Exhibit
10.1


 


SECURITIES
PURCHASE AGREEMENT


 


SECURITIES
PURCHASE AGREEMENT (the “Agreement”), dated as of November 12, 2015, by and among InterCloud Systems, Inc. Inc., a
Delaware corporation, with headquarters located at 1030 Broad, Street,
Suite 102, Shrewsbury, NJ 07702 (the “Company”), and the investors listed on
the Schedule of Buyers attached hereto (individually, a “Buyer” and collectively, the “Buyers”).


 


WHEREAS:


 


A.The
Company and each Buyer is 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) of Regulation
D (“Regulation D”) as promulgated by the United States Securities and Exchange Commission (the “SEC”)
under the 1933 Act.


 


B. The
Company has authorized a new series of senior convertible notes of the Company, in substantially the form attached hereto as Exhibit
A (the “Notes”), which Notes shall be convertible into the Company’s common stock, par value $0.0001 per share
(the “Common Stock”) (the shares of Common Stock issuable pursuant to the terms of the Notes, including, without limitation,
upon conversion or otherwise, collectively, the “Conversion Shares”), in accordance with the terms of the Notes.


 


C. Each
Buyer wishes to purchase, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, (i) that aggregate
principal amount of Notes set forth opposite such Buyer’s name in column (3) on the Schedule of Buyers attached hereto (which
aggregate principal amount of Notes for all Buyers shall be $525,000 (corresponding to an aggregate purchase price of $500,000).


 


D. The
Notes and the Conversion Shares, collectively are referred to herein as the “Securities”.


 


NOW,
THEREFORE, the Company and each Buyer hereby agree as follows:


 


1. PURCHASE
AND SALE OF NOTES; SUBORDINATION; ETC.


 


(a) Purchase
of Notes. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below, the Company shall issue
and sell to each Buyer, and each Buyer severally, but not jointly, agrees to purchase from the Company on the Closing Date (as
defined below), a principal amount of Notes as is set forth opposite such Buyer’s name in column (3) on the Schedule of
Buyers (the “Closing”).


 


(b) Closing.
The date and time of the Closing (the “Closing Date”) shall be 10:00 a.m., New York City time, on the date hereof
(or such other date and time as is mutually agreed to by the Company and each Buyer) after notification of satisfaction (or waiver)
of the conditions to the Closing set forth in Sections 6 and 7 below, at the offices of Robinson Brog, 875 Third Avenue, New York,
New York 10022.


 






     


     


    

 


(c) Purchase
Price. The aggregate purchase price for the Notes to be purchased by each Buyer at the Closing (the “Purchase Price”)
shall be the amount set forth opposite each Buyer’s name in column (5) of the Schedule of Buyers. Each Buyer shall pay $1.00
for each $1.05 of principal amount of Notes to be purchased by such Buyer at the Closing. The Buyers and the Company agree that
the Notes constitute an “investment unit” for purposes of Section 1273(c)(2) of the Internal Revenue Code of 1986,
as amended (the “Code”). The Buyers and the Company mutually agree that the allocation of the issue price of such
investment unit between the Notes in accordance with Section 1273(c)(2) of the Code and Treasury Regulation Section 1.1273-2(h)
shall be an aggregate amount of $1.00 per $1.05 of Purchase Price to the Purchase Price allocated to the Notes, and neither the
Buyers nor the Company shall take any position inconsistent with such allocation in any tax return or in any judicial or administrative
proceeding in respect of taxes.


 


(d) Form
of Payment. On the Closing Date, (i) each Buyer shall pay its Purchase Price to the Company for the Notes to be issued and sold
to such Buyer at the Closing less the amounts withheld pursuant to Section 4(g)), by wire transfer of immediately available funds
in accordance with the Company’s written wire instructions and (ii) the Company shall deliver to each Buyer the Notes (allocated
in the principal amounts as such Buyer shall request) which such Buyer is then purchasing hereunder, in each case duly executed
on behalf of the Company and registered in the name of such Buyer or its designee.
Company shall provide to Buyer written or electronic proof of each such payment in a form reasonably acceptable to Buyer, which
shall include at least dollar amount, date, company name, at least the last four digits of the account number and wire information
(including federal reference number), all on a bank letterhead or bank statement, within three (3) business days of each such
payment.


 


(e)Subordination,
Etc. The Buyer hereby agrees and acknowledges for itself and its successors and assigns, that notwithstanding anything to the
contrary provided herein or elsewhere, this Note, the Securities Purchase Agreement and all other Transaction Documents and all
Indebtedness, liabilities and/or other obligations hereunder and thereunder of the Borrower (as defined in the Waiver, as defined
below) to the Buyer are subject to the provisions of (except to the extent expressly waived pursuant to Section 2 of the Ratification,
Waiver and Acknowledgement dated November 6, 2015 (the “Waiver”) by and between the Borrower and the Lender (both
terms as defined in such Waiver)), the Loan Agreement (as defined below), and all other Documents (as defined in the Loan Agreement)
are subordinated to and junior in all respects including, but not limited to, in right of payment to all Indebtedness and Liabilities
(both terms as defined in the Loan Agreement, as defined below) of the Borrower to the Lender under the Loan Agreement, the 3
Existing Notes and all other Documents (as defined in the Loan Agreement), and constitute Subordinated Debt and Indebtedness (both
terms as defined in the Loan Agreement) under the Loan Agreement. For purposes hereof, the term “Loan Agreement” mean
the Bridge Financing Agreement made as of December 2, 2014 by and between the Borrower and the Lender, as amended, supplement
and/or otherwise changed whether prior to and/or following the date hereof including, but not limited to, pursuant to Amendment
No. 1 made as of May 15, 2015 and Amendment No. 2 made as of August 12, 2015.


 


2. BUYER’S
REPRESENTATIONS AND WARRANTIES. Each Buyer, severally and not jointly, represents and warrants with respect to only itself that,
as of the date hereof and as of the Closing Date: 


 


(a) No
Public Sale or Distribution. Such Buyer is (i) acquiring the Notes and (ii) upon issuance of the Conversion Shares pursuant to
the terms of the Notes will acquire the Conversion Shares issuable pursuant to the terms of the Notes, for its own account and
not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered
or exempted under the 1933 Act; provided, however, that by making the representations herein, such 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. Such Buyer is acquiring the Securities
hereunder in the ordinary course of its business. Such Buyer does not presently have any agreement or understanding, directly
or indirectly, with any Person (as defined below) to distribute any of the Securities. For purposes of this Agreement, “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and any government or any department or agency thereof.


 






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


 


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


 


(d) Information.
Such Buyer and its advisors, if any, have been 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 that have been requested by such Buyer. Such Buyer
and its advisors, if any, have been afforded the opportunity to ask questions of the Company. Neither such inquiries nor any other
due diligence investigations conducted by such Buyer or its advisors, if any, or its representatives shall modify, amend or affect
such Buyer’s right to rely on the Company’s representations and warranties contained herein. Such Buyer understands
that its investment in the Securities involves a high degree of risk. Such Buyer has sought such accounting, legal and tax advice
as it has considered necessary to make an informed investment decision with respect to its acquisition of the Securities.


 


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


 


(f) Transfer
or Resale. Such Buyer understands that: (i) the Securities have not been and are not being registered under the 1933 Act or any
state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder,
(B) such Buyer shall have delivered to the Company an opinion of counsel, in a generally acceptable form, to the effect that such
Securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration,
or (C) such Buyer provides the Company with reasonable assurance that such Securities can be sold, assigned or transferred pursuant
to Rule 144 or Rule 144A promulgated under the 1933 Act, as amended, (or a successor rule thereto) (collectively, “Rule
144”); (ii) any sale of the Securities made in reliance on Rule 144 may be made only in accordance with the terms of Rule
144 and further, if Rule 144 is not applicable, any resale of the 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 the Securities under the 1933 Act or any state securities laws or to
comply with the terms and conditions of any exemption thereunder. 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 and such pledge
of Securities shall not be deemed to be a transfer, sale or assignment of the Securities hereunder, and no Buyer effecting a pledge
of Securities shall be required to provide the Company with any notice thereof or otherwise make any delivery to the Company pursuant
to this Agreement or any other Transaction Document (as defined in Section 3(b)), including, without limitation, this Section
2(f).


 






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(g) Legends.
Such Buyer understands that the certificates or other instruments representing the Notes and, until such time as the resale of
the Conversion Shares have been registered under the 1933 Act, the stock certificates representing the Conversion Shares, except
as set forth below, shall bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed
against transfer of such stock certificates):


 


FOR
THE NOTES AND CONVERSION SHARES


 


[NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE]
[EXERCISABLE] HAVE BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT 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 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 OR RULE 144A 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.


