Exhibit 10.1


 


SECURITIES PURCHASE AGREEMENT


 


This Securities Purchase
Agreement (this “Agreement”) is dated as of November __, 2017, between uSell.com, Inc., a Delaware corporation
(the “Company”), and each purchaser identified in the Schedule of Purchasers hereto attached as Schedule
A (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 (the “Securities
Act”), and Rule 506(b) 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 the following words and terms have the meanings set forth in this
Section 1.1:


 


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


 


“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. With respect to a Purchaser,
any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such Purchaser
will be deemed to be an Affiliate of such Purchaser.


 


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


 


“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 Shares pursuant to Section 2.2(a).


 


“Closing Date”
means the Trading Day when 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 Shares have been satisfied or waived.


 






     


     


    

 


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


 


“Common Stock”
means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which such securities
may hereafter be reclassified or changed into.


 


“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, rights, options, warrants 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”
shall have the meaning ascribed to such term in the Preamble.


 


“Company Counsel”
means Nason Yeager Gerson White & Lioce, P.A., with offices located at 3001 PGA Blvd, Suite 305, Palm Beach Gardens, Florida
33410.


 


“Discussion
Time” shall have the meaning ascribed to such term in Section 3.2(g).


 


“Effective
Date” means the date of effectiveness of a registration statement filed with the Commission by the Company pursuant to
the Registration Rights Agreement.


 


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


 


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


 


“Escrow Agent”
is Company Counsel.


 


“Escrow Agreement”
means the Escrow Agreement, dated the date hereof, among the Company, Escrow Agent and the Purchasers, in the form of Exhibit
A attached hereto.


 


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


 


“Initial Closing”
shall have the meaning ascribed to such term in Section 2.2(a).


 


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


 


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


 


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


 






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


 


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


 


“Maximum Offering”
means the sale of Shares for aggregate gross proceeds of up to a maximum of $4,000,000.


 


“Minimum Offering
Amount” means the sale of Shares for aggregate gross proceeds of a minimum of $2,000,000.


 


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


 


“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.


 


“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.


 


“Public Information
Failure” shall have the meaning ascribed to such term in Section 4.14.


 


“Public Information
Failure Payments” shall have the meaning ascribed to such term in Section 4.14.


 


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


 


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


 


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


 


“Registration
Rights Agreement” means the Registration Rights Agreement, dated the date hereof, among the Company and the Purchasers,
in the form of Exhibit B attached hereto.


 


“Registration
Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and
covering the resale of the Shares by each Purchaser as provided for in the Registration Rights Agreement.


 


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


 






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


 


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


 


“Securities
Act” shall have the meaning ascribed to such term in the Recitals.


 


“Shares”
means the Common Stock purchased under this Agreement.


 


“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” shall mean, as to each Purchaser, the aggregate amount to be paid for the Shares 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(b) and shall, where applicable, also include any direct
or indirect subsidiary of the Company formed or acquired after the date hereof.


 


“Trading Day”
means a day on which the New York Stock Exchange 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 American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange
or the OTC Markets Group, Inc. (or any successors to any of the foregoing).


 


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


 


“Transfer Agent” means
Island Stock Transfer the transfer agent of the Company, with a mailing address of 15500 Roosevelt Blvd, Suite 301, Clearwater,
FL 33760, and a facsimile number of (727) 289-0069, and any successor transfer agent of the Company.


 


“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.10.


 






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“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 4:00 p.m. (New York City time)), (b) (or a similar organization or agency succeeding
to its functions of reporting prices)if the Common Stock is not then quoted for trading on a Trading Market and if prices for the
Common Stock are then reported on another market, the most recent bid price per share of the Common Stock so reported, or (d) 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 then holding a majority in interest of the Shares (still held by original Purchasers in this offering) and reasonably
acceptable to the Company, the fees and expenses of which shall be paid by the Company.


 


ARTICLE II

PURCHASE AND SALE


 


2.1           Term
of the Offering; Minimum. 


 


(a)           At
Closing, the Company agrees to sell, and each Purchaser agrees to purchase, the number of shares of Common Stock listed on the
signature page of such Purchaser, at a price per share of $0.50 (the “Purchase Price”).


 


(b)           The
offering of the Shares hereunder, up to the Maximum Offering, shall be made directly by the Company to “accredited investors”
as such term is defined under Rule 501(a) of the Securities Act.


 


(c)           The
minimum purchase that may be made by any prospective investor, which total shall include purchases made by Affiliates of a prospective
investor, shall be $___. Subscriptions for investment below the minimum investment may be accepted at the discretion of the Company.
The Company reserves the right to reject any subscription made hereby, in whole or in part, in their sole discretion. The Company’s
agreement with each Purchaser is a separate agreement and the sale of the Shares to each Purchaser is a separate sale.


