Exhibit 10.1


 


SECURITIES PURCHASE AGREEMENT


 


THIS SECURITIES PURCHASE
AGREEMENT (this “Agreement”), dated as of July 6, 2021, is between RETO ECO-SOLUTIONS, INC., a company incorporated
under the laws of the British Virgin Islands, with its principal operation office located at c/o Beijing REIT Technology Development Co.,
Ltd., Building X-702, 60 Anli Road, Chaoyang District, Beijing, People’s Republic of China 100101 (the “Company”),
and each of the investors listed on the Schedule of Buyers attached hereto (individually, a “Buyer” and collectively
the “Buyers”).


 


WITNESSETH


 


WHEREAS, the Company
and each Buyer desire to enter into this transaction for the Company to sell and the Buyers to purchase the Convertible Debentures (as
defined below) pursuant to an exemption from registration pursuant to Section 4(2) and/or Rule 506 of Regulation D (“Regulation
D”) as promulgated by the U.S. Securities and Exchange Commission (the “SEC”) under the Securities Act of
1933, as amended (the “Securities Act”);


 


WHEREAS, the parties
desire that, upon the terms and subject to the conditions contained herein, the Company shall issue and sell to the Buyer(s), as provided
herein, and the Buyer(s) shall purchase $2,500,000 of convertible debentures in the form attached hereto as “Exhibit A”
(the “Convertible Debentures”), which shall be convertible into the Company’s common shares, par value $0.0001
(the “Common Shares”) (as converted, the “Conversion Shares”) which shall be purchased upon signing
this Agreement (the “Closing), for a total purchase price of $2,500,000 (the “Purchase Price”) in the
amounts set forth opposite the Buyers name on Schedule I (the “Subscription Amount”);


 


WHEREAS, contemporaneously
with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Registration Rights Agreement (the
“Registration Rights Agreement”) pursuant to which the Company has agreed to provide certain registration rights under
the Securities Act and the rules and regulations promulgated there under, and applicable state securities laws;


 


WHEREAS, contemporaneously
with the execution and delivery of this Agreement, the Company is delivering Irrevocable Transfer Agent Instructions (the “Irrevocable
Transfer Agent Instructions”) to its transfer agent; and


 


WHEREAS, the Convertible
Debentures and the Conversion Shares are collectively referred to herein as the “Securities.”


 






     


     


    

 


AGREEMENT


 


NOW, THEREFORE, in
consideration of the premises and the mutual covenants contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and each Buyer hereby agree as follows:


 


		1.	PURCHASE AND SALE OF CONVERTIBLE DEBENTURES.



 


(a) Purchase
of Convertible Debentures. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below, the Company
shall issue and sell to each Buyer, and each Buyer severally, but not jointly, agrees to purchase from the Company at the Closing Convertible
Debentures in amounts corresponding with the Subscription Amount set forth opposite each Buyer’s name on Schedule of Buyers attached
as Schedule I hereto.


 


(b) Closing
Date. The Closing of the purchase of Convertible Debentures by the Buyers shall occur at the offices Yorkville Advisors Global, LP,
1012 Springfield Avenue, Mountainside, NJ 07092. The date and time of the Closing shall be 10:00 a.m., New York time, on the first Business
Day on which the conditions to the Closing set forth in Sections 6 and 7 below are satisfied or waived (or such other date as is mutually
agreed to by the Company and each Buyer) (the “Closing Date”). As used herein “Business Day” means
any day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to
remain closed.


 


(c) Form
of Payment; Deliveries. Subject to the satisfaction of the terms and conditions of this Agreement, on the Closing Date, (i) the
Buyers shall deliver to the Company such aggregate proceeds for the Convertible Debentures to be issued and sold to such Buyer at the
Closing, minus the fees to be paid directly from the proceeds of the Closing as set forth herein, and (ii) the Company shall deliver
to each Buyer, Convertible Debentures which such Buyer is purchasing at the Closing in amounts indicated opposite such Buyer’s name
on Schedule I, duly executed on behalf of the Company.


 


(d) Maximum
Shares. Notwithstanding anything in this Agreement to the contrary, the Company shall not issue any Common Shares pursuant to the
transactions contemplated hereby or any other Transaction Documents (including the Conversion Shares) if the issuance of such Common Shares,
together with any Common Shares issued in connection with any related transactions that may be considered part of the same series of transactions,
would exceed the aggregate number of shares that the Company may issue in this transaction in compliance with the Company’s obligations
under the rules or regulations of Nasdaq (the “Principal Market”) (such number shall be referred to as the “Exchange
Cap”), except that such limitation shall not apply in the event that the Company (A) obtains the approval of its stockholders
as required by the applicable rules of the Principal Market for issuances of shares in excess of such amount or (B) invokes the home country
exemption and obtains a written opinion from outside counsel to the Company, to the extent required by the Principal Market, that it may
follow its home country practice, and therefore, such approval is not required. The Exchange Cap shall be appropriately adjusted for any
stock dividend, stock split, reverse stock split or similar transaction.


 






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		2.	BUYER’S REPRESENTATIONS AND WARRANTIES.



 


Each Buyer, severally and
not jointly, represents and warrants to the Company with respect to only itself that, as of the date hereof and as of the Closing Date:


 


(a) Investment Purpose. The Buyer is acquiring the Securities
for its own account for investment only and not with a view towards, or for resale in connection with, the public sale or distribution
thereof, except pursuant to sales registered or exempted under the Securities Act; provided, however, that by making the representations
herein, the Buyer does not agree, or make any representation or warranty, to hold any of the Securities for any minimum or other specific
term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to an effective registration statement
covering such Securities or an available exemption under the Securities Act. Such Buyer does not presently have any agreement or understanding,
directly or indirectly, with any Person to distribute any of the Securities.


 


(b) Accredited
Investor Status. The Buyer is an “Accredited Investor” as that term is defined in Rule 501(a)(3) of Regulation D.


 


(c) Reliance
on Exemptions. The Buyer understands that the Securities are being offered and sold to it in reliance on specific exemptions from
the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth
and accuracy of, and such Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings
of such Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of such Buyer to acquire
the Securities.


 


(d) Information.
The Buyer and its advisors (and his or, its counsel), if any, have been furnished with all materials relating to the business, finances
and operations of the Company and information he deemed material to making an informed investment decision regarding his purchase of the
Securities, which have been requested by such Buyer. The Buyer and its advisors, if any, have been afforded the opportunity to ask questions
of the Company and its management. Neither such inquiries nor any other due diligence investigations conducted by such Buyer or its advisors,
if any, or its representatives shall modify, amend or affect such Buyer’s right to rely on the Company’s representations and
warranties contained in Section 3 below. The Buyer understands that its investment in the Securities involves a high degree of risk. The
Buyer has sought such accounting, legal and tax advice, as it has considered necessary to make an informed investment decision with respect
to its acquisition of the Securities.


 


(e) Transfer
or Resale. The Buyer understands that: (i) the Securities have not been registered under the Securities Act or any state securities
laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B) such Buyer shall
have delivered to the Company an opinion of counsel, in a generally acceptable form, to the effect that such Securities to be sold, assigned
or transferred may be sold, assigned or transferred pursuant to an exemption from such registration requirements, or (C) such Buyer provides
the Company with reasonable assurances (in the form of seller and broker representation letters) that such Securities can be sold, assigned
or transferred pursuant to Rule 144 promulgated under the Securities Act, as amended (or a successor rule thereto) (collectively, “Rule
144”), in each case following the applicable holding period set forth therein; and (ii) any sale of the Securities made in reliance
on Rule 144 may be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the Securities
under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that
term is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the rules and regulations
of the SEC thereunder.


