MV Portfolios, INC. 8-K


 


Exhibit 10.1


  


SECURITIES
PURCHASE AGREEMENT


 


This
Securities Purchase Agreement (this “Agreement”) is dated as of November ___, 2016, between MV Portfolios,
Inc., a Nevada corporation (the “Company”), and each purchaser identified on the signature pages hereto (each,
including its successors and permitted assigns, a “Purchaser” and collectively, the “Purchasers”).


 


PREAMBLE


 


WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933,
as amended (the “Securities Act”), and Rule 506 promulgated thereunder, the Company desires to issue and sell
to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company
as more fully described in this Agreement (the “Offering”).


 


NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:


 


ARTICLE
I.


DEFINITIONS


 


1.1         Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following
terms have the meanings set forth in this Section 1.1:


 


“Accredited
Investor” shall have the meaning ascribed to it in Section 3.2(c).


 


“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.17.


 


“Action”
shall have the meaning ascribed to such term in Section 3.1(j).


 


“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.


 


“Beneficial
Ownership Limitation” shall have the meaning ascribed to such term in Section 4.21.


 


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


 


“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized or required by law or other governmental action
to close.


 


“Buy-In”
shall have the meaning ascribed to such term in Section 4.1(h).


 


“Closing”
means the Closing of the purchase and sale of the Securities pursuant to Section 2.1.


 






    


     


    

 


“Closing
Date” means the Closing Date and is the Trading Day on which all of the Transaction Documents have been executed and
delivered by the applicable parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the
Subscription Amount at such Closing and (ii) the Company’s obligations to deliver the Securities to be issued and sold at
such Closing, in each case, have been satisfied or waived, but in no event later than the third Trading Day following the date
hereof in the case of the Closing.


 


“Commission”
means the United States Securities and Exchange Commission.


 


“Common
Stock” means the common stock of the Company, $0.001 par value, and any other class of securities into which such securities
may hereafter be reclassified or changed.


 


“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to
acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument
that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive,
Common Stock.


 


“Company
Counsel” means Schiff Hardin LLP, 100 N. 18th Street, Suite 300, Philadelphia, PA 19103, Attn: Cavas S. Pavri,
Esq., facsimile: (202) 778-6460.


 


“Current
Financial Statements” shall have the meaning ascribed to such term in Section 3.1(i).


 


“Disclosure
Schedules” shall have the meaning ascribed to such term in Section 3.1.


 


“Disqualification
Event” shall have the meaning ascribed to such term in Section 3.1(nn).


 


“Effective
Date” means the earliest of the date that (a) a Registration Statement has been declared effective by the Commission,
or (b) all of the Shares have been sold pursuant to Rule 144 or may be sold pursuant to Rule 144 without the requirement for the
Company to be in compliance with the current public information required under Rule 144 and without volume or manner-of-sale restrictions
and Company counsel has delivered to the Transfer Agent and holders a standing written unqualified opinion that resales may then
be made by such holders of the Shares pursuant to such exemption which opinion shall be in form and substance reasonably acceptable
to such holders.


 


“End
Date” shall have the meaning ascribed to such term in Section 4.19(a).


 


“Escrow
Agent” means G&M.


 


“Escrow
Agreement” means the escrow agreement entered into at or about the date hereof, by and among the Company, the Escrow
Agent and the Purchasers pursuant to which the Purchasers shall deposit Subscription Amounts with the Escrow Agent to be applied
to the transactions contemplated hereunder. The form of Escrow Agreement is annexed hereto as Exhibit B.


 


“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.


 






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“Exempt
Issuance” means the issuance of (a) shares of Common Stock and options to officers, employees, or directors of the Company
issued pursuant to plans that have been approved by a majority of the stockholders and a majority of the board of directors of
the Company not in excess of the amounts set forth on Schedule 3.1(jj) and at a purchase price per share of Common Stock
higher than the Per Share Purchase Price, (b) securities upon the exercise or exchange of or conversion of any Securities issued
hereunder (subject to adjustment for forward and reverse stock splits and the like that occur after the date hereof) and/or other
securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this
Agreement, provided that such securities and any term thereof have not been amended since the date of this Agreement to increase
the number of such securities or to decrease the issue price, exercise price, exchange price or conversion price of such securities
and which securities and the principal terms thereof are set forth on Schedule 3.1(g), (c) full or partial consideration
in connection with a strategic merger, acquisition, consolidation or purchase of substantially all of the securities or assets
of a corporation or other entity which holders of such securities or debt are not at any time granted any registration rights
but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or
to an entity whose primary business is investing in securities, (d) securities in connection with strategic license agreements
and other partnering arrangements so long as such issuances are not primarily for the purpose of raising capital and which holders
of such securities or debt are not at any time granted registration rights, (e) as set forth on Schedule 3.1(g) under the
heading “Proposed Exempt Issuances”, (f) Common Stock and Common Stock Equivalents issuable to investors in a Material
Offering; (g) Additional Shares, and (h) with respect to any Purchaser that participates in a Subsequent Financing, the Subsequent
Financing.


 


“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.


 


“Filing
Compliance Default” shall have the meaning ascribed to such term in Section 4.2(a).


 


“Final
Date” means the later of the time (i) the Warrants are no longer outstanding, or (ii) two years after the Reporting
Compliance Date.


 


“GAAP”
shall have the meaning ascribed to such term in Section 3.1(h).


 


“G&M”
means Grushko & Mittman, P.C., 515 Rockaway Avenue, Valley Stream, New York 11581, facsimile: (212) 697-3575.


 


“Indebtedness”
shall have the meaning ascribed to such term in Section 3.1(aa).


 


“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(o).


 


“Issuer
Covered Person” shall have the meaning ascribed to such term in Section 3.1(nn).


 


“Legend
Removal Date” shall have the meaning ascribed to such term in Section 4.1(d).


 


“Lien”
means a lien, charge pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.


 


“Listing
Default” shall have the meaning ascribed to such term in Section 4.9.


 


“Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).


 






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“Material
Offering” shall have the meaning ascribed to such term in Section 4.19(a).


 


“Material
Permits” shall have the meaning ascribed to such term in Section 3.1(m).


 


“Maximum
Rate” shall have the meaning ascribed to such term in Section 5.21.


 


“Money
Laundering Laws” shall have the meaning ascribed to such term in Section 3.1(r).


 


“OFAC”
shall have the meaning ascribed to such term in Section 3.1(kk).


 


“Offering”
shall have the meaning ascribed to such term in the Preamble.


 


“Outstanding
Reports” shall have the meaning ascribed to such term in Section 3.1(h).


 


“Permitted
Indebtedness” means capital lease obligations and purchase money indebtedness incurred in connection with the acquisition
of capital assets and lease obligations with respect to newly acquired or leased assets but not more than the lesser of the actual
purchase price or resale value of such acquired assets.


 


“Permitted
Lien” means the individual and collective reference to the following: (A) Liens for taxes, assessments and other governmental
charges or levies not yet due or Liens for taxes, assessments and other governmental charges or levies being contested in good
faith and by appropriate proceedings for which adequate reserves (in the reasonable judgment of the management of the Company)
have been established in accordance with GAAP, (B) Liens imposed by law which were incurred in the ordinary course of the Company’s
business, such as carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and other
similar Liens arising in the ordinary course of the Company’s business, and which (x) do not individually or in the aggregate
materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business
of the Company and its Subsidiaries, or (y) are being contested in good faith by appropriate proceedings, which proceedings have
the effect of preventing for the foreseeable future the forfeiture or sale of the property or asset subject to such Lien, (C)
Liens incurred prior to or subsequent to the Closing Date in connection with Permitted Indebtedness; and (D) the judgment lien
set forth on Schedule 1.


 


“Per
Share Purchase Price” equals $0.02, subject to appropriate adjustment for reverse and forward stock splits, stock dividends,
stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.


 


“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.


 


“Pre-Notice”
shall have the meaning ascribed to such term in Section 4.12(b).


 


“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or threatened.


 


“Pro-Rata
Portion” shall have the meaning ascribed to such term in Section 4.12(e).


 






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“Public
Information Failure” shall have the meaning ascribed to such term in Section 4.2(b).


 


“Public
Information Failure Payments” shall have the meaning ascribed to such term in Section 4.2(b).


 


“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.7.


 


“Registration
Statement” means a registration statement declared effective by the Commission allowing the public resale of not less
than all of the Shares by the Purchaser, at the time such registration statement is effective and the prospectus contained therein
is current.


 


“Removal
Date” means the date that all of the issued Shares and Warrant Shares have been sold pursuant to Rule 144 or may be
sold by non-affiliates pursuant to Rule 144 without the requirement for the Company to be in compliance with the current public
information requirements under Rule 144 and without volume or manner-of-sale restrictions.


 


“Reporting
Compliance Date” shall have the meaning ascribed to such term in Section 4.2(a).


 


“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).


 


“Reverse
Split” shall have the meaning ascribed to such term in Section 4.23.


 


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


 


“Rule
506 Bad Actor Questionnaire” means the form annexed hereto as Exhibit E.


 


“Sale
Event” means a Fundamental Transaction as defined in the Warrant that results in the Company’s shareholders at
the time of the Fundamental Transaction receiving cash consideration per share of Common Stock held by them of at least $0.10
(subject to adjustment for stock splits, stock dividends and similar events) and the compliance by the Company with Section 3
of the Warrants with respect to such Fundamental Transaction.


 


“SEC
Reports” shall mean all reports, schedules, forms, statements and other documents filed by the Company under the Securities
Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the three (3) years preceding the date hereof,
including the exhibits thereto and documents incorporated by reference therein.


 


“Securities”
means the Shares, the Warrants and the Warrant Shares.


 


“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.


 


“Securities
Laws” means the securities laws of the United States or any state thereof and the rules and regulations promulgated
thereunder.


 


“Share
Purchase Price” shall have the meaning ascribed to such term in Section 2.1.


 






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“Shares”
means the shares of Common Stock issued or issuable to each Purchaser pursuant to this Agreement, including subsequent to the
Closing, Common Stock issuable by virtue of the Common Stock acquired in the Offering, provided that any such share of Common
Stock shall not constitute a Share after such share has been irrevocably sold pursuant to a Registration Statement or pursuant
to Rule 144 without restrictive legends or further restrictions or conditions to transfer pursuant to Rule 144.


 


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


 


“Stock
Option Plan” means the Stock Option Plan of the Company in effect as the date of this Agreement, the principal terms
of which have been disclosed in the SEC Reports.


 


“Subscription
Amount” means, as to each Purchaser at the Closing, the aggregate amount of cash consideration to be paid for Shares
and Warrants purchased hereunder at the Closing as specified below such Purchaser’s name on the signature page of this Agreement
and next to the heading “Total Subscription Amount,” in United States dollars and in immediately available funds.


 


“Subsequent
Financing” shall have the meaning ascribed to such term in Section 4.12(a).


 


“Subsequent
Financing Notice” shall have the meaning ascribed to such term in Section 4.12(b).


 


“Subsidiary”
means any subsidiary of the Company as set forth on Schedule 3.1(a) and shall, where applicable and with regard to future events,
also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.


 


“Termination
Date” shall have the meaning ascribed to such term in Section 2.1(a).


 


“Trading
Day” means a day on which the principal Trading Market is open for trading; provided, that in the event that the Common
Stock is not listed or quoted for trading on a Trading Market on the date in question, then Trading Day shall mean a Business
Day.


 


“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the
New York Stock Exchange, the OTC Bulletin Board, the OTCQB, the OTCQX, or the OTC Pink Marketplace maintained by the OTC Markets
Group, Inc. (or any successors to any of the foregoing).


 


“Transaction
Documents” means this Agreement, the Shares, the Warrants, the Escrow Agreement, all exhibits and schedules thereto
and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.


 


“Transfer
Agent” means Equity Stock Transfer, and any successor transfer agent of the Company.


 


“Variable
Priced Equity Linked Instruments” shall have the meaning ascribed to such term in Section 4.19(b).


 






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“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.19(b).


 


“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based
on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), or (b) the fair market value of a share
of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest of
the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the
Company.


 


“Warrants”
means, collectively, the Common Stock purchase warrants delivered to the Purchasers at any Closing in the form of Exhibit A
attached hereto and upon the required issuance thereof, the Additional Warrants.


 


“Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Warrants, provided that any share of Common Stock
issued upon exercise of the Warrants shall not constitute an issued Warrant Share for purposes of this Agreement after such share
has been irrevocably sold pursuant to a Registration Statement or pursuant to Rule 144 without further restrictions or conditions
to transfer pursuant to Rule 144.


 


ARTICLE
II.


