Exhibit
10.2


 


SECURITIES
PURCHASE AGREEMENT


 


This Securities Purchase
Agreement (this “Agreement”) is dated as of December 20, 2017, among Applied DNA Sciences, Inc., a Delaware
corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser” and collectively the “Purchasers”).


 


WHEREAS, subject to
the terms and conditions set forth in this Agreement and pursuant to an effective registration statement under the Securities Act
of 1933, as amended (the “Securities Act”), as to the Shares, the Warrants and the Warrant Shares (each as defined
herein), 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, for all purposes of this Agreement, the following terms have the meanings
set forth in this Section 1.1:


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Common Stock”
means the shares of common stock of the Company, par value $0.001 per share.


 




     

     


    

 


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


 


“Disclosure
Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith.


 


“DVP”
shall have the meaning ascribed to such term in Section 2.1.


 


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


 


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


 


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


 


“Exempt Issuance”
means the issuance of (a) Common Stock, options or other equity awards to employees, officers, consultants, members of its strategic
advisory board, or directors of the Company pursuant to any stock or option plan or employee stock purchase plan duly adopted for
such purpose (provided that issuances to consultants and members of its strategic advisory board shall be unregistered and carry
no registration rights other than on a registration statement on Form S-8 and shall not exceed an aggregate of 250,000 shares (subject
to adjustment for any stock splits or recapitalizations following date hereof) in any three (3) month period), by a majority of
the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established
for such purpose for services rendered to the Company, (b) securities upon the exercise or exchange of or conversion of any Securities
issued hereunder and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and
outstanding on the date of this Agreement; provided that such securities have not been amended since the date of this
Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such
securities (other than in connection with stock splits or combinations) or to extend the term of such securities, and (c) securities
issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company; provided that
such securities are issued as “restricted securities” (as defined in Rule 144) and carry no registration rights that
require or permit the filing of any registration statement in connection therewith during the prohibition period in Section 4.12(a)
herein and provided that any such issuance shall only be to a Person (or to the equityholders of a Person) which is,
itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of
the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include
a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary
business is investing in securities.


 


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


 


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


 


“Form 8-K”
shall have the meaning ascribed to such term in Section 4.4.


 


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


 




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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Per
Share Purchase Price” equals $1.75, subject to adjustment for reverse and
forward stock splits, stock dividends, stock combinations and other similar transactions
of the Common Stock that occur after the date of this Agreement.


 


“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.


 


“Placement Agent”
means Maxim Group LLC.


 


“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.


 


“Prospectus”
means the base prospectus filed for the Registration Statement.


 


“Prospectus
Supplement” means the supplement to the Prospectus complying with Rule 424(b) of the Securities Act that is filed with
the Commission and delivered by the Company to each Purchaser at the Closing.


 


“Purchaser Party”
shall have the meaning ascribed to such term in Section 4.8.


 


“Registration
Statement” means the effective registration statement with Commission file No. 333-218158 which registers the sale of
the Shares, the Warrants and the Warrant Shares.


 


“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 or interpreted from time
to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect
as such Rule.


 


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


 


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


 


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


 


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


 


“Shares”
means the shares of Common Stock issued or issuable to each Purchaser pursuant to 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 locating and borrowing shares of Common Stock). 


 


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


 


“Subsidiary”
means any subsidiary of the Company as set forth in the SEC Reports, and shall, where applicable, also include any direct or indirect
subsidiary of the Company formed or acquired after the date hereof.


 


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


 


“Trading Market”
means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question:
the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange
(or any successors to any of the foregoing).


 


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


 


“Transfer Agent”
means American Stock Transfer & Trust Company, LLC, the current transfer agent of the Company, with a mailing address of 6201
15th Avenue, Brooklyn, NY 11219, and any successor transfer agent of the Company.


 


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


 




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“Warrants”
means, collectively, the Common Stock purchase warrants delivered to the Purchasers at the Closing in accordance with Section 2.2(a),
which Warrants shall be immediately exercisable and have a term of exercise equal to 5 years, in the form of Exhibit A attached
hereto.


 


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


 


Article
II.

PURCHASE AND SALE


 


2.1           Closing.  On
the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and
delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly, agree
to purchase, up to 2,735,000 Shares and 2,735,000 Warrants.  Each Purchaser’s Subscription Amount as set forth
on the signature page hereto executed by such Purchaser shall be made available for “Delivery Versus Payment” (“DVP”)
settlement with the Company. The Company shall deliver to each Purchaser its respective Shares and Warrants as determined pursuant
to Section 2.2(a), and the Company and each Purchaser shall deliver the other items set forth in Section 2.2 at the Closing.  Upon
satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of the counsel
to the Company or such other location as the parties shall mutually agree.  Unless otherwise directed by the Placement
Agent, settlement of the Shares shall occur via DVP (i.e., on the Closing Date, the Company shall issue the Shares registered in
the Purchasers’ names and addresses and released by the Transfer Agent directly to the account(s) at the Placement Agent
identified by each Purchaser; upon receipt of such Shares, the Placement Agent shall promptly electronically deliver such Shares
to the applicable Purchaser, and payment therefor shall promptly be made by the Placement Agent (or its clearing firm) by wire
transfer to the Company on the Closing Date).


 


2.2           Deliveries.


 


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


 


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


 


(ii)         a
legal opinion of Pepper Hamilton LLP, counsel to the Company, in form reasonably acceptable to the Placement Agent and Purchasers;


 


(iii)        a
legal opinion of (A) intellectual property counsel to the Company, and (B) British Virgin Islands counsel to the Company, each
in a form reasonably acceptable to the Placement Agent and Purchasers;


 


(iv)        a
cold comfort letter, addressed to the Placement Agent and the Purchasers in form and substance reasonably satisfactory in all material
respects from Marcum LLP;


 


(v)         a
comfort letter, addressed to the Placement Agent and the Purchasers in form and substance reasonably satisfactory in all material
respects from the Chief Financial Officer;


 


(vi)        the
Company shall have provided each Purchaser with the Company’s wire instructions, on Company letterhead and executed by the
Chief Executive Officer or Chief Financial Officer;


 




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(vii)       subject
to the last sentence of Section 2.1, a copy of the irrevocable instructions to the Transfer Agent instructing the Transfer Agent
to deliver on an expedited basis via The Depository Trust Company Deposit or Withdrawal at Custodian system (DWAC) Shares equal
to such Purchaser’s Subscription Amount divided by the Per Share Purchase Price, registered in the name of such Purchaser;


 


(viii)      a
Warrant, registered in the name of such Purchaser, to purchase up to a number of Common Stock equal to 100% of such Purchaser’s
Shares, with an exercise price equal to $2.00, subject to adjustment therein (for avoidance of doubt, such original Warrant may
be delivered within three Trading Days of the Closing Date); and


 


(ix)         the
Prospectus and the Prospectus Supplement (which may be delivered in accordance with Rule 172 under the Securities Act).