 




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(f) Legends.
The Buyer agrees to the imprinting, so long as its required by this Section 2(f), of a restrictive legend on the Securities in substantially
the following form:


 


THE SECURITIES REPRESENTED BY THIS CERTIFICATE
[AND THOSE SECURITIES INTO WHICH THEY ARE CONVERTIBLE] HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE
STATE SECURITIES LAWS. THE SECURITIES [AND THOSE SECURITIES INTO WHICH THEY ARE CONVERTIBLE] HAVE BEEN ACQUIRED SOLELY FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TOWARD RESALE AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION
OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS


 


Certificates evidencing the Conversion Shares
shall not contain any legend (including the legend set forth above), (i) while a registration statement covering the resale of such security
is effective under the Securities Act, (ii) following any sale of such Conversion Shares pursuant to Rule 144, (iii) if such Conversion
Shares are eligible for sale under Rule 144, or (iv) if such legend is not required under applicable requirements of the Securities Act
(including judicial interpretations and pronouncements issued by the staff of the SEC). The Buyer agrees that the removal of restrictive
legend from certificates representing Securities as set forth in this Section 3(f) is predicated upon the Company’s reliance that
the Buyer will sell any Securities pursuant to either the registration requirements of the Securities Act, including any applicable prospectus
delivery requirements, or an exemption therefrom, and that if Securities are sold pursuant to a registration statement, they will be sold
in compliance with the plan of distribution set forth therein.


 


(g) Organization;
Authority. Such Buyer is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its
organization with the requisite power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents
(as defined below) to which it is a party and otherwise to carry out its obligations hereunder and thereunder.


 


(h) Authorization,
Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of such Buyer and shall constitute
the legal, valid and binding obligations of such Buyer enforceable against such Buyer in accordance with its terms, except as such enforceability
may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization, moratorium, liquidation and other
similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies.


 




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(i) No
Conflicts. The execution, delivery and performance by such Buyer of this Agreement and the consummation by such Buyer of the transactions
contemplated hereby will not (i) result in a violation of the organizational documents of such Buyer, (ii) conflict with, or constitute
a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Buyer is a party or (iii) result in a
violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to such Buyer,
except, in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which could not, individually
or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Buyer to perform its obligations
hereunder.


 


(j) Certain
Trading Activities. The Buyer has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding
with the Buyer, engaged in any transactions in the securities of the Company (including, without limitation, any Short Sales (as defined
below) involving the Company’s securities) during the period commencing as of the time that the Buyer first contacted the Company or the
Company’s agents regarding the specific investment in the Company contemplated by this Agreement and ending immediately prior to the execution
of this Agreement by such Buyer. The Buyer hereby agrees that it shall not directly or indirectly, engage in any Short Sales involving
the Company’s securities during the period commencing on the date hereof and ending when no Convertible Debentures remain outstanding.
“Short Sales” means all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the 1934 Act (as
defined below). The Buyer is aware that Short Sales and other hedging activities may be subject to applicable federal and state securities
laws, rules and regulations and the Buyer acknowledges that the responsibility of compliance with any such federal or state securities
laws, rules and regulations is solely the responsibility of the Buyer.


 


(k) Trading Limitation
and Information. For so long as the Buyer holds any Convertible Debentures or Conversion Shares, provided no event of default has
occurred and is continuing, on any given Trading Day, the Buyer agrees that it (together with any affiliates) shall not sell such number
of Common Shares that would exceed 20% of the aggregate trading volume on such Trading Day, unless otherwise agreed by the Company. Upon
the Company’s request, the Buyer agrees to provide the Company with trading reports setting forth the number and average sales
prices of Common Shares sold the Buyer on each Trading Day the prior trading week along with the total aggregate number of Common Shares
traded on each Trading Day. “Trading Day” means a day on which the Common Shares are quoted or traded on an Eligible
Market on which the shares of Common Stock are then quoted or listed; provided, that in the event that the Common Shares are not listed
or quoted, then Trading Day shall mean a Business Day.


 






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		3.	REPRESENTATIONS AND WARRANTIES OF THE COMPANY.



 


Except as set forth under
the corresponding section of the Disclosure Schedules which Disclosure Schedules shall be deemed a part hereof and to qualify any representation
or warranty otherwise made herein to the extent of such disclosure, the Company hereby makes the representations and warranties set forth
below to the Buyer:


 


(a) Organization
and Qualification. The Company and each of its Subsidiaries are entities duly formed, validly existing and in good standing under
the laws of the jurisdiction in which they are formed, and have the requisite power and authority to own their properties and to carry
on their business as now being conducted and as presently proposed to be conducted. The Company and each of its Subsidiaries is duly qualified
as a foreign entity to do business and is in good standing in every jurisdiction in which its ownership of property or the nature of the
business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing
would not reasonably be expected to have a Material Adverse Effect (as defined below). As used in this Agreement, “Material Adverse
Effect” means any material adverse effect on (i) the business, properties, assets, liabilities, operations (including results
thereof), condition (financial or otherwise) or prospects of the Company and its Subsidiaries, taken as a whole, (ii) the transactions
contemplated hereby or in any of the other Transaction Documents or any other agreements or instruments to be entered into by the Company
in connection herewith or therewith or (iii) the authority or ability of the Company to perform any of its obligations under any of the
Transaction Documents (as defined below). “Subsidiaries” means any Person in which the Company, directly or indirectly,
owns a majority of the outstanding capital stock having voting power or holds a majority of the equity or similar interest of such Person,
and each of the foregoing, is individually referred to herein as a “Subsidiary”.


 


(b) Authorization;
Enforcement; Validity. The Company has the requisite power and authority to enter into and perform its obligations under this
Agreement and the other Transaction Documents and to issue the Securities in accordance with the terms hereof and thereof. The execution
and delivery of this Agreement and the other Transaction Documents by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby (including, without limitation, the issuance of the Convertible Debentures, the reservation for issuance
and issuance of the Conversion Shares issuable upon conversion of the Convertible Debentures), have been duly authorized by the Company’s
board of directors and no further filing, consent or authorization is required by the Company, its board of directors or its stockholders
or other governmental body. This Agreement has been, and the other Transaction Documents to which the Company is a party will be prior
to the Closing, duly executed and delivered by the Company, and each constitutes the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with its respective terms, except as such enforceability may be limited by general principles
of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally,
the enforcement of applicable creditors’ rights and remedies and except as rights to indemnification and to contribution may be limited
by federal or state securities law. “Transaction Documents” means, collectively, this Agreement, the Convertible Debentures,
the Registration Rights Agreement, the Irrevocable Transfer Agent Instructions, and each of the other agreements and instruments entered
into by the Company or delivered by the Company in connection with the transactions contemplated hereby and thereby, as may be amended
from time to time.


 




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(c) Issuance
of Securities. The issuance of the Securities are duly authorized and, upon issuance and payment in accordance with the terms of the
Transaction Documents the Securities shall be validly issued, fully paid and non-assessable and free from all preemptive or similar rights,
mortgages, defects, claims, liens, pledges, charges, taxes, rights of first refusal, encumbrances, security interests and other encumbrances
(collectively “Liens”) with respect to the issuance thereof. As of the Closing Date, the Company shall have reserved
from its duly authorized capital stock not less than 300% of the maximum number of Common Shares issuable upon conversion of all Convertible
Debentures (assuming for purposes hereof that (x) such Convertible Debentures are convertible at the Conversion Price (as defined therein)
as of the date of determination, (y) any such conversion shall not take into account any limitations on the conversion of the Convertible
Debentures set forth therein, including the Floor Price). Upon issuance or conversion in accordance with the Convertible Debentures, the
Conversion Shares, when issued, will be validly issued, fully paid and nonassessable and free from all preemptive or similar rights or
Liens with respect to the issue thereof, with the holders being entitled to all rights accorded to a holder of Common Shares.