PURCHASE
AND SALE


 


2.1          Closing. On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with
the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and each of the Purchasers, severally
and not jointly, agrees to purchase Shares and Warrants for an aggregate purchase price of $621,000 (“Share Purchase
Price”), (each such purchase and sale being a “Closing”). Prior to the Closing, each Purchaser shall
deliver to the Escrow Agent, inter alia, such Purchaser’s Subscription Amount as set forth on the signature page
hereto executed by such Purchaser by a wire transfer of immediately available funds, such amount to be held in a non-interest-bearing
escrow account, and the Company shall, on or before the Closing Date, deliver to the Escrow Agent, inter alia, a certificate
representing the number of Shares and Warrants purchased by each such Purchaser at the Closing as determined pursuant to Section
2.2(a). The Company and each Purchaser shall also deliver the other items set forth in Section 2.2 deliverable at the Closing.
Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of
G&M or such other location as the parties shall mutually agree. Notwithstanding anything herein to the contrary, the final
Closing Date shall be as of the date the aggregate Share Purchase Price of $621,000 has been released from escrow to or for the
benefit of the Company (such date, the “Termination Date”). With respect to all provisions of the Transaction
Documents dependent on a time period calculated from or in relation to a Closing Date, the final Closing Date shall be the Closing
Date for such calculations, unless the context requires otherwise. With respect to any Closing not held on or before the Termination
Date, the Escrow Agent shall cause (i) all subscription documents executed by the Company or a Purchaser to be returned to the
Company or such Purchaser, as applicable, and (ii) each Subscription Amount to be returned, without interest or deduction to the
Purchaser who delivered such Subscription Amount.


 






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NO
MINIMUM NUMBER OF SHARES AND WARRANTS MUST BE SOLD IN ORDER FOR THE COMPANY TO ACCEPT ANY SUBSCRIPTIONS, AND ALL NET PROCEEDS
OF THE OFFERING WILL BE IMMEDIATELY AVAILABLE FOR COMPANY PURPOSES. 


 


2.2            Deliveries.


 


(a)            On or prior to the Closing Date, the Company shall deliver or cause to be delivered to the Escrow Agent the following:


 


(i)          this Agreement, and the Escrow Agreement duly executed by the Company;


 


(ii)         legal opinion of Company Counsel substantially in the form of Exhibit C attached hereto;


 


(iii)        a certificate evidencing a number of Shares of Common Stock equal to such Purchaser’s portion of the Share Purchase Price
divided by the Per Share Purchase Price registered in the name of such Purchaser;


 


(iv)        Warrants registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal to fifty percent
(50%) of such Purchaser’s Shares calculated pursuant to clause (iii) above, with an initial exercise price equal to three
hundred percent (300%) of the Per Share Purchase Price, subject to adjustment therein;


 


(v)         The
Company shall have delivered a certificate, executed on behalf of the Company by its Chief Executive Officer or its Chief Financial
Officer, dated as of the Closing Date, certifying to the fulfillment of the conditions specified in Sections 2.3(b);


 


(vi)        The
Company shall have delivered a certificate, executed on behalf of the Company by its Secretary, dated as of the Closing Date,
certifying the resolutions adopted by the Board of Directors of the Company approving the transactions contemplated by this Agreement
and the other Transaction Documents and the issuance of the Securities, certifying the current versions of the Articles of Incorporation
and Bylaws of the Company and certifying as to the signatures and authority of persons signing the Transaction Documents and related
documents on behalf of the Company; and


 


(vii)       A
completed and signed Rule 506 Bad Actor Questionnaire for each of its officers and directors as of the date of this Agreement
and the Closing Date.


 


(b)            On or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Escrow Agent the following:


 


(i)          this Agreement, and the Escrow Agreement each duly executed by such Purchaser; and


 


(ii)         such Purchaser’s Subscription Amount by wire transfer to the account specified in the Escrow Agreement.


 






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(c)             Anything
to the contrary herein notwithstanding, any Purchaser may elect to bypass the escrow arrangement described herein and arrange
for its Closing directly with the Company without employing the Escrow Agent as an intermediary.


 


2.3            Closing Conditions.


 


(a)             The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:


 


(i)          the accuracy in all material respects (determined without regard to any materiality, Material Adverse Effect or other similar
qualifiers therein) when made and on the Closing Date of the representations and warranties of the Purchasers contained herein
(unless as of a specific date therein in which case they shall be accurate as of such date);


 


(ii)         all obligations, covenants and agreements of each Purchaser under this Agreement required to be performed at or prior to the Closing
Date shall have been performed in all material respects;


 


(iii)        the delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement;


 


(iv)       the Escrow Agent shall have received executed signature pages to this Agreement and the Escrow Agreement from at least one Purchaser
showing an agreement to purchase Shares and Warrants hereunder and the Escrow Agent shall have received the corresponding Subscription
Amount from such Purchaser, in cash.


 


(b)             The
respective obligations of a Purchaser hereunder in connection with the Closing, unless waived by such Purchaser, are subject to
the following conditions being met:


 


(i)          the accuracy in all material respects (determined without regard to any materiality, Material Adverse Effect or other similar
qualifiers therein) when made and on the Closing Date of the representations and warranties of the Company contained herein (unless
as of a specific date therein in which case they shall be accurate as of such date);


 


(ii)         all Required Approvals, obligations, covenants and agreements of the Company under this Agreement required to be performed at
or prior to the Closing Date shall have been performed;


 


(iii)        the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;


 


(iv)        there shall have been no Material Adverse Effect with respect to the Company since the date hereof;


 






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(v)         from
the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or the Company’s
principal Trading Market and, at any time from the date hereof prior to the Closing Date, trading in securities generally as reported
by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose
trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the
United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or
other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial
market which, in each case, in the reasonable judgment of such Purchaser, makes it impracticable or inadvisable to purchase the
Securities at the Closing; and


 


(vi)        the Escrow Agent shall have received executed signature pages to this Agreement from at least one Purchaser showing an agreement
to purchase Shares and Warrants hereunder and the Escrow Agent shall have received the corresponding Subscription Amount from
such Purchaser in cash.


 


2.4              Purchaser’s
Right To Terminate. Anything in any of the Transaction Documents to the contrary notwithstanding, each Purchaser has the right
to demand and receive from the Escrow Agent such Purchaser’s Subscription Amount at any time until a Closing takes place
in connection with such Subscription Amount. The Company and each Purchaser acknowledges that the Escrow Agent is acting as agent
and representative for the Purchaser with respect to the Purchaser’s Subscription Amount and at no time is or will be holding
any funds on behalf of Palladium Capital Advisors LLC nor on behalf of the Company until a Closing actually occurs. UNDER NO CIRCUMSTANCES
WILL THE PURCHASER’S SUBSCRIPTION AMOUNT BE DELIVERED TO OR UNDER THE CONTROL OR AUTHORITY OF ANY PLACEMENT AGENT OR BROKER
INCLUDING BUT NOT LIMITED TO PALLADIUM CAPITAL ADVISORS LLC.


 


ARTICLE
III.


REPRESENTATIONS
AND WARRANTIES


 


3.1            Representations and Warranties of the Company. Except as set forth in the Disclosure Schedules, which Disclosure Schedules
shall be deemed a part hereof, the Company hereby makes the following representations and warranties to each Purchaser as of the
Closing Date:


 


(a)             Subsidiaries. All of the direct and indirect Subsidiaries of the Company are set forth on Schedule 3.1(a). The Company
owns, directly or indirectly, the capital stock or other equity interests of each Subsidiary set forth on Schedule 3.1(a) free
and clear of any Liens, other than Permitted Liens, subject to restrictions under applicable laws, and all of the issued and outstanding
shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar
rights to subscribe for or purchase securities. The Company has no equity interest nor the right to acquire an equity interest
in any other Person except for the Subsidiaries. Schedule 3.1(a) will set forth the relationships between the Subsidiaries
and the management of the Company.


 


(b)            Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized,
validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite
power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the
Company nor any Subsidiary is in violation or default of any of the provisions of its respective certificate or articles of incorporation,
bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business
and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity
or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business,
prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse
effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction
Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding has been instituted in
any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.


 






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


 


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


 


(e)             Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of,
give any notice to, or make any filing or registration with, any court or other provincial or foreign or domestic federal, state,
local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company
of the Transaction Documents, other than: (i) the filings required pursuant to Section 4.4 of this Agreement, (ii) the notice
and/or application(s) to each applicable Trading Market for the issuance and sale of the Securities and the listing of the Shares
and Warrant Shares for trading thereon in the time and manner required thereby, all of which shall have been effectuated prior
to the Closing, and (iii) the filing of a Form D with the Commission (collectively, the “Required Approvals”).


 






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(f)             Issuance of the Securities. The Securities are duly authorized and, when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens other than restrictions
on transfer provided for in the Transaction Documents and Liens resulting from the activities of any Purchaser. The Company has
reserved from its duly authorized capital stock the maximum stated number of shares of Common Stock issuable as of the Closing
Date pursuant to this Agreement and the Warrants.


 


(g)             Capitalization. The capitalization of the Company is as set forth in Schedule 3.1(g). Except as set forth on Schedule
3.1(g), the Company has not issued any capital stock since its most recently filed periodic report under the Exchange Act.
Schedule 3.1(g) sets forth the voting terms of the newly issued preferred stock to be issued to the Company’s management.
No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the
transactions contemplated by the Transaction Documents. Except as disclosed on Schedule 3.1(g), there are no outstanding
Common Stock Equivalents, options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating
to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to
subscribe for or acquire any shares of Common Stock, or material contracts, commitments, understandings or arrangements by which
the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents. Except
as set forth on Schedule 3.1(g), the issuance and sale of the Securities will not obligate the Company or any Subsidiary
to issue shares of Common Stock or other securities to any Person (other than the Purchasers) and will not result in a right of
any holder of Company or Subsidiary securities to adjust the exercise, conversion, exchange or reset price under any of such securities.
All of the outstanding shares of capital stock of the Company and each Subsidiary are duly authorized, validly issued, fully paid
and nonassessable, have been issued in material compliance with all federal and state securities laws, and none of such outstanding
shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further
approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities.
Except as set forth in Schedule 3.1(g), there are no stockholders agreements, voting agreements or other similar agreements
with respect to the Company’s or any Subsidiary’s capital stock to which the Company is a party or, to the knowledge
of the Company, between or among any of the Company’s or Subsidiary’s stockholders.


 


(h)             Financial Statements. Except as set forth on Schedule 3.1(h) (the “Outstanding Reports”), the
Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the
Securities Act and the Exchange Act, including pursuant to Section 12(g), 13(a) or 15(d) thereof, for the three (3) years preceding
the date hereof on a timely basis or has received a valid extension of such time of filing and has filed all such SEC Reports
prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects
with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained
any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Form 8-K described
in Section 4.4, upon its filing, will comply in all material respects with the requirements of the Securities Act and the Exchange
Act, as applicable, and will not contain any untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were
made, not misleading. The latest audited financial statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect
at the time of filing. Such audited financial statements have been prepared in accordance with United States generally accepted
accounting principles (“GAAP”) applied on a consistent basis during the periods involved, except as may be
otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements included
in the SEC Reports may not contain all footnotes required by GAAP and are subject to normal, immaterial, year-end audit adjustments,
and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and
for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal, immaterial, year-end audit adjustments.


 






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(i)             Current Financial Statements. Annexed hereto as Exhibit F are the unaudited balance sheets, and the related unaudited
statements of income or operations and cash flows for each of the Company and each Subsidiary, and of the Company together with
the Subsidiaries on a consolidated basis, for the periods stated therein (the “Current Financial Statements”).
The Current Financial Statements fairly present in all material respects the financial condition and operating results of the
Company and Subsidiaries as of the dates, and for the periods, indicated therein, subject to normal year-end audit adjustments.
Since the date of the latest balance sheet included within the Current Financial Statements, except as specifically disclosed
on Schedule 3.1(i): (i) there has been no event, occurrence or development that has had or that could reasonably be expected
to result in a Material Adverse Effect, (ii) the Company and any Subsidiary have not incurred any liabilities (contingent or otherwise)
other than (A) trade payables, and accrued expenses incurred in the ordinary course of business consistent with past practice,
(B) transaction expenses incurred in connection with the Transaction Documents, and (C) liabilities not required to be reflected
in the Company’s consolidated financial statements pursuant to GAAP or otherwise disclosed in filings made with the Commission,
(iii) the Company and each Subsidiary have not altered their method of accounting, (iv) the Company and each Subsidiary have not
declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any
agreements to purchase or redeem any shares of its capital stock, and (v) the Company and each Subsidiary have not issued any
equity securities to any officer, director, Affiliate or any other Person. The Company does not have pending before the Commission
any request for confidential treatment of information.


 


(j)             Litigation. Except as set forth on Schedule 3.1(j), there is no action, suit, inquiry, notice of violation, proceeding
or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any
of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an “Action”) that would, if there were an unfavorable decision,
have or reasonably be expected to result in a Material Adverse Effect, nor to the knowledge of the Company is there any reasonable
basis for any such Action that would, if there were an unfavorable decision, have or reasonably be expected to result in a Material
Adverse Effect. Neither the Company nor any Subsidiary, nor, to the Company’s knowledge, any director or officer thereof,
is or has been the subject of any Action involving a claim of violation of or liability under Securities Laws or a claim of breach
of fiduciary duty. Except as set forth on Schedule 3.1(j), there has not been, and to the knowledge of the Company, there is not
pending or contemplated, any investigation by the Commission involving the Company or, to the knowledge of the Company, any current
or former director or officer of the Company, nor any current or former officer, director, control person, principal shareholder,
or creditor with respect to the relationship of any of the foregoing to the Company, nor to the knowledge of the Company is there
any reasonable basis for any of the foregoing. The Commission has not issued any stop order or other order suspending the effectiveness
of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.