 


2.2 Closing.


 


(a)           Subject to the satisfaction or waiver of the closing conditions contained herein, the purchase, sale, and issuance of the
Shares shall take place remotely via exchange of documents and signatures on or after the date the Minimum Offering Amount has
been received and all other conditions for the initial closing (the “Initial Closing”) have been met. The Initial
Closing shall occur by November 30, 2017. After the Initial Closing, subsequent closings (along with the Initial Closing, each
a “Closing”), if any, up to the Maximum Offering may take place at any time prior to December 31, 2017 (the
“Termination Date”), as determined by the Company. The last Closing of this offering, occurring on or prior
to the Termination Date, shall be referred to as the “Final Closing.” Any subscription documents or funds received
after the Final Closing will be returned, without interest or deduction.


 


(b)           Minimum Offering. The Company must receive proceeds of $2,000,000 (the “Minimum Offering Amount”)
by the Termination Date. All proceeds from the offering shall be held in escrow by the Escrow Agent under the Escrow Agreement
to which each of the Purchasers must become a party. If the Company fails to receive the Minimum Offering Amount by the Termination
Date, the Escrow Agent will promptly refund the funds to their respective Purchasers, without interest or deduction.


 






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(c)           At the Initial Closing, the Escrow Agent shall release to the Company all funds held in escrow (less any sums paid to the
Escrow Agent).


 


(d)           All
Subscription Amounts shall be paid directly to the Company in connection with each Closing.


 


2.3           Closing
Conditions.


 


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


 


(i)            the
accuracy in all material respects on the Closing Date of the representations and warranties of the Purchasers contained herein;


 


(ii)           all
obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date (including obligations
set forth in Section 4.15, as applicable) shall have been performed; and


 


(iii)          the
delivery by each Purchaser of the items set forth in Section 2.4(b) of this Agreement.


 


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


 


(i)            the
accuracy in all material respects when made and on the Closing Date of the representations and warranties of the Company contained
herein, except any representations and warranties which were qualified by “materiality” or similar terms shall be accurate
in all respects;


 


(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 2.4(a) of this Agreement;


 


(iv)          there
shall have been no Material Adverse Effect with respect to the Company since September 30, 2017;


 






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(v)           from
the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or the Company’s
principal Trading Market (except for any suspension of trading of limited duration agreed to by the Company, which suspension shall
be terminated prior to the Closing), and, at any time prior to Closing, 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 each Purchaser, makes it impracticable or inadvisable to purchase the Shares at the Closing;
and


 


(vi)          delivery
of an opinion of counsel to the Company directed to the Purchasers covering such matters as are customarily contained in private
offerings of similar size.


 


2.4           Deliveries.


 


(a)           On
each 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
certificate (or evidence of book entry issuance) evidencing the number of shares of Common Stock subscribed for by the Purchaser,
registered in the name of such Purchaser;


 


(iii)          the
Registration Rights Agreement executed by the Company; and


 


(iv)          the
Escrow Agreement executed by the Company and the Escrow Agent.


 


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


 


(i)            this
Agreement duly executed by such Purchaser;


 


(ii)           such
Purchaser shall have delivered to the Escrow Agent its Subscription Amount for the Shares by wire transfer pursuant to the wire
instructions provided by the Escrow Agent; and


 


(iii)          the
Registration Rights Agreement duly executed by such Purchaser.


 


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:


 






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(a)           Organization
and Qualification. The Company and each of its 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 applicable), with the
requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither
the Company nor any Subsidiary is in violation or default of any of the provisions of its respective Certificate or Articles of
Incorporation, bylaws or other organizational or charter documents except as disclosed on Schedule 3.1(a). Except as disclosed
on Schedule 3.1(a), each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing
as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by
it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could
not have or reasonably be expected to result in (i) a material adverse effect on the legality, validity or enforceability of any
Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial
or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s
ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or
(iii), a “Material Adverse Effect”) provided, however, that each of the following, in and of itself,
shall be deemed to not constitute a Material Adverse Effect: (i) changes generally affecting the industry in which the Company
operates, in each case, that do not disproportionally affect the Company in contrast to its competitors; and (ii) changes in GAAP.
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.


 


(b)           Subsidiaries.
All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1(b). Except as disclosed on Schedule
3.1(b), 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.


 


(c)           Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by each of the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery
of each of the 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 therewith other than in connection with the Required Approvals.
Each Transaction Document has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance
with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company
in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by
laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification
and contribution provisions may be limited by applicable law.