 


(d)
No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company
of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Convertible Debentures, the Conversion
Shares, and the reservation for issuance of the Conversion Shares) will not (i) result in a violation of the Articles of Incorporation
(as defined below), Bylaws (as defined below), certificate of formation, memorandum of association, articles of association, bylaws or
other organizational documents of the Company or any of its Subsidiaries, or any capital stock or other securities of the Company or any
of its Subsidiaries, (ii) conflict with, or constitute a default under, or give to others any rights of termination, amendment, acceleration
or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party, or (iii) result
in a violation of any law, rule, regulation, order, judgment or decree (including, without limitation, U.S. federal and state securities
laws and regulations, the securities laws of the jurisdictions of the Company’s incorporation or in which it or its subsidiaries operate
and the rules and regulations of the Principal Market and including all applicable laws, rules and regulations of the Cayman Islands)
applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound
or affected, except in the case of (ii) and (iii) for any conflict, default, right or violation that would not reasonably be expected
to result in a Material Adverse Effect.


 




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(e) Consents.
The Company is not required to obtain any material consent from, authorization or order of, or make any filing or registration with (other
than any filings as may be required by any federal or state securities agencies and any filings as may be required by the Principal Market),
any Governmental Entity (as defined below) or any regulatory or self-regulatory agency or any other Person in order for it to execute,
deliver or perform any of its obligations under or contemplated by the Transaction Documents, in each case, in accordance with the terms
hereof or thereof. All consents, authorizations, orders, filings and registrations which the Company or any Subsidiary is required to
obtain pursuant to the preceding sentence have been or will be obtained or effected on or prior to the Closing Date, and neither the Company
nor any of its Subsidiaries are aware of any facts or circumstances which might prevent the Company or any of its Subsidiaries from obtaining
or effecting any of the registration, application or filings contemplated by the Transaction Documents. The Company is not in violation
of the requirements of the Principal Market and has no knowledge of any facts or circumstances which could reasonably lead to delisting
or suspension of the Common Shares in the foreseeable future. The Company has notified the Principal Market of the issuance of all of
the Securities hereunder, which does not require obtaining the approval of the stockholders of the Company or any other Person or Governmental
Entity, and the Principal Market has completed its review of the related Listing of Additional Share form. “Governmental Entity”
means any nation, state, county, city, town, village, district, or other political jurisdiction of any nature, federal, state, local,
municipal, foreign, or other government, governmental or quasi-governmental authority of any nature (including any governmental agency,
branch, department, official, or entity and any court or other tribunal), multi-national organization or body; or body exercising,
or entitled to exercise, any administrative, executive, judicial, legislative, police, regulatory, or taxing authority or power of any
nature or instrumentality of any of the foregoing, including any entity or enterprise owned or controlled by a government or a public
international organization or any of the foregoing.


 


(f) Acknowledgment
Regarding Buyer’s Purchase of Securities. The Company acknowledges and agrees that each Buyer is acting solely in the capacity of
an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby and that no Buyer
is (i) an officer or director of the Company or any of its Subsidiaries, (ii) to its knowledge, an “affiliate” (as defined in
Rule 144 promulgated under the 1933 Act (or a successor rule thereto) (collectively, “Rule 144”)) of the Company or
any of its Subsidiaries or (iii) to its knowledge, a “beneficial owner” of more than 10% of the Common Shares (as defined
for purposes of Rule 13d-3 of the 1934 Act). The Company further acknowledges that no Buyer is acting as a financial advisor or fiduciary
of the Company or any of its Subsidiaries (or in any similar capacity) with respect to the Transaction Documents and the transactions
contemplated hereby and thereby, and any advice given by a Buyer or any of its representatives or agents in connection with the Transaction
Documents and the transactions contemplated hereby and thereby is merely incidental to such Buyer’s purchase of the Securities. The Company
further represents to each Buyer that the Company’s decision to enter into the Transaction Documents to which it is a party has been based
solely on the independent evaluation by the Company and its representatives.


 


(g) No
Integrated Offering. None of the Company, its Subsidiaries or any of their affiliates, nor any Person acting on their behalf has,
directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that
would cause this offering of the Securities to require approval of stockholders of the Company under any applicable stockholder approval
provisions, including, without limitation, under the rules and regulations of any exchange or automated quotation system on which any
of the securities of the Company are listed or designated for quotation. None of the Company, its Subsidiaries, their affiliates nor any
Person acting on their behalf will take any action or steps that would cause the offering of any of the Securities to be integrated with
other offerings of securities of the Company.


 


(h) Dilutive
Effect. The Company understands and acknowledges that the number of Conversion Shares will increase in certain circumstances. The
Company further acknowledges its obligation to issue the Conversion Shares upon conversion of the Convertible Debentures in accordance
with this Agreement and the Convertible Debentures is, absolute and unconditional regardless of the dilutive effect that such issuance
may have on the ownership interests of other stockholders of the Company.


 






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(i) Application
of Takeover Protections; Rights Agreement. The Company and its board of directors have taken all necessary action, if any, in
order to render inapplicable any control share acquisition, interested stockholder, business combination, poison pill (including, without
limitation, any distribution under a rights agreement), stockholder rights plan or other similar anti-takeover provision under the Articles
of Incorporation, Bylaws or other organizational documents or the laws of the jurisdiction of its incorporation or otherwise which is
or could become applicable to any Buyer as a result of the transactions contemplated by this Agreement, including, without limitation,
the Company’s issuance of the Securities and any Buyer’s ownership of the Securities.


 


(j)
SEC Documents; Financial Statements. During the two (2) years prior to the date hereof, the Company has filed all reports,
schedules, forms, proxy statements, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements
of the Securities Exchange Act of 1934, as amended (the “1934 Act”) (all of the foregoing filed prior to the date hereof
and all exhibits and appendices included therein and financial statements, notes and schedules thereto and documents incorporated by reference
therein being hereinafter referred to as the “SEC Documents”). The Company has delivered or has made available to the
Buyers or their respective representatives true, correct and complete copies of each of the SEC Documents not available on the EDGAR system.
As of their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules
and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were
filed with the SEC, 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. As
of their respective dates, the financial statements of the Company included in the SEC Documents complied in all material respects with
applicable accounting requirements and the published rules and regulations of the SEC with respect thereto as in effect as of the time
of filing. Such financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”),
consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes
thereto, or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary
statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results
of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments
which will not be material, either individually or in the aggregate). The reserves, if any, established by the Company or the lack of
reserves, if applicable, are reasonable based upon facts and circumstances known by the Company on the date hereof and there are no loss
contingencies that are required to be accrued by the Statement of Financial Accounting Standard No. 5 of the Financial Accounting Standards
Board which are not provided for by the Company in its financial statements or otherwise. No other information provided by or on behalf
of the Company to any of the Buyers which is not included in the SEC Documents (including, without limitation, information in the disclosure
schedules to this Agreement) contains any untrue statement of a material fact or omits to state any material fact necessary in order to
make the statements therein not misleading, in the light of the circumstance under which they are or were made. The Company is not currently
contemplating to amend or restate any of the financial statements (including, without limitation, any notes or any letter of the independent
accountants of the Company with respect thereto) included in the SEC Documents (the “Financial Statements”), nor is
the Company currently aware of facts or circumstances which would require the Company to amend or restate any of the Financial Statements,
in each case, in order for any of the Financials Statements to be in compliance with GAAP and the rules and regulations of the SEC. The
Company has not been informed by its independent accountants that they recommend that the Company amend or restate any of the Financial
Statements or that there is any need for the Company to amend or restate any of the Financial Statements.


