Exhibit 10.4


 


FORM OF FUSION TELECOMMUNICATIONS
INTERNATIONAL, INC.


COMMON STOCK PURCHASE AGREEMENT


 


This Common Stock Purchase
Agreement (this “Agreement”) is made as of November 14,
2016, by and among Fusion Telecommunications International, Inc., a Delaware
corporation with its principal office at 420 Lexington Avenue, Suite 1718, New York, New York 10170 (the “Company”),
and those purchasers listed on the attached Exhibit A, as such exhibit may be amended from time to time (each a “Purchaser,”
and collectively, the “Purchasers”).


 


Recitals


 


A.          The
Company has authorized the sale and issuance of up to 2,608,696 shares (the “Shares” or “Securities”)
of the common stock of the Company, $0.01 par value per share (the “Common Stock”), to certain investors in
a private placement (the “Offering”).


 


B.          Pursuant
to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506(b) promulgated
thereunder, the Company desires to sell to the Purchasers listed on the attached Exhibit A, as such exhibit may be amended
from time to time, and such Purchasers, severally and not jointly, desire to purchase from the Company that number of shares of
Common Stock set forth opposite each such Purchaser’s name on Exhibit A, on the terms and subject to the conditions
set forth in this Agreement.


 


Terms
and Conditions


 


Now, therefore, in consideration
of the foregoing recitals and the mutual covenants and agreements contained herein, the parties, intending to be legally bound,
do hereby agree as follows:


 


1.           Purchase
of the Securities.


 


1.1          Agreement
to Sell and Purchase.  At the Closing (as hereinafter defined), the Company will issue and sell to each of the Purchasers,
and each Purchaser will, severally and not jointly, purchase from the Company, the number of Shares set forth opposite such Purchaser’s
name on Exhibit A for the purchase price set forth opposite such Purchaser’s name on Exhibit A (the “Purchase
Price”). The aggregate purchase price for each Share to be purchased hereunder will be $1.15.


 


1.2          Placement
Agent Fee. The Purchasers acknowledge that the Company intends to pay to Craig-Hallum Capital Group LLC, in its capacity as
the placement agent for the Offering (the “Placement Agent”), a fee in respect of the sale of Securities to
the Purchasers. The Company shall indemnify and hold harmless the Purchasers from and against all fees, commissions, or other payments
owing by the Company to the Placement Agent or any other persons from or acting on behalf of the Company hereunder.


 


1.3          Closing;
Closing Date. The completion of the sale and purchase of the Securities (the “Closing”) shall be held at 10:00
a.m. (Central Time) on Wednesday, November 16, 2016 or, if the conditions set forth in Section 4 have not been satisfied by such
date, as soon as practicable following the satisfaction of the conditions set forth in Section 4 (the “Closing Date”),
remotely by facsimile or other electronic transmission of documents, or at such other time and place as the Company and the Purchasers
may agree.


 


1.4          Delivery
of the Shares. At the Closing, subject to the terms and conditions hereof, the Company will deliver to each Purchaser a stock
certificate or certificates, in such denominations and registered in such names as such Purchaser may designate by notice to the
Company, representing the Securities, or at a Purchaser’s request, a statement or other written evidence that the Securities
issuable to such Purchaser have been issued and are held in book entry form at the Company’s transfer agent, in either case
dated as of the Closing Date (each such certificate and each such book entry position are hereinafter referred to as a “Certificate”),
against payment of the purchase price therefor by cash in the form of wire transfer, unless other means of payment shall have been
agreed upon by the Purchasers and the Company.


 




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2.          Representations
and Warranties of the Company.  The Company hereby represents and warrants to the Purchasers:


 


2.1          Authorization.
All corporate action on the part of the Company, its officers, directors and shareholders necessary for the authorization,
execution and delivery of this Agreement, has been taken. The Company has the requisite corporate power to enter into this Agreement
and carry out and perform its obligations under this Agreement. At the Closing, the Company will have the requisite corporate power
to issue and sell the Securities. This Agreement has been duly authorized, executed and delivered by the Company and, upon due
execution and delivery by the Purchasers, this Agreement will be a valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms, except as rights to indemnity hereunder may be limited by federal or state securities
laws and except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally or by equitable principles.


 


2.2          No
Conflict with Other Instruments.  The execution, delivery and performance of this Agreement, the issuance and sale of the Securities
to be sold by the Company hereunder and the consummation of the actions contemplated by this Agreement will not (A) result in any
violation of, be in conflict with, or constitute a default under, with or without the passage of time or the giving of notice:
(i) any provision of the Company’s charter documents as in effect on the date hereof or at the Closing; (ii) any provision
of any judgment, arbitration ruling, decree or order to which the Company or its subsidiaries are a party or by which they are
bound; (iii) any bond, debenture, note or other evidence of indebtedness, or any lease, contract, mortgage, indenture, deed of
trust, loan agreement, joint venture or other agreement, instrument or commitment to which the Company or any subsidiary is a party
or by which they or their respective properties are bound; or (iv) any statute, rule, law or governmental regulation or order applicable
to the Company or any of its subsidiaries, except, in the case of (ii), (iii) and (iv) above, would not reasonably be expected
to have a Material Adverse Effect (as hereinafter defined); or (B) result in the creation or imposition of any lien, encumbrance,
claim, security interest or restriction whatsoever upon any of the properties or assets of the Company or any subsidiary or any
acceleration of indebtedness pursuant to any obligation, agreement or condition contained in any bond, debenture, note or any other
evidence of indebtedness or any indenture, mortgage, deed of trust or any other agreement or instrument to which the Company or
any subsidiary are a party or by which they are bound or to which any of the property or assets of the Company or any subsidiary
is subject. No consent, approval, authorization or other order of, or registration, qualification or filing with, any regulatory
body, administrative agency, or other governmental body is required for the execution and delivery of this Agreement by the Company
and the valid issuance or sale of the Securities by the Company pursuant to this Agreement, other than such as have been made or
obtained and that remain in full force and effect, and except for the filing of a Form D or any filings required to be made under
state securities laws.


 


2.3          Certificate
of Incorporation; Bylaws.  The Company has made available to the Purchasers true, correct and complete copies of the Certificate
of Incorporation and Bylaws of the Company, as in effect on the date hereof.


 


2.4          Organization,
Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and authority to carry on its business as now conducted. The
Company and each of its subsidiaries has full power and authority to own, operate and occupy its properties and to conduct its
business as presently conducted and is duly qualified to transact business and is in good standing in each jurisdiction in which
the failure so to qualify would not reasonably be expected to have a material adverse effect on its or its subsidiaries’
business, financial condition, properties, operations, prospects or assets or its ability to perform its obligations under this
Agreement (a “Material Adverse Effect”).


 




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2.5          SEC
Filings; Financial Statements. As used herein, the “Company SEC Documents” means all reports, schedules,
forms, statements and other documents filed or furnished, as applicable, by the Company under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), including pursuant to Section 13(a) or 15(d) thereof, including the exhibits
thereto and documents incorporated by reference therein. The Company has filed all SEC Documents
as required on a timely basis and as of their respective filing dates, the Company SEC Documents since December 31, 2015 complied
in all material respects with the requirements of the Exchange Act and the rules and regulations of the Securities and Exchange
Commission (the “SEC”) promulgated thereunder, and none of these Company SEC Documents, when filed, contained
any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make
the statements therein in light of the circumstances under which they were made not misleading. The consolidated financial statements
contained in the Company SEC Documents since December 31, 2015: (i) complied in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC applicable thereto; (ii) were prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the periods covered, except in the case of unaudited statements
as permitted by Form 10-Q of the SEC, and except that unaudited financial statements may not contain footnotes and are subject
to year-end audit adjustments; and (iii) fairly present the consolidated financial position of the Company and its subsidiaries
as of the respective dates thereof and the consolidated results of operations cash flows and the changes in shareholders’
equity of the Company and its subsidiaries for the periods covered thereby.


 


2.6          Capitalization.
The authorized capital stock of the Company consists of (i) 90,000,000 shares of Common Stock, of which (A) 15,064,953 shares
prior to the acquisition of Target (as defined below) and 18,062,879 shares after the acquisition of Target were issued and outstanding
as of the date of this Agreement, and (B) 4,090,520 shares were reserved for issuance upon the exercise or conversion, as the case
may be, of outstanding options, warrants or other convertible securities as of the date of this Agreement; and (ii) 10,000,000
shares of preferred stock, of which 17,299 are issued and outstanding as of the date of this Agreement. All issued and outstanding
shares of capital stock have been duly authorized and validly issued, are fully paid and non-assessable, have been issued and sold
in compliance with the registration requirements of the federal and state securities laws or the applicable statutes of limitation
have expired, and were not issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities.
Except as set forth herein or the Company SEC Documents, there are no (i) outstanding rights (including, without limitation, preemptive
rights), warrants or options to acquire, or instruments convertible into or exchangeable for, any unissued shares of capital stock
or other equity interest in the Company, or any contract, commitment, agreement, understanding or arrangement of any kind to which
the Company or any subsidiary is a party and relating to the issuance or sale of any capital stock or convertible or exchangeable
security of the Company or any subsidiary, other than 1,135,765 options granted to directors and employees of the Company and its
subsidiaries pursuant to its 1998 Stock Option Plan, 2009 Stock Option Plan or the 2016 Equity Incentive Plan and 2,937,456 warrants
that are issued and outstanding; or (ii) obligations of the Company to purchase redeem or otherwise acquire any of its outstanding
capital stock or any interest therein or to pay any dividend or make any other distribution in respect thereof. Except as disclosed
in the Company SEC Documents and as contemplated by the share purchase agreement (the “SPA”) relating to the
Company’s acquisition of a target company (“Target”) proposed to be consummated contemporaneously with
this Offering, there are no anti-dilution or price adjustment provisions, co-sale rights, registration rights, rights of first
refusal or other similar rights contained in the terms governing any outstanding security of the Company that will be triggered
by the issuance of the Securities and no person has any right to cause the Company to effect the registration under the Securities
Act of any securities of the Company (other than the rights which have been granted in connection with this Agreement and under
the SPA).


 




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2.7          Subsidiaries.
 Except for Target and except as set forth in the Company SEC Documents, the Company does not presently own or control, directly
or indirectly, and has no stock or other interest as owner or principal in, any other corporation or partnership, joint venture,
association or other business venture or entity (each a “subsidiary”). Each subsidiary is duly incorporated
or organized, validly existing and, if applicable to the jurisdiction, in good standing under the laws of its jurisdiction of incorporation
or organization and has all requisite power and authority to carry on its business as now conducted. Each subsidiary is duly qualified
to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a Material Adverse
Effect. Except as set forth in the Company SEC Documents, all of the outstanding capital stock or other securities of each subsidiary
is owned by the Company, directly or indirectly, free and clean of any liens, claims or encumbrances.


 


2.8          Valid
Issuance of Securities. The Securities are duly authorized and, when issued, sold and delivered and paid for in accordance
with the terms hereof will be duly and validly authorized and issued, fully paid and non-assessable, free from all taxes, liens,
claims, encumbrances and charges with respect to the issue thereof; provided, however, that the Securities will be subject to restrictions
on transfer under state and/or federal securities laws or as otherwise set forth herein. The issuance, sale and delivery of the
Securities in accordance with the terms hereof will not be subject to preemptive rights of shareholders of the Company.


 


2.9          Offering.
Assuming the accuracy of the representations of the Purchasers in Section 3.3 of this Agreement on the date hereof and on the
Closing Date, the offer, issue and sale of the Securities are and will be exempt from the registration and prospectus delivery
requirements of the Securities Act and have been or will be registered or qualified (or are or will be exempt from registration
and qualification) under the registration, permit or qualification requirements of all applicable state securities laws. 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 require registration under
the Securities Act of the issuance of the Securities to the Purchasers. Other than the Company SEC Documents, the Company has not
distributed and will not distribute prior to the Closing Date any offering materials in connection with the offering and sale of
the Securities. The Company has not taken any action to sell, offer for sale or solicit offers to buy any securities of the Company
which would bring the offer, issuance or sale of the Securities within the provisions of Section 5 of the Securities Act, unless
such offer, issuance or sale was or shall be within the exemptions of Section 4 of the Securities Act.