 


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


 


(i)          this
Agreement duly executed by such Purchaser; and


 


(ii)         such
Purchaser’s Subscription Amount, which shall be made available for DVP settlement with the Company.


 


2.3           Closing
Conditions.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 




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


 


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


 


Article
III.

REPRESENTATIONS AND WARRANTIES


 


3.1           Representations
and Warranties of the Company.  Except as set forth in the Disclosure Schedules, which Disclosure Schedules shall
be deemed a part hereof and shall qualify any representation or otherwise made herein to the extent of the disclosure contained
in the corresponding section of the Disclosure Schedules, the Company hereby makes the following representations and warranties
to each Purchaser:


 


(a)          Subsidiaries.  All
of the direct and indirect subsidiaries of the Company are as set forth in the SEC Reports. Except as set forth in the SEC Reports,
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 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.


 


(b)          Organization
and Qualification.  The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized,
validly existing and in good standing (if applicable in such jurisdiction) under the laws of the jurisdiction of its incorporation
or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as
currently conducted.  Neither the Company nor any Subsidiary is in violation or default of any of the provisions of its
respective certificate or articles of incorporation, bylaws or other organizational or charter documents.  Each of the
Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity
in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary,
except where the failure to be so qualified or in good standing, as the case may be, would 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 or condition (financial or otherwise) of the Company and the Subsidiaries,
taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely
basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”)
and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or
curtail such power and authority or qualification.


 




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


 


(d)          No
Conflicts.  Except as set forth on Schedule 3.1(d), the execution, delivery and performance by the Company of this
Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Securities and the consummation
by it of the transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the
Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents,
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, anti-dilution or similar adjustments, 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 would not have
or reasonably be expected to result in a Material Adverse Effect.


 


(e)          Filings,
Consents and Approvals.  Except as set forth on Schedule 3.1(e), the Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal,
state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the
Company of the Transaction Documents, other than: (i) the filings required pursuant to Section 4.4, (ii) the filing with the Commission
of the Prospectus Supplement, (iii) application(s) to each applicable Trading Market for the listing of the Shares and Warrant
Shares for trading thereon in the time and manner required thereby, and (iv) such filings as are required to
be made under applicable state securities laws, if required (collectively, the “Required Approvals”).


 




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(f)          Issuance
of the Securities; Registration.  The Securities are duly authorized and, when issued and paid for in accordance
with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all
Liens imposed by the Company.  The Warrant Shares, when issued and paid for in accordance with the terms of the Warrants,
will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company.  The Company
has reserved from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement
and the Warrants. The Company has prepared and filed the Registration Statement in conformity with the requirements of the Securities
Act, which became effective on May 26, 2017, including the Prospectus, and such amendments and supplements thereto as may
have been required to the date of this Agreement.  The Company was at the time of the filing of the Registration Statement
eligible to use Form S-3. The Company is eligible to use Form S-3 under the Securities Act and it meets the transaction requirements
with respect to the aggregate market value of securities being sold pursuant to this Agreement and the past 12 months as set forth
in General Instruction I.B.6 of Form S-3. The Registration Statement is effective under the Securities Act and no stop order preventing
or suspending the effectiveness of the Registration Statement or suspending or preventing the use of the Prospectus has been issued
by the Commission and no proceedings for that purpose have been instituted or, to the knowledge of the Company, are threatened
by the Commission.  The Company, if required by the rules and regulations of the Commission, shall file the Prospectus
with the Commission pursuant to Rule 424(b).  At the time the Registration Statement and any amendments thereto became
effective, at the date of this Agreement and at the Closing Date, the Registration Statement and any amendments thereto conformed
and will conform in all material respects to the requirements of the Securities Act and did not and will not contain any untrue
statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements
therein not misleading; and the Prospectus and any amendments or supplements thereto, at time the Prospectus or any amendment or
supplement thereto was issued and at the Closing Date, conformed and will conform in all material respects to the requirements
of the Securities Act and did not and will not contain an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.


 


(g)          Capitalization.
The authorized capitalization of the Company is as set forth on Schedule 3.1(g), including the authorized
and outstanding Common Stock, preferred stock and convertible securities of the Company.  The Company has not issued
any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to:
(i) the exercise of stock options or vesting of restricted stock units under the Company’s equity plans,
the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase
plans, and (ii) the conversion and/or exercise of Common Stock Equivalents outstanding as of the date
of the most recently filed periodic report under the Exchange Act.  No Person has any right of first refusal, preemptive
right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents.  Except
as a result of the purchase and sale of the Securities and as set forth on Schedule 3.1(g), there are no outstanding
options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights
or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire,
any shares of Common Stock, Common Stock Equivalents or the capital stock of any Subsidiary,
or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue
additional shares of Common Stock or Common Stock Equivalents or capital stock of any Subsidiary.  The
issuance and sale of the Securities will not obligate the Company or any Subsidiary to issue shares of Common
Stock, Common Stock Equivalents 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.
There are no outstanding securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions,
and there are no contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become
bound to redeem a security of the Company or such Subsidiary. The Company does not have any stock appreciation rights
or “phantom stock” plans or agreements or any similar plan or agreement. All of the outstanding capital stock of
the Company is duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all
federal and state or foreign securities laws, and none of such outstanding stock was issued in violation of
any preemptive rights or similar rights to subscribe for or purchase securities.  No further approval or authorization
of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities.  Except
as set forth on Schedule 3.1(g), there are no stockholders agreements, voting agreements or other similar
agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of
the Company, between or among any of the Company’s stockholders.


 




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(h)          SEC
Reports; Financial Statements.  Except as set forth on Schedule 3.1(h), the Company has filed all reports,
schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange
Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period
as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto
and documents incorporated by reference therein, together with the Prospectus and the Prospectus Supplement, being collectively
referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of
filing and has filed any such SEC Reports prior to the expiration of any such extension.  As of their respective dates,
the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable,
and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading. The Company has never been an issuer subject to Rule 144(i) under the Securities Act. The financial
statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and
the rules and regulations of the Commission with respect thereto as in effect at the time of filing.  Such financial
statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent
basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements
or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly
present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates
thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements,
to normal, immaterial, year-end audit adjustments.