 


ONLY
FOR THE NOTES


 


THIS
NOTE AND ALL OTHER TRANSACTION DOCUMENTS AND ALL INDEBTEDNESS, OBLIGATIONS AND LIABILITIES OF THE COMPANY (AND ITS SUBSIDIARIES
AND SUCCESSORS), TO THE HOLDER AND ITS SUCCESSORS AND ASSIGNS HEREUNDER AND THEREUNDER, ARE SUBJECT TO THE PROVISIONS OF THE LOAN
AGREEMENT (AS DEFINED IN SECTION 28 OF THIS NOTE), THE 3 EXISTING NOTES (AS DEFINED IN THE LOAN AGREEMENT) AND THE OTHER DOCUMENTS
(AS DEFINED IN THE LOAN AGREEMENT). A COPY OF THE LOAN AGREEMENT, THE 3 EXISTING NOTES AND THE OTHER DOCUMENTS ARE AVAILABLE BY
WRITTEN REQUEST TO THE COMPANY.


 


The
legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of the Securities
upon which it is stamped or issue to such holder by electronic delivery at the applicable balance account at The Depository Trust
Company (“DTC”), if (i) such Securities are registered for resale under the 1933 Act, (ii) in connection with a sale,
assignment or other transfer, such holder provides the Company with an opinion of counsel, in a generally acceptable form, to
the effect that such sale, assignment or transfer of the Securities may be made without registration under the applicable requirements
of the 1933 Act, or (iii) the Securities can be sold, assigned or transferred without limitations or restrictions pursuant to
Rule 144 or Rule 144A. The Company shall be responsible for the fees of its transfer agent and all DTC fees associated with such
issuance.


 






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(h) Validity;
Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of such Buyer and shall constitute
the legal, valid and binding obligations of such Buyer enforceable against such Buyer in accordance with their respective terms,
except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’
rights and remedies.


 


(i) No
Conflicts. The execution, delivery and performance by such Buyer of this Agreement and the consummation by such Buyer of the transactions
contemplated hereby will not (i) result in a violation of the organizational documents of such Buyer or (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Buyer
is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state
securities laws) applicable to such Buyer, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights
or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the
ability of such Buyer to perform its obligations hereunder.


 


3. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.


 


The
Company represents and warrants to each of the Buyers that, as of the date hereof and as of the Closing Date:


 


(a) Organization
and Qualification. Each of the Company and each of its “Subsidiaries” (which for purposes of this Agreement means
any entity in which the Company, directly or indirectly, owns any of the capital stock or holds an equity or similar interest)
are entities duly organized and validly existing and in good standing under the laws of the jurisdiction in which they are formed,
and have the requisite power and authorization to own their properties and to carry on their business as now being conducted and
as presently proposed to be conducted. Each of the Company and each of its Subsidiaries is duly qualified as a foreign entity
to do business and is in good standing in every jurisdiction in which its ownership of property or the nature of the business
conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing
would not reasonably be expected to have a Material Adverse Effect. As used in this Agreement, “Material Adverse Effect”
means any material adverse effect on the business, properties, assets, liabilities, operations, results of operations, condition
(financial or otherwise) or prospects of the Company and its Subsidiaries, individually or taken as a whole, or on the transactions
contemplated hereby or on the other Transaction Documents or by the agreements and instruments to be entered into in connection
herewith or therewith, or on the authority or ability of the Company to perform any of its obligations under any of the Transaction
Documents (as defined below). The Company has no Subsidiaries except as set forth in the SEC Documents.


 


(b) Authorization;
Enforcement; Validity. The Company has the requisite power and authority to enter into and perform its obligations under this
Agreement, the Notes, the Irrevocable Transfer Agent Instructions (as defined in Section 5(b)) and each of the other agreements
entered into by the parties hereto in connection with the transactions contemplated by this Agreement (collectively, the “Transaction
Documents”) and to issue the Securities in accordance with the terms hereof and thereof. The execution and delivery of this
Agreement and the other Transaction Documents by the Company and the consummation by the Company of the transactions contemplated
hereby and thereby, including, without limitation, the issuance of the Notes, and the reservation for issuance and the issuance
of the Conversion Shares have been duly authorized by the Company’s Board of Directors and (other than the filing of a Form
D with the SEC and other filings as may be required by state securities agencies) no further filing, consent, or authorization
is required by the Company, its Board of Directors or its stockholders. This Agreement and the other Transaction Documents have
been duly executed and delivered by the Company, and constitute the legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their respective terms, except as such enforceability may be limited by general principles
of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting
generally, the enforcement of applicable creditors’ rights and remedies.


 






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(c) Issuance
of Securities. The issuance of the Notes are duly authorized and, upon issuance, shall be validly issued and free from all preemptive
or similar rights, taxes, liens, charges and other encumbrances with respect to the issue thereof. As of the Closing, a number
of shares of Common Stock shall have been duly authorized and reserved for issuance which equals or exceeds (the “Required
Reserved Amount”) the sum of the maximum number of Conversion Shares issued and issuable pursuant to the Notes based on
the Conversion Price (as defined in the Notes) (without taking into account any limitations on the issuance thereof pursuant to
the terms of the Notes). As of the date hereof, there are 474,016,776 shares of Common Stock authorized and unissued. Upon conversion
of the Notes in accordance with the Notes, as the case may be, the Conversion Shares will be validly issued, fully paid and nonassessable
and free from all preemptive or similar rights, taxes, liens, charges and other encumbrances with respect to the issue thereof,
with the holders being entitled to all rights accorded to a holder of Common Stock. Assuming the accuracy of each of the representations
and warranties set forth in Section 2 of this Agreement, the offer and issuance by the Company of the Securities is exempt from
registration under the 1933 Act.


 


(d) No
Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company
of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Notes and reservation
for issuance and issuance of the Conversion Shares will not (i) result in a violation of the Certificate of Incorporation (as
defined in Section (3(r)) or Bylaws (as defined in Section (3(r)), any memorandum of association, certificate of incorporation,
certificate of formation, bylaws, any certificate of designations or other constituent documents of the Company or any of its
Subsidiaries, any capital stock of the Company or any of its Subsidiaries or the articles of association or bylaws of the Company
or any of its Subsidiaries or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both
would become a default) in any respect under, or 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 (iii) result in a violation
of any law, rule, regulation, order, judgment or decree (including other foreign, federal and state securities laws and regulations
and the rules and regulations of The NASDAQ Capital Market (the “Principal Market”) and including all applicable laws
of the State of Delaware and any foreign, federal and state laws, rules and regulations) 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.


 


(e) Consents.
The Company is not required to obtain any consent, authorization or order of, or make any filing or registration with (other than
the filing of a Form D with the SEC and other filings as may be required by state securities agencies), any court, governmental
agency or any regulatory or self-regulatory agency or any other Person in order for it to execute, deliver or perform any of its
obligations under or contemplated by the Transaction Documents, in each case in accordance with the terms hereof or thereof. 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 Closing Date (or in the case of the filings detailed above, will be
made timely after the Closing Date), and the Company is unaware of any facts or circumstances that might prevent the Company from
obtaining or effecting any of the registration, application or filings pursuant to the preceding sentence. The Company is not
in violation of the listing requirements of the Principal Market and has no knowledge of any facts or circumstances that would
reasonably lead to delisting or suspension of the Common Stock in the foreseeable future. The issuance by the Company of the Securities
shall not have the effect of delisting or suspending the Common Stock from the Principal Market.


 






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(f) Acknowledgment
Regarding Buyer’s Purchase of Securities. The Company acknowledges and agrees that each Buyer is acting solely in the capacity
of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby
and that no Buyer is (i) an officer or director of the Company or any of its Subsidiaries, (ii) an “affiliate” of
the Company or any of its Subsidiaries (as defined in Rule 144) or (iii) to the knowledge of the Company, a “beneficial
owner” of more than 10% of the shares of Common Stock (as defined for purposes of Rule 13d-3 of the Securities Exchange
Act of 1934, as amended (the “1934 Act”)). The Company further acknowledges that no Buyer is acting as a financial
advisor or fiduciary of the Company or any of its Subsidiaries (or in any similar capacity) with respect to the Transaction Documents
and the transactions contemplated hereby and thereby, and any advice given by a Buyer or any of its representatives or agents
in connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to such
Buyer’s purchase of the Securities. The Company further represents to each Buyer that the Company’s decision to enter
into the Transaction Documents has been based solely on the independent evaluation by the Company and its representatives.


 


(g) No
General Solicitation; Placement Agent’s Fees. Neither the Company, nor any of its Subsidiaries or affiliates, nor any Person
acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation
D) in connection with the offer or sale of the Securities. The Company shall be responsible for the payment of any placement agent’s
fees, financial advisory fees, or brokers’ commissions (other than for persons engaged by any Buyer or its investment advisor)
relating to or arising out of the transactions contemplated hereby, including, without limitation, any placement agent fees payable
in connection with the sale of the Securities. The Company shall pay, and hold each Buyer harmless against, any liability, loss
or expense (including, without limitation, attorney’s fees and out-of-pocket expenses) arising in connection with any such
claim. Neither the Company nor any of its Subsidiaries has engaged any placement agent or other agent in connection with the sale
of the Securities.