 


2.10         Litigation.
Except as set forth in the Company SEC Documents, there is no action, suit, proceeding nor investigation pending or, to the
Company’s knowledge, currently threatened against the Company or any of its subsidiaries that (a) if adversely determined
would reasonably be expected to have a Material Adverse Effect or (b) would be required to be disclosed in the Company’s
Annual Report on Form 10-K under the requirements of Item 103 of Regulation S-K. The foregoing includes, without limitation, any
action, suit, proceeding or investigation, pending or threatened, that questions the validity of this Agreement or the right of
the Company to enter into this Agreement and perform its obligations hereunder. Neither the Company nor any subsidiary is subject
to any injunction, judgment, decree or order of any court, regulatory body, arbitral panel, administrative agency, national securities
exchange or other government body. To the Company’s knowledge, there is no proceeding or investigation by the Principal Market
(as defined below) pending that could lead to a suspension of listing or trading of the Common Stock.


 


2.11         Governmental
Consents. No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing
with, any federal, state, local or provincial governmental authority on the part of the Company or any of its subsidiaries is required
in connection with the consummation of the transactions contemplated by this Agreement, except for notices required or permitted
to be filed with the Principal Market or certain state and federal securities commissions, which notices will be filed on a timely
basis.


 




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2.12         No
Brokers.  Except for any fees payable to the Placement Agent, no broker, finder or investment banker is entitled to any brokerage,
finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based on arrangements
made by the Company.


 


2.13         Compliance.
Neither the Company nor any of its subsidiaries is in violation of its Certificate of Incorporation or Bylaws (or similar organizational
documents). The Company and its subsidiaries, and their representatives, have been conducting their business in compliance with
all applicable laws, rules and regulations of the jurisdictions in which they conduct business, including, without limitation,
all applicable local, state and federal environmental laws and regulations, except where failure to be so in compliance would not
have a Material Adverse Effect. Each of the Company and its subsidiaries has all necessary franchises, licenses, permits, certificates
and other authorizations from any foreign, federal, state or local government or governmental agency, department or body that are
currently necessary for the operation of the business of the Company and its subsidiaries as currently conducted, except where
the failure to currently possess such franchises, licenses, certificates and other authorizations would not reasonably be expected
to have a Material Adverse Effect.


 


2.14         No
Material Changes. Except as disclosed in the Company SEC Documents and except for the acquisition of Target pursuant to the
SPA and the entry by the Company into a new credit facility (the “Credit Facility”) contemporaneously therewith,
since December 31, 2015, there has been no material adverse change in the assets, liabilities, business, properties, operations,
financial condition or results of operations of the Company and its subsidiaries, taken as a whole. Since December 31, 2015, the
Company has not declared or paid any dividend or distribution on its common stock.


 


2.15         Contracts.
Except for matters which are not reasonably likely to have a Material Adverse Effect and those contracts that are substantially
or fully performed or expired by their terms, the contracts listed as exhibits to or described in the Company SEC Documents that
are material to the Company or any of its subsidiaries and all amendments thereto, are in full force and effect on the date hereof,
and neither the Company nor any applicable subsidiary of the Company nor, to the Company’s knowledge, any other party to
such contracts is in breach of or default under any of such contracts. Neither the Company nor any of its subsidiaries has any
contracts or agreements that would constitute a material contract as such term is defined in Item 601(b) of Regulation S-K, except
for such contracts or agreements that are filed as exhibits to or described in the Company SEC Documents and except for the SPA,
the Credit Agreement and agreements contemplated thereby.


 


2.16        Intellectual
Property.


 


(a)          The
Company and each of its subsidiaries has ownership or license or legal right to use, or can acquire on reasonable terms, all patent,
copyright, trade secret, know-how trademark, trade name customer lists, designs, manufacturing or other processes, computer software,
systems, data compilation, research results or other proprietary rights used in the business of the Company or such subsidiary
(collectively “Intellectual Property”), except as such failure to own, license, use or acquire would not result
in a Material Adverse Effect. All of such patents, registered trademarks and registered copyrights have been duly registered in,
filed in or issued by the United States Patent and Trademark Office, the United States Register of Copyrights or the corresponding
offices of other jurisdictions and have been maintained and renewed in accordance with all applicable provisions of law and administrative
regulations in the United States and all such jurisdictions.


 


(b)          The
Company and each of its subsidiaries has taken all reasonable steps required in accordance with sound business practice and business
judgment to establish and preserve its ownership of all material Intellectual Property with respect to their products and technology.


 


(c)          To
the knowledge of the Company, the present business, activities and products of the Company and its subsidiaries do not infringe
any intellectual property of any other person, except or where such infringement would not have a Material Adverse Effect. No proceeding
charging the Company or any of its subsidiaries with infringement of any adversely held Intellectual Property is currently pending.
To the knowledge of the Company, no other person is infringing any rights of the Company or its subsidiaries to the Intellectual
Property.


 




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(d)          No
proceedings are pending or, to the knowledge of the Company, threatened, which challenge the rights of the Company or any of its
subsidiaries to the use of the Intellectual Property. To the knowledge of the Company, the Company and each of its subsidiaries
has the right to use, free and clear of material claims or rights of other persons, all of its customer lists, designs, computer
software, systems, data compilations, and other information that are required for its products or its business as presently conducted.
To the knowledge of the Company, neither the Company nor any of its subsidiaries is making unauthorized use of any confidential
information or trade secrets of any person. The activities of any of the employees on behalf of the Company or of any of its subsidiaries
do not violate any agreements or arrangements between such employees and third parties related to confidential information or trade
secrets of third parties or that restrict any such employee’s engagement in business activity of any nature.


 


(e)          All
material licenses or other agreements under which (i) the Company or any subsidiary employs rights in Intellectual Property, or
(ii) the Company or any subsidiary has granted rights to others in Intellectual Property owned or licensed by the Company or any
subsidiary are in full force and effect, and there is no default (and there exists no condition which, with the passage of time
or otherwise, would constitute a default by the Company or such subsidiary) by the Company or any subsidiary of the Company with
respect thereto.


 


2.17         Exchange
Compliance. The Company’s common stock is registered pursuant to Section 12(b) of the Exchange Act and is listed on The
Nasdaq Capital Market (the “Principal Market”), and the Company has taken no action designed to, or likely to
have the effect of, terminating the registration of the Common Stock under the Exchange Act or delisting the Common Stock (including
the Shares) from the Principal Market. The Company is in compliance with all of the presently applicable requirements for continued
listing of the Common Stock on the Principal Market. The issuance of the Securities does not require shareholder approval including,
without limitation, pursuant to the rules and regulations of the Principal Market.


 


2.18         Form
S-3 Eligibility. The Company is eligible to register the Shares for resale by the Purchasers using Form S-3 promulgated under
the Securities Act.


 


2.19         Accountants.
EisnerAmper LLP, who expressed their opinion with respect to the consolidated financial statements contained in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2015, to be incorporated by reference into the Registration Statement
(as hereinafter defined) and the prospectus which forms a part thereof (the “Prospectus”), have advised the
Company that they are, and to the knowledge of the Company they are, independent accountants as required by the Securities Act
and the rules and regulations promulgated thereunder. The Company covenants to file its Form 10-K containing audited consolidated
financial statements for the year ended December 31, 2016 within the time period required by applicable securities laws and further
represents and warrants that it has no reason to believe that the auditors will not be able to express an unqualified opinion with
respect to such financial statements, assuming the Closing occurs as contemplated herein.


 


2.20         Taxes.
The Company and each of its subsidiaries has filed all federal, state, local and foreign income and franchise tax returns (except
where the failure to file would not have a Material Adverse Effect) and has paid all taxes shown as due thereon. The
Company has set aside on its books adequate provisions for payments of taxes as of its reporting period, and has no knowledge of
a tax deficiency which has been or might be asserted or threatened against it or any of its subsidiaries by any taxing jurisdiction.


 




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2.21       Insurance.
The Company and each of its subsidiaries maintains and will continue to maintain insurance of the types and in the amounts that
the Company reasonably believes is adequate for its business, including, but not limited to, insurance covering real and personal
property owned or leased by the Company and its subsidiaries against theft, damage, destruction, acts of vandalism and all other
risks customarily insured against by similarly situated companies, all of which insurance is in full force and effect.


 


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


 


2.23        Investment
Company. The Company (including its subsidiaries) is not an “investment company” or an “affiliated person”
of, or “promoter” or “principal underwriter” for an investment company, within the meaning of the Investment
Company Act of 1940 and will not be deemed an “investment company” as a result of the transactions contemplated by
this Agreement.


 


2.24      Related
Party Transactions. To the knowledge of the Company, no transaction has occurred between or among the Company or any of its
affiliates (including, without limitation, any of its subsidiaries), officers or directors or any affiliate or affiliates of any
such affiliate, officer or director that with the passage of time will be required to be disclosed pursuant to Section 13, 14 or
15(d) of the Exchange Act other than those transactions that have already been so disclosed.


 


2.25      Books
and Records. The books, records and accounts of the Company and its subsidiaries accurately and fairly reflect, in reasonable
detail, the transactions in, and dispositions of, the assets of, and the operations of, the Company and its subsidiaries.


 


2.26      Disclosure
Controls and Internal Controls. 


 


(a)          The
Company has established and maintains disclosure controls and procedures (as such term is defined in Rule 13a-15 under the Exchange
Act), which (i) are designed to ensure that material information relating to the Company is made known to the Company’s principal
executive officer and its principal financial officer by others within the Company particularly during the periods in which the
periodic reports required under the Exchange Act are being prepared; and (ii) provide for the periodic evaluation of the effectiveness
of such disclosure controls and procedures as of the end of the period covered by the Company’s most recent annual or quarterly
report filed with the SEC.


 


(b)          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 generally accepted accounting principles and to maintain asset
and liability accountability, (iii) access to assets or incurrence of liabilities is permitted only in accordance with management’s
general or specific authorization and (iv) the recorded accountability for assets and liabilities is compared with the existing
assets and liabilities at reasonable intervals and appropriate action is taken with respect to any difference. The Company maintains
disclosure controls and procedures (as such term is defined in Rule 13a-14 under the Exchange Act) that are effective in ensuring
that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the rules and forms of the SEC, including, without limitation,
controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files
or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive
officer or officers and its principal financial officer or officers, as appropriate, to allow timely decisions regarding required
disclosure. The Company is not aware of (i) any significant deficiency or material weakness in the design or operation of its internal
controls; or (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in
the Company’s or any of its subsidiary’s internal controls.


 




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(c)          Since
the date of the most recent evaluation of such disclosure controls and procedures, there have been no changes that have materially
affected, or are reasonably likely to materially affect, the Company’s or any of its subsidiary’s internal control
over financial reporting, including any corrective actions with regard to significant deficiencies and material weaknesses.


 


(d)          Except
as described in the Company SEC Documents, there are no material off-balance sheet arrangements (as defined in Item 303 of Regulation
S-K), or any other relationships with unconsolidated entities (in which the Company or its control persons have an equity interest)
that may have a material current or future effect on the Company’s or any of its/subsidiary’s financial condition,
revenues or expenses, changes in financial condition, results of operations, liquidity, capital expenditures or capital resources.


 


2.27         No
General Solicitation. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf, has engaged
in any form of general solicitation or general advertising (within the meaning of Regulation D promulgated under the Securities
Act) in connection with the offer or sale of the Securities.


 


2.28         Rights
Agreement. The Company has not adopted a shareholder rights plan or similar arrangement relating to accumulations of beneficial
ownership of Common Stock or a change in control of the Company.


 


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


 


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


 


2.31         Employee
Relations. Neither the Company nor any of its subsidiaries is a party to any collective bargaining agreement. The Company reasonably
believes that its and its subsidiaries’ relations with its employees are good. No executive officer of the Company (as defined
in Rule 501(f) of the Securities Act) has notified the Company that such officer intends to leave the Company or otherwise terminate
such officer’s employment with the Company. To the knowledge of the Company, no executive officer of the Company is, or is
expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information
agreement, non-competition agreement, or any other contract or agreement or any restrictive covenant, and the continued employment
of each such executive officer does not subject the Company to any liability with respect to any of the foregoing matters.


 


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


 




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2.32         Environmental
Laws. The Company and each of its subsidiaries (i) is in compliance with any and all Environmental Laws (as hereinafter defined),
(ii) has received all permits, licenses or other approvals required of it under applicable Environmental Laws to conduct its business
and (iii) is in compliance with all terms and conditions of any such permit, license or approval where, in each of the foregoing
clauses (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a
Material Adverse Effect. The term “Environmental Laws” means all federal, state, local or foreign laws relating
to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater,
land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened
releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous
Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand
letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated
or approved thereunder.


