SECURITIES
PURCHASE AGREEMENT


 


This
SECURITIES PURCHASE AGREEMENT (this “Agreement”) is dated as of October 12, 2017, between Canbiola, Inc., a
Florida corporation (the “Company”), and RedDiamond Partners LLC, a limited liability company formed under the laws
of Delaware (the “Purchaser”).


 


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(b) promulgated thereunder, the Company desires to issue and sell to
the Purchaser, and the Purchaser desires to purchase from the Company, convertible preferred stock of the Company designated as
Series BB Preferred Stock and as more fully described in this Agreement;


 


WHEREAS,
the Board of Directors of the Company has approved the creation and authorization of the Series BB Preferred Stock;


 


WHEREAS,
pursuant to the Certificate of Designations, the Company shall issue to the Purchaser certain number of shares of the Series BB
Preferred Stock (the “Preferred Shares”) in accordance with this Agreement.


 


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 the Purchaser agree as follows:


 


ARTICLE
I.


DEFINITIONS


 


I.I
Definitions. In addition to the terms defined elsewhere in this Agreement: (a) capitalized terms that are not otherwise
defined herein have the meanings given to such terms in the Certificate of Designations (as defined herein), and (b) the following
terms have the meanings set forth in this Section I. I:


 


“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.6.


 


“Action”
shall have the meaning ascribed to such term in Section 3.l(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.


 


“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 Jaw or other governmental action to close.


 




    	 	 	 



    	 



    

 


“Certificate
of Designations” means that certain Certificate of Designations, Preferences and Rights of the Series B Convertible Preferred
Stock of the Company.


 


“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable
parties thereto in connection with a Closing, and all conditions precedent to (i) the Purchaser’s obligations to pay the
applicable Purchase Price as lo such Closing and (ii) the Company’s obligations to deliver the Securities as to such Closing,
in each case, have been satisfied or waived. 


 


“Closing”
means one or more closings of the purchase and sale of the Securities pursuant to Section 2.2.


 


“Closing
Statement” means the Closing Statement m the form on Annex A attached hereto.


 


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


 


“Common
Stock” means the common stock of the Company, par value Nil per share, 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 tht’. 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
instment 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 Austin Legal Group, APC.


 


“Redemption
Price” shall have the meaning ascribed to such term in the Certificate of Designations.


 


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


 


“Evaluation
Date” shall have the meaning ascribed to such term in Section 3.l(q).


 


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


 


“Exempt
Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers, directors, advisors or independent
contractors of the Company pursuant to any stock or option plan duly adopted for such purpose, (b) shares of Common Stock, warrants
or options to advisors or independent contractors of the Company for compensatory purposes, (c) securities upon the exchange of
or redemption of any Securities issued hereunder and/or other securities exercisable or exchangeable for or convertible into shares
of Common Stock issued and outstanding on the date of filing of the Certificate of Designations with the Secretary of State of
the State of Florida, provided that the Certificate of Designation has not been amended since such date to increase the authorized
number of such securities or to decrease the redemption price or exchange price of such securities, (d) securities issuable pursuant
to any contractual anti dilution obligations of the Company in effect as of the date of filing of the Certificate of Designations
with the Secretary of State of the State of Florida, provided that such obligations have not been materially amended since such
date, and (e) securities issued pursuant to acquisitions or any other strategic transactions approved by the Board of Directors,
provided that any such issuance 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.


 




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


 


“GAAP” shall have the meaning ascribed to such term in
Section 3.1(h). “Indebtedness” shall have the meaning ascribed to such term in Section 3.l(jj).


 


“Intellectual
Property Rights” shall have the meaning ascribed to such term m Section 3.l(o).


 


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


 


“Material.
Adverse Effect” shall have the mcanmg assigned to such term m Section 3. I (b).


 


“Material
Permits” shall have the meaning ascribed to such term in Section 3.l(m).


 


“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.


 


“Preferred
Shares” means the shares of Series B Convertible Preferred Stock issued to the Purchaser.


 


“Preferred
Stock Certificate” means one or more certificates representing Preferred Shares issued to the Purchaser at a Closing.


 


“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.


 




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“Public
Information Failure” shall have the meanmg ascribed to such tenn m Section 4.3(b).


 


“Public
Information Failure Payments” shall have the meaning ascribed to such terrp in Section 4.3(b).


 


“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.9.


 


“Purchase
Price” in aggregate shall mean $150,000, and as to each Closing shall mean the respective actual amounts of fonds the Purchaser
will transfer to the Company at the Closing.


 


‘“Registrable
Securities” means all Underlying Shares and any other shares of Common Stock issuable under the Certificate of Designations.


 


“Required
Approvals” shall have the meaning ascribed to such term in Section 3.I ( e ).


 


“Maximum
Convertible Amount” means, as of any dale, the maximum aggregate number of shares of Common Stock then issued or potentially
issuable or convertible in the future pursuant to the Transaction Documents, including any Underlying Shares issuable upon the
conversion in full of all Preferred Shares or all, respectively, (including Underlying Shares issuable as payment of dividends,
late-charges, make-whole amounts, and any other amounts described in the Certificate of Designations).


 


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


 


“SEC
Reports” shall have the meaning ascribed to such term in Section 3.1(h). ‘“Securities” means the Preferred
Shares and the Underlying Shares.


 


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


 


“Series
B Preferred Stock” means the Series B Convertible Preferred Stock, par value $0.001 per share, of the Company that can be
issued pursuant to the Certificate of Designations.


 


“Shell
Company” means an entity that fits within the definition of a “shell company” under Section 12b-2 of the Exchange
Act and Rule 144.


 




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“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under “Stated Value” means
the face value of the Series B Preferred Stock, based on which the number of shares of common stock of the Company will be calculated
together with the conversion price. The Stated Value per Preferred Share is $1.00, subject to adjustment for stock splits, stock
dividends, recapitalizations, reorganizations, reclassifications, combinations, subdivisions or other similar events occurring
after the Initial Issuance Date with respect to the Preferred Shares.