 


(k) Absence
of Certain Changes. Since the date of the Company’s most recent audited financial statements contained in a Form 20-F, there has been
no Material Adverse Effect, nor any event or occurrence specifically affecting the Company or its Subsidiaries that would be reasonably
expected to result in a Material Adverse Effect. Since the date of the Company’s most recent audited financial statements contained in
a Form 20-F, neither the Company nor any of its Subsidiaries has (i) declared or paid any dividends, (ii) sold any material assets, individually
or in the aggregate, outside of the ordinary course of business or (iii) made any material capital expenditures, individually or in the
aggregate, outside of the ordinary course of business. Neither the Company nor any of its Subsidiaries has taken any steps to seek protection
pursuant to any law or statute relating to bankruptcy, insolvency, reorganization, receivership, liquidation or winding up, nor does the
Company or any Subsidiary have any knowledge or reason to believe that any of their respective creditors intend to initiate involuntary
bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so.


 






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(l) No
Undisclosed Events, Liabilities, Developments or Circumstances. No event, liability, development or circumstance has occurred or exists,
or is reasonably expected to exist or occur specific to the Company, any of its Subsidiaries or any of their respective businesses, properties,
liabilities, prospects, operations (including results thereof) or condition (financial or otherwise), that has not been publicly disclosed
and would reasonably be expected to have a Material Adverse Effect.


 


(m) Conduct
of Business; Regulatory Permits. Neither the Company nor any of its Subsidiaries is in violation of any term under its Articles
of Incorporation, any certificate of designation, preferences or rights of any other outstanding series of preferred stock of the Company
or any of its Subsidiaries or Bylaws or their organizational charter, certificate of formation, memorandum of association, articles of
association, Articles of Incorporation or certificate of incorporation or bylaws, respectively. Neither the Company nor any of its Subsidiaries
is in violation of any judgment, decree or order or any statute, ordinance, rule or regulation applicable to the Company or any of its
Subsidiaries, and neither the Company nor any of its Subsidiaries will conduct its business in violation of any of the foregoing, except
in all cases for violations which would not reasonably be expected to have a Material Adverse Effect. Without limiting the generality
of the foregoing, the Company is not in violation of any of the rules, regulations or requirements of the Principal Market and has no
knowledge of any facts or circumstances that could reasonably lead to delisting or suspension of the Common Shares by the Principal Market
in the foreseeable future. During the one year prior to the date hereof, (i) the Common Shares has been listed or designated for quotation
on the Principal Market, (ii) trading in the Common Shares has not been suspended by the SEC or the Principal Market and (iii) the Company
has received no communication, written or oral, from the SEC or the Principal Market regarding the suspension or delisting of the Common
Stock from the Principal Market, which has not been publicly disclosed. The Company and each of its Subsidiaries possess all certificates,
authorizations and permits issued by the appropriate regulatory authorities necessary to conduct their respective businesses, except where
the failure to possess such certificates, authorizations or permits would not reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect, and neither the Company nor any of its Subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or permit. There is no agreement, commitment, judgment, injunction,
order or decree binding upon the Company or any of its Subsidiaries or to which the Company or any of its Subsidiaries is a party which
has or would reasonably be expected to have the effect of prohibiting or materially impairing any business practice of the Company or
any of its Subsidiaries, any acquisition of property by the Company or any of its Subsidiaries or the conduct of business by the Company
or any of its Subsidiaries as currently conducted other than such effects, individually or in the aggregate, which have not had and would
not reasonably be expected to have a Material Adverse Effect on the Company or any of its Subsidiaries.


 


(n) Foreign
Corrupt Practices. Neither the Company nor any of its Subsidiaries nor any director, officer, agent, employee, nor any other person
acting for or on behalf of the Company or any of its Subsidiaries (individually and collectively, a “Company Affiliate”)
have violated the U.S. Foreign Corrupt Practices Act (the “FCPA) or any other applicable anti-bribery or anti corruption laws,
nor has any Company Affiliate offered, paid, promised to pay, or authorized the payment of any money, or offered, given, promised to give,
or authorized the giving of anything of value, to any officer, employee or any other person acting in an official capacity for any Governmental
Entity to any political party or official thereof or to any candidate for political office (individually and collectively, a “Government
Official”) or to any person under circumstances where such Company Affiliate knew or was aware of a high probability that all
or a portion of such money or thing of value would be offered, given or promised, directly or indirectly, to any Government Official,
for the purpose, in violation of applicable law, of: (i) (A) influencing any act or decision of such Government Official in his/her official
capacity, (B) inducing such Government Official to do or omit to do any act in violation of his/her lawful duty, (C) securing any improper
advantage, or (D) inducing such Government Official to influence or affect any act or decision of any Governmental Entity, or (ii) assisting
the Company or its Subsidiaries in obtaining or retaining business for or with, or directing business to, the Company or its Subsidiaries.


 




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(o) Equity
Capitalization.


 


(i) Authorized
and Outstanding Capital Stock. As of the date hereof, the Company is authorized to issue 200,000,000 Common Shares, of which, 25,135,000
are issued and outstanding.


 


(ii) Valid
Issuance; Available Shares. All of such outstanding shares are duly authorized and have been validly issued and are fully paid
and nonassessable.


 


(iii) Existing
Securities; Obligations. Except as disclosed in the SEC Documents: (A) none of the Company’s or any Subsidiary’s shares, interests
or capital stock is subject to preemptive rights or any other similar rights or Liens suffered or permitted by the Company or any Subsidiary;
(B) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating
to, or securities or rights convertible into, or exercisable or exchangeable for, any shares, interests or capital stock of the Company
or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries
is or may become bound to issue additional shares, interests or capital stock of the Company or any of its Subsidiaries or options, warrants,
scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into,
or exercisable or exchangeable for, any shares, interests or capital stock of the Company or any of its Subsidiaries; (C) there are
no agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of their securities
under the 1933 Act (except pursuant to this Agreement); (D) there are no outstanding securities or instruments of the Company or
any of its Subsidiaries which contain any redemption or similar provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become bound to redeem a security of the Company or any of its
Subsidiaries; (E) there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by
the issuance of the Securities; and (G) neither the Company nor any Subsidiary has any stock appreciation rights or “phantom
stock” plans or agreements or any similar plan or agreement.


 


(iv) Organizational
Documents. The Company has furnished to the Buyers or filed on EDGAR true, correct and complete copies of the Company’s Articles of
Incorporation, as amended and as in effect on the date hereof (the “Articles of Incorporation”), and the Company’s
bylaws, as amended and as in effect on the date hereof (the “Bylaws”), and the terms of all convertible securities
and the material rights of the holders thereof in respect thereto.


 




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(p) Litigation.
Except as disclosed in the SEC Documents, there is no action, suit, arbitration, proceeding, inquiry or investigation before or by the
Principal Market, any court, public board, other Governmental Entity, self-regulatory organization or body pending or, to the knowledge
of the Company, threatened against or affecting the Company or any of its Subsidiaries, the Common Shares or any of the Company’s or its
Subsidiaries’ officers or directors, whether of a civil or criminal nature or otherwise, in their capacities as such, which would reasonably
be expected to result in a Material Adverse Effect. After reasonable inquiry of its employees, the Company is not aware of any event which
might result in or form the basis for any such action, suit, arbitration, investigation, inquiry or other proceeding. Without limitation
of the foregoing, there has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by
the SEC involving the Company, any of its Subsidiaries or any current or former director or officer of the Company or any of its Subsidiaries.
Neither the Company nor any of its Subsidiaries is the subject of any order, writ, judgment, injunction, decree, determination or award
of any Governmental Entity that would reasonably be expected to result in a Material Adverse Effect.


 


(q) Insurance.
The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company and its Subsidiaries
are engaged. In accordance with the previous sentence, the Company currently maintains no insurance policies. Neither the Company nor
any such Subsidiary has been refused any insurance coverage sought or applied for, and neither the Company nor any such Subsidiary has
any reason to believe that it will be unable 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 at a cost that would not have a Material Adverse Effect.