 


2.33         No
Manipulation; Disclosure of Information. The Company has not taken and will not take any action designed to or that might reasonably
be expected to cause or result in an unlawful manipulation of the price of the Common Stock to facilitate the sale or resale of
the Securities. The Company confirms that, to its knowledge, with the exception of the proposed sale of Securities as contemplated
herein (as to which the Company makes no representation) and information provided with respect to the Target and the SPA and the
Company’s new credit facility, 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 constitutes or might constitute material, non-public information. The Company
understands and confirms that the Purchasers shall be relying on the foregoing representations in effecting transactions in securities
of the Company. All disclosures provided to the Purchasers regarding the Company, its business and the transactions noted in Section
2.33 above furnished by the Company are true and correct 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, not misleading.


 


2.34         Forward-Looking
Information. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) made by the Company or any of its officers or directors contained in the SEC Documents, or made available to the public generally
since September 30, 2016, has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.


 


2.35         No
Additional Agreements. Other than with respect to closing mechanics, the Company has no other agreements or understandings
(including, without limitation, side letters) with any Purchaser or other person to purchase Shares on terms more favorable to
such person than as set forth herein.


 


2.36         No
“Bad Actor” Disqualification. The Company has exercised reasonable care, in accordance with SEC rules and guidance,
and has conducted a factual inquiry, the nature and scope of which reflect reasonable care under the relevant facts and circumstances,
to determine whether any Covered Person (as defined below) is subject to any of the “bad actor” disqualifications described
in Rule 506(d)(1)(i) to (viii) under the Securities Act (“Disqualification Events”). To the Company’s
knowledge, after conducting such sufficiently diligent factual inquiries, no Covered Person is subject to a Disqualification Event,
except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3) under the Securities Act. The Company has complied, to
the extent applicable, with any disclosure obligations under Rule 506(e) under the Securities Act. “Covered Persons”
are those persons specified in Rule 506(d)(1) under the Securities Act, including the Company; any predecessor or affiliate of
the Company; any director, executive officer, other officer participating in the offering, general partner or managing member of
the Company; any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the
basis of voting power; any promoter (as defined in Rule 405 under the Securities Act) connected with the Company in any capacity
at the time of the sale of the Securities; and any person that has been or will be paid (directly or indirectly) remuneration for
solicitation of purchasers in connection with the sale of the Securities (a “Solicitor”), any general partner
or managing member of any Solicitor, and any director, executive officer or other officer participating in the offering of any
Solicitor or general partner or managing member of any Solicitor.         


 




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3.          Representations
and Warranties of the Purchasers. Each Purchaser, severally and not jointly, hereby represents and warrants to the Company
as follows:


 


3.1          Legal
Power.  The Purchaser has the requisite authority to enter into this Agreement and to carry out and perform its obligations
under the terms of this Agreement. All action on the Purchaser’s part required for the lawful execution and delivery of this
Agreement have been or will be effectively taken prior to the Closing.


 


3.2          Due
Execution. This Agreement has been duly authorized, executed and delivered by the Purchaser, and, upon due execution and delivery
by the Company, this Agreement will be a valid and binding agreement of the Purchaser, except as rights to indemnity hereunder
may be limited by federal or state securities laws and except as enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors’ rights generally or by equitable principles.


 


3.3          Investment
Representations. In connection with the sale and issuance of the Securities, the Purchaser, for itself and no other Purchaser,
makes the following representations:


 


(a)          Investment
for Own Account. The Purchaser is acquiring the Securities for its own account, not as nominee or agent, and not with a view
to, or for resale in connection with, any distribution or public offering thereof within the meaning of the Securities Act;
provided, however, that by making the representations herein, the Purchaser does not agree to hold any of the Securities
for any minimum or specific term and reserves the right to dispose of the securities at any time in accordance with or pursuant
to a registration statement or an exemption from the registration requirements of the Securities Act.


 


(b)          Transfer
Restrictions; Legends. The Purchaser understands that (i) the Securities have not been registered under the Securities Act;
(ii) the Securities are being offered and sold pursuant to an exemption from registration, based in part upon the Company’s
reliance upon the statements and representations made by the Purchasers in this Agreement, and that the Securities must be held
by the Purchaser indefinitely, and that the Purchaser must, therefore, bear the economic risk of such investment indefinitely,
unless a subsequent disposition thereof is registered under the Securities Act or is exempt from such registration; (iii) each
Certificate representing Securities will be endorsed or notated with the following legend until the date the Shares are eligible
for sale without restriction or limitation under Rule 144 under the Securities Act:


 


THE SECURITIES REPRESENTED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES
LAWS OF ANY STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
UNLESS SOLD PURSUANT TO EITHER AN EFFECTIVE REGISTRATION STATEMENT OR RULE 144 UNDER THE SECURITIES ACT, THE ISSUER OF THESE SECURITIES
MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR
RESALE IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.


 




    	 	 	10



     


    

 


(iv) the Company will instruct any transfer
agent not to register the transfer of the Securities (or any portion thereof) until the applicable date set forth in clause (iii)
above unless (A) the conditions specified in the foregoing legends are satisfied, (B) if the opinion of counsel referred to above
is to the further effect that such legend is not required in order to establish compliance with any provisions of the Securities
Act or this Agreement, (C) if the Purchaser provides the Company with reasonable assurance, such as through a representation letter,
that the Securities may be sold pursuant to Rule 144 under the Securities Act, or (D) other reasonably satisfactory assurances
of such nature are given to the Company. If so required by the Company’s transfer agent, the Company shall cause its counsel
to issue and deliver a legal opinion to the transfer agent to effect the removal of the restrictive legend contemplated by this
Agreement.


 


The Company acknowledges
and agrees that a Purchaser may from time to time pledge, and/or grant a security interest in some or all of the Securities pursuant
to a bona fide margin agreement in connection with a bona fide margin account and, if required under the terms of such agreement
or account, the Purchaser may transfer pledged or secured Securities to the pledgees or secured parties. Such a pledge or transfer
shall not be subject to approval or consent of the Company and no legal opinion of legal counsel to the pledgee, secured party
or pledgor shall be required in connection with the pledge, but such legal opinion may be required in connection with a subsequent
transfer following default by the Purchaser transferee of the pledge. No notice shall be required of such pledge. At the appropriate
Purchaser’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of
Securities may reasonably request in connection with a pledge or transfer of the Securities, including the preparation and filing
of any required prospectus supplement under Rule 424(b)(3) of the Securities Act or other applicable provision of the Securities
Act to appropriately amend the list of Selling Shareholders thereunder.


 


Certificates evidencing
the Shares shall not contain any restrictive legend (including the legend set forth in this Section): (i) following a resale of
the Shares under an effective registration statement (including the Registration Statement) covering the Shares, or (ii) following
a sale of such Shares pursuant to Rule 144, or (iii) while such Shares are eligible for sale under Rule 144 and, with respect to
any Purchaser’s Shares, such Purchaser is not and has not been for three months an affiliate of the Company (as such term
is defined in Rule 144(a)(1)) and such Shares have been held for one year or more pursuant to the requirements of Rule 144 and
any other requirements under Rule 144 have been satisfied at such time, or (iv) if such legend is not required under applicable
requirements of the Securities Act (including judicial interpretations and pronouncements issued by the Staff of the SEC). Following
such time as restrictive legends are not required to be placed on Certificates representing Shares, the Company will, no later
than three business days following the delivery by a Purchaser to the Company or the Company’s transfer agent of a Certificate
representing Shares containing a restrictive legend and such other documentation and representations as the Company, its legal
counsel or Transfer Agent may reasonably request to confirm compliance with the preceding sentence as applicable (provided, however,
that neither the Company nor its legal counsel will require a legal opinion in connection with any sale pursuant to Rule 144),
deliver or cause to be delivered to such Purchaser a Certificate representing such Shares that is free from all restrictive legends.
The Company may not make any notation on its records or give instructions to any transfer agent of the Company that enlarge the
restrictions on transfer set forth in this Section. Certificates for Shares subject to legend removal hereunder shall be transmitted
by the transfer agent of the Company to the Purchasers by crediting the account of the Purchaser’s prime broker with the
Depository Trust Company system unless a Purchaser provides alternate written instructions. The Company will pay all fees and expenses
of its transfer agent and the Depository Trust Company in connection with the removal of legends pursuant to this Section 3.3(b).


 




    	 	 	11



     


    

 


Each Purchaser, severally
and not jointly with the other Purchasers, agrees that the removal of the restrictive legend from Certificates representing Shares
as set forth in this Section 3.3(b) is predicated upon the Company’s reliance that the Purchaser will sell any Shares
pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements,
or an exemption therefrom.


 


(c)          Financial
Sophistication; Due Diligence. The Purchaser has such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment in connection with the transactions contemplated in this Agreement.
Such Purchaser has, in connection with its decision to purchase the Securities, relied only upon the representations and warranties
contained herein and the information contained in the Company SEC Documents. Further, the Purchaser has had such opportunity to
obtain additional information and to ask questions of, and receive answers from, the Company, concerning the terms and conditions
of the investment and the business and affairs of the Company, as the Purchaser considers necessary in order to form an investment
decision.


 


(d)          Accredited
Investor Status. The Purchaser is an “accredited investor” as such term is defined in Rule 501(a) of the rules
and regulations promulgated under the Securities Act.


 


(e)          Residency.
If the Purchaser is an entity, the Purchaser is organized under the laws of the jurisdiction set forth beneath such Purchaser’s
name on the signature page attached hereto, and its principal place of operations is in the state set forth beneath such Purchaser’s
name on the signature page attached hereto.


 


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


 


3.4          No
Investment, Tax or Legal Advice. Each Purchaser understands that nothing in the Company SEC Documents, this Agreement, or any
other materials presented to the Purchaser in connection with the purchase and sale of the Securities constitutes legal, tax or
investment advice. Each Purchaser has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed
necessary or appropriate in connection with its purchase of Securities.


 


3.5          Additional
Acknowledgement. Each Purchaser acknowledges that it has independently evaluated the merits of the transactions contemplated
by this Agreement, that it has independently determined to enter into the transactions contemplated hereby, that it is not relying
on any advice from or evaluation by any other person. Each Purchaser acknowledges that the Placement Agent has acted solely as
placement agent for the Company in connection with the Offering of the Securities by the Company, that the information and data
provided to the Purchaser in connection with the transaction contemplated hereby has not been subjected to independent verification
by the Placement Agent, and that the Placement Agent has made no representation or warranty whatsoever with respect to the accuracy
or completeness of such information, data or other related disclosure material. Each Purchaser acknowledges that it has not taken
any actions that would deem the Purchasers to be members of a “group” for purposes of Section 13(d) of the Exchange
Act.


 


3.6          Limited
Ownership. The purchase of the Securities issuable to each Purchaser at the Closing will not result in such Purchaser (individually
or together with any other person or entity with whom such Purchaser has identified, or will have identified, itself as part of
a “group” in a public filing made with the SEC involving the Company’s securities) acquiring, or obtaining the
right to acquire, in excess of 19.999% of the outstanding shares of Common Stock or voting power of the Company on a post-transaction
basis that assumes that the Closing shall have occurred. Such Purchaser does not presently intend to, along or together with others,
make a public filing with the SEC to disclose that it has (or that it together with such other persons or entities have) acquired,
or obtained the right to acquire, as a result of the Closing (when added to any other securities of the Company that it or they
then own or have the right to acquire), in excess of 19.999% of the outstanding shares of Common Stock or the voting power of the
Company on a post-transaction basis that assumes that the Closing shall have occurred.


 




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3.7          No
Short Position. Other than consummating the transactions contemplated hereunder, such Purchaser has not directly or indirectly,
nor has any person or entity acting on behalf of or pursuant to any understanding with such Purchaser, executed any purchases or
sales, including short sales as defined in Rule 200 of Regulation SHO under the Exchange Act (“Short Sales”),
of the securities of the Company during the period commencing from the time that such Purchaser first received a term sheet (written
or oral) from the Company or any other person representing the Company setting forth the material terms of the transactions contemplated
hereunder until the date hereof (“Discussion Time”). Notwithstanding the foregoing, in the case of a Purchaser
that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s
assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing
other portions of such Purchaser’s assets, the representation set forth above shall only apply with respect to the portion
of assets managed by the portfolio manager that made the investment decision to purchase the securities covered by this Agreement.
Other than to other persons party to this Agreement, such Purchaser has maintained the confidentiality of all disclosures made
to it in connection with this transaction (including the existence and terms of this transaction, the acquisition of Target and
the Company’s new credit facility). Notwithstanding the foregoing, for avoidance of doubt, nothing contained herein shall
constitute a representation or warranty, or preclude any actions, with respect to the identification of the availability of, or
securing of, available shares to borrow in order to effect short sales or similar transactions in the future.


