Exhibit
10.1


 


SECURITIES
PURCHASE AGREEMENT


 


This
Securities Purchase Agreement (this “Agreement”) is dated as
of September 3, 2015, between Content Checked Holdings, Inc., a Nevada corporation (the “Company”), and each
purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser”
and collectively, the “Purchasers”).


 


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


 


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


 


ARTICLE
I.


DEFINITIONS


 


1.1
Definitions. In addition to the terms defined elsewhere in this Agreement: (a) capitalized terms that are not otherwise
defined herein have the meanings given to such terms in the Debentures (as defined herein), and (b) the following terms have the
meanings set forth in this Section 1.1:


 


“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. The term “control”
(including the terms “controlled by” and “under common control with”) means the possession, directly or
indirectly, of the power to materially direct or cause the direction of the management and policies of a Person, whether through
the ownership of voting securities, by contract or otherwise (other than as a result of advisory or consulting services).


 


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


 


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


 


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


 


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


 


“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable
parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii)
the Company’s obligations to deliver the Securities, in each case, have been satisfied or waived.


 


“Closing
Statement” means the Closing Statement in the form set forth 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 $0.001 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 the Subsidiaries which would entitle the holder thereof to
acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument
that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive,
Common Stock.


 


“Company
Counsel” means Foley Shechter LLP, with offices located at 129 West 29th Street, 5th Floor, New
York, New York 10001.


 


“Conversion
Price” shall have the meaning ascribed to such term in the Debentures.


 


“Conversion
Shares” shall have the meaning ascribed to such term in the Debentures.


 


“Debentures”
means the 8% Senior Secured Convertible Debentures due, subject to the terms therein, July 1, 2017, issued by the Company to the
Purchasers hereunder, in the form of Exhibit A attached hereto.


 


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


 


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


 


“Evaluation
Date” shall have the meaning ascribed to such term in Section 3.1(t).


 


“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 or consultants
of the Company pursuant to any stock or option plan duly adopted for such purpose, by a majority of the members of the Board of
Directors or a majority of the members of a committee of directors established for such purpose, (b)(i) securities upon the exercise
or exchange of or conversion of any Securities issued hereunder and/or (ii) other securities exercisable or exchangeable for or
convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided that for subsection (b)(ii)
such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease
the exercise price, exchange price or conversion price of such securities (other than in connection with stock splits or combinations)
or to extend the term of such securities, (c) securities issued (including those registered on Form S-4) pursuant to acquisitions
or strategic transactions approved by a majority of the members of the Board of Directors of the Company, provided that any such
issuance shall only be to a Person (or to the equityholders of a Person) which is, itself or through its subsidiaries, an operating
company or an owner of an asset in a business deemed to be synergistic with the business of the Company and shall provide to the
Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is
issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities,
and (d) shares of Common Stock pursuant to conversions of any of the Company’s trade accounts payable in the ordinary course
of business, consistent with past practice; provided, however, that the maximum aggregate number of shares of Common Stock
which may be issued pursuant to Exempt Issuances (except for subsection (b) of such definition) is 5,000,000 shares (subject to
adjustment for forward and reverse stock splits and the like that occur after the date hereof).


 


“Exercise
Price” shall have the meaning ascribed to such term in the Warrants.


 




    	2



    	 	 	 



    

 


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


 


“Federal
Reserve” shall have the meaning ascribed to such term in Section 3.1(pp).


 


“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 3.1(cc).


 


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


 


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


 


“Knowledge”
means, with respect to a specific Person, the actual or constructive knowledge of such Person (or if such Person is an entity,
any director, manager or other executive officer of such Person), after reasonable due inquiry. “Constructive knowledge”
means knowledge that such individual would be expected to know in his or her capacity as a director, manager or other executive
officer (as applicable) of the such Person.


 


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


 


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


 


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


 


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


 


“Maximum
Rate” shall have the meaning ascribed to such term in Section 5.17.


 


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


 


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


 


“PC”
means Pryor Cashman LLP, with offices located at 7 Times Square, New York, New York 10036.


 


“Perfection
Certificate” means the Perfection Certificate executed by the Company and delivered to the Purchasers hereunder, in
the form of Exhibit B attached hereto.


 


“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.


 


“Pledged
Securities” means any and all certificates and other instruments representing or evidencing all of the outstanding and
issued capital stock and other equity interests of the Subsidiaries.


 


“Principal
Amount” means, as to each Purchaser, the amounts set forth below such Purchaser’s signature block on the signature
pages hereto next to the heading “Principal Amount,” in United States Dollars, which shall equal such Purchaser’s
Subscription Amount multiplied by 1.12.


 


“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.


 




    	3



    	 	 	 



    

 


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


 


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


 


“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.10.


 


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


 


“Required
Minimum” means, as of any date, the maximum aggregate number of shares of Common Stock then issued or potentially issuable
in the future pursuant to the Transaction Documents, including any Underlying Shares issuable upon exercise in full of all Warrants
or conversion in full of all Debentures, ignoring any conversion or exercise limits set forth therein, and assuming that each
of the Conversion Price and Exercise Price is at all times on and after the date of determination 90% of the then Conversion Price
or Exercise Price, as applicable, on the Trading Day immediately prior to the date of determination.


 


“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.


 


“Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.


 


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


 


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


 


“Securities
Act” shall have the meaning ascribed to it in the 1st “WHEREAS” clause herein.


 


“Security
Agreement” means the Security Agreement, dated as of the date hereof, among the Company and the Purchasers, in the form
of Exhibit C attached hereto.


 


“Security
Documents” shall mean the Security Agreement, the Subsidiary Guarantees, the original Pledged Securities (if any), along
with medallion guaranteed executed blank stock powers to the Pledged Securities, the Perfection Certificate, and any other documents
and filing required thereunder in order to grant the Purchasers a first priority security interest in the assets of the Company
and the Subsidiaries as provided in the Security Agreement, including all UCC-1 filing receipts.


 


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


 


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


 


“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.


 




    	4



    	 	 	 



    

 


“Subsidiary
Guarantee” means the Subsidiary Guarantee, dated the date hereof, by each Subsidiary in favor of the Purchasers, in
the form of Exhibit D attached hereto.


 


“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 NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the
New York Stock Exchange, the OTCQB, the OTCQX or the OTC Pink (or any successors to any of the foregoing).


 


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


 


“Transfer
Agent” means VStock Transfer LLC, the transfer agent of the Company, with a mailing address of 18 Lafayette Place, Woodmere,
New York 11598 and a facsimile number of 646.536.3179, and any successor transfer agent of the Company.


 


“Underlying
Shares” means the Conversion Shares and Warrant Shares, in each case without respect to any limitation or restriction
on the conversion of the Debentures or the exercise of the Warrants.


 


“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.12(a).


 


“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based
on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the OTCQB, the OTCQX or the OTC
Pink is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date)
on the OTCQB, the OTCQX or the OTC Pink as applicable, or (c) in all other cases, the fair market value of a share of Common Stock
as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Securities
then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.