 


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


 


“Trading
Day” means a day on which the principal Trading Market is open for trading.


 


“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 Nasdaq Capital Market; the Nasdaq Global Market; the Nasdaq Global Select Market; the New York Stock Exchange;
the NYSE MKT, any level of the OTC Markets operated by OTC Markets Group, Inc. or the OTC Bulletin Board (or any successors to
any of the foregoing).


 


“Transaction
Documents” means this Agreement, the Certificate of Designations, the legal opinion of Company Counsel, the Transfer Agent
Instruction Letter, all exhibits and schedules. thereto and hereto and any other documents or agreements executed in connection
with the transactions contemplated hereunder.


 


“Transfer
Agent” means Island Stock Transfer, the current transfer agent of. the Company, with a mailing address of 15500 Roosevelt
Blvd Clearwater Fl 33760 and a telephone number of 727-289-0010, and any successor transfer agent of the Company.


 


“Transfer
Agent Instruction Letter” means the letter from the Company to the Transfer Agent which instructs the Transfer Agent to
issue Underlying Shares pursuant to the Transaction Documents, in the form of Exhibit A attached hereto.


 


“Underlying
Shares” means the shares of Common Stock issued and issuable upon conversion of the Preferred Shares (including, without
limitation, any shares of Common Stock issuable as payment of dividends, late-charges, make-whole amounts, and any other amounts
described in the Certificate of Designations) and issued and issuable in lieu of the cash payment of dividends on the Preferred
Shares in accordance with the terms of the Certificate of Designations.


 




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ARTICLE
II.


PURCHASE
AND SALE; EXCHANGE


 


2.1
Purchase. The Purchaser agrees to purchase from the Company and the Company agrees to sell to the Purchaser an aggregate of $15000
of Preferred Shares at a purchase price equal to $0.95 per share, for an aggregate of 157,895 Preferred Shares. The Purchaser
shall not be required to purchase additional shares of Preferred Share subsequent to the First Closing if (a) the Company, its
Subsidiaries, or any of the directors or officers of the Company or its Subsidiaries commit fraud; (b) the Company or its Subsidiaries
breach any covenant contained herein or in the other Transaction Documents; or (c) a Triggering Event (as defined in the Certificate
of Designations) occurs on or before any Closing Day unless the Company cures such Triggering Event within the applicable period
set forth in the Certificate of Designations.


 


2.2
Closings. At each Closing, (i) the Purchaser shall deliver to the Company, via wire transfer to an account designated by the Company,
immediately available funds equal to the Purchase Price, which, for such respective Closing, shall be equal to the number of Preferred
Shares to be purchased and sold multiplied by ninety-five percent (95%) of the Staied Value per share; (ii) the Company shall
deliver to the Purchaser its Preferred Stock Certificate representing the Preferred Shares purchased and sold at such Closing;
and (iii) the Company and the Purchaser shall deliver all other items set forth in Section 2.3. Upon satisfaction of the covenants
and conditions set forth in Sections 2.3 and 2.4for each Closing, each Closing shall occur electronically or at such other location
as the parties shall mutually agree, and may by agreement be undertaken remotely by electronic exchange of Closing documentation.
Within ninety (90) days from the execution and delivery of this Agreement by the parties hereto, the Company and the Purchaser
shall conduct a Closing at which the Purchaser shall purchase and the Company shall sell $100,000 of Preferred Shares (the “First
Closing”). Subsequent to the First Closing, the Company and the Purchaser shall conduct additional Closings on each monthly
anniversary following the date of the First Closing until the Purchaser has purchased and the Company has sold an aggregate of
$150,000 of Preferred Shares hereunder. At the sole discretion of the Purchaser, the Purchaser shall have the option to accelerate
the date of any and all additional Closings by providing the Company notice of such intent to conduct a Closing at least three
(3) Trading Days prior to the date of such accelerated Closing.


 


Notwithstanding
anything to the contrary stated herein, Purchaser acknowledges that pursuant to the Exchange Act, the Company is required to file
forms Pre14C and Def!4C with the Commission at least forty (40) days prior to filing forms designating the Preferred Shares with
the state of Florida and that the failure to file the Certificate of Designations for the Preferred Shares shall not, under any
circumstance, constitute a breach of any provision of this Agreement until the date at least ninety (90) days from the date of
this Agreement and that Purchaser may nonetheless tender the Company a portion of the Purchase Price prior to such filing.


 


2.3
Deliveries Upon Closing.


 


(a)
On or prior to the applicable Closing Date, the Company shall deliver ?.r cause to


be
<kll red <o U., P=h oc <he followl:g,


 




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(i)
as to the First Closing, this Agreement duly executed by the Company;


 


(ii)
as to the First Closing, a legal opinion of Company Counsel, substantially in the form of Exhibit B attached hereto;


 


(iii)
as to the First Closing, a stamped copy of the Certificate of Designations that is filed with the Secretary of State of the State
of Florida;


 


(iii)
as to the First Closing, the Transfer Agent Instruction Letter duly executed by the Company and the Transfer Agent; and


 


(v)
a certificate representing the requisite amount of Preferred Shares equal to the Purchaser’s Purchase Price as to the applicable
Closing, registered in the name of the Purchaser.


 


(b)
On or prior to the applicable Closing Date, the Purchaser shall deliver or cause to be delivered to the Company, as applicable,
the following:


 


(i)
as to the First Closing, this Agreement duly executed by the Purchaser; and


 


(ii)
the Purchaser’s Purchase Price as to the applicable Closing, by wire transfer to the account specified in writing by the
Company.


 


2.4
Closing Conditions.


 


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


 


(i)
the accuracy in all material respects, on the applicable Closing Date, of the representations and warranties of the Purchaser
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 the Purchaser required to be performed at or prior to the applicable Closing Date
shall have been performed; and


 


(iii)
the delivery by the Purchaser of the items set forth in Section 2.3(b) of.this Agreement.