 






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(k)             Labor Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees
of the Company or any Subsidiary, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s
or its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company
or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the
Company and its Subsidiaries believe that their relationships with their employees are good. To the knowledge of the Company,
no executive officer of the Company or any Subsidiary, is, or is now expected by the Company to be, in violation of any material
term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement,
or any other contract or agreement or any restrictive covenant in favor of any third party, which could reasonably be expected
to result in a Material Adverse Effect and the continued employment of each such executive officer does not subject the Company
or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are
in compliance with all applicable U.S. federal, state, local and foreign laws and regulations relating to employment and employment
practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.


 


(l)              Compliance. Neither the Company nor any Subsidiary, except as set forth in Schedule 3.1(j): (i) is in default under or
in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in
a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is
in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to
which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived),
(ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) except
with respect to the Outstanding Reports, is or has been in violation of any statute, rule, ordinance or regulation of any governmental
authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection,
occupational health and safety, product quality and safety and employment and labor matters, except in each case as could not
have or reasonably be expected to result in a Material Adverse Effect.


 


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


 






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(n)             Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned
by them and good and marketable title in all personal property owned by them that is material to the business of the Company and
the Subsidiaries, in each case free and clear of all Liens, except for Permitted Liens. Any real property and facilities held
under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the
Company and the Subsidiaries are in compliance, except where the non-compliance would not reasonably be expected to result in
a Material Adverse Effect.


 


(o)            Intellectual
Property.


 


(i)          The
term “Intellectual Property Rights” includes:


 


		1.	the
                                         name of the Company and each Subsidiary, all fictional business names, trading names,
                                         registered and unregistered trademarks, service marks, and applications (collectively,
                                         “Marks”);






		2.	all
                                         patents, patent applications, and inventions and discoveries that may be patentable (collectively,
                                         “Patents”);






		3.	all
                                         copyrights in both published works and unpublished works (collectively, “Copyrights”);






		4.	all
                                         rights in mask works (collectively, “Rights in Mask Works”);
                                         and






		5.	all
                                         know-how, trade secrets, confidential information, customer lists, software, technical
                                         information, data, process technology, plans, drawings, and blue prints (collectively,
                                         “Trade Secrets”); owned, used, or licensed by the Company as
                                         licensee or licensor.






(ii)         Agreements.
Schedule 3.1(o) contains a complete and accurate list of all contracts relating to the Intellectual Property Rights to
which the Company and each Subsidiary is a party or by which the Company and each Subsidiary is bound, except for any license
implied by the sale of a product and perpetual, paid-up licenses for commonly available software programs with a value of less
than $10,000 under which the Company and each Subsidiary is the licensee. There are no outstanding and, to Company’s knowledge,
no threatened disputes or disagreements with respect to any such agreement.


 


(iii)        Know-How
Necessary for the Business. To the Company’s knowledge: the Intellectual Property Rights are all those necessary for
the operation of the Company’s and each Subsidiary’s businesses as it is currently conducted or as represented, in
writing, to the Purchasers to be conducted. To the Company’s knowledge: the Company and each Subsidiary is the owner of
all right, title, and interest in and to each of the Intellectual Property Rights, free and clear of all liens, security interests,
charges, encumbrances, equities, and other adverse claims, and has the right to use all of the Intellectual Property Rights, subject
in each case to Permitted Liens. To the Company’s knowledge, no employee of the Company and each Subsidiary has entered
into any contract that restricts or limits in any way the scope or type of work in which the employee may be engaged or requires
the employee to transfer, assign, or disclose information concerning his work to anyone other than of the Company and each Subsidiary.


 



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(iv)        Know-How
Necessary for the Business. Schedule 3.1(o) contains a complete and accurate list of all Patents. The Company is the
owner of all right, title and interest in and to each of the Patents, free and clear of all Liens and other adverse claims other
than Permitted Liens. All of the issued Patents are currently in compliance with formal legal requirements (including payment
of filing, examination, and maintenance fees and proofs of working or use), are valid and enforceable, and, except as set forth
on Schedule 3.1(o), are not subject to any maintenance fees or taxes or actions falling due within one hundred and eighty
(180) days after the Closing Date. No Patent has been or is now involved in any interference, reissue, reexamination, or opposition
proceeding. To the Company’s knowledge: (1) there is no potentially interfering patent or patent application of any third
party, and (2) no Patent is infringed or has been challenged or threatened in any way. To the Company’s knowledge, none
of the products manufactured and sold, nor any process or know-how used, by the Company and each Subsidiary infringes or is alleged
to infringe any patent or other proprietary right of any other Person.


 


(v)         Trademarks.
Schedule 3.1(o) contains a complete and accurate list and summary description of all Marks. The Company and each Subsidiary
is the owner of all right, title, and interest in and to each of the Marks, free and clear of all Liens and other adverse claims
other than Permitted Liens. All Marks that have been registered with the United States Patent and Trademark Office are currently
in compliance with all formal legal requirements (including the timely post-registration filing of affidavits of use and incontestability
and renewal applications), are valid and enforceable, and are not subject to any maintenance fees or taxes or actions falling
due within ninety days after the Closing Date. Except as set forth in Schedule 3.1(o), no Mark has been or is now involved
in any opposition, invalidation, or cancellation and, to the Company’s knowledge, no such action is threatened with respect
to any of the Marks. To the Company’s knowledge: (1) there is no potentially interfering trademark or trademark application
of any third party, and (2) no Mark is infringed or has been challenged or threatened in any way. To the Company’s knowledge,
none of the Marks used by the Company and each Subsidiary infringes or is alleged to infringe any trade name, trademark, or service
mark of any third party.


 


(vi)        Copyrights.
Schedule 3.1(o) contains a complete and accurate list of all Copyrights. The Company is the owner of all right, title,
and interest in and to each of the Copyrights, free and clear of all Liens and other adverse claims other than Permitted Liens.
Except as set forth on Schedule 3.1(o), all the Copyrights have been registered and are currently in compliance with formal
requirements, are valid and enforceable, and are not subject to any maintenance fees or taxes or actions falling due within one
hundred and eighty (180) days after the date of the Closing. No Copyright is infringed or, to the Company’s knowledge, has
been challenged or threatened in any way. To the Company’s knowledge, none of the subject matter of any of the Copyrights
infringes or is alleged to infringe any copyright of any third party or is a derivative work based on the work of a third party.
All works encompassed by the Copyrights have been marked with the proper copyright notice.


 






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(vii)      
Trade Secrets. With respect to each Trade Secret, the documentation relating to such Trade Secret is current, accurate,
and sufficient in detail and content to identify and explain it and to allow its full and proper use without reliance on the knowledge
or memory of any individual. The Company has taken all reasonable precautions to protect the secrecy, confidentiality, and value
of all of the Company’s and Subsidiary’s Trade Secrets. The Company and each Subsidiary has good title and an absolute
(but not necessarily exclusive) right to use the Trade Secrets subject to Permitted Liens. The Trade Secrets are not part of the
public knowledge or literature, and, to the Company’s knowledge, have not been used, divulged, or appropriated either for
the benefit of any Person (other than the Company and each Subsidiary) or to the detriment of the Company and each Subsidiary.
Except as set forth on Schedule 3.1(o), no Trade Secret is subject to any adverse claim or has been challenged or threatened
in any way.


 


(p)            Insurance. The Company and the Subsidiaries do not currently maintain any insurance coverage, including, without limitation,
any directors and officers insurance policy


 


(q)            Transactions With Affiliates and Employees. Except as set forth on Schedule 3.1(q), none of the officers or directors
of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary
is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing
for rental of real or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise
requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which
any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member
or partner, in each case in excess of $60,000 other than for: (i) payment of salary or consulting fees for services rendered,
(ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements
under any stock option plan of the Company except as disclosed on Schedule 3.1(g).


 


(r)             Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance
with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money
Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body
or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge
of the Company or any Subsidiary, threatened, nor is there any reasonable basis for any of the foregoing.


 


(s)             Certain Fees. Except with respect to placement agency fees that are payable to Palladium Capital Advisors LLC, no brokerage,
finder’s fees, commissions or due diligence fees are or will be payable by the Company or any Subsidiary to any broker,
financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions
contemplated by the Transaction Documents except as set forth in Section 5.2 and on Schedule 3.1(s). The Purchasers shall
have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a
type contemplated in this Section 3.1(s) that may be due in connection with the transactions contemplated by the Transaction Documents.
The cash portion of the fee payable to Palladium Capital Advisors LLC shall be applied by Palladium Capital Advisors LLC as payment
of a Subscription Amount, pari passu with the other Purchasers and Palladium Capital Advisors LLC shall be deemed a Purchaser
with respect to such Subscription Amount entitled to all of the benefits and rights of a Purchaser with respect thereto, including
the issuance of Warrants and registration rights.


 






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(t)             Private Placement. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2,
registration under the Securities Act is not required for the offer and sale of the Securities by the Company to the Purchasers
as contemplated hereby. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the
Trading Market.


 


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


 


(v)            Registration Rights. Except as set forth on Schedule 3.1(v), and other than each of the Purchasers, no Person has
any right to cause the Company to effect the registration under the Securities Act of any securities of the Company or any Subsidiary.


 


(w)            Listing and Maintenance Requirements. The Common Stock is listed on the OTC Pink Marketplace maintained by OTC Markets
Group, Inc. under the symbol MVPI.


 


(x)             Application of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in
order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar
charter documents) or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result
of the Purchasers and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including
without limitation as a result of the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities.
For the avoidance of doubt, the Purchasers acknowledge that the issuance to management of newly issued preferred stock as described
in Schedule 3.1(g) with super-voting rights shall not be considered to be an anti-takeover provision.


 


(y)            Disclosure. Commencing on the Reporting Compliance Date, the Company confirms that neither it nor any other Person acting
on its behalf will have provided any of the Purchasers or their agents or counsel with any information that it believes constitutes
or might constitute material, non-public information that has not been publicly disclosed. The Company understands and confirms
that the Purchasers will rely on the foregoing representation in effecting transactions in securities of the Company. All of the
disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company and its Subsidiaries, their respective
businesses and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, taken as a whole is
true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in light of the circumstances under which they were made, not misleading. For the avoidance
of doubt, information disclosed in one section of the Disclosure Schedule shall not be deemed disclosed in any other section of
the Disclosure Schedule unless there is an explicit cross reference to such other section. The Company acknowledges and agrees
that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated hereby other
than those specifically set forth in Section 3.2 hereof.


 






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(z)             No Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section
3.2, neither the Company, nor, to the knowledge of the Company, any of its Affiliates, nor any Person acting on its or, to the
knowledge of the Company, their behalf has, directly or indirectly, made any offers or sales of any security or solicited any
offers to buy any security, under circumstances that would cause this offering of the Securities by the Company to be integrated
with prior offerings by the Company for purposes of (i) the Securities Act which would require the registration of any such securities
under the Securities Act, or (ii) any applicable shareholder approval provisions of any Trading Market on which any of the securities
of the Company are listed or designated.


 


(aa)           Solvency. Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the
receipt by the Company of the aggregate Subscription Amount from all the Purchasers: (i) the fair saleable value of the assets
of the Company and its Subsidiaries taken as a whole exceeds the amount that will be required to be paid on or in respect of the
existing debts and other liabilities (including known contingent liabilities) of the Company and its Subsidiaries as they mature,
(ii) the assets of the Company and its Subsidiaries do not constitute unreasonably small capital to carry on its business as now
conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements
of the business conducted by the Company and its Subsidiaries consolidated and projected capital requirements and capital availability
thereof, and (iii) the current cash flow of the Company and its Subsidiaries together with the proceeds the Company would receive,
were they to liquidate all of their assets, after taking into account all anticipated uses of the cash, would be sufficient to
pay all amounts on or in respect of their liabilities when such amounts are required to be paid. The Company does not intend to
incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable
on or in respect of its debt). The Company has no knowledge of any facts or circumstances which lead it to believe that it will
file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the
Closing Date. The Current Financial Statements set forth all Liens and outstanding secured and unsecured Indebtedness of the Company
or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness”
means (x) any liabilities for borrowed money or amounts owed in excess of $100,000 (other than trade accounts payable incurred
in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness
of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes
thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business; and (z) the present value of any lease payments in excess of $100,000 due under leases required to
be capitalized in accordance with GAAP. Except as set forth in Schedule 3.1(j), 3.1(i) or included in the Current Financial Statements,
the Company is not in default with respect to any Indebtedness.


 


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


 






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(cc)           No General Solicitation. Neither the Company nor, to the knowledge of the Company, any person acting on behalf of the Company
has offered or sold any of the Securities by any form of general solicitation or general advertising. The Company has offered
the Securities for sale only to the Purchasers and certain other “accredited investors” within the meaning of Rule
501 under the Securities Act.


 


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


 


(ee)           Accountants. The Company’s accounting firm and its contact information are set forth on Schedule 3.1(ee) of
the Disclosure Schedules. To the knowledge and belief of the Company, such accounting firm is registered with the Public Company
Accounting Oversight Board, and shall express its opinion with respect to the audited financial statements to be included in the
Company’s Annual Report for the fiscal years ended and ending June 30, 2015, 2016 and 2017.


 


(ff)            No
Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably anticipated
by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and
the Company does not believe outstanding fees owed to its accountants and lawyers could affect the Company’s ability to
perform any of its obligations under any of the Transaction Documents.


