Execution
Version


 


SUBSCRIPTION
AGREEMENT


 


SUBSCRIPTION
AGREEMENT (this “Agreement”), dated as of January 29, 2018, by and between Coda Octopus Group, Inc., a Delaware
corporation (the “Company”), and the investors listed on the Schedule of Investors attached hereto (collectively,
the “Investors”).


 


A.
The Company wishes to sell to the Investors, and the Investors wish to purchase, on the terms and subject to the conditions set
forth in this Agreement up to 1,125,950 shares (the “Shares”) of the Company’s Common Stock, par value
$0.001 per share (the “Common Stock”), at a price of $4.40 per Share.


 


B.
The sale of the Shares by the Company to the Investors will be effected in reliance upon the exemption from securities registration
afforded by the provisions of Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”).


 


In
consideration of the mutual promises made herein, and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Company and Investors hereby agree as follows:


 


1.
Purchase and Sale of Shares.


 


1.1.
Closing of Purchase and Sale; Purchase Price. Upon the terms and subject to the satisfaction or waiver of the conditions
set forth herein, the Company agrees to sell and each of the Investors agrees to purchase the number of Shares set forth below
such Investor’s name on the signature pages hereof. The date on which the closing of the purchase and sale pursuant to the
terms of this Agreement occurs (the “Closing”) is hereinafter referred to as the “Closing Date”.
The Closing will be deemed to occur at the offices of Louis A. Brilleman, Esq., 1140 Avenue of the Americas, 9th Floor,
New York, New York 10036, when (A) this Agreement and the other Transaction Documents (as defined below) have been executed and
delivered by the Company and, to the extent applicable, by Investors, (B) each of the conditions to the Closing described in Section
5 hereof has been satisfied or waived as specified therein and (C) unless otherwise specified on an Investor’s signature
page, full payment of Investor’s Purchase Price (as defined below) has been made by each Investor to the Company by wire
transfer of immediately available funds against physical delivery by the Company of duly executed certificates representing the
Shares being purchased by each Investor.


 


1.2.
Certain Definitions. When used herein, the following terms shall have the respective meanings indicated:


 


“Affiliate”
means, as to any Person (the “subject Person”), any other Person that directly or indirectly through one or
more intermediaries controls or is controlled by, or is under direct or indirect common control with, the subject Person. For
the purposes of this definition, “control” when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, through representation
on such Person’s board of directors or other management committee or group, by contract or otherwise.


 




    	 



     


    

 


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


 


“Business”
means the consolidated business, properties, assets, operations, results of operations or financial condition of the Company.


 


“Business
Day” means any day other than a Saturday, a Sunday or a day on which the Nasdaq Capital Market is closed or on which
banks in the City of New York are required or authorized by law to be closed.


 


“Commission”
means the U.S. Securities and Exchange Commission.


 


“Common
Stock” has the meaning specified in the preamble to this Agreement.


 


“Exchange
Act” means the Securities Exchange Act of 1934, as amended.


 


“Execution
Date” means the date of this Agreement.


 


“Governmental
Authority” means any nation or government, supranational agency, any state, provincial or political subdivision thereof
and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government,
including without limitation any stock exchange, securities market or self-regulatory organization.


 


“Governmental
Requirement” means any law, statute, code, ordinance, order, rule, permit, authorization, regulation, judgment, decree,
injunction, franchise, license or other directive or requirement of any federal, state, county, municipal, parish, provincial
or other Governmental Authority or any department, commission, board, court, agency or any other instrumentality of any of them.


 


“Lien”
means, with respect to any Property, any mortgage, pledge, hypothecation, assignment, deposit arrangement, security interest,
tax lien, financing statement, pledge, charge, or other lien, charge, easement, encumbrance, preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever on or with respect to such Property (including, without
limitation, any conditional sale or other title retention agreement having substantially the same economic effect as any of the
foregoing).


 


“Material
Adverse Effect” means an effect that is material and adverse to (i) the Business, (ii) the ability of the Company to
perform its obligations under this Agreement or the other Transaction Documents (as defined below) or (iii) the rights and benefits
to which each Investor is entitled under this Agreement and the other Transaction Documents.


 


“Person”
means any individual, corporation, trust, association, company, partnership, joint venture, limited liability company, joint stock
company, Governmental Authority or other entity.


 




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“Property”
means property and/or assets of all kinds, whether real, personal or mixed, tangible or intangible (including, without limitation,
all rights relating thereto).


 


“Purchase
Price” means the aggregate price paid for the Shares by an Investor.


 


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


 


“SEC
Reports” shall have the meaning ascribed to such term in Section 3.7.


 


“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall
not be deemed to include locating and/or borrowing shares of Common Stock).


 


“Subsidiary”
means any of the Company’s subsidiaries.


 


“Transaction
Documents” means, collectively, this Agreement and all other agreements, documents and other instruments executed and
delivered by or on behalf of the Company or any of its officers at the Closing.


 


2.
Representations and Warranties of Each Investor. Each Investor hereby represents and warrants to the Company for itself
and not for any of the other Investors and agrees with the Company that, as of the Execution Date and as of the Closing Date:


 


2.1.
Organization; Authorization; Enforceability. Such Investor is either an individual or an entity duly and validly organized,
validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization as set forth below
such Investor’s name on the signature page hereof with the requisite power and authority to purchase the Shares to be purchased
by it hereunder and to execute and deliver this Agreement. This Agreement constitutes and upon execution and delivery thereof,
each other Transaction Document to which such Investor is a party will constitute, such Investor’s valid and legally binding
obligation, enforceable in accordance with its terms, subject to (i) applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws of general application relating to or affecting the enforcement of creditors’ rights generally,
(ii) general principles of equity and (iii) limitations imposed by public policy on indemnification obligations.


 


2.2.
Accredited Investor. Such Investor (i) is an “accredited investor” as that term is defined in Rule 501 of Regulation
D promulgated by the Commission under the Securities Act (“Regulation D”), as indicated on the Accredited Investor
Questionnaire attached as Exhibit A, and (ii) is acquiring the Shares in the ordinary course of its business, solely for
its own account, and not with a view to the public resale or distribution of all or any part thereof, except pursuant to sales
that are registered under the Securities Act or are exempt from the registration requirements of the Securities Act and does not
have any agreement or understanding with any person to distribute any of the Shares except in compliance with the Securities Act.


 




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2.3.
Information. Investor acknowledges that it has had the opportunity to review the Transaction Documents (including all exhibits
and schedules thereto) and the SEC Reports and has been afforded, (i) the opportunity to ask such questions as it has deemed necessary
of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Shares
and the merits and risks of investing in the Shares; (ii) access to information about the Company and its financial condition,
results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and
(iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort
or expense that is necessary to make an informed investment decision with respect to the investment.


 


2.4.
Experience of Investor. Investor, either alone or together with its representatives, has such knowledge, sophistication
and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment
in the Shares, and has so evaluated the merits and risks of such investment. Investor is able to bear the economic risk of an
investment in the Shares and, at the present time, is able to afford a complete loss of such investment.


