Exhibit 10.2


 


SECURITIES PURCHASE AGREEMENT


 


This SECURITIES
PURCHASE AGREEMENT (the “Agreement”), dated as of March 20, 2015, by and between UBIQUITY, INC., a Nevada
corporation, with headquarters located at 9801 Research Drive, Irvine, California 92618 (the “Company”), and R-SQUARED
PARTNERS, LLC, a Delaware limited liability company, with its address at 425 East 63rd
Street, #E4K, New York, New York, 10065 (the “Buyer”).


 


WHEREAS:


 


A. The Company and
the Buyer are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section
4(a)(2) of the Securities Act of 1933, as amended (the “1933 Act”) and Rule 506(b) promulgated by the United States
Securities and Exchange Commission (the “SEC”) under the 1933 Act;


 


B. Buyer desires to
purchase from the Company, and the Company desires to issue and sell to the Buyer, upon the terms and conditions set forth in this
Agreement, a Senior Convertible Promissory Note of the Company, in the aggregate principal amount of $140,250.00 (together with
any note(s) issued in replacement thereof or as a dividend thereon or otherwise with respect thereto in accordance with the terms
thereof, in the form attached hereto as Exhibit A, the “Note”), convertible into shares of common stock, $0.001
par value per share, of the Company (the “Common Stock”), upon the terms and subject to the limitations and conditions
set forth in such Note;


 


C. The Buyer wishes
to purchase, upon the terms and conditions stated in this Agreement, such principal amount of the Note as is set forth immediately
below its name on the signature pages hereto; and


 


D. The Company wishes
to issue 37,500 restricted shares of Common Stock to the Buyer as additional consideration for the purchase of the Note by the
Buyer (the “Issuance Shares”).


 


NOW THEREFORE,
in consideration of the foregoing and of the agreements and covenants herein contained, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the Company and the Buyer hereby agree as follows:


 


1. Purchase and Sale of Note.


 


a. Purchase of Note. On
the Closing Date (as defined below), the Company shall issue and sell to the Buyer, and the Buyer agrees to purchase from the Company,
the Note in the principal amount as is set forth immediately below the Buyer’s name on the signature pages hereto.


 


b. Form of Payment. On
the Closing Date: (i) the Buyer shall pay the purchase price for the Note to be issued and sold to it at the Closing (as defined
below) (the “Purchase Price”) by wire transfer of immediately available funds to the Company, in accordance with the
Company’s written wiring instructions, against delivery of the Note in an amount equal to the Actual Amount of Purchase Price
of Note as is set forth below the Buyer’s name on the signature pages hereto, and (ii) the Company shall deliver such duly
executed Note on behalf of the Company, to the Buyer, against delivery of such Purchase Price.


 


c. Closing Date. Subject
to the satisfaction (or written waiver) of the conditions thereto set forth in Section 6 and Section 7 below, the date and time
of the issuance and sale of the Note pursuant to this Agreement (the “Closing Date”) shall be 4:00 PM, Eastern Time
on the date first written above, or such other mutually agreed upon time.


 


d. Closing.
The closing of the transactions contemplated by this Agreement (the “Closing”) shall occur on the Closing Date at such
location as may be agreed to by the parties (including via exchange of electronic signatures). Concurently with the Closing, the
Company shall be permitted to sell promissory notes indentical to the Note to third party investors up to an aggregate additional
principal amount (including original issuance discount) of $140,250.00.


 






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1A.Issuance Shares. 
Within three business days of the Closing Date, the Company shall issue the Issuance Shares to the Buyer. As used in this Agreement,
the term “business day” shall mean any day other than a Saturday, Sunday or a day on which commercial banks in the
city of New York, New York are authorized or required by law or executive order to remain closed.


 


2. Buyer’s Representations
and Warranties. The Buyer represents and warrants to the Company as of the Closing Date that:


 


a. Investment Purpose.
As of the Closing Date, the Buyer is purchasing the Note, the Issuance Shares and the shares of Common Stock issuable upon conversion
of or otherwise pursuant to the Note (including, without limitation, the Additional Conversion Shares (as defined in the Note)
and such additional shares of Common Stock, if any, as are issuable on account of interest on the Note pursuant to this Agreement,
such shares of Common Stock being collectively referred to herein as the “Conversion Shares” and, collectively with
the Note and the Issuance Shares, the “Securities”) for its own account and not with a present view towards the public
sale or distribution thereof, except pursuant to sales registered or exempted from registration under the 1933 Act; provided, however,
that by making the representations herein, the Buyer does not agree to hold any of the Securities for any minimum or other specific
term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement
or an exemption under the 1933 Act.


 


b. Accredited Investor
Status. The Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D (an “Accredited
Investor”).


 


c. Reliance on Exemptions. The
Buyer understands that the Securities are being offered and sold to it in reliance upon specific exemptions from the registration
requirements of United States federal and state securities laws and that the Company is relying upon the truth and accuracy of,
and the Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Buyer
set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire the Securities.


 


d. Information. The
Buyer and its advisors, if any, have been, and for so long as the Note remains outstanding will continue to be, furnished with
all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of
the Securities which have been requested by the Buyer or its advisors. The Buyer and its advisors, if any, have been, and for so
long as the Note remains outstanding will continue to be, afforded the opportunity to ask questions of the Company regarding its
business and affairs. Notwithstanding the foregoing, the Company has not disclosed to the Buyer any material nonpublic information
regarding the Company or otherwise and will not disclose such information unless such information is disclosed to the public prior
to or promptly following such disclosure to the Buyer. Neither such inquiries nor any other due diligence investigation conducted
by Buyer or any of its advisors or representatives shall modify, amend or affect Buyer’s right to rely on the Company’s
representations and warranties contained in Section 3 below.


 


e. Governmental
Review. The Buyer understands that no United States federal or state agency or any other government or governmental agency
has passed upon or made any recommendation or endorsement of the Securities.


 


f. Transfer
or Re-sale. The Buyer understands that (i) the sale or resale of the Securities has not been and is not being registered
under the 1933 Act or any applicable state securities laws, and the Securities may not be transferred unless (a) the Securities
are sold pursuant to an effective registration statement under the 1933 Act, (b) the Buyer shall have delivered to the Company,
at the cost of the Company, an opinion of counsel (which may be the Legal Counsel Opinion (as defined below)) that shall be in
form, substance and scope customary for opinions of counsel in comparable transactions to the effect that the Securities to be
sold or transferred may be sold or transferred pursuant to an exemption from such registration, which opinion shall be accepted
by the Company, (c) the Securities are sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under
the 1933 Act (or a successor rule) (“Rule 144”)) of the Buyer who agrees to sell or otherwise transfer the Securities
only in accordance with this Section 2(f) and who is an Accredited Investor, (d) the Securities are sold pursuant to Rule 144,
or (e) the Securities are sold pursuant to Regulation S under the 1933 Act (or a successor rule) (“Regulation S”),
and the Buyer shall have delivered to the Company, at the cost of the Company, an opinion of counsel that shall be in form, substance
and scope customary for opinions of counsel in corporate transactions, which opinion shall be accepted by the Company; (ii) any
sale of such Securities made in reliance on Rule 144 may be made only in accordance with the terms of said Rule and further, if
said Rule is not applicable, any re-sale of such Securities under circumstances in which the seller (or the person through whom
the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some
other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other
person is under any obligation to register such Securities under the 1933 Act or any state securities laws or to comply with
the terms and conditions of any exemption thereunder (in each case). Notwithstanding the foregoing or anything else contained herein
to the contrary, the Securities may be pledged in connection with a bona fide margin account or other lending
arrangement secured by the Securities, and such pledge of Securities shall not be deemed to be a transfer, sale or assignment of
the Securities hereunder, and the Buyer in effecting such pledge of Securities shall be not required to provide the Company with
any notice thereof or otherwise make any delivery to the Company pursuant to this Agreement or otherwise.