 


(b)
The obligations of the Purchaser hereunder in connection with the First Closing


,
addi,iorutl Closiogs , sabjoci ‘“ Ore fullowiog ooodilioos bciog met “})\


 




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(i)
the accuracy in all material respects when made and on the applicable Closing Date of the representations and warranties of the
Company contained herein (unless as of a specific date therein);


 


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


 


(iii)
the delivery by the Company of the items set forth in Section 2.3(a) of this Agreement;


 


(iv)
the Certificate of Designations has been filed with the Secretary of State of the State of Florida;


 


(v)
there is no Triggering Event (as defined m the Certificate. of Designations);


 


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


 


(vii)
from the date hereof to the applicable 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 prior to the applicable 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 the Purchaser, and without regard to any factors unique to the Purchaser,
makes it impracticable or inadvisable to purchase the Preferred Stock at the applicable Closing.


 


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 and shall qualify any representation or otherwise made herein to the extent of the disclosure contained
in the corresponding section of the Disclosure Schedules, the Company hereby makes the following representations and warranties
to the Purchaser as of the date hereof:


 


(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, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens,
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.


 




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(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 nor 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.


 


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


 




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(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) under, result in the creation of any Lien (except
Liens in favor of the Purchaser) 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,
iajunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject
(including federal and state securities laws and regulations), 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 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 4.15 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 Underlying Shares for trading thereon in the
time and manner required thereby and (iii) the filing of Form D with the Commission and such filings as are required to be made
under applicable state securities laws (collectively, the “Required Approvals”).


 


(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 imposed by the
Company other than restrictions on transfer provided for in the Transaction Documents. The Underlying Shares, when issued in accordance
with the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable, free and clear of all Liens
imposed by the Company other than restrictions on transfer provided for in the Transaction Documents. The Company has reserved
under the Purcha er’s name from its duly authorized capital stock a number of shares of Common Stock for issuance of the
Underlying Shares at least equal to 300% of the Maximum Convertible Amount on the date hereof.


 




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(g)
Capitalization. The capitalization of the Company is as set forth on Schedule 3.l(g), which Schedule 3.l(g) shall also
include the number of shares of Common Stock owned beneficially, and of record, by Affiliates of the Company as of the date hereof.
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 to or known by Purchaser, there are no outstanding
options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities,
rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or
acquire any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary
is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents. The issuance and sale of the Preferred
Stock will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Purchaser)
and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price
under any of such securities. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued,
fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding
shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further
approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities.
There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital
stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.


 


(h) SEC
Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other
documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section
13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by
law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated
by reference therein, being collectively referred to herein as the “SEC Reports”). 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 Company has never been an issuer subject to Rule l 44(i) under
the Securities Act. The financial statements of the Company included in the SEC Reports comply in all material respects with
applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the
time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise·
specified in such financial statements. or the notes thereto nd except that unaudited financial statements may not contain
all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its
consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then
ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.


 




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(i)
Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements
included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof: (i)
there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse
Effect; (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued
expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected
in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission; (iii) the Company
has not altered its method of accounting; (iv) the Company has not declared or made any dividend or distribution of cash or other
property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock;
and (v) the Company has not issued any equity securities to any officer, director or Affiliate. Except for the issuance of the
Preferred Stock contemplated by this Agreement, no event, liability, fact, circumstance, occurrence or development has occurred
or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses,
properties, operations, assets or financial condition, that would be required to be disclosed by the Company under applicable
securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least one (1) Trading
Day prior to the date that this representation is made.


 


(j)
Litigation. Except as set forth on Schedule 3.l(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”) which (i) adversely affects or challenges the
legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) could, if there were an unfavorable
decision, have or reasonably be expected to result in a Material Adverse Effect, and neither the Company nor any Subsidiary, nor
any director or officer thereot; is or has been the subject of any Action involving a claim of violation of or liability under
federal or state securities laws or a claim of breach of fiduciary duty. There has not b en, and to the knowledge of the Company,
there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director
or officer of the Company that is likely to lead to action that can reasonably be expected to result in a Material Adverse Effect.
There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission
involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order
or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange
Act or the Securities Act.


 




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(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, 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 Subsidiari.es 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 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 or”any third party, 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 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 Eftect.


 


(I)
Compliance. Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred
that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary
under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation
of, any 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) 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 e.ach 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 described
in the SEC Reports, except where the failure to possess such permits could not reasonably be expected to result in a Material
Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any· notice of
proceedings relating to the revocation or modification of any Material Permit.


 




    	 	13	 



    	 



    

 


(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 (i) Liens as do not materially affect the value of such
property and do not materially interfere with the. use made and proposed to be made of such property by the Company and the Subsidiaries
and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance
with GAAP and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under
lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company
and the Subsidiaries are in compliance.


 


(o)
Intellectual Property. The Company and the Subsidiaries have. or have rights to use, all patents, patent applications,
trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual
property rights and similar rights as described in the SEC Reports as necessary or required for use in connection with their respective
businesses as presently conducted and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual
Property Rights”). Neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the
Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned,
within (2) years from the date of this Agreement. Neither the Company nor any Subsidiary has received, since the date of the latest
audited financial statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that
the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not have or reasonably be
expected to not have a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights are enforceable
and there is no existing infringement by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries
have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties,
except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.


 


(p)
Transactions with Affiliates and Employees. Except as set forth on Schedule 3.l(p), 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 Subsidiar.y 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 $160,000 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.


 




    	 	14	 



    	 



    

 


(q)
Sarbanes-Oxley; Internal Accounting Controls. Except as set forth on Schedule 3.l(q), the Company and the Subsidiaries
are in 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 applicable Closing Date. 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. 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 th,: period covered by the most recently filed periodic report under the
Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report
under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures
based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control
over financial reporting (as such term is defined in the Exchange Act) that have materially affected, or is reasonably likely
to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.