 


“Warrants”
means, collectively, (i) the Common Stock purchase warrants delivered to the Purchasers at the Closing in accordance with Section
2.2(a) hereof, which Warrants shall be exercisable immediately and have a term of exercise equal to sixty-two months, in the form
of Exhibit E attached hereto (the “A Warrants”), and (ii) the Common Stock purchase warrants delivered
to the Purchasers at the Closing in accordance with Section 2.2(a) hereof, which Warrants shall be exercisable in accordance with
the terms thereof and shall be surrendered by the Purchasers upon the full and timely payment by the Company of all principal
and interest due under the Debentures and have a term of exercise equal to sixty-two months, in the form of Exhibit F attached
hereto (the “B Warrants”).


 


“Warrant
Shares” means the shares of Common Stock issuable upon exercise of the Warrants.


 




    	5



    	 	 	 



    

 


ARTICLE
II.


PURCHASE
AND SALE


 


2.1
Closing. On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with
the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally
and not jointly, agree to purchase, up to an aggregate of $5,040,000 in Principal Amount of the Debentures (corresponding to an
aggregate Subscription Amount of up to $4,500,000). Each Purchaser shall deliver to the Company, via wire transfer or a certified
check, immediately available funds equal to such Purchaser’s Subscription Amount as set forth on the signature page hereto
executed by such Purchaser, and the Company shall deliver to each Purchaser its respective Debenture, A Warrant and B Warrant,
as determined pursuant to Section 2.2(a), and the Company and each Purchaser shall deliver the other items set forth in Section
2.2 deliverable at the Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing
shall occur at the offices of PC or such other location as the parties shall mutually agree.


 


2.2
Deliveries.


 


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


 


(i)
this Agreement duly executed by the Company;




 


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





 


(iii)
a Debenture with a principal amount equal to such Purchaser’s Subscription Amount multiplied by 1.12, registered in the
name of such Purchaser;


 


(iv)
an A Warrant registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal to 100% of the
initial Principal Amount of the Debenture to be issued to such Purchaser divided by $0.80, with an exercise price per share equal
to $0.96, subject to adjustment therein (such Warrant certificate may be delivered within three Trading Days of the Closing Date);


 


(v)
a B Warrant registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal to 100% of the
initial Principal Amount of the Debenture to be issued to such Purchaser divided by $0.80, with an exercise price per share equal
to $0.80, subject to adjustment therein (such Warrant certificate may be delivered within three Trading Days of the Closing Date);
and


 


(vi)
the Security Agreement, duly executed by the Company and each Subsidiary, along with all of the Security Documents, including
the Subsidiary Guarantees, duly executed by the parties thereto, the original Pledged Securities (if any) and corresponding stock
powers (if applicable), and the Perfection Certificate.


 


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


 


(i)
this Agreement duly executed by such Purchaser;




 


(ii)
such Purchaser’s Subscription Amount by wire transfer to the accounts specified in writing by the Company, as provided on
the Closing Statement; and


 


(iii)
the Security Agreement duly executed by such Purchaser.


 




    	6



    	 	 	 



    

 


2.3
Closing Conditions.


 


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


 


(i)
the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material
Adverse Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Purchasers contained
herein (unless as of a specific date therein in which case they shall be accurate as of such date);


 


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


 


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


 


(b)
The respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions
being met:


 


(i)
the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material
Adverse Effect, in all respects) when made and on the Closing Date of the representations and warranties of the Company contained
herein (unless as of a specific date therein in which case they shall be accurate as of such date);


 


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


 


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


 


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


 


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


 


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 each Purchaser, as of the date hereof and as of the Closing Date (unless as of a specific date therein in which case as of
such date):


 


(a)
Subsidiaries. All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1(a). The Company
owns, directly or indirectly, 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.


 




    	7



    	 	 	 



    

 


(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 as set forth on
Schedule 3.1(b)(i), 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, individually or in the aggregate: (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, 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 or to consummate the transactions contemplated
hereby (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.


 


(i)
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 and executed by the Purchasers (as applicable), 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.


 


(ii)
With respect to the Subsidiary Guarantee, each of the Subsidiaries has the requisite corporate power and authority to enter into
and to consummate the transactions contemplated by such agreement and otherwise to carry out its obligations thereunder. The execution
and delivery of the Subsidiary Guarantees and the consummation by the Company of the transactions contemplated thereby have been
duly authorized by all necessary action on the part of the Company, and no further action is required by the respective Subsidiary,
its shareholders, managers or its members in connection therewith. The Subsidiary Guarantee has been (or upon delivery will have
been) duly executed by the respective Subsidiaries and, when delivered in accordance with the terms thereof, will constitute the
valid and binding obligation of the respective Subsidiary enforceable against such Subsidiary in accordance with its terms, except:
(A) as limited by general equitable principals and applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting enforcement of creditors’ rights generally, (B) as limited by laws relating to the availability
of specific performance, injunctive relief or other equitable remedies and (C) insofar as indemnification and contribution provisions
may be limited by applicable law.


 




    	8



    	 	 	 



    

 


(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) subject to the Required Approvals, 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 upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of
termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the
Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected,
or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment,
injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject
(including 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 and the Subsidiaries are not required to obtain any consent, waiver, approval,
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 and
the Subsidiaries of the Transaction Documents, other than: (i) the filings required pursuant to Section 4.6 of this Agreement
and (ii) 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 or under applicable laws of the Commission.
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 from its duly authorized capital stock a number of shares of Common Stock for
issuance of the Underlying Shares at least equal to the Required Minimum on the date hereof.


 


(g)
Capitalization. The capitalization of the Company is as set forth on Schedule 3.1(g), which Schedule 3.1(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. Except as set forth on Schedule 3.1(g) or as disclosed in the SEC Reports, the Company has not issued any capital
stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock
options under the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s
employee stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the
date of the most recently filed periodic report under the Exchange Act. Except as set forth on Schedule 3.1(g), no Person
has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions
contemplated by the Transaction Documents. Except as a result of the purchase and sale of the Securities hereunder, 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 the capital stock of any Subsidiary, 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 or capital stock of any Subsidiary. Except as set forth on Schedule 3.1(g), the issuance and sale of
the Securities hereunder will not obligate the Company or any Subsidiary to issue shares of Common Stock or other securities to
any Person (other than the Purchasers) and will not result in a right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under any of such securities. Except as set forth on Schedule 3.1(g), there are no
outstanding securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and
there are no contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound
to redeem a security of the Company or such Subsidiary. Except as set forth on Schedule 3.1(g), the Company does not have
any stock appreciation rights or “phantom stock” plans or any similar plan or agreement. To the Knowledge of the Company,
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 hereunder. Except as set
forth on Schedule 3.1(g), 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.


 




    	9



    	 	 	 



    

 


(h)
SEC Reports; Financial Statements. Except as set forth on Schedule 3.1(h), 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 (2) years preceding the date hereof (or such shorter period as the Company
was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents
incorporated by reference therein, being collectively referred to herein as the “SEC Reports”) on a timely
basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any
such extension. As of their respective dates, the SEC Reports filed on or after March 12, 2015 complied, and to the Knowledge
of the Company, the SEC Reports filed prior to March 12, 2015 complied, in all material respects with the requirements of the
Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, after March 12, 2015,when filed, and prior to
March 12, 2015, to the Knowledge of the Company, the SEC Reports complied, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports
comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally
accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as
may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may
not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company
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.


 


(i)
Former Shell Company. The Company is a former “shell company” as defined in Rule 12b-2 under the Exchange Act.
The Company filed Form 10 type information on April 30, 2015.