 






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g. Legends. The
Buyer understands that until such time as the Issuance Shares, the Note and, upon conversion of the Note in accordance with its
respective terms, the Conversion Shares, have been registered under the 1933 Act or may be sold pursuant to Rule 144, Rule 144A
under the 1933 Act or Regulation S without any restriction as to the number of securities as of a particular date that can then
be immediately sold, the Securities may bear a restrictive legend in substantially the following form (and a stop-transfer order
may be placed against transfer of the certificates for such Securities):


 


“NEITHER THE ISSUANCE AND
SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE/EXERCISABLE]
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN
A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144, RULE 144A
OR REGULATION S UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”


 


The legend set forth
above shall be removed and the Company shall issue a certificate for the applicable shares of Common Stock without such legend
to the holder of any Security upon which it is stamped or (as requested by such holder) issue the applicable shares of Common Stock
to such holder by electronic delivery by crediting the account of such holder’s broker with The Depository Trust Company
(“DTC”), if, unless otherwise required by applicable state securities laws, (a) such Security is registered
for sale under an effective registration statement filed under the 1933 Act or otherwise may be sold pursuant to Rule 144, Rule
144A or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately
sold, or (b) the Company or the Holder provides the Legal Counsel Opinion (as contemplated by and in accordance with Section 4(n)
hereof) to the effect that a public sale or transfer of such Security may be made without registration under the 1933 Act, which
opinion shall be accepted by the Company so that the sale or transfer is effected. The Company shall be responsible for the fees
of its transfer agent and all DTC fees associated with any such issuance. The Buyer agrees to sell all Securities, including those
represented by a certificate(s) from which the legend has been removed, in compliance with applicable prospectus delivery
requirements, if any. In the event that the Company does not accept the opinion of counsel provided by the Buyer with respect to
the transfer of Securities pursuant to an exemption from registration, such as Rule 144, Rule 144A or Regulation S, at the Deadline
(as defined in the Note), it will be considered an Event of Default pursuant to Section 3.2 of the Note.


 


h. Authorization;
Enforcement. This Agreement has been duly and validly authorized by the Buyer and have been duly executed and delivered
on behalf of the Buyer, and this Agreement constitutes a valid and binding agreement of the Buyer enforceable in accordance with
its terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors’ rights generally and except as may be limited by the exercise of judicial
discretion in applying principles of equity.


 






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i. Residency. The
Buyer is a resident of the jurisdiction set forth immediately below the Buyer’s name on the signature pages hereto.


 


3. Representations
and Warranties of the Company. The Company represents and warrants to the Buyer as of the Closing Date that:


 


a. Organization
and Qualification. The Company and each of its Subsidiaries (as defined below), if any, is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction in which it is incorporated, with full power and authority
(corporate and other) to own, lease, use and operate its properties and to carry on its business as and where now owned, leased,
used, operated and conducted. Schedule 3(a), if attached hereto, sets forth a list of all of the Subsidiaries of the Company and
the jurisdiction in which each is incorporated. The Company and each of its Subsidiaries is duly qualified as a foreign corporation
to do business and is in good standing in every jurisdiction in which its ownership or use of property or the nature of the business
conducted by it makes such qualification necessary except where the failure to be so qualified or in good standing would not have
a Material Adverse Effect. “Material Adverse Effect” means any material adverse effect on the business, operations,
assets, financial condition or prospects of the Company or its Subsidiaries, if any, taken as a whole, or on the transactions contemplated
hereby or by the agreements or instruments to be entered into in connection herewith. “Subsidiaries” means any corporation
or other organization, whether incorporated or unincorporated, in which the Company owns, directly or indirectly, any equity or
other ownership interest.


 


b. Authorization;
Enforcement. (i) The Company has all requisite corporate power and authority to enter into and perform this Agreement
and the Note and to consummate the transactions contemplated hereby and thereby and to issue the Securities, in accordance with
the terms hereof and thereof, (ii) the execution and delivery of this Agreement, the Issuance Shares, the Note and (if applicable)
the Conversion Shares by the Company and the consummation by it of the transactions contemplated hereby and thereby (including
without limitation, the issuance of the Note, the Issuance Shares, and the issuance and reservation for issuance of the Conversion
Shares issuable upon conversion or exercise of the Note) have been duly authorized by the Company’s Board of Directors and
no further consent or authorization of the Company, its Board of Directors, or its shareholders is required, (iii) this Agreement
and the Note (together with any other instruments documents executed in connection herewith) have been duly executed and delivered
by the Company by its authorized representative, and such authorized representative is the true and official representative
with authority to sign this Agreement, the Note, and the other instruments documents executed in connection herewith and bind the
Company accordingly, and (iv) this Agreement and the Note each constitute, and upon execution and delivery by the Company of the
Note, each of such instruments will constitute, a legal, valid and binding obligation of the Company enforceable against the Company
in accordance with its terms.


 


c. Capitalization;
Governing Documents. As of December 31, 2014, the authorized capital stock of the Company consists of: 800,000,000 authorized
shares of Common Stock, of which 109,623,000 shares were issued and outstanding, and 10,000,000 authorized shares of preferred
stock, none of which were issued and outstanding. All of such outstanding shares of capital stock are, or upon issuance will be,
duly authorized, validly issued, fully paid and non-assessable. No shares of capital stock of the Company are subject to preemptive
rights or any other similar rights of the shareholders of the Company or any liens or encumbrances imposed through the actions
or failure to act of the Company. As of the effective date of this Agreement, other than as publicly announced prior to such date
and reflected in the SEC filings of the Company (i) there are no outstanding options, warrants, scrip, rights to subscribe for,
puts, calls, rights of first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever
relating to, or securities or rights convertible into or exchangeable for any shares of capital stock of the Company or any of
its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue additional shares
of capital stock of the Company or any of its Subsidiaries, (ii) there are no agreements or arrangements under which the Company
or any of its Subsidiaries is obligated to register the sale of any of its or their securities under the 1933 Act and (iii) there
are no anti-dilution or price adjustment provisions contained in any security issued by the Company (or in any agreement providing
rights to security holders) that will be triggered by the issuance of any of the Securities. The Company has furnished to the Buyer
true and correct copies of the Company’s Certificate of Incorporation as in effect on the date hereof (“Certificate
of Incorporation”), the Company’s By-laws, as in effect on the date hereof (the “By-laws”), and the terms
of all securities convertible into or exercisable for Common Stock of the Company and the material rights of the holders thereof
in respect thereto.


 






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d. Issuance of Conversion
Shares. The Conversion Shares are duly authorized and reserved for issuance and, upon conversion of the Note in accordance
with its terms, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances
with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders of the
Company and will not impose personal liability upon the holder thereof.


 


e. Issuance of Issuance
Shares. The Issuance Shares are duly authorized and will be validly issued, fully paid and non-assessable, and free from
all taxes, liens, claims and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other
similar rights of shareholders of the Company and will not impose personal liability upon the holder thereof.


 


f. Acknowledgment
of Dilution. The Company understands and acknowledges the potentially dilutive effect to the Common Stock upon the issuance
of the Issuance Shares and, upon conversion of the Note, the Conversion Shares. The Company further acknowledges that its obligation
to issue Issuance Shares and, upon conversion of the Note, the Conversion Shares, in accordance with this Agreement and the Note
is absolute and unconditional regardless of the dilutive effect that such issuance may have on the ownership interests of other
shareholders of the Company.