 


(i)          Material
Changes; Undisclosed Events, Liabilities or Developments.  Since the date of the latest audited financial statements
included within the SEC Reports, except as set forth on Schedule 3.1(i), (i) there has been no event, occurrence or development
that has had or that would 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 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 equity plans.  The Company does not have pending
before the Commission any request for confidential treatment of information.  Except for the issuance of the Securities
contemplated by this Agreement, no event, liability, fact, circumstance, occurrence or development has occurred or exists or is
reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, properties,
operations, assets or financial condition that would be required to be disclosed by the Company under applicable securities laws
at the time this representation is made or deemed made that has not been publicly disclosed at least one Trading Day prior to the
date that this representation is made.


 




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(j)          Litigation.  There
is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened
against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental
or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”)
which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or
(ii) would, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect.  Neither
the Company nor any Subsidiary, nor to the Company’s knowledge, any director or officer thereof, is or has been
the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach
of fiduciary duty.  To the knowledge of the Company, there has not been, and 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.  


 


(k)          Labor
Relations.  No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees
of the Company, which would reasonably be expected to result in a Material Adverse Effect.  None of the Company’s
or its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company
or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the
Company and its Subsidiaries believe that their relationships with their employees are good.  To the knowledge of the
Company, no executive officer of the Company or any Subsidiary, is, or is now expected 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 that would reasonably be expected to have a Material Adverse Effect.  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 would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.


 


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


 


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


 




    	 	11	 



     


    

 


(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 would 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.


 


(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, for which appropriate reserves have been made therefor in accordance
with GAAP and, the payment of which is neither delinquent nor subject to penalties.  Any real property and facilities
held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which
the Company and the Subsidiaries are in compliance.


 


(p)          Intellectual
Property.  The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks,
trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property
rights and similar rights necessary or required for use in connection with their respective businesses as described in the SEC
Reports and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property
Rights”).  None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise)
that any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate
or be abandoned, within two (2) years from the date of this Agreement, except where such action would not reasonably be expected
to have a Material Adverse Effect.  Neither the Company nor any Subsidiary has received, since the date of the latest
audited financial statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the
Intellectual Property Rights violate or infringe upon the rights of any Person, except as would not have or reasonably
be expected to not have a Material Adverse Effect.  To the knowledge of the Company, all such Intellectual Property Rights
are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights.  The
Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of
their intellectual properties, except where failure to do so would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.


 


(q)          Patents.
Any pending patent applications (the “Pending Patents”) are being diligently prosecuted by the Company and/or Subsidiaries.
To the Company’s knowledge, there is no existing patent or published patent application that would interfere, conflict with
or otherwise adversely affect the validity, enforcement or scope of the Pending Patents if claims of such Pending Patents were
issued in substantially the same form as currently written. No security interests or other Liens have been created with respect
to the Pending Patents; and the Pending Patents have not been exclusively licensed to another entity or Person.


 




    	 	12	 



     


    

 


(r)          Insurance.  The
Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but
not limited to, directors and officers insurance coverage at least equal to the aggregate Subscription Amount.  Neither
the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without
a significant increase in cost.


 


(s)          Transactions
With Affiliates and Employees.  Except as set forth in the SEC Reports, none of the officers or directors of the
Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently
a party to any transaction with the Company or any Subsidiary (other than for services or separation from service as employees,
officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, providing for the borrowing of money from or lending of money
to or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity
in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder,
member or partner, in each case in excess of $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,
restricted stock award agreements and restricted stock unit award agreements under any equity plan of the Company.


 


(t)          Sarbanes-Oxley;
Internal Accounting Controls.  The Company and the Subsidiaries are in compliance in all material respects with any
and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable
rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date.  The
Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that:
(i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect
to any differences. The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange
Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to
ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the Commission’s rules and forms.  The
Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and
the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date,
the “Evaluation Date”).  The Company presented in its most recently filed periodic report under
the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based
on their evaluations as of the Evaluation Date.  Since the Evaluation Date, there have been no changes in the internal
control over financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially
affected, or are reasonably likely to materially affect, the internal control over financial reporting of the Company
and its Subsidiaries.


 


(u)          Certain
Fees.  Except as set forth in the Prospectus Supplement, including compensation paid to the Placement Agent in connection
with the placement of the Securities, no brokerage or finder’s fees or commissions are or will be payable by the Company
or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person
with respect to the transactions contemplated by the Transaction Documents.  The Purchasers shall have no obligation
with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in
this Section 3.1(u) that may be due in connection with the transactions contemplated by the Transaction Documents.


 




    	 	13	 



     


    

 


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


 


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


 


(x)          Listing
and Maintenance Requirements.  Except as set forth on Schedule 3.1(x), the Common Stock and the Warrant Shares are
registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to
its knowledge is likely to have the effect of, terminating the registration of the Common Stock and the Warrant Shares under the
Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration.  The
Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Common Stock is
or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of
such Trading Market. The Company is, and has no reason to believe that it will not in the foreseeable future continue
to be, in compliance with all such listing and maintenance requirements. The Common Stock is currently eligible for electronic
transfer through the Depository Trust Company or another established clearing corporation and the Company is current in payment
of the fees to the Depository Trust Company (or such other established clearing corporation) in connection with such electronic
transfer.


 


(y)          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 stock acquisition, business combination, poison pill (including any distribution under a rights
agreement) or other similar anti-takeover provision under the Company’s amended and restated certificate of incorporation
or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and
the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation
as a result of the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities.


 


(z)          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 which is not otherwise disclosed
in the Prospectus Supplement.   The Company understands and confirms that the Purchasers will rely on the foregoing representation
in effecting transactions in securities of the Company.  All of the disclosure furnished by or on behalf of the Company
to the Purchasers regarding the Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby,
including the Disclosure Schedules, 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 3.2.


 




    	 	14	 



     


    

 


(aa)         No
Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2,
none of the Company, any of its Affiliates, or 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 the offering of the
Securities to be integrated with prior offerings by the Company for purposes of any applicable stockholder approval provisions
of any Trading Market on which any of the securities of the Company are listed or designated.


 


(bb)         Solvency.  Based
on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the Company
of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company’s assets exceeds the
amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including
known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry
on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular
capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability
thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, 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 Closing
Date.  Schedule 3.1(bb) sets forth as of the date hereof all outstanding secured and unsecured Indebtedness
of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments.  For the purposes of this
Agreement, “Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess of $100,000
(other than trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent
obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated
balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar
transactions in the ordinary course of business; and (z) the present value of any lease payments in excess of $100,000 due under
leases required to be capitalized in accordance with GAAP.  Neither the Company nor any Subsidiary is in default with
respect to any Indebtedness.


 


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


 




    	 	15	 



     


    

 


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


 


(ee)         Accountants.  The
Company’s independent registered public accounting firm is Marcum LLP.  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 September
30, 2017.