 


(h) No
Integrated Offering. None of the Company, its Subsidiaries, any of their affiliates, nor any Person acting on their behalf has,
directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances
that would require registration of the issuance of any of the Securities under the 1933 Act, whether through integration with
prior offerings or otherwise, or cause this offering of the Securities to require approval of stockholders of the Company for
purposes of the 1933 Act or any applicable stockholder approval provisions, including, without limitation, under the rules and
regulations of any exchange or automated quotation system on which any of the securities of the Company are listed or designated
for quotation. None of the Company, its Subsidiaries, their affiliates nor any Person acting on their behalf will take any action
or steps referred to in the preceding sentence that would require registration of the issuance of any of the Securities under
the 1933 Act or cause the offering of any of the Securities to be integrated with other offerings for purposes of any such applicable
stockholder approval provisions.


 


(i) Dilutive
Effect. The Company further acknowledges that its obligation to issue Conversion Shares pursuant to the terms of the Notes in
accordance with this Agreement and the Notes is absolute and unconditional regardless of the dilutive effect that such issuance
may have on the ownership interests of other stockholders of the Company.


 






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(j) Application
of Takeover Protections; Rights Agreement. The Company and its board of directors have taken all necessary action, if any, in
order to render inapplicable any control share acquisition, interested shareholder, business combination, poison pill (including,
without limitation, any distribution under a rights agreement) or other similar anti-takeover provision under the Certificate
of Incorporation, Bylaws or other organizational documents or the laws of the jurisdiction of its formation which is or could
become applicable to any Buyer as a result of the transactions contemplated by this Agreement, including, without limitation,
the Company’s issuance of the Securities and any Buyer’s ownership of the Securities. The Company has not adopted
a stockholder rights plan or similar arrangement relating to accumulations of beneficial ownership of Common Stock or a change
in control of the Company or any of its Subsidiaries.


 


(k) SEC
Documents; Financial Statements. Except as disclosed in the SEC Documents, during the two (2) years prior to the date hereof,
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 1934 Act (all of the foregoing filed prior to the date hereof or prior to the
Closing Date, and all exhibits included therein and financial statements, notes and schedules thereto and documents incorporated
by reference therein being hereinafter referred to as the “SEC Documents”). The Company has delivered to the Buyers
or their respective representatives true, correct and complete copies of the SEC Documents not available on the EDGAR system.
As of their respective filing dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act
and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents,
at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading. As of their respective filing dates, the financial statements of the Company included in the SEC
Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting
principles, consistently applied, during the periods involved (“GAAP”) (except (i) as may be otherwise indicated in
such financial statements or the notes thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the
Company and its Subsidiaries as of the dates thereof and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit adjustments which will not be material either individually
or in the aggregate). No other information provided by or on behalf of the Company to any of the Buyers which is not included
in the SEC Documents, including, without limitation, information referred to in Section 2(d) of this Agreement or in the disclosure
schedules to this Agreement, contains any untrue statement of a material fact or omits to state any material fact necessary in
order to make the statements therein, in the light of the circumstance under which they are or were made, not misleading.


 


(l) Absence
of Certain Changes. Except as disclosed in the SEC Documents, since June 30, 2015, there has been no material adverse change and
no material adverse development in the business, assets, liabilities, properties, operations, condition (financial or otherwise),
results of operations or prospects of the Company or any of its Subsidiaries. Except as disclosed in the SEC Documents, since
June 30, 2015, neither the Company nor any of its Subsidiaries has (i) declared or paid any dividends, (ii) sold any assets, individually
or in the aggregate, in excess of $100,000 outside of the ordinary course of business or (iii) had capital expenditures, individually
or in the aggregate, in excess of $1,000,000. Neither the Company nor any of its Subsidiaries has taken any steps to seek protection
pursuant to any law or statute relating to bankruptcy, insolvency, reorganization, receivership, liquidation or winding up nor
does the Company or any Subsidiary have any knowledge or reason to believe that any of its respective creditors intend to initiate
involuntary bankruptcy proceedings or any actual knowledge of any fact that would reasonably lead a creditor to do so. The Company
and its Subsidiaries, individually and on a consolidated basis, are not as of the date hereof, and after giving effect to the
transactions contemplated hereby to occur at the Closing, will not be Insolvent (as defined below). For purposes of this Section
3(l), “Insolvent” means, with respect to any Person, (i) the present fair saleable value of such Person’s assets
is less than the amount required to pay such Person’s total Indebtedness (as defined in Section 3(s)), (ii) such Person
is unable to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute
and matured, (iii) such Person intends to incur or believes that it will incur debts that would be beyond its ability to pay as
such debts mature or (iv) such Person has unreasonably small capital with which to conduct the business in which it is engaged
as such business is now conducted and is proposed to be conducted.


 






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(m) No
Undisclosed Events, Liabilities, Developments or Circumstances. No event, liability, development or circumstance has occurred
or exists, or is contemplated to occur with respect to the Company, its Subsidiaries or their respective business, properties,
prospects, operations or financial condition, that would be required to be disclosed by the Company under applicable securities
laws on a registration statement on Form S-1 filed with the SEC relating to an issuance and sale by the Company of its Common
Stock and which has not been publicly announced.


 


(n) Conduct
of Business; Regulatory Permits. Neither the Company nor any of its Subsidiaries is in violation of any term of or in default
under any certificate of designations of any outstanding series of preferred stock of the Company (if any), its Certificate of
Incorporation or Bylaws or their organizational charter or memorandum of association or certificate of incorporation or articles
of association or bylaws, respectively. Neither the Company nor any of its Subsidiaries is in violation of any judgment, decree
or order or any statute, ordinance, rule or regulation applicable to the Company or any of its Subsidiaries, and neither the Company
nor any of its Subsidiaries will conduct its business in violation of any of the foregoing, except for possible violations which
could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Without limiting the generality
of the foregoing, the Company is not in violation of any of the rules, regulations or requirements of the Principal Market and
has no knowledge of any facts or circumstances that would reasonably lead to delisting or suspension of the Common Stock by the
Principal Market in the foreseeable future that cannot be cured within any applicable cure time periods provided by the Principal
Market. Except as set forth in the SEC Documents, during the two (2) years prior to the date hereof, the Common Stock has been
designated for quotation on the Principal Market or the OTCQB. Except as set forth in the SEC Documents, during the two (2) years
prior to the date hereof, (i) trading in the Common Stock has not been suspended by the SEC or the Principal Market and (ii) the
Company has received no communication, written or oral, from the SEC or the Principal Market regarding the suspension or delisting
of the Common Stock from the Principal Market. The Company and its Subsidiaries possess all certificates, authorizations and permits
issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct their respective businesses, except
where the failure to possess such certificates, authorizations or permits would not have, individually or in the aggregate, a
Material Adverse Effect, and neither the Company nor any such Subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or permit.


 


(o) 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 of its Subsidiaries has, in the course of its actions for, or on behalf of, the Company
or any of its Subsidiaries (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses
relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official
or employee from corporate funds; (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act
of 1977, as amended; or (iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment to
any foreign or domestic government official or employee.


 






    	 	9	 



     


    

 


(p) Sarbanes-Oxley
Act. The Company is in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002, as amended, that
are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the SEC thereunder that are
effective as of the date hereof.


 


(q)
Transactions With Affiliates. Except as set forth in the SEC Documents, none of the officers, directors or employees of the Company
or any of its Subsidiaries is presently a party to any transaction with the Company or any of its Subsidiaries (other than for
ordinary course services as employees, officers or 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 such officer, director or employee or, to the knowledge of the Company or any of its Subsidiaries, any
corporation, partnership, trust or other entity in which any such officer, director, or employee has a substantial interest or
is an officer, director, employee, trustee or partner.


 


(r) Equity
Capitalization. As of the date hereof, the authorized capital stock of the Company consists of (i) 500,000,000 shares of Common
Stock, of which as of the date hereof, 25,983,224 shares are issued and outstanding, 4,356,697 shares are reserved for issuance
pursuant to the Company’s stock option and purchase plans and 8,433,636 shares are reserved for issuance pursuant to securities
(other than the aforementioned options, the Notes) exercisable or exchangeable for, or convertible into, Common Stock, (ii) 50,000,000
shares of preferred stock, of which none are issued and outstanding and (iii) there are 22,664,141 shares of Common Stock held
by non-affiliates of the Company (total shares issued and outstanding without officers and directors). All of such outstanding
shares have been, or upon issuance will be, validly issued and are fully paid and nonassessable. Except as disclosed in the SEC
Documents, (i) none of the Company’s capital stock is subject to preemptive rights or any other similar rights or any liens
or encumbrances suffered or permitted by the Company; (ii) there are 175,000 outstanding options of which 16,667 are subject to
future vesting, 16,428,421 warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating
to, or securities or rights convertible into, or exercisable or exchangeable for, any shares of capital stock of the Company or
any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to issue additional shares of capital stock of the Company or any of its Subsidiaries or options, warrants,
scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible
into, or exercisable or exchangeable for, any shares of capital stock of the Company or any of its Subsidiaries; (iii) there are
no outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or instruments evidencing
Indebtedness of the Company or any of its Subsidiaries or by which the Company or any of its Subsidiaries is or may become bound;
(iv) there are no financing statements securing obligations in any material amounts, either singly or in the aggregate, filed
in connection with the Company or any of its Subsidiaries; (v) there are no agreements or arrangements under which the Company
or any of its Subsidiaries is obligated to register the sale of any of their securities under the 1933 Act; (vi) there are no
outstanding securities or instruments of the Company or any of its Subsidiaries which contain any redemption or similar provisions,
and there are no contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or
may become bound to redeem a security of the Company or any of its Subsidiaries; (vii) there are no securities or instruments
containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities; (viii) neither the Company
nor any Subsidiary has any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or
agreement; and (ix) the Company and its Subsidiaries have no liabilities or obligations required to be disclosed in the SEC Documents
but not so disclosed in the SEC Documents, other than those incurred in the ordinary course of the Company’s or any of its
Subsidiary’s’ respective businesses and which, individually or in the aggregate, do not or would not have a Material
Adverse Effect. The Company has furnished or made available to the Buyers true, correct and complete copies of the Company’s
Certificate of Incorporation, as amended and as in effect on the date hereof (the “Certificate of Incorporation”),
and the Company’s Bylaws, as amended and as in effect on the date hereof (the “Bylaws”), and the terms of all
securities convertible into, or exercisable or exchangeable for shares of Common Stock and the material rights of the holders
thereof in respect thereto.


