date that the Debentures are no
longer outstanding (provided that this provision shall not prohibit any sales made where a corresponding Notice of Conversion is
tendered to the Company and the shares received upon such conversion or exercise are used to close out such sale) (a “Prohibited
Short Sale”).  


 


4.13 Right of First Refusal.  


 


(a)   From the date
hereof until the date that is the 12-month anniversary of the last Closing, upon any issuance by the Company of Common Stock, Common
Stock Equivalents or debt for cash consideration, Indebtedness or a combination of units hereof (a “Subsequent Financing”),
the Purchaser shall have the right to participate in up to an amount of the Subsequent Financing equal to 100% of the Subsequent
Financing (the “Participation Maximum”) on the same terms, conditions and price provided for in the Subsequent Financing.   


 


(b) At least three (3) Trading Days
prior to the closing of the Subsequent Financing, the Company shall deliver to the Purchaser a written notice of its intention
to effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask the Purchaser if it wants to review the
details of such financing (such additional notice, a “Subsequent Financing Notice”).  Upon the request of
the Purchaser, and only upon a request by the Purchaser, for a Subsequent Financing Notice, the Company shall promptly, but no
later than one (1) Trading Day after such request, deliver a Subsequent Financing Notice to the Purchaser.  The Subsequent
Financing Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds intended
to be raised thereunder and the Person or Persons through or with whom such Subsequent Financing is proposed to be effected and
shall include a term sheet or similar document relating thereto as an attachment.   


 




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(c)  If the Purchaser desires
to participate in such Subsequent Financing, the Purchaser must provide written notice to the Company that the Purchaser is willing
to participate in the Subsequent Financing, the amount of the Purchaser’s participation, and representing and warranting
that the Purchaser has such funds ready, willing, and available for investment on the terms set forth in the Subsequent Financing
Notice.   


 


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


 


(e)   The Company must
provide the Purchaser with a second Subsequent Financing Notice, and the Purchaser will again have the right of participation set
forth above in this Section 4.13, if the Subsequent Financing subject to the initial Subsequent Financing Notice is not consummated
for any reason on the terms set forth in such Subsequent Financing Notice within thirty (30) Trading Days after the date of the
initial Subsequent Financing Notice.


 


(f)   The Company and
the Purchaser agree that if the Purchaser elects to participate in the Subsequent Financing, the transaction documents related
to the Subsequent Financing shall not include any term or provision whereby the Purchaser shall be required to agree to any restrictions
on trading as to any of the Securities purchased hereunder or be required to consent to any amendment to or termination of, or
grant any waiver, release or the like under or in connection with, this Agreement, without the prior written consent of such Purchaser.


 


(g)   Notwithstanding
anything to the contrary in this Section 4.13 and unless otherwise agreed to by the Purchaser, the Company shall either confirm
in writing to the Purchaser that the transaction with respect to the Subsequent Financing has been abandoned or shall publicly
disclose its intention to issue the securities in the Subsequent Financing, in either case in such a manner such that such Purchaser
will not be in possession of any material, non-public information, by the tenth (10th) Trading Day following delivery
of the Subsequent Financing Notice.  If by such tenth (10th) Trading Day, no public disclosure regarding a
transaction with respect to the Subsequent Financing has been made, and no notice regarding the abandonment of such transaction
has been received by the Purchaser, such transaction shall be deemed to have been abandoned and the Purchaser shall not be deemed
to be in possession of any material, non-public information with respect to the Company or any of its Subsidiaries.      


 


(h)   Notwithstanding
the foregoing, this Section 4.13 shall not apply in respect of an Exempt Issuance.


 




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4.14 Securities Laws Disclosure; Publicity.  The
Company shall (a) by 9:30 a.m. (New York City time) on the 2nd Trading Day immediately following the date hereof, issue a press
release  disclosing the material terms of the transactions contemplated hereby, and (b) by the 4th Trading
Day immediately following the date hereof, file a Current Report on Form 8-K, including the Transaction Documents as exhibits thereto
(if required pursuant to the Exchange Act), with the Commission within the time required by the Exchange Act.  From and
after the issuance of such 8-K, the Company represents to the Purchaser that it shall have publicly disclosed all material, non-public
information delivered to any of the Purchasers by the Company or any of its Subsidiaries, or any of their respective officers,
directors, employees or agents in connection with the transactions contemplated by the Transaction Documents. The Company and the
Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby,
and neither the Company nor the Purchaser shall issue any such press release nor otherwise make any such public statement without
the prior consent of the Company, with respect to any press release of the Purchaser, or without the prior consent of the  Purchaser,
with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure
is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public
statement or communication.  Notwithstanding the foregoing, the Company shall not publicly disclose the name of the Purchaser,
or include the name of the Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the
prior written consent of the Purchaser, except: (a) as required by federal securities law in connection with any registration statement
contemplated by this Agreement and (b) to the extent such disclosure is required by law or Trading Market regulations, in which
case the Company shall provide the Purchaser with prior notice of such disclosure permitted under this clause (b). 