 


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


 


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


 


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


 




    	 	16	 



     


    

 


(ii)         Government
Contracts. No payment has been made by the Company or Subsidiaries, or by any person authorized to act on their behalf, to
any person in connection with any contracts with any governmental entity or regulatory agency (“Government Contracts”),
in violation of applicable procurement laws or regulations. The Company’s and Subsidiaries’ cost accounting and procurement
systems with respect to Government Contracts are in compliance in all material respects with all applicable governmental regulations
and requirements. With respect to each Government Contract: (i) the Company and each Subsidiary have complied with all material
terms and conditions of such Government Contract, including all clauses, provisions and requirements incorporated expressly, by
reference or by operation of law therein; (ii) the Company and each such Subsidiary have complied with all material requirements
of applicable laws pertaining to such Government Contract; (iii) all representations and certifications executed, acknowledged
or set forth in or pertaining to such Government Contract were complete and correct in all material respects as of their effective
date, and the Company and each Subsidiary have complied in all material respects with all such representations and certifications;
(iv) neither the United States government nor any prime contractor, subcontractor or other person has notified the Company or any
Subsidiary, either orally or in writing, that the Company or such Subsidiary has breached or violated any applicable law, or any
material certification, representation, clause, provision or requirement pertaining to such Government Contract; and (v) no termination
for convenience, termination for default, cure notice or show cause notice is in effect as of the date hereof pertaining to any
Government Contract. Neither the Company nor any Subsidiary nor any of their respective directors, officers or employees is (or
during the last three (3) years has been) under administrative, civil or criminal investigation, or indictment or audit by any
governmental authority with respect to any alleged irregularity, misstatement or omission arising under or relating to any Government
Contract (other than routine Defense Contract Audit Agency audits, in which no such irregularities, misstatements or omissions
were identified). During the last three (3) years, neither the Company nor any Subsidiary has conducted or initiated any internal
investigation or made a voluntary disclosure to the United States government, with respect to any alleged irregularity, misstatement
or omission arising under or relating to any Government Contract. There are no outstanding claims against the Company or any Subsidiary,
either by the United States government or by any prime contractor, subcontractor, vendor or other third party, arising under or
relating to any Government Contract. There are no disputes between the Company or any Subsidiary and the United States government
under the Contract Disputes Act or any other statute or between the Company or any Subsidiary and any prime contractor, subcontractor
or vendor arising under or relating to any Government Contract. Neither the Company nor any Subsidiary nor, to the Company’s
knowledge, any of its or the Subsidiary’s directors, officers or employees is (or during the last three (3) years has been)
suspended or debarred from doing business with the United States government or is (or during such period was) the subject of a
finding of non-responsibility or ineligibility for United States government contracting. There is no suit or investigation pending
and, to the Company’s knowledge, no suit or investigation threatened against the Company or any Subsidiary with respect to
any Government Contract.


 


(jj)         Termination
of Contracts. Neither the Company nor any Subsidiary has sent or received any communications regarding termination of, or intent
not to renew, any contract or agreement material to the Company or a Subsidiary, and no such termination or non-renewal has been
threatened by the Company or any Subsidiary or any other party to such contract or agreement.


 


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


 




    	 	17	 



     


    

 


(ll)         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.


 


(mm)      Bank
Holding Company Act.  Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding
Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve
System (the “Federal Reserve”).  Neither the Company nor any of its Subsidiaries or Affiliates owns
or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five
percent 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.


 


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


 


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


 


(pp)       FDA.
As to each product subject to the jurisdiction of the U.S. Food and Drug Administration (“FDA”) under the Federal
Food, Drug and Cosmetic Act, as amended, and the regulations thereunder (“FDCA”) that is manufactured, packaged,
labeled, tested, distributed, sold, and/or marketed by the Company or any of its Subsidiaries (each such product, a “Pharmaceutical
Product”), such Pharmaceutical Product is being manufactured, packaged, labeled, tested, distributed, sold and/or marketed
by the Company in compliance with all applicable requirements under FDCA and similar laws, rules and regulations relating to registration,
investigational use, premarket clearance, licensure, or application approval, good manufacturing practices, good laboratory practices,
good clinical practices, product listing, quotas, labeling, advertising, record keeping and filing of reports, except where the
failure to be in compliance would not have a Material Adverse Effect. There is no pending, completed or, to the Company's knowledge,
threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge, complaint,
or investigation) against the Company or any of its Subsidiaries, and none of the Company or any of its Subsidiaries has received
any notice, warning letter or other communication from the FDA or any other governmental entity, which (i) contests the premarket
clearance, licensure, registration, or approval of, the uses of, the distribution of, the manufacturing or packaging of, the testing
of, the sale of, or the labeling and promotion of any Pharmaceutical Product, (ii) withdraws its approval of, requests the recall,
suspension, or seizure of, or withdraws or orders the withdrawal of advertising or sales promotional materials relating to, any
Pharmaceutical Product, (iii) imposes a clinical hold on any clinical investigation by the Company or any of its Subsidiaries,
(iv) enjoins production at any facility of the Company or any of its Subsidiaries, (v) enters or proposes to enter into a consent
decree of permanent injunction with the Company or any of its Subsidiaries, or (vi) otherwise alleges any violation of any laws,
rules or regulations by the Company or any of its Subsidiaries, and which, either individually or in the aggregate, would have
a Material Adverse Effect. The properties, business and operations of the Company have been and are being conducted in all material
respects in accordance with all applicable laws, rules and regulations of the FDA.  The Company has not been informed by the
FDA that the FDA will prohibit the marketing, sale, license or use in the United States of any product proposed to be developed,
produced or marketed by the Company nor has the FDA expressed any concern as to approving or clearing for marketing any product
being developed or proposed to be developed by the Company.


 




    	 	18	 



     


    

 


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


 


(a)          Organization;
Authority.  Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and
in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership,
limited liability company or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction
Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents
and 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, fraudulent conveyance,
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)          Understandings
or Arrangements.  Such Purchaser is acquiring the Securities as principal for its own account and has no direct or
indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities (this
representation and warranty not limiting such Purchaser’s right to sell the Securities pursuant to the Registration Statement
or otherwise in compliance with applicable federal and state securities laws).  Such Purchaser is acquiring the Securities
hereunder in the ordinary course of its business.


 


(c)          Purchaser
Status.  At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each
date on which it exercises any Warrants, it will be either: (i) an “accredited investor” as defined in Rule 501(a)(1),
(a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule
144A(a) under the Securities Act.