 






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(d)           No
Conflicts. The execution, delivery and performance of the Transaction Documents, the issuance and sale of the Shares and the
consummation by the Company of the other 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, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time
or both would become a default) under, result in the creation of any Lien 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 is not required to obtain any consent, waiver, authorization or order of, give any notice
to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company of the Transaction Documents other than (i) filings
required pursuant to Section 4.5, (ii) the filing of the Registration Statement with the Commission to the extent required by the
Registration Rights Agreement, (iii) the filing of Form D with the Commission, and (iv) any filings required to be made pursuant
to applicable state securities laws (collectively, the “Required Approvals”).


 


(f)            Issuance
of the Shares. The Shares 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.


 


(g)           No
Disqualifying Events.


 


(i)            As
of the date hereof, the Company is not disqualified from relying on Rule 506 of Regulation D under the Securities Act for any of
the reasons stated in Rule 506(d) in connection with the issuance and sale of the Shares, and it has exercised reasonable care
including without limitation, conducting a factual inquiry that is appropriate in light of the circumstances, into whether any
such disqualification under Rule 506(d) exists as of the date hereof;


 






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(ii)           The
Company has exercised reasonable care, including without limitation, conducting a factual inquiry that is appropriate in light
of the circumstances, into whether there are any matters that would have triggered disqualification under Rule 506(d) but which
occurred before September 23, 2013, and, if there are any such matters, they have been or will be disclosed to the Purchasers as
required by Rule 506(e); and


 


(ii)           Any
outstanding securities of the Company (of any kind or nature) that were issued in reliance on Rule 506 at any time on or after
September 23, 2013 have been issued in compliance with Rule 506(d) and (e) and no party has any reasonable basis for challenging
any such reliance on Rule 506 in connection therewith.


 


(h)           Capitalization.
The capitalization of the Company as of as of the date hereof is as set forth on Schedule 3.1(h). Except as set forth on
Schedule 3.1(h), 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
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(h), 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 set forth on Schedule
3.1(h), and as a result of the purchase and sale of the Shares, 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
and/or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock,
or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue
additional shares of Common Stock or Common Stock Equivalents. Except as disclosed on Schedule 3.1(h), the issuance and
sale of the Shares will not obligate the Company 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. All of the outstanding shares of capital stock of the Company are 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 Shares. 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,
except as disclosed on Schedule 3.1(h).


 






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(i)            SEC
Reports; Financial Statements. Except as set forth on Schedule 3.1(i), the Company has filed all reports, schedules,
forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including
pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company
was required by law or regulation to file such material) (the foregoing materials and any amendments filed through the date hereof,
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. Except as disclosed on Schedule 3.1(i) as of their respective dates, the
SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable,
and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading. Except as disclosed on Schedule 3.1(i), 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. Except as disclosed on Schedule 3.1(i), 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.


 


(j)            Material
Changes. Since the date of the latest audited financial statements included within the SEC Reports, except as specifically
disclosed on Schedule 3.1(j), (i) there has been no event, occurrence or development that has had or that could reasonably
be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise)
other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and
(B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings
made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made
any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase
or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or
Affiliate, except pursuant to existing Company stock option plans or in connection with private placements in which case the officers
and directors purchased equity securities on the same terms. The Company does not have pending before the Commission any request
for confidential treatment of information. Except for the issuance of the Shares contemplated by this Agreement or as set forth
on Schedule 3.1(j), no event, liability or development has occurred or exists with respect to the Company or its Subsidiaries
or their respective business, properties, operations 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 1 Trading Day prior to the date that this representation is made.


 






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(k)           Litigation.
Except as described in the SEC Reports, or as set forth on Schedule 3.1(k), there is no action, suit, inquiry, notice of
violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company,
any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency
or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely
affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Shares 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 material labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees
of the Company which could reasonably be expected to result in a Material Adverse Effect. Except as disclosed on Schedule 3.1(l),
none of the Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship
with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining
agreement, and the Company and its Subsidiaries believe that their relationships with their employees are good. To the knowledge
of the Company, no executive officer, 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 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.


 


(m)          Compliance.
Neither the Company nor any Subsidiary (i) is in default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the
Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in violation of any order of any court, arbitrator or
governmental body, or (iii) is or has been in violation of any statute, rule or regulation of any governmental authority, including
without limitation all foreign, federal, state and local laws applicable to its business and all such laws that affect the environment,
except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.


 


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


 






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(o)           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, 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.


 


(p)           Intellectual
Property. Except as disclosed on Schedule 3.1(p) or the SEC Reports, 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 necessary or material 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”). Neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of the
Intellectual Property Rights used by the Company or any Subsidiary violates or infringes upon the rights of any Person. To the
knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another
Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable security measures to
protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.


 


(q)           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. 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.