 






    	 	10	 



     


    

 


(s) Indebtedness
and Other Contracts. Neither the Company nor any of its Subsidiaries (i) except as disclosed in the SEC Documents, has any outstanding
Indebtedness (as defined below), (ii) except as disclosed in the SEC Documents, is a party to any contract, agreement or instrument,
the violation of which, or default under which, by the other party(ies) to such contract, agreement or instrument could reasonably
be expected to result in a Material Adverse Effect, (iii) except as disclosed in the SEC Documents, is in violation of any term
of or in default under any contract, agreement or instrument relating to any Indebtedness, except where such violations and defaults
would not result, individually or in the aggregate, in a Material Adverse Effect, or (iv) except as disclosed in the SEC Documents,
is a party to any contract, agreement or instrument relating to any Indebtedness, the performance of which, in the judgment of
the Company’s officers, has or is expected to have a Material Adverse Effect. For purposes of this Agreement: (x) “Indebtedness”
of any Person means, without duplication (A) all indebtedness for borrowed money, (B) all obligations issued, undertaken or assumed
as the deferred purchase price of property or services, including, without limitation, “capital leases” in accordance
with GAAP (other than trade payables entered into in the ordinary course of business consistent with past practice), (C) all reimbursement
or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (D) all obligations evidenced
by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition
of property, assets or businesses, (E) all indebtedness created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such
indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are limited
to repossession or sale of such property), (F) all monetary obligations under any leasing or similar arrangement which, in connection
with GAAP, consistently applied for the periods covered thereby, is classified as a capital lease, (G) all indebtedness referred
to in clauses (A) through (F) above secured by (or for which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any mortgage, deed of trust, lien, pledge, charge, security interest or other encumbrance of any
nature whatsoever in or upon any property or assets (including accounts and contract rights) with respect to any asset or property
owned by any Person, even though the Person which owns such assets or property has not assumed or become liable for the payment
of such indebtedness, and (H) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred
to in clauses (A) through (G) above; and (y) “Contingent Obligation” means, as to any Person, any direct or indirect
liability, contingent or otherwise, of that Person with respect to any Indebtedness, lease, dividend or other obligation of another
Person if the primary purpose or intent of the Person incurring such liability, or the primary effect thereof, is to provide assurance
to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating thereto will
be complied with, or that the holders of such liability will be protected (in whole or in part) against loss with respect thereto.


 


(t) Absence
of Litigation. There is no action, suit, proceeding, inquiry or investigation before or by the Principal Market, any court, public
board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company, threatened against
or affecting the Company or any of its Subsidiaries, the Common Stock or any of the Company’s Subsidiaries or any of the
Company’s or its Subsidiaries’ officers or directors, whether of a civil or criminal nature or otherwise, in their
capacities as such, except as set forth in the SEC Documents. 


 






    	 	11	 



     


    

 


(u) 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 been refused any insurance coverage sought or
applied for and 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.


 


(v) Employee
Relations.


 


(i)  Neither
the Company nor any of its Subsidiaries is a party to any collective bargaining agreement or employs any member of a union. The
Company and its Subsidiaries believe that their relations with their respective employees are good. No executive officer of the
Company or any of its Subsidiaries (as defined in Rule 501(f) of the 1933 Act) has notified the Company or any such Subsidiary
that such officer intends to leave the Company or any such Subsidiary or otherwise terminate such officer’s employment with
the Company or any such Subsidiary. No executive officer of the Company or any of its Subsidiaries, to the knowledge of the Company
or any of its Subsidiaries, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement, non-competition agreement, or any other contract or agreement or any restrictive
covenant, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries
to any liability with respect to any of the foregoing matters.


 


(ii)  The
Company and its Subsidiaries are in compliance with all federal, state, local and foreign laws and regulations respecting labor,
employment and employment practices and benefits, terms and conditions of employment and wages and hours, except where failure
to be in compliance would not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse
Effect.


 


(w) Title.
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, free and clear of
all liens, encumbrances and defects except such as do not materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property by the Company and any of its Subsidiaries. Any real property and facilities
held under lease by the Company and any of its Subsidiaries are held by them under valid, subsisting and enforceable leases with
such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings
by the Company and its Subsidiaries.


 


(x) Intellectual
Property Rights. The Company and its Subsidiaries own or possess adequate rights or licenses to use all trademarks, trade names,
service marks, service mark registrations, service names, original works of authorship, patents, patent rights, copyrights, inventions,
licenses, approvals, governmental authorizations, trade secrets and other intellectual property rights and all applications and
registrations therefor (“Intellectual Property Rights”) necessary to conduct their respective businesses as now conducted
and as presently proposed to be conducted. None of the Company’s or its Subsidiaries’ Intellectual Property Rights
have expired or terminated or have been abandoned or are expected to expire or terminate or are expected to be abandoned, within
three years from the date of this Agreement. The Company does not have any knowledge of any infringement by the Company or its
Subsidiaries of Intellectual Property Rights of others. There is no claim, action or proceeding being made or brought, or to the
knowledge of the Company or any of its Subsidiaries, being threatened, against the Company or any of its Subsidiaries regarding
its Intellectual Property Rights. Neither the Company nor any of its Subsidiaries is aware of any facts or circumstances which
might give rise to any of the foregoing infringements or claims, actions or proceedings. The Company and its Subsidiaries have
taken reasonable security measures to protect the secrecy, confidentiality and value of all of their Intellectual Property Rights.


 






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(y) Environmental
Laws. The Company and its Subsidiaries (i) are in compliance with any and all Environmental Laws (as hereinafter defined), (ii)
have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and conditions of any such permit, license or approval where, in each of
the foregoing clauses (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the
aggregate, a Material Adverse Effect. 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.


 


(z) Subsidiary
Rights. The Company or one of its Subsidiaries has the unrestricted right to vote, and (subject to limitations imposed by applicable
law) to receive dividends and distributions on, all capital securities of its Subsidiaries as owned by the Company or such Subsidiary.


 


(aa) Investment
Company Status. Neither the Company nor any Subsidiary is, and upon consummation of the sale of the Securities, and for so long
any Buyer holds any Securities, will be, an “investment company,” a company controlled by an “investment company”
or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment
company” as such terms are defined in the Investment Company Act of 1940, as amended.


 


(bb) Tax
Status. The Company and each of its Subsidiaries (i) has made or filed all U.S. federal, state and foreign income and all other
tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental
assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations,
except those being contested in good faith and (iii) has set aside on its books provision reasonably adequate for the payment
of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes
in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of
no basis for any such claim.


 


(cc) Internal
Accounting and Disclosure Controls. The Company and each of its Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain asset and liability accountability, (iii) access to assets or incurrence
of liabilities is permitted only in accordance with management’s general or specific authorization and (iv) the recorded
accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals and appropriate
action is taken with respect to any difference. The Company maintains disclosure controls and procedures (as such term is defined
in Rule 13a-15 under the 1934 Act) that are effective in ensuring that information required to be disclosed by the Company in
the reports that it files or submits under the 1934 Act is recorded, processed, summarized and reported, within the time periods
specified in the rules and forms of the SEC, including, without limitation, controls and procedures designed to ensure that information
required to be disclosed by the Company in the reports that it files or submits under the 1934 Act is accumulated and communicated
to the Company’s management, including its principal executive officer or officers and its principal financial officer or
officers, as appropriate, to allow timely decisions regarding required disclosure. During the twelve months prior to the date
hereof neither the Company nor any of its Subsidiaries has received any notice or correspondence from any accountant relating
to any material weakness in any part of the system of internal accounting controls of the Company or any of its Subsidiaries.


 






    	 	13	 



     


    

 


(dd) Off
Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company 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 would be reasonably likely to have a Material Adverse Effect.


 


(ee) [Reserved].


 


(ff)  Eligibility
for Registration. The Company is eligible to register the Conversion Shares for resale by the Buyers using Form S-3 promulgated
under the 1933 Act.


 


(gg) Transfer
Taxes. On the Closing Date, all stock transfer or other taxes (other than income or similar taxes) which are required to be paid
in connection with the sale and transfer of the Securities to be sold to each Buyer hereunder will be, or will have been, fully
paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with.


 


(hh) 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.


 


(ii) Acknowledgement
Regarding Buyers’ Trading Activity. The Company acknowledges and agrees that (i) none of the Buyers has been asked to agree,
nor has any Buyer agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or “derivative”
securities based on securities issued by the Company or to hold the Securities for any specified term; (ii) any Buyer, and counter-parties
in “derivative” transactions to which any such Buyer is a party, directly or indirectly, presently may have a “short”
position in the Common Stock, and (iii) each Buyer shall not be deemed to have any affiliation with or control over any arm’s
length counter-party in any “derivative” transaction. The Company further understands and acknowledges that one or
more Buyers may engage in hedging and/or trading activities at various times during the period that the Securities are outstanding,
including, without limitation, during the periods that the value of the Conversion Shares are being determined and (b) such hedging
and/or trading activities, if any, can reduce the value of the existing stockholders’ equity interest in the Company both
at and after the time the hedging and/or trading activities are being conducted. The Company acknowledges that such aforementioned
hedging and/or trading activities do not constitute a breach of this Agreement, the Notes, or any of the documents executed in
connection herewith.


 


(jj)  U.S.
Real Property Holding Corporation. The Company is not, has never been, and so long as any Securities remain outstanding, shall
not become, a U.S. real property holding corporation within the meaning of Section 897 of the Code and the Company shall so certify
upon any Buyer’s request.


 






    	 	14	 



     


    

 


(kk) Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries or affiliates is subject to the Bank Holding Company Act
of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”). Neither the Company nor any of its Subsidiaries or affiliates owns or controls, directly or indirectly, five
percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total
equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any
of its Subsidiaries or affiliates exercises a controlling influence over the management or policies of a bank or any entity that
is subject to the BHCA and to regulation by the Federal Reserve.


 


(ll) No
Additional Agreements. Neither the Company nor any of its Subsidiaries has any agreement or understanding with any Buyer with
respect to the transactions contemplated by the Transaction Documents other than as specified in the Transaction Documents.


 


(mm)
Disclosure. Except for discussions specifically regarding the offer and sale of the Securities, the Company confirms that
neither it nor any other Person acting on its behalf has provided any of the Buyers or their agents or counsel with any
information that constitutes or could reasonably be expected to constitute material, nonpublic information concerning the
Company or any of its Subsidiaries, other than the existence of the transactions contemplated by this Agreement and the other
Transaction Documents. The Company understands and confirms that each of the Buyers will rely on the foregoing
representations in effecting transactions in securities of the Company. All disclosure provided to the Buyers regarding the
Company and its Subsidiaries, their businesses and the transactions contemplated hereby, including the schedules to this
Agreement, furnished by or on behalf of the Company or any of its Subsidiaries is true and correct and does not contain any
untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not misleading. All of the written information
furnished after the date hereof by or on behalf of the Company or any of its Subsidiaries to you pursuant to or in connection
with this Agreement and the other Transaction Documents, taken as a whole, will be true and correct in all material respects
as of the date on which such information is so provided and will not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under
which they are made, not misleading. Each press release issued by the Company or any of its Subsidiaries during the
twelve (12) months preceding the date of this Agreement did not at the time of release contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading. No event or circumstance has occurred
or information exists with respect to the Company or any of its Subsidiaries or its or their business, properties,
liabilities, prospects, operations (including results thereof) or conditions (financial or otherwise), which, under
applicable law, rule or regulation, requires public disclosure at or before the date hereof or announcement by the Company
but which has not been so publicly announced or disclosed. The Company acknowledges and agrees that no Buyer makes or has
made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set
forth in Section 2.  


 


(nn) Shell
Company Status. The Company is not an issuer identified in Rule 144(i)(1) of the 1933 Act.


 


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


 






    	 	15	 



     


    

 


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


 


(qq) Money
Laundering. The Company and its Subsidiaries are in compliance with, and have not previously violated, the USA Patriot Act of
2001 and all other applicable U.S. and non-U.S. anti-money laundering laws and regulations, including, but not limited to, the
laws, regulations and Executive Orders and sanctions programs administered by the U.S. Office of Foreign Assets Control, including,
but not limited, to (i) Executive Order 13224 of September 23, 2001 entitled, “Blocking Property and Prohibiting Transactions
With Persons Who Commit, Threaten to Commit, or Support Terrorism” (66 Fed. Reg. 49079 (2001)); and (ii) any regulations
contained in 31 CFR, Subtitle B, Chapter V.


 


(rr) No
Disqualification Events. With respect to Securities to be offered and sold hereunder in reliance on Rule 506(b) under the 1933
Act (“Regulation D Securities”), 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” and, together, “Issuer Covered Persons”) is subject to any of the “Bad Actor” disqualifications
described in Rule 506(d)(1)(i) to (viii) under the 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. The Company has complied, to the extent applicable, with its disclosure obligations under
Rule 506(e), and has furnished to the Buyers a copy of any disclosures provided thereunder.


 


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


 


4. COVENANTS.


 


(a) Best
Efforts. Each party shall use its best efforts timely to satisfy each of the covenants and the conditions to be satisfied by it
as provided in Sections 6 and 7 of this Agreement.


 


(b) Form
D and Blue Sky. The Company agrees to file a Form D with respect to the Securities as required under Regulation D and to provide
a copy thereof to each Buyer promptly after such filing. The Company shall, on or before the Closing Date, take such action as
the Company shall reasonably determine is necessary in order to obtain an exemption for or to qualify the Securities for sale
to the Buyers at the Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of the states
of the United States (or to obtain an exemption from such qualification), and shall provide evidence of any such action so taken
to the Buyers on or prior to the Closing Date. The Company shall make all filings and reports relating to the offer and sale of
the Securities required under applicable securities or “Blue Sky” laws of the states of the United States following
the Closing Date.


 


(c) Reporting
Status. Until the date on which the Buyers shall have sold all of the Conversion Shares and none of the Notes are outstanding
(the “Reporting Period”), the Company shall timely file all reports required to be filed with the SEC pursuant to
the 1934 Act, and the Company shall not terminate its status as an issuer required to file reports under the 1934 Act even if
the 1934 Act or the rules and regulations thereunder would no longer require or otherwise permit such termination.


 






    	 	16	 



     


    

 


(d) Use
of Proceeds. The Company will use the proceeds from the sale of the Securities for working capital purposes.


 


(e) Financial
Information. The Company agrees to send the following to each Investor during the Reporting Period, unless the following are filed
with the SEC through EDGAR and are available to the public through the EDGAR system: within one (1) Business Day after the filing
thereof with the SEC, a copy of its Annual Reports on Form 10-K, any Quarterly Reports on Form 10-Q, any Current Reports on Form
8-K (or any analogous reports under the 1934 Act), any registration statements (other than on Form S-8) or amendments filed pursuant
to the 1933 Act and copies of any notices and other information made available or given to the stockholders of the Company generally.
As used herein, “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in
The City of New York are authorized or required by law to remain closed.


 


(f) Listing.
The Company shall promptly secure the listing of all the Conversion Shares and any capital stock of the Company issued or issuable
with respect to the Conversion Shares or the Notes, in each case as a result of any stock split, stock dividend, recapitalization,
exchange or similar event or otherwise, without regard to any limitations on the conversion of the Notes (the “Underlying
Shares”), upon each national securities exchange and automated quotation system, if any, upon which the Common Stock then
listed (subject to official notice of issuance) and shall maintain such listing of all Underlying Shares from time to time issuable
under the terms of the Transaction Documents. The Company shall maintain the authorization for quotation of the Common Stock on
the Principal Market. Neither the Company nor any of its Subsidiaries shall take any action which would be reasonably expected
to result in the delisting or suspension of the Common Stock on the Principal Market. The Company shall pay all fees and expenses
in connection with satisfying its obligations under this Section 4(f).


 


(g) Fees.
The Company shall reimburse Dominion Capital LLC (a Buyer) or its designee(s) (in addition to any other expense amounts paid to
any Buyer or its counsel prior to the date of this Agreement) for all costs and expenses incurred in connection with the transactions
contemplated by the Transaction Documents up to $20,000 in the aggregate (including, without limitation, for non-accountable expenses,
all legal fees and disbursements in connection therewith, documentation and implementation of the transactions contemplated by
the Transaction Documents and due diligence in connection therewith, costs associated with the deposit of shares, and costs associated
with compliance with Rule 144 promulgated under the Securities Act), which amount may be withheld by such Buyer from its purchase
price for any Notes purchased at the Closing to the extent not previously reimbursed by the Company. The Company shall pay, and
hold each Buyer harmless against, any liability, loss or expense (including, without limitation, reasonable attorney’s fees
and out-of-pocket expenses) arising in connection with any claim relating to any payment with respect to placement agent’s
fees, financial advisory fees, or broker’s commissions (other than for Persons engaged by any Buyer) relating to or arising
out of the transactions contemplated hereby. Except as otherwise set forth in the Transaction Documents, each party to this Agreement
shall bear its own expenses in connection with the sale of the Securities to the Buyers.


 


(h) Pledge
of Securities. The Company acknowledges and agrees that the Securities may be pledged by an Investor in connection with a bona
fide margin agreement or other loan or financing arrangement that is secured by the Securities. The pledge of Securities shall
not be deemed to be a transfer, sale or assignment of the Securities hereunder, and no Investor effecting a pledge of Securities
shall be required to provide the Company with any notice thereof or otherwise make any delivery to the Company pursuant to this
Agreement or any other Transaction Document, including, without limitation, Section 2(f) hereof; provided that an Investor and
its pledgee shall be required to comply with the provisions of Section 2(f) hereof in order to effect a sale, transfer or assignment
of Securities to such pledgee. The Company hereby agrees to execute and deliver such documentation as a pledgee of the Securities
may reasonably request in connection with a pledge of the Securities to such pledgee by an Investor.


 






    	 	17	 



     


    

 


(i) Disclosure
of Transactions and Other Material Information. On or before 5:30 p.m., New York City time, on the fourth Business Day after this
Agreement has been executed, the Company shall issue a press release reasonably acceptable to the Buyers and file a Current Report
on Form 8-K describing the terms of the transactions contemplated by the Transaction Documents in the form required by the 1934
Act and attaching the material Transaction Documents (including, without limitation, this Agreement (and all schedules and exhibits
to this Agreement), the form of Notes as exhibits to such filing (including all attachments), the “8-K Filing”). From
and after the filing of the 8-K Filing with the SEC, no Buyer shall be in possession of any material, nonpublic information received
from the Company, any of its Subsidiaries or any of their respective officers, directors, employees, affiliates 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, employees, affiliates or agents, on the one hand, and any
of the Buyers or any of their affiliates, on the other hand, shall terminate. The Company shall not, and shall cause each of its
Subsidiaries and its and each of their respective officers, directors, employees, affiliates and agents, not to, provide any Buyer
with any material, nonpublic information regarding the Company or any of its Subsidiaries from and after the date hereof without
the express prior written consent of such Buyer. If a Buyer has, or believes it has, received any such material, nonpublic information
regarding the Company or any of its Subsidiaries from the Company, any of its Subsidiaries or any of their respective officers,
directors, employees, affiliates or agents, it may provide the Company with written notice thereof. The Company shall, within
two (2) Trading Days of receipt of such notice, make public disclosure of such material, nonpublic information. In the event of
a breach of the foregoing covenant by the Company, any of its Subsidiaries, or any of its or their respective officers, directors,
employees, affiliates and agents, in addition to any other remedy provided herein or in the Transaction Documents, a Buyer shall
have the right to make a public disclosure, in the form of a press release, public advertisement or otherwise, of such material,
nonpublic information without the prior approval by the Company, its Subsidiaries, or any of its or their respective officers,
directors, employees, affiliates or agents. No Buyer shall have any liability to the Company, its Subsidiaries, or any of its
or their respective officers, directors, employees, affiliates, or agents for any such disclosure. To the extent that the Company
delivers any material, nonpublic information to a Buyer without such Buyer’s consent, the Company hereby covenants and agrees
that such Buyer shall not have any duty of confidentiality to the Company, any of its Subsidiaries or any of their respective
officers, directors, employees, affiliates or agent with respect to, or a duty to the Company, any of its Subsidiaries or any
of their respective officers, directors, employees, affiliates or agent not to trade on the basis of, such material, nonpublic
information. Subject to the foregoing, neither the Company, its Subsidiaries nor any Buyer shall issue any press releases 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 any Buyer, to make any press release or other public disclosure with respect to such transactions
(i) in substantial conformity with the 8-K Filing and contemporaneously therewith and (ii) as is required by applicable law and
regulations (provided that in the case of clause (i) each Buyer shall be consulted by the Company in connection with any such
press release or other public disclosure prior to its release). Without the prior written consent of any applicable Buyer, neither
the Company nor any of its Subsidiaries or affiliates shall disclose the name of such Buyer in any filing, announcement, release
or otherwise.


 


(j)No
Filings. Until the date on which the Buyers shall have sold all of the Conversion Shares and none of the Notes are outstanding,
the Company shall not, pursuant to or within the meaning of Title 11, U.S. Code, or any similar Federal, foreign or state law
for the relief of debtors (collectively, “Bankruptcy Law”), (A) commence a voluntary case, (B) consent to the entry
of an order for relief against it in an involuntary case, (C) consent to the appointment of a receiver, trustee, assignee, liquidator
or similar official (a “Custodian”), (D) makes a general assignment for the benefit of its creditors or (E) admit
in writing that it is generally unable to pay its debts as they become due, without the express, prior written consent of the
Buyer, which consent may be withheld for any reason.


 






    	 	18	 



     


    

 


(k)  Additional
Notes. So long as any Buyer owns any Notes, the Company will not issue any Notes that would cause a breach or default under the
Notes.


 


(l) Corporate
Existence. So long as any Buyer beneficially owns any Securities, the Company shall (i) maintain its corporate existence and (ii)
not be party to any Fundamental Transaction (as defined in the Notes) unless the Company is in compliance with the applicable
provisions governing Fundamental Transactions set forth in the Notes.


 


(m)  Reservation
of Shares. So long as any Buyer owns any Securities, the Company shall take all action necessary to at all times have authorized,
and reserved for the purpose of issuance, no less than the Required Reserve Amount. If at any time the number of shares of Common
Stock authorized and reserved for issuance is not sufficient to meet the Required Reserved Amount, the Company will promptly take
all corporate action necessary to authorize and reserve a sufficient number of shares, including, without limitation, calling
a special meeting of stockholders to authorize additional shares to meet the Company’s obligations under Section 3(c), in
the case of an insufficient number of authorized shares, obtain stockholder approval of an increase in such authorized number
of shares, and voting the management shares of the Company in favor of an increase in the authorized shares of the Company to
ensure that the number of authorized shares is sufficient to meet the Required Reserved Amount.


 


(n) Conduct
of Business. The business of the Company and its Subsidiaries shall not be conducted in violation of any law, ordinance or regulation
of any governmental entity, except where such violations would not result, either individually or in the aggregate, in a Material
Adverse Effect.


 


(o)  Public
Information. At any time during the period commencing from the six (6) month anniversary of the Closing Date and ending at such
time that all of the Securities, if a registration statement is not available for the resale of all of the Securities, may be
sold without restriction or limitation pursuant to Rule 144 and without the requirement to be in compliance with Rule 144(c)(1),
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 requirement 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) (a “Public Information Failure”) then, as partial relief for the damages to any holder of
Securities 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 at law or in equity), the Company shall pay to each such holder an amount in cash equal to two
percent (2.0%) of the aggregate Purchase Price of such holder’s Securities on the day of a Public Information Failure and
on every thirtieth day (pro rated for periods totaling less than thirty days) thereafter until the earlier of (i) the date such
Public Information Failure is cured and (ii) such time that such Public Information Failure no longer prevents a holder of Securities
from selling such Securities pursuant to Rule 144 without any restrictions or limitations. The payments to which a holder shall
be entitled pursuant to this Section 4(o) are referred to herein as “Public Information Failure Payments.” Public
Information Failure Payments shall be paid on the earlier of (I) the last day of the calendar month during which such Public Information
Failure Payments are incurred and (II) the third Business Day after the event or failure giving rise to the Public Information
Failure Payments is cured. In the event the Company fails to make Public Information Failure Payments in a timely manner, such
Public Information Failure Payments shall bear interest at the rate of 1.5% per month (prorated for partial months) until paid
in full.


 






    	 	19	 



     


    

 


(p) Notice
of Disqualification Events. The Company will notify the Buyers in writing, prior to the Closing Date of (i) any Disqualification
Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a Disqualification
Event relating to any Issuer Covered Person.


 


(q) FAST
Compliance. While any Notes are outstanding, the Company shall maintain a transfer agent that participates in the DTC Fast Automated
Securities Transfer Program.


 


(r) Closing
Documents. On or prior to fourteen (14) calendar days after the Closing Date, the Company agrees to deliver, or cause to be delivered,
to each Buyer and Robinson Brog a complete closing set of the executed Transaction Documents, Securities and any other documents
required to be delivered to any party pursuant to Section 7 hereof or otherwise.


 


5. REGISTER;
TRANSFER AGENT INSTRUCTIONS.


 


(a) Register.
The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate
by notice to each holder of Securities), a register for the Notes in which the Company shall record the name and address of the
Person in whose name the Notes have been issued (including the name and address of each transferee), the principal amount of Notes
held by such Person, the number of Conversion Shares issuable pursuant to the terms of the Notes held by such Person. The Company
shall keep the register open and available at all times during business hours for inspection of any Buyer or its legal representatives.


 


(b) Transfer
Agent Instructions. The Company shall issue irrevocable instructions to its transfer agent, and any subsequent transfer agent,
in the form of Exhibit B attached hereto (the “Irrevocable Transfer Agent Instructions”) to issue certificates or
credit shares to the applicable balance accounts at DTC, registered in the name of each Buyer or its respective nominee(s), for
the Conversion Shares issued at the Closing or pursuant to the terms of the Notes in such amounts as specified from time to time
by each Buyer to the Company upon conversion of the Notes. The Company warrants that no instruction other than the Irrevocable
Transfer Agent Instructions referred to in this Section 5(b), and stop transfer instructions to give effect to Section 2(f) hereof,
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 other Transaction Documents. If a Buyer effects
a sale, assignment or transfer of the Securities in accordance with Section 2(f), the Company shall permit the transfer and shall
promptly instruct its transfer agent to issue one or more certificates or credit shares to the applicable balance accounts at
DTC in such name and in such denominations as specified by such Buyer to effect such sale, transfer or assignment to the extent
the transaction is FAST eligible (i.e.: if legended shares are to be delivered, they will be in certificated form). In the event
that such sale, assignment or transfer involves the Conversion Shares sold, assigned or transferred pursuant to an effective registration
statement or pursuant to Rule 144, the transfer agent shall issue such Securities to the Buyer, assignee or transferee, as the
case may be, without any restrictive legend. The Company acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to a Buyer. Accordingly, the Company acknowledges that the remedy at law for a breach of its obligations under
this Section 5(b) will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions
of this Section 5(b), that a Buyer shall be entitled, in addition to all other available remedies, to an order and/or injunction
restraining any breach and requiring immediate issuance and transfer, without the necessity of showing economic loss and without
any bond or other security being required.


 






    	 	20	 



     


    

 


6. CONDITIONS
TO THE COMPANY’S OBLIGATION TO SELL.


 


The
obligation of the Company hereunder to issue and sell the Notes to each Buyer at the Closing is subject to the satisfaction, at
or before the Closing Date, of each of the following conditions, 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 by providing each Buyer with prior written notice
thereof:


 


(i) Such
Buyer shall have executed each of the Transaction Documents to which it is a party and delivered the same to the Company.


 


(ii) Such
Buyer shall have delivered its Purchase Price to the Company (less, in the case of Dominion Capital LLC, the amounts withheld
pursuant to Section 4(g)), for the Notes being purchased by such Buyer at the Closing by wire transfer of immediately available
funds pursuant to the wire instructions provided by the Company.


 


(iii) The
representations and warranties of such Buyer shall be true and correct 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 which shall be true and correct
as of such specified date), and such 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 such Buyer at or prior to
the Closing Date.


 


7. CONDITIONS
TO EACH BUYER’S OBLIGATION TO PURCHASE.


 


The
obligation of each Buyer hereunder to purchase the Notes at the Closing is subject to the satisfaction, at or before the Closing
Date, of each of the following conditions, provided that these conditions are for each Buyer’s sole benefit and may be waived
by such Buyer at any time in its sole discretion by providing the Company with prior written notice thereof:


 


(i) The
Company and each of its Subsidiaries shall have duly executed and delivered to such Buyer each of the following documents to which
it is a party: (A) each of the Transaction Documents, and (B) the Notes (allocated in such principal amounts as such Buyer shall
request), being purchased by such Buyer at the Closing pursuant to this Agreement.


 


(ii) Such
Buyer shall have received the opinion of Pryor Cashman LLP, the Company’s outside counsel, dated as of the Closing Date,
in substantially the form of Exhibit C attached hereto.


 


(iii) The
Company shall have delivered to such Buyer a copy of the Irrevocable Transfer Agent Instructions, in the form of Exhibit B attached
hereto, which instructions shall have been delivered to and acknowledged in writing by the Company’s transfer agent.


 


(iv) The
Company shall have delivered to such 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.


 


(v) The
Company shall have delivered to such Buyer a certificate, executed by the Secretary of the Company and dated as of the Closing
Date, as to (i) the resolutions consistent with Section 3(b) as adopted by the Company’s and each of its Subsidiaries’
Board of Directors in a form reasonably acceptable to such Buyer, (ii) the Certificate of Incorporation of the Company and (iii)
the Bylaws of the Company, each as in effect at the Closing, in the form attached hereto as Exhibit D.


 






    	 	21	 



     


    

 


(vi) The
representations and warranties of the Company shall be true and correct 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 which shall be true and correct
as of such specified date) and the Company shall have performed, satisfied and complied in all respects with the covenants, agreements
and conditions required by the Transaction Documents to be performed, satisfied or complied with by the Company at or prior to
the Closing Date. 


 


(vii) The
Company shall have delivered to such Buyer a letter from the Company’s transfer agent certifying the number of shares of
Common Stock outstanding as of a date within five (5) days of the Closing Date.


 


(viii)
The Common Stock (I) shall be designated for quotation or listed on the Principal Market and (II) shall not have been suspended,
as of the Closing Date, by the SEC or the Principal Market from trading on the Principal Market nor shall suspension by the SEC
or the Principal Market have been threatened, as of the Closing Date, either (A) in writing by the SEC or the Principal Market
or (B) by falling below the minimum listing maintenance requirements of the Principal Market.


 


(ix) The
Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the sale
of the Securities.


 


(x) The
Company shall have delivered to such Buyer such other documents relating to the transactions contemplated by this Agreement as
such Buyer or its counsel may reasonably request.


 


8. TERMINATION.
In the event that the Closing shall not have occurred with respect to a Buyer on or before five (5) Business Days from the date
hereof due to the Company’s or such Buyer’s failure to satisfy the conditions set forth in Sections 6 and 7 above
(and the nonbreaching party’s failure to waive such unsatisfied condition(s)), the nonbreaching party shall have the option
to terminate this Agreement with respect to such breaching party at the close of business on such date by delivering a written
notice to that effect to each other party to this Agreement and without liability of any party to any other party; provided, however,
that if this Agreement is terminated pursuant to this Section 8, the Company shall remain obligated to reimburse Dominion Capital
LLC or its designee(s), as applicable, for the expenses described in Section 4(g) above.


 


9. MISCELLANEOUS.


 


(a) Governing
Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this Agreement
shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of
any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the
state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any
such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served
in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such 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 manner permitted by law. 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 TRANSACTION CONTEMPLATED HEREBY. 


 






    	 	22	 



     


    

 


(b) Counterparts.
This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a
facsimile 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.


 


(c) Headings.
The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this
Agreement.


 


(d) Severability.
If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity
or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations
of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will
endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s),
the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).


 


(e) Entire
Agreement; Amendments. This Agreement and the other Transaction Documents supersede all other prior oral or written agreements
between the Buyers, the Company, their affiliates and Persons acting on their behalf with respect to the matters discussed herein,
and this Agreement, the other Transaction Documents and the instruments referenced herein and therein 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 any Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. Provisions
of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company and the holders of at least a majority of the aggregate
number of shares of Common Stock issued or issuable under the Notes (without regard to any restriction or limitation on the conversion
of the Notes contained therein) and shall include affiliates of Dominion Capital LLC (the “Designee”) so long as the
Designee or any of its affiliates holds any Notes (the “Required Holders”). Any amendment or waiver effected in accordance
with this Section 9(e) shall be binding upon each Buyer and holder of Securities and the Company. No such amendment shall be effective
to the extent that it applies to less than all of the Buyers or holders of Securities. No consideration shall be offered or paid
to any Person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the
same consideration (other than the reimbursement of legal fees) also is offered to all of the parties to the Transaction Documents,
holders of Notes, as the case may be. The Company has not, directly or indirectly, made any agreements with any Buyers relating
to the terms or conditions of the transactions contemplated by the Transaction Documents except as set forth in the Transaction
Documents. Without limiting the foregoing, the Company confirms that, except as set forth in this Agreement, no Buyer has made
any commitment or promise or has any other obligation to provide any financing to the Company or otherwise.


 






    	 	23	 



     


    

 


(f) Notices.
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must
be in writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when
sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file by the sending
party) or by electronic mail; or (iii) one Business Day after deposit with an overnight courier service, in each case properly
addressed to the party to receive the same. The addresses, facsimile numbers and e-mail addresses for such communications shall
be:


 


If
to the Company:


 


InterCloud
Systems, Inc. 


1030
Broad, Street, Suite 102


Shrewsbury,
NJ 07702


Attn:
Chief Financial Officer


 


With
a copy to (for informational purposes only):


 


Pryor
Cashman LLP


7
Times Square


New
York, New York 10036


Attention:
M. Ali Panjwani, Esq.


Facsimile:
(212) 798-6319


 


If
to the Transfer Agent:


 


Corporate
Stock Transfer, Inc.


3200
Cherry Creek Drive South, Suite 430


Denver,
Colorado 80209


Attention:
Daniel Bell


 


If
to a Buyer, to its address, facsimile number and e-mail address set forth on the Schedule of Buyers, with copies to such Buyer’s
representatives as set forth on the Schedule of Buyers,


 


with
a copy (for informational purposes only) to:


 


Robinson
Brog


875
Third Avenue


New
York, New York 10022


Telephone:
(212) 603-6300


Attention:
  David E. Danovitch, Esq.


E-mail:           ded@robinsonbrog.com


 


or
to such other address, facsimile number and/or e-mail address and/or to the attention of such other Person as the recipient party
has specified by written notice given to each other party five (5) days prior to the effectiveness of such change. Written confirmation
of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically
generated by the sender’s facsimile machine or e-mail containing the time, date, recipient facsimile number and an image
of the first page of such transmission or (C) provided by an overnight courier service shall be rebuttable evidence of personal
service, receipt by facsimile or receipt from an overnight courier service in accordance with clause (i), (ii) or (iii) above,
respectively.


 






    	 	24	 



     


    

 


(g) Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and
assigns, including any purchasers of the Notes. The Company shall not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Required Holders, including by way of a Fundamental Transaction (unless the Company is
in compliance with the applicable provisions governing Fundamental Transactions set forth in the Notes). A Buyer may assign some
or all of its rights hereunder without the consent of the Company, in which event such assignee shall be deemed to be a Buyer
hereunder with respect to such assigned rights.


 


(h) No
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, except that each Indemnitee
shall have the right to enforce the obligations of the Company with respect to Section 9(k).


 


(i) Survival.
Unless this Agreement is terminated under Section 8, the representations and warranties of the Company and the Buyers contained
in Sections 2 and 3, and the agreements and covenants set forth in Sections 4, 5 and 9 shall survive the Closing. Each Buyer shall
be responsible only for its own representations, warranties, agreements and covenants hereunder.


 


(j) Further
Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute
and deliver all such other agreements, certificates, instruments and documents, as any 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.


 


(k) Indemnification.
(i)In consideration of each Buyer’s execution and delivery of the Transaction Documents and acquiring the Securities thereunder
and in addition to all of the Company’s other obligations under the Transaction Documents, the Company shall defend, protect,
indemnify and hold harmless each Buyer and each other holder of the Securities and all of their 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 the Transaction Documents or any other certificate, instrument
or document contemplated hereby or thereby, (b) any breach of any covenant, agreement or obligation of the Company contained in
the Transaction Documents or any other 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 the Transaction Documents or any other 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, (iii)
any disclosure made by such Buyer pursuant to Section 4(i), or (iv) the status of such Buyer or holder of the Securities as an
investor in the Company pursuant to the transactions contemplated by the Transaction Documents. 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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(ii) Promptly
after receipt by an Indemnitee under this Section 9(k) of notice of the commencement of any action or proceeding (including any
governmental action or proceeding) involving an Indemnified Liability, such Indemnitee shall, if a claim for indemnification in
respect thereof is to be made against any indemnifying party under this Section 9(k), deliver to the indemnifying party a written
notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent the
indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof
with counsel mutually satisfactory to the indemnifying party and the Indemnitee; provided, however, that an Indemnitee shall have
the right to retain its own counsel with the fees and expenses of not more than one counsel for such Indemnitee to be paid by
the indemnifying party, if, in the reasonable opinion of the Indemnitee, the representation by such counsel of the Indemnitee
and the indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnitee and any
other party represented by such counsel in such proceeding. Legal counsel referred to in the immediately preceding sentence shall
be selected by the Buyers holding at least a majority of the Securities issued and issuable hereunder. The Indemnitee shall cooperate
fully with the indemnifying party in connection with any negotiation or defense of any such action or Indemnified Liabilities
by the indemnifying party and shall furnish to the indemnifying party all information reasonably available to the Indemnitee that
relates to such action or Indemnified Liabilities. The indemnifying party shall keep the Indemnitee fully apprised at all times
as to the status of the defense or any settlement negotiations with respect thereto. No indemnifying party shall be liable for
any settlement of any action, claim or proceeding effected without its prior written consent, provided, however, that the indemnifying
party shall not unreasonably withhold, delay or condition its consent. No indemnifying party shall, without the prior written
consent of the Indemnitee, which consent shall not be unreasonably withheld conditioned or delayed, consent to entry of any judgment
or enter into any settlement or other compromise which (i) does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnitee of a release from all liability in respect to such Indemnified Liabilities or litigation,
(ii) requires any admission of wrongdoing by such Indemnitee, or (iii) obligates or requires an Indemnitee to take, or refrain
from taking, any action. Following indemnification as provided for hereunder, the indemnifying party shall be subrogated to all
rights of the Indemnitee with respect to all third parties, firms or corporations relating to the matter for which indemnification
has been made. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of
any such action shall not relieve such indemnifying party of any liability to the Indemnitee under this Section 9(k), except to
the extent that the indemnifying party is prejudiced in its ability to defend such action.


 


(iii) The
indemnification required by this Section 9(k) shall be made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or Indemnified Liabilities are incurred.


 


(iv) The
indemnity agreements contained herein shall be in addition to (x) any cause of action or similar right of the Indemnitee against
the indemnifying party or others, and (y) any liabilities the indemnifying party may be subject to pursuant to the law.


 


(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) Remedies.
Each Buyer and each holder of the Securities shall have all rights and remedies set forth in the Transaction Documents and all
rights and remedies which such holders have been granted at any time under any other agreement or contract and all of the rights
which such holders have under any law. Any Person having any rights under any provision of this Agreement shall be entitled to
enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any breach of any
provision of this Agreement and to exercise all other rights granted by law. Furthermore, the Company recognizes that in the event
that it fails to perform, observe, or discharge any or all of its obligations under the Transaction Documents, any remedy at law
may prove to be inadequate relief to the Buyers. The Company therefore agrees that the Buyers shall be entitled to seek temporary
and permanent injunctive relief in any such case without the necessity of proving actual damages and without posting a bond or
other security.


 



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(n) Rescission
and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the
Transaction Documents, whenever any Buyer exercises a right, election, demand or option under a Transaction Document and the Company
does not timely perform its related obligations within the periods therein provided, then such Buyer may rescind or withdraw,
in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole
or in part without prejudice to its future actions and rights.


 


(o) Payment
Set Aside. To the extent that the Company makes a payment or payments to the Buyers hereunder or pursuant to any of the other
Transaction Documents or the Buyers enforce or exercise their rights hereunder or thereunder, and such payment or payments or
the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee,
receiver or any other Person under any law (including, without limitation, any bankruptcy law, 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) Independent
Nature of Buyers’ Obligations and Rights. The obligations of each Buyer under any Transaction Document are several and not
joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of the obligations
of any other Buyer under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action
taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as, and the Company acknowledges that
the Buyers do not so constitute, a partnership, an association, a joint venture or any other kind of entity, or create a presumption
that the Buyers are in any way acting in concert or as a group, and the Company shall not assert any such claim with respect to
such obligations or the transactions contemplated by the Transaction Documents and the Company acknowledges that the Buyers are
not acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents.
The Company acknowledges and each Buyer confirms that it has independently participated in the negotiation of the transaction
contemplated hereby with the advice of its own counsel and advisors. Each Buyer shall be entitled to independently protect and
enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents,
and it shall not be necessary for any other Buyer to be joined as an additional party in any proceeding for such purpose.


 


[Signature
Page Follows]


 






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IN
WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Securities Purchase Agreement
to be duly executed as of the date first written above.


 


	 	 	COMPANY:
    
	 	 	 
	 	 	INTERCLOUD
    SYSTEMS, INC.
	 	 	
	 	 	By:	/s/ Daniel Sullivan
	 	 	 	Name:
Daniel Sullivan

        Title:  
        Chief Accounting Officer



 


[Signature
Page to Securities Purchase Agreement] 


 






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IN
WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this Securities Purchase Agreement
to be duly executed as of the date first written above.


 


	 	 	 	BUYERS:
    
	 	 	 	 
	 	 	 	Dominion
    Capital LLC 
	 	 	 	 	 
	 	 	 	By:	/s/
    Mikhail Gurevich
	 	 	 	 	Name: 
    Mikhail Gurevich
	 	 	 	 	Title:
       Managing Member


 






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SCHEDULE
OF BUYERS


 


	(1)	 	(2)	 	(3)	 	(4)	 	(5)	 	(6)
	Buyer	 	Address and
 Facsimile Number	 	Aggregate
 Principal
 Amount of Notes	 	Reserved	 	Purchase Price	 	Legal Representative’s Address
 and Facsimile Number
	Dominion 	 	341 West 38th Street	 	$525,000	 	As set forth	 	$500,000	 	Robinson Brog
	Capital LLC	 	Suite 800
NY, NY 10018
(708) 844-2883	 	 	 	in the Notes	 	 	 	875
Third Ave.
 9th
Floor
 NY,
NY 10022
 (212) 956-2164




 






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EXHIBITS



 


	Exhibit
    A 	Form
    of Notes 
	Exhibit
    B 	Form
    of Irrevocable Transfer Agent Instructions 
	Exhibit
    C 	Form
    of Opinion of Company Counsel 
	Exhibit
    D 	Form
    of Secretary’s Certificate 


 


 


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