 


g. No Conflicts. The
execution, delivery and performance of this Agreement and the Note by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby (including, without limitation, the issuance of the Issuance Shares and the issuance and reservation
for issuance of the Conversion Shares) will not (i) conflict with or result in a violation of any provision of the Certificate
of Incorporation or By-laws, or (ii) violate or conflict with, or result in a breach of any provision of, or constitute a default
(or an event which with notice or lapse of time or both could become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture, patent, patent license or instrument to which the Company
or any of its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including
federal and state securities laws and regulations and regulations of any self-regulatory organizations to which the Company or
its securities are subject) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company
or any of its Subsidiaries is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect). Neither the Company
nor any of its Subsidiaries is in violation of its Certificate of Incorporation, By-laws or other organizational documents and
neither the Company nor any of its Subsidiaries is in default (and no event has occurred which with notice or lapse of time or
both could put the Company or any of its Subsidiaries in default) under, and neither the Company nor any of its Subsidiaries has
taken any action or failed to take any action that would give to others any rights of termination, amendment, acceleration or cancellation
of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party or by which any property
or assets of the Company or any of its Subsidiaries is bound or affected, except for possible defaults as would not, individually
or in the aggregate, have a Material Adverse Effect. The businesses of the Company and its Subsidiaries, if any, are not being
conducted, and shall not be conducted so long as the Buyer owns any of the Securities, in violation of any law, ordinance or regulation
of any governmental entity. Except as specifically contemplated by this Agreement and as required under the 1933 Act and any applicable
state securities laws, the Company is not required to obtain any consent, authorization or order of, or make any filing or registration
with, any court, governmental agency, regulatory agency, self-regulatory organization or stock market or any third party in order
for it to execute, deliver or perform any of its obligations under this Agreement and the Note in accordance with the terms hereof
or thereof or to issue and sell the Note in accordance with the terms hereof and to issue Issuance Shares and, upon conversion
of the Note, Conversion Shares. All consents, authorizations, orders, filings and registrations which the Company is required to
obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof. If the Company is
listed on the Over-the-Counter Bulletin Board, the OTCQB Market operated by OTC Markets Group, Inc. or any successor to such markets
(collectively, the “OTCBB”), the Company is not in violation of the listing requirements of the OTCBB and does not
reasonably anticipate that the Common Stock will be delisted by the OTCBB in the foreseeable future. The Company and its Subsidiaries
are unaware of any facts or circumstances which might give rise to any of the foregoing.


 






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h. SEC Documents;
Financial Statements. The Company has timely filed all reports, schedules, forms, statements and other documents required
to be filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “1934
Act”) (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements and
schedules thereto and documents (other than exhibits to such documents) incorporated by reference therein, being hereinafter referred
to herein as the “SEC Documents”). As of their respective dates, the SEC Documents complied in all material respects
with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents,
and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. None of the statements made in any such SEC Documents is, or has been, required to
be amended or updated under applicable law (except for such statements as have been amended or updated in subsequent filings prior
the date hereof). As of their respective dates, the financial statements of the Company included in the SEC Documents complied
as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC
with respect thereto. Such financial statements have been prepared in accordance with United States generally accepted accounting
principles, consistently applied, during the periods involved and fairly present in all material respects the consolidated financial
position of the Company and its consolidated Subsidiaries as of the dates thereof and the consolidated results of their operations
and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments).
Except as set forth in the financial statements of the Company included in the SEC Documents, the Company has no liabilities, contingent
or otherwise, other than (i) liabilities incurred in the ordinary course of business subsequent to September 30, 2014, and (ii)
obligations under contracts and commitments incurred in the ordinary course of business and not required under generally accepted
accounting principles to be reflected in such financial statements, which, individually or in the aggregate, are not material to
the financial condition or operating results of the Company. The Company is subject to the reporting requirements of the 1934 Act.
The Company has never been a “shell company” as described in Rule 144(i)(1)(i).


 


i. Absence of Certain
Changes.  Since September 30, 2014, there has been no material adverse change and no material adverse development in the
assets, liabilities, business, properties, operations, financial condition, results of operations, prospects or 1934 Act reporting
status of the Company or any of its Subsidiaries.


 


j. Absence
of Litigation. There is no action, suit, claim, proceeding, inquiry or investigation before or by any court, public board,
government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its Subsidiaries,
threatened against or affecting the Company or any of its Subsidiaries, or their officers or directors in their capacity as such,
that could have a Material Adverse Effect. The SEC Documents contain a complete list and summary description of any pending or,
to the knowledge of the Company, threatened proceeding against or affecting the Company or any of its Subsidiaries, without regard
to whether it would have a Material Adverse Effect. The Company and its Subsidiaries are unaware of any facts or circumstances
which might give rise to any of the foregoing.


 


k. Intellectual
Property. The Company and each of its Subsidiaries owns or possesses the requisite licenses or rights to use all patents, patent
applications, patent rights, inventions, know-how, trade secrets, trademarks, trademark applications, service marks, service names,
trade names and copyrights (“Intellectual Property”) necessary to enable it to conduct its business as now operated
(and, as presently contemplated to be operated in the future); there is no claim or action by any person pertaining to, or proceeding
pending, or to the Company’s knowledge threatened, which challenges the right of the Company or of a Subsidiary with respect
to any Intellectual Property necessary to enable it to conduct its business as now operated (and, as presently contemplated to
be operated in the future); to the best of the Company’s knowledge, the Company’s or its Subsidiaries’ current
and intended products, services and processes do not infringe on any Intellectual Property or other rights held by any person;
and the Company is unaware of any facts or circumstances which might give rise to any of the foregoing. The Company and each of
its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of their Intellectual
Property.


 






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l. No
Materially Adverse Contracts, Etc. Neither the Company nor any of its Subsidiaries is subject to any charter, corporate
or other legal restriction, or any judgment, decree, order, rule or regulation which in the judgment of the Company’s officers
has or is expected in the future to have a Material Adverse Effect. Neither the Company nor any of its Subsidiaries is a party
to any contract or agreement which in the judgment of the Company’s officers has or is expected to have a Material Adverse
Effect.


 


m. Tax
Status. The Company and each of its Subsidiaries has made or filed all federal, state and foreign income and all other
tax returns, reports and declarations required by any jurisdiction to which it is subject (unless and only to the extent that the
Company and each of its Subsidiaries has set aside on its books provisions reasonably adequate for the payment of all unpaid and
unreported taxes) and has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined
to be due on such returns, reports and declarations, except those being contested in good faith and has set aside on its books
provisions reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction,
and the officers of the Company know of no basis for any such claim. The Company has not executed a waiver with respect to the
statute of limitations relating to the assessment or collection of any foreign, federal, state or local tax. None of the Company’s
tax returns is presently being audited by any taxing authority.


 


n. Transactions
with Affiliates. Except for arm’s length transactions pursuant to which the Company or any of its Subsidiaries makes
payments in the ordinary course of business upon terms no less favorable than the Company or any of its Subsidiaries could obtain
from third parties and other than the grant of stock options described in the SEC Documents, none of the officers, directors, or
employees of the Company is presently a party to any transaction with the Company or any of its Subsidiaries (other than for services
as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services
to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Company, any corporation, partnership, trust or other entity in which any
officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.