 


(r) Manipulation
of Price. Neither the Company nor any of its Subsidiaries has, and, to the knowledge of the Company, no Person acting on their behalf
has, directly or indirectly, (i) taken any action designed to cause or to result in the stabilization or manipulation of the price of
any security of the Company or any of its Subsidiaries 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 or any of its Subsidiaries.


 


(s) Registration
Eligibility. The Company is eligible to register the resale of the Conversion Shares by the Buyers using Form F-3 promulgated under
the 1933 Act.


 


(t) Shell
Company Status. The Company is not, and has never been, an issuer identified in, or subject to, Rule 144(i).


 




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(u) Money
Laundering. The Company and its Subsidiaries are in compliance with, and have not previously violated, the USA Patriot Act of 2001
and all other applicable U.S. and non-U.S. anti-money laundering laws and regulations, including, but not limited to, the laws, regulations
and Executive Orders and sanctions programs (“Sanctions Programs”) administered by the U.S. Office of Foreign Assets
Control (“OFAC”), including, without limitation, (i) Executive Order 13224 of September 23, 2001 entitled, “Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism” (66 Fed. Reg. 49079 (2001));
and any regulations contained in 31 CFR, Subtitle B, Chapter V.


 


(v) Disclosure.
The Company confirms that neither it nor any other Person acting on its behalf has provided any of the Buyers or their agents or counsel
with any information that constitutes or could reasonably be expected to constitute material, non-public information concerning the Company
or any of its Subsidiaries, other than the existence of the transactions contemplated by this Agreement and the other Transaction Documents.
The Company understands and confirms that each of the Buyers will rely on the foregoing representations in effecting transactions in securities
of the Company. All disclosure provided to the Buyers regarding the Company and its Subsidiaries, their businesses and the transactions
contemplated hereby, including the schedules to this Agreement, furnished by or on behalf of the Company or any of its Subsidiaries, taken
as a whole, is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. All of the
written information furnished after the date hereof by or on behalf of the Company or any of its Subsidiaries to each Buyer pursuant to
or in connection with this Agreement and the other Transaction Documents, taken as a whole, will be true and correct in all material respects
as of the date on which such information is so provided and will 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 the light of the circumstances under which they were made,
not misleading. No event or circumstance has occurred or information exists with respect to the Company or any of its Subsidiaries or
its or their business, properties, liabilities, prospects, operations (including results thereof) or conditions (financial or otherwise),
which, under applicable law, rule or regulation, requires public disclosure at or before the date hereof or announcement by the Company
but which has not been so publicly disclosed. All financial projections and forecasts that have been prepared by or on behalf of the Company
or any of its Subsidiaries and made available to the Buyers have been prepared in good faith based upon reasonable assumptions and represented,
at the time each such financial projection or forecast was delivered to each Buyer, the Company’s best estimate of future financial performance
(it being recognized that such financial projections or forecasts are not to be viewed as facts and that the actual results during the
period or periods covered by any such financial projections or forecasts may differ from the projected or forecasted results). The Company
acknowledges and agrees that no Buyer makes or has made any representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in Section 2.


 


(w) No
General Solicitation. Neither the Company, nor any of its affiliates, nor any Person acting on its or their behalf, has engaged in
any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) in connection with
the offer or sale of the Securities.


 


(x) Private
Placement. Assuming the accuracy of the Buyers’ representations and warranties set forth in Section 2, no registration under
the Securities Act is required for the offer and sale of the Securities by the Company to the Buyers as contemplated hereby. The issuance
and sale of the Securities hereunder does not contravene the rules and regulations of the Primary Market.


 






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		4.	COVENANTS.



 


(a) Reporting
Status. For the period beginning on the date hereof, and ending 6 months after the date on which all the Convertible Debentures are
no longer outstanding (the “Reporting Period”), the Company shall use its best efforts to file on a timely basis all
reports required to be filed with the SEC pursuant to the 1934 Act, and the Company shall not terminate its status as an issuer required
to file reports under the 1934 Act even if the 1934 Act or the rules and regulations thereunder would no longer require or otherwise permit
such termination.


 


(b) Use
of Proceeds. Neither the Company nor any Subsidiary will, directly or indirectly, use the proceeds of the transactions contemplated
herein to repay any loans to any executives or employees of the Company. Neither the Company nor any Subsidiary will, directly or indirectly,
use the proceeds of the transactions contemplated herein, or lend, contribute, facilitate or otherwise make available such proceeds
to any Person (i) to fund, either directly or indirectly, any activities or business of or with any Person that is identified on the list
of Specially Designated Nationals and Blocker Persons maintained by OFAC, or in any country or territory, that, at the time of such funding,
is, or whose government is, the subject of Sanctions Programs, or (ii) in any other manner that will result in a violation of Sanctions
Programs.


 


(c) Listing.
The Company shall promptly secure the listing or designation for quotation (as the case may be) of all of the Underlying Securities (as
defined below) upon each national securities exchange and automated quotation system, if any, upon which the Common Shares are then listed
or designated for quotation (as the case may be, each an “Eligible Market”), subject to official notice of issuance,
and shall use reasonable efforts to maintain such listing or designation for quotation (as the case may be) of all Underlying Securities
from time to time issuable under the terms of the Transaction Documents on such Eligible Market for the Reporting Period. Neither the
Company nor any of its Subsidiaries shall take any action which could be reasonably expected to result in the delisting or suspension
of the Common Shares on an Eligible Market during the Reporting Period. The Company shall pay all fees and expenses in connection with
satisfying its obligations under this Section 4(c). “Underlying Securities” means the (i) the Conversion Shares, and
(ii) any common shares of the Company issued or issuable with respect to the Conversion Shares, including, without limitation, (1) as
a result of any stock split, stock dividend, recapitalization, exchange or similar event or otherwise and (2) shares of capital stock
of the Company into which the Common Shares are converted or exchanged without regard to any limitations on conversion of the Convertible
Debentures.


 


(d) Fees.
The Company shall pay to YA Global II SPV, LLC, an affiliate of the lead Buyer (the “Subsidiary Fund”), a commitment
fee (the “Commitment Fee”) equal to 3.5% of the Purchase Price of the Closing and a due diligence and structuring fee
of $5,000. The Commitment Fee due and payable at the Closing shall be deducted from the gross proceeds of the Closing. The due diligence
and structuring fee shall be deducted from the gross proceeds of the Closing. The Company authorizes each Buyer to deduct any fees due
hereunder from the gross process of the purchase of any Convertible Debentures.


 




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(e) Pledge
of Securities. Notwithstanding anything to the contrary contained in this Agreement, the Company acknowledges and agrees that, subject
to compliance with applicable federal and state securities laws, the Securities may be pledged by an Investor in connection with a bona
fide margin agreement or other loan or financing arrangement that is secured by the Securities. The Company hereby agrees to execute and
deliver such documentation as a pledgee of the Securities may reasonably request in connection with a pledge of the Securities to such
pledgee by a Buyer.


 


(f) Disclosure
of Transactions and Other Material Information. On or before 9:30 a.m., New York time, on the first Business Day after the date of
this Agreement, the Company shall file a current report of foreign private issuer on Form 6-K describing all the material terms of the
transactions contemplated by the Transaction Documents in the form required by the 1934 Act and attaching all the material Transaction
Documents (including, without limitation, this Agreement (and all schedules to this Agreement) and the form of Statement of Designations)
(including all attachments, the “Current Report”). From and after the filing of the Current Report, the Company shall
have disclosed all material, non-public information (if any) provided to any of the Buyers 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 filing of the Current Report, the Company acknowledges and agrees that any and all confidentiality or
similar obligations with respect to the transactions contemplated by the Transaction Documents under any agreement, whether written or
oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, affiliates, employees or agents, on
the one hand, and any of the Buyers or any of their affiliates, on the other hand, shall terminate. The Company shall not, and the Company
shall cause each of its Subsidiaries and each of its and their respective officers, directors, employees and agents not to, provide any
Buyer with any material, non-public information regarding the Company or any of its Subsidiaries from and after the date hereof without
the express prior written consent of such Buyer (which may be granted or withheld in such Buyer’s sole discretion).