 


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


 




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(e)          Access
to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including
all exhibits and schedules thereto, including the Disclosure Schedules) and the SEC Reports and has been afforded, (i) the opportunity
to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the
terms and conditions of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to
information about the Company and its financial condition, results of operations, business, properties, management and prospects
sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company
possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with
respect to the investment.  Such Purchaser acknowledges and agrees that neither the Placement Agent nor any Affiliate of the
Placement Agent have provided such Purchaser with any information or advice with respect to the Securities nor is such information
or advice necessary or desired.  Neither the Placement Agent nor any Affiliate have made or makes any representation as to
the Company or the quality of the Securities and the Placement Agent and any Affiliate may have acquired non-public information
with respect to the Company which such Purchaser agrees need not be provided to it.  In connection with the issuance of the
Securities to such Purchaser, neither the Placement Agent nor any of their Affiliates has acted as a financial
advisor or fiduciary to such Purchaser.


 


(f)          Certain
Transactions and Confidentiality.  Other than consummating the transactions contemplated hereunder, such Purchaser
has not, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed
any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time
that such Purchaser first received a term sheet (written or oral) from the Company, the Placement Agent or any other Person
representing the Company setting forth the material terms of the transactions contemplated hereunder and ending immediately prior
to the execution hereof. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby
separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct
knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets,
the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that
made the investment decision to purchase the Securities covered by this Agreement.  Other than to other Persons party
to this Agreement or to such Purchaser’s representatives, including, without limitation, its officers, directors, partners,
legal and other advisors, employees, agents and Affiliates, such Purchaser has maintained the confidentiality of all disclosures
made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing,
for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty against, or preclude any actions,
with respect to locating or borrowing of shares in order to effect Short Sales or similar transactions in the future.


 


(g)          No
Conflict. The execution, delivery and performance by such Purchaser of the Transaction Documents to which it is a party and
the consummation by such Purchaser of the transactions contemplated hereby and thereby will not (i) result in a violation of the
organizational documents, if any, of such Purchaser or (ii) result in a violation of any law, rule, regulation, order, judgment
or decree (including federal and state securities laws) applicable to such Purchaser, except for such violations which would not,
individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Purchaser to
perform its obligations hereunder.


 


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


 




    	 	20	 



     


    

 


(i)          Residency.
If such Purchaser is an entity, such Purchaser’s principal executive offices are, and if such Purchaser is a natural person,
such Purchaser’s principal residence is, in the jurisdiction set forth immediately below such Purchaser’s name on the
signature page hereto, and all communications between such Purchaser and the Company regarding the transactions contemplated by
this Agreement took place within or from the state of such principal executive offices or principal residence.


 


(j)          Brokers
and Finders. Other than the Placement Agent, no broker or finder has acted for the Purchaser in connection with its purchase
of any Security and no broker or finder is entitled to any broker’s or finder’s fees or other commissions in connection
therewith based on agreements between the Purchaser and any broker or finder.


 


The Company acknowledges
and agrees that the representations contained in this Section 3.2 shall not modify, amend or affect such Purchaser’s right
to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties
contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this
Agreement or the consummation of the transactions contemplated hereby. Notwithstanding the foregoing, for the avoidance of doubt,
nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to locating or borrowing
shares in order to effect Short Sales or similar transactions in the future.


 


Article
IV.

OTHER AGREEMENTS OF THE PARTIES


 


4.1           Warrant
Shares. If all or any portion of a Warrant is exercised at a time when there is an effective registration statement to cover
the issuance or resale of the Warrant Shares or if the Warrant is exercised via cashless exercise, the Warrant Shares issued pursuant
to any such exercise shall be issued free of all legends. If at any time following the date hereof the Registration Statement (or
any subsequent registration statement registering the sale or resale of the Warrant Shares) is not effective or is not otherwise
available for the sale or resale of the Warrant Shares, the Company shall immediately notify the holders of the Warrants in writing
that such registration statement is not then effective and thereafter shall promptly notify such holders when the registration
statement is effective again and available for the sale or resale of the Warrant Shares (it being understood and agreed that the
foregoing shall not limit the ability of the Company to issue, or any Purchaser to sell, any of the Warrant Shares in compliance
with applicable federal and state securities laws). The Company shall use best efforts to keep a registration statement (including
the Registration Statement) registering the issuance or resale of the Warrant Shares effective during the term of the Warrants.


 


4.2           Furnishing
of Information.  Until the earlier of the time that (i) no Purchaser owns Securities or (ii) the Warrants have expired,
the Company covenants to use best efforts to timely file (or obtain extensions in respect thereof and file within the applicable
grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company
is not then subject to the reporting requirements of the Exchange Act.    


 


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


 




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4.4           Securities
Laws Disclosure; Publicity.  The Company shall (a) by 9:00 a.m. (New York City time) on the Trading Day immediately
following the date hereof, issue a press release disclosing the material terms of the transactions contemplated hereby, and (b)
file a Current Report on Form 8-K, including the Transaction Documents as exhibits thereto, with the Commission within the time
required by the Exchange Act (the “Form 8-K”).  From and after the issuance of such press release,
the Company represents to the Purchasers that it shall have publicly disclosed all material, non-public information delivered to
any of the Purchasers by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees or agents
in connection with the transactions contemplated by the Transaction Documents.  In addition, effective upon the issuance
of such press release, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement,
whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees
or Affiliates on the one hand, and any of the Purchasers or any of their Affiliates on the other hand, shall terminate. The Company
and each Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated
hereby, and neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public statement
without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of each
Purchaser, with respect to any press release of the Company (other than the press release described in the first sentence of this
Section 4.4), 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, or
if such disclosure is consistent with the Form 8-K.  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 (a) as required by federal securities law in connection with
the filing of final Transaction Documents with the Commission and (b) to the extent such disclosure is required by law or Trading
Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted under
this clause (b).


 


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


 


4.6           Non-Public
Information.  Except with respect to the material terms and conditions of the transactions contemplated by the Transaction
Documents, which shall be disclosed pursuant to Section 4.4, the Company covenants and agrees that neither it, nor any other Person
acting on its behalf will provide any Purchaser or its agents or counsel with any information that constitutes, or the Company
reasonably believes constitutes, material non-public information, unless prior thereto such Purchaser shall have consented to the
receipt of such information and agreed with the Company to keep such information confidential.  The Company understands
and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.  To
the extent that the Company delivers any material, non-public information to a Purchaser without such Purchaser’s consent,
the Company hereby covenants and agrees that such Purchaser shall not have any duty of confidentiality to the Company, any
of its Subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates, or a duty to the Company,
any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates not to trade on the basis
of, such material, non-public information; provided that the Purchaser shall remain subject to applicable law.
To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information
regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a
Current Report on Form 8-K.  The Company understands and confirms that each Purchaser shall be relying on the foregoing
covenant in effecting transactions in securities of the Company.