 




    	10



    	 	 	 



    

 


(j)
Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements
included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof: (i)
there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse
Effect, (ii) the Company and the Subsidiaries have not incurred any liabilities (contingent or otherwise) other than (A) trade
payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) except for the
transactions contemplated by this Agreement, liabilities not required to be reflected in the Company’s or the Subsidiaries’
financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company and the Subsidiaries
have not altered their method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or
other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital
stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing
Company stock option plans. The Company does not have pending before the Commission any request for confidential treatment of
information. Except for the issuance of the Securities and the transactions contemplated by this Agreement or as set forth on
Schedule 3.1(j), 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.


 


(k)
Litigation. 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, or adversely affects the performance by the Company or the Subsidiaries of their respective obligations under, any of the
Transaction Documents or the Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to
result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been
the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of
breach of fiduciary duty. There has not been, and to the Knowledge of the Company, there is not pending or contemplated, any investigation
by the Commission involving the Company or any current or former director or officer of the Company. The Commission has not issued
any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary
under the Exchange Act or the Securities Act.


 


(l)
Labor Relations. No labor dispute exists or, to the Knowledge of the Company, is imminent with respect to any of the employees
of the Company or the Subsidiaries, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s
or its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company
or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the
Company and its Subsidiaries believe that their relationships with their employees are good. To the Knowledge of the Company,
no director, manager, or 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 of any third party, and the continued employment
of each such director, manager, or 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 Effect.


 




    	11



    	 	 	 



    

 


(m)
Compliance. Neither the Company nor any Subsidiary: (i) is in default under, in conflict with, or in violation or breach
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 under,
result in the acceleration of or create in any party the right to accelerate, terminate, modify or cancel), nor has the Company
or any Subsidiary received notice of a claim that it is in default under, in conflict with, or in violation or breach 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, conflict, violation or breach 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 each case as could not have or reasonably be expected to result in a Material Adverse Effect.


 


(n)
Environmental Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws
relating to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land
surface or subsurface strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals,
pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”)
into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments,
licenses, notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder
(“Environmental Laws”), (ii) have received all permits licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses, and (iii) are in compliance with all terms and conditions of any such
permit, license or approval where in each clause (i), (ii) and (iii), the failure to so comply could be reasonably expected to
have, individually or in the aggregate, a Material Adverse Effect.


 


(o)
Regulatory Permits. The Company and the Subsidiaries possess all certificates, approvals, 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 have or 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.


 


(p)
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.


 




    	12



    	 	 	 



    

 


(q)
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 and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property
Rights”). None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any
of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned,
within two (2) years from the date of this Agreement. Neither the Company nor any Subsidiary has received, since the date of the
latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise has any Knowledge
that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not have or reasonably
be expected to have a Material Adverse Effect. To the Knowledge of the Company, all such Intellectual Property Rights are enforceable
and there is no existing infringement by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries
have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their Intellectual Property
Rights, except where failure to do so could not have or reasonably be expected to have a Material Adverse Effect, individually
or in the aggregate.


 


(r)
Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries
are engaged that are sufficient for compliance with all applicable laws and contracts to which each of the Company and the Subsidiaries
is a party or by which each of them is bound, except for directors and officers insurance coverage and where failure to do so
could not have or reasonably be expected to have a Material Adverse Effect. True and complete copies of such insurance policies
have been made available to the Purchasers. Such insurance policies are in full force and effect and shall remain in full force
and effect following the Closing Date. Neither the Company nor any Subsidiary has any reason to believe that it will not be able
to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business without a significant increase in cost.


 


(s)
Transactions With Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of
the Company or any Subsidiary and, to the Knowledge of the Company, none of the employees of the Company or any Subsidiary is
presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors),
including, without limitation, any contract, agreement or other arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from providing for the borrowing of money from or lending of money to,
or otherwise requiring payments to or from any officer, director or such employee or, to the Knowledge of the Company, any entity
in which any officer, director or any such employee has a substantial interest or is an officer, director, trustee, stockholder,
member or partner, in each case in excess of $120,000 other than for: (i) payment of salary or consulting fees for services rendered
by the Company’s officers, directors or consultants, (ii) reimbursement for expenses incurred on behalf of the Company and
(iii) other employee benefits, including stock option agreements under any stock option plan of the Company.


 




    	13



    	 	 	 



    

 


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


 


(u)
Certain Fees. 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 Purchasers shall have no obligation with respect to any fees
or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section 3.1(u) that
may be due in connection with the transactions contemplated by the Transaction Documents.


 


(v)
Private Placement. Assuming the accuracy of the Purchasers’ 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 Purchasers
as contemplated hereby. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the
Trading Market on which any securities of the Company are listed or designated.


 


(w)
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.


 


(x)
Registration Rights. Except as set forth on Schedule 3.1(x), 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.


 


(y)
Listing and Maintenance Requirements. Prior to April 30, 2016, the Company shall register the Common Stock pursuant to
Section12(g) of the Exchange Act. Except as set forth on Schedule 3.1(y), 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. The Common Stock is currently eligible for electronic transfer through the Depository Trust Company
or another established clearing corporation and the Company is current in payment of the fees to the Depository Trust Company
(or such other established clearing corporation) in connection with such electronic transfer.


 




    	14



    	 	 	 



    

 


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


 


(aa)
Disclosure. All of the disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company and
its Subsidiaries, their respective businesses and the transactions contemplated hereby, including the Disclosure Schedules to
this Agreement, 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 press releases disseminated by the Company during the twelve (12) months preceding the date of this Agreement taken as a whole
do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under which they were made and when made, not misleading.
The Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the
transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.


 


(bb)
No Integrated Offering. Assuming the accuracy of the Purchasers’ 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 shareholder approval provisions
of any Trading Market on which any of the securities of the Company are listed or designated. 


 


(cc)
Solvency. Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the
receipt by the Company of the proceeds from the sale of the Securities hereunder: (i) the fair saleable value of the Company’s
assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities
(including known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small
capital to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account
the particular capital requirements of the business conducted by the Company, consolidated and projected capital requirements
and capital availability thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would
receive hereunder, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be
sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid. The Company does
not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash
to be payable on or in respect of its existing 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 (1) year from the Closing Date. Schedule 3.1(cc) 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 are or should be reflected in the Company’s
consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection
or similar transactions in the ordinary course of business; and (z) the present value of any lease payments in excess of $50,000
due under leases required to be capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is in default with
respect to any Indebtedness.


 




    	15



    	 	 	 



    

 


(dd)
Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result
in a Material Adverse Effect, the Company and its Subsidiaries each (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. There
are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of
the Company or of any Subsidiary know of no basis for any such claim.


 


(ee)
No General Solicitation. 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 Purchasers pursuant to this Agreement and certain other “accredited investors” within the meaning of Rule 501
under the Securities Act.


 


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


 


(gg)
Accountants. The Company’s and the Subsidiaries’ accounting firms are set forth on Schedule 3.1(gg)
of the Disclosure Schedules. To the Knowledge and belief of the Company, each such accounting firm: (i) is a registered public
accounting firm as required by the Exchange Act and (ii) with respect to the Company’s accounting firm, shall express its
opinion with respect to the financial statements to be included in the Company’s Annual Report for the fiscal year ending
March 31, 2016.