 


(g) Reservation
of Shares. So long as any of the Convertible Debentures remain outstanding, the Company shall take all action necessary to at all
times have authorized, and reserved for the purpose of issuance, no less than 300% of the maximum number of Common Shares issuable upon
conversion of all the Convertible Debentures then outstanding (assuming for purposes hereof that (x) the Convertible Debentures are convertible
at the Conversion Price then in effect, and (y) any such conversion shall not take into account any limitations on the conversion of the
Convertible Debentures, including the Floor Price) (the “Required Reserve Amount”); provided that at no time shall
the number of Common Shares reserved pursuant to this Section 4(g) be reduced other than proportionally in connection with any conversion
and/or redemption, or reverse stock split. If at any time the number of Common Shares authorized and reserved for issuance is not sufficient
to meet the Required Reserved Amount, the Company will promptly take all corporate action necessary to authorize and reserve a sufficient
number of shares, including, without limitation, calling a special meeting of stockholders to authorize additional shares to meet the
Company’s obligations pursuant to the Transaction Documents, in the case of an insufficient number of authorized shares, recommending
that stockholders vote in favor of an increase in such authorized number of shares sufficient to meet the Required Reserved Amount.


 




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(h) Conduct
of Business. The business of the Company and its Subsidiaries shall not be conducted in violation of any law, ordinance or regulation
of any Governmental Entity, except where such violations would not reasonably be expected to result, either individually or in the aggregate,
in a Material Adverse Effect.


 


(i) From
the date hereof until (A) no more than $1,000,000 of Debentures remain outstanding, or (B) the first date when each of the following conditions
are satisfied: (i) 9 months have elapsed from the Closing Date and the Buyers are eligible to freely resell Conversion Shares pursuant
to Rule 144, (ii) the closing price of the Common Shares during each of the five (5) consecutive prior Trading Days shall be at least
150% of the Floor Price (as defined in the Debentures), and (iii) no Event of Default (as defined in the Debentures) shall have occurred),
unless the holders of at least 67% in principal amount of the then outstanding Convertible Debentures shall have given prior written consent,
the Company shall not, and shall not permit any of its subsidiaries (whether or not a subsidiary on the date hereof) to, directly or indirectly
(i) other than Permitted Indebtedness, enter into, create, incur, assume, guarantee or suffer to exist any indebtedness for borrowed money
of any kind, including, but not limited to, a guarantee, on or with respect to any of its property or assets now owned or hereafter acquired
or any interest therein or any income or profits therefrom, (ii) other than Permitted Liens, enter into, create, incur, assume or suffer
to exist any lien, security interest, option or other charge or encumbrance (each, a “Lien”) of any kind, on or with
respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom, or
(iii) amend its charter documents, including, without limitation, its certificate of incorporation and bylaws, in any manner that materially
and adversely affects any rights of the holders of the Convertible Debentures.


 


“Permitted
Indebtedness” shall mean: (i) indebtedness evidenced by the Convertible Debentures; (ii) indebtedness described on a Disclosure
Schedule attached hereto; (iii) indebtedness incurred solely for the purpose of financing the acquisition or lease of any equipment, including
capital lease obligations with no recourse other than to such equipment; (iv) indebtedness (A) the repayment of which has been subordinated
to the payment of the Convertible Debentures on terms and conditions acceptable to the Buyers, including with regard to interest payments
and repayment of principal, (B) which does not mature or otherwise require or permit redemption or repayment prior to or on the 91st day
after the maturity date of any Convertible Debentures then outstanding; and (C) which is not secured by any assets of the Company or its
subsidiaries; (v) indebtedness associated with acquiring new intellectual property assets and licenses, so long as the proceeds are going
to the party(ies) from which the Company is acquiring the assets, licenses, and other properties and (vi) any indebtedness (other than
the indebtedness set out in (i) – (v) above) incurred after the date hereof, provided that such indebtedness does not exceed $1,500,000
at any given time.


 




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“Permitted
Liens” shall mean (1) any security interest granted to the Buyers to secure the obligations under the Convertible Debentures,
(2) any prior security interest granted to the Buyers, (3) existing Liens disclosed by the Company on a Disclosure Schedule attached hereto;
(4) inchoate Liens for taxes, assessments or governmental charges or levies not yet due, as to which the grace period, if any, related
thereto has not yet expired, or being contested in good faith and by appropriate proceedings for which adequate reserves have been established
in accordance with GAAP; (5) Liens of carriers, materialmen, warehousemen, mechanics and landlords and other similar Liens which secure
amounts which are not yet overdue by more than 60 days or which are being contested in good faith by appropriate proceedings for which
adequate reserves have been established in accordance with GAAP; (6) licenses, sublicenses, leases or subleases granted to other persons
not materially interfering with the conduct of the business of the Company; (7) Liens securing capitalized lease obligations and purchase
money indebtedness incurred solely for the purpose of financing an acquisition or lease; (8) easements, rights-of-way, restrictions, encroachments,
municipal zoning ordinances and other similar charges or encumbrances, and minor title deficiencies, in each case not securing debt and
not materially interfering with the conduct of the business of the Company and not materially detracting from the value of the property
subject thereto; (9) Liens arising out of the existence of judgments or awards which judgments or awards do not constitute an Event of
Default; (10) Liens incurred in the ordinary course of business in connection with workers compensation claims, unemployment insurance,
pension liabilities and social security benefits and Liens securing the performance of bids, tenders, leases and contracts in the ordinary
course of business, statutory obligations, surety bonds, performance bonds and other obligations of a like nature (other than appeal bonds)
incurred in the ordinary course of business (exclusive of obligations in respect of the payment for borrowed money); (11) Liens in favor
of a banking institution arising by operation of law encumbering deposits (including the right of set-off) and contractual set-off rights
held by such banking institution and which are within the general parameters customary in the banking industry and only burdening deposit
accounts or other funds maintained with a creditor depository institution; (12) usual and customary set-off rights in leases and other
contracts; (13) escrows in connection with acquisitions and dispositions and (14) royalties and other rights to revenue derived from the
sale of the Company’s products that are granted in the ordinary course of business.


 


		5.	REGISTER; TRANSFER AGENT INSTRUCTIONS; LEGEND.



 


(a) Register.
The Company shall maintain at its principal executive offices or with the Transfer Agent (or at such other office or agency of the Company
as it may designate by notice to each holder of Securities), a register for the Convertible Debentures in which the Company shall record
the name and address of the Person in whose name the Convertible Debentures have been issued (including the name and address of each transferee),
the amount of Convertible Debentures held by such Person, and the number of Conversion Shares issuable upon conversion of the Convertible
Debentures held by such Person. The Company shall keep the register open and available at all times during business hours for inspection
of any Buyer or its legal representatives.


 




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


 


		6.	CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL.



 


The obligation of the Company
hereunder to issue and sell the Convertible Debentures to each Buyer at the Closing is subject to the satisfaction, at or before the Closing
Date, of each of the following conditions, provided that these conditions are for the Company’s sole benefit and may be waived by the
Company at any time in its sole discretion by providing each Buyer with prior written notice thereof:


 


(a) Such
Buyer shall have executed each of the Transaction Documents to which it is a party and delivered the same to the Company.


 


(b) Such
Buyer and each other Buyer shall have delivered to the Company the Purchase Price (less, in the case of any Buyer, the amounts withheld
pursuant to Section 4(d)) for the Convertible Debentures being purchased by such Buyer at the Closing by wire transfer of immediately
available funds in accordance with the Closing Statement.