 


(r)
Certain Fees. Other than as set forth on Schedule 3.1(r), no brokerage or finder’s fees or commissions are or will
be payable by the Company or any Subsidiaries 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. The Purchaser 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 that may be due in connection with the transactions contemplated by the Transaction Documents.


 


(s)
Private Placement. Assuming the accuracy of the Purchaser’s representations and warranties set forth in Section 3.2,
no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchaser
a contemplated hereby. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the
Trading Market.


 




    	 	15	 



    	 



    

 


(t)
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.


 


(u)
Registration Rights. Except in Schedule 3.l(u), 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 Subsidiaries.


 


(v)
Listing and Maintenance Requirements. The class of Common Stock is registered pursuant to Section l 2(b) or l 2(g) of the
Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating
the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission
is contemplating terminating such registration. The Company has not, in the twelve (12) months preceding the date hereof, received
notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not
in compliance with the listing or maintenance requirements of such Trading Market. The Company is, and has no reason to believe
that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements.


 


(w)
Application of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in
order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under
a rights agreement) or other similar anti-takeover provision under the Company’s Articles of Incorporation (or similar charter
documents) or the laws of its state of incorporation that is or could become applicable to the Purchaser as a result of the Purchaser
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 Purchaser’s ownership of the Securities.


 


(x)
Disclosure. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction
Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided the Purchaser or their
agents or counsel with any information that it believes constitutes or might constitute material, non-public information. The
Company understands and confirms that the Purchaser 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 Purchaser regarding the Company and its
Subsidiaries, their respective businesses and the transactions contemplated hereby, including the Disclosure Schedules to this
Agreement, is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.
The Company acknowledges and agrees that the Purchaser does not make or has not made any representations or warranties with respect
to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.


 




    	 	16	 



    	 



    

 


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


 


(z)
No General Solicitation. In connection with the transaction contemplated herein, neither the Company nor 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 Purchaser and certain other “accredited investors” within
the meaning of Rule 501 under the Securities Act.


 


(aa)
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, entertaimnent 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 ofFCPA.


 


(bb)
Accountants. The Company’s accounting firm is set forth on Schedule 3.l(bb) of the Disclosure Schedules. To the knowledge
and belief of the Company, such accounting firm is a registered public accounting firm as required by the Exchange Act.


 


(cc)
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 is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s
ability to perform any of its obligations under any of the Transaction Documents.


 




    	 	17	 



    	 



    

 


(dd)
Acknowledgment Regarding Purchaser’s Purchase of Securities. The Company acknowledges and agrees that the Purchaser
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 Purchaser’s purchase of the Securities. The Company
further represents to the 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.


 


(ee)
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 ot: 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.


 


(ff)
Reserved.


 


(gg)
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.


 


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


 


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


 




    	 	18	 



    	 



    

 


(jj)
Solvency. Based on the consolidated financial condition of the Company as of the applicable Closing Date after giving effect
to the receipt by the Company of the proceeds from the sale of the Securities hereunder: (i) the fair saleable value of the Company’s
assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities
(including known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute umeasonably small capital
to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the
particular capital requirements of the business conducted by the Company, consolidated and projected capital requirements and
capital availability thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive,
were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay
all amounts on or in respect of its liabilities when such amounts are required to be paid. The Comi:iany 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 applicable
Closing Date. Schedule 3.l(jj) sets forth as of the date hereof all 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 $50,000 (other than trade accounts payable incurred
in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness
of others, whether or not the same arc or should be reflected in the Company’s consolidated balance sheet (or the notes
thereto), except guaranties by ·endorsement of negotiable instruments for deposit or collection or similar transactions
in the ordinary course of business; and (z) the present value of any lease payments in excess of $50,000 due under leases required
to be capitalized in accordance with GAAP. Neither the Company nor ·any Subsidiary is in default with respect to any Indebtedness.


 


(kk)
Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result
in a Material Adverse Effect, the Company (i) has made or filed all United States federal, 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. Except as set forth on Schedule 3.1(kk),
there are no unpaid taxes in any material amount claimed to .be due by the taxing authority of any jurisdiction, and the officers
of the Company know ofno basis for any such claim.


 




    	 	19	 



    	 



    

 


(11)
Seniority. As of each Closing Date, except as set forth on Schedule 3.l(ll). no Indebtedness or other claim against the
Company is senior to the Preferred Shares in right of payment, whether with respect to interest or upon liquidation or dissolution,
or otherwise, other than indebtedness secured by purchase money security interests (which is senior only as to underlying assets
covered thereby) and capital lease obligations (which is senior only as to the property covered thereby).


 


(mm)
Shell Company Status. The Company is not presently and has not been since December 31, 2010, an issuer identified as a
“Shell Company”.


 


(nn)
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.


 


3.2
Representations and Warranties of the Purchaser. The 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. The 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 the 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 the Purchaser.
Each Transaction Document to which it is a party has been duly executed by the Purchaser and, when delivered by the Purchaser
in accordance with the terms hereof. will constitute the valid and legally binding obligation of the 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.


 




    	 	20	 



    	 



    

 


(b)
Own Account. The Purchaser understands that the Preferred Shares are


“=trided
s,crri<i “ , i< IB aeq”iri:: ili, Prefo,red Sh=s p,ioeip\”‘ owo


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 the Purchaser’s right to sell the Securities in compliance with applicable
federal and state securities laws). The Purchaser is acquiring Preferred Shares hereunder in the ordinary course of its business.


 


(c)
Purchaser Status. At the time the Purchaser was offered the applicable Securities, it was, and as of the date hereof it
is, and on each date on which it converts any Preferred Shares, it will be an “accredited investor” as defined in
Rule 50I under the Securities Act.


 


(d)
Experience of the Purchaser. The 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 or the prospective investment
in the Securities, and has so evaluated the merits and risks of such investment. The 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)
General Solicitation. The Purchaser is not purchasing the Securities as a result of any advertisement, article, notice
or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television
or radio or presented at any seminar or any other general solicitation or general advertisement.