 


(gg)           Acknowledgment Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the
Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the
transactions contemplated thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary
of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby
and any advice given by any Purchaser or any of their respective representatives or agents in connection with the Transaction
Documents and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Securities.
The Company further represents to each Purchaser that the Company’s decision to enter into this Agreement and the other
Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company
and its representatives.


 






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(hh)           Acknowledgment Regarding Purchaser’s Trading Activity. Anything in this Agreement or elsewhere herein to the contrary
notwithstanding (except for Section 4.20 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers
has been asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short,
securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities
for any specified term, (ii) past or future open market or other transactions by any Purchaser, specifically including, without
limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private placement
transactions, may negatively impact the market price of the Company’s publicly-traded securities, (iii) any Purchaser, and
counter-parties in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, may presently
have a “short” position in the Common Stock and (iv) each Purchaser shall not be deemed to have any affiliation with
or control over any arm’s length counter-party in any “derivative” transaction. The Company further understands
and acknowledges that (y) one or more Purchasers may engage in hedging activities in accordance with all applicable laws at various
times during the period that the Securities are outstanding, including, without limitation, during the periods that the value
of the Warrant Shares deliverable with respect to Securities are being determined, and (z) such hedging activities (if any) could
reduce the value of the existing stockholders’ equity interests in the Company at and after the time that the hedging activities
are being conducted. The Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of
the Transaction Documents.


 


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


 


(jj)             Stock Option Plans. Except as set forth on Schedule 3.1(jj), as of the date hereof, no stock options have been granted,
nor any commitments made to grant stock options, under the Stock Option Plan, and neither the Company nor any Subsidiary has ever
had an option plan, other than the Stock Option Plan and other stock option plans which were described in the SEC Reports and
are no longer in effect. The Company has not knowingly granted, and there is no and has been no Company policy or practice to
knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release or other
public announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects.


 


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


 


(ll)             Reporting
Company/Shell Company. The Company is a publicly-held company subject to reporting obligations pursuant to Section 12(g) of
the Exchange Act. As of the Closing Date, the Company is not a “shell company” but is a “former shell company”
as those terms are employed in Rule 144 under the Securities Act.


 






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(mm)         Sarbanes-Oxley;
Internal Accounting Controls. Notwithstanding that the Company is not in compliance with its reporting obligations except
as set forth on Schedule 3.1(h), the Company and the Subsidiaries are in material compliance 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 Commission thereunder that are effective as of the date hereof and as of the Closing Date. Except
as set forth on Schedule 3.1(j), the Company and the Subsidiaries maintain a system of internal accounting controls sufficient
to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP
and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or
specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences. Except as set forth on Schedule 3.1(j), the Company and
the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e))
for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information required
to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and
reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers
have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of
the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”).
The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers
about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Except
as set forth on Schedule 3.1(j), since the Evaluation Date, there have been no changes in the internal control over financial
reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or
is reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.


 


(nn)          No
Disqualification Events. With respect to the Securities to be offered and sold hereunder in reliance on Rule 506 under the
Securities Act, none of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer
of the Company participating in the offering hereunder, any beneficial owner of 20% or more of the Company’s outstanding
voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under
the Securities Act) connected with the Company in any capacity at the time of sale (each, an “Issuer Covered Person”
and, together, “Issuer Covered Persons”) is subject to any of the “Bad Actor” disqualifications
described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for
a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any
Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure
obligations under Rule 506(e), and will furnish to the Purchasers a copy of any disclosures provided thereunder. A form of Rule
506 Bad Actor Disqualification Questionnaire is attached hereto as Exhibit E. A completed and signed Bad Actor Disqualification
Questionnaire for each of the Company’s directors and officers as of the date of this Agreement and the Closing Date will
be provided to the Purchasers.


 


(oo)           Securities
may be purchased by Affiliates of the Company or other parties with a financial interest in the Offering. Purchaser acknowledges
that Securities may be purchased by Affiliates of the Company or by other persons who will receive fees or other compensation
or gain which is dependent upon the success of the Offering. Such purchases may be made at any time, and will be counted in determining
whether the level of purchases has been met for the Closing of the Offering. Purchasers acknowledges that the sale of Securities
to any Person does not indicate that such sales have been made to Purchasers who have no financial or other interest in the Offering,
or who otherwise are exercising independent investment discretion.


 


(pp)           Indebtedness
and Seniority. As of the date hereof, all Indebtedness and Liens of the Company and the principal terms thereof are set forth
on Schedule 3.1(pp).


 






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(qq)           Regulatory
Matters. The Company and its Subsidiaries have complied in all material respects with all statutes and regulations related
to the research, manufacture and sale of its products to the extent applicable to the Company’s and its Subsidiaries’
activities. Items manufactured or under investigation by the Company and its Subsidiaries comply with all applicable manufacturing
practices regulations and other requirements established by government regulators in the jurisdictions in which the Company or
its Subsidiaries manufacture their products. Except as disclosed in the SEC Reports, the Company is not and its Subsidiaries are
not the subject of any investigation by any competent authority with respect to the development, testing, manufacturing and distribution
of their products, nor has any investigation, prosecution, or other enforcement action been threatened by any regulatory agency.
Except as disclosed in the SEC Reports or in Schedule 3.1(j), neither the Company nor any of its Subsidiaries has received from
any regulatory agency any letter or other document asserting that the Company or any Subsidiary has violated any statute or regulation
enforced by that agency with respect to the development, testing, manufacturing and distribution of their products.


 


(rr)             No
Outstanding Variable Priced Equity Linked Instruments. As of the Closing Date and for so long as Warrants are outstanding,
the Company will not have outstanding nor issuable any Variable Priced Equity Linked Instruments, nor any debt or equity with
anti-dilution, ratchet or reset rights, excluding anti-dilution provisions solely to address the Company issuing a stock dividend
or effecting a stock forward or reverse split, or similar transaction.


 


(ss)           Survival.
The foregoing representations and warranties shall survive the Closing Date.


 


3.2            Representations and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents
and warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein):


 


(a)             Organization; Authority. Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership,
limited liability company or similar power and authority to enter into and to consummate the transactions contemplated by the
Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction
Documents and performance by such Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized
by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of such Purchaser.
Each Transaction Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser
in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against
it in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii)
as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii)
insofar as indemnification and contribution provisions may be limited by applicable law. If such Purchaser is an entity, the address
of its principal place of business is as set forth on the signature page hereto, and if such Purchaser is an individual, the address
of its principal residence is as set forth on the signature page hereto.


 






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(b)            Understandings or Arrangements. Such Purchaser understands that the Securities are “restricted securities”
and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Securities as
principal for its own account and not with a view to or for distributing or reselling such Securities or any part thereof in violation
of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Securities
in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings
with any other persons to distribute or regarding the distribution of such Securities in violation of the Securities Act or any
applicable state securities law (this representation and warranty not limiting such Purchaser’s right to sell the Securities
pursuant to a registration statement or otherwise in compliance with applicable federal and state securities laws). Such Purchaser
is acquiring the Securities hereunder in the ordinary course of its business.


 


(c)             Purchaser Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, and on
each date on which it exercises any Warrants it will be either: (i) an “accredited investor” as defined in Rule 501(a)(1),
(a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as defined in
Rule 144A(a) under the Securities Act. Such Purchaser is not required to be registered as a broker-dealer under Section 15 of
the Exchange Act. Such Purchaser has the authority and is duly and legally qualified to purchase and own the Securities. Such
Purchaser is able to bear the risk of such investment for an indefinite period and to afford a complete loss thereof. Such Purchaser
has provided the information in the Accredited Investor Questionnaire attached hereto as Exhibit D (the “Investor
Questionnaire”). The information set forth on the signature pages hereto and the Investor Questionnaire regarding such
Purchaser is true and complete in all respects. Except as disclosed in the Investor Questionnaire, such Purchaser has had no position,
office or other material relationship within the past three years with the Company or Persons (as defined below) known to such
Purchaser to be affiliates of the Company, and is not a member of the Financial Industry Regulatory Authority or an “associated
person” (as such term is defined under the FINRA Membership and Registration Rules Section 1011).


 


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


 


(e)             Information on Company. Such Purchaser has been furnished with or has had access to the EDGAR Website of the Commission
to the Company’s filings made with the Commission during the period from the date that is four (4) years preceding the date
hereof through the tenth business day preceding the Closing Date in which such Purchaser purchases Securities hereunder, including
but not limited to the Risk Factor section of the Company’s Annual Report on Form 10-K filed with the Commission for the
fiscal year ended June 30, 2014 (hereinafter referred to collectively as the “SEC Reports”). Purchasers are
not deemed to have any knowledge of any information not included in the Reports or in this Agreement (including the Disclosure
Schedules) unless such information is delivered in the manner described in the next sentence. In addition, such Purchaser may
have received in writing from the Company such other information concerning its operations, financial condition and other matters
as such Purchaser has requested, identified thereon as OTHER WRITTEN INFORMATION (such other information is collectively, the
“Other Written Information”), and considered all factors such Purchaser deems material in deciding on the advisability
of investing in the Securities. Such Purchaser was afforded (i) the opportunity to ask such questions as such Purchaser deemed
necessary of, and to receive answers from, representatives of the Company concerning the merits and risks of acquiring the Securities;
(ii) the right of access to information about the Company and its financial condition, results of operations, business, properties,
management and prospects sufficient to enable such Purchaser to evaluate the Securities; and (iii) the opportunity to obtain such
additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make
an informed investment decision with respect to acquiring the Securities.


 






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(f)             Certain Transactions and Confidentiality. Such Purchaser understands and agrees that the Securities have not been registered
under the Securities Act or any applicable state securities laws, by reason of their issuance in a transaction that does not require
registration under the Securities Act, and that such Securities must be held indefinitely unless a subsequent disposition is registered
under the Securities Act or any applicable state securities laws or is exempt from such registration. Such Purchaser understands
and agrees that the Securities are being offered and sold to such Purchaser in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and regulations and that the Company is relying in part upon the
truth and accuracy of, and such Purchaser’s compliance with, the representations, warranties, agreements, acknowledgments
and understandings of such Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility
of such Purchaser to acquire the Securities.


 


(g)            Communication of Offer. Such Purchaser is not purchasing the Securities as a result of any “general solicitation”
or “general advertising,” as such terms are defined in Regulation D, which includes, but is not limited to, any advertisement,
article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or on the
internet or broadcast over television, radio or the internet or presented at any seminar or any other general solicitation or
general advertisement.


 


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


 


(i)              No
Conflicts. The execution, delivery and performance of this Agreement and performance under the other Transaction Documents
and the consummation by such Purchaser of the transactions contemplated hereby and thereby or relating hereto or thereto do not
and will not (i) result in a violation of such Purchaser’s charter documents, bylaws or other organizational documents,
if applicable, (ii) conflict with nor constitute a default (or an event which with notice or lapse of time or both would become
a default) under any agreement to which such Purchaser is a party, nor (iii) result in a violation of any law, rule, or regulation,
or any order, judgment or decree of any court or governmental agency applicable to such Purchaser or its properties (except for
such conflicts, defaults and violations as would not, individually or in the aggregate, have a material adverse effect on such
Purchaser). Such Purchaser is not required to obtain any consent, authorization or order of, or make any filing or registration
with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under this Agreement
or perform under the other Transaction Documents nor to purchase the Securities in accordance with the terms hereof, provided
that for purposes of the representation made in this sentence, such Purchaser is assuming and relying upon the accuracy of the
relevant representations and agreements of the Company herein.


 






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(j)              Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has not
directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, executed
any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that
such Purchaser first received a formal offer from Palladium Capital Advisors LLC describing the Offering including the material
terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. 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). 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 after the Closing Date.


 


(k)             The
sale of Securities does not indicate Purchaser’s investment decision is shared by other unaffiliated Purchasers. Because
there may be substantial purchases by Affiliates of the Company, or other Persons who will receive fees or other compensation
or gain dependent upon the success of the Offering, Purchaser acknowledges that such Purchaser is not placing any reliance on
such sales as an indication of the merits of the Offering.


 


(l)              Survival.
The foregoing representations and warranties shall survive the Closing Date.


 


The
Company acknowledges and agrees that the representations contained in Section 3.2 shall not modify, amend or affect such Purchaser’s
right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties
contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this
Agreement or the consummation of the transaction contemplated hereby.


 


ARTICLE
IV.


OTHER
AGREEMENTS OF THE PARTIES


 


4.1            (a)     Transfer Restrictions. The Securities may only be disposed of in compliance with state and federal securities laws.
In connection with any transfer of Securities other than pursuant to an effective registration statement or Rule 144, to the Company
or to an Affiliate of a Purchaser or in connection with a pledge as contemplated in Section 4.1(c), the Company may require the
transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the
Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer
does not require registration of such transferred Securities under the Securities Act. As a condition of such transfer, any such
transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights and obligations of a Purchaser
under this Agreement and the other Transaction Documents.


 



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(b)       Legend. The Purchasers agree to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Securities
in the following form:


 


[NEITHER]
THIS SECURITY [NOR THE SECURITIES [FOR] WHICH THIS SECURITY IS EXERCISABLE] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) AND APPLICABLE STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE
STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL
BE REASONABLY ACCEPTABLE TO THE COMPANY. TO THE EXTENT PERMITTED BY APPLICABLE SECURITIES LAWS, THIS SECURITY [AND THE SECURITIES
ISSUABLE UPON EXERCISE OF THIS SECURITY] MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER
OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES
ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.