 


(c) The
representations and warranties of such Buyer shall be true and correct in all material respects as of the date when made and as of the
Closing Date as though originally made at that time (except for representations and warranties that speak as of a specific date, which
shall be true and correct as of such specific date), and such Buyer shall have performed, satisfied and complied in all material respects
with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by such Buyer at
or prior to the Closing Date.


 


		7.	CONDITIONS TO EACH BUYER’S OBLIGATION TO PURCHASE.



 


The obligation of each Buyer hereunder to purchase
its Convertible Debentures at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions,
provided that these conditions are for each Buyer’s sole benefit and may be waived by such Buyer at any time in its sole discretion by
providing the Company with prior written notice thereof:


 


(a) The
Company shall have duly executed and delivered to such Buyer each of the Transaction Documents to which it is a party and the Company
shall have duly executed and delivered to such Buyer such aggregate principal amount of Convertible Debentures as is set forth opposite
such Buyer’s name in column (b) of the Schedule of Buyers for the Closing.


 


(b) Such
Buyer shall have received the opinion of counsel/s to the Company, dated as of the Closing Date, in a form reasonably acceptable to such
Buyer.


 




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(c) The
Company shall have delivered to each Buyer copies of its and each Subsidiaries certified copies of its charter, as well as any shareholder
or operating agreements by or among the shareholders or members of any of the Company’s Subsidiaries.


 


(d) The
Company shall have delivered to such Buyer a certificate evidencing the incorporation and good standing of the Company issued by the Registrar
for the British Virgin Islands as of a date within ten (10) days of the Closing Date.


 


(e) Each
and every representation and warranty of the Company shall be true and correct in all material respects (other than representations and
warranties qualified by materiality, which shall be true and correct in all respects) as of the date when made and as of the Closing Date
as though originally made at that time (except for representations and warranties that speak as of a specific date, which shall be true
and correct as of such specific date) and the Company shall have performed, satisfied and complied in all respects with the covenants,
agreements and conditions required to be performed, satisfied or complied with by the Company at or prior to the Closing Date, as set
forth in section 3 and 4.


 


(f) The
Common Shares (A) shall be designated for quotation or listed (as applicable) on the Principal Market and (B) shall not have been suspended,
as of the Closing Date, by the SEC or the Principal Market from trading on the Principal Market nor shall suspension by the SEC or the
Principal Market have been threatened, as of the Closing Date, either (I) in writing by the SEC or the Principal Market or (II) by falling
below the minimum maintenance requirements of the Principal Market.


 


(g) The
Company shall have obtained all governmental, regulatory or third-party consents and approvals, if any, necessary for the sale of the
Securities, including without limitation, those required by the Principal Market, if any.


 


(h) No
statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by
any court or Governmental Entity of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by
the Transaction Documents.


 


(i) Since
the date of execution of this Agreement, no event or series of events shall have occurred that has resulted in or would reasonably be
expected to result in a Material Adverse Effect.


 


(j) The
Company shall have obtained approval of the Principal Market to list or designate for quotation (as the case may be) the Conversion Shares,
if applicable.


 


(k) Such
Buyer shall have received a letter, duly executed by an officer of the Company, setting forth the wire amounts of each Buyer and the wire
transfer instructions of the Company (the “Closing Statement”).


 




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(l) From
the date hereof to the Closing Date, (i) trading in the Common Shares shall not have been suspended by the SEC or the Principal Market
(except for any suspension of trading of limited duration agreed to by the Company, which suspension shall be terminated prior to the
Closing), (ii) the closing price of the Common Shares during each of the five (5) consecutive Trading Days immediately prior to the Closing
Date shall be at least 120% of the Floor Price (as defined in the Convertible Debentures), and (iii) at any time prior to the applicable
Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices
shall not have been established on securities whose trades are reported by such service, or on the Principal Market, nor shall a banking
moratorium have been declared either by the United States or New York State authorities nor shall there have occurred any material outbreak
or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change
in, any financial market which, in each case, in the reasonable judgment of each Buyer, makes it impracticable or inadvisable to purchase
the Securities at the Closing.


 


(m) The
Company and its Subsidiaries shall have delivered to such Buyer such other documents, instruments or certificates relating to the transactions
contemplated by this Agreement as such Buyer or its counsel may reasonably request.


 


		8.	TERMINATION.



 


In the event
that the Closing shall not have occurred with respect to a Buyer within five (5) days of the date hereof, then such Buyer shall have the
right to terminate its obligations under this Agreement with respect to itself at any time on or after the close of business on such date
without liability of such Buyer to any other party; provided, however, (i) the right to terminate this Agreement under this Section
8 shall not be available to such Buyer if the failure of the transactions contemplated by this Agreement to have been consummated by such
date is the result of such Buyer’s breach of this Agreement and (ii) the abandonment of the sale and purchase of the Convertible Debentures
shall be applicable only to such Buyer providing such written notice, provided further that no such termination shall affect any obligation
of the Company under this Agreement to reimburse such Buyer for the expenses described herein. Nothing contained in this Section 8 shall
be deemed to release any party from any liability for any breach by such party of the terms and provisions of this Agreement or the other
Transaction Documents or to impair the right of any party to compel specific performance by any other party of its obligations under this
Agreement or the other Transaction Documents.


 


		9.	MISCELLANEOUS.



 


(a) Governing
Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of New York. The Company 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 under
any of the other Transaction Documents or with any transaction contemplated hereby or thereby, and hereby irrevocably waives, and agrees
not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper.
Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding
by mailing a copy thereof to such party at the address for such 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 manner permitted by law. Nothing contained herein shall be deemed or operate to preclude any Buyer from
bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to such
Buyer or to enforce a judgment or other court ruling in favor of such Buyer. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY
HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER TRANSACTION DOCUMENT
OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY.


 






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(b) Counterparts.
This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and delivered to the other party. In the event that any signature
is delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an executed signature page,
such signature page 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 signature page were an original thereof.


 


(c) Headings;
Gender. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of,
this Agreement. Unless the context clearly indicates otherwise, each pronoun herein shall be deemed to include the masculine, feminine,
neuter, singular and plural forms thereof. The terms “including,” “includes,” “include” and words of like
import shall be construed broadly as if followed by the words “without limitation.” The terms “herein,” “hereunder,”
“hereof” and words of like import refer to this entire Agreement instead of just the provision in which they are found.


 


(d) Entire
Agreement, Amendments. This Agreement supersedes all other prior oral or written agreements between the Buyer, the Company, their
affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement and the instruments referenced
herein contain the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically
set forth herein or therein, neither the Company nor any Buyer makes any representation, warranty, covenant or undertaking with respect
to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed by the party to
be charged with enforcement.


 


(e) Notices.
Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in
writing by letter and email and will be deemed to have been delivered: upon the later of (A) either (i) receipt, when delivered personally
or (ii) one (1) Business Day after deposit with an overnight courier service with next-day international delivery specified, in each case,
properly addressed to the party to receive the same and (B) receipt, when sent by electronic mail. The addresses and e-mail addresses for
such communications shall be:


 


	If to the Company, to:	RETO ECO-SOLUTIONS, INC.
	 	
    c/o Beijing REIT Technology Development Co., Ltd.

    Building X-702, 60 Anli Road, Chaoyang District, Beijing

    People’s Republic of China 100101

    Attention: Hengfang Li

    Telephone: (+86) 10-64827328

    Email: ir@retoeco.com

     

	With Copy to:	
    William Rosenstadt, Esq.