 


4.            Conditions
to Closing. 


 


4.1          Conditions
to Obligations of Purchasers at Closing.   Each Purchaser’s obligation to purchase the Securities at the Closing
is subject to the fulfillment, on or prior to the Closing, of all of the following conditions, any of which may be waived by the
Purchaser:


 


(a)          Representations
and Warranties True; Performance of Obligations. The representations and warranties made by the Company in Section 2 shall
be true and correct in all material respects (or, where the representation and warranty itself is qualified by materiality, it
shall be true and correct in all respects) on the Closing Date with the same force and effect as if they had been made on and as
of said date (except to the extent that any such representation and warranty expressly speaks as of an earlier date, in which case
such representation and warranty shall be so true and correct as of such earlier date), and the Company shall have performed and
complied with all obligations and conditions herein required to be performed or complied with by it on or prior to the Closing,
including, but not limited to, those obligations and conditions set forth in Sections 4.1(c), 4.1(f), 4.1(g), 4.1(h), and 4.1(i),
and a certificate duly executed by an officer of the Company, to the effect of the foregoing, shall be delivered to the Purchasers.
The delivery of such certificate shall evidence the satisfaction of the conditions set forth in this Section 4.1.


 


 (b)          Proceedings
and Documents.  All corporate and other proceedings in connection with the transactions contemplated at the Closing and all
documents and instruments incident to such transactions shall be reasonably satisfactory in substance and form to counsel to the
Purchaser, and counsel to the Purchaser shall have received all such counterpart originals or certified or other copies of such
documents as they may reasonably request. The Company shall have delivered (or caused to have been delivered) to each Purchaser,
the Certificates required by this Agreement.


 




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(c)          Qualifications,
Legal Investment.  All authorizations, approvals, or permits, if any, of any governmental authority or regulatory body of the
United States or of any state that are required in connection with the lawful sale and issuance of the Securities shall have been
duly obtained and shall be effective on and as of the Closing. No stop order or other order enjoining the sale of the Securities
shall have been issued and no proceedings for such purpose shall be pending or, to the knowledge of the Company, threatened by
the SEC, or any commissioner of corporations or similar officer of any state having jurisdiction over this transaction. At the
time of the Closing, the sale and issuance of the Securities shall be legally permitted by all laws and regulations to which the
Company is subject. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction will have been enacted,
entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions
contemplated by this Agreement.


 


(d)          Execution
of Agreements. The Company shall have executed this Agreement and have delivered this Agreement to the Purchasers.


 


(e)          Secretary’s
Certificate. The Company shall have delivered to the Purchasers a certificate of the Secretary of the Company certifying as
to (i) the truth and accuracy of the resolutions of the board of directors relating to the transaction contemplated hereby (a copy
of which shall be included with such certificate) and (ii) the current versions of the Company’s Certificate of Incorporation
and bylaws.


 


(f)          Trading
and Listing. Trading and listing of the Company’s common stock on the Principal Market shall not have been suspended
by the SEC or the Principal Market.


 


(g)          Market
Listing. The Company will comply with all of the requirements of the Financial Industry Regulatory Authority, Inc. and the
Principal Market with respect to the issuance of the Securities and will list the Shares on the Principal Market no later than
the earlier of (a) the effective date of the Registration Statement (as hereinafter defined) or (b) the Required Effective Date
(as hereinafter defined).


 


(h)          Blue
Sky. The Company shall have obtained all necessary “blue sky” law permits and qualifications, or have the availability
of exemptions therefrom, required by any state for the offer and sale of the Securities.


 


(i)          Material
Adverse Change. Since the date of this Agreement, there shall not have occurred any event which results in a Material Adverse
Effect.


 


(j)          Opinion.
The Company shall have delivered to Purchasers the opinion of Kelley Drye & Warren LLP, counsel to the Company, dated as
of the Closing Date in substantially the form attached hereto as Exhibit B.


 


(k)          Acquisition
of Target. The acquisition of Target shall have been consummated in accordance with the SPA.


 


4.2          Conditions
to Obligations of the Company. The Company’s obligation to issue and sell the Securities at the Closing is subject to
the fulfillment, on or prior to the Closing, of the following conditions, any of which may be waived by the Company:


 


(a)          Representations
and Warranties True.  The representations and warranties made by the Purchasers in Section 3 shall be true and correct in all
material respects (or, where the representation and warranty itself is qualified by materiality, it shall be true and correct in
all respects) on the Closing Date with the same force and effect as if they had been made on and as of said date (except to the
extent that any such representation and warranty expressly speaks as of an earlier date, in which case such representation and
warranty shall be so true and correct as of such earlier date).


 


(b)          Performance
of Obligations. The Purchasers shall have performed and complied with all agreements and conditions herein required to be performed
or complied with by them on or before the Closing. The Purchasers shall have delivered the Purchase Price, by wire transfer, to
the account designated by the Company for such purpose.


 




    	 	 	14



     


    

 


(c)          Qualifications,
Legal Investment. All authorizations, approvals, or permits, if any, of any governmental authority or regulatory body of the
United States or of any state that are required in connection with the lawful sale and issuance of the Securities shall have been
duly obtained and shall be effective on and as of the Closing. No stop order or other order enjoining the sale of the Securities
shall have been issued and no proceedings for such purpose shall be pending or, to the knowledge of the Company, threatened by
the SEC, or any commissioner of corporations or similar officer of any state having jurisdiction over this transaction. At the
time of the Closing, the sale and issuance of the Securities shall be legally permitted by all laws and regulations to which the
Company is subject. No litigation, statute, rule, regulation, executive order, decree, ruling or injunction will have been enacted,
entered, promulgated or endorsed by or in any court or governmental authority of competent jurisdiction or any self-regulatory
organization having authority over the matters contemplated hereby which prohibits the consummation of any of the transactions
contemplated by this Agreement.


 


(d)          Execution
of Agreements. The Purchasers shall have executed this Agreement and delivered this Agreement to the Company.


 


(e)          Acquisition
of Target. The acquisition of Target shall have been consummated in accordance with the SPA.


 


4.3          Termination
of Obligations to Effect Closing; Effects.


 


(a)          Termination.
The obligations of the Company, on the one hand, and the Purchasers, on the other hand, to effect the Closing shall terminate as
follows:


 


(i)          Upon
the mutual written consent of the Company and the Purchasers;


 


(ii)         By
the Company if any of the conditions set forth in Section 4.2 shall have become incapable of fulfillment, and shall not have been
waived by the Company;


 


(iii)        By
a Purchaser (with respect to itself only) if any of the conditions set forth in Section 4.1 shall have become incapable of fulfillment,
and shall not have been waived by the Purchaser; or


 


(iv)        By
either the Company or any Purchaser (with respect to itself only) if the Closing has not occurred on or prior to December 1, 2016;


 


provided, however, that, in the case of clause
(iii) above and clause (iv) with respect to the Company, the party seeking to terminate its obligation to effect the Closing shall
not then be in breach of any of its representations, warranties, covenants, or agreements contained in this Agreement if such breach
has resulted in the circumstances giving rise to such party’s seeking to terminate its obligation to effect the Closing.


 


(b)          Effect
of Termination. In the event of termination by the Company or any Purchaser of its obligations to effect the Closing pursuant
to this Section 4.3, written notice thereof shall be given promptly to the other Purchasers by the Company and the other Purchasers
shall have the right to terminate their obligations to effect the Closing upon written notice to the Company and the other Purchasers.
Nothing in this Section 4.3 shall be deemed to release any party from any liability for any breach by such party of the terms and
provisions of this Agreement or to impair the right of any party to compel specific performance by any other party of its obligations
under this Agreement.


 




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5.          Additional
Covenants.


 


5.1          Reporting
Status. With a view to making available to the Purchasers the benefits of certain rules and regulations of the SEC which may
permit the sale of the Shares to the public without registration, the Company agrees to use its reasonable best efforts to file
with the SEC, in a timely manner, all reports and other documents required of the Company under the Exchange Act. The Company will
otherwise take such further action as a Purchaser may reasonably request, all to the extent required from time to time, to enable
such Purchaser to sell the Shares without registration under the Securities Act or any successor rule or regulation adopted by
the SEC. If, at any time during the period commencing from the six-month anniversary of the date hereof and ending at such time
that all Registrable Securities (as defined below) may be sold without the requirement for the Company to be in compliance with
Rule 144(c)(1) and otherwise without restriction or limitation pursuant to Rule 144 (the “144 Sale Date”), the
Company fails to satisfy the current public information requirement of Rule 144(c) under the Securities Act, then the Company shall,
on the business day immediately following such failure and each 30th day thereafter until the 144 Sale Date, make a
payment to the Purchasers as partial liquidated damages for such failure equal to 1% of the Purchase Price paid for the Shares
then owned by the Purchasers up to a maximum of 12.0% of the Purchase Price for such Registrable Securities. Payments pursuant
to this Section 5.1 will be prorated on a daily basis during each 30-day period and will be paid to the Purchasers by wire transfer
or check within five business days after the earlier of (i) the end of each 30-day period following such failure to satisfy
the current public information requirement or (ii) the 144 Sale Date. If the Company fails to pay any liquidated damages pursuant
to this section in full within seven days after the date payable, the Company will pay interest thereon at a rate of 12% per annum
(or such lesser maximum amount that is permitted to be paid by applicable law) to the Purchasers, accruing daily from the date
such liquidated damages are due until such amounts, plus all such interest thereon, are paid in full.


 


5.2          Listing.
So long as a Purchaser owns any of the Securities, the Company will use its reasonable best efforts to maintain the qualification
or listing of its Common Stock, including the Shares, on the Principal Market or an alternative listing on the NASDAQ Stock Market,
New York Stock Exchange or NYSE MKT and will comply in all material respects with the Company’s reporting, filing and other
obligations under the rules of such exchanges, as applicable.


 


5.3          Adjustments
in Share Numbers and Prices. In the event of any stock split, subdivision, dividend or distribution payable in shares of Common
Stock (or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly shares
of Common Stock), combination or other similar recapitalization or event occurring after the date hereof, each reference in this
Agreement to a number of shares or price per share shall be amended appropriately to account for such event.


 


5.4          Non-Public
Information. The Company covenants and agrees that neither it nor any other person acting on its behalf will provide any Purchaser
or its agents or counsel with any information that the Company believes constitutes material non-public information, unless prior
thereto such Purchaser shall have executed a written agreement regarding the confidentiality and use of such information. The Company
understands and confirms that each Purchaser shall be relying on the foregoing representations in effecting transactions in securities
of the Company. Furthermore, if the Company has disclosed any material non-public information to the Purchaser, the Purchaser has
no duty to keep such information confidential following the public announcement of the Offering.


 


5.5          Equal
Treatment of Purchasers. No consideration (including any modification of this Agreement and any other documents or agreements
executed in connection with the transaction contemplated hereunder) shall be offered or paid to any person to amend or consent
to a waiver or modification of any provision of this Agreement unless the same consideration is also offered to all of the parties
to this Agreement. For clarification purposes, this provision constitutes a separate right granted to each Purchaser by the Company
and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers as a class and shall not in
any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of securities
of the Company or otherwise.


 




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5.6          Restriction
on Future Issuances. Unless otherwise waived by holders of a majority of the Shares sold in this Offering: 


 


(a)          The
Company will not, from the date of this Agreement through the date that is 45 days after the effective date of the Registration
Statement (the “Lock-Up Period”), (a) offer, pledge, announce the intention to sell, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase
or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible into or exercisable
or exchangeable for Common Stock or (b) enter into any swap or other agreement that transfers, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such transaction described in clause (a) or (b) above is to
be settled by delivery of Common Stock or such other securities, in cash or otherwise, except for (x) grants of options, shares
of Common Stock and other awards to purchase or receive shares of Common Stock under the Company’s equity incentive plans
that are in effect as of or prior to the date hereof or (y) issuances of shares of Common Stock upon the exercise or conversion
of securities outstanding as of the date of this Agreement in accordance with the terms of such securities in effect on the date
hereof or upon the exercise of options or other awards granted under the Company’s equity incentive plans. 