 


(t)
Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, the Purchaser has
not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with the Purchaser, executed
any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as or the time that
the Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting
forth the material terms of the transactions contemplated hereunder and will not engage in such activities during any period in
which it holds the Preferred Shares or Underlying Shares. Notwithstanding the foregoing, in the case of a Purchaser that is a
multi managed investment vehicle whereby separate portfolio managers manage separate portions of the Purchaser’s assets
and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other
portions of the 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


<his
A,reeme”‘• d,., P•ch=,< h,,smai”:”ol tire eoruidMti,11,y of <I=de


to
it in connection with this transaction (including the existence and terms of this transaction).


 




    	 	21	 



    	 



    

 


(g)
Regulation M Compliance. The Purchaser 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.


 


The
Company acknowledges and agrees that the representations contained in Section 3.2 shall not modify, amend or affect the 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
Transfer Restrictions.


 


(a)
The Preferred Stock may only be disposed ofin compliance with state and federal securities laws. In connection with any transfer
of Preferred Stock other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of
the Purchaser or in connection with a pledge as contemplated in Section 4.1(b), 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 Preferred Stock under the Securities Act. As a condition of transfer, any such transferee shall agree in
writing to be bound by the terms of this Agreement and shall have the rights and obligations 11f a Purchaser under this Agreement.


 


(i)
Right of First Refusal. Purchaser hereby grants to the Company, and the Company hereby accepts, the right of first refusal
of any bona fide offer to purchase Preferred Shares (the “Right of First Refusal. In the event that Purchaser receives a
bona fide offer from a third party to purchase all or a portion of the Preferred Shares (an “Offer”) and Purchaser
intends to accept such offer, Purchaser shall notify the Company in writing of the terms, conditions, warranties, and all other
material information included in the Offer. Upon receipt, the Company shall have the Right of First Refusal to purchase the Preferred
Shares subject to the Offer on the same terms contained in the Offer (the “Option”). The Company shall exercise the
Option granted hereby by providing a written notice to Purchaser of the Company’s intent to purchase the Preferred Shares
according to the Offer. If the Company provides notice to Purchaser of its intent to purchase the Preferred Shares according to
the terms of the Offer within fourteen (14) days, the parties shall enter into s standard stock purchase agreement for the Preferred
Shares based on the terms of the Offer. If the Company fails to exercise the Option within fourteen (14) days from receipt from
Purchaser of notice of the Offer, Purchaser may sell the Preferred Shares subject to the terms of the Offer.


 




    	 	22	 



    	 



    

 


(b)
The Purchaser agrees 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 INTO WHICH THIS SECURITY IS CONVERTIBLE HAS 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, 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.
THIS SECURITY AND THE SECURITIES ISSUABLE UPON [REDEMPTION] 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 IHA T JS AN “ACCREDITED INVESTOR”
AS DEFINED IN RULE 501(A) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.


 


The
Company acknowledges and agrees that the 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 Preferred Stock 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, the Purchaser may transfer pledged
or secured Preferred Stock 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 the Purchaser’s expense, the Company will execute and deliver such
documentation as a plcdgee or secured party of Preferred Stock may reasonably request in connection with a pledge or transfer
of the Preferred Stock.


 


(c)
Certificates evidencing the Underlying Shares. Certificates evidencing the Underlying Shares shall not contain any legend
(including the legend set forth in Section 4.l(b) hereof): (a) while a registration statement covering the resale of such security
is effective under the Securities Act; (b) following any sale of such Underlying Shares pursuant to Rule 144; or (c) if such legend
is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued
by the staff of the Conunission). The Company shall, upon request of a Purchaser and at the Company’s expense, cause Company
Counsel to issue a legal opinion to the Transfer Agent promptly after any of the events described in (a)-(d) in the preceding
sentence if required by the Transfer Agent to effect the removal of the legend hereunder (with a copy to the Purchaser and its
broker). If Underlying Shares are 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
Underlying Shares shall be issued free of all legends. The Company agrees that, at such time as such legend is no longer required
under this Section 4.l(c), it will, no later than three (3) Trading Days following the delivery by the Purchaser to the Company
or the Transfer Agent of a certificate representing such Underlying Shares and an opinion acceptable to the Company for the availability
of a resale exemption with a restrictive legend (such third Trading Day, the “Preferred Share Legend Removal Date”),
instruct the Transfer Agent to deliver or cause to be delivered to the Purchaser a certificate representing such Shares that is
free from all restrictive and other legends. 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. Certificates for Underlying Shares subject
to legend removal hereunder shall be transmitted by the Transfer Agent to the Purchaser by crediting the account of the Purchaser’s
prime broker with the Depository Trust Company System as directed by the Purchaser.


 




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(d)
Intentionally Omitted.


 


(e)
The Company shall provide an opinion letter from legal counsel confirming that the Common stock issuable pursuant to the conversion
of the Preferred Stock is exempt from the registration requirements under Rule 144 so long as the requirements of E.ule 144 are
satisfied. The Purchaser shall accept such opinion letter that covers all Preferred Shares and is satisfactory to the Company’s
Transfer Agent. Should the Company seek recommendation of legal counsel who may provide such opinion letter, the Purchaser may
provide recommendation on choice of counsel and the Company bears the legal fees relating to the opinion letter.


 


4.2
Acknowledgment of Dilution. The Company acknowledges that the issuance or conversion of the Preferred Stock may result
in dilution of the outstanding shares of Conunon 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 Underlying Shares pursuant to the Transaction Documents, arc unconditional and absolute 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.


 




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4.3
Furnishing of Information; Public Information.


 


(a)
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 after the date hereof pursuant to the Exchange Act.