 


(c)       Pledge.
The Company acknowledges and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with
a registered broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an
“accredited investor” as defined in Rule 501(a) under the Securities Act and who agrees to be bound by the provisions
of this Agreement and, if required under the terms of such arrangement, such Purchaser may transfer pledge or secure Securities
to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company and no legal opinion
of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice shall
be required of such pledge. At such 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, if the Securities are subject to registration, the preparation and filing of any required prospectus supplement under
Rule 424(b)(3) under the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of
selling stockholders thereunder.


 


(d)       Legend
Removal. Certificates evidencing the Shares and Warrant Shares shall not contain any legend (including the legend set forth
in Section 4.1(b) hereof): (i) while a registration statement (including a Registration Statement) covering the resale of such
security is effective under the Securities Act, (ii) following any sale of such Shares and Warrant Shares pursuant to Rule 144,
(iii) if such Shares and Warrant Shares are eligible for sale under Rule 144, without the requirement for the Company to be in
compliance with the current public information required under Rule 144 as to such Shares and Warrant Shares and without volume
or manner-of-sale restrictions, 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 Commission). The Company shall cause its counsel to issue
a legal opinion to the Transfer Agent promptly after the Effective Date if required by the Transfer Agent to effect the removal
of the legend hereunder. If all or any portion of a Warrant is exercised at a time when there is an effective registration statement
to cover the resale of the Shares and Warrant Shares, or if such Shares and Warrant Shares may be sold under Rule 144 or if such
legend is not otherwise required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements
issued by the staff of the Commission) then such Shares and Warrant Shares shall be issued free of all legends. The Company agrees
that following such time as such legend is no longer required under this Section 4.1(d), it will, no later than five (5) Trading
Days following the delivery by a Purchaser to the Company or the Transfer Agent of a certificate representing the Shares and Warrant
Shares, as applicable, issued with a restrictive legend (such fifth (5th) Trading Day, the “Legend Removal
Date”), deliver or cause to be delivered to such Purchaser a certificate representing such shares that is free from
all restrictive and other legends (however, the Corporation shall use reasonable best efforts to deliver such shares within three
(3) Trading Days). The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge
the restrictions on transfer set forth in this Section 4.1.


 



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(e)       Legend
Removal Default. In addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in
cash, as partial liquidated damages and not as a penalty, for each $1,000 of Shares or Warrant Shares (based on the greater of
the VWAP of the Common Stock on the date such Securities are submitted to the Transfer Agent or the aggregate purchase price of
such Shares and Warrant Shares) delivered for removal of the restrictive legend, subject to Section 4.1(d), $10 per Trading Day
(increasing to $20 per Trading Day from and after the eleventh (11th) such Trading Day) for each Trading Day following
the Legend Removal Date until such Common Stock certificate is delivered without a legend. Nothing herein shall limit such Purchaser’s
right to pursue actual damages for the Company’s failure to deliver certificates representing any Securities as required
by the Transaction Documents, and such Purchaser shall have the right to pursue all remedies available to it at law or in equity
including, without limitation, a decree of specific performance and/or injunctive relief.


 


(f)       DWAC.
In lieu of delivering physical certificates representing the unlegended shares, upon request of a Purchaser, so long as the certificates
therefor do not bear a legend and the Purchaser is not obligated to return such certificate for the placement of a legend thereon,
the Company shall cause its transfer agent to electronically transmit the unlegended shares by crediting the account of Purchaser’s
prime broker with the Depository Trust Company through its Deposit Withdrawal At Custodian system, provided that the Company’s
Common Stock is DTC eligible and the Company’s transfer agent participates in the Deposit Withdrawal at Custodian system.
In any event, such delivery must be made on or before the Legend Removal Date.


 


(g)       Injunction.
In the event a Purchaser shall request delivery of Shares as described in this Section 4.1 and the Company is required to deliver
such Shares, the Company may not refuse to deliver Shares based on any claim that such Purchaser or anyone associated or affiliated
with such Purchaser has not complied with Purchaser’s obligations under the Transaction Documents, or for any other reason,
unless, an injunction or temporary restraining order from a court, on notice, restraining and or enjoining delivery of such unlegended
shares shall have been sought and obtained by the Company and the Company has posted a surety bond for the benefit of such Purchaser
in the amount of the greater of (i) 120% of the amount of the aggregate purchase price of the Shares and Warrant Shares which
are subject to the injunction or temporary restraining order, or (ii) the VWAP of the Common Stock on the trading day before the
issue date of the injunction multiplied by the number of Shares to be subject to the injunction, which bond shall remain in effect
until the completion of arbitration/litigation of the dispute and the proceeds of which shall be payable to such Purchaser to
the extent Purchaser obtains judgment in Purchaser’s favor.


 



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(h)       Buy-In.
In addition to any other rights available to Purchaser, if the Company fails to deliver to a Purchaser Shares as required pursuant
to this Agreement and after the Legend Removal Date, the Purchaser, or a broker on the Purchaser’s behalf, purchases (in
an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Purchaser of the
shares of Common Stock which the Purchaser was entitled to receive in unlegended form from the Company (a “Buy-In”),
then the Company shall promptly pay in cash to the Purchaser (in addition to any remedies available to or elected by the Purchaser)
the amount, if any, by which (A) the Purchaser’s total purchase price (including brokerage commissions, if any) for the
shares of Common Stock so purchased exceeds (B) the aggregate purchase price of the shares of Common Stock delivered to the Company
for reissuance as unlegended Shares, together with interest thereon at a rate of 15% per annum accruing until such amount and
any accrued interest thereon is paid in full (which amount shall be paid as liquidated damages and not as a penalty). For example,
if a Purchaser purchases shares of Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to $10,000
of purchase price of shares of Common Stock delivered to the Company for reissuance as unlegended shares, the Company shall be
required to pay the Purchaser $1,000, plus interest, if any. The Purchaser shall provide the Company written notice indicating
the amounts payable to the Purchaser in respect of the Buy-In.


 


4.2              Furnishing of Information; Public Information.


 


(a)
       Until the Final Date, the Company covenants to maintain the registration of the Common Stock under Section 12(b) or 12(g) of the
Exchange Act and to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports
required to be filed by the Company pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements
of the Exchange Act. The foregoing notwithstanding, the Company shall have a single grace period of one hundred and twenty (120)
days commencing on the initial Closing Date, to become current with the reporting obligations under Section 12(g) of the Exchange
Act and file all reports identified on Schedule 3.1(h) and all other reports due pursuant to Sections 12(g) of the Exchange Act
as of such date (the actual date the Company has become current, being the “Reporting Compliance Date”). The
obligation set forth in the previous sentence will not be deemed satisfied unless and until Purchasers receive a certification
from the Company’s chief executive officer and chief financial officer that all such reports were filed in compliance with
the Exchange Act and accepted for filing by the Commission on or before the Reporting Compliance Date. In the event the Commission
deems any such filing to be deficient such that the Commission believes that the Company does not meet the current information
requirements of Rule 144(c), then such original filing will not be deemed to have been filed. The Company’s failure to strictly
and timely adhere to the obligations of this Section 4.2(a) shall be a “Filing Compliance Default”. The Company
shall be required to become current with its reporting obligations despite the occurrence of a Filing Compliance Default. Upon
the continuing occurrence of a Filing Compliance Default for ninety (90) or more days, upon fifteen (15) Trading Days prior notice
from the Company to all the Purchasers, which include proof of financial ability, given not later than one (1) year after the
Closing Date, the Company may redeem for cash all but not less than all of the Shares (and the Warrants issued in connection with
such Shares) held by a Purchaser as of the date such notice is received at a price per Share equal to 150% of the purchase price
paid by such Purchaser for such Shares. The redemption payment will be null and void and the Company will have no redemption rights
under this Section 4.2(a) in the event the redemption payment and all other accrued and unpaid liquidated damages and other amounts
payable by the Company to Purchaser are paid within twenty (20) Trading Days of the date notice is given. Any exercise by the
Company of its redemption rights pursuant to this Section 4.2(a) must be pari passu to all Purchasers holding Shares and Warrants.
In any event, each Purchaser for itself may elect to continue to hold its Shares and Warrants by notice to the Company that such
Purchaser will waive Public Information Failure Payments that would accrue subsequent to the date of the Company’s notice
of redemption. Such waiver will be voidable at the Purchaser’s sole election if the Company does not pay to Purchaser all
accrued and unpaid liquidated damages and other payments then outstanding, within twenty (20) Trading Days of the date the Company
gives notice of redemption.


 



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(b)
       At any time commencing on the one hundred and twentieth (120th) day after the Closing Date and ending on the Final
Date, if the Company shall fail for any reason to satisfy the current public information requirement under Rule 144(c) (a “Public
Information Failure”) then, in addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser,
in cash, as partial liquidated damages and not as a penalty, by reason of any such delay, an amount in cash equal to 2% of the
aggregate Subscription Amount and purchase price of Warrant Shares (based on the exercise price paid for such Warrant Shares assuming
a deemed exercise on a cash basis even if such Warrants are exercised on a cashless basis) of such Purchaser’s Shares and
Warrant Shares held by such Purchaser on the day of a Public Information Failure and on every thirtieth (30th) day (pro-rated
for periods totaling less than thirty days) thereafter until the earlier of (a) the date such Public Information Failure is cured
and (b) the Effective Date. The payments to which a Purchaser shall be entitled pursuant to this Section 4.3(b) are referred to
herein as “Public Information Failure Payments.” Public Information Failure Payments shall be paid on the earlier
of (i) the last day of the calendar month during which such Public Information Failure Payments are incurred and (ii) the third
(3rd) Business Day after the event or failure giving rise to the Public Information Failure Payments is cured. In the event the
Company fails to make Public Information Failure Payments in a timely manner, such Public Information Failure Payments shall bear
interest at the rate of 1.5% per month (prorated for partial months) until paid in full. Nothing herein shall limit such Purchaser’s
right to pursue actual damages for the Public Information Failure, and such Purchaser shall have the right to pursue all remedies
available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.
The Public Information Failure Payments shall be due and payable in addition to the reduction of the Warrant purchase price due
to the occurrence of a Filing Compliance Default, as described in the Warrants.


 


4.3       Integration.
The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined
in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities by the Company in a manner
that would require the registration under the Securities Act of the sale of the Securities or that would be integrated with the
offer or sale of the Securities for purposes of the rules and regulations of any Trading Market such that it would require shareholder
approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent
transaction.


 



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4.4       Securities
Laws Disclosure; Publicity. The Company shall file a Current Report on Form 8-K describing the Offering and include the Transaction
Documents as exhibits thereto within the time period required by the Exchange Act. The Company is not required to file the Current
Financial Statements as exhibits to such Form 8-K. From and after the filing of such press release and Form 8-K but in no event
later than the Reporting Compliance Date, 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 transactions contemplated by the Transaction Documents. The Company
and each Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated
hereby, and neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public statement
without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of
each Purchaser, with respect to any press release of the Company, which consent 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 shall not publicly disclose the name
of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market
unless the name of such Purchaser is already included in the body of the Transaction Documents, without the prior written consent
of such Purchaser, except: (a) as required by federal securities law in connection with the filing of final Transaction Documents
with the Commission and (b) to the extent such disclosure is required by law or Trading Market regulations, in which case the
Company shall provide the Purchasers with prior notice of such disclosure permitted under this clause (b).


 


4.5       Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction
Documents or set forth in the Disclosure Schedules, 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 entered into a written agreement with the Company
regarding the confidentiality and use of such information. The Company understands and confirms that each Purchaser shall be relying
on the foregoing covenant in effecting transactions in securities of the Company.


 


4.6       Use
of Proceeds. The Company intends to use the net proceeds to the Company from the sale of the Shares and Warrants hereunder
for the purposes set forth on Schedule 4.6. The Company shall not use such proceeds: (a) for the satisfaction of any portion
of the Company’s debt (other than payment of trade payables in the ordinary course of the Company’s business consistent
with prior practices), (b) for the redemption of any Common Stock or Common Stock Equivalents, (c) for the settlement of any outstanding
litigation, or (d) in violation of the law, including FCPA or OFAC regulations.


 



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4.7       Indemnification
of Purchasers. Subject to the provisions of this Section 4.7, the Company will indemnify and hold each Purchaser and its directors,
officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of
a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser
(within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”)
harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all
judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such
Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants
or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against
the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is
not an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless
such action is based upon a breach of such Purchaser Party’s representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser Party may have with any such stockholder or any violations by such
Purchaser Party of Securities Laws or any conduct by such Purchaser Party which constitutes fraud, gross negligence, willful misconduct
or malfeasance). If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant
to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to
assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party
shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been
specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such
defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of such Purchaser Party’s counsel,
a material conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which
case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel for all Purchaser
Parties. The Company will not be liable to any Purchaser Party under this Agreement (iv) for any settlement by a Purchaser Party
effected without the Company’s prior written consent, which shall not be unreasonably withheld, conditioned or delayed;
or (v) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s
breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in
the other Transaction Documents. The indemnification required by this Section 4.7 shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as and when bills are received or are incurred. The indemnity agreements
contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others
and any liabilities the Company may be subject to pursuant to law.