 


o. Disclosure. All
information relating to or concerning the Company or any of its Subsidiaries set forth in this Agreement and provided to the Buyer
pursuant to Section 2(d) hereof and otherwise in connection with the transactions contemplated hereby is true and correct in all
material respects and the Company has not omitted to state any material fact necessary in order to make the statements made herein
or therein, in light of the circumstances under which they were made, not misleading. No event or circumstance has occurred or
exists with respect to the Company or any of its Subsidiaries or its or their business, properties, prospects, operations or financial
conditions, which, under applicable law, rule or regulation, requires public disclosure or announcement by the Company but which
has not been so publicly announced or disclosed (assuming for this purpose that the Company’s reports filed under the 1934
Act are being incorporated into an effective registration statement filed by the Company under the 1933 Act).


 


p. Acknowledgment
Regarding Buyer’s Purchase of Securities. The Company acknowledges and agrees that the Buyer is acting solely in
the capacity of arm’s length purchasers with respect to this Agreement and the transactions contemplated hereby. The Company
further acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity)
with respect to this Agreement and the transactions contemplated hereby and any statement made by the Buyer or any of its respective
representatives or agents in connection with this Agreement and the transactions contemplated hereby is not advice or a recommendation
and is merely incidental to the Buyer’s purchase of the Securities. The Company further represents to the Buyer that the
Company’s decision to enter into this Agreement has been based solely on the independent evaluation of the Company and its
representatives.


 


q. No
Integrated Offering. 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 in any security or solicited any offers to buy any security under circumstances
that would require registration under the 1933 Act of the issuance of the Securities to the Buyer. The issuance of the Securities
to the Buyer will not be integrated with any other issuance of the Company’s securities (past, current or future) for purposes
of any shareholder approval provisions applicable to the Company or its securities.


 






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r. No
Brokers. The Company has taken no action which would give rise to any claim by any person for brokerage commissions, transaction
fees or similar payments relating to this Agreement or the transactions contemplated hereby.


 


s. Permits;
Compliance. The Company and each of its Subsidiaries is in possession of all franchises, grants, authorizations, licenses,
permits, easements, variances, exemptions, consents, certificates, approvals and orders necessary to own, lease and operate its
properties and to carry on its business as it is now being conducted (collectively, the “Company Permits”), and there
is no action pending or, to the knowledge of the Company, threatened regarding suspension or cancellation of any of the Company
Permits. Neither the Company nor any of its Subsidiaries is in conflict with, or in default or violation of, any of the Company
Permits, except for any such conflicts, defaults or violations which, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect. Since September 30, 2014, neither the Company nor any of its Subsidiaries has received
any notification with respect to possible conflicts, defaults or violations of applicable laws, except for notices relating to
possible conflicts, defaults or violations, which conflicts, defaults or violations would not have a Material Adverse Effect.


 


t. Environmental
Matters.


 


(i) There are, to the
Company’s knowledge, with respect to the Company or any of its Subsidiaries or any predecessor of the Company, no past
or present violations of Environmental Laws (as defined below), releases of any material into the environment, actions, activities,
circumstances, conditions, events, incidents, or contractual obligations which may give rise to any common law environmental liability
or any liability under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 or similar federal, state,
local or foreign laws and neither the Company nor any of its Subsidiaries has received any notice with respect to any of the foregoing,
nor is any action pending or, to the Company’s knowledge, threatened in connection with any of the foregoing. The term ”Environmental
Laws” means all federal, state, local or foreign laws relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, groundwater, land surface or subsurface strata), including, without
limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants contaminants, or toxic
or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all authorizations, codes, decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters,
orders, permits, plans or regulations issued, entered, promulgated or approved thereunder.


 


(ii) Other than those
that are or were stored, used or disposed of in compliance with applicable law, no Hazardous Materials are contained on or about
any real property currently owned, leased or used by the Company or any of its Subsidiaries, and no Hazardous Materials were released
on or about any real property previously owned, leased or used by the Company or any of its Subsidiaries during the period the
property was owned, leased or used by the Company or any of its Subsidiaries, except in the normal course of the Company’s
or any of its Subsidiaries’ business.


 


(iii) There are no underground
storage tanks on or under any real property owned, leased or used by the Company or any of its Subsidiaries that are not in compliance
with applicable law.


 


u. Title to Property. The
Company and its Subsidiaries have good and marketable title in fee simple to all real property and good and marketable title to
all personal property owned by them which is material to the business of the Company and its Subsidiaries, in each case free and
clear of all liens, encumbrances and defects except such as are described in Schedule 3(u), if attached hereto, or such as would
not have a Material Adverse Effect. Any real property and facilities held under lease by the Company and its Subsidiaries are held
by them under valid, subsisting and enforceable leases with such exceptions as would not have a Material Adverse Effect.


 






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v. Insurance. The
Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and
its Subsidiaries are engaged. Neither the Company nor any such Subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as
may be necessary to continue its business at a cost that would not have a Material Adverse Effect. Upon written request the Company
will provide to the Buyer true and correct copies of all policies relating to directors’ and officers’ liability coverage,
errors and omissions coverage, and commercial general liability coverage.


 


w. Internal Accounting
Controls. The Company and each of its Subsidiaries maintain a system of internal accounting controls sufficient, in the
judgment of the Company’s board of directors, to provide reasonable assurance that (i) transactions are executed in accordance
with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles 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.


 


x. Foreign Corrupt
Practices. Neither the Company, nor any of its Subsidiaries, nor any director, officer, agent, employee or other person
acting on behalf of the Company or any Subsidiary has, in the course of his actions for, or on behalf of, the Company, used any
corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; made
any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; violated
or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or made any bribe, rebate, payoff,
influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee.


 


y. Solvency. 
The Company (after giving effect to the transactions contemplated by this Agreement) is solvent (i.e., its assets
have a fair market value in excess of the amount required to pay its probable liabilities on its existing debts as they become
absolute and matured) and currently the Company has no information that would lead it to reasonably conclude that the Company would
not, after giving effect to the transaction contemplated by this Agreement, have the ability to, nor does it intend to take any
action that would impair its ability to, pay its debts from time to time incurred in connection therewith as such debts mature.
The Company’s financial statements for its most recent fiscal year end and interim financial statements have been prepared
assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities
in the normal course of business.


 


z. No Investment
Company. The Company is not, and upon the issuance and sale of the Securities as contemplated by this Agreement will not
be an “investment company” required to be registered under the Investment Company Act of 1940 (an “Investment
Company”). The Company is not controlled by an Investment Company.


 


aa. No Off Balance
Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company or any of its Subsidiaries
and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its 1934 Act filings
and is not so disclosed or that otherwise could be reasonably likely to have a Material Adverse Effect.


 


bb. No Disqualification
Events. None of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer
of the Company participating in the offering hereunder, any beneficial owner of 20% or more of the Company’s outstanding
voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under
the 1933 Act) connected with the Company in any capacity at the time of sale (each, an “Issuer Covered Person”) is
subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the 1933 Act (a
“Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has
exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event.


 






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cc. Manipulation
of Price. 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, or that could reasonably be expected to cause or 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.


 


dd. Breach of Representations
and Warranties by the Company.  The Company agrees that if the Company breaches any of the representations or warranties
set forth in this Section 3 and in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be
considered an Event of Default under Section 3.4 of the Note.


 


4. ADDITIONAL COVENANTS, AGREEMENTS AND
ACKNOWLEDGEMENTS.


 


a. Best Efforts. The
parties shall use their best efforts to satisfy timely each of the conditions described in Section 6 and 7 of this Agreement.


 


b. Reserved. 


 


c. Use of Proceeds. The
Company shall use the proceeds for general working capital purposes and not in violation or contravention of any applicable law,
rule or regulation.


 


d. Right of Participation
in Subsequent Offerings.