 


2.5.
Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Investor
has not, nor has any Person acting on behalf of or pursuant to any understanding with such Investor, directly or indirectly executed
any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that
such Investor first received a term sheet (written or oral) from the Company or any other Person representing the Company setting
forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Other
than to other Persons party to this Agreement or to such Investor’s representatives, including, without limitation, its
officers, directors, partners, legal and other advisors, employees, agents and Affiliates, such Investor has maintained the confidentiality
of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction).


 


2.6.
No Governmental Review. Such Investor understands that no United States federal or state agency or any other government
or governmental agency has passed on or made any recommendation or endorsement of the Shares or the fairness or suitability of
the investment in the Shares nor have such authorities passed upon or endorsed the merits of the offering of the Shares.


 


2.7.
General Solicitation. Such Investor is not purchasing the Shares as a result of any advertisement, article, notice or other
communication regarding the Shares published in any newspaper, magazine or similar media or broadcast over television or radio
or presented at any seminar or, to the knowledge of such Investor, any other general solicitation or general advertisement.


 


2.8.
Limitations on Disposition. Such Investor acknowledges that, except as provided herein, the Shares have not been and are
not being registered under the Securities Act and may not be transferred or resold without registration under the Securities Act
or unless pursuant to an exemption therefrom.


 




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2.9.
Legend. Such Investor understands that the certificates, if any, representing the Shares will bear at issuance a restrictive
legend in substantially the following form:


 


“The
securities represented by this certificate have not been registered under the Securities Act of 1933, as amended (the “Securities
Act”), or the securities laws of any state, and may not be offered, transferred, pledged, hypothecated, sold or otherwise
disposed of unless a registration statement under the Securities Act and applicable state securities laws shall have become effective
with regard thereto, or an exemption from registration under the Securities Act and applicable state securities laws is available
in connection with such offer or sale.”


 


2.10.
Reliance on Exemptions. Such Investor understands that the Shares are being offered and sold to it in reliance upon specific
exemptions from the registration requirements of U.S. federal and state securities laws and that the Company is relying upon the
truth and accuracy of the representations and warranties of such Investor set forth in this Section 2 in order to determine the
availability of such exemptions and the eligibility of such Investor to acquire the Shares.


 


2.11.
Compliance with U.S. Law. Such Investor is not, nor is it acting as an agent, representative, intermediary or nominee for,
a person identified on the list of blocked persons maintained by the Office of Foreign Assets Control, U.S. Department of Treasury.
In addition, the Investor has complied with all applicable U.S. laws, regulations, directives, and executive orders relating to
anti-money laundering.


 


3.
Representations and Warranties of the Company. The Company hereby represents and warrants to the Investors that, except
as expressly set forth on the disclosure schedules to this Agreement, as of the Execution Date and as of the Closing Date:


 


3.1.
Organization, Good Standing and Qualification. The Company is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction under which it is incorporated, and has all requisite corporate power and authority to conduct
its business as currently conducted and to execute, deliver and perform all of its obligations under this Agreement and to consummate
the transactions contemplated hereby. The Company is qualified to do business as a foreign corporation in each jurisdiction where
failure to be so qualified could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.


 


3.2.
Authorization; Consents. The Company has the requisite corporate power and authority to enter into and perform its obligations
under the Transaction Documents, including, without limitation, its obligations to issue and sell the Shares to the Investors
in accordance with the terms hereof and thereof. All corporate action on the part of the Company by its officers, directors and
stockholders necessary for the authorization, execution and delivery of, and the performance by the Company of its obligations
under, the Transaction Documents has been taken, and no further consent or authorization of the Company, its Board of Directors,
stockholders, any Governmental Authority or organization (other than such approval as may be required under the Securities Act
and applicable state securities laws in respect of the registration rights herein set forth), or any other person or entity is
required.


 




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3.3.
Due Execution; Enforceability. This Agreement has been and, at or prior to the Closing, each other Transaction Document
to be delivered at the Closing will be, duly executed and delivered by the Company. This Agreement constitutes and, upon the execution
and delivery thereof by the Company, each other Transaction Document will constitute, the valid and legally binding obligation
of the Company, enforceable against it in accordance with its terms, subject to (i) applicable bankruptcy, insolvency, fraudulent
transfer, moratorium, reorganization or other similar laws of general application relating to or affecting the enforcement of
creditors’ rights generally, (ii) general principles of equity and (iii) limitations imposed by public policy on indemnification
obligations.


 


3.4.
Capitalization. (a) The authorized capital stock of the Company consists of 150,000,000 shares of Common Stock, of which
9,136,121 shares are outstanding as of the date of this Agreement, and 5,000,000 shares of preferred stock, par value $0.001 per
share, of which 1,000 shares have been designated as Preferred Stock, Series C (the “Preferred Stock”), all of which
are issued and outstanding as of the date of this Agreement. All of the issued and outstanding shares of capital stock of the
Company have been duly authorized and validly issued, are fully paid, non-assessable, and free of preemptive rights, with no personal
liability attaching to the ownership thereof.


 


(b)
All of such shares were issued in compliance with all applicable laws and contractual obligations binding on the Company. None
were issued in violation of any agreement, arrangement or commitment to which the Company is a party or is subject to or in violation
of any preemptive or similar (contractual or statutory) rights of any Person.


 


(c)
Except as set forth on Schedule 3.4(c), as of the date hereof, no bonds, debentures, notes or other indebtedness that have
the right to vote on any matters on which stockholders of the Company may vote were issued or outstanding, no trust preferred
or subordinated debt securities of the Company or any subsidiary of the Company are issued or outstanding and there are no outstanding
subscriptions, options, warrants, puts, calls, rights, exchangeable or convertible securities or other commitments or agreements
obligating the Company to issue, transfer, sell, purchase, redeem or otherwise acquire any Common Stock.


 


(d)
There are no voting trusts, stockholder agreements, proxies or other agreements in effect pursuant to which the Company or any
of its subsidiaries has a contractual or other obligation with respect to the voting or transfer of the Common Stock or other
equity interests of the Company.


 


3.5.
Due Authorization; Valid Issuance. The Shares are duly authorized and, when issued, sold and delivered in accordance with
the terms hereof, (i) the Shares will be duly and validly issued, and the Shares will be fully paid and nonassessable; in each
case, free and clear of any Liens imposed by or through the Company, and (ii) assuming the accuracy of each Investor’s representations
in this Agreement, the Shares will be issued, sold and delivered in compliance with all applicable Federal and state securities
laws. Immediately following the Closing and the closing of the Concurrent Transaction (as defined in Section 4.5), the Investors
will own the respective percentages of the Company’s outstanding Common Stock set forth next to such Investor’s name
on the Schedule of Investors attached hereto


 




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3.6.
No Conflict with Other Instruments. The (i) execution, delivery and performance of this Agreement and the other Transaction
Documents, and (ii) consummation of the transactions contemplated hereby and thereby will not result in any violation of any provisions
of the Company’s charter, Bylaws or any other governing document or in a default under, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any provision of any
instrument or contract to which it is a party or by which it or any of its Property is bound, or in violation of any provision
of any Governmental Requirement applicable to the Company or be in conflict with or constitute, with or without the passage of
time and giving of notice, either a default under any such provision, instrument or contract or an event which results in the
creation of any Lien upon any assets of the Company.