 


(hh)
Seniority. As of the Closing Date, no Indebtedness or other claim against the Company or the Subsidiaries is senior to
the Debentures 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).


 


(ii)
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 Subsidiaries, on one hand, and their respective accountants and
lawyers presently employed by the Company and the Subsidiaries, on the other hand, and the Company and the Subsidiaries were current
as of June 30, 2015 with respect to any fees owed to their respective accountants and lawyers, which could affect the Company’s
or the Subsidiaries’ ability to perform any of their respective obligations under any of the Transaction Documents.


 




    	16



    	 	 	 



    

 


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


 


(kk)
Acknowledgment Regarding Purchaser’s Trading Activity. Anything in this Agreement
or elsewhere herein to the contrary notwithstanding (except for Sections 3.2(f) and 4.14 hereof), it is understood and acknowledged
by the Company that: (i) none of the Purchasers has been asked by the Company to agree, nor has any Purchaser agreed, to desist
from purchasing or selling, long and/or short, securities of the Company, or “derivative” securities based on securities
issued by the Company or to hold the Securities for any specified term, (ii) past or future open market or other transactions
by any Purchaser, specifically including, without limitation, Short Sales or “derivative” transactions, before or
after the closing of this or future private placement transactions, may negatively impact the market price of the Company’s
publicly-traded securities, (iii) any Purchaser, and counter-parties in “derivative” transactions to which any such
Purchaser is a party, directly or indirectly, may presently have a “short” position in the Common Stock and (iv) each
Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative”
transaction. Subject to Section 4.14, the Company further understands and acknowledges that (y) one (1) or more Purchasers
may engage in hedging activities at various times during the period that the Securities are outstanding, including, without limitation,
during the periods that the value of the Underlying Shares deliverable with respect to Securities are being determined, and (z)
such hedging activities (if any) could reduce the value of the existing stockholders’ equity interests in the Company at
and after the time that the hedging activities are being conducted. The Company acknowledges that such aforementioned hedging
activities do not constitute a breach of any of the Transaction Documents.


 


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


 


(mm)
Stock Option Plans. Each stock option granted by the Company under the Company’s stock option plan was granted (i)
in accordance with the terms of the Company’s stock option plan and (ii) with an exercise price at least equal to the fair
market value of the Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock
option granted under the Company’s stock option plan has been backdated. The Company has not knowingly granted, and there
is no and has been no Company policy or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate
the grant of stock options with, the release or other public announcement of material information regarding the Company or its
Subsidiaries or their financial results or prospects.


 




    	17



    	 	 	 



    

 


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


 


(oo)
U.S. Real Property Holding Corporation. Neither the Company nor any of its Subsidiaries is or has been a U.S. real property
holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall
so certify upon Purchaser’s request.


 


(pp)
Bank Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding
Company Act of 1956, as amended (the “BHCA”) or 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 or 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 or to regulation by the Federal Reserve.


 


(qq)
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 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.


 


(rr)
No Disqualification Events. With respect to the Securities to be offered and sold hereunder in reliance on Rule 506 under
the Securities Act, none of the Company, nor to the Knowledge of the Company, any of its predecessors, any Affiliated issuer,
any director, executive officer or other officer of the Company participating in the offering hereunder, any beneficial owner
of twenty percent (20%) or more of the Company’s outstanding voting equity securities, calculated on the basis of voting
power, (each, an “Issuer Covered Person”) is subject to any of the “Bad Actor” disqualifications
described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for
a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any
Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure
obligations under Rule 506(e), and has furnished to the Purchasers a copy of any disclosures provided thereunder.


 


(ss)
Other Covered Persons. Subject to Section 4.14, the Company is not aware of any Person (other than any Issuer Covered Person)
that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale
of any Regulation D securities.


 


(tt)
Notice of Disqualification Events. The Company will notify the Purchasers in writing, prior to the Closing Date, of (i)
any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time, become
a Disqualification Event relating to any Issuer Covered Person.


 




    	18



    	 	 	 



    

 


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


 


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


 


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


 


(c)
Purchaser Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, and on
each date on which it exercises any Warrants or converts any Debentures it will be an “accredited investor” as defined
in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act. Such Purchaser is not required to be registered
as a broker-dealer under Section 15 of the Exchange Act.


 


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


 


(e)
General Solicitation. Such Purchaser is not, to such Purchaser’s Knowledge, 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.


 




    	19



    	 	 	 



    

 


(f)
Certain Transactions and Confidentiality. Other than consummating the transactions contemplated under the Transaction Documents,
such Purchaser has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such
Purchaser, executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing
as of the time that such Purchaser first received a term sheet (written or oral) from the Company or any other Person representing
the Company setting forth the material terms of the transactions contemplated under the Transaction Documents and ending immediately
prior to the execution hereof. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle
whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have
no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s
assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager
that made the investment decision to purchase the Securities covered by this Agreement. Other than to other Persons party to this
Agreement or to such Purchaser’s representatives, including, without limitation, its officers, directors, partners, legal
and other advisors, employees, agents and Affiliates, such Purchaser has maintained the confidentiality of all disclosures made
to it in connection with the transactions contemplated under the Transaction Documents (including the existence and terms of the
Transaction Documents).


 


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


 


ARTICLE
IV.


OTHER
AGREEMENTS OF THE PARTIES


 


4.1
Transfer Restrictions.


 


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


 


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


 


[NEITHER]
THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS [EXERCISABLE] [CONVERTIBLE]] HAS [NOT] BEEN REGISTERED WITH THE
SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, 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. THIS
SECURITY [AND THE SECURITIES ISSUABLE UPON [EXERCISE] [CONVERSION] OF THIS SECURITY] MAY BE PLEDGED IN CONNECTION WITH A BONA
FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR”
AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.


 




    	20



    	 	 	 



    

 


The
Company acknowledges and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a
registered broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited
investor” as defined in Rule 501(a) under the Securities Act and who agrees to be bound by the provisions of this Agreement
and, if required under the terms of such arrangement, such Purchaser may transfer pledged or secured Securities to the pledgees
or secured parties. Such a pledge or transfer would not be subject to approval of the Company and no legal opinion of legal counsel
of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice shall be required of such
pledge. At the applicable Purchaser’s expense (including all fees and expenses of the Company’s legal and accounting
advisors), the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Securities may
reasonably request in connection with a pledge or transfer of the Securities, including, without limitation, if the Securities
are subject to registration, the preparation and filing of any required prospectus supplement under Rule 424(b)(3) under the Securities
Act or other applicable provision of the Securities Act to appropriately amend the list of selling stockholders thereunder.


 


(c)
Certificates evidencing the Underlying Shares shall not contain any legend (including the legend set forth in Section 4.1(b) hereof):
(i) while a registration statement covering the resale of such security is effective under the Securities Act, (ii) following
any sale of such Underlying Shares pursuant to Rule 144, or (iii) if such legend is not required under the applicable requirements
of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission). If permitted,
the Company shall cause its counsel to issue a legal opinion to the Transfer Agent, if required by the Transfer Agent, to effect
the removal of the legend hereunder and shall pay the fees and expenses associated therewith. If all or any portion of a Debenture
is converted or Warrant is exercised at a time when there is an effective registration statement to cover the resale of the Underlying
Shares, or such legend is not required under the 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; provided,
that at such time such Purchaser is not an affiliate of the Company. The Company agrees that at such time as such legend is no
longer required under this Section 4.1(c), it will, no later than five (5) Trading Days following the delivery by a Purchaser
to the Company or the Transfer Agent of a certificate representing Underlying Shares, as applicable, issued with a restrictive
legend (such fifth (5th) Trading Day, the “Legend Removal Date”), deliver or cause to be delivered
to such Purchaser a certificate representing such Underlying 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 4.1. 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 such Purchaser.