    Ortoli Rosenstadt LLP

    366 Madison Avenue, 3rd Floor

    New York, NY 10017

    Telephone:  212-588-0022

    E-Mail:  wsr@orllp.legal




 






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	If to a Buyer, to its address and e-mail address set forth on the Schedule of Buyers, with copies to such Buyer’s representatives as set forth on the Schedule of Buyers,
	 	 
	With copy to:	
    David Fine, Esq.

    c/o Yorkville Advisors Global, LP

    1012 Springfield Avenue

    Mountainside, NJ 07092

    Email: legal@yorkvilleadvisors.com



 


or to such other address, e-mail
address and/or to the attention of such other Person as the recipient party has specified by written notice given to each other party
five (5) days prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent,
waiver or other communication, (B) electronically generated by the sender’s e-mail service provider containing the time, date, recipient
e-mail address or (C) provided by an overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from an overnight courier service in accordance with clause (i), (ii) or (iii) above, respectively


 


(f) Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns,
including any purchasers of any of the Convertible Debentures (but excluding any purchasers of Underlying Securities, unless pursuant
to a written assignment by such Buyer). The Company shall not assign this Agreement or any rights or obligations hereunder without the
prior written consent of the Buyers. In connection with any transfer of any or all of its Securities, a Buyer may assign all, or a portion,
of its rights and obligations hereunder in connection with such Securities without the consent of the Company, in which event such assignee
shall be deemed to be a Buyer hereunder with respect to such transferred Securities.


 


(g) Indemnification.


 


(i) In
consideration of each Buyer’s execution and delivery of the Transaction Documents and acquiring the Securities thereunder and in addition
to all of the Company’s other obligations under the Transaction Documents, the Company shall defend, protect, indemnify and hold harmless
each Buyer and each holder of any Securities and all of their stockholders, partners, members, officers, directors, employees and direct
or indirect investors and any of the foregoing Persons’ agents or other representatives (including, without limitation, those retained
in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”) from and against
any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection
therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including
reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as a result
of, or arising out of, or relating to (i) any misrepresentation or breach of any representation or warranty made by the Company in any
of the Transaction Documents, (ii) any breach of any covenant, agreement or obligation of the Company or any Subsidiary contained in any
of the Transaction Documents or (iii) any cause of action, suit, proceeding or claim brought or made against such Indemnitee by a third
party (including for these purposes a derivative action brought on behalf of the Company or any Subsidiary) or which otherwise involves
such Indemnitee that arises out of or results from (A) the execution, delivery, performance or enforcement of any of the Transaction Documents,
(B) any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of the issuance of the Securities,
or (C) any disclosure properly made by such Buyer pursuant to Section 4(f), or (D) the status of such Buyer or holder of the Securities
either as an investor in the Company pursuant to the transactions contemplated by the Transaction Documents or as a party to this Agreement
(including, without limitation, as a party in interest or otherwise in any action or proceeding for injunctive or other equitable relief).
To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution
to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law.


 




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(ii) Promptly
after receipt by an Indemnitee under this Section 9(g) of notice of the commencement of any action or proceeding (including any governmental
action or proceeding) involving an Indemnified Liability, such Indemnitee shall, if a claim in respect thereof is to be made against the
Company under this Section 9(g), deliver to the Company a written notice of the commencement thereof, and the Company shall have the right
to participate in, and, to the extent the Company so desires, to assume control of the defense thereof with counsel mutually reasonably
satisfactory to the Company and the Indemnitee; provided, however, that an Indemnitee shall have the right to retain its own counsel
with the fees and expenses of such counsel to be paid by the Company if: (A) the Company has agreed in writing to pay such fees and expenses;
(B) the Company shall have failed promptly to assume the defense of such Indemnified Liability and to employ counsel reasonably satisfactory
to such Indemnitee in any such Indemnified Liability; or (C) the named parties to any such Indemnified Liability (including any impleaded
parties) include both such Indemnitee and the Company, and such Indemnitee shall have been advised by counsel that a conflict of interest
is likely to exist if the same counsel were to represent such Indemnitee and the Company (in which case, if such Indemnitee notifies the
Company in writing that it elects to employ separate counsel at the expense of the Company, then the Company shall not have the right
to assume the defense thereof and such counsel shall be at the expense of the Company), provided further, that in the case of clause (C)
above the Company shall not be responsible for the reasonable fees and expenses of more than one (1) separate legal counsel for the Indemnitees.
The Indemnitee shall reasonably cooperate with the Company in connection with any negotiation or defense of any such action or Indemnified
Liability by the Company and shall furnish to the Company all information reasonably available to the Indemnitee which relates to such
action or Indemnified Liability. The Company shall keep the Indemnitee reasonably apprised at all times as to the status of the defense
or any settlement negotiations with respect thereto. The Company shall not be liable for any settlement of any action, claim or proceeding
effected without its prior written consent, provided, however, that the Company shall not unreasonably withhold, delay or condition its
consent. The Company shall not, without the prior written consent of the Indemnitee, consent to entry of any judgment or enter into any
settlement or other compromise which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnitee of a release from all liability in respect to such Indemnified Liability or litigation, and such settlement shall not include
any admission as to fault on the part of the Indemnitee. Following indemnification as provided for hereunder, the Company shall be subrogated
to all rights of the Indemnitee with respect to all third parties, firms or corporations relating to the matter for which indemnification
has been made. The failure to deliver written notice to the Company within a reasonable time of the commencement of any such action shall
not relieve the Company of any liability to the Indemnitee under this Section 9(g), except to the extent that the Company is materially
and adversely prejudiced in its ability to defend such action.


 


(iii) The
indemnification required by this Section 9(g) shall be made by periodic payments of the amount thereof during the course of the investigation
or defense, within ten (10) days after bills supporting the Indemnified Liabilities are received by the Company.


 


(iv) The
indemnity agreement contained herein shall be in addition to (A) any cause of action or similar right of the Indemnitee against the Company
or others, and (B) any liabilities the Company may be subject to pursuant to the law.


 


(h) No
Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their
mutual intent, and no rules of strict construction will be applied against any party.


 


[REMAINDER PAGE
INTENTIONALLY LEFT BLANK]


 




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IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.


 


	 	COMPANY:  
	 	 
	 	RETO ECO-SOLUTIONS, INC.
	 	 
	 	By:	/s/ Hengfang Li
	 	Name: 	Hengfang Li
	 	Title:	Chief Executive Officer



 




    24


     


    

 


IN WITNESS WHEREOF,
each Buyer and the Company have caused their respective signature page to this Securities Purchase Agreement to be duly executed as of
the date first written above.


 


	 	BUYER:    
	 	 
	 	YA II PN, LTD. 
	 	 
	 	By: 	Yorkville Advisors Global, LP
	 	Its:	Investment Manager
	 	 
	 	 	By:	Yorkville Advisors Global II, LLC
	 	 	Its:	General Partner
	 	 
	 	 	By:	 /s/ Matt Beckman
	 	 	Name: 	Matt Beckman
	 	 	Title:	Member



 




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LIST OF EXHIBITS:


 




    26


     


    

 


EXHIBIT A


 


FORM OF CONVERTIBLE DEBENTURES


 




    27


     


    

 


SCHEDULE OF BUYERS


 


 


	Buyer	 	 	 	Principal Amount of Convertible Debentures	 	 	Purchase Price 

(100% of Face Value)	 
	 	 	 	 	 	 	 	 	 
	YA II PN, Ltd.	 	 	 	 	 	 	 	 
	1012 Springfield Avenue	 	Closing:  	 	$	2,500,000	 	 	$	2,500,000	 
	Mountainside, NJ 07092	 	 	 	 	 	 	 	 	 	 
	Email: mbeckman@yorkvilleadvisors.com	 	 	 	 	 	 	 	 	 	 
	 	 	Aggregate:  	 	$	2,500,000.00	 	 	$	2,500,000.00	 




 


Legal Representative’s Address and Facsimile Number


David Fine Esq.


1012 Springfield Avenue


Mountainside, NJ 07092


Email: Legal@yorkvilleadvisors.com