 


3.7.
SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents
required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d)
thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation
to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein,
being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension
of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. 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 (or if amended or superseded by a filing before the date of this Agreement,
then on the date of such amending or superseding filing), 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 (including, in
each case, any related notes) were prepared from, and were in accordance, with, the books and records of the Company and its Subsidiaries
and when filed (or if amended or superseded by a filing before the date of this Agreement, then on the date of such amending or
superseding filing) complied in all material respects with applicable accounting requirements and the rules and regulations of
the Commission with respect thereto as in effect at such time. Such financial statements have been prepared in accordance with
United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company
and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods
then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. The Company has not
received written comments from the staff of the Commission regarding any of the SEC Reports that remain unresolved, other than
such comments the substance of which have been disclosed in any SEC Report.


 


3.8.
Form 10-K. The information to be included in the Company’s Annual Report on Form 10-K for the fiscal year ended October
31, 2017 (the “Form 10-K”), to be filed after the effectiveness of this Agreement, will not show any Adverse
Changes from the information included in the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended July 31,
2017. As used herein, the term “Adverse Change” means a change that is material and adverse to (i) the Company,
its business or operations, excluding changes in the Company’s financial results for the fiscal year ended October 31, 2017
as set forth in or as may be derived from the financial statements and related footnotes included in the Form 10-K, (ii) the ability
of the Company to perform its obligations under this Agreement or the other Transaction Documents, or (iii) the rights and benefits
to which each Investor is entitled under this Agreement and the other Transaction Documents.


 




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3.9.
Solicitation; Other Issuances of Shares. Neither the Company nor any of its Subsidiaries or Affiliates, nor any person
acting on its or their behalf, (i) has engaged in any form of general solicitation or general advertising (within the meaning
of Regulation D) in connection with the offer or sale of the Shares, or (ii) has, directly or indirectly, made any offers or sales
of any security or the right to purchase any security, or solicited any offers to buy any security or any such right, under circumstances
that would require registration of the Shares under the Securities Act or that would cause this offering of the Shares to be integrated
with other offerings by the Company for purposes of the Securities Act or any applicable shareholder approval provisions, including,
without limitation, under the rules and regulations of the Nasdaq Capital Market.


 


3.10.
Governmental Consents and Filings. Assuming the accuracy of the representations made by each Investor in Section 2 of this
Agreement, no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing
with, any Governmental Authority is required on the part of the Company in connection with the consummation of the transactions
contemplated by this Agreement, except for filings pursuant to applicable state securities laws, which have been made or will
be made in a timely manner.


 


3.11.
Transactions with Affiliates and Employees. Except as set forth herein and in the SEC Reports, none of the officers or
directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary
is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing
for rental of real or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise
requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which
any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member
or partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered,
(ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements
under any stock option plan of the Company.


 


3.12.
Litigation. Except as described in the SEC Reports, there is no, and during the past two years there has been no, action,
suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against
or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental
or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”)
which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents, or (ii)
could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the
Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of
violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and
to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company
or any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending
the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities
Act.


 




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3.13.
Compliance. (a) Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred
that has not been waived that, with notice or lapse of time or both would result in a default by the Company or any Subsidiary
under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation
of, any agreement that has been filed as an exhibit to the Company’s SEC Reports or will be filed as an exhibit to the Form
10-K (whether or not such default or violation has been waived), except as could not have or reasonably be expected to result
in a Material Adverse Effect, (ii) is or has been in violation in any material respect of any judgment, decree or order of any
court, arbitrator or other Governmental Authority or (iii) is or has been in violation in any material respect 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.


 


(b)
Neither the Company, nor, to the knowledge of the Company, any partner, director, officer, manager, employee, independent contractor,
consultant or agent of the Company or any other Person acting on their behalf, has directly or indirectly, during the last three
(3) years: (i) offered or used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense
relating to any political campaign or activity, (ii) offered or made a direct or indirect unlawful payment or unlawful conveyance
of something of value to any U.S. or non-U.S. government official, employee or political candidate or established or maintained
any unlawful or unrecorded funds, (iii) violated any provision of the Foreign Corrupt Practices Act (the “FCPA”)
or any statute or regulation equivalent to the FCPA or concerning such unlawful payments or gifts in any jurisdiction, including
the U.K. Bribery Act 2010, (iv) offered or given any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful
payment or gift of money or anything of value to any U.S. or non-U.S. government official or employee of any Governmental Authority,
(v) offered or made a direct or indirect payment to any U.S. or non-U.S. government official as incentive for the official to
complete some action or process expeditiously, to the benefit of the party making the payment or (vi) received any unlawful discounts
or rebates in violation of any statute or regulation relating to antitrust or competition. For the purpose of this section, a
“non-U.S. government official” means any employee or officer of a government of a non-U.S. country, including
any federal, regional or local department, agency, enterprise owned or controlled by a non-U.S. government, any official of a
non-U.S. political party, any official or employee of a public international organization, any person acting in an official capacity
for, or on behalf of, such entities, and any candidate for non-U.S. political office.


 


(c)
The Company has maintained: (i) books and records that in all material respects accurately and fairly reflect, in reasonable detail,
its transactions and dispositions of assets and (ii) a system of internal accounting controls that provide reasonable assurance
that transactions are executed in accordance with general or specific authorization from the Company’s Board of Directors
and officers.


 




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3.14.
Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the
appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described
in the SEC Reports, except where the failure to possess such permits could not reasonably be expected to result in a Material
Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any Material Permit.


 


3.15.
Intellectual Property. The Company and the Subsidiaries have, or have rights to use, all material patents, patent applications,
trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual
property rights and similar rights necessary or required for use in connection with their respective businesses as described in
the SEC Reports (collectively, the “Intellectual Property Rights”). Except as set forth in the SEC Reports,
none of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual
Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2)
years from the date of this Agreement. Neither the Company nor any Subsidiary has received, since the date of the latest audited
financial statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual
Property Rights violate or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have
a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is
no existing infringement by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken
reasonable security measures to protect the secrecy, confidentiality and value of all of their Intellectual Property Rights.


 


3.16.
Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries
are engaged. Such policies have not been subject to any lapse in coverage. Neither the Company nor any Subsidiary has received
any written notice of cancellation of, premium increase with respect to, or alteration of coverage under, any such policies, and
neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage
as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business
without a significant increase in cost.