 


(d)
In addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, the greater of
(i) as partial liquidated damages and not as a penalty, for each $1,000 of Underlying Shares (based on the VWAP of the Common
Stock on the date such Securities are submitted to the Transfer Agent) delivered for removal of the restrictive legend, and subject
to Section 4.1(c), $10 per Trading Day (increasing to $20 per Trading Day five (5) Trading Days after such damages have begun
to accrue) for each Trading Day after the Legend Removal Date until such certificate is delivered without a legend; and (ii) if
the Company has not delivered such certificates by the Legend Removal Date and if, after the Legend Removal Date, such Purchaser
purchases (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by such Purchaser
of all or any portion of the number of shares of Common Stock, or a sale of a number of shares of Common Stock equal to all or
any portion of the number of shares of Common Stock that such Purchaser anticipated receiving from the Company without any restrictive
legend, then, the amount, if any, by which (x) the Purchaser’s total purchase price (including brokerage commissions and
other out-of-pocket expenses, if any, other than the brokerage commissions and other out-of-pocket expenses that such Purchaser
would have incurred irrespective of the failure to deliver such certificates by the Legend Removal Date) for the shares of Common
Stock so purchased exceeds the product of (y) (A) such number of Underlying Shares that the Company was required to deliver to
such Purchaser by the Legend Removal Date, multiplied by (B) the lowest closing sale price of the Common Stock on any Trading
Day during the period commencing on the date of the delivery by such Purchaser to the Company of the applicable Underlying Shares
and ending on the date of such delivery and payment under this clause (ii).


 




    	21



    	 	 	 



    

 


(e)
Each Purchaser, severally and not jointly with the other Purchasers, agrees with the Company that such Purchaser will sell any
Securities pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery
requirements, or an exemption therefrom, and that if Securities are sold pursuant to a Registration Statement, they will be sold
in compliance with the plan of distribution set forth therein, and acknowledges that the removal of the restrictive legend from
certificates representing Securities as set forth in this Section 4.1 is predicated upon the Company’s reliance upon this
understanding.


 


4.2
Acknowledgment of Dilution. The Company acknowledges that the issuance of the Securities may result in dilution of the
outstanding shares of Common Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges
that its obligations under the Transaction Documents, including, without limitation, its obligation to issue the Underlying Shares
pursuant to the Transaction Documents, are 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.


 


4.3
Furnishing of Information; Public Information.


 


(a)
Until such time that no Purchaser owns Securities, the Company covenants to maintain the registration of the Common Stock, if
the Common Stock is so registered, under Section 12(b) or 12(g) of the Exchange Act (as applicable), 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 even if the Company is not then subject to the reporting requirements of 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)(1) and otherwise without
restriction or limitation pursuant to Rule 144, if the Company (x) (i) shall fail for any reason to satisfy the current public
information requirement under Rule 144(c) or (ii) has ever been an issuer described in Rule 144 (i)(1)(i) or hereafter becomes
an issuer described in Rule 144 (i)(1)(i), and (y) the Company shall fail to satisfy any condition set forth in Rule 144(i)(2)
(a “Public Information Failure”), then, in addition to such Purchaser’s other available remedies, the
Company shall pay to a Purchaser, in cash, as partial liquidated damages and not as a penalty, by reason of any such delay in
or reduction of its ability to sell the Securities, an amount in cash equal to two percent (2.0%) of the aggregate Subscription
Amount of such Purchaser’s Securities on the day of a Public Information Failure and on every thirtieth (30th)
day (pro rated for periods totaling less than thirty (30) days) thereafter until the earlier of (a) the date such Public Information
Failure is cured and (b) such time that such public information is no longer required for the Purchasers to transfer the Underlying
Shares pursuant to Rule 144. The payments to which a Purchaser shall be entitled pursuant to this Section 4.3(b) are referred
to herein as “Public Information Failure Payments.” Public Information Failure Payments shall be paid
on the earlier of (i) the last day of the calendar month during which such Public Information Failure Payments are incurred
and (ii) the third (3rd) Business Day after the event or failure giving rise to the Public Information Failure Payments
is cured. In the event the Company fails to make Public Information Failure Payments in a timely manner, such Public Information
Failure Payments shall bear interest at the rate of one and one-half percent (1.5%) per month (pro rated for partial months)
until paid in full. Nothing herein shall limit such Purchaser’s right to pursue actual damages for any Public Information
Failure, and such Purchaser shall have the right to pursue all remedies available to it at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief.


 




    	22



    	 	 	 



    

 


4.4
Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any
security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in
a manner that would require the registration under the Securities Act of the sale of the Securities or that would be integrated
with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market such that it would require
shareholder approval prior to the closing of such other transaction, unless shareholder approval is obtained before the closing
of such subsequent transaction.


 


4.5
Conversion and Exercise Procedures. Subject to the terms of the Transaction Documents, each of the form of Notice of Exercise
included in the Warrants and the form of Notice of Conversion included in the Debentures set forth the totality of the
procedures required of the Purchasers in order to exercise the Warrants or convert the Debentures. Without limiting the preceding
sentences, no ink-original Notice of Exercise or Notice of Conversion shall be required, nor shall any medallion guarantee (or
other type of guarantee or notarization) of any Notice of Exercise or Notice of Conversion form be required in order to exercise
the Warrants or convert the Debentures (provided that as a result of such exercise or conversion, such Purchaser is not transferring
any of the Underlying Shares to be issued as a result of such exercise or conversion). No additional legal opinion, other information
or instructions shall be required of the Purchasers to exercise their Warrants or convert their Debentures (provided that as a
result of such exercise or conversion, such Purchaser is not transferring any of the Underlying Shares to be issued as a result
of such exercise or conversion). The Company shall honor exercises of the Warrants and conversions of the Debentures and shall
deliver the applicable Underlying Shares in accordance with the terms, conditions and time periods set forth in the Transaction
Documents.


 


4.6
Securities Laws Disclosure; Publicity. The Company shall promptly, but in any event, no later than by 5:30 p.m. (New York
City time) on or before the fourth (4th) Trading Day immediately following the date hereof, (a) issue a press release
disclosing the material terms of the transactions contemplated hereby, (b) file with the Commission a Current Report on Form 8-K,
including the Transaction Documents as exhibits thereto, and (c) if such date is prior to the Closing Date, attach such Form 8-K
as Schedule 4.6 hereto. The Company and each Purchaser shall consult with each other in issuing any other press releases with
respect to the transactions contemplated under the Transaction Documents, and neither the Company nor any Purchaser shall issue
any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect to
any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the Company,
which consent shall not be unreasonably withheld, conditioned or delayed, except if such disclosure is required by law, in which
case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication.
Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser
in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser,
except to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide
the Purchasers with prior notice of such disclosure permitted under this Section 4.6.