 


(b)
At any time during the period commencing from the six (6)-month anniversary of the date hereof and ending at such time that all
of the Securities may be sold without the requirement for the Company to be in compliance with Rule 144(c)(l) and otherwise without
restriction or limitation pursuant to Rule 144, 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 the 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 in or reduction of its ability to sell the Securities, an amount in cash equal to two percent (2.0%) of the aggregate
Stated Value of the Purchaser’s Preferred Stock then owned by the Purchaser on the day of a Public Information Failure and
on every thirtieth (301h ) day (pro-rated for periods totaling less than thirty days) thereafter until the earlier of (i) the
date such Public Information Failure is cured and (ii) such time that such public information is no longer required for, the Purchaser
to transfer the Underlying Shares pursuant to Rule 144. The payments to which the 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 arc
incurred and (ii) the third (3’d) 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 the Purchaser’s right to pursue actual damages for the Public Information Failure, and the 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.


 


4.4
Integration. Except as set forth on Schedule 4.4, 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 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 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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4.5
One-Time Redemption. At any time before the third month anniversary from the date hereof, the Company may redeem the total
outstanding Preferred Stock for an aggregate of one hundred and fifteen percent (115%) of its Stated Value and one hundred percent
(100%) of accrued and unpaid dividends of the outstanding Preferred Stock and any other amounts due pursuant to the Certificate
of Designations. The form of the Redemption Notice included in the Certificate of Designations sets forth the totality of the
procedures required of the Company in order to redeem the Preferred Shares. No additional legal opinion, other information or
instructions shall be required of the Company to redeem all of its outstanding Preferred Shares. The Purchaser shall honor redemptions
of the Preferred Stock and shall deliver the certificate representing all such Preferred Stock outstanding in accordance with
the terms, conditions and time periods set forth in the Transaction Documents.


 


4.6
Stockholder 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 Purchaser.


 


4.7
Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated by the
Transaction Documents, the Company covenants and agrees that neither it, nor any other Person acting on its behalt will provide
the Purchaser or its agents or counsel with any information that the Company believes constitutes material non-public information,
unless prior thereto the 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 the Purchaser shall be relying on the foregoing covenant
m effecting transactions in the Company’s Securities.


 


4.8
Use of Proceeds. The Company may use the net proceeds hereunder at its sole and absolute discretion.


 


4.9
Indemnification of the Purchaser. Subject to the prov1s10ns of this Section 4.9, the Company will indenmify and hold the
Purchaser and its directors, officers, stockholders, 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
the Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors,
officers, stockholders, 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 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 any Purchaser Party in


,
““‘““‘ o,ooy of<h= by , ‘“‘khol®’ ohh, \’


 




    	 	26	 



    	 



    

 


who
is not an Affiliate of the Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents
(unless such action is based upon a breach of the Purchase’s representations, warranties or covenants under the Transaction
Documents or ‘any agreements or understandings the Purchaser Party may have with any such stockholder or any violations
by such Purchaser Party of state or federal securities laws or any conduct by the 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, the 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 choice that is reasonably acceptable to the
Purchaser Party being sued. Any Purchaser Party shall have the right to employ separate counsel in any such action and participate
in the defense thereoC but the fees and expenses of such counsel shall be at the expense of the 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 counsel, a material conflict on any material issue between the position of the Company and the position of the Purchaser
Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel.
The Company will not be liable to any Purchaser Party under this Agreement (x) for any settlement by a Purchaser Party effected
without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (y) to the extent,
but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser’s breach of any of the representations,
warranties, covenants or agreements made by the Purchaser in this Agreement or in the other Transaction Documents or the Purchaser
Party’s negligence or wiliful misconduct. The indemnification required by this Section 4.9 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 indemnification
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 under applicable laws.


 


4.10
Reservation and Listing of Securities.


 


(a)
The Company shall maintain a reserve from its duly authorized shares of Common Stock for issuance pursuant to the Transaction
Documents in such amount as may then be required to fulfill its obligations in full under the Transaction Documents.


 


(b)
If, on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than 300% of
the Maximum Convertible Amount on such date, then the Board of Directors shall use commercially reasonable efforts to amend the
Company’s certificate or articles of incorporation to increase the number of authorized but unissued shares of Common Stock
to at least 300% of the Maximum Convertible Amount al such time, as soon as possible and in any event not later than the seventy-fifth
(751h ) day after such date.


 




    	 	27	 



    	 



    

 


(c)
The Company shall, if applicable: (i) in the time and manner required by the principal Trading Market, prepare and file with such
Trading Market an additional shares listing application covering a number of shares of Common Stock at least equal to the Maximum
Convertible Amount on the date of such application; (ii) take all steps necessary to cause such shares of Common Stock to be approved
for listing or quotation on such Trading Market as soon as possible thereafter; (iii) provide to the Purchaser evidence of such
listing or quotation; and (iv) maintain the listing or quotation of such Common Stock on any date at least equal to the Maximum
Convertible Amount on such date on such Trading Market or another Trading Market.


 


4.11
Prohibition on Variable Securities. So long as any of the Preferred Shares are outstanding, the Company shall not, without
written consent of the Purchaser, issue any Variable Security (as defined herein), unless (i) the Company is permitted to redeem
all outstanding Preferred Shares in cash at the time of the issuance of the respective Variable Security and (ii) the Company
has the option to and does redeem all outstanding Preferred Shares, pursuant to the terms of the Certificate of Designations,
in cash at the time of the issuance of the respective Variable Security. A Variable Security shall mean any security issued by
the Company that (i) has or may have conversion rights of any kind, contingent, conditional or otherwise in which the number of
shares that may be issued pursuant to such conversion right varies with the market price of the Company’s common stock;
(ii) is or may become convertible into the Company’s common stock (including without limitation convertible .debt, warrants
or convertible preferred stock), with a conversion or exercise price that varies with the market price of the common stock, even
if such security only becomes convertible or exercisable following an event of default, the passage of time, or another trigger
event or condition; or (iii) was issued or may be issued in, the future in exchange for or in connection with any contract, security,
or instrument, whether convertible or not, where the number of shares of common stock issued or to be issued is based upon or
related in any way to the market price of the common stock, including, but not limited to, common stock issued in connection with
a Section 3(a)(9) exchange, a Section 3(a)(IO) settlement, or any other similar settlement or exchange.