 


3.17.
Listing and Maintenance Requirements. The Company’s Common Stock is registered pursuant to Section 12(b) or 12(g)
of the Exchange Act, and the Company has taken no action designed to or that is likely to have the effect of terminating the registration
of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating
terminating such registration. Other than as disclosed in the SEC Reports, the Company has not, in the 12 months preceding the
date hereof, received notice from Nasdaq to the effect that the Company is not in compliance its listing or maintenance requirements
of.


 




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3.18.
Disclosure. All disclosure provided to the Investors regarding the Company, its business and the transactions contemplated
hereby furnished by or on behalf of the Company with respect to the representations and warranties made herein are true and correct
in all material respects with respect to such representations and warranties and do 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, and when taken as a whole, not misleading.


 


4.
Covenants of the Company and the Investors.


 


4.1.
The Company agrees with the Investors that the Company will:


 


	 	a.	maintain
    its corporate existence in good standing; 
	 	 	 
	 	b.	maintain,
    keep and preserve all of its Properties necessary in the proper conduct of its businesses in good repair, working order and
    condition (ordinary wear and tear excepted) and make all necessary repairs, renewals and replacements and improvements thereto,
    except where the failure to do so would not reasonably be expected to have, individually or in the aggregate, a Material Adverse
    Effect; 
	 	 	 
	 	c.	pay
    or discharge before becoming delinquent (a) all taxes, levies, assessments and governmental charges imposed on it or its income
    or profits or any of its Property and (b) all lawful claims for labor, material and supplies, which, if unpaid, might become
    a Lien upon any of its Property, except where the failure to do so would not reasonably be expected to have, individually
    or in the aggregate, a Material Adverse Effect; provided, however, that the Company shall not be required to pay or discharge
    any tax, levy, assessment or governmental charge, or claim for labor, material or supplies, whose amount, applicability or
    validity is being contested in good faith by appropriate proceedings being diligently pursued and for which appropriate reserves
    have been established; 
	 	 	 
	 	d.	comply
    in all material respects with all Governmental Requirements applicable to the operation of its business;
	 	 	 
	 	e.	comply
    with all agreements, documents and instruments binding on it or affecting its Properties or business, except for instances
    of noncompliance that would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;
    
	 	 	 
	 	f.	not
    sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of
    the Securities Act) that would be integrated with the offer or sale of the Shares in a manner that would require the registration
    under the Securities Act of the sale of the Shares to the Investors or that would be integrated with the offer or sale of
    the Shares for purposes of the rules and regulations of Nasdaq such that it would require shareholder approval prior to the
    closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction;


 




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	 	g.	deliver
    to any Investor that owns at least 5% of the Company’s outstanding Common Stock, from time to time, such additional
    information regarding the Business as such Investor may reasonably request.
	 	 	 
	 	h.	take
    such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to qualify the
    Shares for, sale to the Investors at the Closing and issuance to the Investors pursuant to this Agreement under applicable
    securities or “Blue Sky” laws of the states of the United States; provide evidence of any such action so taken
    to the Investors; make all filings and reports relating to the offer and sale of the Shares required under applicable securities
    or “Blue Sky” laws of the states of the United States following the Closing Date; and
	 	 	 
	 	i.	execute
    such documents and other papers and take such other further actions as may be reasonably required to carry out the provisions
    hereof and effectuate the transactions contemplated hereby, and use its best efforts to fulfill or obtain the fulfillment
    of the conditions to its obligation to effect the Closing.


 


4.2.
The Company hereby agrees to use best efforts to list, effective upon Closing, all of the Shares on the Nasdaq Capital Market.
The Company further agrees, if the Company applies to have the Common Stock traded on any other exchange, it will include in such
application all of the Shares, and will take such other action as is necessary to cause all of the Shares to be listed on such
other exchange as promptly as possible. The Company will take all action reasonably necessary to continue the listing and trading
of its Common Stock on the Nasdaq Capital Market and will comply in all respects with the Company’s reporting, filing and
other obligations under all applicable Nasdaq rules.


 


4.3.
The Investor agrees with the Company that Investor will not, without the prior written consent of the Company offer, sell, contract
to sell, pledge or otherwise dispose of, (or enter into any transaction which is designed to, or might reasonably be expected
to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise)
by the Investor or any Affiliate of the Investor or any person in privity with the Investor or any Affiliate of the Investor),
directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position
within the meaning of Section 16 of the Exchange Act and the rules and regulations of the Commission promulgated thereunder, or
publicly announce an intention to effect any such transaction, with respect to any shares of capital stock of the Company or any
securities convertible into or exercisable or exchangeable for such capital stock which were acquired by the Investor hereunder,
for a period beginning upon, and ending 120 days after the effective date of a registration statement in connection with an initial
public offering by the Company of its securities, other than shares of Common Stock disposed of in transactions not requiring
registration under the Securities Act, including bona fide gift or gifts, provided that the donee or donees thereof agrees in
writing to be bound by the terms of this provision.


 




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4.4.
Use of Proceeds. The proceeds from the sale of the Shares may be used by the Company in its discretion, and may include
the partial paydown of the HSBC loan described in the SEC Reports.


 


4.5.
Other Subscriptions. There may be one or more directors of the Company who will participate in this offering and who will
be executing Subscription Agreements to purchase up to an aggregate of 50,000 shares of Common Stock that are identical to this
Agreement (the “Concurrent Transaction”), except that the price per Share will be higher in accordance with
Nasdaq rules; provided, however, that such subscription agreements will not be executed until after the filing of the Form 10-K.


 


5.
Conditions to Closing.


 


5.1.
Conditions to each Investor’s Obligations at the Closing. Each Investor’s obligations to effect the Closing,
including without limitation its obligation to purchase Shares at the Closing, are conditioned upon the fulfillment (or waiver
by such Investor in its sole and absolute discretion) of each of the following events as of the Closing Date, and the Company
shall use commercially reasonable efforts to cause each of such conditions to be satisfied:


 


	 	a.	the
    representations and warranties of the Company set forth in this Agreement and in the other Transaction Documents shall be
    true and correct as of such date as if made on such date (except that to the extent that any such representation or warranty
    relates to a particular date, such representation or warranty shall be true and correct as of that particular date); 
	 	 	 
	 	b.	the
    Company shall have complied with or performed all of the agreements, obligations and conditions set forth in this Agreement
    that are required to be complied with or performed by the Company on or before the Closing; 
	 	 	 
	 	c.	the
    Company shall have delivered to each Investor duly executed certificates representing the Shares being purchased by such Investor,
    unless the Shares are issued in uncertificated form; 
	 	 	 
	 	d.	the
    Company shall have delivered to each Investor a secretary’s certificate, dated as of the Closing Date, certifying as
    to (A) the incorporation and active status of the Company in the State of Delaware based upon a certificate issued by the
    Secretary of State of the State of Delaware as of a date within ten (10) days of the Closing Date, (B) the resolutions of
    the Board of Directors approving the transactions contemplated hereby, (C) the Restated Certificate of Incorporation of the
    Company, as amended to date, certified as of a date within ten (10) days of the Closing Date, and (D) the By-Laws of the Company,
    each as in effect as of the Closing Date;
	 	 	 
	 	e.	Counsel
    to the Company shall have delivered to the Investors a legal opinion substantially in the form attached hereto as Exhibit
    B;
	 	 	 
	 	f.	there
    shall be no injunction, restraining order or decree of any nature of any court or Government Authority of competent jurisdiction
    that is in effect that restrains or prohibits the consummation of the transactions contemplated hereby and by the other Transaction
    Documents; 
	 	 	 
	 	g.	the
    Company shall have executed each Transaction Document to which it is a party and shall have delivered the same to Investor;
    and
	 	 	 
	 	h.	no
    Material Adverse Effect shall have occurred.