 


i.From
the date first written above until the earlier to occur of (A) Maturity Date and (B) that date that the Note (including all principal,
interest, fees and expenses related thereto) is earlier fully repaid or converted, the Company will not, (i) directly or indirectly,
offer, sell, grant any option to purchase, or otherwise dispose of (or announce any offer, sale, grant or any option to purchase
or other disposition of) any of its or its Subsidiaries' debt, equity or equity equivalent securities, including without limitation
any debt, preferred shares or other instrument or security that is, at any time during its life and under any circumstances, convertible
into or exchangeable or exercisable for Common Stock (any such offer, sale, grant, disposition or announcement being referred to
as a "Subsequent Placement") or (ii) enter into any definitive agreement with regard to the foregoing, in each case unless
the Company shall have first complied with this Section 4(d). It is agreed that in order for a Subsequent Placement to qualify
as such for purposes of this Section 4(d), the gross proceeds received or to be received by the Company must be $2.5 million or
greater.


 


ii.The
Company shall deliver to the Buyer an irrevocable written notice (the "Offer Notice") of any proposed or intended issuance
or sale or exchange (the "Offer") of the securities being offered (the "Offered Securities") in a Subsequent
Placement, which Offer Notice shall (w) identify and describe the Offered Securities, (x) describe the price and other terms
upon which they are to be issued, sold or exchanged, and the number or amount of the Offered Securities to be issued, sold or exchanged,
(y) identify the persons or entities (if known) to which or with which the Offered Securities are to be offered, issued, sold
or exchanged and (z) offer to issue and sell to or exchange with the Buyer at least fifty percent (50%) of the Offered Securities
(the “Subscription Amount”).


 


iii.To
accept an Offer, in whole or in part, the Buyer must deliver a written notice to the Company prior to the end of the tenth (10th)
Business Day after the Buyer’s receipt of the Offer Notice (the “Offer Period”), setting forth the portion of
the Subscription Amount that the Buyer elects to purchase (the “Notice of Acceptance”). The Company shall have ten
(10) business days from the expiration of the Offer Period to complete the Subsequent Placement and in connection therewith to
issue and sell the Subscription Amount to the Buyer but only upon terms and conditions (including, without limitation, unit prices
and interest rates) that are not more favorable to the Buyer or less favorable to the Company than those set forth in the Offer
Notice. Following such ten (10) business day period, the Company shall publicly announce either (A) the consummation of the Subsequent
Placement or (B) the termination of the Subsequent Placement.


 






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iv.Notwithstanding
anything to the contrary contained herein, if the Company desires to modify or amend the terms and conditions of the Offer prior
to the expiration of the Offer Period, the Company shall deliver to the Buyer a new Offer Notice and the Offer Period shall expire
on the tenth (10th) Business Day after the Buyer's receipt of such new Offer Notice.


 


v.If by
the fifteenth (15th) Business Day following delivery of the Offer Notice no public disclosure regarding a transaction
with respect to the Offered Securities has been made, and no notice regarding the abandonment of such transaction has been received
by the Buyer, such transaction shall be deemed to have been abandoned and the Buyer shall not be deemed to be in possession of
any material, non-public information with respect to the Company.


 


e. Restriction on
Activities. Commencing as of the date first above written, and until the sooner of the six month anniversary of the date first
written above or payment of the Note in full, or full conversion of the Note, the Company shall not, directly or indirectly, without
the Buyer’s prior written consent, which consent shall not be unreasonably withheld: (a) change the nature of its business;
(b) sell, divest, acquire, change the structure of any material assets other than in the ordinary course of business; or (c) solicit
any offers for, respond to any unsolicited offers for,or conduct any negotiations with any other person or entity in respect of
any variable rate debt transactions (i.e., transactions were the conversion or exercise price of the seucrity issued by the Company
varies based on the market price of the Common Stock) above $500,000, whether a transaction similar to the one contemplated hereby
or or any other investment; or (d) file any registration statements with the SEC.


 


f. Listing. The
Company will, so long as the Buyer owns any of the Securities, maintain the listing and trading of its Common Stock on the OTCBB
or any equivalent replacement exchange or electronic quotation system (including but not limited to the Pink Sheets electronic
quotation system) and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws
or rules of the Financial Industry Regulatory Authority (“FINRA”) and such exchanges, as applicable. The Company shall
promptly provide to the Buyer copies of any notices it receives from the OTCBB and any other exchanges or electronic quotation
systems on which the Common Stock is then traded regarding the continued eligibility of the Common Stock for listing on such exchanges
and quotation systems.


 


g. Corporate
Existence. The Company will, so long as the Buyer beneficially owns any of the Securities, maintain its corporate existence
and shall not sell all or substantially all of the Company’s assets, except in the event of a merger or consolidation or
sale of all or substantially all of the Company’s assets, where the surviving or successor entity in such transaction (i)
assumes the Company’s obligations hereunder and under the agreements and instruments entered into in connection herewith
and (ii) is a publicly traded corporation whose Common Stock is listed for trading or quotation on the OTCBB, any tier of the NASDAQ
Stock Market, the New York Stock Exchange or the NYSE MKT.


 


h. No
Integration. The Company shall not make any offers or sales of any security (other than the Securities) under circumstances
that would require registration of the Securities being offered or sold hereunder under the 1933 Act or cause the offering of the
Securities to be integrated with any other offering of securities by the Company for the purpose of any stockholder approval provision
applicable to the Company or its securities.


 


i. Breach
of Covenants. The Company acknowledges and agrees that if the Company breaches any of the covenants set forth in this Section
4, in addition to any other remedies available to the Buyer pursuant to this Agreement, it will be considered an Event of Default
under Section 3.4 of the Note.


 


j. Compliance
with 1934 Act; Public Information Failures. For so long as the Buyer beneficially owns the Note, the Company shall comply with
the reporting requirements of the 1934 Act; and the Company shall continue to be subject to the reporting requirements of the 1934
Act. During the period that the Buyer beneficially owns the Note, if the Company shall (i) fail for any reason to satisfy the requirements
of Rule 144(c)(1), including, without limitation, the failure to satisfy the current public information requirements under Rule
144(c) or (ii) if the Company has ever been an issuer described in Rule 144(i)(1)(i) or becomes such an issuer in the future, and
the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (each, a “Public Information Failure”)
then, as partial relief for the damages to the Buyer by reason of any such delay in or reduction of its ability to sell the Securities
(which remedy shall not be exclusive of any other remedies available pursuant to this Agreement, the Note, or at law or in equity),
the Company shall pay to the Buyer an amount in cash equal to two percent (2%) of the Purchase Price on each of the day of a Public
Information Failure and on every thirtieth day (pro rated for periods totaling less than thirty days) thereafter until the date
such Public Information Failure is cured. The payments to which a holder shall be entitled pursuant to this Section 4(k) 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
(iii) the third 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% per month (prorated for partial months) until paid in full.


 






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k. Reserved.


 


l. Disclosure
of Transactions and Other Material Information. By 9:00 a.m., New York time, following the date this Agreement has been fully
executed, the Company shall file a Current Report on Form 8-K describing the terms of the transactions contemplated by this Agreement
in the form required by the 1934 Act and attaching this Agreement and the form of Note (the “8-K Filing”). From and
after the filing of the 8-K Filing with the SEC, the Buyer shall not be in possession of any material, nonpublic information received
from the Company, any of its Subsidiaries or any of their respective officers, directors, employees or agents that is not disclosed
in the 8-K Filing. In addition, effective upon the filing of the 8-K Filing, the Company acknowledges and agrees that any and all
confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries
or any of their respective officers, directors, affiliates, employees or agents, on the one hand, and the Buyer or any of its affiliates,
on the other hand, shall terminate.