 


4.7
Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other
Person, that any Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison
pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter
adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue
of receiving Securities under the Transaction Documents or under any other agreement between the Company and the Purchasers.


 




    	23



    	 	 	 



    

 


4.8
Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated by the
Transaction Documents and any information previously provided to any of the Purchasers prior to the date hereof, the Company covenants
and agrees that neither it, nor any other Person acting on its behalf will provide any Purchaser or its agents or counsel with
any information that constitutes, or that the Company reasonably believes constitutes, material non-public information, unless
prior thereto such Purchaser shall have consented to the receipt of such information and agreed with the Company to keep such
information confidential. To the extent that the Company delivers any material, non-public information to a Purchaser without
such Purchaser’s consent, the Company hereby covenants and agrees that such Purchaser shall not have any duty of confidentiality
to the Company, any of its Subsidiaries or its Affiliates, or any of their respective officers, directors, managers, employees
or agents, nor a duty to the Company, any of its Subsidiaries or its Affiliates, or any of their respective officers, directors,
managers, employees or agents, not to trade on the basis of such material, non-public information; provided, that the Purchasers
shall remain subject to applicable law. To the extent that any notice provided pursuant to any Transaction Document constitutes,
or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file
such notice with the Commission pursuant to a Current Report on Form 8-K. The Company understands and confirms that each Purchaser
shall be relying on the foregoing covenants of this Section 4.8 in effecting transactions in securities of the Company.


 


4.9
Use of Proceeds. Except as set forth on Schedule 4.9 attached hereto, the Company shall use the net proceeds from
the sale of the Securities hereunder for working capital purposes and shall not use such proceeds: (a) for the satisfaction of
any portion of the Company’s debt (other than payment of trade payables in the ordinary course of the Company’s business
and prior practices), (b) for the redemption of any Common Stock or Common Stock Equivalents, (c) for the settlement of any outstanding
litigation or (d) in violation of FCPA or OFAC regulations.


 


4.10
Indemnification of Purchasers. Subject to the provisions of this Section 4.10, the Company will indemnify and hold each
Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally
equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls
such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors,
officers, shareholders, 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) of such controlling Persons (each, a “Purchaser
Party”), harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses,
including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation
that any such Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations or
warranties, or any failure to perform or comply with any covenants or agreements, made by the Company in this Agreement or in
any other Transaction Documents or (b) any Proceeding instituted against any Purchaser Party, in any capacity, by any stockholder
of the Company who is not an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction
Documents (unless such Proceeding is based upon a breach of such Purchaser Party’s representations or warranties, or any
failure of such Purchaser Party to perform or comply with any of its covenants or agreements, in this Agreement or in any other
Transaction Documents, or any violations by such Purchaser Party of state or federal securities laws, or any conduct by such Purchaser
Party which constitutes fraud, gross negligence, willful misconduct or malfeasance). If any Action or Proceeding shall be brought
against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall
promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its
own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel
in any such Action or Proceeding and participate in the defense thereof, but the fees and expenses of such counsel shall be at
the expense of such Purchaser Party (notwithstanding the first sentence of this Section 4.10) 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 or Proceeding there is, in the reasonable
opinion of counsel to the Company, a material conflict on any material issue between the position of the Company and the position
of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one
(1) 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 Party’s
breach of any of the representations or warranties, or any failure of such Purchaser Party to perform or comply with any of the
covenants or agreements, made by such Purchaser Party in this Agreement or in any other Transaction Documents. The indemnification
required by this Section 4.10 shall be made by periodic payments of the indemnity amount thereof during the course of the investigation
or defense, as and when bills are received or are incurred. The indemnity agreements contained herein shall be in addition to
any cause of action or similar right of any Purchaser Party against the Company or other Persons and any liabilities the Company
may be subject to pursuant to applicable law.


 




    	24



    	 	 	 



    

 


4.11
Reservation and Listing of Securities.


 


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


 


(b)
If, on any date of determination after consultation with the Company’s counsel, the Company determines that the number of
authorized but unissued (and otherwise unreserved) shares of Common Stock is less than the Required Minimum on such date, then
the Board of Directors shall use its best efforts to promptly amend the Company’s certificate or articles of incorporation
to increase the number of authorized but unissued shares of Common Stock to at least the Required Minimum at such time, as soon
as possible and in any event not later than the ninetieth (90th) day after such date of determination.


 


(c)
The Company shall, if applicable: (i) in the time and manner required by the principal Trading Market on which the Company’s
Common Stock is listed or designated, 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 Required Minimum 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 Purchasers evidence (if any) of such listing or quotation and (iv) maintain the listing or quotation
of such Common Stock on any date at least equal to the Required Minimum on such date on such Trading Market. The Company agrees
to maintain the eligibility of the Common Stock for electronic transfer through the Depository Trust Company or another established
clearing corporation, including, without limitation, by timely payment of fees to the Depository Trust Company or such other established
clearing corporation in connection with such electronic transfer.


 


4.12
Subsequent Equity Sales.


 


(a)
From the date hereof until such time as no Purchaser holds any of the Warrants, the Company shall be prohibited from effecting
or entering into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock
Equivalents (or any combination of units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction”
means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable
or exercisable for, or include the right to receive, additional shares of Common Stock either (A) at a conversion price, exercise
price or exchange rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the shares
of Common Stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion price, exercise
price or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security
or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the
market for the Common Stock or (ii) enters into any agreement, including, but not limited to, an equity line of credit, whereby
the Company may issue securities at a future determined price. Notwithstanding the foregoing, the Company shall be permitted to
effect or enter into an agreement involving a Variable Rate Transaction if such agreement provides that any such conversion, exercise
or exchange mechanism shall have a floor of $0.50 (subject to adjustment for forward and reverse stock splits and the like that
occur after the date hereof). Any Purchaser shall be entitled to obtain injunctive relief against the Company to preclude any
such issuance, which remedy shall be in addition to any right to collect damages.


 




    	25



    	 	 	 



    

 


(b)
From the date hereof until such time that the Debentures are no longer outstanding, neither the Company nor any Subsidiary shall
make any issuance whatsoever of Common Stock or Common Stock Equivalents at an effective price per share less than the Conversion
Price (subject to adjustment for forward and reverse stock splits and the like that occur after the date hereof). From the time
that the Debentures are no longer outstanding and for so long as any Warrants remain outstanding, the Company and each Purchaser
(severally and not jointly with any other Purchaser) agree that, in each instance that the Company desires or intends to make
any issuance whatsoever of Common Stock or Common Stock Equivalents at an effective price per share less than the Exercise Price
(subject to adjustment for forward and reverse stock splits and the like that occur after the date hereof), then such issuance
of Common Stock or Common Stock Equivalents shall result in the immediate reduction of the exercise price of each outstanding
Warrant, to the effective price per share of such new issuance. Any Purchaser shall be entitled to obtain injunctive relief against
the Company to preclude any issuance in violation of this Section 4.12(b), which remedy shall be in addition to any right to collect
damages. In no event shall the Company, while the Debentures or the Warrants remain outstanding, make any issuance of Common Stock
or Common Stock Equivalents at an effective price per share of less than $0.50 (subject to adjustment for forward and reverse
stock splits and the like that occur after the date hereof).