 






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(r)            Transactions
with Affiliates and Employees. Except as set forth in the SEC Reports or Schedule 3.1(r), none of the officers or directors
of the Company and, to the knowledge of the Company, none of the employees of the Company is presently a party to any transaction
with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement
or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or
from, 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 or partner,
in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement
for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock
option plan of the Company.


 


(s)           Sarbanes
Oxley; Internal Accounting Controls. The Company is in material compliance with all provisions of the Sarbanes-Oxley Act of
2002 which are applicable to it 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 has established disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company 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 Company’s disclosure controls and procedures
as of the end of the period covered by the Company’s 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 change in the Company’s internal control
over financial reporting (as such term is defined in the Exchange Act) that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial reporting.


 


(t)            Certain
Fees. No brokerage or finder’s fees or commissions are or will be payable by the Company 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(t) that may be due in connection with the
transactions contemplated by the Transaction Documents.


 






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(u)           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 Shares to the Purchasers as contemplated hereby. The issuance
and sale of the Shares hereunder does not contravene the rules and regulations of the Trading Market.


 


(v)           Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Shares, 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.


 


(w)          Registration
Rights. Except as set forth on Schedule 3.1(w), no Person has any right to cause the Company to effect the registration
under the Securities Act of any securities of the Company. Except for security holders who have securities of the Company registered
on an effective registration statement of the Company as of the date of this Agreement, there are no outstanding registration rights
which are superior to the registration rights being provided to the Purchasers under the Registration Rights Agreement.


 


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


 


(y)           Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company
confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel
with any information that it believes constitutes or might constitute material, non-public information. The Company understands
and confirms that the Purchasers will rely on the foregoing representation in effecting transactions in securities of the Company.
All disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company, its business 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
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 3.1(y) hereof.


 






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(z)           No
Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2,
neither the Company, nor 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 Shares to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which would require the
registration of any such securities under the Securities Act, or (ii) any applicable shareholder approval provisions of any Trading
Market on which any of the securities of the Company are listed or designated.


 


(aa)         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 each Subsidiary has filed all necessary federal, state and foreign income and franchise tax returns and
has paid or accrued all taxes shown as due thereon, and the Company has no knowledge of a tax deficiency which has been asserted
or threatened against the Company or any Subsidiary.


 


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


 


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


 


(dd)         No Disagreements
with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably anticipated by the Company
to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and the Company is
current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability to perform
any of its obligations under any of the Transaction Documents.


 


(ee)         Acknowledgment
Regarding Purchasers’ Purchase of the Shares. 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 Shares. The Company further represents to each
Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents has been based solely
on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.


 






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(ff)          Acknowledgement
Regarding Purchasers’ Trading Activity. Notwithstanding anything in this Agreement or elsewhere herein to the contrary
(except for Sections 3.2(g) and 4.12 hereof), it is understood and acknowledged by the Company that (i) none of the Purchasers
has been asked to agree by the Company, 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 Shares
for any specified term, (ii) past or future open market or other transactions by any Purchaser, specifically including, without
limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private placement
transactions, may negatively impact the market price of the Company’s publicly-traded securities, (iii) any Purchaser, and
counter-parties in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, may presently
have a “short” position in the Common Stock; and (iv) each Purchaser shall not be deemed to have any affiliation with
or control over any arm’s length counter-party in any “derivative” transaction. The Company acknowledges that
such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.


 


(gg)        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 Shares, (ii) sold, bid for, purchased, or paid any compensation for soliciting purchases of, any
of the Shares, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities
of the Company.


 


(hh)        Stock Option
Plans. Each stock option granted by the Company under the Company’s stock option plan (any, a “Plan”) was
granted (i) in accordance with the terms of the 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 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.


 


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


 


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


 






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


 


(ll)           Money Laundering.
The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial
record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable
money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”),
and no action, suit or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving
the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary,
threatened.


 


(mm)       DTC Eligibility.
The Company, through its Transfer Agent, is a participant in the Depository Trust Company Fast Automated Securities Transfer Program
or similar system, which provides for the Company’s Common Stock to be transferred electronically between brokers.


 


(nn)         Solvency.
Based on the consolidated financial condition of the Company as of the Closing after giving effect to the receipt by the Company
of the proceeds from the sale of the Minimum Offering Amount 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, and projected capital requirements and capital availability thereof,
and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all
of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect
of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to
pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).
The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation
under the bankruptcy or reorganization laws of any jurisdiction within one year from the final Closing Date.


 


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


 






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(a)           Organization;
Authority. If not a natural person, such Purchaser is an entity duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization with full right, corporate, partnership, limited liability company or similar
power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to
carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by
such Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate,
partnership, limited liability company or similar action, as applicable, on the part of such Purchaser. Each Transaction Document
to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms
hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its
terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification
and contribution provisions may be limited by applicable law.