 


(b)          The
Company agrees not to accelerate the vesting of any option or warrant or the lapse of any repurchase right prior to the expiration
of the Lock-Up Period. 


 


(c)          In
addition, from the Closing Date of the Offering until 45 days after the effective date of the Registration Statement, the Company
will not issue or agree to issue more than (i) such number of shares as is equal in value to $1,000,000 of (a) Common Stock or
(b) any securities of the Company or any subsidiary that would entitle the holder thereof to acquire at any time shares of Common
Stock, including without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time
directly or indirectly convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock,
entitling any person or entity to acquire shares of Common Stock, in the case of each of (i)(a) and (i)(b) above at an effective
price per share of at least $1.15, and (ii) such number of shares as is equal in value to $5,000,000 of (a) Common Stock or (b)
any securities of the Company or any subsidiary that would entitle the holder thereof to acquire at any time shares of Common Stock,
including without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time directly
or indirectly convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock, entitling
any person or entity to acquire shares of Common Stock, in the case of each of (ii)(a) and (ii)(b) above at an effective price
per share of at least $2.00.


 


Notwithstanding this Section 5.6, the Company
shall not be restricted from issuing shares of Common Stock, or registering with the SEC the sale or resale of shares of Common
Stock, in connection with the SPA and any agreement contemplated thereby, provided, however, that the registration statement for
such shares shall not be filed earlier than sixty (60) days following the effective date of the registration statement covering
the shares of Common Stock sold hereunder.


 


6.          Registration
Rights. 


 


6.1          Registration
Procedures and Expenses; Liquidated Damages for Certain Events.


 


(a)          The
Company shall prepare and file with the SEC, as promptly as reasonably practicable following Closing, but in no event later than
45 days following the date hereof (the “Initial Filing Date”), a registration statement on Form S-3 (or any
successor to Form S-3), covering the resale of the Registrable Securities (the “S-3 Registration Statement”)
and use all commercially reasonable efforts to, as soon as reasonably practicable thereafter but in no event later than 90 days
following the date hereof (or 120 days in the event of a full review of the S-3 Registration Statement by the SEC), effect such
registration and any related qualification or compliance with respect to all Registrable Securities held by the Purchasers. For
purposes of this Agreement, the term “Registrable Securities” shall mean (i) the Shares and (ii) any Common
Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued
as) a dividend or other distribution with respect to, or in exchange for or in replacement of, any Shares. In the event that Form
S-3 (or any successor form) is or becomes unavailable to register the resale of the Registrable Securities at any time prior to
the Initial Filing Date, the Company shall prepare and file with the SEC, as promptly as reasonably practicable following the Closing
but in no event later than the Initial Filing Date, a registration statement on Form S-1 (or any successor to Form S-1), covering
the resale of the Registrable Securities (the “S-1 Registration Statement” and collectively the S-3 Registration
Statement, the “Registration Statement”) and use all commercially reasonable efforts to, as soon as reasonably
practicable thereafter but in no event later than 120 days following the date hereof (150 days in the event of a full review of
the S-1 Registration Statement by the SEC), to effect such registration and any related qualification or compliance with respect
to all Registrable Securities held by the Purchasers. If the Company is not eligible to use Form S-3 at the Initial Filing Date,
and the Company subsequently becomes eligible to use Form S-3 during the Effectiveness Period (as defined below), the Company shall
file, as promptly as reasonably practicable, a new S-3 Registration Statement, or if available, an amendment to the Form S-1, covering
the resale of the Registrable Securities and replace the S-1 Registration Statement with the new S-3 Registration Statement or
amended Form S-1, as the case may be, upon the effectiveness of the new S-3 Registration Statement.



 




    	 	 	17



     


    

 


(b)          The
Company shall, during the Effectiveness Period (as hereinafter defined), use its commercially reasonable efforts to:


 


(i)          prepare
and file with the SEC such amendments and supplements to the Registration Statement and the Prospectus used in connection therewith
as may be necessary or advisable to keep the Registration Statement current and effective for the Registrable Securities held by
a Purchaser for a period ending on the earlier of (i) the second anniversary of the Closing Date, (ii) the date on which all Registrable
Securities may be sold pursuant to Rule 144 under the Securities Act or any successor rule (“Rule 144”) during
any three-month period without the requirement for the Company to be in compliance with the current public information required
under Rule 144(c)(1) or (iii) such time as all Registrable Securities have been sold pursuant to a registration statement or Rule
144 (collectively, the “Effectiveness Period”). The Company shall notify each Purchaser promptly upon the Registration
Statement and each post-effective amendment thereto, being declared effective by the SEC and advise each Purchaser that the form
of Prospectus contained in the Registration Statement or post-effective amendment thereto, as the case may be, at the time of effectiveness
meets the requirements of Section 10(a) of the Securities Act or that it intends to file a Prospectus pursuant to Rule 424(b) under
the Securities Act that meets the requirements of Section 10(a) of the Securities Act;


 


(ii)         furnish
to the Purchaser promptly with respect to the Registrable Securities registered under the Registration Statement such number of
copies of the Registration Statement and the Prospectus (including supplemental prospectuses and amendments) filed with the SEC
in conformance with the requirements of the Securities Act and such other documents as the Purchaser may reasonably request, in
order to facilitate the public sale or other disposition of all or any of the Registrable Securities by the Purchaser; 


 


(iii)        make
any necessary blue sky filings;


 


(iv)        pay
the expenses incurred by the Company and the Purchasers in complying with this Section 6, including, all registration and filing
fees, FINRA fees, exchange listing fees, printing expenses, fees and disbursements of counsel for the Company, blue sky fees and
expenses and the expense of any special audits incident to or required by any such registration (but excluding attorneys’
fees of any Purchaser and any and all underwriting discounts and selling commissions applicable to the sale of Registrable Securities
by the Purchasers);


 




    	 	 	18



     


    

 


(v)         advise
the Purchasers, promptly after it shall receive notice or obtain knowledge of the issuance of any stop order by the SEC delaying
or suspending the effectiveness of the Registration Statement or of the initiation of any proceeding for that purpose; and it will
promptly use its reasonable best efforts to prevent the issuance of any stop order or to obtain its withdrawal at the earliest
possible moment if such stop order should be issued; and


 


(vi)        with
a view to making available to the Purchaser the benefits of Rule 144 and any other rule or regulation of the SEC that may at any
time permit the Purchaser to sell Registrable Securities to the public without registration, the Company covenants and agrees to:
(i) make and keep public information available, as such term is understood and defined in Rule 144, until the earlier of (A) such
date as all of the Registrable Securities qualify to be resold immediately pursuant to Rule 144 or any other rule of similar effect
during any three-month period without the requirement for the Company to be in compliance with the current public information required
under Rule 144(c)(1) or (B) such date as all of the Registrable Securities shall have been resold pursuant to Rule 144 (and may
be further resold without restriction); (ii) file with the SEC in a timely manner all reports and other documents required of the
Company under the Securities Act and under the Exchange Act; and (iii) furnish to the Purchaser upon request, as long as the Purchaser
owns any Registrable Securities, (A) a written statement by the Company as to whether it has complied with the reporting requirements
of the Securities Act and the Exchange Act, (B) if not available on the SEC EDGAR system, a copy of the Company’s most recent
Annual Report on Form 10-K or Quarterly Report on Form 10-Q, and (C) such other information as may be reasonably requested in order
to avail the Purchaser of any rule or regulation of the SEC that permits the selling of any such Registrable Securities without
registration.


 


The Company understands
that each Purchaser disclaims being an underwriter, but acknowledges that a determination by the SEC that a Purchaser is deemed
an underwriter shall not relieve the Company of any obligations it has hereunder.


 


(c)          If
(i) the Registration Statement is not filed on or prior to the Initial Filing Date, or (ii) the Company fails to file with the
SEC a request for acceleration of the Registration Statement in accordance with Rule 461 under the Securities Act, within five
Trading Days, as defined below, after the date the Company is first notified (orally or in writing) by the SEC that the Registration
Statement will not be “reviewed” or will not be subject to further review or comment, or (iii) prior to the effective
date of the Registration Statement, the Company fails to file a pre-effective amendment and otherwise respond in writing to comments
made by the SEC in respect of such Registration Statement within 21 days after the receipt of comments by or notice from the SEC
that such amendment or resolution of such comments is required in order for such Registration Statement to be declared effective,
or (iv) the Registration Statement is not declared effective by the SEC on or before the date that is 90 days after the date hereof,
or 120 days after the date hereof in the event of a full review of the Registration Statement by the SEC (the “Required
Effective Date”), or (v) there occurs a Suspension (or part thereof) (as defined below) that does not constitute a Qualifying
Suspension (as defined below) or (vi) at any time during the period commencing from the six month anniversary of the date hereof
and ending at such time, the Company shall fail to satisfy the current public information requirement under Rule 144(c) (any of
the foregoing being referred to as an “Event”, and for purposes of clauses (i), (iv) and (vi), the date on which
such Event occurs, and for purpose of clause (ii) the date on which such five Trading Day period is exceeded, and for purpose of
clause (iii) the date which such 21 day period is exceeded, and for purpose of clause (v) the date on which the applicable 30 or
45 day period is exceeded being the “Event Date”), then except during any period of time during which the Registrable
Securities may be resold pursuant to Rule 144 without volume limitations, in addition to any other rights the Purchasers may have
hereunder or under applicable law, on each such Event Date and on each monthly anniversary of each such Event Date (if the applicable
Event shall not have been cured by such date) until the applicable Event is cured, the Company shall pay to each Purchaser an amount
in cash, as liquidated damages and not as a penalty, equal to the product of 1.0% multiplied by the Purchase Price paid by such
Purchaser with respect to the Registrable Securities affected by such Event and held by such Purchaser on such Event Date or monthly
anniversary thereof, up to a maximum of 12.0% of the Purchase Price for such Registrable Securities; provided, however, that no
amount arising under subsection (vi) above shall be payable in duplication of any amount payable under Section 5.1. If the Company
fails to pay any liquidated damages pursuant to this Section in full within seven days after the date payable, the Company will
pay interest thereon at a rate of 12% per annum (or such lesser maximum amount that is permitted to be paid by applicable law)
to the Purchaser, accruing daily from the date such liquidated damages are due until such amounts, plus all such interest thereon,
are paid in full. The liquidated damages pursuant to the terms hereof shall apply on a daily pro rata basis for any portion of
a month prior to the cure of an Event. A “Trading Day” is any day of the year that the Principal Market is open
for trading of the Common Stock.


 




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6.2          Transfer
of Shares After Registration; Suspension. 


 


(a)          Except
in the event that Section 6.2(b) applies, the Company shall during the Effectiveness Period: (i) if deemed necessary or advisable
by the Company, prepare and file from time to time with the SEC a post-effective amendment to the Registration Statement or a supplement
to the related Prospectus or a supplement or amendment to any document incorporated therein by reference or file any other required
document so that such Registration Statement will not contain 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, and so that, as thereafter delivered
to purchasers of the Registrable Securities being sold thereunder, such Prospectus will not contain 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, in light of the
circumstances under which they were made, not misleading; (ii) provide the Purchasers copies, or access to copies, of any documents
filed pursuant to Section 6.2(a)(i); and (iii) upon request, inform each Purchaser who so requests that the Company has complied
with its obligations in Section 6.2(b)(i) (or that, if the Company has filed a post-effective amendment to the Registration Statement
which has not yet been declared effective, the Company will notify the Purchaser to that effect, will use its reasonable best efforts
to secure the effectiveness of such post-effective amendment as promptly as possible and will promptly notify the Purchaser pursuant
to Section 6.2(b)(i) when the amendment has become effective).