 


4.8       Reservation
of Common Stock. As of the date hereof, the Company has reserved for each Purchaser and the Company shall continue to reserve
and keep available at all times, free of preemptive rights, a sufficient number of shares of Common Stock for each Purchaser for
the purpose of enabling the Company to issue Shares pursuant to this Agreement and Warrant Shares issuable upon complete exercise
of the Warrants (such amount being the “Required Minimum”). If, on any date, the number of authorized but unissued
(and otherwise unreserved) shares of Common Stock is less than the Required Minimum on such date, then the Board of Directors
shall use commercially reasonable efforts to amend the Company’s certificate of incorporation to increase the number of
authorized but unissued shares of Common Stock to at least the Required Minimum at such time, as soon as possible and in any event
not later than the 60th day after such date. Calculations hereunder with reference to Warrant Shares will be made assuming
exercise of the Warrants on a cash basis.


 


4.9       Listing
of Common Stock. From the date of this Agreement until the Final Date, the Company hereby agrees to maintain the listing or
quotation of the Common Stock on the Trading Market on which it is currently listed or another Trading Market. The Company further
agrees, if the Company applies to have the Common Stock traded on any other Trading Market, it will then include in such application
all of the Shares and Warrant Shares, and will take such other action as is necessary to cause all of the Shares and Warrant Shares
to be listed or quoted on such other Trading Market as promptly as possible. The Company will then take all action necessary to
continue the listing or quotation and trading of its Common Stock on a Trading Market until the later of (i) the Final Date, and
(ii) for so long as the Warrants are outstanding. In the event the aforedescribed listing is not continuously maintained for five
years after the Closing Date (a “Listing Default”), then in addition to any other rights the Purchasers may
have hereunder or under applicable law, on the first day of a Listing Default and on each monthly anniversary of each such Listing
Default date (if the applicable Listing Default shall not have been cured by such date) until the applicable Listing Default is
cured, the Company shall pay to each Purchaser an amount in cash, as partial liquidated damages and not as a penalty, equal to
1% of the aggregate Subscription Amount and purchase price of Warrant Shares (based on the exercise price paid for such Warrant
Shares as if such exercise were made entirely on a cash basis) actually held by such Purchaser on the day of a Listing Default
and on every thirtieth day (pro-rated for periods less than thirty days) thereafter until the date such Listing Default is cured.
If the Company fails to pay any liquidated damages pursuant to this Section in a timely manner, the Company will pay interest
thereon at a rate of 1.5% per month (pro-rated for partial months) to the Purchaser. For the avoidance of doubt, the OTC Pink
Marketplace is a Trading Market.


 



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4.10       Reimbursement.
If any Purchaser becomes involved in any capacity in any Proceeding by or against any Person who is a stockholder of the Company
(except as a result of sales, pledges, margin sales and similar transactions by such Purchaser to or with any current stockholder),
solely as a result of such Purchaser’s acquisition of the Securities under this Agreement, the Company will reimburse such
Purchaser for its reasonable legal and other expenses (including the cost of any investigation preparation and travel in connection
therewith) incurred in connection therewith, as such expenses are incurred. The reimbursement obligations of the Company under
this paragraph shall be in addition to any liability which the Company may otherwise have, shall extend upon the same terms and
conditions to any Affiliates of the Purchasers who are actually named in such action, proceeding or investigation, and partners,
directors, agents, employees and controlling persons (if any), as the case may be, of the Purchasers and any such Affiliate, and
shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of the Company,
the Purchasers and any such Affiliate and any such Person. The Company also agrees that neither the Purchasers nor any such Affiliates,
partners, directors, agents, employees or controlling persons shall have any liability to the Company or any Person asserting
claims on behalf of or in right of the Company solely as a result of acquiring the Securities under this Agreement.


 


4.11       Equal
Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered or paid
to any Person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the
same consideration is also offered to all of the Purchasers that are parties to such Transaction Document. 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 or otherwise.


 


4.12       Participation
in Future Financing.


 


(a)       From
the date hereof through the Final Date, upon any proposed issuance by the Company of Common Stock or Common Stock Equivalents
for cash consideration, Indebtedness or a combination of cash consideration and Indebtedness, other than (i) a rights offering
to all holders of Common Stock, (ii) an offering made pursuant to a 1933 Act registration statement other than a shelf offering,
or (iii) an Exempt Issuance, (a “Subsequent Financing”), the Purchasers, shall have the right to participate
in up to an amount of the Subsequent Financing equal to 50% of the Subsequent Financing (the “Participation Maximum”)
on the same terms, conditions and price provided for in the Subsequent Financing.


 


(b)       At
least ten (10) Trading Days prior to the closing of the Subsequent Financing, the Company shall deliver to each Purchaser a written
notice of its intention to effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask such Purchaser
if it wants to review the details of such financing (such additional notice, a “Subsequent Financing Notice”).
Upon the request of a Purchaser, and only upon a request by such Purchaser, for a Subsequent Financing Notice, the Company shall
promptly, but no later than one (1) Trading Day after such request, deliver a Subsequent Financing Notice to such Purchaser. The
requesting Purchaser shall be deemed to have acknowledged that the Subsequent Financing Notice may contain material non-public
information. The Subsequent Financing Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing,
the amount of proceeds intended to be raised thereunder and the Person or Persons through or with whom such Subsequent Financing
is proposed to be effected and shall include a term sheet or similar document relating thereto as an attachment.


 



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(c)       Any
Purchaser desiring to participate in such Subsequent Financing must provide written notice to the Company by not later than 5:30
p.m. (New York City time) on the fifth (5th) Trading Day after all of the Purchasers have received the Pre-Notice that
such Purchaser is willing to participate in the Subsequent Financing, the amount of such Purchaser’s participation, and
representing and warranting that such Purchaser has such funds ready, willing, and available for investment on the terms set forth
in the Subsequent Financing Notice. If the Company receives no such notice from a Purchaser as of such fifth (5th)
Trading Day, such Purchaser shall be deemed to have notified the Company that it does not elect to participate.


 


(d)       If
by 5:30 p.m. (New York City time) on the fifth (5th ) Trading Day after all of the Purchasers have received the Pre-Notice,
notifications by the Purchasers of their willingness to participate in the Subsequent Financing (or to cause their designees who
at the time are Accredited Investors to participate) is, in the aggregate, equal to or less than the aggregate amount of the Participation
Maximum, then the Company may effect the remaining portion of such Subsequent Financing on the terms and with the Persons set
forth in the Subsequent Financing Notice.


 


(e)       If
by 5:30 p.m. (New York City time) on the fifth (5th) Trading Day after all of the Purchasers have received the Pre-Notice,
the Company receives responses to a Subsequent Financing Notice from Purchasers seeking to purchase more than the aggregate amount
of the Participation Maximum, each such Purchaser shall have the right to purchase its Pro Rata Portion (as defined below) of
the Participation Maximum. “Pro Rata Portion” means the ratio of (x) the Subscription Amount of Shares and
Warrants purchased hereunder by a Purchaser participating under this Section 4.12 and (y) the sum of the aggregate Subscription
Amounts of Securities purchased hereunder by all Purchasers participating under this Section 4.12.


 


(f)       The
Company must provide the Purchasers with a second Subsequent Financing Notice, and the Purchasers will again have the right of
participation set forth above in this Section 4.12, if the Subsequent Financing subject to the initial Subsequent Financing Notice
is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within forty-five (45) Trading Days
after the date of the initial Subsequent Financing Notice.


 


(g)       The
Company and each Purchaser agree that if any Purchaser elects to participate in the Subsequent Financing, the transaction documents
related to the Subsequent Financing shall not include any term or provision whereby such Purchaser shall be required to agree
to any restrictions on trading as to any of the Securities purchased hereunder (for avoidance of doubt, the securities purchased
in the Subsequent Financing shall not be considered securities purchased hereunder) or be required to consent to any amendment
to or termination of, or grant any waiver, release or the like under or in connection with, this Agreement, without the prior
written consent of such Purchaser.


 


(h)       Notwithstanding
anything to the contrary in this Section 4.12 and unless otherwise agreed to by such Purchaser, the Company shall either confirm
in writing to such Purchaser that the transaction with respect to the Subsequent Financing has been abandoned or shall publicly
disclose its intention to issue the securities in the Subsequent Financing, in either case in such a manner such that such Purchaser
will not be in possession of any material, non-public information, by the tenth (10th) Business Day following delivery of the
Subsequent Financing Notice. If by such tenth (10th) Business Day, no public disclosure regarding a transaction with respect to
the Subsequent Financing has been made, and no notice regarding the abandonment of such transaction has been received by such
Purchaser, such transaction shall be deemed to have been abandoned and such Purchaser shall not be deemed to be in possession
of any material, non-public information with respect to the Company or any of its Subsidiaries.


 



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4.13       Acknowledgment
of Dilution. The Company acknowledges that the issuance of the Securities may result in dilution of the outstanding shares
of Common Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges that its
obligations under the Transaction Documents, including, without limitation, its obligation to issue the Shares and Warrant Shares
pursuant to the Transaction Documents, are unconditional and absolute, but subject to the terms and conditions of the Transaction
Documents, and not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution
or any claim the Company may have against any Purchaser and regardless of the dilutive effect that such issuance may have on the
ownership of the other stockholders of the Company.


 


4.14       Preservation
of Corporate Existence. The Company shall preserve and maintain its corporate existence, rights, privileges and franchises
in the jurisdiction of its incorporation, and qualify and remain qualified, as a foreign corporation in each jurisdiction in which
such qualification is necessary in view of its business or operations and where the failure to qualify or remain qualified might
reasonably have a Material Adverse Effect upon the financial condition, business or operations of the Company taken as a whole.
Unless otherwise prohibited pursuant to the Transaction Documents, the foregoing obligation shall not, of itself, prohibit Fundamental
Transaction.


 


4.15       DTC
Program. At all times that Warrants are outstanding, the Company will employ as the transfer agent for the Common Stock and
Warrant Shares a participant in the Depository Trust Company Automated Securities Transfer Program and cause the Common Stock
to be transferable pursuant to such program.


 


4.16       Form
D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the sale of the Securities by the Company
under this Agreement as required under Regulation D. The Company shall take such action as the Company shall reasonably determine
is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchasers at the Closing under
applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actions
promptly upon request of any Purchaser.


 


4.17       Shareholder
Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that
any Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison pill
(including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted
by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of
receiving Securities under the Transaction Documents or under any other agreement between the Company and the Purchasers.


 


4.18       Exercise
Procedure. The form of Notice of Exercise included in the Warrants sets forth the totality of the procedures required of the
Purchasers in order to exercise the Warrants. No additional legal opinion, other information or instructions shall be required
of the Purchasers to exercise their Warrants. The Company shall honor exercises of the Warrants and shall deliver Warrant Shares
in accordance with the terms, conditions and time periods set forth in the Transaction Documents.


 



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4.19       Subsequent
Equity Sales.


 


(a)       From
the date hereof until the soonest to occur of (i) the Purchasers and their assigns collectively own less than 25% of the Shares,
(ii) a Sale Event occurs, (iii) one (1) year after the Reporting Compliance Date, or (iv) the closing of a Material Offering (the
first such date to occur being the “End Date”), without the consent of the holders of a majority of each of
the outstanding Shares, Warrants and Warrant Shares, except for an Exempt Issuance, the Company shall not issue, agree to issue
or announce the issue or proposed issuance, of any shares of Common Stock or Common Stock Equivalents. For purposes of this Section
4.19(a), “Exempt Issuance” shall include Common Stock issued and issuable at an effective cash price equal
to or greater than one hundred and ten percent (110%) of the Per Share Purchase Price (subject to adjustment for stock splits,
stock dividends and similar events) at one or more closings at which the Company receives net proceeds of not less than $1,000,000
and in connection with Common Stock Equivalents are not issued granting the holder thereof the right to acquire Common Stock at
a price per share of Common Stock less than the exercise price of the Warrants without giving effect to any anti-dilution reductions
set forth in Section 3(e) of the Warrants (such offering being the “Material Offering”). In addition, the Company
may not file a “shelf registration” (other than a “universal” shelf registration) for the purpose of future
issuances of securities during the time frame set forth in the first sentence of this paragraph if such shelf registration relates
to terms more favorable to any other Person more favorable than the terms of a Material Offering.