 




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5.2.
Conditions to Company’s Obligations at the Closing. The Company’s obligations to effect the Closing with the
Investors are conditioned upon the fulfillment (or waiver by the Company in its sole and absolute discretion) of each of the following
events as of the Closing Date:


 


	 	a.	the
    representations and warranties of each Investor set forth in this Agreement and in the other Transaction Documents shall be
    true and correct as of such date as if made on such date (except that to the extent that any such representation or warranty
    relates to a particular date, such representation or warranty shall be true and correct as of that date); 
	 	 	 
	 	b.	Each
    Investor shall have complied with or performed all of the agreements, obligations and conditions set forth in this Agreement
    that are required to be complied with or performed by such Investor on or before the Closing; 
	 	 	 
	 	c.	there
    shall be no injunction, restraining order or decree of any nature of any court or Government Authority of competent jurisdiction
    that is in effect that restrains or prohibits the consummation of the transactions contemplated hereby and by the other Transaction
    Documents; 
	 	 	 
	 	d.	Each
    Investor shall have executed each Transaction Document to which it is a party and shall have delivered the same to the Company;
    and 
	 	 	 
	 	e.	Each
    Investor shall have tendered to the Company the Purchase Price for the Shares being purchased by it at the Closing by wire
    transfer of immediately available funds.


 


6.
Registration.


 


6.1.
Definitions. As used in this Section 6, the following terms shall have the following meanings:


 


“Issuer
Free Writing Prospectus” means any issuer free writing prospectus, as defined in Rule 433 under the Securities Act,
relating to the offer of Registrable Securities.


 


“Prospectus”
means (i) the prospectus included in the Registration Statement (including a prospectus that includes any information previously
omitted from a prospectus filed as part of an effective Registration Statement in reliance upon Rule 430A, Rule 430B or Rule 430C
promulgated under the Securities Act), as amended or supplemented by any Prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by such Registration Statement and all other amendments and supplements
to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated
by reference in such Prospectus and (ii) any Issuer Free Writing Prospectus.


 




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“Registrable
Securities” means the Shares; provided, that, a security shall cease to be a Registrable Security upon sale pursuant
to a Registration Statement or Rule 144.


 


“Registration
Statement” means any registration statement of the Company filed under the Securities Act that covers the resale of
any of the Registrable Securities pursuant to the provisions of this Agreement, amendments and supplements to such Registration
Statement, including post-effective amendments, all exhibits and all material incorporated by reference in such Registration Statement.


 


“Register,”
“registered” and “registration” refer to a registration made by preparing and filing a Registration
Statement or similar document in compliance with the Securities Act (as defined below), and the declaration or ordering of effectiveness
of such Registration Statement or document.


 


6.2
Registration. The Company shall use its best efforts to cause the Registrable Securities to be registered pursuant to the
Securities Act. In connection therewith, as soon as practicable after the Closing Date and in any event by May 30, 2018 (the “Filing
Date”), the Company shall prepare and file with the Commission a Registration Statement on Form S-3 covering the resale
of the Registrable Securities for an offering to be made on a continuous basis pursuant to Rule 415. The initial Registration
Statement to be filed under this Section will be filed to include all of the Registrable Securities. Subject to any Commission
comments, such Registration Statement shall include the plan of distribution attached hereto as Exhibit C (the “Plan
of Distribution”); provided, however, that no Investor shall be named as an “underwriter” in the Registration
Statement without such Investor’s prior written consent. Such Registration Statement also shall cover, to the extent allowable
under the Securities Act and the rules promulgated thereunder (including Rule 416), such indeterminate number of additional shares
of Common Stock resulting from stock splits, stock dividends or similar transactions with respect to the Registrable Securities.
The Company shall use its best efforts to cause such Registration Statement to be declared effective under the Securities Act
as soon as possible (but in no event more than two (2) business days after the date that the Commission advises the Company that
it either has no comments on the Registration Statement or that all comments with respect thereto have been resolved), and shall
use its reasonable best efforts to keep the resale registration of the Registrable Securities continuously effective under the
Securities Act until the date that is the earliest of (i) such time as all of the Registrable Securities covered by such Registration
Statement have been publicly sold by the Investors, or (ii) such time as the Investors whose Registrable Securities are included
in such registration notify the Company in writing that they will not make any further sales thereunder, or (iii) the third anniversary
of the date the Registration Statement was declared effective (the “Effectiveness Period”). By 5:00 p.m. (New
York City time) on the Business Day immediately following the date any Registration Statement required to be filed hereunder is
declared effective, the Company will file with the Commission in accordance with Rule 424 under the Securities Act the final Prospectus
to be used in connection with sales pursuant to such Registration Statement (if such filing is required under such Rule). The
Registration Statement when declared effective will comply as to form in all material respects with all applicable requirements
of the Securities Act and the Exchange Act and will not contain 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 not misleading (and, in the case of the Prospectus,
in the light of the circumstances under which a statement is made).


 




    	15



     


    

 


6.3
If all of the Registrable Securities to be included in the Registration Statement filed pursuant to Section 6.2 cannot be so included
because the Commission informs the Company that all of the Registrable Securities cannot, as a result of the application of Rule
415 or any other reason, be registered for resale as a secondary offering on a single registration statement, the Company agrees
to promptly (i) inform each of the holders thereof, (ii) use its reasonable best efforts to file amendments to the initial Registration
Statement as required by the Commission, and/or (iii) withdraw the initial Registration Statement and file a new Registration
Statement, in either case covering the maximum number of Registrable Securities permitted to be registered by the Commission;
provided, however, that prior to filing such amendment or new Registration Statement, the Company is obligated to use its reasonable
best efforts to advocate with the then prevailing Commission guidance.


 


6.4
Ineligibility for Form S-3. In the event that Form S-3 is not available for the registration of the resale of Registrable
Securities hereunder, the Company shall (i) register the resale of the Registrable Securities on Form S-1 or another appropriate
form available to the Company for the registration of the resale of Registrable Securities hereunder and (ii) undertake to register
the Registrable Securities on Form S-3 promptly after such form is available, provided that the Company shall maintain the effectiveness
of the Registration Statement then in effect until such time as a Registration Statement on Form S-3 covering the Registrable
Securities has been declared effective by the Commission.