 


(b)           Own
Account. Such Purchaser understands that the Shares are “restricted securities” and have not been registered under
the Securities Act or any applicable state securities law and is acquiring the Shares as principal for its own account and not
with a view to distribution or reselling such Shares 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 Shares 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 Shares (this representation and warranty not limiting such Purchaser’s right to sell the Shares
pursuant to the Registration Statement or otherwise in compliance with applicable federal and state securities laws) in violation
of the Securities Act or any applicable state securities law. Such Purchaser is acquiring the Shares hereunder in the ordinary
course of its business.


 


(c)           Purchaser
Status. At the time such Purchaser was offered the Shares, it was, and at the date hereof it is either: (i) an “accredited
investor” as defined in Rule 501(a) under the Securities Act or (ii) a “qualified institutional buyer” as defined
in Rule 144A(a) under the Securities Act.


 


(d)           Such
Purchaser is not required to be registered as a broker-dealer under Section 15 of the Exchange Act.


 


(e)           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 Shares, 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 Shares and, at the present time, is able to afford a complete loss of such investment.


 


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


 






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(g)           Short
Sales and Confidentiality Prior To The Date Hereof. Other than consummating the transactions contemplated hereunder, such Purchaser
has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, executed
any purchases or sales, including Short Sales, of the securities of the Company during the period commencing from the time that
such Purchaser first delivered or received a term sheet (written or oral) from the Company or any other Person representing the
Company setting forth the material terms of the transactions contemplated hereunder until the date hereof (“Discussion
Time”). Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby
separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct
knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets,
the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that
made the investment decision to purchase the Shares covered by this Agreement. Other than to other Persons party to this Agreement,
such Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including
the existence and terms of this transaction); provided, that a Purchaser may disclose the existence and terms of this transaction
(including any of the Transaction Documents) as may be required by applicable securities laws.


 


(h)           Information.
The Purchaser acknowledges it has been furnished with or has had access to the Company’s SEC Reports on or prior to Closing.
The Purchaser has been given the opportunity to ask questions of, and receive answers from, the Company concerning the terms and
conditions of this offering and to obtain such additional information necessary to verify the accuracy of same as the Purchaser
reasonably desires in order to evaluate the investment. The Purchaser acknowledges it does not desire to receive any further information
from the Company in order to make an investment in the Shares. The Purchaser has received no representations or warranties from
the Company, its employees, agents or attorneys in making this investment decision other than as set forth in this Agreement and
a Term Sheet.


 


(i)            Minimum
Offering Amount Compliance. Securities in this offering may be purchased by the affiliates of the Company, or by other persons
who will receive fees or other compensation or are otherwise dependent upon the success of this offering. Such purchases may be
made at any time, and will be counted in determining whether the Minimum Offering Amount has been met. The Purchasers acknowledge
that they do not expect that the sale of sufficient securities to reach the Minimum Offering Amount, or in excess of the Minimum
Offering Amount, indicates that such sales have been made to Purchasers who have no financial or other interest in this offering,
or otherwise are exercising independent investment discretion. The sale of the Minimum Offering Amount, while necessary to the
business opportunities of the Company, is not designed as a protection to the Purchasers, to indicate that each Purchaser’s
investment decisions are shared by other unaffiliated investors. Because there may be substantial purchases by affiliates of the
Company, or other persons who will receive fees or other compensation or are otherwise dependent upon the success of this offering,
the Purchasers should not place any reliance on the sale of the Minimum Offering Amount as an indication of the merits of this
offering. Each Purchaser acknowledges that they must make their investment decision as to the merits of this offering. The Company
is aware of affiliates of the Company who intend to invest in the offering.


 






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ARTICLE IV 


OTHER AGREEMENTS OF THE PARTIES


 


4.1           Transfer
Restrictions.


 


(a)           The
Shares may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Shares
other than pursuant to an effective registration statement or Rule 144 or Section 4(a)(1) under the Securities Act 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 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 Shares under the Securities Act. As a condition of such transfer, any such transferee
shall agree in writing to be bound by the terms of this Agreement and the Registration Rights Agreement and shall have the rights
of a Purchaser under this Agreement and the Registration Rights Agreement.


 


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


 


THIS SECURITY 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 (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE
TO THE COMPANY. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.


 


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 Shares to a financial institution that is an “accredited investor”
as defined in Rule 501(a) under the Securities Act and, if required under the terms of such arrangement, such Purchaser may transfer
pledged or secured Shares 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 appropriate Purchaser’s expense, the Company will execute and
deliver such reasonable documentation as a pledgee or secured party of Shares may reasonably request in connection with a pledge
or transfer of the Shares, including, if the Shares are subject to registration pursuant to the Registration Rights Agreement,
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.