 




    	 	22	 



     


    

 


4.7           Use
of Proceeds.  The Company shall use the net proceeds from the sale of the Securities hereunder as described in the
Prospectus Supplement, and shall not use such proceeds: (a) except as set forth on Schedule 4.7, for the satisfaction
of any portion of the Company’s debt (other than payment of trade payables in the ordinary course of the Company’s
business), (b) for the redemption of any shares of Common Stock or Common Stock Equivalents, except for the repurchase of equity
awards and underlying shares of Common Stock from employees and consultants whose service with the Company has terminated up to
$100,000 in the aggregate, (c) for the settlement of any outstanding litigation or (d) in violation of FCPA or OFAC regulations.


 


4.8           Indemnification
of Purchasers.   Subject to the provisions of this Section 4.8, the Company will indemnify and hold each Purchaser
and its directors, officers, stockholders, members, partners, employees and agents (and any other Persons with a functionally equivalent
role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser
(within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, stockholders,
agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”)
harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any 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 solely based upon a breach of such Purchaser Party’s representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser Party may have with any such stockholder or any violations by
such Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which is finally judicially determined
to constitute 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 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, actual and documented fees and
expenses of no more than one such separate counsel.  The Company will not be liable to any Purchaser Party under this
Agreement (y) for any settlement by a Purchaser Party effected without the Company’s prior written consent, which shall not
be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a loss, claim, damage or liability is attributable
to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by such Purchaser
Party in this Agreement or in the other Transaction Documents. The indemnification required by this Section 4.8 shall
be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received
or are incurred; provided, however, that if it is subsequently determined by a final, non-appealable judgment of
a court of competent jurisdiction that a Purchaser Party was not entitled to receive such periodic payments, such Purchaser Party
shall promptly (but in no event later than five Business Days) return such payments to the Company. The indemnity agreements
contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others
and any liabilities the Company may be subject to pursuant to law.


 




    	 	23	 



     


    

 


4.9           Reservation
of Shares of Common Stock. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep
available at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the
Company to issue Shares pursuant to this Agreement and Warrant Shares pursuant to any exercise of the Warrants.


 


4.10         Listing
of Common Stock. The Company hereby agrees to use best efforts to maintain the listing or quotation of the Common Stock on
the Trading Market on which it is currently listed for as long as any Warrants remain outstanding, and concurrently with the Closing,
the Company shall apply to list or quote all of the Shares and Warrant Shares on such Trading Market and promptly secure the listing
of all of the Shares and Warrant Shares on such Trading Market. The Company further agrees, if the Company applies to have the
Common Stock traded on any other Trading Market, it will then include in such application all of the Shares and Warrant Shares,
and will take such other action as is necessary to cause all of the Shares and Warrant Shares to be listed or quoted on such other
Trading Market as promptly as possible.  The Company will then take all action reasonably necessary to continue the listing
and trading of its Common Stock on a Trading Market and will comply in all respects with the Company’s reporting, filing
and other obligations under the bylaws or rules of the Trading Market.  The Company agrees to maintain the eligibility
of the Common Stock for electronic transfer through the Depository Trust Company or another established clearing corporation,
including, without limitation, by timely payment of fees to the Depository Trust Company or such other established clearing corporation
in connection with such electronic transfer.


 


4.11         Reserved.  


 


4.12         Subsequent
Equity Sales.  


 


(a)          From
the date hereof until 90 days after the Closing Date, neither the Company nor any Subsidiary shall issue, enter into any agreement
to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents.


 


(b)          From
the date hereof until the twelve (12) month anniversary of the Closing Date, the Company shall be prohibited from effecting or
entering into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents
(or a combination of units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction” means
a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or
exercisable for, or include the right to receive additional shares of Common Stock either (A) at a conversion price, exercise
price or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the shares
of Common Stock at any time after the initial issuance of such debt or equity securities, or (B) with a conversion, 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 (other than a customary anti-dilution provision) or (ii) enters into, or effects a transaction under, any
agreement, including, but not limited to, an equity line of credit, whereby the Company may issue securities at a future determined
price. Any Purchaser shall be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy
shall be in addition to any right to collect damages. 


 




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


 


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


 


4.14         Certain
Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither
it nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including
Short Sales of any of the Company’s securities during the period commencing with the execution of this Agreement and ending
at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release
as described in Section 4.4.  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 pursuant to the initial press
release as described in Section 4.4, such Purchaser will maintain the confidentiality of the existence and terms of this transaction
and the information included in the Disclosure Schedules.  Notwithstanding the foregoing, and notwithstanding anything contained
in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation,
warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that
the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described
in Section 4.4, (ii) no Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company
in accordance with applicable securities laws from and after the time that the transactions contemplated by this Agreement are
first publicly announced pursuant to the initial press release as described in Section 4.4 and (iii) no Purchaser shall have any
duty of confidentiality or duty not to trade in the securities of the Company to the Company or its Subsidiaries after the issuance
of the initial press release as described in Section 4.4.  Notwithstanding the foregoing, in the case of a Purchaser
that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s
assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing
other portions of such Purchaser’s assets, the covenant set forth above shall only apply with respect to the portion of assets
managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement.


 


4.15         Exercise
Procedures.  The form of Notice of Exercise included in the Warrants set forth the totality of the procedures required
of the Purchasers in order to exercise the Warrants.  No additional legal opinion, other information or instructions
shall be required of the Purchasers to exercise their Warrants.  Without limiting the preceding sentences, no ink-original
Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice
of Exercise form be required in order to exercise the Warrants.  The Company shall honor exercises of the Warrants and
shall deliver Warrant Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents.


 




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4.16         Capital
Changes. Until the one year anniversary of the Closing Date, the Company shall not undertake a reverse or forward share split
or reclassification of the Common Stock without the prior written consent of the Purchasers holding a majority in interest of the
Shares unless such split or reclassification is undertaken for the sole purpose of maintaining compliance with the bid price requirements
of The Nasdaq Stock Market LLC.


 


Article
V.

MISCELLANEOUS


 


5.1           Termination. 
This Agreement may be terminated by (a) any Purchaser, as to such Purchaser’s obligations hereunder only and without any
effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the
Closing has not been consummated on or before December 27, 2017, and (b) the Company by written notice to the Purchasers, if the
Closing has not been consummated on or before December 28, 2017; in each case provided, however, that no
such termination will affect the right of any party to sue for any breach by any other party (or parties).


 


5.2           Fees
and Expenses.  Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the
fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party
incident to the negotiation, preparation, execution, delivery and performance of this Agreement.  The Company shall pay
all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered
by the Company and any exercise notice delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection
with the delivery of any Securities to the Purchasers.