 


6.5
Expenses. The Company will pay all expenses associated with each registration and the performance of or compliance by the
Company with this Section 6, including, without limitation, filing and printing fees, its counsel and accounting fees and expenses,
costs associated with clearing the Registrable Securities for sale under applicable state securities laws, and listing fees, but
excluding Investors’ counsel fees, and discounts, commissions, fees of underwriters, selling brokers, dealer managers or
similar securities industry professionals with respect to the Registrable Securities being sold.


 


6.6
Registration Procedures. In connection with the Company’s registration obligations hereunder, the Company shall:


 


	 	a.	Not
    less than three Business Days prior to the filing of a Registration Statement or any related Prospectus or any amendment or
    supplement thereto, furnish via email to counsel for the Investors copies of all disclosures regarding Investors and the plan
    of distribution to be included in such documents proposed to be filed, which disclosures will be subject to the reasonable
    review of the Investors. The Company will reflect in each such document when so filed with the Commission such comments regarding
    Investors and the plan of distribution as Investors may reasonably and promptly propose no later than two Business Days after
    Investors have been so furnished with copies of such documents as aforesaid.


 




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	 	b.	(i)
    Prepare and file with the Commission such amendments, including post-effective amendments, to each Registration Statement
    and the Prospectus used in connection therewith as may be necessary to keep the Registration Statement continuously effective,
    as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the Commission such additional
    Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities; (ii) cause
    the related Prospectus to be amended or supplemented by any required Prospectus supplement, and as so supplemented or amended
    to be filed pursuant to Rule 424; (iii) respond as promptly as reasonably possible, to any comments received from the Commission
    with respect to the Registration Statement or any amendment thereto; and (iv) comply in all material respects with the provisions
    of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by the Registration
    Statement during the applicable period in accordance with the intended methods of disposition by Investors set forth in the
    Registration Statement as so amended or in such Prospectus as so supplemented.
	 	 	 
	 	c.	Furnish,
    upon reasonable request, to each Investor, copies of any and all correspondence with the Commission or any other governmental
    agency or other regulatory or self-regulatory body or other body having jurisdiction (including any domestic or foreign securities
    exchange) relating to such offering of Registrable Securities.
	 	 	 
	 	d.	Notify
    Investors as promptly as reasonably possible of any of the following events: (i) the Commission notifies the Company whether
    there will be a “review” of any Registration Statement; or (ii) any Registration Statement or any post-effective
    amendment is declared effective.
	 	 	 
	 	e.	Advise
    Investors promptly after it receives notice or obtains knowledge of the issuance or the threat of issuance of any stop order
    by the Commission delaying or suspending the effectiveness of the Registration Statement or of the initiation of any proceedings
    for that purpose; and the Company shall promptly use all commercially reasonable efforts to prevent he issuance of any stop
    order or to obtain its withdrawal at the earliest possible moment if such stop order should be issued.
	 	 	 
	 	f.	Immediately
    notify each applicable Investor of (i) any request of the Commission or any other Federal or state governmental authority
    for any amendment or supplement to any Registration Statement or Prospectus or additional information related thereto; (ii)
    the Company’s receipt of notice of any suspension of the qualification or exemption from qualification of any Registrable
    Securities for sale in any jurisdiction, or the initiation or threat of any Proceeding for such purpose; or (iii) the occurrence
    of any event as a result of which the financial statements included in or incorporated by reference into any Registration
    Statement become ineligible for inclusion therein or any Registration Statement or Prospectus or other document contains any
    untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make
    the statements therein, in the light of the circumstances under which they were made, not misleading. Promptly following the
    provision of such notice, the Company shall amend or supplement the Prospectus or Prospectus supplement or take other appropriate
    action so that the Prospectus or Prospectus supplement does not include an untrue statement of a material fact or omit to
    state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light
    of the circumstances then existing. In addition, the Company shall notify Investors as promptly as reasonably possible of
    the receipt by the Company of written comments from the Commission relating to any Registration Statement.


 




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	 	g.	(i)
    In the time and manner required by Nasdaq or any other market or exchange on which the Registrable Securities are listed (the
    “Trading Market”), prepare and file with such Trading Market an additional shares listing application covering
    all of the Registrable Securities; (ii) take all steps necessary to cause such Registrable Securities to be approved for listing
    on a Trading Market as soon as possible thereafter; (iii) provide to Investors evidence of such listing; and (iv) during the
    Effectiveness Period, maintain the listing of such Registrable Securities on such Trading Market or another Eligible Market.
	 	 	 
	 	h.	Cooperate
    with Investors to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be
    delivered to a transferee pursuant to a Registration Statement, which certificates will be free, to the extent permitted by
    this Agreement and under law, of all restrictive legends, and to enable such certificates to be in such denominations and
    registered in such names as Investors may reasonably request.
	 	 	 
	 	i.	Comply
    with all rules and regulations of the Commission applicable to the registration of the Securities and make any necessary “Blue
    Sky” filings.
	 	 	 
	 	j.	If
    the Investor could reasonably be deemed to be an “underwriter,” as defined in Section 2(a)(11) of the Securities
    Act or a “controlling person” within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
    Act, in connection with the Registration Statement in respect of any registration of Registrable Securities of such Investor
    pursuant to this Agreement, and any amendment or supplement thereof (any such Registration Statement or amendment or supplement,
    an “Investor Underwriter Registration Statement”), then the Company will cooperate with such Investor in
    allowing such Investor to conduct customary “underwriter’s due diligence” with respect to the Company and
    satisfy its obligations in respect thereof. In addition, at any Investor’s request, the Company will furnish to such
    Investor, on the date of the effectiveness of any Investor Underwriter Registration Statement and thereafter from time to
    time on such dates as such Investor may reasonably request, (i) a comfort letter, dated such date, from the Company’s
    independent certified public accountants in form and substance as is customarily given by independent certified public accountants
    to underwriters in an underwritten public offering, addressed to such Investor, (ii) an opinion, dated as of such date, of
    counsel representing the Company for purposes of such Investor Underwriter Registration Statement, in form, scope and substance
    as is customarily given in an underwritten public offering, including a standard “10b-5” negative assurance for
    such offering, addressed to such Investor and (iii) a standard officer’s certificate from the Chief Executive Officer
    and Chief Financial Officer of the Company addressed to such Investor. The Company will also permit legal counsel to such
    Investor(s) to review and comment upon any such Investor Underwriter Registration Statement at least five (5) Business Days
    prior to its filing with the Commission and all amendments and supplements to any such Investor Underwriter Registration Statement
    within a reasonable number of days prior to their filing with the Commission and not file any Investor Underwriter Registration
    Statement or amendment or supplement thereto in a form to which such Investor’s legal counsel reasonably objects.
	 	 	 