 






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(c)           Certificates
evidencing the 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, or (ii) following any sale of such Shares
pursuant to Rule 144, or (iii) if such Shares are eligible for sale under Rule 144, without the requirement for the Company to
be in compliance with the current public information required under Rule 144 as to such Shares and without volume or manner-of-sale
restrictions or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations
and pronouncements issued by the staff of the Commission). If all or any portion of the Shares are sold when there is an effective
registration statement to cover the resale of the Shares, or if such Shares may be sold under Rule 144 and the Company is then
in compliance with the current public information required under Rule 144, or if such Shares may be sold under Rule 144 without
the requirement for the Company to be in compliance with the current public information required under Rule 144 as to such Shares
and without volume or manner-of-sale restrictions or if such legend is not otherwise required under applicable requirements of
the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission) then such Shares
shall be issued free of all legends. The Company agrees that at such time as such legend is no longer required under this Section
4.1(c), it will, no later than five Trading Days following the delivery by a Purchaser to the Company or the Transfer Agent of
a certificate representing the Shares issued with a restrictive legend (such fifth Trading Day, the “Legend Removal Date”),
deliver or cause to be delivered to such Purchaser a certificate representing such Shares that is free from all restrictive and
other legends. 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. Certificates for 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, as partial liquidated
damages and not as a penalty, for each $1,000 of Shares (based on the VWAP of the Shares on the date such Shares 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. Nothing herein shall limit such Purchaser’s right to pursue actual
damages for the Company’s failure to deliver certificates representing any Shares as required by the Transaction Documents,
and such Purchaser shall have the right to pursue all remedies available to it at law or in equity including, without limitation,
a decree of specific performance and/or injunctive relief.


 






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(e)           Each
Purchaser, severally and not jointly with the other Purchasers, agrees that such Purchaser will sell any Shares pursuant to either
the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption
therefrom, and that if Shares 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 Shares 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 Shares 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 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. Until the time that no Purchaser owns the Shares, the Company covenants to timely file (or obtain extensions
in respect thereof and file within the applicable grace period) all reports that are required to be filed by the Company pursuant
to Section 13(a) the Exchange Act, even if the Company is not then otherwise subject to the reporting requirements of the Exchange
Act. As long as any Purchaser owns the Shares, if the Company is not required to file reports pursuant to the Exchange Act, it
will prepare and furnish to the Purchasers and make publicly available in accordance with Rule 144(c) such information as is required
for the Purchasers to sell the Shares under Rule 144. The Company further covenants that it will take such further action as any
holder of the Shares may reasonably request, to the extent required from time to time to enable such Person to sell such Shares
without registration under the Securities Act within the requirements of the exemption provided by Rule 144.


 


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 Shares to the Purchasers in a manner
that would require the registration under the Securities Act of the sale of the Shares to the Purchasers or that would be integrated
with the offer or sale of the Shares for purposes of the rules and regulations of any Trading Market.


 






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4.5           Securities
Laws Disclosure; Publicity. At any time when the Company has received the Minimum Offering Amount, the Company shall, by 8:30
a.m. (New York City time) on the 2nd Trading Day immediately following the Closing, issue a Current Report on Form 8-K, disclosing
the material terms of the transactions contemplated hereby and including the Transaction Documents as exhibits thereto. Provided,
however, if the Company is required by the SEC’s disclosure rules to file a Form 8-K on an earlier date, the Company will
file the Form 8-K as required by law. The Company and each Purchaser shall consult with each other in issuing any other press releases
with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release
or otherwise make any such public statement without the prior consent of the Company, with respect to any press release of any
Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the Company, which consent shall
not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall
promptly provide the other party with prior notice of such public statement or communication. Notwithstanding the foregoing, the
Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission
or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except (i) as required by federal
securities law in connection with (A) any registration statement contemplated by the Registration Rights Agreement and (B) the
filing of final Transaction Documents (including signature pages thereto) with the Commission and (ii) to the extent such disclosure
is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers with prior notice of such
disclosure permitted under this clause (ii). Additionally, notwithstanding the foregoing (or anything else to the contrary in this
Agreement), a Purchaser shall not be required to notify the Company or seek the Company’s prior approval to make public disclosures
pursuant to applicable law, including disclosures on a Schedule 13D or Schedule 13G (or any amendment thereto) or as required by
Section 16 of the Exchange Act.


 


4.6           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 Shares
under the Transaction Documents or under any other agreement between the Company and the Purchasers.


 


4.7           Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents,
the Company covenants and agrees that neither it nor any other Person acting on its behalf, will provide any Purchaser or its agents
or counsel with any information that the Company believes constitutes material non-public information, unless prior thereto such
Purchaser shall have executed a written agreement regarding the confidentiality and use of such information. The Company understands
and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.