 


(b)          Subject
to Section 6.1(c), in the event: (i) of any request by the SEC or any other federal or state governmental authority during the
period of effectiveness of the Registration Statement for amendments or supplements to the Registration Statement or related Prospectus
or for additional information; (ii) of the issuance by the SEC or any other federal or state governmental authority of any stop
order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; (iii) of
the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification
of any of the Registrable Securities for sale in any jurisdiction or the initiation of any proceeding for such purpose; or (iv)
of any event or circumstance which necessitates the making of any changes in the Registration Statement or Prospectus, or any document
incorporated or deemed to be incorporated therein by reference, so that, in the case of the Registration Statement, it 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 that in the case of the Prospectus, it 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, in
the light of the circumstances under which they were made, not misleading; then the Company shall promptly deliver a certificate
in writing to the Purchasers (the “Suspension Notice”) to the effect of the foregoing and, upon receipt of such
Suspension Notice, the Purchasers will refrain from selling any Registrable Securities pursuant to the Registration Statement (a
“Suspension”) until the Purchasers are advised in writing by the Company that the current Prospectus may be
used, and have received copies, or access to copies, from the Company of any additional or supplemental filings that are incorporated
or deemed incorporated by reference in any such Prospectus. In the event of any Suspension, the Company will use its reasonable
best efforts to cause the use of the Prospectus so suspended to be resumed as soon as reasonably practicable after delivery of
a Suspension Notice to the Purchasers. In addition to and without limiting any other remedies (including, without limitation, at
law or at equity) available to the Company and the Purchaser, the Company and the Purchasers shall be entitled to specific performance
in the event that the other party fails to comply with the provisions of this Section 6.2(b). 


 




    	 	 	20



     


    

 


(c)          Notwithstanding
the foregoing paragraphs of this Section 6.2, the Company shall use its reasonable best efforts to ensure that (i) a Suspension
shall not exceed 30 days individually, (ii) Suspensions covering no more than 45 days, in the aggregate, shall occur during any
twelve month period and (iii) each Suspension shall be separated by a period of at least 30 days from a prior Suspension (each
Suspension that satisfies the foregoing criteria being referred to herein as a “Qualifying Suspension”). 


 


(d)          During
the Effectiveness Period, the Company shall cause Certificates evidencing the Registrable Securities not to contain any restrictive
legend (including the legend set forth in Section 3.3(b)): (i) following a resale of the Shares under an effective registration
statement (including the Registration Statement) covering such Registrable Securities, or (ii) following a sale of such Registrable
Securities pursuant to Rule 144, or (iii) while such Registrable Securities are eligible for sale under Rule 144 and, with respect
to any Purchaser’s Shares, such Purchaser is not and has not been for three months an affiliate of the Company (as such term
is defined in Rule 144(a)(1)) and such Shares have been held for one year or more pursuant to the requirements of Rule 144 and
any other requirements under Rule 144 have been satisfied at such time, or (iv) if such legend is not required under applicable
requirements of the Securities Act (including judicial interpretations and pronouncements issued by the Staff of the SEC). Following
such time as restrictive legends are not required to be placed on Certificates representing Shares, the Company will, no later
than three Trading Days following the delivery by a Purchaser 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 Purchaser a Certificate
representing such Registrable Securities that is free from all restrictive legends. Promptly after the Registration Statement is
declared effective by the SEC, the Company will cause its counsel to issue a legal opinion to the Company’s transfer agent
to effect the removal of the restrictive legend contemplated by this Agreement upon request by a Purchaser in connection with a
sale of such Purchaser’s Registrable Securities by such Purchaser pursuant to the Registration Statement, which opinion will
not include the resale of shares issued as part of the purchase price for the acquisition of Target pursuant to the SPA. The Company
may not make any notation on its records or give instructions to any transfer agent of the Company 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 transfer agent of the Company to the Purchasers by crediting the account of the Purchaser’s prime broker with the
Depository Trust Company system unless a Purchaser provides alternate written instructions.


 


6.3          Indemnification.
For the purpose of this Section 6.3:


 


(a)          the
term “Selling Shareholder” shall mean a Purchaser, its general partners, managing members, managers, executive
officers and directors and each person, if any, who controls that Purchaser within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act; 


 


(b)          the
term “Registration Statement” shall include any final Prospectus, exhibit, supplement or amendment included
in or relating to, and any document incorporated by reference in, the Registration Statement (or deemed to be a part thereof) referred
to in Section 6.1; and 


 


(c)          the
term “untrue statement” shall mean any untrue statement or alleged untrue statement of a material fact, or any
omission or alleged omission to state in the Registration Statement 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.


 




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(d)          The
Company agrees to indemnify and hold harmless each Selling Shareholder from and against any losses, claims, damages or liabilities
to which such Selling Shareholder may become subject (under the Securities Act or otherwise) insofar as such losses, claims, damages
or liabilities (or actions or proceedings in respect thereof) arise out of, or are based upon (i) any untrue statement of a material
fact contained in the Registration Statement, (ii) any inaccuracy in the representations and warranties of the Company contained
in this Agreement or the failure of the Company to perform its obligations hereunder or (iii) any failure by the Company to fulfill
any undertaking included in the Registration Statement, and the Company will reimburse such Selling Shareholder for any reasonable
legal expense or other actual accountable out-of-pocket expenses reasonably incurred in investigating, defending or preparing to
defend any such action, proceeding or claim; provided, however, that the Company shall not be liable in any such case to the extent
that such loss, claim, damage or liability arises out of, or is based upon, an untrue statement made in such Registration Statement
in reliance upon and in conformity with written information furnished to the Company by or on behalf of such Selling Shareholder
specifically for use in preparation of the Registration Statement or the failure of such Selling Shareholder to comply with its
covenants and agreements contained herein or any statement or omission in any Prospectus that is corrected in any subsequent Prospectus
that was delivered to the Selling Shareholder prior to the pertinent sale or sales by the Selling Shareholder.


 


(e)          Each
Purchaser severally (as to itself), and not jointly, agrees to indemnify and hold harmless the Company (and each person, if any,
who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, each officer
of the Company who signs the Registration Statement and each director of the Company) from and against any losses, claims, damages
or liabilities to which the Company (or any such officer, director or controlling person) may become subject (under the Securities
Act or otherwise), insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise
out of, or are based upon, any untrue statement of a material fact contained in the Registration Statement if, and only if, such
untrue statement was made in reliance upon and in conformity with written information furnished by or on behalf of that Purchaser
specifically for use in preparation of the Registration Statement, and that Purchaser will reimburse the Company (or such officer,
director or controlling person, as the case may be), for any reasonable legal expense or other actual accountable out-of-pocket
expenses reasonably incurred in investigating, defending or preparing to defend any such action, proceeding or claim. The obligation
to indemnify shall be limited to the net amount of the proceeds received by the Purchaser from the sale of the Registrable Securities
pursuant to the Registration Statement.


 


(f)          Promptly
after receipt by any indemnified person of a notice of a claim or the beginning of any action in respect of which indemnity is
to be sought against an indemnifying person pursuant to this Section 6.3, such indemnified person shall notify the indemnifying
person in writing of such claim or of the commencement of such action, but the omission to so notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party under this Section 6.3 (except to the extent that
such omission materially and adversely affects the indemnifying party’s ability to defend such action) or from any liability
otherwise than under this Section 6.3. Subject to the provisions hereinafter stated, in case any such action shall be brought against
an indemnified person, the indemnifying person shall be entitled to participate therein, and, to the extent that it shall elect
by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party,
shall be entitled to assume the defense thereof, with counsel reasonably satisfactory to such indemnified person. After notice
from the indemnifying person to such indemnified person of its election to assume the defense thereof (unless it has failed to
assume the defense thereof and appoint counsel reasonably satisfactory to the indemnified party), such indemnifying person shall
not be liable to such indemnified person for any legal expenses subsequently incurred by such indemnified person in connection
with the defense thereof; provided, however, that if there exists or shall exist a conflict of interest that would make it inappropriate,
in the reasonable opinion of counsel to the indemnified person, for the same counsel to represent both the indemnified person and
such indemnifying person or any affiliate or associate thereof, the indemnified person shall be entitled to retain its own counsel
(who shall not be the same as the opining counsel) at the expense of such indemnifying person; provided, however, that no indemnifying
person shall be responsible for the fees and expenses of more than one separate counsel (together with appropriate local counsel)
for all indemnified parties. In no event shall any indemnifying person be liable in respect of any amounts paid in settlement of
any action unless the indemnifying person shall have approved the terms of such settlement; provided that such consent shall not
be unreasonably withheld. No indemnifying person shall, without the prior written consent of the indemnified person, effect any
settlement of any pending or threatened proceeding in respect of which any indemnified person is or could reasonably have been
a party and indemnification could have been sought hereunder by such indemnified person, unless such settlement includes an unconditional
release of such indemnified person from all liability on claims that are the subject matter of such proceeding.


 




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(g)          If
the indemnification provided for in this Section 6.3 is unavailable to or insufficient to hold harmless an indemnified party under
subsection (d) or (e) above in respect of any losses, claims, damages or liabilities (or actions or proceedings in respect thereof)
referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect
the relative fault of the Company on the one hand and the liable Purchaser on the other in connection with the statements or omissions
or other matters which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative fault shall be determined by reference to, among other things, in the case
of an untrue statement, whether the untrue statement relates to information supplied by the Company on the one hand or the liable
Purchaser on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement. The Company and the Purchasers agree that it would not be just and equitable if contribution pursuant to
this subsection (g) were determined by pro rata allocation (even if the Purchasers were treated as one entity for such purpose)
or by any other method of allocation which does not take into account the equitable considerations referred to above in this subsection
(g). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (g) shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions
of this subsection (g), no Purchasers shall be required to contribute any amount in excess of the amount by which the net amount
received by that Purchaser from the sale of the Registrable Securities to which such loss relates exceeds the amount of any damages
which that Purchaser has otherwise been required to pay to the Company by reason of such untrue statement. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The Purchasers’ obligations in this subsection to contribute
are several in proportion to their sales of Registrable Securities to which such loss relates and not joint.


 


(h)          The
parties to this Agreement hereby acknowledge that they are sophisticated business persons who were represented by counsel during
the negotiations regarding the provisions hereof including, without limitation, the provisions of this Section 6.3, and are fully
informed regarding said provisions. They further acknowledge that the provisions of this Section 6.3 fairly allocate the risks
in light of the ability of the parties to investigate the Company and its business in order to assure that adequate disclosure
is made in the Registration Statement as required by the Securities Act and the Exchange Act.


 


(i)          The
obligations of the Company and of the Purchasers under this Section 6.3 shall survive completion of any offering of Registrable
Securities in such Registration Statement for a period of two years from the effective date of the Registration Statement. No indemnifying
party, in the defense of any such claim or litigation, shall, except with the consent of each indemnified party, consent to entry
of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant
or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.


 




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6.4          Termination
of Conditions and Obligations. The conditions precedent imposed by Section 3 or this Section 6 upon the transferability of
the Registrable Securities shall cease and terminate as to any particular number of the Registrable Securities when such Registrable
Securities shall have been effectively registered under the Securities Act and sold or otherwise disposed of in accordance with
the intended method of disposition set forth in the Registration Statement covering such Registrable Securities or at such time
as an opinion of counsel satisfactory to the Company shall have been rendered to the effect that such conditions are not necessary
in order to comply with the Securities Act. The Company shall request an opinion of counsel promptly upon receipt of a request
therefor from a Purchaser.


 


6.5          Information
Available. So long as the Registration Statement is effective covering the resale of Registrable Securities owned by a Purchaser,
the Company will furnish (or, to the extent such information is available electronically through the Company’s filings with
the SEC, the Company will make available via the SEC’s EDGAR system or any successor thereto) to each Purchaser:


 


(a)          as
soon as practicable after it is available, one copy of its Annual Report on Form 10-K (the foregoing, in each case, excluding exhibits);



 


(b)          upon
the request of the Purchaser, all exhibits excluded by the parenthetical to subparagraph (a)(ii) of this Section 6.5 as filed with
the SEC and all other information that is made available to shareholders; and 


 


(c)          upon
the reasonable request of the Purchaser, an adequate number of copies of the Prospectuses to supply to any other party requiring
such Prospectuses; and the Company, upon the reasonable request of a Purchaser, will meet with each Purchaser or a representative
thereof at the Company’s headquarters during the Company’s normal business hours to discuss all information relevant
for disclosure in the Registration Statement covering the Registrable Securities and will otherwise reasonably cooperate with the
Purchasers conducting an investigation for the purpose of reducing or eliminating the Purchasers’ exposure to liability under
the Securities Act, including the reasonable production of information at the Company’s headquarters; provided, that the
Company shall not be required to disclose any confidential information to or meet at its headquarters with a Purchaser until and
unless that Purchaser shall have entered into a confidentiality agreement in form and substance reasonably satisfactory to the
Company with the Company with respect thereto.