	 	k.	The
    Company shall cause certificates evidencing the Registrable Securities not to contain any restrictive legend: (i) upon the
    effectiveness of a Registration Statement covering such Registrable Securities, or (ii) following a sale of such Registrable
    Securities pursuant to Rule 144, or (iii) if such legend is not required under applicable requirements of the Securities Act
    (including judicial interpretations and pronouncements issued by the Staff of the Commission). Following such time as restrictive
    legends are not required to be placed on certificates representing Shares, the Company will, no later than five (5) Business
    Days following the delivery by any Investor to the Company or the Company’s transfer agent of a certificate representing
    Registrable Securities containing a restrictive legend, deliver or cause to be delivered to such Investor a certificate representing
    such Registrable Securities that is free from all restrictive and other legends. The Company shall, immediately following
    the Registration Statement being declared effective, cause its counsel to issue a legal opinion to the Company’s transfer
    agent with respect to the Registrable Securities to effect the removal of the restrictive legend contemplated by this Agreement.
    The Company may not make any notation on its records or give instructions to any transfer agent for the Registrable Securities
    that enlarge the restrictions on transfer set forth in this Agreement. Certificates for Registrable Securities subject to
    legend removal hereunder shall be transmitted by the Company’s transfer agent to the Investor by crediting the account
    of the Investor’s prime broker with the Depository Trust Company system. 
	 	 	 
	 	l.	The
    Company shall take all such reasonable actions as are necessary to effect the registration or facilitate the disposition of
    the Registrable Securities in accordance with the terms of this Agreement.


 




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6.7
Public Information. With a view to making available to the Investors the benefits of Rule 144 and any other rule or regulation
of the Commission that may at any time permit the Investors to sell shares of Common Stock to the public without registration,
the Company covenants and agrees that (1) as long as the Investors beneficially or legally own Shares, the Company will timely
file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by
the Company after the date hereof pursuant to the Exchange Act and (2) as long as the Investors own Shares, but only until all
such Shares may be sold under Rule 144(b)(i) without regard to meeting the requirements of Rule 144(c), if the Company is not
required to file reports pursuant to the Exchange Act, it will prepare and furnish to any Investor and make publicly available
in accordance with Rule 144(c) such information as is required for such Investor to sell the Shares under Rule 144. The Company
will be deemed to have furnished such reports to the Investors if the Company has filed such reports with the Commission using
the Commission’s Electronic Data Gathering, Analysis and Retrieval system and such reports are publicly available. The Company
further agrees that it will take such further action as any holder of Shares may reasonably request, all to the extent required
from time to time to enable the Investors to sell such Shares without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144.


 


6.8
Investors Information. Each Investor shall furnish in writing to the Company such information regarding itself, the Registrable
Securities held by it and the intended method of disposition of the Registrable Securities held by it, as shall be reasonably
required to effect the registration of such Registrable Securities and shall execute such documents in connection with such registration
as the Company may reasonably request.


 


6.9
Piggy-Back Registrations. If at any time during the Effectiveness Period the Company determines to prepare and file with
the Commission a registration statement relating to an offering for its own account or the account of others under the Securities
Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their
then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business
or equity securities issuable in connection with stock option or other employee benefit plans, then the Company will send to each
Investor written notice of such determination and if, within ten days after receipt of such notice, an Investor will so request
in writing, the Company will include in such registration statement all or any part of any Registrable Securities that such Investor
requests to be registered. Notwithstanding the foregoing, in the event that, in connection with any underwritten public offering,
the managing underwriter(s) thereof impose a limitation on the number of shares of Common Stock that may be included in the Registration
Statement because, in such underwriter(s)’ judgment, marketing or other factors dictate such limitation is necessary to
facilitate public distribution, then the Company is obligated to include in such Registration Statement only such limited portion
of the Registrable Securities with respect to which the Investors have requested inclusion hereunder as the underwriter permits;
provided, however, that the Company shall include Registrable Securities of any other Investor only if all of the Registrable
Securities that Forest Manor NV requests to be registered are included. If an offering in connection with which the Investors
are entitled to registration under this Section 6.9 is an underwritten offering, then the Investors will, unless otherwise agreed
by the Company, offer and sell such Registrable Securities in an underwritten offering using the same underwriter or underwriters
and, subject to the provisions of this Agreement, on the same terms and conditions as other shares of Common Stock included in
such underwritten offering and will enter into an underwriting agreement in a form and substance reasonably satisfactory to the
Company and the underwriter or underwriters


 




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7.
Participation and Purchase Rights.


 


7.1.
Participation Rights Procedures.


 


	 	a.	Any
    offer, sale, grant, disposition or announcement of offer or sale by the Company with respect to its Common Stock, or any stock,
    warrant or other securities convertible into or exercisable or exchangeable for shares of Common Stock, in a manner that is
    not required to be registered under the Securities Act is hereinafter referred to as a “Subsequent Placement.”
	 	 	 
	 	b.	From
    and after the Closing Date and until 36 months after the Closing Date, the Company will not, directly or indirectly, effect
    any Subsequent Placement unless the Company will have first complied with this Section 7.
	 	 	 
	 	c.	As
    a condition prior to the delivery of the Offer Notice (as defined in the next paragraph), an Investor shall agree to enter
    into a non-disclosure agreement with the Company in form and substance reasonably acceptable to such Investor.
	 	 	 
	 	d.	The
    Company will deliver to each Investor an irrevocable written notice (the “Offer Notice”) of any proposed
    or intended issuance or sale or exchange (the “Offer”) of the securities being offered (the “Offered
    Securities”) in a Subsequent Placement, which Offer Notice must (w) identify and describe the Offered Securities,
    (x) describe the price and other terms upon which they are to be issued, sold or exchanged, and the number or amount of the
    Offered Securities to be issued, sold or exchanged, and (y) offer to issue and sell to each Investor a pro rata portion of
    the Offered Securities equal to such Investor’s pro rata ownership of the Company’s then issued and outstanding
    Common Stock (the “Proportionate Share”). By way of example only, if an Investor owns 5% of the issued
    and outstanding shares of Common Stock, such Investor will have the right to purchase 5% of the Offered Securities. 
	 	 	 
	 	e.	To
    accept an Offer, in whole or in part, each Investor must deliver a written notice to the Company prior to the end of the fifth
    (5th) Business Day after Investor’s receipt of the Offer Notice (the “Offer Period”), setting forth
    the portion of such Investor’s Proportionate Share that such Investor elects to purchase (the “Notice of Acceptance”).
	 	 	 
	 	f.	The
    Company will have 90 Business Days from the expiration of the Offer Period above (i) to offer, issue and sell all or any part
    of such Offered Securities as to which a Notice of Acceptance has not been given by the Investors (the “Refused Securities”),
    but only to the offerees or class of offerees described in the Offer Notice (if so described therein) and only upon terms
    and conditions (including, without limitation, unit prices) that are no more favorable to offerees than those set forth in
    the Offer Notice and (ii) to publicly announce (a) the execution of a definitive agreement relating to such Subsequent Placement
    (the “Subsequent Placement Agreement”), and (b) either (x) the consummation of the transactions contemplated
    by such Subsequent Placement Agreement or (y) the termination of such Subsequent Placement Agreement, which will be filed
    with the Commission on a Current Report on Form 8-K with such Subsequent Placement Agreement and any documents contemplated
    therein filed as exhibits thereto to the extent required by the rules and regulations of the Commission. The Company may,
    in its complete and absolute discretion, abandon a Subsequent Placement at any time prior to the execution of a Subsequent
    Placement Agreement.