 


m. Legal
Counsel Opinions. Upon the request of the Buyer from to time to time, the Company shall be responsible (at its cost) for promptly
supplying to the Company’s transfer agent and the Buyer a customary legal opinion letter of its counsel (the “Legal
Counsel Opinion”) to the effect that the resale of the Issuance Shares and the Conversion Shares by the Buyer or its affiliates,
successors and assigns is exempt from the registration requirements of the 1933 Act pursuant to Rule 144 (provided the requirements
of Rule 144 are satisfied and provided the Issuance Shares and the Conversion Shares are not then registered under the 1933 Act
for resale pursuant to an effective registration statement). Should the Company’s legal counsel fail for any reason to issue
the Legal Counsel Opinion, the Buyer may (at the Company’s cost) secure another legal counsel to issue the Legal Counsel
Opinion, and the Company will instruct its transfer agent to accept such opinion.


 


n. Piggyback
Registration Rights. The Company hereby grants to the Buyer the registration rights set forth on Exhibit A hereto.


 


5. Transfer Agent
Instructions. The Company shall issue irrevocable instructions to its transfer agent to issue certificates, registered
in the name of the Buyer or its nominee, for the Issuance Shares and, upon conversion of the Note, the Conversion Shares, in such
amounts as specified from time to time by the Buyer to the Company in accordance with the terms thereof (the “Irrevocable
Transfer Agent Instructions”). In the event that the Company proposes to replace its transfer agent, the Company shall provide,
prior to the effective date of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a form as initially
delivered pursuant to this Agreement (including but not limited to the provision to irrevocably reserved shares of Common Stock
in the Reserved Amount (as defined in the Note)) signed by the successor transfer agent to the Company and the Company. Prior to
registration of the Issuance Shares or Conversion Shares under the 1933 Act or the date on which the Issuance Shares or Conversion
Shares may be sold pursuant to Rule 144 without any restriction as to the number of Securities as of a particular date that can
then be immediately sold, all such certificates shall bear the restrictive legend specified in Section 2(g) of this Agreement.
The Company warrants that: (i) no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section
5 will be given by the Company to its transfer agent and that the Securities shall otherwise be freely transferable on the books
and records of the Company as and to the extent provided in this Agreement and the Note; (ii) it will not direct its transfer agent
not to transfer or delay, impair, and/or hinder its transfer agent in transferring (or issuing)(electronically or in certificated
form) any certificate for Securities to be issued to the Buyer upon conversion of or otherwise pursuant to the Note as and when
required by the Note and this Agreement; and (iii) it will not fail to remove (or directs its transfer agent not to remove or impairs,
delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions
in respect thereof) on any certificate for any Securities issued to the Buyer upon conversion of or otherwise pursuant to the Note
as and when required by the Note and this Agreement. Nothing in this Section shall affect in any way the Buyer’s obligations
and agreement set forth in Section 2(g) hereof to comply with all applicable prospectus delivery requirements, if any, upon re-sale
of the Securities. If the Buyer provides the Company, at the cost of the Company, with (i) an opinion of counsel in form, substance
and scope customary for opinions in comparable transactions, to the effect that a public sale or transfer of such Securities may
be made without registration under the 1933 Act and such sale or transfer is effected or (ii) the Buyer provides reasonable assurances
that the Securities can be sold pursuant to Rule 144, the Company shall permit the transfer, and, in the case of the Securities,
promptly instruct its transfer agent to issue one or more certificates, free from restrictive legend, in such name and in such
denominations as specified by the Buyer. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable
harm to the Buyer, by vitiating the intent and purpose of the transactions contemplated hereby. Accordingly, the Company acknowledges
that the remedy at law for a breach of its obligations under this Section 5 may be inadequate and agrees, in the event of a breach
or threatened breach by the Company of the provisions of this Section, that the Buyer shall be entitled, in addition to all other
available remedies, to an injunction restraining any breach and requiring immediate transfer, without the necessity of showing
economic loss and without any bond or other security being required.


 






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6. Conditions to the
Company’s Obligation to Sell. The obligation of the Company hereunder to issue and sell the Note to the Buyer at
the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions thereto, provided
that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion:


 


a. The Buyer shall
have executed this Agreement and delivered the same to the Company.


 


b. The Buyer shall
have delivered the Purchase Price in accordance with Section 1(b) above.


 


c. The representations
and warranties of the Buyer shall be true and correct in all material respects as of the date when made and as of the Closing Date,
as though made at that time (except for representations and warranties that speak as of a specific date), and the Buyer shall have
performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement
to be performed, satisfied or complied with by the Buyer at or prior to the Closing Date.


 


d. No litigation, statute,
rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by or
in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over the
matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.


 


7. Conditions to The
Buyer’s Obligation to Purchase. The obligation of the Buyer hereunder to purchase the Note, on the Closing Date,
is subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions
are for the Buyer’s sole benefit and may be waived by the Buyer at any time in its sole discretion:


 


a. The Company shall
have executed this Agreement and delivered the same to the Buyer.


 


b. The Company shall
have delivered to the Buyer the duly executed Note in such denominations as the Buyer shall request and in accordance with Section
1(b) above.


 


c. The Irrevocable
Transfer Agent Instructions, in form and substance satisfactory to the Buyer, shall have been delivered to and acknowledged in
writing by the Company’s Transfer Agent.


 






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d. The
representations and warranties of the Company shall be true and correct in all material respects as of the date when made and as
of Closing Date, as though made at such time (except for representations and warranties that speak as of a specific date) and the
Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required
by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Closing Date.


 


e. No litigation,
statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed
by or in any court or governmental authority of competent jurisdiction or any self-regulatory organization having authority over
the matters contemplated hereby which prohibits the consummation of any of the transactions contemplated by this Agreement.


 


f. No event
shall have occurred which could reasonably be expected to have a Material Adverse Effect on the Company including but not limited
to a change in the 1934 Act reporting status of the Company or the failure of the Company to be timely in its 1934 Act reporting
obligations.


 


g. Trading
in the Common Stock on the OTCBB shall not have been suspended by the SEC, FINRA or the OTCBB.


 


h. The
Company shall have delivered to the Buyer a certificate evidencing the formation and good standing of the Company and each of its
Subsidiaries in such entity’s jurisdiction of formation issued by the Secretary of State (or comparable office) of such jurisdiction,
as of a date within ten (10) days of the Closing Date.


 


8. Governing Law; Miscellaneous.


 


a.
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New
York without regard to principles of conflicts of laws. Any action brought by either party against the other concerning the transactions
contemplated by this Agreement, the Note or any other agreement, certificate, instrument or document contemplated hereby shall
be brought only in the state courts of New York or in the federal courts located in the state and county of New York. The parties
to this Agreement hereby irrevocably waive any objection to jurisdiction and venue of any action instituted hereunder and shall
not assert any defense based on lack of jurisdiction or venue or based upon forum non conveniens. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION
WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTIONS CONTEMPLATED HEREBY. The
prevailing party shall be entitled to recover from the other party its reasonable attorney’s fees and costs. In the event
that any provision of this Agreement or any other agreement delivered in connection herewith is invalid or unenforceable under
any applicable statute or rule of law, then such provision shall be deemed inoperative to the extent that it may conflict therewith
and shall be deemed modified to conform with such statute or rule of law. Any such provision which may prove invalid or unenforceable
under any law shall not affect the validity or enforceability of any other provision of this Agreement, the Note or any other agreement,
certificate, instrument or document contemplated hereby or thereby. Each party hereby irrevocably waives personal service of process
and consents to process being served in any suit, action or proceeding in connection with this Agreement, the Note or any other
agreement, certificate, instrument or document contemplated hereby or thereby 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.