 


4.12
Treatment of Obligations and Prohibition on Senior Obligations. All obligations hereunder and pursuant to the Certificate
of Designation, including those to pay dividends, fees, expenses or redemption amounts upon the occurrence of a Triggering Event
(as defined in the Certificate of Designations), and any premiums, whether or not allowed as a claim under bankruptcy or similar
laws) with respect to the Preferred Shares and other obligations, and fees and expenses in connection therewith and hereunder
(collectively, the ‘“Obligations”), shall rank senior to any debt, payment obligations or similar arrangement
(‘“Indebtedness”) in respect of the preferences as to dividends, distributions and payments upon the liquidation,
dissolution and winding-up of the Company and the incurrence of any Indebtedness that ranks senior to the Obligations shall be
prohibited unless the Purchaser expressly consents in writing to such incurrence of Indebtedness.


 




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4.13 Right
of First Offer. From the date hereof until the date that is the twelve (12) month anniversary of the date of the First
Closing, in the event that the Company desires to consummate a transaction with any Person with respect to a bona fide
offer of capital or financing, including without limitation, the issuance of Common Stock, Common Stock Equivalents or debt
for cash consideration, Indebtedness or a combination of units thereof (a “ROFO Financing”), then the Company
shall first offer such opportunity to the Purchaser, in writing (a “ROFO Notice”). The ROH) Notice must be sent
Purchaser pursuant to Section 5.4. Such ROFO Notice shall contain the material economic terms that the Company would, in good
faith, expect to receive in the market for transactions similar in type to the ROFO Financing being sought (the
“Material Economic Terms”). If Purchaser is unwilling or unable to provide such ROFO Financing to the Company
within three (3) Trading Days from Purchaser’s receipt of the ROFO Notice, then the Company may obtain such ROFO
Financing from any other Person upon the exact same Material Economic Terms, which such ROFO Financing must be completed
within ninety (90) calendar days after the date of the ROFO Notice. If the Company does not receive the ROFO Financing from
such Person within ninety (90) calendar days after the date of the respective ROFO Notice, then the Company must again offer
the ROFO Financing opportunity to Purchaser as described above, and the process detailed above shall be repeated.
Additionally, in the event that the Company proceeds to a ROFO Financing with another PeFson and then the Material Economic
Terms are altered or modified in any way, then the Company must again offer the ROFO Financing opportunity (on such altered
or modified Material Economic Terms) to the Purchaser as described above, and the process detailed above shall be
repeated.


 


4.14
Certain Transactions and Confidentiality. The Purchaser, covenants that neither it, nor any Affiliate acting on its behalf
or pursuant to any understanding with it will execute any Short Sales, of any of the Company’s securities during the period
commencing with the execution of this Agreement and ending on the date that the Preferred Shares are no longer outstanding.


 


4.15 Securities
Laws Disclosure; Publicity. The Company shall (a) by 9:30 a.m. (New York City time) on the Trading Day
immediately following the date hereof, issue a press release disclosing the material terms of the transactions contemplated
hereby and (b) by the fourth (4111) Trading Day immediately following the date hereof file a Current Report on Form 8,K,
including the Transaction Documents as exhibits thereto, with the Commission. From and after the issuance of such press
release, the Company represents to the Purchaser that it shall have publicly disclosed all material, non-public information
delivered to the Purchaser 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 the
Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated
hereby, and neither the Company nor the 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 the Purchaser, or without the prior
consent of the Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld,
delayed, denied, or conditioned 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 the Purchaser, or include the name of the Purchaser in any filing with
the Commission or any regulatory agency or Trading Market, without the prior written consent of the Purchaser, except: (a) as
required by federal securities financing, including without limitation, the issuance· of Common Stock, Common Stock
Eqμivalents·or .debt for cash consideration, 1ndebtedness or a combination .of units. thereof (a “ROFO
Financfog’’), then the Company shall first offer such opportunity to the Purchaser, in writing (a
“RQJ;’O Notice”). The ROFO·Notice must be sem Purchaser pursuant io Section 5.4. S ch ROFO N
iice.shall contain the material economic terms that the Company wouid, in good faith, expect fo-,recei’ve in the market
for transactiohs ·similar in type. to the ROFO. Financing being soughqihe”‘Material Economic
Terms”).. If Purchaser is unwil!ing or unalJle to provide stich) OFO .Fimu:icing to the Company within three (3)
Trading Days’frorii”Purcha ef’s receipt of the ROFO Noficc;-,th n the Company may obtain such ROFO
Financiqg from !\11:,t·other Person upon lhe exact same Material Economic Terms, which such.ROH) Financing mUst,be
completed within ninety (90)·carendat days after the·date of the ROFC) Notice.’ Ifjlie’compimy
does. not receive the ROFO Financing from such Person within ninety (90) calendar days after the date of the respective ROFO
Notice, then the Company must again offer the ROFO Financing opportunity to Purchaser as described above, and the process
detailed above shall be repeated. Additionally, in the event that the Company proceeds to a ROFO Financing with another
Person and then the Material Economic Terms are altered or modified in any way, then the Company must again offer the ROFO
Financing opportunity (on such altered or modified Material Economic Terms) to the Purchaser as described above, and the
process detailed above shall be repeated.


 




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4.16
Form D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Securities as required under Regulation
D and to provide a copy thereof, promptly upon request of the Purchaser. The Company shall also 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 Purchaser
on the applicable dates 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 the Purchaser.