 


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


 


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


 




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5.5           Amendments;
Waivers.  No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument
signed, in the case of an amendment, by the Company and Purchasers which purchased (or, if prior to the Closing, which have agreed
to purchase) at least a majority in interest of the Shares based on the initial Subscription Amounts hereunder or, in the case
of a waiver, by the party against whom enforcement of any such waived provision is sought; provided that if any
amendment, modification or waiver disproportionately and adversely impacts a Purchaser (or group of Purchasers), the consent of
such disproportionately impacted Purchaser (or group of Purchasers) shall also be required.  No waiver of any default
with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future
or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay
or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right. Any proposed amendment
or waiver that disproportionately, materially and adversely affects the rights and obligations of any Purchaser relative to the
comparable rights and obligations of the other Purchasers shall require the prior written consent of such adversely affected Purchaser.
Any amendment effected in accordance with this Section 5.5 shall be binding upon each Purchaser and holder of Securities and the
Company.


 


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


 


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


 


5.8           No
Third-Party Beneficiaries.  The Placement Agent shall be the third party beneficiaries of the representations and
warranties of the Company in Section 3.1 and the representations and warranties of the Purchasers in Section 3.2.  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 4.8 and
this Section 5.8.


 


5.9           Governing
Law.  All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents
shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to
the principles of conflicts of law thereof.  Each party agrees that all legal Proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought
against a party hereto or its respective affiliates, directors, officers, stockholders, partners, members, employees or agents)
shall be commenced exclusively in the state and federal courts sitting in the City of New York.  Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for
the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein
(including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not
to assert in any Action or Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that
such Action or Proceeding is improper or is an inconvenient venue for such Proceeding.  Each party hereby irrevocably
waives personal service of process and consents to process being served in any such Action or Proceeding by mailing a copy thereof
via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices
to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing
contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law.  
If any party shall commence an Action or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to
the obligations of the Company under Section 4.8, the prevailing party in such Action or Proceeding shall be reimbursed by the
non-prevailing party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation
and prosecution of such Action or Proceeding.


 




    	 	27	 



     


    

 


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


 


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


 


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


 


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


 


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


 


5.15         Remedies.  In
addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the
Purchasers and the Company will be entitled to seek 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.


 




    	 	28	 



     


    

 


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


 


5.17         Independent
Nature of Purchasers’ Obligations and Rights.  The obligations of each Purchaser under any Transaction Document
are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the
performance or non-performance of the obligations of any other Purchaser under any Transaction Document.  Nothing contained
herein or in any other Transaction Document, and no action taken by any Purchaser pursuant 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 its review and negotiation of the Transaction Documents.  For reasons
of administrative convenience only, each Purchaser and its respective counsel have chosen to communicate with the Company through
the legal counsel of the Placement Agent. The legal counsel of the Placement Agent does not represent any of the Purchasers and
only represents the Placement Agent.  The Company has elected to provide all Purchasers with the same terms and Transaction
Documents for the convenience of the Company and not because it was required or requested to do so by any of the Purchasers.  It
is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between
the Company and a Purchaser, solely, and not between the Company and the Purchasers collectively and not between and among the
Purchasers.


 


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


 


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


 


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


 




    	 	29	 



     


    

 


5.21         WAIVER
OF JURY TRIAL.  IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY UNDER
THE TRANSACTION DOCUMENTS, 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)


 




    	 	30	 



     


    

 


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


 


	APPLIED DNA SCIENCES, INC.	 	Address for Notice:
	 	 	 
	By:	/s/ James A. Hayward	 	50 Health Sciences Drive, Stony Brook, New York 11790
	 	Name: James A. Hayward	 	 
	 	Title: CEO	 	Attention:
	 	 	 	Email:


 


With a copy to (which shall not constitute notice)


 


Pepper Hamilton LLP


620 Eighth Avenue, 37th Floor, New York, New York 10018





 


Attention: Merrill M. Kraines 


Email:


Facsimile:


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK


SIGNATURE PAGE FOR PURCHASER FOLLOWS]


 




    	 	31	 



     


    

 


[PURCHASER
SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]


 


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


 


	Name of Purchaser:	Sabby Volatility Warrant Master Fund, Ltd.
	 	 
	Signature of Authorized Signatory of Purchaser:	/s/ Robert Grundstein
	 	 
	Name of Authorized Signatory:	Robert Grundstein
	 	 
	Title of Authorized Signatory:	COO of Purchaser’s Investment Manager 
	 	 
	Email Address of Authorized Signatory:	rgrundstein@sabbymanagement.com
	 	 
	Facsimile Number of Authorized Signatory:	201-661-8654
	 	 
	Address for Notice to Purchaser:	c/o Sabby Management, LLC, 10 Mountainview Road, Suite 205, Upper Saddle River, NJ 07458


 


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


 


	DWAC for Shares:	Bank of America Merrill Lynch, 4800 Deer Lake Dr. E, Jacksonville, FL 32246-6484, Mail Code - FL9-805-01-08, Attn: Specialized
Securities - LP Ops, Phone: 800-637-4015	 
	 	 	 
	Subscription Amount:  $	2,887,500	 
	 	 	 
	Shares:	1,650,000 @ $1.75	 
	 	 	 
	Warrant Shares:	1,650,000, $2.00 strike, 5 yrs	 
	 	 	 
	EIN Number:	 	 


 


 ̈  Notwithstanding
anything contained in this Agreement to the contrary, by checking this box (i) the obligations of the above-signed to purchase
the securities set forth in this Agreement to be purchased from the Company by the above-signed, and the obligations of the Company
to sell such securities to the above-signed, shall be unconditional and all conditions to Closing shall be disregarded, (ii) the
Closing shall occur on the second (2nd) Trading Day following the date of this Agreement and (iii) any condition to Closing contemplated
by this Agreement (but prior to being disregarded by clause (i) above) that required delivery by the Company or the above-signed
of any agreement, instrument, certificate or the like or purchase price (as applicable) shall no longer be a condition and shall
instead be an unconditional obligation of the Company or the above-signed (as applicable) to deliver such agreement, instrument,
certificate or the like or purchase price (as applicable) to such other party on the Closing Date.


 




    	 	32	 



     


    

 





[PURCHASER
SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]


 


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


 


	Name of Purchaser:	CVI Investments, Inc. 
	 	 