 


6.6          Public
Statements; Limitation on Information. The Company shall (A) by no later than 9:00 a.m. (New York City time) on the fourth
Trading Day immediately following the date hereof, issue a press release disclosing the material terms of the Offering and (B)
file a Current Report on Form 8-K within the time required by and in accordance with the requirements of the Exchange Act. From
and after the issuance of such press release, the Company represents to the Purchasers that it shall have publicly disclosed all
material, non-public information delivered to any of the Purchasers by the Company or any of its subsidiaries, or any of their
respective officers, directors, employees or agents in connection with the Offering. Neither the Company nor any Purchaser shall
issue any other press release with respect to the transactions contemplated hereby nor otherwise make any such public statement
without the prior consent of the Company and the Placement Agent, which consents in each case shall not unreasonably be withheld
or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party
with prior notice of such public statement or communication. Notwithstanding the foregoing, the Company will not make any public
disclosure listing a Purchaser as one of the purchasers of the Securities without that Purchaser’s prior written consent,
except as may be required by applicable law or rules of any exchange on which the Company’s securities are listed.


 




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6.7          Protection
of Exemptions. Without limiting the provisions of Section 5.6, the Company will not, for a period of six months following the
Closing Date offer for sale or sell any securities unless, in the opinion of the Company’s counsel, such offer or sale does
not jeopardize the availability of exemptions from the registration and qualification requirements under applicable securities
laws with respect to the Offering. Except for the issuance of stock options under the Company’s stock option plans, the issuance
of common stock upon exercise of outstanding options and warrants, the issuance of common stock purchase warrants, the issuance
of Common Stock pursuant to the SPA, and the offering contemplated hereby, the Company has not engaged in any offering of equity
securities during the six months prior to the date of this Agreement. The foregoing provisions of this Section 6.7 shall not prevent
the Company from filing a “shelf” registration statement pursuant to Rule 415 under the Securities Act, but the foregoing
provisions shall apply to any sale of securities thereunder.


 


6.8          Form D
and State Securities Filings. The Company will file with the SEC a Notice of Sale of Securities on Form D with respect
to the Securities, as required under Regulation D under the Securities Act, no later than 15 days after the Closing Date.
The Company will promptly and timely file all documents and pay all filing fees required by any states’ securities laws in
connection with the sale of Securities.


 


6.9          Assignment
of Registration Rights. The rights to cause the Company to register Registrable Securities pursuant to this Section 6 may be
assigned by a Purchaser to a party that acquires, other than pursuant to the Registration Statement or Rule 144, any of the Registrable
Securities originally issued or issuable to such Purchaser as contemplated by this Agreement, or to any affiliate of a Purchaser
that acquires any Registrable Securities. Any such permitted assignee shall have all the rights of such Purchaser under this Section
6 with respect to the Registrable Securities transferred during the Effectiveness Period.


 


6.10         Selling
Shareholder Questionnaire. Each Purchaser agrees to furnish to the Company a completed questionnaire in the form attached to
this Agreement as Exhibit C (a “Selling Holder Questionnaire”). The Company shall not be required to include
the Registrable Securities of a Purchaser in a Registration Statement and shall not be required to pay any liquidated or other
damages hereunder to any such Purchaser who fails to furnish to the Company a fully completed Selling Holder Questionnaire at least
three business days prior to the filing of the Registration Statement.


 


7.          Miscellaneous.


 


7.1          Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard
to the choice of law provisions thereof, and the federal laws of the United States.


 


7.2          Successors
and Assigns. Except as otherwise expressly provided herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors, and administrators of the parties hereto. Notwithstanding the foregoing, the Company
may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Purchasers that constitute
at least a majority of the Shares then held by the Purchasers.


 


7.3          Entire
Agreement. This Agreement and the exhibits hereto, and the other documents delivered pursuant hereto, constitute the full and
entire understanding and agreement among the parties with regard to the subjects hereof and no party shall be liable or bound to
any other party in any manner by any representations, warranties, covenants, or agreements except as specifically set forth herein
or therein. Nothing in this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto
and their respective successors and assigns, any rights, remedies, obligations, or liabilities under or by reason of this Agreement,
except as expressly provided herein.


 




    	 	 	25



     


    

 


7.4          Severability.
 In the event any provision of this Agreement shall be invalid, illegal, or unenforceable, it shall to the extent practicable,
be modified so as to make it valid, legal and enforceable and to retain as nearly as practicable the intent of the parties, and
the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.


 


7.5          Amendment
and Waiver. Except as otherwise provided herein, any term of this Agreement may be amended and the observance of any term of
this Agreement may be waived (either generally or in a particular instance, either retroactively or prospectively, and either for
a specified period of time or indefinitely), with the written consent of the Company and each Purchaser. Any amendment or waiver
effected in accordance with this Section 7.5 shall be binding upon any holder of any Securities purchased under this Agreement,
each future holder of all such securities, and the Company.


 


7.6          Fees
and Expenses. Except as otherwise set forth herein, the Company and the Purchasers shall bear their own expenses and legal
fees incurred on their behalf with respect to this Agreement and the transactions contemplated hereby. Each party hereby agrees
to indemnify and to hold harmless of and from any liability the other parties for any commission or compensation in the nature
of a finder’s fee to any broker or other person or firm (and the costs and expenses of defending against such liability or
asserted liability) for which such indemnifying party or any of its employees or representatives are responsible.


 


7.7          Notices.
All notices, requests, consents and other communications hereunder shall be in writing, shall be delivered (A) if within the
United States, by first-class registered or certified airmail, or nationally recognized overnight express courier, postage prepaid
or by electronic mail, or (B) if from outside the United States, by International Federal Express (or comparable service) or by
facsimile or electronic mail, and shall be deemed given (i) if delivered by first-class registered or certified mail domestic,
upon the business day received, (ii) if delivered by nationally recognized overnight carrier, one business day after timely delivery
to such carrier, (iii) if delivered by International Federal Express (or comparable service), two business days after so mailed,
or (iv) if delivered by electronic mail at or prior to 5:30 p.m. (New York City time) on a Trading Day, on the Trading Day so delivered
or, if delivered by facsimile or electronic mail after 5:30 p.m. (New York City time) on a Trading Day or on a day that is not
a Trading Day, the next Trading Day after the date of delivery, and shall be addressed as follows, or to such other address or
addresses as may have been furnished in writing by a party to another party pursuant to this paragraph:


 


		·	if to the Company, to the address of the Company’s principal
office set forth on the first page of this Agreement, Attention: Secretary and Treasurer, e-mail: pturits@fusionconnect.com with
a copy to (which shall not constitute notice to the Company) Kelley Drye & Warren LLP, 101 Park Avenue, New York, New York
10178, Attention: Carol Weiss Sherman, e-mail: csherman@kelleydrye.com and



 


		·	if to the Purchaser, at its address on the signature page to this Agreement.



 


7.8          Survival
of Representations, Warranties and Agreements. Notwithstanding any investigation made by any party to this Agreement or by
the Placement Agent, all covenants, agreements, representations and warranties made by the Company and the Purchasers herein shall
survive the execution of this Agreement, the delivery to the Purchasers of the Securities being purchased and the payment therefor,
and a party’s reliance on such representations and warranties shall not be affected by any investigation made by such party
or any information developed thereby.


 


7.9          Counterparts.
This Agreement may be executed by pdf signature and in any number of counterparts, each of which shall be deemed an original,
but all of which together shall constitute one instrument.


 


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


 




    	 	 	26



     


    

 


7.11         Independent
Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under this Agreement are several and
not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance of
the obligations of any other Purchaser under this Agreement. Nothing contained herein, and no action taken by any Purchaser pursuant
hereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity,
or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or
the transactions contemplated by this Agreement. Each Purchaser confirms that it has independently participated in the negotiation
of the transaction contemplated hereby with the advice of its own counsel and advisors. Each Purchaser shall be entitled to independently
protect and enforce its rights, including, without limitation, the rights arising out of this Agreement, and it shall not be necessary
for any other Purchaser to be joined as an additional party in any proceeding for such purpose. It is expressly understood and
agreed that each provision contained in this Agreement is between the Company and a Purchaser, solely, and not between the Company
and the Purchasers collectively and not between and among the Purchasers.


 


[The Remainder of this Page is Blank;
Signature Pages Follow]


 


 




    	 	 	27



     


    

 


In witness whereof, the
foregoing Common Stock Purchase Agreement is hereby executed as of the date first above written.


 


	 	FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 


 




    	 	 	28



     


    

 


In witness whereof, the
foregoing Common Stock Purchase Agreement is hereby executed as of the date first above written.


 


	 	 
	 	Name of Investor
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 


 


	 	Investment Amount (# shares):	 


 


	 	Investment Amount ($ @ $1.15 share):	 


 


	 	Tax Identification No.:	 


 


	 	Jurisdiction of Organization:	 


 


	 	Jurisdiction of Principal Place of Operations:
	 	 
	 	 
	 	Address for Notice:
	 	 
	 	 
	 	 
	 	Attention:	 
	 	Telephone:	 


 


	 	E-mail:	 


 


	 	Delivery Instructions (if different from above):
	 	 
	 	 
	 	 
	 	Attention:	 
	 	Telephone:	 


 




    	 	 	1



     


    

 


EXHIBIT A


 


SCHEDULE OF PURCHASERS


  


	Purchaser	 	Common
 Shares	 	 	Aggregate
 Purchase Price	 	 	Jurisdiction of
 Organization	 	 	Jurisdiction of
 Principal Place of
 Operations	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 



 




     


     


    

 


EXHIBIT B


 


FORM OF OPINION OF COMPANY COUNSEL


 


[Capitalized terms shall have the meanings
ascribed thereto in the Common Stock Purchase Agreement]


 


1.          The
Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. 


 


2.          The
Company has all necessary corporate power and authority to (i) execute and deliver, and to perform its obligations under the Agreement
and (ii) conduct its business as it is, to our knowledge, currently conducted and described in the Company SEC Documents, and own,
lease and license it properties and assets.


 


3.          The
Company is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction listed on Schedule
1 hereto.


 


4.          The
execution, delivery and performance by the Company of the Agreement and the consummation of the transactions contemplated thereby
including the issuance of the Securities have been duly authorized by all necessary corporate action of the Company.


 


5.          The
Agreement has been duly executed and delivered by the Company and constitutes the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with its terms.


 


6.          Except
for filings, authorizations or approvals contemplated by the Agreement, no authorizations or approvals of, and no filings with,
any governmental or administrative agency, regulatory authority, stock market or trading facility are necessary or required by
the Company for the execution and delivery of the Agreement or the consummation of the transactions contemplated thereby.


 


7.          Neither
the execution and delivery of the Agreement by the Company, nor the consummation or performance by the Company of any of the transactions
contemplated by the Agreement (including the issuance of the Securities) (i) result in a violation of any provisions of the Company’s
certificate of incorporation or bylaws; (ii) to our knowledge, constitute a violation of any U.S. federal or state law, rule or
regulation applicable to the Company; or (iii) to our knowledge, violate any judgment, decree, order or award of any court, governmental
body or arbitrator specifically naming the Company.


 


8.          The
authorized capital stock of the Company on the date hereof consists of 90,000,000 shares of common stock and 10,000,000 shares
of preferred stock. The form of certificates for the Shares conforms to the requirements of the Delaware General Corporation Law.



 


9.          To
our knowledge, except as provided or disclosed in the Agreement on in the Company SEC Documents, no person or entity is entitled
to any preemptive, right of first refusal, contractual or similar rights with respect to the issuance of the Shares. 


 


10.        The
Shares have been duly authorized or reserved for issuance by all necessary corporate action on the part of the Company; and the
Shares, when issued, sold and delivered against payment therefor in accordance with the provisions of the Agreement will be duly
and validly issued, fully paid and non-assessable. The holders of the Shares will not be subject to personal liability by reason
of being such holders. 


 


11.        Based
in part on the representations contained in Section 3 of the Agreement, the offer and sale of the Shares as contemplated under
the Agreement are exempt from registration under the Securities Act of 1933, as amended (the “Act”) [and from registration
and qualification under the securities law of the States of [•]].