 


(c)
Notwithstanding the foregoing, this Section 4.12 shall not apply in respect of an Exempt Issuance, except that no Variable Rate
Transaction shall be an Exempt Issuance. 


 


4.13
Equal Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered
or paid to any Person to amend or consent to a waiver or modification of any provision of the Transaction Documents, unless the
same consideration is also offered to the Purchasers holding a majority in principal amount outstanding of the Debentures as of
the date of such offer or payment. Further, the Company shall not make any payment of principal or interest on the Debentures
in amounts which are disproportionate to the respective principal amounts outstanding on the Debentures at any applicable time.
For the avoidance of doubt, this Section 4.13 constitutes a separate right granted to each Purchaser by the Company and negotiated
separately by each Purchaser, and is intended for the Company to treat the Purchasers as a class and shall not in any way be construed
as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise.


 


4.14
Certain Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants
that neither it, nor any Affiliate acting on its behalf, will execute any purchases or sales, including Short Sales, of any of
the Company’s securities during the period commencing with the execution of this Agreement and ending at such time that
the transactions contemplated by the Transaction Documents are first publicly announced pursuant to the initial press release
as described in Section 4.6. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time
as the transactions contemplated by the Transaction Documents are publicly disclosed by the Company pursuant to the initial press
release as described in Section 4.6, such Purchaser will maintain the confidentiality of the existence and terms of this transaction
and the information included in the Transaction Documents and the Disclosure Schedules. Notwithstanding the foregoing, but subject
to Section 4.8, and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and
agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will not engage in effecting transactions
in any securities of the Company after the time that the transactions contemplated by the Transaction Documents are first publicly
announced pursuant to the initial press release as described in Section 4.6, (ii) no Purchaser shall be restricted or prohibited
from effecting any transactions in any securities of the Company in accordance with applicable securities laws from and after
the time that the transactions contemplated by the Transaction Documents are first publicly announced pursuant to the initial
press release as described in Section 4.6, and (iii) no Purchaser shall have any duty of confidentiality or duty not to trade
in the securities of the Company to the Company or its Subsidiaries after the issuance of the initial press release as described
in Section 4.6. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate
portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge
of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant
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. Notwithstanding anything to the contrary in the foregoing, no Purchaser
shall engage in any Short Sales with respect to the Common Stock until the later of (i) the Maturity Date (as defined in the Debentures)
or (ii) such time as the Debentures have been fully converted into Common Stock.


 




    	26



    	 	 	 



    

 


4.15
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 any Purchaser. The Company shall take such action as the Company shall
reasonably determine is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchasers
at the Closing under applicable securities or “Blue Sky” laws of the states of the United States, and shall provide
evidence of such actions promptly upon request of any Purchaser.


 


4.16
Capital Changes. Until the one (1) year anniversary of the Closing Date, the Company shall not undertake a reverse or forward
stock split or reclassification of the Common Stock without the prior written consent of the Purchasers holding a majority in
principal amount outstanding of the Debentures as of the date of determination; provided, however, that the Company
may undertake a reverse stock split of the Common Stock at any time in connection with, and in order to meet the minimum price
requirement necessary to become approved for, listing on a national securities market or exchange.


 


4.17
CEO Salary. At Closing, Mr. Kris Finstad (“CEO”) will receive all salary that has accrued and is payable
to him for the period from January 1, 2015 through and including the Closing Date. Following the Closing, CEO shall be paid salary
at a rate of $30,000 per month, as per his existing employment agreement with the Company. Until such time as the Debentures have
been paid in full, the Company shall not increase the CEO’s salary in any subsequent employment agreement agreed to between
the Company and CEO or otherwise. CEO shall be entitled to a bonus following such time as three independent board members are
appointed to the Company’s Board of Directors, and such independent board members vote favorably for such bonus plan for
the CEO. Any other amounts owed by the Company to the CEO prior to the date hereof, other than the CEO’s accrued and unpaid
salary from January 1, 2015 through the Closing Date (which shall be paid to the CEO on or about the Closing Date), shall be satisfied
with the issuance to CEO of Common Stock of the Company, at a value of $0.96 per share. Any such shares of Common Stock issued
pursuant to the prior sentence shall be counted towards the 5,000,000 share limit contained within the definition of “Exempt
Issuance.”


 


4.18
Directors and Officers Insurance. Simultaneously with the appointment of an independent member to the Company’s Board
of Directors, the Company will use its best efforts to obtain directors and officers insurance coverage in an amount reasonable
and customary for a corporation similar in size and nature to the Company.


 




    	27



    	 	 	 



    

 


ARTICLE
V.


MISCELLANEOUS


 


5.1
Termination. This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only
and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other
parties, if the Closing has not been consummated on or before September 30, 2015; 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. At the Closing, the Company has agreed to reimburse Hillair Capital Management LLC, a Delaware limited
liability company (“Hillair”), (i) the non-accountable sum of $100,000 for its due diligence expenses, including
expenses associated with background checks of management and directors (or director/management candidates) made by Hillair (of
which $15,000 has been paid prior to the date hereof); (ii) $25,000 for its legal fees and expenses (of which $10,000 has been
paid prior to the date hereof) and (iii) reasonable travel expenses incurred by Hillair. The Company shall deliver to each Purchaser,
prior to the 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 and the other Transaction Documents. The Company shall pay all Transfer Agent fees,
stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers.


 


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: (a) the date of transmission, if such notice or communication
is delivered via facsimile or email attachment at the facsimile number or email address, respectively, as set forth on the signature
pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date
of transmission, if such notice or communication is delivered via facsimile or email attachment at the facsimile number or email
address, respectively, as set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30
p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent
by U.S. nationally recognized overnight courier service or (d) upon actual receipt 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. To
the extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information
regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant
to a Current Report on Form 8-K.


 


5.5
Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written
instrument signed, in the case of an amendment, by the Company and the Purchasers holding at least fifty and one-tenth percent
(50.1%) in principal amount of the Debentures then outstanding (the “Majority Purchasers”) or, in the case of a waiver,
by the party against whom enforcement of any such waived provision is sought. No waiver of any default with respect to any provision,
condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise
any right hereunder in any manner impair the exercise of any such right. Any amendment effected in accordance with this Section
5.5 shall be binding upon each Purchaser and holder of Securities and the Company.


 




    	28



    	 	 	 



    

 


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 Majority Purchasers (other than by acquisition by merger or consolidation with, or by sale of a substantial portion
or all of the assets, stock or other equity of the Company to, any other Person). Any Purchaser may assign any or all of its rights
under this Agreement to any Person to whom such Purchaser assigns or transfers any Securities; provided, that such transferee
agrees in writing to be bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that
apply to the “Purchasers.”


 


5.8
No Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors
and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as
otherwise set forth in Section 4.10.


 


5.9
Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents
shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard
to the principles of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a
party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be
commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including
with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any Action or Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such 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 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 any party hereto shall
commence an Action or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations
of the Company under Section 4.10, the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing
party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution
of such Action or Proceeding.


 


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


 


5.11
Execution. This Agreement may be executed in two (2) or more counterparts, all of which when taken together shall be considered
one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other
party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by
facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and
binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if
such facsimile or “.pdf” signature page were an original thereof.


 




    	29



    	 	 	 



    

 


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 within the periods therein provided, then
such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant
notice, demand or election in whole or in part without prejudice to its future actions and rights; provided, however,
that in the case of a rescission of a conversion of a Debenture or exercise of a Warrant, the applicable Purchaser shall be required
to return any shares of Common Stock subject to any such rescinded conversion or exercise notice concurrently with the return
to such Purchaser of the aggregate conversion or exercise price paid to the Company for such shares and the restoration of such
Purchaser’s right to acquire such shares pursuant to such Purchaser’s Debenture or Warrant, as the case may be (including,
issuance of a replacement debenture or warrant certificate evidencing such restored right).


 


5.14
Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for and upon 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 (i) pay any reasonable third-party costs (including customary indemnity (including any indemnity amounts required by
the Transfer Agent)), and (ii) provide such documentation as may be reasonably requested by the Company or the Transfer Agent,
associated with the issuance of such replacement Securities.


 


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


 


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


 




    	30



    	 	 	 



    

 


5.17
Usury. To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever
claim, and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now
or at any time hereafter in force, in connection with any Action or Proceeding that may be brought by any Purchaser in order to
enforce any right or remedy under any Transaction Document. Notwithstanding any provision to the contrary contained in any Transaction
Document, it is expressly agreed and provided that the total liability of the Company under the Transaction Documents for payments
in the nature of interest shall not exceed the maximum lawful rate authorized under applicable law (the “Maximum Rate”),
and, without limiting the foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated
with any other sums in the nature of interest that the Company may be obligated to pay under the Transaction Documents exceed
such Maximum Rate. It is agreed that if the maximum contract rate of interest allowed by law and applicable to the Transaction
Documents is increased or decreased by statute or any official governmental action subsequent to the date hereof, the new maximum
contract rate of interest allowed by law will be the Maximum Rate applicable to the Transaction Documents from the effective date
thereof forward, unless such application is precluded by applicable law. If under any circumstances whatsoever, interest in excess
of the Maximum Rate is paid by the Company to any Purchaser with respect to indebtedness evidenced by the Transaction Documents,
such excess shall be applied by such Purchaser to the unpaid principal balance of any such indebtedness or be refunded to the
Company, the manner of handling such excess to be at such Purchaser’s election.


 


5.18
Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction
Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way
for the performance or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained
herein or in any other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed
to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption
that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated
by the Transaction Documents. Each Purchaser shall be entitled to independently protect and enforce its rights, including, without
limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary
for any other Purchaser to be joined as an additional party in any Action or Proceeding for such purpose. Each Purchaser has been
represented by its own separate legal counsel in its review and negotiation of the Transaction Documents. For reasons of administrative
convenience only, each Purchaser and its respective counsel have chosen to communicate with the Company through PC. PC does not
represent all of the Purchasers and only represents Hillair. The Company has elected to provide all Purchasers with the same terms
and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by any of the
Purchasers.


 


5.19
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.


 


5.20
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
be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments
thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be
subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions
of the Common Stock that occur after the date of this Agreement.


 


5.22
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)


 




    	31



    	 	 	 



    

 


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.


 


	CONTENT
    CHECKED HOLDINGS, inc.	Address
                                         for Notice:

        8730
        Sunset Blvd., Suite 240 

        West
        Hollywood, California



 


	By:	/s/
    Kris Finstad	 	Facsimile
    Number:
	Name:	Kris
    Finstad	310.564.1990
	Title:	Chief
    Executive Officer	 


 


	With
    a copy to (which shall not constitute notice):	Email
    Address:
	 	kf@contentchecked.com


 


	Jonathan
                                         R. Shechter, Esq.

        Sasha
        Ablovatskiy, Esq.

        FOLEY
        SHECHTER LLP

        129
        West 29th Street, 5th Floor

        New
        York, New York 10001

        Facsimile:
        917.688.4092
	 





	Email:	js@foleyshechter.com
                                         and 

        sablovatskiy@foleyshechter.com
	 


 


[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK


SIGNATURE
PAGE FOR PURCHASER FOLLOWS]


 




    	32



    	 	 	 



    

 


[PURCHASER
SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]


 


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


 


Name
of Purchaser: Hillair Capital Investments L.P.


 


Signature
of Authorized Signatory of Purchaser: /s/ Sean M. McAvoy


 


Name
of Authorized Signatory: Sean M. McAvoy


 


Title
of Authorized Signatory: Managing Member, Hillair Capital Advisors LLC


 


Email
Address of Authorized Signatory: _______________________________________________________________


 


Facsimile
Number of Authorized Signatory: _____________________________________________________________


 


Address
for Notice to Purchaser:


 


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


 


Subscription
Amount: ________________


 


Principal
Amount (1.12 x Subscription Amount): ________________


 


A Warrant
Shares: ____________________


 


B Warrant
Shares: ____________________


 


EIN Number:
________________________


 


[SIGNATURE
PAGES CONTINUE]


 




    	33



    	 	 	 



    

 


Annex
A 


 


CLOSING
STATEMENT


 





Pursuant
to the attached Securities Purchase Agreement, dated as of the date hereof, the purchasers shall purchase Debentures and Warrants
from Content Checked Holdings, Inc., a Nevada corporation (the “Company”). All funds will be wired into an
account maintained by the Company. All funds will be disbursed in accordance with this Closing Statement.


 


Disbursement
Date: September __, 2015 


	 	 


 


I.
PURCHASE PRICE  




 


	 	Gross
    Proceeds to be Received 	$



 


II.
DISBURSEMENTS  



 


	 	$
	 	$
	 	$
	 	$
	 	$


 


	 	 
	Total
    Amount Disbursed:	$
	 	 
	Executed
    this ___ day of September, 2015	 


 


	CONTENT
    CHECKED HOLDINGS, INC.	 


 


	By:	 	 
	Name:	Kris
    Finstad	 
	Title:	Chief
    Executive Officer	 


 


	WIRE
    INSTRUCTIONS:	 



 


	To:	 	 
	 	 	 
	 	 	 
	To:	 	 


  




    	A-1



    	 	 	 



    

 


EXHIBIT
A


 


Form
of Debentures


 


[See
Exhibit 4.1 to this Current Report on Form 8-K]


 




    	 



    	 	 	 



    

 


EXHIBIT
B


 


FORM
OF PERFECTION CERTIFICATE


 




    	 



    	 	 	 



    

 


EXHIBIT
C


 


FORM
OF SECURITY AGREEMENT


 


[See
Exhibit 10.2 to this Current Report on Form 8-K]


 




    	 



    	 	 	 



    

 


EXHIBIT
D


 


FORM
OF SUBSIDIARY GUARANTEE


 


[See
Exhibit 10.3 to this Current Report on Form 8-K]


 




    	 



    	 	 	 



    

 


EXHIBIT
E


 


FORM
OF A WARRANTS


 


[See
Exhibit 4.2 to this Current Report on Form 8-K]


 




    	 



    	 	 	 



    

 


EXHIBIT
F


 


FORM
OF B WARRANTS


 


[See
Exhibit 4.3 to this Current Report on Form 8-K]


 




    	 



    	 	 	 



    

 


EXHIBIT
G


 


FORM
OF COMPANY COUNSEL LEGAL OPINION