 


(b)       From
the date hereof until the Final Date, the Company will not, without the consent of the holders of a majority of each of the outstanding
Shares, Warrants and Warrant Shares, enter into any Equity Line of Credit or similar agreement nor issue floating or Variable
Priced Equity Linked Instruments nor any of the foregoing or equity with price reset rights (subject to adjustment for stock splits,
distributions, dividends, recapitalizations and the like) (collectively, the “Variable Rate Transaction”).
For purposes hereof, “Equity Line of Credit” shall mean any transaction involving a written agreement between the
Company and an investor or underwriter whereby the Company has the right to “put” its securities to the investor or
underwriter over an agreed period of time and at an agreed price or price formula, and “Variable Priced Equity Linked Instruments”
shall mean: (A) any debt or equity securities which are convertible into, exercisable or exchangeable for, or carry the right
to receive additional shares of Common Stock either (1) at any conversion, exercise or exchange rate or other price that is based
upon and/or varies with the trading prices of or quotations for Common Stock at any time after the initial issuance of such debt
or equity security, or (2) with a fixed conversion, exercise or exchange price that is subject to being reset at some future date
at any time after the initial issuance of such debt or equity security due to a change in the market price of the Company’s
Common Stock since date of initial issuance, and (B) any amortizing convertible security which amortizes prior to its maturity
date, where the Company is required or has the option to (or any investor in such transaction has the option to require the Company
to) make such amortization payments in shares of Common Stock which are valued at a price that is based upon and/or varies with
the trading prices of or quotations for Common Stock at any time after the initial issuance of such debt or equity security (whether
or not such payments in stock are subject to certain equity conditions). For purposes of this Agreement and determining the total
consideration for Common Stock or Common Stock Equivalents issued subject to an original issue or similar discount or which principal
amount is directly or indirectly increased after issuance, the consideration will be deemed to be the actual net cash amount received
by the Company in consideration of the original issuance of such Common Stock or Common Stock Equivalent. The restrictions contained
in this Section 4.19(b) shall not apply in connection with the issuance of any Exempt Issuance. For the avoidance of doubt, the
issuance of a security which is subject to anti-dilution protections where the conversion, exercise or exchange price is subject
to adjustment as a result of stock splits, reverse stock splits and other similar recapitalization or reclassification events
shall not be deemed to be a “Variable Rate Transaction.”


 


(c)       The
Company shall not, and shall use its commercially reasonable efforts to ensure that no Affiliate of the Company shall, sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the 1933 Act)
that will be integrated with the offer or sale of the Securities in a manner that would require the registration under the 1933
Act of the sale of the Securities to the Purchasers, or that will be integrated with the offer or sale of the Securities for purposes
of the rules and regulations of any trading market such that it would require stockholder approval prior to the closing of such
other transaction unless stockholder approval is obtained before the closing of such subsequent transaction.


 



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(d)       From
the date of this Agreement until the later of (i) two (2) years after the Closing Date, or (ii) no Warrants are held by a Purchaser
or its assigns, the Company will not amend the terms of any securities or Common Stock Equivalents or of any agreement outstanding
or in effect as of the date of this Agreement pursuant to which Common Stock or Common Stock Equivalents were or may be acquired,
if such amendment would or could result in an effective price per share of Common Stock less than the initial Warrant exercise
price (adjusted for stock splits, stock dividends and similar events) or if such amendment would result in terms more favorable
to such other holder of Common Stock or Common Stock Equivalents or party to such agreement than to the Purchasers, with respect
to the terms of the Offering.


 


4.20       Certain
Transactions. No Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company
in accordance with applicable Securities Laws.


 


4.21       Purchaser’s
Exercise Limitations. The Company shall not effect any exercise of the right granted to each Purchaser in Sections 4.12, 4.15
and 4.27 of this Agreement, and a Purchaser shall not have the right to exercise any portion of such right, pursuant to Sections
4.12, 4.15 and 4.27, to the extent that after giving effect to the issuance after application of such right, the Purchaser (together
with the Purchaser’s Affiliates, and any other Persons acting as a group together with the Purchaser or any of the Purchaser’s
Affiliates), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing
sentence, the number of shares of Common Stock beneficially owned by the Purchaser and its Affiliates shall include the number
of shares of Common Stock issuable upon application of the rights set forth in Sections 4.12, 4.15 and 4.27 with respect to which
such determination is being made, but shall exclude the number of shares of Common Stock which would be issuable upon (i) further
application of such rights by the Purchaser or any of its Affiliates and (ii) exercise or conversion of the unexercised or nonconverted
portion of any other securities of the Company (including, without limitation, any Warrants or other Common Stock Equivalents)
subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Purchaser
or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section 4.21, beneficial ownership
shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder,
it being acknowledged by the Purchaser that the Company is not representing to the Purchaser that such calculation is in compliance
with Section 13(d) of the Exchange Act and the Purchaser is solely responsible for any schedules required to be filed in accordance
therewith. To the extent that the limitation contained in this Section 4.21 applies, the determination of whether the rights in
Sections 4.12, 4.15 and 4.27 (in relation to other securities owned by the Purchaser together with any Affiliates) and of which
portion of such rights is exercisable shall be in the sole discretion of the Purchaser, and the submission of an exercise notice
or other demand shall be deemed to be the Purchaser’s determination of which rights are exercisable (in relation to other
securities owned by the Purchaser together with any Affiliates) and of which portion of the rights are exercisable, in each case
subject to the Beneficial Ownership Limitation. To ensure compliance with this restriction, a Purchaser will be deemed to represent
to the Company when it delivers an exercise notice or other demand that such exercise notice or demand has not violated the restrictions
set forth in this paragraph, and the Company shall have no obligation to verify or confirm the accuracy of such determination.
In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d)
of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 4.21, in determining the
number of outstanding shares of Common Stock, a Purchaser may rely on the number of outstanding shares of Common Stock as reflected
in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent
public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the
number of shares of Common Stock outstanding. Upon the written or oral request of a Purchaser, the Company shall within two Trading
Days confirm orally and in writing to the Purchaser the number of shares of Common Stock then outstanding. In any case, the number
of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the
Company, including the Warrants, by the Purchaser or its Affiliates since the date as of which such number of outstanding shares
of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 9.99%, unless a Purchaser elects
on its signature page hereto a different amount for its own Beneficial Ownership Limitation (which shall also apply to and supercede
the corresponding Beneficial Ownership Limitation as same relates to the Warrants issued to such electing Purchaser) of the number
of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock after conversion
of a Warrant or any other Common Stock Equivalent. The Purchaser may increase the Beneficial Ownership Limitation at any time
and upon not less than 61 days’ prior notice to the Company, may increase the Beneficial Ownership Limitation provisions
of this Section 4.21, provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the
Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon exercise of the option
held by the Purchaser and the provisions of this Section 4.21 shall continue to apply. Any such increase will not be effective
until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed
and implemented in a manner otherwise than in strict conformity with the terms of this Section 4.21 to correct this paragraph
(or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained
or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained
in this paragraph shall apply to a successor holder of the option right. In the event the limitations in this Section 4.21 would
prevent the exercise of a Purchaser’s rights under Sections 4.12, 4.15 and 4.27, then such Purchaser may exercise all such
rights and comply with all obligations applicable thereto except that the delivery of Common Stock will be deferred until such
time as such Purchaser provides notice to the Company that such Purchaser may receive or beneficially own such Common Stock which
exceeds the Beneficial Ownership Limitation without exceeding the then applicable Beneficial Ownership Limitation. In the event
the Company’s compliance with Sections 4.12, 4.15 and 4.27 would cause the Purchaser to exceed the Beneficial Ownership
Limitation, then the requirement to deliver Additional Shares shall be deferred one or more times until the Purchaser notifies
the Company that such delivery will not cause the Purchaser to exceed the Beneficial Ownership Limitation.


 



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4.22       Reserved.


 


4.23       Capital
Changes. Until the one (1) year anniversary of the Closing Date, the Company shall not undertake a reverse or forward stock
split or reclassification of the Common Stock without ten (10) days prior written notice to the Purchasers. In no event will the
Company reduce the par value of the Common Stock to an amount less than the lesser of (i) the Per Share Purchase Price, and (ii)
the then in effect purchase price of a Warrant Share.


 


4.24       Most
Favored Nation Provision. From the date hereof and for so long as a Purchaser holds any Securities, but until not later than
six (6) months after the Reporting Compliance Date, in the event that the Company issues or sells any Common Stock or Common Stock
Equivalents, if a Purchaser then holding outstanding Securities reasonably believes that any of the terms and conditions appurtenant
to such issuance or sale are more favorable to such investors than are the terms and conditions granted to the Purchasers hereunder,
upon notice to the Company by such Purchaser within five (5) Trading Days after disclosure to the Purchaser by the Company of
such issuance or sale and delivery of all term sheets and transaction documents relating to such issuance or sale, the Company
shall amend the terms of this transaction as to such Purchaser only so as to give such Purchaser the benefit of such more favorable
terms or conditions. This Section 4.23 shall not apply with respect to an Exempt Issuance. In lieu of providing the term sheet
and transaction documents after the issuance as described above, until the Reporting Compliance Date, the Company must provide
each Purchaser with notice of any such issuance or sale and aforedescribed documents not later than fifteen (15) Trading Days
before such issuance or sale and the Purchaser must notify the Company within ten (10) days of receipt of notice from the Company
whether such Purchaser will exercise its rights pursuant to this Section 4.24.


 



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4.25       Reserved.


 


4.26       Notice
of Disqualification Events. The Company will notify the Purchasers in writing, prior to the Closing Date of (i) any Disqualification
Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become a Disqualification
Event relating to any Issuer Covered Person not otherwise disclosed herein or in the SEC Reports.


 


4.27        (a)         Purchase
Price Reset. From the date of this Agreement until the Final Date (the “Protection Period”), in the event
that the Company issues or sells any shares of Common Stock or any Common Stock Equivalent (calculated on an as converted, as
exercised basis) pursuant to which shares of Common Stock may be acquired at a price less than the Per Share Purchase Price of
the Common Stock (a “Share Dilutive Issuance”) (adjusted as described in Section 5.23), then the Company shall
promptly issue additional shares of Common Stock to the Purchasers who hold Shares on the date of such Share Dilutive Issuance,
for no additional consideration, in an amount sufficient so that the aggregate Subscription Amount paid at the Closing for such
outstanding Shares held by Purchasers on the date of such Share Dilutive Issuance, when divided by the sum of (i) the total number
of outstanding Shares held by the Purchasers on the date of such Share Dilutive Issuance, (ii) any other shares of Common Stock
then or theretofore issued in respect of such outstanding Shares (by stock split, stock dividend and similar event) that resulted
in an adjustment to the Per Share Purchase Price referred to above pursuant to Section 5.23, and (iii) all Additional Shares issued
with respect to such outstanding Shares held by the Purchasers on the date of such Share Dilutive Issuance that were issued as
a result of Share Dilutive Issuances that occurred prior to such Share Dilutive Issuance, will equal the price per share of Common
Stock in such Share Dilutive Issuance, (each such adjustment, a “Share Dilution Adjustment”, and such shares,
the “Additional Shares”). The Additional Shares to be issued in a Share Dilution Adjustment shall be issued
by the Company to the Purchasers who hold outstanding Shares on the date of the applicable Share Dilutive Issuance. Such Share
Dilution Adjustment shall be made successively whenever such an issuance is made. Such Additional Shares must be delivered to
the applicable Purchasers not later than the date the Share Dilutive Issuance occurs. Not later than three (3) Trading Days after
each Share Dilutive Issuance (the “Share Delivery Date”), the Company shall deliver, or cause to be delivered,
to the Holder a certificate or certificates representing the Additional Shares representing the number of Additional Shares issuable
upon a Share Dilution Adjustment.


 


(b)       Certificate
as to Adjustments. In each case of any adjustment or readjustment in the Shares of Common Stock issuable pursuant to this
Section 4.27, the Company at its expense will promptly cause its Chief Financial Officer or other appropriate designee to compute
such adjustment or readjustment and prepare a certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based, including a statement of (a) the consideration received or receivable
by the Company for any additional shares of Common Stock or Common Stock Equivalent issued or sold or deemed to have been issued
or sold, (b) the number of shares of Common Stock outstanding or deemed to be outstanding, and (c) the number of shares of Common
Stock to be received upon a Share Dilutive Issuance, in effect immediately prior to such adjustment or readjustment and as adjusted
or readjusted as provided in this Section 4.27. The Company will forthwith mail a copy of each such certificate to the Purchaser.
Purchaser will be entitled to the benefit of the adjustment regardless of the giving of such notice. The Company shall promptly,
but not later than the fifth (5th) business day after the effectiveness of the adjustment, provide notice to the Purchaser
setting forth the Additional Shares issuable after a Share Dilutive Issuance adjustment and setting forth a statement of the facts
requiring such adjustment. The timely giving of such notice to Purchaser is a material obligation of the Company.


 



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(c)       Obligation
Absolute; Partial Liquidated Damages. The Company’s obligations to issue and deliver Additional Shares in accordance
with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Purchaser to enforce the same,
any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce
the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Purchaser
or any other Person of any obligation to the Company or any violation or alleged violation of law by the Purchaser or any other
Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Purchaser
in connection with the issuance of such Additional Shares; provided, however, that such delivery shall not operate as a waiver
by the Company of any such action the Company may have against the Purchaser. If the Company fails for any reason to deliver to
the Purchaser such certificate or certificates pursuant to this Section 4.27 by the Share Delivery Date, the Company shall pay
to the Purchaser, in cash, as liquidated damages and not as a penalty, 1% per day Trading Day of the product of (A) such number
of Additional Shares that the Company was required to deliver to such Purchaser by the Share Delivery Date multiplied by (B) the
highest VWAP of the Common Stock of any Trading Day during the period commencing on the date of a Share Dilutive Issuance by the
Company and ending on the date of such delivery (increasing to 1.5% per Trading Day on the fifth (5th) Trading Day after such
liquidated damages begin to accrue) for each Trading Day after such Share Delivery Date until such certificates are delivered.
Nothing herein shall limit a Purchaser’s right to pursue actual damages for the Company’s failure to deliver shares
within the period specified herein and the Purchaser shall have the right to pursue all remedies available to it hereunder, at
law or in equity including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of any
such rights shall not prohibit the Purchaser from seeking to enforce damages pursuant to any other Section hereof or under applicable
law.