 


4.15 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 the Purchaser. The Company shall take such action as the Company shall reasonably determine is necessary
in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchaser at the applicable Closing under applicable
securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actions promptly
upon request of the Purchaser.


 


4.16 Variable Rate Transactions.  From
the date hereof until such time that the Purchaser and its Affiliates no longer hold at least $2,000,000 of debentures of the
Company in the aggregate; provided that at such time the Company has reserved from its duly authorized shares of Common Stock
for issuance to the Purchaser and its Affiliates a number of shares of Common Stock equal to at least 300% of the Required Minimum,
neither the Company nor any of its Subsidiaries shall, other than with a pre-existing investor in the Company, effect or enter
into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents
(or a combination of units thereof) involving a Variable Rate Transaction without the prior written consent of the Purchaser.
“Variable Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity
securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional shares of Common
Stock either (A) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with,
the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity
securities or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial
issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related
to the business of the Company or the market for the Common Stock or (ii) enters into any agreement, including, but not limited
to, an equity line of credit, whereby the Company may issue securities at a future determined price.  In the event the
Company or any of its Subsidiaries does not follow the provisions of this Section 4.16, then the Purchaser shall be entitled to
obtain injunctive relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to
collect damages.


 




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ARTICLE V.


MISCELLANEOUS


 


5.1   Termination.  This
Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect whatsoever
on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the First Closing has
not been consummated on or before June 22, 2016; provided, however, that such termination will not affect the right of any party
to sue for any breach by any other party (or parties).


 


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


 


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


 


5.4   Notices.  Any
and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of: (i) the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number set forth on the signature pages attached hereto at or prior to 12:00 p.m. (New York City time)
on a Trading Day; (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 12:00
p.m. (New York City time) on any Trading Day; (iii) the second (2nd) Trading Day following the date of mailing, if sent
by U.S. nationally recognized overnight courier service; or (iv) upon actual  receipt by the party to whom such notice
is required to be given.  The address for such notices and communications shall be as set forth on the signature pages
attached hereto.


 




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5.5   Amendments; Waivers.  No
provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case
of an amendment, by the Company and the Purchasers holding at least 67% in interest of the Securities then outstanding or, in the
case of a waiver, by the party against whom enforcement of any such waived provision is sought.  No waiver of any default
with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future
or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay
or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.


 


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


 


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


 


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


 


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.  Each party agrees that all legal proceedings concerning the interpretations, enforcement and
defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party
hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of New York.  Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with
respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit,
action or proceeding is improper or is an inconvenient venue for such proceeding.  Each party hereby irrevocably waives
personal service of process and consents to process being served in any such  suit, action or proceeding by mailing a
copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process
and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any other
manner permitted by law.   If either party shall commence an action, suit 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.


 




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


 


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


 


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


 


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


 




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


 


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


 


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


 


5.17   Usury.  To
the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim, and
will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any
time hereafter in force, in connection with any 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.


 




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


 


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


 


5.21   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.


 


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


 


5.23   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.


 




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(Signature Pages Follow)


 




    	 	35	 



     


    

 





 


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.


 


	Notis Global, Inc.	 	Address for Notice:
	 	 	 	 
	By:	/s/ Jeffrey Goh	 	Fax:
	Name:	Jeffrey Goh	 	 
	Title:	CEO	 	 


 


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


 


	 	 
	 	 
	 	 
	 	 


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK



SIGNATURE PAGE FOR PURCHASER FOLLOWS] 


 




    	 	36	 



     


    

 


[PURCHASER SIGNATURE PAGES TO SECURITIES
PURCHASE AGREEMENT] 


 


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


 


	Name of Purchaser: Redwood Management,
    LLC	 
	 	 
	Signature of Authorized Signatory of Purchaser:	/s/ John DeNobile


 


	Name of Authorized Signatory: 	John DeNobile


 


	Title of Authorized
	 Signatory:	Manager	 
	 	 
	Email Address of Authorized
	Signatory:	 	 
	 	 
	Facsimile Number of Authorized
	Signatory:	NA	 
	 	 
	Address for Notice to Purchaser:
	 	 
	Address for Delivery of Securities to Purchaser (if not same as address for notice):
	 	 
	Closing Principal Amount:
	 	 
	Closing Subscription Amount:
	 	 
	EIN Number:	 	 




 









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