 


b. Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall constitute
one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other
party. A facsimile or .pdf signature shall be considered due execution and shall be binding upon the signatory thereto with the
same force and effect as if the signature were an original, not a facsimile or .pdf signature. Delivery of a counterpart signature
hereto by facsimile or email/.pdf transmission shall be deemed validly delivery thereof.


 






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c. Construction;
Headings.  This Agreement shall be deemed to be jointly drafted by the Company and the Buyer and shall not be construed
against any person as the drafter hereof. The headings of this Agreement are for convenience of reference only and shall not form
part of, or affect the interpretation of, this Agreement.


 


d. Severability. In
the event that any provision of this Agreement is invalid or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform with
such statute or rule of law. Any provision hereof which may prove invalid or unenforceable under any law shall not affect the validity
or enforceability of any other provision hereof.


 


e. Entire Agreement;
Amendments. This Agreement, the Note and the instruments referenced herein contain the entire understanding of the parties
with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company
nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement
or any agreement or instrument contemplated hereby may be waived or amended other than by an instrument in writing signed by the
Buyer.


  


f. Notices. 
All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing
and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return
receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted
by hand delivery, telegram, e-mail or facsimile, addressed as set forth below or to such other address as such party shall have
specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder shall
be deemed effective (a) upon hand delivery or delivery by e-mail or facsimile, with accurate confirmation generated by the transmitting
facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where
such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during
normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.
The addresses for such communications shall be:


 


If to the Company, to:


 


UBIQUITY, INC.


9801 Research Drive


Irvine, California 92618


Attention: Christopher Carmichael


e-mail: cc@ubiquitycorp.com


 


With a copy by e-mail only to (which copy shall not
constitute notice):


 


SZAFERMAN LAKIND BLUMSTEIN & BLADER, PC


101 Grovers Mill Road, Second Floor


Lawrenceville, NJ 08648


Attn: Gregg E. Jaclin, Esq.


e-mail: gjaclin@szaferman.com


 


If to the Buyer:


 


R-SQUARED PARTNERS, LLC


425 East 63rd
Street, #E4K

New York, New York, 10065


Attention: Neil Rock


e-mail: neil@firerockcap.com


 






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g. Successors and
Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns.
Neither the Company nor the Buyer shall assign this Agreement or any rights or obligations hereunder without the prior written
consent of the other. Notwithstanding the foregoing, subject to Section 2(f), the Buyer may assign its rights hereunder to any
person that purchases Securities in a private transaction from the Buyer or to any of its “affiliates,” as that term
is defined under the 1934 Act, without the consent of the Company.


 


h. Third Party Beneficiaries. This
Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for
the benefit of, nor may any provision hereof be enforced by, any other person.


 


i. Survival. The
representations and warranties of the Company and the agreements and covenants set forth in this Agreement shall survive the closing
hereunder notwithstanding any due diligence investigation conducted by or on behalf of the Buyer. The Company agrees to indemnify
and hold harmless the Buyer and all their officers, directors, employees and agents for loss or damage arising as a result of or
related to any breach or alleged breach by the Company of any of its representations, warranties and covenants set forth in this
Agreement or any of its covenants and obligations under this Agreement, including advancement of expenses as they are incurred.


 


j. Publicity. The
Company, and the Buyer shall have the right to review a reasonable period of time before issuance of any press releases, SEC, OTCBB
or FINRA filings, or any other public statements with respect to the transactions contemplated hereby; provided, however,
that the Company shall be entitled, without the prior approval of the Buyer, to make any press release or SEC, OTCBB (or other
applicable trading market) or FINRA filings with respect to such transactions as is required by applicable law and regulations
(although the Buyer shall be consulted by the Company in connection with any such press release prior to its release and shall
be provided with a copy thereof and be given an opportunity to comment thereon).


 


k. Expense Reimbursement;
Further Assurances.  At the Closing to occur as of the Closing Date, the Company shall pay on behalf of the Buyer or
reimburse the Buyer for its legal fees and expenses incurred in connection with this Agreement in the amount of $2,500. Each party
shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such
other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the
intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.


 


l. No Strict Construction. The
language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no
rules of strict construction will be applied against any party.


 


m. Indemnification.
In consideration of the Buyer’s execution and delivery of this Agreement and acquiring the Securities hereunder, and in addition
to all of the Company’s other obligations under this Agreement or the Note, the Company shall defend, protect, indemnify
and hold harmless the Buyer and its stockholders, partners, members, officers, directors, employees and direct or indirect investors
and any of the foregoing persons’ agents or other representatives (including, without limitation, those retained in connection
with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”) from and against any and all
actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith
(irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including
reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as a
result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by the
Company in this Agreement or the Note or any other agreement, certificate, instrument or document contemplated hereby or thereby,
(b) any breach of any covenant, agreement or obligation of the Company contained in this Agreement or the Note or any other agreement,
certificate, instrument or document contemplated hereby or thereby or (c) any cause of action, suit or claim brought or made against
such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company) and arising
out of or resulting from (i) the execution, delivery, performance or enforcement of this Agreement or the Note or any other agreement,
certificate, instrument or document contemplated hereby or thereby, (ii) any transaction financed or to be financed in whole or
in part, directly or indirectly, with the proceeds of the issuance of the Securities, or (iii) the status of the Buyer or holder
of the Securities as an investor in the Company pursuant to the transactions contemplated by this Agreement. To the extent that
the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to
the payment and satisfaction of each of the Indemnified Liabilities that is permissible under applicable law.


 






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n. Remedies. The
Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Buyer by vitiating the
intent and purpose of the transaction contemplated hereby. Accordingly, the Company acknowledges that the remedy at law for
a breach of its obligations under this Agreement or the Note will be inadequate and agrees, in the event of a breach or threatened
breach by the Company of the provisions of this Agreement or the Note, that the Buyer shall be entitled, in addition to all other
available remedies at law or in equity, and in addition to the penalties assessable herein, to an injunction or injunctions restraining,
preventing or curing any breach of this Agreement or the Note and to enforce specifically the terms and provisions hereof, without
the necessity of showing economic loss and without any bond or other security being required.


 


o. Payment Set Aside.
To the extent that the Company makes a payment or payments to the Buyer hereunder or pursuant to the Note, or the Buyer enforces
or exercises its rights hereunder or thereunder, and such payment or payments or the proceeds of such enforcement or exercise or
any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged
by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other person or entity
under any law (including, without limitation, any bankruptcy law, foreign, 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.


 


p. Failure or Indulgence
Not Waiver. No failure or delay on the part of the Buyer in the exercise of any power, right or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise
thereof or of any other right, power or privileges. All rights and remedies of the Buyer existing hereunder are cumulative to,
and not exclusive of, any rights or remedies otherwise available.


 


q. Fees. At
the Closing, the Company shall reimburse the Buyer for $5,000 of its legal fees and expenses incurred in connection with the preparation
of this Agreement and the other instruments contemplated hereby.


 


[Signature Page Follows]


 




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IN WITNESS WHEREOF,
the undersigned Buyer and the Company have caused this Agreement to be duly executed as of the date first above written.


 


UBIQUITY, INC.


 


	By: 	 	 
	 	Name: 	 
	 	Title: 	 


 


R-SQUARED PARTNERS, LLC


 


	By: 	 	 
	 	NEIL ROCK	 
	 	 	 


 


SUBSCRIPTION AMOUNT:


 


	Principal Amount of Note: $140,250.00
	Actual Amount of Purchase Price of Note: $127,500.00


 




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EXHIBIT A


 


REGISTRATION RIGHTS


 


All of the Conversion
Shares and the Issuance Shares will be deemed “Registrable Securities” subject to the provisions of this Exhibit A.
All capitalized terms used but not defined in this Exhibit A shall have the meanings ascribed to such terms in the Securities Purchase
Agreement to which this Exhibit is attached.