	Signature of Authorized Signatory of Purchaser:	/s/ Martin Kobinger
	 	 
	Name of Authorized Signatory:	Martin Kobinger
	 	 
	Title of Authorized Signatory:	Investment Manager
	 	 
	Email Address of Authorized Signatory:	kobinger@sig.com and winer@sig.com 
	 	 
	Facsimile Number of Authorized Signatory:	(415) 403-6525
	 	 
	Address for Notice to Purchaser:	c/o Heights Capital Management 101 California Street, Suite 3250 San Francisco, CA 94111


 


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


 


	DWAC for Shares:	DTC Participant: Merill Lynch Professional Clearing Corp. DTC Number: 5198 Account Number: 1140131500	 
	 	 	 
	Subscription Amount:  $	1,898,750	 
	 	 	 
	Shares:	1,085,000	 
	 	 	 
	Warrant Shares:	1,085,000	 
	 	 	 
	EIN Number:	 	 


 


 ̈  Notwithstanding
anything contained in this Agreement to the contrary, by checking this box (i) the obligations of the above-signed to purchase
the securities set forth in this Agreement to be purchased from the Company by the above-signed, and the obligations of the Company
to sell such securities to the above-signed, shall be unconditional and all conditions to Closing shall be disregarded, (ii) the
Closing shall occur on the second (2nd) Trading Day following the date of this Agreement and (iii) any condition to Closing contemplated
by this Agreement (but prior to being disregarded by clause (i) above) that required delivery by the Company or the above-signed
of any agreement, instrument, certificate or the like or purchase price (as applicable) shall no longer be a condition and shall
instead be an unconditional obligation of the Company or the above-signed (as applicable) to deliver such agreement, instrument,
certificate or the like or purchase price (as applicable) to such other party on the Closing Date.



 






    	 	33	 



     


    

 





 





COMPANY DISCLOSURE SCHEDULE


 


To


 


SECURITIES
PURCHASE AGREEMENT


 


By and Between


 


 


 


APPLIED
DNA SCIENCES, INC.


 


and


 


PURCHASERS


 


 


 


Dated as of December 20, 2017






 






 






    	 	1	 



     


    

 










For the purposes of
the Company Disclosure Schedule, any information, item or other disclosure set forth in any section or subsection of the Company
Disclosure Schedule shall be deemed disclosed with respect to any other section or subsection to the extent that the relevance
of any such disclosure to any other section or subsection is reasonably apparent.


 




    	 	2	 



     


    

 


Section 3.1(d)


 


No Conflicts


 


On November 2, 2016, the Company entered into a securities purchase
agreement with funds managed by Sabby Management, LLC. Pursuant to such securities purchase agreement, the Company is prohibited
from effecting or entering into an agreement to effect any issuance of its Common Stock involving a variable rate transaction,
as that term is defined in the securities purchase agreement. By its participation and investment in this transaction, Sabby Management,
LLC is deemed to have waived this provision.


 




    	 	3	 



     


    

 


Section 3.1(e)



Filings, Consents and Approvals


 


The following holders have piggyback registration
rights which are currently satisfied by a registration statement with file number 333-220481.


 


		1.	Purchase Warrants issued by the Company to Pterodactyl Holdings LLC on January 7, 2011 and July
15, 2011.



 


		2.	Purchase Warrant issued by the Company to Global Asset Management, LLC on July 15, 2011.



 


		3.	Purchase Warrants issued by the Company to Maxim Group LLC on November 20, 2014, April 1, 2015,
November 27, 2015 and November 7, 2016.



 


		4.	Purchase Warrants issued by the Company to Imperial Capital LLC on November 7, 2016.



 




    	 	4	 



     


    

 


Section 3.1(g)



Capitalization


 


Capitalization


 


		1.	As of December 17, 2017, the Company has 27,377,057 shares of Common Stock issued and outstanding,
options to purchase 5,333,227 shares of Common Stock issued and outstanding, and warrants to purchase 9,540,455 shares of Common
Stock issued and outstanding. There are no shares of Preferred Stock issued and outstanding.



 


Stock
Ownership By Affiliates


 


		2.	Officers and Directors as of December 17, 2017:



 


James A. Hayward
Common Stock 4,470,062 15.01 %


 


Yacov A. Shamash Common
Stock 205,734 *


 


John Bitzer,
III Common Stock 1,438,903 5.21 %


 


Robert B. Catell
Common Stock 86,668 *


 


Joseph D. Ceccoli
Common Stock 136,080 *


 


Beth M. Jantzen
Common Stock 162,842 *


 


Judith Murrah
Common Stock 213,161 *


 


Charles S.
Ryan Common Stock 163,463 *


 


Sanford R.
Simon Common Stock 156,564 *


 


Elizabeth M.
Schmalz Ferguson Common Stock 11,364 *


 


All directors
and officers as a group (10 persons) Common Stock 7,044,841 22.70 %


 


5% Stockholder
(excluding Officers and Directors):


 


None


 


 


 


* indicates
less than one percent


 


 


 


Options and Warrants exercisable for any capital stock of
the Company


 


		3.	As of December 17, 2017 there are options to purchase 5,333,227 shares of Common Stock outstanding
(includes unvested options) and 9,540,455 Warrants to purchase 9,540,455 shares of Common Stock outstanding.



 


Stockholder Agreement


 


		4.	In connection with the investment by Delabarta, Inc. in the Company on July 11, 2011, the Company
agreed to use best efforts to nominate Delabarta, Inc.’s designee, Mr. John Bitzer, III to the Company Board of Directors
and include Mr. Bitzer on the slate of nominees for the Board of Directors for election by stockholders at the Annual Meetings
of Stockholders for so long as Delabarta, Inc. owns at least 2% of the outstanding shares of Common Stock of the Company.



 




    	 	5	 



     


    

 


Section 3.1(h)


 


SEC Reports; Financial Statements


 


On July 22, 2016, the
Company filed Form 8K/A (Amendment No. 1) providing certain audited financial statements and certain unaudited pro forma information
relating to its purchase of substantially all of the assets of Vandalia Research, Inc. as of September 11, 2015. The Form 8-K/A
was filed after the date it was required to be filed.




 


Section 3.1(i)


 


Material Changes; Undisclosed
Events, Liabilities or Developments


 


On June 28, 2017, the Company
entered into subscription agreements for a private placement of 1,025,574 shares of common stock at a price of $1.76 per with a
group of investors that included all of the Company’s executive officers and all members of the Board of Directors.


 




    	 	6	 



     


    

 


Section 3.1(w)



Registration Rights


 


See the disclosure
provided under Section 3.1(e).


 




    	 	7	 



     


    

 


Section 3.1(x)


 


NASDAQ has orally informed
the Company that it did not give NASDAQ the required 15 days prior notice of its issuance of securities.




 






    	 	8	 



     


    

 


Schedule 3.1(bb)


 


Solvency


 


None


 




    	 	9	 



     


    

 


Schedule 4.7


 


Use of Proceeds


 


None.


 


 



    	 	10