 


4.17 Exchange
Transactions. During the period commencing on the date hereof and for so long as any of the Preferred Shares
remain outstanding, neither the Company nor any of its affiliates or Subsidiaries, nor any of its or their respective
officers, employees, directors, agents or other representatives, will, without the prior written consent of the Purchaser
(which consent may be withheld, delayed or conditioned in the Purchaser’s reasonable discretion), directly or
indirectly: (a) solicit, initiate, encourage or accept any other inquiries, proposals or offers from any Person (other than
the Purchaser) relating to any exchange of any indebtedness or other securities of, or claim against, the Company or any of
its Subsidiaries relying on the exemption provided by Section 3(a)(l 0) of the Securities Act (any such transaction described
in clause (a), an “Exchange Transaction”); (b) enter into, effect, alter, amend, announce or recommend to its
stockholders any Exchange Transaction with any Person (other than the Purchaser); or (c) participate in any discussions,
conversations, negotiations or other communications with any Person (other than the Purchaser) regarding any Exchange
Transaction, or furnish to any Person (other than the Purchaser) any information with respect to any Exchange Transaction, or
otherwise cooperate in any way, assist or participate in, facilitate or encourage any effort or attempt by any Person (other
than the Purchaser) to seek an Exchange Transaction involving the Company or any of its Subsidiaries. In addition, for so
long as any of the Preferred Shares remain outstanding, neither the Company nor any of its affiliates or Subsidiaries, nor
any of its or their respective officers, employees, directors, agents or other representatives, will, without the prior
written consent of the Purchaser (which consent may be withheld, delayed or conditioned in the Purchaser’s sole
discretion), directly or indirectly, cooperate in any way, assist or participate in, facilitate or encourage any effort
or attempt by any Person (other than the Purchaser) to effect any acquisition of securities or indebtedness of, or claim
against, the Company by such Person from an existing holder of such securities, indebtedness or claim in connection with a
proposed exchange of such securities or indebtedness of, or claim against, the Company (whether pursuant to Section 3(a)(9) or 3(a)(]O)
of the Securities Act or otherwise) (a "Third Party Exchange Transfer"). The Company, its affiliates and
Subsidiaries, and each of its and their respective officers, employees, directors, agents or other representatives shall
immediately cease and cause to be terminated all existing discussions, conversations, negotiations and other communications
with any Persons.(other than the Purchaser) with respect lo any of the foregoing. The Company shall promptly (and in no event
later than twenty-four (24) hours after receipt) notify (which notice shall be provided orally and in writing and shall
identify the Person making the inquiry, request, proposal or offer and set forth the material terms thereof) the Purchaser
after receipt of any inquiry, request, proposal or offer relating to any Exchange Transaction or Third Party Exchange
Transfer, and shall promptly (and in no event later than twenty-four (24) hours after receipt) provide copies to the
Purchaser of any written inquiries, requests, proposals or offers relating thereto. The Company agrees that it and. its
affiliates and Subsidiaries, and each of its and their respective officers, employees, directors, agents or
other representatives Subsidiaries will not enter into any agreement with any Person subsequent to the date hereof which
prohibits the Company from providing any information to the Purchaser in accordance with this provision. For all purposes of
this Agreement, violations of the restrictions set forth in this Section 4.17 by any Subsidiary or affiliate of the Company,
or any officer, employee, director, agent or other representative of the Company or any of its Subsidiaries or affiliates
shall be deemed a direct breach of this Section 4.17 by the Company. For the avoidance of doubt, the Company shall not
without the prior written consent of the Purchaser (which consent may be withheld, delayed or conditioned in the
Purchaser’s sole discretion), directly or indirectly consummate an Exchange Transaction or a Third Party Exchange
Transfer if such exchange involves a third party (i.e., a Person that is neither the Company nor any existing security
or debt holder of the Company).


 




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ARTICLE
V.


MISCELLANEOUS


 


5.1
Termination. This Agreement may be terminated by any party by written notice to the other parties if the First Closing
has not been consummated on or before the date ninety (90) days from the date of this Agreement; provided, however, that
such termination will not affect the right of any party to sue for any breach by any other party (or parties).


 


5.2
Fees and Expenses. The parties shall pay their own fees and expenses relating to the transactions contemplated hereby The
Company shall deliver to the Purchaser, prior to each applicable Closing, a completed and executed copy of the Closing Statement,
attached hereto as Annex A. Except as expressly set forth in the Transaction Documents to the contrary, 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.


 


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. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall
be in writing and shall be deemed given and effective on the earliest of: (i)
the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto at or prior to 12:00 noon
(New York City time) on a Trading Day; (ii) the next Trading Day after the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Trading
Day or later than 12:00 noon (New York City time) on any Trading Day; or (iii) the second (2”d) Trading Day following the
date of physical transmittal, if sent by a United States nationally recognized overnight courier service or upon actual receipt
of the physically transmitted notice by the party to whom such notice is required to be given. The address for such notices and
communications shall be as set forth on the signature pages attached hereto.


 




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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 Purchaser, and in the case of a waiver, by the party against
whom, the 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.


 


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 the Purchaser (other than by merger). The Purchaser may assign any or all of its rights under this Agreement to any
Person to whom the Purchaser assigns or transfers any Securit.ies, 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 Purchaser as defined
herein. ·


 


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 4.9.


 


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, stockholders, 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 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, suit or proceeding to enforce any provisions of the Transaction Documents, then, in addition to the
obligations of the Company under Section 4.9, 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.


 




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5.10
Survival. The representations and warranties contained herein shall survive each Closing and the deliveries of the Securities.


 


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 was 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.


 


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 \Vithin the periods therein provided, then
the 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.


 




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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 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 or destruction. The applicant for a new certificate or instrument under such circumstances
shall also pay any reasonable third-party costs (including customary indemnity) 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, the Purchaser 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 )aw (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 setoffhad not occurred.


 


5.17
Reserved.


 


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 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
Reserved.


 


5.20
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.


 


5.21
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
he 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.


 


5.22
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.


 


(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.


 


	RedDiamond
    Partners LLC	Address
    for Notice:
	 	 
	By: __________________________________	156
    West Saddle River Road
	Name:	Saddle
    River, NJ 07458
	Title:	 
	 	 
		Address
    for Notice:


 



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