 


Notwithstanding
the foregoing, this Section 4.27 shall not apply in respect of an Exempt Issuance. No adjustment shall be made hereunder which
would require the Purchaser to surrender any shares to the Company. The holder of outstanding Additional Shares is granted the
same rights and benefits as a holder of outstanding Shares pursuant to the Transaction Documents, except the rights and benefits
of this Section 4.27 and except that such rights and benefits shall not apply to a holder of outstanding Additional Shares after
such outstanding Additional Shares have been irrevocably sold pursuant to an effective registration statement under the Securities
Act or pursuant to Rule 144 without further restrictions or conditions to transfer.


 



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4.28       Piggy-Back
Registrations. If at any time after the Closing Date there is not an effective registration statement registering all of the
issued Shares and Warrant Shares and the Company determines to prepare and file with the Commission a registration statement relating
to an offering for its own account or the account of others under the Securities Act of any of its equity securities, but excluding
the Forms S-4 or S-8 and similar forms which do not permit such registration, then the Company shall send to each holder of any
of the issued Securities written notice of such determination and, if within fifteen (15) calendar days after receipt of such
notice, any such holder shall so request in writing, the Company shall include in such registration statement all or any part
of the Shares and Warrant Shares such holder requests to be registered and which inclusion of such Shares and Warrant Shares will
be subject to customary underwriter cutbacks applicable to all holders of registration rights and minimum cutbacks in accordance
with guidance provided by the Securities and Exchange Commission pursuant to Rule 415. The obligations of the Company under this
Section may be waived by any holder of any of the Securities entitled to registration rights under this Section 4.28. The holders
whose Shares and Warrant Shares are included or required to be included in such registration statement are granted the same rights,
benefits, liquidated or other damages and indemnification granted to other holders of securities included in such registration
statement. In no event shall the liability of any holder of Securities or permitted successor in connection with any Shares and
Warrant Shares included in any such registration statement be greater in amount than the dollar amount of the net proceeds actually
received by such Purchaser upon the sale of the Shares and Warrant Shares sold pursuant to such registration or such lesser amount
in proportion to all other holders of securities included in such registration statement. All expenses incurred by the Company
in complying with Section 4.28, including, without limitation, all registration and filing fees, printing expenses (if required),
fees and disbursements of counsel and independent public accountants for the Company, fees and expenses (including reasonable
counsel fees) incurred in connection with complying with state securities or “blue sky” laws, fees of the FINRA, transfer
taxes, and fees of transfer agents and registrars, are called “Registration Expenses.” All underwriting discounts
and selling commissions applicable to the sale of such securities are called “Selling Expenses.” The Company
will pay all Registration Expenses in connection with the registration statement under Section 4.28. Selling Expenses in connection
with each registration statement under Section 4.28 shall be borne by the holder and will be apportioned among such holders in
proportion to the number of Shares and Warrant Shares included therein for a holder relative to all the securities included therein
for all selling holders, or as all holders may agree. It shall be a condition precedent to the obligations of the Company to complete
the registration pursuant to this Agreement with respect to the Shares and Warrant Shares of a particular Purchaser that such
Purchaser shall furnish to the Company in writing such information and representation letters, including a completed form of a
securityholder questionnaire, with respect to itself and the proposed distribution by it as the Company may reasonably request
to assure compliance with federal and applicable state securities laws.


 


ARTICLE
V.


MISCELLANEOUS


 


5.1     
Termination. This Agreement may be terminated by any Purchaser, only as to such Purchaser’s obligations hereunder
and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice given at
any time to the Company and Escrow Agent at any time until such Purchaser’s Subscription Amount has been released from escrow
to or for the benefit of the Company or returned to such Purchaser; provided, however, that such termination will not affect
the right of any party to sue for any breach by any other party (or parties). Until the Escrow Agent actually releases a Purchaser’s
Subscription Amount in connection with a Closing, each Purchaser has the absolute right to demand back and receive from the Escrow
Agent such Purchaser’s Subscription Amount.


 


5.2      
Fees and Expenses. At the Closing, the Company has agreed to pay G&M for the legal fees in connection with G&M’s
representation of                (and no other Purchasers except pursuant to the Escrow Agreement) in the amount of $20,000. Except as expressly
set forth in the Transaction Documents and on Schedule 3.1(s), each party shall pay the fees and expenses of its advisers,
counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of this Agreement. The Company shall pay all Transfer Agent fees (including, without limitation,
any fees required for same-day processing of any instruction letter delivered by the Company and any conversion or exercise notice
delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to
the Purchasers. The Company shall be responsible for all wire fees incurred by the Escrow Agent for the receipt and disbursement
of Subscription Amounts. Such fees may be disbursed by the Escrow Agent from any funds deliverable to or for the benefit of the
Company. All of the Purchasers have been advised to seek the advice of their own attorneys.


 



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5.3      
Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding
of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral
or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.


 


5.4     
Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder
shall be in writing and, unless otherwise specified herein, shall be (i) personally served, (ii) deposited in the mail, registered
or certified, return receipt requested, postage prepaid, (iii) delivered by reputable air courier service with charges prepaid,
or (iv) transmitted by hand delivery, telegram, or facsimile, addressed as set forth below or to such other address as such party
shall have specified most recently by written notice. Any notice or other communication required or permitted to be given hereunder
shall be deemed effective (a) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting
facsimile machine, at the address or number designated below (if delivered on a business day during normal business hours where
such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during
normal business hours where such notice is to be received) or (b) on the second business day following the date of mailing by
express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first
occur. The addresses for such communications shall be: (i) if to the Company, to: MV Portfolios, Inc., 14286-19 Beach Blvd #386,
Jacksonville, Florida 32250, Attn: William D. Meadow, Fax: (888) 355-1108, with a copy by fax only to (which shall not constitute
notice): Schiff Hardin LLP, 100 N. 18th Street, Suite 300, Philadelphia, PA 19103, Attn: Cavas S. Pavri, Esq., facsimile:
(202) 778-6460, and (ii) if to the Purchasers, to: the addresses and fax numbers indicated on the signature pages hereto, with
an additional copy by fax only to (which shall not constitute notice): Grushko & Mittman, P.C., 515 Rockaway Avenue, Valley
Stream, New York 11581, facsimile: (212) 697-3575.


 


5.5     
Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written
instrument signed, in the case of an amendment, by the Company and the Purchasers holding at least a majority of the component
of the affected Securities then outstanding or, in the case of a waiver, by the party against whom enforcement of any such waived
provision is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall
be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition
or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise
of any such right. As employed herein, “consent” shall mean consent of the holders of the majority of the then outstanding
effected component of the Securities on the date such consent is requested or required.


 


5.6     
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.


 


5.7     
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors
and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written
consent of each Purchaser (other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any
Person to whom such Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be bound,
with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the “Purchasers.”


 


5.8     
No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors
and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as
otherwise set forth in Section 4.7.


 



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5.9     
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents
shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard
to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be
commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including
with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such
suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered
or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under
this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either
party shall commence an action or proceeding to enforce any provisions of the Transaction Documents, then in addition to the obligations
of the Company under Section 4.7, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party
for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution
of such action or proceeding.


 


5.10   
Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Securities
at the Closings for the applicable statute of limitations.


 


5.11   
Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered
one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other
party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.


 


5.12    
Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction
to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result
as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention
of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any
of such that may be hereafter declared invalid, illegal, void or unenforceable.


 



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5.13    
Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar
provisions of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under
a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then
such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant
notice, demand or election in whole or in part without prejudice to its future actions and rights; provided, however, that in
the case of a rescission of an exercise of a Warrant, the applicable Purchaser shall be required to return any shares of Common
Stock subject to any such rescinded exercise notice concurrently with the return to such Purchaser of the aggregate exercise price
paid to the Company for such shares and the restoration of such Purchaser’s right to acquire such shares pursuant to such
Purchaser’s Warrant (including, issuance of a replacement warrant certificate evidencing such restored right).


 


5.14    
Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for and upon surrender and cancellation thereof (in
the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft, destruction, or mutilation, and of the ownership of such Security.
The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including
customary indemnity and bonds) associated with the issuance of such replacement Securities.


 


5.15    
Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of
damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The
parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations
contained in the Transaction Documents and hereby agree to waive and not to assert in any action for specific performance of any
such obligation the defense that a remedy at law would be adequate.


 


5.16    
Payment Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction
Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement
or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other
Person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of
action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.


 


5.17    
Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction
Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way
for the performance or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained
herein or in any other Transaction Document, and no action taken by any Purchaser pursuant hereof or thereto, 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 the Transaction Documents. Each Purchaser shall be entitled to independently protect and enforce its rights, including, without
limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary
for any other Purchaser to be joined as an additional party in any proceeding for such purpose. Each Purchaser has been represented
by its own separate legal counsel in its review and negotiation of the Transaction Documents. For reasons of administrative convenience
only, each Purchaser and its respective counsel have chosen to communicate with the Company through G&M. G&M does not
represent all of the Purchasers. The Company has elected to provide all Purchasers with the same terms and Transaction Documents
for the convenience of the Company and not because it was required or requested to do so by any of the Purchasers. It is expressly
understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between the Company
and a Purchaser, solely, and not between the Company and the Purchasers collectively and not between and among the Purchasers.
No Purchaser shall act in concert, as a group, or together with any other Purchaser with regard to any vote of the stockholders
of the Company.


 



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5.18     
Liquidated Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under
the Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated
damages and other amounts due thereunder have been paid notwithstanding the fact that the instrument or security pursuant to which
such partial liquidated damages or other amounts are due and payable shall have been canceled.


 


5.19     
Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right
required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next
succeeding Business Day.


 


5.20     
Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity
to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to
be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments
thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be
subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions
of the Common Stock that occur after the date of this Agreement.


 


5.21       Usury.
To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim,
and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at
any time hereafter in force, in connection with any claim, action or proceeding that may be brought by any Purchaser in order
to enforce any right or remedy under any Transaction Document. Notwithstanding any provision to the contrary contained in any
Transaction Document, it is expressly agreed and provided that the total liability of the Company under the Transaction Documents
for payments in the nature of interest shall not exceed the maximum lawful rate authorized under applicable law (the “Maximum
Rate”), and, without limiting the foregoing, in no event shall any rate of interest or default interest, or both of
them, when aggregated with any other sums in the nature of interest that the Company may be obligated to pay under the Transaction
Documents exceed such Maximum Rate. It is agreed that if the maximum contract rate of interest allowed by law and applicable to
the Transaction Documents is increased or decreased by statute or any official governmental action subsequent to the date hereof,
the new maximum contract rate of interest allowed by law will be the Maximum Rate applicable to the Transaction Documents from
the Closing Date thereof forward, unless such application is precluded by applicable law. If under any circumstances whatsoever,
interest in excess of the Maximum Rate is paid by the Company to any Purchaser with respect to indebtedness evidenced by the Transaction
Documents, such excess shall be applied by such Purchaser to the unpaid principal balance of any such indebtedness or be refunded
to the Company, the manner of handling such excess to be at such Purchaser’s election.


 


5.22    
WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY,
THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY,
IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.


 



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5.23     Equitable
Adjustment. Trading volume amounts, price/volume amounts, the amount of Warrants, the amount of shares of Common Stock identified
in this Agreement, purchase price per Share, Exercise Price, Warrant Shares and similar figures in the Transaction Documents shall
be equitably adjusted (but without duplication) to offset the effect of stock splits, similar events and as otherwise described
in this Agreement, and Warrants.


 


(Signature
Pages Follow)


 



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IN
WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.



 





	MV PORTFOLIOS, INC.	 	Address for Notice:
	 	 	 	 
	 	 	 	14286-19 Beach Blvd #386
	 	 	 	Jacksonville, Florida 32250
	 	 	 	Fax: (888) 355-1108
	 	 	 	 
	By:	 	 	 
	 	 	 	 
	 	 	 	 
	Name:	 	 	 
	Title:	 	 	 
	 	 	 	 
	With a copy to (which shall not constitute notice):
	 	 	 	 
	Schiff Hardin LLP	 	 
	100 N. 18th Street, Suite 300	 	 
	Philadelphia, PA 19103	 	 
	Attn: Cavas S. Pavri, Esq.	 	 
	Fax: (202) 778-6460	 	 







 


[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK


SIGNATURE
PAGE FOR PURCHASER FOLLOWS]


 



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[PURCHASER
SIGNATURE PAGES TO MV PORTFOLIOS, INC.


SECURITIES
PURCHASE AGREEMENT]


 


IN
WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.


 


Name
of Purchaser: ________________________________________________________________


 


Signature
of Authorized Signatory of Purchaser: __________________________________________


 


Name
of Authorized Signatory: _______________________________________________________


 


Title
of Authorized Signatory: ________________________________________________________


 


Address
for Delivery of Securities to Purchaser (if not same as address for notice):


 


______________________________________________________________________________


 


______________________________________________________________________________


 


______________________________________________________________________________


 


Share
Purchase Price: [REQUIRES COMPLETION] shares of Common Stock x $[REQUIRES
COMPLETION] = US$[REQUIRES COMPLETION]


 


Total
Subscription Amount: US$[REQUIRES COMPLETION]


 


EIN
Number, if applicable, will be provided under separate cover: ________________________


 



    48