 


		1.	Piggy-Back Registration.



 


1.1Piggy-Back
Rights. If at any time on or after the date of the Closing the Company proposes to file any Registration Statement under the
1933 Act (a “Registration Statement”) with respect to any offering of equity securities, or securities or other obligations
exercisable or exchangeable for, or convertible into, equity securities, by the Company for its own account or for shareholders
of the Company for their account (or by the Company and by shareholders of the Company), other than a Registration Statement (i)
filed in connection with any employee stock option or other benefit plan on Form S-8, (ii) for a dividend reinvestment plan or
(iii) in connection with a merger or acquisition, then the Company shall (x) give written notice of such proposed filing to the
holders of Registrable Securities appearing on the books and records of the Company as such a holder as soon as practicable but
in no event less than ten (10) days before the anticipated filing date of the Registration Statement, which notice shall describe
the amount and type of securities to be included in such Registration Statement, the intended method(s) of distribution, and the
name of the proposed managing underwriter or underwriters, if any, of the offering, and (y) offer to the holders of Registrable
Securities in such notice the opportunity to register the sale of such number of Registrable Securities as such holders may request
in writing within five (5) days following receipt of such notice (a “Piggy-Back Registration”). The Company shall cause
such Registrable Securities to be included in such registration and shall cause the managing underwriter or underwriters of a proposed
underwritten offering to permit the Registrable Securities requested to be included in a Piggy-Back Registration on the same terms
and conditions as any similar securities of the Company and to permit the sale or other disposition of such Registrable Securities
in accordance with the intended method(s) of distribution thereof. All holders of Registrable Securities proposing to distribute
their securities through a Piggy-Back Registration that involves an underwriter or underwriters shall enter into an underwriting
agreement in customary form with the underwriter or underwriters selected for such Piggy-Back Registration.


 


1.2Withdrawal.
Any holder of Registrable Securities may elect to withdraw such holder’s request for inclusion of Registrable Securities
in any Piggy-Back Registration by giving written notice to the Company of such request to withdraw prior to the effectiveness of
the Registration Statement. The Company (whether on its own determination or as the result of a withdrawal by persons making a
demand pursuant to written contractual obligations) may withdraw a Registration Statement at any time prior to the effectiveness
of such Registration Statement. Notwithstanding any such withdrawal, the Company shall pay all expenses incurred by the holders
of Registrable Securities in connection with such Piggy-Back Registration as provided in Section 1.5 below.


 


1.3The Company shall
notify the holders of Registrable Securities at any time when a prospectus relating to such holder’s Registrable Securities
is required to be delivered under the 1933 Act, upon discovery that, or upon the happening of any event as a result of which, the
prospectus included in such Registration Statement, as then in effect, includes an untrue statement of a material fact or omits
to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of
the circumstances then existing. At the request of such holder, the Company shall also prepare, file and furnish to such holder
a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of the Registrable Securities, such prospectus shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading
in light of the circumstances then existing. The holders of Registrable Securities shall not to offer or sell any Registrable Securities
covered by the Registration Statement after receipt of such notification until the receipt of such supplement or amendment.


 


1.4 The Company may
request a holder of Registrable Securities to furnish the Company such information with respect to such holder and such holder’s
proposed distribution of the Registrable Securities pursuant to the Registration Statement as the Company may from time to time
reasonably request in writing or as shall be required by law or by the SEC in connection therewith, and such holders shall furnish
the Company with such information.


 






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1.5All fees and expenses
incident to the performance of or compliance with this Exhibit A by the Company shall be borne by the Company whether or not any
Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing sentence
shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses of the
Company’s counsel and independent registered public accountants) (A) with respect to filings made with the SEC, (B) with
respect to filings required to be made with any trading market on which the Common Stock is then listed for trading, (C) in compliance
with applicable state securities or Blue Sky laws reasonably agreed to by the Company in writing (including, without limitation,
fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions of the Registrable Securities)
and (D) with respect to any filing that may be required to be made by any broker through which a holder of Registrable Securities
intends to make sales of Registrable Securities with the FINRA, (ii) printing expenses, (iii) messenger, telephone and delivery
expenses, (iv) fees and disbursements of counsel for the Company, (v) 1933 Act liability insurance, if the Company so desires such
insurance, (vi) fees and expenses of all other persons or entities retained by the Company in connection with the consummation
of the transactions contemplated by this Exhibit A and (vii) reasonable fees and disbursements of a single special counsel for
the holders of Registrable Securities (selected by holders of the majority of the Registrable Securities requesting such registration),
up to $10,000 for each registration. In addition, the Company shall be responsible for all of its internal expenses incurred in
connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries
and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees
and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder.
In no event shall the Company be responsible for any broker or similar commissions of any holder of Registrable Securities.


 


1.6The Company and
its successors and assigns shall indemnify and hold harmless the Buyer, each holder of Registrable Securities, the officers, directors,
members, partners, agents and employees (and any other individuals or entities with a functionally equivalent role of a person
holding such titles, notwithstanding a lack of such title or any other title) of each of them, each individual or entity who controls
the Buyer or any such holder of Registrable Securities (within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act) and the officers, directors, members, stockholders, partners, agents and employees (and any other individuals or entities
with a functionally equivalent role of a person holding such titles, notwithstanding a lack of such title or any other title) of
each such controlling individual or entity (each, an “Indemnified Party”), to the fullest extent permitted by applicable
law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’
fees) and expenses (collectively, “Losses”), as incurred, arising out of or relating to (1) any untrue or alleged
untrue statement of a material fact contained in a Registration Statement, any related prospectus or any form of prospectus or
in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged
omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any such
prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading or (2) any violation
or alleged violation by the Company of the 1933 Act, the 1934 Act or any state securities law, or any rule or regulation thereunder,
in connection with the performance of its obligations under this Exhibit A, except to the extent, but only to the extent, that
(i) such untrue statements or omissions are based upon information regarding the Buyer or such holder of Registrable Securities
furnished to the Company by such party for use therein. The Company shall notify the Buyer and each holder of Registrable Securities
promptly of the institution, threat or assertion of any proceeding arising from or in connection with the transactions contemplated
by this Exhibit A of which the Company is aware.


 


1.7If the indemnification
under Section 1.6 is unavailable to an Indemnified Party or insufficient to hold an Indemnified Party harmless for any Losses,
then the Company shall contribute to the amount paid or payable by such Indemnified Party, in such proportion as is appropriate
to reflect the relative fault of the Company and Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations. The relative fault of the Company and Indemnified
Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged
untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, the Company or the Indemnified Party, and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of
any Losses shall be deemed to include any reasonable attorneys’ or other fees or expenses incurred by such party in connection
with any proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided
for in Section 1.6 was available to such party in accordance with its terms. It is agreed that it would not be just and equitable
if contribution pursuant to this Section 1.7 were determined by pro rata allocation or by any other method of allocation that does
not take into account the equitable considerations referred to in the immediately preceding sentence. Notwithstanding the provisions
of this Section 1.7, neither the Buyer nor any holder of Registrable Securities shall be required to contribute, in the aggregate,
any amount in excess of the amount by which the net proceeds actually received by such party from the sale of all of their Registrable
Securities pursuant to such Registration Statement or related prospectus exceeds the amount of any damages that such party has
otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.


 


[End of Exhibit A]


 



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