 




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	 	g.	Upon
    the closing of the issuance and sale of all or an amount of the Offered Securities, Investors will acquire from the Company,
    and the Company will issue to the Investors, the number or amount of Offered Securities specified in the Notices of Acceptance
    upon the terms and conditions specified in the Offer. The purchase by an Investor of any Offered Securities is subject in
    all cases to the preparation, execution and delivery by the Company and such Investor of a Subsequent Placement Agreement
    reasonably satisfactory in form and substance to such Investor.
	 	 	 
	 	h.	Any
    Offered Securities not acquired by the Investors or other persons in accordance with this Section 7(e) or (f) above may not
    be issued, sold or exchanged until they are again offered to the Investors under the procedures specified in this Agreement.
	 	 	 
	 	i.	Notwithstanding
    anything herein to the contrary, the provisions of this Section 7 shall not apply to (i) issuances of securities to employees,
    directors, officers or consultants under an equity incentive plan approved by the Board of Directors (including issuances
    upon the conversion or exercise of any such securities), (ii) subject to Section 7.2 below, the conversion of preferred
    stock issued and outstanding on the date hereof, (iii) issuances in connection with an acquisition of a business from an unaffiliated
    third party, (iv) any Shares sold in this offering, or (v) issuances for any purpose up to an aggregate purchase price of
    $100,000.


 


7.2.
Preferred Stock Purchase Right. The Company agrees that from and after the Closing Date and until 36 months after the Closing
Date, upon conversion or exchange of any Preferred Stock issued and outstanding on the date hereof into Common Stock, the Investors
shall have the right to purchase shares of Common Stock in an amount equal to a Proportionate Share multiplied by the number of
shares of Common Stock so issued in such exchange or conversion (as adjusted for stock splits or any similar transactions) from
the Company at a price of $4.40 per share in accordance with the terms of this Agreement.


 


8.
Miscellaneous.


 


8.1.
Severability. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction
to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision; provided
that in such case the parties shall negotiate in good faith to replace such provision with a new provision which is not illegal,
unenforceable or void, as long as such new provision does not materially change the economic benefits of this Agreement to the
parties.


 


8.2.
Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the
respective successors and permitted assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer
upon any party other than the parties hereto or their respective successors and permitted assigns any rights, remedies, obligations
or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.


 




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8.3.
No Reliance. Each party acknowledges that (i) it has such knowledge in business and financial matters as to be fully capable
of evaluating this Agreement, the other Transaction Documents, and the transactions contemplated hereby and thereby, (ii) it is
not relying on any advice or representation or warranty of any other party in connection with entering into this Agreement, the
other Transaction Documents, or such transactions (other than the representations and warranties made in this Agreement or the
other Transaction Documents), (iii) it has not received from any party any assurance or guarantee as to the merits (whether legal,
regulatory, tax, financial or otherwise) of entering into this Agreement or the other Transaction Documents or the performance
of its obligations hereunder and thereunder, and (iv) it has consulted with its own legal, regulatory, tax, business, investment,
financial and accounting advisors to the extent that it has deemed necessary, and has entered into this Agreement and the other
Transaction Documents based on its own independent judgment and on the advice of its advisors as it has deemed necessary, and
not on any view (whether written or oral) expressed by any party.


 


8.4.
Governing Law; Jurisdiction. This Agreement shall be governed by and construed under the laws of the State of New York
applicable to contracts made and to be performed entirely within the State of New York. Each party hereby irrevocably submits
to the non-exclusive jurisdiction of the state and federal courts sitting in the City of New York for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby and hereby irrevocably waives, and agrees
not to assert in any such suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding
is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof to such party at the address in effect for notices to it under this Agreement
and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner permitted by law. In any action, suit or proceeding
in any jurisdiction brought by any party against any other party, the parties each knowingly and intentionally, to the greatest
extent permitted by applicable law, hereby absolutely, unconditionally, irrevocably and expressly waives forever trial by jury.


 


8.5.
Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original,
and all of which together shall constitute one and the same instrument. This Agreement may be executed and delivered by facsimile
or electronic (PDF) transmission.


 


8.6.
Headings. The headings used in this Agreement are used for convenience only and are not to be considered in construing
or interpreting this Agreement.


 




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8.7.
Notices. Any notice, demand or request required or permitted to be given by the Company or Investors pursuant to the terms
of this Agreement shall be in writing and shall be deemed delivered (i) when delivered personally or by verifiable facsimile transmission,
unless such delivery is made on a day that is not a Business Day, in which case such delivery will be deemed to be made on the
next succeeding Business Day, (ii) on the next Business Day after timely delivery to an overnight courier and (iii) on the Business
Day actually received if deposited in the U.S. mail (certified or registered mail, return receipt requested, postage prepaid),
addressed as follows:


 


	 	If
    to the Company:	 	Coda
    Octopus Group, Inc.
	 	 	 	7380
    W. Sand Lake Road, Suite 500
	 	 	 	Orlando,
    Florida 32819
	 	 	 	Attention:
    Chief Executive Officer 


 


and
if to the Investors, to such address for each Investor as shall appear on the signature pages hereof executed by the Investors,
or as shall be designated by such Investor in writing to the Company in accordance with this Section 8.7.


 


8.8.
Expenses. Other than as set forth herein, each of the Company and each Investor shall pay all of its own costs and expenses
that it incurs in connection with the negotiation, execution, delivery and performance of this Agreement or the other Transaction
Documents.


 


8.9.
Entire Agreement; Amendments. This Agreement and the other Transaction Documents constitute the entire agreement between
the parties with regard to the subject matter hereof and thereof, superseding all prior agreements or understandings, whether
written or oral, between or among the parties. Except as expressly provided herein, neither this Agreement nor any term hereof
may be amended except pursuant to a written instrument executed by the Company and the holders of at least a majority of the Shares,
and no provision hereof may be waived other than by a written instrument signed by the party against whom enforcement of any such
waiver is sought. Any waiver or consent shall be effective only in the specific instance and for the specific purpose for which
given.


 


IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first-above written.


 


	 	CODA OCTOPUS GROUP, INC. 
	 	 	         
	 	By:	 


 




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CODA
OCTOPUS GROUP, INC. 





SUBSCRIPTION
AGREEMENT


 


Counterpart
Signature Page


 


	FOR
    ENTITY INVESTORS:	 	FOR
    INDIVIDUAL INVESTORS:
	 	 	 	 	 
	 	 	Signature:	      
	 	 	 	 	 
	 	 	 	Name:	
	 	           	 	 	 
	By:		 	 	 
	 	 	 	 	 
	Name:		 	 	 
	 	 	 	 	 
	Title: