Exhibit 10.32


 


PLACEMENT
AGENCY AGREEMENT


 


	 	November___,
    2015


 


Chardan
Capital Markets, LLC


17 State
Street, Suite 1600


New York,
NY 10004


 


Ladies and
Gentlemen:


 


Introduction.
Subject to the terms and conditions herein (this “Agreement”), Ominto, Inc., a Nevada corporation (the “Company”),
hereby agrees to sell up to an aggregate of $[__] of registered securities of the Company, including, but not limited to, shares
(the “Shares”) of the Company’s common stock, $0.001 par value per share (the “Common Stock”),
together with warrants to purchase Common Stock at an exercise price of $__ per share (the “Warrants” and the
shares of Common Stock underlying the Warrants, the “Warrant Shares”), (the Shares, Warrants and Warrant Shares,
collectively, the “Securities”) directly to various investors (each, an “Investor” and,
collectively, the “Investors”) through Chardan Capital Markets, LLC, as placement agent (the “Placement
Agent”). The Placement Agent may retain other brokers or dealers to act as sub-agents or selected-dealers on its behalf
in connection with the Offering (as defined below) whose fees and expenses shall be borne exclusively by the Placement Agent.


 


The
Company hereby confirms its agreement with the Placement Agent as follows:


 


Section
1. Agreement to Act as Placement Agent.


 


(a)
On the basis of the representations, warranties and agreements of the Company herein contained, and subject to all the terms and
conditions of this Agreement, the Placement Agent shall be the exclusive Placement Agent in connection with the offering and sale
by the Company of the Securities pursuant to the Company's registration statement on Form S-1 (File No. 333-207005) (the “Registration
Statement”), with the terms of such offering (the “Offering”) to be subject to market conditions
and negotiations between the Company, the Placement Agent and the prospective Investors. The Placement Agent, as agent for the
Company, will act on a reasonable best efforts basis to assist the Company in obtaining Investors to purchase the Securities and
the Company agrees and acknowledges that there is no guarantee of the successful placement of the Securities, or any portion thereof,
in the prospective Offering. Under no circumstances will the Placement Agent or any of its “Affiliates” (as defined
below) be obligated to underwrite or purchase any of the Securities for its own account or otherwise provide any financing. The
Placement Agent shall act solely as the Company’s agent and not as principal. The Placement Agent shall have no authority
to bind the Company with respect to any prospective offer to purchase Securities and the Company shall have the sole right to
accept offers to purchase Securities and may reject any such offer, in whole or in part. Subject to the terms and conditions hereof,
payment of the purchase price for, and delivery of, the Securities shall be made at a single closing (the “Closing”
and the date on which the Closing occurs, the “Closing Date”). As compensation for services rendered, on the
Closing Date, the Company shall pay to the Placement Agent the fees and expenses set forth below:


 


(i)
A cash fee equal to 4% of the gross proceeds received by the Company from the sale of the Securities at the Closing of the Offering.


 


(ii)
Such number of Common Stock purchase warrants in the form attached hereto as Exhibit A (the “Placement Agent
Warrants”) to the Placement Agent or its designees at the Closing to purchase shares of Common Stock equal to 2.5%
of the aggregate number of shares of Common Stock sold in the Offering (excluding Shares underlying Warrants). The Placement
Agent Warrants shall have the same terms as the Warrants except that the Placement Agent Warrants shall have an exercise
price equal to 125% of the exercise price of the Warrants and shall be exercisable for
3 years following the effective date of the Registration Statement. The Placement Agent Warrants shall contain a cashless
exercise provision. The Company will register the shares of common stock underlying the Placement Agent Warrants and for a
period of    3 years from the effective date of the Registration Statement the holders of the Placement Agent Warrants will
have customary “piggyback” registration rights to the extent the Company does not maintain an effective
registration statement for the Common Stock underlying the Placement Agent Warrants as permitted under Financial Industry
Regulatory Authority (“FINRA”) Rule 5110(f)(2)(G). Neither the Placement Agent Warrants nor the
shares underlying such warrants shall be sold, transferred, assigned, pledged or hypothecated, or the subject of any
hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition of the
Placement Agent’s Warrants or the shares underlying the Placement Agent’s Warrants for a period of 180
days from the effective date of the Registration Statement except as permitted by FINRA Rule 5110(g)(2); and


 






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(iii)Whether
or not the transactions contemplated by this Agreement, the Registration Statement and the prospectus, in the form in which it
will be filed with the Securities and Exchange Commission (the “Commission”) pursuant to Rule 424(b) (“Rule
424(b)”) under the Securities Act of 1933, as amended (the “Securities Act”) or, if the prospectus
is not to be filed with the Commission pursuant to Rule 424(b), the prospectus in the form included as part of the Registration
Statement at the time the Registration Statement became effective (the “Final Prospectus”), are consummated
or this Agreement is terminated, the Company hereby agrees to pay all costs and expenses incident to the Offering, including the
following:


 


(a)all
expenses in connection with the preparation, printing, formatting for the SEC’s Electronic Data Gathering, Analysis and
Retrieval system (“EDGAR”) and filing of the Registration Statement, any preliminary prospectus or prospectus
subject to completion included in such Registration Statement (“Preliminary Prospectus”) and the Final Prospectus
and any and all amendments and supplements thereto and the mailing and delivering of copies thereof to the Underwriters and dealers;


 


(b)all
fees and expenses in connection with filings with FINRA’s Public Offering System;


 


(c)all
fees, disbursements and expenses of the Company’s counsel and accountants in connection with the registration of the Securities
under the Securities Act and the Offering;


 


(d)all
reasonable expenses in connection with the qualifications of the Securities for offering and sale under state or foreign securities
or blue sky laws;


 


(e)all
fees and expenses in connection with listing the Securities on a national securities exchange;


 


(f)all
reasonable travel expenses of the Company’s officers, directors and employees and any other expense of the Company or the
Placement Agent incurred in connection with attending or hosting meetings with prospective purchasers of the Securities (“Road
Show Expenses”);


 


(g)any
stock transfer taxes or other taxes incurred in connection with this Agreement or the Offering;


 


(h)the
costs associated with book building, prospectus tracking and compliance software and the cost of preparing certificates representing
the Securities;


 


(i)the
cost and charges of any transfer agent or registrar for the Securities;


 


(j)any
reasonable costs and expenses incurred in conducting background checks of the Company’s officers and directors by a background
search firm acceptable to the Placement Agent; and


 






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(k)all
other costs, fees (including Placement Agent’s counsel’s fees and expenses) and expenses incident to the Offering
that are not otherwise specifically provided for in this Section 6;


 


provided,
however, that all such costs and expenses pursuant to this Section 1(a)(iii) and otherwise which are incurred by the Placement
Agent shall not to exceed $115,000 in the aggregate (of which a maximum of $100,000 can be allocated to legal expenses and $15,000 to non-legal expenses). To the extent that
the Placement Agent’s out-of-pocket expenses are less than the Advances, the Placement Agent will return to the Company
that portion of the Advances not offset by actual expenses.


 


(iv)It
is understood, however, that except as provided in this Section 1, Sections 5 or 7 hereof, the Placement Agent will pay all of
its own costs and expenses. Notwithstanding anything to the contrary in this Section 1, in the event that this Agreement is terminated
pursuant to Section 5 or 7 hereof, the Company will pay, less any advances previously paid (the “Advances”),
all documented out-of-pocket expenses of the Placement Agent (including but not limited to fees and disbursements of Placement
Agent’s counsel and reasonable travel) incurred in connection herewith which shall be limited to expenses which are actually
incurred as allowed under FINRA Rule 5110 and in any event, the aggregate amount of such expenses to be reimbursed by the Company
shall not exceed $115,000, including the Advances. To the extent that the Placement Agent’s out-of-pocket expenses are less
than the Advances, the Placement Agent will return to the Company that portion of the Advances not offset by actual expenses.


 


(b)
The term of the Placement Agent's exclusive engagement will end on December 31, 2015, after which either party hereto may terminate
the engagement upon 30 days prior written notice to the other party (the “Exclusive Term”). Notwithstanding
anything to the contrary contained herein, the provisions concerning confidentiality, indemnification and contribution contained
herein and the Company’s obligations contained in the indemnification provisions will survive any expiration or termination
of this Agreement, and the Company’s obligation to pay fees actually earned and payable and to reimburse expenses actually
incurred and reimbursable pursuant to Section 1 hereof and which are permitted to be reimbursed under FINRA Rule 5110(f)(2)(D),
will survive any expiration or termination of this Agreement. Nothing in this Agreement shall be construed to limit the ability
of the Placement Agent or its Affiliates to pursue, investigate, analyze, invest in, or engage in investment banking, financial
advisory or any other business relationship with Persons (as defined below) other than the Company. As used herein (i) “Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind and (ii) “Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common
control with a Person as such terms are used in and construed under Rule 405 under the Securities Act (as defined below).


 






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Section
2. Representations, Warranties and Covenants of the Company. The Company hereby represents, warrants and covenants to the
Placement Agent as of the date hereof, and as of the Closing Date, as follows:


 


(a)Registration.


 


(i)The
Company has prepared and filed with the Commission the Registration Statement, and amendments thereto, and related preliminary
prospectuses, including the financial statements, schedules, exhibits and other information (if any) deemed to be part of the
Registration Statement at the time of effectiveness pursuant to Rule 430A under the Securities Act, for the registration under
the Securities Act, of the Securities, which Registration Statement, as so amended (including post-effective amendments, if any)
has been declared effective by the Commission and copies of which have heretofore been delivered to the Placement Agent. If the
Company has filed or is required pursuant to the terms hereof to file a registration statement pursuant to Rule 462(b) under the
Securities Act registering additional Securities (a “Rule 462(b) Registration Statement”), then, unless otherwise
specified, any reference herein to the term “Registration Statement” shall be deemed to include such Rule 462(b) Registration
Statement. Other than a Rule 462(b) Registration Statement, which, if filed, becomes effective upon filing, no other document
with respect to the Registration Statement has heretofore been filed with the Commission. All of the Securities have been registered
under the Securities Act pursuant to the Registration Statement or, if any Rule 462(b) Registration Statement is filed, will be
duly registered under the Securities Act with the filing of such Rule 462(b) Registration Statement. The Company has responded
to all requests of the Commission for additional or supplemental information. Based on communications from the Commission, no
stop order suspending the effectiveness of either the Registration Statement or the Rule 462(b) Registration Statement, if any,
has been issued and no proceeding for that purpose has been initiated or threatened by the Commission. The Company, if required
by the Securities Act and the rules and regulations of the Commission (the “Rules and Regulations”), proposes
to file a Final Prospectus with the Commission pursuant to Rule 424(b). If any revised prospectus or prospectus supplement shall
be provided to the Placement Agent by the Company for use in connection with the Offering which differs from the Prospectus (whether
or not such revised prospectus or prospectus supplement is required to be filed by the Company pursuant to Rule 424(b)), the term
“Final Prospectus” shall also refer to such revised prospectus or prospectus supplement, as the case may be, from
and after the time it is first provided to the Placement Agent for such use. Any reference herein to the Registration Statement,
any Preliminary Prospectus or the Final Prospectus shall be deemed to refer to and include the exhibits incorporated by reference
therein pursuant to the Rules and Regulations on or before the effective date of the Registration Statement, the date of such
Preliminary Prospectus or the date of the Final Prospectus, as the case may be. All references in this Agreement to the Registration
Statement, the Rule 462(b) Registration Statement, a Preliminary Prospectus and the Final Prospectus, and all amendments or supplements
to any of the foregoing, shall be deemed to include any copy thereof filed with the Commission pursuant to its Electronic Data
Gathering, Analysis and Retrieval System (“EDGAR”). The Final Prospectus delivered to the Placement Agent for
use in connection with the Offering was or will be identical to the electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T promulgated by the Commission.


 


(ii)At
the time of the effectiveness of the Registration Statement or any Rule 462(b) Registration Statement or the effectiveness of
any post-effective amendment to the Registration Statement, when the Final Prospectus is first filed with the Commission pursuant
to Rule 424(b), when any supplement to or amendment of the Final Prospectus is filed with the Commission, at all other subsequent
times until the completion of the public offer and sale of the Securities, at the Closing Date, the Registration Statement and
the Final Prospectus and any amendments thereof and supplements or exhibits thereto complied or will comply in all material respects
with the applicable provisions of the Securities Act and the Rules and Regulations, and did not and will not contain an untrue
statement of a material fact and did not and will not omit to state any material fact required to be stated therein or necessary
in order to make the statements therein: (i) in the case of the Registration Statement, not misleading; and (ii) in the case of
the Final Prospectus, in light of the circumstances under which they were made, not misleading. When any Preliminary Prospectus
was first filed with the Commission (whether filed as part of the Registration Statement or any amendment thereto or pursuant
to Rule 424(a) under the Securities Act) and when any amendment thereof or supplement thereto was first filed with the Commission,
such Preliminary Prospectus and any amendments thereof and supplements thereto complied in all material respects with the applicable
provisions of the Securities Act and the Rules and Regulations and did not contain an untrue statement of a material fact and
did not omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.


 


(iii)Neither:
(i) any Issuer-Represented General Free Writing Prospectus(es) (as defined below) issued at or prior to the time of sale of the
Securities (the “Time of Sale”), all considered together (collectively, the “General Disclosure Package”);
nor (ii) any Issuer-Represented Limited-Use Free Writing Prospectus(es) (as defined below), when considered together with the
General Disclosure Package, includes or included as of the Time of Sale any untrue statement of a material fact or omits or omitted
as of the Time of Sale to state any material fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. For the purposes of this Agreement, “Issuer-Represented General Free Writing
Prospectus” means any Issuer-Represented Free Writing Prospectus (as defined below) that is intended for general distribution
to prospective investors and “Issuer-Represented Limited-Use Free Writing Prospectus” means any Issuer-Represented
Free Writing Prospectus that is not an Issuer-Represented General Free Writing Prospectus. The term Issuer-Represented Limited-Use
Free Writing Prospectus also includes any “bona fide electronic road show,” as defined in Rule 433 under the Securities
Act, that is made available without restriction pursuant to Rule 433(d)(8)(ii), even though not required to be filed with the
Commission.


 






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(iv)Each
Issuer-Represented Free Writing Prospectus, as of its issue date and at all subsequent times until the Closing Date or until any
earlier date that the Company notified or notifies the Placement Agent as described in the next sentence, did not, does not and
will not include any information that conflicted, conflicts or will conflict with the information contained in the then-current
Registration Statement, Preliminary Prospectus or Final Prospectus. If at any time following issuance of an Issuer-Represented
Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer-Represented Free Writing
Prospectus conflicted or would conflict with the information contained in the then-current Registration Statement, Preliminary
Prospectus or Final Prospectus or included or would include an untrue statement of a material fact or omitted or would omit to
state a material fact necessary in order to make the statements therein, in the light of the circumstances prevailing at that
subsequent time, not misleading, the Company has notified or will notify promptly the Placement Agent so that any use of such
Issuer-Represented Free Writing Prospectus may cease until it is promptly amended or supplemented by the Company, at its own expense,
to eliminate or correct such conflict, untrue statement or omission. For purposes of this Agreement, “Issuer-Represented
Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 under the Securities
Act, relating to the Securities that (A) is required to be filed with the Commission by the Company, or (B) is exempt from filing
pursuant to Rule 433(d)(5)(i) under the Securities Act because it contains a description of the Securities or of the Offering
that does not reflect the final terms or pursuant to Rule 433(d)(8)(ii) because it is a “bona fide electronic road show,”
as defined in Rule 433 under the Securities Act, in each case in the form filed or required to be filed with the Commission or,
if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g) under the Securities
Act.


 


(v)The
Company has not distributed and will not distribute any prospectus or other offering materials in connection with the offering
and sale of the Securities other than the General Disclosure Package, any Issuer-Represented Free Writing Prospectus or the Final
Prospectus or other materials permitted by the Securities Act to be distributed by the Company. Unless the Company obtains the
prior consent of the Placement Agent, the Company has not made and will not make any offer relating to the Securities that would
constitute an “issuer free writing prospectus,” as defined in Rule 433 under the Securities Act, or that would otherwise
constitute a “free writing prospectus,” as defined in Rule 405 under the Securities Act, required to be filed with
the Commission; provided that the prior written consent of the Placement Agent hereto shall be deemed to have been given in respect
of any free writing prospectus. The Company has complied and will comply with the requirements of Rules 164 and 433 under the
Securities Act applicable to any Issuer-Represented Free Writing Prospectus as of its issue date and at all subsequent times through
the Closing Date, including timely filing with the Commission where required, legending and record keeping. To the extent an electronic
road show is used, the Company has satisfied and will satisfy the conditions in Rule 433 under the Securities Act to avoid a requirement
to file with the Commission any electronic road show.


 


(b)Subsidiaries.
Each subsidiary of the Company identified in the Registration Statement, the General Disclosure Package and the Final Prospectus
(the “Subsidiaries”) has been duly incorporated and is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation, with corporate power and authority to own, lease and operate its properties and
conduct its business as now conducted and as proposed to be conducted, and has been duly qualified as a foreign corporation for
the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties
or conducts any business so as to require such qualification; as of the date of this Agreement, except for the Subsidiaries the
Company does not own or control, directly or indirectly, any equity or other ownership interest in any corporation, partnership,
joint venture or any other Person.


 






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(c)Organization
and Qualification. The Company is an entity duly incorporated or otherwise organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation, with the requisite power and authority to own and use its properties
and assets and to carry on its business as currently conducted. The Company is not in violation nor default of any of the provisions
of its articles of incorporation, bylaws or other organizational or charter documents. The Company is duly qualified to conduct
business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business
conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing,
as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity
or enforceability of this Agreement, the Warrants and any other documents or agreements executed in connection with the transactions
contemplated hereunder (the “Transaction Documents”), (ii) a material adverse effect on the results of operations,
assets, business or condition (financial or otherwise) of the Company, taken as a whole, or (iii) a material adverse effect on
the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document
(any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding has been instituted in any such
jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.


 


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


 


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


 


(f)Filings,
Consents and Approvals. Except for those that have already been obtained, the Company is not required to obtain any consent,
waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state,
local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company
of the Transaction Documents, other than: (i) the filings required pursuant to this Agreement, (ii) the filings required with
the Commission related to the Securities in this offering, and (iii) such filings as are required to be made under applicable
state securities laws (collectively, the “Required Approvals”).


 


(g)Issuance
of the Securities. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company.
The Warrant Shares, when issued in accordance with the terms of the Warrants, will be validly issued, fully paid and nonassessable,
free and clear of all Liens imposed by the Company. The Company has reserved from its duly authorized capital stock the maximum
number of shares of Common Stock issuable pursuant to this Agreement and the Warrants.


 






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(h)Capitalization.
The capitalization of the Company is as set forth in the Prospectus. The Company has not issued any capital stock since its most
recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under the
Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee
stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents (as defined below) outstanding
as of the date of the most recently filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive
right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents.
Except as a result of the purchase and sale of the Securities, there are no outstanding options, warrants, scrip rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable
or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments,
understandings or arrangements by which the Company is or may become bound to issue additional shares of Common Stock or Common
Stock Equivalents. The issuance and sale of the Securities will not obligate the Company to issue shares of Common Stock or other
securities to any Person (other than the Purchasers) and will not result in a right of any holder of Company securities to adjust
the exercise, conversion, exchange or reset price under any of such securities. All of the outstanding shares of capital stock
of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all federal
and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights
to subscribe for or purchase securities. No further approval or authorization of any stockholder, the Board of Directors or others
is required for the issuance and sale of the Securities. Except as set forth in the Registration Statement, there are no stockholders
agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company
is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.


 


(i)SEC
Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required
to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the three years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file
such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together
with the Registration Statement, the General Disclosure Package and the Prospectus, being collectively referred to herein as the
“SEC Reports”). As of their respective dates, the SEC Reports complied in all material respects with the requirements
of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading. The financial statements of the Company
included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance
with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company
as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case
of unaudited statements, to normal, immaterial, year-end audit adjustments.


 


(j)Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included
within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof, (i) there
has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse
Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued
expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected
in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company
has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other
property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock
and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company
stock option plans. The Company does not have pending before the Commission any request for confidential treatment of information.
Except for the issuance of the Securities contemplated by this Agreement, no event, liability, fact, circumstance, occurrence
or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its business,
properties, operations, assets or financial condition that would be required to be disclosed by the Company under applicable securities
laws at the time this representation is made or deemed made that has not been publicly disclosed at least three (3) trading days
prior to the date that this representation is made.


 






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(k)Litigation.
Except for Actions (as defined herein) disclosed in the Final Prospectus or the SEC Reports, there is no action, suit, inquiry,
notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting
the Company or any of its properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely affects or challenges
the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) could, if there were an
unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor, to the Company’s
knowledge, any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability
under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the
Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former
director or officer of the Company. The Commission has not issued any stop order or other order suspending the effectiveness of
any registration statement filed by the Company under the Exchange Act or the Securities Act.


 


(l)Labor
Relations. No material labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees
of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s employees
is a member of a union that relates to such employee’s relationship with the Company, and the Company is not a party to
a collective bargaining agreement, and the Company believes that its relationships with its employees are good. To the knowledge
of the Company, no executive officer of the Company is, or is now expected to be, in violation of any material term of any employment
contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract
or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer
does not subject the Company to any liability with respect to any of the foregoing matters. The Company is in compliance with
all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions
of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.


 


(m)Compliance.
The Company: (i) is not in default under or in violation of (and no event has occurred that has not been waived that, with notice
or lapse of time or both, would result in a default by the Company under), nor has the Company received notice of a claim that,
as of the date hereof, it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other
agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or
violation has been waived), (ii) is not in violation of any judgment, decree or order of any court, arbitrator or other governmental
authority or (iii) is not in violation of any statute, rule, ordinance or regulation of any governmental authority, including
without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health
and safety, product quality and safety and employment and labor matters, except in each case as could not have or reasonably be
expected to result in a Material Adverse Effect.


 


(n)Regulatory
Permits. The Company possesses all certificates, authorizations and permits issued by the appropriate federal, state, local
or foreign regulatory authorities necessary to conduct its business as described in the SEC Reports, except where the failure
to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material Permits”),
and the Company has not received any notice of proceedings relating to the revocation or modification of any Material Permit.


 


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


 






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(p)Intellectual
Property. the Company owns, possesses, licenses or has other rights to use the patents and patent applications, copyrights,
trademarks, service marks, trade names, Internet domain names, technology, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary rights) and other intellectual property necessary or used in any material respect to conduct its
business in the manner in which it is being conducted and in the manner in which it is contemplated as set forth in the Registration
Statement, the General Disclosure Package and the Final Prospectus (collectively, the “Intellectual Property”).
(i) None of the Intellectual Property is unenforceable or invalid; (ii) except as set forth in the Registration Statement, the
General Disclosure Package and the Final Prospectus, the Company has not received any notice of violation or conflict with (the
Company has no knowledge of any basis for violation or conflict with) rights of others with respect to the Intellectual Property;
and (iii) except as set forth in the Registration Statement, the General Disclosure Package and the Final Prospectus, there are
no pending or, to the Company’s best knowledge after due inquiry, threatened actions, suits, proceedings or claims by others
that allege any of the Company or a Subsidiary is infringing any patent, trade secret, trademark, service mark, copyright or other
intellectual property or proprietary right. The discoveries, inventions, products or processes of the Company referenced in the
Registration Statement, the General Disclosure Package and the Final Prospectus do not violate or conflict with any intellectual
property or proprietary right of any third Person, or any discovery, invention, product or process that is the subject of a patent
application filed by any third Person; no officer, director or employee of the Company is in or has ever been in violation of
any term of any patent non-disclosure agreement, invention assignment agreement, or similar agreement relating to the protection,
ownership, development use or transfer of the Intellectual Property or, to the Company’s best knowledge after due inquiry,
any other intellectual property, except where any violation would not, individually or in the aggregate, have a Material Adverse
Effect. The Company is not in breach of, and have complied in all material respects with all terms of, any license or other agreement
relating to the Intellectual Property. To the extent any Intellectual Property is sublicensed to any of the Company or a Subsidiary
by a third party, such sublicensed rights shall continue in full force and effect if the principal third party license terminates
for any reason. There are no contracts or other documents related to the Intellectual Property required to be described in or
filed as an exhibit to the Registration Statement other than those described in or filed as an exhibit to the Registration Statement.
The Company is not subject to any non-competition or other similar restrictions or arrangements relating to any business or service
anywhere in the world. The Company has taken all necessary and reasonably appropriate steps to protect and preserve the confidentiality
of applicable Intellectual Property (“Confidential Information”). All use or disclosure of Confidential Information
owned by the Company by or to a third party has been pursuant to a written agreement between the Company and such third party.
All use or disclosure of Confidential Information not owned by the Company has been pursuant to the terms of a written agreement
between the Company and the owner of such Confidential Information, or is otherwise lawful.


 


(q)Insurance.
The Company maintains insurance covering its properties as the Company reasonably deems adequate and as is customary for companies
engaged in similar businesses. Such insurance protects the Company against losses and risks to an extent which is adequate to
protect the Company its business and includes, but is not limited to, directors’ and officers’ insurance coverage
at least equal to $[____] and key man life insurance on the lives of [______] at least equal to $3 million. The Company has no
reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost. There
is no material insurance claim made by or against the Company pending, threatened or outstanding and no facts or circumstances
exist which would reasonably be expected to give rise to any such claim and all due premiums in respective thereof have been paid.


 


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


 






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


 


(t)Certain
Fees. Except as described in the Registration Statement, the General Disclosure Package and the Final Prospectus, no brokerage
or finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder,
placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents.
Except as described in the Registration Statement, the General Disclosure Package and the Final Prospectus, there are no claims,
arrangements, agreements or understandings of the Company or any officer, director or stockholder of the Company relating to the
payment of a broker’s, finder’s, consulting or origination fee or other similar payment in connection with the transactions
contemplated by this Agreement or that otherwise may affect the Placement Agent’s compensation in respect of the transactions
contemplated by the Transaction Documents as determined by FINRA. Except as described in the Registration Statement, the General
Disclosure Package and the Prospectus, the Company has not made any direct or indirect payments (in cash, securities or otherwise)
to (i) any person, as a finder’s fee, consulting fee or otherwise, in consideration of such person raising capital for the
Company or introducing to the Company persons who raised or provided capital to the Company; (ii) to any FINRA member; or (iii)
to the Company’s knowledge, to any person or entity that has any direct or indirect affiliation or association with any
FINRA member, within the 180 days prior to the Effective Date. None of the net proceeds of the Offering will be paid by the Company to
any participating FINRA member or any affiliate thereof, except as specifically authorized herein. No officer, director or beneficial
owner of 5% or more of the Company’s common stock or securities convertible into common stock (any such individual or entity,
for purposes of this section, a “Company Affiliate”) has any direct or indirect affiliation or association
with any FINRA member (as determined in accordance with the rules and regulations of FINRA). Except for securities purchased on
the open market, no Company Affiliate is an owner of stock or other securities of any member of FINRA. No Company Affiliate has
made a subordinated loan to any member of FINRA. No proceeds from the sale of the Securities (excluding underwriting compensation
as disclosed in the Registration Statement, the General Disclosure Package and the Final Prospectus) will be paid to any FINRA
member, any persons associated with a FINRA member or an affiliate of a FINRA member. Except as disclosed in the Registration
Statement, the General Disclosure Statement and the Final Prospectus, the Company has not issued any warrants or other securities
or granted any options, directly or indirectly, to the Placement Agent within the 180-day period prior to the initial filing date
of the Registration Statement. Except for securities issued to the Placement Agent as disclosed in the Registration Statement,
the General Disclosure Package and the Prospectus, no person to whom securities of the Company have been privately issued within
the 180-day period prior to the initial filing date of the Registration Statement is a FINRA member, is a person associated with
a FINRA member or is an affiliate of a FINRA member. No FINRA member participating in the Offering has a conflict of interest
with the Company. For this purpose, a “conflict of interest” exists when a FINRA member, the parent or affiliate of
a FINRA member or any person associated with a FINRA member in the aggregate beneficially own 10% or more of the Company’s
outstanding subordinated debt or common equity, or 10% or more of the Company’s preferred equity. “FINRA member participating
in the Offering” includes any associated person of a FINRA member that is participating in the Offering, any member of such
associated person’s immediate family and any affiliate of a FINRA member that is participating in the Offering. “Any
person associated with a FINRA member” means (1) a natural person who is registered or has applied for registration under
the rules of FINRA and (2) a sole proprietor, partner, officer, director, or branch manager of a FINRA member, or other natural
person occupying a similar status or performing similar functions, or a natural person engaged in the investment banking or securities
business who is directly or indirectly controlling or controlled by a FINRA member. When used in this Section 3.1(t) the term
“affiliate of a FINRA member” or “affiliated with a FINRA member” means an entity that controls, is controlled
by or is under common control with a FINRA member.


 






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


 


(v)No
securities of the Company have been sold by the Company for the three years preceding the filing of the Registration Statement,
except as disclosed in the Registration Statement.


 


(w)Registration
Rights. Except as disclosed in the Registration Statement, no Person has any right to cause the Company to effect the registration
under the Securities Act of any securities of the Company on the Registration Statement.


 


(x)Listing
and Maintenance Requirements. The Common Stock and the Warrants have been duly authorized for listing on the NASDAQ Capital
Market, subject to official notice of issuance. A registration statement in respect of the Common Stock and the Warrants has been
filed on Form 8-A pursuant to Section 12(b) of the Exchange Act, which registration statement complies in all material respects
with the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect
of, terminating the registration of the Common Stock and the Warrants under the Exchange Act nor has the Company received any
notification that the Commission is contemplating terminating such registration. The Company is in material compliance with the
provisions of the rules and regulations promulgated by the NASDAQ Stock Market and has no reason to believe that it will not in
the foreseeable future continue to be, in compliance with all such listing and maintenance requirements (to the extent applicable
to the Company as of the date hereof and the Closing Date; and subject to all exemptions and exceptions from the requirements
thereof as are set forth therein, to the extent applicable to the Company). Without limiting the generality of the foregoing and
subject to the qualifications above: (i) all members of the Company’s board of directors who are required to be “independent”
(as that term is defined under applicable laws, rules and regulations), including, without limitation, all members of each of
the audit committee, compensation committee and nominating committee of the Company’s board of directors, meet the qualifications
of independence as set forth under such laws, rules and regulations, and (ii) the audit committee of the Company’s board
of directors has at least one member who is an “audit committee financial expert” (as that term is defined under such
laws, rules and regulations).


 


(y)Board
Committees. The Company’s board of directors has validly appointed an audit committee, compensation committee and nominating
committee, each of whose composition satisfies the requirements of the rules and regulations of the NASDAQ Stock Market, and for
each such committee, the board of directors and/or the relevant committee has adopted a charter that satisfies the requirements
of the rules and regulations of the NASDAQ Stock Market. Neither the board of directors of the Company nor the audit committee
has been informed, nor is any director or executive officer of the Company aware, of: (i) any significant deficiencies or material
weaknesses in the design or operation of internal control over financial reporting, since the end of the Company’s most
recent audited fiscal year, which are reasonably likely to adversely affect the Company’s ability to record, process, summarize
and report financial information; or (ii) any fraud, whether or not material, that involves management or other employees who
have a significant role in the Company’s internal control over financial reporting.


 






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(z)Application
of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s articles of incorporation (or similar charter documents) or
the laws of its state of incorporation that is or could become applicable to a potential purchasers as a result of such purchasers
and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation
as a result of the Company’s issuance of the Securities and such purchasers’ ownership of the Securities.


 


(aa)Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company
confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel
with any information that it believes constitutes or might constitute material, non-public information which is not otherwise
disclosed in the Registration Statement, the General Disclosure Package or the Final Prospectus. The Company understands and confirms
that potential purchasers will rely on the foregoing representation in effecting transactions in securities of the Company. All
of the disclosure furnished by or on behalf of the Company to potential purchasers regarding the Company and its business and
the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, is true and correct and does not contain
any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading. Except to the extent superseded by subsequent public
disclosures, the press releases disseminated by the Company during the twelve months preceding the date of this Agreement taken
as a whole do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the circumstances under which they were made and when made,
not misleading.


 


(bb)No
Integrated Offering. Neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly
or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that
would cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of any applicable
shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.


 


(cc)Solvency.
Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the
Company of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s assets exceeds
the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including
known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to
carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular
capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability
thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate
all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in
respect of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability
to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).
at the date of this Agreement, the Company or any other subsidiary or predecessor in the preceding three years has not: (w) been
convicted of a felony or misdemeanor or having been made the subject of a judicial or administrative decree or order as described
in Rule 405, (x) been the subject of a bankruptcy petition or insolvency or similar proceeding, (y) had a registration statement
be the subject of a proceeding under Section 8 of the Securities Act, or (z) been, and is not currently, the subject of a proceeding
under Section 8A of the Securities Act in connection with the offering of the Securities, all as described in Rule 405. The Company
has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under
the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date. For the purposes of this Agreement,
“Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade
accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations
in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance
sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business; and (z) the present value of any lease payments in excess of $50,000 due under
leases required to be capitalized in accordance with GAAP. The Company is not in default with respect to any Indebtedness.


 






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(dd)Tax
Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect, the Company (i) has made or filed all United States federal and state income and all foreign income and
franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and
other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports
and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for
periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material
amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any
such claim.


 


(ee)Foreign
Corrupt Practices. Neither the Company nor to the knowledge of the Company, any agent or other person acting on behalf of
the Company, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful
expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials
or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully
any contribution made by the Company (or made by any person acting on its behalf of which the Company is aware) which is in violation
of law, or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended (“FCPA”).


 


(ff)Accountants.
The Company’s accounting firm is Mayer Hoffman McCann P.C. To the knowledge and belief of the Company, such accounting firm
(i) is a registered public accounting firm as required by the Exchange Act and (ii) has expressed its opinion with respect to
the financial statements included in the Company’s Annual Report for the fiscal year ended September 30, 2014.


 


(gg)MD&A.
The section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
in the Registration Statement, General Disclosure Package and Final Prospectus is accurate. The Company does not have any off-balance
sheet transactions, arrangements, and obligations, including, without limitation, relationships with unconsolidated entities that
are contractually limited to narrow activities that facilitate the transfer of or access to assets by the Company, such as structured
finance entities and special purpose entities that are reasonably likely to have a material effect on the liquidity of the Company.


 


(hh)Critical
Accounting Policies. The section entitled “Management’s Discussion and Analysis of Financial Condition and Results
of Operations” —Critical Accounting Policies” in the Registration Statement, General Disclosure Package and
the Final Prospectus truly, accurately and completely in all material respects describes (i) accounting policies which the Company
believes are the most important in the portrayal of the Company’s financial condition and results of operations and which
require management’s most difficult, subjective or complex judgments (“Critical Accounting Policies”),
(ii) judgments and uncertainties affecting the application of Critical Accounting Policies and (iii) the likelihood that materially
different amounts would be reported under different conditions or using different assumptions; and the Company’s board of
directors and management have reviewed and agreed with the selection, application and disclosure of Critical Accounting Policies
and have consulted with legal counsel and independent accountants with regard to such disclosure.


 


(ii)Other
Disclosures. The statements set forth in the Registration Statement, General Disclosure Package and the Final Prospectus under
the captions “Description of Capital Stock,” “Prospectus Summary,” and “Risk Factors,” insofar
as they purport to describe the provisions of the laws and documents referred to therein, constitute accurate, complete and fair
summaries regarding the matters described therein in all material respects. The statements set forth in under the captions “Business—Government
Regulation,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity
and Capital Resources,” “Management,” “Corporate Governance,” “Executive and Director Compensation,”
and “Security Ownership of Certain Beneficial Owners and Management,” insofar as such statements summarize factual
and legal matters, agreements, documents or proceedings discussed therein, are true and accurate summaries of such matters described
therein in all material respects. The disclosures in the Registration Statement, the General Disclosure Package and the Final
Prospectus concerning the effects of foreign, federal, state and local regulation of the Company’s business are correct
in all material respects and do not omit to state a material fact necessary to make the statements therein, in light of the circumstances
in which they were made, not misleading.


 






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(jj)ERISA.
Except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, the Company is not a party
to an “employee benefit plan,” as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended (“ERISA”), which: (i) is subject to any provision of ERISA and (ii) is or was at any time maintained,
administered or contributed to by the Company or any of its ERISA Affiliates (as defined hereafter). These plans are referred
to collectively herein as the “Employee Plans.” An “ERISA Affiliate” of any person or entity means any
other person or entity which, together with that person or entity, could be treated as a single employer under Section 414(b),
(c), (m) or (o) of the Internal Revenue Code of 1986, as amended (the “Code”). Each Employee Plan has been
maintained in material compliance with its terms and the requirements of applicable law. No Employee Plan is subject to Title
IV of ERISA. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, there is no
liability in respect of post-retirement health and medical benefits for retired employees of the Company or any of its ERISA Affiliates,
other than medical benefits required to be continued under applicable law.


 


(kk)Employee
Benefits. The Registration Statement, the General Disclosure Package and the Final Prospectus identify each employment, severance
or other similar agreement, arrangement or policy and each material plan or arrangement required to be disclosed pursuant to the
Rules and Regulations providing for insurance coverage (including any self-insured arrangements), workers’ compensation,
disability benefits, severance benefits, supplemental unemployment benefits, vacation benefits or retirement benefits, or deferred
compensation, profit-sharing, bonuses, stock options, stock appreciation rights or other forms of incentive compensation, or post-retirement
insurance, compensation or benefits, which: (i) is not an Employee Plan; (ii) is entered into, maintained or contributed to, as
the case may be, by the Company or any of its ERISA Affiliates; and (iii) covers any officer or director or former officer or
director of the Company or any of its ERISA Affiliates. These agreements, arrangements, policies or plans are referred to collectively
as “Benefit Arrangements.” Each Benefit Arrangement has been maintained in material compliance with its terms and
with the requirements of applicable law.


 


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


 


(mm)[additional
regulatory reps TBD].


 


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


 


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


 


(pp)Bank
Holding Company Act. Neither the Company nor any of its 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 Affiliates owns or controls, directly or indirectly, five percent (5%)
or more of the outstanding shares of any class of voting securities or twenty-five percent or more of the total equity of a bank
or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its 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.


 






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(qq)Money
Laundering. The operations of the Company are and have been conducted at all times in compliance with applicable financial
record keeping and reporting requirements and money laundering statutes of the United States and, to the Company’s knowledge,
all other jurisdictions to which the Company is subject, including under: (i) the Bank Secrecy Act; (ii) the Uniting and Strengthening
of America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001; (iii) the Foreign Corrupt
Practices Act of 1977; (iv) the Currency and Foreign Transactions Reporting Act; (v) ERISA; (vi) the Money Laundering Control
Act; (vii) the rules and regulations promulgated under any such law or any successor law, or any judgment, decree or order of
any applicable administrative or judicial body relating to such law; and (viii) any corresponding law, rule, regulation, ordinance,
judgment, decree or order of any state or territory of the United States or applicable foreign jurisdiction or any administrative
or judicial body thereof (collectively, the “Money Laundering Laws”), and no action, suit or proceeding by
or before any court or governmental agency, authority or body or any arbitrator involving the Company with respect to the Money
Laundering Laws is pending or, to the knowledge of the Company, threatened.


 


(rr)
[Reserved]


 


(ss)The
Company has neither sent nor received any communications regarding termination of, or intent not to renew, any of the contracts
or agreements referred to or described in the Registration Statement, General Disclosure Package or the Prospectus, and no such
termination or non-renewal has been threatened by the Company or any other party to such contract or agreement.


 


(tt)The
agreements, instruments and other documents described in the Registration Statement, the General Disclosure Package, the Final
Prospectus conform in all material respects to the descriptions thereof contained therein, and there are no agreements, instruments
or other documents required by the applicable provisions of the Securities Act or the Rules and Regulations to be described in
the Registration Statement, the General Disclosure Package or the Final Prospectus or to be filed with the Commission as exhibits
to the Registration Statement that have not been so described or filed. Each such agreement or instrument to which the Company
is a party or by which its property or business is or may be bound or affected has been duly and validly executed by the Company,
is in full force and effect in all material respects and is enforceable against the Company and, to the Company’s knowledge,
the other parties thereto, in accordance with its terms, except such agreements that have terminated or expired in accordance
with their terms as disclosed in the Registration Statement, the General Disclosure Package, the Final Prospectus and except as
(i) as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and similar laws relating to or affecting creditors’ rights and remedies generally; (ii) as enforceability of any indemnification
or contribution provision may be limited under foreign, federal and state securities laws; and (iii) that the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought. None of such agreements and instruments has been assigned by
the Company, to the Company’s knowledge, no party is in breach or default thereunder and, to the Company’s knowledge,
no event has occurred that, with the lapse of time or the giving of notice or both would constitute a breach or default by any
party thereunder. To the Company’s knowledge, the performance by the parties of the material provisions of such agreements
and instruments will not result in a violation of any law, rule, regulation, ordinance, directive, judgment, decree or order of
any judicial, regulatory or other legal or governmental agency or body, foreign or domestic, except for such violations or defaults
which (individually or in the aggregate) would not have or reasonably be expected to have a Material Adverse Effect.


 


(uu)As
used in this Agreement, the term “knowledge of the Company” (or similar language) shall mean the knowledge of the
officers and directors of the Company who are named in the Final Prospectus, with the assumption that such officers and directors
shall have made reasonable and diligent inquiry of the matters presented (with reference to what is customary and prudent for
the applicable individuals in connection with the discharge by the applicable individuals of their duties as officers, directors
or managers of the Company).


 






    	 	15	 



     

    

 


Section
3. Delivery and Payment. The Closing shall occur at the offices of Ellenoff Grossman & Schole LLP (“Placement
Agent Counsel”), 1345 Avenue of the Americas, New York, New York 10105 (or at such other place as shall be agreed upon
by the Placement Agent and the Company). Subject to the terms and conditions hereof, at the Closing payment of the purchase price
for the Securities sold on the Closing Date shall be made by Federal Funds wire transfer, against delivery of such Securities,
and such Securities shall be registered in such name or names and shall be in such denominations, as the Placement Agent may request
at least one business day before the time of purchase (as defined below).


 


Deliveries
of the documents with respect to the purchase of the Securities, if any, shall be made at the offices of Placement Agent Counsel.
All actions taken at the Closing shall be deemed to have occurred simultaneously.


 


Section
4. Covenants and Agreements of the Company. The Company further covenants and agrees with the Placement Agent as follows:


 


(a)
Registration Statement Matters. The Company will advise the Placement Agent promptly after it receives notice thereof of
the time when any amendment to the Registration Statement has been filed or becomes effective or any supplement to any Final Prospectus
or any amended Final Prospectus has been filed and will furnish the Placement Agent with copies thereof. The Company will file
promptly all reports and any definitive proxy or information statements required to be filed by the Company with the Commission
pursuant to Section 13(a), 14 or 15(d) of the Exchange Act subsequent to the date of any Final Prospectus and for so long as the
delivery of a prospectus is required in connection with the Offering. The Company will advise the Placement Agent, promptly after
it receives notice thereof, (i) of any request by the Commission to amend the Registration Statement or to amend or supplement
any Final Prospectus or for additional information, and (ii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment thereto or any order preventing or suspending the
use of the Preliminary Prospectus or any Final Prospectus or any amendment or supplement thereto or any post-effective amendment
to the Registration Statement, of the suspension of the qualification of the Securities for offering or sale in any jurisdiction,
of the institution or threatened institution of any proceeding for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or a Final Prospectus or for additional information. The Company shall
use its best efforts to prevent the issuance of any such stop order or prevention or suspension of such use. If the Commission
shall enter any such stop order or order or notice of prevention or suspension at any time, the Company will use its best efforts
to obtain the lifting of such order at the earliest possible moment, or will file a new registration statement and use its best
efforts to have such new registration statement declared effective as soon as practicable. Additionally, the Company agrees that
it shall comply with the provisions of Rules 424(b), 430A, 430B and 430C, as applicable, under the Securities Act, including with
respect to the timely filing of documents thereunder, and will use its reasonable efforts to confirm that any filings made by
the Company under such Rule 424(b) are received in a timely manner by the Commission.


 


(b)
Blue Sky Compliance. The Company will cooperate with the Placement Agent and the Investors in endeavoring to qualify the
Securities for sale under the securities laws of such jurisdictions (United States and foreign) as the Placement Agent and the
Investors may reasonably request and will make such applications, file such documents, and furnish such information as may be
reasonably required for that purpose, provided that the Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction where it is not now so qualified or required to file such a consent,
and provided further that the Company shall not be required to produce any new disclosure document other than a Final Prospectus.
The Company will, from time to time, prepare and file such statements, reports and other documents as are or may be required to
continue such qualifications in effect for so long a period as the Placement Agent may reasonably request for distribution of
the Securities. The Company will advise the Placement Agent promptly of the suspension of the qualification or registration of
(or any such exemption relating to) the Securities for offering, sale or trading in any jurisdiction or any initiation or threat
of any proceeding for any such purpose, and in the event of the issuance of any order suspending such qualification, registration
or exemption, the Company shall use its best efforts to obtain the withdrawal thereof at the earliest possible moment.


 






    	 	16	 



     

    

 


(c)
Amendments and Supplements to a Final Prospectus and Other Matters. The Company will comply with the Securities Act and
the Exchange Act, and the rules and regulations of the Commission thereunder, so as to permit the completion of the distribution
of the Securities as contemplated in this Agreement and any Final Prospectus. If during the period in which a prospectus is required
by law to be delivered in connection with the distribution of Securities contemplated by any Final Prospectus (the “Prospectus
Delivery Period”), any event shall occur as a result of which, in the judgment of the Company or in the opinion of the
Placement Agent or counsel for the Placement Agent, it becomes necessary to amend or supplement any Final Prospectus in order
to make the statements therein, in the light of the circumstances under which they were made, as the case may be, not misleading,
or if it is necessary at any time to amend or supplement any Final Prospectus to comply with any law, the Company will promptly
prepare and file with the Commission, and furnish at its own expense to the Placement Agent and to dealers, an appropriate amendment
to the Registration Statement or supplement to the Registration Statement or any Final Prospectus that is necessary in order to
make the statements in any Final Prospectus as so amended or supplemented, in the light of the circumstances under which they
were made, as the case may be, not misleading, or so that the Registration Statement or any Final Prospectus, as so amended or
supplemented, will comply with law. Before amending the Registration Statement or supplementing any Final Prospectus in connection
with the Offering, the Company will furnish the Placement Agent with a copy of such proposed amendment or supplement and will
not file any such amendment or supplement to which the Placement Agent reasonably objects.


 


(d)
Copies of any Amendments and Supplements to a Final Prospectus. The Company will furnish the Placement Agent, without charge,
during the period beginning on the date hereof and ending on the Closing Date of the Offering, as many copies of any Final Prospectus
and any amendments and supplements thereto as the Placement Agent may reasonably request.


 


(e)
Transfer Agent. The Company will maintain, at its expense, a registrar and transfer agent for the Common Stock for
a period of three (3) years from the Closing Date.


 


(f)Maintenance
of Listing. The Company will use its reasonable best efforts to effect and maintain the listing of the Common Stock and the
Warrants on the NASDAQ Capital Market for at least three (3) years after the Effective Date, unless such listing is terminated
as a result of a transaction approved by the holders of a majority of the voting securities of the Company. If the Company fails
to maintain such listing of its Common Stock or Warrants, on the NASDAQ Capital Market or other Trading Market, for a period of
three (3) years from the Effective Date, the Company, at its expense, shall obtain and keep current a listing of such securities
in the Standard & Poor’s Corporation Records Services or Mergent’s Industrial Manual; provided that Mergent’s
OTC Industrial Manual is not sufficient for these purposes.


 


(g)
PCAOB Registered Public Accountant. The Company will maintain, at its expense, Mayer Hoffman McCann P.C. or a firm of comparable
quality and acceptable to the Placement Agent, as its PCAOB registered independent registered public accounting firm, for a period
of at least three (3) years from the Closing Date.


 


(h)
Printer. The Company will maintain, at its expense, a financial printer acceptable to the Placement Agent to handle the
printing and related aspects of the Offering.


 


(i)
Financial Public Relations Firm. The Company shall engage a financial public relations firm, reasonably acceptable
to the Placement Agent, for a period of no less than two (2) years following the Closing Date. The terms and conditions of such
engagement shall be reasonably determined by the Company. The Company further agrees to consult with the Placement Agent as is
customary within the securities industry prior to the distribution to third parties of any financial information, news releases,
or other publicity regarding the Offering, it being agreed that the Company shall give the Placement Agent no less than twelve
(12) hours prior notice of any such distribution and a reasonable opportunity during or prior to such period to review the contents
of the proposed distribution.


 


(j)
Key-Man Life Insurance. The Company shall maintain “key man” life insurance with an insurer rated at least
AA or better in the most recent addition of “Best’s Life Reports” on the life of [___],
[___] and [____] for a period of no less than three (3) years from the Closing
Date, unless such persons’ employment with the Company is earlier terminated. The aggregate policy limits for all insurance
procured pursuant to this section shall not exceed $3,000,000.


 






    	 	17	 



     

    

 


(k)
Earnings Statement. As soon as practicable and in accordance with applicable requirements under the Securities Act, but
in any event not later than 18 months after the Closing Date, the Company will make generally available to its security holders
and to the Placement Agent an earnings statement, covering a period of at least 12 consecutive months beginning after the Closing
Date, that satisfies the provisions of Section 11(a) and Rule 158 under the Securities Act.


 


(l)Periodic
Reporting Obligations. During the Prospectus Delivery Period, the Company will duly file, on a timely basis, with the Commission
and the Trading Market all reports and documents required to be filed under the Exchange Act within the time periods and in the
manner required by the Exchange Act.


 


(m)Additional
Documents. The Company will enter into a purchase agreement with Investors and will deliver any additional certificates
or documents as the Placement Agent deems necessary or appropriate to consummate the Offering, all of which will be in form and
substance reasonably acceptable to the Placement Agent. The Company agrees that the Placement Agent may rely upon, and is a third
party beneficiary of, the representations and warranties and applicable covenants set forth in the purchase agreement with Investors.


 


(n)No
Manipulation of Price. The Company will not take, directly or indirectly, any action designed to cause or result in,
or that has constituted or might reasonably be expected to constitute, the stabilization or manipulation of the price of any securities
of the Company.


 


(o)Acknowledgment.
The Company acknowledges that any advice given by the Placement Agent to the Company is solely for the benefit and use of the
Board of Directors of the Company and may not be used, reproduced, disseminated, quoted or referred to, without the Placement
Agent's prior written consent.


 


Section
5. Conditions of the Obligations of the Placement Agent. The obligations of the Placement Agent hereunder shall be subject
to the accuracy of the representations and warranties on the part of the Company set forth in Section 2 hereof, in each case as
of the date hereof and as of the Closing Date as though then made, to the timely performance by each of the Company of its covenants
and other obligations hereunder on and as of such dates, and to each of the following additional conditions:


 


(a)
Accountants’ Comfort Letter. On the date hereof, the Placement Agent shall have received, and the Company shall have
caused to be delivered to the Placement Agent, a letter from Mayer Hoffman and McCann P.C. (the independent registered public
accounting firm of the Company), addressed to the Placement Agent, dated as of the date hereof, in form and substance satisfactory
to the Placement Agent. The letter shall not disclose any change in the condition (financial or other), earnings, operations or
business of the Company from that set forth in the Preliminary Prospectus or the applicable Final Prospectus, which, in the Placement
Agent's sole judgment, is material and adverse and that makes it, in the Placement Agent's sole judgment, impracticable or inadvisable
to proceed with the Offering of the Securities as contemplated by such Final Prospectus.


 


(b)
Compliance with Registration Requirements; No Stop Order; No Objection from the FINRA. Each Final Prospectus (in accordance
with Rule 424(b)) and “free writing prospectus” (as defined in Rule 405 of the Securities Act), if any, shall
have been duly filed with the Commission, as appropriate; no stop order suspending the effectiveness of the Registration Statement
or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission;
no order preventing or suspending the use of any Final Prospectus shall have been issued and no proceeding for that purpose shall
have been initiated or threatened by the Commission; no order having the effect of ceasing or suspending the distribution of the
Securities or any other securities of the Company shall have been issued by any securities commission, securities regulatory authority
or stock exchange and no proceedings for that purpose shall have been instituted or shall be pending or, to the knowledge of the
Company, contemplated by any securities commission, securities regulatory authority or stock exchange; all requests for additional
information on the part of the Commission shall have been complied with; and FINRA shall have raised no objection to the fairness
and reasonableness of the placement terms and arrangements.


 


(c)
Corporate Proceedings. All corporate proceedings and other legal matters in connection with this Agreement, the Registration
Statement and each Final Prospectus, and the registration, sale and delivery of the Securities, shall have been completed or resolved
in a manner reasonably satisfactory to the Placement Agent Counsel, and Placement Agent Counsel shall have been furnished with
such papers and information as it may reasonably have requested to enable it to pass upon the matters referred to in this Section
5.


 






    	 	18	 



     

    

 


(d)
No Material Adverse Change. Subsequent to the execution and delivery of this Agreement and prior to the Closing Date, in
the Placement Agent's sole judgment after consultation with the Company, there shall not have occurred any Material Adverse Change
or Material Adverse Effect.


 


(e)
Opinion of Counsel for the Company. The Placement Agent shall have received on the Closing Date (i) the favorable opinion
of legal counsel to the Company, dated as of the Closing Date, including, without limitation, a negative assurance letter, addressed
to the Placement Agent and in form and substance satisfactory to the Placement Agent, and (ii) the favorable opinion of intellectual
property legal counsel to the Company, dated as of the Closing Date, including, without limitation, a negative assurance letter,
addressed to the Placement Agent and in form and substance satisfactory to the Placement Agent.


 


(f)
Officers’ Certificate. The Placement Agent shall have received on the Closing Date a certificate of the Company,
dated as of the Closing Date, signed by the Chief Executive Officer and Chief Financial Officer of the Company, to the effect
that, and the Placement Agent shall be satisfied that, the signers of such certificate have reviewed the Registration Statement,
the Preliminary Prospectus, any Final Prospectus, and this Agreement and to the further effect that:


 


(i)
The representations and warranties of the Company in this Agreement are true and correct, as if made on and as of the Closing
Date, and the Company has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied
at or prior to the Closing Date;


 


(ii)
No stop order suspending the effectiveness of the Registration Statement or the use of the Preliminary Prospectus or any Final
Prospectus has been issued and no proceedings for that purpose have been instituted or are pending or, to the Company’s
knowledge, threatened under the Securities Act; no order having the effect of ceasing or suspending the distribution of the Securities
or any other securities of the Company has been issued by any securities commission, securities regulatory authority or stock
exchange in the United States and no proceedings for that purpose have been instituted or are pending or, to the knowledge of
the Company, contemplated by any securities commission, securities regulatory authority or stock exchange in the United States;


 


(iii)
When the Registration Statement became effective, at the time of sale, and at all times subsequent thereto up to the delivery
of such certificate, the Registration Statement contained all material information required to be included therein by the Securities
Act and the applicable rules and regulations of the Commission thereunder, as the case may be, and in all material respects conformed
to the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder, as the case may
be, and the Registration Statement did not and does not include any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which
they were made, not misleading (provided, however, that the preceding representations and warranties contained in
this paragraph (iii) shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished
in writing to the Company by the Placement Agent expressly for use therein) and, since the effective date of the Registration
Statement, there has occurred no event required by the Securities Act and the rules and regulations of the Commission thereunder
to be set forth in the Registration Statement which has not been so set forth; and


 


(iv)
Subsequent to the respective dates as of which information is given in the Registration Statement and any Final Prospectus, there
has not been: (a) any Material Adverse Effect; (b) any transaction that is material to the Company taken as a whole, except transactions
entered into in the ordinary course of business; (c) any obligation, direct or contingent, that is material to the Company taken
as a whole, incurred by the Company, except obligations incurred in the ordinary course of business; (d) any material change in
the capital stock (except changes thereto resulting from the exercise of outstanding stock options or warrants) or outstanding
indebtedness of the Company; (e) any dividend or distribution of any kind declared, paid or made on the capital stock of the Company;
or (f) any loss or damage (whether or not insured) to the property of the Company which has been sustained or will have been sustained
which has a Material Adverse Effect.


 






    	 	19	 



     

    

 


(g)
Lock-Up Agreements. On the date hereof, the Placement Agent shall have received, and the Company shall have caused to be
delivered to the Placement Agent, agreements from the persons set forth on Exhibit C hereto, addressed to the Placement
Agent, dated as of the date hereof, in form set forth on Exhibit D hereto.


 


(h)
Escrow Agreement. The Company and the Placement Agent shall have entered into an escrow agreement with a commercial bank
or trust company reasonably satisfactory to both parties pursuant to which the Investors shall deposit their subscription funds
in an escrow account and the Company and the Placement Agent shall jointly authorize the disbursement of the funds from the escrow
account. The Company shall pay the reasonable fees of the escrow agent.


 


(i)
Bring-down Comfort Letter. On the Closing Date, the Placement Agent shall have received from Mayer Hoffman and McCann
P.C., or such other independent registered public accounting firm of the Company, a letter dated as of the Closing Date, in form
and substance satisfactory to the Placement Agent, to the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (a) of this Section 5, except that the specified date referred to therein for the carrying out of procedures
shall be no more than three business days prior to the Closing Date.


 


(j)
Stock Exchange Quotation. The Common Stock and the Warrants are registered under the Exchange Act and, as of the Closing
Date, the Common Stock and the Warrants shall be approved for listing and authorized for trading on the NASDAQ Capital Market
and satisfactory evidence of such action shall have been provided to the Representative. The Company shall have taken no action
designed to terminate, or likely to have the effect of terminating, the registration of the Common Stock or the Warrants under
the Exchange Act or delisting or suspending the Common Stock or the Warrants from trading on the NASDAQ Capital Market, nor will
the Company have received any information suggesting that the Commission or the NASDAQ Capital Market is contemplating terminating
such registration or listing. The Securities shall be DTC eligible.


 


(k)
Additional Documents. On or before the Closing Date, the Placement Agent and Placement Agent Counsel shall have received
such information and documents as they may reasonably require for the purposes of enabling them to pass upon the issuance and
sale of the Securities as contemplated herein, or in order to evidence the accuracy of any of the representations and warranties,
or the satisfaction of any of the conditions or agreements, herein contained.


 


If
any condition specified in this Section 5 is not satisfied when and as required to be satisfied, this Agreement may be terminated
by the Placement Agent by notice to the Company at any time on or prior to the Closing Date, which termination shall be without
liability on the part of any party to any other party, except that Section 6 (Payment of Expenses), Section 7 (Indemnification
and Contribution) and Section 8 (Representations and Indemnities to Survive Delivery) shall at all times be effective and shall
survive such termination.


 


Section
6. Payment of Expenses. The Company shall be responsible for and pay all expenses relating to the Offering, including, without
limitation: (i) all filing fees and communication expenses relating to the registration of the Securities to be sold in the Offering
and any underlying securities thereof with the Commission and the filing of the offering materials with FINRA; (ii) all fees and
expenses relating to the listing of such Securities on the Nasdaq Capital Market or on such other stock exchanges as the Company
and the Placement Agent together determine, if applicable; (iii) all fees, expenses and disbursements relating to background checks
of the Company’s officers and directors; (iv) fees, expenses and disbursements relating to the registration or qualification
of such shares under the “blue sky” securities laws of such states and other jurisdictions as the Placement Agent
may reasonably designate (including, without limitation, all filing and registration fees, and the fees and disbursements of the
Placement Agent’s counsel related thereto (and further subject to the limits below), it being agreed that if the Offering
is not commenced on the NASDAQ or NYSE MKT, the Company shall be responsible for an initial payment of $5,000 for filing fees
and fees and disbursements of the Placement Agent’s counsel upon the commencement of “blue sky” work by such
counsel, with the balance of such counsel fees, disbursements and expenses to be due on the Closing; (v) the costs of all mailing
and printing of the Registration Statement, and all amendments, supplements and exhibits thereto and as many preliminary and final
prospectuses as the Placement Agent may reasonably deem necessary; (vi) the costs of preparing, printing and delivering certificates,
if any, representing such Securities; (vii) fees and expenses of the transfer agent for such Securities; (viii) stock transfer
taxes, if any, payable upon the transfer of securities from the Company to the investors; (ix) the Company’s road show costs;
and (x) the fees and expenses of the Company’s accountants and the fees and expenses Company’s, legal counsel and
other agents and representatives. Upon the Placement Agent’s request, the Company shall provide funds to pay all such fees,
expenses and disbursement in advance.


 






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Notwithstanding
the foregoing, the Company shall not be responsible for the Placement Agent’s expenses, including, without limitation, the
fees and expenses of its counsel, to the extent such expenses are not permitted to be paid by the rules of FINRA, and the Company’s
obligation to reimburse the Placement Agent’s expenses (including its legal expenses and disbursements) shall be capped
at $115,000.


 


While
the Commission is reviewing the Registration Statement, the Placement Agent may plan and arrange “road show” marketing
trips for the Company’s management to meet with prospective investors. Such trips will include visits to a number of prospective
investors. The Company shall pay for all expenses, including, without limitation, travel and lodging expenses, associated with
such trips. The Placement Agent may request that the Company pre-pay such travel and lodging expenses. During the 45-day period
prior to the filing of the Registration Statement with the Commission, and at all times thereafter prior to and following the
effectiveness of the Registration Statement, the Company and its officers, directors and related parties will abide by all rules
and regulations of the Commission relating to public offerings, including, without limitation, those relating to public statements
(i.e., “gun jumping”) and disclosures of material non-public information.


 


Section
7. Indemnification and Contribution.


 


(a)
The Company agrees to indemnify and hold harmless the Placement Agent, its present and former affiliates and each person controlling
the Placement Agent (within the meaning of Section 15 of the Securities Act), managers, members, directors, officers, legal
counsel, agents and employees of the Placement Agent, its present and former affiliates and each such controlling person (the
Placement Agent, and each such entity or person, an “Indemnified Person”) from and against any losses, claims,
damages, obligations, penalties, judgments, awards, assessments, costs and other liabilities (collectively, the “Liabilities”),
and shall reimburse each Indemnified Person for all fees, expenses, disbursements, and any and all actions, suits, proceedings
and investigations in respect thereof and any and all reasonable legal and other costs, expenses and disbursements in giving testimony
or furnishing documents in response to a subpoena or otherwise (collectively, the “Expenses”) as they are incurred
by an Indemnified Person in investigating, preparing, pursuing or defending any Actions, whether or not in connection with litigation
in which any Indemnified Person is a party thereto, directly or indirectly, caused by, relating to, based upon, arising out of
or in connection with, (i) the Indemnified Person’s acting for the Company, including, without limitation, any act or omission
by such Indemnified Person in connection with its acceptance of or the performance or non-performance of its obligations under
this Agreement, (ii) any breach by the Company of any representation, warranty, covenant or agreement contained in this Agreement,
or (iii) the enforcement by the Indemnified Person’s rights under this Agreement, except to the extent that any such Liabilities
and Expenses are found in a final judgment by a court of competent jurisdiction (not subject to further appeal) to have resulted
primarily and directly from the bad faith, gross negligence or willful misconduct of the Indemnified Party seeking indemnification
hereunder, (iv) any untrue statement or alleged untrue statement of a material fact contained in the Preliminary Prospectus or
by any omission or alleged omission to state therein a material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (other than untrue statements or alleged untrue statements in, or omissions
or alleged omissions from, information relating to an Indemnified Person furnished in writing by or on behalf of such Indemnified
Person expressly for use in the Preliminary Prospectus), or (v) other advice or services rendered or to be rendered by any Indemnified
Person pursuant to this Agreement, the transactions contemplated thereby or any Indemnified Person's actions or inactions in connection
with any such advice, services or transactions; provided, however, that, other than with respect to clause (iv),
the Company shall not be responsible for any Liabilities or Expenses of any Indemnified Person to the extent such have resulted
primarily from such Indemnified Person's (x) gross negligence, bad faith or willful misconduct in connection with any of the advice,
actions, inactions or services referred to above or (y) use of any offering materials or information concerning the Company in
connection with the offer or sale of the Securities in the Offering which were not authorized for such use by the Company and
which use constitutes negligence, bad faith or willful misconduct. The Company shall not be liable in any such case to the extent
that any such loss, claim, damage, expense or liability arises out of or is based upon an untrue statement or alleged untrue statement
in, or omission or alleged omission from any Preliminary Prospectus, any Registration Statement or the Prospectus, or any such
amendment or supplement thereto, or any Issuer-Represented Free Writing Prospectus made in reliance upon, and in conformity with,
written information furnished to the Company by the Placement Agent specifically for inclusion therein, which information the
parties hereto agree is limited solely and exclusively to the information contained in the last paragraph on the front cover page
of the Final Prospectus and the statements concerning the Placement Agent contained under the heading “Plan of Distribution”
contained in the Final Prospectus.


 






    	 	21	 



     

    

 


(b)
Upon receipt by an Indemnified Person of actual notice of an Action against such Indemnified Person with respect to which indemnity
may be sought under this Agreement, such Indemnified Person shall promptly notify the Company in writing; provided that failure
by any Indemnified Person so to notify the Company shall not relieve the Company from any liability which the Company may have
on account of this indemnity or otherwise to such Indemnified Person, except to the extent the Company shall have been prejudiced
by such failure. The Company shall, if requested by the Placement Agent, assume the defense of any such Action including the employment
of counsel reasonably satisfactory to the Placement Agent, which counsel may also be counsel to the Company. Any Indemnified Person
shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Person unless: (i) the Company has failed promptly to assume the defense
and employ counsel reasonably satisfactory to the Indemnified Person to represent such Indemnified Person within a reasonable
time after notice of such an Action or (ii) the named parties to any such Action (including any impleaded parties) include such
Indemnified Person and the Company, and such Indemnified Person shall have been advised in the reasonable opinion of counsel that
there is an actual conflict of interest that prevents the counsel selected by the Company from representing both the Company (or
another client of such counsel) and any Indemnified Person; provided that the Company shall not in such event be responsible hereunder
for the fees and expenses of more than one firm of separate counsel for all Indemnified Persons in connection with any Action
or related Actions, in addition to any local counsel. The Company shall not be liable for any settlement of any Action effected
without its written consent (which shall not be unreasonably withheld). In addition, the Company shall not, without the prior
written consent of the Indemnified Person (which shall not be unreasonably withheld), settle, compromise or consent to the entry
of any judgment in or otherwise seek to terminate any pending or threatened Action in respect of which indemnification or contribution
may be sought hereunder (whether or not such Indemnified Person is a party thereto) unless such settlement, compromise, consent
or termination (i) includes an unconditional release of each Indemnified Person from all Liabilities arising out of such Action
for which indemnification or contribution may be sought hereunder; and (ii) does not contain any factual or legal admission by
or with respect to an Indemnified Person or an adverse statement with respect to the character, professionalism, expertise or
reputation of any Indemnified Person or any action or inaction of any Indemnified Person. The indemnification required hereby
shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as such expense, loss,
damage or liability is incurred and is due and payable, subject to recoupment if the Indemnified Person is found to be not entitled
to indemnification for such amount(s).


 


(c)
In the event that the foregoing indemnity is unavailable to an Indemnified Person other than in accordance with this Agreement,
the Company shall contribute to the Liabilities and Expenses paid or payable by such Indemnified Person in such proportion as
is appropriate to reflect (i) the relative benefits to the Company, on the one hand, and to the Placement Agent and any other
Indemnified Person, on the other hand, of the matters contemplated by this Agreement or (ii) if the allocation provided by the
immediately preceding clause is not permitted by applicable law, not only such relative benefits but also the relative fault of
the Company, on the one hand, and the Placement Agent and any other Indemnified Person, on the other hand, in connection with
the matters as to which such Liabilities or Expenses relate, as well as any other relevant equitable considerations; provided
that in no event shall the Company contribute less than the amount necessary to ensure that all Indemnified Persons, in the aggregate,
are not liable for any Liabilities and Expenses in excess of the amount of fees actually received by the Placement Agent pursuant
to this Agreement. For purposes of this paragraph, the relative benefits to the Company, on the one hand, and to the Placement
Agent on the other hand, of the matters contemplated by this Agreement shall be deemed to be in the same proportion as (a) the
total value paid or contemplated to be paid to or received or contemplated to be received by the Company, in the transaction or
transactions that are within the scope of this Agreement, whether or not any such transaction is consummated, bears to (b) the
fees paid to the Placement Agent under this Agreement. Notwithstanding the above, no person guilty of fraudulent misrepresentation
within the meaning of Section 11(f) of the Securities Act shall be entitled to contribution from a party who was not guilty of
fraudulent misrepresentation.


 






    	 	22	 



     

    

 


(d)
The Company also agrees that no Indemnified Person shall have any liability (whether direct or indirect, in contract or tort or
otherwise) to the Company for or in connection with advice or services rendered or to be rendered by any Indemnified Person pursuant
to this Agreement, the transactions contemplated thereby or any Indemnified Person's actions or inactions in connection with any
such advice, services or transactions except for Liabilities (and related Expenses) of the Company to the extent that the Liabilities
have resulted from such Indemnified Person's gross negligence, bad faith or willful misconduct in connection with any such advice,
actions, inactions or services as to which any such Indemnified Person shall remain liable to the Company.


 


(e)
The reimbursement, indemnity and contribution obligations of the Company set forth herein shall apply to any modification of this
Agreement and shall remain in full force and effect regardless of any termination of, or the completion of any Indemnified Person's
services under or in connection with, this Agreement.


 


Section
8. Representations and Indemnities to Survive Delivery. The respective indemnities, agreements, representations, warranties
and other statements of the Company or any person controlling the Company, of its officers, and of the Placement Agent set forth
in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation made by or on behalf
of the Placement Agent, the Company, or any of its or their partners, officers or directors or any controlling person, as the
case may be, and will survive delivery of and payment for the Securities to be sold in the proposed Offering and any termination
of this Agreement. A successor to a Placement Agent, or to the Company, its directors or officers or any person controlling the
Company, shall be entitled to the benefits of the indemnity, contribution and reimbursement agreements contained in this Agreement.


 




    	 	23	 



     

    

 


Section
9. Notices. All communications hereunder shall be in writing and shall be mailed, hand delivered or telecopied and confirmed
to the parties hereto as follows:


 


If
to the Placement Agent to the address set forth above, Attention: [____________],
Facsimile: (212) __-__,


 


With
a copy to:


 


Ellenoff
Grossman & Schole LLP


1345
Avenue of the Americas


New
York, New York 10105


Facsimile:
(212) 370-7889


Attention:
Barry Grossman, Esq.


 


If
to the Company:


 


Ominto,
Inc.


1110-112th
Avenue NE, Suite 350


Bellevue,
Washington 98004


Facsimile:
(_____) [____]


Attention:
Ivan Braiker


 


With
a copy to:


 


Gordon
and Rees LLP


2211
Michelson Drive, Suite 400


Irvine,
California 92612


Facsimile:
(949) 474-2060


Attention:
Lisa H. Klein, Esq.


 


Any
party hereto may change the address for receipt of communications by giving written notice to the others.


 


Section
10. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto, and to the benefit of
the employees, officers and directors and controlling persons referred to in Section 7 hereof, and to their respective successors,
and personal representative, and no other person will have any right or obligation hereunder.


 


Section
11. Partial Unenforceability. The invalidity or unenforceability of any section, paragraph or provision of this Agreement
shall not affect the validity or enforceability of any other section, paragraph or provision hereof. If any section, paragraph
or provision of this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid and enforceable.


 


Section
12. Governing Law Provisions. This Agreement shall be deemed to have been made and delivered in New York City and both this
Agreement and the transactions contemplated hereby shall be governed as to validity, interpretation, construction, effect and
in all other respects by the internal laws of the State of New York, without regard to the conflict of laws principles thereof.
Each of the Placement Agent and the Company: (i) agrees that any legal suit, action or proceeding arising out of or relating to
this Agreement and/or the transactions contemplated hereby shall be instituted exclusively in New York Supreme Court, County of
New York, or in the United States District Court for the Southern District of New York, (ii) waives any objection which it may
have or hereafter to the venue of any such suit, action or proceeding, and (iii) irrevocably consents to the jurisdiction of the
New York Supreme Court, County of New York, and the United States District Court for the Southern District of New York in any
such suit, action or proceeding. Each of the Placement Agent and the Company further agrees to accept and acknowledge service
of any and all process which may be served in any such suit, action or proceeding in the New York Supreme Court, County of New
York, or in the United States District Court for the Southern District of New York and agrees that service of process upon the
Company mailed by certified mail to the Company’s address shall be deemed in every respect effective service of process
upon the Company, in any such suit, action or proceeding, and service of process upon the Placement Agent mailed by certified
mail to the Placement Agent’s address shall be deemed in every respect effective service process upon the Placement Agent,
in any such suit, action or proceeding. Notwithstanding any provision of this Agreement to the contrary, the Company agrees that
neither the Placement Agent nor its affiliates, and the respective officers, directors, employees, agents and representatives
of the Placement Agent, its affiliates and each other person, if any, controlling the Placement Agent or any of its affiliates,
shall have any liability (whether direct or indirect, in contract or tort or otherwise) to the Company for or in connection with
the engagement and transaction described herein except for any such liability for losses, claims, damages or liabilities incurred
by us that are finally judicially determined to have resulted from the bad faith or gross negligence of such individuals or entities.
If either party shall commence an action or proceeding to enforce any provision of this Agreement, then the prevailing party in
such action or proceeding shall be reimbursed by the other party for its reasonable attorney’s fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such action or proceeding.


 




    	 	24	 



     

    

 


Section
13. General Provisions.


 


(a)
This Agreement constitutes the entire agreement of the parties to this Agreement and supersedes all prior written or oral and
all contemporaneous oral agreements, understandings and negotiations with respect to the subject matter hereof. This Agreement
may be executed in two or more counterparts, each one of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived unless waived in writing by each party whom the condition
is meant to benefit. Section headings herein are for the convenience of the parties only and shall not affect the construction
or interpretation of this Agreement.


 


(b)
The Company acknowledges that in connection with the offering of the Securities: (i) the Placement Agent has acted at arms length,
are not agents of, and owe no fiduciary duties to the Company or any other person, (ii) the Placement Agent owes the Company only
those duties and obligations set forth in this Agreement and (iii) the Placement Agent may have interests that differ from those
of the Company. The Company waives to the full extent permitted by applicable law any claims it may have against the Placement
Agent arising from an alleged breach of fiduciary duty in connection with the offering of the Securities


 


[The
remainder of this page has been intentionally left blank.]


 




    	 	25	 



     

    

 


If
the foregoing is in accordance with your understanding of our agreement, please sign below whereupon this instrument, along with
all counterparts hereof, shall become a binding agreement in accordance with its terms.


 


	 	Very
    truly yours,
	 	 
	 	OMINTO,
    INC.
	 	a
    Nevada corporation
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:


 


The
foregoing Placement Agency Agreement is hereby confirmed and accepted as of the date first above written.


 


CHARDAN
CAPITAL MARKETS LLC


 


 


	By:	 	 
	 	Name:	 
	 	Title:	 


 




    	 	26	 



     

    

 


EXHIBIT
A


 


Form
of Placement Agent Warrant


 


THIS
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED, OR
BE THE SUBJECT OF ANY HEDGING, SHORT SALE, DERIVATIVE, PUT, OR CALL TRANSACTION THAT WOULD RESULT IN THE EFFECTIVE ECONOMIC DISPOSITION
OF SUCH SECURITIES BY ANY PERSON FOR A PERIOD OF one hundred and eighty (180) days IMMEDIATELY
FOLLOWING THE DATE OF EFFECTIVENESS OF THE PUBLIC OFFERING OF THE COMPANY’S SECURITIES PURSUANT TO REGISTRATION STATEMENT
NO. 333-207005 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, EXCEPT IN ACCORDANCE WITH FINRA RULE 5110(g)(2).


 


COMMON
STOCK PURCHASE WARRANT


 


OminTO,
INC.


 


	Warrant
    Shares: ___________ 	Issuance
    Date: [●], 2015


 


THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, Chardan Capital Markets LLC
or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after the date that is 180 days from the effective date (“Effective
Date”) of the Registration Statement (the “Initial Exercise Date”) and on or prior to the close of
business on the [__] (___) year anniversary of the Effective Date (the “Termination Date”) but not thereafter,
to subscribe for and purchase from Ominto, Inc., a Nevada corporation (the “Company”), up to ___________ shares
(as subject to adjustment hereunder, the “Warrant Shares”) of Common Stock. The purchase price of one share
of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).


 


Section
1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain
Placement Agent Agreement (the “Agreement”), [●], 2015, between the Company and Chardan Capital Markets
LLC.


 


Section
2. Exercise.


 


(a)
Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after
the Initial Exercise Date and on or before the Termination Date by delivery to the Company (or such other office or agency of
the Company as the Company may designate by notice in writing to the registered Holder at the address of the Holder appearing
on the books of the Company) of a duly executed email copy of the Notice of Exercise form attached hereto. Within three (3) trading
days following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified
in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless
exercise procedure specified in Section 2(c) below is available and specified in the applicable Notice of Exercise. Notwithstanding
anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the
Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case,
the Holder shall surrender this Warrant to the Company for cancellation within three (3) trading days of the date the final Notice
of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number
of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder
in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing
the number of Warrant Shares purchased and the date of such purchases; provided that the records of the Company, absent manifest
error, will be conclusive with respect to the number of Warrant Shares purchasable from time to time hereunder. The Company shall
deliver any objection to any Notice of Exercise form within one (1) business day of receipt of such notice. The Holder and
any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following
the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any
given time may be less than the amount stated on the face hereof.


 




    	 	27	 



     

    

 


(b)
Exercise Price. The exercise price per share of the Common Stock under this Warrant shall be $[●], subject to adjustment
hereunder (the “Exercise Price”). Except as where otherwise permitted in accordance with Section 2(c), this
Warrant may only be exercised by means of payment by wire transfer or cashier’s check drawn on a United States bank.


 


(c)
Cashless Exercise. If, and only if, at the time of exercise hereof (i) there is no effective registration statement registering,
or the prospectus contained therein is not available for the issuance of, the Warrant Shares, (ii) the Holder is not an affiliate
of the Company, (iii) the applicable holding period set forth in Rule 144(d) has been satisfied, and (iv) the Warrant Agent is
provided with a legal opinion in form reasonably satisfactory to the Warrant Agent to the effect that the shares issuable upon
the respective Cashless Exercise may be issued without restrictive legend, then, and only then, this Warrant may, at the option
of the Holder, be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder
shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) * (X)] by (A), where:


 


(A)
= the average VWAP for the 10 trading days immediately preceding the date on which the Holder elects to exercise this Warrant
by means of a “cashless exercise,” as set forth in the applicable Notice of Exercise;


 


(B)
= the Exercise Price of this Warrant, as adjusted hereunder; and


 


(X)
= the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant
if such exercise were by means of a cash exercise rather than a cashless exercise.