 


4.8           Use
of Proceeds. The Company shall use the net proceeds from the sale of the Shares hereunder for working capital, general corporate
purposes including the purchase of inventory and $310,000 for a reserve account in connection with its TCUS Financial, LLC Note
Purchase Agreement, as amended (the “NPA”).


 






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4.9           Indemnification
of Purchasers. Subject to the provisions of this Section 4.9, the Company will indemnify and hold each Purchaser and its directors,
officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a
Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title) of such controlling Person (each, a “Purchaser Party”)
harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser
Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or
agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against the
Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not
an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless
such action is based upon a breach of such Purchaser’s representations, warranties or covenants under the Transaction Documents
or any agreements or understandings of such Purchaser Party may have with any such stockholder or any violations by such Purchaser
Party of state or federal securities laws or any conduct by such Purchaser Party which constitutes fraud, gross negligence, willful
misconduct or malfeasance). If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought
pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right
to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party
shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been specifically
authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and
to employ counsel or (iii) in such action there is, in the reasonable opinion of such separate counsel, a material conflict on
any material issue between the position of the Company and the position of such Purchaser Party, in which case the Company shall
be responsible for the reasonable fees and expenses of no more than one such separate counsel. 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, warranties, covenants
or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents. Indemnification paid pursuant
to this Section 4.9 will be made during the course of the investigation or defense, as and when bills are received or incurred.


 


4.10         Prohibition
on Variable Rate Transactions. From the date hereof until such time as the Purchasers hold in the aggregate less than 5% of
the Shares purchased under this Agreement, the Company shall be prohibited from effecting or entering into an agreement to effect
any Subsequent Financing involving a Variable Rate Transaction. “Variable Rate Transaction” means a transaction
in which the Company issues or sells (i) 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, exercise 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, exercise 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 sell securities at a future
determined price.


 






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4.11         Equal
Treatment of Purchasers. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification
of any provision of any of the Transaction Documents unless the same consideration is also offered to all of the parties to the
Transaction Documents. For clarification purposes, this provision constitutes a separate right granted to each Purchaser by the
Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers as a class and shall
not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting
of the Shares or otherwise.


 


4.12         Short
Sales and Confidentiality After The Date Hereof. Each Purchaser, severally and not jointly with the other Purchasers, covenants
that neither it, nor any Affiliate acting on its behalf or pursuant to any understanding with it, will execute any Short Sales
during the period commencing with the Discussion Time and ending at such time the transactions contemplated by this Agreement are
first publicly announced as described in Section 4.5. Subject to the last sentence of Section 4.5, each Purchaser, severally and
not jointly with the other Purchasers, covenants that until such time as the transactions contemplated by this Agreement are publicly
disclosed by the Company as described in Section 4.5, 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, no Purchaser makes any representation, warranty or covenant hereby that it will not engage in Short Sales in the securities
of the Company after the time that the transactions contemplated by this Agreement are first publicly announced as described in
Section 4.5. 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 Shares covered by this Agreement.


 


4.13         Form
D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Shares 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 Shares 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.


 






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4.14         Public
Information. At any time during the period commencing from the six (6) month anniversary of the Closing Date and ending at
such time that all of the Shares, 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 shall fail for any reason to satisfy the current
public information requirement under Rule 144(c) (a “Public Information Failure”) then, in addition to such
Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated damages and not
as a penalty, by reason of any such delay in or reduction of its ability to sell the Shares, an amount in cash equal to two percent
(2%) of the aggregate Subscription Amount of such Purchaser’s Shares on the day of a Public Information Failure and on every
thirtieth (30th) day (pro rated for periods totaling less than thirty days) thereafter until the earlier of (a) the date such Public
Information Failure is cured and (b) such time that such public information is no longer required for the Purchasers to transfer
the Common Stock pursuant to Rule 144. The payments to which a Purchaser shall be entitled pursuant to this Section 4.14 are referred
to herein as “Public Information Failure Payments.” Public Information Failure Payments shall be paid on the
earlier of (i) the last day of the calendar month during which such Public Information Failure Payments are incurred and (ii) the
third (3rd) Business Day after the event or failure giving rise to the Public Information Failure Payments is cured. In the event
the Company fails to make Public Information Failure Payments in a timely manner, such Public Information Failure Payments shall
bear interest at the rate of 1.5% per month (prorated for partial months) until paid in full. Nothing herein shall limit such Purchaser’s
right to pursue actual damages for the Public Information Failure, and such Purchaser shall have the right to pursue all remedies
available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.