 




     


     


    

 


12.        We
are not aware of any actions, suits, arbitrations, claims, proceedings or investigations pending or threatened against the Company
or any of its subsidiaries or any of their respective operations, businesses, properties or assets by or before any court, arbitrator
or government or regulatory commission, board, body, authority or agency that challenges the validity of any actions take or to
be taken by the Company pursuant to the Agreement or the transaction contemplated thereby.


 


13.        To
our knowledge, except as set forth in the Purchase Agreement, no holders of the Company’s securities have rights to the registration
of shares of Common Stock or other securities of the Company because of the filing of the Registration Statement or the Offering,
except as set forth in the Company SEC Documents.


 


14.        The
Company is not, and immediately after giving effect to the sale of the Securities in accordance with the Purchase Agreement, and
the application of the proceeds for working capital, will not be required to be, registered as an “investment company”
within the meaning of the Investment Company Act of 1940, as amended.


 




     


     


    

 


EXHIBIT C


 


SELLING SHAREHOLDER QUESTIONNAIRE


 


FUSION TELECOMMUNICATIONS INTERNATIONAL,
INC.


 


Questionnaire for Selling Shareholder


 


This questionnaire is necessary
to obtain information to be used by Fusion Telecommunications International, Inc. (the “Company”) to complete
a Registration Statement (the “Registration Statement”) covering the resale of certain shares of Company Common
Stock currently outstanding and/or of certain shares of Company Common Stock to be issued upon exercise of currently outstanding
warrants to purchase Company Common Stock. Please complete and return this questionnaire to Kelley, Drye & Warren LLP, the
Company’s legal counsel, to the attention of Carol Weiss Sherman either by mail to 101 Park Avenue, New York, New
York 10178 or by fax to (212) 808-7897 or by email to csherman@kelleydrye.com. Please return the questionnaire by [•],
or sooner, if possible. Call Carol Weiss Sherman at 212-808-5038 with questions.


 


FAILURE TO RETURN THE QUESTIONNAIRE
MAY RESULT IN THE EXCLUSION OF YOUR NAME AND SHARES FROM THE REGISTRATION STATEMENT.


 


Please answer all questions.
If the answer to any question is “None” or “Not Applicable,” please so state.


 


If there is any question
about which you have any doubt, please set forth the relevant facts in your answer.


 





		1.	Please correct your name and/or address if not correct below



  


	 	Name:	 


 


	 	Address:	 
	 	 	 
	 	 	 


 





 






*See
Appendix A for definitions


  




     


     


    

 


		2.	Please state the total number of currently outstanding
shares of Company Common Stock that you beneficially own* and the form of ownership and the date that you acquired such stock.
Include shares registered in your name individually or jointly with others and shares held in the name of a bank, broker, nominee,
depository or in “street name” for your account. (DO NOT list options, warrants or other derivative securities. See
Question #3).



 


		3.	Please list any outstanding options and warrants to purchase
Company Common Stock or other derivative securities to acquire Company Common Stock that you beneficially own*, including (i)
the number of shares of Company Common Stock to be issued upon the exercise of such option or warrant, (ii) the date such option
or warrant is exercisable, (iii) the expiration date and (iv) the exercise price per share of EACH such option and warrant.



 


	Number of Shares
 Covered by Option or
 Warrant	 	Date Exercisable	 	 	Exercise Price	 	 	Expiration Date	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 



 


		4.	Please list the number of shares of Common Stock listed
under Question #2 above that you wish to include in the Registration Statement.



 





 






*See
Appendix A for definitions


 





     


     


    

 


		5.	Please list the number of shares of Common Stock underlying
warrants (to the extent such shares constitute Registrable Securities) listed under Question #3 above that, upon exercise of such
warrants, you wish to include in the Registration Statement.



 


		6.	If you are a limited liability company or limited partnership,
please name the managing member or general partner and each person controlling such managing member or general partner.



 


		7.	If you are an entity, please identify the natural person(s)
who exercises sole or shared voting power* and/or sole or shared investment power* with regard to the shares listed under Question
#2 and Question #3.



 


		8.	Please advise whether you are a registered broker-dealer
or an affiliate* thereof. If you are an affiliate of a registered broker-dealer, please explain the nature of the affiliation
and disclose whether you acquired the shares in the ordinary course of business and whether at the time of the acquisition you
had any plans or proposals, directly or with any other person, to distribute the shares listed under Question #2 and Question
#3.



 


		9.	List below the nature of any position, office or other
material relationship that you have, or have had within the past three years, with the Company or any of its predecessors or affiliates*.



 





 






*See
Appendix A for definitions


 





     


     


    

 


		10.	If you expressly wish to disclaim any beneficial ownership*
of any shares listed under Question #2 for any reason in the Registration Statement, indicate below the shares and circumstances
for disclaiming such beneficial ownership*.



 


		11.	With respect to the shares that you wish to include in
the Registration Statement, please list any party that has or may have secured a lien, security interest or any other claim relating
to such shares, and please give a full description of such claims.



 


		12.	Please review Appendix B “Plan of Distribution.”
Please identify and describe any method of distribution, other than described in Appendix B, that you plan on using to sell your
shares of the Company’s Common Stock. By signing below you agree to distribute your shares of the Company’s Common
Stock as described in Appendix B and this Item 11 and to notify the Company of any plan to distribute the Company’s
Common Stock that is not described in Appendix B or herein under Item 11.



 


The undersigned, a Selling
Shareholder of the Company, hereby furnishes the foregoing information for use by the Company in connection with the preparation
of the Registration Statement. The undersigned will notify [•], at the address specified above, in writing immediately of
any changes in the foregoing answers that should be made as a result of any developments occurring prior to the time that all the
shares of Common Stock of the Company are sold pursuant to the Registration Statement referred to above. Otherwise, the Company
is to understand that the above information continues to be, to the best of the undersigned’s knowledge, information and
belief, complete and correct.


 


Dated: ___________ __, 20___


 


	 	 
	 	 
	 	By:	 
	 	Name:	 
	 	Its:	 


 


 






*See
Appendix A for definitions


 




     


     


    

 


APPENDIX A

To Exhibit C


Certain
Terms Used in Questionnaire


 


AFFILIATE


 


An “affiliate”
of a company is a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under
common control with, such company.


 


BENEFICIAL OWNERSHIP


 


A person “beneficially
owns” a security if such person, directly or indirectly, has or shares voting power or investment power of such security,
whether through a contract, arrangement, understanding, relationship or otherwise. A person is also the beneficial owner of a security
if he has the right to acquire beneficial ownership at any time within 60 days through the exercise of any option, warrant or right,
or the power to revoke a trust, discretionary account or similar arrangement.


 


INVESTMENT POWER


 


“Investment power”
includes the power to dispose, or to direct the disposition of, a security.


 


VOTING POWER


 


“Voting power”
includes the power to vote, or to direct the voting of, a security.


 




     


     


    

 


APPENDIX B


To
Exhibit C


PLAN OF DISTRIBUTION


 


15.         We
are registering for resale by the selling shareholders and certain transferees a total of _________ shares of common stock, of
which _______ shares are issued and outstanding. We will not receive any of the proceeds from the sale by the selling shareholders
of the shares of common stock. We will bear all fees and expenses incident to our obligation to register the shares of common stock.
If the shares of common stock are sold through broker-dealers or agents, the selling shareholder will be responsible for any compensation
to such broker-dealers or agents.


 


16.         The
selling shareholders may pledge or grant a security interest in some or all of the shares of common stock owned by them and, if
they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the shares of
common stock from time to time pursuant to this prospectus.


 


17.         The
selling shareholders also may transfer and donate the shares of common stock in other circumstances in which case the transferees,
donees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus.


 


18.         The
selling shareholders will sell their shares of common stock subject to the following:


 


		·	all of a portion of the shares of common stock beneficially owned by the selling shareholders or their perspective pledgees,
donees, transferees or successors in interest, may be sold on the OTC Bulletin Board Market, any national securities exchange or
quotation service on which the shares of our common stock may be listed or quoted at the time of sale, in the over-the counter
market, in privately negotiated transactions, through the writing of options, whether such options are listed on an options exchange
or otherwise, short sales or in a combination of such transactions;



 


		·	each sale may be made at market price prevailing at the time of such sale, at negotiated prices, at fixed prices or at carrying
prices determined at the time of sale;



 


		·	some or all of the shares of common stock may be sold through one or more broker-dealers or agents and may involve crosses,
block transactions or hedging transactions. The selling shareholders may enter into hedging transactions with broker-dealers or
agents, which may in turn engage in short sales of the common stock in the course of hedging in positions they assume. The selling
shareholders may also sell shares of common stock short and deliver shares of common stock to close out short positions or loan
or pledge shares of common stock to broker-dealers or agents that in turn may sell such shares;



 


		·	in connection with such sales through one or more broker-dealers or agents, such broker-dealers or agents may receive compensation
in the form of discounts, concessions or commissions from the selling shareholders and may receive commissions from the purchasers
of the shares of common stock for whom they act as broker-dealer or agent or to whom they sell as principal (which discounts, concessions
or commissions as to particular broker-dealers or agents may be in excess of those customary in the types of transaction involved).
Any broker-dealer or agent participating in any such sale may be deemed to be an “underwriter” within the meaning of
the Securities Act and will be required to deliver a copy of this prospectus to any person who purchases any share of common stock
from or through such broker-dealer or agent. We have been advised that, as of the date hereof, none of the selling shareholders
have made any arrangements with any broker-dealer or agent for the sale of their shares of common stock; and



 




     


     


    

 


		·	in connection with any other sales or transfers of common stock not prohibited
by law.



 


19.         The
selling shareholder and any broker-dealer participating in the distribution of the shares of common stock may be deemed to be “underwriters”
within the meaning of the Securities Act, and any profits realized by the selling shareholders and any commissions paid, or any
discounts or concessions allowed to any such broker-dealer may be deemed to be underwriting commissions or discounts under the
Securities Act. In addition, any shares of common stock covered by this prospectus which qualify for sale pursuant to Rule 144
may be sold under Rule 144 rather than pursuant to this prospectus. A selling shareholder may also transfer, devise or gift the
shares of common stock by other means not covered in this prospectus in which case the transferee, devisee or giftee will be the
selling shareholder under this prospectus.


 


20.         If
required at the time a particular offering of the shares of common stock is made, a prospectus supplement or, if appropriate, a
post-effective amendment to the shelf registration statements of which this prospectus is a part, will be distributed which will
set forth the aggregate amount of shares of common stock being offered and the terms of the offering, including the name or names
of any broker-deals or agents, any discounts, commissions or concessions allowed or reallowed or paid to broker-dealers.


 


21.         Under
the securities laws of some states, the shares of common stock may be sold in such states only through registered or licensed brokers
or dealers. In addition, in some states the shares of common stock may not be sold unless such shares have been registered or qualified
for sale in such state or an exemption from registration or qualification is available and is complied with. There can be no assurance
that any selling shareholder will sell any or all of the shares of common stock registered pursuant to the shelf registration statement,
of which this prospectus forms a part.


 


22.         The
selling shareholders and any other person participating in such distribution will be subject to applicable provisions of the Exchange
Act and the rules and regulations thereunder, including, without limitation, Regulation M of the Exchange Act, which may limit
the timing of purchases and sales of any of the shares of common stock by the selling shareholders and any other participating
person. Regulation M may also restrict the ability of any person engaged in the distribution of the shares of common stock to engage
in market-making activities with respect to the shares of common stock. All of the foregoing may affect the marketability of the
shares of common stock and the ability of any person or entity to engage in market-making activities with respect to the shares
of common stock.


 


We will bear all expenses of the registration
of the shares of common stock including, without limitation, Securities and Exchange Commission filing fees and expenses of compliance
with the state securities of “blue sky” laws. The selling shareholders will pay all underwriting discounts and selling
commissions and expenses, brokerage fees and transfer taxes, as well as the fees and disbursements of counsel to and experts for
the selling shareholders, if any. We will indemnify the selling shareholders against liabilities, including some liabilities under
the Securities Act, in accordance with the registration rights agreement or the selling shareholder will be entitled to contribution.
We will be indemnified by the selling shareholders against civil liabilities, including liabilities under the Securities Act that
may arise from any written information furnished to us by the selling shareholders for use in this prospectus, in accordance with
the related securities purchase agreement or will be entitled to contribution. Once sold under this shelf registration statement,
of which this prospectus forms a part, the shares of common stock will be freely tradable in the hands of persons other than our
affiliates.