 


“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then
listed or quoted on a national securities exchange within the meaning of Section 6 of the Exchange Act (a “Trading Market”),
the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market
on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (“Bloomberg”) (based on a
trading day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the OTC Bulletin Board (or its successor
entity) is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on the OTC Bulletin Board, (c) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin Board (or
its successor entity) and if prices for the Common Stock are then listed or quoted for trading on the OTCQX or OTCQB marketplaces
of the OTC Markets Group, Inc., the volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on such marketplace, (d) if the Common Stock is not then listed or quoted for trading on the OTCQX or OTCQB marketplaces
of the OTC Markets Group, Inc. and if prices for the Common Stock are then reported in the “Pink Sheets” published
by the OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most
recent bid price per share of the Common Stock so reported, or (e) in all other cases, the fair market value of a share of Common
Stock as determined by an independent appraiser selected in good faith by the Board of Directors of the Company and reasonably
acceptable to the Holder, the fees and expenses of which shall be paid by the Company.


 




    	 	28	 



     

    

 


(d)
Mechanics of Exercise.


 


(i)
Delivery of Warrant Shares upon Exercise. The Company shall use best efforts to cause the Warrant Shares purchased hereunder
to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s prime broker with The Depository
Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant
in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares or resale
of the Warrant Shares or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery to the
address specified by the Holder in the Notice of Exercise by the time and date that is no later than 11:00 am, Eastern time, on
the fifth (5th) trading day after the latest of (A) the delivery to the Company of the Notice of Exercise, (B) surrender
of this Warrant (if required) and (C) payment of the aggregate Exercise Price as set forth above (including by cashless exercise,
if permitted) (such date, the “Warrant Share Delivery Date”). The Warrant Shares shall be deemed to have been
issued, and the Holder or any other person so designated to be named therein shall be deemed to have become a holder of record
of such shares for all purposes, as of the date the Warrant has been exercised, with payment to the Company of the Exercise Price
(or by cashless exercise, if permitted) and all taxes required to be paid by the Holder, if any, pursuant to Section 2(d)(vii)
prior to the issuance of such shares, having been paid.


 


(ii)
Delivery of New Warrants upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request
of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder
a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which
new Warrant shall in all other respects be identical with this Warrant.


 


(iii)
Rescission Rights. If the Company fails to cause its transfer agent to transmit to the Holder the Warrant Shares pursuant
to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.


 


(iv)[RESERVED]


 


(v)
Compensation for Buy-In on Failure to Timely Deliver Warrant Shares upon Exercise. In addition to any other rights available
to the Holder, if the Company fails to use reasonable efforts to cause the Transfer Agent to transmit to the Holder the Warrant
Shares pursuant to an exercise on or before the Warrant Share Delivery Date and the Transfer Agent fails to do so before the Warrant
Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or
otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale
by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”),
then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price
(including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying
(1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue
times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the
Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored
(in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would
have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder
purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares
of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately
preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount
of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law
or in equity, including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s
failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.


 






    	 	29	 



     

    

 


(v)
No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise
of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the
Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Exercise Price or round up to the next whole share.


 


(vi)
Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer
tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid
by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed
by the Holder; provided, however, that, in the event Warrant Shares are to be issued in a name other than the name
of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed
by the Holder, and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer
tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise.


 


(vii)
Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise
of this Warrant pursuant to the terms hereof.


 


(e)
Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not
have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect
to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s
Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates), would beneficially
own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of
shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock
issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of
shares of Common Stock which would be issuable upon (i) exercise of the remaining, non-exercised portion of this Warrant beneficially
owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or non-converted portion of any
other securities of the Company (including, without limitation, any other security of the Company or any other entity that is
convertible into, or exercisable or exchangeable for, Common Stock, or any warrant or other right to purchase Common Stock or
any other security of the Company or any other entity that is convertible into, or exercisable or exchangeable for, Common Stock
(“Common Stock Equivalents”)) subject to a limitation on conversion or exercise analogous to the limitation
contained herein beneficially owned by the Holder or any of its Affiliates. Except as set forth in the preceding sentence, for
purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to
the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible
for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e)
applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together
with any Affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the
submission of a Notice of Exercise, shall be deemed to be the Holder’s determination of whether, and representation and
certification to the Company that, this Warrant is exercisable (in relation to other securities owned by the Holder together with
any Affiliates) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation,
and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination
as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the
rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding shares
of Common Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (A) the Company’s
most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by
the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Common
Stock outstanding. Upon the written or oral request of a Holder, the Company shall within two (2) trading days confirm orally
and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares
of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including
this Warrant, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was
reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon exercise of this Warrant.
The Holder, upon not less than 61 days’ prior notice to the Company, may increase or decrease the Beneficial Ownership Limitation
provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of
shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise
of this Warrant held by the Holder, and the provisions of this Section 2(e) shall continue to apply. Any such increase or decrease
will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph
shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct
this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation
herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations
contained in this paragraph shall apply to a successor holder of this Warrant.


 




    	 	30	 



     

    

 


Section
3. Certain Adjustments.


 


(a)
Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or
otherwise makes a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities
payable in shares of Common Stock (which, for the avoidance of doubt, shall not include any shares of Common Stock issued by the
Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii)
combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv)
issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the Exercise
Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury
shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common
Stock outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately
adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section
3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend
or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.


 


(b)
Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time during which
this Warrant is outstanding the Company grants, issues or sells any Common Stock Equivalents or other rights to purchase stock,
warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (“Purchase
Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate
Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon
complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial
Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase
Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined
for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate
in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not
be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as a
result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder
until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
The provisions of this Section 3(b) will not apply to any grant, issuance or sale of Common Stock Equivalents or other rights
to purchase stock, warrants, securities or other property of the Company which is not made pro rata to the record holders of any
class of shares of Common Stock.


 


(c)
Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend
or other distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of
capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options
by way of a dividend, spinoff, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction,
but specifically excluding any cash dividend) (a “Distribution”), at any time after the issuance of this Warrant,
then, in each such case and to the extent permitted by FINRA Rule 5110(f)(2)(G), the Holder shall be entitled to participate in
such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares
of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including,
without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution,
or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the
participation in such Distribution; provided, however, to the extent that the Holder’s right to participate
in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be
entitled to participate in such Distribution to such extent (or in the beneficial ownership of such shares of Common Stock as
a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of
the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation;
and provided, further, that the Holder shall not be entitled to participate in any cash Distribution (other than in connection
with a Fundamental transaction disclosed in Section 3(d) below) with respect to any unexercised portion of this Warrant, and provided,
further, that the Holder shall not be entitled to participate in any cash Distribution (other than in connection with a Fundamental
Transaction described in Section 3(d) below) with respect to any unexercised portion of this Warrant.


 




    	 	31	 



     

    

 


(d)
Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in
one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company,
directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially
all of its assets in one or more related transactions, (iii) any direct or indirect purchase offer, tender offer or exchange offer
(whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender
or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding
Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization
or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted
into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions
consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization,
recapitalization, spinoff or scheme of arrangement) with another Person or group of Persons whereby such other Person or group
acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person
or other Persons making or party to, or associated or affiliated with, the other Persons making or party to such stock or share
purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent
exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon
such exercise immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation in Section
2(e) on the exercise of this Warrant), the number of shares of Common Stock of the successor or acquiring corporation or of the
Company, if it is the surviving corporation, and any additional or alternative consideration (the “Alternative Consideration”)
receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Warrant
is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise
of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to
apply to such Alternative Consideration based on the amount of Alternative Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternative Consideration
in a reasonable manner reflecting the relative value of any different components of the Alternative Consideration. If holders
of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then
the Holder shall be given the same choice as to the Alternative Consideration it receives upon any exercise of this Warrant following
such Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction that is (1)
an all cash transaction, (2) a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the Exchange Act, or (3) a
Fundamental Transaction involving a person or entity not traded on a Trading Market, including, but not limited to, the NYSE,
the NYSE MKT, the Nasdaq Global Select Market, the Nasdaq Global Market, or the Nasdaq Capital Market, the Company or any Successor
Entity (as defined below) shall, at the option of the Holder or the Company or any Successor Entity, exercisable at any time concurrently
with, or within 30 days after, the consummation of the Fundamental Transaction, purchase this Warrant from the Holder by paying
to the Holder an amount of cash equal to the Black Scholes Value of the remaining unexercised portion of this Warrant on the date
of the consummation of such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant
based on the Black and Scholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of
the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest
rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the
applicable Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of 100% and the 100
day volatility obtained from the HVT function on Bloomberg as of the trading day immediately following the public announcement
of the applicable Fundamental Transaction, (C) the underlying price per share used in such calculation being the sum of the price
per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental
Transaction and (D) a remaining option time equal to the time between the date of the public announcement of the applicable Fundamental
Transaction and the Termination Date. The Company shall cause any successor entity in a Fundamental Transaction in which the Company
is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under
this Warrant in accordance with the provisions of this Section 3(d), and to deliver to the Holder in exchange for this Warrant
a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant
which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent
to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the
exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the Exercise Price hereunder
to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental
Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being
for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction).
Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that
from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring
to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of, the Company
and shall assume all of the obligations of the Company, under this Warrant and the other Transaction Documents with the same effect
as if such Successor Entity had been named as the Company herein.


 




    	 	32	 



     

    

 


(e)
Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share,
as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as
of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.


 


(f)
Notice to Holder.


 


(i)
Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the
Company shall promptly mail to the Holder a notice setting forth the Exercise Price after such adjustment and any resulting adjustment
to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.


 


(ii)
Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever
form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common
Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or
purchase any shares of capital stock of any class or any rights, (D) the approval of any stockholders of the Company shall be
required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party,
any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common
Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be mailed to the Holder
at its last address as it shall appear upon the Warrant Register of the Company, at least 10 calendar days prior to the applicable
record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose
of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders
of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined
or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become
effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange
their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation,
merger, sale, transfer or share exchange; provided that the failure to mail such notice or any defect therein or in the mailing
thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any
notice provided hereunder constitutes, or contains, material, non-public information regarding the Company, the Company shall,
simultaneously with the mailing of such notice, file such notice with the Commission pursuant to a Current Report on Form 8-K.
The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective
date of the event triggering such notice except as may otherwise be expressly set forth herein.


 




    	 	33	 



     

    

 


Section
4. Transfer of Warrant.


 


(a)
Transferability. This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable,
in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with
a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney
and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required,
such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable,
and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. The Warrant, if properly
assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant
issued. Neither this Warrant nor any Warrant Shares issued upon exercise of this Warrant shall be sold, transferred, assigned,
pledged, or hypothecated, or be the subject of any hedging, short sale, derivative, put, or call transaction that would result
in the effective economic disposition of the securities, by any person for a period of 180 days immediately following the date
of effectiveness or commencement of sales of the offering pursuant to which this Warrant is being issued, except:


 


(i)
the transfer of any security by operation of law or by reason of reorganization of the Company;


 


(ii)
the transfer of any security to any FINRA member firm participating in the offering and the officers or partners thereof, if all
securities so transferred remain subject to the lock-up restriction in this Section 4(a) for the remainder of the time period;
or


 


(iii)
the exercise or conversion of any security, if all securities received remain subject to the lock-up restriction in this Section
4(a) for the remainder of the time period.


 


(b)
New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office
of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved
in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or
Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated
the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable
pursuant thereto.


 


(c)
Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose
(the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and
treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution
to the Holder, and for all other purposes, absent actual notice to the contrary.


 


Section
5. Miscellaneous.


 


(a)
No Rights as Stockholder until Exercise. This Warrant does not entitle the Holder to any voting rights, dividend rights
or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2, except as expressly set
forth in Section 3.


 


(b)
Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant
Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case
of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate,
if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation,
in lieu of such Warrant or stock certificate.


 


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


 




    	 	34	 



     

    

 


(d)
Authorized Shares.


 


The
Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights
under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers
who are charged with the duty of executing stock certificates to execute and issue the necessary Warrant Shares upon the exercise
of the purchase rights under this Warrant. The Company will take all such commercially reasonable action as may be necessary to
assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of
any requirements of the Trading Market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares
which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights
represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully
paid and nonassessable and free from all taxes, liens and charges in respect of the issue thereof (other than taxes in respect
of any transfer occurring contemporaneously with such issue).


 


Except
and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the
terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all
such actions as may be necessary or appropriate to protect the rights of the Holder as set forth in this Warrant against impairment.
Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above
the amount payable therefor upon the exercise of this Warrant, (ii) take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant
and (iii) use commercially reasonable efforts to obtain all authorizations, exemptions or consents from any regulatory body having
jurisdiction thereof, as may be necessary to enable the Company to perform its obligations under this Warrant.


 


Before
taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or
in the Exercise Price, the Company shall obtain all such authorizations therefor, exemptions thereof and consents thereto, as
may be necessary from any regulatory body having jurisdiction thereof.


 


(e)
Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall
be determined in accordance with the laws of the State of New York, without regard to conflict of laws principles, and federal
or state courts sitting in the City of New York shall have exclusive jurisdiction over matters arising out of this Warrant.