 


4.15.        Amendments
to Other Agreements. The Company agrees as follows:


 


(a)           Prior to the Initial Closing:


 


(i)            The
Company shall amend the NPA, to provide for (x) the Outstanding Principal Amount of Loan/EBITDA Ratio covenant to be deleted and
replaced with a covenant that the Company will maintain a Gross Profit (as defined below) of at least 2% of the Company’s
revenue during each fiscal quarter commencing with the quarter ending December 31, 2017, (y) eliminating the Interest-Coverage
Ratio provision and (z) prior to December 31, 2017, and (z) the Company to consummate an equity raise of at least $1,000,000 and,
from such proceeds, fund a reserve account in the amount of $310,000. “Gross Profit” means net revenue received by
the Company during the applicable period less cost of goods sold during the applicable period, including all direct sales and marketing
expenses incurred by the Company during the applicable period. For the purposes of the definition of Gross Profit, the Company
includes its subsidiaries.


 


(ii)           The
Company shall adopt an internal reimbursement policy that is reasonably acceptable to each Purchaser participating in the Initial
Closing with a Subscription Amount equal to or exceeding $1,000,000.


 


(b)           Brian Tepfer and Scott Tepfer shall amend their employment agreements to reduce their base salaries to $250,000 each by
the next payroll date following the date of this Agreement.


 


ARTICLE V

MISCELLANEOUS


 


5.1           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 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.


 






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5.2           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 at the facsimile number (or e-mail at the e-mail address) set forth on the signature pages attached hereto 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 at the facsimile number (or e-mail at the e-mail address) 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
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.


 


5.3           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 51% in interest of the Shares purchased pursuant
to this Agreement 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.


 


5.4           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.


 


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


 


5.6           No Third-Party
Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth
in Section 4.9.


 






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5.7           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, employees or agents) shall be commenced exclusively in
the state and federal courts sitting in the New York County, New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in New York County, New York for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the
Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that
it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient
venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served
in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence
of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any other manner permitted by law. If either party shall commence an action or proceeding to enforce any provisions
of the Transaction Documents, then the prevailing party in such action or proceeding shall be reimbursed by the other party for
its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution
of such action or proceeding.


 


5.8           Expenses.
The Company and each Purchaser shall pay their own expenses in connection with the transactions contemplated by this Agreement.


 


5.9           Survival.
The representations and warranties shall survive the Closing and the delivery of the Shares for the applicable statute of limitations.


 


5.10         Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. In the
event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file,
such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed)
with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.


 


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


 






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5.12         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.


 


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


 


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


 


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


 


5.16         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 Proceeding for such purpose. Each Purchaser has been represented by its own separate
legal counsel in their review and negotiation of the Transaction Documents.


 






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5.17         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.


 


5.18         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.


 


5.19         Construction.
The parties agree that each of them and/or their respective counsel has 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 hereto.


 


5.20         Waiver of
Jury Trial. In any action, suit or proceeding in any jurisdiction brought by any party against any other party, the parties
each knowingly and intentionally, to the greatest extent permitted by applicable law, hereby absolutely, unconditionally, irrevocably
and expressly waives forever trial by jury.


 


[Signature Pages Follow]


 




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


 


	USELL.COM, INC. 	
	 	 
	By: 	 	 	 
	 	Name:

    Title:	Nikhil
        Raman
 Chief Executive Officer

        171 Madison Ave, 17th Floor

        New York, NY 10016
	 
	 	Email:	Nik@usell.com	 
	 	 	 	 
	With a copy to (which shall not constitute notice):


	
	 	 	 	 
	Nason, Yeager, Gerson, White & Lioce, P.A.
 3001 PGA Boulevard, Suite 305.
 Palm Beach Gardens, FL 33410
 Email: mharris@nasonyeager.com	 



 





[Signature
Page to Stock Purchase Agreement]


 



     


     


    

 


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


 


	Name of Purchaser: 	 


 


	Signature of Authorized Signatory of Purchaser: 	 


 


	Name of Authorized Signatory: 	 


 


	Title of Authorized Signatory: 	 


 


	Email Address of Authorized Signatory: 	 


 


	Fax Number of Authorized Signatory: 	 







  


Address for Notice of Purchaser:


 


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


 


Subscription Amount: ____________ 


Shares of Common Stock: ____________


 


Social Security Number/ EIN Number: [PROVIDE
THIS UNDER SEPARATE COVER]


 





[Purchaser
Signature Page to Stock Purchase Agreement]







 




     


     


    

 


SCHEDULE A 


SCHEDULE OF PURCHASERS


 




     


     


    

 


EXHIBIT A 


ESCROW AGREEMENT 


 




     


     


    

 


EXHIBIT B 


REGISTRATION RIGHTS AGREEMENT