 


(f)
Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered,
and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities
laws.


 


(g)
Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder
shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting
any other provision of this Warrant or the Agreement, if the Company willfully and knowingly fails to comply with any provision
of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall
be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those
of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of
its rights, powers or remedies hereunder.


 




    	 	35	 



     

    

 


(h)
Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company
shall be delivered in accordance with the notice provisions of the Agreement. The Holder shall deliver the Notice of Exercise
to the Company by email to ibraiker@ominto.com with a copy to the Company’s chief financial officer, tvirgin@ominto.com.


 


(i)
Limitation of Liability. No provision hereof, in the absence of affirmative action by the Holder sufficient to exercise
this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise
to any liability of the Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability
is asserted by the Company or by creditors of the Company.


 


(j)
Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages,
will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not
be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees
to waive and not to assert the defense in any action for specific performance or other equitable remedy that a remedy at law would
be adequate.


 


(k)
Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby
shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted
assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant
and shall be enforceable by the Holder or holder of Warrant Shares.


 


(l)
Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company
and the Holder.


 


(m)
Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Warrant.


 


(n)
Headings. The headings used in this Warrant are for reference only and shall not, for any purpose, be deemed a part of
this Warrant.


 


********************


 


(Signature
Page Follows)


 




    	 	36	 



     

    

 


IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first
above indicated.


 


	 	Ominto,
    INC.
	 	 
	 	By:	 
	 	 	Name: 
	 	 	Title: 


 


[Signature
Page to Placement Agent Warrant]


 




    	 	37	 



     

    

 


NOTICE
OF EXERCISE


 


To:
OMINTO, INC.


 


(1)
The undersigned hereby elects to purchase __________ Warrant Shares of the Company pursuant to the terms of the attached Warrant,
dated [●], 2015, and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes,
if any.


 


(2)
Payment shall take the form of (check applicable box):


 


☐ lawful
money of the United States by wire transfer or cashier’s check drawn on a United States bank; or


 


☐ if
permitted by the terms of the Warrant, the cancellation of such number of Warrant Shares as is necessary, in accordance with
the formula set forth in subsection 2(c) of the Warrant, to exercise the Warrant with respect to the maximum number of
Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c) of the
Warrant.


 


(3)
Please issue said Warrant Shares in the name of the undersigned or in such other name or names as is specified below:


	 	 	 


 


The
Warrant Shares shall be delivered to the following DWAC Account Number:


 


	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 


 


[SIGNATURE
OF HOLDER:]


 


Name of
Holder: _______________________________________________________________


 


Signature
of Authorized Signatory: _________________________________________________


 


Name of
Authorized Signatory: ____________________________________________________


 


Title of
Authorized Signatory: _____________________________________________________


 


Date: ________________________________________________________________________


 




    	 	38	 



     

    

 


ASSIGNMENT
FORM


 


(To
assign the foregoing Warrant, execute


this
form and supply the required information.


Do
not use this form to exercise the Warrant.)


 


FOR
VALUE RECEIVED, all of or a [___] portion of the foregoing Warrant and all rights evidenced thereby are hereby assigned to


 


_______________________________________________,
whose address is


 


_______________________________________________________________


 


_______________________________________________________________


 


 


[SIGNATURE
OF HOLDER:]


 


Name
of Holder: ____________________________________________


 


Signature
of Authorized Signatory: ______________________________


 


Name
of Authorized Signatory: _________________________________


 


Title
of Authorized Signatory: __________________________________


 


Date:
_____________________________________________________


 


Signature
Guaranteed: ___________________________________________


 


NOTE:
The signature to this Assignment Form must correspond with the name as it appears on the face of the Warrant, without alteration
or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company. Officers of corporations and those
acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.


 




    	 	39	 



     

    

 


Exhibit
B


 


Officers
and Directors:


 


Mitch Hill


Peter Harris


David Pollei


Ivan Braiker


Tom Virgin


Gary Baughman


Tom Vogl


Greg Newell


Michael
Hansen


Andreas
Kusche


Betina Dupont
Sorensen


Jeffrey
Schuett


 


3%+
Stockholders:


 


Joseph Saouma


K Foundation


Sleiman
Chamoun


 




    	 	40	 



     

    

 


EXHIBIT
C


 


FORM
OF LOCK-UP AGREEMENT


 


_______,
2015


 


Chardan
Capital Markets, LLC


 


17 State
Street, Suite 1600


 


New York,
NY 10004


 


		Re:	Ominto,
                                         Inc. – Registration Statement on Form S-1 (File No. 333-207005) for Shares of Common
                                         Stock and Warrants



 


Dear
Ladies and Gentleman:


 


The
undersigned, a holder of common stock, par value $0.0001 (“Common Stock”), or rights to acquire Common Stock,
of Ominto, Inc. (the “Company”), understands that Chardan Capital Markets LLC is the placement agent (the “Placement
Agent”) that is party to that certain placement agency agreement (the “Placement Agency Agreement”)
by and between the Placement Agent and the Company, providing for the public offering (the “Public Offering”)
of Common Stock and warrants to purchase Common Stock (the “Securities”) pursuant to a registration statement
filed or to be filed with the U.S. Securities and Exchange Commission (the “SEC”). Capitalized terms used herein
and not otherwise defined shall have the meanings set forth for them in the Placement Agency Agreement.


 


In
consideration of the Placement Agent’s agreement to enter into the Placement Agency Agreement and to proceed with the Public
Offering of the Securities, and for other good and valuable consideration, receipt of which is hereby acknowledged, the undersigned
hereby agrees, for the benefit of the Company and the Placement Agent, that, without the prior written consent of the Placement
Agent, the undersigned will not, during the period specified in the following paragraph (the “Lock-Up Period”),
directly or indirectly, unless otherwise provided herein, (a) offer, sell, agree to offer or sell, solicit offers to purchase,
grant any call option or purchase any put option with respect to, pledge, encumber, assign, borrow or otherwise dispose of or
transfer (each a “Transfer”) any Relevant Security (as defined below) or otherwise publicly disclose the intention
to do so, or (b) establish or increase any “put equivalent position” or liquidate or decrease any “call equivalent
position” (in each case within the meaning of Section 16 of the Securities Exchange Act of 1934 and the rules and regulations
thereunder) with respect to any Relevant Security or otherwise enter into any swap, derivative or other transaction or arrangement
that Transfers to another, in whole or in part, any economic consequence of ownership of a Relevant Security, whether or not such
transaction is to be settled by the delivery of Relevant Securities, other securities, cash or other consideration, or otherwise
publicly disclose the intention to do so. As used herein, the term “Relevant Security” means any share of Common
Stock, warrant to purchase Common Stock or any other security of the Company or any other entity that includes or is convertible
into, or exercisable or exchangeable for, Common Stock or any other equity security of the Company, in each case owned beneficially
or otherwise by the undersigned on the date set forth on the front cover of the final prospectus used in connection with the Public
Offering of the Securities (the “Effective Date”) or acquired by the undersigned during the Lock-Up Period.


 


The
Lock-Up Period will commence on the date of this Lock-Up Agreement and continue and include the date one hundred eighty (180)
days after the Effective Date.


 


In
addition, the undersigned further agrees that, without the prior written consent of the Placement Agent, during the Lock-Up Period
the undersigned will not: (i) file or participate in the filing with the SEC of any registration statement or circulate or participate
in the circulation of any preliminary or final prospectus or other disclosure document, in each case with respect to any proposed
offering or sale of a Relevant Security, or (ii) exercise any rights the undersigned may have to require registration with the
SEC of any proposed offering or sale of a Relevant Security.


 




    	 	41	 



     

    

 


In
furtherance of the undersigned’s obligations hereunder, the undersigned hereby authorizes the Company during the Lock-Up
Period to cause any transfer agent for the Relevant Securities to decline to transfer, and to note stop transfer restrictions
on the stock register and other records relating to, Relevant Securities for which the undersigned is the record owner and the
transfer of which would be a violation of this Lock-Up Agreement and, in the case of Relevant Securities for which the undersigned
is the beneficial but not the record owner, agrees that during the Lock-Up Period it will cause the record owner to cause the
relevant transfer agent to decline to transfer, and to note stop transfer restrictions on the stock register and other records
relating to, such Relevant Securities to the extent such transfer would be a violation of this Lock-Up Agreement.


 


Notwithstanding
the foregoing, the undersigned may transfer the undersigned’s Relevant Securities:


 


		(i)	as
                                         a bona fide gift or gifts,



 


		(ii)	to
                                         any trust for the direct or indirect benefit of the undersigned or a member of members
                                         of the immediate family of the undersigned,



 


		(iii)	if
                                         the undersigned is a corporation, partnership, limited liability company, trust or other
                                         business entity (1) to another corporation, partnership, limited liability company, trust
                                         or other business entity that is a direct or indirect affiliate (as defined in Rule 405
                                         under the Securities Act of 1933) of the undersigned, (2) to limited partners, limited
                                         liability company members or stockholders of the undersigned, or (3) in connection with
                                         a sale, merger or transfer of all or substantially all of the assets of the undersigned
                                         or any other change of control of the undersigned, not undertaken for the purpose of
                                         avoiding the restrictions imposed by this Lock-Up Agreement,



 


		(iv)	if
                                         the undersigned is a trust, to the beneficiary of such trust,



 


		(v)	by
                                         testate or intestate succession,



 


		(vi)	by
                                         operation of law, such as pursuant to a qualified domestic order or in connection with
                                         a divorce settlement, or



 


		(vii)	pursuant
                                         to the Placement Agency Agreement,



 


provided,
in the case of clauses (i)-(vi), that (A) such transfer shall not involve a disposition for value, (B) the transferee agrees
in writing with the Placement Agent and the Company to be bound by the terms of this Lock-Up Agreement, and (C) such transfer
would not require any filing under Section 16(a) of the Exchange Act and no such filing is voluntarily made.


 


For
purposes of this Lock-Up Agreement, “immediate family” shall mean any relationship by blood, marriage or adoption,
not more remote than first cousin.


  


The
undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Lock-Up Agreement
and that this Lock-Up Agreement has been duly authorized (if the undersigned is not a natural person) and constitutes the legal,
valid and binding obligation of the undersigned, enforceable in accordance with its terms. Upon request, the undersigned will
execute any additional documents necessary in connection with the enforcement hereof. Any obligations of the undersigned shall
be binding upon the successors and assigns of the undersigned from the date of this Lock-Up Agreement.


  


The
undersigned understands that, if the Placement Agency Agreement does not become effective, or if the Placement Agency Agreement
(other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery
of the Securities to be sold thereunder, the undersigned shall be released from all obligations under this Lock-Up Agreement.


 


The
undersigned, whether or not participating in the Public Offering, understands that the Placement Agent is entering into the Placement
Agency Agreement and proceeding with the Public Offering in reliance upon this Lock-Up Agreement.


 


This
Lock-Up Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the
conflict of laws principles thereof. Delivery of a signed copy of this Lock-Up Agreement by facsimile or e-mail/.pdf transmission
shall be effective as the delivery of the original hereof. 




 


	 	Very
    truly yours,
	 	 	 
	 	Signature:	 
	 	Name
        (printed):

        

	 	Title
    (if applicable):
	 	Entity
    (if applicable):


 




    	 	42	 



     

    

 


DISCLOSURE
SCHEDULES


 


TO
THE


 


PLACEMENT
AGENCY AGREEMENT


 


BY
AND BETWEEN


 


OMINTO,
Inc.


 


and


 


CHARDAN
CAPITAL MARKETS LLC


 


Dated
as of __________ __, 2015 (the “Agreement”)


 


These
disclosure schedules are a series of schedules (the “Disclosure Schedules”) corresponding to the sections contained
in the Placement Agency Agreement dated as of _______ __, 2015 (the “Agreement”), by and between Ominto, Inc.,
a Nevada corporation (the “Company”), and Chardan Capital Markets LLC (the “Placement Agent”).
Capitalized terms used in these Disclosure Schedules and not otherwise defined herein shall have the respective meanings assigned
to them in the Agreement. These Disclosure Schedules contain the information required to be disclosed pursuant to, and certain
exceptions to, the representations and warranties in the corresponding sections of the Agreement. The section headings and subject
headings in the Disclosure Schedules are for convenience of reference only and shall not be deemed to alter or affect any disclosure
in these Disclosure Schedules or any provision of the Agreement. Matters set forth in the Disclosure Schedules are not necessarily
limited to matters required by the Agreement to be reflected in the Disclosure Schedules. Nothing in the Agreement or in the Disclosure
Schedules constitutes an admission that any information disclosed, set forth or incorporated by reference in the Disclosure Schedules
or in the Agreement is material, constitutes a Material Adverse Effect or is otherwise required by the terms of the Agreement
to be so disclosed, set forth or incorporated by reference. Information disclosed (including the terms of any agreements referenced
herein) by the Company in any one Section of the Disclosure Schedules will also be deemed a disclosure as to all other applicable
Sections of the Disclosure Schedules and the Agreement where such disclosure is readily apparent from the face of such disclosure.


 


The
annexes, attachments, and exhibits to these Disclosure Schedules, if any, form an integral part of these Disclosure Schedules
and are incorporated by reference for all purposes as if set forth fully herein.


 




    	 	43	 



     

    

 


Schedule
2(j)


 


Capitalization


 


[Company
to provide.]


 


 


 44